Bc Chamber of Commerce Policy & Positions Manual by Michelle Favero

Policy & Positions Manual 2011 - 2012

NTRODUCTION

The BC Chamber of Commerce (the Chamber) is registered under the Societies Act (British Columbia) as a volunteer, not-for-profit association and serves its members as the provincial federation of autonomous community chambers of commerce, boards of trade and corporate members. Known to have been in operation as early as March 1867, the Chamber was re-established in 1951 to: 1. Develop a true cross section of opinions of the British Columbia business community, and effectively present these opinions to government 2. Build a diverse, competitive and sustainable economy that provides opportunity for all who invest, work and live in British Columbia 3. Create and nurture an effective membership organization that provides value and purpose to its members This Policy and Positions Manual contains informed opinions and policy statements adopted by members during the policy session at The Chamber's 59th Annual General Meeting held in Prince George, BC, May 30th and 31st, 2011. The Chamber's policy statements contained herein are submitted or presented to the Provincial and Federal Governments and are individually called to the attention of the Cabinet ministers responsible in order to make it possible for pending government legislation and regulations to reflect the individual opinion of our chamber members. The Policy and Positions Manual also serves as a working document for the Chamber's Policy Review Committee, whose members regularly review and assess the timeliness, importance and scope of the Chamber's policy statements. PLEASE ADDRESS INQUIRIES TO: Jon Garson Vice President, Policy Development The British Columbia Chamber of Commerce Suite 1201, 750 West Pender Street Vancouver, BC V6C 2T8 Telephone: Facsimile: E-mail:

(604) 683-0700, Ext. 113 (604) 683-0416 jgarson@bcchamber.org

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STRUCTURE OF THE 2011 POLICY MANUAL ...................................................................................................................... 7 POLICY PRINCIPLES .................................................................................................................................................................. 8 2011-2012 POLICY PRIORITY AREAS A VIBRANT RESOURCE SECTOR STATEMENT OF POLICY ................................................................................................................................................... 13 ABORIGINAL ISSUES: ACHIEVING CERTAINTY (2011) .............................................................................................. 14 MINERAL EXPLORATION INVESTMENT AND PERMITTING (2011) ......................................................................... 18 DEPENDABLE POWER FOR THE ASIA PACIFIC TRANSPORTATION CORRIDOR (APTC) (2010) ......................... 20 PROVIDING A PLATFORM FOR THE EXPANSION OF THE MINING INDUSTRY IN BC (2010).............................. 22 THE FUTURE OF THE FOREST INDUSTRY (2010) ......................................................................................................... 24 KEMESS POWER LINE (2009) ............................................................................................................................................ 32 MINISTRY SERVICE PLAN – ADDRESSING THE NEEDS OF INDUSTRY (2009) ...................................................... 32 USING FINANCIAL MECHANISMS TO DEVELOP BRITISH COLUMBIAS MINERAL RESOURCES (2009) .......... 34 BRITISH COLUMBIA – A CARBON RICH ECONOMY (2008)........................................................................................ 36 UNIQUE ECONOMIC ADVANTAGES IN BRITISH COLUMBIA THROUGH THE CONSERVATION OF OUR WATER RESOURCES (2008) ....................................................................................................................................... 36 URANIUM AND MINERAL EXPLORATION (2008)......................................................................................................... 39 COMPETITIVE TAXATION AND REGULATION STATEMENT OF POLICY ................................................................................................................................................... 42 A SUSTAINABILE FISCAL POLICY FOR BRITISH COLUMBIA (2010)........................................................................ 43 HST POLICY (2010) .............................................................................................................................................................. 47 UNIFIED ENVIRONMENTAL ASSESSMENT PROCESS (2009) ..................................................................................... 48 THE NEXT PHASE OF REGULATORY REFORM (2006) ................................................................................................. 50 CRIME AND PUBLIC SAFETY STATEMENT OF POLICY ................................................................................................................................................... 53 POLICE AMALGAMATION (2011)..................................................................................................................................... 54 ASSISTING THE REVITALIZATION OF THE URBAN STREET SCENE (2009) ........................................................... 56 CRIME AND PUBLIC SAFETY - FEDERAL ESTABLISHING A REGISTER OF PROLIFIC OFFENDERS AND A REGISTER OF VIOLENT OFFENDERS (2009) ...................................................................................................................................................... 58 INCREASED SENTENCES FOR PROLIFIC OFFENDERS (2009) .................................................................................... 59 REFORM OF LOCAL GOVERNMENT STATEMENT OF POLICY ................................................................................................................................................... 61 CALL FOR PREMIERS COUNCIL ON MUNICIPAL INFRASTRUCTURE (2011) ......................................................... 62 IMPROVING THE EFFICIENCY AND ACCOUNTABILITY OF LOCAL GOVERNMENT IN BC (2011) .................... 63 REVIEW OF REGIONAL GOVERNANCE MODEL IN URBAN AREAS (2011) ............................................................. 66 THE NEED FOR A BUSINESS VOTE IN BC (2011) .......................................................................................................... 68 CREATING EQUITY IN THE PROPERTY TAX SYSTEM OF BRITISH COLUMBIA (2010) ........................................ 70 MOBILE BUSINESS LICENCE FOR ALL MUNICIPAL GOVERNMENTS IN BRITISH COLUMBIA (2010).............. 75 A PROVINCIAL ROLE IN MUNICIPAL AMALGAMATIONS (2009) ............................................................................. 77 DEVELOPMENT PERMIT TIME LINES (2006) ................................................................................................................. 79 SKILLS AND LABOUR SHORTAGE STATEMENT OF POLICY ................................................................................................................................................... 80 ADDRESSING BC‘S TECHNOLOGICAL AND ENGINEERING SKILLS SHORTAGE (2009) ...................................... 81 THE NEED FOR CONTINUED REFORM OF THE CANADIAN IMMIGRATION SYSTEM (2008) .............................. 82 FOREIGN CREDENTIAL ASSESSMENT AND RECOGNITION (2005) .......................................................................... 84 TRANSPORTATION STATEMENT OF POLICY ................................................................................................................................................... 86 COMMERCIAL DESIGNATION OF ALDERGROVE PORT OF ENTRY ESSENTIAL FOR FUTURE CROSS BORDER TRANSPORTATION NEEDS (2011)............................................................................................................................ 87 IMPROVEMENT TO TRANS CANADA HIGHWAY (2011) ............................................................................................. 88 THE NEED FOR AN INNOVATIVE APPROACH TO TRANSPORTATION FOR AN INCREASINGLY URBAN PROVINCE (2011) ......................................................................................................................................................... 89 COORDINATING HIGHWAY INCIDENCE MANAGEMENT (2010) .............................................................................. 92 EAST-WEST CONNECTOR BETWEEN ABBOTSFORD AND HIGHWAY 99 (2010) .................................................... 96

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MOVING FORWARD ON OPEN SKIES (2010).................................................................................................................. 97 ISLAND TRANSPORTATION STRATEGY (2009) .......................................................................................................... 100 SECOND VANCOUVER/SEATTLE PASSENGER TRAIN (2009) .................................................................................. 100 CONSULTATION ON PROVINCIAL PUBLIC TRANSIT PROJECTS (2008) ................................................................ 102 DRIVING ECONOMIC GROWTH BY IMPROVING INFRASTRUCTURE AND ACCESS TO INTERNATIONAL AIRPORTS IN BC (2008) ............................................................................................................................................ 103 RURAL AND SMALL COMMUNITY TRANSIT – THE MISSING PIECE IN BC‘S TRANSPORT PLANS (2008)..... 106 POSITIONS ON SELECTED PROVINCIAL ISSUES ABORIGINAL RELATIONS AND RECONCILIATION MORE SECURE PROPERTY RIGHTS ON RESERVE LANDS (2010) ........................................................................... 111 AGRICULTURE PROVIDING THE RESOURCES TO GROWN THE AGRICULTURE INDUSTRY IN BC (2011) ................................ 112 AQUACULTURE IN BRITISH COLUMBIA (2010) ......................................................................................................... 114 A POLICY FOR MAINTAINING A VIBRANT SPORT FISHING INDUSTRY (2009) ................................................... 115 AGRICULTURAL LAND RESERVE (2005) ..................................................................................................................... 117 EDUCATION ADVANCING LITERACY (2009) ...................................................................................................................................... 118 GETTING THE MOST FROM OUR EDUCATION SYSTEM (2006) ............................................................................... 119 ENERGY AND MINES PROTECTING OUR ENVIRONMENT AND OUR COMPETITIVE EDGE (2011) ......................................................... 121 SUPPORT FOR BC GEOLOGICAL SURVEY (2011) ....................................................................................................... 123 TIME FOR A REVIEW OF THE CLEAN ENERGY ACT (2011) ..................................................................................... 124 ELECTRICAL ENERGY BENEFITS FOR BUSINESS (2009) .......................................................................................... 125 INVESTING THE INFRASTRUCTURE REQUIRED TO CAPITALISE ON BC‘S MINERAL RESOURCES (2009) ... 128 ENERGY AND MINES - HOUSING RENTAL APARTMENT OWNERS IN BC (2011) ............................................................................................................. 129 RENTAL TENANCY ACT (2009) ...................................................................................................................................... 132 REPLACING BC‘S COMMERCIAL TENANCY ACT (2009) .......................................................................................... 133 ENVIRONMENT AFFORDABILITY OF SITE REMEDIATION PROCESS (2009) ..................................................................................... 134 ECONOMIC AND ENVIRONMENTAL SUSTAINABILITY FOR BUSINESS (2009) ................................................... 134 FLOODING PREVENTION (2008)..................................................................................................................................... 136 FRASER RIVER SUSTAINABILITY AND FLOOD MANAGEMENT (2007) ................................................................ 137 FINANCE HST MITIGATION FOR THE RITC FOR THE TOURISM INDUSTRY (2010) .............................................................. 139 PROMOTING HEALTH THROUGH ENCOURAGING PARTICIPATION (2009) ......................................................... 141 SMALL BUSINESS ACCESS TO CAPITAL (2009) .......................................................................................................... 142 FORESTS, LANDS AND NATURAL RESOURCE OPERATIONS DEVELOPING A SKILLED WORKFORCE FOR A GLOBALLY COMPETITIVE VALUE ADDED WOOD PRODUCTS INDUSTRY (2009) ................................................................................................................................. 144 HEALTH HEALTH CRISIS – CANADA NEEDS THOUSANDS OF NEW DOCTORS NOW (2011) ............................................ 149 THE NEED FOR A COMPREHENSIVE CHRONIC DISEASE STRATEGY (2007) ....................................................... 151 A NEW VISION FOR HEALTH CARE (2002) .................................................................................................................. 153 HEALTH CARE (2000) ....................................................................................................................................................... 154 JOBS, TOURISM AND INNNOVATION A LEVEL PLAYING FIELD FOR BC‘S SHIPBUILDING INDUSTRY (2011) ................................................................ 161 ENSURING THAT THE BC INVESTMENT BOARD LEADS TO IMPROVEMENTS FOR PROPONENTS (2011) .... 163 FILLING LABOUR SHORTAGES IN NORHTERN BC – OBSTACLES TO INTERNATIONAL HIRING (2011) ....... 164 FURTHER IMPROVEMENTS TO THE PROVINIAL NOMINEE PROGRAM (PNP) (2011) ......................................... 165 PREDICTABILITY FOR PROVINCIAL AND REGIONAL DESTINATION MARKETING ORGANIZATIONS (2010) ........................................................................................................................................... 166 ECONOMY RECOVERY THROUGH DEVELOPING EFFECTIVE PROCESSES FOR THE INNOVATION AND TECHNOLOGY SECTORS TO REACH LOCAL AND GLOBAL MARKETS (2009) ............................................ 168 ENHANCING BC‘S FILM INDUSTRY (2009) .................................................................................................................. 172 SKILLS TRAINING FOR A NEW ECONOMY (2009) ...................................................................................................... 173

