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Policy & Positions Manual
2012 - 2013
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NTRODUCTION
The BC Chamber of Commerce (the Chamber) is registered under the Societies Act (British Columbia) as
a volunteer, not-for-profit association and serves its members as the provincial federation of autonomous
community chambers of commerce, boards of trade, and corporate members.
Known to have been in operation as early as March 1867, the Chamber was re-established in 1951 to:
1. develop a true cross section of opinions of the British Columbia business community, and effectively
present these opinions to government;
2. build a diverse, competitive and sustainable economy that provides opportunity for all who invest,
work and live in British Columbia; and
3. create and nurture an effective membership organization that provides value and purpose to its
members
This Policy and Positions Manual contains informed opinions and policy statements adopted by members
during the policy session at The Chamber's 60th Annual General Meeting held in Penticton, BC, May 24th
to 26th, 2012.
The Chamber's policy statements contained herein are submitted or presented to the Provincial and
Federal Governments and are individually called to the attention of the Cabinet ministers responsible in
order to make it possible for pending government legislation and regulations to reflect the individual
opinion of our chamber members.
The Policy and Positions Manual also serves as a working document for the Chamber's Policy Review
Committee, whose members regularly review and assess the timeliness, importance , and scope of the
Chamber's policy statements.
PLEASE ADDRESS INQUIRIES TO:
Jon Garson
Vice President, Policy Development
The British Columbia Chamber of Commerce
Suite 1201, 750 West Pender Street
Vancouver, BC
V6C 2T8
Telephone:
E-mail:
(604) 638 8113
[email protected]
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POLICY PRINCIPLES .............................................................................................................................................. 6
POSITIONS ON SELECTED PROVINCIAL ISSUES
ABORIGINAL RELATIONS AND RECONCILIATION
ABORIGINAL ISSUES: ACHIEVING CERTAINTY (2011) ............................................................................ 11
MORE SECURE PROPERTY RIGHTS ON RESERVE LANDS (2010) .......................................................... 15
ADVANCED EDUCATION
ADDRESSING BC’S TECHNOLOGY AND ENGINEERING SKILLS SHORTAGE (2012) ......................... 16
AGRICULTURE
AQUACULTURE IN BC (2012) ......................................................................................................................... 17
PROVIDING THE RESOURCES TO GROW THE AGRICULTURE INDUSTRY IN BC (2011) .................. 18
COMMUNITY, SPORT, AND CULTURAL DEVELOPMENT
MEASURES TO ADDRESS THE ISSUE OF DERELICT BUILDINGS (2012) .............................................. 21
PROVINCIAL ROLE IN MUNICIPAL AMALGAMATIONS (2012) .............................................................. 22
SUPPORTING ACCOUNTABILITY AND TRANSPARENCY FOR LOCAL GOVERNMENT (2012) ........ 24
CALL FOR PREMIER'S COUNCIL ON MUNICIPAL INFRASTRUCTURE (2011) ...................................... 26
IMPROVING THE EFFICIENCY AND ACCOUNTABILITY OF LOCAL GOVERNMENT IN BC (2011) . 27
REVIEW OF REGIONAL GOVERNANCE MODEL IN URBAN AREAS (2011) .......................................... 30
THE NEED FOR A BUSINESS VOTE IN BC (2011) ........................................................................................ 32
CREATING EQUITY IN THE PROPERTY TAX SYSTEM OF BC (2010) ..................................................... 35
EDUCATION
GETTING THE MOST FROM OUR EDUCATION SYSTEM (2012) .............................................................. 40
ENERGY AND MINES
INVESTING IN THE INFRASTRUCTURE REQUIRED TO CAPITALISE ON BC’S MINERAL
RESOURCES (2012) .................................................................................................................................... 42
URANIUM AND MINERAL EXPLORATION (2012) ...................................................................................... 43
USING FINANCIAL MECHANISMS TO DEVELOP BC’S MINERAL RESOURCES (2012) ...................... 45
MINERAL EXPLORATION INVESTMENT AND PERMITTING (2011) ...................................................... 47
PROTECTING OUR ENVIRONMENT AND OUR COMPETITIVE EDGE (2011) ........................................ 49
SUPPORT FOR BC GEOLOGICAL SURVEY (2011) ...................................................................................... 51
TIME FOR A REVIEW OF THE CLEAN ENERGY ACT (2011)..................................................................... 52
DEPENDABLE POWER FOR THE ASIA PACIFIC TRANSPORTATION CORRIDOR (APTC) (2010) ...... 53
PROVIDING A PLATFORM FOR THE EXPANSION OF THE MINING INDUSTRY IN BC (2010) .......... 55
ENERGY AND MINES - HOUSING
CONSISTENT PROCESSES FOR DISCLOSURE AND REMEDIATION OF BUILDINGS (2012) .............. 58
RENTAL APARTMENT OWNERS IN BC (2011) ............................................................................................ 59
ENERGY AND MINES – LIQUOR CONTROL AND LICENSING
LEVELING THE PLAYING FIELD FOR LIQUOR RETAIL IN BC (2011) .................................................... 63
LIQUOR DISTRIBUTION BRANCH CHANGES TO SUPPORT INDUSTRY CHOICE FOR BC (2010) ..... 65
LIQUOR REFORM POLICY (2010) ................................................................................................................... 67
ENVIRONMENT
FRASER RIVER FLOOD MANAGEMENT (2012) .......................................................................................... 69
FINANCE
BC’S COSTLY CARBON TAX (2012) .............................................................................................................. 71
EXPLORING PUBLIC ENGAGEMENT ON MAJOR NEW TAXATION INITIAITVES (2012) ................... 73
CHANGES TO THE PROPERTY TRANSFER TAX (2012) ............................................................................. 75
A SUSTAINABLE FISCAL POLICY FOR BC (2010) ...................................................................................... 78
FORESTS, LANDS AND NATURAL RESOURCE OPERATIONS
AMEND THE WOOD FIRST ACT (2012) ......................................................................................................... 83
THE FUTURE OF THE FOREST INDUSTRY (2010)....................................................................................... 85
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HEALTH
HEALTH CRISIS – CANADA NEEDS THOUSANDS OF NEW DOCTORS NOW (2011) ........................... 93
THE NEED FOR A COMPREHENSIVE CHRONIC DISEASE STRATEGY (2007) ...................................... 95
A NEW VISION FOR HEALTH CARE (2002) .................................................................................................. 97
JOBS, TOURISM, AND INNNOVATION
ATTRACTING GLOBAL TALENT KEY TO CANADA’S ECONOMIC FUTURE (2012) ............................ 99
ECONOMIC GARDENING – GROWING BUSINESS (2012) ........................................................................ 101
FOREIGN WORKER PROTECTION (2012) ................................................................................................... 103
GROWTH ENGINE BC DIGITAL MEDIA INDUSTRY (2012) ..................................................................... 105
ENSURING THAT THE BC INVESTMENT BOARD LEADS TO IMPROVEMENTS
FOR PROPONENTS (2011) ....................................................................................................................... 106
FILLING LABOUR SHORTAGES IN NORTHERN BC – OBSTACLES TO INTERNATIONAL
HIRING (2011) ........................................................................................................................................... 107
FURTHER IMPROVEMENTS TO THE PROVINIAL NOMINEE PROGRAM (PNP) (2011) ...................... 108
MOBILE BUSINESS LICENCE FOR ALL MUNICIPAL GOVERNMENTS IN BC (2010) ......................... 109
PREDICTABILITY FOR PROVINCIAL AND REGIONAL DESTINATION MARKETING
ORGANIZATIONS (2010) ......................................................................................................................... 111
JUSTICE
REVISE GOVERNMENT FUNDING OF HUMAN RIGHTS COMPLAINTS (2012) ................................... 114
ORGANIZED CRIME TASK FORCE (2012) .................................................................................................. 116
ENHANCING BC’S CHARITABLE GAMING POLICY (2011) .................................................................... 117
EQUITABLE POLICE FUNDING (2011) ........................................................................................................ 118
POLICE AMALGAMATION (2011) ................................................................................................................ 122
LABOUR, CITIZENS SERVICES, AND OPEN GOVERNMENT
LABOUR AND EMPLOYMENT (2011) .......................................................................................................... 125
OFFICE OF THE PREMIER
BORDER PACT: BEYOND THE BORDER ACTION PLAN (2012) ............................................................. 137
IMPROVING CONSUMER CHOICE: REMOVING INTER-PROVINCIAL TRADE BARRIERS TO SALE
OF 100% CANADIAN WINE (2012) ........................................................................................................ 142
ONLINE PROVINCIAL AND MUNICIPAL VOTING (2012) ........................................................................ 144
PRINCIPLES FOR PROGRAM REVIEW (2012) ............................................................................................ 146
LEVELING THE PLAYING FIELD FOR OIL AND GAS COMPANIES (2010) .......................................... 147
TRANSPORTATION AND INFRASTRUCTURE
CHARTING A SUSTAINABLE COURSE FOR BC COASTAL FERRY SERVICES (2012) ....................... 149
CONSULTATION ON PROVINCIAL TRANSPORTATION PROJECTS (2012) ......................................... 152
IMPROVEMENTS TO TRANS CANADA YELLOWHEAD HIGHWAY 16 (2012)..................................... 153
PROVINCIAL LEADERSHIP FOR LOW LEVEL ROAD NEEDED TO ENHANCE BC’S EXPORT
CAPACITY (2012) ..................................................................................................................................... 154
TRUCK DRIVER TRAINING FOR THE ROAD AHEAD (2012) .................................................................. 156
COMMERCIAL DESIGNATION OF ALDERGROVE PORT OF ENTRY ESSENTIAL FOR FUTURE
CROSS BORDER TRANSPORTATION NEEDS (2011) ......................................................................... 158
HIGHWAY TRANSPORTATION IN NE REGION OF BC (2011)................................................................. 159
IMPROVEMENT TO TRANS CANADA HIGHWAY (2011) ........................................................................ 160
PROVINCIAL AIRPORT INFRASTRUCTURE INVESTMENT PLAN (2011) ............................................ 161
QUALITY OF SERVICE STANDARDS AND ENFORCEMENT FOR THE TAXI INDUSTRY (2011) ..... 162
SOUTHERN BC TRANSPORTATION INFRASTRUCTURE: HIGHWAY 3 (2011) .................................... 165
THE NEED FOR AN INNOVATIVE APPROACH TO TRANSPORTATION FOR AN INCREASINGLY
URBAN PROVINCE (2011) ...................................................................................................................... 167
A LONG TERM STRATEGIC APPROACH TO TRANSPORTATION IN THE SOUTHERN INTERIOR OF
BC (2010) .................................................................................................................................................... 170
CAPITAL FUNDING STABILITY FOR BC’S INTERNATIONAL AIRPORTS (2010) ............................... 171
COORDINATING HIGHWAY INCIDENCE MANAGEMENT (2010) ......................................................... 172
EAST-WEST CONNECTOR BETWEEN ABBOTSFORD AND HIGHWAY 99 (2010) ............................... 176
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EXTENSION TO VICTORIA INTERNATIONAL RUNWAY (2010) ............................................................ 177
KOOTENAY COLUMBIA NORTH-SOUTH CONNECTOR (2010).............................................................. 178
MOVING FORWARD ON OPEN SKIES (2010) ............................................................................................. 179
US CUSTOMS PRE-CLEARANCE - BELLEVILLE INTERNATIONAL TERMINAL SECURITY (2010) 182
POSITIONS ON SELECTED NATIONAL ISSUES
ABORIGINAL AFFAIRS AND NORTHERN DEVELOPMENT
ABORIGINAL ISSUES: ACHIEVING CERTAINTY (2011) .......................................................................... 187
MORE SECURE PROPERTY RIGHTS ON RESERVE LANDS (2010) ........................................................ 191
CANADA REVENUE AGENCY
LEVELING THE PLAYING FIELD FOR OIL AND GAS SERVICE COMPANIES (2010) ......................... 192
ENVIRONMENT
FRASER RIVER FLOOD MANAGEMENT (2012) ........................................................................................ 193
FINANCE
GST EXEMPTION FOR MEDICAL SERVICE PROVIDERS (2012) ............................................................ 195
INCREASED RENTAL INVENTORY THROUGH FAIR TAX TREATMENT (2012) ................................. 196
INDEXING OF NEW GST REBATE (2011) .................................................................................................... 198
MARKETING CANADA AS AN INTERNATIONAL DESTINATION (2011) ............................................. 199
THE LOCKED IN ESTATE TRUST – A RESPONSE TO CANADA’S COMING
PENSION CRISIS (2011) ........................................................................................................................... 202
ELIMINATION OF CANADA’S CAPITAL GAINS TAX (2010) .................................................................. 204
RESTRUCTURING THE FCTIP FOR INCREASED TOURISM COMPETITIVENESS (2010) ................... 206
FISHERIES AND OCEANS
AQUACULTURE IN BC (2012) ....................................................................................................................... 208
HUMAN RESOURCES AND SKILLS DEVELOPMENT
REALLOCATING FEDERAL FUNDING TO DEVELOP A NATIONAL PLAN TO ADDRESS
HOMELESSNESS (2011) ........................................................................................................................... 210
INFRASTRUCTURE CANADA
FEDERAL LEGISLATION FOR THE CURRENT GAS TAX PROGRAM (2011) ........................................ 214
NATURAL RESOURCES
UNIFIED REGULATORY REVIEW PROCESSES (2012) ............................................................................. 216
OFFICE OF THE PRIME MINISTER
POST SECONDARY EDUCATION NEEDS NATIONAL COORDINATION (2012) .................................. 218
PUBLIC SAFETY
CANADIAN BORDER SERVICE AGENCY – CUSTOMS AND IMMIGRATION PROGRAMS (2012) ... 221
SERVICE CANADA
ACKNOWLEDGEMENT OF THE BASE PRINCIPLES OF PENSION REFORM (2010) ............................ 223
TRANSPORT
FRASER RIVER NAVIGATION MANAGEMENT (2012)............................................................................. 225
CAPITAL FUNDING STABILITY FOR BC’S INTERNATIONAL AIRPORTS (2010) ............................... 227
EXTENSION TO VICTORIA INTERNATIONAL RUNWAY (2010) ............................................................ 228
US CUSTOMS PRE-CLEARANCE - BELLEVILLE INTERNATIONAL TERMINAL SECURITY (2010) 229
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OLICY PRINCIPLES
Principles of Effective Public Policy
Public policy affects the businesses and economy of British Columbia through the impact of:
Regulation;
Taxation; and
Provision of government services, programs, and infrastructure.
Regulation
Well- designed and effectively enforced regulation improves the functioning of the economy by providing
certainty for the business community. Certainty is essential for decisions about essential long-term
investment in our enterprises. Regulation should achieve environmental and social policy goals without:
Imposing significant compliance costs on firms; or
Weakening the ability of businesses to adapt to changing economic conditions, technologies, and
consumer preferences.
Damage to business and constrained economic activity occurs when regulations have:
Disproportionately high compliance costs (particularly administrative costs);
Inconsistency in the way they are enforced (as unenforced regulation favours those who would
ignore them);
Inequitable in their design and application;
Restrict competition; or,
Otherwise create an onerous or uncertain burden on business.
The Chamber believes that government must ensure that regulation is:
Effective - monitored or measured against intended outcomes to meet justified needs.
Equitable – non-exclusive in their application to the greatest extent practicable, depending upon the
circumstances.
Cost-Efficient – the cost of regulation, both in terms of administrative cost to government and cost to the
economy is balanced against the intended benefits.
Predictable – business must be comfortable the regulatory landscape is not open to sudden or dramatic
change, regulatory changes should not come as a surprise to the regulated sectors, and have appropriate
transitional provisions.
Transparent – both the regulations and the process for establishing them must be open to public input
and review.
Timely – regulations should never been ‘set in stone’ but rather subject to periodic review.
Flexible – regulations, individually and collectively, must be responsive to changing circumstances.
Integrated and harmonized – wherever practicable governments should integrate and reduce regulatory
requirements and streamline assessment and compliance processes (i.e. ‘one project, one process’).
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Taxation
Business recognizes that government has a fundamental role to play in providing the infrastructure, both
physical and societal, that is essential to a vibrant and sustainable business climate. The Chamber
recognizes that tax revenue must be raised by governments to pay for services, programs and
infrastructure, and when properly designed should minimize distortive impacts on business and the
economy.
Specifically the Chamber believes government must ensure that taxes are;
Low but Adequate - just enough to generate revenue required for provision of essential public
services and avoid structural deficits.
Broad Based - spread over as wide as possible section of the population, or sectors of economy,
as the case may be, to minimize the individual tax burden.
Efficient - collection effort should not consume a significant portion of tax revenue, and should
be implemented in an economically efficient way (e.g. consumption taxes versus income or
capital taxes). Tax credits, earmarking and exemptions are generally opposed by the Chamber.
Equitable - taxes should apply equally to all individuals or entities in similar economic
circumstances.
Transparent - to the extent that they interfere with or influence individual decision-making or
favour some sector, explicitly acknowledge this intent.
Predictable - collection of taxes should reinforce their inevitability and regularity.
Simple - tax compliance, assessment and determination should be easily understood by an
average taxpayer.
Competitive –the overall tax burden must reflect the need for BC to remain competitive on a
regional, national, and international basis.
Well managed: Effective and efficient systems of internal control are in place, and proportionate
to the risks they aim to mitigate, yet support innovation and results for Canadians.
1
“Taxation” includes all methods applied by government to raise revenue, whether or not a tax, government budgeting and the application of
fiscal and monetary tools by government.
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OLICY PRINCIPLES
Government Spending and Programs
The provision of government programs is a central responsibility of government. Whether it is education,
health care, housing, policing or income assistance, government plays a fundamental role in providing
services that support families, business, and the broader community. However, government has a greater
responsibility to ensure funding dedicated to these programs is appropriately directed and provides value
to the taxpayer. Specifically government must ensure programs consider the following questions:
Public interest – Does the program or area of activity serve the broad public interest?
Balance – does it balance the overall needs of society and address the sometimes difficult
tradeoffs? For example, health care has increasingly crowded other areas of investment essential
to the economic well-being of Canadians.
Holistic – Does the activity address the issue holistically i.e. across society and government
agencies?
Funded appropriately – Is program funding linked to the natural cycle of the underlying
investment? i.e. Municipal infrastructure has a different life cycle than education or
unemployment insurance.
Harness competition & innovation– Does it consider and appropriately harness competition and
innovation to control the cost of public services? For example, can delivery costs be lowered
through intelligent use of technology, demand management, public-private partnerships or third
party delivery?
Affordability – Is there broad public support for the level of taxation that is required to support a
program and does it appropriately control demand as well as supply?
Role of government – Is there a legitimate and necessary role for government in this program
area or activity, or could the private/voluntary sector play a greater role in whole or in part?
Efficiency – If the program or activity continues, how could its efficiency and effectiveness be
improved?
Accountability – Are Canadians getting value for their tax dollars?
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The BC Chamber of Commerce
POSITIONS
ON
SELECTED PROVINCIAL ISSUES
2012 – 2013
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BORIGINAL RELATIONS AND RECONCILIATION
ABORIGINAL ISSUES: ACHIEVING GREATER CERTAINTY (2011)
Businesses operate best in a stable and predictable environment, where rights are certain and are protected
by the rule of law. The biggest issue for the business community arising from aboriginal claims is
uncertainty. The root of the uncertainty in BC is that aboriginal groups assert rights of ownership or
control over all of the land in the province, but those rights are not recognized in the legal regime that
business operates in.
Many activities that businesses pursue, or would wish to pursue with the permission of the Crown, may
be seen as impacting these asserted aboriginal rights in some way. It is clear that aboriginal rights and
aboriginal title still exist in the province, and are protected by the Constitution, but in most instances the
extent of aboriginal rights is unclear, while the extent of aboriginal title still remains completely
unknown.
Increased Expectations
The gap between what the aboriginal and non-aboriginal populations would accept as a reasonable
resolution or reconciliation can be perceived to have grown in the last decade.
It appears to many of the Chamber’s members that since the 1997 decision of the Supreme Court of
Canada in Delgamuuk’w, to the effect that aboriginal title has not been extinguished in BC, there has been
a trend of increasing expectations by aboriginal peoples as to the extent and strength of their rights.
Two recent and significant events that may have contributed in raising those expectations are the
(nonbinding) statements made by Mr Justice Vickers in the William case in November 2007 concerning
the extent of aboriginal title of the Tsihlqot’in people, and the 2009 Recognition and Reconciliation
initiative of the Provincial Government. Although the ‘R&R’ initiative was ultimately declared “dead,
dead, dead” by the aboriginal leadership themselves, before it died it proposed a very significant degree of
control of Provincial resources through “shared decision making”, as well as the potential recognition by
the Province that aboriginal title existed throughout the whole of the province.
The level of aboriginal expectation is probably best indicated by the extent to which a standard of “free,
prior, and informed consent” was adopted by aboriginal groups as a precondition to business
development. This principle was expressly rejected by the Supreme Court of Canada in Haida in 2004,
expressly rejected by the Federal Government when it voted against the UN Declaration on the Rights of
Indigenous Peoples in 2007, and expressly rejected again by the Federal Government on November 12,
2010 when Canada issued a Statement of Support endorsing the Declaration as an aspirational document
but at the same time noted it was a non-legally binding document that does not alter the legal duty to
consult.
The increased level of expectation of aboriginal people may be a significant factor in the lack of progress
in the Treaty process, and the withdrawal of many aboriginal groups from the Treaty process altogether,
since what is offered in that process cannot meet the present levels of expectation.
Further directions and clarity on what are the legal rights of aboriginal peoples appears to be necessary to
move forward with the ultimate goal of reconciliation. Under our Constitution, the Supreme Court of
Canada is the only body that can define the rights of the aboriginal people.
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The Chamber is not generally of the view that recourse to the Courts is the best way to resolve a dispute.
However, the most prudent way of determining whether the expectations of the aboriginal peoples are
supportable is to have more cases concerning the extent of aboriginal rights and title determined by the
Supreme Court of Canada.
Achieving Long Term Certainty Will Require Negotiation, Litigation, and Time
Certainty concerning the extent of aboriginal rights and title will most likely be achieved by two methods
running in parallel – that is, by a combination of court decisions which will provide better guidance to all
parties as to the actual extent of aboriginal rights and title, and by negotiations culminating in final
settlements in the Treaty process.
It is important to note that achieving certainty concerning the extent of aboriginal rights and title in the
province will take a very long time, and it is necessary to create a workable environment for the business
community pending final achievement of that goal.
Achieving Greater Certainty in the Short Term
The challenge for Federal and Provincial Governments is to create an environment in this province which
will allow businesses to operate successfully and competitively – and with greater certainty – for the
foreseeable future, while the resolution of the aboriginal rights and title issues is still underway. The
solution, as noted below, is to institute an effective process of consultation, as suggested by the Supreme
Court of Canada in Haida.
The most important recent decision that provides how to achieve greater certainty in the short term with
respect to aboriginal rights issues is still the November 2004 decision of the Supreme Court of Canada in
Haida.
The Haida decision – and the companion Taku decision – addressed the process the Crown should follow
before granting licences and rights which might affect unproven but asserted claims to aboriginal rights
and title. This was further clarified by the decision in Rio Tinto Alcan (2010).
The key finding of the Supreme Court of Canada was that the Crown has a duty to consult with aboriginal
groups who have not yet established their rights, before granting licences or permits that might affect their
asserted rights, and in some circumstances, the Crown has a duty to ‘accommodate’ those aboriginal
groups.
The Court made it clear that the duty to consult with aboriginal groups is one owed solely by the Crown,
and is not owed by the business community.
The Court described the nature of the consultation required as being on a sliding scale, based on an
assessment of the strength of the aboriginal claim and the impact of the proposed activity on the asserted
aboriginal interest.
The Court also commented on ‘accommodation’, describing it as a process of trying to harmonize the
competing interests of development and the wish to protect aboriginal interests.
A very interesting part of the decision was a statement by the Court that the Crown (both Federal and
Provincial) could establish regulatory schemes to comply with the legal obligation of consultation. In
effect, the highest Court in Canada advised the Crown that if a fair process for consultation was
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established, and followed, then the courts would uphold the decisions that emerged from that process.
The consultation principles in Haida were also applied to Treaty rights in Mikesew (2005), and were
further clarified in the Treaty context in Little Salmon (2010).
From the perspective of the business community the consultation process largely remains a black box
with almost no rules. This is a major impediment for people wishing to do business in the province.
Achieving greater certainty with respect to the process of aboriginal consultation – with guidelines,
timelines, and outcomes that can be relied on – is of critical importance to the business community.
There have been some recent improvements in the Provincial Government process. There does appear to
be more effort committed to developing expertise in consultation in the recent reorganizations of the “dirt
ministries”. There have also been some recent efforts to provide some guidance to the business
community. The “Updated Procedures for meeting Legal Obligations When Consulting First Nations –
Interim” (May 2010) and the companion “Guide to Involving Proponents When Consulting First Nations
(April 2010) are welcome developments, as are the published policy statements of the Environmental
Assessment Office that provide a guide for project proponents in consulting with aboriginal people in
both a Treaty and Non-Treaty context. It is still an open question as to whether the recent Protocols with
the Haida, Central Coast, and other groups will actually achieve any greater certainty.
With respect to the Federal consultation process, Indian and Northern Affairs Canada made an initial
effort to address this policy vacuum by releasing its “Interim Guidelines for Federal Officials to Fulfill the
Legal Duty to Consult” in February 2008 and has followed up with the Federal Consultation Guidelines
of March 2011.
However, these efforts fall short of the regulatory regime that was suggested to both levels of government
by the Supreme Court of Canada in 2004 in Haida. According to Wikileaks, a cable from the US
Embassy in Ottawa says that, “as long as Canada lacks a clear definition of aboriginal rights or a uniform
model for negotiations, effective mechanisms to resolve aboriginal grievances in a timely manner will
remain elusive”. This statement is consistent with the experience of members of the BC Chamber, and
the general situation remains that there is little guidance from either Crown as to what are the reasonable
outcomes or timing expectations in a consultation process.
One additional point is that the Provincial and the Federal Governments are often both involved in the
same project, with permits required from each of them. There is no real effort to coordinate the
consultation processes required for the different permits, so the consultation process is generally repeated
by both levels of government, with little or no reference to the other, adding to both expense and delay.
Revenue Sharing by the Crown(s)
In addition to wanting greater control over the decision-making process of whether a new business
activity should proceed, aboriginal groups wish to receive a portion of the revenue derived from the
proposed business activity.
Whether an aboriginal group should receive such an economic benefit is a matter of policy that should be
determined by the Crown, and not by individual businesses.
In Haida – and the decisions that followed - the Court did not propose a practice of paying money as a
requirement of ‘accommodation’ before aboriginal rights had been established.
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Outside of business activities carried out on reserve or Treaty land, there is no legal basis to suggest that
the business community should be paying aboriginal groups for the “right” to carry on business in the
province.
There have been some recent developments in the Province to provide for the sharing of Crown revenues
on a variety of projects. Examples of this are the Economic Benefits Agreements that have been
negotiated between the Province and some members of Treaty 8, and the Resource Revenue Sharing
Policy that was announced by the Province for the mining sector in October of 2008, which was
implemented on two mining projects in 2010. There also appears to be a movement by the Province to
apply a revenue sharing approach in the forestry sector.
How the resource revenues and tax base of the province should be shared between the Crown and the
aboriginal peoples ought to be a matter of government policy, and not developed as a consequence of
individual arrangements between aboriginal groups and business people based on self-interest and
pragmatism, as a consequence of the failure of the Federal and Provincial governments to develop an
effective consultation process, or a workable policy around revenue sharing.
In summary, while both levels of government have been taking steps in the right direction to assist in
achieving greater certainty for business in the province, there is still much room for improvement.
THE CHAMBER RECOMMENDS
That the Provincial Government work with the Federal Government to:
1. develop harmonized workable regulatory processes for carrying out consultation with the aboriginal
peoples that will amount to the regulatory schemes referred to in Haida;
2. continue to provide clearer guidelines for the business community with respect to its role (if any) in
the consultation process;
3. continue to develop policies around revenue sharing with aboriginal peoples; and
4. make it clear that it is not an expectation or requirement of either Crown that in the course of permit
approval businesses must pay aboriginal groups in order to carry on business on land over which the
aboriginal peoples do not have an established legal right.
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MORE SECURE PROPERTY RIGHTS ON RESERVE LANDS (2010)
The First Nation Tax Commission (FNTC) is leading an initiative to create more secure property rights on
reserve lands. The existing land tenure and registry system on reserves is a significant source of socioeconomic disadvantage because it contributes to high transaction costs related to investment, limits the
potential property market, and in many cases prevents the securitization of land as a source of credit.
Property rights are the bedrock of the market economy. Property rights are absent or poor on many
reserves. The results are lower property values, less commercial development, and higher incidences of
poverty. Poor property rights contribute to high costs of doing business. One study recently quoted by
the Auditor General of Canada suggests that it costs four to six times more to complete an investment
project on reserve lands than off. The principle reason for these higher costs is that investors have to
establish secure tradable property rights on reserve lands that they don’t have to establish off reserve
lands.
Proposed Solution
The FNTC is proposing to resolve this problem by working on First Nation Property Ownership
legislation (FNPOL). This legislation would create a similar property rights structure to the rest of
Canada. The Chamber understands that land registration under the FNPOL would use a modified Torrens
land title system.
The Chamber understands that FNPOL would be optional for First Nations. The legislation would ensure
that the underlying title or reversionary right remains with the First Nations and the First Nations would
retain land management and property tax jurisdiction regardless of who resides there. The Chamber
understands that this would effectively allow participating First Nations to issue fee simple titles and
provide guaranteed title through the Torrens system.
The Chamber expects that the economic benefits from such an initiative would be large. As an example,
an economic analysis conducted by Fiscal Realities Inc. for the FNTC estimates that if 68 First Nations,
mostly rural, in BC converted their lands using this legislation, the benefits from increased property
values, employment opportunities, and increased revenue potential would be over $4 billion.
THE CHAMBER RECOMMENDS
That the Provincial and Federal Governments work with the First Nations Tax Commission, and other
interested parties, to develop legislation that would provide more secure and marketable property rights
on reserve lands.
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DVANCED EDUCATION
ADDRESSING BC’S TECHNOLOGICAL AND ENGINEERING SKILLS SHORTAGE (2012)
Technologists and engineers are needed to accommodate the economic growth the province of BC is
experiencing. Based on results from the detailed and comprehensive Applied Technical Education &
1
Engineering Consortium (ATEEC) survey of labor market supply and needs , the current supply is
inadequate to the emerging needs. Although many of these jobs and the projects associated with them are
located in the northern part of BC, in the end, this is not a northern problem but something that affects all
of BC and its economy. Prosperity in the north contributes to prosperity in all of BC.
Development of the Central and Northern portions of BC requires technologists and engineers trained in
the north. Statistics show that graduates from a university or college find employment afterwards with a
very high probability within a 200 km radius of the education institute; subsequently, they are not
available in Northern BC as required. Recruitment from the south is ineffective because if they come as
an Engineer In Training (EIT), they leave once they have their required experience and their professional
Engineer (P. Eng.) designation. If they come as a P. Eng. they often leave when major projects are
completed. Professionals are more likely to stay where they are trained: “In the North, for the North”.
Research undertaken clearly shows that the number of students in the North eligible for enrolment in
science and engineering related faculties is very low. This will exacerbate the shortage of technologists
and engineers in the future. Students are often not aware that they foreclose many exciting and interesting
professions by not enrolling in mathematics and physics during the last year in school. Professionals,
school councillors, and parents should keep math and science courses in mind when they advise students
about possible professions and the associated course options, as well as post-secondary education
opportunities.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. provide funding for technology and engineering programs and their implementation at Colleges and
Universities in all regions of BC where the need and demand of the respective programs has been
documented; and
2. provide funds to cover capital and operating costs for the extension and development of facilities in
regions throughout BC that are experiencing dire need in the provision and delivery of much needed
technology and engineering programs.
1
Building a New North: Labour Market Projections for Professional and Technical Occupations in the Natural and Applied Sciences; Executive
Summary: Table 4. Summary of Labor Demand & Supply for Selected Occupations for Northern BC, 2007-2015.
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AQUACULTURE IN BC (2012)
Aquaculture is the fastest growing agri-food industry in the world. The United Nations Fisheries and
Agriculture Organization has estimated that global aquaculture production will outpace commercial
fisheries by 2030. In Canada production has flatlined over the past ten years. There are serious
challenges facing the aquaculture industry in Canada in general and BC in particular. As a relatively new
user of our aquatic resources, aquaculture in BC is challenged by an outdated regulatory regime, lack of
adequate programming, and issues of public confidence around environmental performance and food
safety.
As outlined in a report by the BC Government, the aquaculture industry accounted for 60% of the total
landed value of BC seafood in 2011, and salmon farming makes up about 94% of the aquaculture value.
Salmon farming has grown to take its place as the province‘s largest agricultural export, generating $800
million in economic output according to Price Waterhouse Coopers. It provides stable, year-round
employment for 6,000 men and women, in direct and supply and service jobs, largely in coastal
communities where other opportunities are limited. Further, a study done by the Department of Fisheries
and Oceans (DFO) in 2009 concluded that aquaculture in BC generates about $950 million in economic
activity within the province, and over 1.2 billion in economic activity across Canada, thereby triggering
economic activity across the rest of Canada valued at $1.2 billion. The industry makes an overall
contribution to BC’s GDP of $425.3 million, comprised of $151.1 million in direct, $167.9 million in
indirect and $106.3 million in induced impacts. Aquaculture in BC generates about 6,000 Full Time
Equivalents (FTE) of employment, comprised of 2,220 FTE in direct activities, 2,330 FTE in indirect jobs
and 1,410 FTE in induced activities.
These jobs created $223.3 million in total labour income in 2007. Total direct labour income was $78.4
million, resulting in average income of $35,250 per FTE employed in direct aquaculture activities.
Indirect income earned by those employed in support industries was $95.1 million, with average incomes
of about $40,900. Those employed in induced activities in the broader economy earned $50.4 million, for
an average income of 35,700. Many of these jobs and the resulting income go to BC’s aboriginal
communities.
Until 2010, aquaculture in BC had been a shared jurisdiction between the Provincial and Federal
Governments and involved a number of government agencies. For example, DFO is the lead federal
agency for aquaculture but there are a number of other federal departments and agencies involved in the
regulatory process, including Health Canada, the Canadian Food Inspection Agency, Transport Canada,
the Department of Foreign Affairs and International Trade, Environment Canada, and Agriculture and
Agri-Food Canada. This mix of government agencies has created, and continues to create, issues for the
development of the aquaculture sector. For example, due to lack of growth and uncertainty caused by the
regulatory environment, costs of production for B.C. salmon farmers are over 30% higher than costs for
our main competitors in other developed countries.
As a result of the Hinkson decision, the regulatory authority for the aquaculture industry has shifted from
the Provincial to the Federal Government. The transfer of authority has revealed that there is a gap in
legislation when it comes to aquaculture. A federal aquaculture act would establish national
environmental standards, clarify industry responsibilities, and codify a proud legacy of environmental
stewardship.
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Appropriate legislation would recognize in law the long-standing reality of aquaculture as a legitimate
caretaker of Canada‘s aquatic resources. It would support efforts to ensure a modern industry and build
on an already impressive record of safety and sustainability. The introduction of this legislation could
help facilitate the regulatory changes coming forward from DFO and would enable Canada to realize its
full potential, creating new jobs and expanding opportunity in an industry that can be socially,
economically and environmentally sustainable.
The aquaculture industry has been the subject of strongly divergent research and opinions, not all of
which is based on legitimate and responsible research. Incorrect and misleading information should not
stop the further development and expansion of aquaculture farming in BC.
THE CHAMBER RECOMMENDS
That the Provincial Government work with the Federal Government to:
1. provide fair access to long term tenures for the aquaculture industry;
2. ensure that consultation with First Nations is appropriate and meets the needs of the industry for
timely decisions; and
3. support efforts to build public confidence in aquaculture management and place a focus on science
and solution.
PROVIDING THE RESOURCES TO GROW THE AGRICULTURE INDUSTRY IN BC (2011)
BC’s farmers and ranchers serve as the foundation for a diverse agriculture and food system that includes
the production, processing, distribution and sale of food and other agricultural goods such as flowers and
nursery products. This vital component of the BC economy generates over $35 billion in revenue and
1
employs an estimated 300,000 people .
The industry is facing many challenges. Statistics Canada numbers show that net income for BC farmers
2
and ranchers has been in negative territory for an unprecedented four consecutive years (Figure 1) , and
several sectors have faced particular hardships resulting in significant downsizing.
1
2
These figures include food services and food retail industries.
Source: Statistics Canada – http://www40.statcan.ca/l01/cst01/agri02j-eng.htm
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In addition to having the second largest urban market in Canada, BC has been experiencing a growing
public interest in sourcing local agricultural products, and we have access to a sophisticated transportation
network to help facilitate export market development. Industry and government must work in partnership
to take full advantage of these market opportunities, thereby growing the agriculture and food sectors.
Together with other representatives from BC’s integrated agriculture and food value chain, including the
processing sector, the distribution and retail sectors, and the restaurant and food service sectors, the
Chamber is requesting a reinvestment in a provincial domestic branding program.
Extension personnel and BC Ministry of Agriculture and Lands (MAL) industry experts play an
important role in facilitating information exchange and supporting farmers in day to day decision-making.
Particularly at a time when agriculture is under significant financial pressure, it is important that funding
remains in place for these positions. The BC Agriculture Plan committed government to increasing
extension support by $500,000 a year, but it would appear from subsequent MAL budget cuts that this
was never fully implemented. The Chamber would recommend that funding for extension be given
priority, and would offer to work with MAL to identify key priority areas for the agriculture sector.
The Chamber agrees with the industry and has long held the view that BC is missing opportunities to
address health concerns through more direct linkages with agriculture and food production. The BC
School Fruit and Vegetable Nutritional Program (BCSFVNP) is one initiative that has very successfully
made this connection. There are clear indications of the program’s successes in meeting both health
objectives and benefiting the BC agriculture sector. The Chamber recommends that funding for the
BCSFVNP be provided at a level that would meet the objective of ultimately covering all BC schools in
the program.
As noted in Figure 2, even if all of the requests for funding were met, the agricultural investments by BC
would still pale in comparison to other provinces. It is time to invest in the future of agriculture in BC
and the Chamber looks to the Province for support.
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THE CHAMBER RECOMMENDS
That the Provincial Government:
1. live up to the BC Agriculture Plan commitment to invest $2 million per year into an industry-led
marketing program that will increase awareness of local BC food products;
2. give high priority to funding for agricultural extension and that the Ministry work with the industry
and key stakeholders to identify key priority areas for the agricultural sector;
3. reverse the decision to discontinue funding for the organic extension agent position; and
4. fund the School Fruit and Vegetable Nutritional Program (BCSFVNP) to a level that will meet the
objective of ultimately covering all BC schools in the program.
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MEASURES TO ADDRESS THE ISSUE OF DERELICT BUILDINGS (2012)
Derelict properties can be an obstacle to the positive economic, social, and cultural development of a
community. Even a single derelict building can bring down the value of surrounding properties and
businesses, pushing development elsewhere and encouraging the type of inefficient sprawl that carries
with it significant economic and environmental externalities.
While the Community Charter gives municipalities in BC the ability to encourage property revitalization
through the use of tax exemptions, it does not provide specific authority for municipalities to penalize
property owners who permit derelict properties to remain in a state of perpetual neglect.
Section 226(2) of the Community Charter states that “a council may, for the purpose of encouraging
revitalization in the municipality, provide tax exemptions for land or improvements, or both.…”
However, while municipalities have the option of using this power to promote the redevelopment of urban
centers or “brownfield sites” (dormant properties which usually require environmental remediation), the
Community Charter gives limited discretion to municipalities to impose direct punitive measures in
relation to derelict properties.
There are a number of reasons why property owners might allow a building to remain perpetually derelict.
One reason is that simply allowing a property to remain in a derelict state may avoid increased property
tax assessments, allowing the owner to avoid the higher taxes that may come with improvements. In
addition, if the property’s value has increased significantly since the time the owner purchased it, he or
she may be responsible for paying significant capital gains tax if the property is sold. In order to correct
for these negative economic incentives, municipalities need to be given the direct authority to impose
fines and increased tax burdens on those individuals who maintain property in a derelict condition,
thereby negatively impacting surrounding properties and the community as a whole.
The Community Charter’s current provisions which permit municipalities to take remedial action with
respect to property are too narrowly defined to allow for councils to introduce comprehensive bylaws
containing effective penalties. For example, section 64 of the Community Charter gives a municipality
the limited power to take remedial action to address “unsanitary conditions on property” or “graffiti and
unsightly conditions on property”. In addition, section 53 of the Community Charter allows for a council
to regulate and impose prohibitions in relation to buildings and other structures only in very specific
situations, including if the “health, safety or protection of persons or property” is at issue. There is no
provision in the Community Charter that explicitly allows for the imposition of fines or surtaxes on the
owners of derelict or vacant property.
One example of what could be accomplished by municipalities under an amended Community Charter
can be seen in the City of Winnipeg’s “Vacant Buildings By-law”, which allows the city to impose
escalating fees based on the length of time a building remains vacant. The Winnipeg By-law also allows
for escalating fines and other penalties on non-compliant owners of vacant properties. The Winnipeg Bylaw is only one example of what could be accomplished by BC municipalities if the Community Charter
is amended to allow for individual municipalities to decide how best to provide the much-needed
motivation for owners of derelict properties to begin the revitalization process.
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THE CHAMBER RECOMMENDS
That the Provincial Government:
1. amend the Community Charter to give municipalities the option of introducing tools and strategies to
motivate the owners of derelict properties to improve and maintain such properties; and
2. clearly define what constitutes a derelict property.
PROVINCIAL ROLE IN MUNICIPAL AMALGAMATIONS (2012)
There are a number of municipalities across the province whose borders are immediately adjacent and
where residents conduct their business and personal lives with fluidity across municipalities.
Nonetheless, these neighbouring municipalities are individual units and are autonomous entities under the
Local Government Act. Though some argue that there is advantage to maintaining separate
municipalities, there are instances where it would certainly be more expedient for immediately adjacent
municipalities to amalgamate.
Emerging thoughts in this regard are that immediately adjacent urbanized municipalities may function
better as a single unit (Patrick Smith, Simon Fraser University, 2004). Section 279 of the Community
Charter outlines the procedures for the amalgamation of existing municipalities. In short, the procedure
requires a referendum question asked of residents with positive support equaling more than 50% of votes.
The referendum procedure is to be instigated by the respective municipalities, though it can also be
instigated by the initiative of the provincial minister responsible, if the minister is of the opinion that
1
those persons should, in the public interest be incorporated into a new municipality .
The requirement for municipal amalgamation to be a self-generated initiative, as per the Community
Charter, perpetuates a growing problem of inefficiencies in urban centers. Fractured governance has
become entrenched in municipal self-interest and may be creating unfortunate circumstances for urban
centers, as exemplified below.
The Federal Government recently released its 2012 budget. The budget allocated approximately $6
billion of infrastructure investment funds to be allocated through partnerships with provincial and
municipal governments. While the successful acquisition of infrastructure dollars and the resulting
projects would supply immediate economic stimulus through household sustaining employment
opportunities, the goal of the Chamber is to have the selected projects also provide longer-term benefits
through lasting economic impact. Generally those types of projects are regional in nature and require a
cooperation and partnership not always found in smaller neighbouring municipalities. The danger is that
millions of federal dollars will be poorly invested due to fractured municipal structures and the inability
of the smaller entities to come to the table with large scale, regional projects that provide lasting
economic ripple effects.
1
Local Government Act, Part 2, section 8 (1) (d)
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Another pertinent example of inefficiency is the application of Federal funding formulas. Funding
formulas for federal programs are generally population-based using municipal boundaries. Yet
challenges addressed through the funding programs, such as homelessness and transportation, are in
reality regional issues in areas with immediately adjacent municipalities. Fractured municipalities in
urban settings lose out on available funding to adequately address important social issues on a large scale
and/or often fail to co-operate in the effective implementation of regionally beneficial investments of
federal or federal/provincial dollars.
Municipal amalgamations, to be fair, have been met with mixed reviews in Canada. Those that have been
extensively highlighted in academic writings feature outcomes in Winnipeg, Halifax, Ottawa, Quebec,
Toronto, and other Ontario and Quebec settings.
While the study of these outcomes is most useful, the relatively or extremely short timeframes of each of
these examples, with amalgamation dates ranging from 1972 to 2003, is problematic. It is not surprising
that outcomes to date of these examples are evidencing the challenges of significant organizational
change.
The Vancouver experience of amalgamation may be more useful to examine. In 1929, Point Grey and
South Vancouver amalgamated with the City of Vancouver thereby making it the third largest city in
Canada. Today the amalgamated area is clearly a cohesive unit with distinct neighbourhood
characteristics. Though research on the early days of the transition is not as readily available as research
on more recent examples, one could reason that this area also went through significant organizational
change. It may be that the positive outcomes associated with amalgamated municipalities need a longer
time to become evident.
The growth of our urban areas in the province, their regional efficiencies and their international
competitiveness are important issues to the continued evolution of the province. As municipalities
continue to grow and overlap into each other and as their citizens’ work and leisure lives flow across
boundaries, it becomes important to reexamine effective governance models. While some municipal
government may be willing to examine the issue on their own and seek long-term regional improvements,
others will never seriously consider the question due to self-interest. Where municipalities fail to
examine the question of amalgamation, and the greater community and business benefits, the province
should not be hampered from taking assertive action concerning amalgamation where they believe it to be
in the best interest of the province as a whole.
THE CHAMBER RECOMMENDS
That the Provincial Government amend section 279 of the Community Charter to include a third option
for instigating municipal amalgamation; that being amalgamation by order of the province.
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SUPPORTING ACCOUNTABILITY AND TRANSPARENCY FOR LOCAL GOVERNMENT
(2012)
Preamble
As civic leaders, and in their role as stewards of our community, municipally elected representatives
arguably have the strongest influence over our day-to-day lives. Municipal politicians play a significant
role in ensuring BC has a positive business environment by overseeing operational and capital budgets,
setting land use policies and providing the infrastructure needed to ensure a healthy and vibrant economy.
It is important then that provincial legislation and reporting requirements support them in this endeavor.
Provincially, municipal budgets and spending has been increasing at an unsustainable rate1, highlighting
the need to look at the big picture where regional budgets and priorities are concerned, and to develop
better ways for elected officials within a region to make their decisions in the context of all the other
demands on local taxpayers. One example is the timelines that exist for each municipality, regional
district, local school board and other utilities/services to present their budgets. Under current practices,
elected officials often don’t have information on what others are doing with their budgets until after they
are required to make their own budgetary decisions. Mayors and Councillors are then left to anecdotally
piece together a fuller understanding of the demands on the public purse while they sit around committee
tables, providing a less than perfect picture for them when trying to ensure that communities remain
affordable and financially sustainable. A requirement should be in place for all of these taxing bodies to
coordinate their reporting and budgeting so that elected officials and the public can better understand the
big picture, and fully understand all the demands being placed on them. This would be a significant step
in the right direction.
In 1966, the BC government established the “regional district” concept of local government in hopes of
dealing with problems that transcended traditional municipal boundaries. These regional governments
operate throughout the province as a local form of government. Today, there are 154 municipalities in
BC, plus 27 regional districts. The purpose of regional districts is three-fold: they are regional
governments that deliver regional services, they are inter-municipal and provide a political and
administrative framework for the delivery of services on a partnership basis, and they can offer local
government services for unincorporated areas. While there are a few checks and balances that can help
manage local infrastructure priorities, as regions in province continue to grow this will continue to present
new challenges, as many of the biggest infrastructure projects are now being undertaken at the regional
2
district level . Provincial legislation governing this new paradigm should be reviewed and must evolve to
ensure that measures that support accountability to the taxpayer are not being diluted as a result of these
new realities.
One such example is the two different pieces of legislation that govern the regional districts versus local
municipalities. As a by-product of provincial political history, many of the requirements put on local
municipalities do not apply to regional districts, resulting in distinct differences where accountability to
local taxpayers is concerned. Under the provincial Community Charter municipalities are restricted in the
amount of debt they can take on and are required to seek voter approval for amounts exceeding a certain
limit.
1
BC Municipal Spending - Statistics Canada: Table 385-0003 Local government expenditures for fiscal year ending closest to December 31,
annual (dollars x 1,000)(3,4,6), BC GDP - Statistics Canada: Catalogue no. 13-213-PIB
2
Province of British Columbia, Major Projects Inventory, September 2011
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Regional Districts however, play by a different set of rules. Governed by the Local Government Act, they
don’t have the same legislated limits on the amount of debt that can be accumulated and aren’t required to
directly ask for voter approval when making large capital decisions. From an accountability and
transparency perspective, strengthening these requirements would be a good step towards ensuring that
taxpayer interests and voices remain front and center as regional districts continue to play a larger role in
our economic prosperity and financial sustainability.
Starting in 2009, new accounting standards set by the Public Service Accounting Board, a national
standards governing body, requiring municipalities to adopt “full accrual“ accounting standards when
reporting their annual financial statements, standards similar to those used in the private sector. The
3
changes to these guidelines increased accountability and helped provide a more robust and relevant
depiction of municipal finances and in particular, their future liabilities. A requirement of the Local
Government Act and Community Charter, these annual reports and accompanying local budgets are
important tools to ensure that municipalities and elected representatives are accountable to the taxpayer.
Unfortunately given the recent change, at present there is no requirement in the legislation that the
accounting standard for each be the same. Municipalities in the province are able to present budgets
under a “cash accounting” standard and then later present their annual finance reports in the new full
accrual standard. This contributes to significant difficulty for taxpayers to make reasonable and accurate
comparisons. BC municipalities are not alone in this circumstance, a recent CD Howe report found that
4
nationally, 87% of municipalities surveyed did not use the same accounting standard . The report
highlighted how even neighboring municipalities such as Vancouver and Surrey can employ different
reporting where budgets and financial statements are concerned, with Vancouver not using the same
treatment, while Surrey did meet this standard. Amending the Local Government Act and Community
Charter to ensure that accounting treatments match, would be an important step in ensuring that elected
officials and the broader community can reasonably assess, compare, and discuss their local municipal
finances.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. develop a Municipal Finance Administration Act to standardize reporting requirements and dates;
2. amend Local Government Act to include provisions for elector assent similar to that of the
Community Charter;
3. amend Local Government Act to include similar borrowing ratios to that of the Community Charter;
and
4. amend the Community Charter and Local Government Act to ensure budgetary reporting standards
match financial reporting standards
3
4
Public Sector Accounting Board, Handbook sections PS 4200 to 4270
Holding Canada’s Cities to Account: An Assessment of Municipal Fiscal Management, CD Howe, November 2011
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CALL FOR PREMIER’S COUNCIL ON MUNICIPAL INFRASTRUCTURE (2011)
Urban and regional centers are playing an increasingly important role as engines for economic growth. In
recent years, BC has become known as a world-class destination for opportunity, attracting new citizens
to the province looking to enjoy the quality of life we value and enjoy. Unfortunately they do not bring
their roads, bridges, schools or hospitals with them. This influx has brought a new vibrancy to the
province, but with it, significant challenges for our municipal infrastructure, pressures that must be
addressed if BC is to continue along a path of economic prosperity. The Chamber calls for the formation
of a Premier’s Council on Municipal Infrastructure (PCMI) to provide a comprehensive framework for
municipal infrastructure finance and investment.
The infrastructure requirements of BC’s urban and regional centers are growing, both in terms of new
construction and maintenance of existing assets. The current methods of financing, delivering, and
maintaining infrastructure are not keeping pace, as witnessed by a growing infrastructure debt. Over the
past quarter century this issue has only grown more acute, with the municipal infrastructure gap as a
percentage of national GDP growing from 2.7% in 1984 to 5.0% in the early 2000s. For this reason, all
orders of governments must take a hard look at new delivery options, funding arrangements, and
financing that can provide the required resources for infrastructure investment. The issue has come to a
critical point as much of our infrastructure, the backbone of our economy, has eclipsed over 80% of its
life expectancy.
As Canada’s Asia Pacific Gateway, BC is at the forefront of the pacific century. While this provides new
opportunities for attracting talent and investment to the province, participation in this marketplace will
demand a new look at the level of and commitment to infrastructure investment in the province.
Competition amongst jurisdictions is growing and the businesses and individuals within the region are
highly mobile, able to relocate to the most favorable environment. Jurisdictions that provide new and
innovative solutions for infrastructure investment will experience gains in productivity and increases in
their quality of life while those that do not will find themselves increasingly sidelined and unable to
compete.
Starting in 2009, new accounting standards set by the Public Service Accounting Board, a national
standards governing body, have required municipalities to inventory and better quantify their capital
assets and asset management plans, reporting them in their annual financial statements. These guidelines
will help provide increased accountability and will be powerful tools to inform the discussion on
municipal infrastructure investment.
Beginning in 2001, the Provincial Government has had a number of standing councils that provide
potential templates to further the discussion and public profile of municipal infrastructure investment in
the province. The Premier’s Technology Council, which is comprised of 23 members from the private
sector and academia, is one such example. The mandate of the council is to provide advice to the Premier
on all technology-related issues facing BC and its citizens. To date, the council has published 13 reports
making a total of 205 recommendations to government, over 80% of which have been adopted or are
being adopted.
Another model for providing input to government on issues critical to our economic well-being is the
Small Business Roundtable. Appointed by the Provincial Government, board members serve a term of at
least two years. The Minister responsible for Small Business chairs the Roundtable, appoints new
members, and provides overall strategic direction to guide the board in the overall achievement of its
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mandate. Based on information obtained during small business consultations and other activities, the
Small Business Roundtable provides recommendations to government and the business community on
ways to enhance the growth and success of the small business sector. These recommendations focus on
increasing support for skills training and labour market development, leveraging new technologies to
improve productivity, continuing the commitment to streamline regulatory processes and develop ways to
further increase competitiveness.
Both initiatives have proven to be strong platforms for the Provincial Government to solicit feedback
from concerned stakeholders and provide advice and recommendations to government on how to best
address the opportunities and challenges facing our province.
Broad stakeholder representation is an important consideration in the establishment of the Premier’s
Council on Municipal Infrastructure. Membership could include, but is not limited to, provincial chamber
of commerce representation, the Union of BC Municipalities (UBCM), the Business Council of BC,
municipal elected officials, infrastructure industry representatives and participation from academic and
leading NGO experts.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. establish a Premier’s Council on Municipal Infrastructure to advise on:
•
•
•
The accumulated infrastructure debt and projected deficits;
The net revenue required to pay down the accumulated debt and address future deficits, and;
The establishment of benchmarks for debt reduction and enhanced accountability.
2. collaborate with the proposed PCMI to undertake a comprehensive environmental scan to review best
practices in municipal infrastructure finance, including appropriate funding vehicles and enabling
legislation.
IMPROVING THE EFFICIENCY AND ACCOUNTABILITY OF LOCAL GOVERNMENT IN
BC (2011)
Communities across BC are expressing a growing level of concern regarding budgeting and spending
decisions that are resulting in increased property tax bills. When we combine that with calls from local
government for additional revenue streams to deal with pending infrastructure challenges the business
community is expressing significant concern over the lack of transparency and accountability at the
municipal level.
This concern not only speaks to the lack of transparency within many communities but also across the
province. With 160 municipal governments, 27 regional districts, and 231 Improvement Districts it is
critical that there is an arms length mechanism to review how they interact with the population,
stakeholders or higher levels of government regarding how they spend taxpayer money.
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Many local government outputs - such as the services municipalities provide - are highly visible. On the
other hand, local government processes - how decisions are made - may be quite opaque. This situation is
further exacerbated by the fact that the institutional incentives and information shortcuts that facilitate
accountability at the provincial and national level are largely absent.
Challenges with the current system
Over recent years the Chamber has passed a number of resolutions that recognize the concerns of the
business community regarding specific aspects of what should be viewed as a systemic problem. What
has become apparent is that many of these challenges are truly provincial in that they are being expressed
by communities of every size, in every region and irrespective of the economic base of the community
profile. These issues are clearly systemic and can be broadly summarized as;
Ability of local governments to provide virtually any service they desire through the Community
Charter with no recourse for the business community;
Lack of accountability – low voter turnout means very little public scrutiny of council decisions;
Capacity – facing increasingly complex issues (social issues, homelessness) and struggling to
deal with the challenges of an open, global economy; and
Funding – limited funding sources, how do municipalities utilized alternate service delivery in a
way that protects the service while also protecting the municipality from too much risk?
Performance measurement
Municipal decision-makers want to be efficient and deliver value for local services. Taxpayers need to
know how their tax dollars are spent and how their services compare both year-to-year and in relation to
other municipalities. The only way for this to occur is to determine what constitutes core services for
municipalities and to provide a comparable cost for theses services – something that does not exist at
present in BC.
This does not mean that the Chamber advocates that local governments should only provide a static set of
core services. Rather, the Chamber believes that there is a range of common services that can effectively
be measured based on objective, result based criteria.
Performance measurement is not new. It has been in place for several years in different forms in many
jurisdictions around the world. Every country in the Organization for Economic Cooperation and
Development has a policy at the national level supporting performance measurement. In the United
States, the Federal Government and more than 30 states have legislated performance measurement for
their departments and agencies. In Canada, the Federal Government, eight provinces (including BC), and
two territories have formal systems of performance measurement.
While the Chamber recognises that the Community Charter does place some reporting requirements under
Division 5 – Reporting of the Charter1 these are extremely limited. Indeed, the Charter goes no further
than to require that;
1
http://www.bclaws.ca/EPLibraries/bclaws_new/document/LOC/freeside/--%20C%20-/Community%20Charter%20SBC%202003%20c.%2026/00_Act/03026_04.xml#part4_division5
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98 (2) The annual report must include the following:
(c) a report respecting municipal services and operations for the previous year;
(d) a progress report respecting the previous year in relation to the objectives and measures
established for that year under paragraph (f);
(f) a statement of municipal objectives, and the measures that will be used to determine progress
respecting those objectives, for the current and next year
The Chamber does not believe that this goes far enough in introducing a level of accountability and
scrutiny to municipal decision making. Just as importantly, it does not encourage best practices between
municipalities, nor provide individual municipalities with the tools and resources they need to inform
decision making to better serve their communities.
While the Chamber recognises the difficulty in comparing municipalities given variations in geography,
economic base, population, and a range of other factors there are ‘core’ services provided by local
governments that can be benchmarked and measured against common goals and criteria.
Indeed if we look to Ontario we see the development of a system that measures 54 performance measures
across 12 core municipal service areas. These service areas are:
Local Government
Fire
Police
Roadways
Transit
Sewage
Water
Garbage
Parks and recreation
Libraries
Planning
Other
These service areas are then further broken down into sub-measures that are measured against objective
criteria regarding their efficiency and effectiveness.
Fire
2.1
a) Operating costs for fire services per $1,000 of assessment.
b) Total costs for fire services per $1,000 of assessment.
2.2 Number of residential fire related civilian injuries per 1,000 persons.
2.3 Number of residential fire related civilian injuries averaged over 5 years per 1,000 persons.
2.4 Number of residential fire related civilian fatalities per 1,000 persons.
2.5 Number of residential fire related civilian fatalities averaged over 5 years per 1,000 persons.
2.6 Number of residential structural fires per 1,000 households.
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The Provincial Government already has comprehensive performance measures across all ministries.
These measures ensure that government remains accountable to clients and the public. More importantly
the information allows government to improve outcomes and inform and enhance decision-making and
the utilisation of scarce resources. The Chamber believes these outcomes would be beneficial to local
governments as well.
Local governments are correct to state that the financial challenges they face are significant and only
going to become more acute as we look to upgrade our aging infrastructure. With limited financial
resources and with only one taxpayer it seems critical that the first step to addressing local government’s
fiscal challenges is ensuring that they have the appropriate measures and tools to make well informed and
focused decisions. These tools would result in decisions that are driven by outcomes and efficiencies
within and between municipalities rather than the focus on simply providing additional revenue.
The Chamber believes that this would be achieved through a mandatory reporting system on
predetermined core services. Such a requirement would go a long way towards providing the tools
needed by local government to better serve their communities while also developing a culture of sound
fiscal decision making while promoting balance between the level of taxes paid and the services
consumed.
THE CHAMBER RECOMMENDS
That the Provincial Government work with UBCM and the Chamber to develop:
1. a benchmarking system that outlines core services that are applicable across municipalities of every
size, of every economic base and of all regions of the province; and
2. core metrics based on appropriate measures (per population, per dollar expended etc) that allow for
cross-municipal comparisons.
REVIEW OF REGIONAL GOVERNANCE MODELS IN URBAN AREAS (2011)
In 1966, the BC government established the “regional district” concept of local government in hopes of
dealing with problems that transcended traditional municipal boundaries. These regional governments
operate throughout the province as a local form of government, governed by the Local Government Act
of BC. Prior to the introduction of the regional district, land use and planning were done directly by the
BC government whereas local services (such as fire protection and water management) were provided by
independently incorporated improvement districts or municipalities under contract with the Provincial
Government.
Today, there are 154 municipalities in BC plus 27 regional districts. Most regional districts inhabit
primarily unincorporated rural areas (electoral areas). However, some urban areas, which have been
deemed regionally unregulated because of numerous neighbouring municipalities, have become
dependent on regional districts for certain regional responsibilities. In the Greater Victoria area alone,
there are 13 municipalities with one encompassing Capital Regional District (CRD), serving a population
of over 350,000. The Greater Vancouver Regional District (GVRD) involves 21 municipalities and
serves a population of two million.
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The purpose of regional districts is three-fold: they are regional governments that deliver regional
services; they are inter-municipal and provide a political and administrative framework for the delivery of
services on a partnership basis; and they can offer local government services for unincorporated areas.
The CRD and GVRD are both somewhat considered regional district anomalies because of their highlypopulated urban areas. In these two districts, the regional governments primarily provide fully regional
services like water supply and air quality management. In contrast, less populated regional districts are
more focused on providing local services like planning and fire protection. While both the CRD and
GVRD share regional problems, the province deals them with quite differently. Most notably, accessing
capital and transportation management are two key issues handled legislatively in a different way from
one another.
In 1988, the Legislature adopted the Greater Vancouver Transportation Authority Act, which was the
result of extensive negotiations between the province and the GVRD. This was significant in a number of
respects: it gave the GVRD new powers in transit, major roads, air care and Transportation Demand
Management; and provided revenue sources to match. Significantly, it removed hospital financing as a
regional district responsibility as one of the swaps necessary to achieve a balanced and mutually
acceptable package. In contrast, the CRD, which is experiencing significant transportation challenges,
has no governing transportation body overlooking the region.
