Second Session, 39th Parliament

official report of Debates of the Legislative Assembly

(hansard)

Tuesday, March 30, 2010 Morning Sitting Volume 13, Number 1

the honourable , speaker

ISSN 0709-1281 PROVINCE OF (Entered Confederation July 20, 1871)

LIEUTENANT-GOVERNOR His Honour the Honourable Steven L. Point, OBC

Second Session, 39th Parliament

SPEAKER OF THE LEGISLATIVE ASSEMBLY Honourable Bill Barisoff

EXECUTIVE COUNCIL

Premier and President of the Executive Council...... Hon. Minister of State for Intergovernmental Relations...... Hon. Deputy Premier and Minister of Finance...... Hon. Minister of State for the Olympics and ActNow B.C...... Hon. Mary McNeil Minister of Aboriginal Relations and Reconciliation...... Hon. George Abbott Minister of Advanced Education and Labour Market Development...... Hon. Minister of Agriculture and Lands...... Hon. Steve Thomson Attorney General...... Hon. Michael de Jong, QC Minister of Children and Family Development and Minister Responsible for Child Care...... Hon. Minister of Citizens' Services and Minister Responsible for Multiculturalism and the Public Affairs Bureau...... Hon. Minister of Community and Rural Development...... Hon. Bill Bennett Minister of Education and Minister Responsible for Early Learning and Literacy...... Hon. Margaret MacDiarmid Minister of Energy, Mines and Petroleum Resources...... Hon. Minister of State for Mining ...... Hon. Minister of Environment...... Hon. Minister of State for Climate Action...... Hon. Minister of Forests and Range and Minister Responsible for the Integrated Land Management Bureau...... Hon. Minister of Health Services...... Hon. Minister of Healthy Living and Sport...... Hon. Minister of Housing and Social Development...... Hon. Minister of Labour...... Hon. Minister of Public Safety and Solicitor General...... Hon. Minister of Small Business, Technology and Economic Development...... Hon. Minister of Tourism, Culture and the Arts...... Hon. Minister of Transportation and Infrastructure...... Hon.

LEGISLATIVE ASSEMBLY

Leader of the Official Opposition...... Carole James Deputy Speaker...... Assistant Deputy Speaker...... Claire Trevena Deputy Chair, Committee of the Whole...... Clerk of the Legislative Assembly...... E. George MacMinn, OBC, QC Clerk Assistant...... Robert Vaive Clerk Assistant and Law Clerk...... Ian D. Izard, QC Clerk Assistant and Clerk of Committees...... Craig H. James Clerk Assistant and Committee Clerk...... Kate Ryan-Lloyd Sergeant-at-Arms...... Gary Lenz Director, Hansard Services...... Jo-Anne Kern Acting Legislative Librarian...... Peter Gourlay Legislative Comptroller...... Dan Arbic ALPHABETICAL LIST OF MEMBERS LIST OF MEMBERS BY RIDING

Abbott, Hon. George (L)...... Shuswap Abbotsford-Mission...... Hon. Randy Hawes Austin, Robin (NDP)...... Skeena Abbotsford South...... Bains, Harry (NDP)...... Surrey-Newton Abbotsford West...... Hon. Michael de Jong, QC Barisoff, Hon. Bill (L)...... Penticton Alberni–Pacific Rim...... Scott Fraser Barnett, Donna (L)...... Cariboo-Chilcotin Boundary-Similkameen...... John Slater Bell, Hon. Pat (L)...... Prince George–Mackenzie Burnaby–Deer Lake...... Kathy Corrigan Bennett, Hon. Bill (L)...... Kootenay East Burnaby-Edmonds...... Raj Chouhan Black, Dawn (NDP)...... New Westminster Burnaby-Lougheed...... Harry Bloy Black, Hon. Iain (L)...... Port Moody–Coquitlam Burnaby North...... Richard T. Lee Bloy, Harry (L)...... Burnaby-Lougheed Cariboo-Chilcotin...... Bond, Hon. Shirley (L)...... Prince George–Valemount Cariboo North...... Bob Simpson Brar, Jagrup (NDP)...... Surrey-Fleetwood Chilliwack...... Cadieux, Stephanie (L)...... Surrey-Panorama Chilliwack-Hope...... Hon. Barry Penner Campbell, Hon. Gordon (L)...... –Point Grey Columbia River–Revelstoke...... Norm Macdonald Cantelon, Ron (L)...... Parksville-Qualicum Comox Valley...... Don McRae Chong, Hon. Ida (L)...... Oak Bay–Gordon Head Coquitlam–Burke Mountain...... Douglas Horne Chouhan, Raj (NDP)...... Burnaby-Edmonds Coquitlam-Maillardville...... Diane Thorne Coell, Hon. Murray (L)...... Saanich North and the Islands Cowichan Valley...... Bill Routley Coleman, Hon. Rich (L)...... Fort Langley–Aldergrove Delta North...... Guy Gentner Conroy, Katrine (NDP)...... Kootenay West Delta South...... Vicki Huntington Coons, Gary (NDP)...... North Coast Esquimalt–Royal Roads...... Maurine Karagianis Corrigan, Kathy (NDP)...... Burnaby–Deer Lake Fort Langley–Aldergrove...... Hon. Rich Coleman Dalton, Marc (L)...... Maple Ridge–Mission Fraser-Nicola...... de Jong, Hon. Michael, QC (L)...... Abbotsford West Juan de Fuca...... Dix, Adrian (NDP)...... Vancouver-Kingsway Kamloops–North Thompson...... Donaldson, Doug (NDP)...... Stikine Kamloops–South Thompson...... Hon. Kevin Krueger Elmore, Mable (NDP)...... Vancouver-Kensington Kelowna–Lake Country...... Falcon, Hon. Kevin (L)...... Surrey-Cloverdale Kelowna-Mission...... Hon. Steve Thomson Farnworth, Mike (NDP)...... Port Coquitlam Kootenay East...... Hon. Bill Bennett Fleming, Rob (NDP)...... Victoria–Swan Lake Kootenay West...... Katrine Conroy Foster, Eric (L)...... Vernon-Monashee Langley...... Hon. Mary Polak Fraser, Scott (NDP)...... Alberni–Pacific Rim Maple Ridge–Mission...... Gentner, Guy (NDP)...... Delta North Maple Ridge–Pitt Meadows...... Michael Sather Hammell, Sue (NDP)...... Surrey–Green Timbers Nanaimo...... Leonard Krog Hansen, Hon. Colin (L)...... Vancouver-Quilchena Nanaimo–North Cowichan...... Doug Routley Hawes, Hon. Randy (L)...... Abbotsford-Mission Nechako Lakes...... Hayer, Dave S. (L)...... Surrey-Tynehead Nelson-Creston...... Michelle Mungall Heed, Hon. Kash (L)...... Vancouver-Fraserview New Westminster...... Dawn Black Herbert, Spencer (NDP)...... Vancouver–West End North Coast...... Gary Coons Hogg, Gordon (L)...... Surrey–White Rock North Island...... Claire Trevena Horgan, John (NDP)...... Juan de Fuca North Vancouver–Lonsdale...... Hon. Naomi Yamamoto Horne, Douglas (L)...... Coquitlam–Burke Mountain North Vancouver–Seymour...... Jane Thornthwaite Howard, Rob (L)...... Richmond Centre Oak Bay–Gordon Head...... Hon. Ida Chong Huntington, Vicki (Ind.)...... Delta South Parksville-Qualicum...... James, Carole (NDP)...... Victoria–Beacon Hill Peace River North...... Karagianis, Maurine (NDP)...... Esquimalt–Royal Roads ...... Hon. Blair Lekstrom Krog, Leonard (NDP)...... Nanaimo Penticton...... Hon. Bill Barisoff Krueger, Hon. Kevin (L)...... Kamloops–South Thompson Port Coquitlam...... Kwan, Jenny Wai Ching (NDP)...... Vancouver–Mount Pleasant Port Moody–Coquitlam...... Hon. Iain Black Lake, Terry (L)...... Kamloops–North Thompson Powell River–Sunshine Coast...... Nicholas Simons Lali, Harry (NDP)...... Fraser-Nicola Prince George–Mackenzie...... Hon. Pat Bell Lee, Richard T. (L)...... Burnaby North Prince George–Valemount...... Hon. Shirley Bond Lekstrom, Hon. Blair (L)...... Peace River South Richmond Centre...... Rob Howard Les, John (L)...... Chilliwack Richmond East...... Linda Reid Letnick, Norm (L)...... Kelowna–Lake Country Richmond-Steveston...... Hon. John Yap MacDiarmid, Hon. Margaret (L)...... Vancouver-Fairview Saanich North and the Islands...... Hon. Murray Coell Macdonald, Norm (NDP)...... Columbia River–Revelstoke Saanich South...... Lana Popham McIntyre, Joan (L)...... West Vancouver–Sea to Sky Shuswap...... Hon. George Abbott McNeil, Hon. Mary (L)...... Vancouver–False Creek Skeena...... Robin Austin McRae, Don (L)...... Comox Valley Stikine...... Doug Donaldson Mungall, Michelle (NDP)...... Nelson-Creston Surrey-Cloverdale...... Hon. Kevin Falcon Penner, Hon. Barry (L)...... Chilliwack-Hope Surrey-Fleetwood...... Jagrup Brar Pimm, Pat (L)...... Peace River North Surrey–Green Timbers...... Polak, Hon. Mary (L)...... Langley Surrey-Newton...... Harry Bains Popham, Lana (NDP)...... Saanich South Surrey-Panorama...... Ralston, Bruce (NDP)...... Surrey-Whalley Surrey-Tynehead...... Dave S. Hayer Reid, Linda (L)...... Richmond East Surrey-Whalley...... Bruce Ralston Routley, Bill (NDP)...... Cowichan Valley Surrey–White Rock...... Gordon Hogg Routley, Doug (NDP)...... Nanaimo–North Cowichan Vancouver-Fairview...... Hon. Margaret MacDiarmid Rustad, John (L)...... Nechako Lakes Vancouver–False Creek...... Hon. Mary McNeil Sather, Michael (NDP)...... Maple Ridge–Pitt Meadows Vancouver-Fraserview...... Hon. Kash Heed Simons, Nicholas (NDP)...... Powell River–Sunshine Coast Vancouver-Hastings...... Shane Simpson Simpson, Bob (NDP)...... Cariboo North Vancouver-Kensington...... Simpson, Shane (NDP)...... Vancouver-Hastings Vancouver-Kingsway...... Adrian Dix Slater, John (L)...... Boundary-Similkameen Vancouver-Langara...... Hon. Moira Stilwell Stewart, Hon. Ben (L)...... Westside-Kelowna Vancouver–Mount Pleasant...... Jenny Wai Ching Kwan Stilwell, Hon. Moira (L)...... Vancouver-Langara Vancouver–Point Grey...... Hon. Gordon Campbell Sultan, Ralph (L)...... West Vancouver–Capilano Vancouver-Quilchena...... Hon. Colin Hansen Thomson, Hon. Steve (L)...... Kelowna-Mission Vancouver–West End...... Spencer Herbert Thorne, Diane (NDP)...... Coquitlam-Maillardville Vernon-Monashee...... Eric Foster Thornthwaite, Jane (L)...... North Vancouver–Seymour Victoria–Beacon Hill...... Carole James Trevena, Claire (NDP)...... North Island Victoria–Swan Lake...... Rob Fleming van Dongen, John (L)...... Abbotsford South West Vancouver–Capilano...... Yamamoto, Hon. Naomi (L)...... North Vancouver–Lonsdale West Vancouver–Sea to Sky...... Joan McIntyre Yap, Hon. John (L)...... Richmond-Steveston Westside-Kelowna...... Hon. Ben Stewart

Party Standings: Liberal 49; New Democratic 35; Independent 1

CONTENTS

Tuesday, March 30, 2010 Morning Sitting

Page

Tributes...... 3851 Jean Audrey Munday D. Hayer

Orders of the Day

Committee of the Whole House...... 3851 Bill 6 — Finance Statutes Amendment Act, 2010 B. Ralston Hon. C. Hansen D. Donaldson

Proceedings in the Douglas Fir Room

Committee of Supply...... 3862 Estimates: Ministry of Small Business, Technology and Economic Development (continued) J. Kwan Hon. I. Black J. Brar N. Macdonald

3851

TUESDAY, MARCH 30, 2010 Committee of the Whole House

The House met at 10:03 a.m. BIll 6 — FINANCE STATUTES AMENDMENT ACT, 2010 [Mr. Speaker in the chair.] TheH ouse in Committee of the Whole (Section B) on Prayers. Bill 6; C. Trevena in the chair.

