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


Wednesday, May 13, 2015

Afternoon Sitting

Volume 26, Number 5

ISSN 0709-1281 (Print)
ISSN 1499-2175 (Online)


Routine Business



John Slater

Hon. C. Clark

J. Horgan

Introductions by Members


Introduction and First Reading of Bills


Bill M219 — Franchise Act

C. James

Bill M220 — Recall and Initiative Amendment Act, 2015

A. Weaver

Statements (Standing Order 25B)


Nursing Week and contributions of nurses

J. Yap


J. Shin

Aboriginal social enterprises

D. Plecas

Celebrate Your Breasts art project by Nancy Pratt

R. Austin

Royal British Columbia Museum

J. Tegart

Summit on kidney and organ donation and transplantation

K. Conroy

Oral Questions


Conflict-of-interest concerns regarding Larry Blain and Partnerships B.C.

J. Horgan

Hon. M. de Jong

C. James

B. Ralston

K. Corrigan

Review of child death case

D. Donaldson

Hon. S. Cadieux

J. Rice

Child death review process

N. Simons

Hon. S. Cadieux

Gaming policy changes and role of Lottery Corporation CEO

D. Eby

Hon. M. de Jong



B. Routley

Orders of the Day

Committee of the Whole House


Bill 11 — Education Statutes Amendment Act, 2015 (continued)

R. Fleming

Hon. P. Fassbender

V. Huntington

N. Macdonald

K. Corrigan

Proceedings in the Douglas Fir Room

Committee of Supply


Estimates: Ministry of Natural Gas Development

Hon. R. Coleman

B. Ralston

D. Eby

Proceedings in the Birch Room

Committee of Supply


Estimates: Ministry of Health (continued)

Hon. T. Lake

J. Darcy

S. Hammell

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The House met at 1:32 p.m.

[Madame Speaker in the chair.]

Routine Business




Hon. C. Clark: Madame Speaker, it is with tremendous regret and sadness that I inform you and this House today that one of ours, a former member of this House, MLA John Slater, has passed away.

Anyone who knew John knew that he was incredibly passionate about his home and the people who made Osoyoos so special. That passion led to 30 years of dedicated public service in favour of the community that he loved so much, and he lent his time to everything from coaching young people to volunteering with the chamber of commerce. He stood for public office, first as a councillor, then as mayor, and then, of course, as we all got to know him, as the MLA representing that community.

But those of us who knew him well enough always knew that John never defined himself first as a politician. He always defined himself first as a farmer. He wasn’t afraid to roll up his sleeves and get started on the work that needed to be done, like all the farmers I know. So when he became an MLA, he took on the challenges that he was presented with, with real vigour, including laying the groundwork to modernize the century-old legislation that protects B.C.’s water. He was very proud of the Water Sustainability Act, which has recently been passed in this Legislature, and for very good reason, because he was very much a part of shaping it.

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Throughout Boundary-Similkameen, if you go there today, you can find many more of the fruits of John’s hard work: the new high school in Oliver, the new Horizon Health Centre in Osoyoos, the expanded Midway Arena, the new highway improvements and public walkways you’ll find all over the community. But from a personal perspective, I think the thing that most of us, and certainly I, will remember about John the most is his incredible warmth and how generously he welcomed new people into his life without judgment and with a lot of kindness.

I know that all members in this House, on all sides of it, will join me in extending our deepest condolences to John’s family, his friends, to everyone across the province whose lives he touched and made better.

J. Horgan: I and all of my colleagues join with the Premier and every member of this House in acknowledging and recognizing the passing of John Slater, who for most of his adult life focused on public service to his community. For that, certainly, the region is in his debt.

It is always a difficult time, and I know that my colleagues in the Liberal caucus, who were much closer to John, are having very, very sad feelings today. We on this side of the House, and myself personally, will remember John’s enthusiasm, John’s smile and how he did, as the Premier said, make people feel comfortable and at ease. That is a testimony — in a place that is often riddled with divisiveness and confrontation — that someone could pass from this life to the next knowing that all of his colleagues wish him well on that passage.

Certainly, on behalf of the opposition and joining with the Premier, I ask the Speaker to send our deepest condolences to the Slater family.

Introductions by Members

J. Darcy: It gives me great pleasure to welcome a whole lot of organizations representing nurses to the Legislature today.

This is National Nursing Week, and today in the gallery we have the Association of Registered Nurses of B.C., represented by Julie Fraser, their president; and Zak Matieschyn, the president-elect, representing all RNs and nurse practitioners; the association of Registered Psychiatric Nurses of B.C., represented by Jacqollyne Keaths; the B.C. Nurse Practitioner Association, represented by Stan Marchuk and Andrea Burton; the Licensed Practical Nurses Association of B.C., represented by Teresa McFadyen; and the Nursing Education Council of B.C., represented by Suzanne Campbell.

The theme of Nursing Week this year is “Nurses: with you every step of the way,” and that is certainly the case for all nurses in the province of British Columbia. What’s especially significant this year is that the Registered Psychiatric Nurses of B.C. has formed a new association. We now have all of these nursing associations working together to improve health care for British Columbians.

Will the entire House please join me in welcoming these nurses, who are really central to our health care system and to public health care in the province of British Columbia.

Hon. T. Lake: I, too, would like to join in welcoming all of the nurses that we have here today. I believe there are about 60 nurses joining us in the gallery, and I had the opportunity to meet with the leadership of all of the associations that the member has just mentioned this morning for breakfast. We had a wide-ranging discussion about nursing leadership, about the nursing profession.

We all know and appreciate the tremendous work and contribution that nurses make to our health care system. It is why we’re so proud of the health care system
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in British Columbia: because we know nurses are the foundation of that system. Again, I would like to join the member opposite and welcome all of our nurse friends that are here today.

J. Horgan: I pose a question to everybody, even though it’s not question period. What happens when three women — one from Corner Brook, one from Ottawa and one from Victoria — come together on southern Vancouver Island for a little bit of a reunion? Well, of course they come to question period in the Legislative Assembly.

Joining us here today are my friend Lucy Meares, Lisa Bennett and Helen McNair. All three of them have been lifetime friends, and they’ve come here to watch us deliberate and make good policy for the people of British Columbia. Would the House please make them very, very welcome.

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L. Reimer: It’s my pleasure today to introduce two of my constituents, Mr. Guy Black and his son Cameron. Guy Black is a Canadian Forces veteran and in 2008 organized the largest Korean War commemorative event, which was held at the Burnaby Village Museum. The city of Port Moody has organized many ceremonies and commemorative events, some with as many as 25 groups attending.

He also was integral to the building of some trenches at the Port Moody museum, which is being utilized to provide education about the horrors of war. In addition, he walked over here from Port Moody to Victoria with three others as a remembrance to our war veterans to lay a wreath here in Victoria.

Would the House please make Guy Black and his son Cameron very welcome.

M. Mungall: As was said, nurses do play a central role in our communities and in our lives. But there’s one nurse, up in the gallery right now, who plays a very central role in my life. This is my husband, Zak Matieschyn. So if the House could please give him, particularly, a very special welcome.

Hon. T. Stone: I am honoured today to introduce some members of the B.C. and Yukon Catholic Women’s League. It’s an organization with 9,000 members here in British Columbia. It’s an organization that forms an integral part of my own Christian faith.

The women representing the league here today are president Pat Deppiesse from North Vancouver; president-elect Evelyn Rigby from Powell River; the council legislation chairperson Gisela Montague from Chilliwack; and council resolutions chairperson Dianne Barker from Kamloops.

The motto of the league, “For God and Canada,” embodies their mission of life and vitality of the Catholic Church, of family and community abroad and at home.

They are here today in various meetings with members of the Legislature. I would ask that the House please make them feel welcome.

A. Dix: I’m happy to introduce today Farah Golesteneh and Wane Taylor. They’re entrepreneurs, former franchise owners and advocates for franchise law reform in British Columbia. They’re here both to support the reform and the creation of a new franchise act and to join us here in the gallery for question period.

I hope you make them welcome.

Hon. A. Virk: It’s my incredible honour to rise today to welcome a new community from my city from the Christian Chaldean community, originating from northern Iraq.

This community, where some of the original Christians celebrated mass in the area north of Mosul in the Middle East for almost 2,000 years, was forced from their homes by the terrors of ISIS.

This community has found a new home in Canada, specifically in British Columbia and in Surrey. I want to welcome them, where they can practice their religion, their language, their culture and join with us in creating a stronger British Columbia.

I wish to introduce some of their community leaders who have taken the time to visit us here today. With us we have Sarmed Biloues. We have Samira Astifo. We have Salah Dawood, Athraa Tobyia, Ammar Nabod, Lina Qaryaqos, Sandy Al-Bahee, Aida Astifo, Wasan Qiryaqus and Nabeel Sulaiman.

My friends, we are proud that you remake your lives here in Canada, remake your lives in British Columbia. You’re going to make this province a lot stronger by your presence.

Would the House please join me in making my friends welcome.

B. Routley: I’d like the House to help me in welcoming Sonia Furstenau. She’s a CVRD director for the Shawnigan Lake region of the Cowichan Valley. With her today were the Shawnigan Residents Association, students from the Shawnigan Lake School.

They were here to exercise their democratic rights outside the Legislature and to talk about the importance of Shawnigan Lake to their community and to respectfully ask government to listen to their concerns and petitions and to act on behalf of the community. I have with me a petition of some 15,000 petitioners, which I will present in due course.

Thank you, and could we please join in welcoming these good folks to this House.

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Hon. Michelle Stilwell: It’s my pleasure to welcome two former mayors from my home community of Parksville, who are here today. Although Chris Burger and Ed Mayne are no holding public office, they are still actively engaged
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in our community and committed to contributing to its future.

If I am to be haunted by the ghosts of past mayors, I am lucky and happy that it is these two individuals. If the House would please welcome them, Chris and Ed, to the chamber today.

J. Shin: I have two sets of introductions today. First off, I would like to welcome to the House Mr. Seik Cheon. He hails from Coquitlam, where the B.C.-Alberta chapter of Korea Daily is located, to cover live all of the exciting issues and bills that we are going to be having in store for him today. Of course, Korea Daily and Mr. Cheon play a vital role in communicating news that matters to our local Korean community here in B.C. and the rest of western Canada, so I ask the House to please thank and welcome him.

We also have a very special group of British Columbians visiting us today of Eritrean descent. Eritrea forms the part of the Horn of Africa bordered by Sudan to the west-north and the Red Sea to the east and Ethiopia to the south, with a population that’s quite similar to British Columbia at 4.5 million.

The Eritrean history is one of the oldest in Africa and possibly in the world. It’s the most likely location of the land known to the ancient Egyptians as Punt, whose first mention dates back to 25th century BC. Eritrea means red, with reference to the Red Sea, from which the modern state takes its name.

Many Eritrean Canadians have called Canada their home for more than 30 years, and those in British Columbia reside largely in Metro Vancouver, and Surrey especially. Like any other cultural groups, the Eritreans have formed a community association and a cultural centre to address the social and cultural needs of Eritrean Canadians and that of our province at large.

I ask the members to please join me in welcoming our friends from the Eritrean community who sew their cheery and resilient spirit into our social fabric.

Hon. C. Oakes: It’s not too often that I have the opportunity to introduce friends from my constituency of Cariboo North, and friends of Minister Coleman as well. Laurie Rice is here visiting today, and she joined me last night for an incredibly special signing of two things that I’m absolutely passionate about. The signing of an MOU between the Royal B.C. Museum and Barkerville Heritage Trust.

Tonight we are very privileged, as well, to celebrate the opening of the Royal B.C. Museum’s exhibit Gold Rush: El Dorado. I would encourage all members of the House to have the opportunity to go visit this exciting exhibit that celebrates so much of our history across British Columbia. Would the House please help me to welcome Laurie.

M. Dalton: One of my constituents, Mr. Albert Wells, who lives at the Chartwell Cedarbrooke Residence in Mission, is about to reach a huge milestone — his 100th birthday. But before he reaches his centennial, Albert Wells is to be appointed to the rank of Knight of the National Order of the Legion of Honour in recognition of his heroic efforts in combat during the Second World War.

The award will be presented in a private ceremony by the consul general of France; however, Mission is celebrating this remarkable honour with Mr. Wells at a special community function next week. The distinction, the highest national order of the Republic of France and established in 1802 by Napoleon Bonaparte, honours Mr. Wells’ invaluable participation in France’s liberation efforts and that country’s profound gratitude and appreciation of his allegiance.

I’m sure every member in this House will join me in applauding Mission’s newest Knight, Mr. Albert Wells.

Hon. J. Rustad: Today I have some guests in the gallery that are working as interns in my ministry, for the past number of months now, through the aboriginal youth internship program. They are Mason Ducharme, who is from the Lil’wat and In-SHUCK-ch Nations, who spent a very cold winter, actually, up in Fort St. John doing some work with us, as well as Leslie-Ann Paige from the Nation of Cowichan Tribes. She has actually been working with us through my ministry advisory council on aboriginal women and helped with the organization of our visit to Ottawa for the national round table on missing and murdered women.

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With them, as well, is Stephanie Papik, who has been working now with us in the public service for the last eight years.

I’d ask that the House please make them welcome.

B. Ralston: I’d like to introduce specifically some members in the delegation that the member for Burnaby-Lougheed has referred to, Canadians who trace their origins to Eritrea: Mr. Zerai Beraki, Ruth Beraki, Mamet Berhane, Legesse Gebremedhin Medhane, Yordanos Tsehaye, Saba Guebezai, Redie Kifle Berhe, Tewolde Mehari and Habtom Teclemariam. Would the House please make them all welcome.

G. Kyllo: I have a couple of friends joining me in the House today, reigning from the metropolis of Sicamous — a couple of schoolmates. We have Bob De Wit — Bob is the CEO of the Greater Vancouver Home Builders Association — and Doug Parton, who works with the Ironworkers. Would the House please make them feel very welcome.

H. Bains: Part of the Eritrean delegation I’d like to join with my colleagues to introduce — three members from Surrey: Elsa Woldu, Abrehet Berhe Kinfu and Mengisteab
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Yemane. Please help me extend a warm welcome to them.

D. Bing: I have the pleasure of introducing some visitors from my riding of Maple Ridge–Pitt Meadows today. They are 25 grade 5 students from Maple Ridge Christian School, their teacher Mr. Reid and nine parent escorts. Would the House please make them welcome.

M. Farnworth: I, too, would like to make welcome a member of the Eritrean delegation who is from Port Coquitlam, and that is Mr. Girmai Gmariam. If the House would make him most welcome, I’d really appreciate that.

J. Darcy: I’d also like to welcome a constituent of mine from New Westminster who is part of the Eritrean-Canadian delegation today, Mr. Kibrom Yemane. Will the House please join me in making him feel very, very welcome today.

R. Chouhan: It gives me great pleasure to introduce three of my constituents who are members of this Eritrean delegation today: Mr. Berhan Yassin, Mr. Michael Araya, and Mr. Thamay Araya. Please join me to give them a very warm welcome.

Introduction and
First Reading of Bills


C. James presented a bill intituled Franchise Act.

C. James: I move that a bill intituled Franchise Act, 2015, be introduced and read a first time now.

Motion approved.

C. James: I’m pleased to table in this House the Franchise Act for British Columbia to ensure that franchisees in our province are able to operate on a level playing field with the corporations they are partnering with. Small businesses are the backbone of our economy, creating hundreds of thousands of jobs in British Columbia.

Many of those small businesses are franchise operators. Many franchisees are first-time business owners looking for an opportunity to provide for their family, launch into business, use their entrepreneurial skills and contribute to our economy. It’s estimated that there are roughly 10,000 franchise outlets in British Columbia, with $14 billion in sales and 180,000 employees.

Buying a franchise requires a significant investment of capital on the part of the franchisee, yet the relationship is often characterized by unequal bargaining power. Franchisees are often at the mercy of the large franchisers.

Other provinces have legislation to ensure these large corporations deal fairly with small business, and the act I’m introducing today would do just that. It would ensure a level playing field, require full disclosure. It would allow claims arising for a franchise agreement to be litigated in B.C. courts. It would provide for dispute resolution where needed and would allow a franchisee to recover losses arising from misrepresentation in the disclosure document.

Extensive consultation has occurred in our province, and the B.C. Law Institute has been actively involved in this area, preparing a draft bill to address the concerns raised on which our bill is based. On behalf of small business owners, it’s time to act on their concerns. It’s time to bring protection to these hard-working British Columbians, which is why I bring this bill forward today.

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I move that the bill be placed on the orders of the day for second reading at the next sitting after today.

Bill M219, Franchise Act, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.


A. Weaver presented a bill intituled Recall and Initiative Amendment Act, 2015.

A. Weaver: I move introduction of the Recall and Initiative Amendment Act for first reading.

Motion approved.

A. Weaver: It gives me great pleasure to introduce this bill that is designed to empower British Columbians so that their voices can be more effectively heard on environmental reviews of major projects like oil pipelines.

It’s fitting that I introduce this bill this week as we move to committee stage debates on Bill 20, the Election Amendment Act. Too often politicians let themselves believe that the only time they need to listen to voters is at elections, and I disagree.

If we are to re-engage British Columbians in our democracy, we need to actively seek their view on far more of what we debate in the Legislature. We also need to provide them with additional tools to hold their government to account. The Recall and Initiative Amendment Act is one such tool.

As every member of this House will surely agree, we live in the most beautiful part of the world, and British Columbians want to keep it that way. They want to ensure our pristine coastlines, our natural environment and our unique ecosystems are preserved.

Under the existing Recall and Initiative Act, an individual can put forward a bill to be either debated in the Legislature or put up for a non-binding referendum. To
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be successful, the proponent must collect signatures from 10 percent of registered voters in each of the 85 electoral districts within 90 days.

The Recall and Initiative Amendment Act would change the electoral district requirement for initiatives that specifically address pulling out of environmental assessment equivalency agreements with the federal government. Successful petitions in these instances would require signatures from 15 percent of registered voters in British Columbia, regardless of electoral district, making it easier to meet the requirements.

British Columbians have lost faith in the federal review process, particularly as they pertain to oil pipeline proposals. The province has not listened to their voices, and this bill would offer British Columbians an opportunity to ensure that their voices are heard. If an initiative were to pass, under the proposed changes in the Recall and Initiative Amendment Act, it would require government to pull out of an existing environmental assessment equivalency agreement for a particular project and hold its own, made-in-B.C. review of, for example, a proposed heavy-oil pipeline.

I move that this bill be placed on the orders of the day for second reading at the next sitting of the House.

Bill M220, Recall and Initiative Amendment Act, 2015, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

(Standing Order 25B)


J. Yap: British Columbians can be rightly proud of our province’s public health care system. It’s one of the finest in the world, and this is something to which I can personally attest.

Today I wish to pay tribute to some 50,000 people whose contributions are paramount to this accomplishment and make a world of difference to those they help. These are our province’s nurses. This week, until May 17, is National Nursing Week. It’s recognized annually to coincide with the birth of Florence Nightingale, which is May 12.

For so many, nurses are the first point of contact for patients in the health system. They’re often the health care providers who have the most ongoing, regular interactions with patients. They understand a patient’s entire journey through the health system. They also take the time to listen, help and to provide a voice for those in need along the way.

This Nursing Week, and as always, I’d like to thank and acknowledge all of British Columbia’s nurses for their commitment to their patients and for the quality of support they provide every day at the forefront of our health care system. The lives of most British Columbians have been touched and enhanced by a nurse in some way. I know mine has been, by nurses at Vancouver General Hospital and Richmond Hospital. It’s very fitting that the theme of this year’s Nursing Week is “Nurses: with you every step of the way.”

I hope everyone here will join me in thanking B.C.’s 50,000 nurses and to let them know that we are also with them and offer them our unqualified support.


J. Shin: There’s a party in town that happens once a year that I wouldn’t miss. It’s the city of Burnaby’s appreciation dinner, which just took place earlier this month, for the unsung heroes in our communities, which are the volunteers.

The world has gotten smaller, and perhaps we’ve also become that much more polarized in our views and fragmented in our society. So like my nana tells me, the comforting sense of social connection to our neighbours and looking out for one another is increasingly difficult to achieve in today’s world.

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Canadians continue to rise to this challenge by generously volunteering more than two billion hours every year. That’s the equivalent of 1.1 million full-time jobs.

The latest statistics show that nearly half of us volunteer an average of 156 hours each year, women and men alike. Of all age groups, it’s the elderly in our society that contribute the most, who volunteer the most. As a proud British Columbian, I’m also happy to report that British Columbia celebrates the highest amount of volunteering time per person in religious organizations. That, I think, speaks to the diversity we have in the province, and it’s also a measure of our social conscience amongst our people.

Volunteering benefits those of us who receive the volunteer services and helps charitable and non-profit organizations deliver the needed programs and services. All of us have been touched by the work of volunteers, but those are not the main reasons why we volunteer. We volunteer because so often we find ourselves getting more by sharing, and our own lives are enriched in the process.

The volunteers are the first to break a sweat on the front line and the last on the list of accolades. Often they’re nameless and faceless, but they quietly make history and change the world for the better. I would ask the House to please thank them for all the volunteer work they do in our community.


D. Plecas: Wednesday, May 20, is Aboriginal Social Enterprise Day. A social enterprise is a business that dir-
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ects its profits towards a social purpose, making life better for people and communities. Aboriginal people in British Columbia are leaders in social enterprise. They apply innovation and entrepreneurship as a tool for change and sustainable economic development.

Aboriginal social enterprises provide community services, skills training and employment opportunities for aboriginal people. They enrich lives, strengthen communities and demonstrate that a business devoted to doing good can be successful, profitable and build better futures.

Our government is committed to strengthening B.C.’s social innovation sector and helping social enterprise thrive. As an active member of the B.C. Partners for Social Impact, government works with leaders in the social innovation field to promote and support social innovation and enterprise throughout the province.

On May 20 we celebrate the vision and spirit of aboriginal social enterprises and the work they do. I encourage all members of this House to visit and support social enterprise in your community and go to hubcapbc.ca to learn more about B.C.’s social enterprise sector. Please join me in recognizing May 20 as Aboriginal Social Enterprise Day and help support the growth of social enterprise and the entrepreneurial legacy of aboriginal people in British Columbia.


R. Austin: Terrace resident Nancy Pratt, a photographer and art curator, recently put together a show at the Terrace Art Gallery entitled Celebrate Your Breasts. Her motivation for this came from her own horrific experience using breast implants, which she had inserted in 1991 and which then, unbeknownst to her, leaked silicone and other chemical compounds into her body for 16 years, until she became so ill she almost died and is still suffering the consequences today.

The show had two parts. First, women from the northwest volunteered to use their bodies as a canvas for artists to paint beautiful works of art. Once completed, a photo was taken — from the shoulders down, obviously, to attain anonymity. These pieces of art were then framed in life-size form, creating a unique platform to celebrate the human body as well as the talent of the artists.

The second part of the show was graphic photos — and I mean graphic in a literal sense — of women from all around the world who have shared the disfigured and shattered remnants of their bodies once these devices have had to be removed.

Nancy is the first to admit that decisions to augment a breast are an individual’s choice, but she also believes that the motivation to contemplate such a procedure comes from societal attitudes and pressures that convince some women that their bodies are not worthy and lead to a diminished sense of self. Accordingly, her art show had women of all ages and body types, even three generations of one family, who all volunteered to demonstrate their love and acceptance of what nature and their genetic makeup has blessed them with.

Nancy has dedicated part of her life to warning women of the risks involved, especially when Health Canada has not even deemed these devices safe. They are under investigation, with a ten-year study to conclude in 2016. In the meantime, women are guinea pigs to see what happens when silicone and other chemical compounds, none of which have to be listed, by the way, are used to fulfil a dream — a dream which, in Nancy’s case, became a nightmare.

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J. Tegart: History is important. History helps us understand our identity as British Columbians and Canadians. The Royal B.C. Museum represents an invaluable resource that helps preserve British Columbia’s history. The museum creates engaging, inspiring opportunities for British Columbians, Canadians and visitors from around the world to enjoy learning about our province.

Founded in 1886, the Royal B.C. Museum today includes the B.C. Archives and several heritage properties. The museum holds approximately seven million artifacts and specimens and more than ten million archival records with its collection.

The Royal B.C. Museum is a great British Columbia success story. The museum has established an excellent track record of outstanding and popular exhibitions. I am pleased to note that the American Alliance of Museums recently named the Royal B.C. Museum as a winner in the 27th annual AAM Excellence in Exhibition Competition for Our Living Languages: First Peoples’ Voices in British Columbia.

The Royal B.C. Museum will continue its fine tradition of excellence this week with the opening of its newest exhibition, Gold Rush: El Dorado in British Columbia.

More than 650,000 people visit the museum each year. In addition to a dedicated staff of 115, the museum enjoys strong support from the community through the efforts of more than 500 volunteers and almost 16,000 members.

I trust all members of the House will join me in congratulating the Royal B.C. Museum — the management, staff, supporters and volunteers — for making British Columbia’s flagship museum a great place for people of all ages to learn about our history and to appreciate our unique multicultural heritage.


K. Conroy: On May 1 the Kidney Foundation of
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Canada, B.C. and Yukon branch, held the B.C. Kidney Transplant Consensus Summit in Vancouver. Over 360 kidney patients, family and caregivers travelled to the summit to discuss the urgent need for more transplants.

Set up in courtroom style, an eight-member jury, chaired by the Hon. Wally Oppal, heard experts support kidney transplantation as the most cost-effective option for dialysis patients and then weighed the evidence for and against three topics: should or shouldn’t British Columbians automatically be considered organ donors when they die, should people be paid to register for or be organ donors, and is it a systemic or a cultural barrier that results in lower organ donation in some ethnic communities.

After careful deliberations, the jury recommended the following: (1) that B.C. should consider presumed consent with safeguards that allow the individual to opt out, (2) that B.C. say no to the buying of organs and (3) that certain communities are overrepresented with kidney disease and underrepresented in kidney transplants and require more support to solve cultural and systemic barriers.

The Kidney Foundation is developing a plan to address the recommendations identified by participants in community conversations held across B.C. last year as well as those coming from the summit. Their hope is to:

(1) Make it easier to register as an organ donor. The expansion of access to the Service B.C. centres is a good start. People should be able to register in all government offices, with their family doctor or at local pharmacies.

(2) Increase awareness and understanding of the seriousness of kidney failure.

(3) Provide better support to both transplant recipients and living donors.

(4) Inform and discuss, through a provincewide conversation, views on presumed consent with an opt-out safeguard.

While 95 percent of British Columbians support organ donation, fewer than 20 percent have actually taken the time to register. William Stewart, an actor and co-host of the summit who is waiting for a kidney, said: “I was overcome with emotion at the summit. It was so inspiring to see hundreds of people from all over the province coming together to speak out for kidney patients on dialysis, like me. For the first time in a long time, I felt hope for a better future for me, my wife and my kids.”

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Oral Questions


J. Horgan: Yesterday we were discussing in question period the conflict of interest that was unearthed with Michael Graydon, the former chair of the B.C. Lottery Corporation, and we reviewed the conflict-of-interest rules. The minister assured us that a review was done.

According to the conflict rules for members of government boards…. This is what the document says: “A director should not use his position with the organization to pursue or advance their personal interests.” It seems a reasonable proposition. I think most British Columbians would be assured that government is doing their level best to ensure that insiders don’t get special treatment.

So it’s with some satisfaction, I suppose, that I bring another issue to the floor for the minister and the Premier to respond to. That’s one Larry Blain, who would be known to the government as the transition coordinator of the 2001 Liberal election victory and later went on to become the CEO, and later the chair, of Partnerships B.C.

My question to the Premier is: did Larry Blain comply with the rules, as I just articulated them, with respect to members of government bodies ensuring that they were not in a conflict of interest?

Hon. M. de Jong: Let me say this, first of all, about the organization, one that we are immensely proud of, Partnerships B.C., which has really set the standard in Canada for the advancement of 3P procurements. Let me further say this about Mr. Blain and the time that he spent involved with that organization, which was a key time. His contribution to the advancement of 3Ps was incredibly important. The success of those programs speak for themselves in terms of the countless projects that were delivered on time and on budget.

Madame Speaker: The Leader of the Official Opposition on a supplemental.

J. Horgan: A ringing endorsement from the Minister of Finance.

Mr. Blain’s career at Partnerships B.C. began when he was appointed the CEO in 2003. He remained in that position until the fall of 2010, when he stepped down as CEO and then became chair of the board. Then, five days later, Partnerships B.C. awarded a $95,000 contract to a company called Aardvark Insights.

Now, Aardvark Insights has one company director, and his name is Larry Blain. So that means, as I read it, that the chair of Partnerships B.C. and the board gave a contract to a contractor named Larry Blain. The chair of the board is also named Larry Blain. Perhaps the Premier or the Minister of Finance can clear up if that is, in fact, one and the same person.

Hon. M. de Jong: There are very clear guidelines in place that apply to Crown agencies, Crown corporations, that stipulate the circumstances under which procurements for both services and products must occur. We expect all agencies, Partnerships B.C. included, and
[ Page 8444 ]
all leaders within those agencies to comply with those guidelines.

Madame Speaker: The Leader of the Official Opposition on a further supplemental.

J. Horgan: Partnerships B.C., in defending what, in my opinion, is the indefensible, said that Mr. Blain recused himself from board meetings whenever they were discussing issues that he might have been consulting for on behalf of Partnerships B.C. So we did an inventory of the contracts that were let to Mr. Blain and the projects that he was working for. It seems odd to me that he would have recused himself from more meetings than he actually chaired, because he had so much involvement in each and every one of the projects.

As the minister outlined, Mr. Blain really was Partnerships B.C. It was his idea. The Liberals created Partnerships B.C. because he said it was a good idea. They paid him a princely sum — if princes are paid modest millions, a princely sum — over the course of a decade, and then, to put a cherry on top, when he stepped down from his service to the people of British Columbia and moved from the executive suite into the chairman’s suite, he gave himself a contract. That rings conflict of interest.

To the Premier: is this the type of government that she’s going to continue to run, one where insiders can give contracts to themselves?

Hon. M. de Jong: The code of conduct and the expectations of the government are clear. They require all agencies and the leadership within those agencies to comply with the very strict requirements around the procurement process.

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The standard actually extends beyond that. Not only are the requirements complied with to ensure that there is no conflict but also that there not be any appearance of conflict. That is the standard that we expect of all agencies. That is the standard that we expect of all those who lead those agencies.

C. James: The Finance Minister said this is about appearances and appearances of conflict. Well, appearances of conflict are all over this entire story. As a consultant for Partnerships B.C., Larry Blain advised other Crown corporations on various projects. In fact, in late 2011 B.C. Hydro billed Partnerships B.C. for work done by Aardvark Insights on Site C. One of the directors of B.C. Hydro was — wait for it — Larry Blain.

So just to recap, Partnerships B.C., chaired by Larry Blain, contracted with Aardvark Insights, owned by Larry Blain, which did consulting work for B.C. Hydro, governed by Larry Blain. Can the Minister of Finance tell us how, possibly, conflict-of-interest rules could have been followed with these intertwined relationships?

Hon. M. de Jong: The member may or may not be aware that the internal audit in the advisory services division conducted a review, as it has of a number of Crown agencies. It does so with the specific objective of ensuring that proper processes and procedures are being applied across the fold, including the procurement process.

Whilst one can suggest that by recusing and taking steps that are provided for that that is a means of ensuring that the procurement process is properly followed, the standard that we set and expect of agencies and the leadership within those agencies goes beyond that. There must not, not only not be a conflict; there must be no appearance of a conflict.

Madame Speaker: Victoria–Beacon Hill on a supplemental.

C. James: Let’s take a look at the B.C. Liberal standard. Between 2003 and 2010 Larry Blain was paid nearly $4 million as the CEO for Partnerships B.C. Then, as the chair, he billed $188,836 in fees and expenses. But that’s not all. Mr. Blain also served on the boards of the Transportation Investment Corporation, Powerex and B.C. Hydro, which paid him $264,000 for his services at the same time. So between director fees and expenses and Partnerships B.C. consulting contracts, Larry Blain received $621,000 from taxpayers over four years, all wearing different hats.

Can the Minister of Finance explain how Larry Blain was able to keep all of those various roles and reporting relationships appropriately separated?

Hon. M. de Jong: First of all, I think it bears emphasizing that the roles performed by Mr. Blain and the remuneration that he received were all in the public domain. So I would caution or at least observe that it would be inaccurate and unfair to suggest today that somehow this represents some kind of a revelation.

I will further say this about the work that Mr. Blain undertook on behalf of the province at Partnerships B.C. I can go through a list that begins with the Interior heart and surgical centre, the Cancer Centre for the North, the Canada Line….


Madame Speaker: Members.

Hon. M. de Jong: The examples of Partnerships-led projects that have set the standard for 3P procurement right across Canada, that ensured the taxpayers of British Columbia were well served, that saw those projects come in on time, on budget — sometimes ahead of schedule and under budget — is lengthy and one that we are very proud of in British Columbia.

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[ Page 8445 ]

B. Ralston: There’s more. While wearing his Aardvark Insights hat and working as a consultant for Partnerships B.C., Mr. Blain also consulted for SaskBuilds, which is the Saskatchewan equivalent of Partnerships B.C. SaskBuilds paid Partnerships B.C. $150,000 to advise them on two long-term care and hospital projects, but it appears that Mr. Blain was also working as an independent consultant who obtained a contract directly from SaskBuilds for $18,000 on the very same projects.

The minister has spoken of no conflict and no appearance of conflict, so can he explain how Mr. Blain was able to work as chair of Partnerships B.C., as a contractor for Partnerships B.C. and a contractor with companies directly connected to Partnerships B.C. all at the same time?

Hon. M. de Jong: Well, let me say to the member and members opposite that I hope it’s no secret to them that the work undertaken by Partnerships B.C. garnered the attention of agencies right across Canada. We’re proud of that fact.


Madame Speaker: Hon. Members.

Hon. M. de Jong: I should think that members would celebrate the fact that, for example, Canada’s furthest-northern airport sought advice from Partnerships B.C. on how to advance that procurement and construct the new airport in Nunavut. I don’t think there’s any secret. We’re very proud of the fact that Partnerships B.C. undertook their work in a way that garnered positive attention from not just across Canada but elsewhere in North America, and that’s a testament to the success of the 3P model here in British Columbia.

B. Ralston: Clearly, the Minister of Finance doesn’t want to grapple with the essence of these questions. When you wear as many hats as Larry Blain, things get quite confusing. He was working for SaskBuilds as a contractor. He’s working for SaskBuilds as a Partnerships B.C. consultant and also serving as the chair of Partnerships B.C. He expensed trips to Saskatchewan in April, June and October of 2013 to Partnerships B.C.

The question to the Minister of Finance is multiple choice. Did Larry Blain bill Partnerships B.C. for his travel to Saskatchewan as (1) the chair of Partnerships B.C., (2) the president of Aardvark Insights, his company, contracted by Partnerships B.C. or as president of Aardvark Insights, consulting directly for SaskBuilds?

Hon. M. de Jong: The answer and the commitment remain the same, and the expectation remains the same — that agencies, Crown agencies, operating in British Columbia will do so and uphold the highest possible standard with respect to conflicts of interest and perceived conflicts of interest. That is the expectation of the agencies themselves and those that lead them.

K. Corrigan: What the minister is demonstrating is having absolutely no understanding of the importance of the separation of public and private in British Columbia. You’d think that Partnerships B.C. would have gone to great lengths to make it clear how Mr. Blain’s contract work was separate from his role as board chair, but when you look at the contract we obtained under FOI, what stands out is how utterly vague it is.

In 2010 Partnerships B.C. gave a half-page description outlining the services they expected, and after that, nothing. They amended the contract five times to increase the total value to $219,000 but never described what was expected for that money.

Does the Minister of Finance consider it to be best practice that Mr. Blain was given a four-year-plus consulting contract with no description of the services to be provided?

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Hon. M. de Jong: Well, what I have learned over the years is to be a little bit suspect about the documentation and the selective quotation from documentation that we are inclined to hear from the opposition in this chamber. I am more inclined to, at this stage, rely upon the findings of the internal audit review and report that was conducted with respect to Partnerships B.C. If the member has additional information that she wants to provide to me, I’m happy to look at it.

Madame Speaker: The member for Burnaby–Deer Lake on a supplemental.

K. Corrigan: I have seen that audit, and it expresses concern about conflict of interest. After the Michael Graydon conflict-of-interest fiasco, the minister pledged to ensure that other Crown corporations and government agencies were operating according to the highest standards. He pledged to ensure that the public would not be forced to question whether people in positions of authority were working in their own interests or in the public interest.

Can the minister tell the House how many other government agencies have made cozy contracts like Partnerships B.C.?

Hon. M. de Jong: Well, interesting that we learned in the supplemental question that the hon. member opposite has seen the report, or claims to have seen the report, and chooses to ignore the portions of the report that focus specifically on the issue that she has raised and indicate that those issues were generally well managed. The member can selectively try to present a story here.

I will repeat for her what I have said a few moments
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ago. The standard expectation of every single member of this government is that the highest code of conduct, as it relates to every feature of conducting public affairs, will be upheld by the agencies of government and by those who lead those agencies. That has been the case and will continue to be the case under this government.


D. Donaldson: Isabella Wiens died while in care at 21 months of age on March 16, 2013. The postmortem revealed multiple bruises, healing fractures and swelling of the brain. At the time, the Ministry of Children and Family Development, through the provincial director of child welfare, decided a case review of the circumstances leading to Isabella’s death wasn’t necessary. The minister recently wrote to me saying that now, more than two years later, her ministry will conduct a review after all.

What could be so wrong in her ministry that it’s taken 26 months to get a full case review of the tragic, unexplained death of a child in care?

Hon. S. Cadieux: Any time a child dies it’s a tragedy. I cannot express how deep my sympathy is for the family and for all of the people who cared for and loved this child.

The member has been raising this tragic case in the House for four weeks now, despite knowing or perhaps just ignoring the fact that I cannot, by law, talk about the details of cases in this House. The member has also yet to request a meeting with me in regards to the case, a practice that a number of his colleagues and mine have seen fit to use to support the constituents they speak for.

That said, what I can reiterate for the member and for the other members of this House, as I did during estimates last week, is that the director of child welfare can decide to conduct a case review whenever new information is presented, whether that is through an investigative agency, a family member, the media or another source.

That is entirely appropriate, and it is, by design, in the legislation to ensure that child welfare decisions are made by those trained in the areas of social work and not influenced by external factors such as political or media pressure. That decision is not something that myself or my deputy minister participate in.

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Madame Speaker: The member for Stikine on a supplemental.

D. Donaldson: New information two years later. If that’s true, then I invite the minister to share that info publicly outside this chamber after question period.

We now learn that another coroner’s report was just completed, two years after Isabella’s death. Let’s review. Isabella Wiens….


Madame Speaker: Members. The Chair needs to hear the question.

D. Donaldson: Let’s review: Isabella Wiens, 21 months old, dies while in care, cause undetermined. The minister’s provincial director decides a case review isn’t necessary. Two years later they reverse themselves. The ministry’s protocol investigation into the foster care home takes 16 months to complete when the ministry standard is 30 days. A coroner’s report takes a year to get done. A second coroner’s report is issued a year after that, just this month.

It’s no wonder that the children’s representative says the entire investigative system lacks rigour and misleading information was provided. This is a dereliction of duty with tragic consequences.

When will the minister finally be publicly accountable for her ministry’s decisions?

Hon. S. Cadieux: I have nothing further to add to my previous answer, but I will be in my office after question period. I suggest that the member take that opportunity to speak with me about his concerns at that time.

J. Rice: Every time the minister and her government decide to release any information regarding Isabella’s death, it raises more questions than it answers. The latest coroner’s report is no exception. This is about a child dying in government care. The public needs to know that the government learned from….


Madame Speaker: Members. Members.

Please take your seat.

This House will only proceed when there is quiet.

Please continue.

J. Rice: The public needs to know that the government learned from what happened, and Isabella’s mother, Sara-Jane Wiens, needs answers. Why did the ministry wait two years to order a case review of Isabella’s death?

Hon. S. Cadieux: Again, I have nothing further to add, but the member would be welcome to join us in my office after question period.

Madame Speaker: The member for North Coast on a supplemental.

J. Rice: The minister needs to stop dodging questions. The government has a duty to protect the children in its care.
[ Page 8447 ]


Madame Speaker: This House will come to order.

J. Rice: And when the government fails in its duty, family members and the public deserve to know what happened. The children’s representative has called for a full investigation into what went wrong in this case.

Will the minister finally take some responsibility by ordering a full, public and transparent review of Isabella’s death and how her death was investigated?

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Hon. S. Cadieux: I’m not sure how much clearer I can be for this House that I will not break the law to satisfy the opposition’s political whims.


N. Simons: Ten years after the Sherry Charlie review, and it’s clear that this government has not figured out how to do proper death reviews in order to learn as much as possible from what it can. It’s not the opposition saying that. In fact, to the minister, it’s the Representative for Children and Youth. She said to the MLAs: “I certainly do not want to be complicit in a process…that tells the public that there are reviews and processes in place when there are not.”

This is the government’s problem. What’s the minister going to do about it?

Hon. S. Cadieux: The representative has indeed suggested that there are challenges and that she would like to see them reviewed. Frankly, the Children’s Forum is an opportunity for those sorts of conversations to take place. Considering that it’s been eight years since that forum’s inception, the ministry will be taking the lead on considering ways the forum can be improved, including the options to clarify both the forum’s mandate and direction.