The Municipal Finance Authority Act was created in 1971 and took advantage of the emergence of
regional districts and mandated that all municipalities - with the exception of the City of Vancouver and
special boards - had to borrow through their regional districts. This allowed local governments, through
their regional districts, to pool their assets and borrowing requests and collectively approach the
marketplace producing benefits in lower borrowing costs. Thus, while the CRD’s primary city, Victoria,
must borrow money through its regional district, the GVRD’s primary city, Vancouver, is not mandated
to do the same.
Greater Vancouver’s unique agreements with the province have allowed some of its main issues to be
largely mitigated. Particular areas of BC have grown and will continue to grow at unprecedented rates
since the establishment of regional districts, including the CRD, Regional District of Central Okanagan,
Regional District of Nanaimo, and Regional District of Fraser-Fort George. As these urbanized regions
escalate, they may also benefit from similar agreements that the province holds with the GVRD.
A continuing concern of many residents in urban areas is the question of representation on regional
district boards. Residents of electoral areas elect a representative to sit on the regional district board.
Meanwhile, representation of municipal areas on the district’s Board of Directors is supposedly ensured
by directors who are members of municipal council and appointed by their councils for terms of three
years. In other words, municipal voters have no direct voice in deciding which of their elected
representatives will be on their regional district’s Board of Directors.
A recent example of this need for increased accountability and better local decision-making is the concern
over the proposed property tax increases outlined by BC Transit and the Victoria Regional Transit
Commission over the coming years. This echoes concerns raised in the lower mainland over tax increases
by Translink in 2010. While other regions are also experiencing unsustainable increases, the CRD’s
example illustrates the problem most vividly. As published, the increases reflect a more than doubling of
the property tax portion from just over $60 million in 2009/10 to over $124 million in 2013/14, increases
that will hit businesses in the region particularly hard.
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While the business community supports the goals of public transportation and the principles of
sustainability, there are significant concerns that such increases are financially unsustainable. This most
recent example continues to call for the formation of a regional transportation authority, one that
encompasses all transportation modes and provides for increased accountability and local decisionmaking.
It appears the Regional Governance model does not serve the majority of districts well. The fine-tuning
of the Regional Governance Structure to meet the needs of particular areas is too short term an approach
and longer-term solutions are required. The regions need to be treated fairly and appropriately and review
of this important governing body and its role is needed.
THE CHAMBER RECOMMENDS
That the Provincial Government review its concept of regional districts and their roles and the manner in
which representatives are selected.
THE NEED FOR A BUSINESS VOTE IN BC (2011)
Under the Community Charter in BC, municipalities are being given significantly more authority today
than in the past, with no commensurate level of accountability. Indeed, BC is unique in terms of the
degree of power and autonomy provided to local governments. When this is combined with the fact that
in BC business owners and operators do not have any voting rights in municipal elections we have seen
the development of significant inequities develop between business and residential property tax rates.
Business owners have become the silent taxpayers. They are the easiest group on which to increase taxes
because they no longer have a vote1. Many business owners live outside their jurisdiction and cannot be
part of the election process or vote in a referendum that may impact their business directly. This gives
them no voice in the community in which they pay the highest taxes. It is taxation without representation.
Local Election Task Force
The issue of the corporate vote was recently reviewed by the Local Election Task Force, which was
created in December 2009. The Task Force was created as a joint, consensus-based group of three
provincial government members and three Union of BC Municipality members.
The task force was mandated to review issues related to local government elections, including the
introduction of a corporate vote. The committee received numerous submissions, including from the
Chamber, calling for the introduction of a business vote. The Chamber was therefore disappointed that in
the final report the task force recommended, “maintaining the existing voter eligibility rules on this issue
and not establishing a corporate vote.2”
The rationale given in the report for this position was that “balancing the interests of businesses, local
governments and the public is an essential consideration when contemplating a corporate or business
vote”. It went on to state that, “there was no approach evident to the Task Force that would ensure
fairness among businesses, equity for electors and administrative workability.”
1 A corporate vote existed in BC until 1993.
2 Full report available at http://www.localelectionstaskforce.gov.bc.ca/library/Task_Force_Report.pdf
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A Fair, workable model
During the consultation phase the Chamber partnered with the Canadian Federation of Independent
Business and the Business Council of BC, in close consultation with key Ministry staff, to design a
system for a business vote. This model included a set of principles that would define the business vote.
These were:
The business must have a business number issued by Canada Revenue Agency;
The business must have a non-residential real property address;
The business must be paying a business class property tax;
The business must appoint a designated proxy to vote on its behalf;
A registered business voter may only be registered to vote for one business in a given
municipality
The Chamber believes this model constitutes fairness among businesses.
In short, a legitimate business physically located within a municipality paying business property tax
would be eligible for a vote.
This system would require coordination between existing Canada Revenue Agency and BC Assessment
Authority databases. This list, which would be maintained by the province, would then simply require a
designated voter for the business.
The issue of equity, often described as one person one vote, is problematic as a business vote will likely
mean that one individual could be awarded the opportunity to vote more than once in a municipal
election.
The Chamber believes that the principle of ‘no taxation without representation’ is critical when
discussing the issue of principles and voting. This principle has been utilized within the BC local
election act to allow for non-resident property owners to be allocated a vote in the municipality where
they own property. This is an important point; there is already a clear exception to the principle of one
person - one vote. While we recognize that an individual does not currently have the right to vote more
than once in a single municipality, an individual can vote more than once in the same municipal election.
Local Government Support
The Local Election Task Force report stated that, “UBCM’s policy position is not to support the corporate
vote”. The Chamber has expressed significant concern that in a joint, consensus based model as was used
for the task force, the position of UBCM was bound to lead to an outcome where the business vote would
not be accepted within a consensus report.
Further to this, the Chamber has been consistent in expressing concern that the position of UBCM does
not reflect the fact that there is considerable support within many municipalities for the re-introduction of
the business vote. Indeed, CFIB issued a press release in May 2010 entitled ”CFIB commends mayors
and councilors for supporting the return of the business vote3” which listed four Mayors and four
councilors as being supportive of the need to introduce a business vote.
3
http://www.cfib-fcei.ca/english/media_centre/british_columbia/121-tax_policy/1876cfib_commends_mayors_and_councillors_for_supporting_the_return_of_the_business_vote.html
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The Chamber believes it is worth noting several further points. Firstly, this is an issue that continues to
be raised with resolutions being presented in 1999, 2000, 2002, 2003, 2006 & 2008 and 2010 (full text of
these resolutions can be found in the UBCM history document). This demonstrates a significant degree
of recognition of the unfairness of this issue from local and regional governments across the province on
an ongoing basis.
While these resolutions have always failed to pass on the floor of UBCM this does not necessarily reflect
deep opposition by delegates but is at least partly a reflection of the fact that the Resolutions Committee
has opposed these resolutions. This opposition is based on a 1998 policy paper drafted to address a
number of issues around the 1993 reform of the legislation governing local government elections.
This paper, under section B3, stated that, “like the results of votes on Convention on the same topic, there
was a close draw between respondents for and against this issue.” In subsequent years the Resolutions
Committee have stated in opposition to resolutions on this issue that, “the current UBCM policy dates
back to the 1998 UBCM Convention when delegates considered a policy paper on elections issues. On
this issue the delegates selected the option of no change to present legislation (no corporate vote).”
Further to this concern the Chamber also believes that the reality regarding the need for business to be
represented in municipal elections has changed dramatically since 1998. Local governments continue to
tell us that they are being expected to provide an increasing range of services through downloading from
senior levels of government. The expansion of services provided by local government has a direct impact
on the business community, as the role of local governments in providing the foundation for economic
growth is a key determinant of the ability of businesses to attract workers, service customers, and expand
their businesses. While these services are also of significant importance to the residents of a community
the significant difference is that residents of a community have the ability to hold their elected
representatives to account through the exercise of their democratic rights every three years – business has
no such right.
The fact that businesses do not have the vote has led to some municipalities levying an unfair burden of
property tax onto their business community. The Chamber is concerned that not only do studies suggest
that businesses use fewer services than residents yet are paying more, but as municipalities face increased
infrastructure costs the current system will lead to municipalities continuing to hide the true costs from
voting residential taxpayers; thereby furthering the inequity by saddling business with ever greater levels
of property tax irrespective of their ability to pay.
THE CHAMBER RECOMMENDS
That the Provincial Government allow business a greater say in municipal elections through the
introduction of a business vote that allocates one vote to every business with a business member paying
business class municipal property tax to be exercised by a designated individual.
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CREATING EQUITY IN THE PROPERTY TAX SYSTEM OF BC (2010)
The Chamber has expressed continued concern regarding the propensity of certain local governments to
subsidize residential taxpayers by unfairly burdening business with property tax levies far in excess of the
services they utilize. While the Chamber appreciates the challenges faced by local government with
limited resources, raising those revenues by increasing costs to business is an unsustainable solution. The
Chamber appreciates the efforts of a few municipalities, such as Powell River, Vancouver, and Prince
George, in addressing the concerns of business, however, the Chamber believes a more direct approach
needs to be initiated by the Provincial Government in order to deal with the issue on a larger scale.
Current Situation
The tendency of local governments to apply an excessive tax burden to non-residential taxpayers has been
well documented by experts in the field of municipal governance and taxation. Reports from the BC
Chamber, MMK Consulting Inc., the Fraser Institute, the Canadian Federation of Independent Business,
and Professor Robert Bish among others, have clearly demonstrated that the level of property tax levied
on the business class compared with the residential class is far beyond the level required to cover the cost
of providing the services they consume.
For example, the consumption study by MMK Consulting in 2007 showed that non-residential property
owners pay tax far in excess of the services they utilize. Vancouver non-residential property owners paid
57.4% of the property tax burden while consuming only 24% of municipal services. Interpreted, this
means that residential property owners pay 56 cents for each dollar’s worth of service they consume,
while non-residents pay $2.42 for each dollar consumed. This is a 4.3:1 consumption payment ratio.
Industrial properties have an even greater burden with the business to residential ratio going as high as
20:1. Recently Catalyst Paper Corporation took the municipality of North Cowichan to court in an
attempt to prove that the level of municipal taxation was unreasonable, using their rate of consumption as
a basis for the argument. In October 2009, the Supreme Court of BC ruled on the case, finding that
although the municipality was acting within its legislative discretion in setting their tax rates at such a
high level, Judge Voith recognized that the discrepancy between the consumption of the municipal
services and the Class 4 tax rates is a structural issue that has widely been recognized as a problem.
However, he further noted that the pace at which, and the extent to which, the reduction in the Class 4 rate
is to take place is within the discretion of individual municipalities.
The finding of Judge Voith in the Catalyst v North Cowichan case resonates with the comments made by
Professor Robert Bish that municipalities, “have used their discretion to impose higher and higher taxes
on business properties relative to residential,” and further, “that the current taxing practices have not
been successful in achieving the desirable balance of a favourable business climate along with municipal
discretion.” It is a situation he notes, “may contribute to a potential disaster for (a) community.”
History
Prior to 1984, the BC Provincial Government regulated ratios between residential and other property
classes. This restricted local government’s ability to set arbitrary rates and restricted the difference
between classes to between 2.6 and 3.5, depending on the class. The limits placed by the province did
have the effect of restricting local governments in their decision and therefore provided at least a degree
of fairness and stability.
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In 1984, the Provincial Government granted local government full autonomy in the setting of rates
between the various classes. Property classes were then expanded to the current nine classes we now
have in BC, which allowed municipalities the maximum flexibility to allocate tax collection to distinct
property types. In addition to the 1984 change, the Community Charter introduced in 2003, provided
local governments further control over the methods of tax collection and the services that they may
choose to fund.
This autonomy, combined with additional service pressures, has resulted in municipal governments
becoming ever more reliant on property tax. Indeed, Canada now has one of the highest levels of
dependence on property tax in the industrialized world. In terms of total tax burden, property tax
represents 9.8% of all taxes paid in Canada and represents approximately 46% of total municipal revenues
in BC.
Structure
It is important to note that the term property tax actually refers to a range of components levied on behalf
of a range of different authorities; these are municipal, school, regional districts, hospitals, transportation
authority, and others. It should also be noted that while these are all levied at the local level, only
municipal components are fully under the control of the local governments; the Provincial Government
sets all others. The focus of this resolution is on the municipal portion.
Municipal tax is calculated on the basis of the market value, or "assessment", of land, improvements or
both (i.e. house, barn, garage, yard) and the municipal "tax rate". Most local governments calculate taxes
using the variable tax rate system where tax rates are based on a dollar figure per $1,000 dollars of
assessed property value (i.e. $1.02/$1,000). Using this example, the property taxes payable on a $300,000
property would be $306.
Adding to this complexity is the structure of the tax itself. BC currently has nine distinct recognized
classes of property.
The autonomy provided to local government, the variety of recipients of property tax, the setting of the
mill rate, and the number of classes of property all lend themselves to a complex system that does not
encourage openness and does not even get close to a level of transparency that is critical to prudent
spending, community involvement and most importantly, good decision making.
Addressing the Problem
The Government of BC has identified that there are significant problems with the property tax system.
They expressed concern that tax reductions at the provincial level were being negated by tax increases at
the municipal level. The result is a failure to make BC business as competitive as it can be.
In the 2009 Throne Speech it was stated that, “more needs to be done to ensure that provincial tax relief
is not negated by local property tax hikes,” and included a committment to develop new legislation that
would protect provincial tax reductions. The following Budget Speech stated that, “In collaboration with
the Union of BC Municipalities and its members, the government also plans to restructure current
provincial/local funding arrangements to provide local governments with increased financial certainty in
uncertain economic times.”
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As a result of the Catalyst vs. North Cowichan ruling in the fall of 2009, the provincial government is
concentrating its focus on municipal tax reform to class four properties (major industry). While this is the
most pressing area of concern and one that profoundly impacts the competitiveness of our province for
investment in major industry, the Chamber maintains that the challenge for class four needs to be
addressed within the broader context of all classes. Taken in isolation, there is the danger that changes
made to improve the tax fairness for class four will result in a potential tax shift to other business classes
while maintaining the protection of tax levels for class one.
However, it must be recognized that both the immediate challenges of sustainable tax levels for class four,
and the need to maintain equity to other classes, are essentially a short term approach to the much more
complex problem of a tax system that is itself perhaps unsustainable. While necessary, a short term
solution should be seen as a first step in a more comprehensive review of municipal taxation with the
vision of developing a system that provides a fair tax distribution across all property classes in a
sustainable system.
It is also important to recognize that while the tax system is unwieldy at best, with no similarly complex
system anywhere in Canada, the environment in which municipalities must operate has itself become
increasingly challenging. With the downloading of services to municipal governments and the
infrastructure funding gap from senior levels of government, municipalities are pressed to provide citizen
service and infrastructure maintenance and development with limited funding stream capacities.
According to the Federation of Canadian Municipalities, only 8 cents of each tax dollar paid in Canada
goes to municipalities with the rest going to the Federal and Provincial governments.
Yet within the current system, the Chamber has welcomed the commitment of the Provincial Government
to address issues of concern regarding municipal taxation.
Concern for Unsustainable Industrial Tax Rates
While the Chamber is concerned about the tax fairness for all non-residential property classes, we are
particularly concerned about the exorbitant tax rates on industry (class four) in municipalities where they
are set at an unsustainable level. The method of property taxation has no connection with the business
revenue and the ability of the company to pay. This is particularly troublesome in industrial properties,
where, as previously stated, ratios can be as high as 20:1. With such high tax rates, a shift in economic
conditions can lead to industrial closure. In municipalities that are largely supported by one industry, this
can be disastrous.
The Provincial Government has demonstrated its willingness to assist in addressing the issues of the
industrial tax rate for eligible port properties, with the introduction of the Ports Property Tax Act
introduced in 2004. This act set rate caps for designated port properties from its time of introduction until
2008. The Provincial Government paid cash compensation to the affected municipalities during that
period, with the objective of the municipalities introducing phased tax adjustments to other classes,
thereby relieving the government of compensatory payments at the end of 2008. Unfortunately, without a
more structured program of tax changes, the Ports Property Tax Act and compensatory payment from the
Provincial Government have had to be extended until 2018.
While the chamber was pleased with the relief the Ports Property Tax Act gave to those industrial
businesses, it is not advisable that the provincial government take on additional compensation payments
to municipalities as a part of property tax restructuring in the future.
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Fair Tax Levels for all Business Classes
The virtually unchecked ability of local government to tax non-residential classes with no recourse or
relationship to cost of service has proven to lead to those classes being penalized with unfair taxation
compared to the voting residential taxpayer. Though the Catalyst v North Cowichan finding has shown
that while municipalities have full discretion in taxation, and that consumption rates are not the only issue
considered, it did highlight that the current weighing of issues in taxation decision is producing
unbalanced results.
It is desirable for municipalities to set tax rates and be directly accountable to the electorate for doing so,
but it is also unlikely that municipal government will on their own eliminate the current tax inequalities
for non-residential taxpayers. Thus some form of provincial regulation is required to achieve fairness.
For example, tax reforms were introduced in Ontario bringing “fairness ratios” to ensure that large tax
rate discrepancies between classes could not occur. Alternatively, the Provincial Government may
consider reducing the number of business classes to one class, providing municipalities with greater pause
to the high taxes currently levied on industrial classes. These are but two suggestions for reform; more
options need to be explored. Nonetheless, a mechanism needs to be established to ensure a more fair
method of determining tax, including the consideration of services consumed and fairness between classes
of taxpayers.
Transparency
The complexity of municipal taxation makes it very difficult for taxpayers to compare one municipality to
another. In addition, local governments are able to obfuscate the real amount of total taxation by shifting
certain items to different taxing or fee schemes. The Chamber supports a clearer annual reporting system
to taxpayers, outlining the overall cost to each category of taxpayer including property taxes, fee for
service, consumption taxes, and parcel taxes as well as fees collected for other bodies including school,
regional districts, hospitals, transportation authorities, and others. The reports should be consistently
formatted to allow for comparisons between municipalities.
The Chamber also supports re-instating a Municipal Auditor General to do regular comprehensive value
for money audits of municipal spending. The Chamber believes this concept is applicable to all
municipalities and warrants the development of a Provincial Municipal Auditor General to ensure an
independent review of municipal programs, spending, community plans and services.
Accountability
While all municipalities in BC are required to have a financial audit and report this information publicly,
the Chamber does not believe that this goes far enough in introducing a level of accountability and
scrutiny to municipal decision making. The Chamber supports the notion of a Municipal Auditor General
to do regular comprehensive value for money audits of municipal spending. The Chamber believes this
concept is applicable to all municipalities and warrants the development of a Provincial Municipal
Auditor General to ensure an independent review of municipal programs, spending, and services. Such an
office would go a long way towards developing a culture of sound fiscal decision making while
promoting balance between the level of taxes paid and the services consumed.
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THE CHAMBER RECOMMENDS:
That the Provincial Government:
1.
embark upon a larger examination of the sustainability of our method of municipal funding with the
goal of developing a more sustainable structure related to the tax-payers ability to pay;
2.
provide control and oversight on the level of property taxation levied to all taxpayer groups to ensure
fair and equitable taxation practices;
3.
while introducing immediate relief to class four tax levels, provide equity to class four, six and one;
4.
introduce a structured, clear and consistent annual reporting system to taxpayers that outlines the
total cost of municipal taxes, fees and levies as well as the cost of taxes collected for other
authorities by municipal governments;
5.
establish a mechanism, such as a Provincial Municipal Auditor General, that allows for the continual
review of local government taxation to ensure accountability and our continued competitiveness; and
6.
introduce changes with definitive timetables that provide certainty for taxpayers while allowing
municipalities time to adjust and to ensure a smooth transition for the taxpayers.
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DUCATION
GETTING THE MOST FROM OUR EDUCATION SYSTEM (2012)
BC business and industry can become, and remain, competitive only through continued investment and
maintenance of the highest standards in the development of human capital. These standards must
effectively meet international levels of competitiveness, reflecting the changing needs of world economic
activity to keep BC business and industry competitive in the future.
The Chamber believes that the provincial education system from kindergarten to elementary, secondary
and post-secondary levels must provide equal opportunity for all students to develop to the maximum of
their potential. As the needs of society, and our economy change, so too, must the educational system.
It is critical to the economic future of the province that the elementary and secondary school system stress
basic educational skills, at least equal to leading world standards in the prescribed criteria. The system
must include critical and creative thinking, the ability to analyze, and the skill to communicate. It must
also introduce students to the new educational technologies and provide means for students to become
computer literate.
With this in mind the Chamber welcomed the release of BC’s Education Plan as an important recognition
that the education system requires fundamental change to be able to prepare students for the economy of
the future. While the focus on flexibility, adaptability, and excellence is welcome the Chamber is
concerned that the plan does not address a disconnect between the curriculum and the business
community. The business community has been consistent in its call for a review of the curriculum to
ensure that the skills being provided to students prepare them for the world of work.
Programs such as the Conference Board of Canada’s “Employability Skills 2000+” should become a key
component of the school curriculum. This program provides school children with the basic skill
requirements all entrants to the workforce are expected to develop, and can further enhance as they
progress through their career.
The purpose of the education system must be to prepare students for later life, yet the business community
is telling us that the system is failing to provide students with even basic employment skills such as basic
numeracy and literacy skills.
Education is the single most important investment in the future economic prosperity of the province. To
not have the business community, the providers of that economic prosperity, be provided an opportunity
to be an integral part of shaping the education system of the future will simply ensure that it will not
fulfill its primary function as future generations will remain ill-prepared for the world of work.
Career, vocational, and post-secondary programs should afford students the opportunity to become
involved in, and acquainted with, a variety of work and entrepreneurial environments. This requires a
closer liaison and open partnerships between business, industry, and the school system.
In keeping with the ideal of an educational system which encourages and assists the lifelong learning that
keeps an individual up to date in their chosen field, educational programs should also afford opportunities
for those who are basically or functionally illiterate, including those who face the challenge of acquiring
English as a second language, and those who seek a career in a non-academic field.
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With lifelong learning, the key to prosperity in our future vocational programs must be to prepare students
to meet the challenges of the local, national and international workplace with the new skills required to
make both the students and BC’s economy strong and flexible both now and in the future.
BC colleges and universities (both public and private), and our private and non-profit trainers, can ensure
the quality of their graduates only by the maintenance of high levels of academic excellence.
For these students the business community has a critical role to play through such mechanisms as cooperative education programs, if the correct structure is put in place to encourage their participation. A
province-wide co-operative infrastructure is already well established. Co-operative education programs
exist in every region of BC and are currently offered in 23 post-secondary institutions.
Important to our jobs strategy is preparing today’s children for tomorrow’s jobs. Over the next decade, a
million jobs will be available in BC with more than three-quarters of them requiring some post-secondary
training. Therefore, coordination between the Kindergarten to Grade 12 system and post-secondary
institutions needs to be enhanced. Interplay and connections between these two educational systems is
needed through increased participation in science and math in the Kindergarten to Grade 12 system
combined with expanded opportunities for post-secondary technology and engineering training.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. undertake a fundamental review of the school curriculum in concert with business stakeholders to
ensure that students are being adequately prepared with the necessary employability skills;
2. encourage professional bodies to work with education systems to increase participation and
preparation of students in mathematics and science and to inform the students about the many
available and future jobs in the field of Technology and Engineering; and
3. ensure that small business and industry groups are provided access to schools on a regular basis to
educate students to the expectations of the business community through the facilitation of events such
as career fairs.
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INVESTING IN THE INFRASTRUCTURE REQUIRED TO CAPITALISE ON BC’S MINERAL
RESOURCES (2012)
BC’s geology and mineral resources can provide a strong economic foundation for the province and make
BC a leading global supplier of minerals. But this can only be achieved if BC creates the geological
infrastructure and database to attract investment in this sector.
Two organizations working towards these goals are the BC Geological Survey (BCGS) and Geoscience
BC (GBC). Each has different mandates but complementary goals.
BCGS is responsible for producing, housing, and maintaining public geological and geoscientific
information about mineral resources and mineral potential in the province as well as geological
information important to land use planning, geologic hazard identification and awareness etc. Their core
staff is comprised of professional geoscientists who carry out the systematic inventory and assessment of
the varied and complex geology of BC. BCGS functions as a highly technical institution to answer to the
continuing information needs of government, business, and the general public. The inventory of
information is used to attract industry investment, to assist government‘s stewardship of its rich mineral
resource endowment, and to help manage and protect Crown lands.
The BCGS budget has been inadequate for years.
GBC’s mandate is to encourage mineral and petroleum exploration investment in BC through the delivery
of applied geosciences. It applies new data, new ideas, new technologies, and compiles and reprocesses
existing data and applications of existing technologies in new areas. Geoscience BC seeks collaborative
and partnership projects that come with supporting funding. GBC has – once again - only one more year
of operating funds. (In May 2011 as GBC was preparing to cease operations due to lack of funding the
province announced a 2 year $12 million funding commitment).
Having to prepare for shut-down every second year is disruptive and inhibits maximum utility of this
important vehicle which works cooperatively with BCGS while leveraging additional funding from
industry for industry led priorities.
If BC wants to realize the opportunity of our rich mineral resources it needs to invest in the geological
and other infrastructure that makes this possible.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. reinstate BCGS‘s annual funding to at least the $5 million level, plus additional funds to cover
expensive field costs and the costs to attract expertise in today‘s competitive market; and
2. reinvest another $20 million in Geoscience BC with the mandate, as before, to leverage these funds
with funds from industry and other government agencies and implement an on-going funding
structure to facilitate and allow longer term planning.
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URANIUM AND MINERAL EXPLORATION (2012)
Uranium and thorium are very common elements in the earth‘s crust, although concentrations amenable
to mining are relatively rare. Uranium is a key fuel for nuclear electricity generation in many advanced
jurisdictions including: France, Germany, Great Britain, the United States and Russia. Ontario and New
Brunswick also utilize uranium. It is seen as a key tool in addressing issues of climate change and
reducing our carbon footprint.
Yet BC has instituted a ban on uranium and thorium exploration. All new mineral claims acquired in the
province will not include the rights to uranium or thorium and although mineral tenures acquired before
April 24th, 2008 do carry the rights to these elements, the Province will not honour them. Nor will the
Province issue work permits to allow tenure holders to perform the assessment work necessary to
maintain their claims in good standing.
This decision is not based on science, and denies British Columbians the benefits from their
uranium/thorium resource, as well as the potential benefits of other mineral resources such as copper,
which sometimes occurs with these elements.
In instituting this ban unilaterally and without effective and meaningful consultation with industry,
serious damage was done to BC government’s credibility and to the provinces reputation as a safe place
to do business. Furthermore, it reinforced a perception of uncertainty in international mining and
investment communities regarding BC as a safe harbour for investment.
This perception has been reflected in the annual Fraser Institute Surveys of Mining companies in which
BC dropped from 24th place (out of 71 jurisdictions) in 2008/09 to 38 th out of 72 in 2009/10 in terms of
Policy. Current ranking in 2011/12 is still only 31 out of 93. In terms of uncertainty concerning
administration, interpretation and enforcement of existing regulations BC stands at only 53 rd with a 47%
uncertainty ranking (Chile leads with only a 5% uncertainty ranking). In terms of uncertainty regarding
environmental regulation, BC currently stands 73rd with a 65% uncertainty ranking.
There can be no certainty or investor confidence when government is prone to changing the rules of the
game based on political considerations rather than good science. The Boss Power settlement in October
2011 was a positive indicator of fair market compensation paid by government to a company for the
expropriation of known uranium bearing mineral property and associated rights and development of the
property.
There can be no certainty when governments do not respect established project assessment processes and
procedures or honour established rights.
A mineable mineral deposit - regardless of commodity – is a rare and valuable asset. Supporting uranium
and thorium exploration is not a commitment to develop nuclear power, any more than support for coal
mining is a commitment to develop coal-fired power in BC. Any potential uranium that is discovered and
potentially mined in BC could assist in addressing world climate change efforts, and will create new jobs,
economic activity and new wealth to sustain our health, education, social systems, and our economy.
Uranium is a resource that is mined safely and responsibly to the great benefit of citizens of other
jurisdictions around the world. Mining of uranium is a key foundation of Saskatchewan‘s economy,
which produces between 25% and 30% of the world‘s total production from its high grade, world-class
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deposits. It does so responsibly to the great benefit of its citizens, and is a world leader in health and
safety in its mines. Currently uranium mines are safely operated in over 20 countries around the world,
and both uranium and thorium have many positive and beneficial uses, particularly in energy and critical
health care applications.
Valuable natural mineral resources (such as uranium and thorium) are the common heritage of all British
Columbians. The provincial government has an obligation to develop and manage BC‘s resources including uranium and thorium - to the optimum benefit of all British Columbians. Strict regulations
ensuring safety regarding uranium are in place in all regions of Canada.
BC is very under explored for uranium, consequently known reserves are low. The 1980 Royal
Commission Inquiry into Uranium Mining reported that, at the time of writing, uranium exploration in
BC had only been on-going for eleven years, yet in that short time no fewer than six significant deposits
had been found. Since that time there has been very little new uranium exploration because of moratoria
and low prices.
The Royal Commission quoted the Ministry of Mines, Energy and Petroleum Resource’s Geological
Division’s conclusion that, “vast areas of the central Interior would appear to be potentially favourable
for the discovery of basal type uranium deposits, and, “exploration for other types of deposits,
particularly those types not yet recognized in the province (black shale, phosphate, sandstone) is
warranted.”
More recently, in 1994, the BC Geological Survey began to recognize the potential for, and to encourage
exploration for, polymetallic Olympic Dam (OD) style mineral deposits, (also known as Iron Ore Copper- Gold or IOCG) in BC. The Olympic Dam deposit was discovered in Australia in 1975 and is
one of the world’s largest copper mines, and also, as a by-product, one of the world’s largest uranium
mines.
Not being allowed to excavate the uranium would preclude the mining of the copper. The ban on
uranium essentially makes exploration for these types of copper deposits, which are very large and
valuable when found, much less attractive. Although not all Olympic Dam/ IOCG deposits contain
uranium/thorium, some clearly do, and explorers are now deterred from looking for these world class and
very valuable deposits in BC. It is questionable whether explorers would continue to search for IOCG
deposits should this ban stand.
As stated, uranium and thorium are widespread in the environment and are very common in BC‘s mineral
formations; they can be and are encountered in exploration for other commodities. Care must be taken
not to inhibit exploration for these other resources. Another example is molybdenum, an important
current target today with much on-going exploration in BC. Some molybdenum deposits can have
associated uranium/thorium values. The new policy threatens this important economic activity as well.
As yet another example they can also occur in silver deposits.
This ban effectively discourages exploration over significant areas of BC, including several prospective
properties that include gold, copper, silver, molybdenum, and zinc.
The Chamber believes that uranium and thorium exploration and potential mining should be treated like
any other industrial activity in our society: if it can be done safely, responsibly, and sustainably (as
evidenced by many other jurisdictions), allow it. That it can be done safely and responsibly has been
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amply shown in many other jurisdictions.
Banning uranium/thorium exploration and potential mining is simply bad public policy.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. rescind its ban on uranium and thorium exploration;
2. consult meaningfully and effectively with industry on an appropriate regulatory regime to ensure that
any mineral exploration and development of uranium and thorium is conducted safely and
responsibly;
3. recognize the damage done to investor confidence by this ban, and take steps to redress and restore
that confidence;
4. provide fair compensation for damages to claim holders affected by the uranium exploration ban;
5. institute an assessment work holiday for affected claims, until compensation is provided;
6. establish clear and practical policy and regulations with respect to low level, incidental radioactive
mineral concentrations (e.g. in coal, rare metal deposits, etc.); and
7. educate the public about natural sources of radioactivity, the geology of such deposits, and technical
mitigation.
USING FINANCIAL MECHANISMS TO DEVELOP BC’S MINERAL RESOURCES (2012)
Mineral Exploration expenditures in BC increased from $154 million in 2009 to a record $463 million in
2011. A significant factor in this increase has been the availability of financial mechanisms at both the
provincial and federal levels that encourage such investment.
However, with the recent uncertainties in global economic prospects, financing availability has tightened
up over the past year, and companies are again finding it more difficult to raise money for exploration.
Flow-through share financing has been a successful structure for over 30 years whereby governments
have acted as a catalyst to increase the levels of resource property exploration and development in
Canada. By acting as a catalyst to assist mining companies in attracting greater amounts of private
market funding at more attractive terms than would otherwise be possible without government support,
governments help encourage mineral exploration activity and the discovery and development of their
mineral resource.
Flow-through shares were originally introduced to address an exploration financing inequity that arose
between major and junior exploration companies. Major producing companies have income against
which their exploration (and other) expenses can be deducted; most junior exploration companies are not
yet producing and so have no income from which to deduct their legitimate expenses.
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A flow‐ through share (FTS) is a share, or the right to buy a share, of the stock of a mineral resource
company where these expenses are “flow through” from the company to investors who can use these
expense deductions against their income to reduce their tax payable. A flow‐ through share is issued
under a written agreement between a corporation and an individual under which the individual agrees to
pay for the shares, and the corporation agrees to transfer certain mining expenditures to the individual for
their own use.
The BC mining flow-through share (BC MFTS) tax credit allows individuals who invest in flow-through
shares to claim a non-refundable tax credit equal to 20% of their BC flow-through mining expenditures.
The BC MFTS has been harmonized with, and has been in addition to, the 15% federal Mineral
Exploration Tax Credit. Unfortunately, the expiry date for the BC MFTS tax credit is December 31,
2013.
BC has an excellent Mining Exploration Tax Credit (METC) program that provides a 20% refundable tax
credit for resource companies through January 2017, and an enhanced rate of 30% for companies
exploring areas affected by the mountain pine beetle. The Chamber thanks the government for its
foresight in implementing a long-term tax incentive for companies active in mineral exploration.
A significant amount of money raised from flow-through financing was not deployed during the recent
market downturn while some operating companies were unable to finance brownfield exploration or
expansions. These gaps could be addressed if the flow-through program was amended to allow this
application of flow-through funds to open pit and underground exploration and development at both
brownfield and greenfield sites.
THE CHAMBER RECOMMENDS
That the Provincial Government encourage private sector investment in mineral exploration by:
1. making the BC Mining Flow-Through Share (BC-MFTS) share program a permanent feature of the
tax system or, at a minimum, extend the program for an additional three years. In addition, the
Government should implement a temporary increase in the deduction gross-up to 125% for
development spending and 150% for exploration spending to flow-through share financing, and
increase the associated tax credit of eligible costs from 20% to 30% (similar to the Budget 2007
measure to increase the mineral exploration tax credit in pine-beetle infested regions);
2. expanding flow-through eligibility to include both surface and underground greenfield and brownfield
exploration and development expenditure;
3. making the BC Mineral Exploration Tax Credit permanent; and
4. working with the Federal Government to expand the definition of exploration under federal Income
Tax Act to include spending on or near a closed property.
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MINERAL EXPLORATION INVESTMENT AND PERMITTING (2011)
Although mineral exploration expenditures (and mineral tenure acquisition in the province) continue to
rise, the proportion of BC’s expenditures (investment) have been declining relative to other Canadian
jurisdictions.
Mineral exploration expenditures are rising because of high commodity prices, but the province of BC
cannot take high commodity prices for granted. Even if BC reaches record exploration expenditures of
$494 million in 2011 as projected by Natural Resources Canada, the province’s share of mineral
exploration expenditures in Canada will still only be 15.5%. This is a significant improvement from
11.2% in 2009, but well below 18.0% in 2006, and a peak of 29.2% in 1990. Commodity prices are
drivers of increased mineral exploration expenditures, but there are several factors that prevent mineral
exploration in BC from reaching its full potential.
Principal causes for this situation are perceptions that BC denies access to and for exploration without due
consideration for mineral potential or mineral resource values. Further, when the province arbitrarily
removes mineral lands from exploration and development, it is seen to be unwilling to provide both fair
and timely compensation for rights taken (e.g. Flathead, Boss Power).
In both of the examples above, rights were taken without due process or consultation; indeed in the
Flathead case, an extensive Land Use Plan was prepared with full public participation and designated
those lands as ‘Special Management’, a designation that specifically allowed for resource development.
Yet despite this direction from the public planning table government has now disallowed mining.
If mineral rights are taken from tenure holders under the Parks Act the Act specifies that Fair Market
Value compensation is to be paid. The Act defines Fair Market Value as, “the value that would have
been paid to the holder of the expropriated mineral title if the title had been sold on the date of
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expropriation, in an open and unrestricted market between informed and prudent parties acting at arm's
length.”
However, if those same rights are not taken under the Park Act, then there is no established legal
mechanism to provide compensation for minerals rights expropriated, and government proceeds in an ad
hoc fashion, often forcing companies into long drawn out court proceedings.
In the Flathead example given above, government is proposing to compensate tenure holders only for
‘sunk costs’, not Fair Market Value. Further, while the Province has estimated the compensation
(required to be paid in this case by the United States under a Memorandum of Understanding with BC) at
only $17 million, Governor Schweitzer of Montana has publicly stated, “It is British Columbia who is
walking away from $7 billion,” strongly implying there has been no adequate socio-economic impact
analysis completed and disclosed to British Columbians on this withdrawal of their resources from
development.
The resulting uncertainties in the international investment community, and consequent lack of confidence
in the security of their investments, (and that they will actually be able to develop the mineral resource, or
that they will receive fair treatment from the province), is negatively impacting our ability to attract
investment. Indeed, there is a perception of a ‘BC Discount’ for these reasons.
Concomitant with these perceptions is another perception that exploration companies may not enjoy due
process in areas where proposed activities may be controversial, even in areas where Land Use Plans have
been negotiated and agreed with all-sector and community involvement and processes.
Moreover, mining industry organizations report continuing numerous complaints of government failing to
issue exploration permits in a timely manner, that there is a lack of consistency between government
offices across the province, and that several government offices are understaffed and under- resourced to
fulfill their permitting (and geological) responsibilities. Few of the complainants are willing to go on
record for fear of government retribution thereby making it difficult to quantify the extent of the problem;
however the numbers of complaints received make clear that there is a problem.
An example of understaffing is the current Ministry proposal to have a single Regional Geologist serving
both the Smithers and Prince George offices instead of one in each office – effectively one person to
cover some 65% of the province.
A Regional Geologist serves as the government’s ‘eyes and ears’ on the ground, thereby enabling
government to keep informed about industry activities and discoveries in their regions. In addition to
keeping track of all activities, they work with other government agencies and First Nations regarding
mineral resources, geology and mineral exploration, development to facilitate the development of mineral
resources, and to balance the best interests of the mining industry and the public. They are the first point
of contact and assistance for local prospectors and other citizens respecting rocks, minerals, and
exploration issues. In addition, they serve a very valuable integrity function by conducting site and
property visits and provide a first line of defense against potential investment market scandal.
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THE CHAMBER RECOMMENDS
That the Provincial Government:
1. conduct a full and comprehensive mineral potential analysis of land under consideration for
withdrawal from mineral exploration and development, including a full socio-economic impact
analysis of lost resource values and opportunities before any additional lands are closed to mineral
exploration;
2. provide full and fair market value compensation in a timely manner when expropriating mineral titles;
3. provide increased staff and funding resources to the mineral exploration and mine permitting
administrations of provincial ministries, and ensure consistency across the province; and
4. provide Regional Geologists in both Smithers and Prince George offices.
PROTECTING OUR ENVIRONMENT AND OUR COMPETITIVE EDGE (2011)
Just as a sustainable environment requires the world to manage our emissions of greenhouse gases
(GHGs), sustainable industry requires that we manage the rate and methods used to reduce these
emissions.
In 2007, BC and the other members of the Western Climate Initiative (WCI) agreed on a strategy to
control GHG emissions in North America. Of the four provinces and seven states that belong to the WCI,
BC, a relatively minor producer of GHGs compared to the rest of the world, took an unprecedented and
still unmatched approach to problem of greenhouse gas emissions.
The goal in BC is to reduce emissions by 33% by 2020. To achieve that objective, the province
introduced the Provincial Carbon Tax, a broad based consumption tax equal to $15 per tonne of GHGs
equivalent emissions as of 1 July, 2009 that is scheduled to increase $5 a tonne each year for the next two
years to $30 per tonne by 2012.
BC’s carbon tax stands alone and apart from every other jurisdiction in the world both in the speed of
implementation, the amount of the tax levy, and its impact on business innovation. In a world of cross
border trade and global competition, these distinctions have raised significant concerns over the extent to
which this policy has left the province at a marked disadvantage.
The Unlevel Field
In Canada, six provinces and the three territories have no strategic tax plan aimed at reducing GHGs.
Meanwhile, the three other Canadian provinces that are partners in the WCI have instituted fossil fuel
taxes that apply only to industry and none come even close to the burden the BC Carbon Tax places on
businesses and consumers.
Look no further than Alberta, the number one GHG emissions producer in Canada,1 to see the patchwork
approach to carbon taxation in our domestic markets and jurisdictions. In 2005, exports between BC and
1
http://www.sindark.com/2008/01/19/canadian-emissions-by-province/
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Alberta totalled $22 billion.
The Trade, Investment and Labour Mobility Agreement (TILMA) was negotiated to reduce provincial
barriers, however Alberta’s Climate Change and Emissions Management Amendment Act requires only
109 named industries to pay a $15 per tonne of GHG’s levy to a technology fund for excess emissions
over the established target.
Quebec introduced its carbon tax in 2007 and applies a levy to approximately 50 large energy producers
include Shell Canada, Ultramar, and Petro Canada. Most of those costs are passed on to the consumer
through increased costs.
Furthermore, the other member provinces also have different targets for reducing emissions – all
substantially lower than BC’s 33% target. In Nova Scotia, the Energy Strategy and Climate Change
Action Plan has a 10% reduction target by 2020.
In the United States, BC’s partners in the WCI, with the partial exception of California have yet to even
achieve the legislative power to even implement a strategy to reduce Greenhouse Gas emissions.
Some have since scaled back their targets or even dropped out of the plan.
Many states including Washington State, our neighbour directly to the south, have no plans to implement
a carbon tax or cap and trade system.
Competition Case in Point
The cement industry in BC has been hamstring and undercut as a direct result of a tax that goes too far,
too fast. Just south of the border, Washington State will not implement a cap and trade carbon emissions
control strategy until 2012 and some observers believe that program will be delayed even further.
As a result, BC cement manufacturers are being seriously undercut due to the competitive cost advantage
Washington State cement companies enjoy. According to industry, cement imports to BC have increased
by 16% in recent years due to BC’s carbon tax. By 2012, the Cement Association of Canada estimates
industry losses due to the Carbon Tax to be $67 million.
Global Trade Disadvantage
China is the number one producer of GHGs, producing more than 22% of the world’s carbon emissions.
That compares to Canada, which is in 7th place, producing less than 2% of the world’s annual GHGs2.
China is building renewable energy resources through infrastructure investments. It places no burden on
individual businesses, meaning, critics say, it essentially amounts to a subsidy for business.
Meanwhile, BC business is left to compete in this uneven world. The carbon tax levy further takes a bite
out of industry’s annual profit margins – further stressing its ability to find the money to invest in the
innovations that could reduce emissions and costs of production.
Underscoring these concerns, the Liberal government’s consultant and a proponent of the carbon tax, Dr.
Mark Jaccard, a professor of environmental economics at Simon Fraser University and president of
2
http://en.wikipedia.org/wiki/List_of_countries_by_carbon_dioxide_emissions
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MKJA Energy Policy Consults in Vancouver, concedes there is an issue with BC’s solitary position.
“No jurisdiction can do this on their own. It is pretty hard to keep that tax going if you are sitting alone,”
says Jaccard.
Symbolic but not Significant
Even within our Canadian borders, BC ties with Saskatchewan for fourth place in production of carbon
emissions, well behind Alberta, Ontario, and Quebec. Our leadership role, while laudable, does little to
decrease emissions on a global scale - but does considerable damage to our provincial economy.
In Conclusion
Although controlling GHG emissions is necessary, other jurisdictions have not followed the province’s
lead as was expected several years ago. As a result, the Province has no choice but to review its course of
action.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. freeze the Carbon Tax at its current level of $20 per tonne;
2. take on an immediate review of BC’s approach to its policy on Greenhouse Gas Emissions; and
3. work with other provinces and with the governments in the US to standardize and harmonize the costs
of controlling carbon emissions.
SUPPORT FOR BC GEOLOGICAL SURVEY (2011)
The British Columbia Geological Survey (BCGS), a branch of the Ministry of Energy and Mines, is
responsible for producing and housing public geological and geoscientific information about mineral
resources and mineral potential in the province. Its core staff is composed of professional geoscientists
who carry out the systematic inventory and assessment of the varied and complex geology of BC.
Principal activities include geological and geochemical surveying, mineral, coal and industrial mineral
inventories management, mineral potential assessments for land use planning, monitoring exploration
activities, assessing geological hazards, publishing maps and reports, and providing geoscience expertise
to support government’s sustainable development objectives.
Its role was initiated in 1895 and it functions today as a highly technical institution in answer to the
continuing information needs of government, business, and the general public.
The inventory of information is used to attract industry investment, to assist government’s stewardship of
its rich mineral resource endowment, and to help manage and protect Crown lands.
For the last 116 years exploration and mining companies have relied on BCGS’s data for the
identification and development or ore bodies in BC. As a result, mining activity in BC today is an
important source of revenue that sustains our province.
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Unfortunately, recently, the BCGS has been starved of the funding necessary to properly fulfill its role
thereby inhibiting its ability to put adequate numbers of geologists in the field, to maintain its database,
and to properly deliver information to exploration and mining companies and to the public.
BC is well endowed with mineralization and BCGS has provided critical support for the exploration and
development of revenue producing mines in BC. If the expectation is to continue to have a robust mining
sector, BC must once again recognize BCGS and fund it appropriately to allow them to fulfill their
fundamental role in the Province’s future.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. provide increased, adequate and sustained funding for the BC Geological Survey, to ensure this
agency is able to continue their work of providing a foundation of information around our mineral
resources for future revenue generation in BC; and
2. immediately inject $2.5 million funding into the BC Geological Survey to stop the present erosion of
their capacity to fulfill their role in developing BC’s economic future.
TIME FOR A REVIEW OF THE CLEAN ENERGY ACT (2011)
The Clean Energy Act (CEA) was passed by the previous Liberal Government in April 2010.
The CEA has a number of provisions that govern BC Energy Policy.
The CEA self-sufficiency provisions really are provisions that mandate BC Hydro to generate a surplus.
This is caused by provisions preventing the us of clean, renewable, non-firm energy generated in BC in
BC and instead, requiring the power to be sold into electricity markets. It is further caused by provisions
requiring BC Hydro to buy more power than it will need; therefore BC Hydro must sell the power into
electricity markets. The prices in electricity markets ($40/MWh) are considerably lower than the prices
being paid ($140/MWh) for the new firm shaped supply need to meet these provisions. In addition BC
Hydro is precluded from buying cheap low load hour power from the markets for use in BC.
This surplus is extraordinarily expensive for the province and for BC Hydro ratepayers resulting in
approximately $1 billion per year1 degradation in the performance of the BC economy and about 20% to
30%2 future incremental rate increases for families and businesses, in today’s terms of definition, out of
about 100% rate increases forecast in the next 10 years. The self-sufficiency provisions are only partially
implemented at this time and can easily be rectified through revisions to the CEA.
The CEA also significantly restricts the use of natural gas, even in circumstances where it can be cost
effectively used to generate benefits significantly in excess of its costs including its attributed GHG costs.
1 BC Hydro’s Integrated Resource Planning & 2008 Long Term Acquisition Plan Application show planning criteria changes leading to excess
purchases of new supply (5000 GWh/year non-firm + 3000 GWh/year insurance + 2500 GWh/year market = 10500 GWh/year times a loss of
$100/MWh for each GWh/year = $1 billion/year calculation by the Commercial Energy Consumers)
2 BC Hydro 2012-2014 Revenue Requirements Application shows each $36 million of costs or new revenue requirements leads to a 1% increase
in rates
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Consequently the key values to the electric system of dispatchability, combined heat and power,
distributed generation and rapid construction flexibility are being quite severely limited.
The CEA also removes many facets of BC Hydro’s projects, programs, contracts and expenditures from
review by the BC Utilities Commission. It also removes a significant amount of control over BC Hydro’s
development of an export market.
The CEA also imposes on BC Hydro requirements for implementation of greenhouse gas emissions
reduction through electrification switching of fuel sources and requirements for economic development,
requirements. The potential cost implications have not been projected or fully understood before the
requirements have been established.
Given that the entire BC economy, Gross Domestic Product, is about $200 billion, cost implication in the
range of $1 billion/year become significant to everyone in the province.
THE CHAMBER RECOMMENDS
That the Provincial Government review the Clean Energy Act.
DEPENDABLE POWER FOR THE ASIA PACIFIC TRANSPORTATION CORRIDOR (APTC)
(2010)
The northern BC economy is resource rich, but it is also resource dependant. In order to remain
economically sustainable into the future, the region must continue to diversify and increase the depth of
its resource development. This economic development, and the businesses committed to developing the
resources, require critical infrastructure such as transportation and electric power. Creating products and
moving them to markets involves service delivery and production cycles, which need these reliable
transportation corridors and stable and dependable electric power grid access.
The Asia Pacific Transportation Corridor (APTC), along highway 16 and the CN rail line, links the port
of Prince Rupert with Winnipeg and points east. The APTC passes through the Rocky Mountains by way
of Yellow Head Pass, east of Tete Jaune Cache. This corridor has all the needed components for
economic development except a stable power supply.
The area is currently served by 25 KV distribution power lines, which are typically long radial lines
spanning out from a higher voltage power grid. Extensions of the 25 KV power lines throughout the
North of BC, and the addition of more customers, has resulted in an increase in both the number of power
outages and the frequency of poor power quality in the form of low voltage periods and voltage sags and
spikes. These power quality issues can damage electrical and electronic equipment.
BC Hydro has advised the local area residents and business interests that improvement to power
reliability and power quality would next come from development of 138 KV power supply to the area,
through upgrading the transmission power supply grid, which would be done by the BC Transmission
Corporation.
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Dependable power supply will help facilitate local economic development, such as:
Local meat processing and the opportunity for increased pork, beef and poultry production;
Establishment of a root crop industry, including growing, storing, processing, packaging, and
shipping;
Expansion of forestry industry activity and bio-energy production from wood waste;
Development of the tourism and recreation industry, allowing access to the natural beauty of the
area;
Creation of small hydro power development and electrical energy supply; and
Creation of wind energy development and power supply.
The raw materials, processing capabilities, and entrepreneurial business interests exist to support the
economy in the north of BC. The transportation corridors also exist but power supply and grid access are
weak.
The BC Government is encouraging the development of a green energy industry. Significant untapped
resources exist along this APTC corridor in the form of run of the river hydro projects, bio-energy
projects, and wind generation projects.
These independent power producer (IPP) projects cannot proceed without adequate access to the higher
voltage power grid. These IPP projects add green power to the provincial grid and contribute to the
provincial treasury proportionately for years to come through license fees, development, investment,
substantial water license fees, construction employment, and on-going operation and maintenance
employment.
For example:
In the Robson Valley (Tete Jaune Cache to Slim Creek) alone, creek diversion hydro projects
have the potential to create jobs and taxable incomes for the province during construction. Such
projects along with the construction of a 138 KV transmission line and substation facilities would
result in an estimated $300,000 to $500,000 in tax revenues for the provincial economy;
In McBride, a biomass project planned for a non-operating mill site is projected to cost about $45
million to develop and build. This project would generate estimated net revenues of about
$14.79 million and would provide employment in direct jobs as well as for the local logging
firms. The heat generated as a by-product would make a seedling greenhouse operation viable
and provide for regeneration and renewal of forestry resources; and
The construction of a 138 KV transmission line and substation would help ensure vital economic
development in this rural area of British Columbia. The 138 KV power line access to the
provincial power grid would enable this area to contribute green power to support the
environmentally sustainable future of the BC economy. The construction of the transmission
lines and substation would provide 150 jobs over a three year period and help put local
contractors to work, and allow these businesses to upgrade and reinvest in their equipment.
The planning for transmission lines in the province is conducted by the BC Transmission Corporation and
is done in concert with BC Hydro’s resource planning staff in regard to potential IPP project clusters.
BCTC has advised local residents and businesses that the upgrading of transmission in the area to 138 KV
is not a priority and is not currently scheduled for development. The Chamber has previously
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recommended to the BC Government the advance development of transmission capabilities to ensure that
transmission facilities are available on a timely basis to support economic development throughout the
province. The BC Government has initiated a Section 5 Inquiry before the BC Utility Commission to
review transmission planning to ensure its timely development. The Section 5 Inquiry has been on hold
for the last year while the BC Government deals with its duty to consult with First Nations. Once the
Section 5 Inquiry recommences the transmission planning criteria will come under review. At this point
the importance of economic development particularly to rural communities throughout the province and
including the APTC corridor can be asserted. This can be done directly with the BCTC, BC Hydro, and
the BCUC, and can be augmented by expressions of the importance of these economic development
priorities from the BC Government.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. through its supervision of BC Hydro ensure that criteria for providing reliable supply of electric
power to rural areas of British Columbia, including along the Highway 16 APTC are given greater
weight in the planning for transmission line upgrades;
2. through its supervision of BC Hydro and the BC Utilities Commission and the proposed Section 5
Inquiry and or the Integrated Resource Planning process, aimed at providing direction for the 30 year
transmission plans for British Columbia, ensure that the transmission planning criteria used includes
the objectives of supporting rural economic development and are sufficiently geared to anticipate the
economic potential which can be achieved through the provision of higher voltage power supply and
access to the higher voltage power grids, including the economic potential available along the APTC.
PROVIDING A PLATFORM FOR THE EXPANSION OF THE MINING INDUSTRY IN BC
(2010)
BC’s mining industry is an important contributor to our economy, yet we are again losing ground with
respect to BC’s share of exploration investment. Billions of dollars are raised annually by BC-based
mineral exploration companies, yet exploration expenditures in BC are again declining disproportionately
when compared to other Canadian and International jurisdictions. In 2007 a high of 417 million was
spent on exploration in BC, but with spending down to $154 million in 2009, BC’s share of national
mineral exploration expenditures has fallen from a high of 18% to only 10.5%. We are losing market
share because of serious concerns with process certainty related to permits, land use planning (Flathead
etc), and Aboriginal relations which are significantly increasing investor perceptions of risk for investing
in BC.
This negative perception is confirmed by the 2010 Fraser Institute survey in which BC has dropped 14
places from 24th in 2009 to being ranked 38th as the world’s most attractive jurisdiction for mineral
exploration and development.
Recent land use decisions such as the Flathead ‘no-mining’ ban, and development of other land use
designations such as Wildlife Habitat areas and Ungulate Winter Ranges with little to no consultation
with the mineral sector is creating considerable uncertainty, and undermining the credibility of the
government’s commitment to certainty and to the legislated ‘Two-Zone’ model for mining.
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A recent example is a company that has spent millions of dollars exploring and planning a mine only to
find out that the Provincial Government has implemented Ungulate Winter Ranges and Wildlife Habitat
Areas. These areas have been long identified as critical to the potential mining area in question, and
include half the proposed tailings pond, calling into question the viability of the proposed mine, which
has appeared on government maps for some time.
No Registration Reserves, which prohibit acquiring mineral tenure in designated areas, used to require a
decision by Minister of Energy, Mines and Petroleum Resources; more recently they are being driven by
front-line agencies like Ministry of Environment, with a final decision made by the Chief Gold
Commissioner, creating even more uncertainty for industry.
The process under which Government Action Regulations (GAR orders) are issued under the Forest and
Range Practices Act is fundamentally flawed because it ignores both the energy and mining sectors until
the late stages. Sections 2 and 3 of the regulation provide for limitations of action, consultation, and
review, and specifically ensure that wildlife protection is balanced with other values. For example,
Section 2(1)(b) states the Minister must be satisfied that “the order would not unduly reduce the supply of
timber form British Columbia’s forests.” Unfortunately no such consideration is given to other economic
land use values such as mineral exploration and development.
Given the small portion of land used for exploration and mining, and given that this minimal land use
provides the largest return on investment to the people of BC, the Chamber feels that mineral potential
and mine development should be added as key factors to any GAR order being considered by the
Minister.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. continue to work to enhance the understanding and capacity of Aboriginal Peoples to participate in
industry;
2. work with the mineral industry to develop “user friendly” Best Management Practices;
3. continue to work towards better harmonization of the Department of Fisheries and Oceans with
provincial fish and fish habitat management activities;
4. develop faster, more stream-lined approval procedures for mineral exploration projects, coordinated
by the Ministry of Energy, Mines and Petroleum Resources;
5. reconfirm and continue to actively implement the Two-Zone land use system for mining;
6. educate the public regarding the enormous benefits of the mining industry and its miniscule
“footprint”;
7. better coordinate activities of MOE with MEMPR and the mineral sector to ensure there is active and
early consultation with the mineral sector when actions and government Action Orders which may
affect it are being considered;
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8. add mineral potential and mine development as key factors for any GAR order being considered by
the Minister; and
9. return the authority for No Registration Reserve decision-making to Minister of Energy, Mines and
Petroleum Resources.
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CONSISTENT PROCESSES FOR DISCLOSURE AND REMEDIATION OF BUILDINGS (2012)
In 2009, domestically-produced marijuana continued to be the most seized illicit drug in Canada, in terms
of both frequency and quantity, according to the RCMP. That year, Canadian law enforcement seized a
total of 34,391 kilograms (kg) of marijuana and 1,845,734 marijuana plants.
There has been a continual increase in the level of sophistication of indoor marijuana cultivation,
including more advanced growing techniques and equipment. In many instances, houses are rented
and/or purchased and grow operations are installed.
In 2006, BC Hydro reported that nearly 18,000 homes in BC use suspiciously high amounts of electricity,
a telltale sign that a grow operation may be located in the home. In the past three years, BC Hydro has
helped police locate 1,500 grow operations in BC.
Realtor face significant problems when selling houses that have been used for a marijuana grow
operation. Potential property buyers and renters, and the realtors who assist them, currently have no
consistent method of learning whether a building has been identified as having been used in drug
operations, or whether it has been remediated to a standard that will ensure health and safety risks have
been eradicated.
A consistent process needs to be developed, in accordance with the Freedom of Information and
Protection of Privacy Act, for ensuring that information about the use of properties for drug operations
and subsequent remediation is available in a timely and straightforward manner.
In 2010, Fraser Valley Real Estate Board developed operational guidelines for municipalities to use when
responding to requests for information about specific properties. Simple yes or no answers to
straightforward questions about properties provide potential occupants with enough information to
determine whether additional investigations are necessary.
In recent months, police have started posting addresses of known marijuana grow operations online1.
Currently there are more than 150 residences listed on the site.
To address municipal boundary issues about information sharing and to avoid unnecessary complexity, it
is recommended that the disclosure and remediation processes be directed by the BC Government, within
the framework provided by existing legislation such as the BC Building Code, the Residential Tenancy
Act, and the Homeowner Protection Act. The government took a similar approach when it amended the
Safety Standards Act in 2006 to enable BC Hydro to provide power consumption information to
municipal governments under the grounds of potentially elevated health and safety risks.
A consistent process for remediation of buildings used for marijuana grow operations will ideally provide
a framework to determine such information as what is required to be tested and remediated, roles and
responsibilities, and time frames.
In 2009, the Alberta Real Estate Association published
recommendations for remediation standards, which may serve as an excellent basis for BC.
The Chamber echoes the message of BC’s realtors that removing the stigma of properties used in drug
production ensures housing stock integrity and provides British Columbians with certainty and peace of
1 http://www.rcmp-grc.gc.ca/drugs-drogues/mgi-ircm/bc-eng.htm
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mind when choosing properties to buy or rent.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. develop a centralized, consistent process for disclosure of property history information;
2. develop a centralized, consistent process for remediation of buildings used in drug operations; and
3. implement these disclosure and remediation processes through existing BC provincial legislation.
RENTAL APARTMENT OWNERS IN BC (2011)
Rental Apartment Buildings and other types of rental accommodation, manufactured home parks for
example, in BC are for the most part owned by small business owners. Their commitment and investment
to the rental housing market is substantial. Through formalized memberships in the Building Owners and
Managers Association of BC (BCAOMA) and the Rental Owners and Managers Society of BC (ROMS
BC) well over 2,000 business owners are located throughout most if not all municipalities in BC.
These business owners are regulated by the British Columbia Provincial Residential Tenancy Act. Section
23, Items 1-5 of this Act identifies conditions in which rent increases may be determined. Greater rent
increases equate to a greater return on investment for the business owner, and in many cases prevents the
business owner from suffering a loss on their investment.
For a variety of historical reasons the new construction of private rental housing units in BC has virtually
ceased. The existing return on investment compounds that serious problem and penalizes these business
owners to an unfair degree.
Challenges of Aging Stock
The current rental housing stock in BC can be characterized as follows:
BC rental stock average age is 58 years old;
Aging rental stock requires increasing capital investment;
Current rent control system (based on engineering studies) acts as a disincentive to adequate
investment in the maintenance in existing rental stock to ensure its viability; and
Current rent control and HST policies act as a disincentive to new investment in the new rental
housing units resulting in a downward pressure on supply.
As a consequence of the aging rental housing stock, the rental housing stock will necessarily decline in
quality without policy changes. Current rent control and HST policies affecting rental housing provide
disincentives to undertake capital expenditure.
The BCAOMA believes that the best market stimuli available to the Province of BC is to maintain
existing rental housing and to encourage the development of new, purpose-built rental housing. This
would contribute to achieving the sustainability of the rental housing industry and mitigate the impact of
the planned HST on the rental housing owners. Neutralizing the impact of the HST on the rental housing
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industry will support the tenuous viability of a sustainable rental housing market in BC, and will assist in
the continued provision of safe, secure and well-maintained rental housing stock.
As a result of the existing Rent Increase Calculation Formula that prescribes allowable rent increases in
BC, property owners do not have the ability to pass higher operating costs onto tenants. Consequently,
property owners will be in the untenable position of facing higher costs with no revenue capacity to
recoup the costs directly related to the operation and maintenance of rental housing units.
Essentially the BC HST will have the unintended consequence of acting as a further disincentive to
property owners for the development of new rental housing units and the undertaking of capital
expenditures for rental housing up-grading and maintenance. In short, the combined impact of rent
controls and the BC HST has been to significantly increase costs without providing sufficient means for
property owners to recoup their costs.
Even without the application of the added costs of HST, property owners and landlords are already
challenged by increasing costs and controlled revenue increase potential, with owners facing a current or
prospective negative cash flow.
While accommodation for the cost impact of the BC HST has been made by the BC Government for other
life necessities such as groceries, no accommodation has been made for the necessity of shelter. If the BC
Government chooses not to provide HST accommodation to the Rental Housing Industry, then it must
consider elimination of rent controls so that the BC HST can be passed through to consumers, and the
industry has an opportunity to operate in a financially sustainable environment.
