2009
Legislative Session: First Session, 39th Parliament
COMMITTEE A BLUES
This is a DRAFT TRANSCRIPT ONLY of debate in one sitting of the Legislative Assembly of British Columbia. This transcript is subject to corrections, and will be replaced by the final, official Hansard report. Use of this transcript, other than in the legislative precinct, is not protected by parliamentary privilege, and public attribution of any of the debate as transcribed here could entail legal liability.
(HANSARD)
PROCEEDINGS IN THE
DOUGLAS FIR ROOM
Committee of Supply
ESTIMATES: MINISTRY OF SMALL
BUSINESS, TECHNOLOGY AND
ECONOMIC DEVELOPMENT
The House in Committee of Supply (Section A); H. Bloy in the chair.
The committee met at 2:37 p.m.
On Vote 40: ministry operations, $43,830,000.
The Chair: If you'd like to continue with an opening statement. [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: Yes, I would. I'd like to take a moment or two and walk through, for the benefit of both those viewing and the members opposite, basically an overview of our ministry — what it does, both in terms of its objectives and broad mandates, and some of the specific initiatives it pursues. [DRAFT TRANSCRIPT ONLY]
But I would like to first introduce, if I can, Deputy Minister Don Fast, who's behind me. As well, we'll have a variety of staff joining us through the day. But at this early stage I have behind me Simone Decosse, who is our executive director of small business; Jim Soles, our assistant deputy minister of small business, research and competitiveness division; as well as Brian Hansen, our assistant deputy minister of management services division. [DRAFT TRANSCRIPT ONLY]
Mr. Fast leads the ministry operations of a team of people that is 200 strong. I would like to start by thanking each and every one of them for their contributions to British Columbia on a daily basis. They provide an outstanding service to us. [DRAFT TRANSCRIPT ONLY]
Their focus is helping to build a strong economy here in British Columbia. It's a very, very broad commitment. I think that's exactly the point that demonstrates the ministry's striking characteristics that make it stand out from others. [DRAFT TRANSCRIPT ONLY]
It's got an astonishing diversity — and I suspect my colleagues opposite will be canvassing some of those different areas — with respect to the programs delivered and the initiatives supported. We have, as examples to illustrate that, looking at supporting family-run businesses, small businesses, in the most remote communities of this province through to representing our global economic strategic interests, from promoting trade relations nationally and internationally to fostering a competitive business and investment environment here at home in B.C. [DRAFT TRANSCRIPT ONLY]
[1440]
I want to simply illustrate that range, if I may. We have a trade office in Beijing, a city of 17 million people. Our ministry supports at the same time a solar energy project at the T'sou-ke Nation, an aboriginal community that's only 40 minutes' drive from where I'm currently standing, with a population of 200. You have that range of activity taking place within our ministry. [DRAFT TRANSCRIPT ONLY]
Somewhere in between, we manage to make B.C. the most small business–friendly jurisdiction in North America, we achieve groundbreaking trade agreements, we implement clean technology programs, and we invest in our knowledge-based industries. [DRAFT TRANSCRIPT ONLY]
We spearhead our efforts to grow our low-carbon green economy in B.C., and we stimulate private sector investment in our economies and our businesses within it. We also have the responsibility of capitalizing commercially on the 2010 Olympic and Paralympic Games and maximizing B.C. as an ideal place to do business, invest, work and raise a family. [DRAFT TRANSCRIPT ONLY]
Now, all this dizzying diversity is actually very, very good. It has helped put our province in an enviable position in most western economies, frankly, in terms of coming through what is a very difficult time globally, economically. We're positioned, in the minds and views of most leading economists, to bounce back from the current economic difficulties faster than any other jurisdiction and to a higher degree. [DRAFT TRANSCRIPT ONLY]
Those diverse activities that I've described lead to that assessment on the part of those economists because the people within our ministry have a common purpose, and that common purpose is focused on presenting and developing opportunities for success economically here in B.C. — opportunities to build a better future for the province, for families and for communities. [DRAFT TRANSCRIPT ONLY]
That's why the ministry worked to make the TILMA agreement with Alberta a reality, and that's why we're working on now including Saskatchewan on an extended version of that agreement. That's why ministry staff were in Ottawa just last month, working on a comprehensive trade agreement with the European Union, and why we support the economic freedom of things like Open Skies and vehemently oppose the trade protectionism of Buy America. [DRAFT TRANSCRIPT ONLY]
That's why we're now implementing a joint $50 million economic development program with the federal government called the western economic partnership agreement because, frankly, it boils down to opportunities for British Columbians. That's why we've invested $1.7 million to support research innovation, including almost $357 billion for the B.C. knowledge development fund, $260 million for the Michael Smith Foundation and over $152 million for Genome B.C. [DRAFT TRANSCRIPT ONLY]
That's why we invested $47 million in 34 clean energy projects with a total project value of about $174 million, in communities across B.C., through the innovative clean energy fund. That's also why we offered over $30 million in tax credits each year through our venture capital programs to help British Columbia businesses to compete and to grow. That's also why we administer the B.C. Renaissance Fund, a $9 million investment to date that has leveraged over $39 million for British Columbia's high-tech companies. [DRAFT TRANSCRIPT ONLY]
On a broader level, it's also why we've cut the small business tax rate by over 44 percent, saving small businesses $401 million over the last three years. We've also focused, as promised, on eliminating regulation — over 151,000 of them since 2001. [DRAFT TRANSCRIPT ONLY]
We are very serious about creating opportunities for B.C., and that's why we're enhancing B.C.'s presence overseas, especially in Asia, because it is a very, very important part of our ministry, and its opportunities for our province are equally as great. We have now established six trade and investment offices in Asia, two trade reps in Europe and one in the United States. That's why we've opened the Asia-Pacific Business Centre, right near Robson Square, to help B.C.-based companies connect to business opportunities overseas. [DRAFT TRANSCRIPT ONLY]
It's also why we're working very hard to establish Vancouver as a global financial centre, creating a hub for international trade and investment opportunities. It's all about these opportunities. [DRAFT TRANSCRIPT ONLY]
I'd like to close by thanking the leaders in this ministry and all staff for their efforts in maximizing those opportunities for the benefit of all British Columbians. [DRAFT TRANSCRIPT ONLY]
J. Kwan: I'd like to thank the minister for his opening comments and also thank his staff for the work that they do each and every day on behalf of all British Columbians. [DRAFT TRANSCRIPT ONLY]
Time is short with respect to the estimates debate, so I'm just going to move right into the issues at hand and let the minister know that this is sort of the order which I'm going to go with. I'm going to canvass issues around the HST, then I'm going to move on to Asia-Pacific trade and investment, and then we'll talk a little bit about the technology professionals in B.C., particularly the shortage of female technology professionals in British Columbia. Then I'm going to ask some general questions around discretionary spending and, related to that, in various different areas within the ministry. Then we'll move on to some other general questions within the ministry. [DRAFT TRANSCRIPT ONLY]
[1445]
How much I get done really depends on the time that's allotted. Then, hopefully, we can have a crisp exchange in terms of getting answers and move forward with that. [DRAFT TRANSCRIPT ONLY]
I also want to let the minister know that there will be some MLAs coming in periodically as well. That's why I have my computer on, to let them know that if they want to ask their community questions, to please pop on by. When that happens, I will make sure the MLAs get their opportunity to do so as well. Hopefully, they'll follow the general guideline in terms of the headings that we have. [DRAFT TRANSCRIPT ONLY]
With that, I'm going to ask the first question. The minister's predecessor, Rick Thorpe, mentioned that the ministry would do an HST assessment. I'm wondering whether or not that happened. Was there an assessment done by the ministry regarding the HST? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: The member is referring to a ministry that at the time — as led by Rick Thorpe, as was identified — included the department of revenue. The assessments around taxation would be done by that part of his ministry at the time, which has since moved to the Ministry of Finance. I would refer questions on the assessments and the activities around the Revenue part of the former Small Business and Revenue Ministry to the Ministry of Finance. [DRAFT TRANSCRIPT ONLY]
J. Kwan: The Finance Ministry's estimates will be coming up, and we'll certainly ask the minister that. In the interim will the minister also commit, then, to ask his colleague to provide that assessment and ensure that the opposition gets a copy of it for the Finance Ministry's debate? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: I'm not in a position to make commitments on behalf of my colleague the Minister of Finance. I'd have to refer the question directly to him. [DRAFT TRANSCRIPT ONLY]
J. Kwan: I was asking for a commitment from the minister to make the request to his colleague but not to necessarily say that the minister will provide it. Would the minister himself make that commitment and ask his colleague to provide that document to the opposition? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: I would need to fully understand the request. I'd need to understand the nature of the assessment that's being discussed about, and I don't have enough information from what's been given to me so far from the hon. member to be able to make such a commitment at this stage. [DRAFT TRANSCRIPT ONLY]
J. Kwan: Okay. It's not that complicated. That would be a simple question to the Minister of Finance: "Minister of Finance, I was asked the question at the estimates by the opposition critic if you would provide the HST assessment that was done by the ministry when it was formerly with the Ministry of Small Business that housed Revenue. Because it's now been changed in terms of responsibility and the Revenue component has now moved to the Ministry of Finance, would you please provide that document to the opposition?" [DRAFT TRANSCRIPT ONLY]
It would be a simple question of that nature. If the minister responds no, the Minister of Small Business, I'm sure, can just come back and say: "I'm sorry. I put the question to the minister, and he said no." Or maybe he will say yes. Who knows? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: I would be pleased to pass along the courtesy of advising the Minister of Finance that the question was asked here today. That, in addition to the Hansard record, I think, will reflect the desire of the member opposite. But I'd be pleased to pass along, as a courtesy, the request that's been made to the Minister of Finance for his consideration. [DRAFT TRANSCRIPT ONLY]
J. Kwan: Okay. So I take it that the minister will simply tell the minister the request was made, but not actually ask the question. Now I know how we're going to operate here. [DRAFT TRANSCRIPT ONLY]
Will the minister, then, tell us when he first learned about the HST? [DRAFT TRANSCRIPT ONLY]
The Chair: HST is not part of the debate on this budget estimates. The HST has not been implemented. We're here to discuss Vote 40 on the ministry operations. [DRAFT TRANSCRIPT ONLY]
[1450]
J. Kwan: Thank you, Mr. Chair. The HST issue, of course, is very important for the small business community. I've got reports from the small business community as it impacts their operation. No doubt this would be of interest in the minimum for the minister, I would expect. Therefore, I would expect an answer from the minister, if you please. [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: A couple of thoughts for the member's consideration. My understanding — and I stand to be corrected — is that the focus of our conversation is the 2009-10 budget. There are no implications of the HST on the current fiscal year with respect to the HST. [DRAFT TRANSCRIPT ONLY]
J. Kwan: Sorry, that's not my question. It will come, no doubt. [DRAFT TRANSCRIPT ONLY]
My understanding is that the small business community had conversations with the minister after the government announced the implementation of the HST. One would have assumed that the Minister of Small Business would know and anticipate that the implementation of the HST would impact the small business community. [DRAFT TRANSCRIPT ONLY]
So my first question to the minister is: when did he first find out about the government's intention to implement the HST? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: Hon. Chair, the member opposite has been a member of an executive council and understands fully the cabinet confidentialities that surround conversations of that nature. To that extent I am a little perplexed at the question. [DRAFT TRANSCRIPT ONLY]
I will say that the enormous benefits associated with the HST have been in the public domain for many, many years. I have served on the Select Standing Committee on Finance for several years with the member opposite, where we had one business group after another, most of them overwhelmingly representing the small business interests in this great province, make their views very clear that such contemplation was a good thing. [DRAFT TRANSCRIPT ONLY]
I mean, the bulk of these questions are best referred to the Ministry of Finance, which has responsibility for the HST. But given the limited time we have here today to discuss the current expenditure plans of our ministry in 2009-10, I would be pleased to answer any questions on the numbers contained within those budget estimates. [DRAFT TRANSCRIPT ONLY]
J. Kwan: Well, let me ask the minister this question, because he's reluctant to answer the question. I suspect that the minister may well not have known that the government intended to implement the HST. Or maybe he knew all along. The fact is that the Liberals during the election actually told British Columbians that they would not implement the HST and only after the election announced that they are now going to implement the HST. [DRAFT TRANSCRIPT ONLY]
Why does it relate to this set of estimates, Mr. Chair? You may wonder, along with the minister. Because it impacts the small business community overwhelmingly. Let me just actually provide some documentation for the minister's information in terms of what they have to say about the HST. [DRAFT TRANSCRIPT ONLY]
[1455]
This is a document from the Canadian Restaurant and Foodservices Association. They say the problem with harmonization.... "The significant tax increase caused by harmonizing the PST and GST in British Columbia will hurt restaurant operators, their customers and their employees. Harmonizing the PST and GST will increase the tax on restaurant meals from 5 percent to 12 percent. It will result in an annual loss of sales of $750 million, or nearly $50,000 a year for the average restaurant." [DRAFT TRANSCRIPT ONLY]
As we know and as the minister knows, a significant proportion of small businesses are actually in the service industry, and the restaurant business is very important in the small business industry in British Columbia. And that's only one piece of the information that they've provided in terms of the impact of the HST on their businesses. [DRAFT TRANSCRIPT ONLY]
So my question to the minister is: is he aware of this documentation, and does he have any concerns in terms of the implementation of HST for small businesses? [DRAFT TRANSCRIPT ONLY]
The Chair: I would just like to remind the member that the questions should be directed towards the administrative and operations portion of the 2009-2010 budget estimates we're discussing today. [DRAFT TRANSCRIPT ONLY]
J. Kwan: The operations of the ministry and the work of the ministry, one would assume, is that they would have done some analysis on government policies as they impact that ministry and the people and the stakeholders that ministry deals with. That is the reason why, I would assume, there's a round table on small businesses. [DRAFT TRANSCRIPT ONLY]
Did the minister talk to the round-table stakeholders — what did they have to say? — one of which I know would be the Canadian Restaurant and Foodservices Association. That's how it relates, Mr. Chair, so if the minister could just answer that question. [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: You know, we can spend our time on this if the member wants, but the reality is that the analysis of which the member speaks is done by the Ministry of Finance. The very long list of very real and tangible benefits to the small business community with respect to harmonizing the sales tax is very well articulated. For the member's reference, it's at www.gov.bc.ca/hst. [DRAFT TRANSCRIPT ONLY]
The small business community has been overwhelmingly positive about the information contained on that website and how it benefits their members throughout the province in a variety of industries. I would refer the member there if she wishes to see those benefits beyond any conversation she may have with the Minister of Finance in this forum. [DRAFT TRANSCRIPT ONLY]
J. Kwan: So is the minister saying that he's done no consultation with the small business community around the government's desire to implement HST prior to it announcing the implementation of it? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: Those are questions for the Ministry of Finance, which owns responsibility for this. If there is a question pertaining to the fiscal '09-10 numbers, I would be pleased to answer them. [DRAFT TRANSCRIPT ONLY]
J. Kwan: Was the HST discussed or debated during the Small Business Roundtable meetings? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: We are very, very fortunate to have a group of committed individuals in B.C. who serve on the permanent Small Business Roundtable, a vehicle which was implemented by this government in response to a vacuum that was identified by that community about their needs being understood by the previous administration. [DRAFT TRANSCRIPT ONLY]
We are very proud of the work they've done with respect to the advice they give to government. It was their advice that led us to take the small business tax rate, which was a punishing 4½ percent back in 2001, and take it down to 2½ percent, commit to take it to 1½ percent and then, most recently, in the throne speech, to eliminate it altogether. [DRAFT TRANSCRIPT ONLY]
It was also on the advice of that Small Business Roundtable — taken, again, by this government — that we increased the small business tax threshold — which, for the benefit of our viewers at home, is the amount at which small business starts paying tax — from about $200,000 to $400,000, with an additional commitment from our government to raise it to $500,000. [DRAFT TRANSCRIPT ONLY]
[1500]
In combination with the previous measure, beyond saving over $400 million directly back into the pockets of the men and women who take very real risks in their lives to start small businesses, to pursue the opportunities that they wish to pursue, it was also the Small Business Roundtable that encouraged us down the path of eliminating over 42 percent of the existing regulations in this province — about 152,000 of them — and then urged us to zero-flatline the new regulatory burden at that level and keep it flat, upon which I would advise that we're ahead of that target. We're down 9 percent, never mind a zero baseline. We're actually down 9 percent more unnecessary regulations in the province of B.C., thanks to the Small Business Roundtable. [DRAFT TRANSCRIPT ONLY]
I would include in the many conversations that we have had with our Small Business Roundtable a discussion on the benefits associated with harmonization that predates me as minister, but conversations that I've been involved in with the Small Business Roundtable since having the honour of being appointed to that role in late June of this year. [DRAFT TRANSCRIPT ONLY]
J. Kwan: The minister might not have been around that table, but surely his staff would have been. Was the HST discussed or debated during the Small Business Roundtable meetings? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: One of the very clear benefits for the people of British Columbia through their Small Business Roundtable is the open and frank dialogue that they have with government through this ministry. One of the vehicles that they have to express their various views is an annual report that they present to government. [DRAFT TRANSCRIPT ONLY]
I'm holding in my hands the fourth annual report to government, dated October of this year, which is an accumulation of the previous year's meetings and recommendations as well as some extraordinary success stories of our vibrant small business community across British Columbia. [DRAFT TRANSCRIPT ONLY]
I'd like to read, if I may, from page 14, for the member's reference, of this report. I will quote as follows. It's already a permanent record, a public record, but I have no problem reading this into the record. On page 14 of the Small Business Roundtable annual report…. To be clear, hon. Chair, this is a report from the small business community to government; this is not a government document that I'm referring to. [DRAFT TRANSCRIPT ONLY]
It says: "Many small businesses suggested harmonization of PST and GST to reduce the tax complexity and tax burden for small businesses. The province of British Columbia has responded and will be implementing a harmonized sale tax on July 1, 2010. The round table recognizes the overall benefits that harmonizing will bring to the B.C. economy." I would refer this document to the member's attention. [DRAFT TRANSCRIPT ONLY]
J. Kwan: Great. I'm glad that the minister actually found that document, because I have it too. Will the minister actually table the minutes from the round-table meetings? [DRAFT TRANSCRIPT ONLY]
Interjections.