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LABOUR, CITIZENS SERVICES AND OPEN GOVERNMENT LABOUR AND EMPLOYMENT (2011) ............................................................................................................................ 176 OFFICE OF THE PREMIER LEVELLING THE PLAYING FIELD FOR OIL AND GAS COMPANIES (2010) ........................................................... 188 CREATING A RESPONSIVE MECHANISM TO PROTECT COMMUNITIES SHARED USE OF RIVER WATERS (2009) ........................................................................................................................................................... 189 PUBLIC SAFETY AND SOLICITOR GENERAL ENHANCING BC‘S CHARITABLE GAMING POLICY (2011) ....................................................................................... 190 EQUITABLE POLICE FUNDING (2011) ........................................................................................................................... 192 LEVELLING THE PLAYING FIELD FOR LIQUOR RETAIL IN BC (2011) .................................................................. 195 TACKLING THE IMPACT OF METAL THEFT ON BC‘S ECONOMY (2011)............................................................... 197 LIQUOR DISTRIBUTION BRANCH CHANGES TO SUPPORT INDUSTRY CHOICE FOR BRITISH COLUMBIA (2010)............................................................................................................................................................................ 198 LIQUOR REFORM POLICY (2010) ................................................................................................................................... 201 TRANSPORTATION AND INFRASTRUCTURE HIGHWAY TRANSPORTATION IN NE REGION OF BC (2011) ................................................................................... 203 PROVINCIAL AIRPORT INFRASTRUCTURE INVESTMENT PLAN (2011) ............................................................... 203 QUALITY OF SERVICE STANDARDS AND ENFORCEMENT FOR THE TAXI INDUSTRY (2011)......................... 204 SOUTHERN BC TRANSPORTATION INFRASTRUCTURE: HIGHWAY 3 (2011) ....................................................... 208 A LONG TERM STRATEGIC APPROACH TO TRANSPORTATION IN THE SOUTHERN INTERIOR OF BRITISH COLUMBIA (2010) ..................................................................................................................................... 209 CAPITAL FUNDING STABILITY FOR BC‘S INTERNATIONAL AIRPORTS (2010) .................................................. 210 EXTENSION TO VICTORIA INTERNATIONAL RUNWAY (2010)............................................................................... 211 KOOTENAY COLUMBIA NORTH-SOUTH CONNECTOR (2010) ................................................................................ 212 US CUSTOMS PRE-CLEARANCE - BELLEVILLE INTERNATIONAL TERMINAL SECURITY (2010) ................... 213 NORTH COAST FERRY OPERATIONS CRITICAL TO BC ECONOMY AND INFRASTRUCTURE (2009) .............. 215 REGISTRATION, LICENSING AND MANAGEMENT OF OFF-ROAD VEHICLES (ORV‘S) (2009) .......................... 216 POSITIONS ON SELECTED NATIONAL ISSUES CANADA REVENUE AGENCY LEVELING THE PLAYING FIELD FOR OIL AND GAS SERVICE COMPANIES (2010) ............................................ 221 ENVIRONMENT FLOODING PREVENTION (2008)..................................................................................................................................... 222 FRASER RIVER SUSTAINABILITY AND FLOOD MANAGEMENT (2007) ................................................................ 223 FINANCE INDEXING OF NEW GST REBATE (2011) ...................................................................................................................... 225 MARKETING CANADA AS AN INTERNATIONAL DESTINATION (2011) ................................................................ 226 THE LOCKED IN ESTATE TRUST – A RESPONSE TO CANADA‘S COMING PENSION CRISIS (2011) ................ 229 ELIMINATION OF CANADA‘S CAPITAL GAINS TAX (2010) ..................................................................................... 230 RESTRUCTURING THE FCTIP FOR INCREASED TOURISM COMPETITIVENESS (2010) ...................................... 232 ABOLITION OF THE CUMULATIVE NET INVESTMENT LOSS (2009) ...................................................................... 234 ESTABLISHING ALLOWABLE CAPITAL LOSS ON IN-KIND PENSION CONTRIBUTIONS (2009) ....................... 235 INCREASING RENTAL INVENTORY THROUGH FAIR TAX TREATMENT (2009) .................................................. 235 CANADIAN BORDER SERVICE AGENCY – CUSTOMS AND IMMIGRATION PROGRAMS (2008) ...................... 237 FISHERIES AND OCEANS AQUACULTURE IN BRITISH COLUMBIA (2010) ......................................................................................................... 239 A POLICY FOR MAINTAINING A VIBRANT SPORT FISHING INDUSTRY (2009) ................................................... 241 HUMAN RESOURCES AND SKILLS DEVELOPMENT REALLOCATING FEDERAL FUNDING TO DEVELOP A NATIONAL PLAN TO ADDRESS HOMELESSNESS (2011) ............................................................................................................................................ 243 INDIAN AND NORTHERN AFFAIRS MORE SECURE PROPERTY RIGHTS ON RESERVE LANDS (2010) ........................................................................... 247 INDUSTRY SCRUTINY OF THE PAYMENT INDUSTRY – BENEFITTING THE ECONOMY AS A WHOLE (2009) ................... 248 INFRASTRUCTURE CANADA FEDERAL LEGISLATION FOR THE CURRENT GAS TAX PROGRAM (2011) ........................................................... 250 SERVICE CANADA REMOVING INTER-PROVINCIAL TRADE BARRIERS FOR CANADIAN VQA WINES (2011) ............................... 252

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ACKNOWLEDGEMENT OF THE BASE PRINCIPLES OF PENSION REFORM (2010) ............................................... 253 RELOCATION OF FEDERAL GOVERNMENT OFFICES (2009) ................................................................................... 255 TRANSPORT CAPITAL FUNDING STABILITY FOR BC‘S INTERNATIONAL AIRPORTS (2010) .................................................. 256 EXTENSION TO VICTORIA INTERNATIONAL RUNWAY (2010)............................................................................... 256 US CUSTOMS PRE-CLEARANCE - BELLEVILLE INTERNATIONAL TERMINAL SECURITY (2010) ................... 257 CABOTAGE – A NEED TO INCREASE THE NUMBER OF EMPTY CONTAINERS AVAILABLE TO CANADIANS (2009).................................................................................................................................................... 259

The BC Chamber of Commerce 2010-2011 Policy and Positions Manual

TRUCTURE OF THE 2011-2012 POLICY MANUAL

WHAT IS “POLICY” AND WHERE IS IT FOUND? The official public positions of the Chamber on provincial and federal issues are known as its ―policies‖. Policy Principles: To fulfill the Chambers role as the Voice of Business in BC the Chamber movement have adopted a set of [policy principles that are intended to guide the movement‘s internal policy development process. The principles outlined in this section are intended to provide a framework to assesses existing and proposed public policy positions against principles of effective public policy; and to ensures these policy views are effectively positioned and presented to government. Policy Priority Areas: following consultation with member chambers the following areas were adopted as policy priority areas for 2010-2011; A Vibrant Resource Sector Competitive and Vibrant Communities Crime and Public Safety Reform of Local Government Skills and Labour Shortage Transportation This section includes a Statement of Policy for each of these priority areas. This statement provides a framework for why the Chamber believes this must be a priority for government. In addition each of these areas include specific policy recommendations directed to government. Positions on Selected Provincial Issues: which contain the full text of the Chamber's policy positions on major, current provincial issues, as approved by the membership each year at the Annual General Meeting; and Positions on Selected National Issues: which contain the full text of the Chamber's positions on major, current federal issues, as approved by the membership each year at the Annual General Meeting. This material forms the basis for the Chamber's advocacy programs.

The BC Chamber of Commerce 2010-2011 Policy and Positions Manual

OLICY PRINCIPLES

The British Columbia Chamber of Commerce is the strongest provincial voice in support of the free enterprise system and the role business plays in the economic health and vitality of communities throughout the province. Specifically the BC Chamber is charged with: building a diverse, competitive and sustainable economy; facilitating dialogue and public policy positions on behalf of the British Columbia business community; and effectively presenting these positions to government. Preamble Public policy affects the businesses and economy of British Columbia through the impact of: regulation; taxation; and provision of government services, programs, and infrastructure. Principles of Effective Public Policy Regulation Well designed and effectively enforced regulation improves the functioning of the economy by providing certainty for the business community. Certainty is essential for decisions about essential long-term investment in our enterprises. Regulation should achieve environmental and social policy goals without: imposing significant compliance costs on firms or weakening the ability of businesses to adapt to changing economic conditions, technologies and consumer preferences. Damage to business and constrained economic activity occurs when regulations have: disproportionately high compliance costs (particularly administrative costs): inconsistency in the way they are enforced (as unenforced regulation favours those who would ignore them): inequitable in their design and application; restrict competition; or, otherwise create an onerous or uncertain burden on business. The Chamber believes that government must ensure regulation is: Effective - monitored or measured against intended outcomes to meet justified needs Equitable â&#x20AC;&#x201C; non-exclusive in their application to the greatest extent practicable, depending upon the circumstances Cost-Efficient â&#x20AC;&#x201C; the cost of regulation, both in terms of administrative cost to government and cost to the economy is balanced against the intended benefits. Predictable â&#x20AC;&#x201C; business must be comfortable the regulatory landscape is not open to sudden or dramatic change, regulatory changes should not come as a surprise to the regulated sectors, and have appropriate

The BC Chamber of Commerce 2010-2011 Policy and Positions Manual

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transitional provisions. Transparent – both the regulations and the process for establishing them must be open to public input and review Timely – regulations should never been ‗set in stone‘ but rather subject to periodic review; Flexible – regulations, individually and collectively, must be responsive to changing circumstances Integrated and harmonized – wherever practicable governments should integrate and reduce regulatory requirements and streamline assessment and compliance processes (i.e. ‗one project, one process‘) Taxation1 Business recognizes that government has a fundamental role to play in providing the infrastructure, both physical and societal, that is essential to a vibrant, sustainable business climate. The Chamber recognizes that tax revenue must be raised by governments to pay for services, programs and infrastructure, and when properly designed should minimize distortive impacts on business and the economy. Specifically the Chamber believes government must ensure that taxes are; Low but Adequate - just enough to generate revenue required for provision of essential public services and avoid structural deficits. Broad Based - spread over as wide as possible section of the population, or sectors of economy, as the case may be, to minimize the individual tax burden. Efficient - collection effort should not consume a significant portion of tax revenue, and should be implemented in an economically efficient way (e.g. consumption taxes versus income or capital taxes) Tax credits, earmarking and exemptions are generally opposed by the Chamber. Equitable - taxes should apply equally to all individuals or entities in similar economic circumstances. Transparent - to the extent that they interfere with or influence individual decision-making or favour some sector, explicitly acknowledge this intent. Predictable - collection of taxes should reinforce their inevitability and regularity. Simple - tax compliance, assessment and determination should be easily understood by an average taxpayer. Competitive –the overall tax burden must reflect the need for BC to remain competitive on a regional, national and international basis. Well managed: Effective and efficient systems of internal control are in place, and proportionate to the risks they aim to mitigate, yet support innovation and results for Canadians. Government Spending and Programs The provision of government programs are a central responsibility of government. Whether it is education, health care, housing, policing or income assistance, government plays a fundamental role in providing services that support families, business and the broader community. However, government has a greater responsibility to ensure funding dedicated to these programs is appropriately directed and provides value to the taxpayer. Specifically government must ensure programs consider the following questions:

1 ―Taxation‖ includes all methods applied by government to raise revenue, whether or not a tax, government budgeting and the application of fiscal and monetary tools by government.

The BC Chamber of Commerce 2010-2011 Policy and Positions Manual

OLICY PRINCIPLES Public interest – Does the program or area of activity serve the broad public interest? Balance – does it balance the overall needs of society and address the sometimes difficult tradeoffs? For example, health care has increasingly crowded other areas of investment essential to the economic well-being of Canadians. Holistic – Does the activity address the issue holistically i.e. across society and government agencies? Funded appropriately – Is program funding linked to the natural cycle of the underlying investment? i.e. Municipal infrastructure has a different life cycle than education or unemployment insurance. Harness competition & innovation– Does it consider and appropriately harness competition and innovation to control the cost of public services? For example, can delivery costs be lowered through intelligent use of technology, demand management, public-private partnerships or third party delivery? Affordability – Is there broad public support for the level of taxation that is required to support a program and does it appropriately control demand as well as supply? Role of government – is there a legitimate and necessary role for government in this program area or activity, or could the private/voluntary sector play a greater role in whole or in part? Efficiency –If the program or activity continues, how could its efficiency and effectiveness be improved? Accountability – Are Canadians getting value for their tax dollars?

The BC Chamber of Commerce 2010-2011 Policy and Positions Manual

The BC Chamber of Commerce

POLICY PRIORITY AREAS 2011 – 2012

VIBRANT RESOURCE SECTOR

STATEMENT OF POLICY British Columbia is, and will remain for at least the immediate future, a resource economy. The materials derived from mineral and petroleum deposits, as well as the power derived from energy resources, also the activities and necessary infrastructure associated with their discovery, development, and distribution are crucial to the continued economic growth of British Columbia‘s communities, the Province of BC, and Canada as a whole. The Chamber supports the prudent development of British Columbia‘s vast natural resources in a manner that creates competitive advantages for the BC economy, ensures a resource legacy to future generations and creates jobs and income to help support the province‘s economic, social and environmental wellbeing. Further to this, the Chamber believes that BC‘s natural resources must be developed in a sustainable and environmentally responsible manner that directly considers the positions of stakeholders and First Nations across British Columbia. Government plays a critical role in ensuring our resource industries are as competitive as possible on the global stage. This is done through providing the structure and assistance that encourages the development, and investments, in these critical industries. BC is well endowed with these primary resources, and Government at all levels should be energetically promoting the development of those resources for the future economic and social benefit of our society. Although the Chamber advocates careful management and the wise use of the natural environment, the preservation and enhancement of the social and economic environments essential for the welfare of humanity is equally important. To achieve this balance will require continued and enhanced production of resources such as metals, coal, natural gas, industrial minerals, electric power, as well as the maintenance of an environmental product that enhances our reputation as ‗Beautiful BC.‘ Consequently, review processes of proposed resource developments must balance the impact on the natural environment against the social and economic requirements of society for the products recovered. Duplicative review processes between Federal Government agencies or duplication between federal and provincial processes must be eliminated. The approval process must be efficient and transparent, and ―one-stop shopping‖ processes must be used wherever possible to create a more attractive investment climate for project developers. The benefits which should accrue from specific resource development are often threatened by review and permitting delays which undermine investor confidence and result in a loss of market opportunities. Time is of the essence and it is essential that government investigations be made promptly and decisions be rendered expeditiously. Duplicative processes must be eliminated.

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ABORIGINAL ISSUES: ACHIEVING GREATER CERTAINTY (2011) Businesses operate best in a stable and predictable environment, where rights are certain and are protected by the rule of law. The biggest issue for the business community arising from aboriginal claims is uncertainty. The root of the uncertainty in British Columbia is that aboriginal groups assert rights of ownership or control over all of the land in the province, but those rights are not recognized in the legal regime that business operates in. Many activities that businesses pursue, or would wish to pursue with the permission of the Crown, may be seen as impacting these asserted aboriginal rights in some way. It is clear that aboriginal rights and aboriginal title still exist in the province, and are protected by the Constitution, but in most instances the extent of aboriginal rights is unclear, while the extent of aboriginal title still remains completely unknown. Increased Expectations The gap between what the aboriginal and non-aboriginal populations would accept as a reasonable resolution or reconciliation can be perceived to have grown in the last decade. It appears to many of the Chamber‘s members that since the 1997 decision of the Supreme Court of Canada in Delgamuuk‘w, to the effect that aboriginal title has not been extinguished in BC, there has been a trend of increasing expectations by aboriginal people as to the extent and strength of their rights. Two recent and significant events that may have contributed in raising those expectations are the (nonbinding) statements made by Mr Justice Vickers in the William case in November 2007 concerning the extent of aboriginal title of the Tsihlqot‘in people, and the 2009 Recognition and Reconciliation initiative of the Province. Although the ‗R&R‘ initiative was ultimately declared ―dead, dead, dead‖ by the aboriginal leadership themselves, before it died it proposed a very significant degree of control of Provincial resources through ―shared decision making‖, as well as the potential recognition by the Province that aboriginal title existed throughout the whole of the province. The level of aboriginal expectation is probably best indicated by the extent to which a standard of ―free, prior and informed consent‖ was adopted by aboriginal groups as a precondition to business development. This principle was expressly rejected by the Supreme Court of Canada in Haida in 2004, expressly rejected by the Federal Government when it voted against the UN Declaration on the Rights of Indigenous Peoples in 2007, and expressly rejected again by the Federal Government on November 12, 2010 when Canada issued a Statement of Support endorsing the Declaration as an aspirational document but at the same time noted it was a non-legally binding document that does not alter the legal duty to consult. The increased level of expectation of aboriginal people may be a significant factor in the lack of progress in the Treaty process, and the withdrawal of many aboriginal groups from the Treaty process altogether, since what is offered in that process cannot meet the present levels of expectation. Further directions and clarity on what are the legal rights of aboriginal people appears to be necessary to move forward with the ultimate goal of reconciliation. Under our Constitution, the Supreme Court of Canada is the only body that can define the rights of the aboriginal people.

