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Hansard is the written record of proceedings and debates in Parliament. It is a verified and accurate record rather than strictly verbatim transcript. Repetitions and redundancies are omitted, obvious mistakes are corrected, and interjections omitted unless responded to by the principal speaker.

“Thomas Curson Hansard 1776–1833”. Thomas Curson Hansard, whose name still appears on the Official Report today. In 1810, TC Hansard bought William Cobbett's parliamentary reporting business and founded Hansard's Parliamentary Debates. This engraving was first published in Hansard's book on printing, Typographia, 1825.

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Hansard is the name given to transcripts of parliamentary proceedings. The Senate and House of Representatives Hansards are available on the Internet each morning following a sitting day. Hansards of Committee hearings are also available online. These transcripts are published shortly after the committee meets.

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Hansard is an essentially verbatim record of what was said in the two houses of Parliament and incorporates questions on notice answered on a sitting day.

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English (Lincolnshire): of Norman origin, from the Middle English and Old French personal name Ansard with prosthetic H-; from ancient Germanic ans- '(pagan) god' + ward 'guard, protector' or hard- 'brave, hardy' .

What type of source is Hansard?

Hansard is a “ substantially verbatim ” report of what is said in Parliament. Members' words are recorded, and then edited to remove repetitions and obvious mistakes, albeit without taking away from the meaning of what is said.

Where does the name Hansard come from?

English (Lincolnshire): of Norman origin, from the Middle English and Old French personal name Ansard with prosthetic H-; from ancient Germanic ans- '(pagan) god' + ward 'guard, protector' or hard- 'brave, hardy' .

What is the meaning of Hansard report?

Hansard is a record of speeches, questions and answers and procedural events in the Legislative Council and Legislative Assembly and is known as Parliamentary Debates (Hansard).

What is the meaning of Hansar?

The name Hansar is taken from the ancient Sanskrit language and translates to mean happiness and joy . The concept and philosophy of Hansar Samui is to deliver a luxury resort and spa experience to each guest that is happy, memorable and enjoyable.

Hansard — Wednesday, April 28, 2010 p.m. — Volume 16, Number 3 (HTML) (2024)

2010 Legislative Session: Second Session, 39th Parliament
HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

official report of

Debates of the Legislative Assembly

(hansard)

Wednesday, April 28, 2010

Afternoon Sitting

Volume 16, Number 3


CONTENTS
Page
Routine Business
Introductions by Members	4967
Introduction and First Reading of Bills	4968
Bill 16 — Armoured Vehicle and After-Market Compartment Control Act
Hon. M. de Jong
Bill 17 — Clean Energy Act
Hon. B. Lekstrom
Statements (Standing Order 25B)	4969
Day of Mourning for workers
R. Howard
C. James
Rotary Club of Surrey Wine and Food Celebration fundraiser
D. Hayer
Velox Rugby Club
L. Popham
Multi-sport relay in Comox Valley
D. McRae
Kabaddi
H. Bains
Oral Questions	4971
Impact of harmonized sales tax on economy
C. James
Hon. C. Hansen
Government information on harmonized sales tax
C. James
Hon. C. Hansen
B. Ralston
D. Donaldson
Impact of harmonized sales tax on economy
D. Donaldson
Hon. C. Hansen
Impact of harmonized sales tax on real estate costs
S. Simpson
Hon. C. Hansen
Impact of harmonized sales tax on summer camp fees
N. Simons
Hon. C. Hansen
Treatment of teacher by Little Flower Academy
R. Austin
Hon. M. MacDiarmid
Impact of harmonized sales tax on summer camp fees
G. Coons
Hon. C. Hansen
Speaker's Statement	4976
Standing divisions on Bill 9
Petitions	4976
M. Mungall
Orders of the Day
Committee of the Whole House	4976
Bill 9 — Consumption Tax Rebate and Transition Act
B. Ralston
Hon. C. Hansen
D. Donaldson
S. Chandra Herbert
L. Popham
N. Simons
V. Huntington
K. Corrigan
Proceedings in the Douglas Fir Room
Committee of Supply	5005
Estimates: Ministry of Children and Family Development
Hon. M. Polak
M. Karagianis

[ Page 4967 ]

WEDNESDAY, APRIL 28, 2010

The House met at 1:36 p.m.

[Mr. Speaker in the chair.]

Routine Business

Prayers.

Introductions by Members

J. Horgan: Joining us in the galleries today are two very good friends of mine. Another chip off the old Blarney stone, Michele Murphy is here joining us, and also Kim Manton, who is better known to many members on this side of the House as Sewage Girl.

Yeah, Sewage Girl, hon. Speaker. She's been advocating on behalf of CUPE to ensure that any sewage treatment processes that happen in the capital regional district are publicly owned and publicly operated. Would the House please make my friends Michele and Kim very, very welcome.

Hon. J. Yap: I have four guests to introduce today: Andrea Foster from Climate Project Canada; Ian Bruce from the David Suzuki Foundation; and two very special guests, two outstanding athletes, Justin Lamoureux, member of the Canadian snowboard team, seventh place in half-pipe 2010 Vancouver Winter Games — the best Canadian half-pipe result in an Olympic Games; and also Adam Kreek, former member, Canadian rowing team, gold medallist, 2008 Beijing Summer Games.

The topic that I'll be discussing with them when I meet with them later this afternoon will be the program Play It Cool. This is the largest carbon-neutral athlete-driven program in North America. With over 60 Canadian elite athlete members and counting, Play It Cool athletes' positive actions have inspired Canadians to reduce their own carbon footprints, including the organizers of the Vancouver 2010 Winter Olympics, VANOC. In addition, over 500 NHL players have gone carbon-neutral through this program. Would the House please join me in welcoming these four guests.

K. Corrigan: I too would like to welcome my ex-colleague, friend and coordinator, Kim Manton, who coordinated the very successful and long campaign to make sewage treatment in the CRD a public service. I hope you'll again make her welcome.

T. Lake: In the House today I have a friend visiting from Kamloops here on business. Steve Fritsch works with Urban Systems, and I'm sure many local government leaders that are now in the House are familiar with the great work of Urban Systems, currently working on the Kamloops sustainability plan. Steve worked with us on the Kamloops Airport Authority when we were first visioning the expansion of the airport. We're also teammates on a pretty darn good soccer team, the Platinum Rangers. Please welcome Steve to the House today.

[1340]

N. Simons: Today on the International Day of Mourning for workers who were injured or killed due to occupation, I'm pleased to introduce to the House a man who has worked tirelessly on behalf of disabled workers and their families.

Many of you in this House know Darrell Powell, who despite his own health limitations continues to act as a national advocate on mental health and disability issues. It's my pleasure to introduce him to the Legislative Assembly today, and I ask that members join me in welcoming him here.

Hon. G. Abbott: In the gallery today is a friend and former executive assistant much known for his very accurate impressions of a number of members of this House and former Houses over the years. Jeremy Walden has enjoyed much success in the last few years at the University of Calgary law school. It's a great pleasure to welcome him back, and I ask the House to join me in making him welcome.

B. Ralston: Joining us in the House today is Val John, who resides in the Gordon Head area of Victoria. She's originally from Saltspring Island. She's a local activist and mother who's keenly interested in provincial politics and is teaching her seven-year-old son all about democracy. Could the House please make Val welcome.

Hon. R. Hawes: While I don't see them in the gallery yet, we'll soon be joined by 28 students from the Dasmesh Punjabi School from Matsqui village, along with their teacher Linda Burton. They will be here, I know, for question period, where I'm sure they're going to hear questions put with great courtesy and answers listened to politely and attentively.

J. Slater: It is my pleasure to introduce three guests to the gallery today. Marlene Lipps has been a stalwart volunteer in the town of Osoyoos for decades. As I was on council for 18 years, she put me in my place very many times. I appreciate all the work that she's done for her town.

I would like to also acknowledge her son Al and Hermine, Al's wife. I would like the House to make them very welcome.

Hon. M. MacDiarmid: In the gallery today we are joined by 45 grade 5 students from Vancouver Talmud Torah independent school in my riding of Vancouver-Fairview. These students are joined by parents and led by
[ Page 4968 ]
teacher Lisa Romalis, and I would like the House to join me in making them warmly welcome.

M. Dalton: Visiting with us today in the gallery is Paul Forseth from New Westminster. Paul was a Member of Parliament for 13 years, serving with the Reform Party, the Canadian Alliance and the Conservative Party.

Today he made a presentation to a group of MLAs. He's a board member with the Fraser River Discovery Centre. Its goal as a centre, which is at the Westminster Quay, is to create a place that connects individuals to the river's history, its people, its industry and its environment. Would the House please make him feel welcome.

L. Reid: We are joined today in the legislative precinct by students from the Jewish Day School in the riding of Richmond East. They are enjoying a glorious day here in Victoria, and I'd ask the House to please make them welcome.

Introduction and
First Reading of Bills

Bill 16 — Armoured Vehicle and
After-market Compartment
CONTROL Act

Hon. M. de Jong presented a message from His Honour the Administrator: a bill intituled Armoured Vehicle and After-Market Compartment Control Act.

Hon. M. de Jong: I move that the bill be introduced and read a first time now.

Motion approved.

Hon. M. de Jong: Bill 16 fulfils two commitments contained in the government's seven-point plan to combat gang and gun violence. Armoured passenger vehicles, the evidence shows, facilitate gang and gun violence. They embolden gang members, give them a feeling of invincibility and a feeling that they can act violently and with impunity.

[1345]

Police have also raised the issue and the concern of hidden compartments contained in vehicles and installed in vehicles after their manufacture. These after-market compartments are used by gang members to hide not just weapons but also drugs and cash, and to further illegal activities.

This legislation, firstly, creates an offence to operate an armoured vehicle unless the operator is exempted specifically by regulation. That would apply to armoured vehicles used for law enforcement agencies and licensed security companies that use armoured vehicles for proper purposes. All other persons wanting to operate an armoured vehicle would be required to apply for a permit from the registrar of security services under the Security Services Act.

Secondly, also under this legislation, it'll be an offence to have an after-market secret compartment installed in a vehicle. It's recognized that there are very few legitimate reasons for needing an after-market compartment. Exemptions will, however, be provided for by regulation. Police, under this legislation, will have the authority to seize armoured vehicles that are operated by persons without a valid permit and vehicles that they suspect contain hidden after-market compartments.

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

Bill 16, Armoured Vehicle and After-Market Compartment Control Act, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Bill 17 — Clean Energy Act

Hon. B. Lekstrom presented a message from His Honour the Administrator: a bill intituled Clean Energy Act.

Hon. B. Lekstrom: I move that Bill 17 be introduced and read a first time now.

Motion approved.

Hon. B. Lekstrom: I'm pleased to introduce into the House today the Clean Energy Act. This government has set out a new vision to be a leading North American supplier of low-carbon energy and technologies, and clean, reliable and competitively priced power. The Clean Energy Act is a key step in achieving this vision.

The act clarifies government's role in setting strategic direction while preserving the B.C. Utilities Commission's role in regulating utilities and costs. The act provides the legislative foundation for three priority areas: (1) ensuring electricity self-sufficiency at low rates, (2) harnessing British Columbia's clean power potential to create jobs in every region, and (3) strengthening environmental stewardship and reducing greenhouse gases.

The act will ensure that future power needs of British Columbians can be met at low rates by increasing our commitment to conservation, by expanding B.C.'s publicly owned electricity system, by encouraging new investments in independent power, by streamlining planning processes and strengthening our Crown utilities.

Through this act, we will maximize the value of our clean and renewable resources to create jobs and benefits for all British Columbians by implementing a new
[ Page 4969 ]
model that enables a partnership between government, B.C. Hydro and renewable power producers to become a supplier of choice for clean energy in Canada and the United States. We will do this without subsidies or risks to ratepayers or taxpayers.

We will expand our transmission and distribution systems as well as create a First Nations clean energy business fund to enable First Nations partnerships in clean power. The act includes direction to expedite key strategic projects that we know we need today, creating jobs throughout the province.

The act will strengthen our environmental stewardship and reduce greenhouse gas emissions by increasing the clean or renewable generation target from 90 to 93 percent; by prohibiting the development of energy projects in parks, protected areas and conservancies; by amending the Environmental Assessment Act to specifically provide for assessment of cumulative environmental effects; by enabling consumers to manage their consumption and reduce costs with smart meters; and by enabling new utility programs to encourage the use of clean or renewable energy and vehicles powered by electricity, natural gas and hydrogen.

This bill will keep British Columbia at the forefront of clean energy development in North America.

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

Bill 17, Clean Energy 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.

Statements
(Standing Order 25B)

DAY OF MOURNING FOR WORKERS

R. Howard: I note today that the flags are flying at half-mast outside the Parliament Buildings. It is because today is the annual National Day of Mourning.

[1350]

On this day we remember those workers who have been killed or injured on the job. On behalf of all members of this House, I offer our condolences to those families that have lost loved ones due to workplace injury or illness.

In the past year 121 workers died — 62 on the job and 59 from work-related diseases. More than 94,000 were injured. Everyone deserves to come home safe at the end of the day's work. When they don't, everyone is affected — families, colleagues, neighbours and indeed communities.

Safety should be everyone's concern and everyone's responsibility. We have a tendency to think this is the responsibility of WorkSafe B.C. While it's true that they are there to support those who are injured on the job as well as families who carry on in the wake of the death of a family member, employers, employees, supervisors and workers also need to ensure workplace health and safety.

Today in many communities around the province, there have been and will be ceremonies to recognize this important day. I am told that by the end of the day, some 80,000 workers at over 500 worksites will have gathered to mourn colleagues lost and colleagues injured in the workplace.

In my own community of Richmond, the B.C. Fish Harvester Association is holding a special ceremony to mark this day. I ask that the House join me on this National Day of Mourning to remember the 121 workers who lost their lives in the workplace this past year and the 94,000 others who were injured.

C. James: I also want to speak about the Day of Mourning today, April 28. It's a day when British Columbians gather together to mourn the loss and resolve that every B.C. worker be safe, that every worker be treated with respect and dignity.

Last year in B.C. 121 women and men left their families and loved ones to go to work and never returned. Thousands more suffered serious workplace injuries. For these injured workers, life will never be the same again. For the families of those injured and killed, the grief can last and last.

On March 7 of this year I attended a vigil in memory of the three women farmworkers killed in a tragic accident in Abbotsford three years ago. We gathered to remember these workers and to support their families on this very difficult anniversary.

We also gathered together as a call to action. As I've said before, every road that's built, every tree that's cut, every berry that's picked takes great effort and sometimes comes with the risk of injury or death. Some workers, like farmworkers, have too few protections and often work for very low wages. I ask today that all of us renew our commitment to making all workplaces healthy and safe for every worker, for every British Columbian.

Mr. Speaker: I would ask all members to stand for a moment of silence.

ROTARY CLUB OF SURREY Wine and
Food Celebration fundraiser

D. Hayer: I would like to congratulate the Rotary Club of Surrey for the work they do to enhance our community. I especially want to commend them for hosting their annual Rotary Wine and Food Celebration, which they held at the Surrey Central City Shopping Centre.

Proceeds from that wonderful event are going towards the Surrey Rotary Club's commitment to build a new patient information library and resource centre at
[ Page 4970 ]
the B.C. Cancer Agency, Fraser Valley Centre, next to Surrey Memorial Hospital, which will provide a variety of educational and informative resources to cancer patients and their families.

I want to thank all the volunteers, participants and attendees who helped make this event so successful.

[1355]

Among the many who volunteered were Janis Foster, Mary Jane Stenberg, Tricia Townsend, Michele Gruenhage, Palek Trehan, Kate Ludlam, Mei Li Chong, Alan Champion, Michelle Mackay, Trevor Armstrong, Deane Gurney, Duane Buchanan, David Attfield, John Campbell, John Koropatnisky, Paul Hatch, Roy and Yoshiko Holman, Walt and Shirley Johnson, Bryce and Dale McElroy, Lorne and Bonnie Swindells, Dick and Mary Wareham, Jim and Ester Parren and my wife Isabelle Hayer and my children Sonia, Anthony and Katrina Hayer.

Media sponsor was the Surrey Leader. Music sponsors were West Coast Harmony, Circle of Friends and Emma Attfield. Other contributors included the Central City Shopping Centre, Blackwood Partners, Kwantlen Polytechnic University, Hamilton Duncan Armstrong and Stewart, RBC Royal Bank, Super Save Group and Surrey Board of Trade. Also, Jassa Grewal, Allied Insurance Services, Cactus Club, Ricky's Restaurant, Coast Capital Savings, PriceSmart Foods, Safeway, Starbucks Coffee, Cobs Bread, the Original Cakerie and 11 local vintners helped make this event very successful.

I ask the House to join me in congratulating and thanking everybody who made this event so successful.

VELOX RUGBY CLUB

L. Popham: Rugby is a beastly game played by gentlemen, and in the case of modern rugby, it's a beastly game played by gentlewomen.

The Velox Rugby Club was founded here on southern Vancouver Island by Gordie Hemmingway in the 1968 rugby season. Members of the club at that time were an offshoot of players who had left the James Bay Athletic Association. They wanted to play a more wide-open style of rugby with a running attack second to none. Approval was gained from the Vancouver Island Rugby Union, and the new team was formed.

Velox omnia vincit is Latin for "speed conquers all." The original philosophy of Velox was fast, open play, and today the laws have changed in rugby to promote the idea of fast, open play in the game, proving that Velox was ahead of its time.

Several years after the team was formed, Velox Rugby gained a clubhouse. One of the Velox player's parents, Jim Hume, a well-known Victoria journalist, moved out of his leased home. Three months later Velox took over the rent payments, and 3957 Gordon Head Road became the official home of Velox Rugby.

Developing youth rugby is very important to the Velox Rugby Club, and they have made sure that they continue to support a philosophy of no child on the sidelines. With the dedicated support of dozens of volunteers, the club always finds a way to make sure that any child who comes to play gets the opportunity.

Velox also leads the way in developing girls' rugby. All of the clubs in Victoria have girls at youth levels, but Velox is the only club in Victoria that managed an under-18 girls' side.

Rugby has done well to hold the line on membership costs and has one of the lowest costs for families, enabling them to enjoy a fast-paced sport that encourages teamwork and camaraderie even with the opposition — a little strategy we could use in this House.

I would like to congratulate the Velox Rugby Club on 42 years of teamwork, and I would like to thank them for adding to our quality of life here on southern Vancouver Island.

MULTI-SPORT RELAY IN COMOX VALLEY

D. McRae: This past weekend the Comox Valley celebrated the 25th anniversary of the annual Royal LePage Snow to Surf race. For those of you in the House not familiar with this multi-sport relay event, please let me enlighten you.

The event is limited to 175 nine-person adult teams and 50 junior teams, so almost 2,000 athletes participate in the event. While the majority of athletes are from the local area, it is not uncommon for participants to travel from across the nation to join a team.

The race begins on Mount Washington, where downhill racers run several hundred metres to the top of the ski hill, jump into their skis and race down the mountain. It doesn't sound too difficult, but when you're running up a steep slope at 5,000 feet in your ski boots, you experience a new kind of pain.

The downhiller passes off to a Nordic skier. Fortunately, there was ample snow on the mountain this year, but there have been years when lack of snow has forced the skiers to run the eight-kilometre leg.

The Nordic skier passes off to the first of two runners. The runners race approximately seven kilometres down the steep Mount Washington road to the base of the mountain, and here the mountain bike leg begins with riders racing both on road and on trail to Comox Lake.

The kayak leg begins here, and the paddler takes a five-kilometre route across the lake to the next athlete. At this point, road bikers take charge and race 30 kilometres through the village of Cumberland, down to Royston and into the city of Courtenay. Once reaching the Courtenay River, the biker passes off to the canoeist, and these two paddlers travel five kilometres from the Courtenay estuary into Comox Bay, reach the Comox
[ Page 4971 ]
marina, jump out of their canoe and, after a short sprint, ring a bell to signal their finish.

The event has come to symbolize what the Comox Valley is all about. It encompasses many popular activities that local residents love to participate in, and the various stages of the race show off the scenic beauty of the area from the snow-capped mountains, the beautiful forests and lakes to the amazing ocean vistas. You cannot take part in this event without realizing how fortunate one is to live in the Comox Valley.

[1400]

I want to thank the legions of volunteers, the athletes and the community for 25 years of hard work. I know sometimes the challenges you all have faced seem monumental, but your efforts are appreciated by all. Thank you so much and best of luck to the organizing committee for the planning of next year's race.

KABADDI

H. Bains: While we are pulling for the Canucks to bring the Stanley Cup home for the first time, which I'm sure they will, another season is opening up for just as exciting a game, although this game is not as much talked about outside of the Punjabi community. But in that community, it is the talk of the town.

Kabaddi season is opening up this weekend at Kabaddi Ground at 144th Street and 64th Avenue in Surrey. Almost every weekend thereafter during the summer, tens of thousands will flock to Kabaddi Ground in Surrey to enjoy this exciting game.

The game is about 4,000 years old and is considered to be the mother of all games in Punjab. The game consists of two 20-minute halves with a break of five minutes for a change of sides. The kabaddi playing area is 12.5 metres by ten metres and is divided by a line into two halves.

A raider from one team, starting from the dividing line, raids players on the opposite side. In 30 seconds he is to touch a player of the opponent team and make it back to his side of the court. If successful, he shall be awarded one point. If a defender on the other side holds the raider and stops him from touching the dividing line, points shall be awarded to the stopper's team. Both teams alternate at raiding, and the team with most points during the allotted time wins the match.

It is a team sport which requires both skills and power and combines the characteristics of wrestling and rugby. Kabaddi is growing fast, and today many non-Punjabis are participating on different teams across Canada, Europe and the United States. The community, players and organizations are working hard to have kabaddi recognized as British Columbia's game, alongside our other popular sports. They are confident that this game soon will become a showcase of any provincial and national tournament and eventually will be an Olympic game.

I invite all members of this House to come and enjoy this game played on most weekends at Kabaddi Ground next to the Bell Centre in Surrey or look out for it in your own town and go out and enjoy this exciting game. You'll love it.

Oral Questions

IMPACT OF HARMONIZED SALES TAX
ON ECONOMY

C. James: Since the government snuck in the HST last July, both businesses and consumers have expressed concern about its negative impact on the economy. The latest Conference Board of Canada report shows that B.C. saw a sharper decline in consumer confidence than any other region in the country — a 28 percent decline. The author of the report says the HST is contributing to it.

My question is to the Minister of Finance. During a time of tentative economic recovery, why are the B.C. Liberals hitting B.C.'s consumers and businesses with a new tax that is damaging consumer confidence and hurting our economy?

Hon. C. Hansen: The Conference Board of Canada is also the organization that says that British Columbia is going to lead Canada in economic growth. It's the Conference Board of Canada that has done studies looking at the implementation of the harmonized sales tax in Atlantic Canada which show that the vast majority of embedded PST costs get passed on to consumers — something that the official opposition is denying.

It's the Conference Board of Canada that recognizes that British Columbia over the last eight years has been a leader in job creation. We're going to keep that going, and it's going to be because of the adoption of the harmonized sales tax that British Columbia will continue to be the job generator in Canada.

Mr. Speaker: The Leader of the Opposition has a supplemental.

C. James: I'd like to remind the Minister of Finance that it's also the Conference Board of Canada that says we've had a 28 percent decline in consumer confidence, and the HST is playing into that decline in our economy.

[1405]

Here's what the author of the report had to say: "With the HST, people don't know how that's going to play out." They are "putting off purchases." Again to the minister: why would the B.C. Liberals impose a tax that hurts consumers and hurts businesses just as B.C. struggles to recover in the economy?

Hon. C. Hansen: Well, I think the Leader of the Opposition should go back and read Hansard from yesterday
[ Page 4972 ]
when she was trying to tell us that everyone's trying to rush their purchases because of the harmonized sales tax.

Consumer confidence comes when people have jobs, when people can support their families, and that's exactly what the leading economists tell us will happen as a direct result of the harmonized sales tax.

Mr. Speaker: The Leader of the Opposition has a further supplemental.

GOVERNMENT INFORMATION ON
HARMONIZED SALES TAX

C. James: First, the B.C. Liberals hit British Columbians with a brand-new tax just weeks after they told the public that they weren't going to bring it in. Since then they've repeatedly refused to provide information on how it's going to impact businesses and consumers.

The Ontario government actually posted an eight-page list on their website that described what's going to cost more in their province. But instead of being upfront with British Columbians, all this minister does is point fingers and accuse people of fearmongering. My question is to the minister. Will he follow Ontario's example?

Interjections.

Mr. Speaker: Members.

C. James: Will he post on the government website details of how the HST will cost British Columbians more?

Hon. C. Hansen: I have said that there are some people in this province that are fearmongering around the harmonized sales tax, and I say to the Leader of the Opposition: if the shoe fits, wear it.

What is obvious to all of us on this side of the House is that the NDP opposition would actually like to see the 7 percent PST imposed on top of the 7 percent harmonized sales tax. What the NDP have made quite clear is that they are opposed….

Interjections.

Mr. Speaker: Sit down for a second.

Continue, Minister.

Hon. C. Hansen: What is clear is that the NDP opposition is opposed to the elimination of the provincial sales tax. They're opposed to the exemption of the 7 percent harmonized sales tax on books, on children's clothing and footwear, on children's diapers, children's car seats and booster seats, on motor fuels. They're opposed to the idea that we should be exempting homeowners from the 7 percent cost of home energy. That, in fact, is what they are proposing in their opposition to Bill 9.

B. Ralston: A recent poll said that the number of British Columbians who strongly support the HST was 3 percent. With answers like that, it's likely to fall down to 1 percent or even zero.

The government of Ontario brought in the HST, and they accepted their responsibility to inform their public in a clear and detailed manner. The document on the website is straightforward, and it's entitled "What's Taxable Under the HST and What's Not?" Just that simple.

The B.C. Liberals brought in a tax that they said before the election they would not do. Why do the B.C. Liberals continue to refuse to explain this tax in a transparent way to the public in British Columbia?

[1410]

Hon. C. Hansen: We have set out very clearly on the website what is exempt, which is…. Basically, everything that's currently exempt from GST will be exempt from the 7 percent additional harmonized sales tax. There is also a series of other exemptions that we've set out, so it is pretty clear for anyone that wants to read that section.