The Chair: Members, Members. [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: The hesitation on my answer is only because I am concerned about the privacy considerations of the individuals who sit on this round table. These are private citizens from the province of British Columbia who give of their own free time and give a great deal of commitment to the Small Business Roundtable. I would be pleased to ask them of their thoughts on this when we next meet. [DRAFT TRANSCRIPT ONLY]
[1505]
J. Kwan: Good. Sure, go and ask them about the minutes. One would think that in the spirit of openness and accountability, and where there are round-table discussions around the small business community impacting all British Columbians, that that information would be provided and made available for the public's consumption. [DRAFT TRANSCRIPT ONLY]
One would assume that people would follow through with that, so I would welcome the minister to go and ask that question, and I will await his answer as well. Of course, there are other means by which to get minutes of meetings and so on, and of course, that's onerous as well as time-consuming and sometimes not the best time and expenses spent on behalf of taxpayers either. [DRAFT TRANSCRIPT ONLY]
Ian Tostenson, president of the B.C. Restaurant and Foodservices Association, stated that the minister told him just one week before the HST was announced that they would not be bringing in the HST without extensive consultation. Did the minister honour this by doing the extensive consultation with the B.C. Restaurant and Foodservices Association? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: There have been ongoing consultations with business for several years with respect to the benefits associated with harmonizing our provincial sales tax system. As for that specific question, I would, again, refer that, as a matter of tax policy…. As the vehicles around implementing, planning for, administering and consulting on tax policy are within the strict purview of the Ministry of Finance, I'd refer the question there, accordingly. [DRAFT TRANSCRIPT ONLY]
J. Kwan: No, this question is directly for the minister, because the stated comment made by the B.C. Restaurant and Foodservices Association was about this minister, not the Minister of Finance. My question to the minister is: did he do any consultation with the B.C. Restaurant and Foodservices Association prior to the government's announcement of their intention to bring in the HST? [DRAFT TRANSCRIPT ONLY]
The Chair: Member, I just want to caution you that the minister may have answered this question already on a number of occasions. [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: The member's perspective and the member's opinion and the member's desire do not change the role of this forum, nor does it change the focus of this being about 2009-2010 expenditures on behalf of our ministry. I'd be pleased to answer any questions pertaining to those financial transactions. [DRAFT TRANSCRIPT ONLY]
J. Kwan: Actually, no. As I mentioned, the HST policy impacts the small business community in a significant way. The small business community is the responsibility of this minister. [DRAFT TRANSCRIPT ONLY]
Implication of government policies across the board means something for each minister — if they were do to do their job, to figure out what it is that impact is going to be — and in particular, when this minister himself, as I understand, had made a commitment that he would ensure that there would be consultation with the small business community. [DRAFT TRANSCRIPT ONLY]
He made that commitment, as I understood, to the food services association people. So my question to the minister is about his action as the Minister of Small Business: did he actually fulfil that commitment? Did he actually do that consultation? [DRAFT TRANSCRIPT ONLY]
Not someone else's responsibility. As I tell my daughter, who is just six at the moment, sometimes you have to live up to what you say, even at six years old. When you say something, you have to take responsibility for it. [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: Yeah, this is making for great theatre, but I have to tell you that I could spend half an hour, 40 minutes espousing the benefits of the HST to our small business community in British Columbia. I've been proudly doing that in a series of speeches and remarks around the province over the last couple of months. [DRAFT TRANSCRIPT ONLY]
Nonetheless, if there is a question pertaining to the HST that the member can point to — any line item at all within the existing 2009-2010 budget documents — I'll be pleased to address it. [DRAFT TRANSCRIPT ONLY]
[1510]
J. Kwan: Is the minister denying that the HST would not impact the small business community? Is he denying that there would be no implication whatsoever? Part of that is that it implies, as it applies to this set of estimates — and the minister well knows that it does — that every single small business in British Columbia is going to be affected by this. They are going to be affected by this. [DRAFT TRANSCRIPT ONLY]
One would have assumed that the minister would have taken up his responsibility, especially as a brand-new minister. He would have gone out and consulted with his stakeholders to ensure that their interests are represented at the cabinet table, with his colleagues, and so on. Instead of being a yes-minister to whoever says whatever, he would have gone out and done his job. [DRAFT TRANSCRIPT ONLY]
Maybe that's not the case. Maybe that is too big an assumption on my part. If you don't think that there's a responsibility for the minister to go and do that, to ensure that your stakeholders' interests are represented at the cabinet table, then I find that quite astounding, because that's what I'm hearing from this minister right now. [DRAFT TRANSCRIPT ONLY]
The significant tax increase caused by the harmonization of the PST and the GST in British Columbia will hurt restaurant operators, their customers and their employees — this coming from the small business operators themselves. [DRAFT TRANSCRIPT ONLY]
They also say…. In fact, they've done some analysis. When Canada brought forward the GST back in 1991, the B.C. restaurant and food services industry was hurt by this. In fact, their businesses went down 9.5 percent. Is the minister aware of this in terms of this policy implication, and did he do any comparison between the implementation of the GST versus the intent to implement the HST? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: Where to begin. Let me start by saying that I find the conversion on the road to Damascus, with respect to looking out for the interest of the small business community and the economy in general, to be somewhat refreshing. However, it was the lack of that view that led us to the challenges that we had to inherit and do something about back in 2001. [DRAFT TRANSCRIPT ONLY]
This member asking the question was part of a government that drove jobs out of this province and took our tax regime to one of the most punishing in the country at the personal, corporate and small business level. We have managed to take that situation and turn it around now to where our small business community in Canada represents the highest contributor of GDP of any other province in the country. We're number one with respect to the reliance that we have on our small business community. [DRAFT TRANSCRIPT ONLY]
It was our small business community on whose shoulders we stood in 2001 to get us out of the financial difficulty that we inherited, and it's on the shoulders of our small business community that we're standing today to get us out of the economic difficulties that we currently find ourselves in. [DRAFT TRANSCRIPT ONLY]
We do that because we did lower their taxes. We did get rid of the regulatory burden, and we paved the way for opportunity so that these men and women could take very real risks by walking away from successful careers to take the risk of starting a small business to pursue their life-long dreams, to try to build their families and their communities by taking very personal risks — putting their house on the line, if they needed to. [DRAFT TRANSCRIPT ONLY]
I find that the comments and somehow presenting themselves as the advocates of the small business community in this province are hypocrisy at its finest. I find that the small business community should be getting quite a giggle from the remarks that have been said here this afternoon. The benefits of the HST system are over $2 billion in terms of the savings to business in British Columbia. With 98 percent of all business in British Columbia being small business, they're the ones who will benefit — $880 million in benefits to the construction industries. Those are predominantly small, family-owned businesses. [DRAFT TRANSCRIPT ONLY]
You look at the money and the transportation sector — very often family-owned trucking firms. I think of our northern communities who are so reliant on that — our forest industry, alone, a $140 million benefit. [DRAFT TRANSCRIPT ONLY]
So the benefits associated with the HST are very, very well established. The business community understands them. The small business community understands them. [DRAFT TRANSCRIPT ONLY]
[1515]
They understand the $140 million that they were spending each and every year administering two different taxation systems, which is why they came out and presented to the Select Standing Committee on Finance for years and years, talking about the duplication that was unnecessary of two tax systems that cost the very real out-of-pocket costs associated with maintaining two tax systems — not in growing their business, not in driving a new customer base, not in developing new products and services and growing their business and hiring more people, but in administering a second taxation system. [DRAFT TRANSCRIPT ONLY]
Do they understand this? Yes, they do. They're applauding our government for it, and they recognize this as well. [DRAFT TRANSCRIPT ONLY]
If the member's got a specific question about how the HST came to be, with respect to the analysis — numerically, consultatively, whatever that may be — I would refer her to the Ministry of Finance, with the greatest of respect. [DRAFT TRANSCRIPT ONLY]
J. Kwan: Well, the introduction…. Actually, I want to backtrack. Just for the record, because the minister actually opened it up, on the question around reducing the small business tax. So the minister knows — and maybe he wants to go back and get this information — after 20 years of a conservative government, the Socred government, it was actually a New Democrat government that first brought forward a reduction in small business taxation. [DRAFT TRANSCRIPT ONLY]
That was actually under Glen Clark, during his term. I think that by the time that New Democrat government left office, the small business tax was brought down to 4.5 percent, in that neighbourhood. Just so that the minister knows, in terms of that history, that it was the New Democrats. We do support reducing small business tax and their burden, because they are the economic engine in British Columbia. Make no mistake about it. [DRAFT TRANSCRIPT ONLY]
I will also canvass questions with the Minister of Finance, who actually says that they are not the economic engine in British Columbia. But we'll leave that for another day. [DRAFT TRANSCRIPT ONLY]
Hence, the issue around taxation policies and the implication for the small business community is critically important and therefore should be of concern for this minister, not just for the Minister of Finance, who has responsibility for implementing it. The implication of that tax policy across government — there's got to be some work done by each individual ministry to see what it means for their stakeholders. [DRAFT TRANSCRIPT ONLY]
One would have assumed that the government would have spent some time in this budget cycle doing that — doing some consultation with the community groups around that. The introduction of the GST in 1991 resulted in the large drop in tourism — specifically, occupancy rates across Canada. Some provinces were down as much as 20 percent. [DRAFT TRANSCRIPT ONLY]
As the HST will increase taxes in the hospitality and restaurant sectors, has the provincial government done any forecasting on the economic effects that the implementation of the HST will have on the occupancy rates and tourism in British Columbia? If the government hasn't done it, has the minister actually seen the report from COTA? Because they've done it, and their projection actually says that there would be something like 15,000 jobs lost in the small business community, as they relate to the tourism sector. [DRAFT TRANSCRIPT ONLY]
Has the minister seen that report? Has the ministry done any analysis? Did they take any money from this budget cycle to do that work so that the minister knows how he can ensure that the interests of small businesses are represented? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: Well, I appreciate the effort to try to link it to something, anything, resembling a 2009-2010 budget question. I also think it remarkable that a bragging point of the member opposite would be that her government ended up lowering the small business tax rate to a point, at 4½ percent, that still left it amongst the highest in the nation. [DRAFT TRANSCRIPT ONLY]
In any event, I think that the questions with respect to the analysis that's been done, as I've said, is a matter that should be canvassed through the Minister of Finance. If she would like to ask questions about the tourism industry, my understanding is that this forum is available as well to ask questions of the Ministry of Tourism. [DRAFT TRANSCRIPT ONLY]
J. Kwan: I take it from this minister's response that he's just going to wash his hands of the impacts of the HST for the small business community. He's not interested in knowing from them what the ramifications are on the ground, and he's not interested in the tourism industry, which happens to have a whole lot of small businesses in that sector. He doesn't care about that. [DRAFT TRANSCRIPT ONLY]
He says it's someone else's responsibility. When you would have thought that the government…. This ministry, not very long ago, maybe about a week ago, told this House that they operate as a team. So much for that concept. The team approach only works when it suits the government. [DRAFT TRANSCRIPT ONLY]
When it comes to major taxation policies as it impacts across government ministries, this minister is now saying: "I'm no longer that team player. Don't ask me, because I actually don't know the answer, nor do I care to get the answer." That's what I'm hearing. Maybe that's the message he wants to send to British Columbians and to the small business sector. [DRAFT TRANSCRIPT ONLY]
Does the minister even know about the ramifications of the GST and how it hit the small business sector when it came into play? [DRAFT TRANSCRIPT ONLY]
[1520]
Hon. I. Black: One of the great benefits associated with being the minister responsible for this area is the ongoing consultations that we do through the Small Business Roundtable throughout the province, especially in the month of October, which is Small Business Month. [DRAFT TRANSCRIPT ONLY]
A point of trivia, perhaps, but British Columbia was the first jurisdiction in the country 30 years ago to recognize our small business community. We had Small Business Week. We were the first ones in the nation to do so. Then three years ago we decided that a week was not enough, and we took it to a month. [DRAFT TRANSCRIPT ONLY]
As such, October is a very, very busy month for the Small Business Minister. I spent a part of that month, despite our House being in session, travelling to places like Fort St. John, Prince George, Quesnel, out to Surrey and here in Victoria, meeting with the consultation groups associated with the Small Business Roundtable. [DRAFT TRANSCRIPT ONLY]
The HST discussion was alive and well. When you've got a trusted relationship with a community of people, where you've listened to them as much as we have over the last eight years, the dialogue flows very, very well. The HST was very much a topic of discussion. A great deal of interest in it, and a great deal of, I would say, general support for the topic. [DRAFT TRANSCRIPT ONLY]
As mentioned, I can do 25 or 30 minutes with very few notes on all the benefits associated with HST, in particular for our small business community. But I would suggest that this is probably not the forum for me to do so on that topic. If the member would like me to espouse on that, I do have a few more presentations lined up over the next number of weeks. I'll be sure to let the member know when and where those are taking place. [DRAFT TRANSCRIPT ONLY]
J. Kwan: Very cute. Yes, in fact I was just going to bring that up. The minister is supposed to show up in Burnaby to talk about the HST. On the one hand, he says that it's not his ministry's bailiwick. He won't answer any questions related to HST in this set of estimates. Yet he, being paid out of this set of estimates for his very salary, is going to go out and talk about the HST. [DRAFT TRANSCRIPT ONLY]
Interesting, isn't it? Someone who wants to claim no responsibility is going out there on the circuit to cheerlead for the government on this issue, yet won't answer specific questions related to the HST as it impacts his stakeholders in his ministry; has not done any analysis related to that, or wouldn't provide it if he's actually done it in his ministry; and won't tell us who he's consulted with on the HST. [DRAFT TRANSCRIPT ONLY]
One would assume that in this set of estimates, in his budget, they would have set aside dollars to make sure that they go out and do consultation regarding that. But no, not so. But he's happy to go on road trips to actually talk about the HST. [DRAFT TRANSCRIPT ONLY]
Now, I note that the minister didn't answer the question around the GST as it impacts their community. Well, let me just put this information on the record for him. British Columbia enjoys Canada's second-highest per-capita expenditure on food services — $1,773 per person in 2008. One of the biggest reasons for B.C.'s good performance is the fact that the province does not apply PST to restaurant meals. [DRAFT TRANSCRIPT ONLY]
This is what the Canadian Restaurant and Foodservices Association have to say about the GST: [DRAFT TRANSCRIPT ONLY]
"It isn't neutral. It reduces disposable income. It distorts the marketplace, especially for food service. It's bad for tourism, and it is regressive.