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The BC Chamber of Commerce is not generally of the view that recourse to the Courts is the best way to resolve a dispute. However, the most prudent way of determining whether the expectations of the aboriginal people are supportable is to have more cases concerning the extent of aboriginal rights and title determined by the Supreme Court of Canada. Achieving Long Term Certainty Will Require Negotiation, Litigation and Time Certainty concerning the extent of aboriginal rights and title will most likely be achieved by two methods running in parallel – that is, by a combination of court decisions which will provide better guidance to all parties as to the actual extent of aboriginal rights and title, and by negotiations culminating in final settlements in the Treaty process. It is important to note that achieving certainty concerning the extent of aboriginal rights and title in the province will take a very long time, and it is necessary to create a workable environment for the business community pending final achievement of that goal. Achieving Greater Certainty in the Short Term The challenge for federal and provincial governments is to create an environment in this province which will allow businesses to operate successfully and competitively – and with greater certainty – for the foreseeable future, while the resolution of the aboriginal rights and title issues is still underway. The solution, as noted below, is to institute an effective process of consultation, as suggested by the Supreme Court of Canada in Haida. The most important recent decision that provides how to achieve greater certainty in the short term with respect to aboriginal rights issues is still the November 2004 decision of the Supreme Court of Canada in Haida. The Haida decision – and the companion Taku decision – addressed the process the Crown should follow before granting licences and rights which might affect unproven but asserted claims to aboriginal rights and title. This was further clarified by the decision in Rio Tinto Alcan (2010). The key finding of the Supreme Court of Canada was that the Crown has a duty to consult with aboriginal groups who have not yet established their rights, before granting licences or permits that might affect their asserted rights, and in some circumstances, the Crown has a duty to ‗accommodate‘ those aboriginal groups. The Court made it clear that the duty to consult with aboriginal groups is one owed solely by the Crown, and is not owed by the business community. The Court described the nature of the consultation required as being on a sliding scale, based on an assessment of the strength of the aboriginal claim and the impact of the proposed activity on the asserted aboriginal interest. The Court also commented on ‗accommodation‘, describing it as a process of trying to harmonize the competing interests of development and the wish to protect aboriginal interests. A very interesting part of the decision was a statement by the Court that the Crown (both Federal and Provincial) could establish regulatory schemes to comply with the legal obligation of consultation. In effect, the highest Court in Canada advised the Crown that if a fair process for consultation was The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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established, and followed, then the courts would uphold the decisions that emerged from that process. The consultation principles in Haida were also applied to Treaty rights in Mikesew (2005), and were further clarified in the Treaty context in Little Salmon (2010). From the perspective of the business community the consultation process largely remains a black box with almost no rules. This is a major impediment for people wishing to do business in the province. Achieving greater certainty with respect to the process of aboriginal consultation – with guidelines, timelines, and outcomes that can be relied on – is of critical importance to the business community. There have been some recent improvements in the Provincial process. There does appear to be more effort committed to developing expertise in consultation in the recent reorganizations of the ―dirt ministries‖. There have also been some recent efforts to provide some guidance to the business community. The ―Updated Procedures for meeting Legal Obligations When Consulting First Nations – Interim‖ (May 2010) and the companion ―Guide to Involving Proponents When Consulting First Nations (April 2010) are welcome developments, as are the published policy statements of the Environmental Assessment Office that provide a guide for project proponents in consulting with aboriginal people in both a Treaty and Non-Treaty context. It is still an open question as to whether the recent Protocols with the Haida, Central Coast, and other groups will actually achieve any greater certainty. With respect to the Federal consultation process, Indian and Northern Affairs Canada made an initial effort to address this policy vacuum by releasing its ―Interim Guidelines for Federal Officials to Fulfill the Legal Duty to Consult‖ in February, 2008 and has followed up with the Federal Consultation Guidelines of March 2011. However, these efforts fall short of the regulatory regime that was suggested to both levels of government by the Supreme Court of Canada in 2004 in Haida. According to Wikileaks, a cable from the US Embassy in Ottawa says that ―as long as Canada lacks a clear definition of aboriginal rights or a uniform model for negotiations, effective mechanisms to resolve aboriginal grievances in a timely manner will remain elusive‖. This statement is consistent with the experience of members of the BC Chamber, and the general situation remains that there is little guidance from either Crown as to what are the reasonable outcomes or timing expectations in a consultation process. One additional point is that the Provincial and the Federal governments are often both involved in the same project, with permits required from each of them. There is no real effort to coordinate the consultation processes required for the different permits, so the consultation process is generally repeated by both levels of government, with little or no reference to the other, adding to both expense and delay. Revenue Sharing by the Crown(s) A common companion to the wish of aboriginal groups to have greater control over the decision making process concerning whether a new business activity should proceed, is a wish to receive a portion of the revenue derived from the proposed business activity. Whether an aboriginal group should receive such an economic benefit is a matter of policy that should be determined by the Crown, and not by individual businesses. In Haida – and the decisions that followed - the Court did not propose a practice of paying money as a requirement of ‗accommodation‘ before aboriginal rights had been established. The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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Outside of business activities carried out on reserve or Treaty land, there is no legal basis to suggest that the business community should be paying aboriginal groups for the â&#x20AC;&#x2022;rightâ&#x20AC;&#x2013; to carry on business in the province. There have been some recent developments in the Province to provide for the sharing of Crown revenues on a variety of projects. Examples of this are the Economic Benefits Agreements that have been negotiated between the Province and some members of Treaty 8, and the Resource Revenue Sharing Policy that was announced by the Province for the mining sector in October of 2008, which was implemented on two mining projects in 2010. There also appears to be a movement by the Province to apply a revenue sharing approach in the forestry sector. How the resource revenues and tax base of the province should be shared between the Crown and the aboriginal people ought to be a matter of government policy, and not developed as a consequence of individual arrangements between aboriginal groups and business people based on self-interest and pragmatism, as a consequence of the failure of the Federal and Provincial governments to develop an effective consultation process, or a workable policy around revenue sharing. In summary, while both levels of government have been taking steps in the right direction to assist in achieving greater certainty for business in the province, there is still much room for improvement. THE CHAMBER RECOMMENDS That the Provincial Government work with the Federal Government to:

1. develop harmonized workable regulatory processes for carrying out consultation with the aboriginal people that will amount to the regulatory schemes referred to in Haida; 2. continue to provide clearer guidelines for the business community with respect to its role (if any) in the consultation process; 3. continue to develop policies around revenue sharing with aboriginal people; and 4. make it clear that it is not an expectation or requirement of either Crown that in the course of permit approval businesses must pay aboriginal groups in order to carry on business on land over which the aboriginal people do not have an established legal right.

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MINERAL EXPLORATION INVESTMENT AND PERMITTING (2011) Although mineral exploration expenditures (and mineral tenure acquisition in the province) continues to rise, the proportion of BC‘s expenditures (investment) had been declining relative to other Canadian jurisdictions.

Mineral exploration expenditures are rising because of high commodity prices, but the province of BC cannot take high commodity prices for granted. Even if BC reaches record exploration expenditures of $494 million in 2011 as projected by Natural Resources Canada, the province‘s share of mineral exploration expenditures in Canada will still only be 15.5%. This is a significant improvement from 11.2% in 2009, but well below 18.0% in 2006, and a peak of 29.2% in 1990. Commodity prices are drivers of increased mineral exploration expenditures, but there are several factors that prevent mineral exploration in BC from reaching its full potential. Principal causes for this situation are perceptions that BC denies access to and for exploration without due consideration for mineral potential, or mineral resource values. Further when the province arbitrarily removes mineral lands from exploration and development, it is seen to be unwilling to provide both fair and timely compensation for rights taken. (e.g. Flathead, Boss Power). In both of the examples above rights were taken without due process or consultation; indeed in the Flathead case, an extensive Land Use Plan was prepared with full public participation designated those lands as ‗Special Management‘, a designation which specifically allowed for resource development. Yet despite this direction from the public planning table government has now disallowed mining. If mineral rights are taken from tenure holders under the Parks Act the Act specifies that Fair Market Value compensation is to be paid. The Act defines Fair Market Value is defined as ―the value that would have been paid to the holder of the expropriated mineral title if the title had been sold on the date of

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expropriation, in an open and unrestricted market between informed and prudent parties acting at arm's length.‖ However, if those same rights are not taken under the Park Act there is no established legal mechanism to provide compensation for minerals rights expropriated, and government proceeds in an ad hoc fashion, often forcing companies into long drawn out court proceedings. In the Flathead example given above government is proposing to compensate tenure holders only for ‗sunk costs‘, not Fair Market Value. Further, while the Province has estimated the compensation (required to be paid in this case by the United States under an MOU with BC) at only $17 million, Governor Schweitzer of Montana has publicly stated ―It is British Columbia who is walking away from $7 billion,‖ strongly implying there has been no adequate socio-economic impact analysis completed and disclosed to British Columbians on this withdrawal of their resources from development. The resulting uncertainties in the international investment community, and consequent lack of confidence in the security of their investments, (and that they will actually be able to develop the mineral resource, or that they will receive fair treatment from the province), is negatively impacting our ability to attract investment. Indeed, there is a perception of a ‗BC Discount‘ for these reasons. Concomitant with these perceptions is another perception that exploration companies may not enjoy due process in areas where proposed activities may be controversial, even in areas where Land Use Plans have been negotiated and agreed with all-sector and community involvement and processes. Moreover, mining industry organizations report continuing numerous complaints of government failing to issue exploration permits in a timely manner, that there is a lack of consistency between government offices across the province, and that several government offices are understaffed and under- resourced to fulfill their permitting (and geological) responsibilities. Few of the complainants are willing to go on record for fear of government retribution making it difficult to quantify the extent of the problem; however the numbers of complaints received make clear that there is a problem. An example of understaffing is a current Ministry proposal to have a single Regional Geologist serving both the Smithers and Prince George offices instead of one in each office – effectively one person to cover some 65% of the province. A Regional Geologist is governments ‗eyes and ears‘ on the ground enabling government to keep informed about industry activities and discoveries in their regions. In addition to keeping track of all activities they work with other government agencies and First Nations, regarding mineral resources, geology and mineral exploration and development to facilitate the development of mineral resources and to balance the best interests of the mining industry and the public. They are the first point of contact and assistance for local prospectors and other citizens respecting rocks, minerals and exploration issues, and they perform a very valuable integrity function by conducting site and property visits; they also provide a first line of defence against potential investment market scandal.

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THE CHAMBER RECOMMENDS That the Provincial Government; 1. conduct a full and comprehensive mineral potential analysis of land under consideration for withdrawal from mineral exploration and development, including a full socio-economic impact analysis of lost resource values and opportunities before any additional lands are closed to mineral exploration; 2. provide full and fair market value compensation in a timely manner when expropriating mineral titles; 3. provide increased staff and funding resources to the mineral exploration and mine permitting administrations of provincial ministries, and ensure consistency across the province; and 4. provide Regional Geologists in both Smithers and Prince George offices. DEPENDABLE POWER FOR THE ASIA PACIFIC TRANSPORTATION CORRIDOR (APTC) (2010) The northern BC economy is resource rich, but it is also resource dependant. In order to remain economically sustainable into the future, the region must continue to diversify and increase the depth of its resource development. This economic development, and the businesses committed to developing the resources, require critical infrastructure such as transportation and electric power. Creating products and moving them to markets involves service delivery and production cycles, which need these reliable transportation corridors and stable and dependable electric power grid access. The Asia Pacific Transportation Corridor (APTC), along highway 16 and the CN rail line, links the port of Prince Rupert with Winnipeg and points east. The APTC passes through the Rocky Mountains by way of Yellow Head Pass, east of Tete Jaune Cache. This corridor has all the needed components for economic development except a stable power supply. The area is currently served by 25 KV distribution power lines, which are typically long radial lines spanning out from a higher voltage power grid. Extensions of the 25 KV power lines throughout the North of BC, and the addition of more customers, has resulted in an increase in both the number of power outages and the frequency of poor power quality in the form of low voltage periods and voltage sags and spikes. These power quality issues can damage electrical and electronic equipment. BC Hydro has advised the local area residents and business interests that improvement to power reliability and power quality would next come from development of 138 KV power supply to the area, through upgrading the transmission power supply grid, which would be done by the BC Transmission Corporation. Dependable power supply will help facilitate local economic development, such as; Local meat processing and the opportunity for increased pork, beef and poultry production. Establishment of a root crop industry, including growing, storing, processing, packaging and shipping. Expansion of forestry industry activity and bio-energy production from wood waste. The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

VIBRANT RESOURCE SECTOR Development of the tourism and recreation industry, allowing access to the natural beauty of the area. Creation of small hydro power development and electrical energy supply. Creation of wind energy development and power supply.

