With just a day to go before a suite of new rules come into force, uncertainty is mounting within the real estate sector.

I’ve previously asked the Minister of Finance (who is responsible for this file) on both May 10 and on May 16 whether or not she would consider stepping in to rectify numerous problems that have arisen from the impending ban on limited dual-agency transactions in this sector. The BC NDP inherited this problem from the BC Liberals’ “sledgehammer” approach to dealing with what was largely a Metro Vancouver issue. There are profound consequences for rural BC if this ban goes ahead.

As I note in the press release that we issued today, the rule changes are significant, and penalties for non-compliance are substantial, yet the implications and means of implementation of the new rules are still not well understood in the industry. Real estate professionals across B.C. are bringing forward stories about inaccurate and conflicting information, and inadequate training regarding these new rules.

It’s important that the Minister of Finance and the Office of the Superintendent of Real Estate to extend the timeline for implementation in order to ensure all realtors, and consumers, have access to the training and accurate information required for them to comply with the new rules.

Media Release

Weaver calls for an extension in timeline for real estate rule changes
For immediate release
14 June 2018

VICTORIA, B.C. – Today, in response to ongoing concerns expressed to him by realtors across B.C., Andrew Weaver is once more calling on the Minister of Finance and the Office of the Superintendent of Real Estate to extend the timeline for the introduction of the real estate rule changes.

“I have numerous concerns about the timeline for the implementation of the new rules for the real estate profession, due to come into effect tomorrow, June 15,” says Andrew Weaver, Leader of the B.C. Green Party.

“The rule changes are significant, and penalties for non-compliance are substantial, yet the implications and means of implementation of the new rules are still not well understood in the industry. Real estate professionals across B.C. are bringing forward stories about inaccurate and conflicting information, and inadequate training regarding these new rules.

“This state of affairs is not helping to protect consumers. I urge the Minister at this 11th hour to work with the Superintendent of Real Estate, to extend the timeline for implementation of these rule changes until the fall.

“Extending the timeline for implementation is essential in order to enable brokerages and boards across the industry the time to adapt to the changes and to undertake adequate education with agents, which, in turn, enables them to adequately serve consumers.”

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Media contact
Sarah Miller, Acting Press Secretary
+1 250-858-9891 | sarah.miller@leg.bc.ca

On January 29, 2017 I wrote to the Minister of Health urging him to make all British Columbians with Type 1 diabetes eligible for insulin pump coverage. A few years earlier, the BC government had already made an important decision to fund insulin pumps for British Columbians under the age of 25.

Such a new policy change would greatly increase the quality of treatment for thousands of people. Insulin pumps reduce the likelihood of serious medical complications which can include kidney failure, blindness and amputation. These complications are not only devastating to individuals and their families, they are also incredibly expensive for our health care system. Funding insulin pumps is a cost effective preventative policy that would increase accessibility of treatment and quality of life for thousands of British Columbians.

Today I am thrilled that the BC Government will extend coverage to all British Columbians effective July 3, 2018. Below I reproduce our press release in response to the government’s announcement.

Media Release

Andrew Weaver welcomes expansion of insulin pump coverage
For immediate release
June 12, 2018

VICTORIA, B.C. – “I welcome government’s announcement today to expand insulin pump coverage for all British Columbians requiring one to manage diabetes, eliminating age restrictions,” said Andrew Weaver, Leader of the B.C. Green Party.

“This technology can be life altering for those who deal with diabetes. I’ve heard stories from a number of constituents, all of whom outlined just how significantly their quality of life improved due to the technology.

“Insulin pumps are not only an effective tool for patients to manage a very dangerous disease, they’re also a preventative and cost effective measure for our healthcare. This is a forward thinking policy which will lead to better treatment of diabetes for many British Columbians.”

Andrew Weaver called on the previous government in 2017 to eliminate age restrictions and extend coverage for insulin pumps to all British Columbians with type 1 diabetes, not only those under age 25.

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Media contact
Sarah Miller, Acting Press Secretary
+1 250-858-9891 | sarah.miller@leg.bc.ca

This session I introduced a bill to enable BC companies to become benefit companies. Benefit companies pursue social and environmental benefits in addition to profit. Companies that take this triple bottom line approach are on the cutting edge of rethinking the role of business in the 21st century and helping us tackle our most pressing social and environmental issues. Government needs to support and encourage business to take on this role, and this bill is one way to do just this.