D. Eby: Yesterday we asked the Minister of Finance about Michael Graydon’s efforts to lobby the minister to increase profits for casino operators immediately before he left the B.C. Lottery Corporation to work for a casino operator.

To refresh the minister’s memory, Mr. Graydon lobbied for the change up until his departure from BCLC on January 29, 2014. The minister formally approved the change five weeks later, and the internal audit division completed its review of Mr. Graydon’s activities in July 2014. The minister told this House: “The internal audit division, by my recollection of the report, didn’t find anything untoward about that process.”

Can the minister tell this House on which page of the internal audit division’s report they discussed Mr. Graydon’s lobbying activities?

Hon. M. de Jong: Actually, the opposition had more to say than just that yesterday. They concocted quite an interesting story about how all of this had taken place secretly and away from any scrutiny.

I didn’t say anything yesterday because I wanted to check. I wanted to check to make sure I was accurate. I suppose you could allege it was secret, because the very notice that the member referred to, upon which his whole theory appears to hinge, was published in that secret underground document called the British Columbia Gazette.

Yes, I suppose the member is right. It used codified language to indicate what was taking place by saying, “approving the amendment of the formulae to determine the amount of gaming revenue…as follows,” and then went into excruciating detail — again, in that secret underground document of March 13.

The problem with the member’s theory, which they advanced yesterday and apparently want to advance again today, is it is not rooted in any of the facts of the situation. A process was followed, a process that actually began in 2013. The gaming policy and enforcement branch received an application from the B.C. Lottery Corporation. They processed that application in the way that you would expect the regulator to do so. They came to a decision. That decision was finalized in precisely the way we would want this kind of thing to be undertaken.

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D. Eby: Now, the minister knows this was about the fact that we read that in the Gazette, and we filed a freedom-of-information request that we had to go to the Privacy Commissioner to get released. That’s the issue here.


Madame Speaker: Members. The members will come to order.


Madame Speaker: Ministers.

Please continue.

D. Eby: The opposition filed a freedom-of-information request to the B.C. Lottery Corporation for all of Michael Graydon’s e-mails sent during the period that the Ministry of Finance found that he was in a conflict of interest.

We received the e-mail record, but one e-mail was missing. The e-mail that was missing was the December 10, 2013, e-mail in which Mr. Graydon lobbies the assistant deputy minister responsible for gaming to move more
[ Page 8448 ]
quickly to increase profits for casino operators — casino operators like his future employer, Paragon.

Madame Speaker: The question.

D. Eby: Can the minister explain why the B.C. Lottery Corporation didn’t disclose this critically important e-mail to the opposition? Given that there was no mention of it in the report, can he be sure that the internal audit division received a copy of this e-mail from the B.C. Lottery Corporation?

Hon. M. de Jong: Well, let’s go through the chronology one more time. In 2013 the B.C. Lottery Corporation, fulfilling its obligation as the agency involved in this activity, presents an application, a business plan and advances that — which, yes, seeks to adjust some of the revenue-splitting aspects, expand the number of games, look at what the wager limits will be.


Madame Speaker: Members.

Hon. M. de Jong: That’s received. In the interim, Mr. Graydon leaves. I’ve already acknowledged — I’ve acknowledged it months ago; I’ve acknowledged it again yesterday — the results of the finding that that didn’t happen in the way that the government would have expected, that there was a conflict that the internal audit revealed and confirmed.

But the decision takes place after Mr. Graydon has departed. It is published in a document that the member only has to….

Madame Speaker: No props.

Hon. M. de Jong: That document, by the way, for a century or more…

Madame Speaker: No props, Minister.

Hon. M. de Jong: …has been the place people go to look to for public policy in British Columbia.

What seems to have offended this member — and yesterday, the Leader of the Opposition — is that I didn’t tweet them in advance of the document. But I can promise them that when I have finally figured out how to tweet, they will be at the top of my list.

[End of question period.]


B. Routley: I have a petition signed by 15,339 concerned British Columbians. These are just some of those petitions. I have them all here on my desk.

“The petition of the undersigned, the electorate of the province of British Columbia, states that we, the electorate, call upon the Legislature to respect the environmental, economic and social integrity of the Shawnigan Lake community. Your petitioners respectfully request that the hon. House exercise their authority and rescind the Environmental Appeal Board decision, Environmental Management Act permit PR-105809, Cobble Hill Holdings Ltd., which threatens our water source, our watershed and the economic and social health of our community.”

Respectfully, I suggest that it is critical that our government listen to these petitioners, as they very much cross all the political boundaries. It’s a bipartisan effort, and we want government to review this matter and to take action.

Orders of the Day

Hon. M. de Jong: In this chamber, continued committee stage debate on Bill 11; in Section A, the estimates of the Ministry of Natural Gas Development; and in Committee C, Section C, the ongoing estimates of the Ministry of Health.

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Committee of the Whole House



The House in Committee of the Whole (Section B) on Bill 11; R. Chouhan in the chair.

The committee met at 2:48 p.m.

On section 6 (continued).

R. Fleming: I wanted to ask the minister if he can say when this new section would come into effect.

Hon. P. Fassbender: July of 2015.

R. Fleming: I just wanted to ask the minister, then, moving away from the school planning councils to the board responsibility, the parent advisory council responsibility…. Perhaps this actually fits better under section 8 to ask this question, but I’ll ask his indulgence.

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Will there be a gap between when the school plan, which is normally done by an annually prescribed date, is issued this year, when we’re in a change period moving from the school planning councils back to the board responsibility?

Hon. P. Fassbender: We anticipate — because there have been discussions with BCCPAC, with the school
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districts — that there won’t be a gap. We have talked about the contemplation of change without presuming anything until this bill passes. But we’re assuming that the ongoing consultation and work between the PACs and the school districts and the schools will continue.

R. Fleming: I just want to ask, then, about BCCPAC’s role in potentially influencing the development of this section and the decision by government to get rid of the school planning councils that the former Education Minister brought into being in the early 2000s.

The minister has talked about consultation informing this. I want to know to what extent. There was a questionnaire that was sent to parents that attended one of the accountability framework meetings that I went to — in fact, the only one that I’m aware of that was organized prior to the introduction of Bill 11. None of the questions directly were about these kinds of areas that exist under the School Act or potentially what would be the new role for parent advisory councils.

I’m just wondering: where was the specific feedback? What kind of mechanisms were used to reach out to parents throughout British Columbia to determine that these legislative changes that are before us here this afternoon were, in fact, supported by a majority or by a significant number of parents that were consulted and engaged?

As I said yesterday, I’m only aware of a very, very limited engagement with a set of delegates who were at a BCCPAC conference in Nanaimo. They were asked three questions that were so general as to be…. In no way would they have prompted the kinds of legislative changes that we’re debating here this afternoon in Bill 11.

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Hon. P. Fassbender: For the member opposite, this is not something that came as a surprise to BCCPAC. When the accountability framework committee was set up, BCCPAC, along with the other partners, were asked to appoint two people to be their representatives. One of the understandings, as it was with the other organizations, was that they would go back and communicate with their membership.

I know that Mr. Puddifoot, who is quite well known as a strong advocate for BCCPAC, was at all of those meetings, not only in person when there were meetings, but also in other discussions through conference calls.

There has been a lot of discussion. We also are aware that that information…. At least, we can only assume, because we didn’t track it for all the organizations, that communication went back out to their executive and their membership.

How many times they went out and did that, I have no knowledge of. Our team doesn’t. They were definitely directly involved, as were all the other stakeholder groups and the accountability working group that helped to design the new framework. BCCPAC was a part of it.

I also know that ministry representation was at the annual meeting that the member refers to. There was discussion that there was contemplation about possible changes that might be coming as a result of the work that was done.

So it was more than three questions, Mr. Chair.

R. Fleming: I recall an excellent presentation by a ministry representative at that conference, but I don’t recall it being anything about legislative changes.

I want to ask a different question here, just about the windup of school planning councils. We talked about this a little bit yesterday: that there are probably, out of the 1,600 schools in British Columbia, very few that ever had a school planning council. I don’t think there are a lot of people mourning for their demise, because they were never effective in the first place.

All of the things that were predicted about their duplicative nature and whether the participation and the work required of already overworked parents and school employees would make them successful at the very outset of the legislation….

My point being, though, and the minister said it yesterday…. He acknowledged that this was a statutory requirement, for every school to have a school planning council. It seems to me there was widespread lawlessness throughout the land in British Columbia and an extremely low level of compliance.

The minister said yesterday it was the board’s responsibility to enforce the statutory requirements. The legislation suggests that it was the province’s, the ministry’s responsibility ultimately, to ensure that there was a school planning council in every school in B.C. Anyway, it never happened, never came close.

Given that the school planning councils are now going to be wound up, does the minister have any plans to acknowledge those very few instances where surviving school planning councils continue to exist, to thank them for obeying the law or to at least recognize whatever contribution he thinks they may have made and that their services are no longer required and, in fact, they no longer exist in law?

Hon. P. Fassbender: I addressed this, I think, at some length yesterday. I absolutely acknowledge the hard work of parents throughout the province in their children’s education and the success of the strategic plans that are made in districts. Parents do contribute.

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What we are wanting to do and why we have been working so hard with BCCPAC and the other agencies is to ensure that as we move forward in the transformational agenda, we increase and engage with parents on an ongoing basis in the future outcomes for all students.

R. Fleming: I just want to ask the minister about section 6(a)(4). Well, it will be section 8 that will be amend-
[ Page 8450 ]
ed to have new language on (a)(4) that now substitutes parent advisory councils for school planning councils.

I’m just curious about the language at the end of this new substitution. It allows the parent advisory council, through its elected officers, to “advise the board and the principal and staff of the school or the Provincial school,” in the case of a francophone school — and this is the part that I want to ask about — “respecting any matter relating to the school or the Provincial school.”

Why is that even included? This is a free country. We have rights to make views known. The parent advisory committee’s mandate, I think, is widely understood. Is there a reason why? Is this related to some kind of demonstrated problems in the field that this kind of language has to be made explicit? If the minister could explain why that’s included here.

Hon. P. Fassbender: In the current act, this language exists. The only change is removing the school planning council terminology. It was put in the act when it was originally done to ensure that parents know they have a right to speak to their school and to their principal or the district on any matter that they’re concerned about.

Sections 6 and 7 approved.

On section 8.

R. Fleming: On section 8, I wanted to just ask the minister, the changes here…. The first one that jumps out at me is that there doesn’t seem to be any description of what the plan content will be.

Previously, in the achievement plans of the district, there was at least a sense that there were a number of student performance indicators. It was allied with the district literacy plan and all those sorts of things. There were measurements that were put in place. It seems to me that, with this substitution, it’s silent on what the content of a school plan will now contain. If the minister could just maybe comment on why that appears to be the case.

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Hon. P. Fassbender: As the member is aware, and I’ve said previously in our discussions, there are guidelines that are being developed right now in concert with all of the stakeholders and the BCCPAC. Out of that there are a couple of things that will happen. We’re looking for provincial standards and guidelines that are agreed to by all of those parties.

Also, one of the important things, and why the legislation does not anticipate defining all of those things in legislation, is to provide flexibility in the future, as I said when I introduced the bill, to ensure that we have a flexible system where we can adapt to the changing needs of education as we move forward in concert and in partnership with our stakeholder groups.

R. Fleming: Well, I would just ask the minister…. There has to be some kind of template that has been developed. There must be a minimum of content that is at least contemplated and being discussed — of what the content of a school plan will be. I would ask him to outline that.

Hon. P. Fassbender: I have a document here. I think, subsequent to this, if the member would like to see it…. It’s not a document that we cannot release. It details meetings starting back in February of 2014. We met with the First Nations Education Steering Committee board of directors. We reviewed the current framework, and we talked to them about ways in which the framework could be improved to support student success. That work is ongoing.

We met in March, in June, July, September, October, November, December with B.C. mental health educators; with a presentation at the BCSTA trustee academy in December; in November — the meetings with BCSSA. In all of those the guidelines are being developed in concert with them as we speak. There’s a lot of work on various sections, and I don’t think I would necessarily want to try and read all of those.

Suffice it to say that there has been a significant number of meetings and conference calls with the provincial partner advisory committee, and B.C.’s K-to-12 accountability framework was a discussion, principals and vice-principals. All of those things are work that’s underway. Once that is completed, then of course we will be sharing those guidelines and finalizing them with all of the partner groups.

R. Fleming: I wanted to ask the minister about the section here that says: “A board must make a school plan approved under subsection (1) available to the parents of students attending that school.”

I want to ask him…. There is no specificity about how that must be made available. What does available mean? Is there any format that it must be part of? There is nothing in here that outlines what “available to the parents” may be. It may take a huge onus on their part to find something that is considered available.

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Hon. P. Fassbender: The wording that is here is the same as the wording in the current legislation.

Again, I am aware, as are our staff, that schools post their plans on their website. They discuss those with the PAC. They have meetings as they’re developing the plans. When they’re completed, if there are parents who don’t have access to a website, we know that they can go to the school and ask for a hard copy of that document.

We are, again, looking for every possible flexibility for schools to be able to ensure that parents who want access, who want to see the information, have access to it.

R. Fleming: Well, the language isn’t quite the same here, and that’s obviously why it’s being amended.
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One of the changes I’ve noted, though, is that previously, in the School Act, there was a requirement that by a date set by the board, the document — now called the school plan — had to be made available. That was a responsibility of the board.

It doesn’t say what that date must be, but obviously the minister, I would think, could imagine that there are some dates that would be relatively useless to parents, because it doesn’t influence their ability to make a decision. Christmastime, for example, might not be a good time of year, or that sort of thing. One would think a set date would probably be ideally around September.

Now there’s nothing around dates that must be set by the board in terms of parents being able to, I suppose, hold them accountable to having a school plan made available to them. I’m just wondering why that language was struck.

Hon. P. Fassbender: As the teams are developing the guidelines, one of the things that’s clear is that, because the previous date of July 15 no longer exists with the changes in the legislation, we’re working with the schools, with the districts and with the PAC organization to develop new guidelines.

What will be clear is that there will be a fixed date for the district plans to come into the ministry and then backing up from there. We haven’t established a date yet, and again, through the legislation, the flexibility is there for the guidelines to meet realistic needs on the part of the districts, the schools and the parents.

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R. Fleming: I just wanted to ask the minister about potential administration costs that may be additional to school boards by this change, to get his thoughts on that.

The previous model, which didn’t work and I think was discredited — and the proof of that is that it’s being removed in the bill — was touted as a voluntary effort that would leverage parent resources and such to create the school plans. That body is now done away with. I think in reality it was always principals that the work fell to, to create the school plan. It may well be that the school plans that the board is now responsible for will again fall on the shoulders, primarily, of the principal to develop.

But there could, theoretically — and I would like to get a government view on this — be an increase in costs where there may have been school plans that were developed by, largely, volunteers that now have to be done by professional staff, which are defined as the board. So the district board office may incur additional costs to be able to comply with the way the School Act will now be written after these amendments are passed. I’m just wondering if there has been any quantification of whether there could be potential costs associated with that.

Hon. P. Fassbender: In all the consultation that we’ve had with all of the parties, there is no concern about increased costs. As a matter of fact, there is a suggestion that the process will be much more flexible and, therefore, could result in less administrative burden.


R. Fleming: Yeah. That sounds like what the opposition did say ten years ago.

I would like to actually let this section pass and ask about section 9.

Section 8 approved.

On section 9.

R. Fleming: We talked a little bit yesterday about the superintendents of achievement. There were up to four of them at one point in time. Those positions are being done away with. We’ll get an opportunity later in the bill to ask some specifics about that.

In terms of the superintendent of appeals that these amendments deal with that substitute that for what were called superintendents of achievement, I’m just wondering if the minister can explain why section 11.1(0.1)(b) would allow him to “appoint, by order, an individual who is not appointed under the Public Service Act.” Yesterday he alluded to the fact that maybe the superintendent of appeal, this provincewide position, would be a contractor. Perhaps the answer lies there. I want to maybe ask him specifically why the clause is written in this kind of way and what kind of individual that might apply to who is not appointed under the Public Service Act.

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Hon. P. Fassbender: As I said yesterday, very clearly, because the scope for this particular individual is potentially much narrower than it was under the superintendents of achievement previously, we are looking at what is the most appropriate model. If the individual is not a member of the public service and not being hired under those guidelines but under contract, we will maintain the flexibility of making that appointment based on those criteria.

R. Fleming: I just want to ask the minister, then, about having an individual who’s not appointed under the Public Service Act. Would that mean that this would be an individual, potentially, who has not taken an oath of the public service in regards to a whole host of responsibilities they have to the Crown and to the privacy of citizens? I’m just trying to understand the implications of having somebody perform this function who’s not covered by the Public Service Act provisions.

Hon. P. Fassbender: Because we haven’t actually appointed someone in that role under the new section, what is clear is…. If that person is an employee of the public
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service, of course they would fall under all of the guidelines as a public service employee. If the person is not — the section now allows the minister to appoint — there would be very clear specification in the letter of appointment and the contract that was given to that individual that they must meet all of those same guidelines. So there would be no opportunity for anyone to vary from the guidelines because that would be spelled out.

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R. Fleming: I think we learned yesterday that in most years there are very few appeals that are heard. So this will not be a…. I think the minister said yesterday this may potentially be a part-time position. However, I think it’s fair to say that the appeals that would be heard are very sensitive, involving issues that have gone unresolved all the way up to the superintendent of a district.

I’m just wondering, therefore, given the seriousness of some of these issues…. These are protracted issues that require investigations and adjudications, if you like, to try and reach a resolution. It seems to me that it would be important to have somebody that is invested and accountable under the Public Service Act and reportable directly to the Ministry of Education — not by a contractual arrangement, which may have some drawbacks in that regard.

Maybe to help me better understand that, I would ask the minister to give an indication of some of the typical appeals that have been heard recently by the superintendents of achievement previously that will now be heard by the superintendent of appeals.

Hon. P. Fassbender: Clearly, there are matters and there are appeals regulation, and they’re under a particular section. A decision that would be considered for an appeal relates to a student’s expulsion, relates to a student’s suspension from an educational program. If no other educational program is provided by the board, it requires the student, as a disciplinary measure, to complete all or part of an educational program by distributed learning.

There are a number of criteria, and I’m sure the member can avail himself of that. Again I will say that any person who is contracted by the ministry to deal with this or who may be a public service employee is governed by the same statutes and protection of privacy of information, no matter whether they’re contracted or whether they are an employee of the public service.

In the case of someone who’s contracted, that individual would have to have significant credentials within the educational field to perform that function and would sign an undertaking that they will be governed by all of those appropriate legislative and regulatory requirements.

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R. Fleming: Again, just to help me understand. I think yesterday the minister said there are currently no superintendents of achievement. So even before they’re struck out of existence with the passage of Bill 11, that has essentially been destaffed.

However, I am aware, I think from our estimates debate, that Mr. Rick Davis, who’d previously retired from the ministry, is working for the Ministry of Education on a contract until June. Now, is it the case that he’s a contracted superintendent of achievement and after Bill 11 — and presumably its passage — he will be become the superintendent of appeals on contract? His contract, I think, runs until June. Is this clause essentially being written about a particular situation — not necessarily an individual — that exists now that is contemplated to exist after Bill 11?

Hon. P. Fassbender: First of all, the legislation is not written to presume anything in terms of any individual or current function. When and if the legislation passes the House, we will then go through a transparent and open process in whatever we decide to move into. If it’s a full-time appointment, then that would be done under the purview of the deputy minister and his responsibilities. If it is a contract, it would be done through an open and transparent tendering process with a clear job description and qualification requirements.

R. Fleming: Just curious about appeals because these have been going on for…. There has been a mechanism for these types of appeals to be heard, to be advanced to the Education Ministry, prior to the creation of superintendents of achievement. I’m just wondering whose responsibility those were in the ministry prior to that position.

Hon. P. Fassbender: I’m sure the member is aware that prior to 2008 there was no mechanism in the ministry for appeals, so there was no one in the ministry that handled that function. Since that time, because of requests that came through the parents in the province that they wanted ministry involvement, where parents could ultimately go to an authority beyond the board….

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Prior to 2008 the only appeal was to the board of education. Having been a trustee, I sat in on two of them that I recall, when I was a trustee, as a board member. One parent group that I remember was dissatisfied with the decision, but there was no opportunity for them to take it any further unless they wanted to go into the court system and file a court action.

Because of that request, the superintendent of achievement…. There was one individual in the ministry who took training in the area of appeals and adjudication that fulfilled that function up until now. That function will, as we’ve already discussed, remain within the ministry, whatever form it takes once we move forward.

R. Fleming: I was surprised, actually, to hear yesterday,
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when we were talking about the superintendent of appeals position being created, that the minister suggested that it could be, indeed, a very part-time job. In fact, in some years only four appeals are heard.

Considering how much the minister has been talking on the public record lately about administrative savings and, of course, aiming his finger at the school districts of the province who are, in fact, very administratively lean…. His own district in Surrey has a 2 percent overhead, just 2 cents on the Education dollar used for administration. I would suggest that in the spirit of leading by example, perhaps we could just make a further amendment to this section of Bill 11 — I would ask him to consider it — to not have a superintendent of appeals at all.

To hear four appeals — there must be a skill set that the deputy minister or a number of assistant deputy ministers would already have in the ministry. Instead of contemplating contracts to unknown individuals who may or may not be accountable under the Public Service Act, give it to a professional civil servant that already reports to him and save the taxpayers some money. Show the school boards: “Administrative savings isn’t just something I order you to do. I found a way to do it myself by getting rid of a position that may be entirely unnecessary.”

R. Lee: I seek leave to make an introduction.

Leave granted.

Introductions by Members

R. Lee: In the House just now is a group of 12 students with their teacher Mr. Mike Pedersen and some parents from Burnaby North Secondary School. Burnaby North Secondary is the largest secondary school in Burnaby and one of the largest in British Columbia. The school’s advanced placement program and its Vikings marching band are two of the best in Canada.

My family has a deep connection to this school. I have two sons who graduated and a daughter graduating this year from Burnaby Secondary. So would the House please help me welcome all the visitors from Burnaby North Secondary School.

Debate Continued

Hon. P. Fassbender: I’m happy to answer that. I think the member, in estimates, was well aware that the ministry has done yeoman’s work in terms of increasing the efficiency in the ministry, providing the kinds of administrative efficiencies that we’re asking everyone else to do. As the minister, I stand here absolutely satisfied with the work that’s been done in the ministry over the last couple of years to achieve that.

That said, in this particular case the deputy minister…. As we move forward, we’ll be reviewing the process. We’ll review the need and who is best qualified to fill that. That’s why the wording is as flexible as it is, so that if the deputy minister makes a recommendation to take a particular route that is the appropriate one and reflects the commitment that the ministry already has to be lean and mean, as I refer to it quite often, I know he will do that.

R. Fleming: I’d actually thank the minister for that answer, because it showed a certain open-mindedness, and that’s a good thing, but the problem is that we’re quite at an advanced stage of potentially passing something into law.

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To hear that he’s got a little bit of ambiguity about creating a brand-new position called the superintendent of appeals and would consider whether it’s even necessary, leads me — while being honoured to have been listened to in the perspective I just shared — to wonder why the minister hasn’t given the courtesy of sitting down and meeting with elected school trustees, who’ve written him from every part of the province, and through their provincial association, to similarly ask the minister to pause and to consult them, as they should have been before the legislation.

That’s how you make better laws: by doing the work and getting the feedback from your education partners at the front end. I’ve just advanced something here in committee stage debate, and I got a relatively open answer from the minister, but he’s still going to move ahead and enshrine a position that may be unnecessary, by his own admission, in law. So we may be coming back and amending that at a later time. It’s important to get the law right on the first go. We’ve seen that time and time again.

I would seek leave to make an introduction at this point in time, with the indulgence of the Chair.

Leave granted.

Introductions by Members

R. Fleming: I recognize a couple of faces in the gallery who’ve joined us today, some elected trustees from school district 61. We have Deborah Nohr here with us, and Rob Paynter. I would welcome them for joining us here this afternoon in the House.

Debate Continued

Sections 9 to 11 inclusive approved.

On section 12.

R. Fleming: I would ask the minister just to explain the rationale for a section that appears to give the minister the ability to dispose much more easily of land that is held as an asset by 60 different school boards through-
[ Page 8454 ]
out the province of B.C. This section, I think, while brief in terms of its amendment, perhaps has some more significant implications than many of the other things we’ve been discussing thus far in committee stage debate. Maybe the minister could just explain the rationale and the implications for this change.

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Hon. P. Fassbender: Indeed, this section — I have had a number of discussions and feedback from school districts.

Let me make it very clear. Currently under the act the minister cannot order a board to dispose of property. That is in the purview of the board, and that does not change in the new act. The words “Management of schools and property” — that’s the management of those schools and properties as it relates to any of the services to maintain those properties, to maintain the schools under the shared-services initiative.

Again, as we move forward in consultation with districts, under the regulations there will be clarity in terms of what that does and does not mean. But it is very clear — and I stand here clearly saying — in other sections of the act that the minister will not have increased powers to order boards to dispose of property.

R. Fleming: Well, just reading the language that has changed here, we will go from…. Section 74(1) of the School Act says very clearly: “A board is responsible for the management of the schools in its school district and for the custody, maintenance and safekeeping of all property owned or leased by the board.” Now it will read, “Subject to the orders of the minister, a board is responsible for the management of the schools…”— etc.

That, to me, sounds like a significant change. It sounds to me that subject to the orders of the minister, which can change at any moment…. An order, for example, that now a particular board is not responsible for certain properties or certain management responsibilities of their properties that are owned or leased by them…. That’s a huge difference.

Right now the minister in legislation, in a sense, is supposed to be a bit of a gatekeeper in terms of school districts who want to sell property. They have to approach him, and he must sign off on property disposal. Now, as I read this section, the situation is reversed. The minister can now order — “Subject to the orders of the minister” — school districts to sell or dispose of properties that they own or lease.

That’s what the concern is here. We know this government has taken the lid off school closures before, and hundreds of them were put through in this province. That’s the experience over the last decade. Now we have amendments that look to be going back at this.

There are a lot of disagreements that the minister has had, some very publicly, with different districts in the province — for example, districts that have had enrolment declines and have “capacity” in a number of their school buildings. The minister has taken a very public view that school districts like that should dispose of and sell those properties.

Now, the communities that those elected trustees represent disagree. They have their own business case for managing those properties, maybe as revenue-generating properties or to hold them long term because they have municipal planning communications that suggest they will be needed.

This, to me, looks like a way to resolve that ongoing dispute in the minister’s favour over objections and, so far, refusals by school districts, who have the clear responsibility now under the School Act to administer and manage their properties. That will be changed, subject to the orders of the minister.

I would ask him again…. He’s claiming that none of this will change. There’s no distinction — which, of course, begs the obvious question: why make the change at all? Why not keep the status quo language, which is very clear? If his intention is to change nothing, then change nothing.

I would suggest, and school districts are suggesting, that this is a very significant change that gives power for the minister…. Subject to his orders — a complete reorientation of how asset management has been done in British Columbia.

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That’s a problem for a number of reasons, not only because of the upset in the balance of powers and responsibilities that the ministry has and the school district has and the changes in capital asset management in B.C. It’s a problem in terms of the historical development of how these properties became acquired by many school districts.

I know my own best, but those were city properties. In Victoria, where the city is older than the country of Canada and the province of British Columbia joining Confederation, that was the original owner of school district properties. It has evolved over time. Those assets have become, as we’ve created a modern School Act with delegated responsibilities to school boards, their clear responsibility. This seems to be taking away decades of clear lines of responsibility between the ministry and between school districts.

Again, I would go back to the minister and ask him this question, simply, because I’ve said a lot already. The simple question is: if his contention is that there is no change in this amendment, then why change it at all? Because you’ve got the backs up of school districts right around British Columbia. They believe, as I do, that this could signal a new era where the minister takes control of properties in school districts and makes a series of orders over their objections. He has the tiebreaker in all instances.

If they’re incorrect, then why won’t he prove it and just keep the status quo language as it’s read under the School Act, which is very clear, and forgo having a con-
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fusing amendment that has caused the concerns that I’ve outlined?

Hon. P. Fassbender: The member is not correct, and the wording is clear. It has clearly been defined on the shared services of the management of the properties and the assets in the sense that I’ve described. That is the intent. That will be the subject of ongoing discussions with school districts.

Right now in the existing act it says: “Subject to the orders of the minister, the board may dispose of land or improvements, or both.” Again, that “subject to the orders of the minister” is no different in this new section. I again repeat that the member is not correct, nor is it the intent of the ministry or the minister to change the current practice.

R. Fleming: Well, I detected that the minister was parsing things there. He said that there won’t be any change in that the school board will have to go to him for ministerial permission to dispose of properties. True. That’s not what we’re looking at here. We’re looking at the new powers given to him to order school boards to dispose of properties.

Currently, it’s one way. He has to give permission. He’s supposed to be the gatekeeper over properties being disposed of, because previously, the public interest, as commonly interpreted by the minister, was to make sure that schools didn’t frivolously get rid of properties.

Now, and knowing the tendencies of this government and the context of this legislation, it’s going the other way around. It will be the minister who can have the power to order school districts to dispose of property. As I read this and as every district has read it…. He’s got correspondence from the BCSTA. These are the opinions of legal staff, briefs prepared by their legal counsel, known to him.

We’re at the point right now where we’re discussing it. “Subject to the orders of the minister” seems to me the clearest change possible that I can understand — that now it’s not the board that’s responsible. It’s subject to the orders of the minister that the board is responsible. That is a change, and I’d like the minister to describe how that will operationally change responsibility for the management of these types of properties and their custody and maintenance?

Hon. P. Fassbender: Well, this is about shared services. It’s about those issues on the management and the administrative work around properties, whether it be the property or the assets of the school district. It has nothing to do with the disposal of property. I’ve said it. I will repeat it, and I’m not going to answer that question again.

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R. Fleming: I wonder if the minister can define, then…. Custody, maintenance and safekeeping responsibilities that in the old School Act were the responsibility of the board will become, in the new, amended School Act, subject to the orders of the minister — the responsibility of the board. Tell me, then — custody, maintenance and safekeeping, those functions — how those responsibilities will be impacted by the change here?

I can only imagine that the accounting profession will have to, at the very least, make a note, when it looks at the balance sheet of an individual school district and looks at their capital assets, that the ownership and control of these properties that they own is clear, except it’s subject to the orders of the minister. How could they not have to say that this independent financial body, a school district, has control over all of these assets, but ultimately it’s subject to the orders of the minister that they enjoy that control and administration of these properties?

Again, is there no advice that he’s received from any of his own senior staff, those who were in the legislative drafting, that explains what this change is? He’s trying to minimize and diminish it and say it means nothing. It does. It means something. Otherwise he wouldn’t be doing it. I want to understand that this afternoon.

Hon. P. Fassbender: Well, one last time. It is about shared services. It is about the maintenance of properties and assets within the responsibility of the districts and looking at opportunities for shared-services efficiencies. That is the intent. That is what has been said. And that is what is intended in this change in the act.

The issue of the disposal of property still remains as it does in the current act. It is under the purview of the school districts, and it will remain there.

R. Fleming: Can I ask the minister, then, what the legal definition of “custody” is, in his understanding?

Hon. P. Fassbender: Staff will be happy to provide the legal definition of the word “custody.” I don’t have that at my disposal, but I can assure the member that the legal folks in the ministry and within government reviewed this, and that is a legal term, and they’ll be happy to provide a definition for the member.

R. Fleming: Well, I would ask the minister, then, how long it would take to make that definition available, because I think it’s pretty important, before we look at potentially passing this section on the way to passing the bill, that that be well understood.

Hon. P. Fassbender: I don’t know the answer to that. Suffice to say, as I’ve said, that the legislation was gone over by all legal counsel within government, and the wording stands.

R. Fleming: My point is that the wording and the legislation was not gone over with superintendents, secretary-treasurers of school boards, the B.C. association of school
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board officials. Any of the stakeholders that now have an interest in this legislation were not allowed to view the legislation prior to…. We now have significant education partners — stakeholders, if you like — that have zeroed in on this change with great concern.

I think the minister can give that assurance, but he wouldn’t allow independent sets of eyes, the advanced consultation of others — who, in fact, administer the properties now — to provide him their own opinion because they were unaware that he had a legislative agenda in this regard to make a change like this.

Maybe I would ask him, then: what is his understanding of the definition of “custody,” until we can get a proper legal opinion from his government?

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Hon. P. Fassbender: Again, and I’ve said it a number of times, there has been significant discussion with school districts, administrators in school districts, on the issue of shared services and what would be encompassed in that. As we move forward, the genesis of the legislation is to provide the flexibility and not to be prescriptive at this stage. I’ve been very clear on the intent of the legislation and the intent of government as it relates to the legislation, and that stands.

R. Fleming: This is just really not how law-making should happen. We’ve had the difference of opinion around consultation yesterday. Consultation in the minister’s mind means notification. That’s how the president of the Teachers Federation was given advance notice — “consulted,” in his view — of Bill 11, a 15-minute advance warning — two days for the B.C. School Trustees Association.

[D. Horne in the chair.]

In the context of shared services — and we’ll move on to the debate around his interpretation that this is only about shared services — it’s still significant. To say that those people sitting at the table, the provincial steering committee on shared services or any of the discussion groups that have participated in shared services, were consulted specifically about how they would move from a voluntary system — a discussion-based table around shared services that looked at regionally based opportunities, primarily, some provincially based — to something that is now controlled by the minister…. So it’s no longer voluntary but compulsory; no longer regional — centralized and provincial. They were never consulted on that.

In fact, some of the tier 3 recommendations in the Deloitte report that I can remember — which were rejected out of hand for a whole number of reasons, including that there are contracts signed by regional boards relating to maintenance services, for example — were rejected. There was no interest in there, there was no perceived savings, and there was a whole lot of potential conflict that has caused a lot of dysfunction at the provincial level that they didn’t wish to import at the district level. They were not inspired by the provincial leadership in that regard, and they rejected it.

Now, if I’m reading this correctly — “subject to the orders of the minister” — we go from a voluntary, mutually beneficial system where you basically trade business cases between the district and the province or whoever the set of partners are, to it being on the minister’s desk — minister’s orders for shared-service agreements.

That’s a significant change. I wonder if the minister would agree if my interpretation, as I’ve just described it, is correct. We’ll wait for a legal definition on “custody” to see whether it pertains to all fixed assets as well.

Hon. P. Fassbender: I know the member keeps making the same speech, and I’ll keep giving the same answer.

It is very clear that we will be working with the districts, with their teams, as we have already. It is totally incorrect to suggest that there was no discussion about the potential of mandatory orders by the minister on those things that are deemed to be in the public interest of a provincial nature.

That does not suggest that there isn’t a process that leads up to a decision like that. I clearly articulated that yesterday, and I’m not going to repeat what I’ve said a number of times already.

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R. Fleming: The minister keeps talking about working with school districts and school partners. This legislation means that he can keep working with them, but he can also work without them, because he will have the final say. Is that not what “subject to the orders of the minister” means legally? I’d like to have that opinion here at this stage of the debate, not to say that it’s not available.

I don’t know how many people are in the ministry staff. I don’t know where the legislative drafters are behind the TV screens, but surely, that can be available to this debate in this Legislative Assembly, or we’ve got a bigger problem on our hands.

Hon. P. Fassbender: I have said that we will provide the common definition that may be available. We are committed to shared services. The member refers to the fact of what might be. It’s hypothetical.

My commitment, the ministry’s commitment and the government’s commitment is to work with our stakeholders to ensure that the best practices that can be done, whether they exist already or new ones that may come into force in the future, will be debated and talked about with all of the stakeholders. I’ve made that commitment. I’m not going to repeat it again.

R. Fleming: Well, as I read it, the change in this section, section 12 of Bill 11, comes up again in section 16,
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where “a board may enter into an agreement only with a designated service provider” designated by the minister. So this is sort of the one-two punch here. Subject to the orders of the minister, everything related to the management of schools, physical buildings in a school district — “for the custody, maintenance and safekeeping of all property owned or leased by the board” — becomes subject to his orders. Then later on in the amendments, it’s subject to his orders that can only be in an agreement with a designated service provider determined by the minister. Am I reading that correctly?

It is his determination now — as opposed to previously, where you could reach an impasse where a school district would disagree with the minister and it would remain there unless there was a mutually agreed-upon solution. Now it’s subject to the orders of the minister that all of these things related to the custody, maintenance and safekeeping of the property are subject to those orders. Am I correct in reading that at the very least?

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Hon. P. Fassbender: Yesterday I spoke to this, and I used the example of MyEducation B.C. It is very clear that the intent of this section is to ensure that when there is a clear case, like MyEducation B.C., for a mandatory designation of a service provider, ultimately the minister has the power to break any impasse that might exist. But that will happen in very, very few circumstances, but without that linkage to that, then there would be no opportunity to realize the shared-services efficiencies that everyone has said we want to work together to find.

R. Fleming: Well, I think that’s an interesting example that the minister has provided again, because yesterday we talked about MyEducation B.C. coming on the heels of BCeSIS and that it was done without these legislative changes. Now he’s arguing that it’s an example of why this legislation is required. Interesting.

I want to ask the minister just again about the word “custody” here and maybe ask him to follow up with an example. If, under the new School Act as amended by this bill, Victoria High School is hereby ordered by the minister to surrender custody to an entity — the minister now wants the custody, maintenance and safekeeping of this particular property to be given to, I don’t know, a private language college or some other entity — is that an order that the minister will be able to make? Or any other school that he deems to be no longer a board responsibility to determine in the manner specified by what’s currently section 74 of the act.

That will change as I read this, and I wonder if he can comment on what the scope of the orders he can make will be under this amendment.

Hon. P. Fassbender: I’ve described the intent. I’m not going to get into speculation.

R. Fleming: Well, again, we need to know what custody means. So I would urge the minister, with all of the available resources of the provincial public service known to him, to supply that.

My submission here is that this is a significant change. “Subject to the orders of the minister” is so broad and so vast. As it’s written here at the front end of the existing language about what is now currently a clear board responsibility, it will be amended to make it subject to ministerial order — his responsibility, potentially, in the instances that he deems of his own interest.

That’s a brand-new change. I think we need to know exactly…. I think the minister has to explain. He doesn’t need to use my hypotheticals, but he at least has to give the parameters, which seem to be unlimited, as to what the orders of the minister may be in regards to property assets that are held by school districts currently.

Hon. P. Fassbender: My answers are clear. I’m not going to repeat myself.

R. Fleming: I would ask the minister when he will have a precise legal definition of “custody,” of “property” available for debate here at committee stage.

Hon. P. Fassbender: As soon as it’s available.

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R. Fleming: As soon as it’s available. Is that potentially after the debate is over?

Hon. P. Fassbender: My answer is clear.

R. Fleming: Oh, we are getting into some very interesting territory here that says a lot, beyond the clauses of the bill that’s before us, about Liberal law-making in the province of British Columbia. Unbelievable. It doesn’t involve anyone at the front end. And even when it’s in mid-process, it’s not informed by a professional civil service that’s available to him.

Where are the legislative drafters who wrote these amendments? Why can’t they give him an interpretation to inform the committee? These are legitimate questions about what could be very significant changes in a new regime of what property management of schools looks like in British Columbia. It’s his obligation, his responsibility as a minister to supply that to the debate.

If he needs a recess, we’re perfectly happy to do that. But I think it needs to be supplied now.

The Chair: While the member may like it now, it’s up to the Chair as to whether we recess or not.

V. Huntington: I won’t ask the minister to repeat some of his comments. Hopefully, they will provide some level of comfort to the school boards. However, I think that
[ Page 8458 ]
he will know, as has been mentioned earlier, that there is a great deal of discomfort out there among the school trustees and the boards in the province.

Much of it, if not all of it, has to do with how these amendments came to be. They perceive it as not being a thorough consultation. They perceive it as just basically throwing what they thought was a co-governance agreement out the window.

While the comments that the minister has made may go some way to quieting some of these concerns, I have been asked to request of the minister how he intends to go forward with consultation. What will it look like? When will it occur? Will it be thorough? Will the school boards enter into full explanatory discussions with the ministry on what these regulations might look like and how they may affect them?

Hon. P. Fassbender: Well, I’ve indicated that the discussions on shared services have been undertaken at least for the last year and a half already with school districts. There are no clear guidelines as to which shared services, because that is being worked on with school districts.

I’ve stood in this House not only during second reading debate but also in committee and said very clearly that the committee that was formed of representatives, trustees and administrators throughout the province, with the deputy minister and his team, will continue. No regulations will be brought into place until that process continues and we come to some clear regulation definition of what that would look like and how it would operate.

So there is going to be a period of time. What I can’t do is specify how long that’s going to be, because it depends how long the work will continue. But the commitment on behalf of the government is that we will continue — and I use the word “continue,” because it’s already begun — to work on shared services, moving forward, in the best interests of the districts, of the students in that district, so that every resource that can be dedicated to the classroom is done.

I can’t make it any clearer than that. I appreciate there are, perhaps, questions about that process. All I can say — and I have said this to a number of trustees — is that the number of discussions that have taken place already, the comments by the deputy minister at the most recent BCSTA AGM and the comments of the ministry staff who head up the shared-services committee and have been working with the district….