Tributes The committee met at 10:07 a.m.

jean AUDREY munday On section 1.

D. Hayer: A very prominent member of our com- B. Ralston: Before I begin, I may say that I'd asked the munity, Jean Audrey Munday, passed away on March 3. deputy minister's office for a briefing on this bill, and I She was 82 years old. was told that no one was available until next week. So Jean was a very community-minded and caring lady. if I seem somewhat slow in my questions, it's because I really haven't had a chance to have been briefed on this She was very motivating, exceptionally active in our very technical bill. It may take, therefore, a bit longer be- community. She served as a director and executive on cause of that. many boards in numerous community organizations Section 1 amends section 65, but it really refers to sec- and associations. tion 65.1, which refers to an "uncertificated security."C an Jean was a founding member of the Guildford Com- the minister then explain, perhaps dealing with sections munity Partners association. She was instrumental in 1 and 2 together, what an uncertificated security is? building the Guildford community recreation centre, and she was a founding member of the Surrey seniors Hon. C. Hansen: What these two sections provide for activity society. is the issuance of uncertificated securities. The current Jean and her husband, Ray, have lived in Surrey for provision only applies to securities that are issued as a about 50 years and raised four sons and six grandchildren. physical certificate and does not consider the issuance of Jean was a registered nurse, an airline stewardess, an uncertificated securities. These amendments, sections 1 active realtor, and she also put together the first syllabus and 2, provide for this new way of issuing securities. for the Medical Office Assistants Association in 1962, after liaison with the medical staff and doctors. B. Ralston: What's the purpose of proceeding in this In 1960 she was a founding member of the Riverside– direction? I take it that it's got something to do with Port Mann ratepayers association and was involved in electronic versions of certificates as opposed to paper improving the community in the Surrey-Guildford versions, but perhaps the minister could clarify that. area. She was a very dedicated member of the Newton Fellowship Baptist Church for 30 years. Hon. C. Hansen: Actually, the member is correct in In 2003 Jean received the Queen's golden jubilee that this does allow for the electronic issuance of secur- medal from our late MP Chuck Cadman for her contri- ities that would no longer require to be done in a paper form. This is an initiative that's being driven by theC DS, bution to our community and city. Clearing and Depository Services, and is really recog- She will be missed. She was an open, giving and lov- nizing a new, paperless way of issuing securities. ing personality, and the personality of Jean will be truly [1010] missed by all the Surrey residents of British Columbia. I would ask the House to recognize all her contributions B. Ralston: In proposed section 65.1 it refers to to our city, our province and our country. the Lieutenant-Governor designating "one or more persons as certifiers" and "one or more persons as Orders of the Day counter-certifiers." Can the minister explain what that means and who those persons might be? Hon. M. de Jong: Good morning. In Committee A, I call Committee of Supply — for the information of Hon. C. Hansen: This process would be the same as members, the continuing estimates of the Ministry of currently exists for physical securities and really allows Small Business — and in this chamber, committee stage for the Lieutenant-Governor-in-Council to designate debate on Bill 6, the Finance Statutes Amendment Act, an individual. It would be somebody in the Ministry of 2010. Finance who would be designated as the certifier under [1005] this section. 3852 British Columbia Debates Tuesday, March 30, 2010

B. Ralston: In the proposed section 65.1(4) there's a a change to the definition of "unaffiliated director" as reference to the same two persons that we spoke of and well. then "a statement in a form established by the minister." I take it that this is referring to a paper form, or would Hon. C. Hansen: The new definition of financial that similarly be electronic as well? services facilitates proposed reforms to the act's enforce- ment tools. For example, section 99(2) is amended to Hon. C. Hansen: This would provide for the signing permit the regulator to order a person to cease being off on the form that would be used electronically. a director or officer of a British Columbia credit union, insurance company or trust company if convicted of an B. Ralston: Can the minister just explain: what would offence arising from a transaction related to financial be the security provisions that would ensure that there services. were not counterfeit certificates of this type issued? B. Ralston: I'm looking again at the definition of an Hon. C. Hansen: Before a security is released to the unaffiliated director. There appear to be some changes in market, to the dealers, it would be verified by lawyers, that. I'm wondering what the significance of those chan- who would ensure the validity of the security in its ges is. The new definition strikes out the "or" at the end electronic format. I think, basically, the issues around of paragraph (f). Paragraph (f) reads: "a relative of the security of uncertificated securities have been looked at individual described in paragraph (a) or (b) who occu- very carefully, and it is felt, actually, that it is a more se- pies the same home as that individual…." Then "adding cure method of dealing with securities than the previous 'or' at the end of paragraph (g)" and then "adding the fol- practice of paper-based, certificate-based securities. lowing paragraph…." It goes on for some length. This appears to be an issue where it may be suggested The Chair: Members, it seems that we're discussing that a conflict arises, and this would be the statutory section 2. provision that would regulate that. So I'm interested in the motivation for the changes. Section 1 approved. Hon. C. Hansen: The member is essentially cor- On section 2. rect. The change to the definition of affiliated director could apply, for instance, to lawyers and accountants B. Ralston: Thank you, Madam Chair. I'd hoped I'd who provide a significant amount of services to a finan- made it clear to you that I proposed to deal with those cial institution. Oversight by the board of directors of two together. But that's fine. a financial institution is the key element to proper risk Can the minister then advise — assuming that this management, and unaffiliated directors are a core com- section passes, as I'm sure it will — when this procedure ponent of ensuring that the oversight is independent of will be implemented? management. As with similar Alberta and federal re- [1015] strictions, the change does not prohibit these persons from serving as directors, only serving as unaffiliated Hon. C. Hansen: These sections will come into ef- directors. fect upon royal assent. Therefore, at any time after royal assent we would have the ability to issue uncertificated B. Ralston: Just so I have it clear, then. Someone securities. The exact timing of the first issuance is some- who is in that position — for example, a lawyer or an thing that we will work on in conjunction with other accountant who did…. The reference is to "the total an- provinces. Other provinces are going down a similar nual billing to the company in respect of the goods or road of providing for these uncertificated securities, so services exceeds 10% of the total annual billings of the the exact timing of when the first issuance might occur individual, partnership or corporation." is still to be determined. [1020] Is the purpose of the amendment to permit that per- Section 2 approved. son to take a position as an unaffiliated director or the opposite, to prohibit them from doing that? On section 3. Hon. C. Hansen: If it exceeds 10 percent of their in- B. Ralston: This section takes us to amendments to come, then this provision would restrict them from the Financial Institutions Act. The first section amends serving as an unaffiliated director. a number of definitions, so perhaps the minister could explain the motivation for changing — in particular, B. Ralston: Just so I'm clear. I think that rather than adding the definition of "financial services." There's 10 percent of the income of the individual, it's 10 percent Tuesday, March 30, 2010 British Columbia Debates 3853

of the annual billing of the company, as I understand the to the federal and Alberta frameworks. These proposed provision. amendments would adopt the federal and Alberta legis- lative frameworks. Hon. C. Hansen: The member is correct. It would be In 1991 the federal government adopted a modern in excess of 10 percent of the billings for that individual statutory framework for actuaries. That legislation re- — or a partnership or a corporation, if that was the case. quired the board of directors to appoint the company's actuary. It establishes professional qualifications.I t man- B. Ralston: I believe the minister made reference to dates annual reporting to the board of directors, and it Alberta statutes. Does this provision mirror that of other gives appointed actuaries the statutory right to access provinces, or is it in the standard…? I forget the term, information. but there is a standard proposed corporate legislation The federal legislation also replaced specific valida- that provinces are trying to institute uniformly across tion requirements with the general obligation to value Canada. actuarial and other policy liabilities in accordance with generally accepted actuarial practice and gave broad dis- Hon. C. Hansen: This is similar to language we find cretion to the regulator to vary the standards. in other financial institutions legislation. With regard to other provinces and other jurisdictions, this is very sim- B. Ralston: Presumably, this would incorporate what ilar to language that's currently in Alberta and in federal is already a practice within the insurance companies. restrictions. As far as other provinces, we are certainly… That would be my first question. I just want to confirm These measures are consistent with what is happening in that. other jurisdictions but probably more closely resembles Secondly, this applies to all insurance companies, those of our neighbour immediately to the east. whether they're property and casualty or life insurance companies, I am assuming. What are the views of the in- Section 3 approved. surance industry on these proposed changes?

On section 4. Hon. C. Hansen: First of all, yes, this reflects existing practice. Secondly, yes, it applies to both property and B. Ralston: This is a significant expansion of section casualty and to life insurance. Thirdly, the industry 77, which refers to an insurance company's reserves. basically follows this practice currently. Therefore, it has The present section reads: "An insurance company no objections to the codification of these requirements. must value its claims liabilities and establish adequate reserves against those liabilities in accordance with the B. Ralston: The minister made reference to the regu- regulations." lator. The new proposed section 77 says: "An insurance This makes reference to requiring a company's ac- company must (a) establish adequate reserves against the tuary to determine that. Can the minister explain the value, as determined by the company's actuary." What's motivation for these proposed changes? the regulatory mechanism? If there's a disagreement be- tween what the company's actuary does and the regulator Hon. C. Hansen: My apologies. I couldn't hear the does, what's the method by which that's resolved? member's question. [1030]

B. Ralston: This new proposed section 77 makes ref- Hon. C. Hansen: If I had the member's question erence to the company's actuary, and I gather that this correct, it was: what would happen if there was a dis- is the purpose of a number of these amendments — to agreement between the opinion of the actuary and the introduce an actuary as a person who's legally required opinion of the superintendent? The answer is that the to make certain judgments about the operations of an superintendent has the powers under the act to override insurance company. Can the minister explain the pur- the approach that the actuary may take. pose of this section? There's a reference to…. I believe these are new sub- B. Ralston: The purpose of the act seems to be, and sections further along in the proposed amendment: we'll come to these sections later on, to require an insur- section 126.23(1)(a) and (1)(b). Can the minister ex- ance company to appoint an actuary for the company. Is plain the purpose of this amendment? there then still a provision for an independent audit by [1025] an independent actuary, I'm wondering? Or will the act of appointing an actuary and having that person do their Hon. C. Hansen: The reason for these amendments is work mean that there will be no requirement from the that the British Columbia legislative framework for ac- regulator for an independent actuary to view some or tuaries and actuarial requirements is outdated compared part or all of the company's operations? 3854 British Columbia Debates Tuesday, March 30, 2010

Hon. C. Hansen: As we get a little bit farther into In terms of risks, the other controls balance out what- section 14, there are provisions there that allow for the ever increased risk there may be by that unlicensed Financial Institutions Commission to appoint another company not having capital based in Canada. actuary to undertake a valuation of an insurance com- pany's liabilities. So yes, there is provision for outside B. Ralston: When one thinks of reinsurance, one actuaries to be brought in. thinks of the major global firms such as Swiss Re and Munich Re. Are they examples of companies that are li- Section 4 approved. censed in Canada, in that they have capital in Canada, or would they fall under this category of unlicensed re- On section 5. insurance companies?