The proposed amendment to the Business Corporations Act will create a new Part 2.3 in the Act that enables companies to become benefit companies. These companies will have to meet certain requirements, including:

• Committing in their articles to operate in a socially responsible and environmentally sustainable manner, and to promote specific public benefits;
• The directors must act honestly and in good faith to pursue public benefits and consider the interests of persons affected by the company’s conduct
• Reporting publicly against an independent third party standard.

As part of the initiative to have BC adopt benefit company legislation, my office has written an open letter to Premier Horgan that we are encouraging business owners, employees, and individuals to sign. The text is reproduced below. To sign the letter and show your support for benefit company legislation, please go here.

Premier Horgan: Make BC the first jurisdiction in Canada to have benefit company legislation

The Honourable John Horgan
Legislature Buildings
501 Belleville Street
Victoria, BC
V8V 1X4

Dear Premier Horgan,

We strongly encourage you to pass benefit company legislation in BC.

This legislation would enable companies to incorporate as benefit companies with an explicit social or environmental benefit baked into their purpose through their articles.

Through adopting this legislation, BC could become a leader in supporting the innovative work of sustainable and responsible businesses.

This legislation would encourage the adoption of business forms that have an expanded social and environmental mission, and it would provide a legal framework that supports and protects businesses that choose to take on a broadened mandate.

This legislation would clarify the process of embedding a broader mandate within a company’s articles. It would provide certainty for investors and other stakeholders, looking to support mission-aligned companies, of the nature and the mandate of the company, and it would enable companies to attract capital while remaining true to their mission, even as they scale. Moreover, this legislation would provide a simple framework for companies to adhere to that is legally and commercially recognized.

Benefit company legislation has been passed in a number of other jurisdictions, including over 30 US states.

Through enacting this legislation, your government can play a significant role in better harnessing the power of business to help us, as a society, tackle the unprecedented challenges we face in the 21st century. We urge you to seize this opportunity.

Today in the BC Legislature I rose during estimate debates for the Office of the Premier to ask the premier how he plans to reconcile a new two to four train LNG facility in Kitimat with the province’s recently announced commitment to reduce greenhouse gas emissions by 40% from 2007 levels by 2030. This task will be particularly onerous in the event that new bottom-up methane fugitive emissions measuring techniques are introduced in the province.

Below I reproduce both the video and text of my exchange with the Premier. As I noted in an earlier post, I believe it isn’t possible to do so.

Video of Exchange

Text of Exchange

A. Weaver: I have three questions for the Premier, concerning government policies on LNG development. Let me please start by saying I’m extremely encouraged by the work underway on developing a truly visionary climate plan, and I’m fully committed to delivering on the opportunity that this minority government has — to finally put a plan together that understands that addressing climate change and meeting our greenhouse gas reduction targets is an economic imperative, yet also an economic opportunity.

This will require hard work, thoughtful and innovative solutions and the engagement of all British Columbians. What we must never again allow is for the stated commitments to reduce emissions to be used as a cover for actions that undermine that commitment. That is what we see playing out federally. I believe this government is sincere in its commitments to meeting its greenhouse gas reduction targets, but they have some work to do in showing how the action they have taken — advancing a major expansion of a fossil fuel industry like LNG — is in line with these commitments.

Please let me explore with you three questions. First, in May 2015, the B.C. Liberal government signed a development deal with Pacific NorthWest LNG, in an aggressive move to spur the Malaysian-led project to become the first major Canadian exporter of LNG.

In response, the Premier, who at the time was the Leader of the Official Opposition, was sharply critical and said the provincial government had put too much on the table for industry. I just want to provide a quote. He said this: “My biggest concern is that we are tying the hands of future governments because a desperate government made commitments that they overpromised on.” He said in Victoria: “And now they want to get a deal at any cost.”

The B.C. NDP argued that the agreements the B.C. Liberals were offering to LNG companies were too one-sided and did not provide sufficient certainty for the owners of the resource, the general public. The NDP at the time charged that this was “a sellout for B.C.,” and they said also: “The LNG tax legislation was written by industry and for industry.”

Hon. Chair, are we not similarly now offering LNG Canada a deal that has been written explicitly for them, while ignoring the costs that this project will incur on British Columbians, including the costs to other sectors of our economy that will be forced to pay to accommodate the massive increase in our greenhouse gas emissions?

Hon. J. Horgan: I thank the member for his participation in the estimates today. I know there will be a series of questions on this issue. It’s one that is of critical importance to him and his colleagues, and also to all British Columbians.

When we formed a government, we were approached by industries — mining, forestry and any number of industries — to find out what the new government’s plan was on taxation and what regulatory regime would be in place for a range of issues.