I do want to come back to a reference to the Conference Board of Canada. This is actually a quote from a report they put out called Harmonize Consumption Taxes to Improve Economic Efficiency. It says: "Ontario, B.C., Saskatchewan, Manitoba and P.E.I. should follow the lead of the three Atlantic provinces and Quebec by harmonizing their retail tax regimes with the federal GST to create a single value-added consumption tax system in provinces that have a consumption tax."

This is the key sentence: "Creation of a harmonized consumption tax would reduce business costs and provide a welcome and necessary boost to Canadian productivity growth."

Interjections.

Mr. Speaker: Members.

The member has a supplemental.

B. Ralston: Well, instead of putting a straightforward document on the government website at very little cost, this minister has announced his intention to send out a flyer, at an unspecified cost, across the province, likely to the tune of millions of dollars, to be paid for by taxpayers.

Why won't the minister just commit today to put on the government website a document very similar to that put out by the government in Ontario — what's taxable under the HST and what's not — and help the public
[ Page 4973 ]
to understand and get the information they deserve to know?

Hon. C. Hansen: It's very clear from our website and the links to the Canada Revenue Agency website, which actually gives further information, because as the member knows, this is in fact a federal tax that will be charged, with a provincial portion of it. It'll be administered by the Canada Revenue Agency, and much of the information regarding how it will be administered is in fact found on the Canada Revenue Agency website.

I put the challenge back to that member. In their own NDP website they have a link there to link to some of the most blatant misinformation about the HST that's on Bill Vander Zalm's website. That is what we talk about when we talk about spreading misinformation.

D. Donaldson: Well, the minister can spin it any way he wants. Over 80 percent of the people in this province don't want the tax, and they don't want the HST implemented. That's the fact.

Here's what Bruce Cran, president of the Consumers Association of Canada, said yesterday on the HST: "The sad part of it is that we've got no information of any value at all to speak of from the provincial government to allow us to know what is going to be taxed that wasn't before." That's what the experts are saying. It couldn't be more clear.

My question is to the Minister of Finance. Will he agree to follow Ontario's example, and will he put up a list on the government website on what is going to be taxed that was not taxed before?

Hon. C. Hansen: The information on the website is very clear in terms of the fact that everything that is currently exempt from GST, everything without exception, will be exempt from the HST. It also lists all of the other additional goods and services that are exempt from the 7 percent provincial portion of the harmonized sales tax.

When we talk about the impact on consumers, let's actually look at what's happening in that member's riding. When you look at the mining sector in British Columbia, that is a key part of the economy of his constituency. The harmonized sales tax will benefit the mining sector. It's going to mean more men and women are going to have jobs in the mining sector.

[1415]

That is why the Mining Association of British Columbia is in favour of it. The Association for Mineral Exploration B.C. is in favour of it. The HST is going to mean jobs not just for British Columbians generally but for British Columbians in his constituency.

Mr. Speaker: The member has a supplemental.

IMPACT OF HARMONIZED SALES TAX
ON ECONOMY

D. Donaldson: Well, I'll tell you who is not for the HST. Former Finance Minister Carole Taylor says it'll be bad for consumers. This tax is going to hurt B.C.'s economy precisely when it's struggling to recover.

Here's what Mr. Cran also said: "Believe me, the purchases in the United States will be rising once it's very visible that this 12 percent is hanging there on everything that we buy here. This HST will damage the B.C. economy at a time when we're seeing the sharpest fall in consumer confidence of any region in Canada."

My question is to the Premier. Why won't he listen to the people on the HST and just go ahead and scrap it altogether?

Hon. C. Hansen: I think that's exactly the kind of misinformation that people are spreading around the province, which is instilling fear on the part of British Columbians. Everything is not going to be more expensive because of the HST. The vast majority of goods and services in British Columbia will either be the same or will be less expensive after the HST is implemented.

Interjections.

Mr. Speaker: Continue, Minister.

Hon. C. Hansen: We also know that for the small business community in British Columbia, it's going to take literally millions and millions of dollars of compliance costs out of their bottom line.

That's why the member for Juan de Fuca said in 2006…. He's quoted in Hansard as saying: "I know my spouse is a small business person, and she has to deal with both sets of bureaucrats. That's the motivation for her for harmonization." That's why many, most, small business people in British Columbia support this initiative.

Interjections.

Mr. Speaker: Members.

Members, take heed of some of the comments that have been made. This is a place where we're supposed to listen to the questions and listen to the answer with some respect. Some of the comments that have been thrown back and forth here are disgraceful. If we want to continue with question period, I would expect that we abide by some of the House rules.

IMPACT OF HARMONIZED SALES TAX
ON REAL ESTATE COSTS

S. Simpson: The B.C. Real Estate Association has been speaking out about their concerns regarding af-
[ Page 4974 ]
fordable home ownership in B.C. They cite the RBC Financial Group survey that shows that in B.C. more than 60 percent of a household's pretax income is required to cover home ownership costs on a detached bungalow. In Vancouver that's 70 percent. Normally, 30 percent is considered affordable. In Vancouver an average-priced new detached house costs over $900,000. This means an additional $35,000 in HST after the rebate.

How can the minister justify hitting many British Columbia homebuyers with these kinds of additional costs when we already have the highest housing prices in Canada?

[1420]

Hon. C. Hansen: The Real Estate Association was very complimentary to the government for two measures. One was the increase in the threshold for the new home rebate, which totally offsets the cost of HST. The other was the property deferral program that we put in place for families with children.

But what the real estate board points out is, in fact, that with the thresholds that we have in place now…. The $525,000 threshold actually accounts for 75 percent of all new homes in British Columbia. I can tell the member that for homes valued up to $550,000, the price of those new homes actually comes down, according to the real estate association's own numbers.

Mr. Speaker: The member has a supplemental.

S. Simpson: What the RBC says, when talking about the British Columbia market, is: "Such poor affordability levels represent an element of risk that could weigh heavily on markets when interest rates start rising." Yet this minister is perfectly comfortable to charge 35,000 additional dollars on the price of an average detached home in Vancouver. That's the reality — $35,000 out of the pocket of a consumer.

HST-related increases aren't exclusive to new purchases. John Tillie, the president of the B.C. Real Estate Association, said to the media: "Someone who buys a $450,000 resale house on June 30 pays about $16,500 in closing costs such as appraisals, home inspections, survey certificates and realtor fees. With the introduction of the HST, that same person would pay over $1,100 more due to the tax."

Why does the minister think it's a good thing to add over a thousand dollars to the bill of somebody who's processing their paperwork and doing due diligence to try to buy a modestly priced home in British Columbia?

Hon. C. Hansen: The member is wrong when he does his arithmetic. If he's talking about an average-priced home in Vancouver….

Interjections.

Mr. Speaker: Just take your seat.

Continue, Minister.

Hon. C. Hansen: First of all, the member should know that the vast majority of new homes in Vancouver, Metro Vancouver and the province are less than the $525,000 threshold.

I know the member was talking about a single-family detached home, but the member's arithmetic is wrong, because the incremental cost is nowhere near $36,000. If he would like to actually do that calculation, he could go on the website, where there's a great little value-of-a-new-home HST calculator that will help him with his arithmetic.

The other thing that's important to point out is that the HST does not apply to the cost of the resale of existing homes. It only applies to new homes, and as a result of the way the HST works, the cost of homes valued up to $550,000 will, in fact, come down.

IMPACT OF HARMONIZED SALES TAX
ON SUMMER CAMP FEES

N. Simons: Summer camps, art camps, sport camps, camps all across the province provide so much to kids and their families, and they're being told now that the HST is going to impact affordability of camp fees. Not only that; they're being told that they'd better pay by April 30 if they want to avoid that. Is that fair, Mr. Speaker? Is it fair to be telling families of this province, already struggling, that they're going to have to pay more for camp fees for kids?

[1425]

Hon. C. Hansen: That's exactly why we brought in the income tax changes. It means that for every B.C. family that pays provincial income tax, they're going to wind up with more money in their pocket to offset some of those things. For lower-income families, that's exactly why we brought in an HST tax credit that 1.1 million British Columbians will benefit from.

We want to make sure that the interests of low- and modest-income families are protected in British Columbia, and that's exactly what this does. Just to quote Jon Kesselman in his article last week, he says: "The existing PST imposes a heavier burden on the poor and the near-poor than the impending HST with its companion refundable tax credits."

We on this side of the House want to pass a piece of legislation that's going to eliminate that existing PST, which is a bigger burden on low- and near-poor-income families in British Columbia. I suggest that the opposition get on with the program of getting rid of the provincial sales tax.
[ Page 4975 ]

Mr. Speaker: The member has a supplemental.

N. Simons: You know, 90 percent of the province doesn't believe what the minister is saying. In the Sunshine Coast alone we've got Camp Byng; Camp Artaban on Gambier Island; Camp Olave; Camp Kakhamela, which is for kids with diabetes; YMCA Camp Elphinstone; Salvation Army Camp Sunrise; Keats Camp; Barnabas Camp; Camp Fircom; music camps; sports camps; sailing camps; camps for families on low income.

They are the ones who are extremely concerned about the rising costs being imposed on them in this province. How can this minister justify this increase in the cost of living with the HST to the kids and to the families who go to these camps?

Hon. C. Hansen: This is coming from a member of the opposition who has said that he doesn't want to see Bill 9 pass. Well, Bill 9 actually helps protect those very families that he's trying to pretend he's championing.

Bill 9 actually ensures that those families will not be paying the additional 7 percent on books for those children. It ensures they will not be paying the additional 7 percent on the children's clothing and footwear, on the car seats and booster seats. Bill 9 ensures that B.C. families will not be paying the 7 percent HST on their home heating costs or for the gasoline that they have to put in the car in order to get their kids up to the summer camps.

TREATMENT OF TEACHER
BY LITTLE FLOWER ACADEMY

R. Austin: This week Vancouver's Little Flower Academy fired a teacher because she is a lesbian parent. Little Flower Academy is a publicly funded school. Could the minister please advise this House what she is doing about this disturbing situation?

Hon. M. MacDiarmid: I thank the member for the question, and I take it on notice.

IMPACT OF HARMONIZED SALES tax
ON SUMMER CAMP FEES

G. Coons: I just want to go back to the summer camps. Summer camps of all varieties are warning families to beat the impact of the HST — for example, the Green Bay Bible school situated just outside of Kelowna. I quote directly from their website. The headline is: "Beat the HST. Any Camp Fee Paid on or After May 1, 2010, Will Be Taxed at 12 Percent." It then encourages families to register their children for camp prior to Friday to beat the HST.

To the Minister of Finance: why is he making families struggle two months earlier than July 1, the official implementation date of this government's dreaded HST?

[1430]

Hon. C. Hansen: We have acknowledged that there is a small percentage of goods and services that are going to cost a little bit more after July 1. That is exactly why we put in place HST tax credits and why we put in income tax reductions — to make sure that for the majority of low- and middle-income families that will totally offset any of those incremental costs.

Mr. Speaker: The member has a supplemental.

G. Coons: The minister is totally wrong, and British Columbians don't believe a word he's saying.

Families from all over the province are being told by camp organizers to beat the HST by paying full camp costs before Friday. The organizers of the Ness Lake Bible Camp just north of Prince George are also openly encouraging parents to pay now to beat the HST. I quote from their information materials: "HST will apply to all camp fees unless the full balance is paid by April 30. Pay early, and beat the HST."

Minister, not all families are able to pay more than the deposit for summer camp. They will either be penalized with a higher bill or not be able to send their child to camp at all because of this government's HST.

Why is this minister so determined to force families into these kinds of impossible choices?

Hon. C. Hansen: You know, when you talk about supporting families in that member's constituency, that is why the coast forest industry has totally supported the harmonized sales tax, because it's going to mean that more of his constituents are going to be able to go back to work.

Interjections.

Mr. Speaker: Sit down.

Members.

Continue, Minister.

Hon. C. Hansen: When you look at the importance of the transportation sector to the member's riding and the ability to have secure jobs for his constituents in his communities, the HST accomplishes it. That's why the major job creators in British Columbia support it.

I know how important the trucking sector is to the north and to his constituency, and this takes costs out of the trucking industry. It allows their costs to come down. The consumers in this member's constituency are going to benefit. That's exactly why the Trucking Association of British Columbia is 100 percent supportive of the harmonized sales tax.

[End of question period.]
[ Page 4976 ]

Speaker's Statement

STANDING DIVISIONS ON BILL 9

Mr. Speaker: Hon. Members, during the committee stage debate of Bill 9 it's my understanding that an agreement has been reached which will permit standing divisions on sections of the bill should they be requested. In addition, the provisions of practice recommendation No. 1 will be available to members.

At 5 p.m. on Thursday all remaining sections of the bill will be put to the committee in one block vote which itself will be subject to one standing division. After the committee reports to the House, the question of third reading will likewise be subject to a standing division.

M. Mungall: I rise to present a petition.

Mr. Speaker: Proceed.

Petitions

M. Mungall: I have a petition here with 5,500 signatures from the good citizens of Vernon-Monashee asking their MLA and all members of the House to vote against the HST.

Orders of the Day

Hon. M. de Jong: In Committee A, I call Committee of Supply — for the information of members, the estimates of the Ministry of Children and Family Development — and, in this chamber, committee stage debate on Bill 9.

[1435]

Committee of the Whole House

BIll 9 — Consumption Tax Rebate
and Transition Act

The House in Committee of the Whole (Section B) on Bill 9; L. Reid in the chair.

The committee met at 2:38 p.m.

On section 1.

B. Ralston: Yes, on section 1. Section 1 in part 1 refers to what's called "Definitions." Definitions are a very typical part of any statute. When one comes to interpret a statute, that's often the first place that someone, a reader of the statute, looks to understand what terms are being defined and how they're defined in order to get a sense of the statute.

Often in legal interpretation, in the courts, courts go back to those definitions. Statutory interpretation, particularly in a tax statute where there is a financial burden that may or may not be borne depending on the interpretation of the statute…. Interpretation and judicial interpretation of those kinds of statutes becomes important.

Probably the leading authority on the interpretation of statutes in Canada is a book called Sullivan and Driedger on the Construction of Statutes, and on page 3, there the learned authors talk about the modern principles of statutory interpretation. An interpreter who wants to determine what a provision applies to, particular facts, must address the following questions.

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"What is the meaning of the legislative text?

"What did the Legislature intend? That is, when the text was enacted, what law did the Legislature intend to adopt? What purposes did it hope to achieve? What specific intentions, if any, did it have regarding facts such as these?

"What are the consequences of adopting a proposed interpretation? Are they consistent with the norms that the Legislature is presumed to respect?"

Just by way of a preface to a question I intend to pose, but under the rules, I do have some time to make some preliminary remarks.

Statutory interpretation — and these are the principles that guide courts — is a very important role that is played, and what we do here, both in the wording of the statute and in the responses to questions, can be used by a court to help interpret the meaning of a statute.

In the same text that I've referred to, in appendix 1 they have what are called drafting conventions of the Uniform Law Conference of Canada. These were first established in 1919, but they've been continually updated and are in this latest edition. They have some general provisions, such as, "The organization of an act should be logical" — which would seem axiomatic but doesn't always appear to be the case.

In part 3 in this model statute they talk about arrangement, and they refer to definitions. I'm going to read from paragraph 8, under part III, "Arrangement." "Definitions should be set out in the first part of the section, unless they apply only to a particular act, section or group of sections. In that case, they should be placed at the beginning of the passage in question." So it's fairly clear.

This is the authoritative text referred to by the Supreme Court of Canada and in courts across the country. That's the model statute.

Definitions should be at the beginning of the statute unless they refer to a specific section. Can the minister explain why, in section 1, there is a series of definitions and then, on page 76, in section 205, there's what is called an amendment to this act, an amendment to section 1? So within the same bill, there are section 1 definitions, and then, at section 205, there are purported amendments to the very bill we're discussing.

Leaving aside the question of whether that's in order, because that section, 205, is strictly not before us at the
[ Page 4977 ]
moment, can the minister explain why, in defiance of ordinary drafting conventions — the suggestion that a statute be logical — this statute, if it's passed, will have definitions in section 1 and in section 205?

Not only is there a series of definitions; they're all fairly important definitions in section 205. There are other purported amendments that follow at the end of this bill. It would seem that the drafting process here….

The minister is responsible in our system, can't pass that responsibility off to staff. The minister is here before the Legislature to ask those questions of. Can the minister explain why there are definitions in section 1 and why there are definitions in section 205? And how can this hodgepodge, this illogical construction, this jumble, be helpful to any person who chooses to read the statute?

Hon. C. Hansen: I have been advised that the section 1 definitions actually come into force on May 1, which is required as part of the transition periods that will be triggered on that date. The other definitions take effect — so they come into force — on July 1. By grouping them this way, it actually makes it easier for the reader to follow, depending on at what point in time they are reviewing the legislation.

[1445]

B. Ralston: Perhaps the minister could explain, then, why it wasn't simply in the statute with an annotation. There are notes in the appendix as to when those provisions come into force. Why wasn't it simply put into the act at the front end? Since there are basically two dates, July 1 and May 1, and two groups of amendments, why weren't they grouped in that way at the front of the statute?

That would seem to me to be a fairly logical way to proceed. Mr. Driedger says that statutes should be logical, rather than putting some at the beginning and some at the end and, I would suggest, confusing most readers of the statute.

Hon. C. Hansen: I am advised that after July 1 these two definition sections get consolidated. To do as the member had suggested would wind up with what is not normally expected in a definition section. Normally in a definition section you anticipate that the definitions will all be alphabetical. So this way it allows us to set out alphabetically those definitions that are in force as of May 1.

Subsequent to July 1, when the other section comes into force, it actually allows for this to become consolidated with section 1, and they would all then be able to be presented alphabetically, which is what most readers of legislation would anticipate.

B. Ralston: The minister said in his previous answer that definitions that were included in the later portion didn't come into effect until July 1. I note that just the first definition is a definition of a boat, so is the minister saying that the definition of a boat is going to change between May 1 and July 1?

Hon. C. Hansen: I appreciate the member's question, but that does very specifically pertain to section 205, and I think that would be the appropriate time to deal with it.

B. Ralston: I suppose technically the minister is right, and I have to accept his answer, but the difficulty is that in this debate we're operating under a set of rules put forward and passed by the Legislature, by the government majority, that this debate will conclude at five o'clock tomorrow. So if we by chance don't get through all these sections, all the way to 205, by five o'clock tomorrow, that question is something that the minister won't be required to answer.

Given that he's already said it, given that answer just moments ago, I think it's unfair to the public, and I think it's a little bit unfortunate, that the minister is choosing to adopt this very narrow tactic to avoid answering a question. The broad question is…. It comes from the very answer that he gave. That's the question that I'm asking, based on what he said one answer ago.

He said that those definitions…. I think the question I'm asking is quite legitimate. Are those definitions changing between May 1 and July 1?

Perhaps I could tackle it this way, then. Can the minister explain what the definition of boat will be as of May 1?

Hon. C. Hansen: That is not covered in section 1. It is not relevant to section 1. But I can assure the member that I realize time is limited. This bill has been before the House as the only order of the day from April 1 to today, and there has been a lot of time spent on this bill.

It is the government that actually has suggested we get this into committee, which is why the vote was taken last night. I will endeavour to try to give my answers as succinctly and as quickly as possible so that we can get through, hopefully, all of this legislation, including section 205.

[1450]

B. Ralston: Again, in the section that the minister won't answer questions about, even though he referred to it earlier, there are definitions of such important things as "fair market value," "purchase price," "purchaser," "sale," "taxable value," "use" and "vehicle." Perhaps the minister could just answer this question, then: what definition of those terms will be in effect on May 1 in relation to this legislation?

Hon. C. Hansen: None of those terms are needed for the provisions of this legislation between now and July 1.
[ Page 4978 ]

B. Ralston: Under this section 1, the definitions section, the term is referred to as a "director." The director has a number of powers, particularly in later sections under administration, including inspection and audit powers, assessment, penalties, notice of assessment, irregularities.

Perhaps the minister can then explain how this official's duties intersect with those of the Canada Revenue Agency. It would seem that although this person is defined in the act here, some of the powers seem to broadly relate to an ability to assess tax owing. I think the impression has been created, certainly by government members and by the minister himself, that most, if not all, of this administration is being transferred to Canada Revenue Agency. Those officials will become federal public servants, and all that work will be done under the auspices of the federal government.

Can the minister explain what duties the director who is set out in the definitions section, section 1 — what her or his duties will be?

Hon. C. Hansen: This definition is put into the definitions section so that it can provide guidance to the provisions that are set out in part 4 and part 11 of the act. When we get there, we can certainly get into all of the details in terms of the functions and jobs that the director has responsibility for. This simply sets out the definition for it.

B. Ralston: Well, that's a very sparse answer. I thought the minister would really want to take this opportunity. He says there's a lot of misinformation out there. He repeats that constantly. He has the opportunity here in the House to answer questions fully. This is a person who he will appoint to administer the act, yet he's refusing to give any definition or any sense of what the duties of that person are.

I've referred to administration. He has said publicly that the administration of the HST will be conducted by former provincial public servants who will be transferred over to the Canada Revenue Agency, and all those duties will devolve over to that agency. Here's an opportunity for the minister to give some public information, give some facts, set the record straight, yet he seems to be not wanting to answer the question. So I'm a bit mystified by the minister's approach.

I mean, I understand that the minister is anxious to ram this legislation through, but I don't think refusing to answer questions at this stage will necessarily help him in his quest to elucidate people like Carole Taylor and all those other people who have been bamboozled and misunderstand the legislation.

Hon. C. Hansen: I'm not in any way reluctant to answer the member's questions. All that I ask of the member is that he respect the procedures in this House and that he put his questions at the appropriate place in the discussion.

[1455]

The appropriate place to talk about the role and the function and the activities of the director is under part 4 and later under part 11. This is simply the definitions section.

D. Donaldson: I have some questions related to the definitions section. It's important to be specific about these definitions, because they do have an impact, as the minister says, later in the bill. So we need to be clear, and I'm going to ask some specific questions about definitions, because they will relate to how we interpret the remaining sections of the bill.

Under "energy product" electricity is listed. Could the minister answer whether this is electricity from any source?

Hon. C. Hansen: Yes.

D. Donaldson: Would that include a source such as with people who've now installed solar panels, for instance, or other means to not only feed electricity into their own home but reverse into the grid? Would that be an example of electricity under this definition?

Hon. C. Hansen: An energy product is a product that a consumer purchases. Therefore, if they are developing their own electricity, it would not be captured by this particular definition.

D. Donaldson: Thank you for that clarification. I'm going to ask a number of clarifications on the definition of wood under section 1(h): "wood, when used as a source of energy."

For some members, this might be curious as to why I'm so interested in the definition of wood. In the area that I come from, in remote rural areas and, I would say, in other areas of the province that aren't as urbanized as where we are here in Victoria or in other areas, wood is an important source of heat for people, and usually a relatively inexpensive source of heat. That's a form of energy, of course.

It reminds me of the definition of wood being able to heat three times: once when you get it, once when you split it and once when you burn it. A friend of mine used to tell me that. I can attest to that, because going out and getting wood is not the easiest thing, although it's good in lots of other ways, because it keeps you fit as well.

Going back to the definition of wood, others in my area and others in the province I know have ended up purchasing, for instance, whole logs. I just had a load of whole logs delivered — a short truck, they call them. It ends up to be about ten or 12 cords when you buck it up. But I just had
[ Page 4979 ]
that delivered. Would whole logs be a definition of wood under 1(h)?

Hon. C. Hansen: If the member is purchasing the wood to burn as a source of home energy, then yes, it would definitely be defined as wood.

D. Donaldson: Thank you for that answer, and thank you for your indulgence on all these definitions that I'm going to ask you. It does, as I say, relate to when we get further into the sections of the bill about how these definitions would relate, to elucidate on further sections of the bill. That was a description on whole logs.

I'm not saying I've gotten lazier, but I have in the past also purchased split wood. Again, I purchased it. Is that a definition of wood when used as a source of energy? It's already split and delivered to my house.

Hon. C. Hansen: Yes.

[1500]

D. Donaldson: For wood-burning stoves that have catalytic converters, it's not recommended to burn wood scraps from construction, for instance. They can gum up the catalytic converter and then impair its efficiency in reducing greenhouse gas emissions and other emissions. But some people do, and some people have scraps of wood from construction lying around the yard — wood that, under this bill, they will have paid the HST on. Wood scraps — is that wood under the definition in this section?

Hon. C. Hansen: If they've specifically purchased wood scraps or any other wood product for the purpose of using it as a source of energy in their residence, then it would meet the definition of wood in this section.

D. Donaldson: Well, they purchased it for construction. Then it was left over from construction, and now they're going to use it as a source of energy. So would that be, under the definition of section 1(h), "wood, when used as a source of energy"?

Hon. C. Hansen: No, only if it was purchased for the purpose of an energy source.

D. Donaldson: Again, I thank you for taking time to explain these definitions, because I think it will be important when we discuss sections further on.

In my area there's often…. Some of the few mills that are left are small sawmills where they run logs through, but there's trim. There's actually trim off these logs. It's mostly bark. There are not a lot of Btu's in it. There's some wood on it as well, and people use it as an energy source. They purchase it, but the original intent was not…. It was not produced for fuel. Would that qualify, this trim, as wood under this definition?

Hon. C. Hansen: Yes. As I said, if it's purchased as a source of energy, for residential energy, it qualifies under this definition of wood.

D. Donaldson: Okay. I'll just ask one other definition under this particular 1(h) about wood. Again, thank you for your indulgence on this, because as I said, up where I live, it's important to know how the government, under Bill 9, is going to define wood. It has implications further on when we talk about energy.

In some of the sawmills there are ends. We call them cants, but they're not really cants because cants actually can be used for various purposes. They used to be used, for instance, for railway ties and things like that, or they can be used by other mills that are adding value by turning these cants into end products.

Sometimes the ends of these cants are left over. They could be 12-by-12s or 8-by-8s. Often I see my neighbours driving by with truckloads of them. The intent for those they've purchased…. Some of them they'll use for energy, for heat, but others they might use for landscaping or around the yard. Would these ends of cants be an example of wood when used as a source of energy — 1(h)?

Hon. C. Hansen: Again, if it is a wood product or wood scraps that are purchased specifically to be used as a source of residential energy, then it would qualify.

Hon. R. Hawes: I seek leave to make an introduction.