B. Ralston: This section is entitled "Reinsurance" and Hon. C. Hansen: Most of the major reinsurance com- basically strikes half the wording in the existing section. panies are licensed in Canada — most of the major ones Can the minister explain why that is being done? that are operating in Canada. It may be that some of these large companies may have an arm that might be Hon. C. Hansen: This amendment removes the unlicensed, and in some cases, some of this reinsurance specific reference to limits on reinsurance of contract may be placed with those unlicensed arms of some of liabilities that may be placed by local insurance com- the existing large companies. panies with unlicensed reinsurers. Really, the purpose behind this is to allow us to match the legislative frame- B. Ralston: Does the minister have information as to work set out in the Canada Insurance Companies Act how many B.C. insurance companies or B.C.-based in- for federally regulated insurance companies. surance companies utilize this provision of 25 percent reinsurance with an unlicensed reinsurance company? B. Ralston: I'm not sure from the minister's response, but presumably there's some concern about unregis- Hon. C. Hansen: We don't have that breakdown. We tered reinsurance companies entering into financial don't have those stats, but it's our understanding that arrangements with domestic insurance companies. Will most of the companies operating in British Columbia that prohibit that, will it better regulate that, or will it would have some element of reinsurance with un- simply leave the field open? licensed providers, particularly the catastrophic risk. It would be common for them to utilize some small por- Hon. C. Hansen: There is currently a limit with re- tion with unlicensed providers. gard to reinsurance. A limit of 25 percent will be placed [1040] with unlicensed reinsurers. There is no intention at this point to change that from 25 percent, but this legislative B. Ralston: Is there a regulatory provision that re- amendment is in anticipation that some of those stan- quires a B.C.-based insurance company to report that dards may vary in other provinces and federally. This percentage of up to 25 percent to the regulator and to will give us the power to stay current with those changes report any changes? Is there a provision that requires should they happen in the future, but none are contem- timely reporting of any changes in that percentage up plated in the near term. to the maximum? [1035] Hon. C. Hansen: Yes, the regulator would have those B. Ralston: By an unregistered reinsurer, can the min- numbers. ister explain what that is and what risks there might be to the policyholders of a domestic insurance company Section 5 approved. that may be touched by the financial difficulties of an unlicensed reinsurer? On section 6.

Hon. C. Hansen: The reinsurers are licensed federally. B. Ralston: This is an amendment to section 97, To be a licensed reinsurer in Canada you have to have which is entitled "Number of directors and unaffiliated capital based in Canada. So if a company chooses to go directors." This would appear to refer back to our earlier with their 25 percent of reinsurance with an unlicensed discussion about changing the definition of unaffiliated company…. That would be a company that would not director. Can the minister explain the purpose of this have capital in Canada. Therefore, the company that's proposed amendment? seeking the reinsurance would have to have extra capital themselves in order to compensate for the risk of the un- Hon. C. Hansen: This provision provides flexibility licensed reinsurer not having capital based in Canada. to financial institutions by allowing them to apply for Tuesday, March 30, 2010 British Columbia Debates 3855

relief from the new prohibition on a person serving as language works, and we are copying it, essentially, for an unaffiliated director. The broad new definition on this statute as well. unaffiliated directors may be unduly burdensome on some of the smaller British Columbia entities, and an B. Ralston: Has there been any judicial interpreta- exemption power could be used to alleviate this burden tion of the similar language that's referred to in other where it would be in the public interest. statutes?

B. Ralston: The wording in the proposed amend- Hon. C. Hansen: Not that we are aware of. ment is where "the commission believes, on reasonable grounds, that it is in the public interest…." Is it the inten- B. Ralston: Has there been any interpretation by the tion or the practice for the commission to put forward commission here in British Columbia or commissions or promulgate a more detailed description than that of across the country interpreting similar legislation? the circumstances in which it might consider utilizing this section? Hon. C. Hansen: These powers in the other statutes "Reasonable grounds" and "in the public interest," have been used, typically, to restrict registrants from while they're commendable, are certainly very broad and practicing in other provinces if they've committed an open in terms of definition. How would this proceed at offence in a different province. the operational level were this section to be passed? Certainly under the passport system that we have now, if you have an individual who has violated legislation Hon. C. Hansen: This is language that's common or laws in other parts of Canada, these powers would throughout the statutes affecting financial institu- allow for that person's licence to be revoked in British tions. It is not anticipated that it would be used very Columbia. This would extend those powers to this legis- frequently. But in cases, I think, with other similar lation as well. wording in other parts of the statutes where it is a pro- vision that gets used more frequently, it does, typically, B. Ralston: Presumably, by its wording, "an offence lead to a policy framework or policy definitions around in Canada or another jurisdiction," this proposed sec- public interest. If it's done on very rare occasions, then tion is broad enough to capture offences in either the those situations would be looked at on their own merits United States or Europe or, indeed, anywhere else out- at that time. side of Canada. Is that correct?

B. Ralston: Is it anticipated that this is something that Hon. C. Hansen: Yes. would trigger a hearing, or would it simply be a question of a paper application to the commission? B. Ralston: In the existing subsection (f) it refers to "an individual who ought not to be in a position to con- Hon. C. Hansen: It would be up to the commission to trol or influence a financial institution," and one would determine the appropriate process. have thought that someone who'd been convicted of an offence relating to financial services is a person who Section 6 approved. ought not to be in a position to control or influence a financial institution. Given that there was that existing On section 7. language, I'm wondering why it was thought that this further addition was necessary. B. Ralston: This section is entitled "Removal of direc- tors and officers." This proposes to add a new paragraph. Hon. C. Hansen: It's true that section (f) could be It says that "an individual who has been convicted of an used. By introducing this new section (g), it gives more offence in Canada or another jurisdiction arising from specificity to these actions by an individual that would…. a transaction, business or course of conduct related to It would give more guidance to the regulator with regard financial services…." to these specific actions that would lead to someone be- [1045] ing ordered to cease being a director and officer of an Again, it seems to be a very broad definition, from institution. theft to fraud to….I 'm wondering why the choice of that [1050] particular phrase has been taken rather than something a bit more specific or enumerating specific offences. B. Ralston: Can the minister advise — perhaps the officials here may know: has there been a case or cases Hon. C. Hansen: This language is very similar to where the commission has felt that it couldn't act on the the powers available under the Securities Act and the existing language, yet there was someone who fell into Mortgage Brokers Act. In those cases we feel that this the description in the proposed new amendment (g), 3856 British Columbia Debates Tuesday, March 30, 2010

and therefore, they were not able to prohibit that person legislation. The directors are obligated in section 121(3) from becoming a director? to mail the undated report to members. To meet that obligation, they need to receive a copy of the report in Hon. C. Hansen: The short answer to the member's the first place. question is no, there's not a specific case.B ut this new lan- guage that we are introducing does allow for consistency Section 10 approved. with other statutes, and it does reflect the approach that's taken in other jurisdictions across Canada. On section 11.

Section 7 approved. B. Ralston: This proposes to repeal section 122(3), which refers to authorizing the superintendent to "pro- On section 8. vide the auditor with information about, or obtained from, the financial institution" as a reference to section B. Ralston: This amends section 114. It appears sim- 218, which appears to be a confidentiality provision. Can ply to strike out any reference to "trust company" and the minister explain why this section is being repealed? substitute "credit union" in the several places that trust company appears in the existing statute. Can the minis- Hon. C. Hansen: The authority of the regulator to ter explain why? collect, retain and share information is being clarified in another section, which we will come to a little later in the Hon. C. Hansen: This is really a technical change. It bill. Therefore, this particular provision was redundant. reflects the fact that inB ritish Columbia we do not have local trust companies taking deposits. Therefore, this Section 11 approved. change is really to clean up the legislation and to reflect that fact. On section 12.

Section 8 approved. B. Ralston: This amends section 123(1) and includes a reference to the company's actuary. Again, another On section 9. amendment of this in, I think, section 13 would appear to be very much in the same vein of just simply includ- B. Ralston: This amendment adds a new subsection ing the company's actuary in the existing statute. Is that (b) to section 115(3), requiring the audit committee of correct? a financial institution to meet with the actuary. I would gather, then, that this is part of the stream of amend- Hon. C. Hansen: That's correct. ments that relate to the new role of an actuary in an insurance company. Sections 12 and 13 approved.

Hon. C. Hansen: Correct. On section 14.

Section 9 approved. B. Ralston: This is the substantive amendment which incorporates most of the references to actuaries and the On section 10. operation of insurance companies. Since there are a num- ber of subsections here all relating to the powers and B. Ralston: This appears to be a fairly narrow amend- obligations of an actuary and the relation of that actuary ment, adding something at the end of paragraph (b) in to the insurance company, perhaps the minister could give subsection (2). Again, it appears to be a reference to: "… an overview of the section, and then I'll ask what specific in the case of an insurance company, the company's ac- questions I may have on the individual amendments. tuary." So this would be another amendment instituting the obligation to include the company's actuary and fi- Hon. C. Hansen: Generally, in terms of the purpose of nancial statements and reports in this section. Is that a this entire section 14, it establishes a new division in the fair summary? If the minister can just confirm that, that act that will promote the efficient and effective actuarial would be agreeable. reporting and ensure that there are appropriate reserves [1055] in respect of claims liabilities, thereby decreasing the risk of insolvency for insurers and protecting consumers. Hon. C. Hansen: The member is correct. The re- This new framework will allow FICOM to better imple- quirement to send the amended report to the director ment its risk-based regulatory framework by permitting it corrects what, in our view, is an obvious omission in the to more confidently rely on reports prepared by actuaries. Tuesday, March 30, 2010 British Columbia Debates 3857