That work is going to continue. That’s a commitment. I stand by that commitment, and I know that as we move forward, we’ll find the path together. There may be rare instances — and I suspect they will be rare — where the minister may have to make a mandate on a particular issue. But I’m not even going to speculate on what that might be, because maybe there won’t be any. Maybe it will all be done by consensus. That’s my hope.

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I also believe that if there is a clear business case that something should be done that is in the best interests of the provincial taxpayers and of the districts, that decision will be made at that time.

V. Huntington: I thank the minister for that answer. But there obviously is a real issue out there with what the level of consultation has been, whether it’s specifically in shared services or whether it’s concerns about the sale of assets and how that might proceed or whether there are changes to that process — whether revenues are going to go back into general revenue or whether they’re going to stay with school boards — and what that permissive dialogue is.

For instance, how these consultations take place: is there a disconnect between what the minister and his staff feel is the consultative forum versus what the actual school boards and school trustees think is happening? Is there any room for some dialogue between the parties to perhaps create a more fulsome consultation process that each party really understands the other to agree with? Is there any room for some examination of where the consultation is falling down. It’s obviously not working the way the minister thinks it is and the school boards want it to.

Hon. P. Fassbender: The deputy has established a sector advisory committee that has met once already. It’s going to be meeting in the next couple of weeks. The role of that group…. It represents every stakeholder in the province in the education system. They will be meeting again, and one of the main functions of that committee is to talk about process, moving forward, and how consultations on any of these initiatives will be done.

Other than the BCTF, which we have a separate process with, of course, all of the other partner groups are part of that committee. We will continue the deputy’s commitment to the first meeting, which is that this committee will have a very significant role in crafting where we go, moving forward.

I appreciate that there may be questions on the part of new trustees. We’ve just come through a municipal election. There are many trustees who perhaps weren’t on the board. I don’t know how their superintendents or secretary-treasurers have communicated back, but I know there has been at every level significant discussions around this.

The commitment in looking for shared services and administrative savings is to free up as many dollars as possible to be invested in student learning outcomes and in the classroom. That is the intent. That is what we are wanting to do, and everyone understands that that’s the goal.

V. Huntington: If the special advisory committee could really, seriously take a look at how consultation is working
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and where the gaps are…. There are gaps. Something’s not working properly, and if the ministry thinks it is, there’s a problem. Maybe it’s with the school board and the school board trustees. I don’t know. But there is a gap here.

I’ll start looking at it from my end, too, to see if there’s a hole there that is somehow not being filled. Is it not being filled in communication with school district staff and their boards? Is it a dysfunction between the ministry and school districts?

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There’s something wrong here that, for the benefit of this province, needs to be looked into very seriously. I know your deputy is somebody that will take that job seriously, and if anybody can find an answer, I think he can.

I will take that back to my board. I have a very experienced board, and they are very worried. It is not a board filled with newcomers. There’s one newcomer. Most of them have been on the board for years, and they are a worried board. And they are not a partisan board, or so they say.

At any rate, there’s an issue here, and I’m trying very hard to convince the minister that it has to be resolved. It’s not necessarily his fault, the ministry’s fault or the board’s fault. There’s a gap here that’s got to be bridged somehow.

For instance, the distrust is so strong right now that they want consultations or would like to understand what the minister means by “provincial interest,” by “the public interest.” When the minister says, “I can make an order in the public interest of a provincial nature,” they want to know: what does that mean exactly? How does the minister define “public interest”? How does this ministry define it? They want to shape this so they can understand what these new authorities are in relation to their traditional authorities.

I think everybody sees that movement forward and efficiencies are absolutely critical to going ahead in a fiscally responsible manner. But to ignore satisfying these hard-working individuals that their mandate is not being pulled out from under them, I think, is partially, if not wholly, the ministry’s obligation here.

With that, I’ll run and meet with the Speaker, who’s been calling me for the last half-hour.

Hon. P. Fassbender: Before the member has to leave, the sector advisory council is made up of the heads of all of the organizations, including the president of the B.C. School Trustees Association. One of their first functions is to do exactly what the member has said. Are there gaps in communication? How are those filled? What subjects will be discussed?

We have the shared-services advisory group that’s working as well. That input from that group will go to the sector advisory committee and back, because they may identify gaps, as the member has suggested.

These are all new processes that have been in place. I just said that the sector advisory committee has met once. They are going to meet again. It is going to be that process that, I think, will fill in the gaps that may exist. It will also ensure that communication processes are clearly identified and who’s responsible for what, so that there isn’t a misunderstanding as to who is expected to put out communication.

If I can use one example, I had an opportunity to sit down with a superintendent. We were talking about communication, and the superintendent’s comment to me was: “Minister, it’s not the what; it’s the how.” That is the feedback that I’ve heard. So I asked a couple of simple questions.

I said: “Since the deputy that currently fills that position has been in place, can you tell me that communications are better, worse or the same as they’ve always been?” That superintendent looked me in the eye and said: “They’re much better, because we have fixed calls, communication from the deputy. We’re able to ask questions. We’re able to do all of those things. So my characterization of where it is today: communication — it’s much better than it’s ever been.”

Now, that’s been a relatively short period of time, but the effort on the part of the deputy and the other staff in the ministry is to ensure that we have good and solid and ongoing communication.

V. Huntington: One final comment, then, in reply. The problem is that this act doesn’t indicate the consultation was a part of the minster’s or the ministry’s desire. It has come as a surprise, whether the minister wants to believe it or not. I think there’s some work ahead here. This act should not have happened the way it did, not according to the people I represent.

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With that, I thank you, Mr. Chair, and I’ll come back on different sections.

The Chair: I’m going to suggest we stand down section 12 and move to section 13.

R. Fleming: I would ask if we have a definition from the minister now on what “custody” means legally in terms of the implications of this section.

Hon. P. Fassbender: I am happy to read…. A legal analyst has provided this from Black’s Law Dictionary on the word “custody”: “The care and control of a thing or person. The keeping, guarding, care, watch, inspection, preservation of a thing, carrying with it the idea of the thing being within the immediate personal care and control of the person to whose custody it is subjected. Immediate charge and control and not the final, absolute control of ownership, implying responsibility for the protection and preservation of the thing in custody.”

That is the definition.
[ Page 8460 ]

R. Fleming: I would just ask the minister, then, on this section…. As I’ve explained, it’s a controversial section. The school boards around the province don’t necessarily trust the minister’s interpretation, so far, of its implications.

You’ve got school districts, like Vancouver school board, where the minister has said they need to sell schools. You’ve got other school districts with the exact same concern. They differ on those issues. They differ on whether that’s in the educational interests of the students they serve and whether that even makes financial sense.

I would ask the minister, then, if he can…. Given that this confusion is out there, can he at least make an unequivocal statement or declaration at this stage of debate that he will not use the amendments, should they become law here in section 12 and other sections of the bill, to force the sale of school properties in Vancouver or other districts?

Currently, he doesn’t have that power. He has already said in debate that this won’t give him that power. Others feel differently. Can he give the unequivocal assurance that he will not use amendments contained in Bill 11, in this section and others, to go and sell properties against the will of school districts?

Hon. P. Fassbender: I’ve said it. I repeat it. This provision does not give the minister power to order boards to dispose of property.

R. Fleming: That wasn’t the question I asked him. I asked him to take this opportunity to clear up the confusion that school districts interpret that this section — and other sections of the bill, quite frankly — will give, by the order of the minister, as the language clearly says, the power to dispose of assets currently owned, managed and controlled by school districts.

Will he take this opportunity to clear up what he says is their misconception, apparently, and that he will not undertake to sell Vancouver’s or any other district’s schools against their will after the passage of Bill 11?

Hon. P. Fassbender: I have said it. I repeat it. I really think that asking the same question over and over again…. If the member wants to waste the time of this committee in repeating it and repeating it when I’ve said….

That is not the intent of the legislation. That will not be the process that the minister would use. I don’t know how else to say it more clearly. But I’ve said it, and I mean it.

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Sections 12 to 15 inclusive approved.

On section 16.

N. Macdonald: Could the minister explain the purpose of this change?

Hon. P. Fassbender: It’s like saying if you follow the same process, you’ll come to the same outcome. He’s following the same process — same outcome. This is about shared services. I’ve said it on the record a number of times. I’m not going to repeat it again.

N. Macdonald: I would thank you for the answer, but it wasn’t really an answer.

Let’s just put some context on this. BCeSIS was, it’s my understanding, imposed by this government as an example of a shared service. Can the minister describe, with the legislation that was in place at the time, how that was imposed on school districts across the province?

Hon. P. Fassbender: I’m sure the member is not aware that there are still four districts in the province who are not using BCeSIS, so it was not imposed. The ministry worked very hard, had 56 districts that agreed to use BCeSIS. But the lesson learned out of that is that the ability for student information to move with the student to districts that may not be participating…. That’s one of the reasons MyEducation B.C. is seen as a system that should be provincial in every district in the province.

N. Macdonald: Well, I think there’s a far more rational lesson that can be learned from this rather than what the minister proposed. I would say lucky four districts that didn’t sign on to BCeSIS. The minister would agree that BCeSIS was a disastrous system that cost huge amounts of money and subsequently was withdrawn.

Hon. P. Fassbender: The minister doesn’t agree with that characterization.

N. Macdonald: Has the minister ever taken the time to use BCeSIS, as an example of technology that the ministry would, with this legislation, impose upon teachers? Has he ever used BCeSIS?

Hon. P. Fassbender: Well, I don’t know how that’s relevant to this section, but I will answer this. I’ve had a full demonstration of BCeSIS. I’ve had a full demonstration on MyEducation B.C. and the differences between the two. That is why I believe MyEducation is the next generation of student information, and I have every confidence it’s going to meet the needs that the province has.

N. Macdonald: Well, if the minister has spent any time talking to teachers, talking to administration, talking to trustees who tried to use that system, a system that was so archaic at a time when we had available to us….

I was, as the minister knows, a teacher and a principal. We had available to us commercial products that were working in the schools at the time. We had made that decision as boards to purchase those products, and they worked well.
[ Page 8461 ]

Now, the concept that the minister puts forward and what often sounds reasonable in the minister’s arguments is that it does make sense to have a similar platform so that we can share information. That makes complete sense. The problem with the BCeSIS experiment is that it was hugely costly, and it was an incredibly poor system that made life difficult for teachers across the province.

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I know that the Principals and Vice-Principals Association, the superintendents association, trustees and teachers certainly told this government repeatedly, over the eight or nine years that they were forced to use this system, that it was a poor system. Now, at some point, just like with the accountability agenda that’s being thrown out with this bill, after eight or nine years, when it was so obvious at the beginning that there was a problem, the government dumped it at cost of — what? — $90 million.

How it’s relevant is in this way. The government is now assuming, the minister is assuming, that the system will be helped by the minister imposing solutions on districts. They want to force districts to share services, not where it makes sense for individual districts but where the minister says that it will make sense for some ill-defined provincial interest. We are to believe, trustees here are to believe or teachers watching are to believe that there is any history of this being done well.

In the debate that I sat through, the minister talked about changes to curriculum and talked about all of the conversations that took place in the development of curriculum. I don’t know what point he was making, but the point it made to me is that when you have a respectful conversation, led by the expertise that you have in the ministry, with that perspective, and have a discussion with trustees who have a different experience and perspective and teachers who have a very important and different perspective and principles, then you will come up with decisions that make sense.

What the minister is proposing with this section is something that will, in my view, lead to the same sorts of mistakes that we saw with BCeSIS. If the minister is somehow trying to convince people that BCeSIS wasn’t a disaster, he’s convincing no one that used it. It was an extremely poor system.

Now, the minister intends to impose shared services with the idea that, hey, that’s a new idea. That’s a new way of saving, like nobody ever thought of it. It will only happen if the minister imposes it, right? Of course, it does happen all the time, but it happens where it makes sense. School districts have the ability to enter into shared services and will do so where it makes sense. That is what is taking place right now.

When the Premier goes and puts on Twitter that the average is 7 percent for administrative costs in the province, well, that’s not true. It was never based on any facts. In fact, if you look at school districts, you will find consistently that there is an efficiency within the management of school districts so that they can put the resources where the community wants them to put it, which is into classrooms.

I’ll just read, for example, from Revelstoke school district. Let’s just look at the list of shared services that are there. First, they were obliged to go into BCeSIS, so they participated in that.


N. Macdonald: The minister says they weren’t obliged. They thought that the ministry had a good idea with a platform that would work. They didn’t think the ministry would mess it up as badly as they did. If it wasn’t messed up, then why was it pulled?

If you want to debate BCeSIS and the merits of BCeSIS, let’s just agree that it was a program that flopped and is now replaced. But Revelstoke participated. They chose to.

Revelstoke school district also participates in the provincial learning network for Internet services. They also participate in WorkSafe B.C. administration services with the Central Okanagan district. These are efficiencies that the school board found on its own. The minister didn’t have to impose these solutions.

The British Columbia Public School Employers Association has a benefits-buying group that Revelstoke school district chooses to participate in. The provincial school bus procurement program. Again, it is a choice that Revelstoke school district makes, and I think every school district does.

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If the minister has an idea, what school board is he going to go to give that idea to and have them reject it if it makes sense for that particular school district?

Let’s go on. The provincial schools protection plan for liability insurance. Revelstoke doesn’t go and do it on its own. It participates in that program because it makes sense for the district.

The Ministry of Finance central deposit program for cash management. Again — didn’t have to impose that. That’s something that the Revelstoke school district participates in. The Okanagan Labour Relations Council — partnerships with bus repair staff in school district 83, partnerships with six other districts on an in-house-developed budget preparation program. I mean, it goes on and on for all of these.

That’s one school district. It is happening across the province. These are things that make sense for districts. If it makes sense, they will do it. The experience I’ve had and the districts have had with this government is that when they give themselves the ability to impose, they will impose poor ideas — ideas that may work politically for the government or for friends of government, but it certainly will not be the thoughtful process that is needed, that will include an honest discussion with school districts.
[ Page 8462 ]

The question, then, is to the minister. Instead of imposing shared services on districts, why would the minister not make the case that the idea that he has around shared services is one that the school districts should voluntarily agree to? What is the problem that you are trying to solve with imposing solutions on school districts that are perfectly capable of finding efficiencies?

As I say, I just look at my school district, and it’s demonstrable that they can figure out ways to do things efficiently and effectively for the community. Why would the minister choose to step away from that process?

Hon. P. Fassbender: The exact opposite is true. We’re not stepping away from it at all. We have been working over the last year and a half, as I have said, with the advisory group. We will continue to do that as we move forward.

The member mentioned a number of very good shared services. Those are going to be part of the discussion of what is working and looking for where opportunities still exist. I’m not going to speculate on what those are. I’ve said that. I’ve been very clear in all of my answers on the same subject in the last day and a half. We will work with the districts. We will define those things.

But ultimately, it is true…. The member was incorrect. We did not impose BCeSIS. Everyone came on board because everyone believed at the time that the system was going to serve the districts. We’ve learned a lot, but to characterize it as a complete failure is incorrect. I’ve heard the opposite from teachers that I’ve talked to.

Mr. Chair, we can go back and forth. He can say what he’s heard; I can say what I’ve heard. That serves no purpose. The goal of this legislation is to provide flexibility, to provide a process whereby we will continue to work with districts. We’ve demonstrated that already, even before the legislation was introduced. We will continue to do that, but yes, if there is an extreme situation where we need to make a final determination on a service, the minister will have the ability to do that. But that, as I’ve said, will be in the extreme circumstances, not the rule.

N. Macdonald: The minister says that there has been discussion on this particular idea. Which school district told you to set up, in legislation, the ability for the minister to impose decisions on shared services on districts? Which school district has told you that’s a good idea?

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Hon. P. Fassbender: I’m going to use what I said yesterday on the record. When it came to MyEducation B.C. and there was a concern that there were a couple of districts, four at that time, that were suggesting they were going to set up their own separate system, the BCSTA executive at the time, which I met with along with my deputy, said: “That is a clear example of a system where it should be mandatory, and the minister should mandate that it is such.”

N. Macdonald: I guess I should have been more specific on the question. Rather than in a group, you’re sitting there talking…. Can you point to a motion from a school district or point to a motion from the B.C. School Trustees Association that says that this is the direction that they think the ministry should be going?

I can point to motions from all sorts of school districts that say it’s wrongheaded — the idea that you would impose a solution.

The ability to go to districts and make the case that this is a cost-effective, efficient way of sharing services…. The ministry can’t send staff to go and do that. Instead, the minister has to impose that it’s a good idea.

Can you point to one resolution from any school district? Can you point to one letter that you’ve received officially from a school board or a resolution from the B.C. Teachers Association that says that this is the right direction for the ministry to be going?

Hon. P. Fassbender: No, I cannot. What I can say in the consultation process that’s taken place up to now…. I get feedback from our staff and in the discussions that I have. I haven’t asked for resolutions that say this or that. That’s not my job. What the job is, is to do the robust consultation process that we have been doing and will continue to do.

N. Macdonald: Just because, in the course of the past day and a half, the minister has said robust consultation 1,000 times, it doesn’t mean there was consultation that the people you’re talking to would consider robust consultation. You’re basically imposing a solution that none of them asked for, right? They are not supportive now. You’re not going to say that the school districts are supportive. You’re not going to say the School Trustees Association is supportive.

There are certainly lots of reasons why school districts would be really wondering about the ability of this government to impose solutions in an effective way, given BCeSIS, that failure, and given the failure of the accountability — all that accountability agenda that for ten years you asked school districts and teachers to struggle with and that now you’ve tossed out with this legislation.

Why does the minister feel that it is so important that this minister takes the ability to impose ideas on districts? I can’t speak to Victoria or Vancouver or Prince George or any other district, but I know Revelstoke. The people there that were elected to be school trustees understand the community. They understand the fact that there are different situations in their community compared to Vancouver, and there is a need to do things that are sensible and reasonable.

We elect these people to judge what is right for their particular schools in the school district. It’s a good thing, because they make good decisions. Revelstoke has some of the best outcomes in all of the province. The minister will know that. They should be deciding.
[ Page 8463 ]

If the minister wants to push a new idea, why does the minister not feel that he can go into a community or send his staff and make the case for a shared service that he feels is going to be a more effective use of public funds?

Hon. P. Fassbender: Again, I’ve addressed this I don’t know how many different ways. The members opposite want to make their speeches, and I appreciate that that’s the beauty of democracy.

But the bottom line is that we are in a position where we will work with districts — I said yesterday; I’ll repeat today — where there is a clear business case on a local, regional or provincial basis. The flexibility is not that it will be mandated at the beginning without any process and clear outcomes.

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Yes, I believe that, as a ministry, we will have a responsibility when we look at shared-services initiatives to communicate why we believe that is the right thing, what the benefits are to either a school district or a couple of school districts or to a regional group of school districts or provincially. That is our commitment. That is what this is all about.

We’ve already proven that by the process that we’ve been engaged in. I don’t know how much more I can say about that. It keeps coming back that the members opposite think that there’s some other agenda, which there is not. Our clear objective is to find the efficiencies for the benefit of the students and of the classrooms of this province. We’re committed to that. That’s what the legislative change is all about.

N. Macdonald: Well, but what the minister asserts — the complete opposite is true. I mean, you talk about consultation, and you’re in the midst of a process where, clearly, the stakeholders did not feel that they were consulted. You then put forward a piece of legislation that….

For all the fine words that the minister has, all the idea that you’re going to consult first, the actual legislation gives the minister the ability to impose with no conditions…. There are no conditions that are here in the legislation. The minister can impose shared services on every district in the province.

I guess the question I would have for the minister is: why are you putting forward this legislation? You say in your answer that there’s no hidden agenda. But there has to be a reason. I might call it a hidden agenda, or it might be a reason. Choose whichever word you want. There has to be a reason for the minister to do this, right?

There’s no way that it’s simply something they’re just doing for the sake of doing. There are all sorts of people that are politically upset about what’s going on. There has to be a reason. Does this relate to maintenance contracts? Does it relate to ideas around procurement? What is it? And if the minister has an example, how is it that it’s not being dealt with now by school districts? What specifically is the minister thinking of in terms of the abilities that he’s giving himself in this section?

Hon. P. Fassbender: I’ve already answered the question. The member has heard the answer. I’m not going to repeat it again for the sake of the committee.

I would ask if we could have a 15-minute recess.

The Chair: The committee will recess for ten minutes.

The committee recessed from 4:57 p.m. to 5:05 p.m.

[D. Horne in the chair.]

N. Macdonald: When we left off, the minister had talked about the idea of a secret agenda. I have no doubt that somewhere in the government there’s an idea about how this government is going to use this legislation. I have no doubt that there are people lining up for contracts that the government will impose on districts.

As I say, any reasonable person would look at what happens in school districts and at what school districts are already doing and wonder at the need for this minister to impose. Just go back to that one school district, Revelstoke, which I’m sure is not unique in its ability to find efficiencies. They have enterprise software through SRB Education Solutions that they use as a way of saving money.

This isn’t something that was imposed on them by the minister. It’s an idea that they were convinced would be reasonable for the area that they’re responsible for, so they find efficiencies there. You have EDCO purchasing for office and classroom supplies that are an efficient way of purchasing, and then BCPSEA is used, of course, for teacher contract issues rather than lawyers.

The question for the minister is: what happens if the imposed shared service from the minister actually costs a particular district more? Will the ministry be picking up those costs? Or how does the minister intend to deal with that?

Hon. P. Fassbender: I’m not going to speculate on what-ifs because I don’t think that that’s relevant to this discussion.

What is relevant is what I’ve said already a number of times. That is, we will be sitting down with school districts and developing the business case, whether it be on a local, regional or provincial basis. Any of that business case, as I’m sure the member knows, will look at all aspects and the implications of any particular shared service. That is the work that will be done with the districts before any decisions are made, be they voluntary or otherwise, on what steps will be taken, moving forward.

N. Macdonald: The relevance, of course, is that that can happen now — if it was going to be a proper process, where there was discussion — and an even discussion —
[ Page 8464 ]
where the minister had some obligation to make the case that this was a good idea. But of course, that’s not what the legislation does or is intended to do. This is legislation that gives the minister the ability to impose and to put whatever problem he creates onto the school district.

The question was very specific. We saw with BCPSEA that school boards accepted tremendous cost in terms of training obligations. Now, some of these things the ministry later came in and provided money for. I’m just asking for a commitment from the minister to make sure that the cost that can come with an imposed shared service is one that the government feels an obligation to absorb.

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Hon. P. Fassbender: I said I’m not going to get into hypothetical situations. But what I will say again is that, as we did with MyEducation B.C., the clear cost parameters, the benefits, have been clearly outlined in the business case. As we move forward, every situation will be dealt with on an individual basis. We will make those decisions once it is very clear what the cost-benefit analysis is and what the implications of that are. But I’m not going to get into hypothetical situations and make commitments that I can’t make at this stage because I’m not sure what those situations are.

N. Macdonald: Well, the minister surely has considered that decisions that have been made in the past have cost implications. I mean, the minister is talking about a discussion that is taking place right now where cost, of course, comes up. So it is not unreasonable to expect the minister to be able to answer in some way whether they have considered the imposition of costs at the same time that they’re imposing shared services.

Let’s go to a different area because I think the minister, as with all of these answers, is simply going to go through the 100 or 200 words that he uses — you know, the jargon that he uses — regardless of what is asked. But I’ll put it on the record anyway. Let’s assume that the minister imposes a contract on, say, shared services around maintenance. What consideration has the minister given to the fact that there may be existing contracts for the service that the minister is imposing? What is the thinking done by the minister in terms of dealing with that situation?

Hon. P. Fassbender: The thinking is exactly what I said in my last answer. Each one of them will be analyzed on an individual basis in conjunction with a district, a group of districts, a regional grouping of districts or provincially. But ultimately, the ministry has the responsibility to the taxpayers of British Columbia to ensure that whatever we do is in the best interests of the taxpayers and of the districts, with the ultimate benefit for the classrooms and the students in the province.

N. Macdonald: But the minister would agree that in terms of what works for him politically or what works for his government in terms of their budget can impose tremendous hardship and costs on a school board. We’ve seen this repeatedly. We’ve seen this with the mistakes made around the carbon trading that was imposed on districts. I mean, there is a long history of mistakes made at the provincial level by ministers that imposed costs on school boards — and not your problem, right? You step away from it.

The question is: if you impose a contract on school districts that break existing contracts — let’s talk about with maintenance — does the government feel any obligation to fund or deal with that issue? Or is this something that’s simply going to be…? The consequences are going to be foisted upon school boards?

Hon. P. Fassbender: I’ve said it. I’ll repeat it. We will look at every implication. Local contracts…. We recognize that we’ve got 60 school districts. I believe we have about 75 separate contracts. To suggest that we would not see the implication of any recommendation that comes forward, without looking through the lens of that implication…. And I said clearly yesterday that the flexibility that is contained within this process ensures that we look at even local implications on businesses.

We clearly recognize there are many issues that need to be analyzed. That’s why the structure and the process moving forward will be defined with the school districts as to what issues should be considered on any shared-services initiative. We’ve had those discussions already in a formulative stage and will continue to have that as we move forward.

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K. Corrigan: I wanted to talk about one shared-services agreement that has worked very well. My understanding is that the vast majority, or at least the majority, of school districts have signed on to the Telus agreement where districts purchase telephone, cell phone, data-line types of technical services. This has worked very well. A majority of districts have signed on to this.

My understanding, from talking to my local district and other districts, is that the tests that the school districts use to determine whether they want to sign on to a shared service is they make the evaluation as to whether this will bring value back to the district.

So I guess my question to the minister is: if districts now make the decision that there are shared services which governments or individual school districts put together…? They make the decision that this is a good idea, based on their evaluation, which I trust, as to whether they bring value to the district. If that’s the way it is now…? Why, if it has been successful in the past, does the minister feel that we need to have a section which would now force services, potentially, onto individual districts?
[ Page 8465 ]

Hon. P. Fassbender: I appreciate the comment of the member. Indeed, Telus is a classic example of where the ministry, the government, worked with districts. Clear business cases were made. Benefits were seen, and people moved ahead. There was no need to impose that. There were contractual arrangements that ensured that the needs of the provider and the benefits to the province were clearly articulated.

There may be instances…. Again, speculation, I think, does not serve any purpose here other than to say that on a common IT platform, for example, if we found that we either had all the districts participating or the benefit would not be there, that has to be clearly shown.

If, indeed, we had a few districts that chose not to participate, for whatever reason, then the minister, ultimately, would have the ability to make that decision. There are a couple of key words there — ultimately and after a process and after a business case.

K. Corrigan: I think, from the perspective of districts, every district is different. What may work for one district, another district may feel that that particular contract or service provider might not work.

I wanted to just reference a 2004 comment from none other than Larry Blain, who was at that time the CEO of Partnerships B.C. We discussed and asked questions about Mr. Larry Blain in the Legislature in question period today.

What he said at a Canadian Council for Public-Private Partnerships meeting in 2004 was that in the area of schools — and some other facilities, but schools is the one that jumped out at me — British Columbia has a huge requirement over the next ten or 15 years for a lot of smaller projects.

“We’re very much interested in the partners for school model, say, that’s done in the U.K,. that would implement…. You would compete — a certain geographic area and the assets within it — for an estate of assets and then do P3s. We’re just trying to get our head above water.” That hasn’t happened. That was over ten years ago.

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But given that Partnerships B.C. continues on and was, of course, lauded by the Minister of Finance today in the Legislature, I think that we should be concerned that very large contracts would perhaps contract out custodial services, for example, which was one of the things that Mr. Blain talked about at that conference. Districts would be concerned about that.

Is that the type of service that the minister would consider would be a good candidate for imposing shared services and a designated service provider on?

Hon. P. Fassbender: Clearly, we have a very robust relationship with CUPE throughout the province. I understand there have been discussions within school districts and their local governments about opportunities where they could work together. But that’s always bathed in existing contracts and relationships that are there. Again, I’m not going to speculate, other than we want to respect the ability of districts to work in a number of different ways, whether it’s on a local basis, a regional basis or, eventually, a provincial basis.

K. Corrigan: Does the minister think that this section and taking the power to impose designated service providers on school districts, whether they want it or not, is consistent with the memorandum of understanding that was signed in December of 2014?

Hon. P. Fassbender: It absolutely does. I said clearly at the meeting with the B.C. School Trustees Association, when I signed it, that this is a framework moving ahead. It’s a living document that will be modified as we move ahead. I absolutely have stood in this House during committee debate and prior to this and talked about the fact that the ministry team is going to continue to work with districts, with their officials as we move forward.

That is the spirit of the MOU. The MOU, as any document that you do, is never perfect forever. That’s why I said it is a living document, and I stand by those comments at that time. We are going to continue to work with the districts to see a robust opportunity for us to work together to find efficiencies that are in the best interests of their local taxpayers, of their students and, ultimately, for the provincial taxpayers as well.

K. Corrigan: I’m just going to digress a second.

This reminds me of a conversation or an interaction that we had in our community several years ago. We were told that we were going to have a prison put in a residential area across from BCIT, next to child cares and next to high schools — in complete opposition from the whole of the community. What we were told was: “It’s all right. We’re going to do this. You don’t have any choice.” It ended up being the government had to back down. There was so much opposition to it. We were told: “It’s all right. We are going to consult with you. We’re going to let you help decide what colour the walls of the prison are going to be and what kinds of shrubs are in the front.”

Is the minister, then, saying that with regard to this section…? When the minister says that the memorandum of understanding is a living document, is what he means that it lasts and it stays the same until the minister decides that he’s going to break the memorandum of understanding and that at that point, perhaps, the memorandum of understanding needs to be changed?

Hon. P. Fassbender: The elastic band that the member is using to stretch the facts is quite obvious. The reality is that in the discussions leading up to that memorandum of understanding we met with the B.C. School Trustees committee and talked about how we are going
[ Page 8466 ]
to build the relationship moving forward. Part of that is developing robust committees. I mentioned the sector advisory committee, which is a new committee that was formed by the deputy with the heads of all of the partner groups to sit down and talk about specific and tangible items as opposed to speculation, which the members opposite like to throw out every chance they get.

The reality is that we are committed to sitting down and talking about what the opportunities are. How real are they? What’s the business case? What’s the cost-benefit analysis? What are all of the things that need to be considered?

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That’s going to be done in conjunction with the sector. We’ve committed to that, we stand by that, and that is inherent in the memorandum of understanding as well.

K. Corrigan: “And oh, by the way, at the end of the day, if school districts — all 60 of us, in fact — don’t agree that there is value back to the districts, we could do it anyways.” That’s what the legislation says. It can impose service agreements with designated service providers.

If this is a repetition of a question that was already asked before I came into the chamber, I apologize. I’m wondering if the minister could tell us what kinds of services that he contemplates would be the subject of this that possibly could have a designated service provider, whether it’s agreed to or not by individual school districts. What kinds of services?

Has the minister talked and speculated? Has the minister met with perhaps lobbyists from any particular sector that is lobbying for the ability to have a large contract in an area or across the province? Have those kinds of discussions gone on and, if so, with whom?

Hon. P. Fassbender: No, I have not.

R. Fleming: I wonder if I could just ask specifically about some text that’s being deleted in section 86 of the School Act, via section 16 here. Previously 86(1)(a) was explicit that a board may, “subject to this Act, the regulations and the orders of the minister, (a) enter into an agreement to purchase or provide managerial, administrative or other services with respect to the operation of schools in a district.”

Under the amendment, “with respect to the operation of schools in a district” is deleted. I’m just wondering why that specificity has been deleted from the act, given that it’s obviously integral to a school district but should be….

My concern is that by deleting it, it could make school boards, as you’ve heard from my colleagues in debate — and you’ve heard school districts, in fact, tell the minister — an unwilling partner in all kinds of ventures, potentially, that have nothing to do with the operation of schools in a district, which is their core mandate.

Hon. P. Fassbender: This change speaks directly to back-office services within a district, not a school. There are services that are done in the district that benefit the entire district and all of the schools, not particularly an individual school.

R. Fleming: I wanted to ask the minister if he could elaborate on designated service providers. The concern here, I think, has been that school districts have a range of contracts, both with employee groups as well as local procurement practices. There may be terms to those agreements that are in existence that may not be respected by the minister when he is looking at a provincewide, centralized model of forced procurement. That may create employee groups to go into multinational, contracted service operators. We saw that done in the health care system, when it came to cleaning services.

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There may be penalties, costs and, of course, litigation. That’s not difficult for the minister to imagine, because his government has been before the courts with so many employee groups for so long in this decade. Those risks would actually be, entirely or in part, borne by the school districts, whose signatures are on those agreements.

[R. Chouhan in the chair.]

I’m just wondering if there wasn’t something contemplated here that would, at the very least, allow districts to honour the terms and length of contract for services or for agreements with employees before the minister can embark on any proposed procurement agreement with a designated service provider?

Hon. P. Fassbender: In answer to the question, this government, clearly, in the last year and a half, has got a very good relationship with, as an example, the CUPE unions throughout the province. We want to maintain that relationship. We will not make a decision to impose something without evaluating all the aspects of any decision.

Part of that, of course, is respecting contracts that have been entered. We are committed to doing that. I’ve met with the CUPE executive and have clearly told them that what we’re looking for is a process whereby all of the factors are considered in the business case. That includes relationships and existing contracts.

K. Corrigan: The minister has talked about moving forward and working collaboratively. I’d like to read a quote, a paragraph from a letter that the Burnaby board of education just wrote to the minister and the Premier. I’m not sure that the minister has actually received it yet. It’s possible that he has not, but it was passed by the board, so I believe it’s a public document. It was passed by the board on Tuesday night.
[ Page 8467 ]

An Hon. Member: He gets a lot of mail.

K. Corrigan: Yeah, the minister may have a large stack of mail from school boards right now.

It specifically refers to that assurance that we are going to have a collaborative type of relationship in the future. One paragraph says:

“Further, we wish to express our dismay that Bill 11 was announced without any consultation with BCSTA or local boards of education, directly contravening the language in the memorandum of understanding signed in December 2014. While we recognize the minister’s letter of April 22 indicates that the ‘Ministry of Education is committed to working closely with trustees and other partner groups as we develop the regulations and strategies to implement these important objectives across the public education…’” — and I would submit that that would certainly include section 16 — “the lack of collaboration on Bill 11 thus far undermines this approach.”

Does the minister acknowledge that by imposing Bill 11 without any consultation, it’s understandable that school boards, teachers and other stakeholders — CUPE and so on — would very understandably be concerned about the comment in the letter that they want to work closely together? Would he agree that having Bill 11 undermines that approach?

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Hon. P. Fassbender: No, I do not.

K. Corrigan: Well, I guess that’s the problem. The problem is that district after district is very concerned about this bill, and this is one prime example of the types of sections. Unfortunately, this bill and section 16 seem to be completely consistent with a 14-year pattern of this government imposing its will on teachers and school boards without consultation.

I find it actually quite amazing that the teachers and school districts and so on continue to try to work with the minister. I guess I don’t have a question anymore. I’ll take my seat.

R. Fleming: I want to go over some points and ask a question to the minister about this section to see to see if he actually understands why the objections are so widespread to it from school districts. I think other colleagues have explained…. Even the minister has said that he’s proud of many of the examples of shared services that innovative, entrepreneurial, administrative-savings-minded school boards have determined of their own initiative.

I think when the discussion, which he calls consultation, as if it’s related to this bill, which…. Nobody had ever imagined that legislative action forcing school districts to do something was the end product of a discussion table and a provincial steering committee on shared services.

When the genesis of shared services was originated, it was a bottom-up process. Now under this section it is going to become a top-down process. It is moving us from what was a permissive, collegial, exchange-based, mutually beneficial table of discussion that led to procurement agreements and others around shared services to something that is forced.

That’s what concerns school districts. They fear that they will be left holding the bag for large financial risks that accrue to them — not to the province but to them. They have a right and they have a capacity to do a business case analysis, and they may look at the same issue, the same potential long-term contract with a designated service provider, and come to different conclusions about the risk portfolio of that business proposition and about whether the savings can, in fact, even be achieved.

In fact, there are disagreements right now over the Deloitte report about whether some of the savings projections that were originally forecast are, in fact, even achievable at all. That’s a completely valid discussion to have. It’s one that is iterative and requires more discussion and analysis.

We’ve got numbers that are old now on some of the areas where there seem to be a potential for expansion of shared-service agreements. They need to be updated, and they will be updated. But after the passage of Bill 11 having that exchange between a school district business plan and analysis and the ministries won’t matter anymore, because the trump card is going to be handed to the minister.

That’s why school districts object to this. We’re going from a system where it was, as I said, a collegial, mutual-interest-based system to one that is solely determined by the minister and one that can be punitive to school districts financially. That is why school districts are writing to him.

I would just ask the minister. He’s got volumes of letters from people he ought to and surely does respect, people he knows from his job as the minister and his background in the education system who are not wild-eyed New Democrat members of the opposition, if I can put it that way. As he might put it that way.

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They are professionals who work in the school system — secretary-treasurers, superintendents, those with MBAs and other credentials — that are looking at the clauses in this bill and see problems, see risks, see a complete violation of the principles of co-governance, as my colleagues have pointed out, and they want these sections, as they’ve clearly written to him, to be withdrawn.

The minister has had lots of time to think about it now. He’s not acknowledged the mistake of not talking to these people at the front end of the legislative drafting process, but he’s surely heard from them now.

So I would ask him again. The sky isn’t going to fall if this section of Bill 11 isn’t passed. The credibility, in fact, of the minister might be partially restored if he were to give that gesture of good faith and allow greater scrutiny and exchange of ideas on this section — and a couple of others, I would add. Will he do that now? Has he heard from his colleagues on the school district side of the edu-
[ Page 8468 ]
cation partnership in British Columbia, and will he accede to their request?

Hon. P. Fassbender: The question keeps coming again and again, and I answer it again and again. Let me again clearly say that there has been discussion about many aspects that are covered by the legislation. As a result of that and the commitment to continue to move forward in a positive way…. I don’t know how many times I can say that. The opposition will never accept it. But I stand by the bill, and the government stands by the bill.

K. Corrigan: I just wanted to get clarity on the issue of existing contracts and section 16. Is the minister making a commitment that he and his government will not break in any way, either through legislation or some other matter, or cause to have broken the contracts with CUPE staff who work in the schools throughout the province?

Hon. P. Fassbender: I’ve said it clearly. We will be analyzing every aspect of any decision moving forward, and that includes existing contracts. I’m not going to speculate beyond that because I don’t think that’s appropriate, but I have said that we respect our relationship with CUPE and the good work that they do throughout the province, and that is part of any decision or any discussion that will go forward.

K. Corrigan: So I take from that that the minister is saying — it’s very clear what the minister is saying — he will not give this House an assurance that CUPE contracts will not be broken in order to impose shared services. Is that correct?

The Chair: Minister.

Hon. P. Fassbender: I’ve given my answer, Mr. Chair.

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Section 16 approved on the following division:

YEAS — 44





Michelle Stilwell



















de Jong





















Moira Stilwell

NAYS — 33















Chandra Herbert


















B. Routley

On section 17.

R. Fleming: I just want to ask the minister for an explanation of the changes here relating to the allowance under Business Corporations Act for school districts to create, essentially, for-profit entities.

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I think this is probably specifically in regard to language schools they own, maybe overseas. I’m not quite sure. But if you could outline the types of activities that are trying to be captured here and the explanation for the change.

As I read it, the change is that…. It’s just a slight section there, but it’s that the forms for the incorporation will have to now be approved by Lieutenant-Governor-in-Council. It seems to me that it’s going from a school district–approved entity to something that may now require or must have or may even originate from a cabinet order.

Hon. P. Fassbender: There are a number of sections in the revised bill that clarify that the decision-making is the Lieutenant-Governor-in-Council and not a ministerial regulation.

R. Fleming: I would just ask the minister, then, maybe a different way. What legal problem is this trying to solve? We have some school districts that have created, under the Business Corporations Act, business entities that offer different types of educational services. Some have done well; some have done very poorly by it. It was seen as a real panacea about a decade ago from this government. As we know, some parts of the province have a capacity for this and others do not.

There has been a review of international education, that I’m aware of, in the last two years. It showed that the province was originally interested in looking at, essentially, grabbing revenue for itself from school districts that operated these types of businesses. Ultimately, the government declined to do that. There have been recom-
[ Page 8469 ]
mendations. There have been reviews of these types of businesses.

I’m just wondering if, out of that review — and I forget the name of the report’s author — this change here is one of the recommendations or whether this comes from a completely different source.

Hon. P. Fassbender: Let me again state that this is a housekeeping item. The existing provisions in the act speak of regulations. This clarifies where those regulations preside. In this case it is clear that it is the Lieutenant-Governor-in-Council.

Section 17 approved.

On section 18.

R. Fleming: I would like to ask about this because it deals with referendums. School districts are able to create, I guess, special levies, local taxes over and above what the province gets from property tax payers in British Columbia right now. This isn’t a new provision that’s being amended. I’m wondering how many times this has been used.

I’m not aware of any referendums that have been held locally that give additional funding to school districts, although I can well imagine we may be on the bottom of a curve here, given that there’s something like $190 million of unfunded cost pressures, according to the B.C. association of school board officials. This may be something that they’re looking at.

But I want to understand, maybe just to begin: to the minister’s knowledge, how many times has this provision been used since it has come into force?

Hon. P. Fassbender: Again, this is another one of those housekeeping things that clarifies where the regulation power is.

