As noted earlier, today in the Legislature we were in Committee Stage for Bill 2: Budget Measures Implementation Act 2017. This is a bill that implements the various initiatives discussed in the BC government’s most recent budget update.

One of the sections in the Bill dealt with shutting down the International Business Activity Program. I took this issue very seriously as I was concerned about the unforeseen or unintended consequences of cutting this program. Prior to speaking to the amendment I sought two briefings on this particular section of the bill from staff within the Finance ministry. The evidence I gathered informed the decision I ultimately made.

Below I provide the rationale for my support in eliminating this program.

I also append in the text below an exchange I had with Shirley Bond, the MLA for Prince George-Valemont. In it you will see that I support her statement that the partisan BC NDP Caucus claim that AdvantageBC was a BC Liberal corporate giveaway scheme was not supported by the evidence (the program started under the Social Credit government in 1988).

Video of Justification

Text of Justification & Followup

A. Weaver: I thank the member for Prince George–Valemount for putting forward the amendment. I also wish to thank her sincerely for providing me with information, including a copy of the MMK Consulting report Building B.C.’s Brand and Assessment of the International Business Activity Program.

I have sought two briefings on this particular section of the bill out of concern, as expressed by the member for Prince George–Valemount and others on the opposition side, with respect to: what are the unforeseen or unintended consequences perhaps of cutting this program?

I will say also that I do commend the present CEO of the program, who has clearly taken steps since a previous review to get it on its right track. But if we come, in speaking to the amendment, back to the history of this program, the international business activity program was actually brought forth in 1988 at a time when the corporate tax rate — combined province and federally here in British Columbia — was over 50 percent.

At the time, the rationale for bringing it in was that in British Columbia we were not competitive with other jurisdictions in terms of the corporate tax rate.

Now, as of January 2018, the corporate Canada-plus-B.C. tax rate will be 23 percent. Corporate tax rate has come down 23 percent since the introduction of this program.

If we look, very recently, in terms of what this program is being used at, I have, in the briefings that I’ve sought to get to the full details here…. I understand that, in terms of what’s using it, factoring contributes about 29 percent; dealing in securities, about 28 percent; foreign exchange, about 33 percent; and other issues, such as with the film industry, etc., 10 percent of the usage.

Now, the issue of factoring is an interesting one. What it allows to occur, for example, is British Columbia…. It’s done in a non-arm’s-length fashion. You can set up, in a non-arm’s-length fashion, businesses in other jurisdictions. For example, if I’m a business, I can trade amongst myself by setting up a corporation in America, say, and have a company in Canada. I can go back and forth between myself and take advantage of the tax credits in this program, when really all I’m doing is taking advantage of something that is finding a means and ways of taking advantage of a specific tax break.

Where it gets particularly egregious…. This is a 33 percent that comes in with foreign exchange. I’d like to give a specific example. Let’s suppose that I would like to loan you $100 million U.S., and in order of doing that, I’m going to not loan you but find you $100 million U.S. as capital, so you’re going to get access to it. There may be, say, a 5 percent or a 3 percent commission attached with that. Now, if I’m registered in this, I can go and get the B.C. taxpayer to give me a 12 percent tax credit on that 3 percent commission.

The problem here is that that’s just not right. Why should the B.C. taxpayer…? This is 33 percent of the business model within this international business activity program. One-third of all the activity involves foreign exchange. Any service fee associated with getting money from somewhere…. And it just has to be the money. It doesn’t have to come from another jurisdiction. If it’s another foreign currency, it’s eligible for the money.

One-third of the business model, and you get a 12 percent tax credit. The B.C. taxpayer is subsidizing those who don’t need a subsidy just for the commission. It’s just wrong. I can’t see any justification for that.

You know, I’ve looked at this in detail. I understand that this report is a thoughtful report by MMK Consulting. Unfortunately, it only relied upon interviews, and pre-audited fees were looked at — that is the information that was used. That’s my understanding. The claim of 7,800 jobs that was embedded in this report is actually based on a large number of assumptions that I think could be challenged by the civil service and government if the actual income tax reporting data were available.