B. Ralston: Given the new obligations of actuaries, B. Ralston: In section 126.13 it makes reference to a and I'm not aware of the actual number of actuaries in situation where, if an actuary of an insurance company the province, is the minister confident that there are suf- is not an individual, the actuary "must designate an in- ficient actuaries to take up these new duties, given that dividual who is responsible for acting on behalf of the they are now a requirement for every insurance com- actuary." Is that a situation where the actuary is a per- pany in the province? sonal corporation, or is there some other circumstance envisaged here? Hon. C. Hansen: These changes don't drive new practice or a new workload on existing actuaries or Hon. C. Hansen: It could be, as the member said, obligations of the insurance companies because, as I somebody acting with a personal service corporation, mentioned at the outset earlier in this discussion, these but there are also firms of actuaries, and if an institution changes reflect the practice that is currently being fol- was to contract the services of that firm, then what this lowed by insurance companies in British Columbia. requires is that an individual in that firm needs to be What we are doing here is codifying the changes and en- designated as the person being responsible for acting on suring that the actual legal requirements are consistent behalf of the actuary. with those in other jurisdictions. [1105] [1100] B. Ralston: Again, within this grouping, section B. Ralston: In the proposed section 126.14, in this 126.15 refers to a prohibition against…. A senior officer division, there's a reference to actuaries who are not of an insurance company can't hold the position of actu- authorized to carry on life insurance business, as I under- ary unless authorized in writing by the commission. stand it. That's a reference to the insurance company. I haven't had an opportunity to review it. Is there a So is there a subcategory of actuaries who special- definition of what a senior officer in an insurance -com ize in different types of life insurance companies, or is pany might be? any single actuary qualified to perform these duties on behalf of any insurance company no matter what their [L. Reid in the chair.] lines of business? Hon. C. Hansen: The answer is yes. In the existing Hon. C. Hansen: This section requires that an actuary statute there is a specific definition for senior officer. or an individual appointed under this section 126.13 be a member in good standing of the Canadian Institute of B. Ralston: The provisions here, and the next several, Actuaries, the national organization of the actuarial pro- appear to deal with the issue of revocation or declaration fession in Canada. In the case of an insurance company of a vacancy. Is there a similar mechanism now that the other than a life insurer, the regulator can approve another commission has had to resort to, to remove an actuary, person as having the necessary training and experience. or is this simply a question of covering every possible hypothetical circumstance? B. Ralston: As I understand the actuarial profession, and my understanding may be imperfect, it's essentially Hon. C. Hansen: There is not a legislative provision a self-governing profession. So is the regulator then pre- currently, and that is one of the reasons why these chan- pared to accept the qualifications of anyone who meets ges are being brought in. the qualifications of the self-governing profession, or is there a qualification process necessary that will be en- B. Ralston: I don't expect detail, but can the minis- gaged in by the commission to determine a roster of ter advise if that is a specific problem that's arisen? It approved actuaries, if I could put it that way? would seem that if an actuary was no longer suitable to the commission, most prudent insurance companies Hon. C. Hansen: We are not contemplating any kind would take very quick steps to make sure that they had of an extra designation or requirements for certifica- someone who met the requirements of the commission. tion as an actuary. The Canadian Institute of Actuaries Otherwise, other regulatory action might well follow. has that process today, and we rely on that process for It would seem that this sort of situation would sort it- that certification. What this section does is also allow self out, but I'm wondering if it's a response to a specific the regulator to approve a person other than an actuary concern the commission has expressed. who is in good standing with the institute in the cases of those non-life companies. But as I mentioned earlier, Hon. C. Hansen: These changes are not being driven the current practice by insurance companies operating by any particular circumstance — rather, anticipating in British Columbia is that they do have actuaries per- that circumstances might arise in the future and that forming these tasks that are set out in this legislation. this will give the power to deal with them. 3858 British Columbia Debates Tuesday, March 30, 2010

B. Ralston: Sections 126.19 and 126.2 refer to what tainly be made public. There would be a requirement takes place when a vacancy arises. There's a require- for that. ment to notify the superintendent in writing. Is this But there could be all kinds of reasons for the resig- something that would become a public document in the nation of an actuary. Some of them might be personal. sense that it would be disclosed as part of the regulatory Certainly, we should not assume that it would be in the filings of a company? One could well imagine that if it public interest for those reasons to automatically be dis- were a public company, that might have some impact on closed publicly. public interest and share price. B. Ralston: Well, I thank the minister for that clarifica- Hon. C. Hansen: It's not anticipated that the commis- tion. I certainly wasn't suggesting that it be disclosed in sion would make that information public. In fact, there every case, simply where it would touch upon the financial is a specific requirement in the act under section 218 value of the company, I think, and where there might be a that requires confidentiality and actually seriously- re legitimate public interest in knowing that. But I accept the stricts the ability of FICOM to release information. minister's clarification and the overriding jurisdiction and [1110] discretion of the Financial Institutions Commission. Moving to section 126.23, "Actuary's valuation," I B. Ralston: I did reference section 218 earlier in re- take it that this merely codifies what actuaries have been lation to another provision, but is there a circumstance doing in relation to insurance companies up till now. Is in which…? Obviously, the legislation is placing a great that correct? value on, and incorporating this in the statute, the office of an actuary, the appointment by the insurance com- Hon. C. Hansen: Yes, that is correct. pany and the valuation that the actuary does. [1115] Given that importance, is there a point at which a resignation and circumstances that maybe cast some B. Ralston: There's reference made in the following doubt upon the efficacy of the work that the actuary had section, 126.24, to a "special valuation." Can the minis- done and any concerns that that may raise…? Is there a ter explain briefly what a special valuation might be, as point at which that might be disclosed publicly? Is that opposed to the regular valuation? contemplated in this series of amendments or in the practice of the commission generally? Hon. C. Hansen: This is something we touched on earlier with regard to the power to bring in an outside Hon. C. Hansen: That information would go not auditor. This authorizesFICO M to appoint another actu- only to the regulator but also to the directors. The direc- ary to undertake a valuation of an insurance company's tors would certainly be free to make their decision as to liabilities, and the insurance company is then obligated whether that information should be released. to pay the costs of that valuation.

B. Ralston: Then the minister is saying that it would B. Ralston: Is the circumstance now a question of be left to the discretion of the board rather than any practice — that this is something an actuary, by his or regulatory requirement to release any information. her professional code, would be obliged to do? Or is this Presumably, at a point when we get to where there's a merely codifying that professional obligation? replacement actuary, it's referred to…. If there's a transi- tion, that would become public, but the circumstances Hon. C. Hansen: This is a new power. Certainly the in which one actuary might have left would be left to FICOM today could appoint an outside investigator, and the discretion of the board. One can well imagine that a that could be an actuary, to look at a specific company. board would not want to disclose anything that reflected But what's new in this provision is the requirement that badly upon the company. Does that not clash, at some it's actually the insurance company that would be re- point, with the public right to know? quired to pay for that process.

Hon. C. Hansen: That's really the reason behind re- B. Ralston: In a similar vein, 126.28 would appear quiring that this report go to the superintendent. The to…. It's entitled "Report on matters requiring rectifica- superintendent in turn has the responsibility to look tion." Where an actuary discovers something that in her after the public interest. But if there were any financial or his opinion has some "material adverse effects on the implications that flowed from the resignation of an ac- financial condition of the insurance company, and…re- tuary — for example, if a new actuary came in and had quire rectification," there's an obligation to report to the to redo work that had been done by a previous actuary, board of directors and to the superintendent. and that had implications for the financial statements Is this something that codifies what was a past profes- of the company — then that information would cer- sional obligation of an actuary, or is this a new power Tuesday, March 30, 2010 British Columbia Debates 3859

arising out of a concern that this may not have been tion which is substituted. I understand the change in the done in every case in the past? number of days. That just makes the requirement that the report be filed earlier. But can the minister explain Hon. C. Hansen: Certainly if an actuary was a mem- why that would be struck out? ber of the Institute of Actuaries, that would come with those professional obligations that the institute estab- The Chair: With the minister's indulgence, the mem- lishes for actuaries. ber would wish to return to section 15. This codifies the requirement and makes it quite clear, for any matters that come to the actuary's attention in Hon. C. Hansen: What this does is really bring con- the course of carrying on those duties that materially sistency between the timelines for filing between the affect the financial condition of the company, that the insurance companies and the reinsurance companies to actuary, under this provision, will have a statutory re- establish them both at 60 days. quirement that he provide that information in writing to the directors, the president and the treasurer of the On section 16. insurance company as well as to the superintendent. B. Ralston: Yes. This is an amendment to section B. Ralston: Again on this fairly lengthy section. 158(3), which is a little bit difficult to follow. It makes a Section 126.29 would appear to give the commission a number of references to striking out sections and sub- power to direct the actuary to expand his or her exam- stituting section 136(1) and (2). Perhaps the minister ination and to report on the method by which his or her could briefly explain what the purpose of the amend- conclusions were arrived at. Is this codifying an existing ment that's proposed here is. power of the commission, or is this a new power? [1120] Hon. C. Hansen: This provision reduces the num- ber of British Columbia regulatory requirements that Hon. C. Hansen: Currently, today, if the commis- apply to certain extraprovincial financial institutions, sion asked an actuary to undertake certain actions…. It reflecting current regulatory practice and reducing the would be a highly unusual circumstance, I think, where potential for conflicting regulatory requirements. the actuary would go against the requests of FICOM, [1125] but this does codify it. B. Ralston: Section 136(1) and (2) refer to invest- B. Ralston: The next section refers to a qualified priv- ment and loan standards, and they refer to what's called ilege of an oral or written statement made under this "prudent standards." Is that something that is a new re- act by an actuary. By "qualified privilege," obviously a quirement in relation to the matters that are regulated lengthy legal interpretation is available if necessary. But in a circumstance where a shareholder action was under section 158, then? brought against the company, the board of directors, for the negligence in either failing to disclose or hiding Hon. C. Hansen: The provisions, 136(1) and (2), some material aspect of the company, would this written currently exist. Those are not new. What this does is statement by an actuary then be something that could it removes some of the very detailed regulatory meas- be utilized in a lawsuit or not? ures and focuses primarily on the more principle-based regulatory standards, such as the obligation to adhere Hon. C. Hansen: I have a sense that, having no legal to prudent standards in making investment-lending de- training myself and the Finance critic, of course, being cisions. So this will still apply to these extraprovincial a member of the bar, he probably has a much, much financial institutions, but it allows the regulator to take deeper understanding of qualified privilege than I will action if serious problems arise. ever have. But as I understand it, the answer is yes. There are circumstances where this information could still be B. Ralston: Is the minister's staff aware if there has utilized in a hearing. been a judicial interpretation of section 136(1) and (2)?

Sections 14 and 15 approved. Hon. C. Hansen: We're not aware of specific cases under this statute, but the prudent person principle is B. Ralston: Pardon me, I meant to stand up on sec- a standard that is used internationally, and certainly tion 15 here. I did have one question on section 15, if the most of the OECD countries, for example, have adopted minister will indulge me. this. We have adopted it with respect to other pieces of There's a proposal to strike out reference to "in respect legislation, and this also brings us into consistency with of its reinsurance business," and then there's a subsec- other jurisdictions. 3860 British Columbia Debates Tuesday, March 30, 2010

Section 16 approved. Section 17 approved.

On section 17. On section 18.

B. Ralston: This amends section 160(3) and adds B. Ralston: I believe this mirrors an earlier provision, a new (g), which again…. Perhaps the minister could I think, aligning the timing of the reporting of the re- explain. It appears to be what the minister has called insurance companies. Is that correct? a principle-based regulation, which gives the commis- sion discretion to decide whether or not a corporation is Hon. C. Hansen: Yes. suitable to carry on business in British Columbia. Is that the purpose of this proposed amendment? Sections 18 and 19 approved.

Hon. C. Hansen: This adds to the commission's On section 20. powers that the regulator must consider the business re- cord of an extraprovincial financial institution and the B. Ralston: This amends section 178(3), and this is competency of its staff in deciding whether to grant a a section that refers to "Payment of commission to un- business authorization. licensed agents prohibited." It appears to grant to the [1130] commission a regulatory power, and this will be dealt with in the future by regulation rather than by including B. Ralston: Presumably, that's part of the powers of it in the statute. Is that correct? the commission. At this point, in a general sense, does [1135] this merely codify past practice, or is this seen as aug- menting or adding a new power that was necessary and Hon. C. Hansen: That is correct, but it would be the didn't exist before? Lieutenant-Governor-in-Council, not the regulator.

Hon. C. Hansen: This certainly adds to the obliga- Section 20 approved. tions of the commission to look at these specific aspects of an extraprovincial financial institution in considering On section 21. whether to grant a business authorization. Today there is provision in the existing language that B. Ralston: The present section 209 reads, "Capacity allows the commission to not issue a business authoriza- outside British Columbia," and it appears to give the tion if they believe that it is not in the public interest, but superintendent power to act outside British Columbia. what this additional section requires is that they specif- This appears to add a category beyond the superintend- ically look at these issues around business performance ent, of other persons presumably acting under the and staff competency. direction of the superintendent. B. Ralston: Can the minister give a sense of how Can the minister explain why that would be necessary? many applications of this type would be considered by I would think that ordinarily, the simple application of the commission in a year, and what's the process for delegation would be sufficient to include those people making such an application in terms of the time that's in the past. I assume this is for greater clarity or greater required to do it? specificity. Is that the case?