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But in trying to answer the question, I know that it was put into the act in 1989 under the NDP government. It was used by a couple of districts at that time but hasn’t been used in the most recent knowledge that our staff has.

R. Fleming: Looking at the specific amendments…. They don’t change the right, I suppose, to seek the approval of the electors for a board that wishes to raise residential taxes. But looking at the specific text that’s to be changed here: “is amended by striking out ‘any other prescribed information’ and substituting ‘any other information prescribed by the Lieutenant Governor in Council.’”

It seems to me that the substance of this change is that it was previously within the school board’s ability and purview to design and draft the text of a referendum ballot and put it to referendum. Now it seems to me that this must be overseen by the province. I’m just wondering if that’s the correct interpretation of these amendments — going from something that was locally signed off through to the ballot box and must now have a step where the province must sign off on it.

Hon. P. Fassbender: What is clear is there’s a format in the back of the current School Act that has provided the boards…. The purview of the board is to word that and to take that forward. This simply, again, is one of those housekeeping items to change the designation to the Lieutenant-Governor-in-Council, as opposed to a ministerial regulation.

Sections 18 and 19 approved.

On section 20.

R. Fleming: This is about the tax notices. Again, I expect that the minister will suggest that this is a housekeeping amendment and moving towards a new format.

But I want to ask him on the record if the form that is currently used to advise ratepayers of taxation notices — whether this is going to be a change. I’m trying to understand it. My understanding is there’s already a lot of provincial involvement through B.C. Assessment, but it’s also the collection of these taxes. The notification of these taxes involves local government as well.

So I would maybe ask the minister: what is the rationale for this change, and will it likely lead to any change in format of the notification that ratepayers currently experience?

Hon. P. Fassbender: Let me repeat again. This is a housekeeping item. It does not change any of the procedures.

K. Corrigan: I just want to be clear, then. We have in these very sections a change from saying “the prescribed form” to “a form prescribed by the Lieutenant Governor in Council.” When you’re talking about “the prescribed form,” the prescribed form would refer only to a minister? In other words, it is transferring the ability to prescribe from the minister to cabinet. Is that correct? Or is it transferring it from the minister and cabinet solely to the cabinet?

Hon. P. Fassbender: Again, it is a housekeeping item that clearly articulates that the form is prescribed through the Lieutenant-Governor-in-Council and not ministerial regulation.

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Sections 20 to 24 inclusive approved.

On section 25.

R. Fleming: I have some questions for the minister on this section around what is a significant change. He’ll
[ Page 8470 ]
be aware that this is a section of concern to the school districts and to others who have corresponded with him. Although this relates to the Francophone Education Authority, in another section of this bill it’s duplicated to apply to the other regional and local school districts, not just the provincewide CSF school district.

I guess my question is…. By giving the minister the power to impose special advisers and special advisory committees for, really, any reason…. It clearly says in this section “any other matters,” which is anything, as I see it.

I just wonder if the minister can comment, in light of a recent court ruling by the Supreme Court that families in the west side of Vancouver and potentially other parts of B.C. have had their constitutional rights upheld that those that are French speakers or who have been educated in French are guaranteed under the Constitution of Canada that their children will have full and equal access to the equivalent French-only education. Of course, the government has resisted that or defended an interpretation of that, I should say, before the courts. That has recently come to its conclusion, and the ruling went against the province.

I haven’t got the judgment in front of me, so I can’t quote exactly what the remedies were. But there is some time, and there is, in that ruling, some expectation that the province will fix the situation, that they will, in fact, provide something that’s satisfactory to parents and to what is a reasonable public standard about what schools should look like. The overstuffed school that is in one part of Vancouver will have to create and give way to additional schools. That is likely the implication of this ruling.

Now, what we could see, potentially, with this provision is that the province could move from the unsuccessful defendant in this court action to now using a new authority to go in and essentially take over the francophone school board in B.C. and reverse, undermine, recommend against determinations that have been made by that school district.

I guess I would ask the minister, in light of both the recent context but also the specific meaning of the changes here — special adviser, special advisory committees…. It’s possible that even though the court has set an expectation that the province will open new, French-speaking schools in parts of Vancouver and other parts of the province on the basis of this ruling….

I would ask the minister this. Is it possible that he could appoint a special adviser or a special advisory committee that would go into the Francophone Education Authority and specifically say, “No, we’re not going to do that,” and recommend against the opening up of any new schools by putting his own people in there to overrule the elected officials that are in charge of the authority? Is that a possibility under this new situation?

Hon. P. Fassbender: As the member is very aware, there has been one ruling. There is still a case before the courts. I’m not going to speculate or comment on any of that. I think the change in the legislation in this section is clear. Beyond that, I’m not going to offer any other comment.

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R. Fleming: Let me just read the new section 166.431, subsection (1)(a), which allows the minister “to review the progress of the francophone education authority or francophone education authorities in respect of the improvement of student performance or to inspect and evaluate any other matters as directed by the minister.”

Presumably the need for new school facilities, which I think has been a central preoccupation to improving student performance and being able to satisfy those parents that have their kids involved with this francophone school authority…. Presumably, any other matters would include appointing a special adviser to go in and second-guess — in fact, even rule against — the direction that the francophone school authority would like to move in, which is to open more schools.

Is it not possible that a special adviser reporting to the minister, appointed by the minister, could go in and make an exact opposite determination because that is a matter that the minister has give direction on?

Hon. P. Fassbender: The changes that are made here are consistent with what currently exists in the act. There is no change to that. It just brings it in line with the accountability framework that has been amended and is envisaged in the bill as it stands now.

K. Corrigan: Subsection 166.431(1)(c) does seem to be a substantive change in that the minister can appoint a special adviser to a francophone school if the minister considers that the director general of a francophone education authority “has failed to report to the commissioner a matter that, in the opinion of the minister, should have been reported under section 16.” Section 16 deals with reports of dismissal, suspension and discipline regarding authorized persons.

Is this simply being more specific about obligations? Or does it…? It seems to impose a new obligation and a new power to the minister to appoint a special adviser if the minister considers this reporting has not been appropriately done. Is that correct?

Hon. P. Fassbender: This is simply moving the provisions which are in the current act into a new section of the act. Nothing has changed from current practice.

K. Corrigan: Okay. I’m wondering if the minister could just tell me, because we’re skipping back and forth between acts, what section of the act…? This particular subsection (c) — where does it come from? Where is it in the existing act?

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[ Page 8471 ]

Hon. P. Fassbender: I might ask, with the indulgence of the member…. It’s a fairly complicated process. Where it does currently reside in the existing act, the way it is in that is a little bit more complicated. If you could give us some time, we’ll be happy to provide the answer.

If we could move on.

The Chair: Sorry, I didn’t hear that.

Hon. P. Fassbender: I move that we stand down this section.

Section 25 stood down.

On section 26.

R. Fleming: I just want to ask about this expansion of special advisers to a special advisory committee. I think that right now it basically moves from an individual to some kind of triumvirate or what have you, some kind of combination of a committee. Now, what is problematic here is that the minister is going to be able to create any circumstance he can possibly imagine or desire to appoint a special adviser or special advisory committee. That’s problematic in of itself.

The other problem — and I would just ask my first question about this — is that the school district who has this adviser or advisory committee imposed upon it has to pay the costs for it. It’s bad enough having to pay a special adviser’s travel costs and other expenses related to looking over their shoulder and interacting with their staff and delving into whatever other administrative area they wish to second-guess and report out on, but it becomes more expensive when there are even more people.

I just want to ask the minister: is there any limit to how large this committee can be? Why is it even necessary to have a committee structure to a special adviser?

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If you’re talking about just a special assignment where somebody goes in who is…. The more independent, the better, but I think we’ve seen from the Vancouver experience that’s not the case. Where you’re having that, there are costs, and they’re always assigned to the school district.

Does the minister acknowledge that more people equals more cost — more travel, more budgets, more expenses — to the entity, to the school district that is being investigated by the special adviser?

Hon. P. Fassbender: This change simply allows for the ability to assign special collaborative teams that may go in on a particular issue. I can’t speculate on what that would be. The member was incorrect when he suggested the districts always bear the cost. A recent example is that the Crown has picked up 100 percent of the cost on a special adviser to the Vancouver school district.

Sections 26 and 27 approved.

On section 28.

R. Fleming: I thought I had the most recent version of the School Act, but I’m struggling to find the section that is repealed. Therefore, I would ask the minister to explain very carefully the section, 166.47, that is being repealed and the implication for what is substituting for it. I know he’ll undoubtedly say this is a housekeeping section of the bill as well, but I really need a little bit of assistance as to what we’re looking at.

Hon. P. Fassbender: Under section 28, it adds a new section. It does not repeal any other existing section.

R. Fleming: I just wonder, then, if the minister can maybe describe the general purpose of adding this section. The explanation in the Bill 11 document is quite vague on that.

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Hon. P. Fassbender: This is the same as it was for the public English boards. So it is simply putting the same provision in this for the francophone schools.

Section 28 approved.

On section 29.

K. Corrigan: Our concern is…. Section 29 says: “Section 166.47 is repealed and the following substituted.” Then it has 166.47. But the minister said it was new. So how can we be repealing something that’s a new section?

Hon. P. Fassbender: It took me a while to get the explanation and understand it, but I do now.

Both sections come into force at different times. Section 28 comes into force on royal assent. What we did not want to do was to see the accountability framework be delayed. So when section 29 comes into effect on July 1, under the new accountability framework the amendments that are there would then come into force. So it will repeal section 28 at that time, and section 29 comes into force.

Sections 29 and 30 approved.

On section 31.

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R. Fleming: I want to ask the minister just about the new language here on “designated service provider” and the amendment to 168.

[D. Horne in the chair.]
[ Page 8472 ]

I just want to ask the minister about why this is worded the way it is. It basically says: “for the purpose of section 86 (6), designating one or more persons, including a board, who provide procurement, managerial, administrative or other services as a designated service provider, specifying the service with respect to which a person is a designated service provider and specifying one or more boards with respect to which a person is a designated service provider….”

I just would ask the minister the rationale for both the individual and board entities potentially creating any combination that could be called a designated service provider. I’m just trying to understand why it’s worded in this way and what specifically that may mean.

Hon. P. Fassbender: I wish I always knew why lawyers want to word things in certain ways. I’m not going to speculate on that.

The reality of this is a board could be a service provider, a combination of boards on a regional basis could be a service provider, an individual could be a service provider, and the purpose of wording it this way is to provide maximum flexibility for any combination or any one of those particular circumstances being used.

It’s worded this way to give the flexibility, as we’ve said under the discussion of shared services, where there may be a combination of two boards that become a service provider, an individual could be a service provider, or indeed, it could be regional or even provincial.

K. Corrigan: In that definition, where it references “designating one or more persons, including a board, who provide….” Persons would include a company?

Hon. P. Fassbender: Yes.

V. Huntington: If we go back to the discussion surrounding section 16, where we were trying to establish what the minister was attempting to do with the power to order a designated service or purchase, at the time the minister said that the mandate of the school board to manage schools and properties was not being affected by these amendments.

But when you read the language in section 31, you can see how it disturbs school boards and administration when they look at the language of a designated service provider who can “provide procurement, managerial, administrative…services.”

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What does the minister mean by that language, and to what extent do he and his officials feel that that thus interferes with or could interfere with the management of schools and property? How does he want to define that, given the school board mandate? And when does he expect to use that power?

Hon. P. Fassbender: The answer to this is not dissimilar to my answer in section 16. This would be the exception, not the rule. The process leading up to decisions on shared services and what combination of either districts or individuals or whatever might be utilized is based on the process that I talked about that the ministry has undertaken and will continue to undertake with districts and with their teams.

Again, to speculate when or how is, I think, not something I’m going to enter into. What I will again reinforce is what I said under section 16 — the process of collaboration and working with the local school districts to get to a point where a decision could be made. I would say again, without any hesitation, it would by far and away be the exception, not the rule.

V. Huntington: Then will the same expectations for consultation…? Basically, what you’re going to be entering into here is almost like a negotiation, unless you want total misunderstanding out there about what these authorities and powers that you might designate would become.

The other question that comes up to me quite often is: what are the levels of expertise that can be expected for these designated powers and services? Will you be consulting with the boards on the level of expertise they anticipate or would want? Will you be looking at the types of service providers that the boards might find acceptable in certain situations, or is this all a power that the minister is reserving unto himself? What is the level of understanding and consultation that will be out there?

These are important, frightening powers to these school boards. I don’t blame them. The language is extremely provocative. The definitions of when and how the minister could act, I think, become very important.

Hon. P. Fassbender: Again, to reinforce what I’ve said already in discussions with the shared-services working group, with discussions that have been had by the deputy with members of the BCSTA and by staff at the AGM, there is a wide range of discussions that need to happen before any decision is made on any shared service.

The hope would be that whatever expertise might be required, whether that even be third parties who can be brought in to assist the boards and the ministry to come to the best decision with the best input…. We are wide open to doing that and have said that clearly.

I guess, again, it’s one of those things where we have to continue to go down the road to prove that what we’ve just said is actually going to be the practice, but the commitment is very clear that that will be the practice and that is the process that will be in place.

I can’t alleviate fears that are coming from people who may have concerns. All we can do, and the commitment of the deputy in every discussion that he’s had, is that our team will work with their team to get to the place where a business case is brought forward and a decision is made.
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V. Huntington: With great respect, I do believe it is necessary to alleviate their concerns. I think it can be done with a degree of openness and consultation that so far has been missing.

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I hope you get there, because this constant controversy and disruption within the system isn’t healthy for anybody, not the ministry or the boards. It’s unnecessary, ultimately, I think.

One of the other issues that troubles me with looking at the designated service provider is the arbitrariness of that designation. Does the minister anticipate a provincewide procurement system similar to the health authorities? Therefore, does he anticipate all the ramifications of that in the future — i.e., bundling of products, no ability of local or small businesses to become part of the procurement system?

We have a real problem in the health procurement sector. It would be really unfortunate if you end up transferring those problems into a whole new provincial purchasing mechanism when the same mistakes don’t need to be repeated.

Could the minister describe for us how and what his ministry is thinking of in terms of the long-term nature of the designated service provider and whether the procurement system is going to be centralized and how so?

Hon. P. Fassbender: You know, the question begs some speculation. And I am loathe to do that because the minute I say one thing, someone is going to say: “You said that you were going to do this.”

Let me say this. We’ve had discussions already at the shared services committee where a school district has stepped up and said: “We are prepared to assist in this particular area.” It’s not the government imposing it. As part of those discussions with school districts, A school district has said: “We’re prepared to be the procurement arm for school districts, and here’s the reason why. Here are the benefits.”

I do want to say very clearly…. I’ve had members of my own caucus ask me the question: “What’s the local implication?” We have said clearly that when we evaluate any of those, impact on local businesses and communities is part of that evaluation. We’re not just going to say that just because on paper there’s a savings potential, we’re going to ignore what the implication is.

I will say this, even in the health sector and in the post-secondary education sector, there have been proven benefits to shared procurement on certain aspects. Not without challenge by some people saying: “Well, in our opinion, it hasn’t worked.” But, again, I think we’ve learned from that experience — what has worked, what perhaps has had more challenges. We’re going to evaluate all of that with the districts as we move forward.

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V. Huntington: I can only hope and believe.

I guess my last word on how you go forward in this is to beg you to introduce some flexibility into those systems so that people can manoeuver and have a little bit of autonomy on how they look at their local situation.

It becomes incredibly important. It’s the health of the small business that is really at the heart of that flexibility, which is not now in the health procurement system, and it’s a real shame.

Hon. P. Fassbender: Very simply, flexibility is built into the process moving forward. That’s part of what the sector advisory committee is going to be helping to define in regulations, and that will become obvious as that work is done. That work hasn’t been finished, and that’s why none of this is going to happen from one day to the next. There’s a process moving forward. We’re committed to that, and flexibility and local impact will be one of the considerations.

V. Huntington: Just to quickly follow up, could the minister tell us how open these decisions will be as they move through this committee? Will they be available for some public comment within the education committee? Within this House? Within the trustees association? How will these decisions have some sort of public debate about them?

Hon. P. Fassbender: The deputy in the first meeting that the sector advisory committee has had laid out some very clear expectations. Every sector of the system, with the exception of the BCTF, which is a separate stream that we’re going to be working on in other issues…. The expectation is that the leadership of all of those partner groups are at the table. That’s the first thing.

The second thing is their responsibility, and the expectation of the deputy who chairs that committee is that they will report back to their sectors on issues that are raised and receive input. That input comes back to the table. It is discussed, and if directional issues are agreed to by that group, that would then go back out to their organizations because, in varying degrees, they either have the authority to say yes to a decision, or they may have to go back to their executive.

Again, that process will ensure that there is transparency and openness and communications going both ways.

Section 31 approved.

On section 32.

R. Fleming: Again, this is a substantive section that has been the subject of controversy and feedback that the minister has received from those in the education sector who believe that it is an expansion of ministerial power to make administrative directives for almost any reason.
[ Page 8474 ]

I’m looking at the section that is added here. The concern I think that I have is: why does he need an additional power to not only create administrative directives for anything conceivable, but also that he awards himself the power that…? I’m looking at subsection (4) here: Failure of a board to comply with his administrative directive is “grounds for the appointment of an official trustee.” In other words, the elected board is fired. So more power to create more directives for more things and more explicit grounds to be able to fire elected trustees.

What on earth is the rationale for this? We have heard the minister talk about collaboration and partnership and all kinds of wonderful words — and the right words, if we had the right leadership around education. Absolutely. But here we have the legislative proof that the minister doesn’t trust his education partners, apparently, because he’s scheming up ways to create more directives to force them to do things that he wants them to do and making it more explicit about how and when he can fire them if they don’t follow his administrative direction.

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What is that all about? Why would the minister seek to do this — to poke school trustees and school boards in the eye — when he has said so many times, as has the Premier, that at this point in time, when we’ve been through so much confrontation in the school sector, when parents and kids have suffered so much disruption in their lives and theirs schools, in the words of the Premier, it’s time to heal?

This is not healing. This is reopening a wound. In fact, this is picking a new enemy. It’s no longer teachers. It’s school trustees. We don’t trust them to do their job. If they balance their budget but it’s in a way the minister doesn’t like, we’ll fire them anyway. A board that lives up to its fiduciary responsibilities under the School Act can now be fired in a different way. That’s the concern I want to ask the minister. Why on earth is he doing that?

Hon. P. Fassbender: I suspect that in this section there will be more speeches from the member opposite from his perspective. But to answer the question, under the current legislation, what is being removed and what is being put in is that the powers will reside under the act and the provisions of the act. That is the rationale for this change and this particular section.

That said, noting the hour, I would like to ask that the committee rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 6:52 p.m.

The House resumed; Madame Speaker in the chair.

Committee of the Whole (Section B), having reported progress, was granted leave to sit again.

Committee of Supply (Section A), having reported progress, was granted leave to sit again.

Committee of Supply (Section C), having reported progress, was granted leave to sit again.

Hon. T. Stone moved adjournment of the House.

Motion approved.

Madame Speaker: This House, at its rising, stands adjourned until 10 a.m. tomorrow morning.

The House adjourned at 6:53 p.m.


Committee of Supply


The House in Committee of Supply (Section A); M. Bernier in the chair.

The committee met at 2:52 p.m.

On Vote 38: ministry operations, $23,872,000.

Hon. R. Coleman: Joining me at the table and behind me are a number of my staff: Steve Carr, Shauna Brouwer, Fazil Mihlar, Brian Hansen, Ines Piccinino and Paul Jeakins.

B. Ralston: I don’t have any staff to introduce, but I’ll do my best nonetheless.

I want to begin first with the service plan. On page 8 one of the performance measures is the target of LNG power supply agreements. In 2013-14 the actual number was zero. In 2014-15 one was forecast, and there’s a target for 2015-16 of two.

Can the minister explain where we are on these performance measures?

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Hon. R. Coleman: We have one power supply agreement with LNG Canada for the year ’14-15. That was completed. We have a second one completed, but it’s under a confidentiality agreement pending the consultation with First Nations. We have two more underway that are governed by the same aspect as the first but not as far advanced.

B. Ralston: I didn’t hear clearly the name of the com-
[ Page 8475 ]
pany that the minister said the agreement was completed with. When he’s responding to that, could he explain what the terms of that power supply agreement are in broad terms, what the duration of the agreement is and any other general details to give a sense of what these agreements involve?

Hon. R. Coleman: The LNG Canada one is in the public domain. It was announced and the details released at the time. I don’t have those details, but we can certainly get them quickly from our folks for the member opposite. The second one that’s completed, as I mentioned, is under a confidentiality agreement pending the consultation with First Nations. The two more underway are governed by the same work. They’re underway, and they haven’t advanced far enough that they’re able to be signed or completed as yet.

B. Ralston: I know it’s a bit perilous for the minister to predict when consultation might be completed. In fact, I’ll be pointing out, probably a little bit further, where the minister has made some perhaps overly optimistic statements about when agreements might be completed. But can he give a sense of when this agreement, the second one that he’s referred to, which, as he says, is completed but is in the process of consultation with…? Is it with a First Nation or with First Nations plural?

Hon. R. Coleman: The member is correct that it is a little bit difficult to predict, but we think, given the stage and how far it’s advanced, it’s probably two to three months away. We certainly had no difficulty meeting the targets that are set out in our service plan.

B. Ralston: I want to turn now to talk a little bit more, and perhaps more in detail, about project development agreements. Can the minister explain the legislative authority that gives the minister the power to enter into what are described as project development agreements?

I say this because we have attempted to FOI ongoing discussions about project development agreements between any proponents and the government, and the freedom-of-information request has come back totally redacted — that is, totally blank. It’s very difficult to understand exactly what might be involved in these agreements.

The minister has spoken in a general sense about these agreements providing further prospective certainty to investors. I think he’s used the phrase: “They will be written in stone.” I’m not sure whether it’s pumice or granite. In any event, perhaps the minister could begin by describing where the legislative authority or the statutory authority to enter into these agreements comes from.

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Hon. R. Coleman: The project development agreements are presently at non-disclosure agreements in each project, because each one’s different. That’s the negotiation process the member would be familiar with around the commercial piece of this.

The authority to sign will come in a piece of legislation when the first project development agreement is signed or ready to be signed, and it will be public. Not only will the legislation bring it into force, but it will also attach the agreements, so everybody can see what’s in the agreement.

B. Ralston: Just so I’m clear, then. The authority to enter into these agreements is based on prospective legislation that does not yet exist. Is the minister prepared to table in a broad outline…?

Typically in the legislative drafting process, there’s some internal discussion. Is the minister willing to give the public any idea what might be in these agreements? Given that legislation is being contemplated, it seems somewhat surprising, in terms of the order, that the agreements would be fully negotiated and signed off prior to legislation being introduced into the House. Perhaps he can explain the reason for that approach and what might be contained in these agreements.

I do have further questions. These agreements are well known and used in, particularly, mining developments in the Third World, but many of the commentators seem to think that they’re not used much in the first world. I’ll have further questions about that.

Can the minister explain, one, why agreements are being negotiated before the legislation is introduced and, secondly, what details might be included in that legislation?

Hon. R. Coleman: First of all, under section 21 of the Freedom of Information and Privacy Act, public bodies are often in possession of commercial or financial information of outside businesses and must withhold that information from an applicant if releasing it would cause him harm to his business.

At this stage of the game, when you have a number of people that have different models — where their gas would come from, what their drilling programs are, the depth of the wells in different areas of British Columbia, whether they have gas that would come from Alberta — all of those things are financial information that would be included in the developing of an agreement or project development negotiations. It’s not uncommon to see, if you can get to what would be the outline of an agreement before you would bring the legislation, that be attached to the agreement for public debate.

During the period of time that that’s taking place, as some of these companies are publicly traded companies, the member would understand that our information that could be included in some of the discussions and negotiations could affect markets. That’s why they’re subject to confidentiality until they’re in a position to be finalized.

If they’re not finalized, obviously, there is no reason to
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bring the agreement before the House with the legislation to bring it into force. At that point in time the whole package becomes public.

The member should also know that if you’re negotiating with one project of one description, there can be multiple partners who also have confidentiality arrangements with regards to their financial arrangements with the project company, which could be four or five partners of major companies across the world and all responsible to boards of directors.

All of that detail takes time to work through. When we get to a final project development agreement, as I said, it’ll be public because it will be attached to legislation.

B. Ralston: Supposing for the moment that I accept the minister’s description that there may be commercially confidential information. I have no doubt that that’s the case. Legislation would not deal with the specifics of any one company. Presumably, this would be, unless….

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Is the minister saying that each project development agreement would have a companion piece of legislation passed in order to put it into effect? Is that what he’s saying? If that’s the case, this would be something very much like the Alcan agreement back in the 1950s or perhaps the agreement between Labrador and Quebec on hydro revenue.

Is it a single piece of legislation per project development agreement? Or is this intended that there will be general legislation, that once one project development agreement is made public, the legislation would then fit — or be suited, I suppose is a better way to put it — for other prospective project development agreements? Perhaps the minister could explain that for me.

Hon. R. Coleman: Our approach has been to get to a piece of legislation that is enabling the ability to do project development agreements but not to bring it into the Legislature. Obviously, this is going through drafting. Time, and presentation of legislation…. As the member knows from being a former House Leader across from me a couple of years ago, the legislation, until it hits the floor, can’t actually be publicly discussed unless it’s out for some form of consultation. Even at that, it’s usually in the form of a white paper or legislation that could be amended or adapted in the future.

The enabling legislation would not come before the House until such time as there was actually a project development agreement that was executed, simply because that would show the form and fashion of the project development agreement for the public in the legislative discussion as openly as we possibly can make it, because we will have come through the period of time where we’re subject to confidentiality agreements — on both sides, quite frankly, because you’re trying to negotiate in the room with various lawyers and staff on our side, the government side, and companies and their partners on the other side.

We’re in these confidentiality agreements for a reason, and that is so that we don’t unduly influence an agreement with somebody else when we’re in those conversations and discussions and to actually protect the commercial pieces of this until such time as we get to a deal and get an investment decision or the signing of a project development agreement. Once that’s done, it will come into the Legislature, and the Legislature will have the opportunity to debate it.

The Chair: Just a reminder to the member, too, that the necessity of discussion in estimates around legislation is not typical protocol, so I suggest you move along on that line of questioning.

B. Ralston: The minister said — and I’m sure the Chair heard this — that there are negotiating agreements that will result in legislation. It’s linked directly to ministerial activity within the budget year, within the vote and within the administration of the minister. With the greatest respect, I think it’s fair ball to ask questions about it, and I’ll continue, if the Chair doesn’t mind.

The minister has said that these agreements are necessary. I want to quote from a document published by the International Monetary Fund called Taxation of Petroleum and Minerals: Principles, Problems and Practice. Then I’ll ask him for a comment.

“Fiscal stability clauses are generally justified by: (1) the large size and sunken nature of the initial investment and (2) often a long period required to recover investment and earn a reasonable return, taken together with (3) a lack of credibility on the part of the host country to abstain from changing the fiscal rules, possibly singling out the high-rent petroleum or mining operations, once the investment is sunk — the time inconsistency problem.

“It can be argued that the need for a fiscal stability clause is less compelling under certain conditions: a history of sound fiscal management; statutory and effective corporate tax rates in line with international rates; low tariff rates and non-imposition of taxes that distort investment and production decisions — e.g., asset taxes, excises on machinery — non-discrimination between foreign and domestic investors; a low level of corruption; a transparent tax policy and a reasonably efficient tax administration.

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“Adaptability and progressivity in a fiscal regime may also serve as an alternative. There may be other forms of intervention that reduce risks to investors — subsidies, infrastructure provision, even state equity shares. Fiscal stability clauses are more common in mining and petroleum agreements negotiated by developing…countries than in those negotiated by developed countries.

“Some developing countries with a significant petroleum sector, including Angola and Nigeria, and most developed countries, including Norway and the United Kingdom, do not grant fiscal stability clauses in their petroleum agreements.”

Given that we’re dealing with international companies, given that this is a global market, given that this is a document from the International Monetary Fund and describes how in a jurisdiction…. I think the description of the jurisdiction where the need for such a clause is less compelling, given a number of the attributes, can
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the minister explain why it is necessary, in his view, to enter into any negotiations for such agreements?

Hon. R. Coleman: Obviously, I’m not familiar with all the passages from the International Monetary Fund. But I can tell the member this. We did a competitive scan throughout the world as we started to work on this back in 2011-12. We looked at how we could look at project development agreements to bring certainty to both parties as they moved forward and tried to land this multi-billion-dollar opportunity.

The fact of the matter is that it would be accurate to refer you to Australian contracts, for example, where they have been used very much like we would be designing this in respect to liquefied natural gas in that country, which wouldn’t fall into the sentences that the member referred to about some of the other countries.

B. Ralston: I am genuinely attempting to grapple with the rationale for having these agreements. I mean, this is what the International Monetary Fund says:

The need for these clauses is less compelling than “a history of sound fiscal management, statutory and effective corporate tax rates in line with international rates, low tariff rates and non-imposition of taxes that distort investment and production decisions — e.g., asset taxes, excises on machinery — non-discrimination between domestic and foreign investors, a low level of corruption, a transparent tax policy and a reasonably efficient tax administration.”

Can the minister tell me where he disagrees with that as a reasonable description of the fiscal regime here in British Columbia?

Hon. R. Coleman: First of all, we’re trying to attract a new industry that hasn’t been in British Columbia before. The IMF doesn’t actually dictate British Columbia’s policy on how we do business. If you’re looking to do it right, you go and look at similar economies. Australia has a similar economy. They just developed an LNG industry, and they used project development agreements to help develop that industry.

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We’re not guided by something that’s written in a report by the IMF. We’re guided by what we think would be the ability to provide some stability in agreements with companies who are looking to invest, in this case, somewhere between $15 billion and $30 billion in a jurisdiction. The member would know from his background that as people go to that level of investment and decision-making, they’re looking for some mitigation of the understanding of their risks. The best way, we felt, to go about that was to build, as members debated the tax in the Legislature with the Finance Minister.

His estimates follow mine, so you can certainly get into that conversation with the Finance Minister tomorrow about why we’re doing what we’re doing so we can implement this to let the people that want to invest in British Columbia know what the rules of the game are in B.C.

B. Ralston: I’m curious. I appreciate that IMF is not dictating anything. This is a document that’s offering an international perspective on where these agreements are being used and the kinds of states and fiscal regimes that accommodate them.

According to this document, Angola and Nigeria don’t use them in their petroleum industry, yet British Columbia is proposing to have them in a nascent LNG industry. I’m wondering what the leaders of Angola and Nigeria know or why they would take that approach, along with Norway and the United Kingdom, in terms of dealing with very similar issues — major, long-term investments in resource industries.

The minister has yet to offer beyond just saying it’s necessary to attract business. Is this something that’s put forward by proponents, or has the government taken upon itself to enter into these negotiations?

The minister will appreciate that it’s very difficult for me to debate this, because the minister has been absolutely stingy in giving any description of what is actually the subject of the negotiation.

Do we know whether it’s tax rates? Do we know whether it’s levels of temporary foreign workers? Do we know whether it’s levels of depreciation, municipal taxation? Is there an effort to freeze those taxes over a long period of time? Are there penalties attached to a change in that regime?

Certainly some documents, some agreements, offer a premium in the sense that the company will pay more in return for getting a fiscal stability agreement. That’s, again, what the literature shows. I’m just trying to get a sense, on behalf of the citizens of British Columbia, of what might be involved in this industry.

The minister may recall that when we were debating, I think, Bill 23, the Miscellaneous Statutes Amendment Act, his own ministry had a document which showed, for example, on the issue of royalties, what’s important to look at — whether the royalties are low enough to incent activity but high enough to generate a fair return for the public of British Columbia.

Those are, I think, totally legitimate considerations I’m pursuing here. There’s no basis on which I can evaluate that, because the minister won’t even give a broad outline, other than just saying that these are agreements that are being negotiated in secret, they contain commercial secrets, and by the way, they’re written in stone.

There’s a certain finality to that that makes one wonder what might be in the agreement and whether that’s advantageous to the citizens of British Columbia or not. Is the minister prepared to give any more detail other than what he’s given so far?

Hon. R. Coleman: I hardly think the term “stingy in information” could probably be attached to this file when
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there have been two pieces of legislation on the taxation — one being what the taxation is and the other being with the implementation — put before and debated in the Legislature.

We just debated the royalty curve legislation and the discussion around that just in the last few days with regards to that. All of these things are part of trying to build a competitive industry in British Columbia.

I know it’s frustrating to the member opposite that I’m refusing to breach confidentiality agreements that have been signed so parties can get down and discuss these things, actually discuss issues that might be pertinent to British Columbia creating a competitive LNG industry — and me not wanting to breach that confidentiality. I know from his profession that he would understand that risk to me or anybody else with breaching such a thing.

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I can tell the member this. We started out to consult with industry particularly and, as an extension of that, people that would be in the financing of these types of projects and sought legal advice with regards to the best way for B.C. to approach attempting to build a competitive LNG industry.

I can’t be any more clear that, if there’s a project development agreement accomplished, we will have legislation that will be ready to bring that authority in but at the same time put the entire document publicly out for everybody to see. It’s not like they’re not going to see it. They will see it. It will be public. Anybody will be able to see what’s in those agreements.

At this stage, though, when you’re in negotiations, which we are, I can’t breach that confidentiality. I’m sorry if the member doesn’t understand that. I would have thought, from the legal background, he would understand that.

The reason for that is that there are different companies with different approaches with technology and how they will handle their emissions, how they will handle whether they want to go onto the grid for some power or not on the grid for some power — all those things that would be part of a project development agreement worked out prior to it being finalized and then going to final investment decision.

It’s a lot of work. It has to be done in a way that people can be confident that documents and trade information that they share across the table with people are maintained at the highest level of confidentiality. If there’s a design issue or whatever that is of a competitive nature that could affect the competitiveness of one company over another, that respect has to be maintained as you work through a project development agreement to get to where you now have a deal you can take public and everybody can see, debate and understand.

B. Ralston: Well, I disagree with the minister’s suggestion that I don’t understand the obligation of confidentiality. But at a very high level of generality, there’s literature on these agreements. There are different types of agreements, and there are different provisions.

Another piece of literature says there are basically two courses that can be taken. One would be in a project development agreement to freeze the obligations of the company and the state or the state entity in the name of, basically, sanctity of contract. Those would be, as the minister has said, written in stone.

There is another alternative, which is called an adaptation clause, where both parties bear risk and both parties have the option to reopen the contract in certain stipulated circumstances, a variety. Given that…. Again, I don’t know. We’re not being told. The public’s not being told. These agreements could be for 25, 30, 40 years, for the life of the asset that’s being amortized, and a lot can happen, obviously, during a long long-term contract.

Are there going to be mechanisms? I don’t think this is something that would breach any commercial confidentiality. This is a matter of policy entering into these agreements. Will they freeze the obligations of both sides as best the government and the state can do that, with penalties if they’re broken by subsequent legislation? Or will there be mechanisms that leave open the possibility that there may be change? There may be a mechanism, whether an arbitration mechanism or a reopener of negotiations, to renegotiate.

I think I’ve used the example…. I feel like the Minister of Transportation now. I’ll use the word, as I said. There are agreements where long-term agreements can be very, very harsh on one side. One only has to think of the position of Newfoundland and its power sales agreement with Quebec. They’re locked in selling power vastly below market rates, to the great advantage of the province of Quebec. It’s locked into an agreement, there’s no reopener, and Newfoundland suffers that huge detriment of public revenue over decades.

These are legitimate public policy questions. I’m not asking that the details of the commercial propriety and all the secrets that may be involved be disclosed. Of course not.

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I think the minister has an obligation, at least, to give a sense to the public of: are these long-term agreements? Are they locking everything down so that we are stuck or benefit from — it would be a matter of judgment — the minister’s wise negotiation or bad negotiation? I don’t know. It’s not clear at this point. I have no idea.

When those things come to the light of day, they can’t be changed. Or will there be some mechanism in a long-term agreement where it can be reopened, where there’s an arbitration clause or some renegotiation mechanism on notice? It seems to me that that would be prudent. I’m wondering whether the minister will at least enter into the debate at that very high level of generality on an important question of public policy.
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Hon. R. Coleman: I think what I’ll do is I’ll read something for the member.

“The province intends to enter into project development agreements with project proponents in order to provide certainty for LNG development with respect to those costs within provincial jurisdiction. These agreements will provide proponents with long-term certainty about the fiscal and policy framework that will apply to their projects once they have reached a final investment decision and proceed with construction. The agreements cover a range of matters.”

They include B.C.’s LNG income tax, which has been before the Legislature and everybody knows; B.C.’s corporate income tax, which the member knows is in the budget, and the Finance Minister put some things out there; municipal taxes, on which there’s ongoing work in one of the ministries; and “B.C. greenhouse gas emissions benchmark, upstream benefits and representations regarding B.C.’s positions on the skills and jobs training, engagement with First Nations and federal-provincial issues.”

That is, actually, on pages 8 and 9 of my ministry’s service plan, and it describes exactly what we’re trying to do.

B. Ralston: Thank you. Of course, I’ve read that in the service plan, but my question is a different one. Given that it’s intended to enter into long-term agreements — although it doesn’t really say that…. It just says certainty, although it says long-term certainty.

Long-term certainty can be five years, ten years. Is the minister prepared to, as a matter of policy…? I mean, I know Forrest Kerr hydropower purchase agreement was, I believe, 40 years or maybe 50 years. There are some power purchase agreements that are 30 or 35 years. Are these the kinds of agreements that we’re talking about in terms of the length of agreement that certainty is going to be provided? Maybe we can just deal first with the prospective length of the proposed agreements.

[J. Thornthwaite in the chair.]

Hon. R. Coleman: I think the service plan comments are clear about the long-term agreements that these folks, these companies are making. As an example, an investment in an LNG plant with two trains would be somewhere around $14 billion. In addition to that, they would need to drill about $2 billion a year for a number of years, supporting the communities of Dawson Creek, Fort Nelson, Fort St. John to a much higher level because of the activity that would come with it. Then the pipeline that would come from the northeast part of our province down to the coast…. We’ve got another $7 billion plus.

Obviously, long-term certainty is one of the reasons they would want to know whether we can give some certainty in and around that. With regards to that — the member refers back to the LNG tax — you’ll notice that there’s a formula there, and the reason for that formula is quite simply to understand that to attract an investment of this size into a jurisdiction of our size is going to take some agreements that would give long-term certainty with those.

I can’t give the number of years yet — because an agreement, when it’s finalized, will come before the Legislature — and show that to the member. Considering the fact that we’re in negotiations on a number of fronts on project development agreements, I can’t do that.

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The reality, though, is this. The best example I can give is…. The member for Skeena is here. The Rio Tinto Alcan smelter was probably one of the largest investments in a capital project in B.C.’s history. It’s about $4 billion. For an LNG facility looking for some long-term certainty, it is an investment of anywhere between $15 billion and $30 billion.

Obviously, as we work through this on the competitive side, it’s important. The negotiation of project development agreements relative to how British Columbia will approach the relationship is pretty critical. They will be long-term agreements because without some stability or some long-term agreements attached to them, I would suspect we wouldn’t attract the investment to British Columbia at all.

B. Ralston: That’s clearly not what a survey of literature would say. Other states as various as Angola, Nigeria, Norway and the United Kingdom appear to think about a similar scale of investments in their petroleum sector, but be that as it may.

The minister has said publicly that these agreements would be — and I’m going to quote him again — “written in stone.” Can he explain what he meant by that?

Hon. R. Coleman: Unless I was being glib in some interview, I don’t remember ever saying this to the member opposite. So perhaps he could share with us where the quote was made. I’ve always said that we had to have long-term agreements for certainty.

I guess if you want to take the step and say…. Well, certainty means it’s written in a position where it’s pretty strong, and I would think that bringing a long-term project development agreement through legislation to the Legislative Assembly is about as certain as you possibly can get. And getting the public and the Legislature to debate the value of the agreements in the open is certainly getting there.

B. Ralston: Can I take it, then, from the minister’s comments that his goal in negotiating these agreements is to make the position of these agreements as legally certain as they can possibly be and that there will be in those agreements no — what I’ve called — adaptation clause, which is no opportunity to have reopeners or address, through arbitration, future changes in the global market, for example, or changes in technology? Of course, for a long-term agreement, one could well imagine there
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might be occasions when either side might wish for that.

I gather, from the description that’s been given, basically the entire fiscal framework that exists at the time the agreements are entered into will be as best the minister and the lawyers acting on his behalf can do it. It will be locked in for the length of the agreement. Is that a fair summary?

Hon. R. Coleman: The service plan is very clear that we’re going to provide long-term certainty to attract this investment. I know the members opposite have a difficulty supporting the fact that there might be an opportunity for billions of dollars of investment in British Columbia that could bring thousands of jobs and 57 percent of those jobs not being in the northeast and northwest but actually being throughout the rest of the province. That’s fine.

We need to do our best to provide the long-term certainty in an agreement that will attract the investment so liquefied natural gas can be produced in British Columbia and shipped worldwide. We know that the world has changed even since — the member mentioned the other countries in his comments in the lead-up to the question — what happened in those countries to what the reality is in the world today.

We have to work very hard to make sure that we’re working through these agreements, which are important to the long-term health of our industry in British Columbia and our province in general. At the same time, in order to do that, you have to have long-term certainty for the people you’re asking to spend multiple billions of dollars to invest in the jurisdiction.