We established a framework for the LNG industry. The member will know — we talked about this during the election campaign — that we wanted to ensure there was going to be a return to taxpayers for the resource that belonged to them. Ministry of Finance officials worked on the development of the framework to ensure that there would be a benefit to British Columbia’s treasury as a result of any LNG development in British Columbia, and that’s what the framework is designed to do.

We also made a commitment to the public, and reinforced that when I was in Asia talking to potential proponents, that Indigenous participation and meeting our climate action objectives were integral to any approval by the province of British Columbia.

I know the member’s participation in the development of our climate action plan going forward will be absolutely pivotal to our success. I look forward to his interventions.

I just want to say that as we look at the potential of a final investment decision in the north, we want to make sure…. Industry has said to us — leaders of industry — that they welcome this type of private sector investment. I’ve said to them, as I know the member has, that if there’s an increase in emissions as a result of this sector growing, then that means there’s going to need to be a concurrent reduction and more so in other industrial activity. The business community understands that.

We need to make sure that as we develop the plan, in concert with our colleagues here in the Legislature, that we know that industry understands that we need to reduce emissions over time. If we’re going to have a net increase from one project, that means concurrent decreases from other sectors.

A. Weaver: A key reason why I want to ask this question, the previous one and the next two, is that the financial regime that this government has brought forward is described by the Premier’s government as a better deal than what the B.C. Liberals were offering. When this was brought forward earlier this year, it was reported: “The tax breaks would water down LNG taxes enacted by then Premier Christy Clark after the 2013 election. Instead of the provincial treasury receiving an estimated $28 billion in revenue over 40 years if LNG were built, B.C. would take in only $22 billion.”

Put another way, we’re offering a project that would become the single largest source of new greenhouse gas emissions in Canada at a $6 billion discount from what the previous government was willing to offer, not the least of which is also including a reduction in electricity rates, PST and exemptions on carbon tax increase.

Why are we going out of our way to offer a better deal than even the B.C. Liberals were willing to consider to bring an LNG industry to British Columbia, in spite of the commitments we have made to a real climate plan?

Hon. J. Horgan: I thank the member for his questions.

Firstly, I think we have to look back at the market for natural gas in North America and the precipitous drop-off in prices here for a commodity we have in abundance in the northeast.

When the former government put in place their LNG tax, they had an expectation of higher market prices, which would have led to potentially more revenues coming to the province. But as prices continued to be soft and demand continued to be flat, the prospect of an investment started to fall away. We saw proponent after proponent after proponent leaving the province because with the framework that was in place from the previous government, it wasn’t possible to realize a final investment decision.

Again, working with Finance officials, we took a look at what was possible with tax changes, a repealing of the B.C. Liberal LNG tax and bringing in a tax that would allow us to continue to get revenue to the Crown and also allow the project to proceed.

With respect to electricity, again, the B.C. Liberals created…. Again trying to squeeze more juice out of what was a declining prospect because of prices internationally, they created a new tariff for electricity. We agreed with the industry that if you’re a pulp mill or a mine or any other industrial activity, there’s a tariff that you pay, and that should be the same tariff for an LNG manufacturing plant.

What we have done when it comes to electricity prices is put in place an industrial tariff that exists for all industrial activity. I think that’s a fairness question. On the energy-intensive, trade-exposed industries, I know the member and I have had long discussions about this. He understands the issue very well. If we are going to have a successful climate action plan and a robust economy, we have to keep our energy-intensive, trade-exposed industries in a position of being able to be positive and also meet our climate objectives.

This is not going to be an easy challenge. The member knows that better than anyone else in this Legislature. It’s for that reason that I’m grateful that he’s on board to try and help square this circle. But the investment opportunity is significant. Upstream electrification will help reduce emissions from wellhead to water line. These were issues that we debated in this Legislature when the previous administration brought forward their ideas. I think we’re in a better position now to make the changes that we need.

We’re not focusing on one, two, three, four or ten LNG plants. It’s two trains and a community that is receptive and that has almost complete First Nations participation. I believe that if we work very hard on this, we’ll be able to see a final investment decision by what is a very diverse group of proponents from China, Japan, Korea and Royal Dutch Shell. I think the opportunity is a positive one, but the challenges are significant, and no one knows that better than the member for Oak Bay–Gordon Head.

A. Weaver: Thank you for the answer. I certainly hope government is looking to support from the B.C. Liberals for repealing the LNG Income Tax Act because the B.C. Greens have been quite clear that we will not support the repealing of the LNG Income Tax Act, in light of the fact that the deal that was given by the B.C. Liberals was a rich deal at best, and this rich deal is being made richer. I look forward to the debates ahead as the B.C. Liberals stand in support of government repealing the LNG Income Tax Act that they brought in.