In summary, the BCAOMA believes that the BC Government cannot maintain the burden of a ‘new’ tax
in the form of the BC HST, while at the same time not enabling the rental housing industry to pass
through the cost of the new tax on to consumers, or otherwise earn more revenue, to make up for the costto-revenue shortfall.
The Chamber appreciates that the government is being requested by many industries and sectors for some
form of relief from the additional taxation represented by HST. No industry or sector is in the same
position as the residential rental industry:
Food and shelter are necessities of life;
The provision of food is “zero-rated”, exempt from paying and collecting sales taxes;
Our industry has only one source of revenue – rents;
We are restricted by Provincial legislation in the amount by which rents can be increased;
Rents must continue to be exempt from formally GST/PST, and now HST. The Chamber is not
asking to pass on this tax to tenants; and
The introduction of HST will cause a significant increase in the net costs of providing rental
accommodations, as there are no input tax credits available.
Left unresolved, the imposition of the HST on the rental housing industry will only serve to further
increase the existing negative gap that results from the imbalance between allowable rent increases and
actual increases in costs associated with operations and maintenance. Imposition of the HST has made an
already negative operating balance more negative.
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Rental housing is already a scarce commodity in many regions of BC. Therefore it does not make good
sense – policy or otherwise – to impose further costs on the rental housing industry.
It is critical that the government recognize that the residential rental industry is unique in that it is the only
private industry in BC that is restricted by government legislation from passing cost increases to its
“customers” through increased rents, since rents are controlled unlike other private/industry products.
Further, a typical rental property owner’s only source of income is rents. The current Harmonized Sales
Tax (HST) treatment of commercial real estate illustrates the anomalous situation of rental housing.
Unlike rental housing investors, investors in non-residential properties (e.g office and retail projects)
effectively do not bear the burden of HST. While HST is payable on the final value of a new nonresidential building, the owners receive input credits for all HST paid – credits which can be applied
against HST collected on rents from commercial tenants, or refunded if they exceed HST collected.
This difference between the HST treatment of rental housing and non-residential rental properties is not
clearly understood by many observers. It arises from the fact that, when the GST was introduced, a
decision was made to exempt residential rents, now also to exempt rents from HST. Since commercial
rents are subject to the HST, any HST paid on inputs by the owners of non-residential properties can be
deducted against the HST collected from rents. In contrast, since residential landlords do not collect HST
on rents, they are required to absorb 100% of the HST on inputs because there is no HST collected to
which HST paid can be applied as a credit. Therefore, because no HST is payable on residential rents,
rental housing is an exception from the general rule that the HST paid by businesses can be recovered
from the purchasers of its products and services.
HST has expanded the tax base previously encompassed by the BC PST by essentially adding PST to the
broader range of goods and services upon which GST was previously payable. This change has a
considerable – and totally negative - tax impact on the residential rental industry.
The Impact of Harmonized Sales Tax
Understanding that the average age of rental buildings in Vancouver is 58 years, rental housing owners
are challenged by very real costs associated with required maintenance of older buildings – costs which
are labour and input intensive and subject to the application of HST.
Rental housing owners are also in the very difficult situation of facing real, increasing maintenance costs
while at the same time coming up against the very real revenue barrier imposed by the new HST, which
limit their ability to pay for maintenance projects, possibly placing owners in the unsustainable position
of a negative cash flow.
The implementation of the HST has a significant business impact on owners of residential rental housing
in BC. Under the legislation, owners are required to pay HST on all goods and services related to
residential housing but are unable to recoup these charges as a result of the rent controls found in s.43 of
the Residential Tenancy Act and s.22 of the Residential Tenancy Regulation. In effect, the owners are
forced to bear an increase in operating costs equivalent to an estimated 1.5% - 3.0% of gross income,
which cannot be passed on to tenants. As noted, this will have significant impact on an industry where
margins are already limited, and will have a profound effect on the future quality and quantity of
residential housing in BC. Many owners are highly mortgaged, after which they may net only 5% or less
of rents. A 2% gross income increase in costs that cannot be passed on would result in a 40% reduction in
net income, a severe disincentive to further investment in rental housing.
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Rent Control Prevents Industry from Passing on HST
At the present time, the landlords are restricted to rent increases by the Rent Calculation Increase Formula
in BC calculated as the Canadian Price Index (CPI) + 2%.
If BC’s rental housing providers incur costs such as maintenance or operating expenses above the
allowable rent increase, the landlords have no ability to raise rents to an equivalent increase.
Existing rental housing stock is declining in quality and will continue to do so without policy changes.
Current policies affecting rental housing provide no incentives to undertake capital expenditure.
Failure to proactively address this situation will of necessity force rental housing providers to reduce
“optional” spending, i.e. building servicing and maintenance, leading to building deterioration and tenant
unrest, plus exacerbating upward pressures on deferred (controlled) rents.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. work with the Federal Government to designate the residential rental housing industry as zero-rated;
and
2. amend the current rent calculations formula to reflect current actual cost increases that impact the
rental housing industry.
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LEVELING THE PLAYING FIELD FOR LIQUOR RETAILING IN BC (2011)
In July of 2002 the Provincial Government announced a decision to privatize the liquor industry in BC.
The accompanying news release stated that, “the government brings no special talents or purpose to
retailing, warehousing or distributing alcohol. Increasing opportunities for private-sector involvement
will result in improved services, consumer choice and access, and better use of Liquor Distribution Board
(LDB) resources.”1
In the nine years since this announcement was made, the business case for such a transition has only
strengthened.
The intended privatization never occurred, even though the announcement attracted individual private
sector involvement. In October 2003, the Provincial Government negotiated a contract with the BC
Government and Service Employees’ Union, and in 2004 announced a reversal of their Cabinet decision,
and unveiled its current approach thereby leaving the private sector in the lurch.
Preamble
The Province holds a monopoly on the distribution, warehousing, and price of liquor sales in this
province. The Liquor Distribution Act (“the Act”) gives the LDB the sole right to buy alcohol, either
imported or produced in BC, and the sole right to distribute that alcohol within the province. 2 The LDB
is responsible for retail sales from all Government Liquor Stores (GLS) and for sales to private liquor
stores, restaurants, and bars. However, some licensees must still buy alcohol from a GLS branch at the
retail price3, and private liquor stores receive a 16% discount when purchasing from the LDB. 4 Only the
government truly buys wholesale from producers located in BC or abroad.
The current model pits private and government liquor stores in direct competition, with the LDB being
able to out-compete any private liquor store on price. Private stores are able to compete on hours of
operation and refrigerated products, but the playing field is far from level, particularly on price and
selection.
The LDB 2011/12 – 2013/14 Service Plan clearly shows the costs to government associated with being
involved in the liquor distribution industry. Operating expenses and cost of sales combine for $1.8
billion, leaving a net income for 2010 of $877.3 million dollars.5
Solution
The role the LDB plays is an important one, but not best served in monopolizing distribution and retail.
By amending the Act, the LDB would be able to focus on the inherent strengths of government in the
areas of public safety, regulation, revenue collection, and promoting a viable BC liquor industry. The
overhead associated with retail operations, and partial costs of distribution and warehousing, would be
removed.
1 2002 BC Government news release: http://www2.news.gov.bc.ca/archive/2001-2005/2002CSE0054-000575.htm
2 Liquor Distribution Act: http://www.bclaws.ca/EPLibraries/bclaws_new/document/ID/freeside/00_96268_01
3 The Act, 10(a)
4 2010 BC Financial and Economic Review, http://www.fin.gov.bc.ca/tbs/F&Ereview10.pdf, p. 94
5 LDB Service Plan, p. 19
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The government having the sole right to dictate pricing in this area disadvantages the liquor industry in
this province. The growth of the industry, and its ability to create jobs and contribute to the provincial
economy, would see a significant increase if private sector outlets were allowed true price parity and
competition. If private business sectors could purchase liquor wholesale, competition, not government
policy, would dictate the price and quantities sold. Additionally, removing the single government
distribution and warehousing system would create a more nimble, responsive system that could support
industry growth in line with demand. Consumers and the private sector would both win, and government
revenue would be protected and costs significantly reduced.
The revenue lost by removing LDB control from liquor retail could be generated through the income tax
and licensing of new distributors, warehousers, and retailers. The Chamber recognizes that HST and
these revenues alone will not cover the $877 million currently generated. As such, any potential new
liquor tax or duty collected should be collected via government’s mark up policy. This would allow:
BC’s liquor producers to be unfettered in their expansion to meet market demands;
Retail markets to set their own competitive prices; and
End consumers the option for lower prices and product selection.
This would expand the number and range of businesses in this industry, create jobs and increase the
contribution to the economy, and it would also assist the struggling on premise businesses.
The move to an HST has been fully supported by the Chamber as a boom for the provincial economy, but
a few sectors have not seen the direct benefits, for example, those in the natural resources, oil and gas or
export industries. The HST increased the end prices for consumers in the restaurant and bar sectors by
7%. The effect was a reported decline in revenue for the food and alcohol services sectors, with little to
no way for restaurant and bar owners to combat the increased pricing and customer aversion. One of the
most straightforward ways the government can assist these two sectors of the economy is to give them the
ability to purchase liquor directly from the producers at competitive prices, thereby allowing them to
dictate their own retail price and give customers an incentive to support these service sectors.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. amend the Liquor Distribution Act to allow private businesses to purchase and warehouse liquor at
wholesale prices directly from producers, in equal retail competition with GLS locations;
2. focus the role of the Liquor Distribution Branch on security issues such as underage consumption,
public safety, regulation, revenue collection, and promoting a viable and stable BC liquor industry;
and
3. ensure that any new liquor tax on purchases from producers places no constraints on future industry
growth and allows the retail industry to use price as a competitive tool.
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LIQUOR DISTRIBUTION BRANCH CHANGES TO SUPPORT INDUSTRY CHOICE FOR BC
(2010)
The licensing for all liquor providers is mandated by the Liquor Distribution Branch (LDB) in the
province of BC. When comparing the regulations that govern breweries, wineries and distilleries, the
inequities of the LDB regulations become more apparent and are somewhat disabling to particular
industries. These regulatory imbalances are industry specific, meaning that regulations are not
standardized across each facet of the industry.
The Chamber believes that the all sectors of this critical industry should have the opportunity to compete
on an open basis, to allow for fair and equitable opportunities to sell and distribute their products under
similar regulations granted to other sectors which are not impeded by the current regulatory environment,
such as the BC wine industry.
The Chamber believes that a particularly pertinent example of the negative impact the current system has
on new growth sectors of the economy is that of artisan distillers, a relatively small sector which is unable
to reach its full potential given the current regulatory system.
Background
BC has all of the necessary resources to become the premier artisan distilling region in Canada. At the
current time, there are artisan distillers located in Vernon, Penticton, Hornby Island, Cobble Hill,
Victoria, and Oyster River on Vancouver Island. Clean air and water, diversity of agricultural products
and a skilled workforce are all necessary components that BC has in abundance.
Craft spirits are handmade in pot stills, requiring continuous input from a master distiller. Although BC is
the Canadian leader in artisan distilling at present, the distillers are fighting an uphill battle due to the
LDB’s distribution and mark-up policies for spirits in general.
Current Regulation for the Sector
The licensing for distillers in BC is mandated by the Liquor Distribution Branch. Both Winery Licenses
and Distiller Licenses are controlled by the LDB, which has set separate yet very specific guidelines for
each of these industries. Referencing the BC Ministry documents, Winery Licenses-Terms and
Conditions and Brewer, Distiller and Agent Licenses-Terms and Conditions, the Distillers of BC are only
permitted to sell their products off-site to LDB stores and any other retail stores designated by the LDB,
provided they have an Agent’s License. Additionally, distillers can set aside an area within their
respective manufacturing facility as a sampling room where free samples can be served to the public, as
well as operate one on-site retail store provided they have an on-site operating agreement with the LDB.
Distillers under the current LDB regulations are:
Not permitted to sell directly to the food and beverage industry;
Not permitted to charge a fee for samples provided during tastings;
Not permitted to hosts events at the manufacturing facility;
Not permitted to set aside an outdoor area on their property to host patrons for outdoor picnic
events; and
Not permitted to operate a lounge.
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Why this Agricultural Industry should be developed.
Distillers provide an opportunity to develop a new green, sustainable industry providing new jobs,
enhanced agri-tourism and culinary tourism, while producing a product that is desired throughout world
markets. Artisan distilleries are striving to achieve a high-end culinary delight from agricultural side
products that otherwise are not marketable. Growers have very few secondary markets where they can
direct product that would otherwise be considered a profit loss or waste. As a result, the goods produced
by artisan distilleries provide an avenue where BC raw materials and/or waste agricultural products can
be processed to top shelf merchandise, thus producing a value-added industry contributing to the BC
economy.
Research by the Canadian Tourism Commission and the International Tourism Association shows that
culinary tourism is the fastest growing sector in the tourism industry. In fact, the BC Tourism Ministry is
in the process of facilitating the formation of the Food and Beverage Alliance of BC that would
complement the BC Artisan Distillers Guild. BC distillers will help to provide new destinations as their
craft, and the equipment they use, is not only extremely attractive, but also provides the patrons with a
unique environment where emotional bonds to a region are developed through the expertise exhibited
through traditional craftsmanship. Visitors and locals alike can witness how agricultural goods are being
turned into top shelf products that are being recognized internationally. Additionally, farmers and First
Nations groups who harvest wild fruit would benefit immediately.
Providing product directly to the customer
The LCB and its internal structure create difficulties in how the ‘small niche’ producers of distilled
products deliver their products to market. This results in extremely long delivery times for customers.
For example: If a local liquor store in the Okanagan orders a case of a registered product from one of the
Okanagan distilleries, the following three steps must occur for a legal sales transaction to take place:
1. The order will have to be placed with the LDB in Vancouver;
2. The LDB orders the one (1) case from the distillery in the Okanagan; and
3. The distillery has to physically ship the one (1) case to Vancouver to the LDB Warehouse. From
the Warehouse, the one (1) case will be shipped back to the Okanagan to the liquor store that
ordered the product.
This results in a 900km plus journey with a turnaround time of between four and nineteen weeks. This
reduces the choice available to the consumer, the ability of businesses to get their product to receptive
markets, and unnecessarily and arbitrarily imposes punitive costs on the producer. This is particularly
concerning given that this situation and process must be followed even when the liquor store ordering the
product is in the same community.
Keeping Local Industry Local
Keeping the opportunity for green business initiatives in communities throughout BC is of paramount
importance at a time when the local economies are only starting to emerge from the global economic
crisis. One BC distiller derives 65% of their products sales from their storefront location. In order to
create a financially viable operation, this distiller will either need to expand its wholesale operation or
relocate into a more densely populated centre to increase sales volumes. Such moves may cause artisan
distillers to relocate away from the smaller communities, which will be problematic for many of these
communities who are looking to continue to diversify for future economic stability in their regions.
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Conclusion
The BC wine industry was virtually non-existent before the current distribution policies were introduced
that now support and enable BC wineries to thrive. Today the wine industry has the privilege of
marketing its products via 60-70% of the available floor space in a BC Liquor Store. In speaking with
managers of BC Liquor stores, this is a dramatic shift from 20 years ago when the LDB regulations were
changed for the wine industry.
A strong artisan distilling industry is the next obvious step and would be a fitting compliment to the very
successful, internationally recognized wine sector. However, the current LDB regulations are restrictive
and debilitating to the growth of the artisan distilleries and a range of other producers in our province.
Although artisan distilleries in BC are in their infancy, as noted previously, the quality of distilled
products has already been recognized with numerous gold medals at international and North American
competitions. In addition, the production of 149 million litres of spirits in Canada in 2009 clearly
indicates there is an industry with which to work from.
THE CHAMBER RECOMMENDS
That the Provincial Government review the legislative and regulatory structure with respect to alcoholic
beverage manufacture, distribution and sale in BC to ensure fairness and balance among components of
the industry, including the artisan distillers.
LIQUOR REFORM POLICY (2010)
The Chamber believes that competitive markets, where various vendors can ensure efficiency by
competing on an open-basis, best serve the needs of BC’s businesses and consumers. If private
businesses are obligated to compete with government-run entities, those government-run entities should
not be able to abuse their privileges to distort competition.
However, the province’s Liquor Distribution Branch (LDB) is not only a government-run vendor of
alcohol, but it is also the entity that can unilaterally set the terms of the industry. The LDB, as the
monopolist in terms of sourcing for retailers, sets the wholesale prices for retailers, often at a rate far
above what the LDB itself pays. Unlike other provincial-government influenced sectors, such as ferries
or hydro, there is no regulator or overseer that can limit the risk of monopoly pricing.
Independent of market trends, the LDB can also impose higher prices, through “social reference pricing”
(SRP), in order to discourage drinking. However, SRP it has not necessarily been successful, as binge
drinking has seemingly not decreased. Consequently, while the goal of SRP has not been met, BC
consumers still end up paying higher prices than in most jurisdictions.
Sometimes, the LDB also acts in a manner that abuses its dominant position. For instance, the LDB can
use “cross-docking” to confiscate a retailer’s supply. The LDB can also prevent retailers from
transferring stock between locations. If a retailer has a complaint about LDB practices, there is no
industry regulator that can adequately respond to such complaints.
The Chamber believes that the current LDB model is broken, antiquated, and in need of reform. While
the LDB’s annual consumer visits have fallen 14% since 2004, the LDB’s operating expenses have risen
19% over the same time period. The fear is that the LDB will use its price-making authority to recover its
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potentially inefficient operating model, making British Columbian consumers and private retailers the
most impacted by paying higher than normal liquor prices.
In these tough economic times, where many private retailers and local business are trying hard to remain
profitable, the Chamber believes that some of the LDB’s anti-competitive practices and potential should
be curtailed.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. consider introducing a new model, or reforming the current model, for liquor distribution and retail in
the province that recognizes the efficiencies of a competitive free-market. Analyze and clearly
communicate if it costs government more to sell liquor itself than having liquor sold through private
liquor outlets;
2. address the conflicting motives between distribution (revenue) and control (regulation) which
currently exist by separating them under different ministries;
3. work towards reducing the distortion in price advantage that the Liquor Distribution Branch (LDB)
can avail itself of. For instance, the BC Government must make a major commitment to regulating
the LDB’s price-making power, in order to achieve more competitive pricing;
4. consider the elimination of unnecessary limitations and practices such as “cross-docking” and the
limit against retailers transferring between locations. Private retailers should also have a more robust
review and appeal mechanism for complaints against the LDB;
5. ensure full governance and operational transparency so that the public in BC can be assured that the
entity is well governed, well managed, and that issues such as pricing models accurately reflect true
costs; and
6. review the social reference pricing (SRP) initiative and consider whether it is actually meeting
government objectives. Based on the review, the BC Government should determine the future of
SRP.
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FRASER RIVER FLOOD MANAGEMENT (2012)
The Fraser River has always been a driving force in the economy of BC. Hundreds of thousands of
residents work on and around the river, or with businesses and industries that rely on this vital waterway.
Creating a comprehensive, long-term solution to flood management of the Fraser is a critical component
to maintaining Canada’s gateway to the Asia Pacific region.
Our elaborate system of dykes and pumps that protect farmland, industry, and residents is now utilized to
capacity, in large part due to changes in weather patterns and tidal levels that have affected the flow of the
River. It is time the Provincial and Federal government begins working with local governments and First
Nations to develop a proactive long-term strategy to maintain this powerful, harnessed river.
The Fraser River and its 13 main watersheds drain more than a quarter of the province and are home to
over 2.73 million people (67% of the province’s population). Beyond its geographic importance, this
basin is a vital component of Canada’s gateway to the Asia Pacific region. In addition to contributing a
full 80% of the provincial economic output and 65% of total household income, it also contains 21
million hectares of forest. The Fraser Basin‘s farms, ranches, and orchards comprise half of all BC's
agricultural lands; the Fraser Valley alone exceeds $1.4 billion in farm receipts. Eight major mines
located in the basin account for 60% of BC's metal mine production. In addition, the basin contributes
67% of total tourism revenue1. The volume of goods moving on the Fraser River rivals the volume of
goods transported on the St. Lawrence seaway; however, the amount spent maintaining the Fraser is a
fraction of that spent on the St Lawrence.
In order to avoid the very real threat of flooding, annual dyke maintenance, gravel and debris removal,
and regular dredging of the main channel of the Fraser River must be undertaken. These steps are also
critically necessary to ensure the river remains open and navigable to serve as a major transportation route
for shipping, commercial traffic, pleasure boating, and to further enhance the Pacific fishery.
The Province has decentralized responsibility of flood control to municipalities, regional districts, and
diking authorities, each with limited funds. However, authority for maintenance remains with a myriad of
Provincial and Federal ministries and departments. Work being done is geographically or purposively
isolated and not part of a comprehensive plan to address ongoing maintenance of a flood management
system for the Fraser Basin. Provincial ministries presently involved in flood control include the Solicitor
General, Ministry of Environment, Ministry of Energy and Mines, and the Ministry of Forest, Lands and
Natural Resources Operations.
A recent survey of Lower Fraser stakeholders indicates that dredging, siltation, gravel, as well as flood
mitigation and protection, are the top four pressing issues we currently face. Flood protection and habitat
loss were identified as the top issues that would benefit from collaboration2.
In a quantitative flood risk assessment for the City of Chilliwack completed in 2009, damage and loss
figures from a dyke breach scenario exceed $ 1 billion, not including post-event environmental or health
factors3. Chilliwack is one of 12 cities that share banks with the Fraser River.
1 The Fraser: A Canadian Heritage River, Fraser Basin Council in collaboration with the BC Ministry of Environment, March 2010
2 Lower Fraser River Collaborative Survey, Fraser Basin Council, November 2011
3 Quantitative Flood Risk Analysis, BGC Engineering Inc for the City of Chilliwack, BC Ministry of Environment, BC Ministry of
Transportation, Kinder Morgan Pipelines, Terasen Gas, Seabird Island Band, January 2009
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While natural shifts in river course and flow are anticipated, the effect of harnessing a river of this size
through development along its banks has at once prevented course shifts while also increasing the impacts
of modifications in flow. The economic impact on the provincial economy from a single event such as a
Chilliwack breach would well outstrip the cost of maintenance of the flood systems in the first year.
A climate change study in Prince George projected that Prince George’s average annual temperature
could warm by 1.6°C to 2.5°C by the 2050s4. Annual local precipitation is projected to increase by an
average of 3% to 10%, and more precipitation will likely fall as rain. Floods have buffeted Prince
George, the Northern Gateway, three times in the last five years. A flood risk and control study
commissioned by the City of Prince George following the 2008 ice jam flood identified 14 specific areas
of heightened risk along the Fraser and Nechako rivers5. The cost of maintenance and updating of the
existing systems was projected to be $42.5 million in 2009.
As a significant factor in Canada’s economic prosperity and the backbone of the Province, the Fraser
River must be maintained to ensure economic prosperity and growth.
THE CHAMBER RECOMMENDS
That the Provincial Government work with the Federal Government to:
1. work with municipalities and First Nations to create a comprehensive long-term plan for flood
protection and control on the Fraser within five years;
2. establish a long-term strategy for maintenance of the Fraser River flood control systems that includes
consideration for the growth and viability of the economies that are built around the river;
3. create and maintain a central dyking authority that will manage and support flood control along the
banks of the river; and
4. create and maintain funding agreements that will support the upgrading and maintenance of dyking,
dredging, navigation, and environmental stewardship along all areas of the Fraser.
4 2009: Adapting to Climate Change in Prince George: An overview of adaptation priorities, Picketts, I., Dyer, D., Curry, J., 2009
Flood Risk Evaluation and Flood Control Solutions Phase 2 – Final Report Executive Summary, Northwest Hydraulic Consultants for the City
of Prince George, November 2009
5
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BC’S COSTLY CARBON TAX (2012)
Summary
The last scheduled increase in the BC carbon tax goes into effect in July 2012. The Provincial
Government’s recent budget statement makes it clear that important decisions concerning the future of the
carbon tax will be made in the forthcoming months. Like everyone, the Chamber is strongly in favour of
working towards a clean environment; however, the carbon tax is doing extreme damage to the
competitiveness of many parts of the economy with little evidence to show how it is protecting the
environment.
Although the Carbon Tax was introduced as revenue neutral for the government, it has proven to be far
from revenue neutral for many British Columbians. Those who live in rural areas or colder parts of the
province, or businesses that compete or trade with other jurisdictions where there is no carbon tax, have
without question shouldered a greater burden.
In many cases, the tax already has, or threatens to displace industrial activity in the province. In February
2012, following the most recent provincial budget, the Globe and Mail reported that the province is
actually “providing more in tax breaks than it takes in through carbon-tax revenue.” The Globe reports
that “the carbon tax generates $960-million in revenues against $1.1-billion in tax breaks1.”
The Chamber agrees that a review of the carbon tax is in order.
Background
On 1 July 2008, the province of BC became the first jurisdiction in North America to implement a tax on
carbon.
The original $10 per tonne of carbon dioxide equivalent (CO2e) emissions in 2008 has steadily increased
and in July 2012 will rise to its final scheduled price of $30 per tonne.
It was believed that phasing in the tax would provide time to adjust and that other jurisdictions would
quickly follow BC’s lead. Today BC remains alone. No other government on the entire continent has
followed suit. Even the state of California, arguably the most environmentally conscious of the US states,
has rejected a broad based carbon tax like the one in BC.
“We are dancing alone,” says Jock Finlayson of the BC Council. “BC only makes up 1 percent of the
North American economy, and in general, our organization remains skeptical about the rationale and the
effectiveness of the tax.”
BC Greenhouse Growers Industry
There is little doubt that the growers’ industry has suffered the most from carbon tax plan. “This tax is
killing us,” says Linda Delli Santi, the executive director of the Greenhouse Growers Association. “A five
acre greenhouse operation will pay $50,000 a year in carbon tax. That rivals our yearly labour costs.
Our profit margins are already thin. Three or four smaller operations have already shutdown—others are
moving out of the province to Alberta and US to places like Nevada and Texas.”
1
http://www.theglobeandmail.com/news/national/british-columbia/bc-politics/bc-liberals-announce-review-of-provinces-carbontax/article2345753/
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“The decline in our industry will also affect other industries like the fertilizer business, the irrigation and
trucking industry in the lower mainland. One large operation in Ladner paid $600,000 in carbon tax last
year. We believe in a clean environment, but this is putting our livelihood and thousands of jobs in
danger,” she adds.
The Provincial Government recognized that the Carbon Tax had reduced the competitiveness and
sustainability of this industry and on April 3, 2012 announced that it would provide a onetime grant to
this industry of $7.6 million, which is the amount of Carbon Tax paid by this industry over the period of a
year. This action will help to maintain the industry in BC while the carbon tax is undergoing a review,
whereas if no action had been taken, many of the existing operators would have closed.
The Cement Industry
The economic damage done to the once vibrant BC cement industry is another victim of the carbon tax.
Since 2008, the industry has paid $20 million in carbon taxes while cement imports to the province have
increased from 4% to an unprecedented 23%. According to the Cement Association of Canada, cement
kilns at the Lehigh plant in Delta and the Lafarge plants in Kamloops and Richmond BC in 2011 were
running at only 50 to 70% capacity. The cement industry draws a direct line from declines in the industry
to the carbon tax2.
In a speech held in Kamloops in September 2011, Michael McSweeney, the president and CEO of the
Cement Association of Canada, clarified the challenge faced by the industry.
“Why? Because imported cement is not subject to the BC carbon tax. Foreign cement powder comes into
BC tax free.”
“This has meant rotating layoffs for hundreds of employees and termination or layoff notices for
contractors. Local mines, trucking lines and railways serving the kilns are also hurt. The negative
provincial economic impact runs in the 10s of millions of dollars. But most of all the impact of this is on
BC families - as they are the ones that have to bear the brunt of unemployment, while others are
employed making cement elsewhere in the world.”
Cross Border Gas Consumption
Different types of fossil fuels produce different levels of (CO2e) emissions and are taxed a different rates.
In July 2012, when the carbon tax on gasoline at the pumps will rise to 7.2 cents per litre, BC will have the
highest gas prices in Canada.
The Canadian Taxpayer’s Federation (CTF) in BC is calling for an end to carbon tax legislation in its
2012-2013 pre-budget submission. The CTF argues that the tax is not revenue neutral. Rising home
heating costs and gasoline prices place an unfair burden on lower income families. In rural areas, where
there are few public transport options and no access to cheap gas south of the border, the unfairness
remains an issue. The carbon tax costs drain disposable income from consumers and ripples throughout
the entire economy.
2
http://www.cement.ca/en/Newsroom/CAC-President-and-CEO-addresses-BC-Select-Standing-Committee-on-Finance-and-Government.html
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Public Opinion
A recent poll of a relatively small group (835) done for the Pembina Institute reported that 29% of those
polled showed strong support for “continued increases in the carbon tax after 2012. That is hardly the
majority of British Columbia. The real picture is that 51% of those asked preferred not to see an
increase.”
Conclusion
The Provincial Government has recognized that the carbon tax does affect the competitiveness and the
ability of industry to maintain and increase jobs. It has also taken action to mitigate the effects where it
can be shown that industries have been adversely affected.
The effects are mainly on manufacturing and processing industries and on commercial transport within
the province. Utilizing the same mechanisms as were used with the Greenhouse industry would help
maintain and encourage growth within BC. Furthermore, it would address a major concern that is
currently causing some industries to consider moving from BC or in cases where a company has
production facilities in more than one jurisdiction, to utilize facilities outside BC and importing the
product at a lesser cost. All these factors are to the detriment of the BC economy.
Many manufacturing industries that are exporting from BC have been significantly adversely affected by
this tax and have had their export volumes reduced.
THE CHAMBER RECOMMENDS
That the Provincial Government undergo a complete review of the carbon tax with the specific goal of
immediately relieving extreme pressure on not just the Agri-food industry, but on all industries. The
study should also address the cost that the tax is having on the BC economy and how it is a cascading tax
that is added at all levels of production, transportation and sale, thereby reducing the overall
competitiveness of the BC economy.
EXPLORING PUBLIC ENGAGEMENT ON MAJOR NEW TAXATION INITIATIVES (2012)
There is widespread agreement that a major reason for the rejection of the Harmonized Sales Tax (HST)
in BC was the lack of Provincial Government consultation before the HST’s implementation. Chambers
across BC have long lobbied for the implementation of an HST; a report published by the independent
HST Review Panel appointed by the Provincial Government states that, “virtually all economic analysis
finds the HST increases economic growth, productivity, wages and the quality of jobs.” Thus, there are
very strong arguments in favour of the HST. The problem is that the Provincial Government, in this case,
did not make these arguments before implementing the HST.
The rejection of the HST by voters in the recent referendum has been quite costly to the BC economy.
According the Independent Review Panel, by 2020 the HST would have added 24 000 jobs and 2.5 billion
dollars to BC’s economy. This has all been lost. Additionally, the Provincial Government is obligated to
pay $1.6 billion in HST transition assistance back to the Federal Government.
Going forward, let us take into consideration the valuable lessons learned from the demise of the
HST. Specifically, the Provincial Government and Federal Government should substantively engage the
public before the implementation of major new taxation initiatives.
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The Chamber recognizes that substantive consultation processes already exist in terms of identifying
public policy priorities involving taxation.
In addition to the Select Standing Committee on Finance and Government Services annual Budget
Consultations, the Provincial Government is undertaking a review on BC’s tax competitiveness and a
review of the BC Carbon Tax and has also recently undertaken a review of BC’s major industrial property
tax structure. However, these initiatives are not guided by any principles regarding outreach and more
importantly, no one is held accountable for the recommendations that arise from these processes.
The Chamber therefore believes that such engagement should be guided by best practices for effective
public engagement. As an example, the Chamber believes that the following core values could form a
basis for the design of such a stakeholder participation system:
Based on the belief that those who are affected by a decision have a right to be involved in the
decision-making process;
Includes the promise that the public's contribution will influence the decision;
Promotes sustainable decisions by recognizing and communicating the needs and interests of all
participants, including decision makers;
Seeks out and facilitates the involvement of those potentially affected by or interested in a
decision;
Seeks input from participants in designing how they participate;
Provides participants with the information they need to participate in a meaningful way; and
Communicates to participants how their input affected the decision.
THE CHAMBER RECOMMENDS
That the Provincial Government work with all stakeholders, both public and private, to explore the
creation of stakeholder engagement models that can be used during the proposal and implementation of
major taxation initiatives.
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CHANGES TO THE PROPERTY TRANSFER TAX (PTT) (2012)
The Property Transfer Tax affects affordable housing throughout the province of BC. The cost is often
repeated and imbedded in the ultimate cost passed on to consumers. The cost is demonstrated through
highest housing prices in the country per data provided by The Canadian Real Estate Association:
Canadian Provinces Average House Prices January 20121
Province
Average House Price
British Columbia
$532,000
Ontario
$359,000
Alberta
$343,000
Quebec
$259,000
Saskatchewan
$261,000
Newfoundland/Labrador
$274,000
Manitoba
$228,000
Nova Scotia
$211,000
New Brunswick
$149,000
Prince Edward Island
$146,000
Canadian Average
$348,000
The Canadian Chamber of Commerce is on record that affordable housing for families is a major factor in
creating attractive, livable, and competitive cities. Although, we have seen a strong real estate market, the
Chamber believes it can be stronger. Affordable housing is important to the business community, as it is
a strong selling point for attracting and retaining employees. Business must remain competitive and the
cost of housing is a major source of wage pressure. Any additional wage costs are passed to consumers
and increased consumer costs will only encourage buyers to search alternatives (cross border shopping,
etc.).
The Property Transfer Tax (PTT) places an unfair burden on homebuyers because you are paying a high
tax for a service with minimal cost; you are paying a high tax in a market where the housing prices are the
highest. Until elimination is possible, which many stakeholder groups including the Canadian Home
Builders Association, Urban Development Institute, Canadian Real Estate Association, and the BC Real
Estate Association agree is the right approach, the following recommendations are intended to ensure a
fair approach to the PTT for homebuyers now and in the future.
The Chamber understands that immediate elimination is not fiscally possible. The budget will not allow
any measures that reduce tax revenues. Therefore, any proposals to reduce taxes must have compensating
measures to maintain a balanced budget.
While BCREA’s recommendation to increase the 1% PTT threshold will result in less PTT revenue for
the provincial government, it would put the dream of homeownership within reach for more families
throughout BC and free up others to undertake home renovations or other spending.
Based on 2010 BC Assessment data, increasing the 1% PTT threshold to $525,000 could have resulted in
a decrease in Provincial Government revenues of approximately $158 million. That figure represents less
1 http://www.crea.ca/statistics
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than 1% of the anticipated taxation revenue for fiscal year 2010-2011.
How can we maintain BC as a preferred destination for investment? Provincial tax competitiveness is a
cornerstone of the current government’s policy and considerable reductions have been made in corporate
and personal income tax rates. However, the PTT stands out in a negative way. The effectiveness of low
personal income taxes to attract and retain workers is offset by the high cost of owning a home, which is
intensified by the highest provincial property transfer tax in Canada.
Any reduction in the PTT will ultimately decrease the average house price in BC. Any decrease in the
housing prices will make BC relatively more attractive when comparing to other provinces. As housing
prices are a consideration to those immigrating to BC, any decrease will positively impact these buying
decisions. If BC can make its housing market more attractive, we can be more successful in attracting
people to the province which will positively impact growth in the housing market and corresponding
growth in the economy (ancillary purchases, income taxes, jobs associated with new housing starts).
Despite significant changes in the housing market, the structure of the PTT has not changed since the tax
was introduced in 1987. At that time the average home price was $101,916 and the 2% portion of the tax
was expected to apply to only 5% of sales. For many years, the 2% portion of the tax has applied to most
homes sold in the province.
Indexing the 1% threshold is a critical step, because it will ensure that the PTT has the same impact on
current and future homebuyers. Although the PTT applies to sales of new and existing homes, the New
Housing Price Index provides a reasonable proxy for all home sales in BC.
Comparison of Current and Proposed PTT Structures2
Current
1% up to $200,000
Structure
2% on the remainder above $200,000
$767.3 million
Revenue
Recommended
1% up to $525,000
2% on the remainder above $525,000
$609.3 million
2 Revenue estimates are based on calendar year 2010 transactions and are net of First-Time Home Buyer exemptions.
Source: BCREA
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Homebuyers and business throughout BC will benefit significantly from an increased 1% PTT threshold.
Based on 2010 BC Assessment data, more than 70,000 homebuyers—or about 71%—would have paid
less PTT if the 1% threshold had been increased to $525,000.
Housing is a significant economic contributor as the average housing transaction in BC is estimated to
generate nearly $60,000 in expenditures. This is well above the Canadian figure and the taxes generated
by each sale easily exceed every other jurisdiction. If housing transactions increase from lower PTT rates
then there will be an increase in sales tax collected on the those expenditures.
Estimated Expenditures Generated by the Average Housing Transaction Canada and Regions,
20093
Canada
Atlantic
QC
ON
Prairies
BC
2,400
2,150
2,325
2,375
2,575
2,350
General
Household Purchases
4,225
5,300
4,750
5,550
6,650
Furniture and appliances 5,300
2,475
2,350
3,175
2,325
1,875
2,750
Moving costs
9,400
6,725
10,425
8,800
9,600
10,400
Renovations
4
18,200
9,900
12,275
16,950
14,025
28,475
Services
4,575
1,725
2,500
5,150
1,350
9,050
Taxes (excluding GST)
42,350
27,075
36,000
40,350
34,975
59,675
Total
Sales of existing homes also drive job creation, with BC leading all other provinces. According to Altus
Group Economic Consulting, the sale and purchase of MLS® homes in BC generates 34,595 direct and
indirect jobs—nearly 1 in 65 jobs across the entire BC economy. This is much higher than the national
average of 1 in 109 jobs. These jobs will only increase with further new homes that may be built from a
lower PTT which will increase the amount of Provincial Income taxes collected.
THE CHAMBER RECOMMENDS
That the Provincial Government;
1. increase the 1% PTT threshold from $200,000 to $525,000, with 2% applying to the remainder of the
fair market value; and
2. index the 1% PTT threshold of $525,000 using Statistics Canada’s New Housing Price, and make
adjustments annually.
3 Source: Altus Group Economic Consulting based on Statistics Canada Input-Output Model
4 Financial, legal, real estate appraisal, survey, other professionals
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A SUSTAINABLE FISCAL POLICY FOR BRITISH COLUMBIA (2010)
Over the past few years, the Provincial Government under the direction of the Ministry of Finance has
made credible and very laudable strides in balancing its budget while maintaining many of the services
that British Columbians both expect and rely on. However, the onset of the global financial crisis has
demonstrated that external global realities will have a direct impact on the revenues of government (at the
Provincial and Federal levels) and, therefore, on the ability of government to fund services and programs
relied on by many British Columbians.
The Chamber believes that there is an immediate need for Government to undertake a focused review of
its approach to fiscal prudence to ensure that BC remains the envy of the world. This requires specific
focus on the foundations of sound fiscal management, spending, debt, and taxation.
Spending
As we strive to ensure that all programs and services that rely to some degree on government funding are
provided certainty and security around their funding arrangements, the Chamber believes that there is a
need for fundamental reform of the manner in which Government approaches funding.
This is particularly relevant given the fact that we have seen a marked increase in Government program
spending over the past five years in BC. The figures below (in millions of dollars) illustrate the spending
per year:
Total for BC:
2001-2002:
2004-2005:
2008-2009:
27,923
28,340
36,106 (Increases have been roughly 1.5 – 2 M per year since 2005)
Per Capita:
2001-2002:
2004-2005:
2008-2009:
7,917 3
7,235
8,052
While the Chamber recognizes that much of the current funding goes towards maintaining essential
services, the current fiscal reality has highlighted the need for all spending needs to have measurable
outcomes and avoid unsustainable situations that both increase the deficit and contribute to provincial
debt.
Despite this strong foundation, BC is a small, open trading jurisdiction that has experienced similar
economic impacts as other parts of the industrial world. There have been dramatic reductions in
provincial revenue and as a result the Government has been forced to table a deficit budget in addition to
projecting continued deficits through to 2013-4. This has resulted in the Provincial Government
announcing significant cuts in a range of areas; cuts which have been greeted with concern in the public
arena. The Chamber believes that much of this opposition is a direct result of increases in ongoing, openended program spending that have come with no achievable and measureable outcomes. This has led to a
sense of entitlement from many recipients of public money that feeds an unsustainable cycle. Increases in
public spending lead to increased expectations, which in turn lead to increased demand.
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This does not mean that the Chamber is calling on government to arbitrarily reduce or eliminate program
spending to organizations and agencies that provide critical services to communities. Indeed the Chamber
has been clear - provision of services on a cost effective basis will often mean that these services should
be provided by independent agencies. With that said, there is little public information and transparency
regarding the renewal provisions of these programs, both in terms of frequency and in terms of
measurable outcomes. As such it seems clear to the Chamber, reform over the provision of government
funding requires fundamental reform to ensure that that the public interest is measured against the public
purses ability to pay.
The BC Government projected a balanced budget by 2013 when Budget 2010 was delivered. The keys to
achieving this must be through spending restraint and not through tax increases. Given the current
economic climate following the crisis of 2008- 2009, the Chamber is calling for prudence and selectivity
for future provincial spending projects. The Chamber accepts that some investments in the recovery
climate of 2010 will increase debt, providing that the increased debt brings a good return on the
investment and allows for additional program spending during times of relative surplus. Reducing the
deficit can be achieved by the Provincial Government selectively pursuing spending programs and
infrastructure projects to ensure that public money is being used efficiently to create growth. This will
help to decrease the deficit more quickly and ensure that the total provincial debt does not continue to
climb.
Crown Corporations
The Chamber recognizes that many Crown Corporations in BC provide critical services for British
Columbians (insurance for example); however, the fact that these are important services does not
necessitate that these services should be provided by a public entity, nor that this entity provides a better,
more cost sensitive approach than that which would be provided by a private sector organization
operating under agreement with the province.
The Comptroller General’s review of the governance model of Translink and BC Ferries was the
recognition by the Provincial Government that there is a need to review organizations that provide critical
services. At its core, this review was focused on taxpayer interest in the current structures of these
organizations. The Chamber believes that this principle should be extended to a review of all other
Crown Corporations in order to assess whether the services provided by these entities can be provided
more cost effectively in a manner that maintains service levels and public trust, through the transfer
(either in whole or in part) of a public organization into private ownership or operation.
For too long, Crown Corporations have enshrined monopolies in areas that are not the remit of
government but are rightly the role of the market to ensure choice, innovation, and competition. It is the
belief of the Chamber that the principle tenet of government must be to focus its activities on providing
services and providing the security that is part of the inherent transfer of trust and responsibility between
the people and their government. As a stark example, to currently participate in the retail business of
liquor and insurance sale does not meet this central tenet and compromises choice and open competitive
markets - both of these being principle and guiding philosophies of the current Provincial Governemnt.
Debt
The Chamber appreciates that much of the increases to the provincial debt have derived from the
Provincial Government’s commitment to a significant capital infrastructure investment program. The
Chamber continues to support the need to address the significant investment deficit that is the result of a
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long history of under investment in capital infrastructure. However, the current economic climate
necessitates that future investments also mitigate costs for future generations.
The effects of the global economic downturn and current projected increases in program and
infrastructure expenditures contained in Budget 2010 will greatly increase the provincial debt.
Provincial Debt
($ million)
Sept
Update
Updated
Forecast
Budget
Estimate
2010/11
Plan
Plan
2011/2012 2012/2013
Government direct operating debt
7,467
6,182
7,511
8,209
7,838
Taxpayer-supported debt
30,593
29,093
33,748
36,720
38,329
Total debt
42,332
41,318
47,757
52,363
55,862
Government direct operating debt4.0%
to-GDP ratio
3.3%
3.8%
4.0%
3.6%
Taxpayer-supported debt-to-GDP
16.2%
ratio
15.5%
17.2%
17.9%
17.8%
Total debt-to GDP ratio
22.0%
24.3%
25.5%
25.9%
22.4%
The provincial debt burden is expected to continue to climb from $42,332 billion in 2010 to $55,862
billion by 2012/13. Growth in the taxpayer-supported debt burden in excess of 30% is of considerable
concern to the Chamber, especially without a legislated plan to reduce the burden for future generations.
A key measurement of debt is the taxpayer supporter debt to GDP ratio. This covers the amount of debt
that is born by taxpayers in relation to the amount of money the province earns from economic activity.
This will climb from 15.5% in March 2010 to 17.9% in 2011/12.
Budget 2010 reaffirms the commitment that once the province returns to balanced budgets in 2013, all
surpluses will be dedicated to paying down the province’s operating debt (should this be eliminating the
province’s operating deficit). This will be important to reduce one contributing factor to the overall debt,
but it will not have any effect on the total debt itself; which is the main area of Chamber concern.
Furthermore, waiting three years to begin such payments means that the taxpayer-supported debt will
continue to rise, mainly due to the significant infrastructure investments planned over the next three years.
Taxation
BC has one of the lowest tax rates for both personal and corporate income in Canada, which is a direct
result of action taken by the Provincial Government. The Chamber is very supportive of this initiative,
and looks forward to 2012 when there will be further reductions in this area as outlined by Budget 2010.
Indeed by 2012 BC will have a personal income tax rate that means anybody earning $118,000 or less in
BC will have the lowest personal income tax rates in Canada (if you earn more than $118,000 you will
have the second lowest). BC’s corporate income tax rates will be 10%, meaning it will have a combined
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Provincial/Federal rate of 25%, the lowest in Canada and joint lowest in the G8 for small business
(defined as $500,000 or less annual revenue), and the small business tax rate will be zero.
The combination of these tax reductions with the introduction of HST will see the province become one
of the most competitive taxation jurisdictions in the world. The Chamber believes that it is critical that
government not only ensure that these tax cuts are fully implemented within the timetable announced but
that government continue to review our competitive position in relation to key competing markets on an
ongoing basis. BC currently has a competitive advantage. The Chamber does not believe that tax cuts are
needed beyond those already announced but should other jurisdictions reduce taxes then it is incumbent
on the Provincial Government to take the necessary steps to maintain our comparative advantage.
Should further tax cuts become necessary, the Chamber believes that it is important that these cuts focus
on personal and business income taxes, which act as an impediment to investment, work, and savings.
While the Chamber does not believe that further tax cuts are either fiscally feasible or required to
maintain our competitive position, the Chamber does maintain that there is a need to fundamentally
reform one key area of taxation that is having a significant impact on our competiveness and is unfairly
burdening business. This area of taxation is property tax.
The Chamber believes that the government’s cautious approach to provincial revenue projections, as
outlined in Budget 2010, is an overly prudent one. In order to reduce the taxpayers’ exposure to financial
risk, the government will need to ensure that the deficit is reduced in advance of the 2013 projection.
This can be achieved through a less cautious approach to the growth of provincial revenue and by
pursuing provincial program and infrastructure spending on a selective basis. BC has not been immune to
the global recession nor will it be immune to increases in international interest rates. Pursuing program
and infrastructure spending in 2010 that will not directly create economic growth will unduly expose
British Columbians to certain financial risk. Judicious government spending and a less cautious approach
to provincial revenue growth can reduce the deficit before 2013 and limit the growth of provincial debt.
THE CHAMBER RECOMMENDS
That the Provincial Government:
Spending
1. Starting in fiscal 2011 adopt a Smart Spending Program that:
i.
ii.
introduces a coordinated approach to government spending by ensuring increases are within the
range of growth in real GDP across all government spending;
continue to review all direct program spending and operating costs on a four-year cycle that does
not coincide with an election year to determine the cost-effectiveness of government spending;
Crown Corporations
2. Introduce a taxpayer lens which would allow government to review, on a cycle that is in keeping with
the fundamental planning of the crown corporation, all Crown holdings to see whether taxpayers
interests are better served by transferring control, in whole or in part, of a publicly owned and
operated enterprise to the private sector;
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Debt
3. Once balanced budgets are achieved, legislate a requirement that the provincial budget dedicate at
least 50% of surpluses directly to debt repayment;
4. Maintain this requirement until the total provincial taxpayer supported debt-to-GDP ratio is reduced
to 10%; and
Taxation
5. Continue with their plans to make BC one of the most tax competitive regions in the world by
implement the plans laid in Budget 2010 to further reduce personal and corporate income tax and to
the rates set for 2012.
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AMEND THE WOOD FIRST ACT (2012)
Summary
It is unacceptable for the BC Government to legislate a preference for one building material, in this case
wood, by excluding alternative, viable and competitive, made-in-BC and or Canada materials, from the
BC publicly funded construction market. The objective of the proposed amendments is to remove
legislated material preference and to differentiate marketing and promotion, from prescriptive
procurement practices.
Preamble / Background Information
The core problem is that through the Wood First Act, the BC Government has legislated as a requirement,
“the use of wood as the primary building material in all provincially funded buildings”. The Wood First
Act is contrary to the performance and procurement policies and methods currently governed by the BC
Government’s Capital Asset Management Framework (CAMF), which actively promotes and ensures
openness, fairness, transparency, and inclusiveness. The Wood First Act eliminates these fundamental
equalities within our provincially funded built environment.
Wood, concrete, steel, bricks, glass, aluminum, etc., are common building components used in the
construction of most structures in BC. Each product is used where it is technically, environmentally,
economically, and practically the best product for the job. Most buildings in BC use a blend of these
components, the mix being determined by a broad array of professionals and skilled craftsmen-engineers,
architects, designers, contractors, numerous trade professionals; even fire chiefs, insurance agents,
accountants, lawyers, and bankers have input.
The National Building Code of Canada (NBC) serves as the basis for specifying materials, testing, design,
and construction. The NBC and British Columbia’s Building Code (BCBC) are objective-based codes
intended to facilitate the selection and use of any and all materials that satisfy its stated objectives and
performance requirements. The codes are specifically intended not to limit the application and use of any
material, component, or assembly. The Wood First Act undermines the effectiveness and credibility of
the National and BC Building Codes. It undermines the spirit of competition to achieve higher
performances through research and development. It subordinates and marginalizes other preferred
properties not characterized by wood.
This proposed initiative, to amend the Wood First Act, is based upon the fact that the BCBC already
provides the needed flexibility for design professionals to appropriately select construction materials. The
very fact that our Building Code prescribes certain conditions under which construction materials,
including wood, cannot be used is evidence that no material is always the most appropriate choice.
Publicly funded construction should respect our BC Building Code, its philosophy for development,
content, application, and credibility. A policy for preferential choice of a particular building material
does not respect these.
The Wood First Act limits and undermines the freedom of design professionals and experienced
contractors to select the most appropriate construction material for its intended function and service.
Legislation that compels or influences design professionals to specify “the preferred” product for use,
where it is not suited to the function or service, has attendant risks. Consequences include an increased
likelihood of non-performance, premature failure, and higher initial costs for construction or ongoing
costs for repair and maintenance. The selection of appropriate building materials must remain the
purview of those qualified and licensed to practice in the area of building design and construction. The
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BC building environment is founded on this principle - choose the right building material for the right
job.
It is important to state that this resolution to amend the Wood First Act is not to oppose the wood industry
or to limit any level of government in the promotion of wood products anywhere. All Chambers across
BC support a healthy wood industry. The foundation of the policy proposal is that it is neither good nor
acceptable public policy for our BC Government to legislate a procurement preference for one building
material, in this case wood, by excluding alternative, viable, and competitive BC construction materials.
All construction materials should operate on a level playing field and in a competitive, fair, and open
economic environment.
a) Costs Incurred By Business
The reality of legislated preference and gain for the wood industry at the expense of other supplier
industries does not create any net new jobs. The only result is the loss of economic activity and job loss
within other BC industries.
b) Solution
The solution is to amend the Wood First Act through a motion passed in the BC legislature.
Conclusion
No construction material or assembly should be awarded a legislated priority over others. Let
professional judgment, practical application, fair competition, and respect for our Building Codes system
determine the best materials for the application and service. To achieve these goals, the BC Wood First
Act must be amended.
Implementing Organization
The Chamber recommends that the Provincial Government amend the Wood First Act in a manner that
eliminates the legislated preference for wood as a primary building material in all provincially funded
buildings, and takes away the authority of the Forestry Minister, to prescribe and advise on the form and
content and arrangements for the design and construction of provincially funded buildings.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. revise Section 2, Purpose: from “requiring the use of wood as the primary building material in all
new provincially funded buildings” to “The purpose of this Act is to facilitate and promote the culture
of wood through the marketing and promotion of wood as a building material, consistent with the
British Columbia Building Code”; and
2. strike Section 3 (b) & (c) which empowers the prescriptive interference of the Forestry Minister in the
building procurement process. The Forestry Minister has been given the legal authority to (b) advise
on the form and content of agreements and other arrangements for the design or construction of
provincially funded buildings: (c) carry out prescribed responsibilities.
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THE FUTURE OF THE FOREST INDUSTRY (2010)
The forest industry continues to be an important contributor to the province’s economy. During normal
economic conditions, it sells approximately $18 billion of products annually, contributes about $4 billion
to Government revenue each year, and employs more than 200,000 British Columbians.
In recent years, the Provincial Government has made significant changes to forest policy, intended to
diversify the forest sector, enhance its competitiveness, and improve the regulatory environment in which
it operates. The Government is to be complimented for many of these initiatives, as well as its ongoing
efforts to strengthen the sector.
Ongoing efforts are necessary because the industry still faces very significant challenges that policy
changes to date will not overcome. Some of these challenges, such as the global economic downturn that
has significantly reduced demand for BC forest products and adversely impacted the people, communities
and businesses that depend on the industry is, hopefully, shorter term in nature. Other challenges are of a
different nature, and include the Mountain Pine Beetle (MPB) devastation in the Interior, working within
the framework of the Softwood Lumber Agreement with the United States (SLA), periodic strengthening
of the Canadian dollar that adversely affects exports, marginal investment returns, increasing demands on
the forestry land base and, on the Coast, inadequate capital investment and a changing timber profile with
increasing emphasis on second growth and hemlock.
The complexity of these challenges is compounded by the fact that there are distinct forest industries
within the province both on a regional and product basis. Regionally, there is a coastal industry and an
interior industry – each managing similar but facing very different threats and opportunities to the success
of the respective regions. The Interior could be seen as at least two separate industries, divided into a
southern industry that has many of the same issues as the coast, and a northern industry that is dealing
with the mountain pine beetle (MPB) epidemic, and, for some policy solutions, should be further
subdivided.
The industry is also divided into important product segments. There is a logging and forest management
segment with many small, non-integrated firms. There is a primary – or sawmilling – industry that breaks
down logs into lumber and residual products. This sawmilling sector is the single largest component of
the industry’s manufacturing sector. In addition, however, there is a very significant secondary industry
in value-added wood products and in pulp and paper. The pulp and paper industry depends on the
primary breakdown industry for most of its fibre supply in the form of chips; the primary industry relies
on the pulp and paper sector for important revenue from the purchase of those residual products.
Although bioenergy has been a part of the established forest industry for some time, a bioenergy industry
independent of established sawmills and pulp and paper mills is emerging and growing, presenting both
opportunities for greater utilization of our forests, jobs and economic diversity, as well as challenges in
integrating this sector into the established industry without undermining the stability of the existing
industry.
There is no one solution that will help all industry types but it is clear that more change is needed to
ensure the province’s forest industry can be globally competitive and capable of generating the returns on
capital necessary to support reinvestment.
To its credit, the Provincial Government continues to work toward solutions for these ongoing issues. In
January 2008, it established the Working Roundtable on Forestry. In March 2009, the Roundtable issued
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its report, Moving Toward a High Value, Globally Competitive, Sustainable Forest Industry. In 2009, the
government recommitted to a commercial forest reserve, issued a discussion paper on being a world
leader in growing trees and a discussion paper on promoting further manufacturing of forest products in
BC. The government has begun to implement the Roundtable’s recommendations and is pursuing
additional short and medium term solutions.
The Interior
Sawmills in the Interior are some of the lowest cost producers of commodity lumber in the world. The
Interior has undergone consolidation in recent years, and invested massive amounts of capital to upgrade
sawmill technologies. This has been required in order to lower unit production costs in the face of lumber
duties arising from the Softwood Lumber Dispute with the US (SLD) that preceded the SLA and to
increase the manufacturing efficiencies necessary to effectively saw MPB affected timber. The
government’s recent market-based policy changes, combined with new tenure offerings, have encouraged
this investment in lumber as well as in other products such as OSB and wood pellets.
The unprecedented MPB infestation continues to present the single largest forestry challenge to
government, industry and Interior communities. However, because of improved understanding of the
“shelf life” of attacked trees for lumber production, the policy choices today are different from what they
were only a year or so ago. Research has shown that deterioration rates of attacked trees are slower, that
it varies by area and, due to new mill technology, lumber recovery is higher than previously thought.
While this shelf life was previously thought to be only about 3 years, it is now considered to be 9 to 15
years. This means that the Interior lumber industry will have a larger viable supply of timber over a
longer period of time than previously recognized. As well, the non-sawlog harvest and roadside residue
volumes available for use will be significant as the sawlog of beetle killed timber continues. Although the
industry and communities continue to face significant challenges coping with the MPB issue, government
policy must adapt to these developments.
It is reasonable to continue development of government policy that enables industry and communities to
adapt and diversify, but a longer time scale and, following economic recovery, a less radical, more
gradual drop in medium term timber supply and lumber output should be the basis of this policy in many
cases. In regions where the solid wood sector will be dramatically reduced, policies need to be developed
to promote diversification and access to fibre that will stimulate economic development.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. maintain the competitiveness of the lumber sector. Policies should facilitate the efficient and
economic use of the affected timber through:
i.
A continuing effort to streamline regulatory systems and approval processes;
ii.
Further enhance market-driven industry rationalization; and
iii.
Ensuring the stumpage system reflects and responds to the market, and to updated and
moderated projections regarding the extent and timing of the decline in the quantity and value
of this timber and the products that can be produced from it;
2. encourage alternative forest product uses. Policies should encourage uses for residual chips and other
by-products that are being generated from pine beetle harvesting and lumber production, which could
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include energy generation and alternative wood products as well as ongoing supply for the pulp and
paper sector. Similarly, after taking into account that opportunities for lumber production will
continue for a longer period than previously forecast, policies should encourage alternative uses for
timber that can’t be converted to lumber. In both cases, the primary target for these policies and new
uses should be roadside debris and standing dead timber, as these are significant sources of fibre that,
if used in alternative products, should not adversely affect supply for existing forest products;
3. address forest protection. Policies should continue to address forest fire hazards that will increase to
the extent that affected timber cannot be utilized;
4. encourage and facilitate new forest investment. In light of the increased harvest levels, policies
should, through innovative tenure arrangements, as well as through encouraging more traditional
investment, enable the massive silviculture effort and new forest management initiatives that will be
required to generate a new, healthy forest that will be economically viable in the long term;
5. revise timber supply projections. Previously projected severe reductions in short and medium term
allowable annual harvests in MPB attacked areas should be revised to reflect the evidence of
increased shelf life of this timber, which will avoid unnecessary economic hardship to communities
and enable mills to financially justify investment in innovative technologies that will allow them to
utilize the damaged timber over a longer time frame; and
6. promote new opportunities without undermining existing rights. The foregoing polices should
promote new opportunities, uses and investment without undermining existing rights by, in part,
encouraging private sector solutions that do not require new rights to be issued by government or,
where new rights are issued by government, by avoiding the creation of overlapping tenures on the
same land base.
The Coastal Industry
The Coastal Forest Industry, which encompasses the West Coast from Prince Rupert to Southern
Vancouver Island, is going through a massive transition. On the southern coast, harvesting levels have
declined for a number of reasons:
The economics of operating on the coast have become increasingly difficult because of:
o the legacy of the Forest Practices Code;
o after making a significant effort to replace the Code with forest practices rules that are
more results-based, innovative and cost competitive, the government is now adding
costly “ecosystem-based” management requirements on top of the requirements of its
new forest practices rules; and
o access to much of the available timber is in remote areas;
Areas of high value accessible timber have been put into Protected Areas and Parks through
environmental and aboriginal pressures;
Global competition and product substitution has radically reduced the market share and
profitability of coastal forest products such as softwood pulp and hemlock lumber;
Low returns on investment have prevented capital reinvestment in old, inefficient manufacturing
facilities resulting in widespread closures of sawmills and pulp mills;
Lack of reinvestment has resulted in high labour costs and lower productivity levels compared
with other competing regions;
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Stumpage paid to the government has not reflected the underlying value of the lower grades of
timber;
A fibre supply that no longer fits the traditional model of creating lumber from old growth stands
of timber; and
The SLA has restricted market access for coastal lumber to the US.
These are reasons why the coastal industry is not the vibrant business it was 25-30 years ago. While
government has made efforts to invoke policy to resolve some of these issues through its revitalization
strategy, the industry continues to languish behind the Interior in generating economic returns sufficient
to bring about re-investment. Harvesting levels continue to drop and sawmills continue to close. The
profile of the timber harvest is changing from the traditional source of old growth timber to smaller
diameter, second growth forests (similar in size to the Interior). As such, older mills have closed because
of the inability to efficiently process the smaller logs with much of this supply being exported to the
United States for processing. This is because the SLD effectively blocked, or severely restricted, market
access to the US from any new coastal small log mill. These issues have not disappeared with the SLA.
For the coastal industry to prosper in the future, government needs to help create a climate that will make
the industry competitive in the global marketplace, foster the development of new value-added products,
encourage new entrants into the industry, and open competitive access to the timber supply. If a new
coastal model is to be successful, manufacturers/licensees need to look at focusing on new manufacturing
technologies and extracting the maximum value, or margin, from the timber resource. Government can
aid in developing research chairs to foster new product development. At the same time, small business
should be encouraged and have the ability to access timber resources to supply large manufacturers and to
create small business opportunities. This will enhance employment stability in resource communities and
bring about increased economic development.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. create incentives for new entrants and existing firms to invest capital in manufacturing facilities
aimed at making products from second growth timber. Such incentives would include investment tax
credits on plant and equipment purchases, employment incentives, lower municipal taxation, and
reduced logging tax rates;
2. apply similar incentives to the harvesting sector in an effort to encourage innovation to reduce the
high cost of getting fibre/logs to market; and
3. foster diversification and increased markets for logs through competitive bids and new tenure
opportunities or diversification. Encourage the extraction of lower value timber from cut blocks
through stumpage rates that reflect the market value of lower value timber or other incentives to fully
utilize the coastal timber profile.