I’m not saying that this isn’t a thorough report, but I’m saying the analysis in this report did not have the actual data, the income tax data, that would allow it to make exact or precise assessments of jobs and income.

I took this very seriously. I took the suggestion of the member for Prince George–Valemount very, very seriously. It was not until the second extensive briefing from the civil service…. I’m very grateful to the minister and the staff of the civil service who have provided me with this briefing. It is only after extensive briefing that I must say now that I support the rationale here in recognition of the good work done by the present CEO, and I cannot support this amendment.

S. Bond: I appreciate the comments that have been made. I go back to the fact that the quote that I…. You know, this is a reasoned amendment. It’s not saying that eventually this program needs to be tweaked, modified, changed, but the minister has moved on this issue more quickly than anything else that she’s undertaken. I go back to the words in the NDP government caucus release that “there is a lack of evidence and this is a B.C. Liberal giveaway scheme.”

The request is a simple one. Take a look. Extend the time frame. The program has shown benefit, and I think our job in this House is actually to ask those questions. While there may be some amusement about that on the other side, the fact of the matter is that this has made a difference in British Columbia.

The question is simply: why so quickly? Why not give it the opportunity?

And to the minister: “I’m not interested in referring it to the task force.” That’s exactly what a task force is created for. It’s simply the opportunity to take a look at a program that’s existed, look at its merits and its weaknesses, and take the opportunity to take some due process here. In fact, in our view…. That’s why the amendment has been tabled. There was a significant lack of due process. Quick action. We’re simply asking for reconsideration and allowing there to be some time before the decision moves forward.

A. Weaver: I wanted to stand and support the member for Prince George–Valemount’s comments, with respect to this being a Liberal giveaway. Clearly, this is not a B.C. Liberal giveaway. It’s a program that was established under the Social Credit government in 1988. It was developed and continued through the NDP governments of the 1990s and continued through the 2000s under a B.C. Liberal government.

I think it’s very unfortunate wording that it’s been phrased that way, but it doesn’t change my views with respect to the actual amendment itself. I do respect the fact that it was brought forward. I think it’s a very reasoned amendment. But in light of the briefings that I’ve had with Finance staff, I remain still committed in opposition to this amendment

Today in the Legislature we were in Committee Stage for Bill 2: Budget Measures Implementation Act 2017. One of the questions I asked the Minister of Finance concerned the application of BC’s carbon tax to marine gas oil.

As noted in the video and text exchange, reproduced below, I serve on the Select Standing Committee on Finance and Government Services. We recently had a compelling public presentation in Nanaimo from a representative from Cruise Lines International Association – North West & Canada (also reproduced below). One of the issues he raised was the competitive disadvantage that BC ports have been placed in relative to US ports due to an error in the application of our carbon tax.

In what can be only described as an oversight, the carbon tax in BC is only exempt on traditional bunker fuels and jet fuel for international travel (consistent with international reporting rules). However, more modern cruise ships use refined marine gas oil which is not exempt.

I am thrilled with the response I received from the Finance Minister who stated that she is very open to examining this further.

Video of Exchange

Text of Exchange

A. Weaver: I am on the Finance Committee, and we had a very compelling presentation made by representations from the cruise ship industry who have noted that bunker fuels, as per international standards, are exempt from carbon pricing because of the fact that you’re essentially moving from jurisdiction to jurisdiction, and they’re historically exempt. However, modern cruise ships don’t actually use the traditional fuels that are exempt, and they’re under a competitive disadvantage against Seattle, which does not, of course, have a carbon pricing.

My question: is there a consideration for exempting cruise ships who will be using fuels now subject to the carbon tax?

Although, under international reporting regulations or rules, typically multi-jurisdictional travel is not charged with carbon tax — international airfare, for example, international cruise ships and so forth.