In 2016, the NDP concluded that plans for the $11.4 billion terminal at Lulu Island would generate an unacceptable increase in the province’s greenhouse gas emissions and filed a definitive position against the project with the federal environmental authorities. “The project,” the NDP noted in their March 2016 letter to the Canadian Environmental Assessment Agency, “would increase the province’s entire carbon footprint for industry, transport and residential activity combined by 8.5 percent. The proposal failed to meet the condition of air, land and water protection with respect to both the threat to marine habitat and species as well as to climate, through unacceptable high and inadequately regulated gases, greenhouse gas emissions,” the letter stated. “Until and unless those deficiencies are addressed, we urge you to withhold final recommendation for the approval.” Those are the NDP words.

As was reported in Times Colonist at the time, the key reason the opposition was citing, greenhouse gas emissions, is an issue with all the big LNG plants that have been under consideration in B.C. for the past several years. If the B.C. NDP applies its Pacific NorthWest LNG reasoning to all other proposals, it’s hard to imagine a scenario where the party would support LNG in general. “Unacceptable high emissions cited by the letter are in fact lower than the emissions projected to arise from LNG Canada. According to Pembina’s analysis, LNG Canada would increase our emissions by 14 percent of 2015 levels.”

Furthermore, the same analysis projects that upstream emissions from LNG Canada will be comparable to those outlined as unacceptable in the Canadian Environmental Assessment Agency letter. LNG Canada is about five megatonnes of CO₂ equivalent a year. That’s for two trains — two then four. This would suggest the analysis that led the B.C. NDP to reject Pacific NorthWest LNG on climate grounds would equally, and more so, apply to LNG Canada. Again, I don’t have any philosophical objection to the LNG industry. LNG may be an important local transition fuel to meet our plans for commercial vehicles and other forms.

But what we can’t allow, and what I believe you were arguing yourself, hon. Premier, in the letter you filed with the Canadian Environmental Assessment Agency, was that the LNG industry cannot come at the expense of our commitments to reduce greenhouse gas emissions.

How does the Premier reconcile his strong opposition to Petronas with his support for LNG Canada? I don’t see how you can have it both ways.

Hon. J. Horgan: I thank the member for his question. Our analysis shows that the emission intensity of LNG Canada is significantly lower than the Petronas proposal or Pacific NorthWest LNG — 0.23 versus 0.15 in terms of with emission intensity. Also, LNG Canada proposes their upstream assets are largely in the Montney basin — the southern portion of the Montney basin — which will provide more opportunities for electrification to ensure that emissions at the wellhead are reduced so that the package from wellhead to waterline is significantly greater than the Petronas or the Pacific NorthWest LNG proposal.

I believe that new technologies that are proposed by LNG Canada also assist in reducing their profile, versus Pacific NorthWest LNG. The member will remember that the critical issue when it came to the Pacific NorthWest LNG issue was siting of the plant on Lelu Island, which was contested by the Lax Kw’alaams hereditary leadership as well as many very concerned about one of the most robust salmon rivers in North America at the mouth of the Skeena River. The putting at risk our wild salmon was a significant challenge that I believe Pacific NorthWest LNG wasn’t able to overcome.

When it comes to LNG Canada, they have the full support of the Haisla Nation. They have support virtually from Treaty 8 right through to Kitimat. The city of Kitimat is almost uniformly supportive. I believe that the fiscal framework we’ve put in place will allow a significant return to the people of British Columbia.

The challenge, as the member knows full well, is meeting our climate objectives. We’re going to need a lot of work by a lot of people to do that. Individuals are going to have to reduce their footprint. Industry is going to have to reduce their footprint to make space for this new emerging industry. But it will create significant employment growth, wealth for British Columbians and, I believe, will allow other jurisdictions to reduce their climate emissions by having a transition fuel in place.

I thank the member for his questions.

On Tuesday during budget estimates I had the opportunity to ask the Minister of Energy, Mines and Petroleum Resources a series of questions that quite clearly demonstrate the race for the bottom economics at play as BC continues to pursue an LNG industry. The exchange afforded me the opportunity to get on record the issues I raised earlier this year concerning the fact we are literally giving away a natural resource in order to blow through our greenhouse gas reduction targets.

I asked the Minister to explain the myriad natural gas royalty credit programs and to outline the aggregate amounts claimed under each program in recent years. I conclude with a  question regarding deep well royalty credits and the Minister reveals that as of December 31, 2017 there are $3.1 billion in unclaimed credits.