"Harmonization creates a significant redistribution of who pays the PST. While some price reductions should occur over time as a result of the removal of the PST from business purchases, the expansion in the tax base under harmonization creates a more immediate and significant effect on final consumers.
[1525]
"The introduction of the GST in 1991 reduces disposable income, and consumers reacted by reducing consumption. Canada's food service industry suffered a 10.6 decline in real sales in 1991, 7.3 percent of which was attributed to the GST.
"One of the biggest arguments for the GST was that it removed taxes on exports and made Canadian industries more competitive.
"In the case of tourism, however, the exact opposite occurs. Visitors end up paying the GST, and Canadians can escape it by vacationing outside the country. British Columbia's tourism industry is suffering from a sharp decline in U.S. visitors. Another tax will only accelerate this trend.
"The significant tax increase caused by harmonizing the PST and GST in B.C. will hurt restaurant operators, their customers and their employees. Harmonizing the PST and GST will increase the tax on restaurant meals from 5 percent to 12 percent, and it will result in an annual loss in sales of $750 million, or nearly $50,000 a year for the average restaurant."
Those are the ramifications from the industry themselves, the majority of which are small business operators. [DRAFT TRANSCRIPT ONLY]
I gather from the minister that he hasn't done that consultation. He's not interested in doing that consultation. He's happy to wash his hands and say that it's someone else's responsibility, and hopefully nobody will ask him any more questions around that. [DRAFT TRANSCRIPT ONLY]
The question around the HST. I'd like to ask the minister.... He mentioned the construction industry, the home-building industry. Has the government done any forecasting on the increase in the home-building and renovation industry in terms of the underground economy as a result of the implementation of the HST? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: I'm flattered at the confidence in my presentation skills such that the member opposite would consider my presentations on tax policy a form of cheerleading. However, I think there are a couple of things here that are causing me just a little bit of confusion. [DRAFT TRANSCRIPT ONLY]
I just, in fairly specific ways, explained the small business consultations, 39 of which we've done under this ministry. I've spoken about meeting with chambers of commerce and discussing the HST. I've spoken about doing individual meetings with small business owners in various communities most recently and up in some of our northern communities. Yet the member makes an observation — something about our not doing consultation. So I'm not sure how much more clear I can be on that. [DRAFT TRANSCRIPT ONLY]
The member asked me to distinguish between the work that I do as a minister of the government and the discussion that we're having today. I think that answer is very simple. Those forums are different in very clear ways. [DRAFT TRANSCRIPT ONLY]
This forum is subject to the standing rules of this House, and this forum is specifically in the estimates process. It's specifically focused on financial expenditures of our ministry for 2009 and 2010. To that end, I would be delighted to start on any questions that actually have to do with our expenditures for 2009 and 2010. [DRAFT TRANSCRIPT ONLY]
After the preamble to the most recent question, the question was asked yet again about various analyses on the HST implications. I'll repeat my answer that such analyses are within the purview of the Ministry of Finance. [DRAFT TRANSCRIPT ONLY]
The Chair: The minister has made his point that he's answered these questions. Some of the questions appear to be repetitive in nature. If the member could direct the questions towards the operations portion of the 2009-2010 budget for this ministry. Thank you, Member. [DRAFT TRANSCRIPT ONLY]
J. Kwan: I'm happy to, Mr. Chair. [DRAFT TRANSCRIPT ONLY]
The minister just said that they've done consultation. All along, just prior to that moment, the minister said that that wasn't his responsibility. But now he's finally come clean and said that he's done consultation, and I'm happy to hear that. [DRAFT TRANSCRIPT ONLY]
Can the minister tell us: what is the timeline of that consultation? Who did he talk to? When did the minister talk to these folks? Where did these consultations take place, and what was said? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: The Small Business Roundtable was established in 2005. We have done 39 small business consultations around the province. We continue to do them. [DRAFT TRANSCRIPT ONLY]
Because our government has made it very clear in many tangible and meaningful and repeated ways that we value our small business community and their points of view, I predict that our consultation process with them will continue for many, many years to come. [DRAFT TRANSCRIPT ONLY]
[1530]
J. Kwan: Is the minister saying that the only consultation he's done is with this Small Business Roundtable? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: That's been answered. [DRAFT TRANSCRIPT ONLY]
J. Kwan: The question to the minister is very specific. The only consultation that the minister has done is with the Small Business Roundtable. Is that correct — yes or no? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: I'm not in any way trying to sound obtuse, but the reality is that every engagement that we have in this ministry, every engagement that I personally have as minister, involves speaking with businesses, associations, stakeholders of all types. [DRAFT TRANSCRIPT ONLY]
[D. Hayer in the chair.]
It would be difficult to categorize or characterize the various meetings that I have with chambers of commerce; the main-streeting opportunities to meet with small business owners; the more formal forums, or more structured — they're not more formal; they're open to whomever — the more open and structured forums of the Small Business Roundtable consultations. Those are all forms of consultation. [DRAFT TRANSCRIPT ONLY]
So to the member's point, I have been in dialogue with a variety of businesses, business associations, the Small Business Roundtable proper, if you will — the board of directors — plus the various consultations that we do as part of our ongoing efforts in that area since the day I was given the honour of taking on this responsibility. To that extent, I'm in consultations virtually every day that I have the privilege of holding this job. [DRAFT TRANSCRIPT ONLY]
J. Kwan: Will the minister provide a list of whom he's consulted with, and when? Was the HST talked about, and what was the response? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: There are established processes for members opposite to get access to my calendar. I would suggest the member avail herself of those processes. [DRAFT TRANSCRIPT ONLY]
J. Kwan: So much for openness and accountability. The minister actually just said that we should be talking about the budget. The minister, of course, engaged in consultation, he says, virtually every day. So I'm interested in: whom did he consult with, when and where, and what did they say? But the minister is saying: "Oh, sorry. That information is off-limits; can't tell the public." [DRAFT TRANSCRIPT ONLY]
What does the minister have to hide that he can't actually tell the public? If he's actually done consultation on behalf of the government with the small business community, why can't he tell British Columbians whom he's consulted with, what they had to say, when he did that and where that took place? [DRAFT TRANSCRIPT ONLY]
[1535]
Hon. I. Black: The activities of the ministry of Small Business, Technology and Economic Development and the activities of the minister are predominantly in the public domain. There's very little that is a surprise when it comes to the activities of the minister in particular. [DRAFT TRANSCRIPT ONLY]
When, for example, I go on a tour to engage the small business community on a large variety of issues, if I am speaking at a luncheon with a chamber, it's typically advertised in advance. If I'm doing a Small Business Roundtable consultation, it's advertised in advance on the ministry website. [DRAFT TRANSCRIPT ONLY]
Various associations that would like to come and hear the views on any number of topics very often distribute that information in advance. There's a whole lot that's in the public domain about the activities of the ministry — and the minister, in my case — well before I show up at any given location. [DRAFT TRANSCRIPT ONLY]
With respect to other specific elements of meetings I might have in the day-to-day execution of my duties, I would again refer the member opposite to the processes available for accessing such information. [DRAFT TRANSCRIPT ONLY]
L. Popham: My questioning will be regarding the HST on bicycle purchases. I think there has been a real lack of communication to the public about moving them into transportation choices that are good for our climate change action plan. I think that for almost 30 years bicycles have had an exemption to the social service tax. It included the repairs, I believe, and the helmets, and now we see the HST affecting bicycle purchases and the repairs. [DRAFT TRANSCRIPT ONLY]
I don't think the cycling community, the small business community that sells bicycles, was consulted at all, because I don't think you would find anyone in support of that tax coming in. I'm just going to read a quote from a bike shop in my constituency regarding the HST: [DRAFT TRANSCRIPT ONLY]
"I'm against it. I think it will alienate a lot of people from riding. It's added a cost that is too much. The cost of living is already so exorbitant that the minimum wage isn't going up.
"It's kind of frustrating, especially with things like helmets. Helmets are already a huge chunk of money for some people. You have to wear them or you get a fine, and now they're going up. The cost is going up on other accessories too — oil and grease, patch kits, reflective stickers and locks. All of that was PST-exempt."