Hon. C. James: Thanks to the member for the question. As the member points out, quite rightly, there are already exemptions for interjurisdictional travel that are in place for the carbon tax. But as we’re going through the budget process for February, we know a request and the information has come in. The member sits on the Finance Committee, so it may come forward through that route as well. But we’ll take a look at all of that information as we develop the February budget.

A. Weaver: The Finance Committee has a very broad set of recommendations. I’m not sure something as specific as interjurisdictional travel and fuels with the cruise ship will be in the report. It may, but I’m not convinced. I just bring this to the attention of the minister, if she might consider having a look at this with her staff as we move forward. We wouldn’t want to put our cruise ship industry in a competitive disadvantage against docks in Seattle versus docks in Vancouver.

Hon. C. James: Happy to take a look at it.

Presentation by Cruise Lines International Association – North West & Canada to Select Standing Committee on Finance and Government Services

G. Wirtz: Good afternoon, and thank you for the opportunity.

I am Greg Wirtz. I’m the president of Cruise Lines International Association, North West and Canada. Our association is based in Vancouver, and we represent the cruise lines operating in Canada. Our association has been a pillar of the B.C. economy for decades, with 15,000 jobs associated with B.C.’s cruise industry and some $2.2 billion in economic benefits to our province each year.

Currently British Columbia’s cruise industry is facing some serious competitive challenges. That’s why we’re here today asking for your support for a small change to tax policy that will enhance our competitiveness and further the growth of our industry while reinforcing British Columbia’s environmental leadership and promoting the use of cleaner-burning fuels.

Please allow me to explain. Cruise ships operate in this region typically between Vancouver and Alaska or Seattle and Alaska. Alaska is the marquee destination, and Vancouver and Seattle are the primary home ports. Each year more than one million cruise guests tourists sail to Alaska from either Vancouver or Seattle as home ports. The ships often call at B.C. destination ports, like Victoria, Nanaimo and Prince Rupert as well.

The cruise lines, however, acquire the vast majority of the services and supplies needed by the ships — like fuel, food and other supplies — in the home ports, Seattle and Vancouver. Each home-port call in Vancouver creates $3 million of direct benefits to the B.C. economy. In total, there were more than 230 home-port calls in Vancouver this year alone.

When ships buy fuel for an international voyage, it is normally tax-exempt. This is just like airlines flying on international voyages. The fuel purchased is tax-exempt, recognizing that taxing fuel exports is not good tax or economic policy.

In B.C., cruise lines can purchase what are known as residual fuels, or bunker fuel or heavy fuel oil, for their Alaska voyages on a tax-exempt basis. Cruise lines also purchase cleaner, refined fuel, known as marine gas oil, in B.C.

However, due to a historical artifact of B.C.’s tax legislation, these marine gas oil purchases are only tax-exempt if used in what is called a gas turbine engine. The legislation is more than 15 years old, reflecting that the only cruise ships at the time using marine gas oil were gas turbine ships. Today most ships can operate with the cleaner marine gas oil whether they have gas turbine engines or traditional internal combustion engines. In fact, most cruise ships today are equipped with internal combustion engines, as will be most of the $50 billion in new cruise ships currently on order. Gas turbine ships just have not caught on.

Cruise ships with the much more common internal combustion engines will have to pay three cents per litre on the cleaner-burning fuel when purchased in British Columbia, but not on the less clean-burning bunker fuel. A cruise ship that’s home-ported in Seattle, Washington, does not pay any such tax on their fuel used in international voyages.

As a result, Washington state enjoys a significant fuel-tax advantage over British Columbia in attracting cruise ships, and their passengers, as well as the associated work and supplies needed to support the cruise ships, their thousands of passengers and crew.

In recent years, Seattle has outpaced Vancouver as the home port of choice for cruise ships. There are a number of reasons for this, and a long-term strategy is needed to help British Columbia remain competitive.

However, in the interim, a small, positive change regarding the taxation of cleaner-burning marine gas oil would send a very encouraging signal to the cruise industry that British Columbia remains committed to a sector which contributes $2.2 billion in direct and indirect spending in our province, including $712 million in wages and salaries.