Leave granted.

Introductions by Members

Hon. R. Hawes: In the galleries today we have 28 grade 10 students from the Dasmesh School in Matsqui village. They're here along with the vice-principal, Mr. Dhaliwal; their teacher Mrs. Burton; and a number of parents. They're a great school and a really interesting group of kids. Probably a bunch of them are going to be in here at some stage, sitting down here. Could the House please make them all welcome.

Debate Continued

D. Donaldson: Yes, well, I think the minister's given a number of specific answers, and I thank him for that, because it'll make a difference later on.

I would like to move on to the definition in 1(i), "pelletized fuel." We talk about pellets up in the north, but pelletized fuel is what is listed in the bill. This is referenced "as defined in the Solid Fuel Burning Domestic
[ Page 4980 ]
Appliance Regulation, when used as a source of energy."

[1505]

I've had a read of the solid fuel burning domestic appliance regulation that's referenced as to how to define pelletized fuel. The definition there — and I read from the regulation: "…means processed fuel consisting of uniform, discrete pellets of compressed, dried biomass material."

That seems clear enough. There's a schedule, section 5, "Residential Pellet Fuel Specification." The characteristics listed are numerous, but one of them is dimensions. The specification is a diameter of six to eight millimetres and a length of no longer than four centimetres. Obviously, we're talking about fairly small pellets here for residential use.

I was at the Smithers trade show a couple of weeks ago. They hold it every year, and one of the trade show exhibitors outside in the beautiful sunshine this year was a new startup company. One of the owners is from my constituency, and the other is from the member for Nechako Lakes' constituency. They've created this new product, and I'm sure the member for Nechako Lakes can fill you in on it.

It's an amazing product. They're creating it out of their plant in Houston. It's a compressed log. It's a log made of the same type of material that is used to make the fuel pellets that are described in the regulation. It's a log with dimensions that are uniform and is made under great pressure. It's got a great number of Btu's in it, but it's larger than the specifications under the solid fuel burning domestic appliance regulation. It's probably 18 inches long and maybe six inches in diameter. So would that be considered under this definition as pelletized fuel?

Hon. C. Hansen: The reference to the solid fuel burning domestic appliance regulation, actually, is to allow for a regulatory framework whereby what constitutes a pelletized fuel could be changed over time through an order-in-council or whatever the appropriate process is for changing the regulation.

That would allow the kind of flexibility for not just, as the member was referring to, a different type of pellet but indeed other types of biofuel. For example, there are pelletization processes for things like switchgrass and other biofuels that…. It would be intended for them to be qualified under this particular definition.

D. Donaldson: So as it stands right now — and this is important for when we have further discussions later on in the bill — the log I described, which is basically for home-heating use, home energy use, would not fall under this definition of pelletized fuel unless the regulations are changed. Is that correct?

Hon. C. Hansen: The intention here is to make sure that when we talk about pelletized fuel, we're not just talking about wood but we're talking about other products, as well, that could be constituted under pelletized fuel. By referencing the regulation, it actually gives us that flexibility to recognize other products that may come on the market in the future.

D. Donaldson: Thank you for that answer.

[1510]

This innovative company…. Again, I said it was a local company. One of the owners lives in my constituency, and one in Nechako Lakes. I hope they're very successful with their product.

They also produce — the best description I can give — hockey puck–sized pellets. You know, primarily they're hoping that this will be used for energy generation and likely not home energy generation. The hockey puck–sized pelletized fuel could be suitable, as well, for people to heat their homes in wood-burning appliances. Would the hockey puck–sized fuel fall under this definition of 1(i) "pelletized fuel"?

Hon. C. Hansen: Well, if it didn't qualify today under that regulation, it could certainly be put forward for consideration for an amendment to the regulation. It's possible that it may be covered currently under that reg, but if not, at least the flexibility is there that we could make that change in the future.

I think it is important to recognize that this wood product is for residential. I think, as the member recognized, that not all of these pellets are appropriate for residential heating, but we're also in a time when new people are developing new products and new innovations.

B. Ralston: The minister said, when responding to a question about construction scraps, that if the intention of the purchaser was to use that for home heating, the HST would be owed on that purchase. Can the minister advise whose responsibility it would be in those circ*mstances to discern the intention and to collect the HST — the purchaser or the vendor?

Hon. C. Hansen: That is covered under the provisions in part 4, and that would be the appropriate time for us to discuss that.

B. Ralston: Well, I can see this is going to be a recurring theme in how the minister chooses to answer questions. To give an example and then refuse to follow up until much later in the bill…. Frankly, I don't think that's a very effective way to proceed. I'm going to take it…. The public can judge for themselves.

The minister's made many, many statements about wanting to get clear information out to the public. Here's a very clear example of someone buying construction scraps and who's going to pay the HST, and the minister won't answer the question.
[ Page 4981 ]

If he wants to engage in a narrow interpretation of the rules, I suppose that's his right. If the Chair sustains that, then that's how we'll have to proceed, but certainly, it's open to him, based on my experience, to adopt a slightly more flexible interpretation of the rules and answer those kinds of questions.

As the minister knows…. And perhaps no studies have been conducted, because it doesn't appear that much in the way of study of the HST was conducted in putting forward this legislation. But certainly the experience of the GST and studies of that in articles such as the Canadian Tax Journal and others have shown that when the GST was introduced, the underground economy — that is, those vendors and purchasers who sought to avoid payment of the tax — dramatically increased.

There are some ways of estimating that by economists, basically estimating the amount of cash on hand in certain accounts across the country. A notable paper by Peter Spiro in the Canadian Tax Journal in 1993, entitled "Evidence of a Post-GST Increase in the Underground Economy," speaks about that.

It's well recognized that when a value-added tax comes in…. This is the experience, and the minister knows how broad that experience is, because he refers to it very often. The experience of tax evasion becomes very broad.

I'm wondering: at what point will the minister be prepared in this discussion of this bill, if ever, to answer questions about the degree to which he anticipates, based on studies of the GST and studies…? It's unlikely that his ministry has done any, based on the track record, but if they have done any, when might those studies be disclosed about the likely impact of imposing this tax on tax evasion?

[1515]

Certainly, the experience in the GST, analyzing the gross and cash balances held by the public as an indicator of transaction volumes shows that there was a substantial increase in the underground economy since the introduction of the GST back in 1993.

Given that in some sectors where there is relatively unregulated commerce, in the sense that there are relatively few audits, the increase and experience with the GST was an increase in transactions where the tax wasn't paid. At what point in these proceedings will the minister be willing to answer questions about an estimate and an increase in the underground economy and lost tax revenue as a result of the imposition of the HST?

Hon. C. Hansen: It certainly doesn't pertain to the definition section. I appreciate the fact that there are probably thousands and thousands of questions that the Finance critic may have, but we need to follow the rules of the House in terms of questions that are relevant to the section that's before us, and that's now section 1, which is the definition section.

The impacts of value-added taxes on the underground economy are actually something that I do like to talk about. There is not in this bill, to the best of my knowledge, a section that pertains directly to that, but I'd be pleased to have that discussion with the member — if not during a relevant section, if we can find one, then certainly during Finance estimates discussions.

B. Ralston: Well, I would suggest, based on that answer, that we're not going to have the discussion here in this House before this bill comes to a vote at five o'clock tomorrow, and that's regrettable. I think it's an important aspect of this bill, an important policy consideration. It deserves public discussion, but a very narrow and technical interpretation of the rules, I suppose, enables the minister not to answer that question.

In the definition section there's a reference to a "sales tax agreement." I'm assuming that that is the agreement that the minister and the Premier signed with Mr. Flaherty and the federal government, although it doesn't adopt the formal name of the agreement that was signed. Is that the case?

Hon. C. Hansen: Yes.

B. Ralston: The definition refers to amendments — "as amended from time to time." Can the minister advise in the present agreement — aside from the agreement to forestall accepting the $750 million in the fiscal year just ended on March 31, 2010, and deferring some of that money into this fiscal year — if there have been any other amendments to the agreement between the federal government and British Columbia that was announced on July 23 last year?

Hon. C. Hansen: I just would remind the member that this is talking about a definition of three words, "sales tax agreement," which actually, as I indicated, includes the CITCA and includes the one amendment that has happened to date. This is simply to set out a defining of those three words.

Interjection.

B. Ralston: The Minister of Health seems very anxious to get on with this section. Well, the Minister of Health is always very loose with definitions, so I can understand why he's not interested.

The definition of "supply" says that it has the same meaning as it does in part 9 of the goods and services act, the federal act. That definition is found…. If I could briefly read it: "'supply' means, subject to sections 133 and 134, the provision of property or a service in any manner, including sale, transfer, barter, exchange, licence, rental, lease, gift or a disposition."
[ Page 4982 ]

The rules of interpretation of federal statutes also provide that the French version of the statute has equal weight in the courts. Will the minister confirm that the definition of "supply" in this act…? People will be able to refer to the French version of the federal statute as an aid to interpreting what supply might mean?

[1520]

Hon. C. Hansen: I have a hunch that the member actually probably knows the answer to that question better than I do, given that he has the legal training. I don't know specifically how the French versions of federal statutes are used in courts in British Columbia. I could undertake to get that information for him, but I would actually defer to his experience and his training as a lawyer.

B. Ralston: Well, as complimentary as that answer might be, I don't think it's really satisfactory. The minister is, of course, the minister. This is a definition in the statute that he's putting forward, and I think he should have that answer.

Are his officials not able to advise him as to elementary interpretation of a statute? It specifically adopts the definition in a federal act. That's the choice the minister has made in putting this act forward. Surely he can answer a basic question about how that definition might be interpreted by the courts.

Hon. C. Hansen: This is to ensure that the term "supply" is a definition. It's actually a definition required for the point-of-sale rebates administered by the Canada Revenue Agency and the residential energy program. What its intent is, is to ensure that both are coordinated with the harmonized sales tax and to ensure that the same definition of "supply" applies in the provincial statutes as would apply in the federal statutes.

B. Ralston: Well, just to persist on that question, I think that's accepted and fairly straightforward. The wording is: "'supply' has the same meaning as in Part IX [Goods and Services Tax] of the federal Act."

In order that the meaning be consistent with the federal act, it would seem to me that it would follow that, given that in the federal statutes both the French and English versions have equal weight, a person seeking interpretation of that word, given this definition, could look to the French version for assistance in interpreting the meaning of the word in this particular statute, this provincial statute.

Can the minister not — based on the advice that he has there from learned counsel and advisers, and there are a number of them there — confirm that that's an accurate interpretation of this section?

Hon. C. Hansen: I have very excellent advisers and very excellent advice that is given to me. The specifics of that question that the member has posed…. If he would like me to pursue it, I could pursue it with the Attorney General's ministry, but I'm sure that he probably knows as well as anybody whether that interpretation that he just gave is accurate or not.

B. Ralston: Perhaps the minister mistakes the nature of my endeavour. This is an opportunity for the public to find out about this statute, to have some questions answered. It's not simply for my personal or private knowledge about the interpretation of the statute.

I'd like the answer to be placed on the record, in the record of the proceedings and in Hansard, so that people, if they choose to know that or if courts come to look at this statute in a case at some point in the future….

As the minister might well expect, revenue statutes are litigated because there are often huge sums of money at stake. Those kind of interpretations do come forward before the courts.

This is a very elementary question of construction, and so I'd like the minister to put that on the record. I gather he's not prepared to do that now. Will he give a commitment that before five o'clock tomorrow, when the guillotine comes down and all debate on this statute must cease, that he will place an answer on the record to that question?

Hon. C. Hansen: Yes.

B. Ralston: A similar question relating to taxable supply, also in the definition section. It also makes the same reference to "Part IX [Goods and Services Tax] of the federal Act." And by the federal act, in the definition section, I think it refers to the Excise Tax Act.

[1525]

A similar question relating to that. Perhaps the minister can just briefly explain now the difference between supply and taxable supply, and then give the same commitment on providing an answer about the use of the French version of the statute in relation to interpretation of the term "taxable supply."

Hon. C. Hansen: Just while we're looking up the specifics for that particular answer, I do have an answer to his earlier inquiry about the English and French versions. The English and French versions of a federal statute are equally authoritative.

In the federal act "supply" means "subject to sections 133 and 134, the provision of property or a service in a manner including sale, transfer, barter, exchange, licence, rental, lease, gift or disposition;" and "taxable supply" means "a supply that is made in the course of a commercial activity."

B. Ralston: I thank the minister for that answer.

Over the page on page 3 in section 1 there's a definition of "consideration," and again, the same question
[ Page 4983 ]
about…. I take that the answer the minister has just given, that the French and English versions of the statute have equal weight, applies to this.

Secondly, can the minister…? According to my review of the statute, "consideration includes any amount that is payable for supply by operation of law." Is that the definition that's being referred to here?

Hon. C. Hansen: The definition for "consideration" is the same in part 6 of the federal act. This is the definition that would come into effect on May 1. I think, as we discussed earlier in these discussions, when we get to the definition section that would be implemented for July 1, there is a slight amendment to that definition of "consideration."

S. Chandra Herbert: I've had some previous experience in working with the Vancouver park board around alternative energy means, specifically around the use of horse manure. I know some people have called the HST things related to horse manure, but I would speak more specifically about the definition relating to energy sources and specifically whether or not manure, compost, those kinds of things, would be covered under this section in the definitions.

Hon. C. Hansen: Only if it was pelletized and was included in the solid fuel burning domestic appliance regulation. But I'm not sure that many people would actually want to use that as a residential source of energy.

[1530]

S. Chandra Herbert: I asked because I know there's a demonstration project that they're looking at starting at the Hastings Park racetrack. They've got a lot of manure there, and they're trying to figure out if they can use that to power the track, in a sense. So I'm just wondering: is there any thought around ensuring that that kind of an opportunity would be covered in this section?

Hon. C. Hansen: In the case of an operation like Hastings Park, it's a commercial activity. Whatever GST they pay today, they actually get reimbursed as an input tax credit, and whatever HST they pay, they'd be able to get reimbursed as an input tax credit. That's why this section here, under "energy product," applies specifically to the residential use of that product.

If, for example, horse manure was at some point developed into a product that would be used in residential energy, then certainly the flexibility is here for it to be considered.

S. Chandra Herbert: I know that in some cases, in other parts of the world, horse manure mixed with other kinds of…. It could be yard clippings. It could be those kinds of things. They have been used in anaerobic digesters or aerobic digesters to produce energy. In fact, I think that in some places that goes back as early as the late 1800s.

The question is…. If a community wanted to do something like that to power the homes in a small residential area, for example, this could be considered, as it's not pelletized but would be more of just a general amount of waste.

Hon. C. Hansen: Basically, in this definition section there is section (j) that says: "other prescribed products in prescribed circ*mstances." But this section, in terms of an energy product, is to look at what is purchased by the homeowner for the generation of residential energy. If a product is consumed by, say, a municipally owned facility to generate heat which, in turn, would be used by homeowners, then it is the heat that the homeowner has purchased, and it would qualify under this definition.

B. Ralston: In the definition section both in section 1 and the other one at the end, unless I've missed it, there's no definition of input tax credit. I understand from some of the review I've done of the statute that there are a number of concerns about the possible interpretation of things such as telecommunications services, for example, or Internet access.

The prediction of one lawyer at a seminar I attended — I think the minister spoke at this seminar — was that Internet access will be litigated for years to come in terms of classifying it as an input tax credit. So I find it somewhat surprising that there's no definition of input tax credit in this section. Obviously, as the minister has pointed out, this is an important part of the proposal.

Can the minister explain why there's no definition of input tax credit in the definition section and where that definition might be found? Or is it intended to define that important aspect of the legislation by regulation?

Hon. C. Hansen: The input tax credits under this new system would be administered by the Canada Revenue Agency, so those definitions would be included in federal statute.

[1535]

B. Ralston: I think the minister might have misspoken, because he said "income tax credit" and I think it's "input tax credit." Certainly, the view was at the seminar I attended that there would be a host of litigation and that the definition was not clear. We'll perhaps come back to that a bit later.

Can the minister, then, just explain once again…? As I understand it, the definitions in section 205, then, come into force two months from now, and these definitions, assuming that the guillotine comes down at five o'clock tomorrow and the Lieutenant-Governor is in the chamber shortly after that…. This may become the law.
[ Page 4984 ]
However misadvised and however much that flies in the face of the sentiment of the people of B.C., it'll be law.

Can the minister explain why, if these definitions are provisional for only two months, the amendments that are contained in section 205 at the end of the statute weren't organized in a more logical way in order to assist the public to understand the statute?

Hon. C. Hansen: I think, as I indicated earlier in answer to one of the member's previous questions, these definitions are required for the implementation of the act for the period from May to July. The other, further definitions in section 205 will be required as of July 1, and those definitions will be consolidated with these section 1 definitions and presented in an alphabetical order.

Section 1 approved on division.

On section 2.

B. Ralston: The reference here is to taxable supply —"Taxable supply made in British Columbia." Can the minister explain the significance of adopting section 144.1 of the federal act that attempts or defines a taxable supply made in British Columbia and the significance of that for the act? I think that in a tax statute that might be obvious, but a number of questions do flow from that.

Hon. C. Hansen: This provides certainty with regard to when a supply takes place in British Columbia and, hence, would be subject to the act. This provision clarifies that for the purposes of the point-of-sale rebates, which are administered by the Canada Revenue Agency and the residential energy program, the federal place-of-supply rules apply to ensure that both are coordinated with the harmonized sales tax.

B. Ralston: Looking at section 144.1 of the federal act: "…a supply is deemed to be made in a province if it is made in Canada and is, under the rules set out in Schedule IX, made in the province, but is deemed to be made outside the province in any other case and a supply made in Canada that is not made in any participating province is deemed to be made in a non-participating province."

I think the last clause might be obvious. But can the minister give an example of a purchase where the vendor is in British Columbia and the purchaser is in Alberta and whether that would be deemed to be, for example, supply in British Columbia?

Hon. C. Hansen: To give a specific example, if somebody was ordering, say, a household generator, a backup power generator, and they were ordering that from Alberta and it was being shipped into British Columbia to a British Columbia resident, then the vendor of that product in Alberta would have to charge the 7 percent B.C. provincial portion and remit that to the Canada Revenue Agency.

[1540]

B. Ralston: That does pose obvious practical problems, and I think it refers back to the tax leakage and the underground economy question that I referred to earlier.

But for those citizens and businesses that are operating very close to Alberta — whether in Dawson Creek, Fort St. John in the Peace; or in Fernie, Cranbrook in the East Kootenays…. If a purchaser is from Alberta and the goods are sold in British Columbia and either shipped or sent to Alberta, I take it that the HST would be required to be paid, whatever the competitive disadvantage it might put that vendor in, in relation to a sale of an identical good across the border in Alberta.

Hon. C. Hansen: No, the member is not correct. If a store in British Columbia has a purchaser from Alberta and it would be shipping a product to Alberta, to an Alberta purchaser, it would only have to charge the 5 percent federal portion of the HST.

B. Ralston: I'm always happy to be corrected, because I think that might be good news for some businesses along the Alberta border.

In that particular case, then, is the requirement that the goods be purchased and then immediately shipped to Alberta? If a purchaser comes to a retail outlet in one of those towns in the East Kootenays or in the northeast, in the Peace country, and the purchase is made by a resident of Alberta, is that not considered supply in British Columbia in accordance with section 144.1?

[C. Trevena in the chair.]

Hon. C. Hansen: Actually, I think maybe the example that I gave the member earlier was…. I should rephrase it. The example I used of a portable generator is probably not a good one, because this section only applies to the point-of-sale rebates.

For example, if someone were to buy a children's car seat from Alberta and have it shipped into British Columbia, then the vendor in Alberta would be able to apply the point-of-sale rebate that applies for those products to ensure that the B.C. purchaser would not have to pay the additional 7 percent provincial portion of the HST. The scope of this particular section only pertains to those items.

B. Ralston: I confess to finding that a surprising interpretation. I can see, in section 4(2), which I'm sure we'll get to in due course, which speaks specifically of
[ Page 4985 ]
rebates…. "For the purposes of this Part, a person is resident in British Columbia if the person is deemed to be resident in British Columbia under section 132.1…of the federal Act."

I would have thought that that was the section that governed the issue of residency for the purposes of supply in British Columbia, for the purposes of a rebate. Certainly, section 2 seems to be the general section which applies to the whole act. It's certainly not qualified in any way in section 2. It simply refers to: "For the purposes of this Part…." It doesn't restrict it. There's no dependent or subsequent section or subsection that delimits the scope of this section.

I just want to make sure, for the purposes of those people who may be reviewing it and those judges and lawyers who may be wanting to interpret this in the future, that the answer that's given here is accurate. At first blush, it doesn't seem to me to bear the weight of that kind of interpretation.

[1545]

Hon. C. Hansen: Section 2 is there to determine where a transaction is deemed to have taken place, whereas the other section that the member referred to, section 4, actually pertains to when an individual is deemed to be a resident of British Columbia.

B. Ralston: Well, I appreciate that distinction, but the broader question is whether this section applies to the whole of the act or simply to the issue of the point-of-sale rebates that are referred to in section 4, which we have yet to deal with but will deal with, presumably, fairly shortly.

Once again, I just want to be sure that what the minister is saying is that section 2 applies — and that definition applies — only to those point-of-sale rebates that are set out in section 4 and any that may be added by subsequent amendment of the federal-provincial agreement.

Hon. C. Hansen: It applies to all of the act.

B. Ralston: I'm glad the minister has made what I would suggest is a correction. I think that's helpful, and that's certainly how I would have understood it.

The minister has talked about the participating provinces and non-participating provinces. As we know, there are non-participating provinces, where there is no HST — Alberta, Saskatchewan, Manitoba. This definition, section 144(1) — how would that be impacted by the decision, unlikely as it might be, of Alberta to join the HST scheme and enter into an agreement with the federal government?

Hon. C. Hansen: It would not be affected at all.

Section 2 approved on division.

On section 3.

B. Ralston: This section is part of the phasing out of the social service tax to make way for the HST. Can the minister confirm that the repeal of this tax act doesn't take effect until July 1, 2014?

As much as members opposite on the government side would want to create the impression that the Social Service Tax Act is disappearing on July 1, the minister can confirm, I hope, that it will be there until July 1, 2014. There'll be a series of consequential amendments which will diminish its effect as the HST comes into force on July 1, 2010, assuming that we get to those amendments before the guillotine comes down at five o'clock tomorrow.

Hon. C. Hansen: The social service tax that is imposed under this act ceases as of July 1 — as of midnight on June 30, to be precise. But what this allows for is the continued audits. There are usually a number of years that officials, that ministry staff, will be involved with doing PST audits to ensure that we collect the appropriate amount of PST that needs to be assessed for the period up to and including June 30, 2010. This section provides for that.

[1550]

B. Ralston: Well, given that the PST will still be in effect, in some respects, until the date of July 1, 2014, can the minister then advise who will be conducting the work that he's just referred to in his answer — audits, assessments?

Will that be federal employees, formerly provincial employees transferred to Canada Revenue Agency, who will be undertaking that work on behalf of the province on a contract basis? Is that part of the agreement to transfer that work, or will there be, specifically, provincial employees who will retain the authority and the obligation to carry out that work on behalf of the province?

Hon. C. Hansen: Just to be clear, the PST ceases to exist on July 1, but what will continue are the powers to do the audits and the assessments and the appeals. To answer the member's specific question, those audits, assessments and appeals will be administered by provincial staff in the Ministry of Finance.

We have an agreement in place now for the transfer of the revenue staff from the provincial Ministry of Finance to the federal government, but that is staged in a way that allows for the appropriate number of staff to be retained in the ministry until such time as these audits and assessments and appeals can be concluded.

B. Ralston: Can the minister advise how many employees are expected to be retained by the provincial government to carry out this work over…? I believe it's a
[ Page 4986 ]
four-year period, but I could probably ask a subsequent question about that.

Hon. C. Hansen: I'm going a bit from memory here, but I believe that the total number of employees impacted by this transfer is about 320. There is a minority of that number that will be retained by the ministry until the audit process and assessment process is completed.

B. Ralston: This may be covered in later specific transitional provisions, but my understanding is that there is a four-year limitation period after the obligation to file a provincial sales tax return is triggered, and after that four-year period expires, then no further collection action can be taken.

Is that the rationale, then, for the four-year period before the act ultimately has no longer any force at all?

Hon. C. Hansen: The date of this repeal for July 1, 2014, is because the standard assessment period is four years. This has to do with the assessments, not necessarily with collections. But if the assessment is completed within the four years, then there are still the provisions that the province could continue to pursue collections if they were still outstanding at that time.

B. Ralston: Just so that I'm clear, then. The director that we referred to earlier, and that the minister deferred questions on, appears to have some authority to conduct the assessment. So I take it — and perhaps the minister can indicate, although this would be stepping outside the self-imposed bounds on answers that he's placed on himself — that that director would continue, if he or she chose to, to direct assessments, enforcement action, collections during that four-year period.

What I'm taking the minister to say is that upon the expiration of that four-year period, if there had been a completed assessment and it had not been collected, it would still be open to the province to continue to try and collect that outstanding revenue even after the expiration of the four years. Just so we're clear there.

Hon. C. Hansen: I think the member referenced the director that we had talked about earlier. It wouldn't necessarily be the same person. There is the commissioner, who is responsible for the administration of the Social Service Tax Act, and it is that individual that would have that responsibility. But aside from that, the member was correct.

[1555]

B. Ralston: Can the minister briefly, then…? During this four-year transitional period until 2014, it seems as though there will be some of the apparatus of the provincial sales tax still remaining in the provincial government. The minister has made reference to a commissioner. There's a statutory definition of a director, and there are some staff. That unit will continue, then, until 2014. Is that correct?

Hon. C. Hansen: Yes.

B. Ralston: As part of the transitional features that will be engaged by section 3, can the minister advise: what is the obligation of a director of a company? There are specific obligations placed on directors of companies where a provincial sales tax is owed. What is the ongoing obligation after July 1, 2010, of a director of a company that owes a provincial sales tax? And is there a limitation period on the potential liability of that director to pay provincial sales tax should it still be owing?

Hon. C. Hansen: With this act, those liabilities and obligations with regard to provincial sales tax collected up to and including June 30, 2010, continue. In the case of…. The obligations and liabilities that a director would have today are for two years. That would remain the same.