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In addition to these region-specific issues and recommendations, there are actions the Provincial
Government can take on matters having province-wide application, including the following:
Forestry Revitalization Timber, Including BC Timber Sales (BCTS)
With the implementation of the Forestry Revitalization Act, about 20% of the allowable annual cut held
by major licenses was taken back for redistribution to First Nations, community forests, and the
competitive timber sales program under BCTS.
Since BCTS, the new First Nations and community licensees have not been accustomed to operating
programs to develop and harvest this amount of timber and there have been difficulties accessing timber
that was available in the past.
Together with previously allotted volumes, BCTS is now responsible for about 20% of the Crown timber
in BC. No other single entity controls this much of the province’s timber harvest. This represents a
major source of work for timber harvesters and a major source of fibre supply for manufacturing
facilities. In addition, with the government implementing market-based pricing for stumpage, bids on
BCTS timber influence the stumpage that is paid on much of the rest of the provincial timber harvest. It
is therefore essential that the BCTS program operate on a commercial basis.
Rather than acting as a regulator or policy maker, its focus should be on the needs of the market for wood.
In acting this role it should not be influenced by issues related to impacts on government revenue. Being
a regulatory and policy arm is the legitimate role of the Provincial Government and the Ministry of
Forests and Ranges, not an organization with a mandate to get wood into the marketplace. However, in a
recent reorganization of the Ministry of Forests, BCTS has been re-integrated into the Ministry and its
formerly independent Assistant Deputy Minister is now also responsible for the Ministry’s field
operations. Rather than becoming more independent, BCTS may become subject to more bureaucratic
constraints imposed by government objectives and goals.
As well, BCTS is not tendering the volume of timber annually, in conjunction with what was taken-back
by the Government under the Bill 28 plan. This has created less tender opportunities for BCTS
registrants and limited the amount of timber available for harvest. It also distorts the influence of BCTS
bids on stumpage for other tenures because it does not include the low value, high cost wood that other
licensees must harvest. Further distortion occurs because government does not permit circumstances
where BCTS receives no bids on wood it offers for sale to be treated as evidence of low market values in
the stumpage system.
In order for BCTS and those depending on it to make wood available in the marketplace to succeed, it
must have a mandate that requires clear performance and accountability measures, cost control, and the
flexibility to pursue a business-like vision.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. assist new tenure holders such as First Nations and communities to facilitate development and
harvesting of their tenures and develop mechanisms to put up competitively bid sales on these tenures
that could possibly be included as additional evidence of market value in the stumpage system;
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2. not subsume the BC Timber Sales Program into the government’s regulatory and policy arm but,
rather, must as an independent enterprise, provide:
i. As its first priority, a credible reference point for costs and pricing of timber harvested from
public land in BC; and
ii. As its second priority, be a reliable and consistent supply of timber under all market conditions
through open and competitive auctions, subject to meeting key requirement of being the
reference for cost and price.
First Nations
In addition to being new tenure holders, First Nations are involved in the development and harvesting of
other tenures as a result of their aboriginal rights and the related duty of government to consult and, in
appropriate circumstances, accommodate First Nations. The timely fulfillment of this duty is integral to
efficient forest operations on these other tenures and it is also necessary for First Nations to have a greater
hand in being part of the industry. The Provincial Government and First Nations have made significant
efforts to enter into agreements that improve the consultation and accommodation process.
However, not all First Nations have entered into these agreements and more recent versions of these
agreements seem to be less beneficial to ensuring an efficient process and certainty of outcome. Further,
government has recently entered into shared decision-making arrangements with First Nations, whereby
the First Nation can, jointly with government, make decisions that affect the size and nature of forest
operations of other tenure holders.
Consultation will be improved for all concerned if it follows the principles established by the Supreme
Court of Canada in the Haida case, by focusing on the key issues that can affect aboriginal rights or title,
doing so as early in the process as is reasonable to ensure the consultation is effective and reflecting that
First Nations do not have a veto over land use decisions.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. continue efforts to ensure that all First Nations have these agreements in place, where applicable, and
that the agreements facilitate a more efficient consultation and accommodation process; and
2. follow the principles of consultation and accommodation established by the Supreme Court of
Canada, and not:
i.
Implement shared decision making, if that means a veto on land use decisions; or
ii.
Require in legislation or harvesting agreements decisions from government that attract the
duty to consult, when the decisions are on issues that should not require government
adjudication or at stages late in the process when earlier decisions have already effectively
dealt with the issue.
Commercial Forest Land Base
In 2001, the Provincial Government promised it would establish a ‘Working Forest’ to provide greater
certainty to the forest industry and that there would be sufficient land dedicated to forestry purposes over
the long term. The government did not implement that promise. In March 2009, the Working
Roundtable on Forestry recommended that commercial forest land reserves be established on key portions
of the forest landbase where wood production would be a primary focus.
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The Provincial Government is now promising again to establish a commercial forest reserve, but still has
not done so. Moreover, although the details of this promise are not fully known, government’s thinking
may mean the value of this initiative is not fully realized.
First, it might cover only a relatively small landbase and potentially apply only to where intensive
silviculture will be undertaken. If so, this will produce only modest benefits, as intensive silviculture is
economically viable only if it can increase the allowable cut in the present. This is possible only if there
is substantial available mature timber elsewhere. The greatest current threat to intensive silviculture and
long-term timber supply is not threats to the areas where intensive silviculture might be performed, but to
the areas of existing mature timber where many of its benefits can be realized. The greatest current
threats to these areas is not conversion to other commercial uses and rights of way (although that can be
significant) but rather government decisions, often made by government staff, to place constraints on
practicing forestry, often through decisions under the Government Actions Regulation and the Land Use
Objectives Regulation. There are many changes to government policy that could enhance forestry
opportunities. Whatever its other decisions may be regarding a commercial forest reserve, by reviewing
these government staff decisions to date to assess their impacts on future timber supply, revising them as
necessary to fit within government’s targets for limiting adverse impacts on timber supply and costs and
by more carefully regulating such decisions in the future to stay within those targets, government can
contribute significantly to ensuring an adequate timber supply today and in the future.
Second, the government may extend this protection only to new competitively bid licences or areas.
However, the vast majority of harvesting rights are currently allocated. A policy that does not enable
existing tenures or areas to become part of the commercial forest reserve precludes the majority of forest
operations in the province.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1.
i.
ii.
2.
include as key components of its commercial forest reserve initiative:
Improved regulation of government staff decisions under the Government Actions Regulation and
the Land Use Objectives Regulation to bring those decisions within government’s impact targets;
Implementation of the reserve to enhance the protection of the commercial forest landbase
generally, not for the purpose of favouring certain new licences over others, including those
portions of the landbase subject to existing forest tenures; and
bring the 9 year policy development period to an end by implementing this new policy as soon as
practicable.
Other
The Provincial Government can also enhance industry competitiveness through policies that extend
beyond the timber resource, including policies that affect the availability of skilled workers, the
development of new products and forest industries, the viability of existing manufacturing facilities, and
the demand for BC forest products both domestically and internationally.
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In many communities in the province, a significant source of local government revenue is derived from
forest products facilities. As local government costs increase, the tax burden on these facilities can make
them non-competitive. This serves neither the needs of the community nor the facility. In a separate
policy, the Chamber is recommending Provincial Government action on this issue. In market
development, the two senior levels of government and the forest industry have significant programs but
they are not as well co-ordinated as they could be. Domestically, all three levels of government, together
with industry, have promoted the use of wood in important projects, ranging from Richmond City Hall, to
the University of Northern British Columbia, to the 2010 Olympic Game venues. It is important that new
projects be continually added to this list. The Provincial Government has formalized this initiative as its
Wood First program for public buildings in BC and is seeking to extend this to other Canadian
jurisdictions.
The SLD is one of the more obvious examples of trade barriers against BC forest products but these
barriers come in many forms, including unfavourable building and fire codes. As governments erect
these barriers, the Provincial and Federal Governments have significant roles to play in fighting them.
Although the new SLA has resolved the lumber dispute, the issue now becomes one of ensuring it does
not have unjustified adverse implications on BC’s forest industry.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. encourage innovative secondary forest products industries such as bioenergy and engineered wood
products through commercially based arrangements with primary producers and timber harvesters;
2. where it opts to provide direct tenure opportunities to secondary producers that overlap existing
tenures, ensure forest management obligations are fairly and reasonably apportioned between the new
and the existing tenures;
3. enhance the competitiveness of all forest products manufacturing facilities through improved taxation
and revenue sharing arrangements at all levels of government;
4. promote labour force and skills training applicable to the forest industry;
5. enhance the competitiveness of secondary industries through training targeted at the value-added
industries in business and financial planning and similar skills for entrepreneurs;
6. continue market development and market access policies in co-operation with the Federal
Government and the forest industry, and improve co-ordination of market development programs
among these three key players to maximize the value of investment in these programs and encourage
the use of BC forest products in the province, in Canada and in international markets, including
ongoing promotion and expansion of the Wood First program; and
7. continue to work co-operatively with industry and the Federal Government to address tariff and nontariff trade barriers against BC forest products and, in particular, monitor the effects of the SLA and
act expeditiously where problems arise in its application.
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HEALTH CRISIS – CANADA NEEDS THOUSANDS OF DOCTORS NOW (2011)
The ability to attract business and their workers to a community is directly affected by the presence of
medical services and doctors in the community. There are not enough doctors in Canada to service our
existing populace let alone to service an increase in population that would occur with a relocation of
workers to a community.
From Tofino, BC across the country to Fogo Island, in Newfoundland and Labrador, there are simply not
enough doctors. An estimated 4 to 5 million Canadians have no family physician or are ‘orphan patients’.
According to the Canadian Medical Association, 70% of Canada’s doctors do not have a family
physician.
Although urban areas are somewhat better served, the situation in rural and small town Canada is often
described by health care experts as desperate. This has led to internal competition among provinces in an
attempt to attract the limited number of doctors available. If this continues, it is only a matter of time
until businesses feel the effect of their employees making decisions about continued employment based
not on the job or the salary but based on the quality of healthcare that they and their families will be able
to receive in the community where the business is located.
We are losing some of our brightest medical graduates of Canadian medical schools to other countries
when they take the training we have provided them and leave Canada to practice medicine in another
country.
In addition, Canada’s best and brightest with excellent academic credentials, often leave the country to
train elsewhere because our university medical programs are full. Once such students have been trained
in another jurisdiction there is a greater likelihood of those students choosing to remain in that
jurisdiction.
Details of the problem
Currently, Canada has 69,267 doctors for its 34.2 million people.
According the Organization for Economic Co-operation and Development (OECD) Canada has about 2
doctors for every 1,000 people. That falls well below the OECD average of approximately 2.7 doctors
per thousand people. In fact, Canada ranks 25th out of 30 in the number of physicians to population ratio.
In order to meet just the OECD average, Canada would need 20,000 new physicians.
Canada’s doctor shortage began in the mid 1990s. When the country should have been increasing the
number of medical school graduates, provincial health ministers reduced medical school enrollment in
1997 by 10%.
Although there have been significant increases in enrollment since then, Canada has still not recovered
from the cuts. In fact, according to the Canadian Medical Association (CMA), had Canada continued to
graduate doctors at the pre 1997 levels, we would have 1600 more doctors than we have now.
We currently have 2742 first year medical students but the country continues to lag when it comes to
training new doctors. In 2005, Canada graduated 5.8 doctors per 100,000 people; again well below the
OECD average of 9.8 doctors per 100,000.
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The low numbers of medical students in Canada has nothing to do with a lack of interest in becoming
doctors on behalf of Canadian students; it is quite the contrary. There are hundreds of young Canadians
in medical schools outside Canada – not because they do not meet the standards of admission in Canada,
but because there are not enough spaces available in Canadian medical schools.
The doctor shortage has been further compounded by an aging population and changes to physician
practice styles where doctors demand a better work/life balance and are no longer willing to devote the 70
hours a week to their practice that led to burnout and other health issues for their predecessors. The aging
population is also affecting our existing doctors. 16% of our doctors are over the age of 65 and 38% are
over the age of 55. Many will retire soon or substantially cut back their workloads. Additionally, many
are not accepting new patients.
Furthermore, improved treatments for diseases have resulted in long term chronic conditions placing more
demands on the system and its physicians.
The shortage of doctors often means that provinces compete with each other and with other countries for
the limited supply of doctors and medical school graduates. They may offer financial or other incentives
to secure physicians for their own needs.
Currently, Canada tries to attract International Medical Graduates (IMGs) to cover the short fall of
doctors in our country. Approximately 1 out of every 4 doctors is an IMG. In Saskatchewan, 50% of the
doctors are IMGs. However, there are an estimated 1200 IMGs in Canada who have not been able to
secure a license to practice. At the core of the problem for IMGs is a shortage of residency and postgraduate positions. Completion of those educational requirements is necessary in order to meet the
requirements of the Medical Colleges who regulate medical practice licensing.
While Canada attempts to attract foreign trained medical graduates, countries facing similar doctor
shortages are not idle in their attempts to rectify the issue. Post-secondary medical training in Canada is
among the highest quality in the world and as such, other countries actively seek graduates of Canadian
medical schools. The migration of Canadian medical school graduates and doctors out of the province in
which they were trained contributes to the shortfall of doctors as much as medical students leaving
Canada to attend medical schools in other countries.
However in the case of Canadian trained doctors and medical students leaving Canada they are leaving
with education and expertise that has usually been financed by large student loans. These loans are
sometimes in the hundreds of thousands of dollars with loan guarantees given by the Federal and
Provincial Governments of Canada. If medical students who choose to practice outside of Canada were
enticed to instead practice in Canada by way of loan forgiveness or other forms of subsidization, then it
would limit the migration of Canadian trained doctors to other countries and increase the number of
doctors available for Canadian communities. A requirement that newly graduated doctor’s work in
Canada for a period of 3-7 years before the loan was forgiven or the subsidization would vest, would
allow for the establishment of many more doctors within our country. The time required to work would
be a sliding scale to take into account the region of Canada in which the doctor chose to work. Rural
areas and areas where the need for doctors was greater would require a shorter work period.
Further delays in grappling with the doctor shortage and failing to address the issues indicated above will
compound the crisis in the years ahead and could severely impact the ability of our country and provinces
to attract new business and new workers to our communities.
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THE CHAMBER RECOMMENDS
That the Provincial work with the Federal Government to:
1. actively work towards increasing the number of physicians in Canada and finding solutions to the
doctor shortage;
2. to implement incentives to keep Canadian trained doctors in Canada after their residencies and
encourage those doctors to locate to areas with a need for doctors. Such incentives may include, but
are not limited to, forgiveness of loans, grant programs and payment of living expenses;
3. clear the backlog of IMGs waiting to be licensed to practice. Additionally, that Canada work towards
establishing international licensing standards as well as reducing the general costs and administrative
red tape currently required for provincial licensing; and
4. work to repatriate Canadian trained doctors working outside the country and Canadians who are being
trained in medical schools outside the country.
THE NEED FOR A COMPREHENSIVE CHRONIC DISEASE STRATEGY (2007)
As the Provincial Government looks to control the ever-escalating cost of providing quality healthcare to
all British Columbians, a comprehensive Chronic Disease Management Strategy offers huge benefits for
government’s ability to control costs, as well as provide improved quality of life for the people of BC.
Chronic diseases are those that can only be controlled and not, at the present time, cured. Chronic
diseases are those that occur across the whole spectrum of illness. They include, but are not limited to,
diabetes, depression, mental health issues, asthma, arthritis, heart failure, chronic obstructive pulmonary
disease, stroke, dementia, and a range of disabling neurological conditions. Chronic diseases tend to be
complex conditions and are often long-lasting. Unmanaged, they can produce a range of complications
resulting in increased use of the healthcare system.
The care for people with chronic conditions also consumes a large proportion of health and social care
resources. People with chronic conditions are significantly more likely to see their family doctor, to be
admitted as inpatients, and to use more inpatient days than those without such conditions. The World
Health Organization (WHO) has identified that such conditions will be the leading cause of disability by
2020 and that if not successfully managed, will become the most expensive problem for healthcare
systems.
Good chronic disease management offers a real opportunity to address this challenge through providing
improvements in patient care and service quality while also significantly reducing healthcare costs.
Chronic diseases are becoming increasingly common in BC and more common in both marginalized
populations and ageing populations. As obesity and lack of activity increases, chronic diseases such as
diabetes are becoming much more common. Many older people are living with more than one chronic
condition and face particular challenges, both medical and social. While more prevalent in older people,
these diseases apply to people of all ages with long-term conditions. Indeed in BC, chronic obstructive
pulmonary disease was the leading reason for hospital stays for patients admitted via emergency room
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(ER) visits; this represents the most expensive ways to treat a patient.
Another example of the impact chronic disease has on the sustainability of our healthcare system is
diabetes. Diabetes is the number one killer in Canada today. Approximately 211,304 British Columbians
live with diabetes and studies project that an additional 178,000 will be diagnosed with the disease by
2016. This is a projected 84.3% jump.
The challenge with many chronic diseases, particularly diabetes, is that they often do not stop with the
initial diseases. In the case of diabetes, without access to appropriate and timely treatment required to
manage the disease, many diabetics risk developing serious and costly complications such as heart attack,
stroke, kidney disease, blindness, and even amputation. These are debilitating and often fatal to people
with diabetes, and the overall costs are borne by their families and by all of us in BC.
The Chamber has welcomed the focus placed on addressing many of the risk factors associated with
chronic diseases such as diabetes and cardiovascular disease through cross-government initiatives such as
ActNow BC.
These programs, along with the new Primary Health Care Charter – A Collaborative Approach, are a
welcome recognition that we must address the development of chronic diseases in order to mitigate their
onset and the need for treatment.
While identifying the common risk factors such as tobacco use, diet, levels of physical activity, and
access to primary healthcare are important parts of a comprehensive solution, what is needed is focused
attention on ensuring access to the necessary proven drug therapies that are critical to our ability to both
manage disease and costs on the system.
As we look to address the unsustainable increase in healthcare spending, the key to our success will be
looking at new ways to view healthcare. There must be a shift from the current practice of only treating
the disease, to viewing healthcare as an integrated system where investment at the early stage will reap
significant health and cost benefits in the future.
As we look to the future we will need to ensure that there is a focus on both enhanced preventative
services and diagnosis as well as on investments in proven drug therapies. These foci are two sides of the
same coin.
People living with chronic disease in our province continue to face the costly burden of these diseases as
well as the serious complications that come with not having full access to the appropriate treatments
recommended by their doctor. Not being able to choose the appropriate medication or supplies to avoid
or delay potential complications end up costing all BC taxpayers, who ultimately pay for the ensuring
hospitalization and healthcare treatment.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. continue to support a comprehensive chronic disease management strategy that encourages a shift in
the balance of care from episodic to integrated, continuous care;
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2. as part of this comprehensive strategy, allocate funds for education relating to disease prevention
(diabetes, etc.); and
3. amend the formulary to include newer drugs and approaches to the treatment of chronic diseases such
as diabetes, and to include newfound/improved drugs that can provide measurable benefits.
A NEW VISION FOR HEALTH CARE (2002 – Revised 2007)
The Chamber supports many of the recommendations and strategies outlined in the Ministry of Health
Service Plan 2006. The mandate of the Chamber is to advocate a policy framework that promotes a
healthy and vibrant economy in which all British Columbians can grow and prosper. Given the
importance of a viable, effective, and efficient health system to the economy of the province, the
Chamber makes it a priority to provide reasoned and meaningful recommendations on this most important
issue.
In 2002, the Chamber held a discussion forum with knowledgeable business leaders and professionals
from key healthcare sectors to discuss the fiscal, human resources, legislative, political, and structural
challenges facing our health system. As a result of those discussions and, in consideration of the input of
our health committee and individual members, the Chamber formulated a report entitled, A New Vision
for HealthCare… The Need for Change.
The recommendations contained in this report were presented to the then, Ministers of Health, and Health
Planning. While some success was achieved through the implementation of our recommendations,
significant and substantive issues remain to be addressed.
In 2005, a meeting was held with a knowledgeable and diverse group of health stakeholders to discuss
current health policies and what additional recommendations may be needed and appropriate. The
outcomes of these discussions have resulted in a new version of the Chamber’s earlier report entitled, A
New Vision for Health Care… Striving for Excellence, and a refocusing on several key health policy
issues. It is hoped that the report of the BC Conversation on Health will provide additional
recommendations for improved access to and utilization of appropriate innovations and healthcare
services.
BC currently expends approximately 43% ($11.75 billion) of the provincial budget on health. The rate of
growth in health expenditures cannot be sustained. A different approach must be identified to enhance
the likelihood that our health system not only survives, but also thrives. Quite simply, the current model
will not survive the changing demographics of our population, the explosion of technology, public
expectations, and current economic realities.
The Chamber’s key messages in the report can be summarized as follows:
Prioritize health services based on a patient/resident/client basis; treat the patient, not the disease.
In short, put patients first, and provide the right treatment to the right patient and at the right
time;
The importance of business in promoting healthy workplaces and preventative healthcare;
Identify mechanisms to increase revenues from external sources; and
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Develop a strategic human resources plan that addresses the geographic diversity of BC and
allows foreign-trained health professionals to play a role in BC commensurate with their skills.
The report details 20 specific recommendations in support of these messages that related to fiscal, human
resource, legislative, political, and structural issues.
THE CHAMBER RECOMMENDS
That the Provincial Government endorse and act upon the recommendations of The Chamber’s 2005
report: A New Vision for Health Care... Striving for Excellence.
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ATTRACTING GLOBAL TALENT KEY TO CANADA’S ECONOMIC FUTURE (2012)
Preamble
As Canada’s Asia Pacific Gateway, the Province of BC is at the forefront of the pacific century. While
this provides new opportunities for industry development and investment in the province, increasingly,
participation in this marketplace will demand a new look at the commitment to attracting skilled
employees and talented entrepreneurs to the
province and country.
Demographics
challenges
and
competition
amongst
jurisdictions are growing significantly and the
pace of global demand for talented
individuals means that Canadian companies
must be global in context. Increasingly
global in their own right, without the ability
to attract this highly mobile talent pool,
Canadian companies will fall behind,
hampering our economic prosperity and
reducing the opportunities available to all Canadians.
While BC and Canada face steep demographic and workforce challenges in the coming years, for many
industries, this is already a daily reality1. These businesses need access to global talent in a timely
fashion, or face losing investment and business to their international competitors. In order to remain
competitive, these companies require predictable and efficient government programs to assist them in
bringing talented individuals to our shores and in turn, create new employment for all Canadians.
In recent years, the Federal and Provincial Governments have
undertaken a series of initiatives to respond to the needs of
industry, but more can and must be done2. To address funding
and resource capacity challenges, the current federal immigration
programs would benefit greatly from employing best practices
currently being used by their provincial counterparts, including
adopting new cost recovery models and expedited service
programs in order to better match industry demand with the
government’s ability to respond.
Currently, funding for important economic
immigration programs comes from annual
appropriations of general revenue as determined by
the federal budget. This process makes it hard to
match program demands with the appropriate
resources. Establishing a cost recovery model
similar to that of the BC Provincial Nominee
Program, with a separate line item budget and
1
2
Province of British Columbia Labour Market Outlook 2010 -2020
Citizen and Immigration Canada, Evaluation of the Federal Skilled Worker Program, August 2010
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associated performance requirements, would allow the Federal Government to better respond to industry
demand, saving employers precious weeks and months which adversely impact their bottom lines in lost
productivity and increased costs3. Mirroring current provincial programs, additional consideration should
be given to establishing “fast lane” options for companies and industries that are willing to pay a premium
for expedited service. When combined, these initiatives would better meet the needs of industry and
facilitate job creation and productivity gains for the country.
In 25 years, only 60% of the Canadian population will be of working age4. In addition, we must stay
competitive by gaining highly sought-after skills, talent, and experience in the international marketplace.
To further meet the needs of our country’s fastest growing industries, a stronger emphasis on the
economic impact and spin off job creation from attracting foreign talent must be incorporated into
government requirements, like the current labour market opinion or “LMO” process. For the country’s
knowledge based industries, being able to hire key global talent acts as a catalyst to hire many other
Canadians. Without this talent, this additional job creation is lost. Stronger emphasis on such factors in
the LMO process will only assist in Canada’s economic competitiveness and creating new jobs for
Canadians.
Canada’s future rests on our ability to attract and retain the best and brightest from around the globe.
Reforming and adapting economic immigration programs to better meet these challenges is an important
step in ensuring our continued economic prosperity.
THE CHAMBER RECOMMENDS
That the Provincial Government work with the Federal Government to:
1. place a stronger emphasis on economic and employment stimulus in LMO criteria and in Temporary
Foreign Worker Unit (TFWU) applications such as: potential number of jobs created, amount of total
investment by company, potential investment by the company, unique or new service or product
offering, rural location of the company and/or it’s operations, business succession planning, the affect
on the company’s ability to maintain competitive, and the affect on other Canadian companies;
2. develop an affordable cost recovery model and separate line item budget for LMO, temporary foreign
workers, Federal Skilled Worker and Canadian Experience class programs;
3. develop “fast lane” option with associated performance requirements for employers who choose to
pay a premium for expedited service on LMO applications, TFWU applications, and Temporary
Foreign Workers requiring Temporary Resident Visas (TRV) and work permit application processing
from visa offices/consulates; and
4. allow the current Temporary Foreign Worker Units the ability to review possible LMO-exempt work
permit applications for foreign nationals requiring TRVs or foreign nationals who are visa-exempt but
outside Canada.
3
4
TD Research, Knocking Down Barriers Faced By New Immigrants To Canada Fitting the Pieces Together, February 2012
Canadian Demographics at a Glance, Statistics Canada, January 2008
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ECONOMIC GARDENING – GROWING BUSINESS (2012)
Background
Economic gardening1 is an economic diversification term that connects entrepreneurs to resources,
encouraging the development of essential infrastructure and providing entrepreneurs with needed
information. The term refers to growing local economies by nurturing entrepreneurial businesses.
In 2010 the Community Futures Okanagan Similkameen (CFOS) obtained project funding to pilot an
economic gardening program in the Regional District of Okanagan Similkameen. The South Okanagan
Chamber of Commerce was a steering committee partner. The purpose of the project was to connect local
businesses with resources and to implement a market research tool that could assist in market strategies
and increase revenues for local small businesses. This project combines market research with Geographic
Information Systems (GIS) technology that provides a service to entrepreneurs by assisting with detailed
market research on customers and competitors, new market information, and industry trends. This is not
a new tool; it has been used by large, national firms to carry out market research however, its use for
small business is new.
Most small business owners don’t do their own research due to lack of time, money, and skills. Through
the economic gardening project CFOS has been able to provide business owners access to counseling,
technical assistance, and competitive research.
In delivering the project CFOS has had huge interest to expand the service to other regions of the
province. They have also generated a lot of interest from educational institutions that are interested in
teaching their students how GIS can be incorporated into market research and as a way to have them do
some real life case studies.
The Chamber, in conjunction with Community Futures Okanagan Similkameen, is interested in
developing a provincial Economic Gardening Program that will bring together business, education,
economic development officers, Trusts and Provincial ministries.
This service has the capacity to assist in the growth of small business revenues and increase jobs. An
added value of the program will be students learning new skills that they will bring into the workforce.
This program can be sustainable through business participation; however, to develop it into a province
wide service, 3 years of support is needed.
Small business accounts for 98% of all businesses in the province, with 42% being businesses with less
than 50 employees2. 160,500 small businesses (41%) are located outside of the Vancouver region
(Mainland/Southwest). BC Stats further reports that 30% of BC’s gross domestic product was generated
by small business in 2010. This program is designed to provide small businesses with the critical
information needed to grow.
1
Economic Gardening is an entrepreneurial approach to economic development. It operates at the micro level and focuses on providing
resources, support and sophisticated intelligence to opportunistic entrepreneurs looking to grow their businesses. Using creativity and critical
thinking, Economic Gardening brings tools and technology most often used by large corporations, to the small business owner. Applications like
Geographic Information Systems, and online journal publications, composite performance metrics, online marketing systems and business
research databases, allow Economic Gardeners to provide the data and research entrepreneurs need to make effective business decisions.
2
BC Stats 2011 Small Business Profile.
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Key elements of an economic gardening program include business coaching and technical assistance, a
strong referral network, market research services, coordination, tracking and performance systems, and an
ongoing capitalization plan. Delivery models may be unique to each region of BC. It is our intention to
build partnerships between economic developers, Community Futures, and educational institutions.
The target business for economic gardening services is existing businesses that bring new money into the
region, primarily second stage companies with 10 to 100 employees, and smaller companies with actual
or potential markets outside the region that desire to grow. The program is not designed to meet the needs
of microenterprises or start-up companies, although in some instances it could be used to verify business
plans for businesses looking for financing.
An effective economic gardening program needs to have at least one full-time staff person to support the
coordination and research functions. This person requires the services of a Market Analyst, GIS
Technician, and a Search Engine Optimization Searcher. These positions can be filled by staffing,
contractors, or through business students at Universities or Colleges.
The key to a successful program is having the right tools. The annual cost of subscriptions and
maintenance of databases is approximately $85,000. The single most expensive piece of the tool kit is a
product called Business Analyst which is software that brings geography and business intelligence
together, thereby allowing users to view data in revealing geographic patterns that enable better decision
making. With this technology, businesses can go beyond traditional data analysis and incorporate
geographic location into viewing and analyzing business, demographic, and consumer spending data.
Most university and college libraries have a number of the databases that are used for economic
gardening. By using students to do the research, a full tool kit is not needed in each region. They may or
may not have Business Analyst and they would need to cross disciplines to do the analysis (ie: business,
computer and geography students). Using the universities and colleges would allow for a greater number
of businesses to be served.
Program Outline
The Chamber along with Community Futures Okanagan Similkameen is proposing to assist in developing
a provincial program that will expand the economic gardening pilot completed in the South Okanagan
Similkameen to the other regions of BC.
There are 5 regions in the province that have expressed interest in setting up an economic gardening
program: Vancouver Island, Southwest Fraser Valley, Okanagan, Kootenay, and the North. This program
will work best regionally as we can use the regional colleges or universities and serve a larger population
of businesses.
Benefits
It is expected that each region could work with 75 - 100 businesses annually (375 – 500 provincially).
Benefits to the businesses would be new markets, increased revenues, and maintaining or hiring
employees. Benefits to students would be learning to use GIS for business research and real life case
studies giving them experience they can put on their resumes.
The Chamber is suggesting a 3-year government sponsored pilot program. After 3 years, each region
would be responsible for covering all costs through business revenues. It is estimated that the total cost
for the 3-year program for 5 Regions of BC would be $2,159,105. Potential businesses receiving benefit
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would be 1,400 for a cost per business of $1,542. This is before calculating the benefit to students, the
increase revenues to communities, and the jobs created or maintained.
THE CHAMBER RECOMMENDS
The Provincial and Federal Governments enter into a $2,159,105 funding agreement with appropriate
non-governmental organizations to sponsor a 3-year Economic Gardening program in Vancouver Island,
Southwest Fraser Valley, Okanagan, Kootenay, and the North.
FOREIGN WORKER PROTECTION (2012)
The Government of British Columbia has legislation and agencies in place to protect workers in the
province; however, these laws, and agencies with non-secure funding, may not be adequately protecting
foreign workers who are vulnerable to unfair treatment.
While temporary foreign workers are covered by occupational health and safety regulations and labor
standards, there are employers who are not following the rules.
With dramatic increases in foreign workers in Northeastern BC and across the country, we are seeing an
increase in the number of complaints from foreign workers regarding abuse and mistreatment. Fair
treatment of these workers and protection of their rights will encourage other foreign workers to consider
the Northeast sector of BC as a place to work and build their future. Foreign workers are typically more
susceptible to abuse and mistreatment by recruiters and employers since they are not familiar with
Canadian laws and culture, and hence are more vulnerable. For example: foreign workers are ordered to
live in the housing provided by employers, which are overcrowded by Canadian standards. Some threebedroom dwellings are housing up to 6 and sometimes more individuals. Each of these individuals is
paying $500 or more per month, plus utilities, plus travel to and from work. They are also given long
work hours without being compensated fairly for the overtime. If any of these individuals complain, the
employer tells them that they either abide by the rules or they will be sent home.
With the growth of the Temporary Foreign Workers Program (TFWP), employers are increasingly
dependent on recruitment agencies — also known as “labour brokers,” “employment brokers” or
“recruiters” — to help match them with appropriate temporary foreign workers. Too often, however,
instead of legitimately earning their fee from employers, recruiters charge prospective foreign workers for
work placement, which is illegal under several provincial laws. In addition, recruiters sometimes engage
in illicit conduct, such as charging a fee to bring the worker to Canada for a job that never existed, no
longer exists when the worker arrives, or exists for only a short time before the worker is laid off.
Regulation of recruitment agencies is a provincial matter, meaning that there is no consistent set of rules
across Canada, but only some provinces regulate recruiters. In Alberta, employment agencies (which
include recruiters) must be licensed and are prohibited from charging foreign workers fees for assisting
with settlement1. The system is complaint driven, and temporary foreign workers are less likely than
others to file a complaint against a broker, due to lack of awareness of their rights, self-censorship to
protect their jobs (especially now that LMOs are so difficult to obtain), and fear of reprisal.
1
Alberta, Employment Agency Business Licensing Regulation, Alta Reg. 189/1999; Albert, Fair Trading Act, R.S.A.2000
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Some efforts at improvement are being made in Alberta. In its 2009 Temporary Foreign Worker Guide
for Employees, the Alberta government explains: “Employment agencies charge the employer a fee for
recruiting each worker. This fee is negotiated between the employer and employment agency. The
employer will not be able to recover the cost of this service from the employee. Any agency that indicates
this is possible is wrong. Fees cannot be charged to potential or recruited workers to find a job” (Alberta
2009d, 102). In 2008, Alberta also issued a guide for employers that use employment agencies (Alberta
2008b). Despite such worthwhile steps to provide information to both employees and employers about
the dangers of unscrupulous agencies, the onus still falls on employees to make a complaint and on
employers to monitor the performance of the agency. Yet, in about 30% of cases in Alberta, the employer
3
is not aware of the fact that recruitment agencies are charging workers fees for recruitment .
Other provinces such as Saskatchewan and Nova Scotia are working towards implementing new
legislation to protect temporary foreign workers, especially in matters of recruitment and unfair treatment.
Due to the huge shale gas finds in NEBC, over 80,000 jobs are expected to be created between Fort
Nelson, Fort St. John, and Dawson Creek over the next 25 years4.
The Northeast is driving the BC economy the export value per experienced labor force participant in the
Northeast was $240,858.00 in 2006, compared to $31,935.00 in the rest of BC5. With the unemployment
rate sitting at approximately 4% for the Northeast, we are virtually at full employment and must look to
the hiring of Foreign Workers as playing an important role as a temporary and permanent solution to
filling the positions that exist today and in the ongoing growth and success of our economy.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. review enforcement in place to ensure regulations and standards are being followed;
2. review the penalties for employers not meeting the regulations and/or standards;
3. ensure funding for existing Foreign Worker assistance agencies/settlement services; and
4. expand the mandate and funding of settlement service organizations to include help for the TFW.
Citizenship and Immigration Canada. 2009d. “Facts and Figures 2008 – Immigration Overview; Permanent and temporary Residents, Canada,
Temporary Residents by Yearly Status, 1984 to 2008, Ottawa
3
Interview with Jeff Cowlings, Manager, Temporary Foreign Worker Advisory Office, Edmonton, Albert, June 16, 2009
4
www. http://npedc.ca/key-opportunities
5
northeast-peace-river-exports-final-urban-futures-4-october-2011.pdf
2
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GROWTH ENGINE BC DIGITAL MEDIA INDUSTRY (2012)
Through more productivity and innovation, BC Digital Media industry predicts real job growth and
business opportunities today and for the next decade. The global Digital Media Industry’s 11% growth
per year rate is bringing about rapid changes to and replacing traditional media’s 3% growth per year rate.
BC must remain competitive for the ongoing success of this industry.
British Columbia has more than 600 Digital Media companies, which employ about 16,000 people and
generate $2.3 billion in annual sales. Greater Vancouver accounts for more than 60% of the Digital
Media companies in the province. Digital Media companies currently operate in six areas: interactive
design, digital entertainment and games, digital film, animation and special effects, mobile content and
applications including games, and E-learning. By 2010, products developed by Vancouver’s digital
sectors will impact many other sectors – for example: Health Care, Education and Military activities – as
practical applications and training tools, and as next-generation technology innovations. Vancouver has
one of the top video game clusters in the world, with presence from major publishers including Electronic
Arts (EA), Nintendo, THQ, Vivendi/Activision, Disney, and Microsoft. Electronic Arts’ studio in
Vancouver is the largest of its kind in the world. Digital Media has a strong symbiotic relationship with
the established film and TV sector, making Vancouver a creative force in North America. (Source:
Vancouver Economic Commission)
“There are digital media tax incentives offered in six Canadian provinces, twenty-one US states and
several other countries. Due to this unlevel playing field, BC has lost many jobs to other territories. So
these industry associations are important to protect and grow BC‘s significant investment in
infrastructure and talent.”
“Both DigiBC and BC Interactive have worked closely with the BC government to promote the natural
benefits of BC, ensure immigration for critical employment gaps, and institute our own digital media tax
incentive in 2010, announced by a proactive BC government during the 2010 Olympic Games. The future
looks bright for Digital Media in BC and the opportunity to create thousands of new jobs is a real
possibility. It’s important to keep the business climate vibrant, flourishing and fun with new ideas and
innovation flowing from younger, creative talent.” (2011 quotes from Howard Donaldson, President
DigiBC).
To date, BC families, residents, and businesses are able to access a wide range of resources and skill
development necessary for this sector. To thrive, this industry needs a continuing emphasis on ongoing
consultation, reduction in regulatory requirements, and competitive taxes with enhancement tax credits.
THE CHAMBER RECOMMENDS
That the Provincial Government works with the industry to identify impediments to the sectors growth.
This should focus on:
1. reducing regulatory requirements and to improve regulatory requirements;
2. the ongoing competitiveness of the provincial and federal tax structures; and
3. ensuring the industry has access to a skilled workforce.
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ENSURING THE BC
PROPONENTS (2011)
INVESTMENT
BOARD
LEADS
TO
IMPROVEMENTS
FOR
The provincial economy is built around the development, extraction, and movement of natural resources.
The nature of these activities requires a combination of actions to occur to support the investment. It is
this interaction, or lack, of the market place and government policy that supports, encourages, and
sometimes inhibits these investments.
The vast majority of Projects in Northern BC are billion dollar plus ‘mega projects’: Pacific Trails
Pipeline, Kitimat LNG, Northwest Transmission Line, Rio Tinto Alcan Modernization, Northeast Power
Line, Horn Basin Development, Fairview Terminals & Ridley Island Port expansions.
Additionally, there are the more traditional projects critical to the development of BC in the Independent
Power/forestry sectors: Red Chris Mine, Prosperity, Forest Kerr etc. (investment ranges of $100 - $600
million). All of these have complex public policy, aboriginal, regulatory as well as marketplace timing
issues.
All of these projects move through a variety of regulatory processes with both Federal, Provincial, and
sometimes with local municipal governments. The challenge for project proponents has been in the area
of dealing with multiple government agencies at all levels in moving their projects forward. By
reviewing their progress and any barriers to development, BC can identify if there is a need to adjust
public policy in a way that continues to improve the competitive advantage for an industry in the
province.
With this in mind the Chamber was pleased to see the commitment from Premier Clark in her Liberal
Leadership platform to “create a BC Investment Board, comprised of experienced and respected business
people from across the province, to measure how successful major projects are moving through the
multiple regulatory and environmental processes from all levels of government.” While this is a welcome
commitment, the Chamber is concerned that without authority to assess and make public
recommendations on ways to improve the system the Board will not be leading to any marked
improvements in the investment climate of BC.
The province needs to determine whether it is deterring investment due to an inability of major projects to
move through the multiple levels of regulatory requirements or if government policy is actually
supportive. The Board would provide a place for proponents/investors to go to articulate their challenges
and issues and in some way act as an industry Ombudsman.
THE CHAMBER RECOMMENDS
That the Provincial Government, in the same way that the Progress Board gives a grade and makes
recommendations, this Board would do the same and provide recommendations for improving the system
thereby ensuring that BC creates and maintains a competitive business climate for investment and project
development.
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FILLING LABOUR SHORTAGES IN NORTHERN BC - OBSTACLES TO INTERNATIONAL
HIRING (2011)
Canada is emerging from the worst global economic recession this generation has ever seen and the
demand for labour will skyrocket throughout the next decade. As Northern BC experiences
unprecedented growth in its already burgeoning natural resource industries, faced with severe recruitment
and retention challenges, the ‘breadbasket’ of the province is beginning to panic. One of the few
available sources of skilled labour in the future will be from beyond Canada’s borders. As the demand
for temporary foreign workers increases, government must accommodate the changing needs of
businesses, which are looking to fuel their accelerating human resource needs by increasing support for
immigration services in order that the Canadian economy may flourish.
There are several hurdles and challenges that make international hiring particularly difficult for Northern
employers:
1) Lack of an Immigration Office Located in Northern BC
As immigration services have been pooled into call centers located in the Lower Mainland,
northern communities lack direct access to immigration services which make telephone and
online requests for application updates, information, and processes a frustrating experience often
leading to exhaustion and dead ends. Without specific northern representation, immigration
officers often lack an understanding of the regional issues faced by northern employers, which
differ greatly from those in the south.
2) New Canadian Workers Settle in Metropolitan Cities
The waves of newcomers arriving in BC only go so far as the shores, to cities like Victoria and
Vancouver, where ethnic cluster communities exist. The ability of northern communities to
attract and retain new Canadians and/or Temporary Foreign Workers is hindered in part by our
vast geography which physically separates the few new Canadians we have living in the region,
as well as the lack of services for Immigrant and Multicultural residents which may encourage
them to make northern BC their home.
While positively noting the recent announcement by the Provincial Government to inject a $15-million
boost to community gaming grants from BC Lottery Corporation proceeds, it is imperative that some of
these funds be used to support the settlement, multicultural, and labour market participation services in
Northern BC.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. work with the Federal Government to re-open a northern immigration office; and
2. place greater emphasis on labour market information and integration by informing immigrants of
labour opportunities throughout the province through the Welcome BC program.
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FURTHER IMPROVEMENTS TO THE PROVINCIAL NOMINATION PROGRAM (PNP)
(2011)
With current and forecasted economic growth in BC, it is apparent that the demand for skilled labour will
outweigh the need. Temporary foreign workers are a source of skilled labour and the rate of applications
is on the rise. In order to hire a Temporary Foreign Worker, the employer must first request a Labour
Market Opinion (LMO), as part of the PNP, through Service Canada. The LMO process is the
government’s way of ensuring that hiring a foreign worker isn’t taking away opportunities for Canadians
and Permanent Residents.
There are two major challenges with regards to the LMO process:
1. Over the past few years, we have seen the processing time at Service Canada balloon from three
weeks to its current processing time of up to six months for labour market opinions. Service Canada
can’t keep up with the demand for foreign workers. The processing times at Canadian Consulates
have, on average, slowed slightly but not nearly as much as they have at Service Canada.
Companies simply can’t wait six months for a new employee to arrive, especially when
they actually needed them “yesterday”. Trying to keep a prospective employee interested
over the six-month waiting period is equally difficult in this hot global employment
market.
2. LMOs may only be requested for full time work when often employers have need for part time
workers and there are no local sources of labour to fill the position. Because the number of employed
hours is deemed more important than any other factor, such as the level of pay or the demand for
particular qualifications, employers looking for part time workers are ineligible for a LMO. The
absurdity of this situation becomes evident when we recognize that employers may apply for an LMO
for a full time minimum wage-paying position as a cook at McDonalds but not, for example, a .8
position working as a registered nurse for $32.40 per hour, more than 3 times the amount per hour
than the cook would receive.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. work to shorten the processing time for PNP applications ;
2. work with the Federal Government to remove restrictions for full time employment on the LMO
application.
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MOBILE BUSINESS LICENCE FOR ALL MUNICIPAL GOVERNMENTS IN BC (2010)
Since 2006, BC’s Provincial Government has taken progressive steps in easing the regulatory burden on
businesses. In Canada, BC is leading the way in de-regulation and is used as an example of what can be
done in other Canadian provinces and territories. At the 2006 Union of British Columbia Municipalities
(UBCM) Convention, Premier Gordon Campbell challenged local governments to develop a single
business licence framework, becoming the first jurisdiction in Canada where businesses can operate freely
anywhere in their province. The Ministry of Small Business and Revenue was charged with leading the
Single Business Licence Initiative and was working closely with UBCM, the Ministry of Community
Services, and key stakeholders to develop a model that streamlines business licensing processes while
retaining municipalities’ powers to set local standards for businesses operating within their boundaries.
The Premier’s challenge was predicated on a recommendation made by the Premiers Task Force on
Community Opportunities (which was comprised of 6 local government representatives and two business
representatives) who in 2006 stated that, “local governments need to take steps to streamline and
harmonize licensing regulations, initiate inter-municipal and region-wide approaches to business
licensing.”
This recommendation has further been supported by the Small Business Roundtable who in 2007 called
on the government to, “focus on saving time for business by streamlining and simplifying the regulatory
environment for small business. This can be accomplished by continuing to implement BizPaL and a
single business licence across the province.”
It is important to note that with the exception of the Premiers Task Force on Community Opportunities,
all the recommendations on this issue, including recommendations by the BC Chamber, CFIB and other
business organizations, have called for a single business licence program for the entire province.
However, these calls were met with resistance from local governments. This resistance was typified by a
resolution presented to the Union of BC Municipalities in 2007 which expressed concern over loss of
revenue, loss of autonomy, and ultimately over their ability to govern. The recommendation then called
on the Provincial Government to, “abandon the Single Business Licence Initiative and allow local
governments to continue to issue and regulate business licences in each of their own communities.”
While this recommendation did not become official policy of UBCM it clearly demonstrated a level of
hostility to the concept of a single business licence within local government.
Following the concerns expressed by local government, the Provincial Government moved away from the
introduction of a single business licence and beginning January 1, 2008 introduced a 12-month Mobile
Business Licence pilot project (MBL) in the Okanagan-Similkameen area.
While the Chamber has expressed concern over the lack of focus regarding a single business licence for
BC, we recognise the fact that a MBL would still represent a significant improvement on the current
situation. The MBL allowed mobile businesses (e.g. contractors, trades businesses, photographers and
caterers etc.) to operate across participating municipalities. Businesses within the participating municipal
boundaries benefit by purchasing one licence to do business in all participating municipalities. Mobile
businesses still purchase a business licence for their main location but instead of obtaining multiple
licences for outlying municipalities, only one licence is needed. Local municipal governments in the
participating areas benefit by lowered administration costs to process one licence and increased revenue
due to more licences being acquired.
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The summarized results of the Okanagan Similkameen Mobile Business Licence Project have been clear,
indeed the ministries interim report states:
“Businesses report the Mobile Business Licence is cost-effective and convenient;
municipalities report the Mobile Business Licence has not increased the administrative
workload and has increased revenue. There was expressed support for expansion of the
Mobile Business Licence. Not surprisingly, businesses varied as to whether they would be
willing to pay more for an expanded Mobile Business Licence. There has been a regional
revenue gain of over $160,000. This is due to the strong uptake of Mobile Business
Licences, with an increase of more than 750 Mobile Business Licences sold over the 2007
baseline. This can be attributed to increased compliance and the increase of regional
economic activity.”
The Mobile Business Licence pilot project has been used as an example of how to successfully apply this
program in other areas of BC. Several local municipalities bordering the pilot project have recently
adopted the Mobile Business Licence model too and thereby increased the existing boundaries within
which businesses can operate under one licence. In the absence of a single provincial business licence,
implementing Mobile Business Licences could be a more streamlined and cost-effective way for
municipal governments in all of BC to operate.
The success of the pilot project builds on evidence in other jurisdiction in the province that have shown
the benefits of such a model. Prior to the pilot project, inter-municipal business licence agreements
existed in: Victoria Capital Region, Cowichan Valley, North Okanagan, North-West Vancouver,
Courtenay-Comox, and the Trail Region.
In each of these jurisdictions the Mobile Business Licence has also shown similar results to the MBL pilot
project. For local governments there is a reduction in paperwork accompanied by greater compliance.
For business it results in reduced time and cost, as well as simplified expansion into new markets, while
for residents it leads to more choice of contractors and service providers.
Conclusion
The benefits to local governments, business, and residents of a Mobile Business Licence model have been
supported by the feedback and financial success of the Okanagan-Similkameen MBL Project and by other
Mobile Business Licence programs already in place. Yet despite these clear benefits, we have failed to
see other regions of the province introduce similar programs. This is unacceptable and increases costs for
local government and for business; ultimately resulting in higher costs for the taxpayers in the
community.
The Provincial Government have made a firm commitment as part of its Straightforward BC initiative
that, “for business, this means you spend less time complying with government requirements, and more
time expanding your business and creating jobs. For citizens, this means quicker access to the services
and information you need.” The introduction of Mobile Business Licence programs in all regions of the
province would address both of these goals.
The Chamber believes that even in the absence of support from local governments, the Provincial
Government has a responsibility to act in the interests of business and residents and set a clear timeframe
for regions to develop a Mobile Business Licence with any failure to meet this timeframe resulting in the
imposition of a Mobile Business Licence.
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The Chamber also believes that the introduction of Mobile Business Licence programs that cover the
entire province is only an interim step towards the original stated goal, which is a single, provincial
licensing program for all business.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. recognize that Mobile Business Licence programs are an interim step and that the provincial
government develop a plan, including timelines, for the introduction of a Single Provincial Business
Licence program;
2. develop clear timeframes for defined regions to introduce Mobile Business Licence programs;
3. ensure that should any regions fail to meet these timeframes, a mandatory Mobile Business Licence
will be introduced by the Provincial Government; and
4. work with local municipal governments to standardize terminology and procedures used when
implementing Mobile Business Licence Programs.
PREDICTABILITY FOR PROVINCIAL AND REGIONAL DESTINATION MARKETING
ORGANIZATIONS (2010)
The global tourism environment is rapidly evolving, and in order to remain competitive, BC must have
demand generating systems in place to convert our province's unparalleled comparative advantages as a
destination into competitive advantages.
According to BC Statistics, tourism is now the largest “primary resource industry” in BC, contributing
$6.6 billion in real GDP in 2008 with visitor expenditures equalling $13.8 billion for the year. The
industry is the backbone of the economies of many communities throughout BC.
A progressive marketing plan with adequate and stable funding is a basic necessity for the health and
growth of the industry. While this is always true, it is especially important in order to leverage the
immense international exposure the province received during the 2010 winter Olympic Games.
Capitalizing on this opportunity will only be realized by converting the new awareness of BC as a
destination into new visitations.
British Columbia’s Destination Marketing network consists of the Provincial Destination Marketing
Organization (PDMO), six Regional Destination Marketing Organizations (RDMO), and 37 Community
Destination Marketing Organizations (CDMO). Many, or perhaps most, of marketing agency activities
related to product development, pricing, supply chain management, and promotions require multi-year
agreements and predictability in order to undertake their most core functions.
Funding for the provincial and regional marketing system has been provided through the dedication of
three points of the eight point tax on accommodation purchases in BC. RDMOs have historically been
funded under contract with the PDMO to deliver various tourism programs, to the benefit of tourism
stakeholders within their respective regions. CDMOs have been funded in part through the Additional
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Hotel Room Tax (AHRT) at up to 2% of accommodation fees. For the 2008/09 fiscal year, destination
marketing funding in the form of the Hotel Room Tax and the Additional Hotel Room Tax equalled $85.5
million. This was then leveraged with more than $100 million in additional business expenditures for cooperative marketing, as well as partnership funding with the Canadian Tourism Commission.
The funding environment for all three levels of the DMO network has changed significantly with the
announcement of the Harmonized Sales Tax (HST), implemented in British Columbia on July 1, 2010.
The HST was proposed to replace both the 5% GST and the 8% Hotel Room Tax, and essentially does
away with the stable, predictable, and dedicated stream of funding for tourism marketing in BC at all
levels.
After announcement of the HST, the Council of Tourism Association of BC released a paper titled The
Impact of Sales Tax Harmonization on the British Columbia Tourism Industry, which clearly articulated
concerns of the industry related to the new tax model. The BC Government quickly acknowledged the
concerns of the industry related to continuity of marketing programs, and extended the AHRT until June
30, 2011 to allow time to plan for a replacement funding model for the community level of DMOs. In
Budget 2009, the extension of the AHRT beyond 2011 was announced to ensure stable, long-term, and
dedicated funding to CDMOs, but concerns still remain as to the stability of funding for the provincial
and regional marketing organizations.
In a parallel process, the BC Government announced the dissolution of the Crown Corporation, Tourism
British Columbia (TBC), and assumed direct control of all provincial marketing efforts as of April 1,
2010. Concerns over the uncertainty of future marketing endeavours and direction are top of mind for the
industry professionals.
The Chamber supports a funding formula for tourism marketing that provides a stable, reliable, and
performance driven pool of funds allocated specifically to tourism. It is critical that funding for tourism
marketing not be a part of the government’s annual budget appropriation cycle in terms of competing
funding requests. Rather that the performance based formula is protected in legislation thereby making
the funding levels predictable for industry. It is imperative that funding levels, as per previous amounts
allocated to TBC, be committed to tourism funding to the Ministry of Tourism, Culture and the Arts.
The unpredictability of annual appropriation outside of legislative protection would bring a level of
uncertainly to funding stability. Such instability would jeopardize the ability of DMOs, both the internal
provincial body and the six regional bodies, to implement long-range marketing initiatives necessary to
achieve marketplace recognition and industry growth. It is imperative that the funding be predictable so
that the industry can execute marketing necessary for success.
In addition to having a stable and secure source of funding, it is important to maintain the attributes that
industry experience shows will support an effective PDMO, such as:
Adequate funding relative to potential market share and competitor marketing agency funding
levels;
Performance targets and overall guidance of the organization through a qualified group of
independent tourism professionals; and
A commitment to utilizing market research and analysis as the basis of program expenditures.
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THE CHAMBER RECOMMENDS:
That the Provincial Government:
1. set funding for the provincial and regional destination marketing organizations at a minimum funding
level as per previous amounts allocated to TBC;
2. protect the performance-based formula through legislation;
3. ensure that the executive leadership of the PDMO be comprised of a majority of independent tourism
professionals;
4. ensure strategic goals flow from independent market research and provide flexible program
development to meet market demands; and
5. establish measurable performance targets for the PDMO and conduct regular performance reviews in
a comprehensive and transparent manner.
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REVISE GOVERNMENT FUNDING OF HUMAN RIGHTS COMPLAINTS (2012)
At present, human rights complaints are, in many cases, funded by the Provincial Government. It is also
difficult for a human rights respondent who successfully defends such a claim to obtain costs from the
unsuccessful complainant. This structure represents a considerable incentive to the filing of spurious
complaints and an enormous cost to employers in BC, who are disproportionately the target of human
rights complaints.
The usual rule in civil litigation is that the parties pay for their own counsel and that the losing party is
required to pay a prescribed amount toward the costs incurred by the winning side. Those costs may also
be adjusted by the court to penalize unfair or unreasonable conduct by one of the parties, such as the
refusal of a generous settlement offer. Court in the civil realm costs therefore serve a dual purpose: they
defray the costs of the party ultimately vindicated by the court and encourage the parties to behave
themselves in the litigation process.
Such is not the case in the human rights realm. In an opinion-editorial in the Globe and Mail entitled
“Speech Commissars are the Problem”, George Jonas described human rights tribunals as “complainant’s
forums”, which “absorb the complainant’s costs while defendants pay for themselves”. A party to a
human rights complaint, even if they lose, will only be required to pay costs if they “have engaged in
improper conduct during the course of the complaint” or has failed to abide by the Tribunal’s rules or
orders. “Improper conduct” itself has been given a narrow ambit: the Tribunal has said that the threshold
for ordering costs is high, importing a notion of intentional wrongdoing or culpable action. It has
consequently found that a complainant’s sincere belief that they have been discriminated against, no
matter its un/reasonableness, does not constitute improper conduct.
Similarly, legal representation for human rights complainants is available through the BC Human Rights
Clinic (the “Clinic”) who provide representation to complainants “through all stages of the Tribunal’s
complaint process”. Unlike Legal Aid, which helps pay the legal costs of only the most indigent in our
society, the complainant’s means are not determinative of whether the Clinic takes on a case. In addition
to means, the Clinic also considers, inter alia, whether the complainant has an alternative to going to the
Tribunal, the merits of their claim, the likelihood of it being successful, and whether “the Complaint
raises novel issues of law, the answers to which would advance the purposes of the [Human Rights]
Code.” Respondents in BC have no such similar support or funding. It appears that the only pro bono
legal assistance available in BC expressly for human rights respondents is provided through the
University of Victoria’s Law Centre. While the Law Centre provides assistance for all stages of the
human rights process, it is, however, staffed almost wholly by law students and only provides services
subject to a means test.
With respect to the provenance of its funding, the Clinic obtains all its money from the BC Attorney
General, which provided $960,542 in 2011. The era of governmental austerity has not affected the Clinic;
its funding has increased by 9.2% over the last five years.
The direct cost to the Provincial Government for funding human rights complaints pales in comparison to
the indirect costs that funding imposes on the business community. To appreciate the magnitude of the
costs, one must understand the nature of the human rights process: if a complaint is accepted by the
tribunal and served on the respondent, the parties are encouraged to attend a settlement meeting. If that
meeting fails to result in a settlement, the respondent will file their response and may file an application
either to defer the complaint to another adjudicative body or to dismiss it outright. Getting to this stage
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alone can be expensive, particularly if the dismissal decision is subjected to judicial review before the
courts. In one case in which the University of British Columbia (UBC) was a respondent, it incurred
costs of $150,000 in obtaining a dismissal, without even a full hearing before the Tribunal ever having
taken place.
If the dismissal application is unsuccessful, which it is in about 50% of complaints, a human rights
complainant need only show that s/he is acting in good faith and that the complaint has a reasonable
prospect of success to defeat such an application, the complaint moves on to a hearing. In addition to the
costs, the length of time involved in getting to a decision by the Tribunal can be extraordinary. In the
case of a BC Liquor Store manager who had been fired after having been caught stealing alcohol, it took
10 years and a trip to the Court of Appeal before the complaint was finally resolved in the employer’s
favour. Had the employer been a medium-sized business rather than the government, they would have
been ruined by the litigation.
The Chamber understands that there is a process in place at the Human Rights Tribunal to triage cases as
they are filed. The Chamber believes this system should be enhanced. In certain circumstances,
complainants come to the Human Rights Tribunal determined to lodge a complaint against their employer
whether they have a case or not. It would be advantageous to have someone at the Tribunal who is able to
discuss with the complainant the facts of their particular circumstances and how it relates to the law.
Complaints that are clearly not violating the Human Rights Code can be stopped at this initial stage.
Sometimes employees need to “vent”; sometimes they are ignorant of the law. By stopping these
complaints early, the integrity and the credibility of the process would be enhanced. It is important to
note that the “gatekeeper” must be a truly neutral party and not an advocate.
In order to reduce spurious cases and improve the opportunities for settlements, the complainant must
have to incur some costs for the process. These costs could include nominal initial filing fees (say $200).
A further filing fee of the same amount would be required if the complainant wishes to proceed beyond a
settlement hearing. The costs would be recovered if the complainant was successful.
In the event that the complainant is not successful at a Human Rights hearing, the complainant must bear
some responsibility for the costs incurred by the Human Rights Board. This would be a small fraction of
the costs incurred by the respondent.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. require the complainant to pay a nominal filing fee (say $200) upon initial filing and a further filing
fee in the same amount if the matter is not settled at a settlement hearing and the complainant wishes
to proceed to a Human Rights hearing;
2. in the event the matter is found in favour of the respondent at a Human Rights hearing, the
complainant would be obligated to pay costs at, perhaps, half the scale provided by the courts; and
3. an independent and neutral person review cases at the outset and cases with no chance of success
should be discussed with the complainant. Reasons should be given to the complainant as to why the
case has little or no chance of success. If the complainant still insists their case go forward, and if
they lose their case, full costs will be awarded to the respondent.
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ORGANIZED CRIME TASK FORCE (2012)
The 1999 Organized Crime Agency of British Columbia (OCABC) and the 2004 Combined Forces
Special Enforcement Unit-British Columbia (CFSEU-BC) were created as a designated policing and law
enforcement unit regulated by the British Columbia Police Act. On February 14, 2012, Justice Minister
and Attorney General Shirley Bond stated:
“The CFSEU has been instrumental in the Province’s integrated policing model and our crack-down on
gang violence and organized crime in BC. The unit has contributed to the capture of hundreds of gang
associates, seized hundreds of firearms, and has brought about numerous charges against drug
traffickers.”
On February 8, 2012 the Premier and Minister Bond announced a Green Paper, called “Modernizing
British Columbia’s Justice System” with a report due in July 2012. The Green Paper refers to
accountable policing and the Premier’s direction for government to participate in a Public Engagement on
Policing in 2012 that “will support development of a new policing strategy in British Columbia.”
OCABC and CFSEU-BC addresses the disruption and suppression of organized crime that affects all
British Columbians. While primarily funded by the Provincial Government, it also receives Federal
Government support in the form of cash and contributions in kind through secondments of Royal
Canadian Mounted Police (RCMP) members. The Provincial and Federal Governments are presently
negotiating the next long-term contract for RCMP policing.
CFSEU-BC operates with additional seconded officers from eleven police services: Royal Canadian
Mounted Police, Abbotsford Police Department, Central Saanich Police Service, Delta Police
Department, New Westminster Police Service, Oak Bay Police Department, Port Moody Police
Department, Saanich Police, Vancouver Police Department, Victoria City Police Department, and West
Vancouver Police Department. Augmenting this contingent of police officers, the Organized Crime
Agency of British Columbia has civilian professionals with broad areas of specialization, including
intelligence analysis, forensic accounting, computer science, and foreign languages.
The threat from organized crime to all Canadians requires aggressive enforcement action. Without such,
the physical, emotional, and economic wellbeing of the citizens of this province are at risk. Regardless of
one’s place of residence in the province of BC, organized crime has a negative impact. The technology
that fuels the legitimate economy also fuels the illegitimate economy. Organized crime has been quick to
seize on the advances in technology in the area of identity theft, counterfeit credit card fraud, software
piracy, online gambling, encrypted communications, and money laundering. The profile of criminality is
also changing and is proving to be challenging for law enforcement authorities.
THE CHAMBER RECCOMMENDS
That the Provincial Government:
1. continue to establish Provincial and Regional Task Forces for the province in regions based on
criteria identified by the Combined Forces Special Enforcement Unit-British Columbia and the
Organized Crime Agency of British Columbia and,
2. work with the Federal Government to provide funding on an important priority level.
