Today Carole James announced that she won’t be seeking reelection in the next provincial election. Carole has had an exemplary career as a politician both at the provincial and school board level. We have been very fortunate in British Columbia to have her steady hand guiding the province’s budget as Finance Minister for the last two years. While Carole’s voice in the legislature will surely be missed, I’m sure she’ll selflessly contribute to our community in so many other ways in the years ahead.

Thank you Carole for all that you have done for our province. You are an incredible role model to so many, including me, and I very much value your ongoing friendship.

Below I reproduce the text of the statement my office released in response to Minister James’ announcement.

Media Statement

MLA Andrew Weaver responds to Finance Minister James’ statement
For Immediate Release
March 5, 2020

Victoria, BC – Andrew Weaver, MLA for Oak Bay-Gordon Head, released the following statement in response to the announcement by Minister Carole James today that she will not be running again due to a diagnosis of Parkinson’s Disease:

“I am deeply saddened to hear the news of Minister James’ diagnosis and my thoughts are with her and her family during this difficult time. Minister James has had a distinguished career dedicated to the service of British Columbians and she has been a steady hand in this NDP government. “

“It has been a privilege to have known Minister James for over 20 years. I gained tremendous respect for her when she was Chair of the Greater Victoria Board of School Trustees and it has been an honour to work with her in the legislative assembly.”

“I am confident that she will face the challenges associated with this disease head-on and continue to be a positive influence on the direction of this province throughout the remainder of her term.”

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Media Contact:
Judy Fainstein
Executive Director
Legislative Office of Andrew Weaver, MLA

+1 250-744-7615  |  Judy.Fainstein@leg.bc.ca

The BC Government today released two new reports outlining the scale of money laundering that has been rampant in British Columbia over the last few years.

The first report was coauthored by Professor Maureen Maloney (SFU School of Public Policy), Professor Tsur Somerville (UBC Sauder School of Business), and Professor Brigitte Unger (School of Economics, Utrecht University). It painted an extraordinarily grim picture of widespread money laundering through British Columbia’s real estate sector totalling upwards of $7.3 billion in 2018 alone. In making 29 recommendations this expert panel noted that “a strong government response is urgently required.”

The second report comprised Part 2 of Peter German’s comprehensive three-part analysis into money laundering in BC. Part 2, entitled Dirty Money — Part 2.  Turning the Tide – An Independent Review of Money Laundering in B.C. Real Estate, Luxury Vehicle Sales & Horse Racing, expanded upon his initial analysis into money laundering in BC casinos released on March 31, 2018. The release of Part 2 followed on the heels of government releasing Part 3 of German’s analysis (on Tuesday) into money laundering in luxury cars.

Money laundering through the purchase and sale of luxury automobiles formed the basis of my questions to the Attorney General today during Question Period today. Below I reproduce the video and text of our exchange. I also reproduce copies of the media statement we issued in response to government’s release of today’s reports and my statement delivered at today’s press conference.

Video of Exchange

Question

A. Weaver: Earlier this week the Attorney General confirmed that money laundering goes beyond our casinos. Our biggest city is not just known for the dubious criminal distinction as the Vancouver model for money laundering, it’s also known as the luxury car capital of North America, fuelled, in part, by suspected criminal activity. Indeed, provincial employees identified numerous red flags connecting money laundering to the luxury vehicle export market, and despite these flags, the province issued over $85 million in PST refunds since 2013 to many suspicious individuals.

My question is to the Attorney General. He has said he has taken action on this finding, but why was this suspicious activity allowed to persist for so long? And why did it take this special report to highlight what government officials have known for many years?

Answer

Hon. D. Eby: I thank the member for the question. This is obviously a very serious issue, and I’m very grateful to Dr. German and his team. Former chief LePard was a key part of this report that uncovered this troubling information: among other things, car dealers saying they’re in the middle of money laundering; uncovering the use of straw buyers to purchase luxury cars; thousands of straw buyers acting on behalf of exporters who are the true purchasers, claiming PST rebates; people with extensive criminal backgrounds running resale operations of luxury cars, people who wouldn’t qualify for a liquor licence or other government licences but allowed to operate and run these businesses — obviously, major issues.

The member asked why it has taken so long to uncover these things. One of the major reasons that has been a theme throughout Dr. German’s reports is a lack of oversight, a lack of enforcement. We are moving quickly to address those issues. The Finance Minister is, obviously, reviewing this program, making sure that criminals don’t get PST rebates, for a starter, which seems like a pretty good start. The second piece is we’re working with RCMP, with police and with the Solicitor General’s office to ensure that the provincial government can do everything we can in terms of enforcement. We’re working with regulators in terms of their mandates.

There is a lot going on in this file to respond, and I’m very grateful that Dr. German’s bringing this stuff to our attention so that we can take action on it. And I agree with the member about: why did it take so long?

Supplementary Question

Thank you to the Attorney General for the answer. One quote in the German report on luxury cars, the section released earlier this week, stood out for me. A car dealer said: “I’m right in the thick of money laundering here.” He also said: “It’s unequivocally money laundering.”

It’s not surprising he came to that conclusion when it appears to be a regular occurrence for cars to be bought with bags of cash, sometimes in the hundreds of thousands of dollars, with zero reporting requirements in the industry. It’s absolutely crazy, what’s happening in B.C., not just in casinos but in the luxury car sector. We know the next chapter of the German report will tell us the extent of money laundering in our real estate sector.

To the Attorney General: the more we learn about this, the more we know how important it is now to have a public inquiry. The B.C. Green caucus has been calling for one for months now. Thousands upon thousands of British Columbians have been calling for a public inquiry, and just last week I introduced a petition from a federal EDA of the NDP calling on this government to bring forward a public inquiry.

My question to the Attorney General is: will this government launch a public inquiry, and if so, when?