B. Ralston: Similarly — although the legislation, should section 3 pass, will be repealed — what's the continuing obligation of directors in terms of their own personal liability for unpaid source deductions? The minister has mentioned a period of two years. Upon the expiration of two years, if a director has liability for unpaid source deductions, does that then end? In other words, if you can dodge it for two years, does your obligation to remit end at that point?

Hon. C. Hansen: Source deductions are not covered by the social services act or this act that's before us. They are covered by the Income Tax Act, unless he's referring to some other type of source deduction.

B. Ralston: Similarly, during the period that we're speaking of — the four years — should there be a dispute resulting from an assessment…. Is the appeal mechanism that's available now under the Social Service Tax Act — I believe it's to go to the B.C. Supreme Court — still available if there's a dispute — as a way of settling such a dispute between the government and a person who is alleged to owe outstanding provincial sales tax?

Hon. C. Hansen: Yes.

B. Ralston: When would that avenue of appeal expire? Would that expire in 2014, or is that something that ends after two years?

[1600]

Hon. C. Hansen: Anyone that would like to appeal has 90 days from when the notice of assessment goes out, and that doesn't change as a result of these provisions.
[ Page 4987 ]

B. Ralston: Just so I'm clear, then: when does the legal authority of the branch to send out a notice of assessment about a disputed provincial sales tax end? Does it end on July 1, 2014, or before?

Hon. C. Hansen: We fully expect that all of the assessments and audits would be completed well in advance of 2014 so that any individual who received such an assessment would still have the 90-day provision for their appeal well within the timeline, before the act was formally repealed in 2014.

B. Ralston: As the minister knows, there are a number of exemptions under the Social Service Tax Act. Can the minister advise when, assuming this section passes, those exemptions will expire? There are some which might pose ongoing…. In the sense that they would straddle, if they're periodic payments on the purchase of production machinery and equipment…. For example, there are, as the minister well knows, a number of exemptions for production, machinery and equipment under the Social Service Tax Act.

Can the minister then advise when those exemptions will apply? If it's better dealt with under section 4, then we can pursue it there.

Hon. C. Hansen: Where the exemptions apply under the transitional rules, those exemptions would be available.

B. Ralston: Then that's a question that's governed entirely by the transitional rules, and the minister is not going to give an answer beyond that, at this point, I take it? Is that fair to say — point 1?

And secondly, it would seem to me — perhaps we could pursue this under section 4 — that there are a number of point-of-sale rebates and exemptions, relatively few, that were negotiated as part of the deal with the federal government, but all the other exemptions under the Social Services Tax Act fall away and are no longer available.

I think it's important that at some point in the debate the minister engage in a discussion. Certainly that's my intention — to engage in some discussion about that. Given the minister's answer here, is he agreeing that we can pursue it under section 4? If not, then where in the act does he wish to engage that discussion?

[1605]

As the minister knows, the government has chosen to limit debate on this committee stage part of the bill, and the guillotine will fall at five o'clock tomorrow. Even if there are important areas and questions that should be addressed, they won't be able to be addressed. I think that's an important area. There's a lot of public interest in that.

The minister has kind of shrugged his shoulders when asked about the disappearance of those exemptions. In one radio interview he simply said that they were nice to have, but we won't have them anymore, and that's that. So I think it's important that at some point we engage in some discussion about that.

Obviously, that's part of the specific result and the intention of section 3, so I would have thought it was better dealt with here in broad terms and maybe some more specifics in section 4. But the minister doesn't appear to agree with that.

I'm asking the minister, then, to identify where in the debate he's prepared, if anywhere…. He's also said to some questions that he won't entertain an answer here in the chamber at all. So can the minister indicate where he's prepared to entertain those questions?

Hon. C. Hansen: Part 17 is the section that deals with the transition provisions for the Social Service Tax Act, and that would be the appropriate section.

B. Ralston: I'm just looking at part 17. So that's sections 86, 87, 88 and 89 and thereon.

Perhaps the minister can, beyond that part, indicate at which point he's prepared to entertain that series of questions. Or is it simply scattered throughout the next number of sections including part 1.2, "Transitional Rules"?

Hon. C. Hansen: I'd be quite prepared to field those questions under part 1.2 — as the member suggested, I think — the section titled "Transitional Rules."

B. Ralston: Just so that we're clear, then. The minister is not prepared to answer questions about the effect of the repeal upon exemptions from the Social Service Tax Act at this point, although the section here says simply that the Social Service Tax Act is repealed. It obviously has legal consequences to all those exemptions.

In my view, subject to any ruling of the Chair, it's in order. I appreciate that the minister has a broad discretion, but when something is in order, I think it really is more appropriate than not to attempt to answer the question.

Is the minister saying that he simply will not answer those questions at this point under this section?

Hon. C. Hansen: I'm quite prepared to answer the questions when we get to the appropriate sections, which is the way the committee stage works.

But if I can share this with the member, maybe that might help — at least in a high-level sense — give him the information he's looking for.

"If PST is payable under the transitional rules outlined…any applicable exemptions under the social service…act will continue to provide relief from the PST payable. If the HST is payable under the transitional rules, the exemptions under the Social Service Tax Act will not apply.

"However, purchasers will not be required to pay HST on goods and services that are exempt or zero-rated under the Excise Tax Act of Canada, nor will they be required to pay the provincial component, the 7 percent, of the HST on motor fuels and other
[ Page 4988 ]
items designated for the point-of-sale rebates. In addition, the provincially administered credit on residential energy will provide targeted relief from the 7 percent provincial component of the HST on the purchases of residential energy, similar to the current PST exemptions on residential energy."

[1610]

B. Ralston: I thank the minister for that answer. The fact that exemptions will disappear is obviously the subject of some considerable public debate.

The minister will recall that his predecessor, Carole Taylor, in this House made a speech in 2008. In that budget speech she spoke of a number of sales tax reductions to aid the consumers and the public to make choices that would be for the good of the environment.

For example: "PST relief will be introduced for electric bicycles, scooters and electric motorcycles." I'm reading from her speech. "Relief will be provided for short-term passenger vehicle rentals." This one addresses the co-op car rental issue that has been brought forward this past fall.

"If you do decide to renovate your home, a tax exemption will be provided on insulation for hot water tanks, pipes and duct work. Energy Star–rated fridges, freezers and washing machines will also be exempt from PST, completing and complementing the rebate programs offered by utilities and, in some cases, by local and regional governments."Again, quoting from the minister, Carole Taylor.

One can begin to understand the level of her distress at what she's described as an ideological and factual shift of tax onto consumers when one looks at what was brought forward in that budget, which is now going to disappear.

Let me quote again from her budget speech, and this would be, as a result of this section, directly relevant to what happens if this section is passed: "This budget provides a PST exemption on production machinery and equipment used by local governments for power production and cogeneration, and we're investing $5 million to expand solar power initiatives."

There were a number of initiatives pursued in that budget, and the policy avenue that was chosen was PST exemptions. I think conventional economic wisdom, as controversial sometimes as it might be, was to provide an economic incentive for people to make those kinds of choices.

My colleague from Saanich South has been engaged in a very spirited campaign, with a lot of public support, about removing the exemption on bicycles. That is a PST exemption that was brought in by Hugh Curtis back in the 1980s, when he was Minister of Finance. These are longstanding public policy choices that have been made for the good of the province.

By doing away with the Social Service Tax Act, the number of exemptions has been drastically narrowed. The minister has agreed to that in his negotiations with his colleague Mr. Flaherty, the federal Finance Minister. When questioned about it, he has really just shrugged his shoulders and said that those policy choices are gone — too bad, so sad seemed to be the attitude.

I think that's a very dismissive and an unfortunate way of dealing with important public policy initiatives that there have been a legacy of since at least the 1980s, in the case of bicycles.

As the minister may know, the member for Saanich South has broad support among bicyclists, environmentalists and bicycle shops throughout the province. Of course, the member for Comox Valley was very dismissive of those efforts here in the Legislature and, I think, will encounter a fair degree of public opprobrium as a result of that.

This decision to reduce and limit the public policy options available to the province by repealing this piece of legislation is something that we on this side of the House certainly strongly oppose, and the campaign of the member for Saanich South is a very good example of the public support that exists for our position.

I expect that the minister is not willing to comment at this time, but it's certainly open to him if he chooses to.

[1615]

Hon. C. Hansen: I think the most simple way that I can sum up the purpose of this particular section is that it ensures that every product in British Columbia and all services in British Columbia will be exempt from the provincial sales tax.

[1620]

Section 3 approved on the following division:

YEAS — 42
Horne	Letnick	McRae
Stewart	I. Black	Coell
McNeil	Chong	Polak
Yamamoto	Bell	Krueger
Stilwell	Hawes	Hogg
Thornthwaite	Hayer	Lee
Reid	Thomson	Falcon
Penner	de Jong	Hansen
MacDiarmid	Abbott	Lekstrom
Coleman	Yap	Cantelon
Les	Sultan	McIntyre
Rustad	Cadieux	van Dongen
Howard	Lake	Foster
Slater	Dalton	Pimm
NAYS — 35
S. Simpson	D. Black	Fleming
Farnworth	James	Kwan

[ Page 4989 ]

Ralston	Popham	B. Simpson
Austin	Karagianis	Brar
Hammell	Lali	Thorne
D. Routley	Horgan	Bains
Dix	Mungall	Chouhan
Macdonald	Corrigan	Chandra Herbert
Krog	Simons	Gentner
Elmore	Donaldson	Fraser
B. Routley	Conroy	Huntington
Coons		Sather

On section 4.

B. Ralston: I want to turn to the definition of "qualifying property." These are referred to in each case with the adjective "prescribed," but I take it that these are the point-of-sale rebates negotiated….

Interjections.

The Chair: Member, just one moment.

Could all members please keep their voices down. We are trying to proceed with committee.

Member for Surrey-Whalley, please continue.

B. Ralston: Yes. This is an area where there is some confusion on the part of government members, so perhaps it might be wise to listen about existing exemptions.

[1625]

These are existing exemptions under the provincial sales tax act — (a), (b), (c), (d), (e) and (f) — and they are now part of the negotiations engaged in with the federal government. They form the 5 percent of the GST sales tax base that's provided for point-of-sale rebates after the legislation passed by the federal government and the provincial government, should it come into force.

Can the minister confirm that these are the only exemptions that he was able to negotiate, given the restriction placed on entering into those, and that a number of other exemptions in the present sales tax act, Social Service Tax Act?

I'm looking at section 70, exemptions in relation to food, clothing, shelter; section 71, health and safety; section 72, in relation to publications and school supplies; agriculture and fisheries; fuel, energy and conservation; transportation; industry and commerce. And other general property and service exemptions, section 77; exemptions for purchases or lease intended for resale or lease, section 78; and other exemptions in section 79 that….

Unless they are specifically set out here in this section, those exemptions are no longer available to purchasers of any of that range of goods that is set out in the present Social Service Tax Act.

Hon. C. Hansen: As I've mentioned on other occasions, everything that is currently exempt from the goods and services tax continues to be exempt from the 7 percent portion of the HST, the provincial portion, after July 1. These items….

I think the member made reference to the 5 percent threshold of the goods and services tax base. In terms of those products that would be subject to a point-of-purchase rebate on only the 7 percent provincial portion and rebates that would be administered by the Canadian revenue agency, this list under section 4, under qualifying property, are the items that total up to that total 5 percent room. It basically, totally exhausts that 5 percent allowance that the federal government allowed for.

B. Ralston: The list that's set out in statutory form in the Social Service Tax Act begins at section 70 and continues through to section 79(1). Those are specific Social Service Tax Act exemptions. In other words, those are provincial exemptions, and unless they're specified in this group of one, two, three, four, five, six here — (a), (b), (c), (d), (e), (f) — they're are all gone.

The availability of those exemptions, whether it's production machinery and equipment, whether it's a chainsaw on a cutblock, whether it's a skidder on a cutblock, whether it's production machinery used in a sawmill….

That's set out, as the minister will know, in the Ministry of Finance tax bulletin:

"Sawmill machinery and equipment used on the production line, such as saws and planers are a direct and integral part of the process that transforms a log into a finished product. Therefore, the production line equipment qualifies for the exemption."

That exemption is gone.

On page 11 of that bulletin, they give further examples of qualifying production machinery and equipment which is exempt from PST now:

"Machinery and equipment used to store raw materials… machinery and equipment used on the production line — e.g., lathes; drills, saws and blades, digesters, paper dryers, sawdust cookers and lumber kilns including kiln strips; computers used to monitor the operation of production machinery and equipment — e.g., computers used by a pulp mill in its control centre to monitor pulp production; handheld tools used in the manufacturing process but not for repairs and maintenance."

Those qualify for a PST exemption now. Those exemptions, by the decision that this minister and this government has made, are gone. Now, I'm sure the minister will find that easy to confirm because I'm reading from the Ministry of Finance tax bulletin based on manufacturers under the Social Service Tax Act.

[1630]

The minister, when questioned in estimates last fall, was unable to cite any specific study about the impact of these exemptions on production machinery and equipment, which had been in existence since 2001. A ballpark dollar value of the tax forgone was about $110 million a year, so roughly a billion dollars in forgone revenue
[ Page 4990 ]
focused, in this particular case, on what economists consider important investments to make to increase productivity.

The productivity debate continues. British Columbia has the worst productivity of any province in Canada, according to Mr. Finlayson of the B.C. Business Council. There was no provincial sales tax assessed on these things. Investments were made. No effort to study that was done.

The question comes when these exemptions are no longer available. The minister, I'm sure, will say: "Well, these kinds of operations get input tax credits." Will the minister confirm that unless the operation has total sales of greater than $10 million, input tax credits will not be available for the first five years?

Those businesses that presently — a small logging operation, for example — get exemptions on a wide range of items involved in the production process won't have input tax credits available to them for five years. So they will be worse off — not better off, worse off — as a result of the actions of this government.

Hon. C. Hansen: I must say I find the member's question astounding, because clearly he doesn't understand how a value-added tax works. What will happen as of July 1 is that every product, all goods and services, will be exempt from the social service tax, the PST, not just the items that are listed on the pages that he referenced.

All of the production equipment that he talked about, whether it's used in a logging operation or anywhere else — not just those things that he indicated, but all equipment and services that are needed to be sourced by a logging contractor — will be rebated through the input tax credit program.

For example, I'll pick something that's not PST-exempt today, and that's the cost of a pickup truck for that logging contractor. Today he's going to be paying 5 percent GST on it. He gets that rebated through the input tax credit process, and he pays either 7 percent or 10 percent PST on that pickup truck. He has to build the cost of that PST into his cost of operations.

As of July 1, if he buys a pickup truck, he actually gets the entire 12 percent of the harmonized sales tax, both the 5 percent federal portion and the 7 percent provincial portion, rebated to him. That logging contractor will be far better off and have significantly lower costs as a direct result of the harmonized sales tax because of getting the benefit of the rebate of the full 12 percent of HST on all of the costs of running that company.

B. Ralston: But the minister will agree that if the revenue of the company is greater than $10 million, input tax credits will not be available for the first five years. That's very clearly set out in the transitional rules. It may benefit some companies, very small ones, but $10 million in revenue for many logging operations would not even make it as a maybe mid-sized operation. That's revenue — not profit, revenue.

Those input tax credits, the ability to seek those on all this range of production equipment, won't be available. You'll be paying 12 percent on everything. If you make more than $10 million in revenue, you won't be able to get any input tax credits. So for that transitional period, for the five years, you will be worse off, not better off, because right now, on a number of these items available for production, you don't have to pay provincial sales tax because of the production machinery and equipment deduction.

I think, rather, it's the minister that doesn't understand the legislation as it exists now, rather than myself.

[1635]

Hon. C. Hansen: Well, first of all, I think we're way off this section, but the short answer to the member's point is that companies that have revenues over $10 million a year have some very minor restrictions on input tax credits that they can use for these incremental startup years, which is interesting.

You hear lots of people saying that somehow this shift to a harmonized sales tax is a big benefit for big companies and not for small companies. It's actually because of this slight restriction of some input tax credits for large companies…. Yet companies with sales under $10 million a year get the full advantage right from day one of the rebate of all of the 12 percent HST that they would be paying through the input tax credit process.

L. Popham: My questioning is around the sales of bicycles and bike parts and repairs in British Columbia. It would seem that bike sales, repairs and parts would fit within a climate change action plan and the green agenda that are spoken about in this House. As well, it would go towards supporting a reduction in our health care budget. I know there was no consultation within this retail sector or consumer group, and there's been a huge backlash by people who support cycling in British Columbia.

I've created a website and a database that reaches the majority of bike shops in B.C. as well as thousands and thousands of cyclists. This group is a very potent constituency, in my view. I know that the minister's answer, when I ask a question, will be directed at me, but the answer will be clipped and sent out immediately to thousands and thousands of people in British Columbia who don't understand why an exemption for bicycles won't be brought in.

My question is: why did bicycles not meet the prescribed circ*mstance to meet as a qualifying property?

Hon. C. Hansen: As we discussed earlier with her colleague the Finance critic — in fact, he raised it — under the provisions that were set out by the federal government,
[ Page 4991 ]
there's a maximum of 5 percent of the GST tax base that can be unique for provincial-only HST exemptions, so those items that are subject to GST but can be exempted from the provincial portion of the HST. We have maxed out the number of the items that we can use within that 5 percent. For us to have considered any other product, we would have had to bump some things off that list.

L. Popham: It would seem that given the talk about reducing our carbon emissions, bicycles should have fit into that 5 percent. Can the minister tell me why bicycles were not fit into the 5 percent that we were given?

Hon. C. Hansen: With the six items that we chose for the exemption, it used up all of that 5 percent room.

L. Popham: How was that decision made on those items?

Hon. C. Hansen: With regard to the first five items, they actually were the items that the province of Ontario chose. We looked at those, and we were encouraged, to whatever extent possible, to model our exemptions after the same so that there could be consistency and ease of administration. In addition to that, we still had additional room and we made the decision to exempt prescribed motor fuels.

L. Popham: Can the minister tell me how much additional revenue the government will get by taxing bikes, bike parts and repairs?

Hon. C. Hansen: That would be outside of the scope of this question, but I do not have that information with me.

N. Simons: My question has to do with the exemption that was hard fought and won with respect to medical equipment purchased by charities and non-profits for the use of the public — for example, CAT scans, and the like.

[1640]

I know that in Powell River and Sunshine Coast, both communities raised a significant amount of money, in the millions, to purchase medically required equipment for use by the public.

An exemption was made in 2007 or 2008, I believe, by Carole Taylor, eliminating the need to pay the social service tax on these pieces of equipment if the money was raised by charities and non-profits. Can the minister let us know what the status of that exemption is?

Hon. C. Hansen: Again, this is very much outside the scope of section 4 that we're on, but to oblige the member…. Basically, what this provides for is that hospitals, when they are acquiring equipment — whether it's purchased by a hospital auxiliary or not — wind up with full rebate of the HST. Today, for example, hospitals do not pay GST. They will be paying the HST, but they will get it rebated internally through provincial government accounting systems.

The registered charities will actually now be entitled to a rebate for the incremental cost of the HST on their operations. So what we have put in place is a 57 percent rebate, and that, based on Stats Canada data, represents what a typical charity would experience in terms of incremental costs.

N. Simons: What is the material impact on health care auxiliaries, on other non-profit and charity groups, when they are raising, for example, $2 million for a new machine for a hospital?

Hon. C. Hansen: There should not be any material impact. It's actually more than likely a benefit, because if they are today purchasing a product that would be subject to PST and donating it to the hospital, they would have to actually absorb that. After July 1, if they raise money for the purchase of a piece of medical equipment for a hospital, then the hospital would get that 12 percent HST rebated.

N. Simons: Just as a point of interest, currently charities do not pay the social service tax if they're purchasing medical equipment for the use of the public. So I'm not sure how things would get better from no social service tax to a 57 percent rebate.

I confess not to be an expert in this area, but I think for the benefit of the public — who are unfortunately not as well informed as they could be, due to reasons that we've expressed in numerous opportunities here — could the minister explain it to those charities who are quite interested in this?

Could the minister explain to those charities — to those individuals, men and women throughout the province — if they are, in fact, going to have to raise enough money to cover the HST when they've finished picking up all the cans with the change in it and all the cheques that have been written during fundraisers?

Hon. C. Hansen: Again, we're way outside the scope of section 4. I should be clear that hospitals and health authorities today will be paying PST on certain items, and the same is true for charities. The rebate system that will be in place under HST reflects the incremental cost that they would typically experience as a result of HST.

There should on balance be no negative impact on a charity or a health authority hospital if they are typical consumers. That's not to say that every single charity winds up being completely neutral, but on balance, based on Stats Canada data, they would be held whole as a result of the rebate.
[ Page 4992 ]

V. Huntington: I'm wondering if the minister could explain the reasoning behind the exemption of children's clothing based on size rather than age. A lot of people are very concerned about that.

[1645]

Hon. C. Hansen: Actually, a very good question. The system that was in place before, around the PST exemption for children's clothing based on age, was, I think, one of the biggest headaches that retailers faced. Certainly, it was a constant concern that was brought to governments. It was not just British Columbia; it was in other jurisdictions. The same was true in Ontario as well, where it was very difficult to administer. In many cases, it's actually the merchant that is responsible for whether or not that exemption should be granted or not.

By going to children's-sized clothing, it's actually based on a UPC code, a universal product code. It's very easy. It's very streamlined, and it's very easy to administer on the part of the retailers.

V. Huntington: I can understand that reasoning from the government administrative point of view and, probably, from the retailers' point of view. I know it was difficult to believe always what the exemption was for, but what concerns me is that you've now created an area where there's discrimination on size, where children are being treated very differently according to their size rather than their age. I don't know whether the department has had any discussion with you or with the Attorney General's office on that issue.

Hon. C. Hansen: This was the only way that a point-of-purchase exemption could be done for children's clothing that could be administered by CRA. They administer it based not on who uses or doesn't use a product…. You know, when you look at the PST system we have in place, that's one of the reasons why it costs $150 million a year for compliance cost and administration cost. A lot of that is borne by small business.

The other alternative would be for us not to have included this as a point-of-purchase exemption. There are actually people that had suggested that, that we should put in place a tax credit — you know, expand the HST tax credit for low- and modest-income families, rather than doing an exemption. But we felt this was the appropriate way that could be administered according to the rules of the CRA and still provide that benefit for families.

V. Huntington: I wouldn't be surprised, though, if down the road there is some objection made and forwarded to a tribunal on the basis of discrimination according to size. I would think that maybe the department might want to consider looking at a credit if they're going to proceed with this section.

I'd also like to ask, on 4(1)(c), "prescribed children's diapers": have you at all considered exempting incontinence products for seniors in that same category?

Hon. C. Hansen: There is no GST on those products now, so therefore there would be no HST. Currently, on children's diapers there is GST, and interestingly, there is currently today a PST exemption on non-disposable diapers only. This actually expands that exemption — or, technically, a point-of-purchase rebate — to all children's diapers, so there's actually an expansion of the scope.

B. Ralston: I just wanted to pursue for a moment what the minister had said about the way in which this list was compiled. I understood him to say that Ontario was looked to as an example, and for administrative convenience, the first five products or product areas were settled upon. I think he said that there was room left over within the 5 percent, and then it was decided to add motor fuels.

[1650]

Now, as I understand — and I don't have the percentages exactly at my fingertips — the motor fuel exemption comprises the vast…. If 5 percent is a hundred, of that 5 percent, motor fuels are, I understood, to be 70 to 80 percent of the available exemption room. Can the minister advise what percentage it's estimated…? Because there must have been some figures run on this. What percentage of the exemption room will motor fuels take up in contrast to the other areas? And then I have some follow-up questions.

Hon. C. Hansen: The member's right. It's about 80 percent.

B. Ralston: The decision, then, was to copy Ontario, except for 80 percent of the exemption. That's really what the minister is confirming. Would the minister not agree that…? Again, I appreciate these figures are rough. So it would leave 20 percent of the remaining products there. Is it possible to assign a rough percentage of the expected amount of the exemption that each one of these product areas will take up, beginning with prescribed books?

Hon. C. Hansen: I don't have the percentage breakout, but the remaining 20 percent totals about $70 million worth of forgone tax. Books account for about $25 million to $30 million of that, children's clothing and footwear about $30 million to $35 million, and all of the other items are about $10 million annually.

B. Ralston: In those negotiations, or in that effort to compile a list…. For example, the member for Saanich South has mentioned the exemption for bicycles, a long-
[ Page 4993 ]
standing exemption. Was there any effort to quantify the dollar value of that exemption were it to be added to the list, for example?

Hon. C. Hansen: The reason why we chose motor fuels for the remaining room that we had in there was because of the carbon tax.

If you look at the principles behind the carbon tax, where you actually use that tax and pricing as a way to discourage use and to encourage conservation in the future by applying something like a value-added tax instead of the carbon tax that we have in place…. It would actually mean that you'd only be able to get at half of the problem, because the net effect of the value-added tax affects the end consumer. You would wind up with…. Commercial consumers of motor fuels would, in fact, get that rebated, which they don't get rebated on the carbon tax.

So the carbon tax is designed as a way to incent change of behaviour and incent the reduction in consumption of fossil fuels. Utilizing a value-added tax instead of that tax mechanism would have defeated the purpose of the carbon tax.

B. Ralston: So I take it that the option of doing both is obviously rejected as well, of stacking this tax on top of the carbon tax. Was that a consideration as well, then?

Hon. C. Hansen: For the purpose of the climate action agenda, we see the carbon tax as a more effective tax vehicle.

B. Ralston: Earlier in the debate, I did refer to a number of exemptions that the minister's predecessor Carole Taylor referred to in her budget speech in 2008.

[1655]

Was there any effort to quantify those as part of a climate action agenda separate from the carbon tax? Certainly, bicycles would fall in that category, but there were a number of other items of relief. Presumably, if they were in the budget…. I think I have the table in the back of the 2008 budget. I think there was some effort to quantify them back at that time. I'm thinking of electric motorcycles or Energy Star residential refrigerators, clothes washers and freezers, for example.

Was there any effort to quantify any of those exemptions and include them in this list of qualifying property?

Hon. C. Hansen: Some of those items that the member referred to were, for a time, a specific term. Even in the case of the PST exemptions for some of those, some of those have already expired because the time that was provided for the exemption has already passed. But in terms of looking at what point-of-sale exemptions would be included in this 5 percent once we had completed our decisions on the six items that are included in this section, there was no more room to consider further items.