The agreements, once finalized…. Like I said, the first one that’s finalized will come with legislation to the House, totally public. All of those questions, some of which I cannot answer because of the confidentiality agreement, will be public, and there will be no issues.

Obviously, if you look at the legislation on the taxation piece, that provides certainty because it’s legislation that says here’s what the tax is. That’s the type of work that’s coming out of the work of the project development agreements that can come into the front end of the actual finality of the agreements and moving forward in order to….

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Well, one piece. It actually tells people that we’re moving forward with our commitments with regards to how we’re going to try and make this globally competitive and at the same time continue to negotiate the project development agreements so that when we get to one, we can bring it forward with legislation and say here it is. Everybody can see it and understand how it’s going to work.

B. Ralston: Then, just to further understand what the long-term certainty might mean, the minister has given the example in that list of, say, municipal taxes. Would there be long-term certainty as to municipal taxes in the agreement?

Hon. R. Coleman: We’ve been working — through our ministries responsible for municipalities, community and citizens’ services — with regards to these communities across the northwest and northeast. What we’ve done is we’ve actually put a project together to know what is going to be needed for infrastructure and those things and where the province would play with regards to that.

At the same time we’ve helped and facilitated with the communities to be able to get into discussions with proponents. For example, there has already been…. The Minister of Community, Sport and Cultural Development congratulated Port Edward and Pacific NorthWest LNG on the 15th of December on a 25-year taxation benefit for the municipality that was negotiated, should the plant go ahead.

They’re the first community to sign such an agreement with a liquefied natural gas proponent, making another step forward. That would not necessarily have to be in the project development agreement, but I understand that as a result of this agreement-in-principle, there will need to be an amendment to the Community Charter for Port Edward to enter into the agreement.

B. Ralston: In the list that the minister provided was B.C.’s corporate income tax. Is it the intention, then, to provide long-term certainty as to the specific rate of corporate income tax over the life of the agreement?

Hon. R. Coleman: I’ll try and answer the question generally, because I’m not the technical minister for tax. Tomorrow afternoon the Minister of Finance starts his estimates, and I’m sure his tax specialists will be here with him, because this may come up, although we did debate in the House the LNG tax already. In this year’s budget it showed some adjustments to the corporate income tax, which I think the member is well aware of.

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Part of working and negotiating with folks to provide some confidence and certainty are things that you can complete as you’re coming through negotiations that are global, like the income tax and those sorts of things. They can be identified and brought in to provide that the government is going to meet its commitments. It’s something like those pieces of legislation which, relative to a project development agreement, would be in there to recognize that the Legislature’s moved forward as part of the agreement to accomplish these goals already.

B. Ralston: Perhaps the LNG income tax does provide a useful example. Between the spring and the fall, the market changed, and the government’s decision was to substantially drop the rate at which the LNG tax would be operative. That was over a period of roughly six months.

What the minister is proposing here are agreements that will lock these rates in, for better or for worse, over
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a period of — who knows? I’m suggesting 30 or 40 years. That’s my interpretation, based on some of the power purchase agreements. That’s my definition of “long-term certainty.”

Obviously, that could work to great advantage to the taxpayers or the citizens of British Columbia if that were negotiated at an advantageous rate and the market suddenly fell. But given that there couldn’t be a prediction of what the rate would be in six months, how is it possible to negotiate any long-term agreement that locks those things in with maximum certainty and not be subject to the vicissitudes of the global market over decades without the prospect of some mechanism for adjusting the terms of the contract?

Hon. R. Coleman: The member’s assertions are totally incorrect. If he’d read the budget documents last year, it said an LNG tax of up to 7 percent. At the time the Minister of Finance was very clear that this was subject to actually looking at world markets, that we’d set a threshold to work within parameters, that we were going to go to work to see where it fit in other jurisdictions. He foreshadowed that that was going to take place. It took place over the next number of months, as we refined our discussions and our information and our understanding of the industry. It was subsequently brought down to where it is today, to be competitive. So I don’t think that the assertion is correct.

I don’t know what the member’s solution is. This isn’t Norway. This isn’t the United Kingdom. In the United Kingdom it’s not liquefied natural gas. They don’t have any. You’re talking about a whole different industry — the way it’s done and how it is.

This is us sitting on a resource, a reserve of gas that we have nowhere to send, that we cannot sell in North America. We can either sit on it for the next 150 years — that’s how much gas we have, and that’s not even at a 100 percent recovery — or we can try and find a way to create jobs, investment, opportunities for British Columbians and training and other things, with regards to trying to put together the ability to work with international corporations to make sure B.C. gets its fair share of its resource — which they will, both from royalties and from tax.

It’s so that British Columbians have the opportunities for jobs — which they will — and training and skills development. We can actually create long-term stability for the northeast part of our province, where communities like Fort Nelson, Dawson Creek, Fort St. John and Chetwynd actually rely on this industry for their jobs and their economic opportunities — in some areas of that region without any other industry available to them. I think we have a moral responsibility to try and keep the industry sustainable for those communities as well as using the opportunity to enhance training and opportunities for our First Nations communities and others.

I know that when we get into the debate in the Legislature, no matter how the PDA works, the NDP will not support it, simply because they’ll want to find something wrong because they don’t support the industry in the first place. That’s fine.

We have done this as fiscally responsibly as we can, as professionally as we can, in dealing with different jurisdictions worldwide, different countries and companies from those different countries and cultures, as well as understanding the international financing ability for these sorts of things for when people go to make a final investment decision.

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We’ve built around it certainty within British Columbia, looking at global competitiveness to make sure we’re globally competitive so we have a chance to attract this investment to British Columbia. At the end of the day, we’ll actually do something. I don’t know if it’s been necessarily done elsewhere. We’ll bring the project development agreement and the legislation into the House for public debate.

B. Ralston: I know the minister takes comfort in attributing to myself and the New Democrats a fictitious position. That’s his default position in these debates. I’m very familiar with it, and I don’t really think it needs much comment. People know otherwise.

In performance measure No. 2, just above the passage that the minister read just recently, 2014-15 was forecast to have a project development agreement completed. So was a project development agreement completed in that year?

Hon. R. Coleman: Actually, no, there wasn’t. We were moving down the road towards it when…. The member will be familiar with what happened in the world markets globally, which caused a reboot to some of the people looking at oil jurisdictions in the world as to how their numbers were and how they would like to maybe rebid their projects or whatever the case may be.

We continue to work through that, because of what happened in the marketplace, and will continue to work through to success with regards to the project development agreements on a number of projects.

To the member opposite, I think it’s very simple to clarify. If I have offended the member with my comment about his party not supporting LNG, in his next question he can say the NDP supports the liquefied natural gas industry in British Columbia.

B. Ralston: I’m not going to get into some kind of a childish exchange with the minister. I appreciate that that’s his default position and that it gives him comfort rather than dealing with the questions that I’m posing.

The Premier in May 2014 said that “Woodfibre is expected to be the first LNG plant in operation in B.C., and with both companies” — that’s Woodfibre and Petronas —
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“we agreed to finalize our project development agreements by November 30 at the latest.” That was in May 2014.

I gather from the minister’s last answer that that was optimistic and that, in fact, neither of those project development agreements have been completed. Is that correct?

Hon. R. Coleman: It was optimistic at the time, certainly, but it was certainly because of the indications the companies were giving to us at the time. Then the world price of oil went from about $100 a barrel down to under $50 a barrel, and the worldwide petroleum industry had to reboot.

I think if the member looks back in the publications of press releases, particularly with regards to Petronas…. The CEO of Petronas came out and clearly said in December that they were going to take a step back. They were going to pursue their EPC contracts with regards to their tendering and look at their numbers over the next number of months to pursue to get to a final investment decision this year.

I totally respect the decision, because this particular company in this country is very much involved in the petroleum industry and had effects of that worldwide change in the price of oil with regards to their operations.

They have not disengaged, however, and they would work very closely to getting success. I still share the same optimism that this particular company will make a final investment decision in British Columbia.

The other company mentioned has also taken a step back to do a bit more work, some of it with regards to some of the community outreach they want to do some more work on and then move along. Obviously, I don’t know all their financing arrangements that they’re trying to put together, but that’s work each company does.

The other companies have all indicated that they’re still pursuing LNG as an opportunity in B.C., are staying to the timelines they’ve given us in confidence to get their projects moving down the line and will continue to do that with their conversations in and around the project development agreements as they move to where they would want to get to final investment decision.

Each one of these projects has multiple partners from multiple countries that are either off-take partners or investment partners or both. That work continues.

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Even as one gets to a threshold where the parent board or the board of the company has reached a point where they can proceed to the next level, that still requires them to go to the boards of their partner companies to get to a consolidated decision to move forward to the next stage.

It’s complicated work. Obviously, if it was simple to get $20 billion to $30 billion of capital investment in your province, you could. When the Premier made that comment, we were getting indication that they were wanting to move to a deadline that was a bit shorter than it is today. But there was good reason for that. They were bullish. At the same time, the world markets changed, so they needed the reboot to look at their prices.

In actual fact, for those companies that did that, it has turned out to be a good thing because a number of other petroleum projects worldwide, as a result of the downturn in oil, have been cancelled or delayed. As a result, the prices they’re actually getting for their quotes are better than they would have been a year ago.

It’s all business that they’re working through. I remain confident that we will get to a project development agreement with these and other companies that we’re working with in the appropriate amount of time as we work through this.

B. Ralston: In performance measure 2, page 8 of the minister’s service plan, it says that in the current fiscal year that is beginning April 1, 2015 and ending March 31, 2016, the performance measure is five completed agreements, and that includes six in total. There was one forecast for the previous year. Is the minister still agreeable to keeping that as a target, or is that, as sometimes called, a stretch goal, or is there no realistic prospect of achieving six project development agreements in this fiscal year?

Hon. R. Coleman: It is actually still doable. We’re negotiating on eight fronts, on eight project development agreements with varieties of LNG projects. They are all advancing. So it is doable. I’d like to have a focus of a goal. I think it’s a goal worth focusing on.

Just off the top of my head, as I was counting before I got up, I knew I could come up with, quickly, five to six that would be further advanced than others and two more that are entering into project development agreements and a couple more who have actually recently come and said they want to enter into that process. I am confident, if stars align, that we can get to the number that’s in the service plan.

B. Ralston: I want to turn to a different topic.

One of the things that the minister has talked about — and I’m not sure whether these would be included, although there is some suggestion they might be included in project development agreements — is “upstream benefits and representations regarding B.C.’s position on skills and jobs training.” That’s the phrase from the service plan that the minister read about half an hour ago.

I want to deal specifically with the form of construction that may take place. The minister will be, I’m sure, aware that the standard now for construction of LNG plants is what’s called modular, in the sense that contemporary construction of plants involves a large amount of fabrication and preassembly, typically offshore, and then barging or shipping those components to the site and assembling there on the site.

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[ Page 8483 ]

In those agreements, and particularly referencing skills and jobs, are there any components about the percentage of work that’s required to be done in British Columbia or in Canada as opposed to serviced or sourced offshore in jurisdictions where, I think most would agree, the price of wages might be substantially lower?

Certainly, I know with Petronas, some of their representations have expressed an interest on engineering services — that they get access to engineering services from other jurisdictions where, presumably, the cost of engineering services and engineers is lower.

Will the agreements contain any representations about that component of the construction, which is obviously a fairly labour-intensive phase of any project?

Hon. R. Coleman: It’s a fair question. Some of the components are massive. We don’t actually have a port space where you could build them in British Columbia, on our coast, or in Canada and get the components here. Even if it was modular, where you actually build components and ship them in and have them connected into the other piping and what have you, a project like the Pacific NorthWest LNG project will still require about 5,000 to 6,000 people during the peak of construction.

To try and determine the percentage of work is just not possible. The fact of the matter is that Australia tried to do some things with quotas on labour, and it ended up costing about 50 percent more to build the plants in Australia. That’s why today there’s a little bit of reluctance to go forward with additional plants in that particular jurisdiction.

The difference between us and Australia, though, is that we actually have more people than Australia does. We set out way back at the beginning of this — through the Minister of Jobs, Tourism, Skills Training and Minister Responsible for Labour — to work with industry, to work with union and non-union labour organizations to the point where we have an agreement and a working group to identify the skills that are needed.

Our approach has been the same with the companies, and they agreed with us. I actually met with one of the companies this morning and reiterated to them that it’s British Columbians first, Canada, and then if there’s a shortage of skills, there has to be a need to make a case to Canada to determine whether there is an additional need for skilled labour with regard to projects, or specific expertise.

The member referenced engineering firms. There are a number of engineering firms in British Columbia that have actually added staff to start to work on the APC contracts and design with the international engineering world. When I’ve sat down with the engineering companies, they tell me that there’s not a company in British Columbia that by itself could actually design the entire components in or around an LNG plant at the level it is, because it’s not the size of project they’re used to.

What they do, because some of them are international firms with offices here, is they partner with their other offices worldwide. If they don’t have international offices, they create partnerships to be able to go into the engineering tendering, and then as they come through the tendering, do the work together and add the necessary people and skills as they need to do that.

The industry thing has three approaches to this, depending on the size. One is to try and build components as close to the project as possible, if the size and space for construction is available, which is limited in western Canada.

The second is to build some of the larger pieces that are units that need to be built, like the refrigeration unit and what have you, which would be like the length of B.C. Place — to build them and modulize them into the project.

The third, something that some companies have looked at worldwide, is to actually build a floating LNG plant and move it into the jurisdiction. At this stage, though, the one company that was looking at a major floating operation has now advised us that they wouldn’t be doing that. They think it would be better in our ports and our space to go on land. That would mean more labour and that sort of thing.

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That’s the piece. These have been built this way in the last decade or so worldwide. They will continue to be built this way, whether it be in Qatar or Australia or wherever, because the components require a significant amount of manufacturing space in jurisdictions, and there are only so many building places that can actually build components of this size that are available to supply this industry.

B. Ralston: The minister does, then, seem to be agreeing with me that the anticipated mode of construction will be a modular one, and huge chunks of the components of a plant will be fabricated and manufactured offshore and then brought to the jurisdiction. I note that in the Liquefied Natural Gas Facility Permit Application and Operations Manual there is a reference on page 22 to “modular units built outside of British Columbia.” So that does appear to be contemplated by the regulator.

Would it be fair to say, given that this is the dominant form of construction, that any plant that’s being contemplated in British Columbia…? Woodfibre initially was proposed to be on a barge, and I think, as a result of some environmental representations and concern for the sonic vibrations and the effect they might have on marine mammals, the decision was made to move it onto land. I’m not sure, but I believe AltaGas is contemplating a barge-type arrangement — at least, last time I heard.

Whether it’s Petronas or LNG Canada or Chevron Canada, the bulk of the fabrication work will be done offshore and simply assembled here in British Columbia on the respective construction sites. Indeed, that seems
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to be…. This is a somewhat dated reference, but “developers have shifted from custom on-site construction to preassembling much of a liquefaction plant or receiving terminal in fabrication facilities and transporting huge modules on site.”

To that extent, I just want to confirm that the minister agrees with me that that’s the way in which these projects are anticipated to proceed. Indeed, the regulator seems to have commented on that and anticipated that.

Hon. R. Coleman: It’s not entirely correct. Like I said to the member, there are components that would need to be built that we do not have the manufacturing skill or space to do in British Columbia or, probably, on the west coast of North America.

Even with a modular construction, a plant like the one in Port Edward, with the Pacific NorthWest LNG, would require, as I said, 5,000 to 6,000 skilled labourers, people with skills to actually build some of the components on site, do some of the computerization on site, to additionally do the welding and all that stuff. Some components could come in modularly, simply because it’s the best way to do it.

The experience with trying to basically build and manufacture on one site requires substantially more land than to put the plant on. You have all the staging area and everything else. Whereas, because of efficiencies, if you wanted to build the plant over a timely way, you would contract out pieces of the project. You could have the components arriving at the same time as your on-site work, and the work you’re doing to manufacture on site can match up on a time frame. Over a three- to four-year period — which is about the time you’d take to build a major LNG plant — that they could be coordinated in such a way for the efficiencies is the proper way to get built.

With regard to us versus Australia, I think the biggest advantage is that we’re not an island continent. We do have a significant and large amount of skilled labour, not just in Canada but in the United States.

The B.C. building trades and folks like that did get together with government and agree that it was important that we send the message that skilled labour be allowed to come in to help assist us in building the LNG facilities, if it should come to that, because like I said, it’s British Columbians first, and then Canadians. At the same time, even the unionized labour forces have recognized that there will be a need for some additional skilled labour, and they want to work with us to find the solutions for that skilled labour so that much of this can be done in British Columbia.

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Even as I described the manufacturing plant, it’s still 4,000 to 5,000 to 6,000 people working on the site. While there may have to be some components that will be modularized, as the member describes them, and shipped to Prince Rupert — for instance, in a case, or Kitimat, because they are waterbound…. We don’t have the highway network that takes some of the more significantly sized components and actually moves them by a road system in there because of the size and scope and all of that.

All those things have to be taken into account as they put this thing together. At the end of the day, you get thousands of jobs, you get the operational jobs, you get the GDP. Some of this stuff will have to be manufactured where there are skills or the engineering or whatever the combination of materials are to be able to do those. That’s, I think, what the member is referring to there. That has been the practice of the industry, going forward, for some time.

B. Ralston: Obviously, I haven’t made it clear. I’m interested what degree, what percentage or what part of the project will be constructed overseas. The Woodfibre LNG project description document says: “Any prefabricated modules associated with construction of the LNG facility will be transported from Asia for direct off-load at the project site.” The similar project description document that appears on line in the Pacific NorthWest LNG says that LNG modules refers to LNG modules imported from Asia.

Prince Rupert LNG — now, that’s the BG Group, and obviously, they’ve certainly retreated. Their intention was — I think consistent with industry standards — that the facility would be built overseas in modules and shipped to Prince Rupert for assembly. LNG Canada — they’ve chosen contractors: CFSW LNG Constructors chosen as contractors because of their “experience in developing modular construction.”

Rio Tinto Alcan’s Kitimat modernization is “also highly dependent on modular construction. Many components of the new aluminum smelter are produced in China, brought to Kitimat and then used to create the new potlines and related facilities.”

Would the ministry agree that a substantial amount of the fabrication work and the construction of these modules will take place not in British Columbia, not in Canada but overseas? That’s the practice that’s been disclosed. I’m just asking the minister to acknowledge the obvious.

Hon. R. Coleman: I thought I acknowledged it in my last answer. The member should maybe, if he gets the opportunity or if he wants to go on line…. I don’t know if that would help him because when he sees the size and scope of one of these projects — the amount of piping, the amount of modules, the amount of stuff that has to be built for them — he would clearly come to the conclusion that he couldn’t identify anywhere in British Columbia where the components, the skilled labour and the materials are in one place to build some of these particularly large components.
[ Page 8485 ]

Obviously modularization, to be able to coordinate how you’re going to put the plant together, is important. The industry has learned lessons from on-site manufacturing of components because they don’t find that the materials are where they need them at the time or that the skilled labour is all there at the time.

Modular or not, there are still going to be 5,000 or 6,000 people, per project, working on those projects as they get constructed in British Columbia. I’m familiar enough with what we can build with regards to ships in British Columbia, what the size and scope of even just an LNG ship is and where the shipyards are that are good at it. It’s where the industry would go to have ships built, for instance, to ship the stuff worldwide.

I don’t think we should be afraid to acknowledge that there will be modularization in these. It’s the industry standard to do that. At the same time, there are still the 5,000 or 6,000 jobs in British Columbia during construction and then all the service jobs and those things that come after the construction — on the operation and the downstream and upstream benefits to having an LNG industry.

We do have to recognize the size and scope of our population, the size and scope of what we’re trying to attract and what the size and scope, actually, of the manufacturing challenge with regards to some components are. If the member just had an opportunity to see that, I think maybe he’d have a better understanding.

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The fact of the matter is the industry has always said that portions of these plants had to be modularized simply because of size and scope — and for timing, to be able to successfully stage the project on the land that’s available for the project and to be able to stage it in such a way that they can make it function.

When it comes together, and all the work that’s got to be done on site, everything from site to electricity to pipefitting to gauges to manufacturing and cutting a pipe to match up the different components and all those things…. I don’t claim to be an expert on how an LNG plant is constructed, but I do know modularization has become somewhat of the norm because it’s easier to coordinate your construction.

I also know that the companies that are here had been meeting with companies in places like my riding — with regards to what components they could manufacturer for LNG, everything from gauges to dials to certain types of piping configurations — and other places around the province. Their goal is to purchase as much of it and get as much of it manufactured in the host country. That’s the most economical way to do it.

But they also have to be realistic to themselves as to what components are not available with the companies that we have in B.C. as far as being able to deliver. That’s why we started Buy B.C., which is an outreach program to businesses across British Columbia to create a list of what folks can manufacturer and other services they could build to this industry, passing that information onto each proponent as they come through.

When I’ve sat down with each proponent, they’ve always said they want to do as much of this as they possibly can in-country. They’ll continue to pursue that, recognizing that there may be components that just, in-country, can’t be accommodated because of size and scope.

B. Ralston: There’s a report from Brent Jang, who’s a reporter with the Globe and Mail, who has reported on engineering costs and Petronas’ view. I think they’re probably, arguably, the leading proponent. Their concern was not the quality of the engineering services or their availability here in British Columbia or Canada, but simply their cost.

What the report says is that firms wanting to do business with Petronas will be pressed to use their connections with Asian suppliers to get better deals for orders of raw materials. “Engineering firms are expected to revise their plans with a view to greater input from ‘high-value engineering’ offices in countries such as China and India, where labour costs for engineering work are lower than in North America and Europe.”

So the concern there doesn’t seem to be the availability of local labour or local engineering services. It’s with the cost.

The relative use of domestic or foreign-sourced engineering services — is that something that is the subject of discussion between the ministry and the proponent?

I know the minister has said repeatedly that best efforts are being made to use B.C. labour and then Canadian labour and then North American labour first. It doesn’t seem to be the approach that is being set out here by Petronas.

Hon. R. Coleman: You have to take a realistic approach to the size and scope of these projects. One project, two trains, $14 billion-ish, 5,000 to 6,000 people required on site during construction — that’s what’s needed even if they modularize a number of the components of the plant.

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The second thing is we have 5,000 to 6,000 people required, which will be difficult for British Columbia and Canada to fulfil. That’s why we’ve reached out to labour for skilled development. That’s why we’ve written the plan with the companies identifying where skill shortages or gaps would be so we can actually start training people now. It’s still a significant challenge.

As we go through that, in addition to that, there is, obviously, this significant opportunity to actually move gas, which is lost to the economies of other places in British Columbia like Fort St. John and Fort Nelson, where the gas plants and those things are built, the gas pipelines are built.
[ Page 8486 ]

The actual gas fields and the drilling activity create thousands of jobs in their own right. There are 13,000 people working in the oil and gas industry today — probably down a little bit in British Columbia now from the 13,000 because of the world oil prices and some of the slowdowns we’ve seen in some drilling. But without moving this resource, we have no value added to the product whatsoever.

I realize it may be the philosophy of some people that say you shouldn’t allow any of the pieces to this thing be manufactured elsewhere. But the reality is that if you can’t allow some of the…. If some of these modulars can’t be built elsewhere in the world, they can’t get built at all.

If you have a chance to see the size and scope of a shipbuilding operation in a place like Korea or Japan, which are significant builders with regards to plants like this, you would understand that we don’t have anything here like that because we’ve never built manufacturing components of this size in British Columbia and, I suspect, probably the rest of our country.

As the pieces come together, there’s still a lot of on-site manufacturing put together that would be done on site, but some of the components — maybe a lot of the components — will come modularized. As will things…. Like if Britco builds a camp, we call that modular construction, and they ship their camp in and put it together on site because they manufacture it in places like Agassiz and Langley.

The companies have been out looking at where the manufacturing opportunities are for each individual project. They’re going to continue to do that in British Columbia and other areas of Canada, looking, at the same time, at the infrastructure that can accommodate it — whether it can be brought in by rail or by road.

In the case of being to the coast, the most economical and efficient way is to bring it in by water simply because a lot of our roads would have a significant challenge with some of the overheads on overpasses and those sorts of things. Even on the Lower Mainland there are a couple that bring significant challenges to us to move certain goods and services.

I think it’s a significant opportunity but also recognize at the same time that if you’re going to build something of this scope, you are going to modularize components to be able to put it together and put the 5,000 or 6,000 people to work here. At the same time as you’re staging your project across, you’ve got your next piece coming.

It’s the same thing with a camp. If your camp is expanding, if it’s modular, you can start out with a camp of 2,000 and add a couple of thousand beds by manufacturing additional components and adding them on and tacking them onto the design that you have. It’s not an unusual way to manufacture.

B. Ralston: Clearly, the minister brings a wealth of expertise and knowledge and is deeply immersed in the file. I know sometimes it’s hard to narrow down the comments to the question that I asked. But I was specifically trying to focus on the report — the Globe and Mail, Brent Jang — about Petronas choosing, not by reason of the lack of expertise of engineering services here in British Columbia or Canada, but because they cost too much, and encouraging the sourcing of those engineering services in China or India.

My question is…. The members of the government and members of the opposition as well like to point to Vancouver’s example of a centre of expertise as a mining hub, whether it’s all aspects of mining construction, whether it’s civil engineering in relation to mining projects globally.

There is global expertise on the civil engineering side — perhaps, arguably, not necessarily in the details of LNG construction. But I have confidence, having met with the professional engineers of British Columbia that they’re more than capable of taking on some of these tasks.

My question is: what discussions — and I’m leaving it as loose as that — has the minister had about Petronas’s stated public intention not to use B.C. engineers? It’s not because they’re not available, not because they don’t have the skills but just because they want to drive the cost down by sourcing in China and India.

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Any concerns about that, on the part of the minister, which have been expressed on behalf of the government to this proponent?

Hon. R. Coleman: I know already of B.C. engineering firms that are doing work for companies like Petronas and Shell and their operations with regard to the LNG opportunity in British Columbia.

I also know — they’ve told me — that the size of their engineering firm needs partnerships. In some cases, they’re already related. They do projects worldwide with other companies that are also engineers that they associate with because obviously the capacity and the expertise in some portions of the industry are housed in other areas — just like, the member referenced, mining. The mining side is more the exploration success, as the member knows, worldwide. We seem to be the exploration centre of the world. Go to Roundup and you would see that, with the 6,000 or 8,000 people that come to that.

I have actually sat with folks that are engineers in British Columbia telling me that they’re doing work for these companies already. I also know that companies are designing camps. Companies are laying out food operations that would be needed for camps, in bids to proponents.

I do know, sitting across the table from Petronas, they’ve never said that — what this particular reporter has said to me. They said they want to source as much as they can incountry, that they will go to competitive bids for their business — which I would expect that any business would do — and select the supplier that’s best for
[ Page 8487 ]
them, which I think, since they’re investing the $12 billion or $20 billion, they’re entitled to do.

But at the same time this is the same company that actually opened a community office in Prince Rupert some time ago to take people and their skills and start to match them up to what their needs will be as they go forward towards construction of an LNG plant. They’ve done that there. They have reached out with the First Nations in the same way.

I’m confident. Well, there’s one thing I know. There’s going to be work for everybody. We’re going to have a challenge in meeting the number of jobs that would come from one plant itself, given the 5,000 to 6,000 jobs that would be needed incountry with regards to that. And knowing the experience of Rio Tinto and their labour when there were about 1,800 people, I know that we’re going to have to work very hard to make sure that we have people with skills and training matched up to the jobs so that they can take the opportunity.

It’s going to be very large, should we be successful, and a challenge. The whole thing’s got to come together, and my expectations are that these companies who have built elsewhere in the world know what they’re doing. And they will build…. They have to meet our environmental standards. They have to meet our engineering standards. They have to meet all of our standards and permitting in British Columbia, not somewhere else. They will be held to that level.

B. Ralston: I appreciate that the minister said Petronas has never said that to him, but this is a public report. There are direct quotes from Petronas representatives in this December 4, 2014, story by Brent Jang in the Globe and Mail.

This was at the time that Petronas was deferring, at that point, its intention to proceed. One of the reasons they gave was:

“For past 18 months there had been three competing bidders in a process involving front-end engineering and design. Petronas has deemed the bids so far to be too expensive, rendering the project uneconomic based on construction costs. ‘Costs associated with the pipeline and LNG facility remain challenging and must be reduced further,’ Petronas says.

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“Engineering firms are expected to revise their plans with a view to greater input from ‘high-value engineering’ offices in countries such as China and India, where labour costs for engineering are lower than in North America and Europe.”

So my question is: does the minister have any comment on that, or is that just simply the reality of the market? The idea that B.C. engineering firms, insofar as they’re able…. It’s not saying that the skills aren’t there or the people aren’t there. It’s saying that they’re just too expensive. Is that something that concerns the minister, or in the effort to get a deal, are these acceptable strategies?

Hon. R. Coleman: We ask countries to buy our natural resources that we export from British Columbia, value-added or otherwise, in forestry and in mining and other things we export to other countries, including education. We trade with these countries today in a global sense. The market worldwide is global.

I know, for instance, that one project has 250 engineers, a number from British Columbia, working worldwide on the design for their plant. It’s quite possible, considering the expertise of the largest LNG supplier in the world, Qatar, that there are engineers and designers in Qatar that actually have some pretty good ideas on how to design and engineer an LNG plant.

They, at the same time, will have international relations with a firm in Canada or British Columbia, where they will use their expertise in the country with regards to engineering, soils, geotechnical, plus design components and all of those things.

That’s how engineering works with regards to even something as simple as the design and construction of a highrise building. There are engineering firms from various numbers of places that would be involved in certain aspects of it. A number of our environmental engineers are already engaged on the land, on the ground, with this.

Quite frankly, it is a fact that there are some places where some of their costs are lower than British Columbia’s on some aspects but not as low on other aspects that are in country. That’s why, quite frankly, the decisions that have to be made on bids and tenders to build an LNG plant are the responsibility of the company.

Our responsibility is to provide a foundation for someone to make a final investment decision to invest billions of dollars in B.C., create thousands of long- and short-term jobs that will be beneficial, as well as all the spinoffs to the economy, protect the communities that need the exploration and the gas works that take place with regards to the ability to actually ship the products somewhere in the world.

We’re asking the same countries that the member is asking about being able to do some componentization to actually buy the gas from British Columbia, take our gas into their country in a liquid form and regasify. So the value chain goes both ways, the way I see it.

B. Ralston: Another aspect of Petronas’s reported public statements was the report in the B.C. environmental assessment office that cited statistics supplied by Pacific NorthWest LNG about the labour component. The minister has mentioned that.

I’m quoting here from the report.

“Canadians are expected to account for 70 percent of the on-site workforce for the first three years of construction. However, because of competition for labour from other projects and the specialized skills required for the later stages of construction, Canadians will account for only 30 percent of the on-site workforce for the remaining two years of construction.”

Now, I should say, in fairness, we’ve had representations from the B.C. LNG office when I commented publicly on this. That was set out in the report as a worst-case
[ Page 8488 ]
scenario in the sense that, if at the peak of construction there were other major projects proceeding, there would be a shortage of skilled labour of the type that was required, and contractors would be required to source outside Canada and maybe outside North America.

[S. Hamilton in the chair.]

So again, I’m wondering what the minister’s comment is on this. Is that consistent with his understanding of B.C. first, Canada first, North America, and only then would these projects look at workers from other countries beyond the United States? Can the minister comment on that public statement by Petronas?

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Hon. R. Coleman: I think that is, for a large portion…. I mean, they did say “worst-case scenario.” It’s basically honesty. I mean, in the experience in Australia we saw that there was a significant shortage of labour when two or three plants were being built at the same time — so much to the point that the cost escalation on labour, because of the whipsawing between projects and the quota that Australia had put into place, actually at the end of the day made the projects quite marginal.

So as we’ve gone through this, we’ve worked with industry. At the same time, in deference to the comments or challenges, you’ve always got to take the snapshot in time when somebody says something. There wasn’t a $60 price per barrel of oil at the time those comments were made, so the oil sands in Alberta were still pretty active, and there were some expansions they were going to do.

Now there have been significant layoffs in the oil sands. There’s a group with skilled labour there, and if someone were to make a final investment decision in the next little while, they would actually have access to a group of skilled labourers that they probably, in their early calculations, didn’t think would be available to them. That would affect the number of people.

We’ve seen in-migration and out-migration across Canada, relative to construction of different projects, for all of my life. I mean, I’ve met people on every site I’ve been on — from Newfoundland and Nova Scotia to Quebec, Ontario and other places — that come into British Columbia when the jobs are there and the opportunities are there. A number of them stay here and live here.

I think what we did with the industry is that we sat down, got the information on all the levels of jobs we had, looked at the scan of how many of those particular jobs would be available in the climate that we were living in before $60 oil. We looked at it and said: “Okay, this is what we need.”

Construction in the earlier stage requires a few less people. That’s why the 70 percent would be easier to achieve. But if three projects went in at the same time in British Columbia, I guess there’d be two pieces to that. One would be that we’d be very happy, but we’d also have a significant challenge. If you have 5,000 or 6,000 people on one, that means you need 15,000 to 18,000 on three, to be able to build them. So you’re going to have to look at the relationship between labour and skills on the continent.

That’s why the B.C. trades council is in an agreement with a group of people working with the Minister of Skills Training and for Labour to be able to achieve the ability to move people, particularly for construction trades, up north and south as they’re needed, across the border if there are not enough in Canada to do the jobs. I think that is one of the features, as we start to try and move into LNG, that the industry liked.

We were actually prepared to sit down and identify what jobs and skills were required for the industry, should it go ahead in British Columbia, and then to make sure we can look at how we could have the capacity in Canada and British Columbia to achieve the needs that they have for their labour, but at the same time build a relationship with our various labour trades in such a way that they could work with us to also enhance training in trades and opportunities to meet the need that we anticipate, depending on how many projects would go ahead.

B. Ralston: Just to confirm, then — the minister has referred to this as simply being straightforward — in the scenario where there are two or three projects proceeding in that time frame, this suggestion about the Canadian labour component versus the foreign labour component is pretty accurate. That would be, simply, that the domestic supply would not be able to meet the demand required to construct three projects more or less simultaneously. Have I clearly summarized what the minister is saying?

Hon. R. Coleman: Yeah, I think, relatively speaking. I mean, if you drop the need for 6,000 skilled labourers into the job market of British Columbia, given that the unemployment level is down around 6 percent, there are only so many people that would take those 6,000 jobs. If you drop three of those into the British Columbia marketplace, which would be between 15,000 and 18,000 jobs, and you were attracting skilled labour from across the country, you may find, depending on the economy and on what’s going on elsewhere, that it’s tough to fill that void of jobs.

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Somebody making an investment wants to know that there’s a plan, with the relationship with labour, to be able to identify where any shortfalls are and identify where they can be filled. Fortunately for British Columbia, should we actually reach that situation, we do have a significant population to the south who also have experience in oil and gas, who have skilled labourers that right now probably would be slowed down because of the price of oil.
[ Page 8489 ]

They may be able to, once British Columbians and Canadians have taken whatever jobs are available and there’s a shortage, have those folks — with a relationship with the building trade unions…. They have already stepped up and said they will work with us across the country and across British Columbia to meet the need.

It would also work for us if at peak periods there was a need for additional pipefitters or electricians or whatever. They would help us to identify where those could be got from, in a relationship with us, which I think is great. It’s not about an adversarial relationship between us and the labour movement. It’s actually the labour movement saying: “We recognize there’s a huge opportunity here. We want to be part of the solution. At some point in time, if we peak out and part of the solution is we need to help you find additional skills, we’ll do that with you.”

B. Ralston: The minister has mentioned that the timing of these projects may result, if they occur more or less simultaneously, in the kind of labour shortage that he has spoken of. Does the minister think that there’s any role for the state, for British Columbia, to intervene and suggest staging of these projects over a longer period of time so that that kind of a result doesn’t take place, or does he view that as an undue influence in the operation of the market?

Hon. R. Coleman: I don’t think we could do that. Actually, looking at the time frame of what could be the final investment decisions on the projects, and the experience that these companies have had in a jurisdiction where they tried to do too many at once, they’re actually quite cognizant of the fact — the size and the timing of projects.

If you look at each one, with their timelines to a final investment decision between, let’s say, 2015 and the end of 2018, out of the five or six larger ones, I think you’d find that the timing isn’t that bad. I think that they all know the experiences that were experienced in Australia, when three were being built at once, and the impact of being able to get materials and supplies in addition to labour. Skilled labour was important.

I think they will make their final investment decisions based on what they know about the marketplace. If one is under construction and they see that there’s a labour challenge on that particular project, and they look at their project, they could make a decision to say: “We’ll do our final investment decision, but we won’t start until X because our timing is wrong.”

The flip side of that can be, though, that they might end up where there’s a need because other projects worldwide haven’t gone on. They get contracts from somebody that wants to buy LNG four years from now, and they say: “We’ve got to move now.”

All of those aspects are not things that we control with regards to it. They have to make that significant investment decision based on markets and on timing and on costs — their own labour analysis with regards to how they can build the project. They know a lot more about building LNG plants than the government does.

B. Ralston: I want to turn now to a different topic. What’s called the Society of International Gas Tanker and Terminal Operators has a document that’s been referred to by some advocacy groups and, I think, by some proponents. The document is Site Selection and Design for LNG Ports and Jetties. There are a number of provisions in there for port design, safety of cargoes, distance between plants and populated areas.

I’m wondering what place these guidelines play in any evaluation or approval process that the ministry has direct responsibility for. Is this something that’s contained in the environmental assessment process, or, in the view of the minister, is this simply a federal responsibility under their authority for ports and terminals?

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Hon. R. Coleman: The way we do it in Canada is we follow Canadian standards for jetties in all our jurisdictions. We have looked at your other jurisdictions, and they do too. Canada does a scan of jetties and information with regards to guidelines and engineering on a regular basis and sets the standards. The standards for jetties are set at the national level.

I know the member will know that designs of whatever plant or whatever you are doing also have to be submitted to the environmental assessment process.

B. Ralston: The reference to these principles seems to crop up in a number of public submissions that groups are making, both in Howe Sound in relation to the wood fibre project and also in relation to Nexen project on Digby Island.

The minister will be, no doubt, familiar, at least in general terms, with the Nexen project. It’s proposed on the same island, across from Kaien Island. Digby Island has the airport and a small community called Dodge Cove. The project is proposed to be immediately adjacent to the community there, which is directly across the water from Prince Rupert.

Some of the terms prohibit operation, or the members of this subscribe to these criteria that they not be located where LNG vapours could affect civilians.

They must be far from ship transit to avoid collision from other vessels. They must be located where they do not conflict with other waterway uses, and long, narrow inland waterways are to be avoided due to greater navigation risk. They must not be located on the outside curve in the waterways, since other transiting vehicles, at some time during their transits, would be headed directly at the berthed LNG ship.

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[ Page 8490 ]

They generally have a series of criteria which address substantial safety concerns. Now, the public record of LNG shipping is, according to the industry, a good one, but a number of public concerns have been raised, certainly, in Howe Sound in relation to the Woodfibre project across Howe Sound on the old Woodfibre pulp site and, similarly, by residents of Dodge Cove immediately adjacent to the proposed Nexen project.

I know that the minister may have received letters and communication from these citizens. They’re of the view, certainly in the case of the Dodge Cove residents, that the proposed Nexen project meets none of the basic standards set out by the SIGTTO. That is the Society of International Gas Tanker and Terminal Operators.

What assurance can the minister provide to these members of the public that their health and safety interests are being protected? In the case of the Nexen project, this will be built, if it is built, right on top of their community on a very busy waterway at the entrance to the Port of Prince Rupert.

Hon. R. Coleman: We meet standards, both Canadian and international standards, when we do this. We have a very rigorous environmental assessment process that looks at all of this. In addition to that, obviously, there’s public engagement there with regards to it.

I should mention that I’ve been to Bintulu twice, which is where the LNG Train 9 plant is located in Malaysia. Beside it is a community of 250,000 people. In speaking to the people that live there…. Actually, on top of it there’s a container port, not dissimilar to what there is in Rupert, and other port activities that came at the start, way back in ’68 when they started to build LNG.

These have to meet the rigorous environmental standards and standards with regards to shipping and all that. We’re not going to change those rules. We’re going to make sure they meet them. And certainly, as we come through the process…. That particular project hasn’t entered into the public process yet, but it will have to. It will have to go through that and meet all the questions that are required under an environmental assessment.

I wonder if the member could agree to about a ten-minute recess.

The Chair: The committee stands in recess for ten minutes.

The committee recessed from 4:48 p.m. to 4:56 p.m.

[S. Hamilton in the chair.]

B. Ralston: Can the minister, then, confirm whether the SIGTTO siting guidelines form part of the environmental review of any projects by the B.C. environmental assessment office or not?

Hon. R. Coleman: No, I can’t confirm that, hon. Member. We’ve been doing some work to see if that was actually relative to the fact that we used Canadian CSA standards, which could be informed by that with regards to the environmental assessment and the other assessments. It’s one entity worldwide that will probably have comments and issues in and around ports and stuff like that.

What we try and do in Canada is look for the best practices. We take the design. We take it into…. You know, all of that stuff that goes through an environmental assessment process. I’m not at a technical level to be able to give you any more than that.