Hon. C. Hansen: These companies would apply in Hon. C. Hansen: The intent here is to clarify that not writing to the commission. There are a few a year that just the superintendent but, in certain circumstances, would be looked at and added. If these companies are investigators that he appoints or that the commission authorized federally in Canada, then the approval of appoints have the ability to do investigations that may their application provincially is automatic. be outside of the province. Just as an example, now that B.C. credit unions are operating in other jurisdictions, B. Ralston: I take it from what the minister said that it may be that an investigator from B.C. may want to that would be the usual avenue for, say, a foreign insurance examine documents that are held in another province. company. It would be to obtain federal registration and then This would ensure explicitly that the power is there to make a decision as to which provinces it wished to operate do that. in. Would that be the usual avenue for registration? Section 21 approved. Hon. C. Hansen: Almost all of these would come through the federal route. On section 22. Tuesday, March 30, 2010 British Columbia Debates 3861

D. Donaldson: We're still dealing with the Financial that and report in writing to the superintendent, what Institutions Act here. This section repeals and substitutes may be the consequences as a result of that, according wording in section 211 of the Financial Institutions Act. to these changes? Part of it, from my understanding, is requiring credit unions, trust companies and insurance companies to re- Hon. C. Hansen: If there was a circumstance where port to the superintendent convictions and findings of a company was in breach of this provision, a failure to contraventions by regulators in other jurisdictions aris- notify, the commission would have several avenues at ing from transactions related to financial services. its disposal. One would be to convict it as an offence My question to the minister is specifically around under the act. The other would be regulatory measures credit unions. What would be the implications to credit that the commission could take against the financial in- unions of this new wording in this section? stitution with the existing powers that the commission has. Hon. C. Hansen: You know, it is relatively recent that credit unions have been operating in more than one Section 22 approved. province in Canada. It's certainly something that we want to encourage. On section 23. We think it's healthy for the credit union movement in Canada to have that ability, but at the same time, gov- B. Ralston: This is a new provision conferring pow- ernments and our respective regulators have to have the ers on the commission to make an application to take ability to understand what is happening to those credit evidence outside the province. I'm assuming that this unions as they operate in other jurisdictions. So if there is conforms with similar provisions in the Evidence Act an order by a regulator in another jurisdiction or if there's and other similar statutes. Secondly, have there been cir- activity that's taking place that could impact their oper- cumstances in which it hasn't been possible to obtain ations in British Columbia, we need to know about it. necessary evidence, given the absence of this provision up until the present time? D. Donaldson: Well, thank you for that answer. I ap- preciate the intent of what you're outlining there. Hon. C. Hansen: This change is not driven by any [1140] specific occurrence, or we're not aware of an occasion I do have some questions related to, specifically, sec- where obtaining this information has been problematic, tion 211.1(b), around the responsibilities to report to the but we do want to make sure that the legislative provi- superintendent in writing if the credit union "has been sions are there to enable it. This is also, word for word, found by a regulator in…another jurisdiction to have contravened the laws of that jurisdiction." We're talking what is established today in the Securities Act. about outside of Canada in this amendment. [1145] My question would be: how would this apply to a credit union even if the laws that could have been contravened Section 23 approved. in another jurisdiction don't line up with Canadian law? How does that transpire and play out in this section? On section 24.

Hon. C. Hansen: This really requires for a notifica- B. Ralston: This is a new section that's added, and it's tion requirement that the commission would have to entitled "Collecting and sharing information respecting evaluate what that information is, the seriousness of the financial institutions." Can the minister explain what breach. It would not necessarily trigger any action in this change signifies? British Columbia other than to make sure that the com- mission is aware of what took place. Hon. C. Hansen: This clarifies the authority of the British Columbia regulator to collect and use informa- D. Donaldson: What I understand with the answer tion from other financial institutions, regulators and from the minister is that the credit union, for instance, others, and to share information with other Canadian in this example is responsible for reporting in writing to regulators. the superintendent if they discover they've been found by a regulator outside of Canada that they're contraven- B. Ralston: As the minister is aware, there is certainly ing laws of another jurisdiction outside of the country extended discussion and a commitment from the fed- respecting financial services, even if they don't align eral government to create a national securities regulator. with Canadian laws. Is this, I suppose, a foretaste of the kind of information- I'm trying to assess how onerous a task this might sharing that might take place were a national regulator be for a credit union. If they weren't able to ascertain to be enacted and be in existence? 3862 British Columbia Debates Tuesday, March 30, 2010

Hon. C. Hansen: This would not be impacted by any where these persons that were appointed under section initiative to move towards a national securities regulator, 243 of the act to provide assistance to the administra- or vice versa. tor of a credit union that is under supervision, were not protected and the consequences of that? Section 24 approved. Hon. C. Hansen: We are not aware of any circumstance On section 25. wherein a person appointed to assist an administrator has refused to take the responsibility because of the lack of B. Ralston: This appears to be a fairly specific and this provision, but we think it is reasonable to extend the narrow amendment, but perhaps the minister could immunity to those individuals who are assisting the admin- clarify just what it means. There's a new section 253.1(8) istrator in the case of credit unions in financial difficulty. being added to section 235(1), but the meaning of it es- With that, hon. Chair, I move the committee rise, re- capes me. port progress and ask leave to sit again.

Hon. C. Hansen: Section 235 requires that certain or- Motion approved. ders of the regulator be made in writing. This is purely a consequential amendment as a result of changes that we The committee rose at 11:54 a.m. made to section 253.1. The House resumed; Mr. Speaker in the chair. Section 25 approved. Committee of the Whole (Section B), having reported On section 26. progress, was granted leave to sit again.

B. Ralston: This may also be a similar consequential Committee of Supply (Section A), having reported amendment to section 237(2)(a), but perhaps the min- progress, was granted leave to sit again. ister could confirm that. Hon. B. Penner moved adjournment of the House. Hon. C. Hansen: This section sets out hearing re- quirements for certain orders made by the regulator, and Motion approved. it makes two consequential amendments. It includes a new reference to the proposed new section 244(5), Mr. Speaker: This House stands adjourned until 1:30 which authorizes the regulator to issue a cease order or this afternoon. a remedial order where a person has been convicted of an offence, and it removes the reference to section 253.1, The House adjourned at 11:55 a.m. which authorizes the regulator to order an administra- tive penalty. [1150] PROCEEDINGS IN THE DOUGLAS FIR ROOM Sections 26 to 29 inclusive approved. Committee of Supply On section 30. ESTIMATES: MINISTRY OF B. Ralston: This section refers to immunities, and SMALL BUSINESS, TECHNOLOGY there's an amendment that adds a person in subsec- AND ECONOMIC DEVELOPMENT tion (1) appointed under section 277.2, and similarly in (continued) (b) there's a similar amendment. Perhaps the minister could explain what that means. The House in Committee of Supply (Section A); H. Bloy in the chair. Hon. C. Hansen: This actually pertains to the provi- sions where a credit union is in financial difficulty. So The committee met at 10:09 a.m. what this does is it extends the immunity protection to cover persons appointed under section 277.2 to assist On Vote 43: ministry operations, $47,426,000 (con- the administrator of a credit union in difficulty. tinued).

D. Donaldson: Could the minister describe situa- J. Kwan: It's a beautiful British Columbia day, as my tions…? Is this amendment in response to situations old colleague used to say. Tuesday, March 30, 2010 British Columbia Debates 3863

Let me pick up from where we left off yesterday with Is that what he's referring to on that? If I could get some some of the questions. I'd like to actually explore a little clarification on that. bit — as we sort of got into it yesterday — the Small Then he talked about overseas offices. How much is Business, Technology and Economic Development being allocated out of that $20 million or so towards budget related to the "Asia PacificT rade and Investment" overseas offices? What location? Does the minister line item. anticipate a full office, as in a trade office in whatever lo- [1010] cation with a staff complement? If so, what kind of staff The budget from 2009-10 was about $12 million — complement are we anticipating for those areas? $11.7 million, to be more exact — and then this year This is actually a major shift, in fact, if it's the trade we're looking at about $20 million. There is about a $9 office that's being set up, from that of the previous min- million difference — $8 million and change worth of ister, who is now currently the Minister of Finance, difference. I wonder if the minister could explain the when he had the responsibility here. At that point, he difference and what the anticipated programs are related swore against trade offices — meaning he spoke against to the increase in budget in that category. trade offices quite vociferously — because of the exten- sive costs, he said. Hon. I. Black: The increase in this area of our budget His preferred approach to trade offices was to have represents the third year of a three-year plan. In previ- trade representatives there, and therefore, we wouldn't ous years we've been building the infrastructure in and have an office but rather would have someone work out around our focus on the Asia-Pacific — and, indeed, of their homes, on a plane, on a bus or something like some of our other international trade efforts — and that, and that is what it seems was going on. this is the year where we actually start rolling out the I have to admit that I thought that was strange, to say programming. the least. How is anybody going to find anybody on a I will try to give the member some specific examples. bus and on a train and on a plane to talk about business? It also includes, for example, a large instalment on our I thought that was very weird, actually. China wood commitment that was made by this govern- I'm glad to hear that there's a change in mindset here, ment. That is effectively where it's focused — around the because I think the presence — needing to make sure earthquake that took place and the subsequent initia- people know where you are, how to contact you and all tives from this government to impress upon the Chinese of those things — is an additional piece to marketing government that wood products are very effective build- British Columbia overseas. I wonder if the minister can ing materials to be used in China. So there was a large elaborate on that. commitment made. I'm going to stop there. I have other questions about About $2.45 million of the amount I just identified is the Asia-Pacific Business Centre as well, but too many the commitment — from the line item that the member questions all at once might boggle the mind. So I'm just is referencing — to effectively continue the demonstra- going to leave it there and then come back to the Asia- tion that wood is a very good building product for the Pacific Business Centre questions. Chinese to use. Historically they have not been large purchasers of wood from British Columbia. It wasn't Hon. I. Black: First, to the question on wood. Yes, I too many years ago that the wood exports were actually can confirm for the member that asI mentioned, this has at zero. They've come a long way since then and are been a demonstration project — a business development probably our fastest-growing export market for wood exercise, if you will — with the Chinese government that products. So this is part of that initiative. comprises the reconstruction of three buildings. [1015] [1020] A second area is building out our network of overseas One is a primary school, which was completed in offices. We have trade and investment representatives September of 2009, and then two under construc- around the world. We would like to add more of them, so tion. There are a special school for the disabled and there will be a portion of the money put towards that. a central elderly care centre, both of which are under Finally, we've got our Asia-Pacific Business Centre, construction. That is where the expenditures involved which is now operational. A lot of the programming in are going. that centre is going to be rolled out this year as well, and Two items worth noting. It's felt that this initiative is that money will be used towards that programming. having a significant impact. It is estimated that we will export 1.5 billion board feet of wood to China in 2010. J. Kwan: Okay, just picking up from that, the minister That is an increase of about 91 percent over 2009 alone. says $2.4 million for wood in China; that is to say, it's As I mentioned in my previous remarks, we were ac- demonstration wood. Is that what the minister is talk- tually at or near zero in terms of our wood exports to ing about — that this ministry purchases from wherever China only a few years ago, so we're very, very pleased and then ships over to China as demonstration projects? with the growing market we have there. 3864 British Columbia Debates Tuesday, March 30, 2010