B. Ralston: Well, I wouldn't think that the fact that something was temporary was necessarily a reason to end it. I mean, after all, people point out that income tax was introduced as a temporary wartime measure a long time ago, and it certainly seems to have continued.

But I want to deal with the issue of "prescribed books." The minister has referred to Mr. Kesselman. At the seminar that the minister attended, and he spoke…. I also attended, and I think it was Mr. Kesselman who said that he thought that an exemption on books was unreasonably skewed in terms of the income levels of those who were able to take advantage of it.

Was there any attempt to decide the tax incidence of these exemptions, on which income levels the benefits of these exemptions might fall? Certainly, I have a personal preference for not paying tax on books, for example, but I think the point that he was making was that that, in its incidence, might be unfair and benefit people who had the income where others might not have.

Did the minister engage in those kinds of considerations in deciding on these exemptions?

Hon. C. Hansen: We did not get into that level of detail, but I would be surprised if the member would be suggesting that somehow we should increase the cost of books so that those with lower, modest incomes would have more difficulty purchasing books. In fact, the definition that is used for books is, under this point-of-purchase exemption, broader than the current exemption is for the provincial sales tax.

B. Ralston: The choice of the word "prescribed," then, means that there's a regulation that accompanies each act. On the face of it, it's not very helpful in deciding what falls into this. Is the regulation anticipated, or is it available in draft, or how is that going to come about?

Hon. C. Hansen: There is an information bulletin that was put up on our website back on, I think, November 16, 2009, that talks about the definitions of books that we would be incorporating in the regulation.

[1700]

B. Ralston: The definition of "supplier" adopts the federal definition. Can the minister advise which section that's to be found in? I want to make sure that I had it right. The version that I have in English is: "'supplier,' in respect of a supply, means the person making the supply." That seems a trifle circular, but is that the definition the minister is relying on?
[ Page 4994 ]

Hon. C. Hansen: The answer is yes. It is in subsection 123(1).

D. Donaldson: The question I have for the minister in regards to this section 4 has to do with the new implementation of the HST on bicycles and how much revenue would be expected from that — if you can give an idea of what kind of revenue will be coming in from the tax on bicycles.

Hon. C. Hansen: As I indicated earlier, we don't have that kind of precise information with us. Basically, as we get through the experience of HST, we'll be able to collect data through the Canada Revenue Agency and will have that information over time, but we don't have preliminary estimates that would have any degree of accuracy to them.

D. Donaldson: I find that curious, because you've been able to break down exactly what you feel or this government feels are going to be the benefits of the $1.9 billion in tax breaks to various categories of industry.

I would think, then, that you would be able to come up with a figure of what revenue is going to be generated from new products that will have the new tax on it, such as bicycles, and therefore would be able to come up with how you came up with it being a revenue-neutral tax. I find it curious that that analysis hasn't been done. I'm sure there are records of the number of bikes that have been sold, and bicycle accessories, in the province.

The next question, then, would be the same thing on the so-called green appliances that hadn't seen this kind of tax on before and will now. Are there projected numbers on the revenues that will be generated from that?

Hon. C. Hansen: Canada Revenue Agency today would have a fair amount of detailed data. When we looked at the overview as to the impact on British Columbia and what our revenue projections would be, it was based on CRA running those broad numbers. It would take a special computer run for them to parse out a particular product for British Columbia.

I'm quite confident they would have that degree of data and that if a province were to request it, they would technically be able to do it. I don't know the ramifications in terms of how long that would take or the cost of having that done.

B. Ralston: The federal minister that's referred to in this section…. That falls to the federal government, then, to designate which minister, but I'm assuming it would be the minister responsible for the Canada Revenue Agency. It would be the Minister of National Revenue, not the Finance Minister. Is that correct?

Hon. C. Hansen: Today that's correct.

Section 4 approved on division.

On section 5.

B. Ralston: This section refers to "Rebate for supply made in British Columbia of qualifying property," and there are a number of subsections. Can the minister briefly explain the purpose of the section? It appears to empower suppliers to pay a rebate to a purchaser and then make application to the appropriate government agency to claim it back, if I've got the chain correct.

[1705]

Could the minister briefly explain the purpose of this section and how it would work?

Hon. C. Hansen: This section provides for the mechanics of those point-of-purchase rebates. For example, today under the GST system, if you go into the grocery store to buy a head of lettuce, as the consumer, you're not paying any GST on it, but there is technically a point-of-purchase rebate.

The grocery store owner can still claim their input tax credits for the GST that they've had to pay out in the cost of operating their business. But to the consumer, because they get the point-of-purchase rebate, it has all of the appearances of being an exemption. So it's obviously important.

The other section in here under subsection (3) provides for a mechanism whereby if somebody is wrongly charged the HST on something that should have had a point-of-purchase rebate, they can apply for the appropriate reimbursem*nt.

B. Ralston: Just in practical terms, if Blackberry Books sells a book to the minister on…. I don't know what his preference might be, so I'll avoid that — diplomatically. He purchases a book there, and that would trigger, then, I think what's called a zero-rated GST, under the GST. The bookstore would have to make application to the provincial agency administering this — or would it be to Revenue Canada? — to claim the input credit that might flow from this. Is that correct?

Hon. C. Hansen: Subsection (1) actually provides for the ability of the provider of that product to apply that point-of-purchase rebate and still qualify for the input credits that that company would be entitled to. It is sections 3, 4 and 5 that really are there to provide for relief if a purchaser is wrongly charged the full HST.

In the case of a book, for example, they would be charging the 5 percent federal portion, but they would not be, ultimately, charging the customer the 7 percent provincial portion because of the point-of-purchase rebate.

B. Ralston: Then it would fall to the retailer to make the application to the agency describing the sales and
[ Page 4995 ]
including that in an application to the minister for the relevant…. What do they call it? The supplier "may pay or credit the person an amount equal…." I'm looking at subsection (1).

[1710]

I just want to make sure that I understand the mechanism. So if you were to assist a retailer…. If they were to look at this, how they would go about doing it…. But I take it they don't collect it, but they remit a form that would describe the volume of sales, and the Canada Revenue Agency would process it on that basis. I want to make sure I have the basic mechanism correct.

Hon. C. Hansen: If we take the example of a book retailer today, they would be charging 5 percent goods and services tax on all of their books. They would total up on a monthly basis — or, if they're really small, perhaps a quarterly basis — all of their revenue, the goods and services tax revenue, that they've charged their customers. Then they would be deducting from that all of the 5 percent goods and services tax that they've paid in the operation of their company. Then they would remit the difference to the federal government.

So under a point-of-purchase rebate after July 1, a book retailer would still be charging the 5 percent federal portion, and they would accumulate that revenue. But meanwhile, because there is now a 12 percent HST, they would be paying the 12 percent HST on a whole range of the costs of doing business, and they get all of that rebated through an input tax credit.

Hypothetically, it's quite possible for a book retailer, depending on their mark-ups…. They could wind up, in a month, having more HST credits than they would actually be receiving in their cash register for the 5 percent federal share, in which case they can apply for a refund, and CRA would send them a cheque.

B. Ralston: The only limitation on that, it would appear, other than the regulations, would be the limitation period of four years that's set out in subsection (5). Is that correct?

Hon. C. Hansen: The time limits in terms of a company or retailer receiving their input tax credits would be a direct result of the federal legislation, the federal Excise Tax Act, so this pertains to the provincial point-of-purchase rebate on these selected items that we're talking about. So that provision for the four-year restriction would be if an individual is wrongly charged the provincial portion of the HST. They would have four years to make application for a refund.

B. Ralston: One of the points the minister has made in some of his public statements is about the consolidation of the need to remit to the provincial authority the PST and to the federal authority the GST. But from the description that's given, there will still be a need for the retailer to at least run a separate calculation of the GST that's been charged and the 7 percent point-of-sale rebate. Would that be an accurate description?

Hon. C. Hansen: The forms and the process for the administration of this are entirely governed by the CRA, and it certainly would be much simpler than the existing system where they have to separate out both a provincial sales tax remittance and a federal GST remittance.

[1715]

For companies that aren't involved with providing point-of-purchase rebates, it's actually a very simple form. In fact, I think if any small company looks closely at the form that they remit their GST on, they would actually see that in all cases it says GST/HST, because the same form is used in Atlantic Canada as it is in the rest of the country that is not in HST today.

In terms of exactly how that form will look, we don't have that information, but we know that that will be coming out from the CRA.

[1720]

Section 5 approved on the following division:

YEAS — 43
Horne	Letnick	McRae
Stewart	I. Black	Coell
McNeil	Chong	Polak
Bell	Krueger	Bennett
Stilwell	Hawes	Hogg
Thornthwaite	Hayer	Lee
Bloy	Reid	Thomson
Falcon	Penner	de Jong
Hansen	MacDiarmid	Abbott
Lekstrom	Coleman	Yap
Cantelon	Les	Sultan
McIntyre	Rustad	Cadieux
van Dongen	Howard	Lake
Foster	Slater	Dalton
	Pimm
NAYS — 35
S. Simpson	D. Black	Fleming
Farnworth	James	Kwan
Ralston	Popham	B. Simpson
Austin	Karagianis	Brar
Hammell	Lali	Thorne
D. Routley	Horgan	Bains
Dix	Mungall	Chouhan
Macdonald	Corrigan	Chandra Herbert

[ Page 4996 ]

Krog	Simons	Gentner
Elmore	Donaldson	Fraser
B. Routley	Conroy	Huntington
Coons		Sather

On section 6.

[1725]

B. Ralston: The title of this section is "Rebate on imported qualifying property." Can the minister explain the purpose of this section? It appears to refer to property purchased from another province, but it's not entirely clear to me.

Hon. C. Hansen: This pertains to those qualifying properties that we discussed under section 4 — the six items. What this section 6 provides for is that if somebody were to order those products from outside of British Columbia — or from another country, let's say — when those products are landed and the individual goes down to customs, or to claim those products, they would be entitled to the same point-of-purchase exemption from the provincial 7 percent as they would be if they bought those products in British Columbia.

B. Ralston: Well, perhaps a bit easier to understand in the case of books, but how would that apply in the case of motor fuels, gasoline — any of the motor fuels that are referred to? If they are imported in bulk, can the minister then describe how that works?

Hon. C. Hansen: It would apply the same. If somebody was importing bulk gasoline motor fuels, then the same would apply.

B. Ralston: Then how would this be administered? Would this be administered by the Canada Border Services Agency at the border as part of a customs inspection if these items were being imported into the country, say, across the border? If the minister could answer that, and I'm wondering what the connection between that and the Canada Revenue Agency would be, in terms of goods imported across Canada's national borders.

Hon. C. Hansen: It is the Canadian Border Services that would administer this.

[1730]

B. Ralston: The definition that's referred to in section 212.1 refers to commercial goods. They're defined as goods that are "imported for sale or for any commercial, industrial, occupational, institutional or other like use." So anything imported for personal use, I take it then, would not be subject to this section. Is that correct?

Hon. C. Hansen: This provides that if it is a good that is subject to the GST today and will be subject to the 5 percent portion of the federal HST but is part of this list of six items, this qualifying property, which would not be subject to the provincial 7 percent share of the HST, then this section applies.

Section 6 approved on division.

On section 7.

B. Ralston: This section refers to the rebate and qualifying property brought into British Columbia. I take it that it applies to the same items that are referred to in section 4. I'm looking at section 218.1, and 218.1 is "Tax in a participating province." Can the minister explain the effect of section 218.1 upon this section? It appears to be…. Well, it's something less than transparent; let's put it that way.

Hon. C. Hansen: What this sets out is that if a tax is imposed on a product that is brought into the province under section 218 but it is one of these six products that qualifies as qualifying property, then the provincial portion of the HST would not apply.

Section 7 approved on division.

On section 8.

B. Ralston: This section refers to deduction of payments. The minister, in his earlier answer, referred to an occasion where there might be an offset of tax owing against a rebate that had been earned or granted through sales of qualifying products. This appears to provide for an offsetting provision in calculating the total amount to be remitted, if I've read that correctly. Perhaps the minister could confirm, or not, that my understanding is correct.

[1735]

Hon. C. Hansen: This section provides that the provision of the point-of-sale rebates will be deducted from the amount payable to the province under the CITCA agreement. It just basically allows that we agree that that could be deducted from what the federal government would transfer to the province as our share of HST revenues.

Section 8 approved on division.

On section 9.

D. Donaldson: This section deals with point-of-sale energy credits. I have a few questions that pertain to this section based on the definitions that we discussed earlier in section 1.
[ Page 4997 ]

I want to describe a situation to the minister to get his response on how this section might apply so that it brings further clarity, especially to a number of people in Stikine. We have outdoor burners in Stikine — and elsewhere, I'm sure, in lots of rural areas in B.C. — where they're usually used for home heating purposes. They can burn quite large logs, six feet long, and they're outside. Actually, there are some issues with emissions from those, but that's another topic. They're outside, and they can burn large logs.

There are instances where they are used to heat a church, for instance. I'm wondering: would that be a situation where the HST would apply on the provision of that source of energy?

Hon. C. Hansen: If they were to make that purchase for the church today for heating purposes, they would be paying both the 5 percent GST and 7 percent PST on that purchase. So they would be paying a 12 percent tax on that today.

If they were a registered charity under the federal CRA rebate system and qualifying for a rebate of 50 percent of their GST, then they would automatically be qualifying for a 57 percent rebate of any HST that they would pay on that provincial portion of the HST.

In a worst-case scenario, if they're not one of the charities that is recognized by CRA, they would wind up paying exactly the same 12 percent. But if they were one of those charities that were registered under the goods and services tax rebate system, they would, in fact, come out better off.

D. Donaldson: Thank you for that answer. Again, there's another situation I'm aware of, and I'm sure it's not isolated, where the same kind of system is used to heat a school, a privately run school.

[L. Reid in the chair.]

What would be the point-of-sale energy rebate or the kind of situation that they would face under the new HST?

[1740]

Hon. C. Hansen: If a school was purchasing this wood for heating purposes, they would be entitled to an 87 percent rebate on the provincial portion of the HST. That calculation is…. In fact, it's interesting. When the school financial officers — I forgot the exact name of the association — originally calculated the impact of what they thought HST would be, it was about a third of what we calculated it to be.

So they wound up with a much bigger rebate program for schools than they were asking for, but it was based, again, on our Stats Canada data that showed what the incremental cost of HST would be. If a school were to choose to buy wood for heating purposes, they would be eligible for that 87 percent rebate.

D. Donaldson: Thank you for that. Another scenario that's not uncommon is that these outdoor burners are used to heat a home, as I described, for residential use, but oftentimes, in the area where I come from, there are many home-based businesses. Would a person owning such a home that's using part of it for a home-based business, then, have to pay HST on the wood, on the logs that they're going to use in the outdoor burner?

Hon. C. Hansen: This particular section, section 9, is what provides for the point-of-sale energy credit for residential energy. That is provided for energy products "other than wood or pelletized fuel," as you'll see in subsection 9(1)(b).

The reason for that is for all of the other energy suppliers…. It's the reason why we could actually do this particular point-of-purchase rebate system. There are a very limited number of suppliers, and we are currently dealing with those suppliers for the collection of the carbon tax. So for us to extend this HST rebate, we can use the same vehicles and the same mechanism that we have for that tax collection.

When we started looking at this, we recognized the fact that there are homes in British Columbia that are heated by wood or pellets. They will have a different process for applying for a rebate rather than through the supplier, but we wanted to make sure that they were dealt with equitably. If somebody has a home-based business today, they would actually have to determine what portion of the costs would pertain to the business and what portion of costs pertain to their residence, and that's true today under a GST world. They would have to make that differentiation.

It's the same for even things like capital gains on a residence. The capital gains on the portion used for residential purposes are exempt but not for the portion used for business. I think most businesses that are set up as a home-based business already have that mechanism in place, so the same would apply for heating. The portion of the heating that applies for residential purposes would technically be exempt. Any HST costs that would apply to the home-based business, of course, could be recouped by the filing of input tax credits.

D. Donaldson: Thank you for that. I've got another question that deals with rebates, and this is specifically around energy. It's not wood.

Again, I talked earlier about people who have set up solar or wind — I'm more familiar with solar panels — on their properties to sell into the grid. In the scenario we're talking about under this section, would they, then, be charging B.C. Hydro HST for selling that power into the grid?

[1745]
[ Page 4998 ]

Hon. C. Hansen: The only way that would apply is if the homeowner was selling more than $30,000 a year worth of electricity into the grid. Basically, any small business that has $30,000 a year of sales or less, whether that's an incorporated company or an unincorporated business operated by an individual, is currently not subject to GST, and they would not be subject to HST.

B. Ralston: This section refers to a registrant who must provide a credit for the provincial portion. There is a definition in the Excise Tax Act which is fairly broad, but will the minister confirm…? He mentioned that there are a number of suppliers that have been registered for the carbon tax. Essentially, for most people in the province this will be either B.C. Hydro or Terasen Gas. Would that be accurate?

Hon. C. Hansen: Those are two examples, yes.

B. Ralston: And beyond those two and the special cases that the member for Stikine has spoken of, are there many other registrants under the carbon tax who would be touched by this particular section?

Hon. C. Hansen: The term "registrant" that appears in this particular section actually refers to a company that is registered as a GST collector. Basically, all companies today that would be obligated to collect GST would be registrants, and that is the term.

But in terms of the companies that would fall under this particular section, it would include the B.C. Hydros, the Terasens, the Fortises. Those are, obviously, on the very large side of it. On the smaller side, there's companies like Lonsdale Energy, which provides hot water heating, I think it is, to a couple of thousand residences in the south Lonsdale part of North Vancouver. There are a number of these companies, but there's a limited number and, administratively, we are able to deal with this particular point-of-purchase rebate.

B. Ralston: In subsection (3) it's an exception to what's set out in subsection (1). There are disqualifications, and it appears to be any person who receives or is eligible for an input tax credit. Can the minister explain the mechanism there?

[1750]

Hon. C. Hansen: This section would provide, for example, for the home-based businesses that we were talking about earlier. If it is a home-based business and has one supply in terms of, say, natural gas that goes into that home, then that property may not be entitled to the point-of-purchase rebate from the supplier, but under a later section that we come to, they would be able to apply for a rebate of the provincial share of the HST on the portion of the property that's used as a personal residence.

[1755]

Section 9 approved on the following division:

YEAS — 44
Horne	Letnick	McRae
Stewart	I. Black	Coell
McNeil	Chong	Polak
Bell	Krueger	Bennett
Stilwell	Hawes	Hogg
Thornthwaite	Hayer	Lee
Barnett	Bloy	Thomson
Falcon	Penner	de Jong
Hansen	Bond	MacDiarmid
Abbott	Lekstrom	Coleman
Yap	Cantelon	Les
Sultan	McIntyre	Rustad
Cadieux	van Dongen	Howard
Lake	Foster	Slater
Dalton		Pimm
NAYS — 35
S. Simpson	D. Black	Fleming
Farnworth	James	Ralston
Popham	B. Simpson	Austin
Karagianis	Brar	Hammell
Lali	Thorne	D. Routley
Horgan	Bains	Dix
Mungall	Chouhan	Macdonald
Corrigan	Chandra Herbert	Krog
Simons	Gentner	Elmore
Donaldson	Fraser	B. Routley
Conroy	Huntington	Coons
Sather		Trevena

On section 10.

B. Ralston: The minister's staff is just returning, but we can perhaps proceed and get that assistance in a moment.

In section 10(2) there's a reference to the director. That's a person that we'd discussed earlier in the definition section who is to be appointed by the minister. This director, if this section passes, would be obliged to pay, from the consolidated revenue fund, a rebate to the person in the amount prescribed, in accordance with the regulations.

It looks like in subsequent sections that there's an application process. Can the minister, then, explain how
[ Page 4999 ]
this works and how it works in conjunction with section 9, which we just dealt with?

[1800]

Hon. C. Hansen: Essentially, this would apply in the case, as we were discussing earlier, where an individual was charged the provincial share of the HST for a home energy product. We talked earlier about wood products or pellet products, for example.

The other example that came up was somebody who had a mixed-use property — partly home-based business, partly residence — where they would be charged the HST. This actually sets out the process by which they can apply for a rebate, the HST rebate they would be eligible for. It is essentially the same as we currently have in place today for PST.

B. Ralston: The legal designate in the act that's proposed is the director. In practical terms, who would that be, or what agency would that be of the provincial government?

Hon. C. Hansen: We expect that it will be the executive director of consumer branch programs, but the flexibility in the definition would allow us to designate another person within government in the future. At the outset, that's who we expect it will be.

B. Ralston: Subsection (4) makes reference to: "…if the person who paid the amount claimed is a corporation…." There's a provision that "the application must be signed by a member of the board of directors or an authorized employee."

It appears to be a slightly archaic provision, given the way in which other statutes function, if my understanding is correct. Is it anticipated — or is this just a matter perhaps of pure administration? — that an initial application could be signed and, providing it's submitted regularly, that each individual application wouldn't have to be signed? It would appear to perhaps be slightly onerous if that were the case.

Hon. C. Hansen: There are cases where a corporation would buy the energy, would be the purchaser of the energy which is used for residential purposes. An example of that would be an apartment building where there is heat included with rent, where the actual tenant isn't paying separately for their energy costs. In this case it would be the corporation that would be able to be entitled to a rebate.

What this does is simply set out who must sign that application, that it be…. Well, it says "a member of the board of directors or an authorized employee of the corporation."

B. Ralston: I suppose the second part of the question would be: would it be simply required to make an initial application and then not have to sign each application? That would appear to be a bit archaic in terms of contemporary administration. If the minister could answer that.

On subsection (6), can the minister explain…? This appears to be an exception to the rule about making the payment and appears to be related or is similar in its scope to 9(3). Perhaps the minister could confirm that.

[1805]

Hon. C. Hansen: I'm not sure what the member refers to when he talks about the requirement for a member of the board of directors or an authorized employee of the corporation to be the signator to the application. I think this subsection (4) just sets out certainty in terms of who must sign on behalf of the corporation.

Subsection (6) actually just ensures that there can't be a double-dipping, that somebody can't claim an input tax credit through the CRA process and apply for a rebate under these provisions, under this part of the legislation.

B. Ralston: Subsection (6)(b) refers to section 259. As I understand it, that would apply to agencies or bodies that might get a partial HST rebate, such as charities, non-profits, school boards, municipalities and health authorities. Are those the bodies that this subsection is intended to apply to?

Hon. C. Hansen: Yes, that would be an example.

Section 10 approved on division.

On section 11.

B. Ralston: This refers to a change in use and a repayment. Obviously, this is designed to contemplate a situation that might arise.

Can the minister briefly explain what this section is designed to prevent in terms of continuing to pay an energy allowance when the uses change, presumably from residential to some other use? Perhaps the minister can just clarify that.

Hon. C. Hansen: That's exactly the intent.

Section 11 approved on division.

On section 12.

B. Ralston: The title of this section is "Adjustment of energy allowance if consideration reduced." I think that in the definition section we did deal with consideration, which had a meaning in part 9 of the federal act. Can the minister explain the circ*mstances that this section is intended to apply to?
[ Page 5000 ]

Hon. C. Hansen: This would provide for a case where, for example, an energy company may provide a rebate on a bill. This would actually say that that would have to be taken into consideration when calculating what this rebate would amount to.

You know, an example that comes to mind is B.C. Hydro, with their equal monthly billings. So if there's a change of use at a time when the property owner has a credit on their hydro bill, then that would have to be taken into consideration.

D. Donaldson: As my colleague from Surrey-Whalley pointed out, section 12 is on "Adjustment of energy allowance if consideration reduced." My question is specifically to subsection (2)(a) of this section. Could the minister elaborate on the rationale for this subsection (2)(a)? The onus seems to be on the person to provide and track the reduction, not the director — the director being the government, in this case.

[1810]

Hon. C. Hansen: Subsection (2) would apply in the case of a rebate that's been processed but then there is a subsequent retroactive adjustment, or a credit that is applied retroactively. This would allow for that to be dealt with, even though the credit had already been processed.

B. Ralston: I'm interested in the interaction, then, between the registrant and the director here. In subsection (2), which we were just discussing, it appears that the application has to be made to the director. Then how is that communicated to the registrant? Presumably, the supply would be received from a registrant, if we're thinking of B.C. Hydro or Terasen. How would that work?

Hon. C. Hansen: Subsection (1) actually provides for those circ*mstances where it is the energy supplier that is providing the point-of-sale rebate on the 7 percent provincial portion.

Subsection (2) is for those cases like we've described earlier — the wood, wood pellets; and cases of mixed-use properties, residential and non-residential — where the energy supplier would not be providing the point-of-sale rebate, in which case it's the person or the homeowner that would have to make the application.

Section 12 approved on division.

On section 13.

B. Ralston: This section is entitled "Reimbursem*nt of energy credit." Again, it refers to the director, the person appointed by the minister, a provincial appointee. Can the minister explain, then, how this works? It would appear to be related to section 12(1), where the director is empowered to make a payment to a person entitled to an energy credit if a reimbursem*nt is appropriate.

Hon. C. Hansen: Again, this comes back…. This is not an exemption from the 7 percent provincial portion. This is a point-of-sale rebate. Even though the homeowner only sees the impact of the 5 percent federal share, it is still deemed to be a 12 percent HST that the energy supplier rebates to the CRA. The CRA would include that as part of the HST that would then flow back to the province. It's basically a triangle. This ensures that the energy supplier is kept whole out of that transaction.

[1815]

B. Ralston: In this subsection 13(2) it refers to regulations. Is there a draft regulation prepared that the minister can table, or is it anticipated those will be written? I take it that this section…. Just if I could check at the back. It's going to be operational as of…. Commencement is May 1, according to this. No, perhaps not. Let me just see here. It would be operational and come into effect, commence, on May 1, 2010. Is there a regulation that the minister can table that's referred to here in subsection 13(2)?

Hon. C. Hansen: It is in the final stages. It has not gone through an approval process, but obviously, it's pretty close to getting there.

B. Ralston: I can understand that it's close to being finished, but assuming the bill passes when the guillotine comes down tomorrow at five o'clock, it will then be in force. This section contemplates a regulation. Presumably, a regulation would have to come before cabinet in order to be in force, so what's the provision to put this regulation into effect?