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ENHANCING BC’S CHARITABLE GAMING POLICY (2011)
Many communities have been hit hard with the reduction of gaming funds to non-profit organizations.
It is clear that what a community has to offer is the primary factor in drawing families to these
communities and supporting the social well-being of the community.
People seek out communities that have family-friendly neighbourhoods that offer employment, safe
environments, arts, culture, recreation, childcare, and social programming. This in turn builds healthy and
sound economic communities.
Gaming funds provide many services that have a huge impact on the quality of life in most communities.
The non-profit organizations that receive gaming funding also provide much employment in their
respective communities where other government programs are not available due to size and location.
Furthermore, many non-profits are members of local Chambers of Commerce.
Without charitable gaming, more and more fundraising pressure will be placed on businesses to support
non-profit charitable organizations and their functions, thereby making it harder for those businesses to
attract the needed workforce.
On June 17, 1999, the Provincial Government, the Union of British Columbia Municipalities (UBCM),
and the British Columbia Association for Charitable Gaming (BCACG) signed two memoranda of
agreement, formally crystallizing the permanent revenue sharing formula of the three parties with the
White Paper on Gaming.
In 2002 the Province enacted the Gaming Control Act. Although the Memoranda of Agreement with the
UBCM and the BCACG concerning revenue sharing were not statutorily codified, both the Act and
Regulations are consistent with them. No superseding legislation, enactment, or agreement extinguishes
the 1999 Memoranda of Agreement between the Provincial Government, the BCACG, and UBCM.
Charity Share of BCLC Net Income 2000-20101
($
millions)
1 Totals for net payout to charities for 2000/01 and 2001/02 are incomplete and do not include independent bingo.
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THE CHAMBER RECOMMENDS
That the Provincial Government:
1. revisit eligibility criteria for community gaming grants and consider reinstating grants for three years
to provide stability, predictability, and consistency;
2. honour the 1999 Memorandum of Agreement between BCACG and the Provincial Government,
which allocated 33% of gaming profits to the charitable sector;
3. request that funding levels be returned to those previously established by the government as of 2008 –
that is $156 million since 2008; and
4. that the responsibility for establishing eligibility for gaming funding to charities and non-profit
organizations be reviewed at arm’s length from government.
EQUITABLE POLICE FUNDING (2011)
Overview of Policing in BC
Residents of BC receive police services from an RCMP provincial force, 60 RCMP municipal forces, 11
independent municipal police departments, one First Nations Administered Police Service (FNAPS), and
the RCMP federal force.
Municipal, provincial, and federal Integrated Teams, the Combined Forces Special Enforcement Unit
(CFSEU, formerly known as the Organized Crime Agency of British Columbia), and the Canadian
National and Canadian Pacific railway police forces also provide specialized law enforcement within the
province.
In the Lower Mainland area of the province, the South Coast British Columbia Transit Authority Police
Service (SCBCTAPS) was established as a designated police unit under the Police Act in late 2005.
There are also enhanced police services at the Vancouver and Victoria International Airports.
Under the BC Police Act, municipalities with a population exceeding 5,000 persons are responsible for
providing police services within their boundaries. These municipalities may contract for the services of
the RCMP to provide municipal policing or they may form an independent (non-RCMP) municipal police
department.
The RCMP provincial force polices municipalities with a population below 5,000 persons, as well as
unincorporated (usually rural) areas.
Independent police departments, First Nations Administered Police Service, and provincial and municipal
RCMP detachments provide police services to specific geographic locations within the province.
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RCMP Federal Force
The RCMP federal force enforces federal statutes across the province. Examples of federal policing
programs include border integrity, national security, commercial crime, international proceeds of crime,
drug enforcement, and protective services. In 2009, the authorized strength of the federal force in BC was
1,034, including 185 protective policing positions.
RCMP Provincial Force
In BC, the Provincial Government contracts with the Federal Government and the RCMP to provide
policing services to municipalities with populations under 5,000, as well as to the unincorporated areas of
the province.
If a municipality is under 5,000 in population, the provincial force polices not only the municipality but
also any unincorporated or rural area surrounding it. If a municipality is over 5,000 in population, the
provincial force polices the surrounding unincorporated area and a municipal police unit polices the
municipality.
The RCMP provincial force also maintains the policing infrastructure for the province. This
infrastructure includes centrally provided police functions that serve all communities. In addition to
capital-intensive items, such as boats and planes, the provincial force provides specialized units such as
unsolved homicide, hate crime, commercial crime, and traffic enforcement that serve all jurisdictions in
BC. In essence, the RCMP provincial force is the umbrella for all policing in the province.
The cost of the provincial force is shared between the Federal and Provincial Governments under the
terms of the Provincial Police Services Agreement (PPSA). The Provincial Government pays 70% of the
contract costs and the Federal Government pays 30%.
In 2009, the RCMP provincial force served 90 municipalities with populations below 5,000 persons in
addition to the unincorporated areas. In 2009, the provincial force had an authorized strength of 2,306
officers providing police services to a population of 685,596.
Until 2007, municipalities with a population of less than 5,000 did not make a direct contribution toward
the provincial police services they receive. Rural property owners paid a rural property tax but the
amount raised from this tax did not make a significant contribution to policing. In 2007, a new police
financing model was introduced that required municipalities with populations below 5,000 persons and
unincorporated areas to pay a more equitable share of their policing costs. Under the new model, less
than 50% of the total cost for the provincial force is collected from property taxpayers in these
communities.
The RCMP provincial force detachments are usually named after the municipalities in which the
detachment offices are located. For example, the Houston RCMP provincial unit polices not only the
Town of Houston but also the rural areas and other communities within the detachment's boundaries.
Where both municipal and provincial units are located in the same detachment or integrated detachments,
the RCMP members from each unit report to one commanding officer and provide police services to the
combined provincial and municipal policing areas.
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Municipal Police
Under the BC Police Act a municipality must assume responsibility for its police services when, as a
result of a Canada Census, its population reaches 5,000 persons. As noted previously, these
municipalities may form their own independent police department or contract for the RCMP as a
municipal police service.
In 1996, there were 67 municipalities with populations exceeding 5,000 persons. This number increased
to 71 in 1997 following the release of the 1996 Canada Census results and remained at 71 following the
release of the 2001 Canada Census results. In 2009, there were 72 municipalities exceeding 5,000
persons as reported by the 2006 Canada Census.
RCMP Municipal Forces
In 2009, there were 60 municipalities with RCMP municipal police services. Each of these municipalities
has signed a Municipal Police Unit Agreement (MPUA) with the Provincial Government for the
provision of RCMP police services to the area within their municipal boundaries. Under this agreement
(contract), the cost of policing these municipalities is shared between the municipality and the Federal
Government.
There are two different MPUA cost-sharing formulas. Municipalities with populations exceeding 15,000
persons are responsible for 90% of the cost of their RCMP police services. Municipalities with
populations between 5,000 and 15,000 persons are responsible for 70% of the cost of their RCMP police
services. The Federal Government pays 10% and 30% respectively. Municipalities are responsible for
100% of their accommodation and support staff costs.
Independent Municipal Police Departments
Twelve municipalities in BC have formed their own police departments and are policed by 11
independent municipal police departments. These police departments are referred to as ‘independent’ and
are responsible for 100% of their policing costs.
The independent municipal police departments include:
City of Abbotsford;
District of Central Saanich;
District of Delta;
Township of Esquimalt (in contract with Victoria);
City of Nelson;
City of New Westminster;
District of Oak Bay;
City of Port Moody;
District of Saanich;
City of Vancouver;
City of Victoria; and
District of West Vancouver.
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The Problem
The current provincial policing contract with the RCMP is scheduled to expire in early 2012 and
negotiations are currently underway to renew the contract. One of the most noteworthy requests from the
UBCM is that Federal and Provincial subsidies for communities with a population over 15,000 go from
the current 10% subsidy to 30%.
Throughout the negotiation process, no mention has been made of the gross inequity that currently exists
between communities contracted with the RCMP through the Provincial Government and those with
municipal police forces.
In 2009, Federal and Provincial Government contributions to policing totalled $517,604,970. It is
patently unfair that, collectively, the communities with municipal policing represent over 1.26 million
residents, 28.3% of the BC population, and tens of thousands of businesses, and received absolutely no
funding from senior governments towards policing costs.
Individuals and businesses in municipalities with municipal police forces pay 100% of their local policing
costs. These costs, without exception, are the single largest part of the total municipal tax bill. To
exacerbate the problem, the residents and business owners in these municipalities directly subsidize the
costs of policing in neighbouring communities using the RCMP through our provincial and federal
personal and corporate income taxes.
While the required funding structure was known to each of these municipalities when they created their
own police force, all other aspects have since changed. The complexity and the challenges facing modern
policing are dramatically different from those facing communities only a few years ago. Whether it is the
huge challenge organized crime presents to many communities or the challenge of addressing cyber
crime, the nature and complexity of policing has changed considerably. This all comes with a significant
cost to police forces that could not have been foreseen at the time they created their own municipal force.
The growth in cost to municipalities comes at a time when municipalities are facing significant cost
pressures in areas such as transportation and infrastructure. As the Chamber addresses in other
resolutions, this has led to a trend towards unfair levels of property tax being levied onto the business
community. With the single biggest line item in these communities being protective services, the impact
on business is of significant concern.
Crime doesn’t recognize, or stop at, geopolitical boundaries.
The majority of communities with their municipal forces have international points of entry (border
crossings, harbours, airports, etc). Organized crime tends to move towards areas of least resistance.
The Chamber believes public safety is a foremost concern for communities and their respective business
members and residents.
The Chamber finds it unacceptable that both the Provincial and Federal Governments deem the public
safety of our citizens to be of secondary importance when it comes to the allocation of dollars.
To create silos of policing inequity is detrimental to all communities in BC due to the geographically
fluid, predatory, and opportunistic nature of crime.
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THE CHAMBER RECOMMENDS
That the Provincial Government work with the Federal Government to:
1. urgently address the issue of equitable police funding by developing an equitable funding program for
all BC municipalities;
2. have senior levels of government provide the same cost sharing to those communities using a
municipal police force as to those contracting the services of the RCMP;
3. and further, that the Provincial Government not entertain or sign a new contract with the RCMP for
policing in the province of BC that creates inequity in policing throughout the province.
POLICE AMALGAMATION (2011)
There has been much debate relating to the amalgamation and/or regionalization of police services in BC.
At the present time, the Royal Canadian Mounted Police (RCMP) and 11 independent municipal police
organizations provide service across BC. Those include independent police departments in: Abbotsford,
Central Saanich, Delta, Nelson, New Westminster, Oak Bay, Port Moody, Saanich, Vancouver, Victoria,
and West Vancouver.
This patchwork quilt of municipal police forces and RCMP detachments across the province is filled with
departments that often manage their cases differently and lack the specialized training being provided to
officers elsewhere.
A number of police forces lack the resources to do day-to-day work, let alone commit officers to work on
multi-agency teams. These types of obstacles have hampered major multi-jurisdictional investigations,
like the case of dozens of missing women from Vancouver’s Downtown Eastside. Two decades after
Clifford Olson began abducting and murdering children on the Lower Mainland, BC police agencies still
face major roadblocks when trying to catch organized, mobile serial predators.
Examples such as the Olson case and the Pickton case have exploited the lack of guidelines covering how
and when police agencies come together to form joint task forces when a criminal begins crossing
jurisdictions. When municipal police forces act alone, they can often miss critical information to an
investigation that might have been detected under a wider coverage area. Issues of public safety are of
particular concern in areas where municipal boundaries are immediately adjacent.
Municipalities are feeling the impact of provincial downloading and increased costs of police service
delivery. Amalgamation of police services may provide uniformity of enforcement, specialization, better
coordination of resources, ongoing and in-service training, fewer infrastructures, improved efficiency, and
the avoidance of duplication.
Municipalities in BC of more than 5,000 persons are required to bear the expenses necessary to maintain
law and order. The Police Act gives such municipalities three choices: they may establish their own
police force, they may contract with the provincial police agency, or they may contract with another
municipal police force.
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Ultimately in BC the Attorney General is responsible for policing. Where it is evident that amalgamated,
regional police services would field more effective policing rather than a multitude of local services, the
Provincial Government has the power to legislate such action. The Provincial Government demonstrated
this power in January of 2003, when it amalgamated the Victoria and Esquimalt police departments.
Arguably, the most divided policing continue to be found in the capital region of BC, an area policed by
four independent police forces and three RCMP detachments. Central Saanich, Saanich, Oak Bay, and the
amalgamated Victoria-Esquimalt departments all run independently of each other in the Greater Victoria
area. Dividing police resources along city borders makes little sense from a practical point of view. Few
criminals or policing problems confine themselves within a municipality; prostitution, the drug trade,
organized gangs and violent serial offenders have increasingly regional, national, and international
patterns that require a coordinated solution.
An example of the shortcomings of integration policy versus full amalgamation was found in 2009, when
the Victoria Police Department withdrew from the regional integrated crime-fighting unit, citing financial
constraints and pressures on department resources. This reinforced the need for full amalgamation as
regional demands continued to overly impact one municipal police force, forcing budgetary concerns to
trump public safety. During the announcement, Police Chief Jamie Graham highlighted this issue, stating
that, “It should be a regional force, right from that ferry terminal to Oak Bay to the Western
Communities."
Since 2003, successive provincial Solicitor Generals have highlighted the need for regional police
amalgamation. Most strongly, Solicitor General Rich Coleman stated that if municipalities in the Greater
Victoria region did not further integrate police services, the Provincial Government should force them to
merge into a single agency. No substantial integration has happened between the police departments
since that statement despite a 2003 poll conducted for CHEK and the Times Colonist that found police
amalgamation was supported by 70% of capital region residents, including a majority in every single
municipality.
These results are echoed in the public’s continued concern cited in a 2008 report to the Vancouver Police
Department2, which stated, “A recent (November 10, 2007) Angus Reid survey found, for example, that 65
percent of residents surveyed in the GVR support creating a regional police service. This is a significant
finding that should inform discussions of a regional police service going forward. It appears that public
concern with the effectiveness of the police in responding to crime and violence in the region outweighs
concerns related to the creation of a larger police service and the loss of “no call too small” policing.”
In larger urban and metropolitan areas, police amalgamation would be beneficial for several reasons,
including:
Reduced policing costs - reduction in policing costs realized through integrated infrastructure and
management;
Better integration and increased effectiveness – By amalgamating units such as serious crimes
unit, sex crimes unit, financial crimes section, strike force, gang unit, dispatch unit, human
resources, purchasing, K9, administration functions, forensic identification, and detention
facilities;
2
Options for Service Delivery in the Greater Vancouver Region: A Discussion Paper of the Issues Surrounding the
Regionalization of Police Services, February 2008
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Population shifts – Thousands of people work and live across municipal boundaries and are
exposed to multiple police forces and jurisdictions;
More equal administration of justice – Each police department carries its own operational
policies, leading to regional disparities in law enforcement; and
Increased Quality of Life and Safety – when approached separately in the region as opposed to
cohesively, it jeopardizes public safety and our quality of life
THE CHAMBER RECOMMENDS
That the Provincial Government addresses the issue of regionalization of police services in the province
of BC by:
1. establishing provincial standards for the integrated delivery of police services by police forces where
municipal boundaries are immediately adjacent; and
2. where necessary, legislating amalgamation of police services in areas where established standards are
not being met and where uniformity would benefit service delivery and public safety.
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ABOUR, CITIZENS’ SERVICES AND OPEN GOVERNMENT
LABOUR AND EMPLOYMENT (1998 – Revised 2011)
The vast majority of employment and economic development in BC is generated from the small and
medium sized business sector (SME). SME’s currently account for 80% of job creation in Canada and
their employees represent nearly 50% of all workers in the province.
A disincentive to investment and a killer of jobs is over-regulation by government of SME’s. Labour and
employment regulations underwent significant changes under the previous government. In most cases,
the changes made it more difficult for SME’s to operate and significantly hindered job creation in BC
during that period.
The current Federal Government has taken significant steps to address the concerns of business and has
indicated that further measures will be introduced. While the Chamber supports the majority of changes
introduced to date, further reform is necessary if SME’s are expected to cope with the economic realities
of the 21st century in BC.
Although there are many government regulations in this field, the key labour and employment regulations
addressed by the Chamber’s Policy and Positions Manual at the provincial level are:
Labour Relations Code;
Employment Standards Act;
Workers' Compensation; and
Human Rights Code
The Chamber is not the only organization that advocates further reform. The Coalition of BC Business
(the Coalition) continues to monitor and speak to labour and employment law reform. The Chamber
remains very active in the Coalition and the Business Council of BC in monitoring and promoting change.
Labour Relations Code
In 2001, the Government amended the Labour Relations Code (the Code) to restore the mandatory secret
ballot vote in all certification applications and to provide that educational programs to students and
eligible children under the School Act be designated as essential services. This would eliminate sectoral
bargaining in the construction industry and clarify the basis upon which votes, including a strike vote,
must be conducted by secret ballot.
In 2002, the government introduced further amendments to the Code that were intended to “provide a
framework for labour and management to build healthy workplace environments and enterprises that
compete in a modern world economy,” and that would, “send an important message to the labour
relations community and to investors that BC is open for business and that we are prepared to make sure
labour relations in BC are balanced, fair minded and support growth and prosperity.”
Changes included amending the Purposes Section 2 of the Code to rename it “Duties” and to emphasize
their overall importance. The list of such duties was expanded to recognize the rights and obligations of
employees, employers, and trade unions under the Code and foster the employment of workers in
economically viable businesses. The Provincial Government also introduced significant amendments to
employer free speech by expanding the right to communicate under Section 8 of the Code.
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ABOUR, CITIZENS’ SERVICES AND OPEN GOVERNMENT
In December 2003, the Minister of Skills Development and Labour announced the formation of a Section
3 Committee to provide advice on 14 policy issues related to the Labour Relations Code. The changes
were aimed at returning balance, flexibility, and individual accountability to the Code for both employers
and employees. A number of the issues assigned to the Section 3 Committee addressed aspects of
certification, decertification, and fair representation. Others include: Definition of Picketing, Definition
of Employee – as it pertains to exclusion from a bargaining unit; and Successor Rights and Obligations,
as they pertain to “contracting out.” The Chamber actively participated in the development of a
submission from the Coalition, which, since 1992, has spoken for small and medium-sized business
employers with respect to regulation of employment matters in the province, including labour relations,
employment standards, human rights, and Workers’ Compensation Board (WCB) issues. The Committee
filed its report in April 2003. The Committee analyzed the issues before it, “to assist the Minister in
making decisions about how to proceed.” However, the Provincial Government has yet to act on the
Committee’s report.
Other items not mentioned in the report that were not subject to review include the following:
Section 5(2)(a)
This Section requires the Labour Relations Board (LRB) to schedule a hearing into certain unfair labour
practice and complaints within three days of its filing. This creates significant problems for employers
preparing their response to the complaint. It also creates a problem for the LRB in arranging hearings in
such a short time period.
Elimination of Employment Due to Loss of Membership in a Trade Union
Under Section 5.1 of the former Industrial Relations Act, unions were prohibited from expelling or
suspending membership unless the employee failed to pay the periodic dues, assessments and initiation
fees uniformly required to be paid by all members of the union, or having engaged in activity against the
union contrary to the statute. This Section limited the circumstances under which unions could require
employers to terminate employees under collective agreements that required union membership as a
condition of employment. The Chamber submits that this protection should be restored.
Replacement Workers – Section 68
The Chamber was most disappointed to see that the Government has not decided to deal with Section 68.
The Chamber maintains its position that Section 68 must be repealed in all its forms.
Section 68 restricts the right of an employer to carry on operations during a lawful strike or lockout. The
Chamber has consistently maintained that Section 68 is manifestly unfair, especially insofar as it affects
small-and medium-sized businesses in BC. Where such an employer is involved in a labour dispute, it
typically finds that the balance of power is tilted significantly in favour of the trade union because of the
impact of Section 68. Often an employer is unable to continue its operations in any form due to the
labour dispute while the striking employees on the other hand are able to obtain alternate work during the
labour dispute, which greatly reduces the employer's ability to counteract the union's economic pressure.
Moreover, Section 68 discourages investment, as it is a provision that does not appear in the labour
legislation in most other Canadian jurisdictions. Eliminating Section 68 would send a strong message to
the global business community that BC has finally balanced the playing field in a way that opens up the
many business opportunities that are available in this province.
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ABOUR, CITIZENS’ SERVICES AND OPEN GOVERNMENT
Elimination of Remedial Certification – Section 14(4)(f)
It is the Chamber’s position that the remedial certification power in Section 14(4)(f) should be repealed.
The amendment to the Code, which re-introduced mandatory secret ballot votes in certification
applications, was designed to ensure that trade unions are not forced on groups of employees who do not
want them. Remedial certification is inconsistent with this principle and can result in significant damage
to a workplace. Moreover, Section 14(4)(f) is unnecessary as the LRB has sufficient powers elsewhere to
fashion appropriate orders to remedy violations of the Code.
The Chamber believes it is important for BC to take this step, consistent with other jurisdictions, which
would ensure that workers' democratic rights are preserved.
Essential Services
There is a perception that when the government designates a service as essential, the service will continue
to be delivered as is. This is not the case, however, and service levels in essential undertakings are often
set by the LRB at relatively low-levels. The recent BC Ferries dispute demonstrated the harm caused to
innocent third parties by setting relatively low-levels of service, and the Provincial Government was soon
required to step in. The Chamber recommends that essential service levels be set high enough to prevent
loss to SME’s.
Issues discussed by the Committee which the Chamber believes require attention include the following:
Partial Decertification
The Chamber joins the Coalition in recommending that the Code be amended so that rules governing
decertification are the same as for certification. A group of employees must have the right to decertify if
they no longer want union representation and they should not be confronted with difficult rules or
unnecessary roadblocks in doing so.
Successorship and Bankruptcy
The Chamber recommends that the Code be amended so that employees have a choice about union
representation when a bankrupt business is restarted. The new owners should not be required to inherit
the previous union certification and collective agreement.
Picketing
The Chamber recommends that a new definition of picketing be introduced to provide clarity in terms of
what constitutes picketing and what type of labour activities will be included and exempted from the
LRB's regulations. A recent decision of the BC LRB traditionally has provided clarity by providing a
bright line test between picketing consumer leafleting which would remain exempted from regulation by
the LRB pursuant to the Supreme Court of Canada decision in K-Mart. However, the Government could
still consider enacting a new definition in light of the K-Mart decision to ensure a clear and pragmatic
approach balancing the right of people to express themselves versus right of businesses to operate without
illegal picketing.
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THE CHAMBER RECOMMENDS
That the Provincial Government act on the recommendations included in the Chamber submission of
April 10th, 2002, and furthermore:
1. consider legislation emanating from the report of the Labour Relations Code Section 3 Committee;
2. that Section 5(2)(a) be eliminated, leaving it in the LRB's discretion to schedule expedited unfair
labour practice hearings as it deems appropriate, considering the interests of the parties and the
Board's available resources;
3. restore the limitations of Section 5.1 of the former Industrial Relations Act such that trade unions be
prohibited from forcing employers to dismiss employees who have been expelled or suspended from
membership in a trade union, or who have been denied membership in a trade union;
4. that Section 68 be eliminated;
5. that Section 14(4)(f) on remedial certification be repealed; and
6. that the Labour Relations Board be directed to set essential services at higher levels to minimize
disruption to the public.
Human Rights
a) General Policy Recommendations
On March 31st, 2003, amendments to the Human Rights Code came into effect, most of the changes being
procedural. The Human Rights Commission, with its cumbersome investigation and complaint vetting
model and its advocacy component, was eliminated. A direct access complaint model was put in place
with complaints being filed directly with the BC Human Rights Tribunal. In addition, the limitation for
filing complaints was reduced from 12 months to 6 months.
At the same time, the Ministry of the Attorney General created a new complainant representation system.
Prior to the demise of the Commission, all complainants whose complaints had been referred to the
Tribunal by the Commission for hearing were entitled to free legal aid representation through a lawyer
appointed by the Legal Services Society, without a means or merits test. Now, a Human Rights Clinic
represents all complainants before the Tribunal, without a means or merits test. The Clinic is made up of
two entities, the BC Human Rights Coalition, a human rights advocacy organization, and the Community
Legal Assistance Society (CLAS), which provides legal aid services especially on poverty and human
rights issues. The Coalition represents human rights complainants up until a hearing. CLAS represents
complainants at the hearing.
The Ministry of the Attorney General contracted with the Law Centre in Victoria, a legal-aid clinic
operated by the University of Victoria, to provide advice to respondents before the tribunal. There is,
however, no system of free legal representation for respondents, even on a means test basis. Many of the
respondents before the tribunal are small businesses that have little, if any, financial resources to defend
against human rights complaints. The Law Centre acts on behalf of very few respondents, as it is based
only in Victoria. There is no system for legal aid representation for respondents throughout the province.
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While there were problems with the Commission in the speed of their process, and with their apparent
lack of neutrality, only about 10% of the complaints filed with the Commission were referred to the
Tribunal for hearing.
The current adjudication system before the Tribunal is a very paper intensive and litigation-focused
system. The Tribunal vets very few complaints, vetting only those complaints clearly out of time or not
within the Tribunal's jurisdiction, prior to sending them out to the respondent for a written response.
The Tribunal has very limited power to award costs. Under s. 37(4)(a) of the Human Rights Code, the
Tribunal can award costs only if a complainant, “has engaged in improper conduct during the course of
the complaint.” The Tribunal has awarded costs only five or six times.
Respondents must make applications to dismiss the complaint prior to a hearing within seventy days of
the date of the Tribunal’s notice that it accepted a complaint within thirty days of the date on which
information or circumstances, which formed the basis of the application, came to the respondent’s
attention. Additionally, the respondent must file the dismissal application at the same time that they file
the Response to Complaint Form, where the Tribunal has added a respondent or, if the Tribunal has
extended the time for filing, a Response to Complaint Form.
As a result, respondents must make considerable effort to dismiss marginal complaints. Given that the
formality of the Tribunal's system and that the complainants are represented by a free advocate and legal
services, the respondents must usually hire a lawyer.
While the Tribunal encourages early mediation as well as mediation prior to the hearing, many
respondents feel that mediation of a marginal complaint amounts to blackmail; in other words, pay me or
you will go through a lengthy and costly hearing. The Tribunal hearings average between three to five
days.
The bottom line is that the playing field is not level for respondents. Since its inception, the track record
of the Tribunal has been varied in terms of disposing of complaints in an efficient and cost effective
manner.
On one hand, many cases are dismissed on preliminary applications brought by employers under section
27 of the Human Rights Code. Many complaints are dismissed because they do not establish a prima
facie case of discrimination. The Tribunal has dismissed complaints on a preliminary application in a
number of cases where there was “no reasonable prospect of success”. In other areas, the Tribunal will
dismiss a complaint if it is filed out of time and it is usually very reluctant to exercise its discretion to
extend that time limit. If there is no point in proceeding with the complaint, or if it does not further the
Purposes of the Code, the Tribunal can dismiss it without a formal hearing on the merits. Additionally,
the Tribunal will, on occasion, defer a human rights complaint until another proceeding is completed or
may dismiss it if the substance of the complaint has been dealt with in another proceeding, thus avoiding
a duplication of effort and unnecessary time and expense.
The extent of the Tribunal’s powers to avoid lengthy hearings and resolve matters at an early stage are
seen in the Carter v. Travelex Canada Limited decision of the BC Court of Appeal. That decision
confirmed the scope of section 27 of the Human Rights Code which allows the Tribunal to dismiss a
complaint on the basis that the complainant failed to accept a reasonable settlement offer. Generally, the
Tribunal’s mediation efforts are fairly successful.
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On the other hand, there are significant problems with the adjudication of many human rights complaints
in BC. Those problems include the following:
First, many hearings simply get out of hand in terms of the length of the proceedings and the cost. In the
Brar and Others v. the College of Veterinarians of British Columbia proceedings the Tribunal has already
held 200 days of hearing since September 2007. The respondents, following the closing of the
complainant’s case, brought an application to dismiss but were unsuccessful. The Tribunal member
hearing the case was not reappointed and her five-year term expired in July 2010. It was anticipated at
that time that the case would take at least another 150 hearing days before the complaint would be fully
addressed by the parties. There were numerous court proceedings including a recent decision of the Court
wherein the respondent College sought to exclude Tribunal member Parrack from hearing the balance of
the case because it alleged there was a reasonable apprehension of bias. The Court dismissed the
application and Tribunal member Parrack will now complete the case. It is noteworthy to consider the
Court’s disposition of the cost issue: “I am, however, sufficiently concerned about the words and actions
of the respondent complainants that gave rise to these events as well as the unsubstantiated and
speculative allegations advanced by the petitioners and their counsel in response that I have concluded
that no award of costs should be made that would reward the conduct of either party.” (para 93.)
The second problem that is very much at the forefront of concerns for employers, especially for small and
medium sized enterprises (SME’s) that make up the bulk of businesses in BC, is the fact that the Tribunal
believes it has jurisdiction to award legal fees to complainants. There is no doubt that there has been an
explosion of human rights litigation following the Supreme Court of Canada’s 1999 Meiorin decision
which reformulated the duty to accommodate. Despite the direction of the Supreme Court of Canada that
a “common sense” and practical approach must be taken, many human rights tribunals, following Meiorin
seem to have ignored or minimized that direction. Lengthy and costly hearings often follow. The BC
Human Rights Tribunal has held that it does have authority in certain cases to award legal fees. The
uncertainty created by this area of the law makes it very difficult for employers to decide whether to
defend themselves from human rights complaints that may be without merit. How expensive can it get?
In one case, UBC claimed legal fees it incurred in successfully defending a complaint that was outside the
time limit. The case was complicated but never went to a hearing on the merits. UBC’s legal fees were
in excess of $150,000.
A third area that causes concern is the importance the Tribunal places on the procedural aspects of the
Duty to Accommodate (DTA) even where there is no substantive breach of the Code. As a result, there
are decisions where the employer has not violated the substantive aspects of the DTA but has failed to
follow the proper procedure to assess its obligations under the DTA. In one case involving the
government paramedics the complainant, with the assistance of his union, successfully prosecuted his
complaint before the Human Rights Tribunal even though the employer had not violated the substantive
rights under the Code. The paramedic in question had Multiple Sclerosis (MS) and as a result he had
diminished sensation in his hands resulting in an inability to palpate pulses. Paramedics are required as a
part of their jobs to palpate pulses. Following a 22 day hearing and after hearing extensive expert
evidence, the Tribunal dismissed the substantive part of the complaint. It found that the employer had
established that the requirement for paramedics to be able to manually palpate pulses is a bona fide
occupational requirement and it was not reasonably possible to accommodate the complainant by
allowing him to work as an attending paramedic in light of his inability to do so. That, however,
remarkably was not the end of the analysis. The Tribunal went on to consider whether or not the
government had treated the complainant fairly and “with due respect for his dignity throughout the
accommodation process”. It held “a failure to do [so] may result in a breach of the procedural aspect of
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the duty to accommodate, notwithstanding the fact that the standard the employer applied to the employee
was otherwise justified.”
The complainant was awarded $22,500 for injury to dignity, feelings, and self-respect. Furthermore, the
manager involved was also found jointly and severally liable for the damages. The chilling effect of such
a decision on a manager’s ability and desire to act on behalf of an employer in a unionized setting cannot
be overstated. Other remedies were claimed and the complainant was awarded an additional $35,000 in
damages. In another case involving McDonalds, the breach of the procedural aspects of the DTA
resulted in an order for 2 years of wages and $25,000 as compensation for injury to dignity and self
respect.
While the fair treatment of complainants is a laudable goal, these types of damage awards are inconsistent
with the purposes of human rights legislation where an employer can be found to act contrary to the Code
even though there has been no substantive violation of the Code.
Finally, there have been serious questions raised regarding the structure of the Human Rights Tribunal.
The government has sought feedback on the proposal for a “Unified Workplace Tribunal” which would
deal with workplace related disputes and other matters currently overseen by the BC Labour Relations
Board, the Employment Standards Branch, and the BC Human Rights Tribunal. The proposal is that the
Unified Workplace Tribunal would merge these agencies on matters relating to the workplace. The
Chamber, through its affiliation with the Coalition of BC Businesses, supports the creation of the Unified
Workplace Tribunal.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. amend its contract with the Human Rights Clinic so that complainants must meet a means and merits
test in order to receive free legal aid;
2. create a legal aid clinic or system for human rights respondents;
3. amend the Human Rights Code to give the Tribunal more vetting power for marginal complaints on
their own, prior to sending the complaint to the respondent;
4. strike a committee to consider ways in which hearings may be streamlined and conducted in a much
more economical and fair manner;
5. consider the creation of a Unified Workplace Tribunal;
6. amend the Human Rights Code to specifically preclude the Human Rights Tribunal from awarding
complainants costs including legal costs;
7. amend the Human Rights Code to eliminate or limit the circumstances under which an employer can
be found in violation of the Human Rights Code due to a failure to follow “procedural” as opposed to
“substantive” provisions of the Code. The Tribunal should be restricted and precluded from finding a
violation of the “procedural” aspects of the duty to accommodate where there has been no substantive
breach of the Code and no remedies should be allowed for procedural breaches
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b) Abolition of Mandatory Retirement and Age Discrimination
In the 2007 Chamber Policy, it was noted that changes were being proposed to the BC Human Rights
Code to abolish mandatory retirement and prohibit age discrimination for those over 65. The Chamber
recommended and supported a number of initiatives and recommendations with respect to the proposed
legislative changes.
On January 1, 2008, the Federal Government amended the Human Rights Code by changing the
definition of age. These amendments to the Human Rights Code extended protection against age
discrimination to employees and others who are 65 years of age or older. As a result of the amendments,
employers in BC will no longer be able to implement mandatory retirement policies through corporate
policies, collective agreement provisions, or individual contracts requiring retirement at age 65.
The amendments reflect many of the concerns of the Chamber, resulting in a measured approach to the
elimination of mandatory retirement and age discrimination. For example, employers will still be able to
rely upon age-based distinctions, which may be contained in bona fide retirement, superannuation or
pension plans, or bona fide group or employee insurance plans. Therefore, although the change in the law
will give employees the right to work beyond 65 years of age, there will be no requirement that the
benefits, which are provided to older workers, will necessarily be the same as those which are provided to
employees who are younger than 65. The amendments also allow for age discrimination where other
statutes specifically provide for the same. Therefore, WCB restrictions based on age 65 remain in force.
In addition, the Human Rights Code still allows exceptions based on bona fide occupational requirements
to allow employers to institute a blanket mandatory retirement policy at a particular age. Realistically,
however, it will be difficult for employers to justify establishing such mandatory retirement policies.
The amendments potentially create problems for employers who can no longer retire employees at age 65.
Employers will now have to make individual assessments about the capabilities of employees if they wish
to terminate employees. Accordingly, employers will need to pay more attention to performance
management over the entire course of an employee’s career in order to gauge and monitor changing levels
in performance or capacities. If employers wish to encourage older workers to retire then they will have
to consider developing attractive voluntary retirement packages, thus avoiding the necessity of dealing
with employees who may have simply decided to remain working for too long.
While these changes are consistent with changes elsewhere in Canada, the Chamber remains concerned
that it will be difficult for employers to terminate senior employees who have chosen to work beyond age
65. The duty to accommodate requirements under the Human Rights Code have not been modified to
allow a more reasonable accommodation balance between the needs of the employee with the financial
and infrastructure resources available to small and medium sized employers. Further, the exemptions
regarding benefits and other government policies such as WCB may, at some point, be challenged under
the Charter of Rights.
THE CHAMBER RECOMMENDS
That the Provincial Government maintain careful consideration and monitoring of these changes to ensure
that the exemptions remain in place. The Chamber also encourages employers to educate themselves
regarding the advantages of maintaining employees in the workplace who are beyond the age of 65.
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Employment Standards
The Employment Standards Act (the Act) affects all business in BC but notably small businesses are the
most affected as they do not have collective agreements. The Act has been amended several times in the
last couple of years. Several of those amendments are of concern, notably:
Averaging Agreements
An employer and employee can now agree to average the schedule work hours over a period of 1, 2, 3 or
4 weeks. Averaging agreements must be in writing and have a start and an end date. While large
employers have the capacity to create written averaging agreements in advance, small businesses often do
not. They are generally scrambling, as the ultimate multitask employer. A written average agreement
adds another dimension to the workload that is often confusing and difficult to create.
Penalties
Effective November 30, 2002, the Director of Employment Standards can add a $500 monetary penalty
for each violation of the Act, a $2,500 penalty for the violation of the same section of the Act or
regulation at the same location within three years of the first violation, and a $10,000 penalty for the
violation of that same section at the same location within three years of the second violation. Typically,
the Director will add penalties for each section of the Code that is alleged to have been violated. For
example, where a business closes due to financial circumstances, penalties can be added for every section
of the Act that has not been met; i.e., unpaid statutory holidays, unpaid vacation pay, or failure to pay
wages within the time limits of the Act. Furthermore, if there were two employees who were owed
wages, the Director could issue a penalty for $2,500 for that second employee and then $10,000 for the
third employee.
The Director has no discretion under the Act about issuing penalties. There is no due diligence test to the
issuance of penalties. A penalty is often issued where an employee has been fired for what the employer
feels is just cause. Ultimately, just cause is a judgment call that may or may not be held up on review yet
there is at least a $500 penalty for that determination.
Investigation and Adjudication:
The Director rarely investigates complaints of unpaid wages. Instead, the Director has created a SelfHelp Kit and an adjudication process that is conducted by one of the Director's officers. While in some
circumstances, that adjudication process may be helpful, in other cases it is not. An investigation can be
simpler, less costly, and time-consuming for the employer. Often the hearings are long and formal. They
are conducted before an officer who often has little experience or training in adjudication. The Director
has founded its adjudication process on very little statutory power to do so, s. 76(2).
Director's Role
The Director has a statutory neutral role as established by the BWI Business World Inc. BCEST #D050/96
and Mitchell v. Director of Employment Standards, Dec 28, 1993 decision of Justice Vickers. The exact
nature of that role is often very uncertain, and neither the Director nor the BC Employment Standards
Tribunal (the BCEST) has a policy statement or pamphlet on the Director’s role before the BCEST.
There is no consistency as to whether or not the Director will appear on Appeals, or whether the Director
takes a neutral or aggressive role. That lack of clarity and consistency is problematic for appellants. The
Director’s neutral role also dovetails with their statutory obligation under s. 112(5) to disclose the full
record to the Tribunal. This is not consistently done (JC Creations Ltd, BCEST #RD317/03).
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Failure to Follow BCEST Decisions
There have also been several instances recently where the BCEST has upheld appeals on the basis that the
Director has failed to follow precedent set by its previous decisions. This has notably occurred in
decisions involving commission sales. For example, in Parklane Ventures Ltd., BCEST # D211/03, the
Director argued that it may ignore BCEST decisions. The BCEST Tribunal member said that the
argument, "smacks of an abuse of the decision-making and appeal processes established by the
legislature."
The business community is caught in this tension between the Director and the Tribunal. The Tribunal
has set law and the Director is failing to follow it, either in its decisions, in providing the record to the
Tribunal, or in its role before the Tribunal.
THE CHAMBER RECOMMENDS
That the Provincial Government amend the Employment Standards Act by:
1. removing the penalty provision entirely, or placing a broad due diligence style defense, and clarity
around the circumstances when a penalty may be issued;
2. providing clear statutory direction on the role of the Director in investigating and determining
complaints, and in its role and obligation before the BCEST;
3. giving clarity and simplicity to the Averaging Agreements;
4. binding the Director to decisions made by the Tribunal; and
5. awarding costs against the Director for failing to provide a record to the Tribunal and in failing to
follow directions and decisions of the Tribunal.
WorkSafeBC – Introduction
In late 2001 and early 2002, the then Workers Compensation Board underwent a pair of Core Reviews
conducted by Alan Hunt and Alan Winter. The Provincial Government has taken some initial steps to
address the concerns raised by these reviews but more needs to be done as WorkSafeBC, with its costly
administration and weighty regulatory burden, continues to represent a challenge to conducting business
in BC today.
The Chamber recognizes the work the Provincial Government has done to date but advocates further
measures to reform WorkSafeBC.
WorkSafeBC – Occupational Health and Safety
For nearly a decade the Chamber has consistently advocated a regulatory regime better suited to the needs
of small business. Although progress has been made in many areas of the WCB, there are still some basic
challenges presented by Occupational Health and Safety regulations as they currently stand. These
include:
Complexity – Neither SME operators nor many of their employees have the expertise to
understand a host of complex regulations, all formulated by experts in a variety of fields. Large
organisations and government have the resources to keep such experts on staff but this is not an
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option for SME’s. This leaves small businesspeople with two options. They can run the risk of
being unknowingly in violation of the regulations, or they can hire a series of experts to ensure
their workplace is not in violation, a near prohibitive expense for an average SME;
Cost of compliance – One of the largest expense concerns of SME’s is directly related to the
complexity of the regulations. In order to comply with the regulations as written, SME’s would
have to hire a battery of consultants. They would need toxins experts, engineers and architects
just to determine if they are in violation. This expense alone precludes compliance. There are
also regulations that create unnecessary direct costs both by arbitrarily assigning to employers
responsibility for issues that are not legitimately their concern, and by being so vague they can be
interpreted as all-encompassing. Furthermore, there is no evidence that these regulations will
actually decrease the number of workplace injuries. Until a cost/benefit risk analysis can be
conducted there is no way to justify such expense; and
Prescription and inflexibility – The problems described above are all caused by the approach
taken within the regulations. The regulations are prescriptive in nature and attempt to regulate
every single activity that may or may not occur in a workplace. The regulations are aimed at the
lowest common denominator, those few employers who do not follow regulations. These few
employers, however, will not follow regulations, regardless of how restrictive or all
encompassing the WCB attempts to make them. The Chamber believes that this approach is
ineffective and, indeed, unrealistic. Compliance instead must be encouraged through positive
means.
WorkSafeBC should set clear and consistent health and safety standards and leave businesses with the
flexibility to determine how best to meet those standards. This approach would allow the employers to
spend time and resources addressing potential problems rather than spend that time and those resources
following needless and complex regulations. This approach would also put pressure on employers to
produce results as they would be unable to hide behind the loopholes and red tape inherent in any attempt
to create such comprehensive regulations.
Through the Industry Services Branch (ISB), WorkSafeBC has attempted to address some of these issues.
Initiatives they have undertaken include the production of sector-specific guides that would help
employers in certain sectors to better understand what regulations apply to them and how best to comply.
Although this incremental approach has not had the revolutionary impact the business community has
consistently advocated for, the Chamber wishes to continue working with the ISB to further implement
business-friendly amendments to the current regime.
Despite the further work required within this report, there are several recommendations supported by
employers, including the recommendations to fine workers who knowingly breach safety rules and the
recommendation that regulatory review be continuous and completed every three years.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. revise the current Occupational Health and Safety regulations to introduce a goal-based model that
will allow the employer the flexibility to achieve the required safety targets, and emphasize a
preventative and proactive approach that encourages education for employers and workers about their
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rights and responsibilities;
2. continue to rescind the provisions that create unnecessary bureaucracy such as requiring health and
safety committees, and the appointment of safety representatives for small, low risk workplaces;
3. continue to implement the Commission recommendation to fine workers who knowingly breach
safety rules to recognize that both employers and employees are responsible for workplace health and
safety;
4. implement the Commission recommendation to complete a regulatory review every three years to
reflect the constant pace of change in the workplace; and
5. ensure that WorkSafeBC do a better job of educating employers about their rights and responsibilities
by ensuring that communications are in plain, simple language.
WorkSafeBC – Rehabilitation Costs
One of the major objectives of the workers compensation system is to assist injured workers with a timely
return to productive employment. The Chamber strongly supports this goal and believes that more must
be done to help make it a reality.
Early intervention by WorkSafeBC is the key to achieving successful rehabilitation results.
Unfortunately, the experience of many employers is that WorkSafeBC’s administrative processes in
adjudicating and monitoring claims may result in lengthy delays before any vocational rehabilitation
services are considered. In too many cases, the disabled worker has been away from work for such a
lengthy period of time before vocational rehabilitation services become involved, that there is little
chance of successfully returning the employee to any form of productive employment. This is evidenced
by the massive increase in the number of days to return an employee to work over the past two years and
the corresponding increase in costs.
THE CHAMBER RECOMMENDS
That WorkSafeBC encourage timely return to work for injured employees by improving the practices of
the compensation division and the delivery of vocational rehabilitation services.
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BORDER PACT - BEYOND THE BORDER ACTION PLAN (2012)
Trade between Canada and the United States currently equates to the movement of approximately $1.6
billion in goods and services per day in addition to which some 300,000 people cross the Canada-US
border every day. This international trade between our two countries represents tremendous mutual
economic benefit and has grown substantially since the enactment of the North American Free Trade
Agreement. The new Beyond the Border Agreement endorsed by Canadian Prime Minister Harper and
US President Obama makes provision for action plans that are intended to reduce trade barriers through
harmonization of the regulatory process, increase mobility, and reduce delay while increasing efficiency
under enhanced security measures.
Trusted-traveller and business programs such as NEXUS and the Free and Secure Trade (FAST)
programs are slated for expansion. Harmonization of the regulatory process is intended to improve and
streamline the flow of traffic and trade. Trade facilitation, economic growth, and jobs are key areas of
cooperation outlined in this new border pact. Both parties to the Action Plan recognize the need to reduce
the cost of conducting legitimate business across the border, and to implement “coordinated, cooperative,
and timely border management decision making”.
There are some flaws within the prevailing border programs relating to the cross-border mobility of
people that are deserving of attention within the forthcoming harmonization process – some of which are
addressed within the following observations:
NEXUS
NEXUS is an enrollment-based system in which applicants are pre-screened to determine what risk, if
any, they pose as travellers. Upon approval, low-risk applicants are issued a NEXUS card and receive the
privilege of using the NEXUS lane at border checkpoints. By separating NEXUS card-holders from the
rest of the traveling public, NEXUS enables Canadian and US border authorities to concentrate their
efforts on potentially high-risk travellers and goods, thereby enhancing border security. It also allows
card-holders to enjoy predictable and timely border-crossings.
NEXUS attempts to strike a balance between national security and economic security. However, both the
“zero-tolerance” enrollment policy and absence of an appeal mechanism for those denied enrollment
shows little regard for personal security. To date, NEXUS procedures have left individual rights subject
to the whim of institutional expediency.
Pages 12 and 13 of the Plan recognize the need for NEXUS enhancement. By 2013, the parties aim to
enhance enrollment, compliance enforcement redress, and other benefits. The Chamber urges that the
Plan’s NEXUS enhancements include the following:
1. Retreat from NEXUS’ Zero Tolerance enrollment policy that denies NEXUS benefits to persons
with criminal convictions for minor violations of the law, no matter how old. A waiver of
ineligibility for FAST enrollment is available to qualifying truck drivers with minor convictions.
A NEXUS waiver of ineligibility might be modeled on the FAST waiver process.
2. Establish an appeals process for NEXUS denials and revocations (Canada already has such a
process insofar as revocations are concerned). NEXUS has matured since it began in 2001 as part
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of the Smart Border Accord, and due process protections need to be built into its application and
revocation procedures. A “Smart Border” is incomplete without such safeguards.1
The Plan also indicates that the US and Canada will implement a joint marketing plan for NEXUS. We
suggest that building transparency and accountability into the program, as suggested above, is the simple
way to ensure increased enrollment. Many potential users have opted out of NEXUS because of
perceptions that both program enrollment and revocation processes are subject to arbitrary and capricious
administration.
Meanwhile, we suggest that NEXUS card-holders be able to opt-in for periodic e-mail updates which
would provide information regarding additions and deletions of prohibited food items, changes in
NEXUS hours, addition of NEXUS lanes at various Ports of Entry, and periodic reminders of NEXUS
rules. The e-mail list should also request periodic feedback from NEXUS participants – the system as it
currently exists has no formal feedback mechanism. Confusion exists within the NEXUS lanes as to
whether card holders can make verbal declarations (as exists within non-NEXUS lanes) or must research
and prepare formal written declarations. The Chamber suggests that this inequity needs to be addressed
in order for entry requirements to be clearly understood and so that travellers are not inadvertently
directing to non NEXUS lanes (so as to make verbal declarations) and thus adding to traffic congestion.
NEXUS has proven itself at land-border crossings and airports. The Chamber suggests NEXUS
documented passengers receive priority treatment when boarding US destined cruise ships or AMTRAK
in Vancouver, BC.
After-sales service
Page 15 of the Plan outlines several cross-border business areas in which improvement is anticipated.
One of these areas is after-sales service to industrial and other critical operations systems (e.g. software)
acquired from abroad. The Chamber notes that Customs and Border Protection (CBP) often construes
rules allowing foreign nationals to enter the US for this purpose as narrowly as possible. However,
narrow construction is not inherent in applicable law.
For example, the Department of State’s (DOS) Foreign Affairs Manual (FAM) does not require business
visitors travelling to the US to perform after-sales-service to have the same country of origin as the
product to be serviced:
9 FAM 41.31 N10 OTHER BUSINESS ACTIVITIES
CLASSIFIABLE B-1
While the categories listed below generally may be classified under the
proper applicable nonimmigrant class, i.e., A, E, H, F, L, or M visas, you
may issue B-1 visas to otherwise eligible aliens under the criteria
provided below.
1
NEXUS card-holders are not allowed to use the NEXUS lane for transport of commercial goods upon threat of revocation of NEXUS benefits.
Persons enrolling at the Blaine enrollment center are frequently advised that they cannot take more than six of their business cards with them
when using the NEXUS lane, as transportation of seven or more business cards constitutes transportation of commercial goods for NEXUS
purposes. The Chamber knows of no commercial or security justification for such statement; it suggests that the lack of an appeals process is a
factor that allows such statements to be made.
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9 FAM 41.31 N10.1 Commercial or Industrial Workers
1. An alien coming to the United States to install, service, or repair
commercial or industrial equipment or machinery purchased from a
company outside the United States or to train U.S. workers to
perform such services. However, in such cases, the contract of sale
must specifically require the seller to provide such services or
training and the visa applicant must possess specialized knowledge
essential to the seller’s contractual obligation to perform the
services or training and must receive no remuneration from a U.S.
source…
The North American Free Trade Agreement (NAFTA) contains a similar provision:
After-Sales Service
Installers, repair and maintenance personnel, and supervisors,
possessing specialized knowledge essential to a seller's contractual
obligation, performing services or training workers to perform services,
pursuant to a warranty or other service contract incidental to the sale of
commercial or industrial equipment or machinery, including computer
software, purchased from an enterprise located outside the territory of
the Party into which temporary entry is sought, during the life of the
warranty or service agreement.
The NAFTA provision mirrors the After-Sales Service clause of the U.S. - Canada Free Trade Agreement
(CAFTA), which reads as follows:
After-Sales Service
Installers, repair and maintenance personnel, and supervisors,
possessing specialized knowledge essential to a seller's contractual
obligation, performing services or training workers to perform services,
pursuant to a warranty or other service contract incidental to the sale of
commercial or industrial equipment or machinery, including computer
software, purchased from an enterprise located outside the United
States/Canada, during the life of the warranty or service agreement.
The after-sales service provisions of the CAFTA and the NAFTA are virtually identical with the
exception that the NAFTA provision refers to the Parties to cover the United States, Canada and Mexico,
while the CAFTA provision refers to United States/Canada.
None of the three after-sales service clauses cited above requires the person providing service to be a
national of the country in which the equipment was manufactured. However, CBP frequently requires
the sale to involve Canadian made product sold from a Canadian company for a Canadian to supply
the after-sales service.
In 1991, the US Department of Commerce published a pamphlet entitled “U.S. - CANADA Free Trade
Agreement After-sales Service and Repair Questions and Answers”. The publication is aimed at US
persons seeking to perform after-sales service in Canada under the CAFTA.
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Page 5 of the pamphlet is most instructive. Paragraph 3 of page 5 indicates that for an American to
perform after-sales service in Canada the product to be serviced be purchased from a seller “located
outside of Canada and must not be of Canadian origin.” Accordingly, applying this rule to the converse
situation (i.e., a Canadian to perform after-sales service in the US) the product to be serviced must be
purchased from a seller located outside of the US and must not be of US origin.
In addition, the last paragraph of page 5 of the pamphlet indicates that for an American to perform aftersales service in Canada, it is not even necessary for an American company to have made the sale of the
product to the Canadian user; it sets out provisions for a third country national company to make the sale
and to contract the after-sales servicing to a US company. Accordingly, applying this rule to the converse
situation (i.e., to Canadian after-sales service providers) a Canadian company need not have made the sale
to the US user provided the after-sales servicing has been contracted to it, for one of its Canadian
employees to provide the after-sales servicing.
Thus, it appears that after-sales service is frequently construed by CBP more narrowly than intended. In
Beyond the Border discussions regarding after-sales service, the Chamber suggests that the criteria
contained in referenced publication be used as the baseline for expansion of after-sales service rules
instead of the endpoint.
Lastly, the Chamber suggests that a bilateral pamphlet similar to referenced publication reflecting the
Beyond the Border after-sales and after-lease service agreements be published.
Redress and expedited removal
The Plan calls for a review of the effectiveness of existing redress and recourse mechanisms for business
travellers whose applications are denied, and for implementing administrative and operational
improvements by the end of 2012. The Chamber suggests that CBP’s use of expedited removal against
Canadians be part of this review.
Expedited removal is a procedure authorized by US law in 1986 by which non-resident aliens may be
excluded from the US without the opportunity of a hearing and barred from re-entry for a period of five
years. There is no judicial review of an Order of Expedited Removal. Nothing can be as devastating for a
cross-border business as the expedited removal of a key employee.
However, the Attorney General has been authorized to exempt certain aliens from the expedited removal
process, and has done so by promulgating 8 C.F.R. § 235.3:
“An alien who is arriving in the United States, … who is determined to be inadmissible
under section 212(a)(6)(C) or 212(a)(7) of the Act (except an alien for whom
documentary requirements are waived under §211.1(b)(3) or §212.1 of this chapter),
shall be ordered removed from the United States…”
Documentary requirements have been waived for most Canadian non-immigrants. Specifically, 8 C.F.R.
§ 212.1 provides that “a visa is generally not required for Canadian citizens.” Thus, reference to 8
C.F.R. § 212.1 by 8 C.F.R. § 235.3 means that Canadian citizens are not to be subjected to expedited
removal. Unfortunately, CBP subjects Canadians to expedited removal on a daily basis.
Expedited removal does not have effective redress and recourse mechanisms, as anticipated by the
Beyond the Border Action Plan, because (1) persons on whom it is used have been exempted from redress
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and recourse, and (2) it bars these persons from entering the US for a period of five years with no
opportunity for judicial review. Under the expedited removal scheme, CBP acts as the judge, jury, and
executioner.
Meanwhile, Canada has no equivalent to the expedited removal process.
The Chamber suggests that the Beyond the Border process provides an excellent opportunity to clarify
that expedited removal is not to be used on Canadians requesting admission to the US at Ports of Entry
for business or pleasure purposes.
Facilitating the conduct of cross-border business
Among other things, this topic calls for:
a) Providing enhanced administrative guidance and training to CBP and CBSA officers and enhanced
operational manuals to achieve optimal operational consistency at all ports of entry on business traveler
issues.
Improvements for consideration to;
Ensure that all guidance and training materials and enhanced operational manuals are made
available to stakeholders prior to finalization so as to allow stakeholder feedback.
Share all current guidance and training materials and current operational manuals as soon as
possible.
b) Reviewing current administrative processes under which all categories of business travelers may
request adjudication of employment and related petitions by the destination country’s immigration
authorities to identify and resolve potential issues prior to the actual date of travel.
Improvements for consideration to :
Expand border processes that work for Canadian and US Citizens by extending them to
permanent residents of the two countries wherever possible.
Expand border processes to include expanded NAFTA work permit processing options:
o The US could provide a new Perimeter Security Partner Processing option to Canadians
encouraging them to submit work permit applications to US Citizenship and Immigration
Service (USCIS) Regional Processing Centers where the applications would be
adjudicated within 10 days at no additional charge other than the standard processing fee.
As it presently stands, applications sent to Regional Processing Centers take
approximately 90 days to process unless an additional Premium Processing fee of $1,225
is provided, in which case the matter is adjudicated in 15 business days.
o The US could allow initial processing for TN (NAFTA professional) matters to take
place at both Ports of Entry and at USCIS Regional Processing Centers. Currently the
initial TN application must be made at a Port of Entry.
o The US could reestablish NAFTA Free Trade Officer positions at major ports of entry.
The US abolished such posts many years ago.
o USCIS could expand its operations to include adjudication of NAFTA work permit
matters at major Ports of Entry, thus taking over CBP’s duties in this regard.
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These and other examples have been the subject of negative publicity and are the cause for concern,
doubt, and confusion and have led to significant loss of public confidence. The foregoing corrective
undertakings are expected to provide beneficial changes within border programs that will serve to create
an increased level of public confidence and acceptability with the view that enhanced greater participation
will lead to improved mobility and reduced congestion while advancing the cause of international trade
and travel.
THE CHAMBER RECOMMENDS
That the Provincial Government work with the Federal Government in conjunction with their United
States counterparts to:
1. address the current existing inequities between regulatory and interpretative aspects of Canada – US
border impediments, as demonstrated in the combination of options for consideration and the urging
of action with specific suggestions outlined in the Preamble, which negatively impact the legitimate
flow of people, goods and services across the Canada/US border and undertake these in conjunction
with implementing improvements under the new “Beyond the Border Action Plan”; and
2. implement improvements in cross-border transactions to support the principle that people, goods and
services are deserving of equitable treatment irrespective of whether the transaction is southbound or
northbound across our mutual international borders.
IMPROVING CONSUMER CHOICE: REMOVING INTER-PROVINCIAL TRADE BARRIERS
TO SALES OF 100% CANADIAN WINE (2012)
In an increasingly competitive global marketplace, inter-provincial barriers in Canada still prohibit
growth in many businesses and industries. In 1994, Provincial and Territorial Governments concluded
the Agreement on Internal Trade providing a basis to tackle inter-provincial trade barriers. While this
approach was a commendable first step towards creating a more competitive national marketplace, for
some industries it has yet to deliver on its promise.
A prime example of a sector faced with inter-provincial barriers is Canada’s growing wine industry.
Canadian consumers have limited access to the world-class, award winning wines that Canada’s 400+
grape-based wineries are producing. Federal and provincial laws and regulations prohibit the personal
transport or direct delivery of Canadian wines across provincial boundaries. An amendment of these
prohibitive and archaic regulations would strengthen the domestic wine industry and facilitate consumer
choice.
Background
Since 1928, the federal Importation of Intoxicating Liquors Act (IILA) and corresponding provincial and
territorial legislation has prevented the movement of liquor across provincial boundaries. Currently, it is
illegal to transport or deliver alcohol across provincial borders unless it is purchased by or on behalf of a
provincial liquor board, which controls cross-border movement of alcohol. The result of these laws is that
it is a federal criminal offense for Canadians to take even one bottle of alcohol across a provincial border.
Canadian wineries are able to apply to provincial liquor boards, or to private Alberta and BC stores, to
have their products listed and sold. The retail sales application process require time, agency support and
adds significant costs, which are often beyond the reach of some wineries which have neither the sales
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volumes to meet liquor board thresholds nor the financial means to afford the restricted profit margins due
to liquor board markups (e.g., 62.5% in Ontario, 123% in BC). Moreover, all liquor boards have limited
shelf space, and cannot physically stock the growing number of wine products from more than 400 grapebased wineries operating across Canada. Many provincial liquor boards have special order programs, but
these systems are cumbersome, costly, and inefficient compared to an order directly from a winery.
These rules were designed long before internet sales and just-in-time delivery became viable options for
wine distribution. As the industry continues to grow, it is vital that it have access to domestic
opportunities beyond its province of production. Direct sales would give Canadian wineries of all sizes a
new sales channel and greater choice for Canadian wine consumers.
Reduced inter-provincial barriers would also provide an important benefit for wine tourism. With
significant growth in wine and culinary tourism, out-of-province Canadian tourists are restricted by law
from bringing wine home, joining a wine club, or even ordering wine online. The winery loses because it
cannot build a long term loyal relationship. The customer loses because they may not be able to find the
wine at their local retail store. The winery province loses because winery tourism loses its caché with
Canadian tourists. It is simply wrong that Canadians who visit Canada’s wine regions do not have the
opportunity and choice of transporting or ordering domestic wines not readily available in their home
province.
The growth of the wine industry in the four key producing provinces – Ontario, BC, Nova Scotia and
Quebec – and the potential in other provinces (e.g., Prince Edward Island, New Brunswick) is clearly
beneficial to Canada. Not only does the domestic wine industry create jobs, preserve valuable
agricultural land, and create vibrant tourism destinations, it also adds value to the economy in many other
ways. A 2008 study conducted by KPMG and commissioned by the Wine Council of Ontario concluded
that the sale of one litre of 100% Ontario wine added $11.50 in value to the Ontario economy compared
to $0.67 in added value from the sale of an imported wine.
In the United States, similar prohibitive state regulations hindered the domestic wine industry from
delivering directly to out-of-state consumers. In 2005, the US Supreme Court ruled that regulations
restricting the direct delivery of wine between states were unconstitutional and ordered regulations to be
adjusted to allow for domestic wines to be direct delivered across state jurisdictions. As a result, some 38
states now permit direct-to-consumer delivery (including 72% of states that have a monopoly over wholeselling and retailing of alcohol, e.g., Maine, Pennsylvania and Oregon) representing 1% of total wine
produced in the US, excluding exports. By allowing more consumer choice, the entire domestic industry
has benefited.
Changes in Canada could have the same positive impact. By removing inter-provincial barriers to
domestic wine delivery, an important agricultural commodity will gain access to a larger domestic
market, improving the financial stability of the industry; help it to compete against imported wines which
dominate the Canadian wine sales; and enhance its overall positive impact on the economy. Importantly,
Canadian consumers will have increased access to quality Canadian products.
There is clearly a growing citizen, voter, and parliamentarian demand to allow Canadians to buy more
Canadian wine. The Alliance of Canadian Wine Consumers’ campaign has been formed to spearhead a
consumer voice for change. In the prior Parliament, MP Ron Cannan also introduced a motion in the
House of Commons that proposes a personal exemption to the IILA allowing Canadian consumers to
move a limited volume of wine across provincial boundaries. In the last Parliament, MP Dan Albas MP
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introduced the same motion. Additionally, MP Rick Dykstra, during 2011 pre-budget consultations,
indicated that inter-provincial barriers to domestic wine delivery negatively impacts businesses
(particularly SMEs) as well as consumers and their choices.