Answer

Thank you very much to the member for the question. The member knows — and I’ve outlined for him and for the Legislature — our government’s approach on this, which has been to identify what’s happening right now and move as quickly as we can to stop it. We’ve had some success in the casino sector, stopping the bulk cash transactions. We will have success in the luxury car sector, addressing the issues that have been raised here.

The issue around public inquiry is really more aimed at: who knew what when, and are there any issues related to corruption? People want to know the answers to those questions. I understand why people want to know that. I mean, this went on for a long time. It’s the decision that is in front of cabinet, and cabinet will have a decision, and government will have a decision for British Columbians very shortly.

I thank the member for that.

Media Statement

Most recent money laundering reports support BC Green call for public inquiry
For immediate release
May 9, 2019

VICTORIA, B.C. – The two reports into money laundering in B.C. directly support the value of a public inquiry, reinforcing the B.C. Green caucus’ call for government to act.

“We saw in German’s report a direct rationale for a public inquiry. Namely, that it would improve public awareness, play a crucial role in fault finding, and would help to develop full recommendations,” said B.C. Green Party leader Andrew Weaver. “The B.C. Green caucus has been calling for a public inquiry for months, as have thousands of British Columbians. It is time for this government to start a public inquiry so that the public can get the answers it deserves and B.C. can move forward.

“Today, we discovered a much fuller picture of money laundering going on in our province. It is no surprise, but we can now be confident that illicit money has been influencing Vancouver’s housing market.

“One of the key findings of both reports was the issue of beneficial ownership. This is something I have been raising in the legislature under both the BC Liberal and BC NDP governments as a huge loophole in our system that should have been fixed long ago. Recent steps by government to address beneficial ownership through establishing a registry are encouraging, but we need to go further and end the use of beneficial ownership as a tax avoidance tool.

“We also saw that there are many sectors of our economy that have lax financial regulation, leaving them vulnerable to money laundering: from bags of cash being used to buy luxury vehicles, pianos and even to pay post-secondary fees. To deal with all of this the report recommended a ‘system-wide reset’ in criminal prosecution.

“With each new finding and each new report, we learn more about how our province has been exploited by criminals and how the systems and people charged with protecting us have failed over and over again. It is time to remove this investigation from any possible political influence, to get to the bottom of what happened, and to ensure this assault never happens again. British Columbians deserve to have their public interests protected and their trust in government restored.”

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Media contact
Macon McGinley, Press Secretary
B.C. Green Third Party Caucus
+1 250-882-6187 |macon.mcginley@leg.bc.ca

Speaking notes

Today we discovered a much fuller picture of money laundering in BC –  it is clear that illicit money has been influencing our real estate market as British Columbians struggle with the impacts of the housing crisis.

One of the key findings of this report was the issue of beneficial ownership. This is something I have been raising in the legislature under both the BC Liberal and BC NDP governments as a huge loophole in our system that should have been fixed long ago.

Aside from real estate, the German report showed that there are many sectors of our economy that have lax financial regulation, leaving them vulnerable to money laundering: from bags of cash being used to buy luxury vehicles, pianos and even used to pay post-secondary fees. To deal with all of this Germans report recommended a ‘ system-wide reset’ in criminal prosecution.

With each new finding and each new report, we learn more about how our province has been exploited by criminals and how the systems and people charged with protecting us have failed over and over again. It is time to remove this investigation from any possible political influence, to get to the bottom of what happened, and to ensure that this assault never happens again. British Columbians deserve to have their public interests protected and their trust in government restored.

We have a clear rationale for a public inquiry. German himself referenced a positive change that came out of the Charbonneau Commission in Quebec. Clearly public inquiries can be useful and result in real change.

My colleagues and I have been calling for a public inquiry for months, as have thousands of British Columbians. The housing and opioid crises have impacted every single community and it is unacceptable that criminals have been profiting from these very personal, heartbreaking challenges. We need to work together. It’s time for a meaningful, independent explanation – we need a public inquiry.

Thank you.

Today in the legislature I rose during budget estimate debates for the Ministry of Finance to ask about the growing liability that British Columbia is incurring through the deep well royalty credit program. Last spring I extensively canvassed the Minister of Energy, Mines and Petroleum Resources on the same topic. It was revealed that that as of December 31, 2017 there are $3.1 billion in unclaimed credits. It turns out that another $383 million was added last year.

Below I reproduce the video and text of our exchange. The BC Green Caucus remains profoundly troubled by the generational sellout embodied in the BC NDP corporate welfare aimed at trying to attract LNG to BC.

Video of Exchange

Text of Exchange

A. Weaver: This is for the benefit of the children in the gallery from, I believe, Surrey Christian School. What we’re doing here in the Legislature is we’re debating estimates for the Ministry of Finance. It’s a time for opposition MLAs, the Liberals or the Greens here, to pose questions to the minister about various budgetary issues that are related to her file. I’ll be asking about some finance questions with respect to natural gas royalties.

The reason why I’m posing these to the minister is that I did ask last time: the deep-well royalty credit program is actually administered by the Ministry of Finance. The qualified wells receive these credits automatically, and they don’t need to apply separately.

The credit was first created in 2003, expanded in 2014, and in last year’s public accounts, the unclaimed balance of deep-well credits totalled $2.59 billion. A further $3.5 billion has already been cashed in to reduce royalties that would otherwise have been payable. This program has reduced gas producers’ existing and future royalty liability to the Crown by nearly $6 billion.

My questions in this area are this: how many deep-well credits were issued over the past year and to whom?

Hon. C. James: The member asked how many deep-well credits. We don’t have the information around the breakdown of which are new credits and which are continuing credits with us, but I’m happy to get that information for the member of which are new. We don’t have that breakdown with us, and we’ll get that information.

On page 120, it identifies the number for new, and that would be $383 million. Then the identifier — the member asked how many and who got them — is personal tax information so we can’t provide that. But we’re happy to get the information and get it back to the member around the number of new credits for this year.

A. Weaver: Further on…. I suspect I’ll get a similar answer, and I welcome the information at a later date. How many deep-well credits have been issued since 2014 and to whom?