[1540]
I'm just wondering at what point this symbolic change of transferring a social tax onto the bicycle was made. I think that there would be no support from anyone in B.C. [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: Again, those questions are best directed to the Ministry of Finance. [DRAFT TRANSCRIPT ONLY]
The Chair: Member, I would remind you at this time to please focus your questions on Vote 40. Some of the other questions might be relevant to the Ministry of Finance. [DRAFT TRANSCRIPT ONLY]
L. Popham: I think that I would like to know whether the minister is hearing that sort of conversation on his consultation tours. [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: I've heard nothing from the retailers of bicycles. I'm advised by my staff that they are similarly lacking in any direct correspondence with people who retail bicycles. [DRAFT TRANSCRIPT ONLY]
M. Sather: It's my pleasure to join the estimates debate for Small Business, Technology and Economic Development. We all know that small business is essential to our province and our well-being, and to the economic development of our province. The minister has done a lot of consulting, apparently, with folks, so he'll know this too. I have to say that the kind of feedback I've been getting lately is quite at odds with what the minister is suggesting that he gets in his consultations. [DRAFT TRANSCRIPT ONLY]
I've gone out and talked to a number of small businesses in my community, including hairdressers, who tell me that they simply cannot…. Their margins are so low. If you follow the success of hairdressing businesses, they're like restaurants. Their margins are low, and it's not easy to make a go of it. They say to me that they cannot absorb the extra cost of the HST and that it's going to negatively affect their business and that the consumer would have to pay the full amount. [DRAFT TRANSCRIPT ONLY]
What would the minister say to these small business owners in my community about how they can deal with this burden that they're going to be faced with? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: While people in the hairdressing community will be able to take advantage of the now tax deductions that are available on cleaning products, hair supply products, chairs, sinks, taps, flooring, furniture and fixtures, etc…. While all of those benefits associated with a flow-through tax like the HST will be available to that community as well, again, these broader questions of the implementation of the tax and the tax policy questions have to be referred to the Ministry of Finance. [DRAFT TRANSCRIPT ONLY]
[1545]
M. Sather: Certainly we're going to be asking the Minister of Finance a lot of questions about the HST, but personally, I'm a little disappointed that the minister is not defending his ministry more fully. I mean, in the first estimates we faced with him he didn't, but I thought this time we might get a bit more. [DRAFT TRANSCRIPT ONLY]
The minister is wrong, in my view, about the impact of this measure. My constituency assistant just e-mailed me a couple of minutes ago to say we just got another 359 petitions delivered to our office today. Everywhere I go, people are concerned. [DRAFT TRANSCRIPT ONLY]
I talked to a dry cleaner — been in business a hundred years — and he's saying that he thinks he's going to see a drop of 20 percent in his business and that it's going to take years for him to recover. Now, these are small businesses that I would hope the minister would want to engage in some sort of support of. [DRAFT TRANSCRIPT ONLY]
He did say something — I will give him that — with regard to the issue of hairdressers. But, you know, it is his bailiwick. It's not just the Minister of Finance — technically it is, but in fact, this is the bread and butter of these people's livelihoods. [DRAFT TRANSCRIPT ONLY]
We've got real estate agents — who I'm thinking generally are supportive of the government — very, very upset in my community. We have a lot of development, a lot of new houses. They're going to be facing new fees, purchasers are, on houses, for lawyers' fees and real estate fees, notwithstanding the fees on the houses themselves. It's going to cost, for the average house, about something in the neighbourhood of — I can't remember the exact figures — $10,000 to $30,000 or more in Maple Ridge. [DRAFT TRANSCRIPT ONLY]
This is all going to have an effect on the well-being of our community and our ability to rebound. In addition to which, people who are trying to save money are hit with administration fees on their mutual funds. All of these things are huge to the small business community, my community and, I think, throughout the province. [DRAFT TRANSCRIPT ONLY]
I won't question the minister about it again, but I would like to hear a statement of support from him for these businesses — a recognition that it is a negative effect for them and that it will be difficult for them. [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: While it is always a source of angst to disappoint a colleague opposite, I should perhaps point out for the member's benefit that I have difficulty accepting a point of criticism on my last appearance in the estimates process, because this is actually my first appearance in the estimates process. So it must have been another one of my outstanding oratory performances that caused him his concern. [DRAFT TRANSCRIPT ONLY]
But nonetheless, I can only refer to the B.C. Chamber of Commerce, the Vancouver Board of Trade and a long list of other organizations that collectively represent tens of thousands of small businesses across British Columbia that have come out strongly and immediately to express their support that this is, without question, the right thing for our economy. [DRAFT TRANSCRIPT ONLY]
[1550]
It is the right thing for small business, and it will benefit British Columbia in a great number of ways, not the least of which, frankly, is job creation and job security. People with jobs are the ones who have the extra money to actually go and avail themselves of the services, including those offered by the businesses that the member references. [DRAFT TRANSCRIPT ONLY]
B. Simpson: The minister had a recent visit up to my riding, so it has to do with his time spent during this term. He did a tour of downtown businesses, I believe. I wonder if the minister could, for the public record, indicate if he'd heard anybody in the downtown Quesnel business area complain about the potential impacts of HST to them when it's put in place. [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: Yes, I had the privilege of being in Quesnel recently, and the member lives in a very beautiful part of the province. I've been there before, and it's always a treat to go back. The people are very, very friendly, and their attitude is incredibly positive. I enjoyed the visit and the hospitality a great deal. One of the best Italian meals I've actually had in a long time was at a restaurant in the member's riding in Quesnel. [DRAFT TRANSCRIPT ONLY]
But to the member's question, I had the opportunity of mainstreeting, for lack of a better phrase. In the businesses in which we went, the HST was not brought up as a conversation point, number one. [DRAFT TRANSCRIPT ONLY]
It would also perhaps interest the member that we did a Small Business Roundtable consultation in Quesnel later that afternoon. During that consultation we tried to elicit from those present their most pressing concerns. We said: "This is what we're hearing so far. What do you think? Do you agree? Are there things we should add to the list?" [DRAFT TRANSCRIPT ONLY]
There are themes that develop through the process which are very instructive to our ministry. They go back to the Small Business Roundtable. In turn, they produce the report that was referenced earlier. [DRAFT TRANSCRIPT ONLY]
The HST was brought up in one very specific context. First of all, as a point of concern, it did not make the three or four key issues that were front and centre for the small businesses in attendance at the small business consultation that day in Quesnel. [DRAFT TRANSCRIPT ONLY]
Where it did come up was as a point of communication, and this has been a theme that I have heard a great deal in my travels on the topic of the HST. Most of the small business community that I've engaged on this topic — and most of it is conversational, most of it is one on one, business owner to business owner — is in the area of communication and understanding. [DRAFT TRANSCRIPT ONLY]
I've found that repeatedly, including in some of the speaking engagements I've had on the HST, when people understand the implications better, when they understand how it's going to be implemented, when they understand the impact of a flow-through tax, people generally are much more relaxed about the topic, and their angst typically dissipates a great deal. [DRAFT TRANSCRIPT ONLY]
So to the extent that the HST came up in our consultation in Quesnel, it did so as a point of communication — people looking for more information. I referenced earlier the Ministry of Finance website, which — surprisingly for a website, never mind the topic at hand — is actually receiving very, very good accolades as being very good in its communication and quite specific and very, very helpful. I would mention that into the record, as well, and for any small businesses that happen to be tuning in at the moment. [DRAFT TRANSCRIPT ONLY]
The Chair: I would like to remind both members at this time: HST is a future policy. It is not in effect right now. Previous Chairs have ruled before that if it's not relevant to the current vote, it's not something that is discussed under the current estimates. Can we keep the questions relevant to Vote 40, please. [DRAFT TRANSCRIPT ONLY]
[1555]
B. Simpson: I'm speaking about the minister's expenditures as a minister under his executive functions in a visit to my community, and exploring what he learned while he was in my community. So it has to do with the vote. [DRAFT TRANSCRIPT ONLY]
Did the minister visit three particular businesses that are right in the core — the minister said that he mainstreeted: Carryall Books, Cycle Logic and a restaurant called Season'D? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: I have to ask the member's indulgence on this one. The number of businesses I've been inside in the last month or so is a little overwhelming. I actually don't remember the names of the specific businesses that day, so I couldn't give the member a specific answer one way or the other on that one question. I could see if I still had it in my notes, but I'm not actually aware, off the top of my head. [DRAFT TRANSCRIPT ONLY]
B. Simpson: Well, the bookstore is the only bookstore in town, so if you visited a bookstore…. Let me get to my point. Those three businesses form the central core of the main street of businesses. If the minister went mainstreeting, he should have seen Ban HST signs on the front door and the window of all of those three stores, and they're all side by side. It would be very hard to miss. [DRAFT TRANSCRIPT ONLY]
I have a twofold question. One, did the minister see those signs? Two, if he did, did he go in and have the decency to ask those folks why, as small business people, they don't want to see HST come into existence? [DRAFT TRANSCRIPT ONLY]
[1600]
Hon. I. Black: Again, we're kind of in that odd area of discussing policy without discussing policy. I'm trying to be respectful of the member's question because I understand how he's trying to link it to our budget estimates for 2009-10. [DRAFT TRANSCRIPT ONLY]
You know, there's no question that despite the overwhelming and immediate support of organizations like the B.C. Chamber of Commerce and others, who represent tens of thousands of small businesses throughout B.C., there are pockets within the business community who are impacted differently by the HST. That has never been a secret. That's never been anything that's been hidden. [DRAFT TRANSCRIPT ONLY]
So to the member's question: am I aware of businesses that have posted signs in their windows? I've certainly seen the signs. That's not in and of itself anything that's a surprise. Again, when we went and visited the businesses we did in Quesnel that day, in the conversations I had with those business owners, they didn't bring it up. I can only go based on what I hear from people that I speak to, of course. But it is perhaps interesting to note that the Quesnel Chamber of Commerce has come out in favour of and does support the HST. [DRAFT TRANSCRIPT ONLY]
B. Simpson: I did mainstreeting, as well, with all those businesses. I simply asked them a question: what do you think about HST? That would be a novel way, actually, for the minister to find that out if it's not being given uninvited. He could hear directly from individuals and then feed that forward into the system. [DRAFT TRANSCRIPT ONLY]
When I visited Caryall Books, they were very concerned, particularly about seniors who are going to have to pay additional costs for their favourite magazines or newspapers, etc. When I visited Cycle Logic, they were very concerned that they were losing the PST exemption on bicycles and repairs and accessories, and that added an additional 7 percent cost in a community that has a very high unemployment rate and a very uncertain future. [DRAFT TRANSCRIPT ONLY]
When I visited Season'D, they're struggling to keep their doors open and see the HST as one of the final insults from the government for failure to consult with the restaurant business. [DRAFT TRANSCRIPT ONLY]
Again, the minister can go in and glad-hand and do mainstreeting in that way, or he could actually go in and ask public policy questions and solicit feedback even though it may not be the feedback that he wishes to hear. [DRAFT TRANSCRIPT ONLY]
My question is: how does the minister take direction from the community or from staff and determine who gets invited to the little closed-door sessions when he goes into communities? Who makes the determination, when you come into a community like Quesnel, on who gets to sit with the minister and have an audience with him? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: Actually, I need you to expand on it. I'm not sure what you mean by closed-door sessions. Most of what we do on these consultation tours is published in advance of our arrival. I need the member to clarify if he could, please. [DRAFT TRANSCRIPT ONLY]
B. Simpson: Well, the minister knows that he had a sit-down meeting with a number of businesses. He actually stated it here on the public record. As part of that dialogue he had a number of things that were given to him in his priority list. [DRAFT TRANSCRIPT ONLY]
The question that I got in my community was: who determined who got invited to sit down and give the minister some sense of what the priorities were in the community? That's the question I'm asking. Who sets up the invitation list, and who gets to come and sit and have an audience with the minister? [DRAFT TRANSCRIPT ONLY]
[1605]
Hon. I. Black: The meeting in question that I referenced earlier and which was cited back a moment ago by the hon. member, was the actual Small Business Roundtable consultation meeting that I was speaking of and that he just referenced. [DRAFT TRANSCRIPT ONLY]
To answer the member's question, the attendance is determined in two ways, both of them public. One of them is by advertising on the ministry website where the Small Business Roundtable consultation meetings will be taking place. There's a general invitation there for people to register, sign up and attend. [DRAFT TRANSCRIPT ONLY]
The second way that happens, as did happen in Quesnel, is that we go to the chamber of commerce or other business associations. We let them know that we are coming, and they, in turn, contact the various member organizations within their communities and encourage them to attend, where possible, and to give the kind of feedback, the candid feedback, the constructive criticism, the encouragement, as it may be. [DRAFT TRANSCRIPT ONLY]
Whatever is on their mind is open for fair-game discussion, and the forum is a very wide-ranging discussion. There's a specific point at the meeting where everyone is given a chance to identify the one major thing that the government could do on a go-forward basis to make a very meaningful difference in their small businesses. [DRAFT TRANSCRIPT ONLY]
It's a very open and frank dialogue, and it's something that we, in our ministry, value a great deal and have a great deal of respect for — the time that these small business owners give to come and share their views with us. [DRAFT TRANSCRIPT ONLY]
B. Simpson: I want to just close off with a couple of questions. The first is that I'm trying to understand how the Minister of Small Business — who is supposed to be the champion for small business — actually champions small business concerns into the executive, into cabinet and into the Finance Minister's office, etc. Because really, what businesses want in the minister is that champion. [DRAFT TRANSCRIPT ONLY]
As the Chair has already pointed out, with respect to today's debate, HST is a forward policy. As yet, the legislation has not come in. There's supposed to be some potential to shape that legislation. I know, for example, that the member for Saanich South raised the whole issue of bicycle stores, and I have the same feedback in my neck of the woods. [DRAFT TRANSCRIPT ONLY]
So how does the minister take forward what he hears into the process of government and attempt to influence future legislation? He's deflecting us to go just talk to the ministry, but the reality is that this is an in-process thing. It is part of the minister's responsibility today to champion small businesses. We're certainly, on this side, hearing a lot of concern from small businesses, and the minister has even admitted in one of his last comments that not all small businesses are happy with this. [DRAFT TRANSCRIPT ONLY]
So if the minister could tell us: how is he taking forward feedback about adjustments that are needed to be made to HST to make it work for the small business community? [DRAFT TRANSCRIPT ONLY]
[1610]
Hon. I. Black: As I mentioned a little earlier, it's the responsibility of our ministry. The member opposite used the word "champion," and I agree with his choice of words. It is our responsibility to champion the views of small business on every topic that's important to them. It's certainly not limited just to a taxation policy on the table today. [DRAFT TRANSCRIPT ONLY]
A couple of answers for the member, because he asked a broad question that had some specific bits within it. I think that, first and foremost, the ongoing nature of the consultation process that we have in place with our small business community does a couple of things. It illustrates our commitment to them when we established and made a permanent part of government the Small Business Roundtable in 2005. [DRAFT TRANSCRIPT ONLY]
It was to do precisely what the member has intimated is important, and I share the member's view on that — that we have to constantly listen to and champion the causes of our small business community. It was the establishment of that round table and the ongoing consultations that we do across British Columbia with our small business community that has led to two important documents. [DRAFT TRANSCRIPT ONLY]
One, as I mentioned earlier, is the Annual Report to Government, written by the Small Business Roundtable. The other document is actually what falls out of that, which is the Action Plan for Small Business. I'm holding a copy of the more recently published one in my hand at the moment. [DRAFT TRANSCRIPT ONLY]
Just for the member's information and anyone viewing at home who is interested, this talks about the priorities for action within government, pertaining to small business. It starts with a section entitled "Action to Date" and talks about the tax saving. It mentions the 68 tax-related measures returning over $2.3 billion in tax savings to small businesses and consumers since 2001. [DRAFT TRANSCRIPT ONLY]
It talks about the specific income tax relief vis-à-vis the small business income tax threshold, which I mentioned earlier, taking it from $200,000 to $400,000. [DRAFT TRANSCRIPT ONLY]
Fewer regulations. I mentioned that as well. We're expected to champion the deregulatory cause in the province, which we did very effectively in our first series of steps, eliminating 152,000 regulations. The small business community told us to do that. We heard their input. We took action on that input. We championed that cause on their behalf, and there are 43 percent fewer regulations on the books today as a result of that. [DRAFT TRANSCRIPT ONLY]
They were obviously supportive of their round table. It's their round table, not government's round table, and it is a vital communications conduit between the small business community and government. [DRAFT TRANSCRIPT ONLY]
They also include provincewide surveys and consultations to date. "The round table itself" — and I'm quoting from the Action Plan — "undertook a provincewide survey and held consultations with small businesses in 18 different communities in '05-06 to identify the key issues and opportunities facing them." That, again, led to many of the policy changes that have been discussed here already. [DRAFT TRANSCRIPT ONLY]
Then they talked about the small business venture capital fund. The request came from our small business community to streamline it. We did that and, as a result, had a fivefold increase in the investment from that area. [DRAFT TRANSCRIPT ONLY]
Then, on a go-forward basis, the priorities for actions that have been identified and that we continue to be focused on are the regional consultations and small business forums. We've just exchanged, in the last hour or so here, some conversations talking about my travels to the northern part of the province, and clearly that's alive and well. [DRAFT TRANSCRIPT ONLY]