The time has come for Canadian governments (Federal, Provincial and Territorial), in cooperation with
the wine industry, to eliminate the barriers to trade and finally make it legal for adult Canadians to
purchase 100% Canadian wines at out-of-province wineries or have it shipped to their home without
breaking the law. This can be accomplished while meeting our trade obligations, social responsibility
concerns, and delivering some tax revenues to the receiving province. Given the small impact to the
overall wine volumes, the mandate and revenue stream of liquor boards will not be compromised.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. work with all provinces and territories to facilitate the shipment and/or direct sale and delivery of
wine from out-of-province/territory wineries to Canadian consumers; and
2. work with the provinces/territories and the Canadian wine industry to create a personal exemption
system that would allow specified quantities of wine to be personally transported by or delivered
directly to out-of province/territory Canadian consumers.
ON LINE PROVINCIAL AND MUNICIPAL VOTING (2012)
Canadians live in an increasingly electronic era and expect a range of options to increase flexibility to
accommodate in their busy schedules. One of the challenges facing Canadian democracy is a reduction in
voter turnout. Some of this is due to voter apathy, while other reasons include availability and ease of
voting. On-line voting enhances convenience, flexibility, and potentially promotes increased participation
in the voting process. With an aging population, this issue may very well compound even more.
Many small business owners are still not able to vote, as they would need to close their business in order
to cast a ballot. This group is not only a large portion of the population, but is quite often the vote that
represents a large portion of the tax base and does not have a voice. In addition to this group, there are
seniors who are unable to arrange transportation to a voting station in a timely fashion. This again is a
significant portion of the population that may be a missed vote. Given that both of these groups have
access to computers and the Internet, an electronic vote that is both convenient and secure is a possible
solution.
Three municipalities in Canada (Halifax, Markham, and Peterborough) have conducted municipal Internet
voting. According to elections.ca, the introduction of Internet voting was well received by the public.
There is general public support for the extension of Internet voting especially among the younger
demographics in these communities. A fully integrated on-line vote allows for faster vote counting, better
voter turnout, and reduced fossil fuel usage (eliminates driving to polling station).
Given that a full analysis of the risks and possible benefits has not been completed, nor has a marketing
campaign been completed, analysis is needed of the feasibility of implementing an on-line system as a
solution to voter turnout challenges, in particular within the small business community.
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Prince George is an example of low voter turnout in the last municipal election; of approximately 53,000
eligible voters for 2011’s municipal election, only 15,000, or about 29%, headed to the polls. That
compares to 16,800 voters, or 32%, in the last municipal election (it is noted the weather was worse
during this election). In the federal election earlier this year, the two Prince George ridings saw a voter
turnout of 58% and 54% respectively.
In Vancouver’s municipal election, 2011 turnout was 34.57%, up slightly from the 2008 turnout of 31%
and the 2005 turnout at 32%. However, the 2002 voter turnout was 50%.
In the 2011 municipal elections, turnout according to CivicInfoBC was 29.55%, hardly a clear
representation of public input. CBC New posted on November 19, 2011 that, “Municipal voter turnout in
BC has dropped to the lowest in Canada.”
Overall, statistics from Elections BC show a decline in provincial voter participation from 77.66% in
1983 to 50.99% in 2009.
Benefits of on line voting:
1. Increased accessibility for businesses and for general population;
2. Increased opportunity for participation for businesses and for general population;
3. Inclement weather would not be an obstacle;
4. Increased convenience for businesses and for general population;
5. Environmentally greener, less paper (a potential decrease in the budget for voting procedure); and
6. Facilitates creation of government that is more representative of the overall electorate and avoids
domination of special interest groups.
Risks:
1. Internet hacking;
2. Technical difficulties; and
3. Difficulty in verifying voter identification (However, Markham developed a system that required
login to the system prior to registering. The voters were issued an access code and had to provide
their address and date of birth to mitigate this difficulty).
Conclusion
The benefits are positive and outweigh the risks. The democratic system of voting in BC and Canada is a
fundamental right and removing barriers and increasing accessibility to that right is essential. On-line
voting allows for more business owners to conveniently vote as well as those with mobility issues.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. develop a plan for implementing an on-line voting system for BC municipal and provincial elections;
and
2. develop a means to address security and identification challenges to prevent abuse of the system.
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PRINCIPLES FOR PROGRAM REVIEW (2012)
In 2001-2002 the BC Government undertook a Core Service Review that asked every government
department to review their spending with a focus to eliminate, reduce, consolidate or transfer
responsibility to the private sector. To do this they looked at each Ministry and asked them to use the
following tests as a lens:
Public Interest – whether the mandate, program, activity, or business unit continues to serve a
compelling public interest;
Affordability – is it affordable within the current fiscal environment;
Effectiveness and role of government – is this a legitimate role for the Provincial Government in
this program, activity or business unit;
Efficiency – are the current organization and service delivery models the most efficient way to
manage and deliver the program, activity or business activity; and
Accountability – are the current measures and reporting mechanisms the most effective way to
account for program activity or business unit performance.
This core service review produced real savings to Provincial Government, which saw per capita spending
decrease from $7,437 in 2001 to $7,381 in 2004. However, since that review was completed there has
been no comprehensive review of government program spending which has risen to $9,062 per capita in
2012-13.
The Chamber commends the Provincial Government for its focus on spending restraint as a key
mechanism in ensuring we return to balanced budgets by 2014. Over the period of the current fiscal plan
government expenditure will result in average annual growth in spending of 2%, fulfilling a
recommendation of the Chamber to maintain spending at no more than the rate of growth of the
economy2.
However, limiting increases in the amount of public money put into programs does not address the
question of whether a program is necessary and effective. In our ever-changing world we need to assure
tax payers that their dollars are being appropriately allocated to our province’s most critical and current
needs. The Chamber believes that now is the time to take a close look at all areas of government
spending to ensure they are delivering the priority programs and services to British Columbians as
efficiently, effectively, and affordably as possible.
It has been ten years since the Premier’s office has released a comprehensive report that summarizes the
performance of government, ministries, and Crown corporations based on their objectives and targets. It
is encouraged that a timely and conscious effort be made by our province to ensure that the Provincial
government’s annual report is a readable, user-friendly, and concise document that meets the needs of our
citizens and fulfills this government’s commitment to transparency and accountability as they did in
2001-2002.
2
BC Budget and Fiscal Plan 2012/13 – 2014/15
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THE CHAMBER RECOMMENDS
That the Provincial Government:
1. initiate a new Core Service Review across all ministries using the same criteria that were used in
2001;
2. following the completion of the review, develop measurable outcomes and criteria for Ministry
Service Plans; and
3. introduce ‘sunset’ clauses for all new government programs.
LEVELING THE PLAYING FIELD FOR OIL AND GAS SERVICE COMPANIES (2010)
BC’s Oil and Gas industry generated the single largest source of revenue to the province in 2008 at $4.09
billion. In fact, since 2001 the oil and gas industry has invested almost $38 billion in BC.3 The Chamber
understands that the Provincial Government is attracting new investment through innovative
infrastructure and royalty programs, and that this has been key to the growth of the industry.
Most exploration companies are based outside of BC. Given north-eastern BC's close proximity to
Alberta, and the large number of oil and gas service firms based there, BC-based oil and gas service firms
feel great competitive pressure from Alberta-based firms for work that is completed on BC land. The
Trade, Investment and Labour Mobility Agreement agreement further enables cross-border work as many
regulations have now been streamlined.
With the increased volume of Alberta-based companies coming into BC, the number of Alberta trucks on
our roads has increased. These trucks may not meet the Ministries requirements. Without adequate
enforcement these out of province companies may be operating with a competitive advantage.
While the implementation of the HST greatly improves the chances for BC companies to stay
competitive, there is risk that out-of-province firms will not remit the full amount of the HST, especially
when they are invoicing other out-of-province firms for work performed in BC. In order to ensure a level
playing field for BC-Based Oil and Gas companies with their primarily Alberta-based competitors, BC
regulations must be enforced at the same standards for both out-of-province firms and BC-based firms.
This would include, but not be limited to, Commercial Vehicle Regulations and HST tax collection.
THE CHAMBER RECOMMENDS
That the Provincial Government implement a regulation system to ensure BC regulations are followed by
out of province firms conducting work in BC by:
a. establishing a very active presence of Commercial Vehicle/Law enforcement on the highways
between the Alberta and British Columbia border; and,
3
Source: www.gov.bc.ca
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b. encouraging the Canada Revenue Agency to develop systems to ensure all work performed in BC is
invoiced with the full 12% HST regardless of the province or state where the company's offices are
located.
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CHARTING A SUSTAINABLE COURSE FOR BC COASTAL FERRY SERVICES (2012)
In communities across coastal BC, BC Ferries is a cornerstone of their transportation infrastructure and
represents an important part of their economic prosperity. However, in recent years this important service
has experienced significant increases in costs and unsustainable increases in fares, which have acted as a
deterrent to many of BC’s most important industry sectors and have become a disincentive of local
economic development. The economic conditions experienced provincially and globally over the past
few years have highlighted these challenges and require a renewed commitment to consultation,
accountability, and transparency in order to ensure we address these issues and continue to have a
competitive transportation infrastructure.
Preamble
Since 2003 the BC Ferry Service has operated as a private corporation, with a governance and regulatory
framework overseen by the BC Ferry Authority and the independent BC Ferry Commission. This
arrangement is legislated by the Coastal Ferries Act and the operator is bound by the terms a service
agreement that outlines service levels and standards amongst the different communities in which it
operates. Subsequent reports and consultation processes have identified a number of short comings and
improvements that should be made to address the sustainability of the service, including changes to the
governing act and service contract, and needed to address the ongoing challenge of rising ferry costs and
the impact they have had on fares and the communities they serve.
Starting in 2006, the Auditor General of British Columbia reviewed the service to examine its operations
and provided a series of recommendations for change. Building on this review, in 2009 the Provincial
Controller General again reviewed the BC Ferries and provided further recommendations about how to
improve accountability and transparency to the users of the service and the taxpayers who support its
annual operations. Most recently, the BC Ferry Commissioner delivered a report to the provincial
government in January of 2012, outlining a series of recommendations to improve the BC Ferry’s
governance and oversight, as well as address the operational and financial sustainability of the service.
Strengthen Consultation for Major Routes
As part of ongoing consultation programs, a number of
standing Ferry Advisory Committees (FACs) have been
established to consult with communities, but at present
there is no standing consultation process for the major
routes. As the largest revenue generators for BC Ferries,
these routes also do not receive subsidization by either
the Provincial or Federal Governments.
This
shortcoming in the consultation process has had the
effect of understating the issues faced by communities
served by the major routes and has the potential to
impact operational and capital spending decisions by BC Ferries. As significant contributors to the
vitality of the west coast transportation system, establishing an appropriate and ongoing consultation
process for the major routes should be a priority for BC Ferries and the two governing bodies responsible
for overseeing its operations and sustainability.
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Importance of the Guiding Principles
When drafted in 2003 the Coastal Ferries Act included 6 guiding principles
to ensure that the new entity would operate in a manner that was in keeping
with a commercial operator. The principles support proper business
planning and encourage the operator to act in the best long-term interests of
the system. The principles were reviewed by the Office of the Controller
General in 2009 and found to support the efficient and prudent operation of
the ferry service. The Controller General went one step further and
recommended that the six guiding principles be expanded to include a new
principle, that of “protecting the interests of ratepayers and users”. To
achieve these aims, maintaining and strengthening the principles is an
important factor in ensuring that BC Ferries continues to operate prudently
and wherever possible, free from political interference.
Guiding Principles
o
o
o
Priority is to be
placed on the
financial
sustainability of the
ferry operators
Ferry operators are
to be encouraged
to adopt a
commercial
approach to ferry
service delivery
Ferry operators are
to be encouraged
to seek additional
or alternative
service providers
on designated ferry
routes through fair
and open
competitive
processes
Ferry operators are
to be encouraged
to minimize
expenses without
adversely affecting
their safe
compliance with
core ferry services
Cross subsidization
from major routes
to other designated
ferry routes is to be
eliminated
Designated ferry
routes are to move
toward a greater
reliance on a user
pay system so as
to reduce, over
time, the service
fee contributions by
the government
Performance Measurement and Value for Money
While the Coastal Ferries Act and service contract outlines a number of
methods by which ferry services are measured, the requirements of the
contract and the Act focus on service delivery metrics and satisfaction
o
surveys and
not whether or “The Minister of Transportation is responsible for
not
those administering the Coastal Ferry Act. In its annual service
plan report, the Ministry states that the Province’s contract
services
provided the with BC Ferries sets out measurable service levels, such
on-time trips, and payment of service fees is based on
o
best value to as
the company meeting these levels. We found that the
the user or Ministry monitors performance to ensure contracted service
whether or not levels are met, but there is no monitoring of the new
the
service structure to evaluate how well it is meeting the objectives of
o
was delivered the Act.” – Auditor General’s Report 2006
in the most effective way possible. The Auditor General’s report
highlighted this as a concern in 2006, and subsequent reports from the
Controller General and Ferry Commissioner have also highlighted the need
to not only measure the quantity of services provided, but also the quality
and “value for money” that BC Ferries achieves.
Ensuring that the ferry
system
continues
operate efficiently is a significant issue as in recent
years the increases to fares has continually
outstripped the rate of inflation and the rate of
economic growth. This has led to a situation that
continues to test the ability of users to pay and to
increased costs to businesses, residents, and visitors
alike.
Figures provided by the Controller General’s report
highlight this challenge, showing a significant increase in the cost of operations and fares in the face of
slow economic growth and declining ridership1. To allow the public and stakeholders to better
1
Report on Review of Transportation Governance Models, Office of the Controller General, October 2009
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understand the system’s operational performance, additional publicly reported metrics and indicators
should be developed in tandem with minimum acceptable targets to ensure that ferry operations not only
meet their volume and schedule requirements, but financial and operational performance as well. Similar
requirements already exist for many of BC Ferries peers, including the Washington State Ferry system
that publicly reports their “cost per passenger per mile” and “fare box recovery as percentage of operating
costs”, as well as other performance tests. In conjunction with these metrics the Washington State
Department of Transportation has also set performance targets for the ferry service by which to compare
the system’s success both financially and operationally2. The BC Ferry Commissioner’s report has also
highlighted these important accountability measures, calling for a change to the Coast Ferries Act to allow
the Commission to regularly perform and report “value for money” audits to ensure that ferry users and
taxpayers are receiving the best possible service for their dollar.
Lastly, each of the three most recent reports has highlighted the benefit of improved financial
transparency where ferry operations are concerned. Starting in 2006, the Auditor General highlighted the
improved ability to understand the financial reporting of BC Ferries. In 2009, the Controller General
report recommended continued improvements be made to better report BC Ferries cost structure to the
public. The recommendation called for “BC Ferries to provide the Commission their methodology for
allocating costs… for major cost category along with the allocation by route. The Commission should
also make this information public.” In its current public reporting, details are provided by type of revenue
and route where BC Ferry’s income is concerned, but this level of detail is not currently reported where
the service’s expenses are concerned. Given the increases to ferry fares and expenses over the past few
years, and the anticipated capital spending increases in the near future, providing a more detailed
reporting of BC Ferries expenses would allow users, ratepayers, and stakeholders a fuller understanding
of the corporation’s cost pressures, allow for better year over year comparisons, and bolster public
confidence in BC Ferries cost containment programs.
The coastal ferries service represents a significant part of the provincial transportation network. In order
to ensure that this network operates efficiently and helps to support the province’s continued economic
prosperity, additional steps should be taken to ensure a robust system of consultation, accountability, and
transparency.
THE CHAMBER RECOMMENDS
That BC Ferry Services Inc., BC Ferries Authority, BC Ferries Commissioner and Provincial Government
work to:
1. establish a formal mechanism for consultation on the major routes;
2. maintain and strengthen the current guiding principles;
3. develop a set of public performance metrics and appropriate standards to measure system utilization
and financial performance, including system-wide public, detailed operational and capital expenditure
reports and similar expense reports by route; and
4. engage in public consultation to review the current service agreement and service levels based on the
aforementioned performance metrics and standards.
2
A Comparison of Operational Performance: Washington State Ferries to Ferry Operators Worldwide, WSDOT Research, June 2010
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CONSULTATION ON PROVINCIAL TRANSPORTATION PROJECTS (2012)
BC’s public transportation needs are increasing significantly as communities across the province
experience significant levels of growth that require new investment in infrastructure, particularly public
transit. To encourage these communities to grow in a sustainable way there is also an increasing need to
ensure that residential communities are connected with commercial areas.
Provincial Government goals and incentives for reducing carbon emissions, along with the proliferation
of traffic chokepoints in many communities, necessitate increased public rapid transit infrastructure to
meet this need.
Following the release of the Provincial Transit Plan the Provincial Government recently released the
Pacific Gateway Transportation Strategy 2012-2020 that includes investment in transportation
infrastructure across the provinces.
The Chamber recognizes that investments in transportation carry high provincial significance given the
integrated nature of the transportation network for a jurisdiction that is the Gateway to the Asia Pacific.
However, the Chamber recognizes that our success is only possible if the business communities which
create the economic vitality of their communities are involved as key stakeholders, many of whom are
dependent on a steady flow of customer traffic.
As we look to new transportation projects, the Chamber is concerned that these will face challenges
unless accompanied by significant consultation and strategic assistance for relevant stakeholders the
construction of these projects. Business owners need to be able to be apprised ahead of time of the
possible impacts on their businesses as a result of infrastructure improvements.
Of particular concern to the Chamber is the planned rapid transit infrastructure projects. As we know,
transit is often installed near commercial and retail properties and while this provides significant benefits
to business upon completion it can often be offset by the negative effects of the construction and
installation. To ensure that an appropriate balance is achieved, the Chamber believes that the stakeholder
businesses in the community need to be engaged in meaningful, timely dialogue on all aspects of the
project including the type of transit that is built, whether it is above ground, at grade, or underground, and
what construction method is used (cut and cover, or tunnelling, for instance).
Should a construction project pose a risk of negatively impacting businesses in the area, there needs to be
consultation with the businesses impacted ahead of time so that options for business can be considered,
including for instance, promotion programs or other initiatives to help the businesses retain their vitality.
In particular, the Chamber believes that in neighbourhoods that revolve around their key commercial
clusters, and where there is little reasonable option for relocation as their clientele is neighbourhood
based, such as along West Broadway in Vancouver, the Provincial Government must make all reasonable
efforts to consult with area business owners to avoid impeding the successful operation of their
businesses. The Chamber recognizes that this will be a significant issue for communities such
as Kelowna, Vancouver, Victoria, Langford, Burnaby, Sooke, Coquitlam, Westbank and Port Moody, as
all are either targeted or shown as strong interest areas in future projects. As a result, businesses in these
communities would be affected.
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THE CHAMBER RECOMMENDS
That the Provincial Government:
1. in conjunction with other bodies who have responsibilities for public transit, consult and engage with
such stakeholders in the communities that are targeted for transit infrastructure upgrades, so that, at a
sufficiently early phase in the project work, the Government and stakeholders can devise the best plan
that can reasonably accommodate and ease local stakeholder concerns;
2. in the event that significant changes to the design, structure, and/or construction process is
considered, those proposed changes must go through the same consultation process with all
stakeholders prior to implementation of those proposed changes; and
3. prior to moving forward with any rapid transit infrastructure projects conduct a study to determine a
fair and adequate mitigation plan and/or compensation structure for businesses who are negatively
affected.
IMPROVEMENTS TO THE TRANS CANADA YELLOWHEAD HIGHWAY 16 (2012)
Trans Canada Yellowhead Highway 16 is a vital link for residential and commercial traffic in Northern
BC.
Background
With the expansion of the Port of Prince Rupert, the construction of the Northwest Transmission Line and
the numerous mining developments and continued exploration in the Northwest region, the section of
highway stretching from the Alberta border to Prince Rupert has seen an increase in the amount of heavy
commercial traffic over the past year and a half and is beginning to show the wear and tear. With the
increase in commercial traffic also comes the concern of safety for the other drivers on the road.
Dangerous situations arise on our roads when drivers are stuck behind large loads and attempt to pass in
unsafe conditions.
The use of this corridor by heavy commercial traffic is only expected to increase as trade expands with
Asian Markets. BC’s ports in Prince Rupert, Kitimat, and Stewart are Asia’s closest ports of entry on the
west coast of North America, cutting out up to 4 days transportation time over other west coast ports.
Given the province’s geographical position, BC is poised for economic growth. Considering the low cost
of industrial land in Northern BC that is suitable for diverse manufacturing operations, the North is ready
to lead the way in the decades ahead.
Improved infrastructure for transporting goods to external markets is critical to improving BC’s growth
position. Increased transportation costs associated with roads that have height, width, or load restrictions
impact the profitability of firms and pose significant barriers to development in the north. Despite the
fact that highways in northern BC are responsible for transporting wealth-generating resources from rural
regions of BC and Alberta into export markets, this infrastructure has been underfunded for some time.
Unlike much of the infrastructure investment in the Lower Mainland, which is driven largely by
population pressures, investment in the north must be undertaken in response to economic opportunities
inherent to the region. A commitment to build critical highway infrastructure that will move the economy
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of Northern BC to the next level of development and economic growth is required. This investment is
certainly forward-looking but will definitely have far-reaching effects on provincial prosperity.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. work with the Federal and Alberta Governments to upgrade and begin safety and technical
improvements of the Trans Canada Yellowhead Highway # 16 from the Alberta border to Prince
Rupert to enable a higher volume of commercial traffic; and
2. work with stakeholders and communities to identify areas of concern and opportunity, and develop a
list of priorities, including timelines, to address these issues.
PROVINCIAL LEADERSHIP NEEDED FOR LOW LEVEL ROAD TO ENHANCE BC’S
EXPORT CAPACITY (2012)
As BC looks to build on the success of the Gateway project, the surrounding road and rail infrastructure
will be a critical component in our ability to grow this critical industry.
One infrastructure challenge is of particular concern to the Chamber: the Low Level Road Project serving
the North Shore Trad Area. The North Shore Trade Area, covering Port terminals and industrial activities
along the north shore of Burrard Inlet, is a critical export gateway to the Asia-Pacific region.
The Low Level Road Project is designed to enhance rail and port operations as international trade
continues to grow and to address long-standing community safety and traffic congestion challenges in the
area.
These improvements are identified as part of a broader investment in the North Shore Trade Area on
behalf of the Government of Canada, the Province of British Columbia, Port Metro Vancouver,
TransLink, the City and District of North Vancouver and the private sector.
Currently, the North Shore terminals are estimated to generate about 19,400 direct and indirect jobs in
Canada (of which 12,300 jobs are based in BC), and $1.2 billion in direct and indirect GDP ($790 million
in BC). Investments in an efficient and effective transportation system in the area will enable the
economic benefits of this strategic gateway to be realized to their full potential3.
On July 18, 2011, Port Metro Vancouver proposed a Detailed Design phase for the Low Level Road.
During the Design Phase, the Port would come up with a plan that would allow for rail expansion,
improvements to the road corridor, enhancements to the Spirit Trail, and address community concerns.
The City of North Vancouver agreed to make a financial contribution to explore known slope stability
issues and Port Metro Vancouver agreed to an additional council endorsement at the end of the Detailed
Design phase.
3
http://portmetrovancouver.com/en/projects/ongoing_projects/NorthShoreTradeArea.aspx
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The Detailed Design phase is currently underway. Public meetings, Open Houses, and a series of options
for design have been presented to Council and the public. A final design based on feedback from
stakeholders, industry, the business community, and residents will go before Council in late May or early
June 2012.
Over the past two years, the project has been delayed for a number of reasons, and now there is concern
that project could be defeated at Council putting international trade, jobs, and the economy at risk
The issue is that the decision on whether this project goes ahead is with local council, however, the
project is of Provincial, and in fact National, importance.
It is a project that benefits residents and businesses.
The proposed $100 million project will provide substantial benefits to the City, the Region, and the
Province.
These benefits are significant and include:
1. Avoided Costs For Slope Stabilization And Flooding – the proposed project will substantially
reduce risks associated with these important and pressing matters of public safety and
accountability for the City of North Vancouver, the railways and the international terminals;
2. Reduced Noise – the project will remove three at-grade rail crossings, eliminating about 60 train
whistles each day;
3. Improved Road Safety For All Users – with separated 2m-wide bike lanes and a sidewalk along
the entire road, a new intersection in the area, an overpass at the Neptune/Cargill Terminals
entrance, and turning lanes; and
4. 2.5 Kilometres Of New Spirit Trail – These recreational improvements enhance the local
community but provide for Provincial tourism opportunities.
The scale of these benefits to residents, combined with the economic benefits make it clear; doing
Nothing Is Not An Option
North Shore Trade Area is an Economic Generator
The North Shore Trade Area, covering 7 deep-sea marine cargo terminals and industrial activities along
the north shore of Burrard Inlet, is an essential export gateway and local economic generator for the North
Shore. The North Shore Trade Area supports 5,000 North Shore jobs, 12,000 BC jobs, contributes more
than $10 million in municipal taxes each year, and generates $7.9 billion annually to BC’s gross domestic
product.
We all need these road improvements and the benefits of this project are clear.
THE CHAMBER RECOMMENDS
That the Provincial Government publicly recognizes the significant changes that have been made to
address community concerns as well as the enormous economic benefits of the project, and publicly
support the approval of the Low Level Road Project.
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TRUCK DRIVER TRAINING FOR THE ROAD AHEAD (2012)
There has never been a better opportunity to help the trucking industry get the skilled truckers it needs
and improve public safety at the same time. Over the next ten years, the BC Trucking Association
(BCTA) expects the industry will need 375,000 new truck drivers4. Some of that demand will come from
an expanding industry, and some will be needed to replace an aging workforce. The end result will be
that within a few years, a there will be a huge turnover in the men and women that currently sit behind the
wheel of the big rigs that roll along on our highways.
At the moment, there are no minimum training standards for truckers. The BC Ministry of Transport
requires only a pass on a written examination and 30-minute road test combined with a 16-hour ICBC
approved course on airbrake testing. Anyone with a good driving record and a clean bill of health can
apply for and get a Class 1 commercial trucking license and begin driving with a learner’s licence in as
little as one day.
There is no shortage of drivers with Class 1 licenses, but many positions go unfilled because companies
cannot find drivers with sufficient training and knowledge to be trusted with expensive semitrailers and
transport trucks. Nor can the industry find enough highly skilled drivers needed to haul oversize loads or
hazardous cargo.
According to the Business Expectations Survey by Transport Capital Partners (TCP), in 2011, 70% of
Canadian carriers experienced, “unseated trucks.”5
The Chamber believes that boosting the testing and training required for a Class 1 licence would move
towards ensuring a new generation of quality truckers for the industry and make our roads a safer place to
be for everyone.
Background
Trucks haul 90% of all consumer goods and food stuffs across Canada. They also handle 70% of our
trade with the US. According to the most recent data, trucking in Canada is a $65 billion industry that
employs over 260,000 drivers and somewhere in the order of 400,000 Canadians including dispatchers,
office staff, and managers. The industry consists of a few large companies and thousands of small and
medium-sized businesses and independent owner-operators6.
Trucking industry experts describe the current BC Class 1 test as minimal. It consists of demonstrating
the ability perform a short list of basic skills, such as shifting gears, safely merging onto highways,
unhitching a trailer, backing up, parking and so on. “The road exam does not require the truck to even be
fully loaded, and often times they are not required to even back up the vehicle,” says BCTA president,
Louise Yako whose organization is lobbying for better skilled drivers.
Most Class 1 drivers attend one of the dozens of truck driver training schools in the province for
preliminary instruction. Anyone can open a ‘trucking school’. There is no standardized curriculum.
Instructors need to hold a Class 1 license for at least three years, but there is no requirement for them to
actually have driven a truck for three years. There is no accreditation requirement. Many schools teach
4
http://www.getyourcareerontheroad.com/
http://www.cantruck.ca/imispublic/Business_Issues3/AM/ContentManagerNet/ContentDisplay.aspx?Section=Business_Issues3&ContentID=103
28
6
http://www.cantruck.ca/iMISpublic/Content/NavigationMenu2/CTAIndustry/TruckinginCanada/default.htm
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only to the level needed to pass the Class 1 test and offer no specialized additional truck driver training.
The Mountain Transport Institute (MTI) in Castlegar, BC is an accredited “Earn Your Wheels” trucking
school. The Earn Your Wheels program was developed in 1995 by the Canadian Trucking Human
Resource Council (CTHRC) in Ontario. It is one of the few nationally recognized and accredited truck
driver training programs in Canada. It is considered the “gold standard” in training. Graduates of
accredited schools can earn over $100,000 a year and are highly sought after by companies requiring
drivers with special knowledge of supersized rigs or dangerous loads.
Andy Roberts, the owner of MTI, is a certified master trainer. Roberts says, “If you talk to many trucking
companies, a person who has simply passed the road test and has no skills beyond that is not employable.
That is not a person that you would want to give a loaded trailer to and send on a road trip over the
Coquihalla between Kamloops and Vancouver”.
There are severe penalties for trucking companies that allow insufficiently trained drivers to be in charge
large commercial vehicles. As a result, many large trucking companies have their own internal training
programs.
Rick Geller, from Markel Insurance in Toronto, one the largest insurers of trucks in Canada, says, “Entry
level drivers that do not take a recognized program at a recognized institution are simply not insurable.
Very often we are asked if they can be insured with higher premiums – the answer is they are simply not
insurable.”
Going Back to First Gear
Getting better truckers into the industry and ensuring a qualified supply of new truckers starts with
ramping up basic testing, according to BCTA president Louise Yako. The BCTA suggested that the test
be longer, and include more demonstrated skills such as parking or stopping on a hill.
“If the test was harder,” says Yako, “then that will encourage people to get more training in order to
pass.”
Ultimately, it would put pressure on driving schools to offer more than basic training. It would in turn put
more pressure on improving the qualifications of instructors.”
THE CHAMBER RECOMMENDS
1. that the Insurance Corporation of BC work with key stakeholders to develop a standardized
“minimum” curriculum for “all” commercial vehicle driver training schools in the province; and
2. that the Provincial Government review reciprocal “commercial” drivers licence exchange agreements
with other Canadian jurisdictions to reflect the need for testing of commercial drivers licence holders
which have not previously held a BC commercial drivers licence - until such time as respective
jurisdictions in Canada meet or exceed the BC minimum curriculum standard for commercial licence
testing.
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COMMERCIAL DESIGNATION OF ALDERGROVE PORT OF ENTRY ESSENTIAL FOR
FUTURE CROSS-BORDER TRANSPORTATION NEEDS (2011)
Based on 2008 northbound truck volumes, the Aldergove-Lynden crossing is the second busiest US7
Canada commercial crossing in BC (after Pacific Highway) . The importance of this crossing will only
increase in light of anticipated volume increases due to population growth, escalating economic activity
into the eastern environs of the Fraser Valley, and projected expansion of Asia-Pacific trade through the
Port of Vancouver.
Existing and projected growth rates indicate that by 2030 the population in Metro Vancouver will reach 3
million, with similar growth in neighbouring Fraser Valley communities. The Port of Vancouver is
expanding with container volumes anticipated to double within the next 10 to 15 years. While 70% of
containers are transported by rail, doubling of containers to be transported by truck is still significant.
During 2008, the Aldergrove-Lynden port saw $496 million USD of goods exported from Washington
and $38 million USD of goods exported from BC. In 2008, this border crossing saw 74,040 commercial
8
vehicle trips northbound and 57,155 truck trips southbound . Based on 2008 GDP statistics, 21% of BC’s
annual economic output ($32 billion CAD) and 15% of Washington’s annual economic output ($49
billion USD) is generated by industries that produce exportable goods. These sectors individually, and
the export sector collectively, depend on effective international connections, including access to land
border ports of entry like Aldergrove-Lynden.
To illustrate the interdependence of the regional economies on both sides of the border, the wood, metal,
and mineral goods that enter BC at Aldergove-Lynden represent sectors (manufacturing and forestry) that
comprise 12% of Washington’s economic output and are inputs into sectors (construction and retail) that
make up over 12% of BC’s economic output.
Recent comparisons of observed crossing choices and shortest-path traffic-model assignments, show that
Aldergrove-Lynden is not an “overflow route” for higher-volume crossings in the area. Rather,
Aldergrove-Lynden serves a distinct population of carriers and shippers for whom the crossing is the most
efficient route.
Analysis of an Aldergrove-Lynden closure to trucks estimates that the current population of users would
need to drive an additional 198,433 km per month. In addition to fuel and time costs, this has
implications for increasing greenhouse gas emissions both as a function of increased drive distances and
more frequent idling at other, now more congested, crossings.
Cumulative truck travel added by loss of the Aldergove-Lynden route (in both directions) would generate
an estimated 3.85 kilo tonnes of GHG emissions per year. In terms of BC’s Climate Action Plan goals,
this hypothetical route closure would cancel out 0.51% of the annual GHG reduction that the freight road
transportation sub-sector is expected to attain by 2015 (761 kt). Moreover, prolonged trips have negative
safety benefits by increasing the exposure risk of crashes and contribute to unnecessary congestion and
noise, both of which can be disruptive to local communities and businesses.
7
The statistics and analysis contained in this briefing note are based on the June 2010 Technical Assessment of the Aldergrove-Lynden Port of
Entry prepared by the Whatcom Council of Governments for the International Mobility and Trade Corridor Project.
8
The southbound US Lynden Port of Entry is a permit port that only allows low-risk, repetitive truck-load shipments by prior permission from
the Customs and Border Protection area port director.
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The Aldergrove-Lynden Port of Entry is one of three cross-border truck routes between the Lower
Mainland in BC and Western Washington State. In addition, the Peace Arch crossing is available to
passenger traffic only. Because of land constraints at the Pacific Highway and Sumas/Huntingdon border
crossings, the only viable option for adding infrastructure and processing capacity for commercial
vehicles is through Aldergrove. Increased congestion on the part of commercial traffic at these land
border crossings would also frustrate the ability of passenger traffic to access these border crossings and
add to wait times and congestion. Even the passenger car-only crossing of Peace Arch could be
negatively affected if passenger car drivers choose to avoid crossings that have become congested due to
increased commercial traffic volumes and divert to Peace Arch.
THE CHAMBER RECOMMENDS
That the Provincial Government work with the Federal Government to:
1. in conjunction with impending border infrastructure replacement review the current designation of
the Aldergrove Port of Entry to remove any limitations to its ability to serve as a full commercial
traffic Port of Entry;
2. fund, design, and build the necessary infrastructure to support full commercial operations at the
Aldergrove Port of Entry; and
3. establish service levels that would denote when additional resources, including hours of operation,
should be increased.
HIGHWAY TRANSPORTATION IMPROVEMENTS IN THE NORTHEAST REGION OF BC
(2011)
Efficient transportation systems are critical to building modern, robust, and diversified economies.
Communities in Central and Northern BC along Highway 97 corridors are at the heart of the provincial
resource economy and accounted for over $4.09 billion in revenue to the Province in 2008.
The Provincial Government has made substantial investments in the stretch of highway from the Alberta
Border to Fort St. John in the past decade. However, serious accidents and deaths along this stretch of
highway are a common occurrence and further, the amount of heavy industrial traffic on the road is
substantial and would be considered above-average when compared to other major corridor highways in
the province.
Given the continued industry activity in the Northeast and the bright outlook of the oil and gas industry
and the entire growth prospects in the Northeast, BC needs to immediately begin plans to twin the stretch
of Highway 2 and Highway 97 between the Alberta Border and Fort St. John, including dealing with the
substantial challenges of the North and South Taylor Hill as well as the bridge crossing the Peace River.
The economy of the Northeast is dependent on the efficiency of Highway 2 and Highway 97 north, as
both routes are the only primary transportation link between communities and the busy oil and gas
exploration areas. The route is heavily used by the energy industry, tourists, and by local traffic.
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Although the Minister of Transportation and Infrastructure has identified improving this stretch of road as
one of his three top transportation priorities in BC, there are no plans currently in place to twin the
highway in the near or long term.
THE CHAMBER RECOMMENDS
That the Provincial Government develop a plan and timeline to twin the route along Highway 2 and
Highway 97 from Fort St. John to the Alberta Border within the next 5 to 10 years and begin immediate
improvements to the most concerning spots.
IMPROVEMENTS TO TRANS CANADA HIGHWAY (2011)
The section of the Trans Canada Highway stretching from Kamloops to the border of Alberta, east of
Field, BC is renowned as a windy, narrow, and extremely dangerous transportation route. It is the main
thoroughfare for vehicular traffic entering or exiting the province of BC from the east, linking the
province with the rest of Canada. For many communities this is the only access or egress for road travel.
Frequent closures, poor maintenance, and dangerous conditions on this highway drastically impact the
economy of BC. All southern BC communities rely on tourism and related commerce throughout the
year. The Trans Canada Highway is a vital conduit for the movement of goods, services, and people to
and from BC.
This part of Canada's national highway was finished in April 1962 and the Three Valley and Kicking
Horse pass sections were not built to safety standards of the day. There have been no major
improvements since then even though the amount of traffic now using this section of the highway is more
than five times what it was almost 50 years ago. That includes not just family cars, but also heavy freight
transports and tour buses.
Data has been correlated to demonstrate the negative impacts this dangerous highway has on the local
Revelstoke economy. Statistics from the Ministry of Transportation and Infrastructure indicate that in
2010, 11 key sections of the Trans Canada Highway east and west of Revelstoke were closed for a total of
27.51 days, or 659.7 hours. The key attraction in Revelstoke’s tourism industry realized an approximate
loss in revenue of $200,000 due to these closures, which in turn has a trickledown effect on numerous
local businesses such as accommodation, restaurants, retail, and more. Furthermore, local shipping and
industry have realized losses of $255,000 and greater, due to highway closures. When viewed from a
province wide perspective, it is clear that closures of the Trans Canada Highway have immense negative
impacts on the bottom line for tourism, shipping, manufacturing, forestry, and more.
Despite the importance of this highway for provincial connectivity, the lack of suitable infrastructure has
led to dozens of deaths, hundreds of injuries, and frequent avalanche closures each year. These incidents
choke off delivery of goods and services and cripple industry.
The Provincial Government must realize that now is the time to improve this crucial highway and commit
to adding four lanes, highway dividers, paved shoulders, and improved lighting to bring it up to
acceptable travelling standards for the 21st century.
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THE CHAMBER RECOMMENDS
That the Provincial Government:
1. work with the Federal Government to cooperate and work together to upgrade Trans Canada
Highway #1 by widening and straightening from Kamloops to the BC/Alberta border;
2. that safety features such as increased highway lighting and snow sheds be installed, thereby
improving the Trans Canada Highway to a standard that is safe, efficient and mitigates closures; and
3. acknowledge the importance and urgency of this project by publicly announcing an action plan
detailing immediate steps to improve and enhance this essential transportation link.
PROVINCIAL AIRPORT INFRASTRUCTURE INVESTMENT PLAN (2011)
BC is fortunate to have several international airports as well as many smaller regional airports.
Naturally, airports are critical transportation links between our communities and are major economic
drivers.
There is a large demand for infrastructure investment dollars for airports across the province and funding
from municipal, provincial, and federal sources.
Currently, there is no master plan either provincially or federally that outlines infrastructure priorities for
the province’s airports. As it stands, spending decisions by governments on airport infrastructure is done
on a local needs basis and guided by local lobbying efforts.
Furthermore, there does not appear to be any guidelines or criteria for investment towards airport projects
by the Federal or Provincial Government. Most spending by either level of government is made under the
justification of infrastructure and economic development spending.
Collectively, the Provincial and Federal Government should work together to develop a plan that will
consult with businesses, residents, and airport authorities and provide solid research from users from
around the province and neighboring districts that will encourage the most effective use of taxpayer
dollars on airport improvements. Criteria should be established that differentiates between spending on
critical basic needs and spending on desired, non-critical improvements.
In the interest of realizing the greatest economic impact and responsibility for taxpayer dollars in relation
to airport infrastructure, future decisions should be made based on the areas of highest demand and
economic impact to the entire province.
THE CHAMBER RECOMMENDS
The Provincial Government, work with the Federal Government and airports around the province to
develop a long term strategic plan to guide future investments in the province’s airport infrastructure with
guidelines and criteria established for spending on airport infrastructure.
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QUALITY OF SERVICE STANDARDS AND ENFORCEMENT FOR THE TAXI INDUSTRY
(2011)
Background
Taxis are an essential part of the transportation infrastructure and many businesses are particularly
sensitive to the tie between taxi service quality and their business success. Businesses in many industries
rely on the flexible transportation provided by taxis to enable their customers to easily get to and from
their place of business.
Several communities in the province including Oliver, Dawson Creek, and Fort St. John have all had
serious problems with their taxi operators. In the case of Fort St. John, one operator has 23 of the 24
licenses but chooses to only put 6 vehicles on the road. Applications for a new taxi licenses by possible
new market entrants have been denied by the Provincial Passenger Transportation Board due to the
number of licenses already issued in the community per capita.
In Fort St John, The Fort St John Tourism Board has received complaints from businesses and residents
that the poor state of Taxi Service in the community is having a detrimental impact on their business.
In Oliver, the local city council was forced to pull the business license from the only taxi operator in the
community after many complaints about unsafe service.
In Dawson Creek, City Council and the community have come forward with several concerns and
complaints about the primary taxi operator. In protest, the only cab operator cut all overnight taxi service
1
in the community for a period of about three weeks in the summer of 2010.
In all of these situations, the local governments were virtually powerless to force any type of
improvement on their cab operators.
The Chamber recognizes that the Taxi Industry study done in 1999 (Study of the Taxi Industry in British
Columbia) corrected several of the taxi issues in the lower portion of our province; however, in reviewing
the document, there have been no studies that include areas north of Prince George.
The complaints received by the Fort St. John & District Chamber of Commerce, as well as the Tourism
Fort St. John board, include, but are not limited to:
Waits of up to several hours for a taxi to be dispatched. Because of these extended delays and the
resulting frustration, these extended waits for taxi service mean that people that otherwise were
planning on taking a safe ride home with a taxi, may be led to operate their own vehicles when
they may be intoxicated;
Inadequate taxi service at the airport, leaving travelers stranded with no way to get into town;
No taxis equipped with Handicap service;
Unclean taxis;
Drivers smoking in taxis with and without passengers in the vehicles;
Drivers treating customers abusively and using foul language;
Business people missing appointments because of long delays in taxi service.
1
http://www.dawsoncreekdailynews.ca/article/20110118/DAWSONCREEK0101/301189994/-1/dawsoncreek/major-changes-in-store-for-localtaxis
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Provincially, the restaurant industry is already facing challenges with the tougher drinking and driving
2
regulations introduced in late 2010, including revenue losses of between 15-20% .
Having a reliable taxi service is essential to patron safety and to the economic vitality of the hospitality
industry.
Local municipal authorities as well as large institutional consumers like airports and hotels are
particularly sensitive to the tie between the quality of taxi service and their city’s image and reputation.
Poor treatment of tourists, business people, and corporate visitors by taxi drivers can tarnish the city’s
reputation and drive away business. The city is then viewed as an undesirable place to do business.
The effect on business is also significant with the retail sectors. Some shops and businesses are reported
to be heavily affected in terms of lost sales due to reduced services and sometimes no service at all.
Without reliable taxi service between the airport, hotels, and merchants, potential patrons will not be able
to access the businesses.
Taxi and private hire vehicles are an essential form of transportation for the blind and the less mobile. In
a sample of over 500 people, one in seven people stated that regulated taxis and private hire vehicles were
their most frequently used form of transport3.
The British Columbia Passenger Transportation Board is the regulating body in charge of granting taxi
licenses in all communities across the province. Once a taxi license is granted, there is no local input into
renewals, proof of performance, or quality of service. Further, it is virtually impossible to remove a taxi
4
license from an operator unless the operator is convicted of a criminal offence.
The Passenger Transportation Act was amended in the summer of 2010 to provide the Registrar of
Passenger Transportation (Registrar) the tools and authority needed to ensure that only individuals of
suitable conduct and character provide commercial passenger transportation services.
The amended act allow the Registrar to conduct an investigation into whether any applicant, licensee, or
permit holder is a fit and proper person to provide the service, however, it cannot be anticipated that the
Registrar will unilaterally initiate these reviews.
The Registrar will not conduct a “fit and proper” assessment unless they are responding to
information of concern, which may come to light in association with license applicants or
General Authorization licensees. Some of the circumstances that may trigger a fitness review are:
unsavory/illegal activities, serious criminal convictions, continually disregarding conditions of
the license, has transferred its license without prior approval from Registrar, and licensee has no
control over the business, drivers or other aspects of the business. (Section 39.1 – British
Columbia Passenger Transportation Act)
While these new changes are a step in the right direction, there are still no provisions to enforce or
encourage proper taxi quality of service in a community.
2
http://www.theglobeandmail.com/news/national/british-columbia/bc-town-pulls-its-only-taxi-off-the-road-after-a-flood-ofcomplaints/article1713024/
3 Study done in 2001 by the Joint Committee on Mobility of Blind and Partially Sighted People
4
Passenger Transportation Board presentation slideshow to Tourism Fort St. John, Jan 11th. 2011
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The Passenger Transportation Branch has a framework for Passenger Transportation Audits of License
holders, however these audits are focused more on vehicle licensing and driver records rather than quality
of service. There are no provisions in the audits for quality of service or recourse if there are public
complaints about the service.
Taxi service is similar in nature to a public utility. (According to the Study of the Taxi Industry in British
5
Columbia, done in 1999, the Utilities Commission once regulated taxis in BC) .
The Ministry of Transportation and Infrastructure consulted with the Metro Vancouver and other key
stakeholders to develop a Taxi Bill of Rights. This Taxi Bill states the rights of both a taxi passenger and
taxi driver. To support the Taxi Bill, the Ministry of Transportation and Infrastructure partnered with the
6
Consumer Protection BC . Although this partnership helps keep the taxi service in Metro Vancouver
compliant with standards and regulations, the bill of rights does not apply to areas outside of Metro
Vancouver.
The Taxi Bill of Rights is as follows:
As a Taxi Passenger you have the right to:
Be picked up and transported to your stated destination by any available on duty taxi
driver
Pay the posted rate by cash, or accepted credit card or TaxiSaver voucher
A courteous driver who provides assistance, if requested
Travel with an assistance dog or portable mobility aid
A taxi that is clean, smoke free and in good repair
Direct the route, or expect the most economical route
A quiet atmosphere, upon request
A detailed receipt, when requested
As a Taxi Driver you must obey all laws and have the right to refuse to transport a passenger:
To avoid contravening a law or condition of licence
To protect your, or any passenger’s, health or safety
If the passenger is acting in an offensive manner
If the passenger refuses to provide a deposit, if requested
As it stands, the Passenger Transportation Board, The Ministry of Transportation, and local municipalities
are basically powerless to enforce quality of service guidelines in their community. The Passenger
Transportation Board will grant licenses, but once those licenses are in place, there is very little that can
be done to attract new cab companies to communities.
Taxi companies have stated in the past having a hard time with the length of time it takes for drivers to
obtain a chauffeur’s license from the RCMP or local police. The Passenger Transportation Board stated
that it can take anywhere from 1 to 30 days for approval, and taxi operators have difficulty holding on to
new employees that are otherwise ready to work except for waiting for the Chauffeur’s license to clear.
5
6
Study of the Taxi Industry in British Columbia in 1999 and submitted to the Minister of Transportation.
http://www.th.gov.bc.ca/taxirights/index.html
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THE CHAMBER RECOMMENDS
That the Provincial Government work with the Federal Government to:
1. review the legislative and regulatory structure with respect to the licensing and enforcement of taxi
companies to:
a) Grant the Passenger Transportation Board the jurisdiction to monitor and enforce quality of
service guidelines and conditions of license,
b) Increase minimum operating standards for taxi operators, including fleet, customer service and
mechanical standards and maintenance guidelines,
c) Adopt the “Taxi Bill of Rights” program that is in place in Metro Vancouver across the province.
2. expedite the process for processing Chauffeur’s Permits;
3. establish measurable performance targets and minimum standards for taxi operators and conduct
regular performance reviews about their adherence in a comprehensive and transparent manner that
allows the public to review the records of taxi operators.
SOUTHERN BC TRANSPORTATION INFRASTRUCTURE: HIGHWAY 3 (2011)
Highway 3 (Crowsnest Highway) stretches across southern BC from Hope to the Alberta border. It is a
principal access route to major tourist centres in the south Okanagan, the Kootenays, and the BC Rockies
and directly serves many communities such as Hope, Princeton, Keremeos, Osoyoos, Grand Forks,
Castlegar, Creston, Cranbrook, Fernie, Sparwood and many others not directly on the highway. Many of
these communities are becoming increasingly dependent upon tourism; if these communities are to reach
their full potential as tourist destinations better transportation links are crucial.
With the proliferation of golf courses, resorts, and subdivisions in the east Kootenay, traffic from Alberta
into BC has increased exponentially over the past 5 years. Alberta is making improvements on the
highway on the Alberta side of the border, in recognition of the increasing trade, tourism, and amenity
migrant traffic. Recognizing recent investments in Highway 3 by government, BC should continue to do
the same.
Highway 3 also provides an alternate route to the Trans Canada Highway for truck traffic, thus easing the
burdens on that overcrowded route. Indeed, traffic loads on Highway 3 are said to rival those on the
Trans-Canada Highway (TCH), and Highway 3 is the most traveled route for commercial traffic from the
rest of Canada into the Kootenays and to the coast due to close proximity to the United States.
Crossing several mountain ranges, Highway 3 can sometimes be termed ‘an adventure’, especially in
winter conditions. There are many steep hills, bridge crossings, and sharp, blind corners to negotiate,
with relatively few passing lanes in sections where they are badly needed both to facilitate traffic
movements and for safety.
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Several major industries in the region served by Highway 3 would benefit from improved highway access
– an example is Teck Corp in Trail which sometimes is forced to rely on the Highway because of a
shortage of rail cars.
A group called the Highway 3 Coalition (previously considered a ‘mayor’s committee’), made up of local
government representatives from communities and Regional Districts along Highway 3, has been in place
for many years (although inactive for a number of those years). In 2009, the Okanagan-Similkameen
Regional District spearheaded reinstatement of the committee to discuss issues of common interest
concerning the Highway 3 corridor from Hope to the Alberta border, and to present a unified position to
the Ministry of Transportation regarding the importance of upgrading this important highway corridor.
All Mayors and Regional District Chairs along Highway 3 recognize that the economic viability of their
communities relies on the safe and efficient movement of traffic. The Highway 3 Coalition (representing
23 communities and Regional Districts on or near the highway) has developed a set of four priorities for
Highway 3:
1.
2.
3.
4.
Realignment – Sunday Summit to Whipsaw Creek;
Passing lanes – Cranbrook to the Alberta border (work has begun);
Creston Alternate Alignment; and
Elko Chicane
The Coalition is also hoping that an economic impact study on the highway will identify current
economic constraints, assess opportunities for investment, and quantify economic impacts and benefits,
including possible net increases in employment and productivity, positive impacts on trade and on private
sector investment. It is the Chamber’s understanding that Terms of Reference for such a study have been
drawn up by Ministry of Transportation and Investment, with a reporting target for mid-September 2011.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. place a priority on the timely completion of the proposed economic impact study;
2. continue aggressively investing in Highway 3 improvements both to facilitate economic growth, and
to improve transportation safety in southern BC; and
3. accept the Highway 3 Coalition’s recommendations to improve Highway 3 safety and traffic flow,
and give priority to their implementation.
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THE NEED FOR AN INNOVATIVE APPROACH TO TRANSPORTATION FOR AN
INCREASINGLY URBAN PROVINCE (2011)
Urban productivity is highly dependent on the efficiency of its transportation system. The ability to move
people and goods efficiently and smoothly between multiple origins and destinations is the cornerstone of
successful urban regions. As BC continues to grow, the ability to improve the flow of people, but more
importantly goods, in our urban centres will require a range of measures, from new infrastructure to
demand management tools.
Trend Towards Urbanization
Census 2006 clearly demonstrated that Canada, and BC in particular, are becoming highly urbanized. In
fact, the Census demonstrated that 85.4% of the provincial population now resides in urban areas. BC’s
largest urban areas are at tidewater where a considerable number of our transportation bottlenecks are
located. This affects transportation movements originating from outside these regions and economic
activity generated within. The successful alleviation of bottlenecks will facilitate the movement of
resource-based exports from the regions to international export markets, while ensuring local “supply
chains” move fluidly.
Importance of the Transportation System
The Provincial Government’s Asia Pacific Strategy is a highly ambitious plan to place BC as the gateway
for the huge increase in trade traffic from the fastest growing economic region in the world. The overall
strength of the economy and significant population growth are placing a noteworthy strain on our entire
transportation system.
All levels of government have committed significant funding for the expansion of transportation
infrastructure across the province as an investment in transport as the next big driver of growth for the
province.
There are many areas of the province that have significant congestion that result in lost productivity,
increased costs, and deleterious effect on the environment. BC needs to address these issues in order to
remain prosperous.
The Chamber believes that new and innovative approaches to transportation in our urban centres are
required to address these challenges now, and for the future.
A Crisis in the Lower Mainland
While the issue of funding for transportation is of critical importance across the province it has reached a
crisis point in the Lower Mainland.
On November 9, 2010, TransLink's Board of Directors recommended a number of improvements to the
region's transportation network, based on public input, which were contained in two approved
supplemental plans for consideration by the Mayors' Council. These Supplemental Plans detail the
investments in services and capital that the Board deemed necessary to meet the immediate needs of the
region. It also identified the required incremental new revenues and the proposed sources to fund each of
the plans.
A starting point for both these plans was a statement from the Mayors’ Council that property tax was not
to be increased to fund any supplemental plan. Unfortunately, due to the limited funding streams
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available to Translink under its legislative mandate, the Translink Board was unable to budget for any
other revenue mechanisms; as such, property tax was contemplated in the plans. As a result, the Mayors'
Council chose not to vote on the two 2011 Supplemental Plans and subsequently the Plans expired in
early February 2011.
This has resulted in Translink having to revert to its base plan which does not allow for any expansion of
the system. This is not a new situation; the discussion around sustainable funding for Translink has been
a feature of the region for as long as the organization has existed. Indeed, one of the disappointing
aspects of the current crisis is that all parties knew this was coming and yet no party took a long-term,
strategic approach to the issue.
While we have seen some progress with the signing of an Memorandum of Understanding between the
Provincial Government and the Mayors’ Council that commits all parties to reviewing all potential
funding mechanisms, the Chamber remains concerned that the ability to reach a common solution seems
no closer.
Lack of Demand Management Techniques
Road infrastructure in BC, as in many other jurisdictions, is considered a public good and therefore, is
heavily financed by the taxpayer. In the absence of effective price signals such as road pricing, as well as
other mechanisms to influence behaviour such as High-Occupancy Vehicle (HOV) lanes, and appropriate
and available transit options, there is inevitably an increase in single-passenger vehicles and use which
then leads to congestion and bottlenecks.
In short, simply investing in new capacity will lead to the vicious cycle of congestion. The Chamber has
been consistent in its support for projects such as the Lower Mainland Gateway Strategy and the need for
transportation infrastructure investments in other regions of the province. Underpinning this is a firm
belief these projects can only be successful if they improve the flow of goods both now and in the
foreseeable future.
A key to our long-term success will be strategic and long-term investment in high-quality public transit.
The Chamber recognizes that transit investments by themselves will not reduce roadway congestion.
However, they become more effective at reducing congestion as a critical component of a comprehensive
strategy that includes complementary road pricing, mobility management strategies, and smart growth
land use policies.
Numerous studies, along with empirical evidence from around the world, clearly demonstrate that simply
building new roads and other infrastructure in the absence of demand management techniques, including
quality public transit options, will not alleviate congestion in the long run. In other words, in the BC
context it is not one or the other but both.
The Chamber believes this presents a unique opportunity for the Provincial Government to remove
politics from transportation planning and to create a vision that provides clean, efficient, accessible, and
reliable public transit covering the entire region, while introducing innovative mechanisms to ensure the
efficient movement of goods and services.
The Chamber believes that the Provincial Government’s current tolling policy must be reviewed. Under
the current policy, the Provincial Government will only introduce road pricing to pay for new
construction on specific pieces of infrastructure and when a viable, free alternative is available. The
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Chamber believes this policy is not in the province’s economic, social, or environmental interest and puts
at serious risk the success of the Asia Pacific strategy.
The benefits of investment in transportation depend on good traffic speed, and in the long term, there is
widespread agreement that the only way to preserve this is to ensure that there are appropriate price
signals placed on the use of the road across the region. This recognition is resulting in a global trend
towards an acceptance of the necessity of road pricing as the optimal way to fund transportation
improvements. Jurisdictions around the world are recognizing that to be sustainable funding mechanisms
need to combine sustainability with the principle of user pay while managing traffic demand; road pricing
meets all of these criteria.
The Chamber understands that there is likely to be significant public resistance to comprehensive road
pricing. However, the Chamber also believes that public acceptance of road pricing would be possible if
quality transit options are made available from the start. Initial road pricing can fund the inevitable startup costs and can be adjusted to keep traffic at targeted performance for the benefit of the public and
business. Vehicle road pricing would be appropriate in instances where alternate means of transportation
are available and the entirety of the charges collected is allocated to improve transportation infrastructure
in the region in which is being served.
In circumstances where road pricing is approved, a comprehensive traffic demand strategy should be
created to ensure that transportation solutions are integrated.
BC stands at a transportation crossroads. As we embark on significant investments in transportation
infrastructure and transit options, the Chamber believes the Provincial Government must ensure we
embrace new ways of thinking about transportation from an integrated economic, social, and
environmental perspective.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. commit to funding transportation infrastructure investment through mechanisms that are equitable,
efficient, and reflect basic traffic demand management principles;
2. make as a prerequisite of these visions the need for investment in public transit to provide viable
alternatives to single passenger vehicle travel;
Further that the Provincial Government work with the Mayors’ Council and other urban municipalities to:
3. provide funding streams that address the long-term needs of the region and enshrines traffic demand
managements as a key principle;
4. create, in conjunction with business, a road pricing strategy as a foundation for sustainable regional
transportation funding; and
5. negotiate with the Federal Government to allow the gas tax revenue to be utilized for operational
support of public transit as well as transportation infrastructure funding in the region.
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A LONG TERM STRATEGIC APPROACH TO TRANSPORTATION IN THE SOUTHERN
INTERIOR OF BC (2010)
The need for transportation infrastructure that encourages and supports economic growth is a fundamental
element of a prosperous economy. However, the infrastructure that exists in many parts of the province
does not support economic growth, and in many areas results in a deterrent to the prosperity of the
surrounding communities.
Nowhere is this more evident than in one of the fastest growing regions of the province: the southern
interior of BC. The southern interior of BC roughly falls south of the Thompson River and Shuswap
Country, corresponding mostly to the post-Oregon Treaty remainder of the old, original, Hudson's Bay
Company Columbia District. When used directly, it generally refers to the Okanagan and adjoining areas,
particularly the Similkameen, southern Monashees, and Boundary Country.
With a growing and diverse economy, the region holds particular importance for the province as a
considerable engine of growth. From manufacturing, agriculture, construction, education, tourism, hightech as well as strong commercial and institutional development, the economic strength of the region has
driven significant in-migration, both from other provinces and abroad. This growth has had a profound
effect on the region and on the transportation infrastructure that needs a continuing, long term strategy.
As with any region in a province as vast and geographically distinct as BC, the viability of the local and
regional economy is directly linked with the transportation network that serves it. This network includes
provincial highways, local roads, transit service, cycling and pedestrian corridors. This network is not
only critical to the larger urban centres in the region but is also important to the small communities and
rural areas that are an integral part of the social, environmental, and economic fabric of the province.
The Chamber believes that along with the “traditional” highway corridor expansion projects,
opportunities for innovative projects and initiatives exist, such as public transit and other initiatives
directly and indirectly related to transportation issues.
In addition to the economic challenges the transportation network brings, there are also significant safety
issues relating to narrow and often meandering roadways from high mountain passes to indirect routes
around water bodies.
In recognition of these challenges, Western Economic Diversification Canada partnered with the three
regional districts in the Okanagan and Similkameen Valleys in 2004 to produce the report, “Okanagan
Valley Transportation Corridor – An Assessment of Select Projects and Initiatives”. This report delivered
a comprehensive prioritized list of transportation infrastructure projects, focused on the corridors between
Osoyoos and Enderby, and along the corridor between Osoyoos and Princeton; in essence, Highway 97
and Highway 3.
The Chamber welcomed the recommendations of the report which focused on highway expansion and
enhancement projects as well as public transit options. The Okanagan Transportation Panel also
welcomed the efforts made by the report’s authors to prioritize the projects using a benefit-cost analysis to
balance the benefits which a project produces against the costs of producing that benefit.
The Chamber has noted the significant improvements to the Highway 97 corridor by the Provincial
Government since 2007. While the Chamber has welcomed this initiative, it should be noted that these
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projects do not fully deliver on all of the improvements required.
It is recognized that the scope of the 2004 study does not address the entire region. As such, a new report
should be commissioned that uses the 2004 report as a basis of information and notes improvements that
have been made since that time in order to establish a long-term strategic vision for transportation in the
southern interior of BC.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. review and take immediate action to update the “Okanagan Valley Transportation Corridor – An
Assessment of Select Projects and Initiatives” report;
2. develop an integrated, multi-modal transportation vision for the Southern Interior region that builds
on the “Okanagan Valley Transportation Corridor – An Assessment of Select Projects and Initiatives”
report; and
3. develop this vision by working with municipalities and regional districts to include the tributary
highways of the southern interior of BC.
CAPITAL FUNDING STABILITY FOR BC’S INTERNATIONAL AIRPORTS (2010)
BC’s international airports are rapidly evolving from regional transportation hubs into large-scale, multimodal, international airports. As BC continues to grow, international airports will play an increasingly
vital role in the economic growth of the province by providing the connectivity essential to keeping
companies competitive in a global economy and by facilitating significant job creation within the
province.
Growth in the province will necessitate a need to reduce pressure on Vancouver International Airport
(YVR) and, as such, will drive significant growth in airport activity through BC’s other international
airports on an annual basis. Increased access from the entire province, by road and air, will allow BC’s
international airports to play a greater role in relieving the pressure on YVR’s already challenged air and
ground access network.
Infrastructure upgrades and improvements are required to support airport operations and airside land
development at all of BC’s international airports. Current federal funding is provided through the Airport
Capital Assistance Program (ACAP). ACAP is a line-budget item and, as such, is subject to changing
governments, ministers, budget constraints, and capital funding burden shifts between government
priorities.
BC’s international airports have significant capital expenditure programs relying on ACAP funding.
They are forced to institute business plans based on uncertain capital funding to complete the plan. The
objective of running BC’s international airports in a generally accepted free-enterprise business model
becomes extremely onerous under this funding model.