Hon. C. James: We’ll add that to the information for the member. We don’t have that information with us.

A. Weaver: My question, then, is: why is there not a standard public disclosure of these credits and royalties that are received? There is, for example, for stumpage fees in the province, under the harvest billing system. Why are we not making public the royalty credits that are being claimed here?

Hon. C. James: This credit, the deep-well credit, fits under FOI, and under FOI, we can’t release taxpayer information. I can’t give an explanation around why it would be different, as the member talks about, in stumpage. But the requirement is under FOI to protect individual taxpayer information, which would include, of course, the names and the identifiers.

A. Weaver: The inconsistency, as was noted, is with respect to the harvest billing system, so perhaps we could explore that at some other date.

What’s the total value of deep-well credits that are still outstanding and that could be claimed against?

Hon. C. James: As the member pointed out, $2.6 billion in ’17-18. The ’18-19 numbers get reported out in Public Accounts. That tracking is just being done now, and they get reported out in Public Accounts.

A. Weaver: My final question is with respect to FOI, freedom-of-information, requests that went to the Ministry of Finance. The file number, for reference, is FIN-2019-90584. This was a freedom-of-information request put in by an independent person outside of the Legislature. What was being requested there was a list showing the total royalty credits granted to each company that applied for such credits in the most recent fiscal year.

Now, the freedom-of-information requests from the Ministry of Energy and Mines and from the Ministry of Finance provided completely different answers. The Ministry of Energy and Mines had no issue and provided, actually, the detailed credits, by whom and to whom, whereas the Ministry of Finance withheld all information.

So my question to the minister is: why is there a discrepancy between information we’re getting from the Ministry of Energy and Mines versus the Ministry of Finance?

Hon. C. James: The FOI request that the member is referring to was asking about the infrastructure royalty credits. The infrastructure royalty credits actually have a provision where when someone applies for the credit, they give permission for their information to be shared. That’s why Energy and Mines was able to share the information, because the infrastructure royalty credits have that application for the individuals when they apply. So that’s, obviously, a different program than the deep-well credits

Yesterday in the legislature Bill 10, Income Tax Amendment Act, 2019 was being debated at committee stage.

As I noted during my second reading speech, if enacted, this bill would repeal the LNG Income Tax Act as amended in April 2015, as well as the Liquefied Natural Gas Project Agreements Act. The bill also creates yet another tax credit for the natural gas sector.

During committee deliberations yesterday I took the opportunity to unpack an outrageous government claim that LNG Canada would be committed to hiring locals. Well to no surprise to those of us who have been following this for a while, there is no such requirement. In fact, and further, government has no tools at its disposal to insist that LNG Canada preferentially hire British Columbians during the construction phase.

Below I reproduce the video and text of my exchange with the Finance Minister.

We will resume committee stage debates today.

Video of Exchange

Text of Exchange

A. Weaver: I’ve been listening quite attentively, trying to get some information with respect to the jobs, because I have clearly witnessed the same language that was emanated from government, as well as LNG Canada. “We’re going to be hiring British Columbians.”

I know for a fact that right now Boskalis is dredging in Kitimat, and I know for a fact that Boskalis uses a Newfoundland company to bring in employees. That is a distance from LNG Canada, and I know for a fact that those employees are not from British Columbia. I know for a fact that those employees that were from British Columbia did not last very long on the Boskalis dredge because they were summarily fired for raising safety issues.

I come back to what the member for Abbotsford West was suggesting. Is the minister saying that she has no mechanism at all to ensure that any of these jobs are actually for British Columbia citizens other than the goodwill of LNG Canada because they said they’re going to try?

Hon. C. James: Thank you for the question. I think we’ve spoken about a great deal of this over the last few hours but happy to run through it again.

We have, as I said, a job strategy with LNG Canada, a commitment around the support that will be there for local hire first, including apprentices on this project. The job numbers, as I said, we have built in when it comes to assumptions around revenue — very conservative numbers. But we certainly expect thousands of jobs for British Columbians.

I can’t speak to the specifics that the member raises. I’m happy to take that information and have that conversation. But as I said, the local hire first, including the requirements around contractors using local hire first, is a very important piece that is in place. The contractor is bound by that local hire first, which I think, again, is a very important factor in making a decision around whether local jobs are going to be in place.

Then, again, there’s the work that’s already being done in Kitimat and the number of locals — 600 people — already working since December. You know, over 45 percent of those were from Kitimat alone, in that area. That’s, again, showing the support that needs to be in place for these jobs.

A. Weaver: I recognize that that’s been read in a couple of times to the record. My very specific question is this: is there a single mechanism that the government has to ensure that the jobs will be from B.C. — yes or no?

Hon. C. James: The answer is the jobs strategy, put together and negotiated with LNG Canada and negotiated together, which requires local first, which requires the contractors to also be utilizing the local first, which requires apprentices and makes a commitment around the dollars that have already been put in place by LNG Canada.

A. Weaver: So we now have an LNG jobs plan. What are the ramifications for LNG Canada if that document is ignored? Does the government have any teeth to that document — yes or no?

Hon. C. James: I think the biggest strategy is making sure that this project is successful. That is a commitment that not only we have as government but obviously LNG Canada has when it comes to their investment. The fact that they have a number of contracts with communities across the pipeline strengthens that kind of commitment as well.

A. Weaver: Again, coming back to the question, the question was: does government have a single measure to actually ensure that British Columbians are hired — yes or no?

Hon. C. James: I think I’ve answered that question. Again, the commitment is the four conditions that we put in place. The commitment is the agreement by LNG Canada to meet those four conditions and the commitment to the people of British Columbia to follow through on that.

A. Weaver: With respect, there is a duty in committee stage to get answers, to get answers to questions. The question was very simple. There is a jobs plan. I understand that. Let us suppose LNG Canada ignores that. What avenues, what teeth, does government have that will ensure that LNG Canada does make sure they hire British Columbians first?