The raw materials, processing capabilities, and entrepreneurial business interests exist to support the economy in the north of BC. The transportation corridors also exist, but power supply and grid access are weak. The BC Government is encouraging the development of a green energy industry. Significant untapped resources exist along this APTC corridor in the form of run of the river hydro projects, bio-energy projects and wind generation projects. These independent power producer (IPP) projects cannot proceed without adequate access to the higher voltage power grid. These IPP projects add green power to the provincial grid and contribute to the provincial treasury proportionately for years to come through license fees, development, investment, substantial water license fees, construction employment, and on-going operation and maintenance employment. For example: In the Robson Valley (Tete Jaune Cache to Slim Creek) alone, creek diversion hydro projects have the potential to create jobs and taxable incomes for the province during construction. Such projects along with the construction of a 138 KV transmission line and substation facilities would result in an estimated $300,000 to $500,000 in tax revenues for the provincial economy. In McBride a biomass project planned for a non-operating mill site is projected to cost about $45 million to develop and build. This project would generate estimated net revenues of about $14.79 million and would provide employment in direct jobs as well as for the local logging firms. The heat generated as a by-product would make a seedling greenhouse operation viable and provide for regeneration and renewal of forestry resources. The construction of a 138 KV transmission line and substation would help ensure vital economic development in this rural area of British Columbia. The 138 KV power line access to the provincial power grid would enable this area to contribute green power to support the environmentally sustainable future of the BC economy. The construction of the transmission lines and substation would provide 150 jobs over a three year period and help put local contractors to work, and allow these businesses to upgrade and reinvest in their equipment. The planning for transmission lines in the Province is conducted by the BC Transmission Corporation and is done in concert with BC Hydroâ&#x20AC;&#x2DC;s resource planning staff in regard to potential IPP project clusters. BCTC has advised the local residents and businesses that the upgrading of transmission in the area to 138 KV is not a priority, and is not currently scheduled for development. The Chamber of Commerce has previously recommended to the BC Government the advance development of transmission capabilities to ensure that transmission facilities are available on a timely basis to support economic development throughout the province. The BC Government has initiated a Section 5 Inquiry before the British Columbia Utility Commission to review transmission planning to ensure its timely development. The Section 5 Inquiry has been on hold for the last year while the BC Government deals with its duty to consult with First Nations. Once the Section 5 Inquiry recommences the transmission planning criteria

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will come under review. At this point the importance of economic development particularly to rural communities throughout the province and including the APTC corridor can be asserted. This can be done directly with the BCTC, BC Hydro and the BCUC, and can be augmented by expressions of the importance of these economic development priorities from the BC Government. THE CHAMBER RECOMMENDS That the Provincial Government: 1. through its supervision of BC Hydro ensure that criteria for providing reliable supply of electric power to rural areas of British Columbia, including along the Highway 16 APTC are given greater weight in the planning for transmission line upgrades. 2. through its supervision of BC Hydro and the BC Utilities Commission and the proposed Section 5 Inquiry and or the Integrated Resource Planning process, aimed at providing direction for the 30 year transmission plans for British Columbia, ensure that the transmission planning criteria used includes the objectives of supporting rural economic development and are sufficiently geared to anticipate the economic potential which can be achieved through the provision of higher voltage power supply and access to the higher voltage power grids, including the economic potential available along the APTC. PROVIDING A PLATFORM FOR THE EXPANSION OF THE MINING INDUSTRY IN BC (2010) BC‘s mining industry is an important contributor to our economy, yet we are again losing ground with respect to BC‘s share of exploration investment. Billions of dollars are raised annually by BC based mineral exploration companies, yet exploration expenditures in BC are again declining disproportionately when compared to other Canadian and International jurisdictions. In 2007 a high of 417 million was spent on exploration in British Columbia, but with spending down to $154 million in 2009 BC‘s share of national mineral exploration expenditures has fallen from a high of 18% to only 10.5%. We are losing market share because of serious concerns with process certainty related to permits, land use planning (Flathead etc), and Aboriginal relations which are significantly increasing investor perceptions of risk for investing in British Columbia. This negative perception is confirmed by the 2010 Fraser Institute survey in which British Columbia has dropped 14 places from 24th in 2009 to being ranked 38th as the world‘s most attractive jurisdiction for mineral exploration and development. Recent land use decisions such as the Flathead ‗no-mining‘ ban, and development of other land use designations such as Wildlife Habitat areas and Ungulate Winter Ranges with little to no consultation with the mineral sector is creating considerable uncertainty, and undermining the credibility of the government‘s commitment to certainty and to the legislated ‗Two-Zone‘ model for mining. A recent example is company that has spent millions of dollars exploring and planning a mine only to find out that the Government has implemented Ungulate Winter Ranges and Wildlife Habitat Areas. These areas have been long identified as critical to the potential mining area in question, and include half the proposed tailings pond, calling into question the viability of the proposed mine, which has appeared on government maps for some time.

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No Registration Reserves, which prohibit acquiring mineral tenure in designated areas, were used to require a decision by Minister of Energy, Mines and Petroleum Resources; more recently they are being driven by front-line agencies like Ministry of Environment, with a final decision made by the Chief Gold Commissioner, creating even more uncertainty for industry. The process under which Government Action Regulations (GAR orders) are issued under the Forest and Range Practices Act is fundamentally flawed because it ignores both the energy and mining sectors until the late stages. Sections 2 and 3 of the regulation provide for limitations of action, consultation, and review, and specifically ensure that wildlife protection is balanced with other values. For Example Section 2(1)(b) states the Minister must be satisfied that ―the order would not unduly reduce the supply of timber form British Columbia‘s forests.‖ Unfortunately no such consideration is given to other economic land use values such as mineral exploration and development. Given the small portion of land used for exploration and mining, and given that this minimal land use provides the largest return on investment to the people of British Columbia, the Chamber feels that mineral potential and mine development should be added as key factors to any GAR order being considered by the Minister. THE CHAMBER RECOMMENDS That the Provincial Government: 1. continue to work to enhance the understanding and capacity of Aboriginal Peoples to participate in industry; 2. work with the mineral industry to develop ―user friendly‖ Best Management Practices; 3. continue to work towards better harmonization of the Department of Fisheries and Oceans with provincial fish and fish habitat management activities; 4. develop faster, more stream-lined approval procedures for mineral exploration projects, coordinated by the Ministry of Energy, Mines and Petroleum Resources; 5. reconfirm and continue to actively implement the Two-Zone land use system for mining; 6. educate the public regarding the enormous benefits of the mining industry and its miniscule ―footprint‖; 7. better coordinate activities of MOE with MEMPR and the mineral sector to ensure there is active and early consultation with the mineral sector when actions and government Action Orders which may affect it are being considered; 8. add mineral potential and mine development as key factors for any GAR order being considered by the Minister; and 9. return the authority for No Registration Reserve decision-making to Minister of Energy, Mines and Petroleum Resources.

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THE FUTURE OF THE FOREST INDUSTRY (2010) The forest industry continues to be an important contributor to the Province‘s economy. During normal economic conditions, it sells approximately $18 billion of products annually, contributes about $4 billion to Government revenue each year, and employs more than 200,000 British Columbians. In recent years, the Provincial Government has made significant changes to forest policy, intended to diversify the forest sector, enhance its competitiveness, and improve the regulatory environment in which it operates. The Government is to be complimented for many of these initiatives, as well as its ongoing efforts to strengthen the sector. Ongoing efforts are necessary because the industry still faces very significant challenges that policy changes to date will not overcome. Some of these challenges, such as the global economic downturn that has significantly reduced demand for BC forest products and adversely impacted the people, communities and businesses that depend on the industry is, hopefully, shorter term in nature. Other challenges are of a different nature, and include the Mountain Pine Beetle (MPB) devastation in the Interior, working within the framework of the Softwood Lumber Agreement with the United States (SLA), periodic strengthening of the Canadian dollar that adversely affects exports, marginal investment returns, increasing demands on the forestry land base and, on the Coast, inadequate capital investment and a changing timber profile with increasing emphasis on second growth and hemlock. The complexity of these challenges is compounded by the fact that there are distinct forest industries within the Province both on a regional and product basis. Regionally, there is a coastal industry and an interior industry – each managing similar, but also very different threats and opportunities to the success of the respective regions. The Interior could be seen as at least two separate industries, divided into a southern industry that has many of the same issues as the coast and a northern industry that is dealing with the mountain pine beetle (MPB) epidemic, and, for some policy solutions, should be further subdivided. The industry is also divided into important product segments. There is a logging and forest management segment, with many small, non-integrated firms. There is a primary – or sawmilling – industry that breaks down logs into lumber and residual products. This sawmilling sector is the single largest component of the industry‘s manufacturing sector. In addition, however, there is a very significant secondary industry in value-added wood products and in pulp and paper. The pulp and paper industry depends on the primary breakdown industry for most of its fibre supply in the form of chips; the primary industry relies on the pulp and paper sector for important revenue from the purchase of those residual products. Although bioenergy has been a part of the established forest industry for some time, a bioenergy industry independent of established sawmills and pulp and paper mills is emerging and growing, presenting both opportunities for greater utilization of our forests, jobs and economic diversity as well as challenges in integrating this sector into the established industry without undermining the stability of the existing industry. There is no one solution that will help all industry types but it is clear more change is needed to ensure the province‘s forest industry can be globally competitive and capable of generating the returns on capital necessary to support reinvestment. To its credit, the provincial government continues to work toward solutions for these ongoing issues. In January 2008, it established the Working Roundtable on Forestry. In March 2009, the Roundtable issued The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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its report, ―Moving Toward a High Value, Globally Competitive, Sustainable Forest Industry‖. In 2009, the government recommitted to a commercial forest reserve, issued a discussion paper on being a world leader in growing trees and a discussion paper on promoting further manufacturing of forest products in BC. The government has begun to implement the Roundtable‘s recommendations, and is pursuing additional short and medium term solutions. The Interior Sawmills in the Interior are some of the lowest cost producers of commodity lumber in the world. The Interior has undergone consolidation in recent years, and invested massive amounts of capital to upgrade sawmill technologies. This has been required in order to lower unit production costs in the face of lumber duties arising from the Softwood Lumber Dispute with the US (SLD) that preceded the SLA and to increase the manufacturing efficiencies necessary to effectively saw MPB affected timber. Government‘s recent market-based policy changes, combined with new tenure offerings, have encouraged this investment in lumber as well as in other products such as OSB and wood pellets. The unprecedented MPB infestation continues to present the single largest forestry challenge to Government, industry and Interior communities. However, because of improved understanding of the ―shelf life‖ of attacked trees for lumber production, the policy choices today are different from what they were only a year or so ago. Research has shown that deterioration rates of attacked trees are slower, that it varies by area and, due to new mill technology, lumber recovery is higher than previously thought. While this shelf life was previously thought to be only about 3 years, it is now considered to be 9 to 15 years. This means the Interior lumber industry will have a larger viable supply of timber over a longer period of time than previously recognized. As well, the non-sawlog harvest and roadside residue volumes available for use will be significant as the sawlog of beetle killed timber continues. Although the industry and communities continue to face significant challenges coping with the MPB issue, government policy must adapt to these developments. It is reasonable to continue development of government policy that enables industry and communities to adapt and diversify, but a longer time horizon and, following economic recovery, a less radical, more gradual drop in medium term timber supply and lumber output should be the basis of this policy in many cases. In regions where the solid wood sector will be dramatically reduced, policies need to be developed to promote diversification and access to fibre that will stimulate economic development. THE CHAMBER RECOMMENDS That the Provincial Government: 1. maintain the competitiveness of the lumber Sector. Policies should facilitate the efficient and economic use of the affected timber through: a) a continuing effort to streamline regulatory systems and approval processes; b) further enhance market-driven industry rationalization; and c) ensuring the stumpage system reflects and responds to the market, and to updated and moderated projections regarding the extent and timing of the decline in the quantity and value of this timber and the products that can be produced from it; 2. encourage alternative forest product uses. Policies should encourage uses for residual chips and other by-products that are being generated from pine beetle harvesting and lumber production, which could

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include energy generation and alternative wood products as well as ongoing supply for the pulp and paper sector. Similarly, after taking into account that opportunities for lumber production will continue for a longer period than previously forecast, policies should encourage alternative uses for timber that canâ&#x20AC;&#x2DC;t be converted to lumber. In both cases, the primary target for these policies and new uses should be roadside debris and standing dead timber, as these are significant sources of fibre that, if used in alternative products, should not adversely affect supply for existing forest products; 3. address forest protection. Policies should continue to address forest fire hazards that will increase to the extent that affected timber cannot be utilized; 4. encourage and facilitate new forest investment. In light of the increased harvest levels, policies should, through innovative tenure arrangements, as well as through encouraging more traditional investment, enable the massive silviculture effort and new forest management initiatives that will be required to generate a new, healthy forest that will be economically viable in the long term; 5. revise timber supply projections. Previously projected severe reductions in short and medium term allowable annual harvests in MPB attacked areas should be revised to reflect the evidence of increased shelf life of this timber, which will avoid unnecessary economic hardship to communities and enable mills to financially justify investment in innovative technologies that will allow them to utilize the damaged timber over a longer time frame; and 6. promote new opportunities without undermining existing rights. The foregoing polices should promote new opportunities, uses and investment without undermining existing rights by, in part, encouraging private sector solutions that do not require new rights to be issued by Government or, where new rights are issued by Government, by avoiding the creation of overlapping tenures on the same land base. The Coastal Industry The Coastal Forest Industry, which encompasses the West Coast from Prince Rupert to Southern Vancouver Island, is going through a massive transition. On the southern coast, harvesting levels have declined for a number of reasons: the economics of operating on the coast have become increasingly difficult because of: o the legacy of the Forest Practices Code; o after making a significant effort to replace the Code with forest practices rules that are more results-based, innovative and cost competitive, the Government is now adding costly â&#x20AC;&#x2022;ecosystem-basedâ&#x20AC;&#x2013; management requirements on top of the requirements of its new forest practices rules; and o access to much of the available timber is in remote areas; areas of high value accessible timber have been put into Protected Areas and Parks through environmental and aboriginal pressures; global competition and product substitution has radically reduced the market share and profitability of coastal forest products such as softwood pulp and hemlock lumber; low returns on investment have prevented capital reinvestment in old, inefficient manufacturing facilities resulting in widespread closures of sawmills and pulp mills; lack of reinvestment has resulted in high labour costs and lower productivity levels compared with other competing regions;