B. Ralston: Well, certainly, representations have been made to me, and I know that these are public representations made by groups in Howe Sound and in Prince Rupert that the Site Selection and Design for LNG Ports and Jetties, published by the Society of International Gas Tanker and Terminal Operators, has a wide number of members worldwide. It appears to be the industry standard. That’s what I’m told.

Accordingly, when people in both Howe Sound and in Dodge Cove are evaluating their respective projects in their jurisdictions, they’re turning to these guidelines. Their view is, probably dealing first with Dodge Cove with the Nexen project, that the siting criteria that are set out in that handbook are not met by the proposed project. Whether it’s the location of the port, the relationship to other shipping traffic or the proximity to residences, none of those criteria are met.

They’re understandably concerned and raise those questions. They’ve sent letters to the Premier. I don’t believe they have been responded to yet, but perhaps that’s coming. I think it’s an important question that needs to be answered for those people in Dodge Cove, for one.

Secondly, in Howe Sound I know there’s a lively public debate. Let’s put it that way. The mayor of Squamish and the council have intervened in this debate and set out what, in their view, are a number of conditions about whether or not they’re prepared to support an LNG proposal at Woodfibre. Certainly, the executive and the leaders of the Woodfibre LNG project are well aware of this, and they’re engaged in a substantial public consultation process. Some of the First Nations are involved as well. In that debate these guidelines do reappear.

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One of the things in Howe Sound that’s raised is whether or not the shipping channel meets the SIGTTO guidelines. What’s the potential conflict with B.C. Ferries and other shipping? Are the passages through which ships egress, and Howe Sound itself, wide enough to be safe? Given that it’s close to a populated area, what are the dangers.

Again, there’s substantial public concern. I think the Minister of Natural Gas Development could provide, if he chose, some public reassurance on these issues. If he
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perhaps, for regulatory reasons, feels it’s not appropriate to enter into those debates, perhaps he could just say so.

Certainly, these are real public issues. They’ve been raised in a very serious way by, my judgment is, fairly knowledgeable people. I think it would be important for the minister, on behalf of the government, to let those people know what reassurances, if any, he can give.

Hon. R. Coleman: I know you’re taking the opinion of one organization that’s written one report.

We have a process in Canada called TERMPOL. TERMPOL is managed by the federal government. We have a number of ports in Canada where we actually look at the best practices and set Canadian standards with regards to them. I would venture to say that our ports are pretty well monitored.

Vessel movement is a federal process, and this is within this TERMPOL. We monitor that, as we do our processes, and work with the federal government on that. We also look at shipping lanes and those sorts of things with regards to the standards in Canada. I wouldn’t be surprised at some of the stuff that’s contained in there, or actually even in the Canadian process at all, which have led to the Canadian standards with regards to ports in British Columbia.

I know there are issues in and around the Howe Sound area with regards to some folks who have opinions of it, including the council. It’s important that that’s why the engagement process with the public take place. When people have questions, you can get back to them with technical answers. The reason you do an environmental assessment process is to have that.

It’s the same thing with shipping. I know that some folks have talked about shipping into Howe Sound, but they forget…. I’ve actually had people that didn’t realize that there was a pulp and paper mill there that had shipping of pulp and paper going in and out of there for probably 30 or 40 years into that port. It’s a deep port.

All of those things are brought into the consideration with regards to any project that’s going to take place through an environmental assessment. That’s a process that is managed as a statutory process, arm’s length from us, and will continue to be that way. We don’t interfere in that process.

At the same time, we do monitor to make sure that the standards for Canada, which is basically TERMPOL, that their vessel movement…. It is a federal responsibility. With regards to that, and how vessel movement is, will obviously be part of that public process and the proposal that would come forward through the environmental assessment process to that statutory authority.

B. Ralston: Certainly there is, as the minister knows, a vigorous public debate taking place in the communities of Howe Sound. There are those who are aware of the industrial jobs and operations at the port of Squamish at its present location on the river and also the history of the Woodfibre site, having been an industrial site for many, many years. Having grown up in the Lower Mainland, I remember well the existence of the Woodfibre pulp mill.

I think there’s a feeling in Squamish among some, perhaps the new mayor, that the community is at a transition point and that the future is one which doesn’t involve industrial jobs so much as it involves another kind of greener economy. I’m only judging from some of the comments I’ve seen.

I suppose the minister is going to leave it to the regulatory process and the public process. I can understand that. I just think it’s important that those concerns be brought here to the minister and to his staff, given the, I think, fairly intense public debate that’s taken place in Howe Sound and the communities and the political jurisdictions, whether they’re federal, some of his own provincial members or municipal governments there in Howe Sound.

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I think I’ve raised that, and I think the minister’s response is clear, so perhaps I can move on in the time that remains. I see my colleague here from Vancouver–Point Grey is anxious to get on to the other part of the minister’s portfolio, Housing, but I do have a few more questions.

In the House a couple of days ago we debated the Miscellaneous Statutes Amendment Act, which has now passed and become law. The minister and the staff person explained how these long-term royalty agreements might work.

I gather that what was talked about was an algorithm that would raise the royalty in years when the market price was lower and reduce it in years when it was higher in order to, I suppose, stabilize the revenue to the Crown and stabilize the expense to the company.

I’m wondering if the minister, beyond that general description, which I hope I’ve expressed accurately, has any further information on how that would work or what would be the calculation mechanisms for that. I know some of these calculations — having looked at the royalty handbook, which is some 300 pages long — are not simple equations.

I’d appreciate it. I think in order to understand that legislation and its future application as it relates to the operation of the ministry and to this particular vote — just for the benefit of the Chair and the Clerk — I’m wondering if the minister could add a bit more detail to that.

Hon. R. Coleman: Just so you know, in the Squamish corridor I have met with council. I’ve met with the First Nations. I know where they stand with regards to it. I know where some of their personal biases exist, because they were clear to me what they were with regards to that.

I still believe that you need to go through the public process with regards to the environmental assessment as
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it is required and provide the information to the public so that they can become informed. My expectation is that that’s going to take place.

I’ll try and deal with this. The member is right. It’s very technical. The legislation allows us to move into these types of royalty agreements. Obviously, by regulation they would define the details of a specific agreement or package, but the purpose is to provide stability. It’s not to reduce the company’s overall royalty obligations.

Basically, over the same period of time we get the same money. It’s just that the benefit for both parties is, first of all, the increased certainty that the natural gas feedstock for LNG will be coming from British Columbia, because you cannot get into a long-term agreement or agreement with regards to a royalty curve unless it is B.C. gas, because we have no control over the royalties in other provinces. It also encourages the use of B.C. gas, which we think is important in the northeast part of the province.

A price sensitivity mechanism would change royalty rates so the province gets a higher royalty percentage when the prices are low and a lower one when prices are high; i.e., it’s like a hedge. It’s actually an averaging across.

A floor on the revenue is to be established based on minimum amount of deemed production regardless of actual production. If they’re actually producing less, they still have to pay us based on the minimum production that was established.

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In addition to that, as we go through this, the long-term royalties agreements, there’s also a commitment required for minimum investment levels in the upstream. That is the part that I mentioned earlier whereby places like Fort Nelson, Fort St. John and Dawson Creek…. Fort Nelson right now is feeling some of the stresses of world oil prices, because the expiration has dropped off considerably up in Fort Nelson, and therefore, a lot of folks are being affected by layoffs and not investment this year.

It actually gets to the stability of an industry so that we can have the ability for people to plan for their lives, plan for their communities, plan for what infrastructure they want to build in those communities for recreation and other aspects. It allows us to be able to plan with regards to this with things like health care and education and those types of infrastructures.

When it was brought up in a discussion with industry, I think everybody thought it was kind of about time to actually stabilize this thing and have some ability to be able to make sure there’s certainty, not affect revenues but actually make sure you get your revenues over time and make sure that you can do a budgeting process at all levels that makes sense for all communities and affected parties.

B. Ralston: In the performance measure 2 on page 8 and over on page 9, there are a number of items listed. That’s the list that the minister read off now several hours ago. I note that it does not include royalties. Is that an omission by error, or is that a deliberate omission? Are these long-term agreements intended to take the place of the kind of certainty that the minister speaks of in relation to other topics in project development agreements?

Hon. R. Coleman: The legislation is a tool that enabled us to make the long-term royalty agreements. They’re not included in the list of PDAs because they’re intended to be separate agreements, and they will be public. When they’re executed, they would then be made public with regards to it, so everybody could know what was done in the long-term royalty agreement.

As I said, that’s to basically shape the revenue so that there’s stability over time for both government and industry. We get the same revenue. It’s just that the budgeting process for both parties is not as volatile as up-and-down gas prices.

B. Ralston: One of the topics that’s also being renegotiated and currently of great interest to communities in the northeast is the Fair Share agreement. What is the relationship, if any, between long-term royalty agreements and their impact on communities in the northeast through the Fair Share program?

Hon. R. Coleman: There is none.

B. Ralston: The next topic I want to turn to is…. I think, given the hour, this will be near the end of my questions. I want to look at the Moody’s Investors Service report which was issued on April 7, 2015. Moody’s is, of course, an investment house in New York.

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Among other services, they provide a rating service for bonds. We often hear of their reports in relation to the rating of government bonds. It would seem that the government has some confidence in Moody’s and their outlook into financial matters.

Their investor service, which is a different part of the organization, issued a report on April 7. It was, I think it would be fair to say, not terribly optimistic about the prospects for LNG development in Canada, given their view that Australia was coming on stream and would be, I think, one of the largest producers in the world in 2020 — up there with Qatar.

Brownfield projects in the States, such as Sabine Pass — Sabine Pass, as I’m sure the minister knows, the former gasification project when LNG was flowing the other way, a regasification project — where there is a constructed terminal, where there’s a connection to the pipeline grid…. Much of the infrastructure, although it would have to be reconverted, is available.

The long-term process, in their view, seemed…. And I’m just going to quote: “However, in today’s low oil price environment, greenfield projects like those proposed in
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British Columbia are less economic to build. Furthermore, the Canadian dollar correlates to oil prices, and weaker currency makes U.S.-denominated prices of equipment and services more expensive for Canadian projects.”

I appreciate that the minister has devoted much of his personal energy and political commitment to pursuing the LNG opportunity. I don’t begrudge him that. That’s his job. But what’s the minister’s reaction to this report from this fairly authoritative financial house, Moody’s?

Hon. R. Coleman: I read the Moody’s thing, like everybody else did, but I’ve also read other analysts. As recently as a couple of weeks ago, I was in Houston at the large international CERAWeekconference, which is one of the world’s largest with regards to natural gas. I sat down with senior people at the very senior level of major companies around the world who still believe that their project will go to a final investment decision in British Columbia in the timelines they’ve identified to me. So they will continue to do their work.

If I lost sleep every time some analyst decided to give their opinion with regards to what might happen in British Columbia, I’d just be reading reports. I know the people across the table from me that I’ve dealt with. I know the people that have been here and already spent $12 billion in British Columbia in exploration to prove out a reserve for one plant. That was about $6 billion. Another company is spending $1 billion on their engineering design and the site work that they’ve already done.

The activity is still going on in British Columbia. Sitting across from the senior partners of five of the projects, face to face, and going through their timelines, their enthusiasm for British Columbia does not appear to be waning to me. The fact that British Columbia can be an all-in project and provide the reserve and the flows that have already been identified for the gas is unique to the world. They know they don’t have a situation like they have with some projects in other countries, where they built a plant and found out the actual flow of the gas and the expense of getting the gas was completely different, and then they’re getting 75 percent of the product that they need to run at 100 percent capacity.

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They know that in B.C., with our gas and the pressure we have and the volume we have — because they’ve done the exploration in one case — they can supply their plant with all B.C. gas, and they feel that that is a significant advantage over any other jurisdiction.

You have to aggregate in most other jurisdictions with regards to getting your supply from different sources. It isn’t an opportunity to come in like we have done in B.C. for decades, where we have the lands lease opportunity for people to pursue the reserve in a royalty environment.

So I remain optimistic. I am actually optimistic there will be some stuff happen in the near future that might change some other people’s opinion with regards to what’s going to happen in British Columbia. I look forward to that when it comes.

I can tell you that whether it be in China or Asia or Europe or the U.S. where these companies are housed — or in Malaysia…. I’m sitting down and going through their project. They’re pretty bullish on continuing to get to a final investment decision in B.C.

So we’ll pursue that on the part of British Columbians, and maybe in the future Moody’s might have to change that analysis.

B. Ralston: They’ve been wrong before, obviously. But usually on…. Certainly, in 2007 and 2008 they were, like many financial houses, notoriously wrong. But they do say here: “The likeliest project to go forward is the Pacific Northwest project cited in exhibit 3, and its lead sponsor, Petronas, appears to be leaning towards deferring this project as lower oil prices reduce its cash flow and it directs more investments, domestically, to Malaysia.”

The minister referenced Asian markets. At the front of the report the summary is: “China, followed by India, will be the principal driver of demand for LNG for the rest of the decade. Demand in Asia, which set off a flurry of LNG project development, won’t be strong enough to absorb the new capacity coming on line by 2020, and that will cause many companies to defer new liquefaction projects for a few years.”

[P. Pimm in the chair.]

The minister’s view is that Moody’s, in this case, is wrong and we can look forward to some final investment decisions here in British Columbia in the next year or two. Is that a fair summary?

Hon. R. Coleman: I don’t think you can ever say an analyst is wrong, because they could use different factors of information than somebody else does. We have some analysts that say B.C. is well-positioned and others that say there’s a challenge because of the U.S. southeast and those sorts of things. But I have to go on the basis of who’s in negotiation with us for project development agreements, what their timelines they’ve identified to us are.

It’s interesting. Whenever somebody says that one particular company, in a public statement — whether it be a Moody’s report or press release from someone else — is the leading proponent in British Columbia, I usually get four or five phone calls from the other companies that are pursuing an opportunity in British Columbia. They say: “Hey, they may not be the lead. It might be us.” They are all very keen to let me know that they’re still pursuing their projects at the level they’ve told me as well.

Every time somebody makes a comment, the industry calls and basically says: “Don’t forget that we’re actually further advanced than we are. We have our plan together.” One company has told me that the way they operate dif-
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ferently and how they communicate, they will just make a decision and go ahead. They’re going to make that timeline decision within the next 24 to 36 months in one case.

Each one is different. I don’t think necessarily…. We also know that some projects may get delayed — liquefaction projects worldwide. This is actually more and more beneficial to B.C.’s opportunity. We have the gas. We have the reserve. We know we can supply the gas. They know they have a stable supply, which makes their projects long-term viable. We take a lot of the risk out of their decisions as a result. I’m just confident. I think we’ll get a number of plants, and then people can readjust their analysis of British Columbia.

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B. Ralston: Given what Moody’s seems to think, that the greenfield projects, given construction costs — pipeline construction costs, plant construction costs — are at a price disadvantage…. That’s certainly public statements by someone as well known as Moody’s.

Is the minister of the view that this gives some of the major proponents an advantage in negotiations, in the sense that they may be in a stronger position to get preferential treatment — lower royalties, a lower taxation structure, locking into a project development agreement, an advantageous financial position — given the desire of the government? The minister has repeatedly said and promised some final investment decisions in the immediate future. Does that assist the government in its negotiating position, or does it act to its detriment?

Hon. R. Coleman: I don’t think it affects the relationships we’ve established and what we’ve accomplished so far at all, and I don’t think it will in the future. There is going to be a need for additional natural gas in the marketplace.

The member referenced China. Three of the projects in British Columbia have major Chinese partners who want offtake agreements and are prepared to invest in those projects with other companies. I would say that none of that has an effect on how we’re negotiating.

We laid down pretty clearly what our goals were when we started this. We’ve stuck to them, and we’ll continue to stick to them.

B. Ralston: Those are my questions. I’m going to turn to my colleague the member for Vancouver–Point Grey. I appreciate that a staff change will be required. The minister’s other responsibility is housing, and there will be a change required.

Thank you very much. Thank you to the minister. Thank you to his staff. With that, my part in these estimates is done.

The Chair: The committee will recess for five minutes.

The committee recessed from 5:27 p.m. to 5:31 p.m.

[P. Pimm in the chair.]

Hon. R. Coleman: I just want to introduce the staff that I have with me. To my left is Shayne Ramsay, the president and CEO of B.C. Housing. To my right is Jeff Vasey, the assistant deputy minister, office of housing and construction standards. Behind me is Greg Steves, housing policy; Trudy Rotgans, building policy; Janet Donald, residential tenancy branch; Cheryl May, residential tenancy branch; and Shauna Brouwer, who was here earlier and was introduced earlier.

D. Eby: Maybe what we’ll do is I’ll try to do as many residential tenancy branch questions as I can and get that out of the way so that the RTB doesn’t have to return tomorrow.

Can the minister advise whether there is anything in this budget to deal with the fact there has not yet been an administrative penalty laid against a landlord that resulted in any fine being paid by a landlord, despite some very notorious buildings being run in British Columbia? Is there something in the budget that’s going to help us deal with this issue?

Hon. R. Coleman: We’ve used it once. The member will probably be aware of it. What we did was we negotiated a settlement with the particular landlord because they went and invested the money to bring it up to the list of standards that we asked them to do with regards to it. That was done.

We don’t have…. It’s not really a budgeted item; it’s basically a complaint-driven item. If we have something we find egregious, then the branch has that tool available to it to go pursue administrative penalties if they so wish.

D. Eby: With respect to the minister, there was a freedom-of-information request done by the opposition. It set out that the issue around administrative penalties is, in fact, a resource issue and a budgetary issue — in particular, one of the e-mails in discussion about why more penalties hadn’t been laid: “We continue to struggle with resources and get legitimate requests to apply the provisions. Made internal decision to pursue worst of worst and now need to revisit that.”

Another quote: “As well, RTB does not have legal authority to inspect buildings as part of issuing administrative penalties, nor does it currently have expertise or human resource capacity to conduct inspections.”

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The analysis has not been flattering of this initiative. The staff described it as “not particularly successful” with respect to this worst-of-the-worst approach — that it’s not working. Also, that demand for these penalties is increasing. “FYI: there seems to be a noticeable increase in
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requests for admin penalties.” These e-mails and quotes come from the policy director of the RTB, among others, in correspondence with the executive director. These aren’t low-level staff; these are staff who know what’s happening at the RTB.

Again, to the minister: is he going to provide the resources necessary for administrative penalties to actually have some meaning in the province?

Hon. R. Coleman: The thing, I guess, when we did this change, which we did just a few years ago, was the expectation that…. We get people that phone in now and say, “My landlord hasn’t fixed my tap,” or plumbing or whatever the case may be. That is really not how this was intended to be — to go give a ticket every time there was a complaint for a landlord. It was really about the most egregious.

A lot of those folks will phone in and expect that to be the case, when they haven’t even entered into the dispute resolution process, which is a process that we deal with in 99-point-some percent of any of our issues with regards to landlords.

We are doing a bit of a review to look at how this has worked or how it could be improved in the future. That work will continue over the next number of months. The reality is that the request may be out there for some administrative penalties that are better served by the dispute resolution process than by pursuing a resolution by going to the courts, with regards to what we would do to have the administrative penalties.

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D. Eby: The minister hinted at it. Certainly, I’m not coming out of nowhere with these concerns about administrative penalties. There is a review that has been done by the residential tenancy branch into these. Now, I would tell the minister what the problem was, but of course, on the FOI it was redacted.

But I can say that the document says: “RTB does not have legal authority to inspect buildings as part of issuing administrative penalties, nor does it currently have expertise or human resource capacity to conduct inspections to address the problem. RTB needs a concise, clear and common understanding of the current challenges in administering administrative penalties.”

Can the minister tell me what the outcome of the review was and whether he’s willing to release that review to the public?

Hon. R. Coleman: A couple of answers. First of all, what the member has is not a report. It’s some internal notes with regards to the process of work to get to the report.

In addition to that, just so the member knows, it has never been the intention for residential tenancy, in my experience in the last 30 years, to be an enforcement agency. It has never been anticipated any time the legislation was written, whether back when the first rentalsman was put together in, I think, the late ’70s through to the residential tenancy during the ’90s, when I debated the act from the other members’ side of this House with former Attorney General Ujjal Dosanjh, through to the writing of the act.

It has always been the notion that the Residential Tenancy Act is to be there to allow for the management of the relationship between landlords and tenants in an environment where there’s a dispute resolution process to go through.

The movement to administrative penalty has actually been a challenge, not because of resources but because it has taken us down a road that, having done it, has changed the dynamic of how we would look at this organization and that relationship in the future.

The biggest challenge we have today in residential tenancy is the fact that even though on the Internet there’s a tenancy agreement that’s a boilerplate agreement, I find more often than not, the issues between the landlord and tenant are because somebody hasn’t actually put together the residential tenancy agreement between the two parties. Then they show up in dispute, and there’s no form of anything that outlines whether they could have, for instance, pets or whatever the case may be in their agreement, because it’s all verbal.

We’re trying to increase the education around that so people — particularly people who have, like, a basement suite or something that they actually rent out — understand that it still is a relationship that has to be bound by an agreement so people can manage the disputes.

[The bells were rung.]

The Chair: Committee A will go into recess.

The committee recessed from 5:44 p.m. to 5:55 p.m.

[P. Pimm in the chair.]

D. Eby: I think we have a shared interest in the issue of administrative penalties. I know for landlords they’re concerned about tenants committing fraud, needing to be detected; from the tenant perspective, problematic landlords creating unsafe conditions in buildings.

Can the minister advise: when the review is complete, will he release it to the public so that we can have a shared understanding about the challenges that need to be addressed in this area?

Hon. R. Coleman: It’s probably going to take six months or so, but yeah, we’d make it public. I think it would bring forth some healthy conversation.

There is this line between an act that is supposed to balance a relationship between about 500,000 people and
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landlords who have 500,000 units across B.C. — that relationship. As you go down some of the narrative around this, but especially administratively, somebody says: “Well, go inspect the buildings.” The next question is the landlords will say: “Are you going to go inspect the unit?” Then you get into: what’s the access? I mean, it goes into a whole different relationship at that point in time.

I think the review…. What we’re looking at is to really say: is this working? Can it work better? What else could, could not or should not be done with regards to this particular act?

D. Eby: Community Legal Assistance Society and a number of other service providers that are involved in residential tenancy law issued a report. One of their recommendations was around the availability of decisions made. I know there’s been an effort at the branch to post more decisions to the website. One of the issues identified was that it’s really hard to search them.

The reason why it’s important to have decisions posted on line and searchable is that they provide the opportunity for both landlords and tenants to read similar fact scenarios and potentially avoid attending the residential tenancy branch at all. They resolve the issue because they say: “Look at this case. It’s really obvious what your obligations are here.”

Can the minister advise whether there’s any discussion about either partnering with CanLII, which is a free on-line service, to post those decisions in a more searchable way, or to address those through the residential tenancy branch website?

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Hon. R. Coleman: We do post decisions, but there is some challenge with the searchability.They’re significantly redacted because there can’t be any information about a person’s freedom of information and privacy being breached. So the address, the landlord, the tenant, the tenant’s witnesses, the landlord’s witnesses, the circumstance — anything that would actually point to who the individual is that’s been in this dispute resolution process has to be taken out, from an FOI perspective. It’s quite a bit of work to do that.

Then evidently we have some challenges with searchability to pick people to go and do this. We are doing some work to see how we can improve that service.

But certainly one of the challenges has been, and it has been for years…. I’ll use 601 Duncan Avenue because that was my mother’s house, and so there’s no tenant in there, and she’s gone. We can’t say: “At 601 Duncan Avenue there was a dispute.” You could leave out all the people, but now you know what the address is. People can say: “Well, now I know.” Then you can figure out who the landlord is. You can figure out who the tenants were and all those sorts of things as you go through that.

The FOI function has been significantly a challenge, because it’s a dispute resolution process. We do try and put up decisions so people can do that, but then the searchability is evidently a challenge. So we’re doing some work on that.

D. Eby: I don’t have any particular position one way or the other. I’m just curious, following on the minister’s answer, why this tribunal is treated differently than other tribunals where names, identifying information is all public — Office of the Information and Privacy Commissioner decisions, for example. The complainant’s name is often provided as well as details about their complaint. I’m just curious about what the source is for the different treatment, why there’s such effort to redact in this tribunal versus other tribunals.

Hon. R. Coleman: A couple of reasons. First, there’s a high expectation of privacy because the hearings are done in private. So that’s part of that. They’re not like an administrative tribunal or something where it’s done in public. And they’re highly personal. When you try and protect a situation, you need to protect it on all kinds of levels.

There are, in a residential setting, all kinds of challenges that come with regards to information being disclosed or somebody identifying somebody. It could be a situation where somebody has fled abuse and is now in a tribunal. Somebody, an ex, an abusive spouse or whatever…. You could have some situation where that could occur.

You have to really protect this because it’s such a personal level when it comes to your home and also because the hearings are in private. Our advice is that redaction is necessary at that level that they do it at.

D. Eby: How many information officers does the branch currently have, and how many phone calls and e-mail contacts did they handle in the last year that you have records for?

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Hon. R. Coleman: The residential tenancy branch receives about 500 telephone calls a day, most of which are dealt with over the phone and don’t require a dispute resolution process. The reorganization of the residential tenancy branch contact centre resulted in the ability to answer 65 more calls each day. The telephone wait times have been reduced. There are 15 information officers. And we’ve sent over a request to get you the number of e-mails per day, because we don’t have that statistic with us today.

D. Eby: I’m curious. The number that I had from the class report was 44 information officers, and that was a couple of years ago, handling between 185,000 to 200,000 calls. If there were 30 fewer, I think I would have heard about it before today.

I’m curious whether the minister can confirm that
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number, whether the class report was talking about something different when they say 44 information officers.

Hon. R. Coleman: Good catch, hon. Member.

Evidently, my hearing’s not so good. Mind you, my wife tells me that all the time. She says I have very selective hearing.

It’s 50 information officers, not 15. It’s 20,000 calls per year, and we get about 50 e-mails a day.

D. Eby: The minister mentioned phone wait times. Can he give me some indication of a change in phone wait times over the last couple of years — or the period that he has available?

Hon. R. Coleman: The wait time right now is about 34 minutes. It was up at 45 minutes before the reorganization of the contact centre.

On our recording now we also have useful information that people can access to help them understand things before they even have to talk to somebody. You can leave a message, and we will call you back if you don’t want to wait on the phone. I guess that covers that.

D. Eby: Will the minister advise me when the reorganization of the call centre took place?

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Hon. R. Coleman: It was started in January 2014. The year-long process to work out all the pieces and everything else…. It took about a year-long process, so it’s been active and in full capacity for about three months or so.

D. Eby: Can the minister advise what was involved in that restructuring? Was it adding additional staff or technology or contracting out?

Hon. R. Coleman: It’s the same staff. There’s been no outsourcing. We’re changing the model somewhat, some training with basically consistent messaging, particularly on the questions that the person on our end of the phone would be asking so that there’s a consistent, plain-language relationship with the people that would be calling in.

To improve that piece of communication — a new website. The revamp plain-language thing is so that the right questions are being asked, so that we can actually better understand the issues that people are dealing with.

All of those things took time to go through, and we’re actually getting good feedback both on our website and on this model, where people are actually able to get in and understand. Of course, we also continue to have information on there for people who can access, over the phone, information that might help them in making their decision as to how they would go further with their discussion with the branch.

D. Eby: As the minister notes, for both landlords and tenants, a wait for a residential tenancy branch hearing, even a short wait, is agonizing, especially in a situation that either side deems to be urgent.

I know the RTB has different categories by which it measures wait times for residential tenancy branch hearings. What I don’t know is what they all are.

I wonder if the minister could give an overall average for the last three years that he has information, in terms of wait time for a hearing, and then any divisions by any particular categories that the RTB may measure this metric by.

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Hon. R. Coleman: I think I’ve given this answer before, actually, sometime in the last 14 years. We prioritize the scheduled hearings to focus on the most urgent issues, limiting wait times for issues with the greatest impact on landlords and tenants.

A direct request is 12 days. That’s an uncontested tenancy request for non-payment of rent or utilities, that sort of thing. Hearings related to urgent matters, including applications for an early end to tenancy for emergency repairs, are scheduled within two weeks. Wait times for hearings related to orders of possession or to cancel a notice to end a tenancy have been reduced from nine weeks to six weeks. In prioritizing more urgent claims, wait times for monetary hearings have been extended, and we are looking for ways to improve our service in this particular area.

D. Eby: I take it these numbers are the most recent the minister has. This would be for fiscal 2015, for the most recent fiscal year. What I had from his answer was direct was 12 days, early end of tenancy was two weeks, order of possession was six weeks and then monetary order…. I didn’t hear a timeline from him. I wonder if he has the two previous years’ statistics as well.

Hon. R. Coleman: Yeah, I’ll attempt to get the information for that last question. The first piece with the timeline is for the ones that I mentioned earlier. Plus we don’t have the statistics for the previous two years here, so we’ll have to…. If we can get it by e-mail or we get it by tomorrow, I’ll just bring it into the record for the member as soon as I get my hands on it.

D. Eby: One of the interesting statistics that came out of the CLAS report was they did some math dividing the number of cases heard and decided by the residential tenancy branch by the funding provided to the branch. The funding provided to the residential tenancy branch was about $405 by their math. I imagine the minister has a different number. But the point was that it was about ten times less than the workers compensation tribunal received for hearings, and it was about five times less
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than the employment and assistance tribunal received per hearing.

I wonder if the minister has looked at this issue of funding. Certainly, it’s closely related to some of the issues we’ve been talking about here, whether it’s wait times or on the phone or for hearings and so on, and whether there’s some explanation about why the RTB is so differentially funded compared with these other tribunals.

Hon. R. Coleman: I can’t speak for one of the two, but certainly, when it comes to workers compensation, which is WorkSafe B.C., it’s an insurance agency that’s paid for by its premiums from the employers with regards to its operations. It has, basically, an actuarial model where the user pays from the standpoint of the premiums paid by the employer and the employee.

The residential tenancy branch isn’t meant to be that type of model. Most of our hearings are a lot simpler than the other tribunals the member mentioned. A lot of them can be done by telephone, and we allow that ability to do so. We’ve never intended it to be a self-funding model above that. I guess it speaks to the efficiency of the branch.

At the same time, it has always been a model that successive governments have looked at and said if you went to a user-pay model, like a premium-based-type model, you’d be building it into everybody’s cost, and that would just affect the cost of tenancy for every tenant in British Columbia.

Really, it’s a system set up to have an efficient tribunal process to deal with people being comfortable to be able to come in or give their information with regards to their dispute for resolution. It’s certainly not as complicated as some of the other tribunals.

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D. Eby: Does the minister have statistics on the number of adjudications heard and decided by the residential tenancy branch this year, the year previous and the year before that?

Hon. R. Coleman: Last year there were 15,800 hearings in last fiscal out of 20,000 calls. The numbers have been pretty consistent. We don’t have the exact number for the year before, but they tell me they have been pretty consistent over the last number of years.

D. Eby: The numbers that I have for the residential tenancy branch budget in the estimates show a $39,000 increase. Can the minister advise if that’s correct? I have $8.001 million in 2014-15 increasing to $8.04 million in 2015-16.

Can the minister advise whether those numbers are correct? If so, what’s the $39,000 about? How is the branch going to cope with inflationary increases in staff salaries, hydro and so on?

Hon. R. Coleman: The $39,000 is related to the union staff’s wage increase.

D. Eby: Does the residential tenancy branch not anticipate any additional inflationary increase in their cost of doing business? If they do — and, I think, reasonably anticipate that — how will they be dealing with the inevitable budget shortfall that’s going to come from this? Will they be cutting staff positions? Will they be closing offices? Will they be…? I’m curious about how they’re going to be dealing with this shortfall in their budget.

Hon. R. Coleman: This branch is…. Most of its expenses and costs are fixed costs, so they’re not anticipating any inflationary pressures. Each year we go through the budget cycle with them. They make their budget presentations, like every other branch, to the minister.

D. Eby: Those are my questions related to the residential tenancy branch. I won’t be raising any further questions. So those staff, if they are segregated by that, are free to leave. I thank the staff very much for their assistance to me today through the minister.

Moving into the area for which B.C. Housing is responsible. One of the roles of B.C. Housing is to maintain a list of people interested in moving into housing maintained by B.C. Housing or by agencies under contract with B.C. Housing. Can the minister advise on the wait times for the B.C. Housing wait-list for Vancouver, Metro Vancouver and the province of British Columbia?

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Hon. R. Coleman: I’ll give the member the best answer I can. This is one of the most statistical challenges in Housing. It has been ever since we maintained the registry, for a couple of reasons.

First of all, applicants in our housing registry are often applicants of a non-profit organization’s housing registry as well. Tracking them sometimes can be a challenge because they could be housed in a non-profit that isn’t on the registry. About 1,400 — or 10 percent, because it’s about 14,848 on the housing registry today — of them are people that are requesting a transfer to another housing project within the registry. So they’re housed, but they’ve requested a transfer.

The challenge with it is the list is based on need, and so some folks will stay on there longer than the others. It’s hard to give you…. I know we’ve tried for some time to get it down as tight as we can.

I can give you the considerations that affect the time an applicant is on the registry. An applicant may have requested a specific property, but an appropriate unit may not be available. For example, it doesn’t match the family composition or something that they want. We run into this a lot, oftentimes with requests from MLAs where they will come and ask for….
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They will have a family that needs a housing situation, but they say specifically that they only want to be in a four-block radius or a six-block radius of where they are. Of course, we have limited product in that area, so they will stay on it a long time because we don’t have a vacancy anywhere.

If somebody matches up to SAFER or to the rent assistance, we’ll move them to that.

An applicant’s contact details — which is a challenge, actually — may change, and they have not kept their file up to date. When we call them, they can’t be contacted when a unit is available, which then affects them.

An applicant may refuse an offer of tenancy due to personal preferences — i.e., access to work; the pet policy; the proximity to transit, community health services, etc. — and remain on the wait-list.

An applicant could have a change of circumstances that may require a different type of housing than they initially requested. Sometimes that can be because of a change in the family makeup, or ability issues that now require a building with an elevator and adaptable, accessible units, that didn’t when they initially applied. That could be somebody that had a hip issue or a knee issue after they’ve applied, and that’s affected it.

Then, of course, the needs of the other applicants on the registry, based on level of need, can also affect the time they’ll spend on the registry.

While waiting, applicants are also eligible for assistance through the rent assistance program, SAFER and the HPP programs as well. We try and turn out…. This number has gone down, is my recollection, from a few years ago, where I think it was up around 18,000. But I think it’s been relatively consistent around this number, given that mix of challenges and keeping the list that I just described.

D. Eby: Can the minister advise, then…? Clearly there’s a range of times that people spend on the list. Of the 14,848 people on the list, who’s been on the list the shortest, and what amount of time would that be? I’m not asking for the name.

What’s the shortest amount of time that a person on the list currently has been on the list, what’s the longest amount of time, and what’s the average? I’m trying to get a sense of the amount of time that people sit on this list — urgent cases versus less-urgent cases, and then the average.

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Hon. R. Coleman: The average wait-list wait is about 19 months. The urgent cases are usually dealt with within a month. In cases of people that would have fled abuse and gone to a transition house…. In certain circumstances where they’re fleeing abuse and there’s a risk to the family and they’ve done their 30 days in a transition house with the regular stay time, that can be as quick as two to three days, because we have a pretty good relationship with folks in the marketplace for second-stage housing and projects for people that are at significant risk. So that would be the summation of that.

D. Eby: I’m curious. I have a constituent living in the woods in Jericho Park. He was in for surgery. He’s on the B.C. Housing wait-list. We weren’t able to get him into…. It would seem to me that he was in quite an urgent situation, going in for surgery and so on and living outside. He’s been on the list for about a year, I would say. I realize that anecdotal information is not particularly useful to the minister, but a one-month wait for urgent cases doesn’t seem consistent with our office’s experience.

Anyway, can the minister advise what an urgent case would be that would qualify for a one-month period of time versus others?

Hon. R. Coleman: Let’s just deal with…. I’ll call it the case that the member is talking about, because I don’t usually get into individual…. That individual as described would actually be entitled, by the description, to the homeless prevention program, which has got nothing to do with the waiting list at B.C. Housing or an application process.

We have non-profit outreach workers who would go to someone like that because there is a program at B.C. Housing for a rent supplement for people that are homeless to get them into housing. Provided they wanted to move or they wanted to go into housing, they could actually, in most cases, take care of that the same day. I don’t know whether they have accessed that information.

Urgent cases are usually a number of aspects. Mainly, for the most part, it would be somebody that’s in an abusive situation, where they need to move into housing because of a split-up of a family and the safety of the individual or are coming out of a transition house. The transition house system is really a 30-day transition house to second-stage housing, which is more permanent housing that is more beneficial to a family that’s at risk.

Other urgent cases could be someone who, for medical reasons or whatever the case may be, needs to move from one form of housing to another or is in a housing situation that is so dangerous to them that they need to move into B.C. Housing versus be where they are. They might be in the marketplace. Those are the ones that we would usually get done within a month or two to three days, depending on where they were coming from.

There are other examples, I would think, but I don’t have them off the top of my head because there is such a diverse portfolio of people and circumstances — mental illness, addictions, people from that standpoint. When we’re talking about most of these things with the B.C. Housing list, it’s really not about somebody that, let’s say, is in need of supportive housing in the Downtown Eastside in a building that B.C. Housing has.
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That wouldn’t be a registry issue. That would be somebody with a needs issue. We manage that portfolio a bit differently.

D. Eby: I appreciate the minister’s answers. I just have trouble understanding them. I know that the city of Vancouver’s street homelessness count has gone up in their most recent count, and I don’t understand how the minister could say that people who are living outside in Vancouver get into housing on the same day through outreach programs.

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That simply is not the reality in Vancouver. It may be in other centres, but I know that Terrace just completed their count. Their homeless count was up as well, as they expected it would be, because people, anecdotally, knew that there was increased demand. There is a call for funding of a full-time homeless shelter in Penticton, because the cold-wet weather shelter is only open for a few months. Homeless numbers are increasing in many centres in the province.

I don’t understand how the minister could say that people living outside could get into housing on the same day. I wonder if the minister can clarify where that information comes from so that we can either correct the record…. Or maybe he can give me the phone number for this service, because I know there are a lot of people in Vancouver that would appreciate this phone number, including the mayor, who committed to ending street homelessness and would love to house those people.

Hon. R. Coleman: The one thing I’ve learned on this issue is that it’s very complex. People who have a single band-aid solution in their mind for homelessness or mental health and addictions don’t understand the clientele and don’t understand the challenges.

The homeless prevention program — the funding for that — was only announced back in October, November. And the relationship with the federal government…. Up to today it’s already housed 1,400 people — with regards to the subsidies in the marketplace for people like the member described.

We find that we have resistance on some of the folks that we would like to house, from the standpoint that they don’t want to go into, let’s say, an SRO or whatever the case may be. Each client is treated on an individual basis, because that’s the only way we can be successful.

We put homeless outreach workers starting in Vancouver in an experimental project in about 2004. We found success over the first 18 to 20 months of that. We were having success connecting people with housing supports.

We then moved to where we moved it to some other communities across B.C. Now, if my recollection is correct, we’re up around 40 communities across B.C. that have homeless protection programs.

I’m very familiar with the city of Penticton because I grew up there. It has a number of social housing projects and some projects for people that are at risk of homelessness and mental health issues. We actually bought, ironically, an old motel that used to have a restaurant where my wife worked when she was 16 years old. We renovated it and turned it over to the South Okanagan Mental Health Association, which is today running that particular facility for people who are homeless or at risk of homelessness.

Each community comes to us at different times and outlines to me…. Every UBCM they would normally come and say what they thought their priorities were within their community. I usually talk about them. Penticton has not come to me and asked for a shelter.

We do have emergency shelter programs for winter and cold-wet weather across the province — it’s a pretty dynamic program — but we will follow up with the Penticton issue. I can tell the member that we’ve been building and buying and renovating and doing this all over B.C., in just about any community you can name.

With regards to some, there is some work actually being done right now in Terrace with regards to another project to be proposed — as well as some other communities across B.C. It’s quite extensive.

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The challenge with this is that there is a cycle of people or folks who actually will come into housing and cycle back to the street and will come back into housing and cycle back to the street. A lot of it has got to do with issues that they deal with, whether it’s mental health and addictions or other issues, or they don’t like the particular housing that is made available to them.

We never turn our back on them. We just continue to try to work to find solutions for them.

I’ve specifically stayed away from a statistical argument in and around that, because a homeless count is a snapshot in time. What you need to do is look at whether your police calls are down, whether your mental health calls are down, the issues in and around those interactions that take place.

We know our interactions are down, because we added things like meals and supports into the buildings that we purchase — for instance, in Vancouver when we build — which helps stabilize the population. They don’t cycle back and forth as much, so you don’t get the same cycling with regards to homelessness.

I think the other challenge for me is when people see people on our streets and just decide that they’re homeless, when oftentimes they’re not. They may have a single-room-occupancy hotel. If you ever get the opportunity to walk the Downtown Eastside and carry on a conversation with some of the folks, you’ll find that a lot of them do have a place to live. They do, in some cases, have their cart, and they collect bottles and those sorts of things that they do as well. But you’ll find that the population you talk to is not always….
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What I think the challenge is…. I know the counts are the counts, and they’re done as a snapshot. I’m not saying the member does this, but one of my frustrations on this file is that I hate it when people decide on a blank comment on somebody on the street — and I hear it in my community; “There’s another homeless person” — when in actual fact they may not be.