The reason why I raise that is that the minister said that what’s critical is the success of this project. How do you define success? Well, success involves triple bottom line. There’s a social aspect to that, and one of those is hiring British Columbians. Because both the minister and the Premier, and several others, were very proud that this was going to bring 10,000 jobs.

Yet I come back to the question, and I think we are owed an answer to this: does government have any mechanism — yes or no? — to ensure that LNG Canada actually hires local? This is not a difficult question, and in this chamber, it is a duty and a responsibility of government to provide a yes or no answer to this question. I’m afraid it is not acceptable to pivot off to some kind of loosely worded commitment letter, which has no legal standing. I would like to know what legal tools this government has to ensure that British Columbians are hired first, because they said they would.

I’ve offered you one specific example, the example of Boskalis, a dredger up there that uses a contractor to get labour in Newfoundland. That labour is coming from all across Canada and elsewhere. It is not coming from British Columbia, and I know that for a fact, because I know people who were fired for raising safety issues.

What metrics does government have to ensure that LNG Canada is hiring British Columbians?

Hon. C. James: I know the member wants a simple yes-or-no answer, and I’m not being obstructionist. I’m being upfront with the member about the process that was utilized to come to our four conditions that had to be met by LNG Canada.

This was a back-and-forth process. This was a discussion around how important it was to meet the commitments, how important it was to reach these four conditions, how critical they were to us as a government and critical to British Columbians, we feel. I talked about the four conditions. One of those are jobs for British Columbians.

We did go back and forth around the letter. We did go back and forth around a strategy on jobs. We did go back and forth around the climate action and the importance of making sure that we address that in part of our CleanBC. We did go back and forth around First Nations and a real partnership with First Nations.

Again, on the jobs piece, the member has the copy of the letter. He will make his determination about whether that, from his perspective, holds LNG Canada to meet these commitments or not.

But, certainly, from our perspective as government, when you are taking a look at a project this large, when you are taking a look at the kind of investment that’s there, when you are taking a look at the reputation of the company coming in to do a long-term project in British Columbia, and when you’re taking a look at the fact that this project will not be successful unless the communities are engaged and taking part….

I think it’s part of the example that we’ve seen with the work that they did with First Nations along the pipeline. Again, we’ve seen many projects that have not come forward in British Columbia because they did not build that community partnership. They did not, in fact, engage the communities.

This is a very different project from that perspective. They have engaged the communities, and those communities will be critical for them to be able to be successful in this project. Therefore, as I said, we feel that the jobs strategy provides that support.

A. Weaver: I’m getting a little frustrated. I’ve asked a very simple question. What tools does government have at its disposal to ensure that the company follows through with its intention to actually hire British Columbians? I’m not asking for all the rhetoric around “my four conditions.” I’m asking for the specific tools that the government can use.

I’m asking the same question, and I recognize I’ve asked it several times. I have not got an answer to this question. I have got rhetoric about other stuff. The question is very direct and very simple. What tools does a government have at its disposal to ensure that the letter that they’re trusting LNG Canada to do is used to ensure that British Columbians are hired?

The minister can just say we don’t have any, and that’s fine. But I think she owes it to this chamber here to say what those tools are. Failing to do so, I think, frankly, is not what we’re meant to do at committee stage. We need answers to provide further guidance to the people of British Columbia.

Hon. C. James: I think that the biggest tool that government has is the success or non-success of the project. From my perspective, that is the biggest tool that is in place. In order to have the success or non-success of the project, it requires a relationship. It requires negotiations. It requires building that between the partners.

In fact, if you will speak to the Premier, I know he’ll also make those kind of comments around the work that that took to get to this place. The success of the project, from my perspective, and those relationships and the negotiations are the critical tools that government continues to have in this project.

A. Weaver: This is very frustrating, because now we have a circular argument. The success of the project is defined by bringing jobs to British Columbians, and the tools that the government has available to it are the success of the project. That’s a classic chicken and the egg. What is it? Is the project successful by definition, because they’re bringing it in? Therefore, it must have people in B.C.? It just doesn’t make sense. Clearly, the only take-home message I can have from this exchange is government has no tools.

What the statements are about hiring British Columbians is nothing short of unsubstantiated political rhetoric that, frankly, British Columbians should have cleared up. It’s quite embarrassing that this government would suggest to British Columbians that they’re going to be hiring British Columbians.

I’ve given you one example. The only example that I know of that is actually ongoing now, the dredging, where that company, Boskalis, is hiring a contractor in Newfoundland. The employees up there are not from B.C. Some of them are from Newfoundland, some from the oil patch, some temporary foreign from the Netherlands. And government has yet to provide any information as to how they’re going to ensure B.C. jobs.

But it gets worse than this. My final question on this: has the minister actually suggested that their four criteria were met? They never actually once, since prior to the 2017 election campaign, defined what those criteria were. What does it mean to say that it fits within our climate targets? What does it mean to say that truth and reconciliation has been looked at? What does it mean to say that it’s a good deal for British Columbia?

In essence, the question is, then, this. Why has the minister not, at any point in the last two years, at any time, ever once, put up metrics that would say: “These are how we’re defining success, and these are what we’re looking for to ensure that our four conditions are met”?

Frankly, all we’ve been told is, “Trust us,” and that is clearly what government’s wanting, for us to trust them. But it’s very difficult to do so when I look in this document here, which I won’t use as a prop. I’ll just read the title: “Operating Performance Payment Agreement.” I don’t see any requirement in there. When I look at some of this other stuff, “LNG Investment Fiscal Framework,” I don’t see a requirement there. I see a lot of rhetoric.

The question, coming back to it: what are the metrics? What metrics did government use to actually determine that their four criteria were met? Simple.

Hon. C. James: Thank you very much to the member. The member talks about what success will be. From my perspective, yes, success is meeting the four conditions. The Premier laid them out and talked about the four conditions. We will be held, as a government, accountable for meeting those commitments to British Columbians, as we should be — as we should be and as the company should be. That’s going to be critical.