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This financial hurdle is commonplace among airports across Canada. It is significantly more pronounced
at larger, rapidly expanding, provincially significant airports.
THE CHAMBER RECOMMENDS
That the Provincial Government work with the Federal Government to identify and allocate a consistent
and predictable annual funding model for BC’s international airports.
COORDINATING HIGHWAY INCIDENT MANAGEMENT (2010)
Traffic accidents on highways and roads in and around major urban centres often cause major gridlock.
The cost of time and money to provide emergency services is no doubt high when those services complete
legal investigation processes at the scene of an accident, and attend to the personal and property needs of
individuals directly affected. During these incidents, the cost to many businesses and regional residents
caught in the gridlock, often for several hours, if measured, would no doubt prove to be many times
higher than the cost of emergency services. There is no single authority in BC to oversee the processing
of highway incidents and develop an integrated approach among emergency services. An incident
management system under the coordinated direction of a single agency is needed. Such an agency needs
to seek ways to reduce the overall costs related to highway incidents through an integrated emergency
services approach.
Background
Agencies responding to even a relatively minor traffic accident or stall on primary traffic corridors in the
Lower Mainland, appear to assign little, or no, priority to reopening the roads following these incidents,
regardless of how proficient their service may be in an emergency response.
Necessary equipment to complete the task of clearing wreckage is generally not available for two or more
hours after the incident. There appears to be no critical traffic incident management plan that is exercised
during highway incident events. Traffic left paralyzed for hours on end is left to resolve itself during and
after the incident.
During periods of heavy traffic, or if a major roadway, bridge, or tunnel is involved in an incident, the
entire road network in the Lower Mainland rapidly becomes paralyzed. Traffic cascades to alternate
routes with insufficient capacity to deal with the demand during what is often an inordinate amount of
time to clear the incident.
The ensuing delays exasperate an already strained road network and contribute to significant losses to
trade and commerce in the Lower Mainland, which is heavily dependent on road vehicles for the
movement of goods, services, and people.
President & CEO of the BC Trucking Association, Paul Landry, says, “A robust incident management
system is one element of a policy toolkit that would help to preserve priceless existing infrastructure
capacity and reduce the demand for new investments. Other elements include managing/restricting on
street parking during peak periods, enhanced left hand turning bays and truck-only lanes in key
corridors.”
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Using information from the transportation industry, it is not unreasonable to value the loss of productivity
created by inordinate delays in reopening roadways after an incident, across all industry sectors, into the
hundreds of millions of dollars.
Among agencies involved in highway incident management, none is charged with the responsibility to
execute a coordinated and effective management system to address the entire spectrum of impact of any
incident.
The consequences resulting from the interruption of the free flow of traffic from accidents on roads
throughout the Lower Mainland are rapidly becoming more serious. Suburban and industrial growth
infrastructure development in border, sea- and air- ports contribute to the number of traffic units moving
around the area. These units, in general, exceed the designed capacity of the existing route structure as it
is, without the further complication of traffic incidents.
Following one of several major gridlocks of many hours over the past year, a top police official in the
Lower Mainland indicated that not only was emergency response of paramedic, fire, and police services a
top priority, so was the investigation by police and other authorities. With little apparent regard for the
chaos and massive expense of time and money in terms of commercial loss throughout the entire region,
the police official added that he was far less concerned about whether a number of people caught in the
gridlock were “home late for dinner”.
The point is not to be critical of emergency services but rather to indicate that simply handing the
challenge over to existing authorities without direction is not sufficient. It would only deal with a portion
of the problem. There needs to be a system of priorities and protocols developed and direction given to
emergency service authorities which encompasses the full systems response to major traffic incidents.
“Incident management should go beyond crashes involving large commercial vehicles to consider any
incident that constricts traffic such as fender-benders and police enforcement of rules of the road,”
according to Mr. Landry. “In both these cases, there can be partial blockages and rubber-necking that
can create backups.”
Not only do agencies responsible for reopening the roads following serious traffic incidents in the Lower
Mainland assign little or no priority to their task outside of immediate emergency response, it is a
challenge to determine which of the range of federal, provincial, regional and municipal authorities
actually has the primary authority to effect control of an incident at any given point in the system.
Observed issues
Lack of reliable statistical information
Reliable statistical information relating to the numbers of incidents that resulted in the interruption of free
flowing traffic movement along arterial roads is difficult to obtain for the province. International research
has demonstrated the significant costs to the economy of these incidents. In all likelihood there is little to
no reliable or consistent information for recording incidents in a given location and correlating them with
the time it took to reopen an affected roadways. Furthermore, there is no system currently in place that
measures the impact of an incident on adjacent components of a route system or larger area of the Lower
Mainland.
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Major route system disruption
Even a minor incident can completely block an entire route system through a community and its adjacent
municipalities, causing problems that can include:
Significant losses to commercial operations because material or people necessary for normal
business activities are unable to reach their respective destinations;
Loss of emergency access to ambulance, fire/rescue/hazmat and police vehicles;
Environmental damage from idling vehicles;
Wasted fuel from idling vehicles;
Public transit schedules being disrupted.
Businesses and the economy suffer, and many personal lives are affected by these gridlock traffic
incidents. Collectively they are of sufficient severity to warrant a determined effort to address them.
Lack of identified responsibility
Ownership of the routes in question can include federal, provincial, and municipal authorities, and
responsibility for their management may include all of the above together with police forces, private
contractors and, in the Lower Mainland, Translink. No single agency has the overall authority and no
protocols appear to be in place to govern situations where two or more agencies have conflicting
jurisdictions. It certainly appears that no agency sees it as a priority to reopen roads in an expeditious
manner following a traffic incident.
On scene control and traffic management
For the most part, control at the scene is exercised by a police officer. Jurisdiction appears to be limited
to the scene and its immediate surroundings. While most police vehicles are well equipped with
communication and data capture equipment, none of it appears equal to the task of implementing a route
management plan or damage recovery task in a timely manner.
The accident scene also needs to be protected by coning off the area in accordance with recognized
engineering guidelines to protect those personnel attending to the scene of the accident, those involved in
the accident, and those approaching the accident to ensure there are no secondary accidents to further
exacerbate the situation.
Investigation
Often the need for authorities to complete a full investigation at the scene of an incident is offered as the
reason for extended road closures. In the case of fatalities or serious injury, this may well be a valid
explanation. In other cases, however, it would appear that the use of advances in technology such as air
photographs, computerized measuring techniques, and other data assessment devices have not been
considered, let alone used.
Equipment
In the case of some incidents involving large vehicles, such as overturned dump trucks or semi-trailer
trucks, one explanation given for time required to process an accident scene has been that equipment of
sufficient size not being readily available to move damaged vehicles or other obstructions from the roads.
Efforts to ensure that a proper inventory of suitable equipment is immediately available to clear scenes of
traffic incidents and protocols are in place to obtain them on a priority call basis are more than overdue.
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This also includes the necessary equipment to quickly restore the area to its original condition before
reopening, such as restoring concrete barriers that might have moved, clearing debris or hazardous
materials left on the roadway, etc. If this is not done, the reopened roadway could contain new dangers to
motorists as a result of the roadway and roadside damage caused by the accident.
Detour management
A key technique to the maintenance of route systems is the identification of detours that divert traffic
away from blocked roads for the duration of the incident. Effective initiation of alternative routing
requires previously positioned advisory signage and a comprehensive manpower servicing plan,
especially to facilitate the additional traffic movement on these routes through intersections.
This also entails a communications plan, whereby information on the accident and alternative routes is
quickly and effectively communicated to the traveling public, supported by the use of air observation
facilities. While techniques of this nature are not necessarily always available or practicable, the analysis
of a route system to determine their potential for the elimination of locations subject to blockage will, at
the very least, assist in the planning process for new facilities.
Objective
That all BC highway administrators adopt as a principal objective that routes blocked for any reason be
restored to fullest possible use in the shortest possible time as an incident management system.
These procedural issues are offered for consideration in addressing the recommendations of this
resolution:
The adoption of improved protocols covering the coordination of two or more agencies affected
by any adverse situation affecting the use of the route in question;
A review of investigation techniques employed in the analysis of vehicle accidents be reviewed
and where possible altered to accommodate the requirement to reopen the route rapidly;
The identification of legal or regulatory issues that prevent the timely reopening of a route and the
initiation of any appropriate modifications;
A review of inter-agency communications facilities to insure that information with respect to
incidents occurring in one jurisdiction is rapidly passed to other affected areas for the purposes of
generating route management action;
The development and institution of regular training exercises to provide those charged with the
responsibility of route and incident management with opportunities to practice their skills and
refine the processes they employ; and
A review of the use of existing and obtainable resources including signage, temporary and
attached manpower, air observation assets and specialized lifting and removal equipment.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. request that the Minister of Transportation and Infrastructure direct an appropriate agency within the
province to accept responsibility for the management of operation of its highway system;
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2. ensure that protocols are developed which require agencies that respond in the management of
highway and road incidents have definitive operational plans to rapidly clear incident areas or when
appropriate invoke alternate traffic management situation plans to effectively offset the effects of
major roadway blockages;
3. ensure that major roadway incident management plans include the rapid deployment of suitable heavy
rescue and recovery equipment to mitigate the term of the incident and the subsequent effects on
regional traffic flows; and
4. develop, through the responsible agency, highway and road incident management exercises, involving
all appropriate agencies dedicated to implementing the management plan, to ensure a high standard of
real life execution.
EAST-WEST CONNECTOR BETWEEN ABBOTSFORD AIRPORT & HIGHWAY 99 (2010)
Transportation is a major barrier to business and investment in south western BC, and it must be
addressed on a regional basis. While each municipality has specific challenges with the movement of
people, goods and services, transportation and traffic concerns go far beyond individual municipal
boundaries and must be considered on all fronts. The province of BC is promoted internationally as a
world-class destination, with the Greater Vancouver Region as the gateway to the province. It is vital for
this region to have facilities and infrastructure to handle the existing and future demand to alleviate
transportation gridlock and to protect our air quality.
Currently, passenger and commercial carriers en route to or from Highway 99, the US border and
destinations in the southwest sector of the Fraser Valley are commonly directed to travel on Highway 1.
Residential and commercial development throughout the lower Fraser Valley and additional service and
capacity at Abbotsford Airport continue to add to the stress and gridlock on Highway l. There is a
demonstrated need for development of a provincial southern connector to link the Abbotsford Airport and
Canada/US border crossings with Highway 99, Delta Port, and Vancouver International Airport. At the
present time commuter and commercial traffic are utilizing inadequate municipal arteries to travel
through Abbotsford, Langley, Surrey, and Delta. Based on the Chamber’s understanding of continuing
development in the Fraser Valley, this corridor will be urgently needed.
Engineering consultant reports continue to confirm the need for a major east-west highway south of
Highway 1 so as to connect Highway 99 in Surrey/Delta to join Highway 1 east of the Abbotsford
International Airport and facilitate future traffic growth in the entire lower mainland. This secondary
high-capacity route south of the Fraser is also deemed necessary for both capacity and safety reasons in
the event of incidents that shut down Highway 1.
Recently, the Abbotsford International Airport is reported to have acquired title to the property west of
their facility, extending westward to Bradner Road in direct alignment with 16th Avenue. This property
could provide a direct east-west connection to Highways l3, 15, and 99 along such a corridor. Further
property acquisition on the part of the Abbotsford International Airport is in planning stages to facilitate
an eastward direct connection with Highway 1.
Recognizing prevailing common utilization of an incomplete route and on the basis of information
currently available, 16th Avenue appears to be the primary choice for an east-west connection. However,
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the parties are open to other options if such can be reasonably devised, within the limited geographic
restraints, as a better alternate. The objective should be to immediately explore and designate an eastwest connector route that can ultimately be developed to highway standards, while enabling
municipalities the ability to align their planning and route access via a protected route in an orderly
fashion.
Thus, timely Provincial Government “designation” of an east-west connector will serve to protect the
right-of-way and facilitate development of such a route on the basis of harmonious regional planning. It
is incumbent that an east-west connector route be designated and subsequently developed over time to
significantly improve access, reduce congestion, enhance safety, and reduce stress on the environment.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. commence planning immediately for the designation, development/confirmation of the alignment for
a southern east-west connector between Abbotsford Airport and Highway 99. Such planning should
identify a desirable timeframe for completion of portions or all of this corridor; and
2. following completion of the alignment selection, commence protection and/or purchase of the
required right-of-way in conjunction with affected municipalities.
EXTENSION TO THE VICTORIA INTERNATIONAL AIRPORT RUNWAY (2010)
Transportation connectivity is the key to prosperity. Commercial and general aviation is a significant
aspect of transportation in BC. Improvements to airport facilities are important projects that will help
realize our province’s economic potential.
The Victoria International Airport is Canada’s 9th busiest airport, and has the shortest runway of all major
Canadian airports and provincial capitals. The airport has seen year over year growth, averaging 5.7%
annually since 2002. The Victoria Airport Authority (VAA) has successfully completed a major terminal
expansion and is setting the stage to attract additional international air service.
To promote economic growth and sustainability for Vancouver Island, the VAA is proposing a 1400 foot
runway extension. This $41.2 million dollar project will enable non-stop air service to international
destinations such as London. A three-way equal partnership between the Airport Authority, Provincial
Government, and the Federal Government would allow this project to begin almost immediately. The
project will extend the airport’s main runway from 7000 feet to 8400 feet.
Over the last five years, the Provincial Government has contributed funding to a number of airport
facilities across the province. The most recent contributions include $22 million towards the extension of
the main Prince George runway, $1.35 million towards the extension of the Kelowna Airport runway in
2008, and $6 million to help extend the Nanaimo Airport runway. There is also $10 million committed to
a taxiway and apron extension project at the Abottsford Airport in 2010. The Provincial Government also
contributed to the extension of runways in Smithers, Cranbrook, Abbotsford, Terrace, and Kamloops.
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The Victoria International Airport, in the province’s capital city, has not yet secured a funding partnership
with the Provincial Government to implement its $41.2 million runway extension. The Victoria Airport
Authority estimates that the ability to land jumbo jets will add another $37 million dollars to Greater
Victoria’s economy annually. Research to date from the Victoria Airport Authority shows a ready market
from key European destinations, including France, London, and Germany. These markets have some
interest in one-stop flight packages, but the prospect of direct connections is highly desired. VAA
estimates that with the extension, they will see 36,000 new international movements from London in the
first year with an increase to 48,000 within five years, and 75,000 movements from France in the first
year with an increase to 100,000 within the first five years.
Economic growth, particularly opportunities related to post-Olympic benefits and the provincial goal of
doubling tourism revenues by 2015, depend on transportation connections that can host the world. An
extended runway at the Victoria International Airport fits is an important part of bringing those provincial
goals to fruition.
THE CHAMBER RECOMMENDS
That the Provincial and Federal Governments provide monetary support for the extension of the Victoria
International Airport.
KOOTENAY COLUMBIA NORTH SOUTH CONNECTOR (2010)
BC is reliant on transportation infrastructure for economic sustainability, growth, and diversification.
Quality transportation infrastructure can act as a catalyst for economic health by providing inter-regional
access to economic opportunities throughout the province. In addition to inter-provincial access, it is
important to recognize the need for effective North American transportation access to capitalize on the
close economic ties to the US in support of economic sustainability and expansion opportunity.
Efforts are being made south of the border to recognize the importance of infrastructure work on HWY
395; the Canada - US North South Corridor. The US Senate Transportation Appropriations Committee
and Washington State Governor recently announced that the North Spokane Corridor project will receive
$35 million under the Transportation Investment Generating Economic Recovery (TIGER) grant program
from the American Recovery and Reinvestment Act (ARRA). The $1.5 billion TIGER program funds
transportation projects to boost local economies and improve transportation infrastructure that is vital to
regional job growth and economic competitiveness. The $35 million investment includes the northern
development of HWY 395.
The Provincial Government clearly recognizes the importance of improved transportation infrastructure.
The Provincial “Transportation Service Plan 2009/10”, states one of its goals to, “expand and strengthen
the roads, rails, ferries, bridges, ports and airports that tie our communities together and link us to the
world.” During this period we are investing over $2 billion in the future of BC.
In order to increase opportunities for sustainable growth and diversification of regional economies,
including tourism, resource sectors and manufacturing, there must be support with infrastructure
investment for a north-south corridor.
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With the completion of a highly successful 2010 Olympic and Paralympic Games and the Provincial
Government’s commitment to tourism growth, as per the “Tourism Action Plan” (February 2007), The
Provincial Government has committed to grow the tourism industry from “good” to “great”, and double
tourism revenues by 2015. The North South Connector will be an important part of achieving this goal by
acting as a new gateway for tourism in BC.
Studies have shown that low elevation routes reduce carbon emissions by more than 30% as compared to
high elevation routes. This in turn makes this low elevation corridor an alternative to reduce BC and
Washington’s carbon footprint. A low-elevation route between the Canada-US border and the TransCanada highway to a southern route HWY 395 connector would provide an important alternate route that
would allow greater access to new economic markets within BC and enable shipping trucks to avoid high
traffic volume and bottlenecked highways, thereby reduce idling time, fuel consumption, and carbon
emissions.
The Chamber believes this resolution will reduce the carbon footprint in BC by providing a direct route to
economic markets. This in turn would improve economic strength by increasing global competitiveness
through direct access for shipping of goods. Through the development of an additional north/south
transportation corridor there will be an elimination of highway and border bottlenecks; the North South
Connector would be a direct route to support the massive Prince Rupert terminal expansion.
THE CHAMBER RECOMMENDS
That the Provincial Government:
1. develop a comprehensive transportation plan that will align with the USA North Spokane HWY 395
infrastructure investment; and
2. work in collaboration with economic development offices and local government in the North South
Corridor area to explore economic development opportunities that would be created through the
completion of the North South Corridor.
MOVING FORWARD ON OPEN SKIES POLICY (2010)
Airports and the services they provide are critical to the economy of BC. Canadian air policies need to be
brought into the 21st century; current air policies encourage secrecy and unfair agreements. Specifically,
the Federal Government must be called on to recognize that the current approach to air agreements is
having a negative impact on the economy of BC and Canada. As such, the Federal Government must
move beyond the current Blue Skies policy and embrace a true open skies approach to air agreements.
Included in this approach should also be a focus on allowing right of establishment for foreign domiciled
carriers in Canada.
Background
In November 2006, the Federal Government announced the Blue Skies International Air Policy. Further
to this, Canada negotiated an Open Skies treaty with the US, which, while concluded in November of
2005, was not fully implemented until March of 2007. Both of these announcements were welcomed by
the BC and Canadian Chambers. The benefit to both of these agreements is seriously impaired by the
lack of truly Open Skies.
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It should be noted that air agreements alone are not the panacea in terms of growing international markets.
The one-off agreement with China in 2007 was relatively liberal, but the lack of Transit-Without-Visa
(TWOV) for Chinese Nationals, coupled with other visa issuance issues initially contributed to China
withholding Approved Destination Status (ADS) for Canada, thus seriously undermining the potential
market.
Further complicating the issue is the lack of alignment between Federal Government departments to deal
with an Open Skies policy. For example, there are very few airports in Canada that offer 24/7 Canada
Border Services for the arrival of an international passenger or cargo flight.
In establishing negotiating priorities and mandates, the Federal Government should take into account the
needs of the broader stakeholder community. Over the past year, the Federal Government placed its focus
to an Open Skies agreement with the European Union (EU). While concluded, the implementation
structure remains challenging given that implementation is structured in four phases with open skies not
coming into existence until phase 3 of the agreement. While the restrictions remain concerning, the
agreement does move us forward in that it removes all previous restrictions on direct service between the
27 EU member countries and BC. The Chamber welcomes the opportunity with the EU, but is concerned
that this will again mainly benefit Eastern Canada. This in turn undermines Canada’s ability to move
forward on the Asia Pacific agenda, which is an important avenue for both the British Columbian and
Canadian economy.
It was originally stated that the agreements would cover the following elements for all scheduled
passenger and cargo service:
Third, fourth, fifth and sixth freedom rights;
Seventh freedom rights will apply to stand alone, all-cargo service;
No limit to the number of airlines permitted to operate;
No limit on the permitted frequency of service or type; and
Openness and flexibility of code-sharing services.
The Chamber continues to support these foundations to all air agreements; however, the conditions that
are placed on the negotiating priorities of the Federal Government are a concern. In particular, both the
negotiating calendar and the process itself, with two exceptions, are problematic. With respect to the US
and EU negotiations, two representatives of the Canadian Airport Council have been afforded the
opportunity to participate as observers. Canadian observers have been limited to Canadian airlines and
the pilots union. The Chamber believes that this policy needs to evolve similar to the US, whereby any
airport may sit as an observer/representative of its community.
The Chamber is also concerned with the lack of transparency in the Open Skies policies. Canada has, as
of March 2007, adopted an Open skies agreement with the US. In addition, Canada claims 9 Open Skies
agreements with Barbados, Costa Rica, Dominican Republic, El Salvador, Iceland, Ireland, South Korea,
and the United Kingdom. These treaties are confidential with access granted only to government
officials, airlines, and airports. Business stakeholders and the general public do not have access to the
details. An example of this is the agreement with China, signed in April 2005. Details such as frequency
entitlements and destinations served are still confidential. As well, Iceland has signed an Open Skies
agreement with Canada, the details of which have never been disclosed to the airport community,
stakeholders, or the general public. As Iceland's agreement was not totally disclosed and most of the
expanded freedoms did not occur for many years to come, this is not truly an Open Skies agreement. The
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Chamber is concerned since bilateral agreements are still being negotiated and are never made public. By
contrast, the US is not legally permitted to enter into such agreements without public disclosure.
The Chamber is also concerned with a lack of urgency placed on the need to immediately enter
negotiations with key markets. BC has a history of suffering under the legacy of restrictive agreements
with some of our most important markets for tourism and trade. The Chamber believes it is incumbent on
the Federal Government to move beyond the current Blue Skies International Air Policy and develop a
21st century true open skies policy, placing significant emphasis on the Asia Pacific region, as well as the
United Arab Emirates.
The Chamber is also disappointed by the lack of action on the issue of rights of establishment in Canada’s
approach to air policy. The Chamber continues to believe that rights of establishment are the most
effective way to immediately introduce significant new investment and competition into the market. The
granting of rights will increase competition and choice as companies look to establish a Canadian
presence. This increased investment will inevitably increase employment as the sector grows, helping to
re-establish the British Columbian economy.
THE CHAMBER RECOMMENDS
That the Provincial Government aggressively lobby the Federal Government to:
1. move responsibility for air agreements from Transport Canada to Foreign Affairs and International
Trade Canada;
2. move beyond the current Blue Skies International policy and aggressively pursue true open skies
agreements in all bilateral transport negotiations, both in passenger and cargo;
3. focus governments efforts on key markets as identified by community and industry stakeholders;
4. adopt a balanced approach to stakeholders, recognizing the needs of Canada’s air carriers as well as
taking into consideration community stakeholders. Individual airports as well as community
representatives must be granted observer status to that of the airlines, thus ensuring against
confidential addendums and MOU’s in the process;
5. adopt a policy of negotiating open, transparent air agreements;
6. immediately allow the establishment of foreign-owned but Canadian-domiciled carriers (the right of
establishment) in Canada; and
7. undertake a proactive, aggressive and unified strategy across all departments and jurisdictions in
order to fully leverage the gateway potential of BC’s airports.
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US CUSTOMS PRE-CLEARANCE
SECURITY (2010)
–
BELLEVILLE
INTERNATIONAL
TERMINAL
Canada’s economic trade viability relies significantly on a number of gateways and major land and sea
border crossings, where transportation networks converge to connect centres of economic activity.
Gateways to Canada include approximately 300 commercial sea ports, over 20 major airports, and a large
number of land border crossings, 18 of which are major trade gateways. The Belleville International
Terminal in Victoria, BC is one example of a gateway connecting the leisure travelers of the United States
and Canada.
It is of paramount importance to ensure that appropriate capacity and infrastructure improvements are
adopted at all necessary crossings. In the post 9/11 world, appropriate capacity includes not only
infrastructure considerations but also high-level security measures. The United States is Canada’s
primary trading partner, and as such, it behooves the Canadian Government to work in harmony with US
officials and Provincial Governments on security measures.
Ballantyne and Canada Place in Vancouver, both cruise terminal sites with US preclearance service, each
have modern facilities with adequate pre-clearance services with no expressed concerns from the US
Customs and Border Protection Agency. While important at commercial crossings, it is equally important
to be vigilant in border security and infrastructure investment at gateway locations with a concentration of
leisure travelers.
The US Customs and Border Protection Agency (CBP) have a number of pre-clearance locations around
the world, one of which is the Belleville International Terminal in Victoria, BC. In a letter written on the
issue of the terminals condition in 2006, the US CBP advised that the terminals in Victoria currently “lack
an infrastructure necessary to maintain passenger sterility and vessel security,” and expressed concern
that this situation has been a long standing issue in Victoria without a proposed solution, in regards to
both increased security and passenger sterility.
In the event that the Belleville Terminal is not upgraded and brought into compliance with international
safety standards and requirements of the Department of Homeland Security, the Agency has stated that,
“a withdrawal of Preclearance services at Victoria must be considered.” Clearly, the status quo at this
terminal site is untenable and clearly does not support a strategic alliance with our US partners.
The potential loss of pre-clearance services at Belleville International Terminal would have a significant
impact on the economy of Vancouver Island and the tourism industry of BC. The terminal, which covers
a land mass of 6.5 acres, provides international foot passenger ferry service to various destinations in
Washington State and international vehicle ferry service to Port Angeles. In 2005, the terminal welcomed
1.1 million return foot passengers and 175,000 return vehicle trips. A marine transportation study done in
that same year by Moffat and Nichol showed an increase in traffic projections for 2010 to be 1.2 million
return foot passengers and 188,000 return vehicle passengers.
The Belleville Terminal pre-clearance site is one of only a few marine based sites in the country. The
majority of CBP pre-clearance locations in Canada are at international airports. The airport facilities were
all originally built and funded with initial investment by the Federal Government with some costs
recouped through airport improvement fees. Airports were subsequently transferred to Airport
Authorities. In contrast, the Belleville International Terminal has operated with little government support
from any level. Unfortunately, its current status reflects that funding reality.
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The responsibility for re-development of the Belleville Terminal is a complicated issue. Since the
property itself was fully devolved to the Province of BC, and is now managed by the provincial crown
corporation called the Provincial Capital Commission, the Provincial Government has a significant role to
play. However, as the Belleville Terminal is an international border crossing, its infrastructure and
security requirements are clearly within the mandate of federal responsibilities. Finally, the terminal is in
the middle of the City of Victoria, which means much of its redevelopment would be subject to municipal
land use requirements.
There have been numerous studies concerning the redevelopment of the terminal over the last decade.
One study in 2005 put the infrastructure redevelopment cost estimates between 40 and 50 million dollars,
with real estate development costs on top of that. Another task force put forward a proposed vision with
similar cost projections. However, the concept of redevelopment has never been sent out as a request for
proposal with concrete cost projections.
The redevelopment of Belleville International Terminal is a project of considerable size and would need
to be accomplished through a partnership with the Provincial Government of BC. For its part, the project
may qualify for federal funding under the Building Canada Fund, a fund for federal investment of $33
billion dollars over seven years, through to 2014.
Canada’s commitment to security is an important indication of our strategic partnership with the United
States. In order for Belleville International Terminal, which poorly represents the capital of British
Columbia, to be an international standard transportation portal and safe gateway, infrastructure and
security investment is hastily required. A partnership is required between the Federal Government of
Canada on this international border crossing and the Provincial Government of British Columbia, who
owns the terminal property to bring the facility up to date and ensure many more years of secure service
for Vancouver Island.
THE CHAMBER RECOMMENDS
That the Provincial Government partner with the Federal Government to develop the Victoria marine preclearance site at Belleville International Terminal in collaboration with the municipality as a model for
future marine facilities in Canada.
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POSITIONS
ON
SELECTED NATIONAL ISSUES
2012 – 2013
A
BORIGINAL AFFAIRS AND NORTHERN DEVELOPMENT
ABORIGINAL ISSUES: ACHIEVING GREATER CERTAINTY (2011)
Businesses operate best in a stable and predictable environment, where rights are certain and are protected
by the rule of law. The biggest issue for the business community arising from aboriginal claims is
uncertainty. The root of the uncertainty in BC is that aboriginal groups assert rights of ownership or
control over all of the land in the province, but those rights are not recognized in the legal regime that
business operates in.
Many activities that businesses pursue, or would wish to pursue with the permission of the Crown, may
be seen as impacting these asserted aboriginal rights in some way. It is clear that aboriginal rights and
aboriginal title still exist in the province, and are protected by the Constitution, but in most instances the
extent of aboriginal rights is unclear, while the extent of aboriginal title still remains completely
unknown.
Increased Expectations
The gap between what the aboriginal and non-aboriginal populations would accept as a reasonable
resolution or reconciliation can be perceived to have grown in the last decade.
It appears to many of the Chamber’s members that since the 1997 decision of the Supreme Court of
Canada in Delgamuuk’w, to the effect that aboriginal title has not been extinguished in BC, there has been
a trend of increasing expectations by aboriginal peoples as to the extent and strength of their rights.
Two recent and significant events that may have contributed in raising those expectations are the
(nonbinding) statements made by Mr Justice Vickers in the William case in November 2007 concerning
the extent of aboriginal title of the Tsihlqot’in people, and the 2009 Recognition and Reconciliation
initiative of the Provincial Government. Although the ‘R&R’ initiative was ultimately declared “dead,
dead, dead” by the aboriginal leadership themselves, before it died it proposed a very significant degree of
control of Provincial resources through “shared decision making”, as well as the potential recognition by
the Province that aboriginal title existed throughout the whole of the province.
The level of aboriginal expectation is probably best indicated by the extent to which a standard of “free,
prior, and informed consent” was adopted by aboriginal groups as a precondition to business
development. This principle was expressly rejected by the Supreme Court of Canada in Haida in 2004,
expressly rejected by the Federal Government when it voted against the UN Declaration on the Rights of
Indigenous Peoples in 2007, and expressly rejected again by the Federal Government on November 12,
2010 when Canada issued a Statement of Support endorsing the Declaration as an aspirational document
but at the same time noted it was a non-legally binding document that does not alter the legal duty to
consult.
The increased level of expectation of aboriginal people may be a significant factor in the lack of progress
in the Treaty process, and the withdrawal of many aboriginal groups from the Treaty process altogether,
since what is offered in that process cannot meet the present levels of expectation.
Further directions and clarity on what are the legal rights of aboriginal peoples appears to be necessary to
move forward with the ultimate goal of reconciliation. Under our Constitution, the Supreme Court of
Canada is the only body that can define the rights of the aboriginal people.
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The Chamber is not generally of the view that recourse to the Courts is the best way to resolve a dispute.
However, the most prudent way of determining whether the expectations of the aboriginal peoples are
supportable is to have more cases concerning the extent of aboriginal rights and title determined by the
Supreme Court of Canada.
Achieving Long Term Certainty Will Require Negotiation, Litigation, and Time
Certainty concerning the extent of aboriginal rights and title will most likely be achieved by two methods
running in parallel – that is, by a combination of court decisions which will provide better guidance to all
parties as to the actual extent of aboriginal rights and title, and by negotiations culminating in final
settlements in the Treaty process.
It is important to note that achieving certainty concerning the extent of aboriginal rights and title in the
province will take a very long time, and it is necessary to create a workable environment for the business
community pending final achievement of that goal.
Achieving Greater Certainty in the Short Term
The challenge for Federal and Provincial Governments is to create an environment in this province which
will allow businesses to operate successfully and competitively – and with greater certainty – for the
foreseeable future, while the resolution of the aboriginal rights and title issues is still underway. The
solution, as noted below, is to institute an effective process of consultation, as suggested by the Supreme
Court of Canada in Haida.
The most important recent decision that provides how to achieve greater certainty in the short term with
respect to aboriginal rights issues is still the November 2004 decision of the Supreme Court of Canada in
Haida.
The Haida decision – and the companion Taku decision – addressed the process the Crown should follow
before granting licences and rights which might affect unproven but asserted claims to aboriginal rights
and title. This was further clarified by the decision in Rio Tinto Alcan (2010).
The key finding of the Supreme Court of Canada was that the Crown has a duty to consult with aboriginal
groups who have not yet established their rights, before granting licences or permits that might affect their
asserted rights, and in some circumstances, the Crown has a duty to ‘accommodate’ those aboriginal
groups.
The Court made it clear that the duty to consult with aboriginal groups is one owed solely by the Crown,
and is not owed by the business community.
The Court described the nature of the consultation required as being on a sliding scale, based on an
assessment of the strength of the aboriginal claim and the impact of the proposed activity on the asserted
aboriginal interest.
The Court also commented on ‘accommodation’, describing it as a process of trying to harmonize the
competing interests of development and the wish to protect aboriginal interests.
A very interesting part of the decision was a statement by the Court that the Crown (both Federal and
Provincial) could establish regulatory schemes to comply with the legal obligation of consultation. In
effect, the highest Court in Canada advised the Crown that if a fair process for consultation was
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established, and followed, then the courts would uphold the decisions that emerged from that process.
The consultation principles in Haida were also applied to Treaty rights in Mikesew (2005), and were
further clarified in the Treaty context in Little Salmon (2010).
From the perspective of the business community the consultation process largely remains a black box
with almost no rules. This is a major impediment for people wishing to do business in the province.
Achieving greater certainty with respect to the process of aboriginal consultation – with guidelines,
timelines, and outcomes that can be relied on – is of critical importance to the business community.
There have been some recent improvements in the Provincial Government process. There does appear to
be more effort committed to developing expertise in consultation in the recent reorganizations of the “dirt
ministries”. There have also been some recent efforts to provide some guidance to the business
community. The “Updated Procedures for meeting Legal Obligations When Consulting First Nations –
Interim” (May 2010) and the companion “Guide to Involving Proponents When Consulting First Nations
(April 2010) are welcome developments, as are the published policy statements of the Environmental
Assessment Office that provide a guide for project proponents in consulting with aboriginal people in
both a Treaty and Non-Treaty context. It is still an open question as to whether the recent Protocols with
the Haida, Central Coast, and other groups will actually achieve any greater certainty.
With respect to the Federal consultation process, Indian and Northern Affairs Canada made an initial
effort to address this policy vacuum by releasing its “Interim Guidelines for Federal Officials to Fulfill the
Legal Duty to Consult” in February 2008 and has followed up with the Federal Consultation Guidelines
of March 2011.
However, these efforts fall short of the regulatory regime that was suggested to both levels of government
by the Supreme Court of Canada in 2004 in Haida. According to Wikileaks, a cable from the US
Embassy in Ottawa says that, “as long as Canada lacks a clear definition of aboriginal rights or a uniform
model for negotiations, effective mechanisms to resolve aboriginal grievances in a timely manner will
remain elusive”. This statement is consistent with the experience of members of the BC Chamber, and
the general situation remains that there is little guidance from either Crown as to what are the reasonable
outcomes or timing expectations in a consultation process.
One additional point is that the Provincial and the Federal Governments are often both involved in the
same project, with permits required from each of them. There is no real effort to coordinate the
consultation processes required for the different permits, so the consultation process is generally repeated
by both levels of government, with little or no reference to the other, adding to both expense and delay.
Revenue Sharing by the Crown(s)
In addition to wanting greater control over the decision-making process of whether a new business
activity should proceed, aboriginal groups wish to receive a portion of the revenue derived from the
proposed business activity.
Whether an aboriginal group should receive such an economic benefit is a matter of policy that should be
determined by the Crown, and not by individual businesses.
In Haida – and the decisions that followed - the Court did not propose a practice of paying money as a
requirement of ‘accommodation’ before aboriginal rights had been established.
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Outside of business activities carried out on reserve or Treaty land, there is no legal basis to suggest that
the business community should be paying aboriginal groups for the “right” to carry on business in the
province.
There have been some recent developments in the Province to provide for the sharing of Crown revenues
on a variety of projects. Examples of this are the Economic Benefits Agreements that have been
negotiated between the Province and some members of Treaty 8, and the Resource Revenue Sharing
Policy that was announced by the Province for the mining sector in October of 2008, which was
implemented on two mining projects in 2010. There also appears to be a movement by the Province to
apply a revenue sharing approach in the forestry sector.
How the resource revenues and tax base of the province should be shared between the Crown and the
aboriginal peoples ought to be a matter of government policy, and not developed as a consequence of
individual arrangements between aboriginal groups and business people based on self-interest and
pragmatism, as a consequence of the failure of the Federal and Provincial governments to develop an
effective consultation process, or a workable policy around revenue sharing.
In summary, while both levels of government have been taking steps in the right direction to assist in
achieving greater certainty for business in the province, there is still much room for improvement.
THE CHAMBER RECOMMENDS
That the Federal Government work with the Provincial Government to:
5. develop harmonized workable regulatory processes for carrying out consultation with the aboriginal
peoples that will amount to the regulatory schemes referred to in Haida;
6. continue to provide clearer guidelines for the business community with respect to its role (if any) in
the consultation process;
7. continue to develop policies around revenue sharing with aboriginal peoples; and
8. make it clear that it is not an expectation or requirement of either Crown that in the course of permit
approval businesses must pay aboriginal groups in order to carry on business on land over which the
aboriginal peoples do not have an established legal right.
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MORE SECURE PROPERTY RIGHTS ON RESERVE LANDS (2010)
The First Nation Tax Commission (FNTC) is leading an initiative to create more secure property rights on
reserve lands. The existing land tenure and registry system on reserves is a significant source of socioeconomic disadvantage because it contributes to high transaction costs related to investment, limits the
potential property market, and in many cases prevents the securitization of land as a source of credit.
Property rights are the bedrock of the market economy. Property rights are absent or poor on many
reserves. This results in lower property values, less commercial development, and higher incidences of
poverty. Poor property rights contribute to high costs of doing business. One study recently quoted by
the Auditor General of Canada suggests that it costs four to six times more to complete an investment
project on reserve lands than off. The principle reason for these higher costs is that investors have to
establish secure tradable property rights on reserve lands, which they don’t have to do off reserve lands.
Proposed Solution
The FNTC is proposing to resolve this problem by working on First Nation Property Ownership
legislation (FNPOL). This legislation would create a similar property rights structure to the rest of
Canada. The Chamber understands that land registration under the FNPOL would use a modified Torrens
land title system.
The Chamber understands that FNPOL would be optional for First Nations, that the legislation would
ensure that the underlying title or reversionary right remains with the First Nation, and the First Nation
would retain land management and property tax jurisdiction regardless of who reside there. The Chamber
understands that this would effectively allow participating First Nations to issue fee simple title and
provide guaranteed title through the Torrens system.
The Chamber expects that the economic benefits from such an initiative would be large. As an example,
an economic analysis conducted by Fiscal Realities Inc. for the FNTC estimates that if 68 First Nations,
mostly rural, in BC converted their lands using this legislation, the benefits from increased property
values, employment opportunities, and increased revenue potential would be over $4 billion.
THE CHAMBER RECOMMENDS
That the Federal and Provincial Governments work with the First Nations Tax Commission, and other
interested parties, to develop legislation that would provide more secure and marketable property rights
on reserve lands.
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LEVELING THE PLAYING FIELD FOR OIL AND GAS SERVICE COMPANIES (2010)
BC’s Oil and Gas industry generated the single largest source of revenue to the province in 2008 at $4.09
billion. In fact since 2001, the oil and gas industry has invested almost $38 billion in BC. 1 The Chamber
understands that the Provincial Government is attracting new investment through innovative
infrastructure and royalty programs, and that this has been key to the growth of the industry.
Most exploration companies are based outside of BC. Given north-eastern BC's close proximity to
Alberta, and the large number of oil and gas service firms based there, BC-based oil and gas service firms
feel great competitive pressure from Alberta-based firms for work that is completed on BC land. The
TILMA agreement further enables cross-border work as many regulations have now been streamlined.
With the increased volume of Alberta-based companies coming into BC, the number of Alberta trucks on
our roads has increased. These trucks may not meet the BC Ministry of Transportation requirements.
Without adequate enforcement these out of province companies may be operating with a competitive
advantage.
While the implementation of the HST greatly improves the chances for BC companies to stay
competitive, there is risk that out-of-province firms will not remit the full amount of the HST, especially
when they are invoicing other out-of-province firms for work performed in BC. In order to ensure a level
playing field for BC-Based Oil and Gas companies with their primarily Alberta-based competitors, BC
regulations must be enforced at the same standards for both out-of-province firms and BC-based firms.
This would include, but not be limited to, Commercial Vehicle Regulations and HST tax collection.
THE CHAMBER RECOMMENDS
That the Federal Government develop effective systems which ensure all work performed in BC by out of
province firms is invoiced with the full 12% HST, regardless of the province or state where the company's
offices are located.
1
Source: www.gov.bc.ca
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FRASER RIVER FLOOD MANAGEMENT (2012)
The Fraser River has always been a driving force in the economy of the Province of British Columbia.
Hundreds of thousands of residents work on and around the river, or with businesses and industries that
rely on this vital waterway. Creating a comprehensive, long-term solution to flood management of the
Fraser is a critical component to maintaining Canada’s gateway to the Asia Pacific region.
Our elaborate system of dykes and pumps that protect farmland, industry, and residents is now utilized to
capacity, in large part due to changes in weather patterns and tidal levels that have affected the flow of the
River. It is time the Provincial and Federal Government begin working with local governments and First
Nations to develop a proactive long-term strategy to maintain this powerful, harnessed river.
The Fraser River and its 13 main watersheds drain more than a quarter of the province and are home to
over 2.73 million people (67% of the province’s population). Beyond its geographic importance, this
basin is a vital component of Canada’s gateway to the Asia Pacific region. In addition to contributing a
full 80% of the provincial economic output and 65% of total household income, it also contains 21
million hectares of forest. The Fraser Basin‘s farms, ranches, and orchards comprise half of all BC's
agricultural lands; the Fraser Valley alone exceeds $1.4 billion in farm receipts. Eight major mines
located in the basin account for 60% of BC's metal mine production. In addition, the basin contributes
67% of total tourism revenue1. The volume of goods moving on the Fraser River rivals the volume of
goods transported on the St. Lawrence seaway; however, the amount spent maintaining the Fraser is a
fraction of that spent on the St. Lawrence.
In order to avoid the very real threat of flooding, annual dyke maintenance, gravel and debris removal,
and regular dredging of the main channel of the Fraser River must be undertaken. These steps are also
critically necessary to ensure the river remains open and navigable to serve as a major transportation route
for shipping, commercial traffic, pleasure boating, and to further enhance the Pacific fishery.
The Provincial Government has decentralized responsibility of flood control to municipalities, regional
districts, and diking authorities, each with limited funds. However, authority for maintenance remains
with a myriad of provincial and federal ministries and departments. Work being done is geographically
or purposively isolated and not part of a comprehensive plan to address ongoing maintenance of a flood
management system for the Fraser Basin. Provincial ministries presently involved in flood control
include the Solicitor General, Ministry of Environment, Ministry of Energy and Mines, and the Ministry
of Forest, Lands and Natural Resources Operations.
A recent survey of Lower Fraser stakeholders indicates that dredging, siltation, gravel, as well as flood
mitigation and protection, are the top four pressing issues we currently face. Flood protection and habitat
loss were identified as the top issues that would benefit from collaboration2.
In a quantitative flood risk assessment for the City of Chilliwack completed in 2009, damage and loss
figures from a dyke breach scenario exceed $ 1 billion, not including post-event environmental or health
factors3. Chilliwack is one of 12 cities that shares banks with the Fraser River.
1
The Fraser: A Canadian Heritage River, Fraser Basin Council in collaboration with the BC Ministry of Environment, March 2010
Lower Fraser River Collaborative Survey, Fraser Basin Council, November 2011
3
Quantitative Flood Risk Analysis, BGC Engineering Inc for the City of Chilliwack, BC Ministry of Environment, BC Ministry of
Transportation, Kinder Morgan Pipelines, Terasen Gas, Seabird Island Band, January 2009
2
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While natural shifts in river course and flow are anticipated, the effect of harnessing a river of this size
through development along its banks has at once prevented course shifts while also increasing the impacts
of modifications in flow. The economic impact on the provincial economy from a single event such as a
Chilliwack breach would well outstrip the cost of maintenance of the flood systems in the first year.
A climate change study in Prince George projected that Prince George’s average annual temperature
could warm by 1.6°C to 2.5°C by the 2050s4. Annual local precipitation is projected to increase by an
average of 3% to 10%, and more precipitation will likely fall as rain. Prince George, the Northern
Gateway, has been buffeted by floods three times in the last five years. A flood risk and control study
commissioned by the City of Prince George following the 2008 ice jam flood identified 14 specific areas
of heightened risk along the Fraser and Nechako rivers5. The cost of maintenance and updating of the
existing systems was projected to be $42.5 million in 2009.
As a significant factor in Canada’s economic prosperity and the backbone of the province, the Fraser
River must be maintained to ensure economic prosperity and growth.
THE CHAMBER RECOMMENDS
That the Federal Government work with the Provincial Government to:
1. work with municipalities and First Nations to create a comprehensive long-term plan for flood
protection and control on the Fraser within five years;
2. establish a long-term strategy for maintenance of the Fraser River flood control systems that includes
consideration for the growth and viability of the economies that are built around the river;
3. create and maintain a central dyking authority that will manage and support flood control along the
banks of the river; and
4. create and maintain funding agreements that will support the upgrading and maintenance of dyking,
dredging, navigation and environmental stewardship along all areas of the Fraser.
4
2009: Adapting to Climate Change in Prince George: An overview of adaptation priorities, Picketts, I., Dyer, D., Curry, J., 2009
Flood Risk Evaluation and Flood Control Solutions Phase 2 – Final Report Executive Summary, Northwest Hydraulic Consultants for the City
of Prince George, November 2009
5
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GST EXEMPTION FOR MEDICAL SERVICE PROVIDERS (2012)
It has come to our attention that certain medical service providers are required to charge GST on their
services, while other medical service providers are exempt. This creates a competitive advantage to
service providers who are not required to charge the tax, as consumers can choose a non-taxable service
over a taxable service.
Also, in certain instances where a medical service provider holds a medical licence in a non-taxable
medical services profession (e.g. Chiropractic), while also holding a medical licence in a taxable medical
services profession (e.g. Massage Therapy), the former medical service provider is not required to charge
tax on services rendered in the otherwise taxable service (in this case, massage therapy). This results in a
tax advantage within the profession.
Based on our research, for a medical professional to qualify for a GST tax exemption, the following
conditions have to be met:
The medical service provider has to be defined by the Canada Health Act as a “Health Care
Practitioner”, meaning “a person lawfully entitled under the law of a province to provide health
services in the place in which the services are provided by that person”;
The medical service provider is to be a member of a professional organization that requires
members to receive continuing education credits and holds its members accountable for
malpractice; and
The services rendered by the medical service provider are to be covered by the Veterans Affairs
Health Care Benefits Program.
Currently the following health care services, provided by licensed health professionals, are covered by the
Veterans Affairs Health Care Benefits Program:
Occupational Therapy;
Physiotherapy;
Massage Therapy;
Chiropractic;
Acupuncture;
Speech Language Pathology; and
Psychological Counselling.
Of these, all services are exempt of charging GST on services, but:
1. Acupuncture; and
2. Massage Therapy.
As the exemption of the GST for the above medical professions (Acupuncture and Massage Therapy)
would result in lost revenue for the Federal Government, we used information from a Statistics Canada
Health Report (“Use of Alternative Health Care” by Jungwee Park [2003]) to estimate the yearly loss in
revenue.
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Formula Input:
1. 5.4 Million Canadians (20% of the Canadian population that used alternative health care services
in 2003);
2. Of those 8% consulted with Massage Therapists and 2% consulted with Acupuncturists or
Traditional Chinese Medicine Doctors;
3. Average Price of Session: $95.00;
4. Number of Practitioner Visits per Year: 5 (estimated);
5. Actual percentage of GST Charged on Goods and Services.
Calculation of Lost Tax Revenue:
1. Taxes - Massage Therapy: 5.4 million x .08 x $95.00 x 5 x .05 = 10.26 million / year;
2. Taxes - Acupuncture: 5.4 million x .02 x $95.00 x 5 x .05 = 2.565 million / year.
Based on the increasing popularity of alternative health care services we rounded the numbers to arrive at
a yearly revenue loss of $15 Million.
THE CHAMBER RECOMMENDS
That the Federal Government exempt all medical service providers, as outlined above, from charging
GST on medical services rendered in their facilities once the federal budget is in balance.
INCREASING RENTAL INVENTORY THROUGH FAIR TAX TREATMENT (2012)
A healthy rental market is important to business operations as the rental inventory provides housing for
employees at all levels of the employment spectrum, and most importantly, for entry level employees.
Employers are increasingly finding the issue of rental availability to be a hurdle to recruitment and
retention of employees. In some areas, extremely low vacancy rates may have adverse effects on the
ability of businesses to grow.
Tax changes introduced over the past 25 years have disadvantaged the treatment of investment in real
property and rental housing in particular. The tax changes have created inequitable taxation on these
investments when compared to other forms of investment. The result has been decreased activity in the
rental housing market, such as less property turnover and revitalization, and less purpose built rental
property construction. This has been reflected in the erosion of available rental units, which according to
the Canada Mortgage and Housing Corporation, has fallen from an average Canadian vacancy rate of
4.5% in 1994 to 2.5% by the spring of 2011.
Treatment of Capital Gains
In the 1990s, investments in real property were eliminated from the lifetime capital gains exemption. The
rationale for the tax move was to direct investment dollars to more “productive” investments. The capital
gains tax formula on the sale of rental property is applied immediately upon the disposition of the asset,
whereas capital gains on other assets, such as “former property” or “former business property” are eligible
for tax deferral when a replacement property is purchased within a specific time frame. Rental property,
oddly, is specifically excluded from the definition of “business property”.
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In addition to the capital gains tax, property owners must also pay tax at their full tax rate on the
recaptured amount of capital cost allowance depreciated over the period of their ownership tenure.
Together these two tax measures result in a significant “lock-in effect”, where owners of real property
hold on to the assets rather than re-invest in more productive properties. The tax measures also act as a
disincentive to maintain or revitalize the overall quality of both commercial and residential assets, as
doing so would result in higher capital gains tax payment upon eventual disposition.
The Canadian Real Estate Association, through the services of Dr. Thomas Wilson, a leading authority on
taxation and the University of Toronto’s Institute for Policy Analysis, has determined that the cost to
government to introduce a deferral on capital gains for real property is minimal. The approximate cost in
the first year is estimated to be $415 million to the Federal Government and $208 million in total to
Provincial and Territorial Governments. The Association asserts that the cost would actually decrease in
subsequent years as the deferrals of gains would come into play and that increased business activity from
newly freed capital would more than compensate through increased tax revenue.
Tax Treatment of Rental Income
In addition to the treatment of capital gains on rental properties, the rental income they generate falls
under the definition of “aggregate investment income” in the Canada Income Tax Act (CITA). Since it is
not “active business income”, a Canadian Controlled Private Corporation (CCPC) is not able to take
advantage of the small business credit, which reduces the corporate tax rate to only 16.5% on the first
$500,000 of active business income. Furthermore, since “aggregate investment income” is excluded from
the definition of “full rate taxable income”, the CCPC will also not be eligible for the General Rate
Reduction. This means that the starting point of the corporate tax rate on this type of income can exceed
40%. To potentially qualify for a lower rate, the business must be classified as a “Principal Business
Corporation” (PBC). A PBC’s primary business must be the leasing, rental, or the development for lease,
rental or sale of real property owned by them, and they must employ at least six full-time employees.
Most of the companies that provide the majority of rental housing in Canada do not meet these
requirements and therefore are taxed at the higher rate.
Furthermore, governments have moved to discourage the use corporations to defer tax on investment
income, instituting an “Additional Refundable Tax” (ART) on aggregate investment that qualifies for a
dividend refund. This is an additional tax on corporations that aggregate investment income and don’t
pass along the income through dividends to their shareholders. The ART adds a tax of 6.66% on the
aggregate investment income of CCPCs, which makes the corporate tax rate for CCPCs roughly equal to
the highest individual marginal tax rate.
The effect of these definitions and requirements has been to deter investment in rental housing, directing
it to other real estate sectors such as the hotel and accommodation industry, where the requirements and
tax treatment on active business income are more favourable.
Effects of the GST on Rental Housing
Since it was introduced in 1991, the GST has discriminated against rental housing by providing a rebate
for ownership housing but none for rental units. In addition, because residential rents are classified as
exempt rather than zero-rated under the GST, landlords are unable to recover tax paid on the purchase,
repair or improvement of residential buildings. Allowing for a zero-rated designation would mean that
because landlords cannot charge GST on rent, they would be able to claim GST on their Input Tax
Credits.
All taxes induce people to behave in certain ways. It is clear that the changes in tax policy of the last 25
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years applying to investment in real property, and specifically rental property, have resulted in a lock-in
effect, less activity in the rental housing industry, and an overall decrease in rental accommodation
availability. Yet as noted at the outset, a healthy rental market is important to business operations since
rental inventory provides housing for all levels of the employment spectrum.
THE CHAMBER RECOMMENDS
That when fiscal conditions allow, the Federal Government:
1. enact deferral of capital gains tax on the sale of real property, including rental property, when the
proceeds of sales are reinvested within a six-month period into other real property investments;
2. defer the recapturing of the value of depreciated capital cost allowances on real property;
3. include rental income under the definition of “active business income” for CCPCs in the CITA
legislation;
4. allow a 100% refund of GST paid by businesses investing in rental housing; and
5. zero-rate rental housing operations to allow landlords to claim ITCs on their expenses.
INDEXING OF GST/HST NEW HOUSING REBATE (2011)
A number of organizations, including the Canadian Home Builders Association (CHBA), have identified
the failure to adjust the new home GST/HST rebate to current housing prices as a major concern to home
builders and associated businesses throughout Canada. It also poses a significant deterrent to housing
affordability in Canada.
When the GST was introduced in 1991, the new home GST rebate threshold was set at $350,000 for a full
rebate of 36% of the GST. Between $350,000 and $450,000 the rebate was progressively reduced. Over
$450,000 no rebate was available. The Federal Government committed to reviewing the thresholds every
two years to adjust for the likely upward change in home prices. Since then, Statistics Canada’s new
home price index shows a 54.78% increase between 1991 and 2010 and in some markets prices have
increased well beyond that. Meanwhile the rebate thresholds have not changed.
The Federal Government’s original intention was that 90% of new home buyers would receive the full
GST rebate, and an additional 5% would receive a partial rebate. However, according to the CHBA only
an average of 43% of new home buyers purchased homes at a price point that qualified them for the full
GST rebate.
While market conditions are the primary driving force behind the sale of both new and used housing, the
sale of entry level new housing is predominantly aimed at new home buyers who have very little equity
and for whom the GST rebate plays a significant role in their decision to purchase. An increase in the
thresholds could add up to $3500 to the purchasing power of a new home buyer. That addition to
purchasing power is reflected in the business community by the concentric rings of home builders,
subcontractors, suppliers, and wholesalers all of whom would benefit by the addition of more buyers to
the new home building market.
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The failure to index the new home rebate is compounded by the introduction of HST in five provinces
where now the Federal Government’s failure to index the threshold has resulted in a two pronged
calculation of rebates applied at the federal threshold (in relation to that portion of HST that represents the
GST) and a different threshold to reflect the application to that portion of the HST that represents the
provincial portion.
Reviewing the Rebate
In Vancouver, where the average price of a detached home is $760,000, less than 1% of new home buyers
qualified for a new home GST rebate in 2009. Compare that to 1991, when 75% of buyers in Vancouver
qualified.
If the rebate thresholds had been adjusted to accommodate the 54.78% increase in the cost of housing to
the end of 2010, the lower and upper thresholds would have increased in 2011 to $545,000 and $700,000.
The economic contribution that new home construction brings to markets has been severely dampened
due to failure to index of the thresholds.
THE CHAMBER RECOMMENDS
That the Federal Government:
1. in the next Budget act on an outstanding commitment to adjust the GST/HST rebate thresholds to
reflect new housing price increases by reviewing the threshold every 2 years in relation to the
Statistics Canada New House Price Index; and
2. acting in consultation with the provinces, that participate in HST, create a combined HST New
Housing Rebate that is administered by the HST department and provides for a single rebate based on
indexed thresholds that includes the GST portion of the HST and the provincial sales tax portion of
the HST.
MARKETING CANADA AS AN INTERNATIONAL DESTINATION (2011)
Marketing Canada as an international travel and tourism destination is critically important to maximizing
economic benefits for provinces but there is a downward trend in the level of core funding for the national
tourism marketing agency, according to the Canadian Tourism Commission (CTC). This trend of
declining core funding needs to be reversed to ensure Canada can effectively compete in the international
marketplace and by extension drive incremental visitation to provinces.
Background
The global tourism market continues to increase and is forecasted by the World Tourism Organization to
reach 1.6 billion international tourist arrivals worldwide by 20201. Many jurisdictions are vying for
market share because the sector “provides significant potential for economic growth and development2”.
1
UN World Tourism Organization - Tourism 2020 Vision.
World Economic Forum, The Travel & Tourism Competitiveness Report 2009: Managing in a Time of Turbulence.
https://members.weforum.org/pdf/TTCR09/TTCR09_FullReport.pdf
2
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In 2009, total tourism revenue for Canada was $69.5 billion. 80% (or $55.4 billion) came from tourism
3
domestic demand and 20% ($14.1 billion) from tourism export revenue . Over the last 10 years the
contribution from international travellers to Canada’s total tourism revenue has dropped from 35% in
2000 to 20% in 2010. Revenue generated from international travellers represents new dollars for the
Canadian economy and this remains a primary focus of our national marketing strategies. According to
the CTC’s research, domestic travellers spend on average $91 per day while international travellers spend
4
$129 per day on average . Dependence on the domestic market is a concern with limited growth potential
available from Canada’s relatively small population base.
In order to capture a significant portion of the tourism market, Canada must remain competitive with
other destinations. Between 2002 and 2009, international tourist arrivals to Canada declined from 20.1
5
million to 15.8 million, a 21.5% decrease . In 2002, Canada ranked 7th in the world for international
arrivals but in 2009 Canada ranked 15th behind new competitors like Malaysia, Turkey, Ukraine, and
Russia. The global tourism marketplace is increasingly competitive.
Part of Canada’s declining competitiveness stems from limiting travel policies. For example, stricter visa
and passport requirements dampen demand. When Canada imposed visa requirements on Mexican
nationals on July 14, 2009 the market, already under stress from the global recession, contracted sharply.
August 2009 customs entries to Canada decrease 50.1% compared to August 2008, and 2009 year-end
6
Mexican travel to Canada was down 36.6% compared to 2008 . Likewise, the short-haul United States
drive market has been negatively impacted by new passport requirements. Air access continues to be a
limiting factor on international travel to Canada. Greater liberalization of air service agreements
combined with complementary visa policies would contribute to a more internationally competitive
tourism sector in Canada.
Some situations are beyond immediate control and/or require negotiating complex agreements with other
countries. Marketing, on the other hand, is totally within our control and represents another critical area
of our international competiveness. In this area Canada is falling behind. By allocating the necessary
resources for international tourism marketing, the Federal Government can ensure that Canada competes
on a level playing field with other long-haul destinations. Canada is currently ranked 20th in the world in
terms of national tourism organization funding. The Canadian Tourism Commission’s core funding has
7
declined from nearly $100 million in 2001 to an anticipated $70.7 million in 2012 . By means of
comparison, Tourism Australia receives an annual base investment of $147 million CDN from the
8
government of Australia and Tourism Ireland receives a base investment of $211.3 million CDN . In
early 2010, the United States created the Corporation for Travel Promotion, which will oversee the
development and implementation of a global marketing and promotion campaign aimed at increasing the
number of international visitors to the US. The corporation’s annual budget is projected to be $250
9
million CDN, making it one of the largest national tourism communications programs in the world .
3
Canadian Tourism Commission, 2009 Annual Report.
Statistics Canada, Travel Survey 2009: Residents of Canada and International Travel Survey (ITS).
Statistics Canada International Travel Survey, December 2009.
6
Ministry of Jobs, Tourism & Innovation, Overnight Customs Entries to B.C. and Canada, August Bulleting, and December year-End Bulletin.
http://www.jti.gov.bc.ca/research/IndustryPerformance/pdfs/intl_visitor_arrivals/2009/International_Visitor_Arrivals_August_2009.sflb.pdf
7
Canadian Tourism Commission, main estimates 2011.
8
2009 Annual Reports for Tourism Australia and Tourism Ireland.
9
Looking to 2020: The Future of Travel and Tourism In Canada. White Paper produced by National Travel & Tourism Coalition.
http://www.tiac-aitc.ca/english/press/2010/NTTC_PR_Oct27_2010_en.pdf
4
5
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The Canadian Tourism Commission
The marketing of Canada as a destination is the responsibility of several groups including the CTC,
provincial, regional, and city Destination Marketing Organizations (DMOs), and private sector
companies. The CTC is the lead entity and works to coordinate Canada’s promotional efforts abroad in
order to drive visitation. To achieve its strategic goal of growing tourism export revenues for Canada, the
CTC focuses on markets where Canada’s tourism brand leads and the return on investment is highest.
It stimulates and promotes tourism through joint public and private marketing initiatives based on an
industry-led and market-driven approach. The tourism industry’s role within the CTC is to define
industry needs and goals, contribute to strategic planning efforts, and invest financially in marketing
initiatives.
The tourism industry believes that the CTC is the appropriate entity to lead the Canada branding and
marketing file and that its current strategies, informed by solid research, are the right ones to pursue as we
go forward.
Investments in CTC’s promotion of Canada as a tourism destination produce significant returns on
investment. For example in 2009, CTC produced a return on investment of 101:1 on its core marketing
activities. The demand created by this promotion directly created or protected over 15,000 jobs in
10
Canada.
In spite of strong business results, since its creation as a Crown Corporation in 2001, the CTC’s core
funding from the Federal Government has declined from nearly $100 million to an anticipated $70.7
11
million in 2012. This decrease in funding comes at a time when Canada faces increasing competition
from existing and mature tourism markets and from new exotic market entrants.
Canada’s overall global market share has eroded in recent years, in large part as a result of competition
from new entrants. Since 2000, Canada’s overall market share of global tourist arrivals has decreased by
approximately 24%, while overall global tourist arrivals to all countries have increased by approximately
12
24%. Given the CTC’s declining resources and intense competition, the CTC has had to sharpen its
strategic focus and invest where Canada’s brand has greater recognition and impact than the provincial
and major Canadian city brands. It has reduced the number of long-haul countries where it targets highyield travellers. For example, the CTC no longer invests in consumer marketing in the United States.