In summary, if British Columbia provides an expanded exemption for the purchase of marine gas oil, it will (1) eliminate a significant competitive disadvantage in attracting cruise ships to British Columbia’s port cities, (2) send a clear signal of support to a key revenue-generating industry in the province and (3) help create jobs in related industries on which British Columbians rely.

I do have copies of a letter and a short backgrounder, which I’d be happy to give to you for your reference. I’d welcome questions, although I acknowledge you can’t ask them.

Today in the Legislature I was up in Question Period. I took the opportunity to continue pressuring the government to commit to demand-side housing reforms.

Housing affordability is the single most pressing issue facing British Columbians. As mentioned in the exchange below, I’ve sat through question period for the last two months and have yet to hear any questions of substance from the BC Liberals on this topic.

I’m not entirely happy with the response to my supplemental question and will continue to pressure government to deal with speculation in our real estate sector.

Below I reproduce the video and text of the exchange.

Video of Exchange

Question

A. Weaver: The single biggest issue facing British Columbians today is the issue of housing affordability. I’ve now sat in this question period for a full two months, and I’ve yet to hear anything of substance in question period from members opposite. As a consequence….

Interjections.

Mr. Speaker: Members.

A. Weaver: As a consequence, please let me pick up the file.

Interjections.

Mr. Speaker: Member, if you could please be seated for a moment.

Members, I’m not sure this is a productive use of the time in the House here.

Member, please continue.

A. Weaver: As a consequence, I’ll pick up the file.

The B.C. Liberals introduced the B.C. home owner mortgage and equity partnership in early 2017. The then opposition housing critic and now Attorney General called the program “completely bizarre,” and he said: “It’s an incredibly poorly thought-out policy.” And he further noted our provincial government’s — that’s the previous government — response is to encourage people to take on more debt and subsidize the debt. It’s bizarre, he said.

I agree, and so does Evan Siddall, the president and CEO of the Canadian Mortgage and Housing Corporation, who said this: “Programs that support demand in supply-constrained markets like Vancouver serve primarily to increase prices and make the affordability problem worse.”

In reference to the stated goal of the program and the program and making houses more affordable, he stated: “I’m joined by loud chorus of economists in insisting that it will do the exact opposite.”

My question is this. When will this government eliminate the program, which nothing more than incentivize British Columbians to take on more debt than they can afford, a reckless incentive particularly when the interest rates are rising, as they have twice already this year?

Answer

Hon. C. James: Thank you to the member for the question. I think, as the member pointed out, after 16 years of ignoring the housing crisis in British Columbia, there’s a lot of work that has to be done.

I’m very proud of the first steps we took — in less than two months after being sworn in, in government — in our budget update by announcing funding for 1,700 affordable housing units and 2,000 modular housing units.

We’ve also added resources to the residential tenancy branch to support good landlords and good tenants in the work that they do.

We’ve also improved information sharing with the homeowner grant and the Income Tax Act to look at speculation and how we address the speculation.

On the member’s specific question around the B.C. partnership program. It is being looked at as part of the budget. The member will know from the budget update that the amount of money has been reduced in that program, because the previous government predicted about $700 million over three years as usage. We have reduced that by $500 million because the program has been underutilized because of the concerns that the member has raised. So this is being looked at as part of the budget process.

Supplementary Question

A. Weaver: The members opposite seem to think that if I don’t hurl a character assassination at government, it’s a softball question, as opposed to a question dealing with real issues facing British Columbians.

Yesterday, Global News noted New Zealand’s approach to tackle their housing crisis and clamp down on offshore ownership and speculation. The story included a very disturbing comment attributed to government: “Foreign ownership of homes is not being considered as part of the budget 2018 planning.”

There’s a lot of foreign capital out there looking for a safe place to park money in these tumultuous times. Foreign investors have turned to our real estate sector, thereby turning our houses and land into commodities for investing in speculation, not living in or working on. Our residents are paying a social cost, as they can’t afford to live in the places that they work.