I know the member was directly involved in the discussion around LNG emissions and including LNG emissions in our CleanBC program. Again, I expect the member to hold us accountable for that. I expect him to ensure that that occurs and that the discussion occurs.

Fair return. Again, I expect members to ask questions about whether we believe that’s a fair return or if they have other ideas or other approaches.

Partnerships with First Nations. Certainly the expectation around the elected bands along the route who have signed on to the LNG agreement and the work that continues to be done, I think, again, talks about how we will be successful.

So I think it is important to come back to those four conditions. I know the member felt that that didn’t provide him with an answer, but I think it’s critical and important, and I think we will be held accountable as to whether we’ve met those conditions or not.

A. Weaver: Well, this is the problem I’m having. It is impossible to hold the government to account when they’re not forthcoming with the answers to very simple questions that I’ve articulated. The four criteria, which, frankly, are nothing more than an election slogan, are this.

One, “Proposals must include express guarantees of jobs and training opportunities for British Columbians.” Well, we’ve heard today, from very extensive questioning from opposition and my further attempts to get something, that the government has no ability, clearly, no ability at all to guarantee any British Columbians any jobs. That clearly was never met. You could not have met criteria No. 1, because you’ve got no requirement of any jobs.

Two, “Proposals must provide a fair return for our resource.” Well, given that government has never once articulated since two years now what a “fair return” is, how do we know that we’ve got a fair return? I’ve suggested, through the analysis of the deep-well credits in second reading and elsewhere and through what I’ve described as a generational sellout and the giving away of this, that and the other in a desperate attempt to land what Christy Clark couldn’t, that, in fact, you’re not getting a fair return, because not once has government articulated what that return will be.

We haven’t seen the numbers, and it’s worse than that. We can’t even get information on simple questions like: “What is that $23 billion going to…? Where is it coming from?” We get rhetoric. We get no substance. So, clearly, criteria No. 2 was never met, because government actually hasn’t articulated what a fair return is.

Number 3: proposals must respect and make partners of First Nations. Well, we know that there are some, quite a lot, that have partnerships. Wet’suwet’en — still some issues, but government there abdicated its responsibility and essentially left it up to LNG Canada to deal with the Wet’suwet’en Unist’ot’en Camp, and what can they do? The only thing they can do is seek injunctive relief and get the police in there to move them. The government clearly did not do what you would expect on a leader-to-leader, government-to-government negotiation point of view, so I’m not so sure that No. 3 is being met.

Number 4: proposals must protect air, land, water, including living up to our climate commitments. Well, I’ve seen no analysis from government as to the air quality within the Terrace–Kitimat valley. As you know, Rio Tinto Alcan just did a substantive upgrade to their resource facility — increase sulphate emissions, reduce greenhouse gas emissions. There’s a very problem in terms of the air quality in that watershed. I’ve heard no discussion. I’ve heard no criteria, no check — “We can do it.”

I do recall a report that was written a number of years ago where the Liberals explored what the consequence to the air quality in the valley would be, and it was very troubling. It was very, very troubling — a number of years back. It was, actually, in terms of…. It was. You probably don’t remember it. I looked at it very well. I know the author of it.

And living up to our climate commitments. Well, that has yet to be seen. Certainly we know that we can only get, with all of the policies that have been identified, just 75 percent of the way there. So how can you say that it’s fitting into living up to our climate commitments when we still haven’t articulated the other 25 percent of getting to those climate commitments? That was the basis of my reasoned amendment.

What’s happening here today is a charade. It’s literally just a charade. We have no substantive, quantitative analysis of any of these criteria. We’re told: “Trust us. We’ve met it.” We’ve clearly tried to find what metrics government’s using. They haven’t. It’s embarrassing. And so I go back to my original second reading speech, and I think what happened is that LNG Canada walked in to the new government and said: “We’re out of here unless you do this.” And they said: “What do you want us to do?” And they said: “This, this, this, this, this.” And, out of their depth in negotiations, completely out of their depth, they said yes.

LNG Canada has got a good deal here. I’m not so sure you can actually articulate how British Columbia has, and we haven’t heard a single answer to any of the questions that I have raised. This is very troubling.

With that I’ll leave it. I know that the member for Abbotsford West was suggesting a break, and I’m perfectly open to such a break now as well, if the Chair believes we should do so.

Hon. C. James: I’ll just respond to the question, and then…. I know that the members want to take a break. And, you know, I think it’s…. I respect the member in bringing forward the issues. I respect the member. We know that our Green partners are against LNG development. We understand that, and I think the member is very articulate in raising his issues and concerns. But when we take a look at the success in meeting the four conditions and meeting our commitments to British Columbia as a government who looks at how we balance our promises, economically, socially, and environmentally, and our commitments to reconciliation, I, in fact, am very proud of the four conditions that we’ve put in place and the work that we’ve done to be able to address those.

Jobs for British Columbia. Again, I come back to the jobs strategy around, around “locals first” around the support for apprentices on the project. When it comes to partnerships with First Nations — 20 bands, all of the bands, elected bands, along the route who have signed on, who have partnerships, who see this as an opportunity for economic development and for growth for their communities and opportunities for their members to be able to be working.

The fair return for British Columbians — $23 billion when it comes to support for programs and services here in British Columbia, including action around climate. I think it’s critical. And I know we’ll get a chance to talk about those as well as we go through this process and other processes through the budget.

Protection for our air, land and water, the fact that we required LNG emissions to be included as part of CleanBC and brought forward a commitment around CleanBC, over $900 million in the budget to commit to environmental protections. I think it speaks to our commitment as a government around addressing environmental issues and the fact that we’ve been able to sit down with a large company and get to a final investment decision that recognizes how important that is and requires us to live up to this.