This has been a difficult decision but a necessary decision given reduced core funding. While this
strategy is producing excellent business results for the markets and the amounts invested, growth will be
difficult to achieve and Canada will be hard pressed to reach the stated goal of $100 billion in tourism
13
revenues by 2015.
While CTC’s base budget has been in steady decline, CTC has attracted some one-time or special project
funds. For example, the CTC invested $26.0 million between 2008 and 2012 to leverage the 2010 Winter
Games tourism opportunity for Canada, and $48.0 million in 2009-2011 as part of Canada’s Economic
Action Plan. These one-time funding injections are very useful in delivering short-term specified
10
Canadian Tourism Commission, 2009 Annual Report.
Canadian Tourism Commission, main estimates 2011.
12
United Nations World Travel Organization, Annual Compendium.
13
In September 2009, Canada’s Federal, Provincial, and Territorial tourism ministers set a new national tourism revenue target of $100 billion by
2015, representing an increase of approximately $29 billion over 2009 revenue.
11
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14
marketing programs for which the CTC has provided significant returns on investment (e.g. 43:1 ROI).
However, the long-term stability provided by core, or A-Base, funding allows for improved market
development and sales strategies, increased partner contributions, and phased campaign implementations.
As previously referenced, core investments produce significantly higher returns on investment for the
Canadian economy than short-term one-time funding initiatives (e.g. $101 in tourism revenues generated
15
for every $1 invested in the CTC’s 2009 core campaigns compared to $43 to $1).
Conclusion
Canada faces increasing competition from existing and mature tourism markets and from exotic
new market entrants;
Canada’s overall global market share has eroded in recent years as a result of competition from
new entrants;
The CTC, Canada’s national tourism marketing agency, produces significant business results for
the dollars invested; and
The tourism industry needs the CTC better resourced.
THE CHAMBER RECOMMENDS
That the Federal Government increase investment for tourism marketing efforts of the Canadian Tourism
Commission by increasing their current A-Base funding levels to a minimum of $100 million annually.
THE LOCKED-IN ESTATE TRUST - A RESPONSE TO CANADA’S COMING PENSION
CRISIS (2011)
The Chamber recognize the severity of the pension reform problem in Canada and in 2010 adopted a
policy titled “The Base Principals of Pension Reform”. There looms a pension crisis for Canadians in the
near future. The Federal Government will be unable to fund the pension requirements of the baby boomer
retirees let alone the requirements of subsequent generations of retirees. A Locked-in Estate Trust (LIET)
is one of the many required solutions that would allow for individuals to privately fund LIET’s with the
money being held in trust for the future benefit of the named beneficiaries of the LIET.
Federal and provincial finance ministers are seeking solutions to protect older Canadians from income
shortfalls during their retirement years, but there are few solutions on the horizon. At the same time,
many older Canadians, through hard work and extraordinary windfalls in the housing market, find they
have accumulated a great deal of wealth, but ironically, have little cash flow to supplement their own
retirement.
It is estimated that as much as $1 trillion will pass to the next generation of Canadians through estate
transfers. Acutely aware of the value of their estates, many older Canadians have concerns about the
wisdom of passing on such large lump sum estates to children and grandchildren.
14
15
Canadian Tourism Commission, 2009 Annual Report, pg 34, Insignia Research: advertising tracking and conversion study.
Canadian Tourism Commission, 2009 Annual Report, pg 34, Insignia Research: advertising tracking and conversion study.
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Creating a new financial instrument could provide seniors with income now from their valuable estates
and at the same time allow them to utilize family wealth to ensure that their children and grandchildren
are able to receive private pension income when they retire. This could be fashioned similar to the
Charitable Remainder Trust that is widely used and promoted in the United States.
A LIET would provide a creative solution to our specific demographic quandary where the size of the
retired population will soon far outweigh the working population. It also has the potential to remove
some of the well documented and anxiously anticipated strain on the government’s ability to provide Old
Age Security and Guaranteed Income Supplement funding to Canadian seniors as the baby boomer bulge
exits the workforce. Furthermore, a LIET would provide an investment vehicle that could ensure
financial independence for subsequent generations of Canadians.
In recognition of the importance of responsible federal fiscal policy, the federal tax revenue will actually
be enhanced by this account on a deferral basis. Typically, contributions to the LIET will result in a
deferral of capital gains tax of which only 50% of the gain is taxed, whereas the subsequent withdrawal
can and will be taxed as 100% regular income at the current marginal tax rate resulting in incrementally
larger revenue tax stream.
Furthermore, this account could be used for the generational transition of small business interests similar
to a “Family Trust” with this inclusion of limiting access to the revenue and pension income by the
beneficiary until the beneficiary is at age 55.
Large pools of wealth in private portfolios transferred to a LIET would have the potential to significantly
reduce the drain on government pension resources. It could also represent significant tax savings to
individuals who make a decision to move wealth into a LIET.
The LIET would work similar to already available trust vehicles (Charitable Remainder Trust) but with
tax advantages to the donor or the settler, such as a non-refundable tax credit based on the amount
transferred into the LIET. Funds inside the LIET would be allowed to accumulate tax free and be
professionally managed and guided by a conservative investment strategy.
The donor would be permitted to access a percentage of the income generated by the LIET while they
remain alive.
Named beneficiaries of the LIET would only be allowed to withdraw a legislated percentage of the capital
and income of the LIET after age 55, similar to Locked in Retirement Accounts. This would ensure the
long term viability of the LIET for future generations.
Because of the tax advantages, the decision to create a LIET would be made by the donor before death
and would be an irrevocable decision or the LIET could be created as a Testamentary Estate Trust (After
Death).
It is anticipated that the tax foregone (by the granting of a tax credit to the donor and by a deferral of a
valuation of the donor’s estate) is far outweighed by the reduction of costs related to pension benefits over
the long term and the reduction in the benefits payable under Old Age Security and other government
programs such as income tested health care and Guaranteed Income Supplement.
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THE CHAMBER RECOMMENDS
That the Federal Government work with the Provincial Government to:
1. introduce an amendment to the Income Tax Act creating the “Locked In Estate Trust” as a step
toward solving the Pension Reform problem in Canada and allowing a mechanism for business and
Canadians to offer a more stable financial future for generations to come; and
2. amend relevant provincial legislation and regulation to allow for the implementation of a LIET.
ELIMINATION OF CANADA’S CAPITAL GAINS TAX (2010)
Canada’s Capital Gains Tax represents less than one percent of the country’s total tax revenue and has
been described by leading economists as being of marginal worth.1 To the businesses that pay the tax, the
levy represents a huge burden that has a stultifying affect on their capacity to innovate and expand.
Our partners in NAFTA, and indeed our competitors around the world, have substantially lower capital
gains taxes. Countries such as Germany, Turkey, Mexico, New Zealand, Belgium and others, have a zero
capital gains tax.2 By comparison, Canadian business shoulders an unfair tax that frustrates its ability to
unlock the capital needed to update manufacturing plants, invest in new technology, and keep pace in a
competitive global environment.
According to the National Angel Corporation of Toronto in their report dated October 12, 2004, $1
invested in an SME at early stages creates $10 of economic activity, and a further $5 of later stage
investment. Thus, a $1 investment can lead to $50 of economic activity. According to the autumn 2000
Stats Canada Perspectives study for the year 1997, the latest date such comparisons were reported, taxes
were 36.8% of GDP. This would mean that $50 of economic activity would generate $18.40 of tax.
Details of the Problem
In 2005/2006, the Federal and Provincial Governments collected approximately $443.1 billion in tax
revenue. The bulk of the revenue came from personal income tax (37.2%), corporate income tax (11.1%)
and sales income tax (24.2%). Additional sources of revenue accounted for 26.7% of the country’s total
tax revenue. The Capital Gains Tax represented just .08% of that amount, or approximately $3.5 billion
of the country’s total tax revenue.
Numerous economists, including Alan Greenspan, the former chairman of the Federal Reserve in the US,3
as well as several leading Canadian economic thinkers have derided capital gains as detrimental to
entrepreneurs, business, and the communities that depend on businesses to create jobs.
Taxpayers who benefit from these tax reductions will usually do one of two things. They will spend the
savings or invest them. Using a normal multiplier of between 2 and 3, and the OECD percentage of tax
generated per dollar of economic activity of 36%, the revenue to government should be about the same.
1
Niels Velduis, Keith Godin, Jason Clemens. The Economic Costs of Capital Gains Taxes. Fraser Institute. Studies in Entrepreneurship Markets.
Number 4/ February 2007
2
Newt Gingrich and Emily Renwick. Journal of the American Enterprise Institute. August 13 2009.
3
Remarks by Chairman Alan Greenspan on Current Monetary Policy. Haskins Partners Dinner at the Stern School of Business. New York
University. May, 1997.
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However, if the funds are invested, studies indicate that a dollar of new investment generates $50 dollars
of economic activity, which using the same OECD statistics would generate about $18 of tax revenue.
A study completed by Grant Thornton concerning the BC Investment program found that a dollar of tax
credit from the system generated $1.30 of payroll, income and sales tax revenue. This excludes federal
taxes. Grant Thornton found the payback period to be 2.8 years. A dollar tax credit from this program is
similar to a dollar of reduced tax from capital gains.
In 2006, the Federal Government committed to relieving Canadian businesses of some of that tax burden.
It was a prescient plan that might have served to offset some of the difficulties currently being
experienced by small and medium sized business in the current tight lending market. The reductions
however, were never achieved.
Capital gains, or losses, occur when the value of the asset at the time of sale differs from its value at the
time of purchase.4 In Canada, 50% of any capital gain, with exception of principle residences, is subject
to the Capital Gains tax. Canada does not have a separate Capital Gains tax. Any increases in the value
of an asset are considered income and the tax amount is calculated based the taxpayer’s marginal rate of
income.
The provincial capital gains tax varies between provinces, however the western provinces have the lowest
combined capital gains tax while Quebec, Nova Scotia, Newfoundland and Labrador have the highest
rates. Generally speaking, as a nation Canada has a high capital gains tax when compared to other
countries in the OECD. Canada in fact ranks as having the 9th highest capital gains tax rate.
The Capital Gains Tax was first introduced by the Liberal government in 1971, and there is wide spread
agreement among economists that is represents an ‘all pain-no gain’ tax. For example, it discourages
business from reallocating capital. Business owners are more likely to hang on to outdated investments
even if better opportunities arise. Economists call this the locked-in effect.
Since business still must find ways to raise money, and can’t access the gains they have made without
being taxed, they are forced to find other ways to raise cash. This means businesses must incur borrowing
costs in order to make new investments in their businesses, thereby further stressing their capital.
The Capital Gains Tax also has a negative impact on entrepreneurship. For example, start up businesses
searching for high quality talent may offer shares in the business or a partnership agreement; however,
when they wish to withdraw that investment they are taxed.
There is a mound of academic research that indicates capital gains taxes run counter to entrepreneurship
and to the creative, risking-taking, and innovative environment that strengthens both economies and
communities. It is argued that by eliminating the capital gains tax, the resulting economic impact of reallocation of capital will more than offset the .08% reduction in tax revenue.5
4
Canada Revenue Agency (2010). Calculating and Reporting your Capital Gains and Losses. www.cra.gc.ca .
Niels Velduis, Keith Godin, Jason Clemens. The Economic Costs of Capital Gains Taxes. Fraser Institute. Studies in Entrepreneurship Markets.
Number 4/ February 2007
5
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THE CHAMBER RECOMMENDS
That the Federal Government eliminate the capital gains tax.
RESTRUCTURING THE FCTIP FOR INCREASED TOURISM COMPETITIVENESS (2010)
Tourism is a $74.9 billion industry in Canada. More than 1.8 million people in Canada were employed in
tourism jobs in 2008. Keeping the industry healthy and competitive requires that governments address a
number of concerns that pressure its viability.
One such concern is the way in which Canada exercises it value added tax (VAT) rebate program. Value
added tax rebates are common internationally in the tourism industry. These programs allow for out of
country visitors to be rebated the value added taxes for purchases during their visits to the country. VAT
rebates are used as a competitive factor in the marketing efforts of tourism organizations.
VAT rebates are common because international tourism is seen as an export industry, the same as
manufacturing. Export industries are rarely able to pass on consumption taxes to overseas consumers
since those consumers will simply divert their consumption to another source. Spending on international
tourism is highly subject to this sort of consumer elasticity, which in Canada is 2.7-2.8%. An effective
VAT rebate system in Canada is needed to remain competitive.
Up to 2007, Canada’s VAT rebate program was called the Visitor Rebate Program, which applied to both
individual travelers as well as tour and convention travelers. That program was cancelled in 2007 and the
Government of Canada introduced a new program called the Foreign Convention and Tour Incentive
Program (FCTIP). The primary reason for the cancellation of the former program was due to
administrative cost inefficiencies and concerns from Government about accountability.
The new FCTIP has different rules for rebate application and applies only to tour organizers and
conventions. A limited number or types of group tours are eligible for only a 50% GST/HST rebate. It
does not apply to individual travelers. It is meant to keep tourist packages competitive with other
countries and encourage foreign tour operators to sell Canada as a tourism destination. It is also meant to
be delivered in a more cost effective manner, while at the same time increasing the accountability of
government tax rebate expenditures.
However, the changes in process have resulted in a program that is too cumbersome to benefit the
industry. Despite best intentions, the FCTIP is not meeting its objectives due to program complexities
and the administrative burden it places on international tour operators. The Tourism Industry Association
of Canada (TIAC) has found through a commissioned survey of US tour operating companies that “those
who regard the rebate process as burdensome outnumber those who do not by a ratio of more than 7:1.”
Furthermore, one in four operators claim that they will simply absorb the GST and adjust their price of
Canadian tours upwards to recoup the GST costs rather than be bothered with the rebate process. This
makes Canadian tour options less competitive.
The tendency to price in a further 5% on the tour cost to avoid the rebate process is significantly
concerning, and especially so as the introduction of a Harmonized Sales Tax (HST) will be introduced to
two of the country’s major tourism destination provinces in the summer of 2010. There is concern that a
move from 5% tax to 12% and 13% in BC and Ontario, respectively, will have an immediate negative
effect on a system that is already not being embraced by users. The concern of industry is that, upon
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introduction of the HST, tour packages to BC and Ontario will essentially increase as operators “cost in”
the additional tax, making BC and Ontario even less competitive in the international tourism market.
A second concern of the industry is that the new FCTIP program does not apply to individual visitors to
Canada, rather only to convention and tour travelers and operators. The industry asserts that in
disqualifying individual visitors from the Canadian VAT rebate program, Canada is placing itself at a
considerable disadvantage to other attractive locations across Europe and South America that offer tax
rebate programs to their independent travelling visitors. Independent travelers are a growing segment of
the travel market. The substantial increase in the price of tourism goods and services to this market with
the introduction of the HST will reduce independent travel to Canada, and negatively impact the sale of
retail goods such as accommodation, meals, attractions, and recreational activities.
A study done by CRA International in 2007 on the estimated impacts of the cancellation of the GST
rebate to individual visitors projected the following:
An estimated decline in tourism spending of $213 million per year;
A decline in GDP of $114 million per year; and
The loss of 1,900 jobs.
Using similar elasticity estimates, one could assume a similar loss in revenues and jobs with the increase
in cost to tourism products and services by 7% and 8% in BC and Ontario, respectively.
The Chamber acknowledges the importance of the tourism industry to Canada’s economy. Adjusting
Canada’s GST/HST rebate system for foreign travelers is imperative to attracting a higher share of the
global tourism market and placing international inbound tourism on equal footing with other Canadian
export markets.
THE CHAMBER RECOMMENDS
That the Federal Government:
1. eliminate the excessive administrative burden on international tour operators that hampers the uptake
of the FCTIP program;
2. ensure that the full HST be eligible for rebate in BC and Ontario under the FCTIP as the GST
currently is; and
3. develop an individual traveler GST/HST rebate program that is industry-run but subject to
certification and regular audit by the appropriate federal agencies, for use by individual non-resident
visitors on eligible short-term accommodation and goods purchased for personal use.
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AQUACULTURE IN BC (2012)
Aquaculture is the fastest growing agri-food industry in the world. The United Nations Fisheries and
Agriculture Organization has estimated that global aquaculture production will outpace commercial
fisheries by 2030. In Canada production has flatlined over the past ten years. There are serious
challenges facing the aquaculture industry in Canada in general and BC in particular. As a relatively new
user of our aquatic resources, aquaculture in BC is challenged by an out-dated regulatory regime, lack of
adequate programming, and issues of public confidence around environmental performance and food
safety.
As outlined in a report by the BC Government, the aquaculture industry accounted for 60% of the total
landed value of BC seafood in 2011, and salmon farming makes up about 94% of the aquaculture value.
Salmon farming has grown to take its place as the province‘s largest agricultural export, generating $800
million in economic output according to Price Waterhouse Coopers. It provides stable, year-round
employment for 6,000 men and women, in direct and supply and service jobs, largely in coastal
communities where other opportunities are limited. Further, a study done by the Department of Fisheries
and Oceans (DFO) in 2009 concluded that aquaculture in BC generates about $950 million in economic
activity within the province, and over 1.2 billion in economic activity across Canada, thereby triggering
economic activity across the rest of Canada valued at $1.2 billion. The industry makes an overall
contribution to BC’s GDP of $425.3 million, comprised of $151.1 million in direct, $167.9 million in
indirect, and $106.3 million in induced impacts. Aquaculture in BC generates about 6,000 FTE of
employment, comprised of 2,220 FTE in direct activities, 2,330 FTE in indirect jobs and 1,410 FTE in
induced activities.
These jobs created $223.3 million in total labour income in 2007. Total direct labour income was $78.4
million, resulting in average income of $35,250 per FTE employed in direct aquaculture activities.
Indirect income earned by those employed in support industries was $95.1 million, with average incomes
of about $40,900. Those employed in induced activities in the broader economy earned $50.4 million, for
an average income of 35,700. Many of these jobs and the income go to BC’s aboriginal communities.
Until 2010, aquaculture in BC had been a shared jurisdiction between the Provincial and Federal
Governments, and involved a number of government agencies. For example, DFO is the lead federal
agency for aquaculture but there are a number of other federal departments and agencies involved in the
regulatory process, including Health Canada, the Canadian Food Inspection Agency, Transport Canada,
the Department of Foreign Affairs and International Trade, Environment Canada, and Agriculture and
Agri-Food Canada. This mix of government agencies has created, and continues to create, issues for the
development of the aquaculture sector. For example, due to lack of growth and uncertainty caused by the
regulatory environment, costs of production for BC salmon farmers are over 30% higher than costs for
our main competitors in other developed countries.
As a result of the Hinkson decision, the regulatory authority for the aquaculture industry has shifted from
the Provincial to the Federal Government. The transfer of authority has revealed that there is a gap
inlegislation when it comes to aquaculture. A federal aquaculture act would establish national
environmental standards, clarify industry responsibilities and codify a proud legacy of environmental
stewardship.
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Appropriate legislation would recognize in law the long-standing reality of aquaculture as a legitimate
caretaker of Canada‘s aquatic resources. It would support efforts to ensure a modern industry and build
on an already impressive record of safety and sustainability. The introduction of this legislation could
help facilitate the regulatory changes coming forward from DFO and would enable Canada to realize its
full potential, creating new jobs and expanding opportunity in an industry that can be socially,
economically, and environmentally sustainable.
The aquaculture industry has been the subject of strongly divergent research and opinions, not all of
which is based on legitimate and responsible research. Incorrect and misleading information should not
stop the further development and expansion of aquaculture farming in BC.
THE CHAMBER RECOMMENDS
That the Federal Government work with the Provincial Government to:
1. provide fair access to long term tenures for the aquaculture industry;
2. ensure that consultation with First Nations is appropriate and meets the needs of the industry for
timely decisions; and
3. support efforts to build public confidence in aquaculture management and place a focus on science
and solution.
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UMAN RESOURCES AND SKILLS DEVELOPMENT
REALLOCATING FEDERAL FUNDING TO DEVELOP A NATIONAL PLAN TO END
HOMELESSNESS (2011)
Homelessness is bad for business and the Federal Government does not have a national plan to end
homelessness in Canada.
Homelessness has a direct financial impact on businesses as it deters customers, damages employee
recruitment and retention, harms tourism, and discourages companies from setting up offices in areas with
a visible homeless population.
For many municipalities and business communities in Canada, homelessness is a real problem that
requires expenditures on security upgrades to maintain the safety of staff and property. Businesses cannot
realize their full potential while homelessness exists in their areas, due to reduced revenues through lost
sales.
Since the Federal Government needs to contain spending on programs, and because it would not be
socially and economically prudent to cut funding for homelessness initiatives, a viable course of action
would be to reallocate funds from the federal budget to develop a national plan to end homelessness.
While solutions to homelessness exist and efforts are being made by communities to implement solutions
across the country, the Government has been unable to reduce the total number of homeless in Canada. In
fact, over the past two decades, the Federal Government has spent considerable tax dollars to address the
national crisis, but the problem continues to grow. Significant federal spending on homelessness has not
yielded a positive return on investment.
A national plan to end homelessness will clearly set the goals, objectives, metrics, and outcomes for all
homelessness initiatives and will provide the proper mechanisms to more effectively address the issue.
Without a clear strategy to direct national efforts to end homelessness, businesses will continue to be
negatively impacted by the growing crisis.
For these reasons, the Federal Government needs to develop a new approach that includes the reallocation
of resources to develop a national plan that mandates the Federal Government to end homelessness within
a reasonable timeframe.
Canada is the only G8 country without a national housing strategy;
It is estimated that homelessness costs Canadian taxpayers between $4.5 and $6 billion annually,
1
inclusive of health care, criminal justice, social services, and emergency shelter costs. Between
1993 and 2004, homelessness cost Canadian taxpayers an estimated $49.5 billion, across all
2
services and jurisdictions;
3
It is estimated that the homeless population in Canada ranges between 150,000 and 300,000.
Local surveys in communities like Calgary, Vancouver, Edmonton, Ottawa, and Victoria all
4
report that homelessness continues to be on the rise;
Gordon Laird. “SHELTER: Homelessness in a Growth Economy: Canada's 21st century paradox.” Sheldon Chumir Foundation for Ethics in
Leadership, Calgary, Alberta, 2007 p. 87.
2
Ibid.
3
Homelessness Partnering Strategy, http://www.hrsdc.gc.ca/eng/homelessness/index.shtml. Last accessed May 31, 2010.
4
UN Human Rights Council, Report of the Special Rapporteur on Adequate Housing as a Component of the Right to an Adequate Standard of
Living, and on the Right to Non-Discrimination in This Context, Miloon Kothari : addendum : mission to Canada (9 to 22 October 2007), 17
February 2009, A/HRC/10/7/Add.3,
1
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A 2008 count in Metro Vancouver indicated a 22% increase since 2005; a 2009 count in Toronto
indicated an 8% increase since 2006; a 2008 count in Calgary indicated a 15% increase since
2006; a 2008 count in Halifax indicated a 370% increase since 2004; a 2007 count in Victoria
5
indicated a 16% increase since 2005.
Homelessness is a business deterrent that negatively affects commercial activity, harms tourism, and
deters investment. In fact, many businesses have incurred extra costs in response to increased
homelessness activity in their area.
The Downtown Vancouver Business Improvement Association (DVBIA) references aggressive
6
panhandling, open drug use, trespassing, and sleeping on private property as business deterrents.
More specifically, the DVBIA estimates that Vancouver hotels have lost convention contracts
worth $500,000 due to increased homelessness on visible poverty. Vancouver Civic Theatres,
the City of Vancouver, and business associates have had to spend money to increase private
7
security to guard against aggressive panhandling;
Hotel Vancouver has spent $60,000 to upgrade hotel security systems and increase outdoor
lighting. Bathrooms available to the public have been closed after dark due to homeless people
8
using them as a place to sleep or use drugs.
A national plan to end homelessness will provide the necessary leadership to allow the Federal
Government to measure the success of investments on homelessness programs.
In 2009, the Federal Government invested a total of $3.57 billion in direct spending on
homelessness and affordable housing initiatives, but Canada lacks a framework to assess the
9
overall value and impact of these investments;
Without a national homelessness plan, efforts to meet the needs of the 1 in 4 Canadian
households at risk of becoming homeless remain fragmented and uncoordinated;
Effective performance management and accountability begin by setting a clear direction and
assigning accountability for results. Defining goals and objectives to address homelessness
establishes a frame of reference where programs can be appropriately designed and integrated,
and roles and responsibilities can be defined. These are typically set out in a comprehensive
10
plan;
The Conference Board of Canada insists that Canada must engage in more precise targeting and
establish more achievable objectives in addressing homelessness. In 2009, the Board called for a
11
reduction of the homelessness from approximately 150,000 to 100,000 by 2015.
Housing the homeless as a first priority is a cost-effective approach to reducing homelessness. Case study
evidence shows that vulnerable and at-risk homeless families are more responsive to interventions and
social services support after they are in their own housing, rather than while living in
5
Data gathered from the Metro Vancouver Homelessness Secretariat, 2010. Differences in methodology may vary between different cities and
year the count took place; these are typically one-time counts performed in a 24-hour period and may not represent the true extent of
homelessness nor does it track the ‘hidden homeless’.
6
Downtown Vancouver Business Improvement Association. 2009.
7
Ibid.
8
Vancouver Sun. “Beggars, drug dealers kill convention" August 18, 2006.
9
Wellesley Institute. Canada needs a national housing strategy that engages key partners from the community up. November 2009. p. 2-3.
10
Auditor General of British Columbia. Homelessness: Clear Focus Needed. March 2009.
11
Conference Board of Canada. Building From the Ground Up: Enhancing Affordable Housing in Canada. March 2010.
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temporary/transitional facilities or housing programs. A national plan to end homelessness should adopt a
housing-first approach as a best-practice model for reducing homelessness.
On average, each homeless person in BC costs the public system in excess of $55,000 per year,
while the provision of adequate housing with supportive services is estimated to reduce this cost
to $37,000 per year. This results in an overall cost avoidance of about $211 million per year in
12
BC alone;
o The cost avoidance in health care and provincial corrections institution costs are more than
sufficient to offset the capital costs and the costs of providing housing supports to those who
13
are absolutely homeless.
In the absence of a purposeful, planned response, chronically homeless individuals consume
services in the emergency and institutional systems: police, ambulance, psychiatric hospitals, and
emergency wards. Costs of these emergency responses are four-to-ten times higher per day than
14
the cost of providing transitional or supportive housing.
A cost analysis on the effectiveness of emergency, institutional, shelter, supportive and
permanent housing services for the homeless in Vancouver, Toronto, Halifax, and Montreal
indicate a consistent pattern of cost-avoidance; that acute emergency, tertiary psychiatric care,
and incarceration involves significantly higher costs than various forms of transitional,
15
supportive, and permanent affordable housing.
Federal leadership involves providing a clear vision about what government aims to accomplish with
respect to Canada’s homelessness issue. Without a clear direction that outlines what government wants to
achieve for the homeless, we can only expect limited progress.
The sooner the Federal Government commits to ending homelessness in a reasonable time frame, the
sooner Canadian businesses and citizens will benefit from the resulting increase in Canada’s economic
productivity and quality of life.
The development of a national plan to end homelessness is the necessary first step toward fulfilling this
commitment.
THE CHAMBER RECOMMENDS
That the Federal Government:
1.
reallocate funds from within the existing federal budget envelope to develop a national plan to end
homelessness;
2.
establish a reasonable target for the reduction of homelessness in Canada and set a reasonable
timeframe to accomplish this goal;
12
Michelle Patterson and Julian Somers, Housing and Support for Adults with Severe Addictions and/or Mental Illness in British Columbia,
Centre for Applied Research in Mental Health & Addiction, October 2007, p.11.
13
Ibid.
14
Federation of Canadian Municipalities. Sustaining the Momentum: Recommendations for a National Action Plan on Housing and
Homelessness. Jan 2008, p. 12.
15
Steve Pomeroy, Regional Municipality of Waterloo. Pro-Active Versus Reactive Responses: The Business Case for a Housing Based
Approach to Reduce Homelessness in the Region of Waterloo. 2007. p. 5.
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3.
maintain the housing-first approach of creating and sustaining affordable and supportive housing as
a first priority, in the development of the national plan;
4.
consult with other levels of government and community partners in the development of federal
benchmarks for a national plan; and
5.
support Provincial, Territorial, and lower-tier Governments in their implementation of a nationally
benchmarked plan.
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FEDERAL LEGISLATION FOR THE CURRENT GAS TAX FUND PROGRAM (2011)
Economic Issue Statement
In the absence of a legislative framework, infrastructure investment in Canada has waned since the 1940s,
resulting in lower levels of productivity and reduced economic performance. Often taking a back seat to
entitlement and program spending, the country’s infrastructure is now a major concern for multi-national
corporations and detraction to foreign direct investment. Legislation reinforcing the commitment to
infrastructure investment is urgently needed to provide for a predictable and positive business climate.
An environment is needed where businesses and communities can confidently make long-term investment
decisions that will propel our country into a new era of prosperity.
Background
Following the Second World War, Canada was among the strongest nations in the world in terms of
public infrastructure investment, enabling an environment where Canadian and multinational corporations
leveraged additional capital investments and significantly improved the country’s economic growth and
productivity of the Canadian economy for the decades to come. By the late 1960s and into the 1970s,
public infrastructure investment had started to slow as different orders of government deferred
maintenance on the country’s infrastructure system and focused on program spending at the cost of new
capital investment.
During the 1980s and 1990s, provincial and federal budget deficits continued to exact a toll on
infrastructure investment as the governments of the day sought to balance budget deficits, which had
grown to record proportions when measured against the GDP of the country. During this time the
municipal infrastructure gap as a percentage of national GDP grew from 2.7% in 1984 to 5.0% in the
early 2000s. Starting in 2005, the Federal Government recognized this challenge in announcing the New
Deal for Canadian Cities, pledging to commit funds raised through the national gas tax to infrastructure
investment. This pledge was reaffirmed in 2008, when the Federal Government committed to extending
the program and providing $2 billion annually for investment that supports sustainable municipal
infrastructure. This was an important and welcome decision. Unfortunately, the municipal infrastructure
gap is growing by approximately $2 billion per year. This funding stabilizes the gap, but does not address
the accumulated infrastructure deficit, which stands at roughly $123 billion, and the additional $115
billion in projected demand.
The issue has come to a critical point as much of the country’s infrastructure, the backbone of our
economy, has eclipsed over 80% of its life expectancy. In short, the communities in which our businesses
operate can no longer afford any deferral of the issue or any policy reversals if we are to remain
competitive in the global market place. More than 80% of foreign multinational executives surveyed
indicated that the poor state of business infrastructure has adversely affected Canada as a destination for
foreign direct investment. One of the key concerns is the state of the country’s physical infrastructure in
comparison to other G7 countries.
While the Federal Government’s pledge of $2 billion is a step in the right direction, more needs to be
done. Progress made in restoring infrastructure investment through the Gas Tax Program is encouraging
but efforts must be made to protect the value of the $2 billion allocated from the effects of inflation. As
competition for infrastructure continues to increase in jurisdictions such as China and India, so do the
prices of construction materials in Canada. In the United States, the Construction Cost Index, a gauge of
infrastructure expense, grew by 3.5% in 2010 and is projected to grow by an annual rate of 3.3% in 2011,
or two and a half times the rate of consumer inflation. As part of the legislative framework, it is
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imperative that the appropriate Canadian cost index be identified, with particular consideration paid to
those supported by the national Public Sector Accounting Board. Without a provision to index
infrastructure investments through legislation, the current rate of investment will likely fall by half in real
terms within 15 years, effectively returning to levels of that prior to 2005.
In addition, legislation is an imperative to ensure that year over year program/entitlement expenditures no
longer compete with and displace critical infrastructure investment, which is required to help set the stage
for a new era of prosperity and productivity. Legislation will provide a more predictable investment
climate, the absence of which would incent further deferral of these investments, ultimately adding cost
and increasing the burden on taxpayers, and in particular on the business community. This legislative
framework can further act as a tool to help ensure that the tenants of good tax policy are followed,
namely: efficiency, equity, accountability, and ease of administration. Current provincial agreements
vary greatly in their implementation and the framework for accountability in each jurisdiction.
THE CHAMBER RECOMMENDS
That the Federal Government:
1. establish federal legislation to secure the current federal gas tax program;
2. index the annual investment in the program to the appropriate infrastructure cost index; and
3. require consistency in the legislative framework that strengthens the program’s efficiency, equity,
accountability, and ease of administration
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ATURAL RESOURCES
UNIFIED REGULATORY REVIEW PROCESS (2012)
Environmental Assessment (EA) reviews are essential and must be done thoroughly and with care.
Currently, separate federal and provincial review processes are undertaken with an agreement to
harmonize those processes. However, the federal process is historically inefficient, lacks defined
timelines, and often fails to consider and balance social and economic values. Moreover, the federal
process is accompanied by a significant time lag behind the provincial process (averaging about 9
months), thereby delaying economic activity and job creation.
In January 2010, (in its Red Chris decision), the Supreme Court of Canada recognized that the respective
environmental assessment processes of the Federal and Provincial Governments can and should operate
so as to minimize duplication. A truly unified single process would reduce duplication, reduce costs for
all concerned, and reduce the period of uncertainty associated with pending decisions.
Half of Canada’s proposed new mines are in BC. A number of them are caught up in the federal and
provincial pre-EA process. There are also examples of large infrastructure projects, such as energy and
transportation projects, which are affected by these inefficient, duplicative, and costly processes.
Both levels of government have their own coordination offices:
The BC Environmental Assessment Office (BCEAO) (www.eao.gov.bc.ca); and
The Canadian Environmental Assessment Agency (CEAA) ( www.ceaa.gc.ca).
They did agree to harmonize their processes but the result has been more aspirational than operational.
On-going specific issues include:
Insufficient resources to manage the joint federal/provincial process;
Basic incompatibility between processes and timelines;
The Federal Government established a parallel structure in a separate Department (the Major
Projects Management Office in Natural Resources Canada Ministry) and is now reviewing
problems within the CEAA.
The BCEAO process has the benefits of clarity with to respect to which projects are included (and which
aspects of them) early in the process, clarity with respect to study and consultation scope (including a
very clear designation of aboriginal consultation scope), and legislated timelines (promised but still absent
in the federal process).
Timelines and a move toward equivalency (wherein both federal and provincial EA processes may be
deemed to be equivalent) were announced in the March 2012 federal budget, and in April major changes
to and streamlining of federal approval processes aimed at improved efficiencies and more timely
decisions (without compromising important environmental standards) were announced.
The Chamber believes these are steps in the right direction which will reduce costly duplication and result
in more timely decisions which will help create jobs and much-needed economy activity.
However these changes are already facing significant opposition from environmental groups who will
strive to stop these changes coming into effect. The Chamber therefore believes that the Federal
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Government must move quickly to ensure that these changes are introduced in a timely manner for the
benefit of the Canadian economy.
THE CHAMBER RECOMMENDS:
That the Federal Government make the legislative and regulatory changes required to permit a unified
process led by the province with technical participation by federal regulators in areas of federal
jurisdiction and interest by 2013.
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POST SECONDARY EDUCATION NEEDS NATIONAL CO-ORDINATION (2012)
Background
Canada and BC`s international competitiveness will require a highly skilled, educated workforce. Our
ability to produce this workforce is being hampered by the fact that Canada, unlike its competitors, has no
national strategy for post-secondary education (PSE), no benchmarks, and no public reporting of results
based on widely accepted measures.
Canada’s track record in PSE
Chamber members welcome the importance placed on PSE by senior levels of government. Indeed, their
investment positioned Canada well in the post-World War II marketplace. According to a study
conducted by the Canadian Council on Learning:
Canada has achieved significant standing in PSE. It has been able to provide high levels of
public funding for PSE … support high participation rates across the PSE sector; reduce
disparities in access to PSE; maintain high standards of scholarship and quality; maintain a
relative equivalence of quality across institutions and provincial boundaries; and attract
increasing numbers of international students
The issue
Notwithstanding the above, the world of education has changed significantly, particularly in the last 30
years, with PSE establishing itself as a global product accessed via a fiercely competitive global
marketplace, particularly in the English language. Almost all countries have aggressive national
strategies for PSE systems to advance their national agendas, especially in terms of awareness of the
country’s innovation, productivity, and economic growth strategy. While some Provincial Governments
have such strategies, they have little international awareness levels, and Canada does not have such a
strategy.
The impact
A recent annual education report released by the Organization for Economic Development and
Cooperation (OECD) placed Canada last amongst the 20 OECD countries covered by the report for the
amount of PSE information provided. This dismal result was the result of Canada’s inability to provide
figures for a full 60% of the information gathered for this report.
While the lack of ability to provide this information rightly results in such a poor showing in the OECD
report, we cannot forget that while individual PSE institutions compete in an increasingly competitive
global environment, they do so within a national context. The absence of a national strategy for PSE and
therefore our inability to demonstrate the quality of programs offered by Canada’s provincial institutions,
compromises our ability to attract both Canadian and foreign students, each with repercussions:
With regards to Canadian students, the lack of coordinated statistics and information not only
results in an inability to benchmark and compare institutions records against other institutions (as
well as between specific programs), but also means we are unable to track and assess our
collective and individual progress in delivering outcomes in post-secondary education; and
Foreign students are a fundamental element of not only the economic viability of Canada’s postsecondary institutions but also a group that represents the best and brightest hope for attracting
new, highly skills workers to Canadian communities. Canada must be able to demonstrate that it
offers a world-class product in order to attract world-class workers.
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The importance of quality control
Given the above, a particular area of concern for the Chamber, particularly as we look to attract
increasing levels of foreign students, is the lack of national quality control and the associated international
recognition of Canada’s post-secondary education system, fragmented as it is.
The Chamber believes that this concern was succinctly encapsulated by the Canadian Council on
Learning, in the report “What is the Future of Learning in Canada – October 2011”, when they stated:
As a result of the extreme fragmentation of education in our country, out of 30 OECD countries,
Canada is the only one that has no formal PSE-accreditation system of programs and PSE
institutions. As a result, students have difficulty navigating the PSE sector and assessing the fit of
a particular institution to their needs. This becomes particularly problematic for international
students and therefore diminishes Canada`s competitiveness in this ever-growing market.
This was further supported by the Canadian Information Centre for International Credentials which stated
that:
The absence of a formal, national system of accreditation for post-secondary education providers
in Canada makes it challenging to obtain a clear picture of how quality is assured at both the
institutional and program level.
The Chamber believes that the lack of quality control is becoming an increasingly problematic public
policy issue for Canada. BC has made great strides in addressing this issue through the creation of the
1
Degree Quality Assessment Board (DQAB) , a body that reviews and makes recommendations to the
Minister of Advanced Education on applications for new degree programs and exempt status applications
submitted by BC public post-secondary institutions and private and out-of-province public post-secondary
institutions. This however, is simply quality control, and has little to do with actual marketing.
However, progress in BC cannot replace the need for a co-ordinated national approach. Indeed, neither
the DQAB nor the only pan-Canadian agency, the Council of Ministers of Education, are in a position to
set truly Canadian standards. This can only be done by a federal institution or structure that simply does
not exist at this point.
The Chamber believes that not only does this mean we are poorly positioned to compete in the knowledge
economy of the 21st century but also, perhaps more importantly, hampers our position as a globally
attractive market for post-secondary students and investment in this critical knowledge sector. Without
this change, Canada will continue to slide on the international scale.
The future of Canada`s PSE
The entry of new private universities that provide new, market focused, practices and programs are
greatly enhancing the Canadian post-secondary sector. These new institutions, combined with the
expansion of degree programs, represent significant change for the post-secondary education system in
Canada. While this change is welcome as it brings new competition and ideas to the sector, we must
ensure that we promote Canadian post-secondary education sector as a world-class product. The
Chamber believes this can only be done through the establishment of a national structure that guarantees
standards.
1
Other provinces have similar structures.
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THE CHAMBER RECOMMENDS
That the Federal Government establishes a permanent organization that works in partnership with the
federal, provincial and territorial Council of Ministers on Education, to develop a trans-Canadian strategy
on PSE that includes a framework for quality control for Canada’s public and private post-secondary
education institutions
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UBLIC SAFETY
CANADA BORDER SERVICES AGENCY - CUSTOMS & IMMIGRATION PROGRAMS (2012)
Canada’s economic trade viability relies significantly on a number of gateways where transportation
networks converge to connect centres of economic activity. Gateways to Canada include approximately
300 commercial sea ports, over 20 major airports, and a large number of land border crossings, 18 of
which are part of major road border crossings.
There are inequities in the provision and cost of Canadian Border Services at Gateways across the
country. The Canadian Border Services Agency (CBSA) considers Gateway operators to be the sole
beneficiaries of customs service’s rather than the public at large and, therefore the Gateway operators are
subject to cost recovery.
The CBSA is a critical part of developing international trade and tourism throughout all regions in Canada
yet the current CBSA policy is inflexible to develop new or expand existing services. CBSA is inflexible
in its approach to requests for new levels of service and treats every application as a cost recovery issue.
Smaller communities across Canada are being unfairly penalized by this policy.
Where Gateways are obliged to contract with CBSA for additional new service, they either lose a large
portion of the benefit from the new trans-border and international traffic, or must increase fees to cover
the cost. The ability to attract new service for the community suffers. The economic benefits resulting
from increased international traffic to Gateways can far outweigh the cost of providing customs services.
The Chamber believes that if a business case exists to demonstrate significant direct tax benefits to the
federal government this should justify the additional cost. Where it can be demonstrated through predetermined criteria, where the benefits of this service extend beyond a single user or supplier, the system
should adjust to accommodate the need without additional cost to the Gateway operator.
Transportation schedules change on a regular basis to accommodate customer’s needs. The CBSA needs
to have the flexibility to adjust to these shifts in demand. The CBSA must develop a policy for Gateway
operators to:
a. have a method to obtain afterhours service; and
b. have a cost recovery schedule collected by the CBSA directly.
It is critical that border services and infrastructure act as a catalyst and not an impediment to this vital part
of our economic prosperity. Removing discriminatory policies, which penalize certain Gateways over
others, must be a part of ongoing discussions to develop accurate staffing models for border services that
reflect and respond to demand, and further strengthen border infrastructure programs.
This is an issue experienced by gateways in all regions of the country and across all ports of entry.
However, the Chamber is particularly concerned over the impact of this policy on our airports that are
experiencing significant growth that will continue as we look to new air agreements with the EU and with
key Asian markets. A few choice examples can illustrate the negative effect of existing policies on this
sector alone;
Kamloops, B.C. - Custom services are offered Monday to Friday 08:30am to 4:30pm. Aircraft
can arrive directly in Kamloops during those times and CBSA officers are on hand to attend to
the aircraft and facilitate arrive to Canada. After hours cross border aircraft (with 30 passengers
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or less) are diverted to other points of entry. More often than not, the pilot is cleared by telephone
in an alternate entry point and directed to proceed onto Kamloops for landing. Under the current
agreement with CBSA, the Kamloops Airport Authority has the responsibility to collect the
custom fees from the passengers, often at a later date. Due to the privacy policy CBSA will not
divulge fees charged in the past for this service and because fees are not posted on the CBSA
website, Kamloops Airport receives an invoice from CBSA after the passengers have
disembarked and the plane has already left the jurisdiction. Kamloops Airport then has to bill
each passenger after the fact and up to 30% of inbound passengers refuse to pay. This leaves the
Kamloops Airport in a loss position for these fees. Ironically the CBSA does provide after-hours
customs service in Kamloops for aircraft with animals or insects on board.
Prince George, B.C. - also experiences a similar issue. International flights not arriving during
the 8:30am to 4:30pm window are charged an additional fee by CBSA. Since the vast majority of
flights arrive outside of these hours, almost all international flights are charged by CBSA. CBSA
core hours should be adjusted to match the peak operational hours of the airports where they are
providing services. To make matters worse, when airports submit their business case for
expanded services, CBSA does not consider arrivals of cargo planes or tech stops. Therefore,
carriers are often forced to divert to other locations for clearance.
Mont Tremblant airport a La Macaza, QC - is experiencing similar problems. They are
having difficulty establishing an air connection for the area’s tourism attractions which includes a
ski resort in winter and golf in the summer. Currently CBSA charges $1,200 per aircraft to clear
customs. Plans for scheduled service with a major commercial carrier are on hold due to
prohibitive CBSA charges that will exceed $2,000 per flight.
This policy is significantly hindering growth in key sectors and in key markets. The Chamber believes
that a review of this policy which would assess the cost of new incremental service against the increased
revenue generated by new economic opportunities is required to ensure that the need for security does not
offset the need for continued economic growth and job creations.
THE CHAMBER RECOMMENDS
That the Federal Government;
1. move immediately to remove the discriminatory cost recovery mechanism for Customs and
Immigration services and provide these services on the same basis as they are provided in other areas
of the country and at the same cost to Canadians.
2. where new services are required in any region of Canada, the provision of such services should meet
a legitimate business case that is a net benefit to Canada.
3. develop and publish an after-hours service policy on a cost recovery and this basis should reflect
actual costs of coverage; not HQ and regional overhead.
4. post all its fee schedules, including on call services, on its website and set-up a direct collection
methodology.
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ACKNOWLEDGMENT OF THE BASE PRINCIPLES OF PENSION REFORM (2010)
While some Canadians are prepared and will be sufficiently funded for retirement, either through private
or public service pension plans or through their own prudent planning, it is generally acknowledged that
many are not. Within the next decade, Canada will see millions of baby boomers enter retirement, many
without sufficient savings to sustain a reasonable standard of living.
Although the impact of this shortfall is unclear, the risks to our economy and the stability of government
funded old age benefits are so significant that immediate action is warranted.
The Chamber agrees that the fundamentals of the retirement income system are strong; however, there are
significant challenges that unless addressed, will impact the ability of many retirees to live out their
retirement in dignity. The Chamber believes that the Federal Government must continue to engage
business in developing recommendations to ensure that it can provide for seniors without putting stress on
government budgets and forcing business and younger Canadians to carry the burden through increased
taxes.
Details of the Problem
Over the next two decades, Canada will see an unprecedented number of people enter retirement. Dealing
with shortfalls for underfunded senior citizens is a complex problem and one that requires Federal
Government attention immediately.
Not every Canadian has had an opportunity to participate in a private or public sector pension plan, and
the Canada Pension Plan will not meet the needs of many seniors. The stock market upheaval of 2008
saw many Canadians sustain heavy losses in their personal retirement portfolios.
Further exacerbating the problem is the disparity of retirement preparedness for different groups of
Canadians. Civil service pensions have traditionally been richer than private pensions. Self-employed
Canadians, or those without any kind of pension plan, are being left far behind even though they have
may worked longer and harder than their fellow retirees.
Asking Canadians to endure a tax hike in order to close the gaps is rightly seen as unfair and represents an
excessive burden to younger generations. The Chamber congratulates the Federal Government for
recognizing the importance of this issue and their efforts to solicit input through the Ensuring the
Ongoing Strength of Canada’s Retirement Income System. The Chamber was particularly pleased to see
that this consultation process was underpinned by a set of principles:
“The system should remain affordable for individuals and businesses;
Costs incurred by governments should be appropriate and affordable, as well as sustainable over
the long-term;
The system should function so that it does not transfer costs from one generation to another;
There should continue to be an appropriate balance maintained between individual and
government responsibility for retirement savings, and an appropriate level of individual choice;
and
The system should remain accessible to all Canadians.”
The Chamber endorses these principles as the foundation of any recommendation for change, and is also
pleased to see that efforts are being made to find solutions on a partnership basis with the provinces and
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territories.
However, the Chamber is concerned that there is a lack of clarity regarding next steps and timelines. The
Chamber believes it is critical that to ensure this process moves forward in an expeditious manner, a clear
and binding timetable be developed for the publication of recommendations, that these recommendations
be open for public and stakeholder input, and that a timetable for legislative changes be introduced.
There may be reforms related to estate issues, the employment insurance program or other initiatives to
reduce government overhead that could mitigate the pension funding issues. There may be a need for a
retirement education program to help Canadians prepare for retirement costs, or there may be a need to
create a mandatory individual retirement plan directed by accredited planners.
There may be some immediate reforms that can be made, and there may be some longer term solutions to
be found. The important fact is that we begin to approach the situation.
THE CHAMBER RECOMMENDS
That the Federal and Provincial Governments:
1. continue to engage Canadian business in a dialogue around any potential recommendations;
2. make a public commitment to providing draft recommendations within one year; and
3. amend existing pension legislation within the next 5 years.
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FRASER RIVER NAVAGATION MANAGEMENT (2012)
The Fraser River is a vast business generator in Canada. Hundreds of thousands of residents work
directly or indirectly on or around the river, beyond the Port Metro Vancouver to ensure goods are
transported to the Pacific Gateway. Without federal support of navigable waters beyond the salt water
reach, the ability to develop and grow this vital transportation route to the Asia gateway will be limited.
Natural siltation and gravel build up in the Fraser has caused it to become shallow and broad, at time
reaching depths of less than two feet. Since 1998 no regular maintenance on a main channel of the Fraser
River has been done. Many communities rely on the Fraser to transport resources to processing and to
market. It is time that the Federal Government works with the BC Government and First Nations to
develop a proactive long-term strategy to maintain the Fraser River as a sustainable transportation route.
The Fraser River and its 13 main watersheds drain more than a quarter of the BC and are home to over
2.73 million people (67% of the province’s population). Beyond its geographic importance, this basin is a
vital component of BC’s economic base. In addition to contributing a full 80% of the provincial
economic output and 65% of total household income, it also contains 21 million hectares of forest. The
Fraser Basin‘s farms, ranches, and orchards comprise half of all BC's agricultural lands; the Fraser Valley
alone exceeds $1.4 billion in farm receipts. Eight major mines located in the basin account for 60% of
BC's metal mine production.1 The Port Metro Vancouver handles more than half of containers that go
through Canadian ports2 and is the identified gateway to growing trade with Asia.
In addition to annual dyke maintenance, the Fraser River requires the removal of gravel and debris and
regular dredging of its main channel. Not only would this help avoid the threat of flooding, it would keep
the river open and navigable for shipping, commercial traffic, pleasure boating, and to further enhance the
Pacific fishery.
Presently the maintenance of navigable waters along the river is limited to deep sea and domestic
shipping channels that support international and domestic trade within the Port Metro Vancouver. This
program is subsidized by federal funding and funds levied by the Port. Municipalities must apply for the
Local Channel Dredging Contribution Program for funding. Only river-front communities within the salt
water reach and directly related to the Port Metro Vancouver are eligible.
Beyond the Port, many river-front communities have industries that rely on transporting goods to market
via the river. In these areas, maintenance of the waterway is limited to flood management and within the
boundaries of the docks or loading areas of industry at their own expense. Authority for this maintenance
remains with a myriad of federal departments and provincial ministries. Work being done is isolated and
not part of a comprehensive plan to address ongoing maintenance of the Fraser.
Federal departments and Acts that guide the process in allowing maintenance on the Fraser River include:
Fisheries Act, subsection 35(2) Authorization for the harmful alteration, disruption, or destruction
of fish habitat, DFO;
Fisheries Act, section 32 Authorization for the destruction of fish, DFO;
Canadian Environmental Assessment Act, Screening report, DFO and Environment Canada; and
1
2
The Fraser: A Canadian Heritage River, Fraser Basin Council in collaboration with the BC Ministry of Environment, March 2010.
Shipping in Canada: 2008, Statistics Canada, (Ottawa October 4, 2010).
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Navigable Waters Protection Act, subsection 5(1) and 5(3) Approval of work, Transportation
Canada.
The process required by these federal acts can take in excess of four years to obtain approval. When
approval is granted, limited time windows are given to complete work. In many cases these time frames
are during freshet when the river is too turbulent fast and full of debris for work cannot be done.
A recent survey of Lower Fraser stakeholders indicates that dredging, siltation, and gravel as well as flood
mitigation and protection are some of the top four pressing river issues.3
Not maintaining the Fraser has impact on many resource industries where global market value is
competitive such as the forest industry. Due to siltation and lack of management, many areas of the
Fraser no longer are deep enough to move logs to market. Moving a log boom by river using one tug can
cost an average of $2/cubic meter; to truck that same boom can cost $11/cubic meter and take as many as
50 trucks which have a significantly higher carbon foot print. Given the competitive nature of the market
and Canada’s opportunity to build trade to Asia, cost of transport plays important role in determining the
value of timber.
Looking forward, the Asia Pacific Gateway and Corridor Initiative (APGCI) was established to integrate
investment and policy measures focused on trade with Asia-Pacific region. Its mission is “to establish the
APGCI as the best transportation network facilitating global supply chains between the North American
marketplace and the booming economies of Asia.”4
Environmental initiatives of the AGGCI include the reduction of environmental impacts of
transportation.5 The Fraser is a natural transportation route that can meet that goal. Short Sea Shipping
Projects were identified to improve air quality, reduce traffic congestion, and reduce noise pollution as
well as to build infrastructure to grow the Gateways ability to move goods. If the river is not maintained
this objective cannot be fulfilled as minimum draft for barges range from 4’-6’ depth.
The Fraser River is the backbone of transportation for the Asia Gateway. It has the ability to provide a
significant competitive advantage that will build Canada’s economic prosperity as it shifts to trade with
Asia. Streamlining and facilitating process that allows a main transportation channel to be maintained
will be primary in developing this key opportunity.
THE CHAMBER RECOMMENDS
That the Federal Government:
1. work with the British Columbian Government and First Nations to create a comprehensive long term
plan for navigable waters on the Fraser within five years;
2. establish a long-term strategy for maintenance of navigable waters of the Fraser to further develop the
Asia Gateway and Corridor Initiative;
3
Lower Fraser River Collaborative Survey, Fraser Basin Council, November 2011
Asia Pacific Gateway and Corridor Initiative ‘Our Mission’ Website, Government of Canada, March 2011
5
Canada’s Pacific Gateway: The Environment and the Asia-Pacific Gateway and Corridor Initiative, Transport Canada, 2009
4
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3. develop a single timely process that allows for maintenance on the Fraser that is not limited to freshet;
4. create and maintain a central authority under one federal ministry that will manage and support the
process required in maintaining the Fraser as a sustainable transportation route; and
5. create and maintain funding agreements that will support the maintenance of navigable waters along
the Fraser River beyond the Port Metro Vancouver.
CAPITAL FUNDING STABILITY FOR BC’S INTERNATIONAL AIRPORTS (2010)
BC’s International Airports are rapidly evolving from regional transportation hubs into large-scale, multimodal, international airports. As BC continues to grow, international airports will play an increasingly
vital role in the economic growth of the province by providing the connectivity essential to keeping
companies competitive in a global economy, and by facilitating significant job creation within the
province.
Growth in the province will necessitate a need to reduce pressure on YVR and, as such, will drive
significant growth in airport activity through BC’s other international airports on an annual basis.
Increased access from the entire province, by road and air, will allow BC’s international airports to play a
greater role in relieving the pressure on YVR’s already challenged air and ground access network.
Infrastructure upgrades and improvements are required to support airport operations and airside land
development at all of BC’s international airports. Current federal funding is provided through the Airport
Capital Assistance Program (ACAP). ACAP is a line-budget item and, as such, is subject to changing
governments, ministers, budget constraints, and capital funding burden shifts between government
priorities.
BC’s international airports have significant capital expenditure programs relying on ACAP funding.
They are forced to institute business plans based on uncertain capital funding to complete the plan. The
objective of running BC’s international airports in a generally accepted free-enterprise business model
becomes extremely onerous under this funding model.
This financial hurdle is commonplace among airports across Canada. It is significantly more pronounced
at larger, rapidly expanding, provincially significant airports.
THE CHAMBER RECOMMENDS
That the Federal Government identify and allocate a consistent and predictable annual funding model for
BC’s international airports.
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EXTENSION TO THE VICTORIA INTERNATIONAL AIRPORT RUNWAY (2010)
Transportation connectivity is the key to prosperity. Commercial and general aviation is a significant
aspect of transportation in BC. Improvements to airport facilities are important projects that will help
realize our province’s economic potential.
The Victoria International Airport is Canada’s 9th busiest airport, and has the shortest runway of all major
Canadian airports and provincial capitals. The airport has seen year over year growth, averaging 5.7%
annually since 2002. The Victoria Airport Authority (VAA) has successfully completed a major terminal
expansion and is setting the stage to attract additional international air service.
To promote economic growth and sustainability for Vancouver Island, the VAA is proposing a 1400 foot
runway extension. This $41.2 million dollar project will enable non-stop air service to international
destinations such as London. A three-way equal partnership between the Airport Authority, Province of
British Columbia, and the Federal Government would allow this project to begin almost immediately.
The project will extend the airport’s main runway from 7000 feet to 8400 feet.
Over the last five years, the Provincial Government has contributed funding to a number of airport
facilities across the province. The most recent contributions include $22 million towards the extension of
the main Prince George runway, $1.35 million towards the extension of the Kelowna Airport runway in
2008, and $6 million to help extend the Nanaimo Airport runway. $10 million has also been committed
to a taxiway and apron extension project at the Abottsford Airport in 2010. The Provincial Government
also contributed to the extension of runways in Smithers, Cranbrook, Abbotsford, Terrace, and Kamloops.
The Victoria International Airport, in the province’s capital city, has not yet secured a funding partnership
with the Provincial Government to implement its $41.2 million runway extension. The Victoria Airport
Authority estimates that the ability to land jumbo jets will add another $37 million dollars to Greater
Victoria’s economy annually. Research to date from the Victoria Airport Authority shows a ready market
from key European destinations, including France, London, and Germany. These markets have some
interest in one stop flight packages, but the prospect of direct connections is highly desired. VAA
estimates that with the extension, they will see 36,000 new international movements from London in the
first year with an increase to 48,000 within five years, and 75,000 movements from France in the first
year with an increase to 100,000 within the first five years.
Economic growth, particularly opportunities related to post-Olympic benefits and the provincial goal of
doubling tourism revenues by 2015, depend on transportation connections that can host the world. An
extended runway at the Victoria International Airport fits as an important part of bringing those provincial
goals to fruition.
THE CHAMBER RECOMMENDS
That the Federal and Provincial Governments provide monetary support to the extension of the Victoria
International Airport.
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US CUSTOMS PRE-CLEARANCE
SECURITY (2010)
–
BELLEVILLE
INTERNATIONAL
TERMINAL
Canada’s economic trade viability relies significantly on a number of gateways and major land and sea
border crossings, where transportation networks converge to connect centres of economic activity.
Gateways to Canada include approximately 300 commercial sea ports, over 20 major airports, and a large
number of land border crossings, 18 of which are major trade gateways. The Belleville International
Terminal in Victoria, BC is one example of a gateway connecting the leisure travelers of the United States
and Canada.
It is of paramount importance to ensure that appropriate capacity and infrastructure improvements are
adopted at all necessary crossings. In the post 9/11 world, appropriate capacity includes not only
infrastructure considerations but also high-level security measures. The United States is Canada’s
primary trading partner, and as such, it behooves the Canadian Government to work in harmony with US
officials and Provincial Governments on security measures.
Ballantyne and Canada Place in Vancouver, both cruise terminal sites with US preclearance service, each
have modern facilities with adequate pre-clearance services with no expressed concerns from the US
Customs and Border Protection Agency. While important at commercial crossings, it is equally important
to be vigilant in border security and infrastructure investment at gateway locations with a concentration of
leisure travelers.
The US Customs and Border Protection Agency (CBP) have a number of pre-clearance locations around
the world, one of which is the Belleville International Terminal in Victoria, BC. In a letter written on the
issue of the terminals condition in 2006, the US CBP advised that the terminals in Victoria currently “lack
an infrastructure necessary to maintain passenger sterility and vessel security,” and expressed concern
that this situation has been a long standing issue in Victoria without a proposed solution, in regards to
both increased security and passenger sterility.
In the event that the Belleville Terminal is not upgraded and brought into compliance with international
safety standards and requirements of the Department of Homeland Security, the Agency has stated that,
“a withdrawal of Preclearance services at Victoria must be considered.” Clearly, the status quo at this
terminal site is untenable and clearly does not support a strategic alliance with our US partners.
The potential loss of pre-clearance services at Belleville International Terminal would have a significant
impact on the economy of Vancouver Island and the tourism industry of BC. The terminal, which covers
a land mass of 6.5 acres, provides international foot passenger ferry service to various destinations in
Washington State, and international vehicle ferry service to Port Angeles. In 2005, the terminal
welcomed 1.1 million return foot passengers and 175,000 return vehicle trips. A marine transportation
study done in that same year by Moffat and Nichol showed an increase in traffic projections for 2010 to
be 1.2 million return foot passengers and 188,000 return vehicle passengers.
The Belleville Terminal pre-clearance site is one of only a few marine based sites in the country. The
majority of CBP pre-clearance locations in Canada are at International airports. The airport facilities
were all originally built and funded with initial investment by the Federal Government with some costs
recouped through airport improvement fees. Airports were subsequently transferred to Airport
Authorities. In contrast, the Belleville International Terminal has operated with little government support
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from any level. Unfortunately, its current status reflects that funding reality.
The responsibility for re-development of the Belleville Terminal is a complicated issue. Since the
property itself was fully devolved to the BC Provincial Government, and is now managed by the
provincial crown corporation called the Provincial Capital Commission, the Provincial Government has a
significant role to play. However, as the Belleville Terminal is an international border crossing, its
infrastructure and security requirements are clearly within the mandate of federal responsibilities.
Finally, the terminal is in the middle of the City of Victoria, which means much of its redevelopment
would be subject to municipal land use requirements.
There have been numerous studies concerning the redevelopment of the terminal over the last decade.
One study in 2005 put the infrastructure redevelopment cost estimate between 40 and 50 million dollars,
with real estate development costs on top of that. Another task force put forward a proposed vision with
similar cost projections. However, the concept of redevelopment has never been sent out as a request for
proposal with concrete cost projections.
The redevelopment of Belleville International Terminal is a project of considerable size and would need
to be accomplished through a partnership with the Government of British Columbia. For its part, the
project may qualify for federal funding under the Building Canada Fund, a fund for federal investment of
$33 billion dollars over seven years, through to 2014.
Canada’s commitment to security is an important indication of our strategic partnership with the United
States. In order for Belleville International Terminal, which poorly represents the capital of BC, to be an
international standard transportation portal and safe gateway, infrastructure and security investment is
hastily required. A partnership is required between the Federal Government of Canada on this
international border crossing and the Provincial Government of British Columbia, who owns the terminal
property to bring the facility up to date and ensure many more years of secure service for Vancouver
Island.
THE CHAMBER RECOMMENDS
That the Federal Government partner with the Provincial Government to develop the Victoria marine
pre-clearance site at Belleville International Terminal in collaboration with the municipality as a model
for future marine facilities in Canada.
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