It’s always my caution to some of my friends and people: don’t judge the book by its cover, and remember that we’re all trying to pull in the same direction. We will continue to provide housing and opportunities for that and programs that we think can actually push back on these issues, including the homeless prevention program and others.

D. Eby: I appreciate the minister’s comprehensive answer here. I think we are all grappling with this challenge around homelessness.

The minister raises the issue of homeless counts, and I’d like to explore that a little bit with the minister in terms of whether he’s allocated resources in this budget to do a provincial count. We raised this in question period, but I think this is a better place to have the conversation.

His own ministry says that housing counts are an effective tool to make sure that the services being delivered are having an effect, or not. I agree with the minister that they’re just a snapshot, but they can certainly help you identify trends. The minister has said that his ministry is doing great work in opening a lot of units up for people, yet the counts that we’re seeing from individual centres are showing an increase in the number of people who are homeless.

The other metrics the minister suggested…. Mental health calls to police are a notorious issue in Vancouver, two separate reports by the Vancouver police department on this issue. The Union of B.C. Municipalities has raised this as an issue.

On the issue of a homelessness count, can the minister explain why he is not doing a provincial homelessness count when so many other jurisdictions find this to be a useful tool to identify the efficacy of the programs they’re putting in place?

Hon. R. Coleman: A lot of communities do homeless counts. It’s a snapshot in time. It does form some of our policy stuff that we work with.

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The challenge with some of these counts is that we have volunteers who will go out in an area like Vancouver, and there could be people in the city from outside the city that are counted that are actually gravitating in and out. Economic changes in different areas of this country affect the homeless amounts in areas where the weather is different and all of those things.

What you need to do is have a foundation and work with this so we can take those counts into consideration as we build policy. But we’re not going to be spending all of our money on counting when what we should be doing is finding solutions.

I’ll give the member one example. I know he’ll understand this one because it’s in Vancouver. The Backpackers Inn in Vancouver was considered the most notorious building in the city of Vancouver. It had a dumb waiter in the building for the drugs to go up and down through the building. We bought the building through B.C. Housing. We renovated it. It was surprising, when we got in to renovate it, that it hadn’t fallen down, because there was a beam in there that was actually hollow inside when we did a cross-cut on it. We had to put in metal beams.

The police told us just in that alone — because of the change in calls relative to that one particular building — there was a huge drop in their calls into that particular area of Vancouver because we changed the dynamic of the building and the dynamic of the calls.

We do know that people we bring into our building with mental health issues and addictions, where they’re being given supports…. They might have been in touch with law enforcement or a social agency 80 to 100 times in the last year or so. That drops off dramatically when we get them meals and supports.

I know we’ll talk about this tomorrow some more. Noting the time, I move the committee rise, report progress and seek leave to sit again.

Motion approved.

The committee rose at 6:46 p.m.


Committee of Supply



The House in Committee of Supply (Section C); J. Martin in the chair.

The committee met at 2:54 p.m.

On Vote 29: ministry operations, $17,297,183,000 (continued).

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Hon. T. Lake: If I might read into the record some information from a question that we had yesterday. We’ve been able to retrieve that information. This was around actions taken in the residential care sector when there is a licensing issue. We do use a progressive enforcement approach, but there are measures that we can take.
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The question was: how many times have we used some of those measures? I can say from 2010 to 2015 we have placed an administrator in facilities five times. We have suspended a licence once, and we have revoked a licence on four occasions.

J. Darcy: I’d indicated that we’re going to continue on capital projects. I want to spend the next hour and a half or so — it may take more discussion later — on the clinical and systems transformation project, CST project.

One year ago, almost to the day, the minister said with regard to the clinical systems transformation project — which, as we know, deals with electronic health records for Vancouver Coastal, Providence Health and the Provincial Health Services Authority — “The project is 29 percent complete and entering week 8 of the 26-week design subphase. I can report that the project is currently on time and on budget.”

Obviously we know that has since changed. The contract has ended, and the project is significantly behind schedule. Can the minister please explain what happened between then and now.

Hon. T. Lake: The clinical systems transformation project is a complex project, no question. Whenever we have large IT projects in any organization, no doubt there will be challenges along the way. It’s important that those challenges are addressed as quickly as possible.

The member is probably aware of other provinces where they have tried to implement electronic health records and had challenges along the way. For instance, in Manitoba. The provincial government there initially committed $150 million towards their e-Health initiative when it launched in 2007. The projected costs quadrupled to $600 million, and it’s expected to take much longer. That was the Manitoba NDP government — because, obviously, computer systems don’t discriminate by political ideology.

These are complex systems. Let me just outline — as the member probably knows, but I want to just make sure for those that may be listening in — the benefits of the project. What this project will do for large health organizations — Provincial Health Authority, the Vancouver Coastal and Providence Health — is create a number of different things.

First of all, standardized clinical orders. Health practitioners will use a consistent set of care orders based on practices to treat illnesses. That means they use a standard and consistent plan for the type of lab work, medical imaging work, medications and other diagnostics — all kept in one single consistent electronic health record.

It provides improved patient safety, because providers can more readily identify potential drug interactions, and improves patient care knowledge transfer during shift changes.

You get real-time information. Lab tests, diagnostic tests of other types can be seen in real-time. That obviously is going to help the patient. Standardized administrative functions, such as referrals, scheduling and registration, will increase and smooth the flow of the patient journey through the system.

Obviously, one thing that’s very important is patient privacy. As compared to paper records, we will have a system where every time someone accesses a patient medical record, it leaves a footprint. So we can see who has been accessing a medical record.

The project was in the planning stages, the member noted, last year. Essentially, the challenges in terms of the way it would be implemented…. There were, I would say, differences of opinion from one of the main suppliers, IBM, and the project board on some of the work that the vendor had done.

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We tried to work through that. I met with the project board, and we reviewed the progress. The project brought in a couple of independent reviews by North York General Hospital and McKenzie. Again, that’s part of the due diligence to say: “Okay. We’re partway down the track here. We’ve got some issues with the vendor and issues around how we’re going to implement. Let’s bring in someone to give us a third-party look at the system and the way we’re doing things to see if we can improve it.”

Well, those agencies did note some weaknesses that needed to be managed. We tried to work with IBM to settle differences. At the end of the day, both sides agreed that it would be better to part ways, so the IBM team transitioned over to the CST project board.

Now we have brought in Cerner to work with us. Cerner is the main software company involved in this transformation project. The project board now is in a reorganization phase to look at finishing the planning. Then we’ll move into the implementation phase. So we certainly are behind schedule.

I would say to the member, yes, at this point we are behind schedule — probably, I would think, nine to 12 months, by the time the project is finished, behind where we would want to be. But I think, importantly, before we get to the halfway point of this project, that we correct course and make sure that we will have the kind of product that will provide the benefits I outlined and ensure that we have good patient care as well.

J. Darcy: There’s no question about the importance of having electronic health records — what an enormous difference and an enormous improvement it can mean to the quality of health care and health care services that are delivered to British Columbians.

There is, of course, no question that this is a very complex undertaking — all the more reason, I would think, why the minister would pay attention to risk assessments that were conducted very early on in this process, precisely in order to be ahead of the game, to recognize the
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challenges, to learn from what’s gone right and wrong elsewhere.

In March 2013 a risk assessment on the project was carried out. The opposition revealed at the time that 12 of the 13 risk indications were high. I’ll read those into the record for another year. The risk indications that were indicated to be high were: finances, governance, culture, technical complexity, shared vision, resourcing, clinical standardization, achieved expectations and timelines, clinical engagement and accountability, leadership, end-user adoption and vendor relationship.

That’s 12 out of 13. The only one that was considered to be not high risk was the political risk. We’ll leave that to other people to decide.

Last year when we discussed this, the minister said: “A lot of those risks essentially fall away as the project moves down the track.” Well, it appears that those risks did not “fall away as the project moved down the track.”

Can the minister explain why the government chose to ignore the risk assessment that was, in fact, produced and submitted, with the full involvement of Vancouver Coastal Health, Providence and PHSA? It was their own risk assessment. Can the minister explain why the government chose to proceed with the contract despite those risks and explain what happened over the past year with regard to those risks supposedly falling away?

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Hon. T. Lake: The member is quoting, I think, a risk assessment registry from March of 2013. In October of 2013 I filed a report, an update, with the Clerk of the Legislative Assembly in accordance with the Budget Transparency and Accountability Act, which was the major capital project plan for the clinical and systems transformation project.

It describes the project, and it outlines some of the benefits, the costs, the status. It goes through some of the major risks, which the member has identified. Also in that report are mitigation strategies. It’s not unusual to have risks on a project like this. In fact, it’s really important that you identify what those risks are so that you can develop strategies to mitigate those risks. There’s a list of things that we did outlined in that report, which is part of the public record. The member may have read it.

The mitigation strategies identified…. There are ten strategies there. So we worked through those mitigation strategies. That was in the fall of 2013. Through the next year, into the summer, those strategies were being developed. In the fall of 2014 it became clear that the relationship with the vendor was not ideal, that there were still some concerns as to the type of implementation that was envisioned, and that is when I met with the project board.

We made a decision at that time that we would put focused effort into our relationship with the vendor to see if we could agree on outcomes and continue the relationship. Unfortunately, as focused an effort as that was, it became apparent in January that the vendor relationship was still not working to the satisfaction of the project board. At that time, we went into mediation with the vendor. Late in the winter the decision was made — a mutually agreed decision by the vendor and the project board — to part ways and to transition over, which is where we find ourselves today.

It has put a delay in the project, for sure. But the vast majority of the work that has been conducted to date has been preserved, has been transitioned over to the project team and will help us to move forward with this project as we design the next phase of the CST project.

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J. Darcy: I have to say that it seems to me there’s a pattern here. I wasn’t in this House at the time, but I know that my predecessors in the official opposition raised this issue in the Legislature prior to the last election, prior to the start of the project, based on the risk assessment at the time. The minister’s predecessor was completely dismissive of it, essentially saying: “All is well. No worries.”

I raised the issue with the minister in estimates first a couple of years ago — told: “All is well. Not to worry.”

Last summer in estimates — last May, a year ago now — I raised serious questions. I just referred to what the minister said at the time, which was essentially: “Those risks will fall away as the project moves down the tracks.” The fact of the matter is that they didn’t move away.

The pattern that I think is very striking here is that the minister and the government seem to be completely dismissive of concerns that are raised either by some of the partners in the health authorities themselves, by the official opposition or by front-line staff who were ringing alarm bells from the beginning.

The minister talked about North York General Hospital coming in. As he indicated, a consulting team from North York General Hospital came to British Columbia in October of 2014. They visited the CST project offices for a comprehensive review of the project, and in their words: “Some aspects have been proceeding well. However, important risks to project success were also identified.”

I’d like to cover some of those risks with the minister. I quote from the report: “Project scope not always clearly defined.” That was under “Scope and rollout, risk 1,” page 1.

“When communicating go-live dates to end users, it should be a firm date in order to avoid loss of confidence.” “Scope and rollout, risk 2,” page 2.

“CST project structure has resulted in design and decision-making processes that are siloed. The working groups have overlapping accountability, and there’s no Cerner system build expertise at the table to guide design decisions. It also appears there’s a lack of clarity in project deliverables for each group.”

The report pointed out that this leads to “work flow that does not meet all clinical needs” and that “time is
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wasted because clinical groups are requesting or suggesting build that is not technically possible within Cerner or not best practice.”

Another quote: “A risk of inconsistency of build, duplicate build or missing items that will result in an unintuitive, inefficient and possibly unsafe system design.” That’s under “Governance structure and workforce, risk 1,” page 3.

Another quote: “The CST project is heavy with consultants driving design and build.”

Another quote: “The risk is that once the project is live, the knowledge of design considerations and build techniques are lost.”

Another quote: “There’s also a risk that decisions will be made for short-term success but are not realistic to manage long term.” That’s under “Governance structure and workforce, risk 3,” page 4.

Another quote: “Many different aspects are underway simultaneously. This approach is not recommended.”

A further quote: “There’s a risk to effective design, proper clinical validation, optimal build, training and adoption.” That’s under “Clinical content design and clinician engagement, risk 1,” page 5.

A further quote: “Due to difficulties with consultants completing the build, no prototypes have been available, and clinicians have not been able to see how their design decisions will look in the system. This is a major risk to project success.” That’s from “Clinical content design and clinician engagement, risk 2,” page 5.

These are serious risks, and they are many of the same risks that were identified in advance in the risk assessment that was ignored by this government. I’ve only read out a select few, but there is a total of 12 different risks identified over four different areas.

My questions to the minister: which of the mitigation strategies was accepted? How did the project board respond to those serious risks?

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Hon. T. Lake: This CST project is one of the largest health care projects in B.C. to date — $842 million — and is the critical path forward, I think, to future health care having electronic health records and standardization of clinical care. It’s a big project, and as the project board was moving through this, those risks that we talked about earlier had been identified. Mitigation strategies had been identified.

As is, I think, appropriate due diligence, other third parties were brought in to take a look, to see if there were observations that they could make that would help move this project forward. So McKinsey came in and did some work.

The member is quoting from a document from North York General Hospital. Now, North York General Hospital is a relatively small hospital that has a similar type of electronic health record, but it’s only one hospital, whereas in the clinical systems transformation project there are a number of very large hospitals and smaller hospitals that are linked. It is not an organization that is exactly the same — in fact, quite different in many ways — but their advice was sought.

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This organization spent about five days with the team at the clinical systems transformation project. A comprehensive review was undertaken in those five days. They met with executives, directors, managers and other project personnel to gain a broad perspective of the current project state. In their opinion, some aspects of the project have been proceeding well. However, the risks to the project were also identified, and they organized them in four main themes.

What the project board and the team would have done is to take this report, information that was received from the McKinsey report, information that they saw from other organizations…. Vancouver Island Health Authority, for instance, has a similar system that they’ve been using here and have some experience.

Again, all kinds of information and advice was sought, and the project board worked diligently with the vendor to try and mitigate some of the risks that had been identified both through their own work and through the work of external consultants. But not all of these recommendations would have been necessarily accepted by the project board.

Again, this is a relatively small hospital that doesn’t have the scope and the breadth of hospitals and services that we’re talking about in the clinical systems transformation, so not all of these recommendations, the project board may have felt, would have applied to the system they were working with.

J. Darcy: Well, the minister can be dismissive of what North York General suggested were risk factors and mitigation strategies, but I find it quite striking, in reviewing their report, the similarities — I’m repeating myself — between the risk factors that they highlighted and the original risk factors that were identified in a review that was done on the part of Vancouver Coastal, Providence Health and PHSA.

I won’t repeat those into the record, but some of them were technical complexity, achievable expectations and timelines, clinical engagement and accountability — that’s a theme that keeps coming back — end-user adoption. Obviously, clinical engagement and accountability are absolutely critical when we’re developing a system for health care and on a project as complex as this.

This is not the only consultant group, as the minister has acknowledged, that was brought into the high-risk CST project. Even earlier, as he’s indicated, McKinsey, a management consulting firm, was engaged in July 2014. This is earlier than the North York General Hospital one. It was engaged just two months after the minister had expressed complete optimism in this House.
[ Page 8505 ]

I’ll read the following key risks from that report as well, heavily redacted as it was. We worked for some time to get this through FOI. When we did, it was heavily redacted, but there are some things that were very clear in the report.

“The lack of transparency on scope.” That’s McKinsey report, page 6. Insufficient physician involvement. “While clinicians are involved in design, there is strong doubt among key stakeholders whether they are ready to adopt a solution.” That’s the McKinsey report, page 8. “Uninformed decision-making by the steering committee” — McKinsey report, page 6.

Some very worrisome quotes: “Cost and timeline are the only things measured.” That’s McKinsey report, page 7. Another quote: “We are not aware of the ramifications of the decisions we are taking on how the system is going to work and how the workflow is going to look. This is our most significant risk” — McKinsey report, page 7.

The minister will surely be familiar with the concerns raised in this report, as one of those interviewed was his own assistant deputy minister at the time, Elaine McKnight, who sat on the project board. On one of the occasions when the minister gave assurances in the House about how confident he was and how this was well in hand, he said: “I have my own ADM sitting on the project board.” Again, not to worry.

Again, my question is how the project board responded to these serious risks. What steps were taken in the wake of these interviews? We know, from the North York report, that serious problems still existed in October. That’s a few months after this McKinsey report. And we know, of course, that the contract with IBM has ended in 2015. Can the minister reflect on the concerns identified in that report, which was from an even earlier date in the summer of 2014?

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Hon. T. Lake: I think I’ve laid out sort of the timeline of when things occurred, and the project board recognized there were significant risks.

I certainly didn’t mean to be dismissive of North York. I was trying to characterize the difference between a single hospital and a system of hospitals that we have — including B.C. Children’s and Women’s Hospital, Vancouver General Hospital, St. Paul’s Hospital — as well as smaller community hospitals like Sechelt. So certainly not dismissive. Just pointing out the differences between a single hospital, North York, and the system of hospitals which makes it more complex here in British Columbia.

Interestingly…. You know, the member may think that it’s a simple venture to have a single electronic health record for every British Columbian, but editorials certainly recognize it’s not. It says:

“Every year British Columbians on average visit a family physician four to five times, fill 16 prescriptions and have at least one diagnostic test. Across the province those interactions alone generate about 120 million file entries….

“It will take years to unify recordkeeping across the entire health sector, and the computers can’t be shut off while the work is done. So any changes must be merged, step by step, without blowing up the entire system….

“Things will get really expensive. Vancouver Island Health Authority is spending $100 million to computerize all of its handwritten files. The goal is to have a completely paperless system, on uniform software, across the Island….

“Yet modern medicine is increasingly complex. If that’s what it takes to keep up, there’s really no choice.”

I think, certainly, editorial writers recognize the difficulty in moving from a historic, manual, fragmented system to a single, unified electronic health records system.

I mentioned the NDP government in Manitoba and the difficulties they had with a project. When you have a difficulty with a project, you don’t just cut and run. You identify what the problems are. You work through them. We identified the risks. We had mitigation strategies for the risks. Those mitigation strategies were implemented.

There were still concerns. Recognizing those concerns, consultants were brought in to take another look. We took that information. We worked with the vendor to try to mitigate further some of the risks that were identified by consultants, including North York General Hospital.

At the end of the day, we weren’t able to resolve those concerns with the vendor. The decision was made, first of all, to go to a mediation process. The final outcome was that the decision was made to part ways with the vendor so that we could get on and move this project forward again.

I’m not trying to minimize the difficulty that these big IT projects have, especially when you’ve got clinicians that are used to doing things differently in different hospitals, differently with their different backgrounds and training, when you’ve got heritage systems that are in place and are fragmented across the system. These are very, very challenging projects, but that doesn’t mean that we just say we’re not going to do it.

We will continue to identify what the concerns are and put in strategies to overcome those difficulties. That’s what we are doing with this project. Before we get too far down the line, we want to make sure that we have identified the problems.

We tried to work through a number of those problems. Those efforts did not meet with success. That is why we’ve changed the relationship. That is why we are planning on moving forward with a different approach, and we will continue to put all our efforts into making sure this project is successful.

Will it put us back a little bit? Yes, it will. But at the end of the day, the benefits from the single electronic health record will be enormous for patients in the Lower Mainland and then spread throughout the province of British Columbia.

J. Darcy: Well, of course, it’s not a simple process. Of course, it’s a complex process. All the more reason why the minister and this government should not be dismissive of
[ Page 8506 ]
concerns that have been raised before the fact, during the fact, at every step of the process — not just dismissive of North York General Hospital but of the risk assessment itself that was produced earlier and of concerns that were raised in the Legislature on many occasions and so on.

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That is a very definite pattern, and we see some of the consequences of that, unfortunately, at the expense of British Columbians and at the expense of a delay of a very, very valuable electronic health record system.

My next question to the minister has to do with these external reports. Can the minister please explain who paid for these external reports and what was the cost of each of them?

[M. Morris in the chair.]

The Chair: Minister.

Hon. T. Lake: Thank you, hon. Chair. Welcome to the debate.

I don’t have the numbers for the cost of each of those reports. I will get that for the member. But the money would have come from the project budget. The budget is $842 million. Of that, $120 million is contingency, so that is money that’s set aside to use in this way and for other potential challenges along the way in a project of this size. There are contingency funds built in to do precisely what the project board did, which was bring in external consultants to take the pulse of the project, identify challenges and suggest mitigation strategies.

J. Darcy: The minister will be able to provide those figures later in estimates? Thank you.

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On January 29, 2015, an internal memo on the CST project talked about senior health authority leaders and IBM meeting in “an attempt to avoid a formal escalation process.” It further stated: “In line with the contract, if the parties are not able to reach an agreement, our options will be mediation…or arbitration.”

Yet, on February 19, when we raised the matter of the CST contract in question period, the minister was still expressing considerable optimism, despite all the indications that the project was way off track. He said: “We have a project board that is working with the supplier. They will work through these problems.”

They’re working through the challenges. Another one of those responses that set a very clear pattern: “Everything’s okay; not to worry.” My question is: what gave the minister such cause for optimism at that time, given that the contract was just about a month away from collapse at that point?

Hon. T. Lake: Mediation is a process to overcome differences in opinion. I guess I’m a glass-half-full kind of guy. We were working with the vendor. We were working through the problems that were identified, and there was a process in place to work through those problems in mediation.

As it turns out, subsequently, the mediation did not result in agreement on the way forward, and a decision was made to part.

I’m not sure what the member would like me to say. I’m an optimist. I wasn’t giving up on the relationship. We were working hard to identify and work through the challenges we had, and mediation is part of that. At the end of the day, the best decision agreed to was to part ways, do a proper transition so that that knowledge transfer could occur, and that is what has happened.

J. Darcy: Well, certainly, optimism is a positive quality, but so are accountability and transparency. I would say that providing assurances that everything is just fine when it’s clear that things were already badly off the rails, doesn’t meet the test as far as accountability and transparency.

Surely the minister must have known at that point, when questions were raised on February 19 and when already there was notification to staff on January 29 about serious conflicts that had developed, that the so-called playbooks, which, I understand, form the basis for electronic health records in every department, had all been rejected by the health authorities for being “not quality products.”

Can the minister explain why those products were rejected? And if he knew that these products had already been rejected, why was he so optimistic when questioned about the project? And if he didn’t know, I guess my question would be: why not?

Hon. T. Lake: The clinical playbooks are standard clinical practices that are put in place — algorithms, if you like — so that when you’re presented with a certain history, clinical features, lab tests, it essentially helps standardize the diagnostic treatment plan for a patient. These clinical playbooks were developed by the vendor and were not satisfactory to the project board.

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That was part of the dispute that the project board had with the vendor. So the vendor was not paid at that point for these clinical playbooks because they weren’t up to the standard of the project board. That is accountability. That’s the strength of this contract — to hold the vendors accountable for quality. The project board was not satisfied.

However, there were members of the project board that felt that, working with the vendor, we could work through those problems and bring those clinical playbooks up to the satisfaction of the project board. That is why the discussions were held. That’s why mediation occurred. It wasn’t until in March, I believe, where the deci-
[ Page 8507 ]
sion was made that we weren’t getting to the point where we were going to accept the clinical playbooks from the vendor, so the decision was made to part ways.

Again, because that off-ramp was built into the contract, into the system, we weren’t locked into paying for something that we didn’t think was quality. That, I think, is the strength of the work that was done.

It has slowed us down, but it has allowed us to identify that the quality that people on the project board thought should be there wasn’t there, in their eyes. That was ultimately the nub of the dispute with the vendor.

The vendor and the project board agreed to disagree, at the end of the day, when they went through a process of mediation. I’m not saying the vendor is right, the project board is right, but they could not agree and decided to separate ways. The project board will move forward with a different vendor.

I have been kept informed of the progress all along. But at the particular point the member is talking about, I remained optimistic, as did some members of the project board, that we would be able to resolve those differences on the clinical playbooks.

J. Darcy: What is striking again is that there are themes that run through the risk assessments and the potential problems that were identified right from the beginning. One of the key ones had to do with clinician engagement and the risk, with serious problems in the process, of producing products that would not be acceptable at the end of the day for the users.

In any IT system, but especially when we’re talking about health care, it’s the front-line health care providers that have to…. The product needs to meet their needs if it’s going to accomplish what it needs to accomplish.

The issue, again, is not the complexity. The issue is that these concerns were raised, and when the minister was questioned in February, despite the fact that these clinical playbooks had all been rejected, he still said: “They’ll work through the problems. They’re working through the challenges.”

On February 19, 2015, the minister also said that he’d “met with the responsible health authority board chairs and CEOs to discuss the status of the project” along with his deputy and associate deputy. Can he share with us today what was discussed and how he followed that up?

Hon. T. Lake: I just want to read into the record an answer from previously about the consultant reports. The North York report was $30,000. The McKinsey report was $70,000 — so a total of $100,000 for those two reports.

Well, when I met with the project board, we identified the concerns that we had with clinical playbooks — the quality — and the relationship with the vendor. I made it very clear that we had to keep our focus on the goal of a single instance of an electronic health record. We went away from that meeting determined to work through the problems, determined to work with the vendor and to try to overcome the concerns we had with the problems that had been identified.

I’ve been through the timeline. We endeavoured to do that over the winter. It became evident that we weren’t going to get to a place where we agreed with the vendor on some of the products and went into mediation to try to resolve that and were unsuccessful there.

I’m not sure what the member would have us do if we say: “There are risks that we identify. Okay, then we better not do this project.” Of course you identify the risks, and then you identify strategies to mitigate them. Then you implement those mitigation strategies.

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They’re not always going to work. I mean, if we could predict the future, all of these projects would go a lot simpler. Everything we do would be a lot simpler — not quite as interesting.

We followed a procedure of identifying risks, putting in mitigation strategies. Risk wasn’t mitigated properly? Bring in consultants to help us and to identify what other things we could do, take that information, implement it, work with a vendor — we went through all of those processes. These are difficult and complex projects that often don’t go tremendously smoothly from the beginning. You’re always going to run into unexpected problems — and problems that you can foresee and try to overcome. That doesn’t mean you don’t do them.

We know that this is very valuable. I’m sure the NDP government in Manitoba earlier this decade realized how important it was. They had difficulties. They didn’t just quit. They worked through them and improved their electronic health records. That is our aim as well.

J. Darcy: The minister’s former ADM, Elaine McKnight, sat on the project board on behalf of the ministry. The minister told us last year she was the chair of that board, I believe. She left that position in December. A few questions. Who replaced Ms. McKnight in that role? What has the minister’s engagement with the project board been? And how often has he had updates on the project’s progress?

Hon. T. Lake: Sabine Feulgen, who is behind me, is my new associate deputy minister. Sabine took over as chair of the project board. She has attended about four briefings with me. My deputy minister, Stephen Brown, I speak with almost every day, I would say. He keeps me updated on the project going forward.

I asked Ms. Feulgen to keep me updated on a regular basis, which she does. She has been dedicating a large portion of her time to this project. As we went through the mediation and ultimately the separation of the relationship with the vendor, Ms. Feulgen has been very involved in that. As we did the transition of knowledge over to the team, she’s been very involved in monitoring that as well.
[ Page 8508 ]

This is a project that we have a lot of eyes and ears on. I still remain confident that we will be able to move this project forward in a successful way.

J. Darcy: Can the minister state for the record how much money was paid to IBM under the contract before it was terminated?

Hon. T. Lake: I’m not able to release that information at this particular time, in that we are still working through some issues. As we go out to a new vendor, obviously, that kind of information may impair our ability to get the best value for the taxpayer with a new vendor.

J. Darcy: I’m having a little difficulty understanding this. The minister is not able to say on the record how much was paid to IBM under the contract before it was terminated. Is that what the minister is saying?

Hon. T. Lake: Yes.

J. Darcy: Can the minister explain…? The undisclosed amount of money paid to IBM under the contract before it was terminated — where did that money come from? Which budget lines?

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Hon. T. Lake: The project has a budget of $842 million, so any funds that are put towards this project obviously come from that budget that we have identified.

J. Darcy: The minister said earlier — correct me if I’m wrong; I’m sure the minister will — that $72 million had gone to IBM. But I believe — again, I’m very pleased if this can be clarified — the budget says that $90 million has been spent on the project to December 31, 2014. Is that correct?

Hon. T. Lake: I can say that, as I’ve mentioned, the cost of the project is $842 million over ten years. The capital cost component is estimated at $480 million, the operating component at $362 million. As of March 31, 2015, forecasted spend on the project life to date is $149 million, consisting of $130 million capital and $19 million operating.

J. Darcy: Can I ask the minister to repeat that a little more slowly?

Hon. T. Lake: The total cost of the project is $842 million over ten years. The capital component is estimated at $480 million, and the operating cost is estimated at $362 million. As of March 31, 2015, the forecasted expenditure on the CST project to date is $149 million, $130 million of which is capital and $19 million is operating.

J. Darcy: The minister has been quoted as saying that $72 million has gone to IBM. Is that not correct? It was reported in the media. I’m asking the minister whether he in fact said that.

Hon. T. Lake: I can’t recall saying specifically that. I might have been asked the total cost of the budget or how much had been spent to date on the budget. I can’t recall, honestly, if I was asked how much IBM has been paid and answered that question, or how much has been spent on the budget. I certainly can try to track that information, but I can’t recall off the top of my head the exact answer or the question that I was given.

J. Darcy: I’m just trying to compute these numbers as we go. So $90 million, I believe, was spent as of December 31, 2014. Is that correct? But as of March 2015 a total of $149 million had been spent. Is that correct?

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Hon. T. Lake: I don’t have the figure of $90 million that the member is referring to. We can certainly look that up. But let’s accept, perhaps, for now that there was $90 million spent in late 2014, and we are at $149 million at this point in time.

There are 200 people who historically have been working on this project, and those costs are ongoing. We’ve made some changes since the transition and as we restart the project or refocus the project, so there have been some changes in the number of people working on the project. But 200 people on the project, so you can imagine that the burn rate in terms of employee costs is fairly high.

J. Darcy: The quote that I referenced is from a Rob Shaw piece on April 16, where the minister is quoted as saying: “The project is now nine to 12 months behind schedule. IBM has been paid almost $72 million.” I wonder if the minister can comment on that.

Hon. T. Lake: Well, I would never accuse Rob Shaw of misrepresenting what I said.

J. Darcy: Is the minister confirming he did say that?

Hon. T. Lake: I guess I did.

J. Darcy: Can the minister state for the record if any termination fee was paid to IBM?

Hon. T. Lake: I’m told there was no termination fee. We negotiated with IBM on work that had been completed and also negotiated with them work that was necessary to complete the transition of knowledge.

J. Darcy: So no termination fee paid to IBM. Were there any other costs associated with ending the contract early?
[ Page 8509 ]

Hon. T. Lake: With the transition, costs would be necessary to make sure that all of the information from IBM was transferred over to the project team. I guess you could characterize that as a cost of the divorce, if you like, but it is important to make sure that we captured as much information as possible from the work that had been completed previously.

J. Darcy: Where would that money have come from — the transition costs?

Hon. T. Lake: That would have come from the project fund. As I mentioned, there is a contingency of over $100 million in the $842 million budget.

J. Darcy: Further on the issue of whether there were any costs incurred, my question is: are there any costs incurred by the project board, Vancouver Coastal Health, PHSA or Providence in the process of ending the contract, including arbitration costs and lawyers’ fees? And if so, who bore those costs?

Hon. T. Lake: Well, there would’ve been costs, probably, from all of those organizations, to some degree. And there certainly would’ve been legal advice that was sought along the way. Again, all of those costs would have come from the project budget with its sizeable contingency fund.

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J. Darcy: How many days of arbitration were involved in this dispute?

Hon. T. Lake: The mediation efforts…. There was no arbitration, by the way. I just want to clear that up. It’s mediation. The mediation efforts began in earnest in January, following the Christmas and New Year’s break. That would have been a series of meetings with legal teams and went until March 5, when the separation occurred.

In terms of actual days with the mediator, I’m told that there were about three days with a formal mediator present.

J. Darcy: Can the minister please speak to the costs involved in mediation and to the costs of lawyers’ fees?

Hon. T. Lake: We don’t have those figures broken out to that detail. We will endeavour to find those numbers. Again, that would have been funds that would have been attributed to the project and the contingency fund in the project. We can try to tease those particular numbers out and provide them to the member.

J. Darcy: The minister has spoken about the $842 million over ten years — $480 million from capital, $362 million from operating. Can the minister please speak to how these costs have changed in the wake of the end of the contract with IBM?

Hon. T. Lake: I want to just put on the record that when I was scrummed on the costs with the venerable Rob Shaw, I said it was my understanding that a $70 million to $72 million range was the cost of the IBM services. It was a range of costs that I was given to understand went to IBM.

In terms of the budget, the budget remains the same. We are transitioning into a different phase of the project. We will seek a vendor with whom to work, and we will continue on with the same budget. As we move through and with a new vendor, will there be some changes that occur? Yes, probably, to address some of the concerns that have been identified to date. Modifications in terms of the amount of operating and the amount of capital may change at that particular point in time, but those changes have not been made yet. The budget total of $842 million over ten years remains the same.

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J. Darcy: The minister has said that any of the problems associated with this delay come out of the contingency. I believe that is what I understand the minister to be saying. So what is the cost to the contingency fund, to the Health budget, of the delay?

Hon. T. Lake: We can’t give that answer at this particular time. As we work through this process, there will be changes that are made in the approach that we take. In fact, as we move through, we may find things that we can do more efficiently. We may find a vendor that can help us to achieve our goals at a lower cost. So it is premature to be able to tell the member the impact on the budget until we move forward with the new vendor.

J. Darcy: I’m just looking back at the transcript from question period on April 14, when the minister was again questioned on this issue.


J. Darcy: Okay. The minister is not just optimistic, but he can…

Hon. T. Lake: Do two things at once. That’s right.

J. Darcy: …do two things at once.

When the minister was questioned by myself and by the member for Vancouver-Fairview on April 14, he said words…. Well, aside from the unfortunate marriage analogy, but we’ll leave that aside for now. Considering the magnitude of the problems, I’m not sure that it was appropriate.
[ Page 8510 ]

Speaking of what this project has given birth to, what it has generated so far, the minister said that the project was now approximately 15 percent underway. Is that the minister’s assessment of where we are in the project, and how does he…? Can he please explain to me what it means that the project is 15 percent underway? Now, he did also say that the project had been delayed by an estimated nine to 12 months. So how is it that the project is 15 percent underway?

Hon. T. Lake: I’m not sure it was an unfortunate analogy to marriage. Sometimes situations occur, and out of those situations great things happen. Adversity, after all, forces ingenuity.

J. Darcy: Spare us.

Hon. T. Lake: Really? Come on. I could go on like this for an hour.

J. Darcy: I know you could.

Hon. T. Lake: It was a rough calculation in terms of the amount of money spent to date on the project versus the budget. So 15 percent would be, today, $126 million. We’re at, I think, $149 million. At that particular time, when I answered the question, about 15 percent of the budget had been spent on the project. That was where that figure came from.

J. Darcy: The minister has mentioned…. Regarding staffing. Was it 200 staff or 200 full-time-equivalents? Can the minister clarify that, please.

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Hon. T. Lake: I don’t have the answer as to whether these numbers represent staff or FTEs. We can endeavour to find that information out.

What we have done with the knowledge transfer and the resetting of the project, if you like, is we have reduced staff to reduce the burn rate, the spending rate, of the project so that we’re not using up money. But work is still ongoing. There’s still work that is continuing to be done on the project. It’s not down tools for everybody. There have been some positions that have been reassigned to other places in the organization and some people that have left the organization. That is a mitigation strategy to reduce the expenditures.

J. Darcy: So the minister will confirm how many FTEs. Can the minister say how many staff are working on the project at this time? And what is the total budget that has been allocated for staff up to this point?

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Hon. T. Lake: I don’t have those numbers. We can certainly endeavor to find them. I have, though, been given our cost for the mediator. It was $36,093.25. And legal fees to date: $146,779.52.

J. Darcy: Were those costs….? I know that mediators can be very pricey, and lawyers as well, but were all of those costs incurred in that period in question that the minister referred to there being mediation between the parties and the termination of the contract?

Hon. T. Lake: That is my understanding.

J. Darcy: So there were not legal costs incurred at other stages in the process?

Hon. T. Lake: There would have been legal fees when we negotiated and signed the contract, and there would have been some ongoing legal fees along the way. When we negotiated with the vendor, for instance, we would have consulted with our legal team in terms of the meaning of the contract if we were having a difference with the vendor.

I don’t have the exact numbers of the legal fees at each part of the journey to date, but my understanding is that the number I quoted was through the mediation process from January to March. That is my understanding.

J. Darcy: Just back to the issue of the staff working on the project. I understand that IBM…. There are consultants who are employed by IBM on the project. But the question that I’m asking about is the direct employees of the health authorities. How many of those FTEs? That’s the information that the minister will provide.

Hon. T. Lake: That’s my understanding of the question.

J. Darcy: Thank you.

Have any external consultants been brought in this year to help with the contract?

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Hon. T. Lake: I’ve just been passed a note that says that approximately 200 staff — that’s a resource count, not FTE — were on the project. That included some part-time resources, but most are full-time. It may not be equivalent to 200 full-time-equivalents, but it will be close. We can see if we can define that a little bit better.

The question about bringing in other consultants. The answer is yes. When Ms. Feulgen took over as the chair of the project board, she wanted to bring in a team of experts. So through PricewaterhouseCoopers, a team with experience — actually, a lot of experience — with Cerner systems…. Cerner is the software backbone of the systems that are used and will be used. I believe included in that team of experts are people that have worked with the Cerner system in over 60 hospitals in North America.
[ Page 8511 ]

This was a top-notch team that was brought in to provide advisory services to the Ministry of Health and to identify any potential opportunities to improve the project. We’re working with PricewaterhouseCoopers as they have done their work and are continuing to do work. They will help us as we work with the new vendor. With their experience with this Cerner system, it will be very helpful.

We are awaiting…. I’m anticipating the next question, which will be the costs of the services of PricewaterhouseCoopers, so we will endeavour to find that number.

J. Darcy: I’m glad that the minister is able to anticipate some of my questions, at least. Perhaps I can anticipate his answers.

Can the minister explain what PricewaterhouseCoopers recommended, and what is the role of PricewaterhouseCoopers at this stage? When were they brought in? What have they recommended? And what is their role at the present stage?

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Hon. T. Lake: PricewaterhouseCoopers was brought on in February of 2015 as we were working through the mediation process with IBM. The project board chair, Ms. Feulgen, wanted them to do some work over project assurance — that involves budget, scope and timelines — and, as it became clear that our relationship with the previous vendor was coming to an end, to help us develop a go-forward plan.

That work is ongoing, and so we will be working with PricewaterhouseCoopers as we transition over to a new plan. They will be assisting the project board with identifying and working with the new vendor and, again, transitioning the work that’s been done to date over to the new vendor.

J. Darcy: Has PricewaterhouseCoopers…? If they’ve been here since February, they’ve produced a report, an evaluation, surely. Can the minister please explain the substance of such a report, which I assume exists? Will he commit to sharing it?

Hon. T. Lake: As I mentioned, they came in, in February of 2015. They are working with the project board, looking at the analyses that have been done by previous consultants, looking at a go-forward plan. They have not completed a formal report. They provide updates to the project board on a regular basis, and that is not information that can be shared at this time.

J. Darcy: What is the gist of their recommendations?

Hon. T. Lake: They’re continuing to work with the project board. I don’t have the details on every specific recommendation, but they are working with us as we transition in the go-forward plan, helping us to develop that plan, helping us to identify and work with the new vendor.

That is ongoing work. Ms. Feulgen is chair of the project board and is getting regular updates from the work with PricewaterhouseCoopers, but that is not public information. That’s not information that we would share, because we’re in a sensitive time, working with a new vendor. Obviously, we want to make sure that we do that in a way that provides best value for taxpayers.

It’s not something that’s done in public. These are confidential discussions that occur.

J. Darcy: I want to go back to the North York General report, which described one of the risks as being that “the CST project is heavy with consultants driving design and build. The risk is that once the project is live, the knowledge of design considerations and build techniques are lost. Those left to support the system are lacking fundamental understanding of design decisions, rationale and knowledge of system build for maintenance purposes. There’s also a risk that decisions will be made for short-term success but are not realistic to manage long term.”

Not knowing what was in a report or recommendations, I am not in a position to assess it, but can the minister please speak to what the purpose was of bringing in PricewaterhouseCoopers, and what is it that they have been contracted with to do for this project?

Hon. T. Lake: I’ve answered that question already. They were brought in to provide advice on project assurance. They have a team of experts that have extensive experience with Cerner systems, so they provided the project board with project assurance information and are being utilized by the project board to help develop a go-forward strategy in a transition to the restart of the project with a new vendor.

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J. Darcy: Can the minister explain what he means by “project assurance”?

[J. Martin in the chair.]

Hon. T. Lake: Project assurance, essentially, is doing a deep dive into the work to date, looking back at the original objectives and assuring the project board that those objectives would still be able to be achieved or, if there needed to be work done, to change and shift priorities in order to achieve those objectives, and identify weaknesses in things like the implementation plan.