The actions that they're looking to have taken in their area are the small business exports. We have a great percentage of our small business communities involved in exports in B.C., so we have to make sure we're attentive to that. [DRAFT TRANSCRIPT ONLY]
Government procurement. They'd like focus on that area. [DRAFT TRANSCRIPT ONLY]
The single business licence is a pilot that we've done, again, at the urging, championing the cause of our small business community to get to a single business licence. We've piloted that with great success — a cross-jurisdictional business licence. There are plans and a stated direction to roll that out across B.C. Again, our small business community came to us, asked us to do that. We championed their cause. [DRAFT TRANSCRIPT ONLY]
We look at BizPaL, which is a marvellous opportunity for any small business owner to basically take care of all their permitting type of requirements. Something that could take a day or two can now be done in about 20 minutes. One-stop shopping through BizPaL, which is an on-line vehicle rolled out by the federal and provincial governments together on a municipality-by-municipality basis — 79 of them so far in B.C. — where you can get all your permitting done across three levels of government. Getting out of the way of small business owners and letting them do what they do well. [DRAFT TRANSCRIPT ONLY]
[1615]
I think there's a long list — and I could continue here, if the member wants to indulge me — with respect to employers' toolkits, the business skill development for small business owners, and the regional access that's required to some of the business resources. Then, one of the priorities for action here is to support a competitive tax structure, and it specifically mentions the review on the sales tax. [DRAFT TRANSCRIPT ONLY]
I think that it's clear that the efforts to listen to our small business community, to champion their cause, have been very, very well established by our government. We will continue to do that. We don't believe that there's a finish line in this exercise. They come to us on a wide range of topics, some of which I've just touched on in quoting from the action plan. [DRAFT TRANSCRIPT ONLY]
I should point out, as well, that this is a living, breathing document. This document gets refreshed and republished every year as a direct result of the input from our small business community. It is with great confidence that I say that we do listen to our small business community. We are listening to them in a manner they've never seen before. They're embracing that opportunity to give government advice and will continue to do so. [DRAFT TRANSCRIPT ONLY]
Now, the member did ask a specific question in the area of advice and consultation, vis-à-vis the HST and input that they may wish to have to the implementation and rollout, etc. The answer that was given to them, as the questions came in of that nature, was the same, quite honestly, that we've been giving here today, which is that the Ministry of Finance does own that responsibility of the rollout of the HST and of hearing the different avenues or the different ways they might consider doing so. [DRAFT TRANSCRIPT ONLY]
Those consultations have been ongoing with the Ministry of Finance, and I've referred our small business community — mainly, I should point out, their associations that had questions and concerns — to work directly with the Ministry of Finance officials. My understanding is that they've done just that. [DRAFT TRANSCRIPT ONLY]
J. Kwan: I wonder if the minister did any championing for the restaurant and food services industry, to tell the Minister of Finance and the Premier that they did not support the HST. [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: I wanted to add a quick follow-up point. To the member who represents Quesnel: I am advised, actually, that an invitation was extended to you to attend that as well. Whether that was lost in the pile of mail that we all get every day or not, I don't know, but I wanted to make sure that the member knew he was welcome and that should we come back he'd be certainly welcome again to attend the Small Business Roundtable in Quesnel. [DRAFT TRANSCRIPT ONLY]
Hon. Chair, the question was asked about the communication with the Premier and the Minister of Finance. The trusted, very open and frank relationship that we have with a variety of business associations, including the restaurateurs, is a relationship that is not owned by this ministry or by this minister in a stand-alone fashion. There are existing and healthy relationships that exist with the Ministry of Finance and the Minister of Finance and indeed the Premier of British Columbia. My understanding is that a dialogue is alive and well and will continue to be alive and well. It does not and has not required my assistance or facilitation. [DRAFT TRANSCRIPT ONLY]
J. Kwan: Of course, that wasn't my question. The minister went on for some length about how he champions the cause of small businesses, and of course, as we know, the food services and restaurant business community is very much part of the small business community. My question was actually about the minister's actions, whether or not he's done any championing for them. I take it from that answer that the answer is no. [DRAFT TRANSCRIPT ONLY]
[1620]
A harmonized goods and services tax is, of course, as the B.C. Liberals said during the election, something they would not contemplate during the platform. We now know that that's different and that the government has flip-flopped on that decision. Peter Simpson, who is the chief executive officer of the Greater Vancouver Home Builders Association, expects that the HST will have serious ramifications for homebuilders and renovators as the cost of doing business goes up — another sector of the small business community that would be tremendously impacted by the HST. [DRAFT TRANSCRIPT ONLY]
The B.C. government is fond of pointing out the implementation of the HST in the maritime provinces, where the HST is linked to increasing capital investment and the general trend to lower prices for consumer goods. Of course, in the maritime provinces harmonization resulted in a decrease in the overall sales tax rates, since the combined PST and GST was 19 percent in Newfoundland and 18.7 percent in Nova Scotia and New Brunswick. The situation in British Columbia, however, is just the opposite, where the harmonization will actually result in an increase in the overall sales tax rate in many areas. [DRAFT TRANSCRIPT ONLY]
I wanted to note that for the record, because there's a significant difference. Again, a lot of the services impacting the small business community and the products which they sell did not have the GST applied to it formerly, and now with the HST, they will have a new tax that they would have to pass onto their consumers. No doubt that would be huge in terms of its implications. [DRAFT TRANSCRIPT ONLY]
I'm wondering: in the minister's cause to champion for the small business community, did he actually ask for any exemptions from the HST in any small business sector? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: The member, in her wide-ranging series of remarks, mentioned the Home Builders of British Columbia, and in doing so touched upon yet another organization with a longstanding open and trusted relationship with our government. Again, when you have longstanding open and trusted relationships where you are able to speak candidly about your views on different things, and we have…. [DRAFT TRANSCRIPT ONLY]
[1625]
As a point in passing, I have engaged with the Home Builders of British Columbia on several occasions in the last number of months since assuming the responsibilities of this ministry. I should say that having been present in their company when they, in turn, have been discussing among themselves, they've been very clear on a couple of key points. [DRAFT TRANSCRIPT ONLY]
It's important that when you're cherry-picking from different areas to bring specific things to a forum such as this, that some of the broader messaging is also understood by the public. When you look at the Home Builders of British Columbia as an example, their opening foray into a discussion such as the HST — in fact, specifically including the HST — often includes comments like: "We know the HST is right for British Columbia. We know that the HST is right for the economy." [DRAFT TRANSCRIPT ONLY]
Then they go on to say: "Our industry, however, has some questions, and we want to understand how the impact to our industry is going to take place and what types of mitigation steps can be taken." Those are reasonable things to ask and reasonable things to say. We have never stood in judgment of their desire to ask those questions and to make those statements. [DRAFT TRANSCRIPT ONLY]
But here's the rub. Those conversations took place and are taking place — as I understand it, as I'm advised — with the Ministry of Finance. At the risk of being very repetitive, the specific conversations about how a new tax of any kind is going to be rolled out are done with the Ministry of Finance. [DRAFT TRANSCRIPT ONLY]
I've engaged in the consultation process that's ongoing both formally and informally since I was given the honour of taking on this responsibility. As a former business person, as somebody who understands full well the responsibilities of running businesses and the challenges associated with it, I'm able to have very good conversations because I speak the language. [DRAFT TRANSCRIPT ONLY]
The reality is that when we reach a point in the conversations where they want to have input, where they have specific questions of policy, where they have policy implementation, they are referred, appropriately, to the Ministry of Finance, which is where I refer the member once again. [DRAFT TRANSCRIPT ONLY]
J. Kwan: The minister waxed eloquent about how he was the champion of all causes for the small business community. So I wonder, in that championship of the causes of the small business community, if he actually undertook to bring their voices to the minister who is going to implement the HST for the province of B.C. or to the Premier's attention. I take it from that answer, frankly, from the minister that the answer is no. He has not. He has not done that work. So much for being the champion. Lip service is cheap. [DRAFT TRANSCRIPT ONLY]
[J. Thornthwaite in the chair.]
Let me just say this, in terms of the implications. I'll close with this, and I'll move on to another area. The CFIB, in fact, did a prebudget survey, and the results actually said that 74 percent of those surveyed said: "Customers would not like higher tax rates on some of my firm's goods or services." The information also says that on the question, "how important would it have been to consult with small businesses prior to announcing the change to the HST?" the results showed 79 percent. [DRAFT TRANSCRIPT ONLY]
Based on this information — and I'm not going into the details of it — the small business community who were surveyed say that they've not been consulted. They say that is very important, that they should have been consulted. Yeah. When the minister says that they have these trusting relationships and so on, part of that trust is contingent on the government doing what they said that they would do prior to the election and following through with it. Guess what. [DRAFT TRANSCRIPT ONLY]
This Liberal government has failed on that score. They said they wouldn't implement the HST, and then after the election they are implementing the HST. Hence, I would say that they've breached that trust, and I think that's most unfortunate. [DRAFT TRANSCRIPT ONLY]
Just for the minister's information…. I don't have all the resources of the minister, you know, but I've gone out and talked to a few people about the HST and the implication for them in their small businesses and what it means to them. There's a long list of people who are opposed. I'll just put some of those organizations on the record. [DRAFT TRANSCRIPT ONLY]
[1630]
The chair of the Chinese Canadian Chef Association, Mike Li, is on the public record against the HST. The Floata Seafood Restaurant — now, I must admit I go to the Floata pretty well every week, because there's a community event there pretty well every week, and to support the community I show up as much as I can. They are against the HST. I talked to the patrons of the Floata restaurant and the people who use their services there, and they are against the HST. [DRAFT TRANSCRIPT ONLY]
The union of the Traditional Chinese Medicine Association of B.C., Tony Zhang — they are against the HST. The owner of the Swiss Spa and beauty salon, Jamie Chan, is against the HST. The operator of Hanson Travel, Hanson Lau, is against the HST. The operator of Wong's Insurance, John Wong, is against the HST. Barry Morley, on behalf of the Community Business and Professionals Association of Canada, is against the HST. [DRAFT TRANSCRIPT ONLY]
Francis Chen, who is representing the Chinese Consumers Association, is against the HST. The owner of The Golden Swan Restaurant, Trevana Ho, is against the HST. The Canadian Alliance of Chinese Associations Helen Quan — she, on behalf of her association, is against the HST. The Traditional Chinese Medicine Association of B.C.'s Brett Studer is against the HST. The Chinese Benevolent Association, the chair John Lum, on behalf of their association — which represents over a hundred organizations in the Lower Mainland — is against the HST. The Chinese Freemasons of Canada — Peter Luke on behalf of the Chinese Freemasons — are against the HST. Ben Tseng, the chair of the Greater Vancouver Taiwanese-Canadian Association — they are against the HST. [DRAFT TRANSCRIPT ONLY]
This is just a sampling of some of the organizations that are against the HST. So, if there was a real champion within the government, somewhere along the way in there, I would expect that they would have actually spoken up on behalf of the community. If there was a minister of small businesses who would actually champion the small business community — on behalf of these organizations and on behalf of the small business community and the individual businesses — that minister would have stood up and voiced their concern. At a minimum, I would anticipate, they would have asked for exemptions, instead of just passing the buck along to someone else. [DRAFT TRANSCRIPT ONLY]
Perhaps — who knows? — if Rick Thorpe was back he would actually be championing that cause on behalf of the small business community. Who knows? I never thought there would come a day that I would miss Rick Thorpe, but maybe somebody on that side of the House — and maybe the minister thinks it's funny — would find a voice to champion the small business community, so that the impact of the HST would be well understood by the government and eliminated for those sectors. [DRAFT TRANSCRIPT ONLY]
I'm now going to move on to the Asia-Pacific trade and investment file. We don't have that much time, but I'm going to move on to that sector. On the question on the Asia-Pacific Business Centre, which the government announced with much fanfare, could the minister please advise: what is the cost to create and maintain the Asia-Pacific Business Centre? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: I realize hit-and-run politics is a style with which this member has developed considerable expertise. I realize that this is a consistent behaviour pattern: that when you don't get the answer that you want, you resort to personal attacks. But I don't play that game. [DRAFT TRANSCRIPT ONLY]
I will tell you that misguided and misinformed as many of the views are of the member opposite, when she speaks of the Canadian Federation of Independent Business, she cherry-picks, again, from elements within a survey, but she fails to mention that the Canadian Federation of Independent Business has come out resoundingly in favour of the HST. [DRAFT TRANSCRIPT ONLY]
It doesn't stop there. I don't have the dozen-and-a-half or so individual businesses that she identified within her constituency, but what I do have is a list and, for the purposes of making sure there is something resembling a balanced view on this subject entered into the record, these don't represent a dozen-and-a-half or so small businesses, I must admit. They represent several hundred thousand businesses in British Columbia. [DRAFT TRANSCRIPT ONLY]
[1635]
So organizations that have come out strongly in favour of the HST as being the right thing for our economy, the right thing for the small business community and the right thing for the employees within this province — and the prosperity of the families that they're trying to raise and grow — include: the B.C. Chamber of Commerce, the Canadian Federation of Independent Business, Retail Council of Canada, the Institute of Chartered Accountants of British Columbia, the Certified General Accountants, the Canadian Manufacturers and Exporters Association, the Business Council of B.C., British Columbia Technology Industry Association, the New Car Dealers Association of B.C., the Conference Board of Canada, B.C. Agriculture Council, Canada West Foundation, the Mining Association of B.C., the Council of Forest Industries, the B.C. Trucking Association, the B.C. Road Builders and Heavy Construction Association, Coast Forest Products Association, the B.C. Construction Association, the B.C. pulp and paper steering committee. [DRAFT TRANSCRIPT ONLY]
The Truck Loggers Association, the Motion Picture Production Industry Association of British Columbia, the Greater Vancouver Gateway Council, the Railway Association of Canada, the Independent Contractors and Businesses Association of B.C., Initiatives Prince George, Canadian Association of Petroleum Producers, the Association for Mineral Exploration B.C. and New Media B.C. [DRAFT TRANSCRIPT ONLY]
These are organizations — and it's a partial list — who have come out in favour of the HST as being the right thing for our economy. They represent a multitude of industries. They represent organizations and small and large businesses alike across the entire province. They understand very clearly, as the people who sign the front of paycheques, who actually create the jobs in this province and who lead to the direct prosperity of the families and small business owners across the province, that this is the right thing for our province. [DRAFT TRANSCRIPT ONLY]
We stand by this policy, the specifics of which can gladly be referred to the Ministry of Finance. But as a small business minister who's actively listening to our small business community on a daily basis, I can tell you that there's support for this within the small business community. I'll continue to listen as minister to the different views that they have on this topic and any others that they wish to bring before me or our ministry. [DRAFT TRANSCRIPT ONLY]
Madam Chair, I would like to answer the member's question with respect to the new topic. I would like to request, if I may, just a five-minute recess. [DRAFT TRANSCRIPT ONLY]
J. Kwan: I will just close with this, then, before we recess. You know what? Maybe we should rename the minister's ministry and call it the big corporation ministry, because a lot of those groups that the minister read out actually are not small business people but rather from the big business community. [DRAFT TRANSCRIPT ONLY]
Having said that, I could match the minister, if he wants, but I'm not going to waste that time in reading off a long list of people that are against the HST as well. The fact of the matter, and I have to say this, is that virtually every single small business person that I speak with has been against the HST since the government actually announced it. [DRAFT TRANSCRIPT ONLY]
What we've heard from this set of estimates is that we don't have a champion of the small business industry. We don't within this government. I haven't heard it in the estimates today. I was hoping that there would be analysis done, that the government, from this ministry, would actually have done that work and brought it forward to the Minister of Finance to make sure they considered that before the announcement of the HST took place. [DRAFT TRANSCRIPT ONLY]
I was hoping that I would hear from the minister that consultation would have been done with the small business sector and the small business community prior to the announcement of the HST implementation, and we haven't heard that. [DRAFT TRANSCRIPT ONLY]
I was hoping that the government would actually have had some review of the impacts of the GST and as it relates to the HST and its implications and what it means. [DRAFT TRANSCRIPT ONLY]
I was hoping that the minister would actually have done some work on a sector-by-sector analysis in terms of the implications of the HST. If he's done that work, maybe he'll table it for the public to see. [DRAFT TRANSCRIPT ONLY]
I was hoping that the minister would actually look to see whether or not the HST would drive some of the small business sector into the underground economy and what that would mean for our province of British Columbia. I heard none of that from this minister. [DRAFT TRANSCRIPT ONLY]
Cheerleading is all very well and fine, but the real work actually comes in doing the consultation and making sure that the reports and the analyses are done, and making sure that is actually tabled with the minister responsible in bringing forward the HST. [DRAFT TRANSCRIPT ONLY]
With that, I'm happy to take a five-minute break. We'll resume, I suppose, on Asia-Pacific. [DRAFT TRANSCRIPT ONLY]
The Chair: Committee A will take a five-minute recess. [DRAFT TRANSCRIPT ONLY]
The committee recessed from 4:39 p.m. to 4:47 p.m.