Below I reproduce the text and video of the exchange.

Text of Exchange

A. Weaver: I don’t need the minister to read it. I’ll go afterwards and make sure I follow up with the people I’ve been communicating with to get access to the exact quote.

I have a number of questions with respect to natural gas royalties. I’ve provided these to the minister in advance. There’s a clear theme in here. My first question is this. Would the minister please describe the clean infrastructure royalty credit program?

The Chair: Just before the proceedings continue, I’d like to read to the members the section of Standing Order 17A(1). “Electronic devices must not be used by a Member who is in possession of the floor, or during the following proceedings: (a) Speech from the Throne; (b) Royal Assent; (c) Prayers; (d) Oral Question Period; (e) Speaker’s rulings; (f) divisions; (g) at any other designated time pursuant to instructions by the Speaker.” So the relevant piece is that when the member has possession of the floor, an electronic device shouldn’t be used. Thank you, Members.

Hon. M. Mungall: I’ll answer the question in two parts, essentially. First, I’ll kind of speak to the broader concept, and then secondly, I’ll speak specifically to how this particular program works.

The broader concept around this is a tool that governments in many jurisdictions often use to incentivize, whether it’s individual behavior or industrial behavior, to change. This type of incentivization, using financial incentives as well, is often used, particularly when we want to change behaviors or practices to make them more environmentally friendly.

Just as a really quick example…. I don’t want to use all the member’s time in giving these examples. But when I was on city council in Nelson, we wanted people to start recycling more — a good environmental practice. So we made the payment of garbage…. To just dispose of things into the landfill, we charged everybody $1 for a garbage bag. But putting recycling into a blue bag that we were then going to start to pick up from door to door — we made that free.

In this type of scenario, what we’ve done is made a royalty credit program to incentivize industry to advance clean technologies and solutions for reducing greenhouse gas emissions specifically that are linked to the development and production of the oil and natural gas resources. That’s specifically what this program is, and that’s the concept behind it. It’s accomplished through a provincial royalty deduction of up to 50 percent for eligible products that are approved by the ministry.

So applicants are required to, first off, fund the entire project themselves and then make applications. Then the ministry determines whether or not they’re eligible, and then how much they might be eligible, for a royalty credit.

A. Weaver: I’m wondering if the minister could please provide me with information as to how much was claimed under this program in the aggregate sense for 2014, 2015, 2016, 2017 and what is projected for 2018?

Hon. M. Mungall: This would be our newest royalty credit program. It started in 2016. The first installment had approved royalty deductions of $10.7 million to successful applicants. To date, no amount has been released, as the projects have not yet been completed. So that $10.7 million has not been released and will only be released once the projects are actually completed.

The second installment for 2018 is currently underway. We’re thinking we might be looking at $19.3 million, which to us means that it’s showing greater interest in terms of taking opportunities to reduce greenhouse gas emissions and receive the benefits of doing that. The incentivization is working as we hoped it would be.

A. Weaver: In my view, this is…. It’s the first of many credits that I’ll allude to, discuss. The first one. In my view, government is giving natural gas companies a royalty credit to clean up their own pollution. Remarkable that this was done in 2016.

A second credit that I’m hoping the minister could describe — as opposed to the clean infrastructure royalty credit program, just the infrastructure royalty program…. Could she please describe that program for me? To ask the second question at the same time, what was claimed under this program in the last five years?

Hon. M. Mungall: The infrastructure royalty program has a different focus, obviously, than the previous credit program that we were talking about, the clean infrastructure royalty credit program. This is for infrastructure in general that industry may have not been incentivized on their own to develop. So there is a variety of infrastructure that goes with the industry. Rather than minimizing the type of infrastructure that can benefit the community, we want to maximize the infrastructure. So this is part of the purpose behind all of this.

In terms of the numbers for the last few fiscal years, in 2014-15, the following royalty deductions have been released, and that was $56.8 million; in 2015-16, $54 million; ’16-17, $28.6 million; and in 2017, $1844.4.

A. Weaver: I very much appreciate the thoughtful and thorough answer from the minister. This is a royalty program, as the minister meant, that can pay up to 50 percent of the costs of building roads and pipelines, for example.

One of the concerns, of course, I have and that I raised to the minister is that there are concerns arising from this in terms of the destruction of natural habitat, which creates costs to society and wildlife populations because of predator routes and lack of biodiversity that is not paid for. We’re in some sense, through this program, incentivizing the buildings of roads, and the taxpayer is on the hook to deal with any concomitant effects on wildlife and ungulate populations in the affected regions.