Then I note this morning that there's an article — I Hon. I. Black: To the member's question about pro- believe it's in the Vancouver Sun — talking about a deal moting value-added wood products, I can confirm that that has been struck by my colleague over in China yes, efforts are very much part of what is happening at the moment, which identifies a wood purchase by within the ministry. I'll give a specific example. China. That is tied directly to the efforts of our govern- As the member may be aware, the world expo is tak- ment to increase the profile of our wood products with ing place in Shanghai this year. At Shanghai there is, I'm the Chinese government and with the Chinese people advised, a very large pavilion between 3,000 and 4,000 over the last number of years. feet in size, which is focused on B.C. lumber products Turning to the second question pertaining to our trade and value-added products. and investment representatives, the member is correct We are working in conjunction with the Ministry of in her recollection as to the model that the government Forests on this as well as with the B.C. Forestry Innovation is deploying. There has not been a change. I thought I'd Investment group, who are working with the two minis- used the phrase "trade and investment representative" in tries in preparing for that exhibition. TheBCFII , as they my first answer, but that is the model we are using as we are known, has a focus on promoting British Columbia take our message around the world. value-added wood products. That is one of the groups For the benefit of those not familiar with it, instead we're working with, engaged directly with our trade and of using ex-pats from Canada and sending them abroad, investment reps in the six Asian countries to pursue that which is a very, very expensive model, what we do — a endeavour on behalf of the people of B.C. model that we believe is very, very cost-effective — is hire in-country. We hire people to represent us within J. Kwan: Yes, I'm aware of the Shanghai expo coming their own country, who understand the local lay of the up. I was actually involved with a photo exhibition open- land in terms of the business context, the culture, the ing ceremony in Vancouver showcasing the Shanghai priorities and the value systems of the people of those expo that's forthcoming in China. nations. Okay, so there is an opportunity to showcase value- In the case of Asia, it's also very important — and I added materials produced by British Columbia in China agree with the member on the point — to have a physical during the expo period. I'm also wondering, though: presence. I can confirm for the member that in each of are there initiatives within government and within this our six offices in Asia, we do have physical buildings, as minister's bailiwick where there are investments from well, out of which these trade and investment represent- government in supporting the development of value- atives work. added products and businesses in B.C. — so economic development initiatives that might be taking place here J. Kwan: Okay. Let me just first deal with the wood in British Columbia to expand that market? issue in China, and then we'll move on to the trade of- [1030] fices, becauseI do have a number of questions stemming from that. Hon. I. Black: Three parts to the answer. The first is As I understand, the government is trying to explore that, as the member may know, there's been consider- opportunities with China in exporting wood to China. able recent investment on the part of Asian investors in There have been some gains, although there are some our pulp and paper industry and wood pellets. It runs problems as well. the gamut in a lot of ways, and it would be our ministry It was cited, of course, that the size in which the logs that has been actively involved in helping to arrange are being cut and shipped to China does not actually that — to corral that interest, point that interest and play meet their standards. There are issues which I know the matchmaker, if you will. That's one way in which we're industry is, hopefully, working through to address those involved in that. issues to increase the volume and the opportunities that The second is that we do work a fair amount with the exist there. B.C. FII with respect to sharing resources — basically, I hear that from business people from China saying that tackling it hand in hand when it comes to promoting this is only a small dent, if you will, into the opportun- the value-added sector of our forestry industry. They ities there and that if there are some changes structurally typically do take the lead, but we work with them quite from our side, things could be very different. actively. Having said that, I'd like to also explore with the min- The third part of the answer is that our trade and in- ister whether or not any of the moneys in his budget this vestment reps have communicated quite clearly that year — also compared to last year — have been invested there is an appetite for a lot of the value-added wood in exploring opportunities for value-added initiatives in products of our forestry sector — door frames, counter- British Columbia, especially as it relates to the forestry tops, window frames, etc. sector. To that end, when we have any trade delegations going [1025] over or government officials going over — particularly Tuesday, March 30, 2010 British Columbia Debates 3865

if they are accompanied by some of the representa- don't have to go through each one of those line by line tives from either the B.C. FII or, indeed, the companies here at these estimates. I don't expect that the minister themselves — there is high interest, and subsequently has a full list anyway. Perhaps if we could do that, then meetings are arranged with companies like that when we can move on to the next area, on overseas offices. they are overseas. [1040]

J. Kwan: For the value-added products that the minister Hon. I. Black: Yes. Hon. Chair, I certainly have no talked about — the wood frame, door frame, countertops problem communicating that to the member. and so on and so forth — are we talking about having those items manufactured here in British Columbia, in J. Kwan: Great. Thanks. I'll be looking forward to re- terms of opportunities for British Columbians and dif- ceiving that from the minister. Hopefully, this time the ferent jobs created here in British Columbia? Or are we stuff won't go somewhere else somehow or other. talking about exporting wood to China where, of course, they excel at production at very low cost? Will they be Hon. I. Black: I'll walk it over myself. taking our wood, then, in anticipation for them to grow that industry over there in China? J. Kwan: All right. Ah, my colleague just tracked down I'm just trying to understand which way we are going the stuff that was sent, apparently, yesterday. here, which is an important point for us in B.C. Okay. On the overseas trade offices. The minister said [1035] that they are trade representatives, so we're still back to the bus- and the train-type mode, although it sounds Hon. I. Black: The answer, in short, is: it's actually like they also have a physical location. The issue that I both. There is interest in the riches of our logs, if you take on these trade representatives is not so much that will, but there's also decided interest in the value-added they are people from the industry, if you will, who ac- side of our forest industry. I'm advised of a trade dele- tually know the market and know the opportunities that gation last week of investors who were here looking at exist. purchasing mills, where the work would get done here My issue is having a physical presence so that people in British Columbia. So on the point that the member know where to find these trade representatives.B ecause is trying to establish, with respect to where the employ- earlier — literally, Hansard will show — the former min- ment takes place, the interest from the Asian community ister said that they would be on a taxi, on a bus and so is actually in both veins. on. I just thought…. I don't even know how you do that I cite the example of some investors last week look- work if you're just flying around here and there.H ow do ing to purchase mills here, where of course the work people track you down if you're working out of these would be done in British Columbia. I can also cite…. I various modalities? believe it was called China wood expo. I believe it was In any event. Okay, so trade offices and trade repre- 200 Chinese companies here. It was their high-end en- sentatives. Can the minister put on the record for me gineers. They were focused on the gamut of different how many physical locations we have and where? How wood products out of British Columbia, but certainly many trade representatives are at these physical loca- there was an interest, again, in the finished product or tions? What are the new ones that are anticipated, and the value-added product, to use the member's term, at where will they be located? that event as well. [1045] It seems that there's an interest in both the logs and the finished product on the part of Asian investors and Hon. I. Black: I can confirm that the member and Asian decision-makers, and the job of our ministry is to our ministry are on the same page with respect to the facilitate both of those areas of interest. physical presence side of our presence in Asia. We have six offices in Asia, which I believe was the focus J. Kwan: In the interest of time, perhaps I could get of the member's question. There are trade and invest- the minister to commit to this. Clearly, there are a num- ment representatives who have physical space in those ber of different initiatives that the ministry may well jurisdictions, and they include Tokyo, Seoul, Beijing, have embarked on with respect to promoting and cap- Shanghai, Guangzhou and Bangalore. Those are the six turing economic development opportunities for British where we have trade and investment representatives. Columbia in the trade area and also with overseas op- The number of staff in each of those varies around the portunities in other countries. world. It averages about three per office. I hope that's Perhaps the minister could commit to providing me helpful to the member. They would have three people in with a list of those initiatives that the ministry is involved each of those offices. in, and of programs and opportunities that the ministry Then the member asked about anticipated new loca- is seeking on behalf of British Columbians. Then we tions. We're exploring three new locations for our trade 3866 British Columbia Debates Tuesday, March 30, 2010

and investment representatives to operate on our behalf. of our ministry, at this stage I personally plan to have at Those include Mumbai, Taipei and Singapore. least one trip over to Asia in the fiscal year '10-11. The details of that are not yet available, but we'll certainly J. Kwan: When does the minister expect those other scope them out and provide them to the member to three locations to materialize? the best that we have at this stage and try to put some stakes in the ground, which will hopefully be useful to Hon. I. Black: We're currently going through the ex- the member on that one. ploration of the different options and what they entail It is important to note, though, that some of the other and trying to establish the relationships necessary to ministries — and I think of our colleague the Ministry proceed on these offices. It is our hope that that work of Forests — will take trips over or go around the world will be done towards the end of this summer, at which to further the interests of their own ministry. That is not point we'll be able to lock in on the specific timing that in any way unusual. They pay for those, and they plan we would put down as our objectives or desires for when those. They do consult with us as they get ready to go, to we would actually open the offices at that point in time. make sure that there's a consistency in our message. Obviously, there's a perhaps on-the-ground knowledge J. Kwan: Sorry, I just want to go back one minute on that we can share with them to make sure that they're as- the request for information. The minister was going to sisted and get the best use of their time and the taxpayers' provide written information to us on the different -in money while they're over there. We do have a kind of itiatives that the ministry is embarking on, trying to consultative role, but we don't profess to take ownership expand opportunities for British Columbia in the trade for those trips, and they pay for them themselves. sector but also with local potential initiatives here for So I don't want to set the expectation of the member economic development. that I can provide any other ministries who may be trav- Along with that I'm wondering: with the budget of elling, because they don't share that information with us $20 million or so this year, what are the forecasts for the until they announce that they're ready to go, and then ministry in terms of trade missions that this ministry we basically try to consult with them and assist them. will be paying for us to go overseas — for the minister or With respect to the trade and investment offices and his designate or representatives to go overseas — to try requests for more detailed information, we will provide to capture opportunities? If I could get a list of that — of that in writing to the member, as requested — just with what the trade missions would entail and who would be one caveat. It is a competitive process, because these going and to what locations and when — I would ap- individuals that we have hired are in many cases com- preciate that. panies who have competed for the right to represent I fully expect that the minister doesn't have all that British Columbia in their jurisdictions. So there is an information at his fingertips right now, so ifI could get a element of competitive information there that we have commitment to receive that in writing from the minister, to be a little guarded with, to protect them and, frankly, I would appreciate it. to protect the negotiating position of the province of I saw that the minister nodded, so I presume that he'll British Columbia. get up and confirm. But I think that there are some bulk numbers there On that, I'll move on to the trade offices question as on an office-by-office basis that should certainly give the well. Could the minister please tell me: what's the budget member some context and flavour of our expenditures allocated for each of these trade offices? I say trade of- in this area. If we can use that as a starting point, I'll cer- fices with the understanding or proviso that it's the tainly commit to send that to the member in writing. physical location. Then, of course, the trade representa- tives. So the detailed sort of breakdown of the budget for J. Kwan: Yeah, I'd be interested in receiving that. each of these trade locations. When the minister says that there are issues of a com- [1050] petitive nature around releasing the material, is the It could be because I'm asking for some fairly detailed minister talking about the contracts which the minis- information here for each of the trade offices.I keep say- ter has signed with these trade representatives, because ing trade offices.I t's just a habit, but the minister knows they're marketing it themselves? So if people knew, for what I mean by that. If I could receive that information example, that the province of B.C. pays them X amount in writing, as well, in terms of each location and what to do this work, they may not be able to sort of go out the budget breakdown is and the operating breakdown, there and drive a tougher bargain for potentially better etc., for each of those locations and trade representatives contracts elsewhere? — I'd be happy to receive that as well. [1055] Is that what the minister is talking about? I'm not quite Hon. I. Black: Going back to the member's first ques- sure what he's referring to on the competitive nature of tion pertaining to anticipated trade missions on the part things. Tuesday, March 30, 2010 British Columbia Debates 3867