[J. Thornthwaite in the chair.]
Hon. I. Black: For the information of the member, I wish to quickly correct something. To the member's point in citing the Canadian Federation of Independent Business and their survey work that was done, the Canadian Federation of Independent Business has for many years advocated government analyzing the HST and taking advantage of its benefits and moving in this direction. [DRAFT TRANSCRIPT ONLY]
I wish to clarify, for the benefit of the member opposite, that they have not formally come out in favour of this particular implementation of the HST. While they have encouraged us to look at it because of all the benefits associated with it, I am advised that they are still analyzing their specific position on this. I thought it was appropriate to correct that on the record for the benefit of the member opposite as well as the viewers at home. [DRAFT TRANSCRIPT ONLY]
With respect to the member's specific question on the Asia-Pacific centre, the cost of that was $1.1 million. [DRAFT TRANSCRIPT ONLY]
J. Kwan: I have the Canadian Federation of Independent Business documents in front of me, and I've studied it. I met with them on several occasions about the situation, and they told me exactly where they stand on it. [DRAFT TRANSCRIPT ONLY]
I'm glad that the minister has corrected the record so that there is no misinformation in Hansard with respect to their position, because it's different from what the minister had said. [DRAFT TRANSCRIPT ONLY]
So it's $1.1 million. Could the minister please advise: for the centre, is that $1.1 million for the operating, or is that for the startup capital cost? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: It is $1.118 million of capital expenditures associated with the actual building of the original construction and renovation of that space. [DRAFT TRANSCRIPT ONLY]
J. Kwan: What about the operations cost? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: I just require a little clarification from the member, if I may, please. Is the member asking us about the costs of the physical building itself — the rent, the heat, the electricity, all that good stuff? Or is the member asking us about the cost of the people who are inside the building doing the actual work they do on behalf of the people of British Columbia? [DRAFT TRANSCRIPT ONLY]
[1650]
J. Kwan: All of the above. [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: The cost of running our Asia-Pacific program is about $11.9 million. That is a cost figure which includes not just the physical Asia-Pacific centre located in around Robson Square but also people who work out of Canada Place as well as people who work on international projects for us physically located in offices around the world. The total cost of that program is $11.9 million. [DRAFT TRANSCRIPT ONLY]
J. Kwan: I would like to actually get a breakdown of that program cost on a program-by-program basis. How much of that $11.9 million is for the Asia-Pacific Business Centre operations in terms of the maintenance of the building, in terms of the staffing, in terms of the actual work that they do, for example? Can I get a breakdown of all of that cost on a program-by-program basis and what it is for? How much goes to what to fund what? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: The challenge we have in how we run this particular part of the ministry is that the people involved in delivering the different programs do so from a variety of different locations. If there is, for example, a trade mission being planned, that might involve one or two people who are working at the Asia-Pacific centre, it may involve one or two people who are working at Canada Place several blocks away, and it could involve one or more of our trade representatives in the Pacific Rim area. [DRAFT TRANSCRIPT ONLY]
[1655]
I'm not trying to be evasive at all. I'm just trying to understand how I can best answer the member's question. The work that is done in that physical facility in and around Robson Square called the Asia-Pacific centre and the people who work within that are assigned across a multitude of different projects at any given point in time. Their work could not be contained and identified as being a specific project in and of itself. [DRAFT TRANSCRIPT ONLY]
They are actually contributors on a day-to-day basis to any number of initiatives taking place around the world involving people that are physically located in a lot of different spaces. So coming up with the…. [DRAFT TRANSCRIPT ONLY]
We could certainly come up with a number that says what it costs for rent, heat and electricity and what it costs for the salaries of the people who are there, but I want to ensure that we're providing meaningful information to the member. That information, in and of itself, isn't necessarily going to help determine how the ministry spends money and on what they spend money. But I would welcome input and suggestions from the member opposite. [DRAFT TRANSCRIPT ONLY]
J. Kwan: Maybe the minister can provide me with a master list of all the initiatives that this amount of funding supports — the $11.9 million. One example the minister raised was trade missions. So how many trade missions? From which area did this take place? When did it take place? Where did they go, and how much was spent? How many staff were allocated to it, and what did they achieve? [DRAFT TRANSCRIPT ONLY]
For example, if the minister can actually itemize the list of initiatives which this $11.9 million supports and provide the detailed information on who, when, what, and what was accomplished and the individual expenditures. That would then, perhaps, make it easier for the minister — so that we don't have to go building by building per se but, rather, go in these broader categories that would fit in the definition of how the ministry themselves define it. [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: While the ministry doesn't necessarily package the information that way, they believe they can do so. They will endeavour to do so, and we will forward that information once it's compiled. [DRAFT TRANSCRIPT ONLY]
J. Kwan: I would expect that would be before the session ends. If I could have that information, would that be a reasonable request? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: Which session? [DRAFT TRANSCRIPT ONLY]
J. Kwan: The session end of November. [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: I am advised that our staff believe that they can certainly accommodate that time frame as well. [DRAFT TRANSCRIPT ONLY]
J. Kwan: Can I just focus on trade missions for a minute? Can the minister please advise this House: how many trade missions did the ministry undertake in this fiscal year and where did they go? [DRAFT TRANSCRIPT ONLY]
[1700]
Hon. I. Black: The ministry undertakes a variety, and a fairly extensive list, of both inbound and outbound missions in a given course of a year. My suggestion, if it's agreeable to the member opposite, would be to include that information with the information that she's just requested, because it's an extensive list of both inbound and outbound. [DRAFT TRANSCRIPT ONLY]
I would leave that for the member to comment on, but in doing so, I would simply add the observation that by virtue of the large number of people coming our way in the next four or five months, most of our focus this year is on the inbound-mission end of things. [DRAFT TRANSCRIPT ONLY]
J. Kwan: Sure. The information that the minister can compile could be inbound-outbound, but in two separate categories so that it's clear which ones are which. [DRAFT TRANSCRIPT ONLY]
I would also like with it, on the outbound missions, those who went on these missions and for how long, what the expense associated with these missions was, and what the accomplishment was — the set-out mandate of the mission, what the mission actually accomplished and how you measured it, or how the ministry measured it, more to the point. If the minister can ensure that those questions are answered within each of the missions, I would appreciate it. [DRAFT TRANSCRIPT ONLY]
Then again, on the inbound missions, I guess it would be delegations from elsewhere, where their ministry would be entertaining these delegations. I would assume that's what the minister is referring to. If we could have the information on who these visiting delegations are, what the purpose of their visit is, how much the ministry spent in entertaining these delegations and who was involved in that work, I would appreciate that. [DRAFT TRANSCRIPT ONLY]
The other question I have for the minister is more of a general one: is it the case that this ministry would pay for other ministers who have gone on trade missions? For example, with the member for Burnaby North — just because he's sitting right there, and I know he's travelled to Asia and other places on a number of occasions — is it this ministry which pays for that expenditure? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: One of the very intriguing parts of this ministry, as the minister responsible for the Asia-Pacific, is that I am called upon on occasion to travel abroad on behalf of the government of British Columbia and to go to various meetings in international locations. [DRAFT TRANSCRIPT ONLY]
[1705]
In the event that I am not able to travel, as was identified specifically by the member opposite, the member for Burnaby North, who is also the Parliamentary Secretary for the Asia-Pacific, would be requested by me and by our ministry to travel in my stead. To date that has not been required. [DRAFT TRANSCRIPT ONLY]
J. Kwan: So is the minister saying that all the trade missions which this ministry funds do not support any other MLAs who have travelled on behalf of the government — that is to say, all other MLAs who have travelled on trade missions for whatever reason — that that expenditure does not come out of this ministry? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: The travel budget associated with our ministry with respect to the international travel and, specifically, the Asia-Pacific travel is there to fund the interests of our ministry. Normally, that would involve funding for my travel and those who would be required to support our efforts and my efforts in that endeavour. [DRAFT TRANSCRIPT ONLY]
I'm trying to address the broader question of the member. If we felt in a trade mission some time in the future that we required the company of other private member MLAs, including but not necessarily limited to our Parliamentary Secretary of the Asia-Pacific and the member for Burnaby North, then that would be contemplated on a case-by-case basis. So we wouldn't rule it out, but I can say that to date and to this point in the fiscal year that has not been required, and it has not taken place. [DRAFT TRANSCRIPT ONLY]
J. Kwan: When the minister says "to date," the fiscal year for 2009 has only just begun, so I don't expect that there have been very many trade missions, because we have actually been in the House. Maybe there have been a whole bunch of them, but I expect not. [DRAFT TRANSCRIPT ONLY]
But surely there have been trade missions. Is it the case, then, that as a policy of this ministry, this ministry has never funded MLAs on trade missions? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: Well, we are over seven months into the 12-month fiscal year at this stage, and to this point, anyway, we've not required that type of travel on the part of my office. The question was whether that's ever happened in the past. I can tell that you that it hasn't happened in the term that I have been minister, and I cannot comment on what happened before I was minister. I'm not aware of a policy that precludes or specifically includes the involvement of private MLAs to enhance and support a minister doing business abroad. [DRAFT TRANSCRIPT ONLY]
[1710]
J. Kwan: As the minister knows, prior to the election we didn't actually finish the estimates debate. So for the budget year of 2008-09, the question on…. Maybe the minister can answer this question. Had there been trade missions which government MLAs had gone on that were funded out of the '08-09 budget from this ministry? If so, could the minister provide details on those trade missions. [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: We're a little bit at a disadvantage because we are prepared to talk about '09-10, versus '08-09. The staff behind me advise me that, to their knowledge, there were no trips paid for, for private member MLAs in the previous fiscal year either. Again, my caveat on that is that we came with material to discuss '09-10, not '08-09. But the corporate memory sitting behind me, extensive as it may be, is of the opinion that there were no trips funded for private member MLAs from last year's fiscal expenditures of our ministry as well. [DRAFT TRANSCRIPT ONLY]
J. Kwan: In my experience with trade missions you would often go on a trade mission and make various connections, meet with various delegations, and it goes on day and night, literally, for the entire trade mission, which is a lot of fun. But with that rigorous schedule, you also bring home contacts and leads and follow-up work, which often lasts into future fiscal years. [DRAFT TRANSCRIPT ONLY]
If it's a successful trade mission, it goes on for several years and not just one year, not just in that fiscal year. So certainly that would be the case, I would expect, for this ministry. It certainly was the case when I was in government, so I would expect that's the case now. [DRAFT TRANSCRIPT ONLY]
I would want, if they can't provide this information at this moment, which I can understand, for the minister to actually ask his staff to look back in previous years — let's say in the last four years of trade missions which the ministry had undertaken. Where did they go? How much was expended? And whether or not MLAs also attended. And then, what follow-up work followed from that ministry in terms of leads in pursuing economic opportunities for British Columbia from those trade missions? [DRAFT TRANSCRIPT ONLY]
[1715-1720]
Hon. I. Black: My apologies for the delay in coming up with an answer here. We're struggling with this one for a couple reasons. The first one is that, again, we're here to discuss our expenditures on '09-10 in this area and not a four-year retrospective on some of the initiatives that have taken place by some of these great people. [DRAFT TRANSCRIPT ONLY]
Perhaps more to the point, the challenge we're having is that while we can go back to '08-09 and look at the some of the projects and trips that took place and some of the reports that came out of that, there has been…. First of all, this is a very new initiative. The Asia-Pacific initiative was launched by our government because we recognized the importance of trade with India, with China, with Korea, with Japan, with a lot of the other countries in the Pacific Rim area and the South Asian part of the world. [DRAFT TRANSCRIPT ONLY]
These are very new initiatives. These are very new programs that are in place, and there's a complete new staff added as we build capacity to focus our attention in this area or, in some cases, a turnover of staff. Part of the challenge that we're wrestling with is trying to come up with meaningful information with the resources we have. [DRAFT TRANSCRIPT ONLY]
The concern we have, frankly, in not being able to fulfil the member's request as it's been articulated is that we don't necessarily have the capacity to go back four years and dig up the information in the manner that has been requested. With respect to '08-09, I would offer up to the member that we'll certainly pull together what we have from that fiscal year, when some of the current activities were first started. Hopefully, that will be some use to the member. [DRAFT TRANSCRIPT ONLY]
The Chair: Let me just remind the members that we are trying to stick to Vote 40 and the current fiscal year with regards to these debates. [DRAFT TRANSCRIPT ONLY]
J. Kwan: With respect to how it relates to this fiscal year, let me just outline that for the minister and for the Chair. As I said earlier, presumably trade missions take place. But after you finish the trade mission, you don't just sort of go, "Oh well, that's been done," and there's no follow-up. There is always a lot of follow-up if you're going to chase the leads and the opportunity in which the trade mission presented itself. [DRAFT TRANSCRIPT ONLY]
Oftentimes that takes several years, and that would mean that ongoing resourcing of staff in the current budget would be required to continue on with that work — unless it's the case that there have been no opportunities that arose from those other trade missions to carry on in pursuing economic development opportunities for British Columbia. Then I could accept the answer. [DRAFT TRANSCRIPT ONLY]
To say: "Sorry, there has been nothing that has continued in terms of possibilities for us to pursue in B.C., so therefore, those fiscal years and that expenditure has ended…." I would expect that's not the case, because trade missions go on year after year after year, and those leads often don't die. In fact, when you get them, you don't want them to die. You pursue it like crazy just so you can get it to materialize into something. That's why I'm asking these questions, and I expect that the current expenditure supports that work. [DRAFT TRANSCRIPT ONLY]
I can fully understand that it is difficult to gather all that information together. I do fully understand that. I know that there are two, four, six staff with the minister at the moment, and it's tough to have that kind of detailed information with him. [DRAFT TRANSCRIPT ONLY]