Hon. C. Hansen: It would have the authority of a cabinet decision.

D. Donaldson: The question I have for the minister in this section has to do with the reimbursem*nt aspect. We've seen that the justification from this government, from this minister, for implementing the HST was that it was going to pay for health care. Does anybody remember that? I don't hear it repeated very often anymore, but the minister is on record, as well as this government, that the HST was going to be paying for health care.

Most people in the province, when they hear that kind of proclamation, would assume that the revenues generated from, apparently, this revenue-neutral tax — but in this case, by the government's thinking — would go to the health care budget, the health care ministry.

It's curious to me, then…. If you're going to be giving rebates and reimbursem*nts as a result of this HST legislation, then following that logic, if you were a right-minded
[ Page 5001 ]
person in the province, one would think that any kind of rebates or reimbursem*nts in this case would come from the Ministry of Health budget. After all, if you're going to use the HST to support health care on the revenue side, then any reimbursem*nts logically would come from the Ministry of Health.

Can the minister explain why the reimbursem*nts in this section and other sections would be coming from the consolidated revenue fund when HST is supposed to be supporting health care?

Hon. C. Hansen: It is the consolidated revenue fund that funds the Health budget. I'd be certainly pleased to entertain all of the member's questions about the commitment that was made, and that would be dealt with under part 14.

D. Donaldson: If the health care budget — and this pertains to section 13 — comes from the consolidated revenue fund, then was the revenue from the HST going to be going to the consolidated revenue fund, or was it going to be going directly to the health care budget?

And how would people in the province have any satisfaction in knowing that the promises made by the government, around the HST, that the actual funding from revenue generated by the HST was going to go to health care, if it was going to go into the consolidated revenue fund, where it could be allocated by any ministry in this government…?

Hon. C. Hansen: The HST revenues that are transferred from the federal government go into the consolidated revenue fund. We can certainly get into all of the details of the commitment that was made and how it will be fulfilled when we get to part 14.

[1820]

B. Ralston: The minister made reference to an order having the authority or the power of a cabinet decision. I was asking a question about when the regulation that's referred to in section 13(2) would come into force and what the mechanism would be for doing that. I didn't quite understand the minister's answer. If he could bear with me and perhaps explain that, that would be appreciated.

Hon. C. Hansen: The regulations that have been drafted cannot be approved until this legislation receives royal assent. All of those regulations can only then be approved. We'll only have the legislative authority for cabinet to make that decision.

B. Ralston: Well, given that this is going to commence on May 1, assuming that it passes, is there a plan, then, to draw your colleagues together as a cabinet on Friday morning and have a regulation-passing party on Friday morning? I'm just wondering how that's going to come about.

Hon. C. Hansen: There are other processes whereby cabinet approval can be provided for a measure of this nature.

B. Ralston: Well, the minister has now piqued my curiosity as to how this will come about. Is there a mechanism for a virtual meeting of cabinet to pass the regulation? It would seem that there's reference to regulations that come into effect on May 1 throughout much of this bill, so can the minister explain the mechanism by which those regulations will come into force?

Hon. C. Hansen: The approval of the regulations can be done by corridor order.

B. Ralston: There may be some that know what that means, but it is, I think, a term of art here in the Legislature. Could the minister explain what that is, please?

Hon. C. Hansen: It is an order-in-council that can be signed by a presiding member of the executive council. It has the power of an order-in-council.

B. Ralston: So a single member of cabinet can pass the regulation, and then it will come into effect? Is there any restriction on the member of cabinet who that might need to be, or can any member of cabinet…? Could the Minister of Tourism or the Minister of Citizens' Services, for example, pass that regulation by signing it, or is there any restriction on that?

Hon. C. Hansen: To the best of my knowledge, there's no restriction on which member of executive council can serve as the presiding member of executive council for these purposes.

[1825]

Section 13 approved on the following division:

YEAS — 44
Horne	Letnick	McRae
Stewart	I. Black	Coell
McNeil	Chong	Polak
Bell	Krueger	Bennett
Stilwell	Hawes	Hogg
Thornthwaite	Hayer	Lee
Barnett	Bloy	Thomson
Falcon	Penner	de Jong
Hansen	Bond	MacDiarmid
Abbott	Lekstrom	Coleman

[ Page 5002 ]

Yap	Cantelon	Les
Sultan	McIntyre	Rustad
Cadieux	van Dongen	Howard
Lake	Foster	Slater
Dalton		Pimm
NAYS — 35
S. Simpson	D. Black	Fleming
Farnworth	James	Ralston
Popham	B. Simpson	Austin
Karagianis	Brar	Hammell
Lali	Thorne	D. Routley
Horgan	Bains	Dix
Mungall	Chouhan	Macdonald
Corrigan	Chandra Herbert	Krog
Simons	Gentner	Elmore
Donaldson	Fraser	B. Routley
Conroy	Huntington	Coons
Sather		Trevena

[1830]

On section 14.

B. Ralston: Speaking on section 14, there's a regulation referred to in section 14(1)(a). Would that be the same regulation that is in draft, not yet complete and that the minister anticipates, should this bill pass, when the guillotine comes down at five o'clock tomorrow, will be the subject of what he called a corridor order to be signed by a single minister of the Crown on the following day?

Hon. C. Hansen: Yes.

B. Ralston: The application that's referred to will be submitted to a provincial official, the director, other than the requirement that the reimbursem*nt, if it's a corporation, be signed by a member of the board of directors or an authorized employee.

Is there anything else that's unusual or out of the ordinary that the minister would anticipate might be included in regulation and that is not here in the proposed section?

Hon. C. Hansen: I think if the member's question was: "Is there anything unusual or strange about the regulation other than things he mentioned…?" I'm not sure I would qualify those as strange myself, but the short answer is no.

D. Donaldson: In this section 14 it describes claims for reimbursem*nt. Part of the justification, if I can call it that, that the minister and the government have put forward for wanting to implement the HST is that it was going to reduce paperwork when it came to taxes and those kinds of things.

My question is to the minister. In section 14(1)(a) the claim for reimbursem*nt must be submitted to the director, a written application. Can the minister describe the type of written application that will be expected under this section?

Hon. C. Hansen: A form is being developed for this purpose. It would go up on the website. These registrants would be able to print the form, to have it duly signed as required and to submit it.

[1835]

D. Donaldson: This form — will it be up on the website by May 1? When is the timeline for having this reimbursem*nt form available to the public?

Hon. C. Hansen: The form will be finalized as quickly as possible. We certainly feel that it will be ready and available to registrants in advance of any registrant needing access to it.

K. Corrigan: I'm wondering what the time frame is that it's expected would be from the time of the credit to the time that the reimbursem*nt is made.

Hon. C. Hansen: We will be setting this process up so that it happens as quickly as possible. We recognize that we don't want to make this a cash flow problem for some of these suppliers. Therefore, we are trying to make sure that it is as expeditious as possible.

K. Corrigan: So as expeditiously as possible. Has the ministry, in setting this up, got a timeline that is expected? Can the minister perhaps estimate what that timeline would be? Are we talking a week, a month?

Hon. C. Hansen: As I say, we want to make sure that these claims are processed as fast as possible. We expect it may be in a month or so. But if we can actually get a process that's faster, we will strive to do that.

S. Chandra Herbert: A question regarding, I guess it would be, part (b), providing "any information or records required by the director," and then there's part (c) around providing sufficient evidence. I'm just curious what kinds of records and information would be required and just concerned that it could be onerous.

Hon. C. Hansen: Again, we're going to try to make this as streamlined as possible. We don't want to add an administrative burden to any greater extent than is absolutely necessary. The information we'd be seeking
[ Page 5003 ]
is information that, typically, these suppliers would be collecting already.

S. Chandra Herbert: I guess I'm asking that…. It's not too hot, and it's not too cold. It's just right in the ability of it being too onerous or not too onerous.

Hon. K. Krueger: You're talking about Goldilocks.

S. Chandra Herbert: Yes, the Minister of Tourism has woken up and is talking about Goldilocks. It's good.

I guess the question that I'd have is specifically…. In this kind of information, they're collecting it already. Would it require, you know, a week's work? What kind of work would be required to pull this together for the applicant?

Hon. C. Hansen: We have had discussions with these suppliers to make sure that we set up a process that works in terms of the accountability that we need but, at the same time, is as administratively as efficient as possible on their part.

[1840]

Much of this is already in place. For example, these companies today have to process the very complex PST exemptions. So I think that they will actually find, on balance, that this will be less of an administrative burden than many of them are facing today under the PST system. We are working with them. The process has not been finalized, but we do want it to be as simple as possible.

B. Ralston: Is there any industry council or something like that that would help in drafting a common form that would be administratively efficient yet would meet the requirements of government in terms of accounting for public money?

Hon. C. Hansen: There is a committee of suppliers that came together to work with ministry officials in designing this process.

Section 14 approved on division.

On section 15.

B. Ralston: Other than setting out the limitations, this section doesn't appear to have anything else in the way of substance to it. Is there any particular reason why there's the limitation of four years in section 15(2), or could it have been less? I'm not quite sure why four has been chosen.

Hon. C. Hansen: The four years is standard in terms of a limitation period for most of the consumption tax provisions.

Section 15 approved on division.

On section 16.

B. Ralston: This section is entitled "Repayment of reimbursem*nt by registrant." Can the minister explain the purpose and intention of this particular section?

Hon. C. Hansen: Under this provision, energy suppliers must repay to the government, or the director may deduct from a subsequent reimbursem*nt, the following amounts: first of all, if an energy supplier receives an amount as reimbursem*nt that exceeds the credit they provided; secondly, if an energy supplier receives an amount as reimbursem*nt for a credit the energy supplier should not have provided; and thirdly, if an energy supplier receives an amount as reimbursem*nt but reduces the amount of HST they remit to the CRA as a result of a bad debt.

This provision prevents energy suppliers from being reimbursed an amount that exceeds the credit they did or ought to have provided.

H. Bloy: I seek leave to make an introduction.

Leave granted.

Introductions by Members

H. Bloy: Many of you have heard me speak in the past about scouting as our future. We have a number of scouts and parents in the audience. I would just like to introduce them. I'm going to get to spend some time with them just after the House finishes sitting.

We have Spencer Clapper-Dupont, Elijah Franzen, Jeremy Osborne, Phillip Law, Benjamin von Shulmanm, Ethan Kwan, Preston Clapper-Dupont and Curtis Fletcher. We have scout leaders Bernard von Shulmann and Chris Fletcher. We have parents Lisa Martin, Dean Dionne and Sarah Osborne. Would the House please make them welcome.

[1845-1850]

Section 16 approved on the following division:

YEAS — 43
Horne	Letnick	McRae
Stewart	I. Black	Coell
McNeil	Chong	Polak
Bell	Krueger	Bennett
Stilwell	Hawes	Hogg
Thornthwaite	Hayer	Lee
Barnett	Bloy	Thomson
Penner	de Jong	Hansen

[ Page 5004 ]

Bond	MacDiarmid	Abbott
Lekstrom	Coleman	Yap
Cantelon	Les	Sultan
McIntyre	Rustad	Cadieux
van Dongen	Howard	Lake
Foster	Slater	Dalton
	Pimm
NAYS — 35
S. Simpson	D. Black	Fleming
Farnworth	James	Ralston
Popham	B. Simpson	Austin
Karagianis	Brar	Hammell
Lali	Thorne	D. Routley
Horgan	Bains	Dix
Mungall	Chouhan	Macdonald
Corrigan	Chandra Herbert	Krog
Simons	Gentner	Elmore
Donaldson	Fraser	B. Routley
Conroy	Huntington	Coons
Sather		Trevena

On section 17.

B. Ralston: In this section it refers to "the registrant may by action in a court recover from the person the amount credited," and "court" is not defined in section 1 nor in section — I think it's 212. So the court in which that could be recovered would be the Supreme Court of British Columbia. Is that a correct assumption?

Hon. C. Hansen: It would be in a court of competent jurisdiction, so it could be the Supreme Court, or it could be small claims court, depending on the circ*mstances.

D. Donaldson: Section 17(c). I'm sorry if this was answered. Who would make the determination if the person is not entitled to an energy credit?

Hon. C. Hansen: It would be the director.

D. Donaldson: And would the appeal process be laid out in this document for the situation where the registrant would disagree with the director's decision?

Hon. C. Hansen: Yes.

[1855]

D. Donaldson: Is that further in this bill?

Hon. C. Hansen: Yes.

Section 17 approved on division.

On section 18.

B. Ralston: Can the minister advise what method the director will use to determine the amount? Will the method of calculation be prescribed by regulation, or what other method would the director refer to in making that calculation?

Hon. C. Hansen: It is not necessarily prescribed by regulation. It actually allows the director to determine what is appropriate.

B. Ralston: Could the minister give some indication of what criteria would be used to make that determination? Surely it wouldn't be random.

Hon. C. Hansen: The director would be bound by administrative fairness and natural justice, and the decisions of the director, of course, could be appealed.

B. Ralston: What would be the mechanism for publicizing the determination of the director?

Hon. C. Hansen: The director would have the power to issue a notice to the registrant.

Section 18 approved on division.

Hon. C. Hansen: I move that the committee rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 6:58 p.m.

The House resumed; Mr. 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.

Hon. M. de Jong moved adjournment of the House.

Motion approved.

Mr. Speaker: This House stands adjourned until 10 a.m. tomorrow morning.

The House adjourned at 6:59 p.m.
[ Page 5005 ]

PROCEEDINGS IN THE
DOUGLAS FIR ROOM

Committee of Supply

ESTIMATES: MINISTRY OF
CHILDREN AND FAMILY DEVELOPMENT

The House in Committee of Supply (Section A); J. McIntyre in the chair.

The committee met at 2:42 p.m.

On Vote 20: ministry operations, $1,333,693,000.

The Chair: This afternoon we'll be doing the estimates of the Ministry of Children and Family Development.

Hon. M. Polak: Before we begin, I just thought I would introduce my staff who are present. To my right is Lesley du Toit, deputy minister; to my left, Mark Sieben, associate deputy minister and chief operating officer. To my right and behind me is Sarf Ahmed, assistant deputy minister and executive financial officer. There will be, of course, other staff who will come and go throughout the time that we spend.

I wanted to also take a few minutes just to talk about the ministry itself and particularly the scope of the work that we do. There is a common misperception that the work of the ministry is confined to child protection and child welfare. Certainly, this is often the focus of media reports, and protecting children and youth is, of course, without question, a top priority for the ministry and the government in general.

The ministry also offers a very comprehensive array of programs, services and initiatives, which every day serve to support many tens of thousands of children, youth and families in communities throughout the province.

To this end, the Ministry of Children and Family Development is responsible for early childhood development; foster care and adoption; youth justice — that includes youth custody centres and youth services, supporting young people as they move away from government care; children and youth with special needs, including those diagnosed with autism spectrum disorder and FASD; child and youth mental health; child care, including the provision of operating funding for licensed childcare spaces, subsidies which support low- and middle-income families with the cost of child care; and for those children with special needs, supported child development, which helps ensure that these children can participate in typical child care programs alongside their peers.

One of our key priorities continues to be supporting aboriginal people in designing and delivering services that meet the unique needs of aboriginal children, youth and families. Underpinning these responsibilities is a strong commitment to quality assurance and, importantly, to consistent evaluation and continued improvement.

Certainly, this year has been a tough one, and the fiscal climate has, without question, necessitated some very difficult decisions in order to limit the impact on key and critical front-line services.

[1445]

But from the outset, we made a very conscious decision to work collaboratively with our key stakeholder groups, including the Federation of Community Social Services Society of B.C., in developing joint principles that would help guide these decisions. I can't say enough about the positive working relationship that we've had throughout a very difficult time for them.

Operating in this fiscal environment hasn't been easy. It certainly hasn't been easy for those agencies with whom we work, and it has really tested the strength of the relationships that we've built over many years, based on mutual respect and, I think most assuredly, a shared vision.

It has forced us to look closely at our own priorities and the expenditures as a ministry that we make to refocus and, where necessary, sometimes to pare down. Despite these challenges, we will continue to move forward. The months ahead are going to see us beginning with the initial implementation of child and family support assessment planning and practice, otherwise known as CAPP, and practice change.

We'll also be reinvigorating our support for aboriginal people in designing and delivering services that meet the needs of their children, youth and families. We're continuing with the development of an integrated case management system. To support all of the above, we will be managing our budget effectively so that we can continue to ensure that B.C.'s children, youth and families are indeed strong, safe and supported.

I have to say that I feel very fortunate to have this portfolio, with the support of an incredibly passionate and dedicated — and very often patient with me — staff to work toward these important goals. It really is satisfying work, and I know that for all of the struggles we all go through in this ministry, especially our front-line staff, there is not one of them who wouldn't say that it's very satisfying work when we can do our best for children and families.

M. Karagianis: Maybe just to just help the minister in outlining how we expect to go through the MCFD estimates debate, we'll concentrate first and foremost today and in the early part of tomorrow on ministry children in care and a number of the things outside of child care.

We will have child care questions put by the deputy critic tomorrow afternoon. That's our expectation, so it'll concentrate child care as a special block. Between
[ Page 5006 ]
the child care and the other balance of estimates, we'll probably have some members of the opposition come in and ask questions about their specific areas.

Now, I'd also like to say, given what we expect could be a fairly choppy discussion here in estimates…. I know that the debates going on in the main House may interfere from time to time with the smooth flow of discussion here, so I'm going to try to keep my questions in groups and perhaps put several questions at a time, anticipating that if we're interrupted to call a vote or something, it may be more efficient if we get many questions on that allow the minister to answer in kind of a block form.

I would like to start off…. The minister alluded here, in her opening comments, to the new practice change, the CAPP process that's being undertaken within the ministry. I will confess to the minister that I've had two briefings now. I've looked through all of the documentation given to me, including a rather large binder of information. I've talked with representatives throughout the ministry, staff and social service agencies that work with the ministry, and it's not clear to me exactly what this practice change is.

I know there's a lot of great language here strung together that are value statements and motherhood statements, but I don't understand, and no one has been able to explain to me, exactly what is going to take place here.

What is this transformation? How is it different from the way we currently do business within the ministry — all the processes that families go through in making contact with the ministry and the various steps they go through? What is the transformative difference that is going to occur here? I'd like the minister to be able to explain that to me, if she could, in terms that the listening audience, as well as members of the House, could understand.

[1450]

Hon. M. Polak: Yes, it is a rather comprehensive and rather large transformation process, but I'll attempt to put it into layman's terms and provide a couple examples that perhaps will assist.

First and foremost, in an overall way, this is a change from a risk assessment approach, which has been the manner in which the ministry has conducted itself over very many years, to a strength-based developmental approach. What that means in practice is that there is, as one of my staff has just said — a very good way to put it — no wrong door through which to enter to receive services from the ministry.

For example, it might mean entering the system of supports from MCFD through a child and youth mental health door, as opposed to a child protection door. It means that instead of basing our services on eligibility for programs, our services and supports for families and children become based on a comprehensive and holistic assessment of the child and that family.

I should also point out that it's not to say there aren't examples of good practice like this occurring already in pockets within the system. We have very many who are taking advantage of things like family development response, like family group conferencing, mediation. But the aim here is to ensure that our entire system of support for families and children is based on assessment of the child's and family's needs and an appropriate response to that, rather than based on avoiding child protection incidents.

M. Karagianis: Pardon me for being perhaps a little bit dumb here, but I still don't see…. The minister has not explained to me: what's the difference between the way we do things now within the ministry and how they will change under this new process? I mean, certainly saying, "This door or that door…." For a family seeking services from the ministry, what will change for them?

[1455]

Hon. M. Polak: I just want to first put out on the table that in terms of what I'm describing, it doesn't in any way mean that we would leave behind our responsibility to keep children safe and keep them from harm.

To further describe the change that will take place in the ministry — and, in fact, is beginning to take place — one needs to consider that currently in order for a family, for a child to receive supports and services…. Essentially they're required to have the right problem to qualify for the right service, because very much of what we do is program-based.

In terms of the shift, which is a practice change, if we can move to a situation where there is a seamless continuum of opportunities for support…. It's not program-based; it's not based on eligibility; it's based on a menu of services that we can provide and support that we can provide. Based on a holistic assessment of that child and the family's needs, we can select from that range of supports and services outside of the current limitations that are defined largely by program areas.

In short, we're moving toward a focus on prevention, primarily preventing family breakdown — doing that by assessing the strengths that a family brings to that situation and offering services and supports that focus on the developmental aspect of service, as opposed to the philosophy that has been in place for so many years, which is simply a philosophy of preventing harm.

If one were to take a medical analogy, it would be going beyond the idea of preventing harm and moving forward to the idea of actually developing those strengths and good health. I hope that is somewhat helpful in describing it.

M. Karagianis: Well, that's still somewhat esoteric. I'd like just a plain, simple explanation of people coming into the system. A child is seized because there
[ Page 5007 ]
has been a grow-op bust in a house. A child comes to the ministry's attention because a neighbour reports abuse. A child comes to the ministry's attention because the family has had some kind of breakdown where they are now needing some services and some help.

What happens? What exactly are the physical events that take place for families under this new system that are dramatically different from what happens now with their engagement?

[1500]

Hon. M. Polak: Actually, the first example that the member raised is probably a really good way to use to illustrate this. If we were to take the case of a child who is seized as a result of a grow op, currently what would happen is that the immediate safety needs of the child would certainly be looked after. We would be looking to ensure that the child is appropriately dealt with so that they're not returned to an unsafe environment. If there were additional services that were needed, those would be provided in some rather separate pockets, because it's based on program eligibility.

For example, there may be child and youth mental health needs as a result of some of the traumatic experience of dealing with police or maybe other issues in the home. There could be an array of different things that would all necessitate a separate file, a separate worker, perhaps, for each and every item. Child and youth mental health is a good example of that.

What we are working towards with practice change is that there would be a seamless continuum of service. So first and foremost, the scope of service and support we would seek to provide would be broader than simply assessing what had gone on with respect to the particular incident. Those services would be provided with one file, with one point of contact for the family, instead of them having to be served by a range of different programs. Those would all be there as one seamless continuum for that child and that family.

M. Karagianis: I'll maybe, then, go through the assessment program that happens at that point. We didn't discuss some of the other examples that I outlined. But certainly, we do know that there are a vast variety of ways that children end up coming into contact with and needing some kinds of services from the ministry. So how is this assessment…?

Explain to me how that would be done in the case of several of the examples I gave — not just in the case of a child who comes into the ministry's care as a result of a police raid on a grow op, but some of the other ways that children come into care.

[D. Hayer in the chair.]

I know, myself, where children…. Many years ago, when I was a foster parent for just emergency situations, where children were seized and needed very quick care overnight or for several days, those incidents quite often happened very rapidly.

How is this assessment done? Who is doing this assessment? What is the process by which they very quickly analyze all of the vast variety of these services that the minister has outlined? And how is that different right now from a social worker being put in charge of the care and responsibility of that child?

[1505]

Hon. M. Polak: To talk about the assessment currently, our assessment processes really do focus on a default investigation lens. The assessment looks at things through a child protection lens.

Really, for our social workers there are very limited criteria within which they are asked to operate as they assess a child's situation. It is very much focused on reducing child welfare risk as opposed to what practice change in the new assessment model would bring us to, which is assessing the need at an overall child and family level — focused on reducing the risk not just with respect to child welfare but also with respect to asking questions about the entire ecology of that family's situation.

The change that is coming about will not be something that happens in a rapid or instantly noticeable way. It is incremental, and it is designed to be so. We want it to be well adapted to what social workers do, because they will be retaining their very key role within the ministry.

We also recognize that this needs to be something developed with staff involvement. Unlike many of the past shifts that the ministry has taken over the years, this is one that is subtle and incremental and is meant to be developmental with respect to the ministry.

I should also say, though, that as we pursue this line of questioning, there is a certain amount that the member and myself can address as non-practitioners. But I think there is a certain limit which we can go to insofar as detail with respect to how practice works day in and day out that professionals engage in every day in the ministry.

M. Karagianis: That's interesting. The minister is now using language around this practice change that is a little bit in contrast to the transformative change that we were promised here. It has now become a subtle process that is going to take place over time.

I'd like to know where this is written down so that we can take a look as legislators and certainly for the public. Where is it written now exactly what this new practice framework is going to deliver? Where do we find the actual written explanation of what it is?

I think that's been the biggest puzzling thing here. The minister has talked about how we are now going
[ Page 5008 ]
to do this new practice framework and deliver a whole variety of services that are going to be presented to families in a holistic way. I'm trying to use the minister's language here. But I'd like to know where families would in fact find this written down so they know exactly what to anticipate.

For everyone working in the field, how can they anticipate exactly what this is supposed to be like on the front lines out there, on the ground? What are the deliverables in this new system? Is it in fact a big shift? Is it something subtle, as the minister has now talked about?

I continue to fail to really grasp the big difference this is going to make on the front-line services. I know lots of front-line social workers. I know that when they become involved with a specific family or a child, they look at the array of opportunities and services that the child might need or the family might be able to access.

[1510]

Generally, they work within the capacity of what's available to provide that to those families and children, so I don't understand where this big shift has come about. I know there has been a great deal of time spent on it, a great deal of money spent on it.

I still do not grasp where the big change or the big shift is to come about and what it actually means on the front lines with social workers, for families and certainly to staff throughout the ministry.

I know that in the briefings I got, there was some discussion about five pilot sites having been established, so perhaps we could use those as the more comprehensive example of what this practice change is. If there are these five sites, where are they, how were they chosen, and what is happening there? What's the evaluation process for measuring exactly the effectiveness of the change that they're undergoing? Presumably, if they're test sites, they're well along in the shift from the current way of doing business to this new transformative but subtle practice change.

Hon. M. Polak: The member is correct. I know she is knowledgable with respect to many of our staff out in the field. As I tour around and travel around, I see many examples of best practice that are already existing out there, some of which I mentioned in terms of family development response, family group conferencing, increased use of mediation.

We are looking to build on those — not to throw out many of the good things that we have but to build on those existing best practices to ensure there's consistency in the way in which we're meeting the needs of children and families.

[1515]

I do want to address the member's view with respect to this change being transformative. I actually happen to believe rather firmly that the only way this can be transformative, in terms of getting at the very day-to-day practices of our social worker staff and others, is if this is incremental and this is subtle and if we take the time to ensure that they're receiving the appropriate training, that we're doing the appropriate research and that we're involving them in the work of the development.