Yesterday I also received an email from a rural farm and ranch realtor who had been approached on behalf of a limited company based in Hong Kong looking to purchase 35,000 acres of farmland in British Columbia. The stories are never ending.

This government continues to focus on the supply side of housing. When will this government step in to clamp down on foreign money flooding into our real estate sector and agricultural markets like other jurisdictions have done internationally?

Answer

Hon. C. James: Thanks to the member for the questions and the ideas and the solutions to take a look at speculation and closing loopholes. Stay tuned for more information this afternoon around one piece of that.

I’m working with the Minister of Housing. We’re working together on both the demand and supply side. It is critical, as the member has pointed out, that we look at both pieces.

The member will know that tax measures are not talked about before the budget comes out so that we ensure that people don’t utilize tax information to their own personal benefit. That will come out as part of the February budget.

I can assure the member that speculative issues are being looked at — how we close the loopholes. It’s all part of a comprehensive housing strategy that we are going to be proud to table and proud to implement in this province.

Today in the legislature I reintroduced a private member’s bill now entitled Bill M204 —University Amendment Act, 2017. The purpose of this bill is to halt the creeping government interference in university governance, an issue I have previously raised.

I provided a detailed rationale for the bill l when I first introduced it in February 2017.

Below I reproduce the video and text of today’s introduction along with the accompanying media release.

Video of Introduction

Text of Introduction

A. Weaver: I move that a bill intituled the University Amendment Act, 2017, of which notice has been given in my name, be introduced and read a first time now.

I’m pleased to be introducing a bill, intituled the University Amendment Act. Universities in this province of British Columbia serve a key role in an economy that is increasingly driven by knowledge, information and ideas. Academic freedom is a fundamental tenet for a culture of learning to succeed and a key part of academic freedom is found in the right to participate in the universities governance. While the role of a board of governors is essential to a university, the governance of a university must also be independent.

It is with this in mind that I bring this bill forward today. This bill amends the University Act to ensure that appointees from the Lieutenant-Governor-in-Council cannot unilaterally set the tone and direction of a university board through having a majority of votes and that the university boards cannot unilaterally appoint a chancellor for their university.

This act also amends the University Act to change the composition — not the powers — of the senate for special purpose teaching universities.

The current composition of the senates of special purpose teaching universities gives the administration of these universities the majority vote. This harms the ability of the senate to keep the academic autonomy of the university at arm’s length from government.

This bill will bring British Columbia into the same university governance standards employed by much of the rest of Canada.

Motion approved.

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

Bill M204, University Amendment Act, 2017, 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.

Media Release

Andrew Weaver introduces bill to protect the independence of universities
For Immediate Release
October 25, 2017

VICTORIA, B.C. – Andrew Weaver, leader of the B.C. Green Party, today introduced a Private Member’s Bill that would protect the independence of B.C. university governance. Weaver previously introduced this bill in February 2017, as well as similar legislation aimed at addressing the issue of university governance in 2016. The legislation would bring B.C.’s rules in line with the majority of other Canadian jurisdictions.

“Our universities must be a place where innovation and creativity are allowed to flourish,” said Weaver.

“In B.C., there has been a worrying trend of creeping political interference in university governance. The potential for government to drive a top-down imposition of its ideology in our academic institutions is absolutely unacceptable in a free democracy. This bill would ensure that B.C.’s university boards remain autonomous so that critical thinking and the untethered pursuit of knowledge can drive their work.”

This Bill amends the University Act to ensure that appointees from the Lieutenant Governor in Council cannot unilaterally set the tone and direction of a university board through having a majority of votes, and that university boards cannot unilaterally appoint a Chancellor for their university.

It also amends the University Act to change the composition of the Senate for special purpose teaching universities. As it currently stands, it is possible for the administration (instead of faculty) of these universities to have the majority vote which harms the ability of the senate to keep the academic autonomy of the university at arm’s length from government.