I'm happy to receive it at a later date so that we can go through that information and then figure out the value of these trade missions and what was accomplished and the potential leads that continue to exist and what work the government is doing to continue to pursue those opportunities. [DRAFT TRANSCRIPT ONLY]
[1725]
Hon. I. Black: The challenge we're having with the question is that the way the information is tracked in the ministry is not in the same format or structure as has been asked for by the member. So we're trying to give a meaningful answer without being able to follow a specific kind of structured format of the actual question, because that's not the way information is tracked and collected within the ministry. [DRAFT TRANSCRIPT ONLY]
If I look at, for example, the trade stats from 2004 versus 2008 and the efforts that have been extended in this area, the resulting trade numbers look just…. [DRAFT TRANSCRIPT ONLY]
I'm touching on a couple of examples. Taiwan — we did about $487 million of trade in 2004, compared to 2008, where it was almost $600 million. I look at Japan, which was $3.8 billion in 2004, and it was over $5 billion in 2008. China was $1.2 billion in 2004 and almost doubled to over $2 billion in 2008. South Korea is a similar story — $910 million in 2004, and South Korea was just shy of $2 billion in 2008. [DRAFT TRANSCRIPT ONLY]
So there's no question that the growing importance of the Pacific Rim as a trading partner with British Columbia is there. The efforts focused by our Asia-Pacific initiative seem to be paying off in a fairly material fashion. But to provide the information in the specific format of the member opposite is inconsistent with how it's actually tracked within the ministry. [DRAFT TRANSCRIPT ONLY]
J. Kwan: In what format, then, can the minister provide that information to me? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: The previous couple questions ago of the member, I believe, will answer most of that question with respect to getting the information about the various trade missions that have taken place and some of the details around them. It's a format that we believe should answer most of the member's questions. [DRAFT TRANSCRIPT ONLY]
J. Kwan: Why don't we do it this way then? I'll receive the information. I'll take a look at it and see if it actually answers my questions. If not, then I could perhaps have a follow-up meeting with the minister's staff to canvass other questions that might pop up if it doesn't actually provide the answers that I'm looking for. That might be the best way to do it. [DRAFT TRANSCRIPT ONLY]
If the minister believes that the information his staff will gather together will answer all my questions, that would be great. If it does, then no follow-up would be required. But if it doesn't, then perhaps we could have the minister commit that his staff can meet with me, and we can go through all of that to ensure that I get the answers that I'm looking for. [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: I would be pleased to host the member opposite for a follow-up meeting if the information provided isn't sufficient for her. [DRAFT TRANSCRIPT ONLY]
[1730]
J. Kwan: Excellent — progress. Can I ask the minister this question? Maybe this will be provided in the information that the staff would be gathering for the minister. There was a trade mission that took the Premier to Korea and to Beijing for the Summer Games. Is it safe to assume that those expenditures came out of the Premier's budget and did not come out of this minister's budget? [DRAFT TRANSCRIPT ONLY]
[N. Letnick in the chair.]
Hon. I. Black: Notwithstanding the compilation of the information that has been requested, assuming it's the same mission in question, I am advised that the Premier's costs and those of his staff were not funded out of our ministry. I'm advised that they were paid for by the Premier's office. [DRAFT TRANSCRIPT ONLY]
J. Kwan: Were there staff that came out of this ministry, who supported the work of the Premier in that mission? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: Again, we're struggling a little bit here, because we're using a serious rearview mirror on numbers from a previous year. But it is my understanding, and I'm advised, that the Premier's staff took care of the Premier. [DRAFT TRANSCRIPT ONLY]
J. Kwan: That is to say that nobody from this ministry supported the work of the Premier in his missions. Okay. Good. Then we can canvass the Premier's travels in the Premier's estimates. [DRAFT TRANSCRIPT ONLY]
Could the minister please advise: did this ministry provide funding for the marketing of British Columbia in any other jurisdictions? [DRAFT TRANSCRIPT ONLY]
When I say that, I mean: did the ministry provide any financial support to a marketing campaign — let's say in China — to promote British Columbia for trade opportunities? Let's say in Korea. Let's say in Japan, in India and so on. If so, what is the budget for that, and what were the programs which the ministry undertook? [DRAFT TRANSCRIPT ONLY]
[1735]
Hon. I. Black: The $11.9 million put aside under our ministry budget for this year is focused on marketing British Columbia on an international basis, using a variety of programs and a variety of techniques. [DRAFT TRANSCRIPT ONLY]
It would include, of course, using the nine offices that we have around the world. It would include the website, which is surprisingly –– surprising to many –– a very well-utilized tool for those looking at investing in British Columbia and understanding more about our competitive tax regimes and all the other advantages of investing here. So we are not limited to any one geography in those marketing efforts. [DRAFT TRANSCRIPT ONLY]
J. Kwan: Where did the ministry do their marketing or focus their marketing efforts? The minister says it's not limited to one jurisdiction. Where did the marketing campaign take place, and how much was spent in each of those locations? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: Just a very important distinction, if I may ask the member. [DRAFT TRANSCRIPT ONLY]
There's a difference between advertising and marketing. Marketing is an umbrella exercise in which advertising or an advertising campaign…. I picked up on the word "campaign." I'm not trying to be evasive. I just want to make sure I am answering the question appropriately. [DRAFT TRANSCRIPT ONLY]
An advertising campaign is one of up to a dozen different initiatives that a marketeer or an organization does in marketing, in positioning and whatnot — product placement, price, all those kinds of good things that one does in business. That's all considered part of the marketing exercise. So I would have to ask for clarification on the question, if I may, of the member. [DRAFT TRANSCRIPT ONLY]
J. Kwan: I was going to go into advertising, but in light of the time and given that the minister brought it up, we may as well just cut it short. Why don't we do both of them at the same time? [DRAFT TRANSCRIPT ONLY]
In terms of the marketing endeavours, which ones were actual advertising initiatives that took place? How much did it cost, and where did it take place? What was advertised, actually, would be useful as well. [DRAFT TRANSCRIPT ONLY]
Then in terms of the marketing initiatives that took place –– what were those, where did it take place, and how much did it cost? [DRAFT TRANSCRIPT ONLY]
Again, I do understand. These are kind of detailed questions, and if it's easier for the minister to provide that information to me at a later time with his staff in compiling that information for me, I'm happy to receive that as well. [DRAFT TRANSCRIPT ONLY]
[1740]
Hon. I. Black: For the member's information, for '09-'10 there is no specific advertising campaign per se that has been budgeted for –– identified as an intended expenditure on the part of our ministry. [DRAFT TRANSCRIPT ONLY]
I can say that the other marketing activities that take place within the ministry include things like our website; our inbound and outbound trade missions — a topic on which the member has asked for and will receive information, in addition to what we've already discussed here today. It would include the funding of the sales calls of our various trade representatives around the world, and it would include the printing of marketing collateral which references British Columbia and gets reproduced in a variety of different languages. [DRAFT TRANSCRIPT ONLY]
J. Kwan: What about for the '08-09 budget year, which I know the minister says is the previous budget year? Again, if those advertising and marketing schemes actually yield a return, there may well be follow-up, I would expect, which the ministry would be busy with in this budget cycle. Therefore, expenditure from the staff from this budget cycle would show the connectivity, if you will, from last year's budget. [DRAFT TRANSCRIPT ONLY]
Can the minister tell us if there were any expenditures in the marketing and advertising aspects of the ministry's work in the '08-09 budget? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: I want to be very careful with my answer here. I don't want to give the House or the Chair or the member opposite the impression that I am accepting the logic or establishing precedence vis-à-vis allowing previous years' expenditures to be dragged into the current year's estimates debate. [DRAFT TRANSCRIPT ONLY]
I will say that while I'm very, very pleased to provide, as a courtesy to the member opposite, some of the information that has been requested from years gone past, it's an important distinction to make…. I don't want any silence on my part vis-à-vis the logic that's been expressed about previous years' expenditures somehow tying into current year budget items to be one that I necessarily — or that our ministry or our government or, for that matter, the standing rules of this House — accept. [DRAFT TRANSCRIPT ONLY]
I would, however — again, on a point of courtesy — advise the member that according to the gentlemen sitting behind me…. They are not aware of any advertising that took place at all in the '08-09 year. [DRAFT TRANSCRIPT ONLY]
The Chair: Member, just a reminder to deal with this year's estimates, please. [DRAFT TRANSCRIPT ONLY]
J. Kwan: I've linked these things because, of course, the government is fond of saying, for example, with the Olympic year going forward, that all the work in promoting British Columbia is going to yield a return in economic activity for British Columbia. Therefore, it follows. The fiscal year doesn't just end, and all of a sudden all the activities that took place in that fiscal year stop, and there's no other follow-up and no work being done in the following fiscal year as it relates. [DRAFT TRANSCRIPT ONLY]
These programs are connected if they are to yield the kind of return that one would hope. Therefore, surely I would think that folks would understand the connectedness with respect to that, and that's why I ask these questions. I do think it's important. [DRAFT TRANSCRIPT ONLY]
We now know that none of the marketing and advertising that took place in terms of the funding came out of this ministry. That's good. I assume that if you didn't do the work, then obviously there's no follow-up. [DRAFT TRANSCRIPT ONLY]
Can the minister please tell us, with the trade offices in China and in…? I believe there is a trade office in India. I believe there's an existing one in Korea and in Tokyo and Japan as well. Correct me if I'm wrong, if those are not the right locations. Can the minister provide information to me on: what is the budget to support those trade offices? [DRAFT TRANSCRIPT ONLY]
And is it an actual office that exists in those respective locations, or is it a trade representative? The former Minister of Economic Development, who is now the Minister of Finance, used to advise us in this House that there were trade representatives but not actual trade offices. I believe that has now changed and that the government actually set up trade offices in those countries. If that's the case, could the minister please advise us what the budget allocated was for each of those trade offices? [DRAFT TRANSCRIPT ONLY]
[1745]
Hon. I. Black: Just to make sure, again, that the record is very clear on this point. I didn't want to leave the member with the impression that I didn't understand her logic in trying to connect previous years' expenditures to this year. I did understand the logic, and I understood it well. I simply disagreed with it, and I felt it was important to have the record reflect my disagreement with it. [DRAFT TRANSCRIPT ONLY]
The other comment made by the member, which I also think has to be clarified from our standpoint, is that according to the recollection of the staff present, looking in that rearview mirror, there was no advertising campaign specifically in the year 2008-09. No follow-up was necessarily required on initiatives. [DRAFT TRANSCRIPT ONLY]
I just wanted to point out that follow-up is a regular part of the efforts of the talented team in the Asia-Pacific initiative. Our trade and investment reps around the world, as they do various sales calls and whatnot, will have follow-up meetings and follow-up initiatives that are required. Those are other types of marketing that are taking place. So again, I draw the distinction between advertising as a subset or an example of a broader marketing campaign. [DRAFT TRANSCRIPT ONLY]
I'll use that, if I may, as a segue to the member's question, which had to do with the trade and investment reps. The member asked a couple of questions, which I'll try to answer, the first one being the model deployed for our trade and investment reps around the world. I can confirm for the member that it is the same model that was first deployed by the now Minister of Finance when our government stepped up to the challenge and the opportunity of investing in this area to the betterment of our economy in British Columbia. [DRAFT TRANSCRIPT ONLY]
That model involves independent contractors, competitively procured contractors, in the different locations in Asia. They do have physical offices which have British Columbia–consistent branding on their doors to make sure that we're being consistent in our approach to the world. [DRAFT TRANSCRIPT ONLY]
J. Kwan: So am I understanding the minister correctly that there are trade offices in these countries? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: There's a distinction here — which I thought was important to clarify with our staff — between, if you will, a trade office in a more traditional sense and what we have for the trade and investments reps who, yes, have physical space in the foreign countries in question. [DRAFT TRANSCRIPT ONLY]
A traditional trade office would involve, frankly, more of an expat model, where we would typically have a Canadian move to a foreign jurisdiction, incur the cost of an office and support staff, etc., to help him or her integrate into the local environment, understand it and then try to leverage the benefits of British Columbia in the local environment and encourage trade and investment accordingly. [DRAFT TRANSCRIPT ONLY]
[1750]
The model we have basically says that we take individuals who are already living in these countries, and we contract them. Typically, it's managed space, so they basically sublet a piece of real estate, and they're already integrated into the environment. [DRAFT TRANSCRIPT ONLY]
There's no premium associated with what you would normally have to pay an expat on that model. Their families are part of the community, and children already go to school there, etc. This ends up being a far more cost-effective model for the people of British Columbia to get the same positive result as a more traditional trade office — a bricks-and-mortar type of concept, to which I think the member was referring. [DRAFT TRANSCRIPT ONLY]
J. Kwan: These are trade representatives located in an office somewhere in China, for example, or in India or any one of the countries in which these trade representatives are located. They're not what used to be, in terms of actual trade offices, set up like many other provinces and jurisdictions that have actually actively pursued ensuring that there's a gigantic presence from their country to represent their interests. [DRAFT TRANSCRIPT ONLY]
This is what I'm understanding from the minister, so that's actually very different from the notion of a trade office. We only have a trade representative in China in a physical location that has an office space but is not a trade office, by any stretch of the imagination. Okay, it's good to understand that, because I was under some misdirected information around the setting of the trade offices by the government in China and these other jurisdictions. [DRAFT TRANSCRIPT ONLY]
Noting the time, I'm sure I will have other questions around these issues and that we'll have an opportunity to canvass that perhaps in a meeting with the minister's staff, as well, related to these missions that we're going to be talking about. We can do that. [DRAFT TRANSCRIPT ONLY]
I do want to quickly ask the minister on the U.S. situation. As we now know, the United States had been our primary trading partner, although with things evolving and changing, that is now starting to shift. I'm wondering what the ministry is doing about that and about looking into how to ensure that British Columbia recaptures and maintains our trade share with the United States. [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: Actually, I characterize that quite differently than the member. There's been a very, very deliberate focus, much of which has been reflected in the topic that's currently under discussion with respect to our Asia-Pacific trade and how it has gone up substantially with China and India and South Korea and Japan over the last number of years. This is a crucial thing that we've done. [DRAFT TRANSCRIPT ONLY]
[H. Bloy in the chair.]