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These are reasons why the coastal industry is not the vibrant business it was 25-30 years ago. While Government has made efforts to invoke policy to resolve some of these issues through its revitalization strategy, the industry continues to languish behind the Interior in generating economic returns sufficient to bring about re-investment. Harvesting levels continue to drop and sawmills continue to close. The profile of the timber harvest is changing from the traditional source of old growth timber to smaller diameter, second growth forests (similar in size to the Interior). As such, older mills have closed because of the inability to efficiently process the smaller logs, with much of this supply being exported to the United States for processing. This is because the SLD effectively blocked, or severely restricted, market access to the US from any new coastal small log mill. These issues have not disappeared with the SLA. For the coastal industry to prosper in the future, Government needs to help create a climate that will make the industry competitive in the global marketplace, foster the development of new value-added products, encourage new entrants into the industry and open competitive access to the timber supply. If a new coastal model is to be successful, manufacturers/licensees need to look at focusing on new manufacturing technologies and extracting the maximum value, or margin from the timber resource. Government can aid in developing research chairs to foster new product development. At the same time, small business should be encouraged and have the ability to access timber resources to supply large manufacturers and to create small business opportunities. This will enhance employment stability in resource communities and bring about increased economic development. THE CHAMBER RECOMMENDS That the Provincial Government: 1. create incentives for new entrants and existing firms to invest capital in manufacturing facilities aimed at making products from second growth timber. Such incentives would include investment tax credits on plant and equipment purchases, employment incentives, lower municipal taxation, and reduced logging tax rates; 2. apply similar incentives to the harvesting sector, in an effort to encourage innovation to reduce the high cost of getting fibre/logs to market; and 3. foster diversification and increased markets for logs through competitive bids and new tenure opportunities or diversification. Encourage the extraction of lower value timber from cut blocks through stumpage rates that reflect the market value of lower value timber or other incentives to fully utilize the coastal timber profile. In addition to these region-specific issues and recommendations, there are actions the Provincial Government can take on matters having province-wide application, including the following:

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Forestry Revitalization Timber, Including BC Timber Sales (BCTS) With the implementation of the ―Forestry Revitalization Act‖, about 20% of the allowable annual cut held by major licenses was taken back for redistribution to First Nations, community forests and the competitive timber sales program under BCTS. Since BCTS, the new First Nations and community licensees have not been accustomed to operating programs to develop and harvest this amount of timber, there have been difficulties accessing timber that was available in the past. Together with previously allotted volumes, BCTS is now responsible for about 20% of the Crown timber in BC No other single entity controls this much of the Province‘s timber harvest. This represents a major source of work for timber harvesters and a major source of fibre supply for manufacturing facilities. In addition, with the government implementing market-based pricing for stumpage, bids on BCTS timber influence the stumpage that is paid on much of the rest of the provincial timber harvest. It is therefore essential that the BCTS program operate on a commercial basis. Rather than acting as a regulator or policy maker, its focus should be on the needs of the market for wood. In this role it should not be influenced by issues related to impacts on Government revenue. Being a regulatory and policy arm is the legitimate role of the Provincial Government and the Ministry of Forests and Ranges, not an organization with a mandate to get wood into the marketplace. However, in a recent reorganization of the Ministry of Forests, BCTS has been re-integrated into the Ministry, and its formerly independent Assistant Deputy Minister is now also responsible for the Ministry‘s field operations. Rather than becoming more independent, BCTS may become subject to more bureaucratic constraints imposed by government objectives and goals. As well, BCTS is not tendering the volume of timber annually, in conjunction with what was taken-back by the Government under the Bill 28 plan. This has created less tender opportunities for BCTS registrants and limited the amount of timber available for harvest. It also distorts the influence of BCTS bids on stumpage for other tenures because it does not include the low value, high cost wood that other licensees must harvest. Further distortion occurs because government does not permit circumstances where BCTS receives no bids on wood it offers for sale to be treated as evidence of low market values in the stumpage system. For BCTS, and those depending on it to make wood available in the marketplace, in order to succeed, it must have a mandate that requires clear performance and accountability measures, cost control and the flexibility to pursue a business-like vision. THE CHAMBER RECOMMENDS That the Provincial Government: 1. assist new tenure holders such as First Nations and communities, to facilitate development and harvesting of their tenures and develop mechanisms to put up competitively bid sales on these tenures that could possibly be included as additional evidence of market value in the stumpage system; 2. not subsume the BC Timber Sales Program into the Government‘s regulatory and policy arm but, rather, must as an independent enterprise, provide: The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

VIBRANT RESOURCE SECTOR a) as its first priority, a credible reference point for costs and pricing of timber harvested from public land in BC; and b) as its second priority, be a reliable and consistent supply of timber under all market conditions through open and competitive auctions, subject to meeting key requirement of being the reference for cost and price.

First Nations In addition to being new tenure holders, First Nations are involved in the development and harvesting of other tenures as a result of their aboriginal rights and the related duty of government to consult and, in appropriate circumstances, accommodate First Nations. The timely fulfillment of this duty is integral to efficient forest operations on these other tenures, and it is also necessary for First Nations to have a greater hand in being part of the industry. The Provincial Government and First Nations have made significant efforts to enter into agreements that improve the consultation and accommodation process. However, not all First Nations have entered into these agreements, and more recent versions of these agreements seem to be less beneficial to ensuring an efficient process and certainty of outcome. Further, government has recently entered into shared decision making arrangements with First Nations, whereby the First Nation can, jointly with government, make decisions that affect the size and nature of forest operations of other tenure holders. Consultation will be improved for all concerned if it follows the principles established by the Supreme Court of Canada in the Haida case, by focusing on the key issues that can affect aboriginal rights or title, doing so as early in the process as is reasonable to ensure the consultation is effective and reflecting that First Nations do not have a veto over land use decisions. THE CHAMBER RECOMMENDS That the Provincial Government: 1. continue efforts to ensure that all First Nations have these agreements in place, where applicable, and that the agreements facilitate a more efficient consultation and accommodation process; and 2. follow the principles of consultation and accommodation established by the Supreme Court of Canada, and not: a) implement shared decision making, if that means a veto on land use decisions; or b) require in legislation or harvesting agreements decisions from government that attract the duty to consult, when the decisions are on issues that should not require government adjudication or at stages late in the process when earlier decisions have already effectively dealt with the issue. Commercial Forest Land Base In 2001, the Provincial Government promised it would establish a â&#x20AC;&#x2014;Working Forestâ&#x20AC;&#x2DC; to provide greater certainty to the forest industry and that there would be sufficient land dedicated to forestry purposes over the long term. The government did not implement that promise. In March 2009, the Working Roundtable on Forestry recommended that commercial forest land reserves be established on key portions of the forest landbase where wood production will be a primary focus.

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The Provincial Government is now promising again to establish a commercial forest reserve, but still has not done so. Moreover, although the details of this promise are not fully known, governmentâ&#x20AC;&#x2DC;s thinking may mean the value of this initiative is not fully realized. First, it might cover only a relatively small landbase and potentially apply only to where intensive silviculture will be undertaken. If so, this will produce only modest benefits, as intensive silviculture is economically viable only if it can increase the allowable cut in the present. This is possible only if there is substantial available mature timber elsewhere. The greatest current threat to intensive silviculture and long term timber supply is not threats to the areas where intensive silviculture might be performed, but to the areas of existing mature timber where many of its benefits can be realized. The greatest current threats to these areas is not conversion to other commercial uses and rights of way (although that can be significant) but rather government decisions, often made by government staff, to place constraints on practicing forestry, often through decisions under the Government Actions Regulation and the Land Use Objectives Regulation. There are many changes to government policy that could enhance forestry opportunities. Whatever its other decisions may be regarding a commercial forest reserve, by reviewing these government staff decisions to date to assess their impacts on future timber supply, revising them as necessary to fit within governmentâ&#x20AC;&#x2DC;s targets for limiting adverse impacts on timber supply and costs and by more carefully regulating such decisions in the future to stay within those targets, government can contribute significantly to ensuring an adequate timber supply today and in the future. Second, the government may extend this protection only to new competitively bid licences or areas. However, the vast majority of harvesting rights are currently allocated. A policy that does not enable existing tenures or areas to become part of the commercial forest reserve precludes the majority of forest operations in the Province.

THE CHAMBER RECOMMENDS That the Provincial Government: 1.

include as key components of its commercial forest reserve initiative: a) Improved regulation of government staff decisions under the Government Actions Regulation and the Land Use Objectives Regulation to bring those decisions within governmentâ&#x20AC;&#x2DC;s impact targets; b) Implementation of the reserve to enhance the protection of the commercial forest landbase generally, not for the purpose of favouring certain new licences over others, including those portions of the landbase subject to existing forest tenures; and

bring the 9 year policy development period to an end by implementing this new policy as soon as practicable.

Other The Provincial Government can also enhance industry competitiveness through policies that extend beyond the timber resource, including policies that affect the availability of skilled workers, the development of new products and forest industries, the viability of existing manufacturing facilities and the demand for BC forest products, domestically and internationally.

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In many communities in the province, a significant source of local government revenue is derived from forest products facilities. As local government costs increase, the tax burden on these facilities can make them non-competitive. This serves neither the needs of the community, nor the facility. In a separate policy, the Chamber is recommending Provincial Government action on this issue. In market development, the two senior levels of Government and the forest industry have significant programs, but they are not as well co-ordinated as they could be. Domestically, all three levels of government, together with industry, have promoted the use of wood in important projects, ranging from Richmond City Hall, to the University of Northern British Columbia, to the 2010 Olympic Games venues. It is important that new projects be continually added to this list. The Provincial Government has formalized this initiative as its Wood First program for public buildings in BC and is seeking to extend this to other Canadian jurisdictions. The SLD is one of the more obvious examples of trade barriers against BC forest products, but these barriers come in many forms, including unfavourable building and fire codes. As these barriers are erected by governments, the Provincial and Federal Governments have significant roles to play in fighting them. Although the new SLA has resolved the lumber dispute, the issue now becomes one of ensuring it does not have unjustified adverse implications on BCâ&#x20AC;&#x2DC;s forest industry. THE CHAMBER RECOMMENDS That the Provincial Government: 1. encourage innovative secondary forest products industries such as bioenergy and engineered wood products through commercially based arrangements with primary producers and timber harvesters; 2. where it opts to provide direct tenure opportunities to secondary producers that overlap existing tenures, ensure forest management obligations are fairly and reasonably apportioned between the new and the existing tenures; 3. enhance the competitiveness of all forest products manufacturing facilities through improved taxation and revenue sharing arrangements at all levels of government; 4. promote labour force and skills training applicable to the forest industry; 5. enhance the competitiveness of secondary industries through training targeted at the value-added industries in business and financial planning and similar skills for entrepreneurs; 6. continue market development and market access policies in co-operation with the Federal Government and the forest industry, and improve co-ordination of market development programs among these three key players to maximize the value of investment in these programs and encourage the use of BC forest products in the province, in Canada and in international markets, including ongoing promotion and expansion of the Wood First program; and 7. continue to work co-operatively with industry and the Federal Government to address tariff and nontariff trade barriers against BC forest products and, in particular, monitor the effects of the SLA and act expeditiously where problems arise in its application.