Next credit program. This is the third one. I’m wondering if the minister could please describe the low-productivity well royalty reduction production program.

Because I suspect we’re going to have a recess after this, if we might, at the same time, get the projected revenues that were claimed for 2014 through to now as well.

Hon. M. Mungall: What we’re trying to incentivize with this particular royalty program is the continuation of a well rather than an early shutdown. To explain this, I’ll do my best.

For example, a well will have a predicted 30-year lifespan, right? So you get to year 25, and there’s less gas in the well. Rather than have a company just shut it down, walk away and start up something new, we want to keep that production going so that we have the full lifespan of the well. So we want to incentivize them continuing the work. There’s less gas in that well at that time, so it’s going generate less revenue. Rather than get nothing and still have this well that is there but is not operating, we want to get something out of that well and get some kind of revenue for it as well.

This incentivizes them to continue that well until its full lifespan, to make sure that they’re paying people to go there, inspect it and maintain it appropriately. That’s the purpose of this. And I would argue the effects of that make sure that the wells we have continue their full lifespan, rather than a shorter lifespan and then that company saying, “Okay, we’re going to go start up a new well that’s going to generate more gas right away,” and therefore increase the number of wells that we have in a particular area.

The amount of money that was claimed under this program in 2013-14 was $6.4 million; in ’14-15, $6.2 million; in 2015-16, $2 million; and ’16-17, $1.8 million.

A. Weaver: The fourth royalty credit program I’d like to discuss. I’m wondering if the minister could please describe the marginal well royalty reduction program, as opposed to the low-productivity well royalty reduction program that we just discussed, and if she could please let us know what was claimed under the program in the same years.

Hon. M. Mungall: The marginal well royalty reduction program is very similar to the one that I was just talking about, which is the low-productivity well royalty reduction program, except that it’s not at the end of the lifespan of a well. Rather, what’s happened is that the operator has drilled the well, and not much is coming out. Specifically, the natural gas is coming out at a rate below 23 cubic metres of gas per day, per metre of well depth.

We can pull out our calculators and do the math on that, but the point is that it’s producing very, very low. The same purpose behind the previous royalty reduction program that I spoke of is behind this one as well. It’s so that we don’t have a company just walking away, but rather, we’re incentivizing them to maintain operations of that well so that the taxpayer and British Columbians are getting something in return for that well.

The numbers associated with that particular program. In 2013-14, it was $43 million; ’14-15 is $41.9 million; ’15-16 was $12 million; and in ’16-17, $13.1 million.

A. Weaver: The fifth royalty credit program I’d like to get some information is the ultramarginal well, as opposed to the marginal well royalty reduction program. I’m wondering if the minister could please describe the ultramarginal well royalty reduction program and also let us know what was claimed under this program over the last five years.

Hon. M. Mungall: I thank the member for this line of questioning, because it allows us to get into describing the various types of wells that we have in our gas fields and also to give definition to some of the lingo in the industry.

An ultramarginal well is, I guess, kind of your next step below a marginal well. It’s slightly different in the sense that what makes it ultra-marginal is that it’s a shallow gas well and it’s a single vertical drill. That’s what makes it distinct from the previous types of wells that we’ve been talking about.

What was claimed over the last few years — I’ll give those numbers to the member. In 2013-14, it was $23.5 million, and in 2014-15, it was $24.6 million. In 2015-16, $6.1 million, and in ’16-17, $5.9 million.

Do you mind if we have a quick recess?

A. Weaver: Not at all.

Hon. M. Mungall: Chair, would we be able to have just a five-minute recess?

The Chair: This committee stands in recess for ten minutes.

A. Weaver: Thank you to the minister for her comprehensive answers to these. We’ve discussed a number of credit programs that were designed to incentivize marginal or unproductive wells to keep them going.

Now I would like to move on to some other credit programs. The next one I was hoping the minister could describe is the net profit royalty program. Again, as per the previous ones, if she could let us know what was claimed under this program for the last five years.

Hon. M. Mungall: The net profit royalty program is all about, in terms of timing, when we anticipate a well to be profitable. If a well starts off, and it’s not producing as much as it will in the future, we want to make sure that that well is still developed and that we get the economic benefits of that eventually. The program allows producers to pay a lower royalty rate in the initial stages of a project in exchange for higher royalty rates once the producers have recovered their initial capital costs.

What was claimed under this program in previous years? For 2013-14, it was $16.4 million. In 2014-15, it was $19.1 million. Then in 2015-16, something good must have happened, because it was only $2.9 million and, in 2016-17, $2.3 million.