If you look at the economies in the province of Ontario and the province of Quebec, which are between 82 percent and 85 percent dependent on the United States, our neighbours to the south — our friends and neighbours and largest customer south of the border — they have a reliance on the United States which puts them in a very precarious position. Frankly, that's one of the reasons why they are considerably more disadvantaged than British Columbia at the moment, as we come through what is one of the biggest economic interruptions we have seen in a generation. [DRAFT TRANSCRIPT ONLY]
Quite frankly, when the largest consumer block in the world stops consuming — their customers just aren't buying — those provinces that have a very high dependency on them are going to be hurting more. You're clearly seeing that in Quebec; you're clearly seeing that in Ontario. Their economies are suffering as a result. Their provincial revenues are taking a hit, and families in those provinces are going to be in considerably more difficulty than in British Columbia for some time to come. [DRAFT TRANSCRIPT ONLY]
Relative to that, let me paint a picture of British Columbia, whose dependency on the United States or the percentage of trade we do with the United States is at 65 percent, not 85 percent. That has allowed us in this difficult economic time, frankly, to look to the Asia-Pacific as a trading alternative to the United States, and we are a far healthier province in terms of diversity of the trade that we have going geographically. [DRAFT TRANSCRIPT ONLY]
There has been a diversity of our economic development across industries as well, but it's a bit of a matrix because it's both across industries and across geographies. That has given us the position of strength that we currently enjoy in this difficult economic climate. [DRAFT TRANSCRIPT ONLY]
[1755]
I would characterize that as a very important, very positive and very deliberate step on the part of government. We do not wish to see that trading balance with the United States go to the 85 percent level — go back, if you will — which is currently causing a great deal of difficulty in the provinces of Ontario and Quebec. [DRAFT TRANSCRIPT ONLY]
J. Kwan: Well, I'm actually very happy to say that the New Democrats worked very hard to expand our trading partners –– in fact, through the work of former Premier Dave Barrett, who was the first Canadian Premier from B.C. who travelled to China to make that connection. In fact, this would be the 35th anniversary of the trade mission that took place with former Premier Dave Barrett. [DRAFT TRANSCRIPT ONLY]
That, of course, was followed up by former Premier Mike Harcourt, who has done a tremendous amount of work in expanding trade opportunities into China and other jurisdictions in his capacity as the former mayor of Vancouver, twinned with Guangzhou, and then later on as the Premier of B.C., twinning Guangdong province with British Columbia. [DRAFT TRANSCRIPT ONLY]
Again, that legacy continues on in terms of the work and then followed by former Premier Glen Clark. So the list sort of goes on, and that is valuable, no doubt, in terms of B.C.'s economy and building the strength on that. [DRAFT TRANSCRIPT ONLY]
But at the same time I recognize that we are also sliding backwards with respect to trade opportunities in the United States. I recognize that we should not put all our eggs in one basket, but having said that, we also need to ensure that we don't lose trade opportunities as well with our traditional partners. [DRAFT TRANSCRIPT ONLY]
My specific question is — and noting the time, if I could get a short answer from the minister: what specific work is the ministry doing in trying to make sure that we don't lose our market share of trade opportunities with the United States? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: I find it humorous to think that the member opposite has the monopoly on long-winded preamble, but the fact is that I'm a little confused only because I'm hearing a contradictory message. [DRAFT TRANSCRIPT ONLY]
On the one hand, in response to the great work that's been done by our Asia-Pacific team expanding there, I'm hearing that there's credit being solicited for the work of previous NDP governments. At the same time, there's a question: why aren't we doing more with America? So I'm trying to reconcile those two things. [DRAFT TRANSCRIPT ONLY]
Let me attempt to do so this way. There's a variety of initiatives underway to expand our trade relationships around the world. As we look to America we do not have the desire to see our relative trading position by percentage. We do not have the desire to see it go as high as it is in Ontario and Quebec. We've spent too many years working to bring that down, to give us the position of relative security that we've got, so we don't want to go back there. [DRAFT TRANSCRIPT ONLY]
The member makes the point — and it's a good point — that we always want to be looking for ways to expand trade and do more business internationally, including with our American friends. [DRAFT TRANSCRIPT ONLY]
I would point to the B.C.-Washington initiative that's currently underway. I would point to the very strong lead that British Columbia has taken in response to the buy-American initiative in the United States and the leadership that's been shown by our Premier taking that message to the federal stage and making sure there's a very strong message of open and fair trade being delivered to the Americans on that very, very important issue. I would point to the fact that we have a trade investment rep in the United States as well. [DRAFT TRANSCRIPT ONLY]
J. Kwan: The notion of actually increasing your market share does not necessarily mean that you need to and should diminish the market share in other countries as well. You can actually drive up both aspects to ensure that we capture those opportunities for B.C. [DRAFT TRANSCRIPT ONLY]
[1800]
I am noting the time, so I'm going to move on very quickly to another area. What is the minister doing with respect to the skill shortage in the high-tech industry in B.C., particularly with respect to the shortage in female technology professionals in British Columbia? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: There's no question that as we come through the economic environment we're in right now, a consistent message coming from our business community will be skill development. That's very clear. We've got a good problem to have perhaps, but we've got a million jobs to fill in the next ten years. We only have about 800,000 people graduating from high school, technical colleges and universities. So we certainly do have that challenge, and it's across many industries. [DRAFT TRANSCRIPT ONLY]
With a bit of a caveat on my answer that a lot of labour market development questions should be referred to the Minister of Advanced Education and Labour Market Development, what I can say is that in the technology industry as I understand it, there are about 55 percent male and 45 percent female in that industry, according to B.C. Stats. While it is not gender parity by simple math examination, it does fare better than some other industries that we have in British Columbia. I'd welcome the member's comments as to where she thinks we might go with that. [DRAFT TRANSCRIPT ONLY]
J. Kwan: The association of technology professionals in B.C., Applied Science Technologists and Technicians of British Columbia, actually recently wrote a letter. In their letter they raised the issue of the skills shortage, particularly in the technology professionals in B.C. among women, and that only 9 percent of the ASTTBC's 9,000-plus technology professionals are in fact female. [DRAFT TRANSCRIPT ONLY]
These are not very good stats, I may add. We can have that discussion — I'd be happy to engage in that discussion with the minister — around initiatives that could be undertaken to enhance that probability. One of the things they pointed out is that young students need to be captured at a younger age in terms of those opportunities — their awareness made — and technology careers promoted among students, their teachers, the counsellors and so on. [DRAFT TRANSCRIPT ONLY]
Co-op programs, internships and those kinds of things would also assist in that regard. For women to access tools, seminars, workshops, etc., so as to better prepare them for the job search, is another tool. These are just some examples with respect to that, and of course, the minister can work collaboratively with other ministries to achieve that goal. [DRAFT TRANSCRIPT ONLY]
[1805]
I'll leave that for a moment and set it aside. I want to quickly just ask this question of the minister. Can he tell us, in this budget, how much of the budget had been set aside for pure advertising and how much of it would be set aside for statutory advertising? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: I'm advised with respect to the previous question, incidentally, that part of the discrepancy between the numbers…. B.C. Stats is a much larger sample size. The number cited by the member is a very specific sample size, particular to the membership of that organization. That could explain the disparity there. [DRAFT TRANSCRIPT ONLY]
With respect to the member's specific question, we do not have an advertising budget in the ministry for the current fiscal year. [DRAFT TRANSCRIPT ONLY]
J. Kwan: So no money will be expended by this ministry on advertising at all, then? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: There are no advertising expenditures planned with respect to the operations of this ministry. [DRAFT TRANSCRIPT ONLY]
J. Kwan: Is there any discretionary spending for this ministry? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: I just need a little more clarification. You can consider travel as a discretionary expenditure. I'd ask the member to be a little more specific just so that I can give her the answer she's looking for. [DRAFT TRANSCRIPT ONLY]
J. Kwan: Maybe more to the point is for the minister to define what he calls discretionary spending. How much is allocated for that? [DRAFT TRANSCRIPT ONLY]
Interjection.
J. Kwan: Sure, travel would be one of them, but that's only one item that I would call discretionary spending. It looks like the minister is very busy in discussion with his staff, so maybe they're coming up with a list of discretionary spending in his ministry. [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: I can advise the member that the travel budget for our ministry was reduced this year by about 26 percent to a total of $424,000. [DRAFT TRANSCRIPT ONLY]
[1810]
J. Kwan: Could the minister actually provide me, not at this time, with a list of the cuts that the ministry has made with respect to their budget this year in comparison to that of last year? [DRAFT TRANSCRIPT ONLY]
Just to clarify and to be more specific, in terms of cuts, I'm talking about the global number and the programs and initiatives that might have been eliminated as a result of that budget cut. [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: There have been two significant reorganizations in our ministry as various responsibilities have gone in and gone out over the last year or so, but we will certainly put our best efforts into putting something together for the member opposite. [DRAFT TRANSCRIPT ONLY]
J. Kwan: Are there any Olympic-related expenditures coming out of the budget of this ministry? [DRAFT TRANSCRIPT ONLY]
Maybe I can assist. Maybe the minister can provide me with that information in writing — if there are Olympic-related expenditures from this ministry, what they are and how much. He can provide that to me at a later date, because I am noting the time. [DRAFT TRANSCRIPT ONLY]
I also note that my colleague, the member for Vancouver–West End, has arrived. He does have one quick set of questions around tax credits. [DRAFT TRANSCRIPT ONLY]
S. Herbert: Thank you to the minister and his staff for their attention to this matter. It's about the digital and new media sector in the province. I know the minister's predecessor took some interest in this sector as well. [DRAFT TRANSCRIPT ONLY]
I'm just wondering if there have been any discussions about potentially advocating for a change in the tax credit structure so that digital effects companies, new media companies and technology–video game kinds of companies might be able to have a similar tax credit as the film sector has with a labour tax credit, as some in the industry have been advocating for? [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: I have not, to my knowledge, had any conversations of this type with the new media industry. I would refer the member…. With respect to some of these tax credit issues, he may wish to canvass them as well with the Minister of Finance. [DRAFT TRANSCRIPT ONLY]
J. Kwan: I just, then, want to clarify my request on Olympic-related expenditures. Could the minister please get on record to say that he will actually provide me with that information? [DRAFT TRANSCRIPT ONLY]
Mr. Chair, while they're deliberating, maybe I can just throw this one out there as well. Did the ministry spend any money or does it intend to spend any money on Olympic tickets to entertain guests from anywhere? [DRAFT TRANSCRIPT ONLY]
[1815]
The Chair: Minister, and noting the hour. [DRAFT TRANSCRIPT ONLY]
Hon. I. Black: Noting the hour indeed, hon. Chair. [DRAFT TRANSCRIPT ONLY]
The ministry has an ongoing program that has been going on for several years with respect to the inbound and the outbound missions, which we canvassed fairly extensively a little over an hour ago — an hour and a half ago now. [DRAFT TRANSCRIPT ONLY]
To the extent that some of those activities will involve the hosting of some of our international guests, there is no question that some of the programs that we've been running for years will come in touch with people who are coming here for the Olympic Games. It's what we do. It's what our team here has done very, very well for a long time, and it's very much a part of the, if you will, going-rate business that that section of our ministry does. [DRAFT TRANSCRIPT ONLY]
There are no specific line items in our ministry that have a specific tagged expenditure related to them. To the member's second question, there are no expenditures planned within our ministry for any Olympic tickets. [DRAFT TRANSCRIPT ONLY]
J. Kwan: I will then simply say that I will follow up in further questions, no doubt, with the information that the minister will provide around these trade missions as they relate to the entertaining of guests and to the Olympics in those meetings. [DRAFT TRANSCRIPT ONLY]
I do want to take a moment to thank the staff and the minister for their agreement in providing the information to the subsequent meetings in which we'll engage in exchange of information and better understanding of the operation and the expenditure of this ministry. [DRAFT TRANSCRIPT ONLY]
With that, I note the hour. [DRAFT TRANSCRIPT ONLY]
Vote 40: ministry operations, $43,830,000 — approved.
Hon. I. Black: I move that the committee rise, report resolution and completion of the Ministry of Small Business, Technology and Economic Development and ask leave to sit again. [DRAFT TRANSCRIPT ONLY]
Motion approved.
The committee rose at 6:18 p.m.
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