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KEMESS POWER LINE (2009) Kemess South Mine, an open pit operation with 400 full-time employees, is approaching the end of its mine life as ore reserves are nearing exhaustion. An integral part of mine closure is the requirement by Government for the removal of infrastructure and reclamation by the company. Infrastructure in this case includes an important power line which could be used in future to supply needed power to several potential new mines, including the Cirque (Stronsay) lead-zinc deposit and the Kemess North gold-copper deposit. Additionally, there is interest for power generation plants that would benefit from using this line (or at least the right of way to add lines) to transport power into the provincial power grid. These projects would be very helpful industries in diversifying our economy, be very important to this area, and would be beneficial to the province in its quest to support its mineral industry and grow its electrical generation capacity to meet future needs. Furthermore, the Kemess Power Line runs in relatively close proximity to three small communities, Kwadacha, Tsay Keh and Germansen Landing. These communities currently use diesel generation to provide their electricity. As an added benefit the potential exists to use this line to put these communities onto the provincial Hydro Grid, thus meeting another provincial objective of reducing greenhouse gas emissions. We understand that the province has the opportunity to acquire this power-line at minimal cost and thus preserve this opportunity to support new development and new jobs in the region. THE CHAMBER RECOMMENDS That the Provincial Government: 1. exercise its option to purchase the Kemess power line; and 2. maintain the line in place to service future power needs and assist in bringing to production new mines in this part of British Columbia. MINISTRY SERVICE PLAN – ADDRESSING THE NEEDS OF INDUSTRY (2009) British Columbians expect the province, through the Ministry of Energy, Mines and Petroleum Resources (MEMPR), to manage BC‘s mineral resources for the optimum benefit of all British Columbians. However, that mandate is not reflected in the Ministry‘s Service Plan. The focus of the Ministry appears to be on managing the sector, rather than the resource. The Chamber is concerned that this seeming contradiction presents significant challenges to both industry and potential investors. The Ministry‘s Purpose Statement (as defined in the 2000/10 – 20111/12 Service Plan) reads: ―The Ministry of Energy, Mines, and Petroleum Resources manages the responsible development of British Columbia‘s energy, mining and petroleum resource sectors. Through the promotion of teamwork and positive working relationships with our clients we facilitate The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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a climate for thriving, safe, environmentally responsible and competitive energy, mining, and petroleum resource sectors. It is through these initiatives that the Ministry will continue to contribute to the economic growth and development of communities throughout British Columbia.‖ In practice this means regulating the impacts mining sector activities have on other sectors, interests and on the environment. It defines what can and can‘t be done, when and how. There is little to no emphasis in the Ministry‘s stated Purpose/mandate on actually identifying the mineral resource, and even less on protecting that resource (which belongs to all the people of the province) from competing interests, or keeping it available for production, so that British Columbians might benefit from their mineral resource birthright. There is likewise no discussion on how it should be developed and /or managed to benefit British Columbians, other than how to limit environmental impacts. No targets or objectives for identifying resources or ensuring actual mineral production from the resource occurs. In sharp contrast there is reference in the Purpose Statement to regulatory policy ensuring, ―the orderly and timely extraction of British Columbia‘s oil and gas resources.‖ There is insufficient emphasis on ensuring that exploration actually happens, that mines actually get built and that British Columbians actually benefit from their resource; most of the Ministry‘s activities are simply regulatory and limiting in nature. The Service Plan states, ―The Ministry will maintain effective and efficient regulation of mines and mineral exploration sites aimed at health, safety and environmental best practices.‖ Another objective is, ―Improving the effectiveness and timeliness of multi-agency federal and provincial approvals.‖ However, there is no objective or goal specifically aimed at increasing, or even replacing exhausting mines, the number of mines or exploration activity, and nothing measurable towards that end. Instead GOAL 1, OBJECTIVE 1.1 of the Plan merely states that, ―Increased investment, revenue generation and job creation in energy, mineral and petroleum resource development for the long term benefit of all British Columbians.‖ This Objective is then quickly qualified with the observation that demand can be cyclical, affecting levels of investment. This is followed by a forecast that Annual Investment in Mineral exploration and Mines will decline from an expected $0.720 billion in 2008/09 to $0.580 billion in 2011/12, a 20% reduction. The Chamber believes that this represents a flaw in the Ministry‘s mandate. While managing the activities of miners and their impacts on other people, sectors and interests, and the environment is a key responsibility of the Ministry, the Chamber does not believe this represents any requirement for the Ministry to manage the mineral resource for the optimum benefit of all British Columbians. Mines are becoming exhausted, too few are opening, and there is no evidence in the Service Plan that steps are being taken to address the forecast decline in investment in the sector. Despite a definitive Purpose Statement that the MEMPR will, ―In developing its policies, legislation and guidelines the Ministry consults with its clients in … industries,‖ the years 2007 – 2009 have been remarkable for the number of conflicts between the mining industry and the provincial government that have arisen precisely because there has been a failure of the Ministry to consult the mineral industry on its initiatives. Forest Roads, Law and Equity Act, Surface Owner Notification, Uranium, and proposed First Nations Reconciliation Act are but a few examples. Clearly, that consultation has not been occurring The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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(though the appointment of the Minister‘s Council on Mineral Exploration and Mining by Minister Hogg is a welcome step forward). THE CHAMBER RECOMMENDS That the Provincial Government develop a clearer direction in its mandate and purpose regarding the mineral resource with measurable goals of resource delineation, mineral production and mine openings in the Ministries Service Plan. USING FINANCIAL MECHANISMS TO DEVELOP BC’S MINERAL RESOURCES (2009) A more positive investment and regulatory climate that will be conducive to revitalizing the exploration and development of the mineral resources of BC must be created by government at all levels. British Columbia has excellent mineral potential, and a skilled work force which needs to be replaced. Vancouver is a mineral exploration Centre of Excellence. Challenges in permitting, approvals, land access and land use are long-standing, while aboriginal engagement and consultation have recently emerged as major obstacles to mineral resource development. Ministry divisions responsible for mineral exploration and mining have been unable to meet demands. Over the past two years the mineral exploration community has found increasing variations in timelines and conditions for Notice of Work permits and appropriate approvals across regions of BC. This community has documented examples of extensive delays, inconsistencies in permitting requirements, and delays or inaction due to uncertainties pertaining to referrals and consultations with First Nations. A common element to many of these challenges is significant under-resourcing of the Ministry relative to the sector‘s contribution to the provincial economy when compared to other sectors. Lack of appropriate funding levels results in higher turn-over within the Ministry, with a corresponding reduction in knowledge, experience, efficiency and morale. Including primary and fabricated metals producers, the minerals and oil and gas sector was responsible for $6.3 billion or 4.2% of BC‘s 2007 GDP, while the forest sector at $11.2 billion is responsible for 7.4% of GDP; not quite double. Yet in 2009/10, the mineral and oil and gas sector divisions of EMPR will have an operating budget of only $73 million and a capital budget of $21.2 million, with a total of 341 employees. The Ministry of Forests and Range has an operating budget of $778 million, a capital budget of $65 million, and 3604 employees outlined in its service plan for the same period. The forest sector is responsible for a larger share of BC‘s GDP, but not by a factor of more than 10 as implied by Ministry funding and staffing levels! The Chamber believes the Provincial Government needs to increase MEMPR‘s budget allocations to a level commensurate with the value of the sector‘s economic contribution to the province, with stable funding for staff and infrastructure to optimally support permitting, geoscience, survey work, and exploration and mining activities. Flow-through share financing has been a successful structure for over 20 years whereby governments have acted as a catalyst to increase the levels of resource property exploration and development in The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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Canada. In 2008, approximately $300 million in flow-through shares were issued by Canadian mining companies, compared to $800 million in 2007. Investors in flow-through share offerings, completed prior to the market meltdown, have experienced losses on both a pre and post-tax basis. Therefore, 2009 is expected to see a significant reduction in flow-through financings relative to 2008, contributing to already worsening exploration activity levels. By acting as a catalyst to assist mining companies in attracting greater amounts of private market funding at more attractive terms than would otherwise be possible without government support, governments can help encourage mineral exploration activity. A significant amount of money raised from flow-through financing was not deployed in 2008 while some operating companies were unable to finance brownfield exploration or expansions. This gap could be addressed if the flow-through program was amended to allow this application of flow-through funds to open pit and underground exploration and development at both brownfield and greenfield sites. THE CHAMBER RECOMMENDS That the Provincial Government encourage private sector investment in mineral exploration by: 1. expanding flow-through eligibility to include both surface and underground greenfield and brownfield exploration and development expenditure on a temporary two-year basis; 2. making the super flow-through share program a permanent feature of the tax system or, at a minimum, extend the program for an additional three years. In addition, the Government should implement a temporary increase in the deduction gross-up to 125% for development spending and 150% for exploration spending to flow-through share financing, and increase the BC Mining FlowThrough Share Tax Credit of eligible costs from 20 to 30% (similar to the Budget 2007 measure to increase the mineral exploration tax credit in pine-beetle infested regions) 3. working with the Federal Government to expand the definition of exploration under federal Income Tax Act to include spending on or near a closed property; and 4. BC has an excellent Mining Exploration Tax Credit (METC) program that provides a 20% refundable tax credit for resource companies through January 2017, and an enhanced rate of 30% for companies exploring areas affected by the mountain pine beetle. We thank the government for its foresight in implementing a long-term tax incentive for companies active in mineral exploration. The BC Mining Flow-Through Share (BC-MFTS) program for investors, however, is set to expire December 31, 2009. The Chamberâ&#x20AC;&#x2DC;s recommendation is to implement this program permanently.

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BRITISH COLUMBIA: A CARBON-RICH PROVINCE (2008) BC is blessed with an abundance of carbon based energy resources (petroleum, natural gas, coal bed methane and coal), representing enormous wealth potential for the people of BC. The largest of those carbon energy resources is coal. Between 1836 and 2001, BC mined a total of 700 million tonnes of coal. The known and estimated coal resource potential in BC exceeds 20 billion tonnes,1 enough coal to satisfy trade demands for centuries at the current rate of extraction. Recent and emerging provincial policy changes discourage the extraction, utilization, and sale of fossil fuels in BC to the detriment of the provincial economic interest. Turning away from these resources significantly reduces their potential economic value to the people of BC Commodity price signals are thought to be one way to encourage a more efficient use of our precious resources, and as such, carbon price signals may appropriately draw attention to the globally acknowledged challenge of climate change. The value of our carbon based resources, combined with emission targets, and demonstrated leadership in technology development/deployment will help ensure a sustained economic return to the Province. THE CHAMBER RECOMMENDS That the Provincial Government: 1. undertake initiatives to encourage the scientific discovery of technologies that allow BCâ&#x20AC;&#x2DC;s vast carbon based energy resources, in particular coal and coal bed methane, to be used in an environmentally responsible manner; and 2. invest funding to develop a carbon neutral - fossil fuel research and development stream that will deliver technology that can be deployed on a domestic and international basis. UNIQUE ECONOMIC ADVANTAGES IN BRITISH CONSERVATION OF OUR WATER RESOURCES (2008)

COLUMBIA

THROUGH

THE

One way British Columbiaâ&#x20AC;&#x2DC;s business community can lead the way in conserving our natural resources is through using water more efficiently. Water efficiency will also trigger new economic activities for water-related manufacturing and service sectors, encourage new business opportunities and promote new job creation. These opportunities will create additional economic advantages by lowering costs to business, and generate clients in support of businesses that implement sustainable practices. The Canadian Council of Ministers of the Environment believes that improved water efficiency practices are essential to sustainable development. Despite the apparent abundance of water in BC, our water supply is not as plentiful as we would like to think. Over 17% of our surface water sources have reached, or are nearing, their capacity to reliably supply water for extractive uses. Long-term trends of observation wells indicate that ground water levels are declining in some areas of the Province and over one-third of our aquifers are vulnerable to 1 Ministry of Energy Mines and Petroleum Resources, British Columbia

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contamination. While the water supply situation is not a serious problem for many communities, these figures tell us that the availability of a healthy, sustainable, and plentiful water resource can no longer be presumed. According to the Organization for Economic Co-operation and Development, ―Canada ranks a dismal 28th among the 29 nations of the OECD in terms of per capita water consumption. Only Americans use more water than Canadians. Since 1980, overall water use in Canada has increased by 25.7%. This is five times higher than the overall OECD increase of 4.5%. In contrast, nine OECD nations were able to decrease their overall water use since 1980 (Sweden, the Netherlands, the United States, the United Kingdom, the Czech Republic, Luxembourg, Poland, Finland and Denmark).‖ The Canadian trend cannot be maintained in the long run and in British Columbia it is prudent that we take steps to conserve our natural resources while supporting a strong and vibrant economy. In Canada, residential, commercial and institutional buildings represent more than a third of total Green House Gas Emissions,2 and the single largest opportunity to make progress towards Canada‘s 2020 target of 200 Mt (megaton) reduction in GHG. By 2015, the Canada Green Building Council aims to recognize 100,000 buildings and 1 million homes (new and existing) using 50% less energy and water than the 2005 baseline for their building type, while achieving exemplary environmental standards in the other LEED categories. Saving water through efficient new building techniques and through retrofitting existing buildings is one of many ways businesses can participate in water conservation. It is also critical to increase the productivity of the water that we do use. That means that we must be able to do more with each unit of water. Agriculture in BC accounts for the highest water usage, followed by industrial applications. By concentrating on improving our water productivity, we can assist in the continuation of a healthy economy. There are many ways in which we can employ our water more efficiently. It has been proven that water use efficiency measures are viable and beneficial. The percentage of observation wells with declining water levels due primarily to human activities increased from 10% in 1965–1970, to 14% in 1995–2000. Declining water levels related to human activities are mostly a result of intensive local groundwater pumping for industry, agriculture and municipal water supplies and, in urbanized areas, decreased recharge due to impervious surfaces. The Canadian Government program ―Every Drop Counts,‖ has identified four main water efficiency categories that are currently available. These initiatives fall within the jurisdiction of municipal governments and/or public utilities, and also include: Structural: metering water recycling systems wastewater re-use flow control devices distribution system pressure reduction water saving devices (efficient fixtures, appliances and retrofits) drought resistant landscaping (xeriscaping) efficient sprinkling/irrigation technology new process technologies 2 Roundtable on the Environment & Economy‘s ―Energy-Related Green House Gas Emissions in Canada 2050 Report

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Operational: leak detection and repair water use restrictions elimination of combined sanitary/storm sewers to reduce loadings on sewage treatment plants plant improvements Economic: rate structures pricing policies incentives through rebates and tax credits other sanctions (fines) Socio-political: public education information transfer and training regulatory (legislation, codes, standards and by-laws) To conserve our water it is important to start managing our water more efficiently. Business communities can take an active role in managing water by gauging their consumption and by using the existing programs and resources available to them. By taking a stand for the conservation of water, British Columbiaâ&#x20AC;&#x2DC;s businesses can lead the way for their own economic sustainability and the sustainability of the Province at large. THE CHAMBER RECOMMENDS That the Provincial Government: 1. make water conservation a priority and encourage businesses to adopt water conservation as part of their corporate policy; 2. partner with municipal governments, businesses and other stakeholders to implement and develop cost effective strategies and goals for efficient water usage and conservation; 3. where appropriate, as a first step urge the installation of meters on all domestic and industrial water systems provided by municipalities and regional districts; 4. develop a free auditing program to assist businesses in gauging their water usage and once the audit is complete, design a program of measures or actions based on the goals and objectives, and opportunities for water efficiency improvements, costs and benefits, and other criteria specific to each organization; and 5. initiate and fund public awareness and education programs to British Columbiaâ&#x20AC;&#x2DC;s business communities about water conservation practices currently available to them.