To that end, we do have five sites. They are not pilots. I want to emphasize that. They are initial implementation sites, the difference being that pilots, of course, are things you test out, and if they don't work, they end. These are initial implementation sites. I'll give the list of them. There's Dawson Creek, South Okanagan, Fraser Valley Youth, Vancouver Youth Services and Nanaimo Youth Services.

What's occurring there is that the training they are undergoing right now will be completed by the end of June. They will begin implementation around the end of this summer. This involves, right now, about 300 staff of ours and also contracted agency staff. There is evaluation built in right from the beginning through our integrated quality assurance team.

I should also say, with respect to CAPP, there is a CAPP description that will be out in the next couple of months. So one can expect to see, as we begin the training component and the initial implementation, many more concrete examples of what is occurring in the field. But again, I want to emphasize that it is my firm belief that if this is going to be truly transformative, we must take the appropriate time to have this involve all of the staff who will be affected.

M. Karagianis: The minister actually touched on a couple of issues here. The issue of transformation — that was the promise of your government. I'm simply following the language of what was promised here, and if that's changed, that's fine. Building on existing practices — that's, of course, completely different than a fundamental practice change. It's building on existing practice and services, which is a considerably different promise than what the government made in 2006.

We're four years in on this process. The minister said that it is subtle. It is going to take, presumably, much more time to implement.

The issue here of pilot sites…. It was my understanding in my original briefings that these sites were not initial implementation sites, which I think the minister has called them now.

In fact, how do we know that this process is effective? What are the performance measures? If we haven't piloted this — we're simply implementing this now, in these sites — how is this evaluation being done on whether or not this new approach, this new practice framework, is effective, is better than the previous system or is working?

The minister talked about the CAPP description that would be coming in the future. Why would that not
[ Page 5009 ]
be leading the process? If in fact that is the premise on which the system is changing the way they conduct practice, why would that not be the first thing that came about — a description of that?

Perhaps the minister can talk about that. She did also mention here that the training is underway right now, to be finished in June, so I'd like to ask a little bit more about the training. I'd like to know, in the process of this training, who is delivering the training. What are the costs for this training? What training materials are available, obviously, to these five sites where this process is underway? In fact, are those training materials available to view by others, including myself?

[1520]

Hon. M. Polak: I first want to make very clear that I reject the position of the member that transformation would have to involve leaving behind best practices. Transformation, in fact, is best accomplished when one works closely with an entire organization to determine where there are pockets of best practices and then seeks to support those.

In fact, in the past many of the difficulties and challenges faced by the ministry as a result of major restructuring — in my view and in the view of many others, such as Ted Hughes — resulted from the fact that rather than there being a developmental approach to change, there was instead a top-down, often crisis-driven response that resulted in change that was not effective.

I want to emphasize my belief and the belief of the social workers with whom I work and the belief of my senior staff that in order to successfully transform this ministry, which is extremely large and extremely complex, we have to take the time that is appropriate. We must make sure that we do not toss out best practices that currently exist.

Certainly, it is important to ensure that those things upon which we embark are adequately researched. I would draw the member's attention to a binder — I think about five inches tall — full of the national, international and local research that was conducted in advance of this work, which has been provided to the Select Standing Committee on Children and Youth.

My reference to CAPP did not…. I apologize if I was not clear. The CAPP document will be available publicly in a couple of months. It is already what we are utilizing for the purposes of training.

With respect to the training, we have a ministry that employs approximately 4,300 people across a very complex system, so this training will be ongoing over a number of years. It does not utilize discrete resources; it utilizes those internal resources that we always use for ongoing training, for professional development, etc.

With respect to that, there is no specific change as we go through this implementation around how we fund training. That is something that is always ongoing within our ministry.

[1525]

M. Karagianis: I think the minister misinterpreted my comments. The transformation that was promised by the current government had nothing to do with best practice. I'm talking about what we currently do and have done in the way of delivering children and family services versus this new fundamental transformation that we were promised.

If that's changed — and really what I'm looking for here is just a verification — and it's now become something that's building on existing practices, if it's no longer a huge transformation or, as I think the deputy in presenting this to the child and youth committee called it, a critical mass of change….

If that's no longer happening and we are simply building upon the practices and the current way of delivering services in the Children and Families Ministry and making subtle changes, that's fine. I accept that. But that's been four years in the process, and I hoped we'd have been further along than this at this point.

This issue in the reference that the minister makes to research…. I did get a five-inch binder of research. It was really a compilation of the kind of service provision of other jurisdictions, and I appreciate that. It laid out very clearly how these kinds of services are delivered in other provinces, but it didn't lead me in any way to understand the CAPP process and how what's happening in other provinces has in fact informed that.

The CAPP document that the minister refers to…. She said it is there. There is a description. It's just not public at this point. I would like to know what that is. I do have a diagram here that is not, to me, any kind of descriptive document or description in full of what this practice change is and what this actual CAPP is in a meaningful way. So I would like perhaps a little bit more clarification on that.

I would like to talk a little bit more about this training — the qualifications of the training process of the trainers and, again, the training materials, the actual training curriculum. Is that available? And can the minister just elaborate on what the costs are of this training process that's underway as well?

[1530]

Hon. M. Polak: Nothing has changed with respect to our commitment to transformation. Including the retention of best practices is always the right way to achieve transformation.

I also take issue with the member's reference to "just building on past practices." We are incorporating best practices. We are also ensuring that those who are not engaged in best practices are trained to do so. I would have to argue that with respect to the monumental
[ Page 5010 ]
nature of this change in practice in our ministry, the difference between splitting up a family and keeping a family together is, I would submit, very transformative. That is exactly the kind of goal that we set for ourselves as a ministry.

[J. McIntyre in the chair.]

With respect to the training that's taking place, the curriculum is broken down into modules, some of which take a few hours and some of which take a few days. Those modules are delivered, depending on the person's skill set, by various individuals amongst our senior staff, including the deputy minister.

I want to add, though, that I think we ought to recognize that if we were professionals and practitioners in the field, to learn and understand completely what practice change entails would take us a number of days, perhaps even a number of months.

The idea that we are going to somehow be able to fully canvass the details of what is essentially practice in the limited hours we have in estimates is, I think, not a wise use of our time here. I would suggest that the detailed manner in which this is taken on is not particularly useful to be dealing with in estimates.

M. Karagianis: I appreciate the minister's comments. Nonetheless, this is a four-year process, which is eating through most of the ministry's budget in realigning what the minister has called here…. Now we're back to transformation. It is a transformation. I would say that perhaps the minister is confusing "past practice" and "best practice" terms, which are two entirely different things. I have no issue with best practice. In fact, I think we would all want to see that be the general goal of all government ministries and all aspects of the service delivery.

I am talking, however, about four years of work transforming the service delivery from the past practice and the way things have been done to some future goal that still is, I will admit, a little bit vague and unclear to me. Does it involve new services? Is that in fact going to be part of the new holistic approach? Are there new services going to be available to families, which have been unavailable before?

I understand the minister has talked about new ways of perhaps assessing the needs of a child or family when they make contact with the ministry for whatever reason. But the array of services is in fact being diminished, not increased. Certainly, in the current budget they're being diminished. Where the CAPP program provides something new for families escapes me.

I would like to go back to the minister's comments about the training. Are these written documents? Is there something available that would demonstrate exactly what kind of training is being done and what the timeline is for this? In fact, perhaps the minister can talk about when this transformative exercise will be complete.

We have still not addressed, and the minister hasn't touched on, the cost for this training. Obviously, if we're talking about numbers of individuals, including the deputy minister, going out and doing the training, that's extraordinary to their current position. So either there are new people doing this work, or current individuals within the ministry are doing this work. What are the costs for that? What are the qualifications required each step of the way in order to assure that the training being done is following a prescripted training curriculum, and where is that curriculum?

I guess it's a complete package. What are people being trained to do? Who is training them to do that? What are the costs of that training process? Where is the written curriculum for the training? What is the timeline for this transformation exercise to be complete?

[1535]

Hon. M. Polak: Two things off the top. This is not eating through our budget. Secondly, services are not being diminished. We can talk about specific items if the member has questions, but those two points ought to be made very, very clear.

The goal, as always with respect to practice change for us, is outlined in our operational plan: Strong, Safe and Supported. That's exactly what we want children to be within British Columbia.

[1540]

I might add that in terms of an overall vision for our ministry, rather than being the ministry that families fear may come and take their children, we intend to become the very first place that a family would think to call for help and support.

In terms of the costs of training, as I've said, there is no discrete line item for training. These are salaried employees, and with respect, the reason that the deputy minister is involved…. It's not extraneous in the least. That's one of the reasons that our deputy minister happens to have been employed by this ministry — because she is, in fact, one of the international experts in this field. We are very fortunate to have her involved.

With respect to how the training will unfold, there is already the first module complete. That deals with research and outcomes, and we can make that available to the member if she wishes. We are ensuring that we take the appropriate time. What will happen with respect to timelines…. We anticipate this particular round of training with the five initial implementation sites will be completed by the end of June. They will begin implementation at the end of this summer.

As we approach the end of each phase of this work, we will then allow that to inform how we proceed with the next one. So we will ask ourselves questions such
[ Page 5011 ]
as: "Did we take the appropriate amount of time? What can we learn from this training session? Should there be more time spent on certain areas?" We are committed to ensuring that we take as much time as is necessary so that our staff in all areas of the province are able to provide the very best possible service.

I just want to emphasize how consistent that is with what we were directed to consider after the report of Justice Hughes — that this must not be a case where the ministry lurches from crisis to crisis in terms of remodelling itself but rather takes a very circ*mspect approach to considering the best of research, considering the way in which we approach the support of our staff, and ensuring they receive the ample training and support to move forward with all of this. We are not in a mind to hurry this for the sake of hurrying it.

M. Karagianis: The minister talked about services. I'm sure we'll canvass that in these estimates before we're done, so I'll leave that topic for the moment.

I do want to understand, again…. The minister didn't answer my question about where any written documentation is on this training module. In fact, I would say, given the vast size of the document I was given, which was to be the evidence for this…. There is nothing in there that addressed in any way the CAPP — where it came from, where any documentation is of that style of practice being implemented, where evaluations of where it has been implemented in other jurisdictions and how it's worked, and where the evidence coming out of that is that has informed the decision to use that style of approach here.

That wasn't included in the large binder I had. I was going to actually bring it, but it was pretty heavy to carry. I certainly would be happy to bring that in if we think it's germane to my questions here. I'd like to know a little bit more about where I can find the evidence of that — the CAPP program and where it's implemented in the past and the documentation of that.

I do know that the Strong, Safe and Supported, much like some of the other material I've got, has not got any real hard evidence about how any of this plays out on the front lines or how it will be evaluated. Frankly, because so many of the performance measures are now being dropped, it's going to be hard to even follow through and see the performance evaluation proof of this.

Again, I would like to just ask the minister if she could give me a bit more clarity on the training module, on the CAPP itself, and where I might find the evidence of its use, success and performance and evaluation information.

[1545]

Hon. M. Polak: As I said, the curriculum module is available, and we can make it available to the member. No problem with that. I'm not sure what she means by saying I did not answer her question with respect to that.

With respect to the evidence, I happen to see the evidence differently than the member does. It certainly is a large body of evidence. It encompasses local, national and international research, and it was the basis upon which the design of our transformation plan has taken shape.

I must also point out to the member that we have not dropped a single performance measure. In fact, this year we have added a number of new ones. Again, though, I don't intend to get into a detailed discussion of what practice change entails because I am not a practitioner; nor is the member opposite. I think we would be finding it much more productive to confine our discussion to those topics that are germane to estimates.

M. Karagianis: I'm surprised that the minister doesn't want to answer these questions. Given the amount of resources within this ministry that have gone to this very process, I am, in fact, really surprised that the minister is at this point saying, "I don't want to answer any questions with this," that this is not germane. In fact, I think it is the most germane topic here when we talk about the budget.

Everything within this service plan talks about this new approach, this change in how the ministry delivers services. Everything in the document Strong, Safe and Supported…. Everything in here is about this new way of doing business, and so it would seem to me that the budget and the estimates process here are all about this.

I would like to, then, if the minister doesn't want to answer some of these questions…. I would like to see the curriculum module information, but I didn't see anything in the binder of evidence that I received. I saw a list, a compilation of how service is delivered in Alberta, how it's delivered in Ontario, how it's delivered in a bunch of other provinces, but I don't see how that ties into this CAPP, unless the minister can provide me with more clarity on this.

I simply do not see in any of the documents I've been given here on CAPP where it plays in. Are we simply copying another province? Is that what we're doing? We're copying Ontario's, or are we copying Alberta's, or are we taking an amalgam of those? If that's true, then why do we need international expertise here if we're just copying other provinces?

The minister hasn't clarified for me in any way what the CAPP is, where it came from, what its genesis is. If it in fact is going to inform the way the ministry goes forward from the ground level right through every member of staff, then I think it's important that we do discuss it here and that the minister be able to explain it to me, because I'll tell you, no one else within the ministry seems to be able to explain it.
[ Page 5012 ]

Certainly, service providers in the front lines have no understanding of what it will actually be and do and the change that will impact them, the changes that will occur.

The minister said there is no cost to the training, but is there in fact an administrative cost for this transformation — contractors, travel, materials?

[1550]

There has to be some tangible evidence of something going on if there's all of this busywork going on. I would like to have more clarity on it because I do believe it speaks very strongly to the very essence of the ministry's budgets and the work of this ministry. So I think I deserve more clarity than I'm getting.

Hon. M. Polak: I am very excited about the potential this practice change has to alter the way in which we are able to provide services and supports for children and families. It's actually pretty exciting. But I am not a social worker. I'm not a practitioner, and the idea that we, in the few hours we have in estimates, would be able to describe in detail and come to a deep understanding of practice change — which takes practitioners days, many times, and months to understand — I think is bordering on the ridiculous.

With respect to the research that was provided, no, we are not copying other provinces, countries, localities. What we are doing is utilizing the evidence to inform the development of the practices that will be put into place in British Columbia.

There is no specific budget for transformation because it is about practice. Practice is what we do each and every day. The ministry does have a training budget of $2.835 million. That will pay for any training costs that are related to CAPP. In terms of ministry staff trainers, those costs are already paid out of our existing salary budget.

M. Karagianis: So the training budget is the current training budget for all aspects of training across ministry, not just for this CAPP program. Can the minister tell us, then, how much of this budget is going towards the CAPP training? How much of this is being used for that process versus how much is being offered for other forms of training that are ongoing? If this is a brand-new program being introduced here in British Columbia, this CAPP program, then surely we'd be able to sort of break away previous training opportunities from this training opportunity.

I would like to also ask, if I may…. We'll move into a little bit more about the implementation sites, which we're no longer calling pilots but are implementation sites. How were they chosen? How are they being evaluated before further sites are trained? What's the timeline, then, for moving into more sites than the current five?

So there are a couple of questions in there, again, with the expectation that we'll try and get as much of this clarified as possible before we're disrupted in any way here.

[1555]

I do want to go back to this idea that this CAPP program…. So the minister talked about how we're not borrowing from other provinces, but we are somehow using some of the evidence from other provinces or other jurisdictions to, I guess, inform this CAPP program as it's being developed.

How could it, then, be in writing? The descriptor around what CAPP is and the evidence that's been used or the practice that's been used elsewhere to inform this — can the minister talk about where that came from? Is it primarily from other provinces?

Can we look to Ontario's way of delivering services for their children and families ministry? Do we look there to see the bones, the flesh, the meat, part of the bones? Are we looking at 50 percent of their type of process combined with other things?

Can the minister just sort of flesh out a little bit more of this CAPP? I am trying to understand it in a very concrete way, and it still escapes me entirely what it is that has been developed here. What has given birth to this CAPP, and where did it come from? I think it's a fair question to ask.

Hon. M. Polak: There is no separate budget for training with respect to CAPP. We have a training budget. Perhaps the reason that the member would expect to find a particular training budget for that is the member's reference. She referred to CAPP as a program. It is not a program; it is a practice.

With respect to the pilot sites, as the member refers to them…. I'm sure those reading Hansard will note that I have not referred to pilot sites. Only the member has referred to pilot sites. These are initial implementation sites.

Insofar as how CAPP has been developed or many other features of practice change, granted there are elements in areas all around the world that will be similar to the types of practice that will ensue from this transformation in British Columbia. I can even point the member to, if she's interested, the topic of a strength-based developmental assessment. In fact, you can google it. There's a tremendous body of additional research available to show that this is, in fact, best practice being adopted around the world.

It is important to note that everything we do is a practice. With respect to CAPP, again, it is not a program. It is a practice.

[1600]

M. Karagianis: We'll call it a practice. That's fine. I don't mind calling it that at all.
[ Page 5013 ]

The minister talked about elements that are similar to elsewhere. Well, "similar to elsewhere" doesn't necessarily tell us what it is here in British Columbia, so again I would like to just drill down a little bit more. I'd like to walk away from this understanding what the CAPP program really is, what it is going to do, what fundamental difference it is going to make here in the system.

It's unfortunate if I'm not going to be able to understand that, but I did ask about the implementation sites, about how they were chosen, about what the evaluation criteria is for looking at…. As the implementation goes on, what is the evaluation of these sites, and then what is the plan for moving into more sites — when and how?

Hon. M. Polak: I know that the member would like to understand that. I do think, as I've said, that it is impossible for us to completely go over what practice change or CAPP entails in a setting such as estimates. I will say that as I have toured the north, Vancouver Coastal, the Interior, the Island, the Fraser Valley…. I'll tell you that the practitioners do understand it, and they're excited about it, and they're anxious to see this unfold.

In terms of the initial implementation sites, the regions made decisions with respect to which particular site would be most appropriate. We wanted to have one in each region of the province. They also then made selections based on having a range of different service needs represented in those sites. The evaluation process will be running parallel with this process, and as each phase is complete, the evaluation will be made public.

M. Karagianis: I would appreciate, then, I guess for my understanding of CAPP…. I do appreciate the minister's comments about the amount of time it might take to explain it, so a written description of it would be very helpful. I'm a good reader, and I can read through a high volume of information and absorb it quite quickly, so I'd be very happy if I could have that.

I know that the minister talked about being able to supply a training curriculum in writing, if I could have both of those. The written descriptor of CAPP can be as complex and detailed as you wish. I'm very happy to read through that until I understand that.

The minister talked about how each step of the way would kind of inform the next step in this process and, I guess, how it would be evaluated at each step as well. I'm guessing that that's what she's talking about — that each step of the way would inform how you proceed to the next step of this change.

[1605]

Perhaps the minister could just talk about how the evaluating of that would be done? How has the evaluation been done so far on the five implementation sites? What kind of evaluation timeline will there be? Where will the evidence be published on that, and how can we keep track of the process as it moves along?

Hon. M. Polak: As I said earlier, the CAPP document will be available publicly in a couple of months. The evaluation, with respect to the implementation sites, is a formative evaluation. When that site is complete, there is a reporting out with respect to the identified outcomes and whether or not those were reached.

Also, they will be reporting out on any challenges that were identified in the implementation to then allow us to incorporate that knowledge and make the appropriate course corrections as we move on to the next phase.

M. Karagianis: Are the evaluations going to be made public? If so, how, when and where are they going to be done? Where would I seek that information and find it, as time goes on? What's the timeline for that? Are they posted monthly, quarterly? What will be the timeline on that?

Then could the minister just elaborate a little bit more on where the next phase is of moving this implementation into other regions?

Lastly, I know that the minister said there's no cost for the training, but surely there must be some travel costs extraordinary to the normal ministry operations — for materials, for the deputy to travel or for other senior members of the leadership team to travel. Or is this all being done by osmosis? I mean, there must be physical travel and materials entailed in this at some point, and I don't see any kind of breakout within the ministry budget that tells me about where I can find those costs.

[1610]

Hon. M. Polak: Yes, the evaluations will be public. They'll be made available on the website at the completion of each one of them. With respect to time frame, though, this is another example of how things operate differently when we're dealing with practice as opposed to a program.

For example, we don't control, of course, how many children and families come through our doors, nor do we control the complexity or types of challenges that they may bring forward. So the evaluation and the implementation with respect to each site will vary.

Also, we will be producing that material, and the process will be complete when we have had sufficient data — when we have had sufficient numbers and sufficient types of situations that we've dealt with in order to ensure that that implementation and that training is entirely complete. So it will vary. But with respect to each phase, that will be made public.

Again though, that's a result of the fact that we are dealing with real people, real families. We need to ensure that we evaluate and proceed with implementation in accordance with the numbers of children and families and, as I say, the range of needs that they may present. It will vary with respect to each site, but they will be made public.
[ Page 5014 ]

There is no additional cost. Staff travel for training is quite minimal because the trainers are going to where the staff work. Any travel costs that are incurred by senior staff are part of their regular work already, so it's within our $2.8-million-plus training budget.

M. Karagianis: The minister talked about how the evaluation process will be driven by the number of families and children seeking service and the complexity of service. But I would say that there's a history here within the ministry, so there should be some expectation of workload.

I mean, we know that the number of children coming into care has a very predictable curve over the last 20 or 30 years within the province. I would have assumed that built into this process of CAPP, in determining how it is implemented, there would be a certain overlay and understanding of the expectation of the workload and the types of services.

Obviously, if you're going to look at a holistic way of delivering services, you must anticipate and have looked at the historical needs of children and families as they approach the ministry for services and the array of services that they have been accessing in order to determine that they have not been delivered in some way that now requires this transformative change.

Has that evaluation not been done? There should be an understanding and a matrix that clearly would outline expectations of what the process looks like. I'm actually a little bit disturbed by how still very undefined and unstructured the process is.

I would have anticipated that with the amount of work that's gone in, in four years, informed by the work in other jurisdictions, we wouldn't be quite so unstructured in our expectations of the future — that each thing will come as it comes and each change will be determined based on what's happened in the past. It seems to me still very, very unstructured.

[1615]

I do note from the presentation that I received from the minister and the deputy minister that at one point I did also have some questions then that were unanswered about moving resources, about how this will change how resources flow within the ministry. Obviously, we're moving resources around from current or past practice versus the new practice — the new way of practice, as the minister has cautioned me to call it.

How did those shifting resources affect the timelines of both this and the existing services? Obviously, as we move from one course of action to the other, there are implications on when services are devoted to the new framework versus the old way of doing business.

[The bells were rung.]

M. Karagianis: Perhaps we can take that up when we return.

The Chair: I'll recess Committee A for the vote, and we'll be back shortly.

The committee recessed from 4:16 p.m. to 4:25 p.m.

[J. McIntyre in the chair.]

The Chair: I'll just quickly call the committee back to order, and we'll resume where we left off. I believe the member had the last question.

Hon. M. Polak: I should just say, with respect to dates, that we aren't going to set an arbitrary date by which various components of this will be complete. That is not to say that it's not a very structured process. It is structured with respect to the elements that we know we need to provide for the professionals we're training.

But we recognize that in order to do this well, we have to recognize that we're working with individual people. We're working with assisting professionals in learning a new and different way of practising in their field, and as we proceed through various stages of the development of this, as we proceed through the training in the different sites, that too will inform how we proceed. That, too, will inform us with respect to exactly — I shouldn't say exactly — what numbers are sufficient for us to be able to accomplish various aspects of this.

Those are things that we will be monitoring in an ongoing way, and that's why we've established the quality assurance in a parallel process with this. But we are not going to attach ourselves to arbitrary dates because that truly is a recipe for failure in terms of implementing a transformation of this nature.

M. Karagianis: Can the minister, perhaps, then just answer for me…? I see from the previous map that I was given, this coloured sheet that I was given during the briefing, that it does talk about a very specific timeline here — that the CAPP practice description, in fact, was expected to be in the January time frame.

As the minister said, we're not going to see a description for some time, so that is obviously not being fulfilled on the timeline that was originally anticipated. Are there other things that have now been pushed back as a result of that?

One of the things that was anticipated as part of this, as well, is that new standards and policy would be written, and that was expected to have occurred in the February-March time period. So are there new standards and policies being written that reflect the CAPP practice approach?

[P. Pimm in the chair.]

Is there anything else on this timeline, then, that has changed significantly? If the description of the CAPP
[ Page 5015 ]
practice is not available, then obviously that pushes much of that work well beyond the timelines that I was previously given. Is there a new timeline framework here, a new timeline map that is available?

[1630]

Hon. M. Polak: I should just make clear with respect to CAPP that the CAPP documents are completed and available. That's how we've been doing the training, etc. They will be made public in the next couple of months. We can provide the member with an updated products map that has the various items that are complete or not complete.

In many cases we have items that have been completed in draft form, and yet we still are working on them to ensure that they're in a usable format and in fact are of the highest quality that we would like to see them. I don't want to leave the impression that if there isn't a completion of an item, no work has taken place.

In fact, there was one that was mentioned…. The IQA standards, for example, were completed in February, but they are in draft form. There's additional work we want to do with them, and we're not releasing items that are still in draft. We're trying to be very careful that a final product is a final product.

Again, as the member knows from when we discussed in the briefing, this product map is very interdependent in terms of the products that are represented there, and so very often one affects another. As we described in the briefing, we're ensuring that as we track, we make those course corrections as we go so that if something does need to take a little longer, we're going to take that time and ensure that we have a very high-quality final product.

M. Karagianis: I don't necessarily need a new product map, because it is not as informative as I would have hoped it had been. I'm going to be much more interested in seeing the CAPP, the actual description when that is made available, and looking in more depth at the training curriculum that the minister is going to make available.

It's my understanding that CAPP is being copyrighted, so who will be the holder of that copyright? Is that the government? Is it the minister? Is it the author of that? The deputy minister? Who actually holds that copyright, and what will be the benefits from that? Are there going to be any financial arrangements around the use of this or implementation of this? What are the implications of that, and who profits by that?

Hon. M. Polak: I'm advised that there's been no discussion of copyright and that, in fact, this is the first that we're hearing of it.

[1635]

M. Karagianis: So this CAPP will not be copyrighted. Is the minister saying that? There would be no opportunity to do that. There would be no move by either the government, the ministry, the author or the deputy minister to copyright this in any way. It is simply a practice framework that the government, then, owns the language, the description, the training modules and all of that.