A. Weaver: My understanding is that it’s also used to promote the development of high-risk resources that would otherwise unlikely be developed — in some sense, taking risk out of the investment nature of the natural gas sector. Again, thank you for the answer.

The next credit program I’d like to get some information on — hon. Chair, through you to the minister — is: I’m wondering if she could describe the natural gas deep re-entry credit program and, once more, let us know what was claimed under this program in the years 2014, 2015, 2016 and 2017.

Hon. M. Mungall: Before I get the answer for the next question, I will say that I just checked, and yes, your understanding for high-risk activity is correct as well. Sorry I missed that.

This particular program is for wells that already exist, and it’s to incentivize companies drilling further down, drilling deeper. Rather than a new well and all of the impacts that are associated with a new well and a new pad, we would keep the existing well, and we would incentivize the company to drill deeper.

Wells receiving this credit are subject to either a 3 percent or a 6 percent minimum royalty. So they will be having to definitely pay some kind of royalty. The figures for this are released within the public accounts. For 2013-14, it was $261.9 million; in ’14-15, $486.8 million; in 2015-16, $171.7 million; and in 2016-17, $178.3 million.

A. Weaver: Again, I think the minister is seeing the direction I’m heading with this line of questioning. These are some very big numbers here as credits. I’m only on the seventh, with more to come, of royalty credit programs that exist.

The next one is my favourite, which is called the natural gas deep-well credit program. I’m wondering if the minister could please describe what the natural gas deep-well credit program is prior to 2014, and what that program is after April 1, 2014? What occurred in the transition on April 1, 2014?

Hon. M. Mungall: I’m just going to go back to the numbers that I shared with the member in my previous answer about the natural gas deep-well re-entry credit program.

A. Weaver: Were those the deep-well credits?

Hon. M. Mungall: They’re both. They are both the deep-well credits as well as the deep-well re-entry program. Sorry to say, but the Ministry of Finance doesn’t separate the two out. So that actually is the total for two different credit programs.

For the natural gas deep-well credit program, the issue here is less the incentivizing that I was speaking to in some of the previous wells, where we were trying to incentivize a very distinct behavior. That means that the company is already here. They’re dedicated to setting up, and this is the type of behaviours or practices that we want from them as they are beginning their activity.

This particular one is addressing our competitiveness on the global stage — making sure that B.C.’s upstream in the northeast is competitive on that global stage. What it does is it provides a royalty credit for wells, for deep wells specifically.

The member wants to know…. There was a change that was made on April 1, 2014, and he wants to know what the change was specifically. What it was is that this credit program was expanded to cover wells with a vertical depth of less than 1,900 metres. Prior that that, it was 1,900 metres or more.

That’s not to say that you can drill 1,500 metres, and — that’s it — you’re eligible. What it is, is that you can drill less than 1,900 metres, but you still need to keep drilling. You just go horizontally rather than straight vertically. So there is less depth, but there still needs to be length in terms of accessing the actual resource.

A. Weaver: I assume that the numbers that were claimed are the numbers that were given earlier for the…. I believe the minister’s nodding, so I won’t ask what the numbers for the deep-well are.

Essentially, what we’ve got, in summary of these credit programs…. In British Columbia here, we provide a credit for infrastructure construction. We provide a credit for cleaning up your pollution. We have a credit to ensure marginal, cost-ineffective wells are kept in production. We provide a credit, actually, for deep wells, and we provide a credit for horizontal fracking as well. In essence, we provide credits in all areas of our natural gas sector here to incentivize natural gas drilling. Oh, were that to be the case in other sectors of our economy.

With that said then, credits are important to actually incentivize — and I get that — emerging technologies and sectors. Let’s take a look — and perhaps the minister can help us through illustration — at some of the revenues we’ve been getting, then, from the natural gas sector. I’m wondering if the minister could please provide the net royalties received by the province of British Columbia for natural gas for each of the fiscal years from 2007 through 2017.

Hon. M. Mungall: I’ll start with 2007 and the fiscal year 2007-2008. The net royalties received were $1.132 billion. The following year, ’08-09, was $1.314 billion; ’09-10, $406 million; 2010-11 was $313 million; 2011-12, $339 million; 2012-13, $169 million; 2013-14, $445 million; 2014-15, $493 million; 2015-16, $139 million; and 2016-17, $152 million.

A. Weaver: Thank you. I very much appreciate those answers. In essence, in summary, in 2009, we were at a high of $1.3 billion in royalties coming to the province of British Columbia. And in fiscal year ending 2017, were $152 million — almost ten times less.