Hon. I. Black: To the member's question, the con- J. Brar: I will probably go from China to India very tracts in question are all actually managed through a briefly, for a short visit. formal RFP process. Like other procurement processes, The minister just mentioned a few minutes ago that in these are managed according to the standards of the India the government of British Columbia has what we province of British Columbia, which allows for the pro- call a trade representative in Bangalore. If the minister tection of competitive information that any proponent can provide a bit more information as to when that was would include in an RFP-type process. So to that extent, opened and if there's any location of that office. we have an obligation to protect their competitive inter- ests and, indeed, our own. Hon. I. Black: I can confirm for the member that the When this contract comes up for renewal, as an ex- trade and investment rep was hired in February 2009, ample, if it was public information…. The breakdown and the real estate was secured in the late spring of that and details — if you will, competitive information — of year. I can get the specific date for the member. The a given consulting firm or contractor that's bidding on specific address and photos, I understand, are available these types of projects would give an unfair advantage to on our ministry website. We don't have that with us, but their competitors, who at that point are trying to com- if the member would like me to get that and send that to pete to win the business as well. him, I can do that, or I can refer the member to the web- site. The physical address of the building is there. J. Kwan: Okay. Then, on the expenditures, is it a break- I'd just add as a corollary that this is a really interest- down of the trade representatives and their contract, ing office for us. We're piloting a neat project that may whatever that contract is? Would it include a breakdown be of interest to the member opposite. Bangalore, as of the costs associated with the other staff — there's one many know, is kind of viewed as the Silicon Valley of trade representative and their support staff, I imagine India, and there are a lot of budding technology com- — which the province of B.C. pays for? Then, I would panies there. imagine, for the physical space itself…. Is it space that What we have done in this trade and investment office B.C. also pays for, for these trade representatives there to as part of that contract is to actually have additional real exist and be housed in this sort of B.C. physical location? estate made available on an incubator-type basis, where There's expenditure associated with that. British Columbia companies that would like to get es- Is that what I can anticipate from the minister, along tablished and do business in India have actually got those lines, in terms of the operating expenditures of some physical space that they can work with in trying to these trade locations with the trade representatives? I reach out into the community there and to expand their understand that on the contractual side of things, there reach as Canadian companies with respect to business are some safeguards there. I understand that, but overall, partnerships, marketing opportunities, etc., which is so surely we can get the scope of the expenditures associ- crucial, especially in the partnership end of things in the ated with each of these offices as they break down into technology sector. the line items associated with it. The Bangalore office does indeed, to the member's question, have a physical address, and it's being used in [D. Horne in the chair.] a rather unique and innovative fashion.

Hon. I. Black: We will release all the information that J. Brar: What are the operating hours of that office? we can under the competitive provisions of our procure- ment processes. We're bound by those. Hon. I. Black: I'm advised that they operate on stan- But for the member's information, we effectively have dard business hours. one contract. We don't actually hire the support staff [1105] of the individuals. We pay them in bulk. It's one of the advantages to this particular process. We negotiate a J. Brar: I just want to make sure, because the question contract to get a service at a bulk number. They are re- has been a bit confusing. I just want to make sure that sponsible for the hiring of staff. They pay their real estate there's a physical location and that the operating hours out of that amount, and it is not government who does are, as the minister said, regular time in Indian operat- the breakdown of those different costs. ing hours. But we will provide absolutely everything that we can My understanding is this: there is a physical office with within the existing frameworks of our purchasing poli- what you call a sign there — B.C. trade representative — cies of the government of B.C. Within that framework and the phone number and all that kind of information, we'll give as much information as we have available to as we provide in a normal case. I just want the minister us. to confirm that there's a physical location with a sign — [1100] B.C. representative office — with set operating hours. 3868 British Columbia Debates Tuesday, March 30, 2010

Hon. I. Black: I'm advised by my staff that I can an- Bangalore, and the other one is being considered, which swer affirmatively to each of the member's questions. is Mumbai. So I understand that. I just want to again clarify: are there any kind of trade-related activities tak- J. Brar: The second thing I want to confirm…. The ing place in Chandigarh by the B.C. government? minister just mentioned that they're working on three other possible locations, which includes one location in Hon. I. Black: Yes, I can confirm for the member that India — that is, Mumbai — and Taipei and Singapore. I there is. The individual inC handigarh is not a trade and just want to ask the minister: is there any other location investment representative. It's a consultant from whom other than Mumbai which is being considered at this we are benefiting in furthering our interests, but that is point in time by the minister — in India? a contract owned by the Advanced Education Ministry. It's a rather unique relationship, but that representative Hon. I. Black: I can confirm for the member that with is furthering our interests on a contractual basis that is respect to our formal trade and investment representa- different from our trade and investment representatives tive contracts that we have within our ministry and the that have been discussed here. physical offices that they subsequently open within the So just to clarify for the member: there are differ- Asian jurisdictions, Mumbai is the only office being con- ent types of relationships. We own wholly the contracts templated on a go-forward basis by our ministry at this with trade and investment representatives within our point in time. ministry, and the location that we've described, con- It's a very large commercial centre. There's lots of templating Mumbai as our next physical location with a logic behind why that's the case. But while there may trade and investment rep securing that location as part be other opportunities within India as we go forward, of his or her contract. We have the benefit of a contract at this point I think the priority that we're placing with that is held by another ministry, the Advanced Education respect to new trade and investment representative rela- Ministry, with respect to economic development con- tionships, as we have them within our ministry, remains sulting that is being done in the Chandigarh region. Mumbai. J. Brar: Can the minister confirm, then, that there's J. Brar: I'm a bit confused about the locations as to no trade representative in Chandigarh opened by the what those factors are, based on which the location is government of British Columbia? basically chosen. Like Delhi, for example, is the capital of India, and Delhi is not part of those two options. I just Hon. I. Black: To be very clear to the member, what wanted to ask the minister: what are those key factors, I was speaking about was that the Ministry of Small based on which the location is chosen for the B.C. trade Business, Technology and Economic Development representative office — whatever we call it? has trade and investment representatives under a very [1110] specific model. We are fortunate that we are benefiting from a contract that exists with another ministry in the Hon. I. Black: The member asked kind of two ques- Chandigarh region of India. tions at once: what's the basic criteria that we use, and My understanding — and I have to defer to the min- second, why is there not more focus in Delhi? I think istry responsible — is that the primary focus is one of that like any ministry and any government, we have to the provincial nominee program and looking for that apply our resources where we feel we can get the most entrepreneurial element, which certainly benefits us return on that investment. provincially from an economic development standpoint, Delhi, as we know, is one of the major political cen- and that there's a focus on labour and labour mobility tres within India. It is also where we've got the Canadian and skills that are being focused with the individual in high commission, so we believe that we can capture the Chandigarh region. much of the economic opportunity for Canada, and par- [1115] ticularly British Columbia, by leveraging an office that But I think there's definitely an economic develop- exists there in the high commission's office. ment benefit to British Columbia and to our ministry But we also take advice beyond that. We also take ad- in the work that we do in India. It is my hope that there vice from groups such as the Asia-PacificT rade Council, would be active communication between our trade who steered us towards our existing offices and con- and investment representatives and the consultant in curred with us that Mumbai is the more logical place Chandigarh, but that is not a relationship that reports in to next focus our resources as we seek to grow our pres- through our ministry. ence in the Asian countries. I don't want to comment too much further on it when it's not one that we own, but I would state that I do J. Brar: Once again, my understanding is that at believe there's a definite economic development bene- this point in time we have one trade representative in fit we get from that relationship, and I consider it a bit Tuesday, March 30, 2010 British Columbia Debates 3869

of a bonus, if you will, based on how the consultant is ber opposite is referencing. All I was saying is that that focused. is owned by a different ministry because of a different focus on that area. But the labour market development, J. Brar: What happens on a normal case, if we ask the skills development area and the entrepreneurial focus any question which falls under any other ministry, is as manifested through the provincial nominee program that this minister says: "That's not my responsibility." are the primary focuses of that individual, which is why But now I'm specifically asking a question as it relates it's contained within another ministry. to the responsibility of this minister, and I will repeat So there isn't the inconsistency. There's just the parcel- the question. Is there any office opened by your ministry ling out of the work being done by a different ministry — any B.C. trade representative open — in the city of because of the very specific focus of that office in the Chandigarh in India? Yes or no? Chandigarh region.

Hon. I. Black: I thought I was fairly direct. There is J. Brar: Clearly, this is another broken promise of this no trade and investment representative, as we have them government. The Premier of this party goes to the city within our ministry, in the Chandigarh region of India. of Surrey in the middle of the election and makes an announcement that this government will open a trade J. Brar: Now, I have asked the question about: what are office in Chandigarh, and as soon as the election is over, the key factors based on which location is chosen? And I it becomes something else. would add to that. In the last election the Premier of this Clearly, there is no office, this minister has said, by province made the promise to the people of India — and, this ministry — particularly, we call it trade representa- particularly, went to Surrey to make the announcement tive — in the city of Chandigarh. I still fail to understand — that they will open up a trade office in Chandigarh. why the Premier would make a promise before the Secondly, I would like to say that in B.C. about 80 election and then not deliver after the election on his percent of the population comes from Punjab, and promise and why he chose to go to the city of Surrey, Chandigarh is part of Punjab. The offices we are open- with significant populations from India, and make that ing are in Bangalore, which is not a bad thing, and then announcement and then open the office in Bangalore in Mumbai, which is in another part of the country. and Mumbai — which is not a bad thing, by the way. I just want to understand from this minister his busi- I would ask the minister to include the city of ness plan. The people who are here come from that Chandigarh in his list for opening a new trade represent- particular location; 80 percent of the Indo-Canadian ative in Chandigarh, because as I said before, 80 percent population in B.C. comes from Chandigarh. So how of the population in the province of British Columbia does it make sense to not open an office in Chandigarh from India comes from Punjab and Chandigarh. That's and to open the offices in Bangalore and Mumbai? why it makes sense to open an office in Chandigarh spe- I would like to ask the minister to clarify that and also cifically focusing on trade, as the minister is opening to make a business case on that — as to why he chose not offices in other areas. to recommend opening the office in Chandigarh, when That's important because the Premier of this province the Premier promised it and when we have 80 percent of made a promise with the people of Surrey and people the Indo-Canadian population in B.C. from around the of Indo-Canadian origin during the election. That's why Chandigarh area. it's important as well. I would ask the minister to include [1120] the city of Chandigarh in his list for opening this office as quickly as possible as promised by the Premier of his Hon. I. Black: The different offices that we have around party. the world often have different focuses.I t was only in the recent past that, I believe, our Attorney General was in Hon. I. Black: There are other arms of government, the Chandigarh region opening the office of the consult- agencies of government, that have got offices in differ- ant that I described just a few moments ago. ent regions in India. TheFII , as we mentioned earlier, is The focus of that particular work that had been done an example. I understand that they've got two offices in by that individual in that office in the Chandigarh re- India. You put these offices where it makes some sense gion is one of entrepreneurial development, consistent to match up the needs and the opportunities of each of with our provincial nominee program, which is wholly these regions relative to the agenda of British Columbia owned by the Ministry of Advanced Education and and to furthering our plans here. Labour Market Development. It is for that reason that [1125] they are in that area. The member just mentioned the fact that 80 percent That opening of that office celebrated recently by the of Surrey's population — his words, not mine — comes Attorney General, as far as I can see, makes good on the from that particular region of India. To me, it makes per- commitment that the Premier made, which the mem- fect sense, then, that if you've already got the mobility 3870 British Columbia Debates Tuesday, March 30, 2010