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URANIUM AND MINERAL EXPLORATION (2008 – Revised 2009) Uranium and thorium are very common elements in the earth‘s crust, although concentrations amenable to mining are relatively rare. Uranium is a key fuel for electricity generation in many advanced jurisdictions including: France, Germany, Great Britain, the United States and Russia. Ontario and New Brunswick also utilize uranium. It is increasingly being seen as a key tool in addressing issues of climate change and reducing our carbon footprint. Yet BC recently announced that all new mineral claims acquired in the province will not include the rights to uranium or thorium. Moreover, although mineral tenures acquired before April 24 th, 2008 do carry the rights to these elements, the Province will not honour them. Nor will the Province issue work permits to allow tenure holders to perform the assessment work necessary to maintain their claims in good standing. This decision is not based on science, and denies British Columbians the benefits from their uranium/thorium resource, as well as (potentially) the benefits of other mineral resources such as copper, which sometimes occurs with these elements. The lack of effective, meaningful consultation with industry in advance of this announcement is very damaging to government‘s credibility and to the provinces reputation as a safe place to do business. By acting unilaterally, and without consultation with industry, the only certainty provided is uncertainty reinforcing BC‘s extremely negative reputation in international mining and investment communities as an unsafe place to do business (as reflected in annual Fraser Institute reports). A very negative message has been sent to investors, clearly signalling that BC is not ‗open for business.‘ This year‘s Fraser Institute Survey of Mining Companies shows BC has dropped to 24th from 19th (out of 71 jurisdictions) in terms of Policy. 40% of survey respondents reported, ―uncertainty concerning the administration, interpretation, and enforcement of existing regulations,‖ as a deterrent to investment in BC, while almost 65% see ―Environmental Regulations‖ as another deterrent. There can be no certainty or investor confidence when government is prone to changing the rules of the game based on political considerations rather than good science. There can be no certainty when governments do not respect established project assessment processes and procedures, or honour established rights. The provincial government asserts that because it has not included nuclear energy in its 2007 BC Energy Plan that there is no need to mine uranium in BC. This is a false assertion, confusing two essentially unrelated activities: power generation, and the development and utilization of our uranium resources. The support of uranium exploration and mining is not a commitment to develop nuclear power, any more than support for coal mining is a commitment to develop coal-fired power in BC. Uranium is increasingly referred to as the new ―Green Power‖. Any uranium mined in BC will assist in addressing world climate change efforts, and would create new jobs, economic activity and new wealth to sustain our health, education and social systems and our economy. Uranium is a resource that is mined safely and responsibly to the great benefit of citizens of other jurisdictions around the world. Mining of uranium is a key foundation of Saskatchewan‘s economy which produces between 25% and 30% of the world‘s total production from its high grade, world class deposits. The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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It does so responsibly to the great benefit of its citizens, and is a world leader in health and safety in its mines. Currently uranium mines are safely operated in over 20 countries around the world, and both uranium and thorium have many positive and beneficial uses, particularly in energy and critical health care applications. Valuable natural mineral resources (such as uranium and thorium) are the common heritage of all British Columbians. The provincial government has an obligation to develop and manage BC‘s resources including uranium and thorium - to the optimum benefit of all British Columbians. Strict regulations ensuring safety regarding uranium are in place in all regions of Canada. BC is very under explored for uranium, consequently known reserves are low. The 1980 Royal Commission Inquiry into Uranium Mining reported that, at the time of writing, uranium exploration in BC had only been on-going for eleven years, yet in that short time no fewer than six significant deposits had been found. Since that time there has been very little new uranium exploration because of moratoria and low prices. The Royal Commission quoted the Ministry of Mines, Energy and Petroleum Resource‘s Geological Division‘s conclusion that, ―vast areas of the central Interior would appear to be potentially favourable for the discovery of basal type uranium deposits,‖ and, ―exploration for other types of deposits, particularly those types not yet recognized in the province (black shale, phosphate, sandstone) is warranted.‖ More recently, in 1994, the BC Geologic Survey began to recognize the potential for, and to encourage exploration for, polymetallic Olympic Dam (OD) style mineral deposits, (also known as Iron Ore Copper- Gold or IOCG) in BC. The Olympic Dam was discovered in 1975, and is one of the world‘s largest copper mines, and also, as a by-product, one of the world‘s largest uranium mines. Not being allowed to excavate the uranium would preclude the mining of the copper. The ban on uranium essentially makes exploring for these types of copper deposits, which are very large and valuable when found, much less attractive. Not all Olympic Dam/ IOCG deposits contain uranium/thorium, but some clearly do. Explorers are now deterred from looking for these world class and very valuable deposits in BC. It is questionable whether explorers would continue to search for IOCG deposits should this ban stand. Uranium and thorium are widespread in the environment and are very common in BC‘s mineral formations; they can be and are encountered in exploration for other commodities. Care must be taken not to inhibit exploration for these other resources. Another example is molybdenum, an important current target today with much on-going exploration in BC. Some molybdenum deposits can have associated uranium/thorium values. The new policy threatens this important economic activity as well. This ban effectively discourages exploration over a significant area of BC, including several prospective properties that include gold, copper, silver, molybdenum, and zinc. The Chamber believes that uranium mining should be treated like any other industrial activity in our society: if it can be done safely and sustainably, allow it. That it can be done safely and responsibly has been amply shown in many other jurisdictions.

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VIBRANT RESOURCE SECTOR

THE CHAMBER RECOMMENDS That the Provincial Government: 1. rescind its ban on uranium mining; 2. consult meaningfully and effectively with industry on an appropriate regulatory regime to ensure that any mining of uranium is conducted safely and responsibly; 2. abandon any intention of not providing fair compensation for rights it no longer intends to honour; 3. recognize the damage done to investor confidence by this misguided ban, and take steps to redress and restore that confidence; 4. provide fair compensation for damages to claim holders affected by the uranium ban; 5. institute an assessment work holiday for affected claims, until compensation is provided; 6. establish clear and practical policy and regulations with respect to low level, incidental radioactive mineral concentrations (e.g. in coal, rare metal deposits, etc.); and 7. educate the public about natural sources of radioactivity, the geology of such deposits, and technical mitigation strategies (in accordance with MEMPRâ&#x20AC;&#x2DC;s Objective 3.3, â&#x20AC;&#x2022;Enhanced public awareness of 1 resource opportunities and the benefits of their responsible development and use. ).

1 Budget 2009/10-2011/12 Service Plan

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STATEMENT OF POLICY The Chamber believes the role of Government in economic affairs should be limited to providing a framework, within which businesses are encouraged to develop their full potential. Within this framework Governmentâ&#x20AC;&#x2DC;s role is to provide a positive environment to support the private enterprise system. The foundation of this framework will always be to eliminate or reduce the tax and regulatory structure that is levied on the existing business community, as well as on new investment. As an open, trading jurisdiction BC is reliant upon a competitive tax and regulatory regime at the Federal, Provincial and Municipal levels. As important as the overall level of taxation, the distribution of the tax burden and the targeting of fiscal incentives in key sectors are equally important issues affecting businesses and the regulatory obligations they face. The multiplicity of taxes, and administration thereof, which confront businesses add unnecessarily to the cost of doing business in a disproportionate ratio to some other jurisdictions. They do this in a number of ways. The first is through the direct costs of taxes, be they personal taxes, meaning businesses in BC have to pay higher wages than their competitors to attract the talent, or business taxes that go straight to the bottom line, or the proliferation of fees and licences that businesses face in BC today. The key for the business community is to ensure a low, efficient taxation structure which recognises that if taxes are levied at a rate that places BC at a competitive disadvantage, or if the burden of undue and unnecessary taxes adds to a businessâ&#x20AC;&#x2DC; bottom line, all British Columbians suffer. The Chamber believes the Provincial Government should recognize that it is essential that BC industries' ability to compete in world markets not be impaired either through undue, or disproportionate, business or personal taxation or government imposed competitive handicaps which would contribute to significant increases in operating costs. Such costs place all industries at a disadvantage relative to competitors in foreign countries and within Canada.

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A SUSTAINABLE FISCAL POLICY FOR BRITISH COLUMBIA (2010) Over the past few years, the Provincial Government under the direction of the Ministry of Finance has made credible and very laudable strides in balancing its budget while maintaining many of the services that British Columbians both expect and rely on. However, the onset of the global financial crisis has demonstrated that external global realities will have a direct impact on the revenues of government (at the provincial and federal levels) and, therefore, on governmentsâ&#x20AC;&#x2DC; ability to fund services and programs relied on by many British Columbians. The Chamber believes that there is an immediate need for Government to undertake a focused review of its approach to fiscal prudence to ensure that BC remains the envy of the world. This requires specific focus on the foundations of sound fiscal management; spending, debt and taxation. Spending As we strive to ensure that all programs and services that rely to some degree on government funding are provided certainty and security around their funding arrangements, the Chamber believes that there is a need for fundamental reform of the manner in which Government approaches funding. This is particularly relevant given the fact that we have seen a marked increase in Government program spending over the past five years in BC. The figures below (in millions of dollars) illustrate the spending per year: Total for BC: 2001-2002: 2004-2005: 2008-2009:

27,923 28,340 36,106 (Increases have been roughly 1.5 â&#x20AC;&#x201C; 2 M per year since 2005)

Per Capita: 2001-2002: 2004-2005: 2008-2009:

7,917 3 7,235 8,052

While the Chamber recognizes that much of the current funding goes towards maintaining essential services, the current fiscal reality has highlighted the need for all spending needs to have measurable outcomes and avoid unsustainable situations that both increase the deficit and contribute to provincial debt. Despite this strong foundation, BC is a small, open trading jurisdiction which has experienced similar economic impacts as other parts of the industrial world. There have been dramatic reductions in Provincial revenue and as a result. The Government has been forced to table a deficit budget, and projects continued deficits through to 2013-4. This has resulted in government announcing significant cuts in a range of areas; cuts which have been greeted with significant concern in the public arena. The Chamber believes that much of this opposition is a direct result of increases in ongoing, open-ended program spending that have come with no achievable and measureable outcomes. This has led to a sense of entitlement from many recipients of public money that feeds an unsustainable cycle. Increases in public spending lead to increased expectations, which in turn lead to increased demand.

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This does not mean that the Chamber is calling on government to arbitrarily reduce or eliminate program spending to organizations and agencies that provide critical services to the community. Indeed the Chamber has been clear, provision of services on a cost effective basis will often mean that these services should be provided by independent agencies. With that said there is little public information and transparency regarding the renewal provisions of these programs, both in terms of frequency and in terms of measurable outcomes. As such it seems clear to the Chamber, reform over the provision of government funding requires fundamental reform to ensure that that the public interest is measured against the public purses ability to pay. The BC Government projected a balanced budget by 2013 when Budget 2010 was delivered. The keys to achieving this must be through spending restraint, not through tax increases. Given the current economic climate following the crisis of 2008- 2009, the Chamber is calling for prudence and selectivity for future provincial spending projects. The Chamber accepts that some investments in the recovery climate of 2010 will increase the debt, providing that the increased debt brings a good return on the investment and allows for additional program spending during times of relative surplus. Reducing the deficit can be achieved by the Government selectively pursuing spending programs and infrastructure projects to ensure that public money is being used efficiently to create growth. This will help to decrease the deficit more quickly and ensure that the total provincial debt does not continue to climb. Crown Corporations The Chamber recognizes that many Crown Corporations in BC provide critical services for British Columbians (insurance for example). However, the fact that these are important services does not necessitate that these services should be provided by a public entity, nor that this entity provides a better, more cost sensitive approach than that which would be provided by a private sector organization operating under agreement with the province. The Provincial Government has recognized the need for review of organizations that provides critical services with the report of the Comptroller Generalâ&#x20AC;&#x2DC;s review of the governance model of Translink and BC Ferries. At its core this review was focused on the taxpayer interest in the current structures of these organizations. The Chamber believes that this principle should be extended to a review of all other Crown Corporations, to review whether the services provided by these entities can be provided more cost effectively, while maintaining service levels and public trust, through the transfer (either in whole or in part) of a public organization into private ownership or operation. For too long Crown Corporations have enshrined monopolies in areas that are not the remit of government but are rightly the role of the market to ensure choice, innovation and competition. It is the belief of the Chamber that the principle tenet of government must be to focus its activities on providing the services and providing the security that is the inherent transfer of trust and responsibility between the people and their government. As a stark example, participating in the retail business of liquor and insurance sales does not meet this central tenet and simply reduces choice and open competitive markets â&#x20AC;&#x201C; principle philosophies of the current government. Debt The Chamber appreciates that much of the increases to the provincial debt have derived from the Provincial Governmentâ&#x20AC;&#x2DC;s commitment to a significant capital infrastructure investment program. The Chamber continues to support the need to address the significant investment deficit that is the result of a long history of under investment in capital infrastructure. However, the current economic climate necessitates that future investments also mitigate costs for future generations. The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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The effects of the global economic downturn and current projected increases in program and infrastructure expenditures contained in Budget 2010 will greatly increase the provincial debt. Provincial Debt ($ million)

Sept Update

Updated Forecast

Budget Estimate 2010/11

Plan Plan 2011/2012 2012/2013

Government direct operating debt

7,467

6,182

7,511

8,209

7,838

Taxpayer-supported debt

30,593

29,093

33,748

36,720

38,329

Total debt

42,332

41,318

47,757

52,363

55,862

Government direct operating debt4.0% to-GDP ratio

3.3%

3.8%

4.0%

3.6%

Taxpayer-supported debt-to-GDP 16.2% ratio

15.5%

17.2%

17.9%

17.8%

Total debt-to GDP ratio

22.0%

24.3%

25.5%

25.9%

22.4%

The provincial debt burden is expected to continue to climb from $ 42,332 billion in 2010 to $ 55,862 billion by 2012/13. Growth in the taxpayer-supported debt burden in excess of 30% is of considerable concern to the Chamber, especially without a legislated plan to reduce the burden for future generations. A key measurement of debt is the taxpayer supporter debt to GDP ratio. This covers the amount of debt that is born by taxpayers in relation to the amount of money the province earns from economic activity. This will climb from 15.5% in March 2010 to 17.9% in 2011/12. Budget 2010 reaffirms the commitment that once the province returns to balanced budgets in 2013, all surpluses will be dedicated to paying down the Province‘s operating debt (should this be eliminating the province‘s operating deficit). This will be important to reduce one contributing factor to the overall debt, but it will not have any effect on the total debt itself; which is the main area of Chamber concern. Furthermore, waiting three years to begin such payments means that the taxpayer-supported debt will continue to rise, mainly due to the significant infrastructure investments planned over the next three years. Taxation British Columbia has one of the lowest tax rates for both personal and corporate income in Canada, which is a direct result of action taken by the Provincial Government. The Chamber is very supportive of this initiative, and looks forward to 2012 when there will be further reductions in this area as outlined by Budget 2010. Indeed by 2012 BC will have a personal income tax rate that means anybody earning $118,000 or less in BC will have the lowest personal income tax rates in Canada (if you earn more than $118,000 you will have the second lowest). BC‘s corporate income tax rates will be 10%, meaning it will have a combined provincial/federal rate of 25%, the lowest in Canada and joint lowest in the G8 for small business (defined as $500,000 or less annual revenue), and the small business tax rate will be zero.