Do I expect the member to continue to raise concerns and continue to hold us accountable for this? Yes, I do. I expect that that’s exactly what the member will do and what other members will do and what the people of British Columbia should do as well.

With that, Chair, we will take a ten-minute break?

The Chair: The member has a question. Then we’ll have a break.

A. Weaver: A brief follow-up because the issue of $23 billion was raised again. Could the minister please articulate how that $23 billion is calculated and not just generally but actually specifically? That number has been batted around a lot. It used to be $40 billion; now it’s $23 billion.

Despite asking a multitude of times, not once have I got an answer as to what makes up the $23 billion and where that number came from.

Hon. C. James: I’m happy to answer that question when we come back from recess.

The Chair: The House is recessed for ten minutes.

The committee recessed from 5:31 to 5:44 p.m.

Hon. C. James: The member asked a question around the $23 billion and where the $23 billion came from. We did offer a briefing, an opportunity to go through that, but I know the member wasn’t able to make it. I just wanted to let the member know we can provide that opportunity, the documents around the generic LNG project and the highs and lows that we’ve been talking about. That information will be public. It’s going to go up on the site, so we can provide an opportunity for the member to get the materials and then ask questions as we go on. I expect committee stage will continue, and there will be an opportunity for the member to ask questions, if that works for the member.

Today in the legislature we debated Bill 5: Budget Measures Implementation Act, 2019 at second reading. This bill amends several pieces of legislation in order to implement a number of the tax measures proposed in the BC Government’s budget. As one might expect from my earlier detailed remarks on the overall budget, I spoke in favour of this bill.

Below I reproduce the video and text of my remarks.

Video of Speech

Text of Speech

A. Weaver: It gives me great pleasure to rise and speak on second reading on Bill 5, 2019: Budget Measures Implementation Act.

As we know, this bill implements a number of the tax changes that were outlined in the budget. I won’t go into rather gory detail on this. Of course, I did speak quite a long time to the original budget, and we’re seeing a few of the items there reflected in the implementation act here.

There’s, obviously, a number of initiatives — major new initiatives — like the new B.C. child opportunity benefit, as well as things like expanding existing programs, like the small business venture capital tax credit. I’ll come to some others shortly. There’s a number of other minor changes that we’ve been told clarify administrative aspects of existing taxes. By and large, I and my colleagues are supportive of the overall direction of this budget, as we articulated in our budget speech.

The first one I want to address, though, is section 1 of Bill 5, 2019. This is a proposed change to the Carbon Tax Act. Now, it’s been suggested to us that the legislative change here just clarifies that the existing penalty already exists for selling natural gas without a certificate, and the legislation wasn’t clear enough previously. I must admit. A flag was raised by this section, and I look forward to a briefing on this section, in approximately 45 minutes, to ask a few questions directly about what was intended here.

Other sections in the bill are not particularly controversial, from our perspective.

I want to address the flow-through mining tax credit. This is a key piece of ongoing legislation, or now becoming permanent, that we’ve seen in budget implementation act after budget implementation act — at least every year since I’ve been here. It’s either done for one year or a couple of years, sometimes three years. We know that certainty is critical to the industry. One of the reasons why this is, essentially, being made permanent is to provide said certainty for the mining sector.

In that aspect, I’m very pleased to see this become a permanent feature of legislation, because we know — I mean, pun intended — mining, literally, is the bedrock industry of our economy. It’s the foundation of much of what we have — that and forestry. We build a foundation with mining and the house with wood from our forestry sector, so it’s critical that we continue to support these industries.

I recognize that the mining sector would have approached the government and suggested that this would be something that they’d like to see. Government has already announced this. In January, they announced that they were going to be doing this and that the tax credit would continue to flow directly from a company through to investors.

My one caveat in all of this is not that I’m opposed to the notion of flow-through tax credits to the mining sector. The problem I have, of course, with this is that we need to ensure that there’s government oversight. The flow-through program is important in terms of attracting investment, particularly into venture capital. But without proper regulatory oversight, it can be exploited.

It is very difficult for the average investor to get access to this flow-through tax credit. You have to be part of private placements. You have to, sometimes, know the right person who is issuing it. So it’s not really a tool that’s open to the average retail investor, and that’s one of the caveats and flags I have. It allows so-called in-the-know investors or investment corporations to get the flow-through tax credits. If there’s no hold on them…. And the holds vary. These can actually be dumped on the market, as soon as they become tradeable, at a discount to the market. In essence, it can be an unfair advantage that certain people in the know get when they have access to the flow-through.

So the notion and concept — very much support. I hope government ensures that there’s regulatory oversight and that we ensure that, in fact, the average retail investor is not put at disadvantage, as only a select few have access to these programs for private placements and so forth.

The child opportunity benefit, I would argue, is a flagship change in this government’s budget. It’s a flagship change that we’re very pleased to support.

Actually, what’s fascinating about this is you can view this as an important transition credit. As we start to worry more and more about gig economies, as we start to worry more and more about artificial intelligence replacing certain jobs in our society, this really is looking like a form of basic income. But it’s really a form of basic income that applies to people with children. I suspect, both in the province of British Columbia and federally, we’re going to see more and more of these kinds of initiatives take place as the gig economy continues.

This change aligns very nicely with the fundamental core values of our party, which is the notion of intergenerational equity. This is a benefit that’s being applied for people with children, who are struggling now with affordability issues. They’re going to be given a little bit of a leg up, and that is something we’re very proud to support — an initiative that we think is a very timely initiative that government has brought in.

Child poverty in British Columbia is stubbornly high. One in five children in B.C. has been growing up in poverty. Honestly, when you think about it, this is not Zambia. This is not some Southeast Asian country that’s struggling with a dictator. This is British Columbia. Twenty percent of children living in poverty in British Columbia? This is unacceptable. I think most British Columbians would argue that this is an unacceptable situation, particularly as our province is so wealthy and as we have so many opportunities before us.