The next question then is in the area of how much natural gas we have produced. I’m wondering if the minister could please let us know what the net production of natural gas in the province of British Columbia was in thousands of cubic metres for each of the fiscal years 2007 through to 2017.

Hon. M. Mungall: These are all in cubic metres. For 2007-2008, we have 27,084,782 cubic metres.

A. Weaver: Say that again.

Hon. M. Mungall: It’s 27 million. If the member wants, I can just round it out to the million rather than giving the entire number. If he likes, for the full detail right down to the last cubic metre, I’m happy to provide that in writing.

For 2008-2009, it was 28 million; 2009-2010, we’re at 27.6 million; 2010-2011, 31 million; 2011-2012, 36.5 million; 2012-2013, 35.8 million; 2013-2014, 39 million; 2014-2015, 42.5 million. And the last year that we have the available numbers is 2015-2016, at 44.7 million.

A. Weaver: I’ll have to get under…. Those numbers differ from the numbers that I have, being 32 million in 2007, 33 million in 2008, 33 million in 2009, 35 million in 2010, 41 million in 2011, 41 million in 2012, 44.5 million in 2013, 47 million in 2014, 49 million in 2015, 51 million in 2016 and 51.5 million in 2017. Hopefully we can, I can, reconcile where our differing sources are from, down the road.

The point here is that we’ve had close to a 50 percent increase in production over the last decade or so, at a time when in fact royalties have gone from $1.3 billion to $152 million.

My second-last question in this line of questioning is this. I’m wondering if the minister could please let us know what the net royalty per thousand cubic metres of natural gas produced in the province of British Columbia is for the fiscal years 2007 through 2017.

Hon. M. Mungall: I’ll answer this question, and then I think we’re going to have to wrap up for the day, if that works for the member. He has one more? Okay.

For B.C., the net royalty per 1,000 cubic metres for natural gas in 2007-08 was $40.45. I’ll do the same as I did before. I’ll round up or down, using those grade-school math skills.

In 2008-09, it was $45. In ’09-10, it was $14. In 2010-11, it was $10. In 2011-12, it was $9. In 2012-13, it was $4 — closer to $5, pardon me. In 2013-14, it was $11. In 2014-15, it was closer to $12; it was just $11.55. And then in 2015-16, it was $3. In 2016-17, it was $3.

This type of increase and decrease situation — if you look at Alberta numbers, it’s very similar. For example, in 2007-2008, the net royalty per thousand cubic metres was $38.30. Then, fast forward nine years into the future to 2016-17, it was $4.93. The reason why you see this, is that the royalties are not based necessarily on the volume of gas being extracted; it’s based on the price. And the price of gas is determined by the marketplace. So what we have here is that the price of gas was quite high in 2007-08, 2008-09 fiscal years, and it has come down quite substantially.

What I’d like to do for the member here, so that he has this information, is I’d just like to table this so that he can access it. Am I able to table in budget estimates?

D. Routley (Chair): I would ask you to share it informally. To properly table, we would have to do it in the main chamber.

Hon. M. Mungall: Okay. No problem. I’ll do that. Great. I’ll just hand that to the member opposite so that he has that as well.

A. Weaver: I do appreciate the response. We had slightly different numbers, from my calculations — again, based on the natural gas production estimates and the source of values — versus the sources you’ve got there.

The bottom line here is the net royalties, in using the government’s numbers, were $45 for every thousand cubic metres produced in B.C., and now it’s $3, despite a 50 percent increase in natural gas production over that same time. This is race-for-the-bottom economics at its finest.

My final question is this: what is the total accumulated and outstanding natural gas deep-well credits available to companies in British Columbia? When I asked this question in the fall, it was something of the order of $3.2 billion. I’m wondering what that number is now.

The Chair: Minister, and noting the hour.

Hon. M. Mungall: Absolutely, Chair.

The total outstanding deep-well royalty credits since the inception of the program as of December 2017, are estimated at $3.1 billion. Now, this includes all credits for all wells, whether or not they’re in production. So that’s what we have.

I just want to make sure that the public knows that a company can’t come up and say, “I have all these credits; pay me out,” and somehow they’re walking away with a bag full of money. That’s not how it works at all. They’re able to use their credits to reduce their royalties down to a 3 percent or 6 percent rate. They still have to pay royalties.

Noting the hour, I move that the committee rise, report completion of the resolutions of the Ministry of Advanced Education, Skills and Training and report progress on the Ministry of Energy, Mines and Petroleum Resources and ask leave to sit again.

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