It might be attractive to other provinces to adopt this program. How would they go about doing that? Is there a structured order to all of this that is worthwhile for other jurisdictions to look at or adopt or copy or purchase?

Hon. M. Polak: As with any other core policy documents of government, we would be happy to share those with others and would usually receive a citation for that, as we would do if we were to utilize the work of others in other jurisdictions. We are happy to do that. We don't have any plans to seek copyright.

M. Karagianis: I would like, then, to ask some questions here about the leadership team. Could the minister elaborate for me what the numbers are right now on that leadership team?

Hon. M. Polak: There are 27 in total. There are seven assistant deputy ministers, one deputy minister, one chief operating officer, five regional executive directors, five executive directors of practice — those are also regional positions — and six executive directors at the provincial level.

M. Karagianis: I didn't write down fast enough all of the various members that the minister outlined, so pardon me if I'm repetitive in any way.

Can the minister outline how many of the leadership team…? Are they all full-time? Are they all salaried, and what are the salaries for that leadership team?

[1640]

Hon. M. Polak: Those are all salaried, full-time positions. That's disclosed through public accounts. We can provide that list for you tomorrow. We do not have it here with us at this time.

M. Karagianis: I'd be happy to have that list. That would be terrific.

I'd also like to know travel costs to and from Victoria for any of those leadership teams, and if there are any special allowances for any members of the leadership team. I know that there has been a public inquiry about a living allowance for the deputy minister. Is that, in fact, still in place?

I'd like to then ask some questions about the multimedia conference room. Is that being used for meetings of the executive as well?

[1645]
[ Page 5016 ]

Hon. M. Polak: With respect to the conference room, it is used by the leadership team. It's also used extensively by other ministries. It's also used extensively by other outside agencies. It is used for training. It's used for other staff meetings within that building. We also, interestingly enough, made great use of it with respect to contract negotiations, because we were able to use the video conferencing capabilities of the room.

There is no special allowance for travel. In fact, our overall budget for travel has been reduced, in large measure because of our capacity for utilizing the video conferencing services of that conference room. That has made possible very many video conference meetings that otherwise would have resulted in travel.

I'm just now looking for the number to provide you with, with respect to the reduction for this year over last. I can tell you that our travel budget for 2010-2011 is $6.2 million. As soon as we have the other number, I will provide it. Last year's figure was $7 million, so it has come down substantially.

Sorry, I missed one other item. With respect to the deputy minister, I'm not going to discuss specific items dealing with a personal employment contract.

M. Karagianis: So the travel budget has gone down from $7 million last year to $6.2 million this year, yet the training expectations around CAPP are going to be very demanding. It's only implemented in five sites. It will be implemented elsewhere. There would appear to be much more training required to do that. How can the travel budget go down with this much training left to do?

I would ask: with regard to housing allowances, are there other housing allowances within personnel contracts that are being paid for by this ministry? Are they listed, then, in the public accounts, or where would I find that information? If there are any other extraordinary allowances being paid to individuals either on the leadership team or elsewhere, how would I find that?

Those are tax dollars. Respecting personnel contracts is one thing, but certainly when it comes to taxpayer-paid salaries and other special allowances, I believe that there is a requirement for disclosure on that.

So training is one, and housing allowance is the other.

Hon. M. Polak: As I've said before, one of the reasons that we are using our internal staff for the purposes of training is that that allows the trainers to travel to the worksites in the course of their ordinary duties, which means that we have been able to keep a very modest travel cost.

[1650]

Our travel budget for training, and that is with respect to practice change as well as all other types of training that may take place, this year is $450,000. That is included in the $6.2 million figure.

With respect to specifics around individual allowances, there are no special travel allowances, etc. With respect to what can be produced around an individual's personal employment contract, those are available through public accounts.

M. Karagianis: So if that information is available through public accounts, why would the minister not disclose now what kind of housing allowance the deputy minister is being given?

I appreciate the answers around travel.

Maybe again, with this idea of clustering questions as much as possible…. The leadership team, could the minister break down…. I know she listed off the various numbers, but in the course of trying to write them down, I missed some of the details. How many are responsible for child care, how many for aboriginal services, how many for child protection? Perhaps she could break it down in the child protection ones. Do they have specific duties around the quality assurance portion of the responsibilities and others — policy or operations, things like that?

[1655]

Hon. M. Polak: Before I go through the list, I'll just apologize for missing two people on my list. You may have noticed that in the list I gave you originally, I said there were 27. Those I listed off only actually added up to 25. I lost two people. The other two that I missed out are the executive director of aboriginal services, and that's David Stevenson, and the head of our public affairs bureau, and that's Kelly Gleeson. So that makes 27.

First of all, I should just advise that we are no longer organized according to program. You won't see that exactly reflected in terms of the question that was asked. We are much more integrated now, and so there are many positions that cross over. What I thought I would do is list off roles, and that should give you an idea of how they all flow.

We have a human resources director. We have a public affairs bureau head. We have the executive director of aboriginal services. We have an executive director of youth justice. We have our chief operating officer, who oversees matters of policy and legislation, and the deputy minister, of course. You're familiar with the role of the deputy minister.

Then we have an assistant deputy minister responsible for aboriginal services. We have an assistant deputy minister responsible for integrated quality assurance, an assistant deputy minister responsible for corporate management. Then we have four assistant deputy ministers who are responsible for child and family development.

We also have five directors of integrated practice, which I think is self-explanatory. We also have five regional executive directors who represent the five regions. Then we have a chief information officer, a chief
[ Page 5017 ]
financial officer and an executive director of integrated policy.

M. Karagianis: One of the questions was about child care. I didn't hear child care in that list. The minister didn't elaborate either on the special allowances beyond salaries for a deputy minister or other members of the team. I'd like to know if there have been any salary increases for any members of the team, including the PAB member.

[1700]

Hon. M. Polak: This perhaps will best illustrate the integrated way in which we work currently at that level. We have an integrated policy management which includes child care. We have integrated quality assurance; it includes child care. We are having senior leadership work in an integrated way, and therefore, we don't have a specific person who would be responsible, for example, for policy in the child care area or for quality assurance in the child care area.

With respect to salary increases, there have been no salary increases. In some cases there have been promotions where somebody has taken on and been promoted to a new role, and as would be expected, the new role may pay more than their previous role did. But we have not increased any salaries.

With respect to special allowances, there are no special allowances, with the exception of the deputy minister's housing allowance, which I think is well known to be approximately $2,000 a month. That is the only special allowance that we are aware of.

M. Karagianis: I was referring specifically to salary increases for the leadership team. Have any of those members been promoted in some way recently? And I would have to ask how decisions are made, then, if you have 27-plus individuals taking over the leadership and this integration, as the minister has referred to. So how are decisions made on critical issues?

Will the roles within this leadership team change when CAPP is fully in place? Will they become more integrated? Less integrated? Will there still be the need for such a vast number of people on this leadership team, or will that diminish as the CAPP is fully implemented?

[1705]

Hon. M. Polak: Some of the changes that have taken place in terms of promotions…. Our regional executive directors have been promoted. We have executive directors of practice, assistant deputy ministers of child and family development, and an assistant deputy minister of corporate management. Those are new positions.

[1710]

What we have done is this. While we've created some new positions at leadership, we have also done away with some other ones so that there is no net gain in the number of assistant deputy ministers.

With respect to the number of people around the table, there's a difference between…. The fact that we include a larger number of people around the decision-making table does not reflect a larger number of people at the provincial administrative level. We simply involve more of them around the table.

In many ministries the executive leadership team consists of the deputy minister and a very small number of assistant deputy ministers. In our ministry we have, in line with practice change, developed an integrated model that allows us to include those very many important people around the table who would not necessarily have been in the past.

We don't expect there to be a substantial…. Actually, we don't expect a change at all with respect to our structure at that level. We have purposely structured it in this way in order to support the shift in practice. How decisions are made is the same as any other ministry. Strategic decisions are made at the provincial level. Operational decisions are made at the regional and local level.

M. Karagianis: You don't anticipate that there will be any reduction in numbers, so this 27-person team is the body that will go forward, the leadership group that will go forward into the full implementation of this CAPP. But what happens in the case of complex decisions that have to be made? Are they considered strategic and, therefore, determined by government strategic direction?

With a team of 27 people around the table, it's pretty difficult to reach consensus with that group, so who actually makes the ultimate decision on complex issues and cases? I'll leave it at that and see if the minister can explain exactly how 27 people plus come to a decision on something really complex or complicated.

Hon. M. Polak: One of the benefits of having very experienced staff is that I can get a good example from them of how things used to be, and I'm advised that under the old way of doing things in the ministry, each individual who was responsible for an area would end up having to go and talk with each individual from another area, and it was very time-consuming. In many cases, it was very challenging to bring together a holistic view around a complex challenge.

It is not always possible to get consensus with respect to a complex matter, and those are occasions when, if it must be, the deputy minister will make a final decision, as would happen in any other ministry. But we find, and have found, that by involving a much broader group of people who have a much broader skill set, we are reaching better decisions. We are also able to incorporate the skill set that is represented by those individuals around the table.
[ Page 5018 ]

I do want to point out, though, so that there is no confusion, that cases themselves, individual cases, are never dealt with at that particular table. That is not the role of that table. Those decisions are made in the regions within their individual area.

[1715]

M. Karagianis: Is there any contract work that the leadership team engages in or has engaged in? And this may seem like a frivolous question, but I know that there has been past practice to purchase flowers and muffins and things for leadership team meetings. Is that still going on — meals, refreshments? Are there costs being expended for leadership team meetings on that? There will be a purpose to that question later on.

[H. Bloy in the chair.]

The contract work interests me very much — if there has been any, if there is any ongoing or any contemplated in the future.

[The bells were rung.]

The Chair: Committee A will recess five minutes for the vote.

The committee recessed from 5:16 p.m. to 5:28 p.m.

[H. Bloy in the chair.]

Hon. M. Polak: I'll do these in reverse order.

We don't do flowers, I understand from one of my staff members. He's upset that he missed them the first time around, I guess.

In any case, what we do, though, is provide for meals when there is a full-day meeting, for example, and they have a short lunch break. One of the reasons we do that is because staff that are provided with a meal in that way do not claim per diems when they're on a travel day. So that has been one way in which we have assisted in reducing the costs when staff are travelling.

But it's important to note, too, that all of our office expenses are down in all areas. All of those expenses are made within the standard policy for ministries around provision of meals, etc.

With respect to your first question around contracts, I was…. When you asked about that, were you asking whether or not our staff contract themselves out, or were you asking if we have contracts with others? I wasn't clear.

M. Karagianis: I'm actually specifically asking about contracts that you might undertake. I'm looking to see if there are any contracts currently underway with outside agencies or persons and if there are any anticipated in the future. So I'm just looking at costs for contracting out of any kind of information, collection, anything like that.

In particular, I know that Mr. Parfitt and Mr. Cook have done some contract work in the past. I wanted to know how much those contracts were. Are they ongoing? I didn't have some of the information — anything they'd produced — in my binder, so I wanted to know what their deliverables had been.

[1730]

Are they still ongoing? Are there more in the future? Just elaborate on that, or other contracts of a similar nature.

Hon. M. Polak: We are doing an awful lot more of that work in-house. As a result, our contract budget has been reduced to $3 million, and that includes training. All of the contracts are issued for ministry business. It was $12.9 million in '08-09.

We have also found $32 million in administrative savings in areas such as consultancy. In the coming budget years we will be looking for more.

M. Karagianis: That's a significant change — from $12.9 million down to $3 million. That's a big drop.

Now, the material that was produced in the particular contract that I mentioned…. How was that used, the $3 million that you're talking about? The previous contracts with Mr. Parfitt and Mr. Cook — maybe elaborate on those, how that information was used and whether or not this $3 million….

You talked about it also being for training. Perhaps the minister could elaborate a little bit more on that, because it was my understanding there were no new training dollars beyond the…. I would have to look to see what the minister had originally quoted me; $4.2 million comes to mind, but I could be wrong.

Previously, the minister had talked about…. Sorry — $6.2 million. I would like to know: is this $3 million extraneous to that, part of that? Perhaps the minister could just talk about what that might entail in the way of contracts as well.

[1735]

Hon. M. Polak: With respect to the contracts with Mr. Parfitt and Mr. Cook, we did have those in budget binders in previous years, but that information is archived now. It isn't recent enough. We can provide that information to you, but we don't have it with us.

With respect to the $3 million figure, I've just checked back. Training was the $2.8 million figure. The $3 million reflects our cost for contracts. Some of those contracts will be related to training but not all of them.

In addition to that, the $2.8 million, which is a training cost, includes some things that are contracts, but it also includes things such as travel, curriculum development, child and youth mental health clinician training.
[ Page 5019 ]
So while there is crossover between those two budget items, they are not added one to the other.

M. Karagianis: How would I, then, understand the breakdown between the $2.8 million training budget that includes all cross-ministerial training, but some portion of it is for the CAPP, and the $3 million that the minister talks about under contracted work? What portion of that has to do with CAPP, and how do I align the two?

Is there a total amount of both internal and external dollars that are going towards the CAPP training? The minister did say part of this $3 million is for contracted training. Is that to do with CAPP or something else? And is that the total? The $3 million is just for that — training — and not for any other kind of contracted work?

Hon. M. Polak: Of the $3 million allotted for contracts, none of that is related to CAPP. We can provide a breakdown in tables of both the $2.8 million and the $3 million. We don't have that detailed a breakdown with us, but we can provide that to you.

M. Karagianis: Then the $3 million is for what kind of contractual training exactly?

Then I would ask another question that came out of…. This applies to the line of questioning I've been on, because one of the things that I did take away from the briefing I had with the minister and the deputy minister was that resources will align with changes in management structure. That may have been in reference to this leadership team or perhaps other changes.

I'd like to know how the resources will align with changes in management. What exactly does that mean, and what kind of resources are we talking?

[1740]

Hon. M. Polak: Just to be clear, the $3 million that we spoke about was in answer to the question about contracts, so that is the budget for contracts. The $2.8 million is the budget for training. As I said, some of that is contract, some of that is travel, some of that is curriculum development, and it is in all areas of training.

With respect to the $3 million, though…. Included in that $3 million for contracts is…. Some of those contracts relate to training, but they are not related to CAPP. We have many other areas of training that occur within the ministry.

In terms of aligning resources, it's not just with respect to management and how we might structure ourselves; it's with respect to the entire ministry. Again, this goes to changing to reflect the philosophy that goes along with practice change as represented in Strong, Safe and Supported.

For example, we are moving from a model where our resources were aligned along program lines to one in which we are aligned according to the pillars in Strong, Safe and Supported — aligned according to our priorities, which are prevention, early intervention, individual assessment and planning, aboriginal services and integrated quality assurance. That is the shift that we are making in terms of how we make our budget allocations.

M. Karagianis: The $3 million in contracted training. Perhaps the minister could just elaborate a little bit on what that would be so there's no confusion about it, because it's a significant drop from the $12.9 million previously to $3 million. I'd be very interested to see what significant change that makes in those contracted services. If it's strictly training, the $3 million, I'd like to just know a bit more detailed breakdown of that.

With regard to the resources realigning themselves to the management structure, does that mean that there will be new services? If the minister is talking about the various areas in this Strong, Safe and Supported, does that mean that many of the existing programs and services are being removed or cancelled or will disappear and that new programs, new services, are going to be created in order to meet the goals that have been outlined here?

What physically will take place with regard to service provision to meet the goals that the minister has outlined here in this Strong, Safe and Supported document? Certainly, it would be alarming if, as part of this holistic response that the minister has talked about in providing services to families that contact the ministry for whatever reason, services change dramatically.

[1745]

Right now there are lots of services being cut back. The minister has been quite forthright with the initial $10 million cut to services, which has now been reduced to $7.4 million. While you're reducing services, I would like to know how the minister expects to meet the goals of this document and provide the level of support that is indicated in the language of CAPP, if not in any real details of how that's going to work on the front lines.

Hon. M. Polak: The $3 million is not just for contracted services related to training. It includes things such as consultancies. It includes international social services. It includes child death reviews and amounts we might need to outlay for that. But as I said, we can provide a complete table that lists all of those out.

[1750]

I should also note that it is a significant drop from the $12 million to the $3 million, but it is not unique. It's something that all ministries were directed to do and that all ministries have done — to take a serious look at reducing their contracted services.

With respect to….

[The bells were rung.]
[ Page 5020 ]

Hon. M. Polak: Well, I'll cover that part of the question after the vote.

The Chair: Committee A will stand recessed until after the vote.

The committee recessed from 5:51 p.m. to 5:59 p.m.

[H. Bloy in the chair.]

Hon. M. Polak: Continuing on with the previous answer — yes, we are making changes that will redirect to, in some cases, new programs. That kind of decision-making, though, grows from a desire to respond to the needs of the community as they change and also to recognize that we have a very large population of aboriginal people who are not currently served as well as they could be. We recognize that.

[1800]

For example, we will be beginning a new dedicated sexual abuse intervention program specifically for aboriginal people. Another new program in play is a new aboriginal parenting program. So those are two examples.

With respect to the reductions in our contracted agency's budget, I'm happy to inform the member that, in fact, we've managed to reduce the amount by which we will have to reduce that $825-some-odd million. We had been working with a $7.4 million target, as the member knows, and I was advised today that we have now been able to bring that number down to $5 million. That will be money that is reduced from the overall contracted agency's budget. A further $5 million, as we've spoken of before, will be redirected to provide increased and better services for aboriginal people.

Again, we are going to be making changes to programs. We're doing it in a very careful, thoughtful way with respect to the STOB 80 reductions. We have worked closely with the Federation of Community Social Services agencies.

With respect to the changes in terms of programming for aboriginal people, etc., again, we're working through this in a way that involves a community-based process and involves our agencies in making those decisions.

M. Karagianis: I'm very happy to hear that the cuts to agencies and social service providers have been diminished considerably. I expect we will canvass those later on in the estimates.

I did want to pursue a little bit further, though, part of this CAPP process and the questions we've been discussing here that relate to that and relate to staffing and the leadership team. The minister made reference to the Hughes report, and I'd like to just touch on that for a moment before I get into some discussion on integrated case management.

[J. Thornthwaite in the chair.]

Now, I know that initially when the Hughes report came out and a number of those recommendations were acted upon, there was $100 million initially allocated to take care of many of the recommendations and actions that came out of that. Could the minister let me know if any of that money is still unspent?

I know where some of it went. It was very obvious that some of it went into creating the representative's office and some of the cost coming out of that. Perhaps the minister could elaborate on where that money went. Is there still any left? Has some of that money been protected to fully implement all of the recommendations, and perhaps where are we in those recommendations? I know that we may canvass that at the Children and Youth Committee in the future, but I'd like to ask about that.

What evaluations may have been done on that spending, and how effective has it been in addressing all of the recommendations that came out of Ted Hughes' report?

[1805]

Hon. M. Polak: In 2006 — you're correct — the ministry received $100 million over three years to provide additional children's services, including the response to the Hughes recommendations and other external reviews of the child protection system, and for transformation of ministry services. That was broken down as $20 million in '06-07, $30 million in '07-08 and $50 million in '08-09.

In 2007 part of that funding was provided to establish the Office of the Representative for Children and Youth and for the Office of the Public Guardian and Trustee. The funding was provided again in 2008, with over a million dollar increase for the Office of the Public Guardian and Trustee.

With respect to Hughes' recommendations, the majority are implemented. The few that are underway and ongoing are that way because of the very nature of the recommendations themselves.

M. Karagianis: The minister neglected to say if there were any of those dollars left. I know you talked about this was to be for the Hughes recommendations and others. Maybe you could just repeat that for me into the record, just so I can get an understanding here without having to go back and read Hansard.

Are any of those dollars still protected? If, in fact, they are ongoing for some functions coming out of the Hughes recommendations, perhaps the minister could elaborate on what those might be and at what point that money might be either topped up or run out or…. You know, what would be the circ*mstances around those dollars from here forward?
[ Page 5021 ]

Hon. M. Polak: There is no money remaining. The other reports that I spoke of were related to, for example, another couple of reports from the child and youth officer that existed at the time. The finances that were provided were not just provided for Hughes. They were also provided for the ministry to meet the recommendations with respect to the other external reviews and also for the work of transformation and, as the member mentioned, the Representative for Children and Youth, as well as the Office of the Public Guardian and Trustee.

With respect to the Hughes recommendations, those are now a part of the everyday operations of the ministry, because they are fully implemented. Now that is all a part of our base budget in an ongoing way. There is no specific funding that would be topped up related to Hughes, as it is now a part of our day-to-day practice in the ministry.

M. Karagianis: I am going to move on to some other questions here related to the aboriginal framework. Now, I do note that that has not been provided. Under the CAPP presentation I received, I think there was a promise that the aboriginal transformation work was coming. I'd like to know what the timeline is on that.

And I'd like to ask a few questions about some of the transfer dollars that I have from public accounts, plus the future of that. And I have one other question.

[1810]

I know that the deputy minister's international skills in South Africa were primarily in the youth justice system. I'm just wondering if you could clarify for me what her qualifications are in the child welfare system and whether or not she has designated or delegated directorship under the CFCSA or any other credentials of that nature for child welfare.

So those two questions, and then I'd like to ask some questions about aboriginal transfers.

Hon. M. Polak: Actually, all of the deputy minister's approximately 30 years working with children and families was spent in the child welfare and child protection areas. She did oversee the changes related to youth justice under the Mandela government in South Africa, but that was not her area of expertise. She is qualified in the areas of social work, child and youth care and clinical psychology. She is not, however, delegated, nor has a directorship under the CFCSA.

M. Karagianis: Could the minister answer about where the aboriginal transformation work is and at what stage that is — when it will be delivered?

[1815]

Hon. M. Polak: In terms of aboriginal transformation, we have now completed the framework, which is our internal piece to guide staff with respect to their actions. We are now in a process where we are working government-to-government with First Nations and Métis as we develop the implementation. Also involved in that process will be the 24 delegated agencies.

This began four years ago, and it will continue, I'm sure, for a while longer yet. But it's important to note that our philosophy going forward is that it truly is the aboriginal people we are working with who are in charge of this process. We want to respond, to allow those people to develop and deliver those services based on their culture, their traditions.

So our framework piece is complete. It now remains for us to work government-to-government with those First Nations, Métis and develop the implementation plan according to what they wish to do.

M. Karagianis: I do have some concerns about the resources within the ministry being redirected away from some services and dedicated specifically to this one area. I noticed here from public accounts…. I have some pages from public accounts here, and I'd like to just ask some questions with regard to this.

I see that grants and allocations to First Nations communities have been considerable in the last year's public accounts. The All Nations Trust Company, Fraser Region Interim Aboriginal Authority got $250,000. The All Nations Trust Company, Vancouver Island region, got $816,000, almost $817,000.

A further public accounts line item here is for the Fraser Region Interim Aboriginal Authority, another $669,000. The Interior Métis Family and Child Services received $857,000, and a very, very small, tiny little community, Iskut Band Council, got almost $183,000.

Now, these were last year's transfers. Those are significant dollars, considering there has been very slow progress on this transformation and of the transfer to delegated authorities.

[1820]

Could the minister answer for me: is it anticipated that we will see the same volume of dollars this year, or will there be more in transfers and grants to communities as we move further into this process? This is aside from the resources being redirected away from other ministry services into aboriginal-focused services. So can we anticipate an additional volume of transfers above and beyond this or of equal amount to this?

Hon. M. Polak: We do anticipate that the volume of dollars will likely be the same or perhaps even a little more. It wouldn't likely be to the same agencies. Many, if not all, of these — I didn't write them all down fast enough — were related to the earlier move to aboriginal authorities, which no longer is in play. Nevertheless, because of the need in the community and because of the fact that addressing the gaps in service to aboriginal
[ Page 5022 ]
people is a priority for the ministry, we do anticipate that those amounts would remain the same and perhaps be a little more.

I should point out, though, that these amounts are for a range of different things — sometimes child welfare, sometimes operational and sometimes related to transformation, but any number of different activities.

[The bells were rung.]

The Chair: We'll recess until after the vote.

The committee recessed from 6:24 p.m. to 6:32 p.m.

[H. Bloy in the chair.]

M. Karagianis: Could the minister just elaborate a little bit on the criteria for distribution of the grants? I understand from her comments that the money that was reported out in public accounts was for a process that is no longer underway. But what is the criteria for distributing these grants, and what are the dollars used for?

I guess it's no good to revisit history. To say that these millions of dollars here that went to communities for a process that has not been successful…. I'd like to know what the criteria are, what the dollars are used for and what the anticipated grants will be in the future.

The minister just elaborated that they might be more than this. I'm not entirely sure that I've captured everything that was given away here. I didn't go through the hundreds of pages of public accounts, but these did come to my attention.

Perhaps the minister could elaborate a little bit more on what the grants are anticipated to be.

[1835]

Hon. M. Polak: These are not, in actual fact, grants. They are contracts that we have with different nations and agencies within them. The criteria or the process through which we would be signing these contracts occurs in this way. We receive proposals. We would receive a proposal, we would enter into consultation with that First Nation or Métis, and we would then, through that consultation process, develop jointly what the deliverables for that contract would be. After that, the contract is signed, and they report to us periodically — typically every year — with respect to the activities that they've been engaged in, as well as the outcomes that were agreed to.

[1840]

A good example of this — we could provide you with the documentation around it, because it is actually not only quite interesting, but it's also, I think, quite a success story — is the work we've been doing with treaty 8. They have now reached a place where they have conducted assessments around all their community. They have then structured a response that would be their way of designing what services ought to be put in place and how they ought to be put in place to meet the specific needs of their children and families.

Not only do you have the leadership in terms of treaty 8 involved in that, but they have organized themselves into community groups that then carry out much of the work. We can provide that example to you. It is quite astonishing — the progress that they have made.

M. Karagianis: I would ask one more question that could be answered tomorrow, noting the hour. I would ask if there's been any effort — given the sort of failed process around establishing aboriginal authority over their own child and family system — to train or build some of the appropriate credentials and skills and other resources into those communities so that there wouldn't be the same problems as what was encountered in the first attempt to do this.

Perhaps the minister can answer that in the morning.

Hon. M. Polak: I move that the committee rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 6:42 p.m.

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Hansard — Wednesday, April 28, 2010 p.m. — Volume 16, Number 3 (HTML) (2024)

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