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Media contact
Jillian Oliver, Press Secretary
+1 778-650-0597 | jillian.oliver@leg.bc.ca

Today in the BC Legislature the BC Liberals proposed an amendment at committee stage to section 3 of  Bill 5: Constitution Amendment Act 2017. The purpose of this amendment was to change the date of the next election from October 2021 to October 2020.

After listening to the arguments proposed by the BC Liberals I stood and spoke against the amendment.

The BC Liberals subsequently called for a standing vote and the amendment was defeated.

Below I reproduce the video and text of my statement. These outline the reasons why I voted the way I did. I also append the results of the vote.

Video of Statement

Text of Statement

A. Weaver: I rise to speak against the amendment put forward today by the official opposition, for a number of reasons. The amendment, of course, as we know, is to change the fixed election date to 2020 instead of 2021. The member opposite does himself a disservice when he continues to refer to government here as a coalition.

The member opposite, as he tries to put forward his wealth of expertise in democratic reform in British Columbia, should know at a very fundamental level that a coalition is not what we have here in British Columbia. It is a minority government, where the majority of members in this House support the B.C. NDP in government.

It would do this member well — and it would do opposition members opposite well — if they actually were to be factual in their responses and debates. To mislead British Columbians by talking about things like a B.C. coalition is not fitting of members of this place.

We know that it is a minority government, under the great vast tradition of Westminster parliamentary democracies, where the government of the day, the B.C. NDP, is supported by the three B.C. Green members in a minority, not a coalition. So I correct that for the record.

We know that under the Constitution Act, we must have an election every five years. The member opposite, again, in what I can only describe as a somewhat revisionist history, forgets to point out that in 1986, the Social Credit government, the 1986 elected Social Credit government did not have an election for five full years, until 1991. Five years — not four years, as was suggested by the members opposite.

Here, what is happening, and why I do not support the amendment and why I support the original legislation, is as follows. Again, in the tradition of Westminster parliamentary democracies, we stood here in this House and pointed out to the B.C. Liberals this past summer that they did not have the confidence of the House. We didn’t quietly spring this on them at the last minute. In fact, shortly after we signed the confidence and supply agreement…. As, I’m so pleased to say, is signed in a similar manner in New Zealand, between the labour party there and the Greens, celebrated today in some of their housing policies.

We signed this agreement and told British Columbians that we would have this agreement signed before the writ was returned because we wanted to instil confidence, and we wanted to ensure that British Columbians had certainty as we moved forward. So we messaged out to British Columbians, through this government, that on May 31, we were going to support a B.C. NDP minority government.

Hon. Speaker, members opposite, despite saying they would call back the House soon, took their time. We waited months for this to come. So to say it’s four and a half years is simply incorrect. We wasted months by this government, not willing to stand up and have confidence tested in this House, somehow in denial that we live in a parliamentary democracy. So to say it’s four and a half years is flat out wrong. That is why I continue to support the bill as it stands and speak against this amendment.

We talk about precedent. We had three independent MLAs in this House: one who formally was with the B.C. NDP, Bob Simpson, who sat as an independent; one who was formally with the B.C. Liberals, John van Dongen, who also sat as an independent; and then, of course, our friend and colleague Vicki Huntington, who was the only independent MLA in British Columbia to be re-elected as an independent. The three of them got together and they made recommendations.

They made recommendations to bring the election to the fall, as we did, but they also recommended and they also suggested that it was important to recognize that we need to go a little longer because of some time for Elections B.C. to adjust. So this is not some kind of surprise, as suggested by the member opposite, the member for Nechako Lakes. This is no surprise to British Columbians. This is precisely what happened in 1986 when the Social Credit government served for five years.

It’s what was recommended in the bill brought forward, which is somehow not being raised by members opposite. They refer to previous NDP opposition bills — not referring to the independent members’ bill, which was truly independent, with one member from the B.C. Liberals, one from the NDP, and Vicki Huntington, suggesting otherwise.

With that, hon. Speaker, I thank you for your time, and I do appreciate the opportunity to speak against this amendment.

The Vote