We believe that supporting children in their earliest years…. Whether it be through education by ensuring that kids get the services they need when they need them in the school system, those critical developmental years; whether it be through support to ensure that parents struggling to make ends meet have access to early childhood education provisions and services; whether they have access to child benefits — these are all critical for income security for struggling families in British Columbia. So good on government for doing this.

We understand that it can’t go until 2020. I’m a little…. I understand that the critic from the official opposition was troubled that it’s going to take a year to get in, and government has argued that the revenue agency needs this lead time.

I’m not so sure, knowing the way governments work, that in fact it would be possible for the federal government to do the necessary changes in the time frame that the member opposite wants in light of the fact that they can’t even still get their payroll system done federally. I don’t know how many years they’ve been working on that. They can’t even fix the T4 slips for their own employees who are filing tax returns this year.

With the greatest respect to the member opposite, I’m going to go….

Interjection.

A. Weaver: Yeah, benefit of the… And I look forward to the question at committee stage, because I agree it’s a very legitimate question. But I am quite troubled, federally, when I hear that people are getting T4 slips that don’t reflect the income they actually made.

This credit. One of the good things about this, of course, is it’s being extended to children who are 18. You know, hon. Speaker, it seems that I always miss out on these. My children have just passed the 18 threshold yet again. When you are born right at the boundary of the baby boom era, you get nothing. When you graduated from university…. We always look at the millennials, and we always look at the baby boomers, but there are those people who were born in the early 1960s, those transition people. They didn’t reap the benefits of the boomers. They didn’t have the people coming to the universities when they graduated, interviewing for jobs.

Back in the day, you had a degree? You got a job. Back in the 1980s, we didn’t have that. So yet again, had I been born a few years later — my generation; those transitional boomers, let’s call them — there would have been a benefit. But no, we don’t get a benefit.

So I feel no conflict at all in resoundingly voting for this, for the extending of this tax credit, given that my children have all aged out of this benefit.

I’m not sure that families with higher-end incomes, at the higher end, will be better off. In fact, they might even be worse off than under the existing credit. However, I think most people would reflect upon the fact that we have a society where it’s difficult to make ends meet if you’re earning below, say, $80,000 as a net income of your family. That’s really tough in places like Victoria and Vancouver to make ends meet.

If you have a couple of children living in a two-bedroom house, you’re maybe spending $1,500 to $2,000 a month of after-tax income. That’s a lot of money. Groceries aren’t going down, transportation costs. Hydro — heaven forbid, you get a hydro bill. It’s going up dramatically. I think people understand that it is important to target those families that need it, particularly families that are on the lower income stage.

We’ve got some changes to the motor fuel tax. This is an important change, the one allowing for an additional 1½ cents per litre of gas to be collected in Metro Vancouver. Of course, this is the power that the mayors wanted to fund their phase 2 transit projects. Again, they’re responsible for 20 percent of the cost, and they have a $30 million shortfall.

I suspect people in Vancouver will be concerned, but in fact, I suggest that with the transitioning to…. If you view this in the context of the ZEV mandate that’s been introduced, we’re going to find more and more people, particularly in Metro Vancouver and on Vancouver Island, switching to electric vehicles in a timely fashion. The one danger is that if you become overly reliant on fuel taxes, at some point, with the adoption of electric vehicles, you’re going to be in a shortfall down the road — which is a good problem to have, I would suggest, a good problem to find alternate sources.

Let’s continue on moving forward with this. TransLink’s estimate was that this small 1½ cents is going to cost the average vehicle $24 a year. I think most people in Metro Vancouver would be pretty okay with a much revamped and upgraded transit system. One of the things, I think, we need to look at is getting transit out into the Fraser Valley in a very efficient manner. It troubles me that TransLink stops and B.C. Transit picks up. There are transitional issues that they have to deal with, and hopefully, that will get dealt with in the months ahead.

The small business venture capital tax credit. A small change here but an important change: effective 2019, the annual tax credit limit that an individual can claim for an investment will increase from $60,000 to $120,000 a year. Again, it’s a small change but a very important change, particularly for the innovation community in British Columbia.

So I take exception with the notion from members opposite that said there’s nothing in here for business. It’s actually not true. This change, while small, is actually critical for the innovation industry: technology companies, start-up companies, companies that are looking to make investments in themselves. This is a very welcome change. It assists companies in scaling up from being stuck perpetually in the bottom echelons of corporate hierarchy. With an ability, through this tax credit, to do some reinvesting in themselves, it allows for a more efficient a scaling up of programs — again, something that we’re delighted to support.

Government’s expanding support at the commercialization stage to businesses outside of Vancouver and Victoria only. This is important. You know, it’s a good place to start. But businesses in Victoria and Vancouver, I would suggest, also need to get some benefits as well.

Speculation tax. We have a slight change in this bill too. Another exemption to the speculation tax has been added for an owner of a residential property, for a calendar year, if a residence that is part of the residential property becomes uninhabitable fewer than 60 days before the end of the immediately preceding calendar year.

You can imagine a house burning down, for example. It would be pretty rough to be nailed with a speculation tax if your house is uninhabitable, because it happened to be habitable, you had a house fire, and it’s no longer inhabitable. So I’m obviously supportive of this approach to add this commonsense exemption for people who are being burdened. That would be another…. There are other commonsense exemptions that we might talk about at some point in the future, but now is not the day for that. I’m sure in question period in the weeks ahead, I’ll hear some other examples.

There are a number of other minor changes to existing taxes. For example, section 33 “authorizes the use and disclosure of personal information for the purpose of administering and enforcing the Income Tax Act,” if collected under…. Which is why that’s important because we’re now getting a linking there between Home Owner Grant Act and the Land Tax Deferment Act and Income Tax Act and this allows for sharing. Gone are the days that you can actually buy and sell properties and try to avoid, through nefarious activity, paying the taxes that you’re supposed to pay.

The bill also prevents local governments from averaging or phasing in the additional school tax that was announced. I found that interesting that they did this, because I wasn’t aware that there were municipalities planning to do so. Clearly, if the minister is bringing it forward, there must have been. It’ll be interesting to find out more details there.