of people — which, I should point out, is an important good problem to have. That would be a great problem part of trade as well…. Trade is not just about exporting for them to bring to us as we contemplate where we're and importing of raw goods and finished goods.I t's also going to go next within India. about the movement of people. For now, however, we have done the spadework and To that extent, to me, it makes intuitive logic — if much of the research and are pulling together the data you've already got a region of the country of India around opening our next office. Mumbai appears to where there's an obvious movement of people taking be the higher priority from an economic development place already, because, as the member said, 80 percent of standpoint of British Columbia, but there is no finish Surrey's Indo-Canadian population comes from that re- line in the exercise of analyzing your priorities in a given gion of India — that the trade office that you would have region around the world. in that region would be focused on the people element It is my hope that one of the many benefits of the re- of trade, which certainly would include entrepreneurs. lationship that now exists in the Chandigarh region of There are great entrepreneurs that we have in British India will be to educate us on other opportunities that Columbia of Indo-Canadian origin, and there are great may exist in that region, which may indeed involve entrepreneurs that exist in India, in the Chandigarh re- opening a trade and investment representative's office gion, who perhaps are looking for opportunities to bring that we have in our ministry somewhere down the road, what they do and their skills to British Columbia and to but I don't want to predict that part of the future until Canada — not just to start out new lives for themselves we have that relationship established and have the data but also to bring what they have to offer, their skills, to work with. to help grow our economy on this side of the Pacific Ocean. J. Brar: Clearly, the minister is refusing to even In that context, to me, it makes perfect sense — if consider Chandigarh as a preferred location for open- we're going to open an office in the Chandigarh region, ing trade representation. That's what the minister said. as has now been done, as was celebrated in the not too What I understand the minister to say is that Mumbai distant past by our Attorney General when he was in is a priority at this point in time and Chandigarh is not. that region — that the focus should be entrepreneurship, That's understandable, because as I said, I have asked that it should be the provincial nominee program and the minister categorically a specific question. At the be- that it should be skills development and mobility. By the ginning the minister said that we have only one office member's own description, that makes perfect and in- in Bangalore, and the minister is considering opening tuitive sense. another one in Mumbai. He never mentioned anything The fact that that would be an office opened by our about Chandigarh. government but under a different ministry which hap- ThenI asked what the key factors are for choosing the pens to own the provincial nominee program, to me, location to open an office. The minister said that, some- makes perfect sense. It fulfils the commitment made by how, they believe Bangalore and Mumbai are better the Premier of British Columbia. locations because in Delhi we have our embassy there. That's not to say that we wouldn't look at expanding. I asked the minister…. This is about the promise made I think it's important to understand — perhaps this by the Premier of this province before the election that will help the member — that, as I mentioned earlier, it they would open an office inC handigarh, and they men- is my expectation that the trade and investment repre- tioned a trade office. sentatives and the model of the trade and investment I want to correct the minister. There's a big differ- representatives that we have deployed around the world ence. The minister is Minister of SmallB usiness. There's would communicate with each other within a given a big difference between a trade office and theN P P pro- country — and across a continent, where it makes sense gram. The NP P program is an arm of the immigration as well. department. It's not a trade office. That's a totally differ- Likewise, within India itself, it's my expectation that ent focus. our trade and investment representative in Bangalore [1130] would be in contact with the trade consultant that we The focus of a trade office is trade, economic- activ have got hired in the Chandigarh region and that is ity, Minister — you should know that — and that's what focused on the entrepreneurship and the provincial was promised by the Premier of this province, not the nominee program. PNP program. PNP is a simple arm of immigration, not To me, it is my expectation they would be in contact trade activities. with each other. As that representative reports back to The Premier and this government have betrayed the us and identifies more opportunities, if the Bangalore people of Surrey, betrayed the people of India on this representative is not able to assist in that regard, which case, because they made the promise before the elec- is my expectation, and perform the duties that a trade tion, and now they are refusing to open an office in and investment representative performs, that that's a Chandigarh. Tuesday, March 30, 2010 British Columbia Debates 3871

The minister mentioned two times, although I never mendations have been acted on by the government and asked about it, that there is a trade office open in the progress, if you will, related to the suggested recom- Chandigarh. Do we have the location of that office? Do mendations from the Asia-Pacific Trade Council from we have a building for that office? Do we have the sign these reports. there that there's a B.C. trade office in Chandigarh? I would like to ask the minister to clarify that. Hon. I. Black: As the member referenced, there was a series of recommendations made by the Asia- Hon. I. Black: The member, in his preamble, basically PacificT rade Council to government. What we did with said the opposite of everything I had just finished say- those recommendations was develop the Asia-Pacific ing. I won't go through it on a point-by-point basis, but initiative, and we did that in conjunction with the Asia- it's clear that I disagree with the member's assessment of Pacific Trade Council. So our objective was to take their the situation. number of recommendations — and I understand that I believe it was January 22 when our Attorney General in one report they're actually a very long list of recom- stood, surrounded by entrepreneurs in the Chandigarh re- mendations — and develop that into the approach that gion, celebrating the opening of that office.T o suggest that is known as the Asia-Pacific initiative. the provincial nominee program, which is one of the most It was done in conjunction with them, with the Asia- successful programs that we've run in British Columbia at Pacific Trade Council. They validated the Asia-Pacific so many different levels…. I mean, the dean of our busi- initiative to connect the dots, if you will, with what we are ness school at the University of British Columbia was one doing on a go-forward basis. It's executing on that initia- of the first people to come through that program. tive, the Asia-Pacific initiative and the plan within that, The focus of getting skilled people into the right jobs which is actually the focus of the budget lift that the mem- and getting the latitude from the federal government to ber first asked me about when we started this morning. actually attract the right people to our country when we need them in the areas where we need them — that is J. Kwan: So the strategic plans for the Asia…. absolutely an area of economic development. In fact, the Presumably there are plans in place for each of the dif- member may not be aware of this, but that program ac- ferent regions that were cited in the report — what the tually was at one point in this ministry. It started in this Asia-Pacific council had asked for — and they deemed ministry. It's clear that the linkage is there. History is that as implementation of the recommendations. Is that very clear on that. The pragmatics and the mechanics of what I'm hearing the minister say? the program itself are pretty clear on that. [1140] To the member's question, I am advised that there is a physical office — they're referring to it as an oppor- Hon. I. Black: I can confirm for the member that, tunity office; a trade opportunity office is what I believe yes, the Asia-Pacific Trade Council is aware that gov- they're calling it — in the Chandigarh region. I don't ernment's response to their reports was the Asia-Pacific have the address of that office.I can certainly get that for initiative. The objective of that was to take from those the member or simply refer them to the ministry that recommendations an approach that government could actually owns the contract for that individual who is use on a go-forward basis, taking advantage of their ad- representing our interests in developing our economy in vice and their wisdom that went into their reports. British Columbia in the Chandigarh region of India. It is my understanding, from my conversations with them, that they deem that an appropriate response to J. Kwan: I wonder if the minister could commit to pro- their various reports. We remain very grateful for their vide to me information related to the Asia-PacificT rade guidance in putting that stuff together in the first place. Council, where they have done a number of reports — China, Hong Kong, India, Japan and South Korea. Then J. Kwan: Let me ask another question on the Asia- there were discussion papers as well — Southeast Asia Pacific Business Centre that the minister mentioned. and Taiwan. It's a fairly new centre that's been set up. I'm wondering In these reports there is a list of recommendations how much of the budget within the ministry is allocated on things that they recommended to the government to operate that centre. Presumably, the operating funds in terms of taking action. I'm curious to know which are coming from this ministry. What programs do they of those recommendations have been acted on and the have in place for that centre? progress related to their recommendations to the gov- Again, in the interest of time, I'd be happy to receive ernment. I won't go through all the recommendations, that information in writing and in detail from the minis- because there are many. ter. If that's okay with the minister, then I'm going to yield [1135] the floor to my good colleague the member forC olumbia In the interest of time, I wonder if the minister could River–Revelstoke to ask a question on a riding-specific commit to responding to me in writing on what recom- issue. 3872 British Columbia Debates Tuesday, March 30, 2010

N. Macdonald: In the ministry's major projects in- Hon. I. Black: A couple of things for the member op- ventory, one of the projects is Jumbo Glacier Resort. posite. Just to give the actual definition of this. We do The date on the most recent list that I've seen, which is this on a quarterly basis, as the member may know. It December 2009, is spring of 2010. lists all major projects that are proposed, planned or The question is: what is the status? If the minister has underway. Those are the specific categories. I was be- that information, I'd appreciate it — or if you can direct ing colloquial in my last answer. It's proposed, planned me to the ministry that would have that information. or underway. They are projects that have a capital cost of at least $20 Hon. I. Black: As the member may be aware, the million within the Lower Mainland and valued at $15 large projects under major projects inventory…. It is an million or more if you're outside the Lower Mainland of inventory that is done. It's a weather vane, one of the British Columbia. It is basically a listing that they gather. weather vanes that we use as to our economic health in The individual who gathers this on behalf of government the province of British Columbia. It is gathered by an in- does so using a variety of sources. Very often it will be dependent third party who basically works with what I business permits, but it can be also be private statements call a statement of intent on the part of various propon- of intent on the part of a developer, or something like ents around the province of projects of a certain size. that. I believe that it's by size of building permit and the It is not tracked in terms of who the investors are for projects themselves. This helps us to determine the over- the different projects in terms of what we publish and all economic optimism, if you will, on the part of those what we track. We don't have that level of detail. We who would invest large sums of money to put people don't attract that. We're not looking for it. to work in B.C. It's an important weather vane that we I am noting the hour, hon. Chair. I would like, how- track. ever, to state a correction on the record. Yesterday in our With respect to the specific project, our ministry discussion in the hallway with the media pertaining to wouldn't track the status of that. While it may be in- my attendance at various Olympic events, I distributed a cluded in the list that we get — and it is published on the list to the media which was correct. My citing from that Web, I believe — we wouldn't get the specifics around list, which was distributed to the members opposite and each of the projects as to where it's at and how it's do- to the media, however, included a misstatement on my ing other than grouping them into those that are in the part. I wanted to correct that on the record to make sure planning stage, those that are in the execution stage there's no doubt. and those that are in the completed stage — to coin a There were seven different dates at which I attended phrase. Olympic events, sporting events. On one of those dates [1145] — and the list actually shows this — there were two I don't have the specifics for the member, but I will events. I referenced that I'd been to seven events. That certainly commit to finding out who does. We'll com- number is actually eight, and if you look at the list that municate that to the member, if that's acceptable to the was distributed to the members opposite and to the member. media, it actually shows both of those events on that piece of paper. N. Macdonald: To get a sense. So I go to a different Certainly, the information has been distributed ac- ministry, and you'll…. I would presume that would be curately. However, when I cited it in conversation I used the Tourism Ministry. If you could maybe correct that the number seven. I should have used the number of and give me that information. Do you also have sort of eight, and I wanted to remove any shadow of doubt from a list, for instance, with this project, like who the invest- that piece of data for the House. ors are? Do you have any specific information on the Noting the hour, hon. Chair, I move that the commit- project at all, or is this simply a list where you're tak- tee rise, report progress and seek leave to sit again. ing information from other places? None of it is very specific, and it's just put into a list. For instance, with Motion approved. this project, do you have a list of who the investors are in this project? The committee rose at 11:48 a.m. Hansard Services

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