One of the largest risks on a project of this size is the way you implement it. There are sort of two schools of thought that I’m familiar with, and I’m certainly no expert by any stretch of the imagination on this stuff.

There is a big bang theory, where everything is implemented at once, all the systems at once rather than doing
[ Page 8512 ]
a staged implementation system. There is a schedule of implementation. Do you start with a small hospital and then go with a larger hospital as a next step? What is the time differential between doing the first one and identifying any weaknesses, troubleshooting any problems before you go to the next one?

With their experience with the Cerner clinical systems, this team is able to help us as we move through that process now of resetting the project to look at all of those different things. It is essentially taking a deep dive and looking under the hood, finding out what needs to be done and working through some of the issues that have been identified along the way — and providing advice to the project board on how to best manage those difficulties and assure the project board that this type of implementation versus another type of implementation is the recommended plan, with their vast experience with Cerner systems.

J. Darcy: Is the project, and the project board, now moving ahead with recommendations made by the consultant, by PricewaterhouseCoopers?

Hon. T. Lake: I thought I had indicated that they are continuing to work with the project board and the project team to develop the new plan moving forward and identify an appropriate vendor or a mechanism for identifying an appropriate vendor and identifying a company at the outset or perhaps going to the market. These are all the things that the project team is working with, with PricewaterhouseCoopers. That work is ongoing.

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J. Darcy: In February PricewaterhouseCoopers is brought in because the project is going off the rails and assistance is needed. The minister is confident that things are now capturing the work that was done, and it’s all going to move forward. Surely, there must be recommendations or a report of some sort that is guiding how work is now going forward. Has PricewaterhouseCoopers been retained in order to help to guide the work going forward?

Hon. T. Lake: I’ve answered the question. PricewaterhouseCoopers is working with the project board and the project team in a transition phase as we work through a reset of the project: identifying ways to improve it, looking at implementation plans, working with the project team to identify a vendor that will take this project forward.

J. Darcy: I do have a few more questions on this, but I’m mindful that we were going to break at this time.


J. Darcy: Okay. We can certainly continue if you’d like to do that.

The January internal memo is clear that no projects will go live in 2015, which is a significant delay. The minister has since estimated nine-to-12 months. How much worse…? Is that what the minister is projecting at this time, a nine-to-12-month delay, or will it be longer? When does the minister expect that the project will go live?

Hon. T. Lake: We were hoping to go live September 2015 originally. Now we’re estimated to be October of 2016, which is 13 months — estimated at this particular point in time.

As we move forward, things may change. As I mentioned, with a vendor with the experience and PricewaterhouseCoopers with their experience, there may be opportunities to reduce that timeline. But that’s our best estimate at this particular time.

With that, I would seek a ten-minute break if we could.

The committee recessed from 4:40 p.m. to 4:55 p.m.

[J. Martin in the chair.]

J. Darcy: I want to pursue this issue further. It was clear in January 2015, if not before, that this project, a very costly project — $842 million over ten years — was going off the rails. The project was clearly going sideways. In February 2015 the minister has said, after questioning, that he brought in PricewaterhouseCoopers in order to evaluate the project. In March the contract with IBM is terminated.

The minister says he’s not able to share whatever report was produced, whatever recommendations were produced. We’re talking about a significant delay in a project that is critical to the future of health care. We’re talking about tens of millions of dollars from the health care budget, and yet the minister is not able to share what recommendations PricewaterhouseCoopers made.

They’re clearly still on the job. I understand that they’re still…. Can the minister confirm if they are still on the job now? What recommendations did they make? What role are they playing going forward?

Hon. T. Lake: First of all, the member may wish to describe something as “going off the rails,” “going sideways.” That’s her characterization. There are challenges in a project like this, as there are often challenges with IT transformation projects. It’s a very complex project, and risks were identified, mitigation plans put in place.

When we did not get to a place that we thought we should be in terms of our relationship with the vendor, we had a focused attempt with the vendor to resolve those issues. At that time a new project board chair was appointed — my associate deputy minister, Sabine Feulgen — and she, with the project board but upon her direction, brought in PricewaterhouseCoopers.
[ Page 8513 ]

PricewaterhouseCoopers didn’t recommend the end of the relationship with IBM. They were brought in to do, as I mentioned, the project assurance work — to do a deep dive into the project, look at different issues around design of the project, implementation phases of the project, a whole variety of different aspects.

There are, I think, eight members of the PwC team that have been working with the project board, and there are no reports that have been produced. They are working actively with the project team to guide us to the next milestone. One of the next milestones will be when we secure a relationship with the vendor, and certainly, that information, once we get to that new milestone, will no doubt become available. But at this particular point we are working through the project.

You know, I don’t get a report every day on what everyone did that day. I have confidence in my associate deputy minister who is leading the project board. That team is working. They’ve made some adjustments in terms of staff levels so that they’re reducing the expenses while we’re in this resetting phase, which is only appropriate to do at this particular stage.

I think I’ve explained what the goal is with PwC. It’s to, first of all, analyze the project itself, the objectives — are they still obtainable? — and how to implement, how to move forward, given their extensive experience with over 60 hospitals that have done similar projects in the past.

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J. Darcy: Well, I think the minister is really minimizing this problem. He says, “Of course there are problems. Of course, we reassess,” etc. We’re talking about a lot of money. We’re talking about a project that the minister has said repeatedly is critical to the future of health care, and we agree.

The minister is clearly contradicting himself. On the one hand he says: “Brought in PricewaterhouseCoopers. They are sort of helping us to evaluate.” The minister also said just now: “They are working actively to guide us.” Guide us in what direction? Based on what recommendations? Based on what report?

Surely, if PricewaterhouseCoopers wasn’t just brought in, in February…. It’s now mid-May. They’re still on the job. They’ve clearly been retained on an ongoing basis by this project. What is it they’re recommending? Why are there no reports?

How can the people of British Columbia, whose money is paying for this, have confidence that the people in charge of the project and the minister have learned the lessons of what went wrong, have learned from the fact that they ignored the risk assessments at every stage of the game — the risk assessment done prior to the project, risks that were raised by the official opposition, risks that were raised by North York General Hospital and in the McKinsey report?

How can we have confidence today in how this project is going forward when the minister won’t release any report, any recommendations, that were made by the consultant that has now been retained?

Hon. T. Lake: I believe I’ve answered this question. I’ll try it one more time, but then I will not stand up to answer the same question.

The consultant was brought in as we were moving through the process with IBM to help do project assurance, which I’ve described already, and to look at some of the assessments that were made earlier by other consultants. At the same time, the relationship with IBM was coming to an end.

It was decided to continue to employ PwC to help us move forward with the transition plan. A big part of that transition plan will be identifying a new vendor to replace the work that would have been done by IBM.

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That’s a commercially sensitive area, obviously. That’s why we don’t discuss publicly the information received from PricewaterhouseCoopers, at this time, while we’re in a commercially sensitive stage of the project where we are identifying and will have a contractual relationship develop with a new vendor.

J. Darcy: Well, I find it disturbing that the minister says he’s answered the question and he’s not going to answer any longer. I think that he owes it not just to the opposition in estimates, but he owes it to the people of British Columbia. We’re talking about a very important project. We’re talking about a lot of money.

Frankly, it stretches…. I don’t know what the term is. It stretches credibility to say that you’ve brought in a consultant, that the project is being changed, that the project is moving in a whole new direction. The minister just said, “reviewed the previous assessments, made recommendations,” and there’s not a single piece of paper? Not a single recommendation? Not a single report?

Hon. T. Lake: That’s not what I said. You didn’t listen to my answer.

J. Darcy: There’s not a report. Now, the minister says that there’s commercially sensitive information. If there’s commercially sensitive information, I would expect a report that was redacted. The reports we’ve received that we FOI’d were redacted reports. But there is no record at all? There is nothing that the minister can share? I’m mind-boggled. I don’t understand how that can be the case.

Certainly, the record of this government…. We’ve pursued this in estimates. We’ve pursued it in question period. There are all kinds of exchanges and discussions and reports produced that never see the light of day, e-mails that are on private e-mail rather than on the record.

But surely, Minister, this is an enormous project. Surely there is some paper available to indicate what
[ Page 8514 ]
PricewaterhouseCoopers recommended that has caused this project to go in a different direction.

Hon. T. Lake: The member knows well the process to follow when seeking information. It may sound like it would be simple for me to hand over reams of documents. I’m not a lawyer. I’m not a professionally trained legal expert to look at information that is on paper, which has been provided to the Health Ministry and the project board, and to be able to determine what is and isn’t in line with the Freedom of Information and Protection of Privacy Act.

The member knows that. She’s being naive, or pretending to be naive, if she doesn’t. The fact is that if she requests that information, it goes through a process to ensure that sensitive information and protection of privacy is met according to the Freedom of Information and Protection of Privacy Act.

To assume that I could just hand over a pile of documents without it going through that process…. It is there for a reason. It’s to protect the public and to protect the taxpayer.

J. Darcy: I’m going to choose to ignore the minister’s comment that I’m pretending to be naive. I think that these are all absolutely legitimate questions and concerns that the people of British Columbia have the right to expect answers to.

I don’t expect the minister to be a lawyer and to assess what is commercially sensitive and what is not, but I do find it shocking that there are no reports available at all, even heavily redacted.

I guess that explains why…. The minister is probably aware that we did seek this information through a freedom-of-information request. We requested copies of consultants’ reports received regarding the clinical and systems transformation project from December 19, 2014, to April 29, 2015.

That’s well before PricewaterhouseCoopers and well after they’ve been on the job and have proposed a new direction that appears to be being followed. They seem to be engaged based on recommendations we’re not allowed to be told about.

We were informed through freedom of information that “we have not been able to find any records that are responsive to your request.” It’s not just: “Here are some reports, and they’re heavily redacted because of commercial interests that must be protected.” There are no reports.

Can the minister please comment on how that can possibly be the case?

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Hon. T. Lake: Well, I take back my comment that the member is being naive. She’s being disingenuous. She’s asking me to provide information that she’s already sought through a legal process. I’m not about to hand over information that is not available through freedom of information.

J. Darcy: I guess we’ll have to go back to freedom of information and rephrase the request so that we’re not asking for reports, we’re asking for any records, any e-mail exchanges, any information whatsoever. Have to jump through a few more hoops in order to really understand what’s going on, which is unfortunate.

The March 23 memo to staff regarding the CST project refers to a transition plan, and the minister has just referred to additional vendor support. Can the minister indicate what additional vendor support is anticipated and at what cost?

Hon. T. Lake: Not at this time.

J. Darcy: I want to return to an issue that we touched on earlier, which appears in the CST risk assessment from January 2013 about clinical engagement and accountability — a theme which was considered to be high risk. It’s a theme that was also canvassed extensively in the North York General report, in the McKinsey report, which was the engagement of clinical staff in order to ensure that the end product meets their needs.

Purely by coincidence this morning, at the Select Standing Committee on Health, a person who was speaking to us and presenting to us was the head of the Doctors of B.C., Dr. Bill Cavers. In part of his presentation and then in follow-up exchanges later on, he said the following. I’d be interested in the minister’s comments on this, because it speaks specifically to this issue of clinician involvement and developing systems that serve the front lines of health care.

In his formal presentation he said:

“We desperately need information technology infrastructure that allows the secure sharing of a patient’s clinical information across multidisciplinary team members and across different locations. Currently, different groups of physicians can’t interconnect and communicate. Currently, community physicians and hospitals cannot send messages, cannot communicate clinical information with each other via electronic medical records.

“That isn’t workable. It’s not workable now. It doesn’t allow coordinated care. If it doesn’t work today, it’s certainly not going to work in the future team-based system.”

He was asked a question a little further on about collaboration, and he said:

“When I was referring to collaboration, I was referring to the relationships that we needed to develop across the boundaries between government health authorities, profession, in talking about the problems and how we jointly get to a solution.

“In terms of IT, we’re faced with a Tower of Babel. I have a very, very powerful electronic medical record computerized system in my office. I can identify different patient groups. I can identify union groups — A plus B. I can identify intersection groups of people with diabetes and heart failure. I can identify people around certain medications.

“I can do whatever you want, but when it comes to sending a referral for my patient to a specialist, when it comes to sending my patient into the hospital, do you know what I do? I type up
[ Page 8515 ]
a referral letter, I print it out, and then I fax it in. What does the specialist do? That specialist gets the fax….”

They can send it into their own electronic medical records. He then goes on to cite an example.

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I won’t read the whole thing into the record about having heard from a colleague of his because he had referred a patient to him, and the medical records arrived after the consult with the specialist had taken place, and there was all kinds of valuable information that was needed in order to ensure the best possible care for the particular patient. He concludes by saying:

“That functionality, that ability for me to share information when somebody goes into the hospital that they have a deathly allergy to penicillin and they haven’t had a good reaction before…. That should be vendor-agnostic. It shouldn’t depend on whether I’m on the same software company as the other doctor. Right now what I refer to as the Rosetta stone hasn’t been built. We are actually testing the interconnectivity between two software companies available in B.C., and we’re testing it in Saskatchewan.”

I have two questions based on this, because I think it’s pretty compelling. It’s certainly the kind of thing I’ve heard from many of the front-line health care providers, some of whom have been involved in some of the consultation process around developing this project.

Two questions. Since the minister is not prepared to share the recommendations — the minister says there’s no report — how can we be assured that, going forward, the concerns that have been raised by various consultants, the concerns that have been raised by front-line health care providers about the connection between clinicians and the systems that are developed…? How can we be assured that, in fact, those problems are going to be resolved if the minister is not prepared to talk about what was recommended and what direction is being taken, moving forward?

Hon. T. Lake: First of all, Dr. Cavers and I have had a lot of discussions around this. I know, over my history, this is something that I’ve been very interested in. I remember sitting on the regional district hospital board in the Thompson-Nicola regional district and having this very same discussion about systems being able to talk to each other, about having a patient record that follows the patient around.

I would say to the member that this is the Rosetta stone that we are all trying to find, and Dr. Cavers says it hasn’t been invented yet. People everywhere…. The most expensive system in the world, in the United States, in many cases has not solved this problem either. A single patient record that follows the patient, that provides the health care provider the right information at the right time — everyone is struggling with that because it is extremely challenging.

But we have done some very good work. This is a paper we were working on that will go out for discussion, one of our policy papers. This is in draft at the moment, so it’s not quite finished, but it’s Enabling Effective Quality Population Patient-Centred Care, a Provincial Strategy for Health Information Management and Technology.

In it, it does outline some of the things that we have been able to do over the years. Things like our PharmaNet are world-recognized. There’s a technology that other provinces are very envious of. That’s why researchers using data like the information we have here in British Columbia, because of the PharmaNet system.

We have provincial systems that do help identify…. We have client identity services. We have provider identity services. I mentioned PharmaNet. Panorama is a public health application that supports surveillance; communicable disease outbreak cases; vaccine, family health and immunization management services. It improves the ability of public health officials to detect outbreaks and collect, share and analyze information in real time.

We have provincial telehealth services, which allow for real-time two-way live video conferencing for clinical, administrative and health-related educational encounters in more than 130 different communities. We have home health monitoring. We have the B.C. Services Card. We have clinical information systems, medical imaging systems.

The challenge that we are confronted with at the moment is bringing this all together. It has confounded governments in Manitoba. It has confounded governments in Saskatchewan. It has confounded governments in Ontario. It has confounded jurisdictions in the United States.

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This is, in fact, the Rosetta stone. It won’t happen overnight, but that doesn’t mean we don’t continue that quest to bring all that information available in a way that is secure, which is very important, and is available on a need-to-know basis by the provider.

I’ve had this discussion with the Privacy Commissioner, Ms. Denham, as well. This is the great challenge of modern medicine — to be able to have a nimble, comprehensive patient record that can be accessed appropriately by health care providers and that has all the clinical information for that patient.

We’re working hard on it. That’s what the CST is designed to do — not entirely, because even once CST is complete, then we need to connect physicians’ offices in community with that system. That will be an evolution of the CST project. I hope I see the day when, in fact, in British Columbia, we have that single instance, that single record that follows patients around, that is accessible, appropriately, when and where it is needed.

J. Darcy: Just one last question, and I’m glad that the minister at the end there referenced that this deals with electronic health records in our health authorities. It doesn’t deal with physician records. Most people who follow this story actually assume that that’s what this project is all about and are surprised to learn that it doesn’t.
[ Page 8516 ]

My last question to the minister. It was originally projected, I believe — or this is this the current projection? — that this CST project will go live by 2019. Is that right?

[G. Kyllo in the chair.]

Hon. T. Lake: The best estimate is October of 2016.

J. Darcy: But it is a ten-year project, so what is it that will be completed in October of 2016? And we still have many more years to run in that ten years.

Hon. T. Lake: It started in 2013, so ten years would take us to 2023. We’re approximately a year behind, so it would be 2024.

What happens is that when it goes live in one site…. That’s what the work at the moment is identifying — which site. You would implement at that site. You would use it until you were at a steady state and everyone is confident with the system — make sure that any problems have been identified. Once you’re in a steady state, then you would move on to the next facility and the next facility.

There are more than three dozen facilities that would be implemented, so it will take some time. Now, I suspect — I don’t know this for a fact, but I suspect — that once you’ve been through a couple of sites, you’ve learned a lot that will help make implementation at each future site go smoother.

Of course, technology and knowledge will change as we move through this process. It will be an evolutionary process. Over that time, we will hope to see some innovation around the outside of the sphere, if you like — in community, in doctors’ offices — so that applications will be developed to allow integration of those community facilities into the acute care system and provide that record that really does follow someone around.

J. Darcy: Just on that last point. At what point in this next nine years now, I guess, does the minister anticipate that electronic health records from physicians’ offices will also be integrated so that we do have one electronic health record for the province?

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[S. Hamilton in the chair.]

The Chair: Minister.

Hon. T. Lake: Thank you, hon. Chair. Welcome to the debate.

The interconnection with the community is not part of the CST project, but we are hopeful that innovation will occur that will allow plug-and-play solutions with community that will be able to come into the system. But we have no plans at this time for the Ministry of Health or health authorities or physicians. These are likely to be solutions that are provided by the private sector, which will develop solutions allowing that plug-and-play feature with the central clinical systems that we have in place.

S. Hammell: I would like you to switch hats to mental health.

Hon. T. Lake: Sure. Can we bring some other staff in?

The Chair: The committee will stand in recess for two minutes.

The committee recessed from 5:29 p.m. to 5:30 p.m.

[S. Hamilton in the chair.]

S. Hammell: Last time we started with just some of the basic numbers. If I can pick up from last year, I understood that we spent out of the Health budget about $1.4 billion on mental health. I was just wondering if that remains the same or if there’s any shift in the big-picture number.

Hon. T. Lake: Welcome, to the hon. member, to the debates.

In 2013-14 we spent $1,384,598,658 on mental health and substance use. All the numbers aren’t in. We haven’t had the final public accounts, but it’s estimated that in ’14-15 that number increased to $1,417,115,780.

S. Hammell: Is that a decrease? Did I write it down wrong? You said $1.484, and it’s now….

Hon. T. Lake: No, $1.384.

S. Hammell: So it’s a slight increase. Okay.

Last year when I asked for a little bit further breakdown, you did give it to me. One of them was community-based services and physician services and drugs for mental health. Could you do that breakdown again for me?


S. Hammell: Let me…. In 2012-13 there was, according to Hansard last year, $218 million for in-patient acute and tertiary services. There was community-based services, which was $595 million, and that would include expenditures like the Burnaby Centre for Mental Health and assertive community treatment teams. Then there was $283 million spent on physician services, and that included psychiatry within hospitals and a number of other areas. Then drugs for mental health was $168 million. Prevention and promotion at $86 million. I think that was about the sum total of what was recorded last year.

My question, really, is: are there any differences, generally, in those numbers?
[ Page 8517 ]

Hon. T. Lake: The member was quoting, I think, ’12-13 actual numbers. If we go through line by line, acute and tertiary was the first one. In ’12-13 it was $218,462,647. In ’13-14 it went down to $206,445,569. That’s in acute and tertiary, and that is part of the devolution from institutionalized care into community care.

When we go to community-based mental health and addiction services, in ’12-13 it was $595,302,081. In ’13-14 that went up to $629,594,032. Physician services in ’12-13 were $283,071,351. Those went up in 2013-14 to $295,153,666.

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PharmaCare was $168,297,741 in ’12-13. We saw a small reduction to $162,072,975 in ’13-14. In health prevention and promotion we went from $86,751,051 to $91,332,416.

You can see there are shifts. Generally, things are going up but in acute and tertiary going down — and that shift over into community-based services.

S. Hammell: I’ll start from the bottom up. You have increased prevention and promotion, say $5 million, and that’s AIDS services, the methadone program, drugs for abuse, screening the alcohol and drugs. Can you explain what the reason is for that increase?

Hon. T. Lake: We saw about a $2.6 million increase in the HIV/AIDS program, which, of course, is world renowned from the centre for excellence. Methadone PharmaCare costs went up about $600,000. Methadone treatment fee-for-service went up about $800,000, and lab screening for drugs of abuse went up about $300,000. Those are the major changes in the health prevention and promotion tranche of the budget.

S. Hammell: When you’re talking about the methadone program going up, it is the promotion. This item line is prevention and promotion. How does that translate into the increase and the amount?

Hon. T. Lake: I’m not sure I understand the question. These programs fall under health prevention and promotion because they are essentially harm reduction strategies that are employed for people that are at risk for HIV/AIDS or have opioid addictions.

S. Hammell: I do understand there is a cost to the methadone program, and some of it is in the drugs. Some of it is in the prescriptions and the witnessing of ingestion. But this is just in promotion and prevention. I would assume this is some strategy that’s used to either prevent people from using methadone inappropriately or….

I’m just trying to get an understanding of what the $86 million translates into on the ground.

Hon. T. Lake: Sorry. Maybe I need to clarify. These programs are classified under the health prevention and promotion line items in the budget. This is the actual cost of the methadone through PharmaCare and the actual cost of the fee-for-service for dispensing and witnessing methadone consumption.

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S. Hammell: My mistake. I misunderstood.

Then I’d like to slip up to the $168 million. That line is drugs for mental health, and it has gone down. Can you explain the difference between those two numbers?

Hon. T. Lake: The PharmaCare line there is drugs that are used for mental health and addiction services. Some of these would be generic drugs that we’ve been able to drive down the costs through our participation on the Pan-Canadian Pharmaceutical Alliance or through our product listing agreements with drug companies and the legislation that we put in place that we would pay no more than 20 percent of brand name for prescription drugs.

I think the member is aware that overall in PharmaCare we have reaped significant savings through the strategy of trying to get a better deal from drug companies for the PharmaCare budget.

S. Hammell: The $168 million then is drugs that are antidepressants or another kind of drug that is used when a drug is needed for some kind mental health issue.

Hon. T. Lake: Through our PharmaNet system, every drug is recorded, and every drug has a drug identification number or DIN. The DIN would correspond to a therapeutic class. With that classification system and the PharmaNet system, we can break out drugs that are prescribed for mental health and substance use purposes.

S. Hammell: So, Minister, is part of this drug line, this set of drugs…? Is it attached to the drugs that are often given as an accompaniment to methadone? In the literature and in….

[The bells were rung.]

The Chair: The committee stands in recess.

The committee recessed from 5:44 p.m. to 5:56 p.m.

[S. Hamilton in the chair.]

S. Hammell: I think I’ll just repeat the question. I maybe wasn’t very clear.

I understand that embedded in that $86 million is the amount for the harm reduction substance methadone. It’s a harm reduction drug, so it’s placed under that line item.

I’m now looking at drugs for mental health, which are $168 million, down to now $162 million, and the under-
[ Page 8518 ]
standing is that there have been some savings through moving more aggressively into generics. But in one of the reports on the methadone review program, it suggests that daily dispensing of other drugs to the same patient may add a further $13,800 per patient per year.

In this, I’m asking: are the ancillary drugs that are given to a methadone patient, which could add up to $13,800 per year per patient…? How much of that item is spent on the ancillary drugs?

Hon. T. Lake: I can’t tell you exactly, because people that are on methadone may have a variety of different conditions, co-morbidities. Some of those medications…. A pharmacist, if they’re dispensing methadone, obviously has the ability to dispense other drugs as well.

So if a patient is on methadone, they may be on a variety of different drugs. They may be on a diabetic drug. They may be on a thyroid drug. They may be on an anti-depressant. They may on a cholesterol-lowering drug.

I think what the report is saying is that when someone is methadone patient at a pharmacy, they bring with them the other prescriptions that they are also in need of, and so that would add to the business of the pharmacy. But some of them would be drugs that are included in that line item there, under “Mental health and substance use drugs.” For instance, when we look at the drugs most dispensed by the top 20 methadone pharmacies…. I’m going to pronounce some of these incorrectly, because I’d never prescribe some of these for a dog.

Quetiapine is an anti-psychotic, so that is one of the drugs that is in the top 20. Others are levothyroxine, which is for low thyroid condition. There’s citalopram, trazodone — both anti-depressants — and venlafaxine, which is an anti-depressant.

There are a number of different drugs that are prescribed, some of which would appear in that line item and others which would appear in the other line item under PharmaCare.

S. Hammell: Which line item would the PharmaCare be under, of these ones?

Hon. T. Lake: The items we’ve been discussing are all the estimated expenditures related to mental health and substance use. Drugs that are not used for mental health and substance use would appear in the PharmaCare budget, so they wouldn’t be part of this.

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This is a subsection of the PharmaCare budget that is to do with drugs used for substance use and mental health.

[J. Martin in the chair.]

S. Hammell: The issue I’m trying to get at is the number, and I’ll just read the report: “The number of additional drugs the methadone maintenance pharmacy population takes creates a powerful incentive for pharmacies to put these patients on short dispensing intervals…. Dispensing methadone to a single patient results in almost $6,500 per year in revenue, net of the cost of the drug. Daily dispensing of other drugs to the same patient may add another $13,800 per patient per year.”

It seems to me that if the Ministry of Health saw this as a problem, as they have outlined in this report, they would have an understanding of what the number is that they’re playing with that is creating the incentive, especially when they have $13,800 so specific to a patient.

I guess my question then would be…. I hear the minister. It is not out of this line item. It’s a line item from some other part of the budget. Can he tell me what the cost of…? Would it be safe for me to just assume that that is an average and that if we have so many methadone patients, and they’re being supplied by specific…? These appear to be, from what I’m reading, methadone specific pharmacies. Can we assume that that…? Well, this paragraph follows, and I see the minister shaking his head.

Let me just read the paragraph before. It says: “There’s a significant concentration of MMT patients, services and PharmaCare expenditures in a small number of geographical areas in the province. Pharmacies in three local health areas — Surrey, Downtown Eastside, Vancouver midtown — serve nearly half of the PharmaCare methadone patients in the province. Many of these pharmacies serve mainly methadone patients.”

I’m just trying to understand if that $13,800 is an average, and you can sort of rest on it to draw conclusions, then if somebody had 80 patients, you multiply the number by 80 and you get the approximate revenue, grossly, from the dispensing of drugs other than methadone.

Hon. T. Lake: The point that I think is trying to be made here is that there’s a powerful financial incentive to have methadone patients come to your pharmacy. Methadone patients, by their very nature, are addicted to a narcotic. Often they are on income assistance, which means they have supplementary coverage for other drugs.

I don’t want to stereotype, but it’s not unusual for someone on methadone to have other health problems that are being treated. The typical methadone patient would have a number of co-morbidities that are being treated at the same time, many of which would be covered under their supplemental benefits through income assistance.

I think the point is that there’s a powerful incentive to draw patients into your pharmacy if you are dispensing methadone. I think that’s really what this report is trying to say. That’s why we are keenly interested in ensuring that methadone patients are being given the best possible treatment, the best possible service, and that they are not given inducements, for instance, that the best interests of the patients are being placed by the prescriber and the dispenser of the methadone and the accompanying prescriptions that the average methadone patient is on.
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S. Hammell: I do want to make it clear that I do support the notion of harm reduction, and the members on this side do also.

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We support the minister and the ministry’s move to support the use of methadone. But, of course, I’m sure the minister and ourselves are very concerned about the pharmacies that have had some very negative consequences on some of the people who are on the methadone maintenance program.

This problem has existed for a long time. The University of Victoria Centre for Addictions Research, which is out here in the university, presented a report in 2010 that identified that the pharmacies and clinics that are, in particular, methadone-specific are resulting in some unintended consequences to the clients.

“Reported problems at clinics range from the failure to provide continuity of care to clients when clinics would close overnight to overly punitive practices used to control client behaviour. Commonly cited problematic pharmacy practices related to daily witnessing of doses — either failure to witness on delivery or pressuring clients to request daily witnessed ingestion, even when not prescribed by the physician.”

This is a report from 2010, the information gathered between 2008 and 2009, and it seems we still have this huge problem with pharmacies abusing the methadone program.

I do understand that around May 1 there were notices going out to pharmacies to signal that this is a problem. Can the minister explain to me the action that’s been taken?

Hon. T. Lake: In 2010 we conducted undercover operations in conjunction with the College of Pharmacists. There were eight pharmacies that were found to be practising in contravention to either the legislation or the code of ethics. They were successfully closed.

We brought in the new Pharmaceutical Services Act in 2012 because we needed a stronger regulatory framework to address this particular problem and other regulatory changes that are necessary. The regulations are often developed after the legislation is passed. The member noted that we have developed new enrolment regulations.

What we did was we had all pharmacies that wanted to participate in PharmaCare enrol with PharmaCare. They had to provide information in terms of the owner, in terms of the history, in terms of their compliance, in terms of any issues that have been dealt with by the college. This was really the first opportunity that we’ve had the regulatory ability as government to get that information from a pharmacy.

As the member well knows, the practice of pharmacy is a self-regulating profession, so the College of Pharmacists has a code of conduct. They have bylaws, but like most regulatory bodies, they operate on a complaints-and-investigation system.

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Relying on that system has proven to be adequate for most of the activities of pharmacies but is probably not as robust as it could be in terms of these particular drugs that the taxpayer of British Columbia is paying for.

These new enrolment regulations allow us to collect that information. On May 1 we sent out information to 46 pharmacies, and we gave them 21 days to respond in writing. The deputy minister will consider the responses and either confirm or reverse the decision to deny enrolment of each pharmacy. This is really the best regulatory instrument we have to get at pharmacies that have presented some concerns in terms of their practices.

S. Hammell: Is there any analysis or looking at the methadone-specific pharmacies, as opposed to a general pharmacy that deals in a broader range of services other than methadone specifically? We have a number of those. I mean, I’m from one of the areas that people have identified, and they really are a blight, in many ways, on the community.

We understand — I certainly haven’t done any undercover surveillance myself — that people are picked up in vans and taken to a pharmacy from a recovery house and then taken back. They have some connections to specific pharmacies, which has been identified by some of the reports, where there’s some kind of payback going on.

That seems to be…. I certainly can’t prove what I’m going to say. That’s why I couch it with “seems.” It seems that that behaviour is connected to the pharmacies that are methadone-specific. Has the ministry looked at that aspect and looked to try to encourage pharmacies that are more general in their nature to become more involved in this particular aspect?

Hon. T. Lake: I think I understand the member’s question. There are some pharmacies…. If I look at the top 20 methadone-dispensing pharmacies in the province, we can see that some of them are almost exclusively catering to methadone patients.

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One here on the Vancouver Downtown Eastside has 508 methadone patients and only 51 non-methadone patients. Obviously, their business model is around methadone. Others are a little more balanced.

The member is saying: “Are you targeting specifically these methadone-only pharmacies?” My answer is that pharmacists have a licence to practise, and that licence is granted by the College of Physicians and Surgeons, not by the Ministry of Health. Their business model is up to them, and they can dispense, legally, drugs that are prescribed by physicians.

In order to continue to be in the good graces of the PharmaCare program, now that we have these enrolment regulations, anyone that has abused their privileges or not lived up to some of the requirements of proper prescribing practice have not been allowed to enrol.
[ Page 8520 ]

I can give the member some example. Controlled drug form error. So if a pharmacy is missing the drug or the strength in their information or if they have incomplete patient information — if there’s no prescribing date, if there’s no start or end date or no daily quantity — if that information is missing from their PharmaNet information, then these would be contraventions of their obligations, and then we would not allow them to enrol.

We also do audits on pharmacies. We go in and look at whether or not they are living up to their obligations. There’s a whole host of things that we find in those audits that we would work through in a progressive enforcement, with the college in many cases. But now if there are outstanding problems that pharmacies haven’t resolved, then we have this ability to not enrol them in PharmaCare.

S. Hammell: I think we’re probably sharing the same report. The report says that “ten of B.C.’s 202 local health authorities accounted for 65 percent of PharmaCare’s expenditures in the fiscal year ’13-14.” These ten health authorities served nearly 67 percent of B.C.’s methadone maintenance patients. There are 363 methadone subscribers provincewide, 323 of which prescribe methadone in these ten local health authorities. But in the top ten you would have to call them all the methadone-specific pharmacies.

Having heard what the minister has said, that he cannot…. And I understand that. If a person is going to choose that kind of business model and it works, why would they do anything different? I think that obviously there’s been a huge approach to try to control this issue in terms of making life easier for the people who are on this form of harm reduction.

It does lead me, though, to ask…. It’s, again, documented in the report that the increase in this budget has been 7.6 percent over a long period of time. I think it goes back to 2001, as far as this document says. Given the goals of the ministry to contain costs and given that we have the highest methadone dispensing and witnessing ingestion fees in all of Canada, are there any plans to try to reduce that part of the expenditure around methadone? I would think that that would also reduce some of the incentive around the big bucks that can be made out of this area.

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Hon. T. Lake: Our incentive to improve the program is not based on driving down costs. Our incentive to improve the program is to ensure that one of the most vulnerable populations that we have are being treated properly, that they are getting appropriate treatment, that they are not being victimized or taken advantage of. That is our driving goal. It is not necessarily to save money. If in that process money is saved…. That may happen, but that is not our primary objective.

We spend about $44 million on methadone, but if we can make sure that every patient getting methadone is being treated appropriately and that the objectives of care are being realized, then that will provide better outcomes, and that would be the goal that we have.

We are currently doing consultation. Obviously, we’ve done the review, the report that the member is quoting from. This follows meetings that I have had with the college and the Pharmacy Association. I expressed my extreme displeasure with some of the stories that I had heard, that the member has reflected as well.

I went so far as to say that maybe we should just use health authorities for the methadone program rather than community pharmacies. We want to give the pharmacy industry an opportunity, and patients, because we want to make it, obviously, patient-friendly as well, and resorting to going to health authorities may impair that.

Putting patients first. We’ve done the report. We are talking with patients through the Vancouver Area Network of Drug Users. We are working with health authorities, particularly Vancouver Coastal, but Fraser Health as well and other health authorities. We are working with the College of Physicians and Surgeons and the College of Pharmacists. We’re working with the Doctors of B.C. and the Pharmacy Association.

We’re doing that consultation process now. We want to come up with improvements to the methadone program, but all of those changes that we make must have the patient at the centre of those decisions. If we happen to save some money while we’re doing that, that would be a bonus, but it is not the driving purpose of the review and the consultation that we’re doing now.

S. Hammell: That’s very interesting. Everything has to be measured against how much it’s costing. When you have a system where we pay more than any other province in the country and, in fact, the federal health authority, then I would be concerned, not because I didn’t think it would result in appropriate treatment but just that we are paying more. There must be some reason and perhaps some potential to do cost savings. But I think that, in essence, the minister has sort of indicated that might be something that is being considered. I certainly hope it is.

I’d like to just switch over to…. I know I’ve kind of wandered off down the methadone lane. I’ll come back to the money spent on physicians in the budget.

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The last time we spoke of it, it was at $283 million for physicians. It has gone up to $295 million. These are very small increases when you think of the massive amount of money that the health care ministry does spend, but it’s up a bit.

In that physician piece I would also assume that some of that is the physician component of the methadone treatment program. So if you had a number for me, I would appreciate it. How much of the $283 million is methadone-specific from the doctors? Then, in general, what is the increase in this amount of money?
[ Page 8521 ]

Hon. T. Lake: I need to make a correction in something I said previously. I hope it doesn’t confuse things even more. It’s near the end of a long day, so it’s not surprising if I do.

Under the health prevention and promotion section that we were discussing earlier, we talked about the HIV/AIDS programs, and I mistakenly said those were the programs delivered by the centre for excellence. These are not. These are harm reduction programs that are delivered by health authorities — so needle exchanges. These are programs to reduce the potential for infection with HIV by people that are using drugs.

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Now, getting on to physician services, in 2012-13, as the member noted, it was $283,071,351 for mental health and substance use services. That went up in 2013-14 by about $12 million to $295,153,666. So a $12 million increase, and, of course, that would be part of the physician master agreement. Not the new one — this would have fallen under the umbrella of the old physician master agreement.

That’s based on the increases that were built into the physician master agreement and, of course, the volume of fee-for-service billings that would have been there. That’s where most of that increase comes from — the fee-for-service. It’s just an additional volume, plus these small increases built into the physician master agreement.

S. Hammell: I asked how much of that $283 million is methadone-related.

Hon. T. Lake: We estimate that $12 million of the fee-for-service budget was on methadone prescription.

S. Hammell: Is the increase in the methadone continuing at 7.6 percent? What is the reason for that increase? Is it actually a greater number of people on the program?

Hon. T. Lake: May I clarify my last answer?

S. Hammell: Sure you can.

Hon. T. Lake: We’re being so polite. It’s very nice. Thank you.

The $12,886,952 spent for methadone-prescribing by physicians is separate from physician services. That went up from $12,886,952 in ’12-13 to $13,752,663 in 2013-14, so about a $900,000 increase in the fee-for-service for methadone-prescribing by physicians. That is outside of that physician services number that we talked about earlier.

S. Hammell: The next question is about the increase. My understanding is the increase is about 7.6 percent per year on this program. I’m just wondering what is driving that increase.

Hon. T. Lake: The biggest driver of the cost is the number of people on the methadone program. When it was started in the ’90s, approximately 3,000 patients were on methadone. Today we are at about 15,500.

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The costs of the drug itself have gone up a small amount — not significantly. The dispensing fee has gone up from $8.60 to about $10 over the last five years — again, small increases in dispensing fee. The witnessing fee has been largely stable.

What is interesting, though, is that when Vancouver Coastal did their review of services in the Downtown Eastside, what they found was the number of IV heroin users in the Downtown Eastside has actually fallen fairly substantially over the last number of years. That’s correlated with the rise in methadone use. Whether there’s a causation…. One would hope there’s a link there. But with increased use of methadone, the hope would be that fewer people would be using IV drugs — heroin, essentially. The volume of the number of patients is the biggest driver in the cost of the program.

S. Hammell: There are just two more questions around the cost. In the community-based services the bulk of expenditures are…. That’s where they are. According to last year — and clearly the same this year — it’s gone up significantly, I would say. It’s gone from $595 million to $629 million. Can the minister explain that cost increase?

Hon. T. Lake: As I mentioned earlier, there has been a devolution of care out of tertiary and acute services into communities. People that once were housed at Riverview are now supported in community, in a variety of different settings. The money has followed the patient from the acute and tertiary centres into community. That is the reason for the change in those numbers.

S. Hammell: The acute care has gone down about $12 million, and this has gone up close to $32 million. So there must be further explanation than that. There’s no further explanation than that?

Hon. T. Lake: Well, there are increases in all budgets every year. The global budget goes up. The shift from tertiary to acute would find its way into community, but the base community budget would have gone up as well.

Then things like the severely addicted and mentally ill plan that we brought into effect…. Some of that would occur in the ’13-14 year. That’s an increased number of ACT teams and other supports at St. Paul’s Hospital, for instance — or not at St. Paul’s, sorry, but out into the community. The increases to ACT teams and other supports in the community would appear in the community mental health and addiction services line.

S. Hammell: With the reduction in the in-patient acute and tertiary services of $12 million, basically — I
[ Page 8522 ]

mean, other than generally that it’s just the devolution — can you be specific around some of the specific places or services that have been devolved to the community?

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Hon. T. Lake: The member is saying we’ve taken $12 million, essentially reduced the acute and tertiary care budget by about $12 million, but the community budget has gone up by about $31 million or $32 million. What is the delta? What is the difference between the reduction there and the increase we see there?

Well, things like group home beds that we have at Riverview are part of the community system. The six-bed youth facility that Providence Health Care runs would be part of the community system. The Burnaby substance use and mental health centre would be part of the community system as well as the assertive community treatment teams that are present in…. It started in Vancouver but also on the Island, and now they’re being expanded across the province.

All of those are the additional supports that are going into community as we change the model of care from institutionalized care into community-based care.

S. Hammell: The item here, as I understand it…. This figure, $206 million, is about in-patient acute care and tertiary services. Am I to assume that…? I think when you talk about acute services that you’re talking about acute care beds, some of them in hospitals, and they have been cut back. They have been reduced in number. In-patient acute and tertiary services have been reduced in number. If so, where have they been reduced?

Hon. T. Lake: Noting the time, I’ll finish up with the answer here.

Those aren’t reductions in psychiatric departments of regional and community hospitals. These are reductions in the Riverview in-patient population that are now being transferred out to communities.

The Riverview project. I think there was $138 million of capital funding that was committed to building or expanding mental health facilities in communities around B.C. as part of the Riverview redevelopment project. That’s capital. But then the operating of those new facilities around the province has increased the community services all through the province of British Columbia.

With that, hon. Chair, I move that the committee rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 6:45 p.m.

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