In conclusion, as promised, not a long second reading address to this. Obviously, my colleagues and I will be supporting this bill. They’re not all, again, as I say, the things we would do, but we are not government. We are but three MLAs who spend a lot of time going through the documents we have to ensure that the essence of the values that are reflected in our confidence and supply agreement are in bills like this. We’re delighted to see that they are.

We’re very pleased, as I said, with the government for funding CleanBC to the extent that they did. As well, we’re very pleased with the professional reliance reform, increasing affordability for students. I could make a cheap shot here, but I’m going to resist the temptation. One of the things I think is…. Oh, no, I don’t think it’s appropriate.

One of the things that is really, really…. I can’t emphasize enough how important it was to get the interest removed from student loans. One of the things I hope to see further is, as our province continues to benefit from a growing, clean economy, that we start to think about needs-based grants system for certain post-secondary education students. We’re one of the few — I’m not sure if there are any others that don’t — provinces that doesn’t have a needs-based grant system. To me, if I look at the progressive northern European nations and I look at some of the more progressive societies in our world, public education, post-secondary education and education in general is deemed to be a right as opposed to a privilege.

I would suggest that no student in British Columbia should have availability of resources be a barrier to them attending a post-secondary institution. As a society, it’s critical that we need to nurture our next generation. If they don’t, the ability to actually go to post-secondary institutions…. I think it’s imperative that we actually create some resources to allow them to do so, in a manner that doesn’t burden them for the rest of their life.

If you’re a student who, perhaps, comes from a poorer family, you don’t have the financial wherewithal to pay for the post-secondary education. You may be working part-time as you do it. It’s tough working part-time. You may be working in a restaurant. You may be being paid $13 an hour. You may be getting even $15, even $20. Even with tips, it’s tough to make ends meet while paying tuition fees and living full time in a province. So I think a needs-based grant system is the direction that our society here in British Columbia needs to go, something we’re committed to continuing to work towards advocating for. It is ultimately one of our most important jobs — to preserve our education system for future generations and to not make it one that only the elite can actually attend.

I will have note across that I did not take that opportunity to make any cheap shots about any comments that anyone made about the importance of the grant system.

As I said, we would have made different choices. We are very grateful to the minister and her staff for the process that was put in place here. We do commend the minister for actually listening to the Finance Committee. When I saw some of the inclusions of support for the Foundry services across B.C….I was on the Finance Committee last year. The cases being made by Foundry have been so compelling and their successes so great that I was very pleased to see that the minister listened to the report from the Finance Committee. Both two years ago and I suspect…. I didn’t read the full thing this year — but I know two years ago, we were all in on the Foundry and their presentation. It’s good to see that that process led to it.

Also, we provided a submission, like others, and we were pleased that CleanBC was funded. Obviously, one of the things that we would have liked to see more of…. We would have liked to see more investment in terms of, say, riparian habitat preservation; and more investment in terms of protecting species at risk. We recognize the problems with federal and provincial jurisdiction.

We would have liked to have seen, perhaps, more investment in terms of forestry, but again, I recognize government is starting the process to build and take a look at the forest system. Some of the low-hanging fruit that we can actually deal with and that don’t cost that much money are regulatory.

I’m quite excited to take a look at government, despite what question period said — taking a look at our tenure lot licensing system here in B.C. I can tell you that these are Crown trees on Crown land. When we give Crown trees on Crown land to multinationals that don’t actually report to the people of British Columbia but have a fiduciary responsibility to their shareholders to maximize profits, those said Crown trees on Crown land are shipped south of the border as raw logs because (a) you can avoid softwood lumber tariffs, and (b) why have a mill in Burns Lake if you could have one south of the border and mill it up there?

We really need to take a look at this. I’m not advocating for reintroducing the appurtenancy requirement, but we’ve got to do better than this tenure lot licensing system.

We could also stop spraying glyphosate on our forests. Why on earth do we think it’s okay? Well, the reason why we do it is not because the forest companies actually want to go into our pine forests and spray glyphosate. It costs money. They have a requirement to allow the stands to come back, and this is part of what they believe they need to do in order to meet requirements.

However, we would suggest that if you eliminated that use of glyphosate, you actually get a double benefit. Number 1, you get the broadleaf undergrowth — the aspens, for example, and other broadleaf undergrowth, which are critical food sources for ungulates. These are depleting in our province, partly because of predator management but also inappropriate forest management practices which have led to predators having more take-in on our ungulates — and food sources going away. Co-benefit right there.

Secondly, if you allow the aspens and the birches to start to grow up, you provide a natural fire retardancy. We’re spending money after the fact, in terms of fighting fires. We’re spending money rebuilding devastated areas. We’re spending money going into forests and trying to deal with things after the fact.

Perhaps we could take a little proactive approach and say: “You know what? A little bit of forestry policy change. Let’s stop spraying glyphosate. Let’s allow that broadleaf undergrowth. We’re not going to have a monoculture stand. We recognize it may take longer for the pines to come back and compete, etc., but we’re going to have healthy ungulate populations and we’re going to provide a natural fire redardant. And guess what. We’re going to save money in the process.” It seems to me a win-win-win there. Hopefully, the Forests Minister and budgetary measures moving forward will deal with this.

Finally, moving forward, we’ll continue to work to ensure that government continues to deliver on the promises it has made. It has offered British Columbia as putting people first — the health and wellbeing of people first — while, at the same time, ensuring that the innovation agenda that this government has adopted in partnership with our party continues to thrive.

And it is thriving. Next week is the B.C. Tech Summit in Vancouver. I hope to see members there. I can tell you the community in B.C. is excited. The innovation community feels reinvigorated, and I’m very much looking to see the fruition of this good hard work that’s been going on for the last 18 months or so play out in the next couple of years.

I thank you for your time. With that, I’ll take my place