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The combination of these tax reductions with the introduction of HST will see the province become one of the most competitive taxation jurisdictions in the world. The Chamber believes that it is critical that government not only ensure that these tax cuts are fully implemented within the timetable announced but also that government continue to review our competitive position in relation to key competing markets on an ongoing basis. BC currently has a competitive advantage. The Chamber does not believe that tax cuts are needed beyond those already announced, but should other jurisdictions reduce taxes then it is incumbent on the provincial government to take the necessary steps to maintain our comparative advantage. Should further tax cuts become necessary the Chamber believes that it is important that these cuts focus on personal and business income taxes, which act as an impediment to investment, work and savings. While the Chamber does not believe that further tax cuts are either fiscally feasible or required to maintain our competitive position, the Chamber does maintain that there is a need to fundamentally reform one key area of taxation that is having a significant impact on our competiveness and is unfairly burdening business, property tax. The Chamber believes that the governmentâ&#x20AC;&#x2DC;s cautious approach to Provincial revenue projections, as outlined in Budget 2010, is an overly prudent one. In order to reduce the taxpayersâ&#x20AC;&#x2DC; exposure to financial risk, the government will need to ensure that the deficit is reduced in advance of the 2013 projection. This can be achieved through a less cautious approach to the growth of provincial revenue, and by pursuing provincial program and infrastructure spending on a selective basis. British Columbia has not been immune to the global recession, nor will it be immune to increases in international interest rates. Pursuing program and infrastructure spending in 2010 that will not directly create economic growth will unduly expose British Columbians to certain financial risk. Judicious government spending and a less cautious approach to provincial revenue growth can reduce the deficit before 2013 and limit the growth of provincial debt. THE CHAMBER RECOMMENDS That the Provincial Government: Spending 1. Starting in fiscal 2011 adopt a Smart Spending Program that: a) introduces a coordinated approach to government spending by ensuring increases are within the range of growth in real GDP across all government spending; b) continue to review all direct program spending and operating costs on a four-year cycle that does not coincide with an election year to determine the cost-effectiveness of government spending; Crown Corporations 2. introduce a taxpayer lens which would allow government to review, on a cycle that is in keeping with the fundamental planning of the crown corporation, all Crown holdings to see whether taxpayers interests are better served by transferring control, in whole or in part, of a publicly owned and operated enterprise to the private sector;

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Debt 3. Once balanced budgets are achieved, legislate a requirement that the provincial budget dedicate at least 50% of surpluses directly to debt repayment; 4. Maintain this requirement until the total provincial taxpayer supported debt-to-GDP ratio is reduced to 10%; and Taxation 5. Continue with their plans to make BC one of the most tax competitive regions in the world by implement the plans laid in Budget 2010 to further reduce personal and corporate income tax and to the rates set for 2012. HST POLICY (2010) The Chamber believes that British Columbia needs to continue to attract new investment and ensure that its small businesses are as competitive as possible as they strive to market goods and services to the consumer. Consequently, the Chamber has consistently called for the Provincial and Federal Governments to harmonize the Provincial Sales Tax with the Federal Goods and Services Tax as a critical mechanism to reduce the marginal effective tax rate applied on business investment. Equally, the Chamber has supported changes that would eliminate the $1.9 billion in tax costs on intermediate and capital goods and services. The Chamber has also supported changes that would reduce the compliance costs that proportionately burden small-businesses. Removing the PST businesses pay will reduce costs and allow businesses to expand, create jobs in their community and make capital investments to improve product delivery. British Columbia is falling behind internationally using an antiquated retails sales tax in the PST. By reducing the costs to BC businesses, the HST will be essential to maintaining their competitiveness both domestically and on the world stage. Noted economist Dr. Jack Mintz recently concluded: ―By 2020, the combined effect of federal and provincial corporate tax cuts and sales tax harmonization is expected to increase the province‘s capital stock by more than $14.4 billion and add 141,000 new jobs. Sales tax harmonization alone will account for an increase of $11.5 billion in capital investment and a net increase of 113,000 jobs by the end of the coming decade.‖ There is no disagreement; all analysts (even many opponents) recognise the fact that the HST in BC will mean a stronger economy, more jobs, and higher incomes over time. Indeed, the Chamber believes this raises a critical question for those that oppose the introduction of the HST: how would you achieve the outcomes of HST while keeping the current inefficient and ineffective PST? Despite these benefits legitimate concerns remain in certain sectors of the business community. Certain products and services, such as restaurant services, which have enjoyed tax breaks under the current PST system, will see their tax-rates rise to 12% from its current 5%. While these businesses will save money through increased ITC‘s and the removal of embedded PST the The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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cost structure of these businesses are such that these savings are unlikely to offset the need to increase the sales tax charged to their customers. This has led to the very real concern that where demand is elastic, any increase in the cost to a consumer may dissuade these consumers patronizing a business, or may erode the profit margin for an impacted small business if they feel they cannot fully pass on the cost to customers. The potential for a negative impact to certain sectors means that, as with all taxes, the Chamber believes government has a duty to continue to review the impact of tax across the economy and make adjustments where a negative and potentially harmful impact can be demonstrated. This will be particularly important in the case of the HST. We need economic policies that enable BC employers to create jobs, increase investment and enhance productivity. The HST will give BC export industries the competitive edge they need in the new world economy, and Government must ensure that the benefits are felt by the service and domestic sector as well. THE CHAMBER RECOMMENDS The Provincial Government: 1. review the impact of the HST and continue to consult with businesses, particularly those from adversely impacted sectors, in order to mitigate any negative effects of the HST; and 2. introduce targeted transitional assistance for business sectors that are adversely impacted by the added HST cost. UNIFIED ENVIRONMENTAL ASSESSMENT PROCESS (2009) Environmental assessment reviews are essential and must be done thoroughly and carefully. Currently, separate, parallel federal and provincial processes are done with an agreement to harmonize those processes. A truly unified single process would reduce duplication, reduce costs for all concerned, and reduce the period of uncertainty associated with decisions that are pending. Further, such a unified system could help prevent considerations from falling between jurisdictional cracks. A number of ―shovel ready‖ projects that already have Provincial Environmental Assessment Certificates are still caught up in the Federal Environmental Assessment process: The Terrane Metals (Mount Milligan) project received Provincial Environmental Assessment Certification in March 2009 but now must wait for Federal Environmental Assessment approval. It took over 2½ years to prepare for the 6 months (180 days) of detailed review by First Nations, Local, Provincial and Federal governments and cost millions of dollars. Additional examples of mines that have received Provincial Certificates and are awaiting Federal approvals include Adanac (the Ruby Creek project) and Imperial Metals Red Chris development. Taseko Mines Ltd has invested $90 million and spent 15 years working towards opening Prosperity Mine. The mine would employ 700 people and at an $800million capital investment this would be one of the largest private sector investments in BC in this decade. The mine is

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OMPETITIVE TAXATION & REGULATION currently undergoing a provincial assessment review and harmonization of the federal and provincial process would speed approval and get people working sooner.

Mining projects are presented here as focused examples of large infrastructure projects, including energy and transportation projects, caught in this sequence of Environmental Assessment Reviews. BC, Canada, and the world are struggling to find ways to weather the economic storm including stimulus packages to restart the economy. These projects and several others are â&#x20AC;&#x2022;shovel readyâ&#x20AC;&#x2013;; with approvals in place they could proceed without costing taxpayers extra money for incentive packages, they would provide jobs and hope for a more stable future and would contribute millions of tax dollars to government coffers. Both levels of government have their own coordination offices: the British Columbia Environmental Assessment Office (BCEAO) (www.eao.gov.bc.ca), and the Canadian Environmental Assessment Agency Office (CEAAO) (www.ceaa.gc.ca). They committed to harmonizing their processes with an agreement Canada-British Columbia Agreement on Environmental Assessment Cooperation (2004). In practice, this harmonization is aspirational but not operational. We are aware of a few specific issues: insufficient resources applied to management of the process at the Federal level; basic incompatibility between processes (CEAA is more of a self-assessment process; BCEAO is much more structured) makes harmonization especially challenging; and the Federal Government set up a parallel group, the Major Projects Management Office, in a separate ministry (Natural Resources Canada) rather than resolve the problems with CEAA. The harmonization problem is sufficiently recognized that the Canadian Council of Ministers of Environment (CCME) has struck a task group to deal specifically with environmental assessment. BCEAO gets widespread praise for their project management and process - the CEAA does not. Among the most helpful features of the BCEAO process are clarity respecting which projects are included (and what aspects of them) early in the process, clarity respecting study and consultation scope (and particularly, a very clear designation of aboriginal consultation scope), and timelines prescribed by the legislation. If Federal resources are sufficient for technical review only, and they have yet to develop efficient processes, it would seem logical to follow a single environmental assessment process managed by the BCEAO with technical participation by Federal regulators in areas of Federal jurisdiction and interest. However, court cases relating to aboriginal consultation appear to have caused the federal government to feel they must be directing the process. Although additional resources in the form of the Major Projects Management Office are dedicated to improving the process, the Federal approach to aboriginal consultation still requires coordination and clear roles and responsibilities to make them efficient and effective. The Chamber understands that CEAA is undergoing a mandated 5 year process review, but early rumours suggest that consultation with stakeholders and those who have been through the process will not be part of this review. The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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Present efforts to improve the process, (e.g. Major Projects Management Office) ultimately aim to duplicate work efficiently. Even efficient and timely duplication is still duplication. The Chamber believes that the situation could be improved and decrease costs for all parties. THE CHAMBER RECOMMENDS That the Provincial Government work with the Federal Government to: 1. urgently examine how to expedite provincially-certified projects through the Federal environmental assessment process, whether covered by the Major Projects Management Office or not; 2. federal officials responsible for the CEAA 5-year review should engage in open consultation with stakeholders to support elimination of duplicative review; 3. when they become available, review the recommendations of the CCME Environmental Assessment Task Group with critical stakeholders to identify promising approaches; and 4. use information from the above to inform a redraft of the legislation and regulation in both jurisdictions to permit a unified process led by the Province with technical participation by Federal regulators in areas of Federal jurisdiction and interest by 2010. THE NEXT PHASE OF REGULATORY REFORM (2006) The effectiveness and quality of regulation and the institutions that enforce it are a major determinant of a jurisdictions prosperity. Well-designed and efficiently enforced business regulation improves the functioning of the economy by providing certainty for the business community. In addition, they also achieve environmental and social policy goals without imposing significant compliance costs on firms or weakening the ability of businesses to adapt to changing economic conditions, technologies and consumer preferences. Regulations that create high compliance costs or restrict competition have been shown to damage investor confidence, increase costs and reduce investment in technology and innovation. Many of the costs of regulation are not immediately visible. Regulation can result in higher prices and costs, a reduction in consumer choice and a reduction in flexibility. In the USA the total gross cost of federal regulation alone has been estimated at almost 8% of GDP1. In this context, the Chamber believes that the Provincial Government has an impressive record in reducing the regulatory burden faced by BC business, by cutting 154,000 regulatory requirements since June 2001, a total reduction of 40.31%2. Despite this progress, regulatory reform has not gone far enough. The Chamber believes that there are a number of other policy directions that BC could utilize to ensure it achieves a more business-friendly 1 2

â&#x20AC;&#x2022;Regulation in a Regional Economyâ&#x20AC;&#x2013; Michael J Sullivan, Idecon Public Policy Lecture, 15 September, 2005 BC Regulatory Reform Initiative, Quarterly progress Report, February 2006

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regulatory and policy development climate. Too frequently, governments at all levels make regulations pertaining to business without considering the total cost of compliance, or they initiate arbitrary changes to legislation without due consideration of the impact on the business community. We do not deny the necessity for certain regulations; however, many demands on business made by government can be a deterrent to the establishment of new enterprises and the operation of existing enterprises. As we move towards the next phase of regulatory reform the Chamber sees a system of ―smart‖ regulatory reform where the emphasis will be more on addressing particularly onerous or costly regulations rather than a simple numeric reduction. To achieve this goal, the public and businesses must have access to information that is readily available and current. (For example, the Chamber sees no reason why the Provincial Government does not publish regulations on its website.) This process of public dialogue cannot stop with a simple printing of a list of government regulations, government must be proactive in developing a mechanism for providing qualitative analysis through the publication of regulatory indicators to better measure the cumulative administrative and compliance cost on business, and SME‘s in particular, from regulation. The operation of government is a public activity. Public policies ought to be shared with all members of the public, who are the customers and owners of the Government. The focus of this process must be a move towards a ―risk-based‖ approach to regulatory enforcement to replace general requests for information from industry with more targeted enforcements as has been undertaken in the UK. The UK Government initiated a review of regulatory inspection and enforcement that identified risk assessment as a method of reducing administrative burdens for business. A risk-based approach argues that scarce resources should not be used to inspect, request or assess data from companies that are low risk or that are operating within inherently safe regulatory regimes. Such a system would involve the removal of general requests for information from industry and replace them with more targeted enforcement mechanisms. The UK‘s risk-based approach is expected to reduce the number of forms regulators send out by 25%, and the need for inspections by up to a third. THE CHAMBER RECOMMENDS That the Provincial Government: 1. give business and the public access to information that is readily available and current regarding the cost and impact of regulations by publishing regulations on its website; 2. must be proactive in developing a mechanism for providing qualitative analysis through the publication of regulatory indicators to better measure the cumulative administrative and compliance cost on business, and SME‘s in particular, from regulation; 3. ensure that all government departments strengthen their programs that review existing legislation and regulations pertaining to business and eliminate those measures which result in an unnecessary cost to small business (and, ultimately, the consumer); The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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4. continue to provide ample notice of intention to modify its laws, regulations and policies, not just to interest groups, but to the public generally as a matter of practice; and 5. introduce a risk-based approach to regulation that ensures scarce resources are not used to inspect, request or access data from companies that are low risk or operating in a safe regulatory regime.

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RIME AND PUBLIC SAFETY

STATEMENT OF POLICY Crime and public safety has become a prime concern for the chamber movement across the province, and indeed the country. Concerns regarding crime and public safety are not peculiar to the Chamber; rather they reflect concerns of citizens in the broader community. Public opinion polls show that British Columbians view crime as more of a problem that citizens of other provinces. There are particular areas of concern that most affect the business community. First, BC has higher property offences than most other provinces in Canada, and higher than our nearest US neighbours in Washington and Oregon. Second, there is a concern that offenders do not face adequate consequences for criminal behaviour, particularly as it relates to non-violent offences, drug offences, and for recidivist offenders. Third, the length of time to clear a court case is excessive and the process is cumbersome, thus distancing the offender from any consequence he may receive. The challenges associated with addressing the issues of crime and public safety are admittedly complex and cross federal and provincial, as well as municipal jurisdictions. Since criminal behaviour crosses these boundaries in terms of crime classification, it is important that greater coordination between the various levels of policing and justice be attained. This requires a greater level of inter-provincial coordination, under federal leadership, to ensure that legal and judicial processes are effective, consistent across provinces, and recognize cross-jurisdictional offenders. While policing and judicial initiatives are the responsibilities of the Ministry of Public Safety and Solicitor General, and also the Attorney General respectively, there are obvious underlying causes to some of the occurrences that police and the judiciary deal with on a daily basis. These include but may not be limited to drug addiction, mental health issues and homelessness. Therefore cross-ministerial coordination is also required. Initiatives and cooperation with other ministries including, but not limited to, the Ministry of Health, the Ministry of Children and Families and the Ministry of Employment and Income Assistance should be integrated. The negative impacts of poor system coordination have resulted in an erosion of public confidence. Concerns have developed regarding policing and, more pointedly, the ability of the judiciary to deal with offenders. The public are concerned that their safety is being compromised and offenders are experiencing relatively little consequence for their criminal acts. While the Chamber does not advocate a â&#x20AC;&#x2022;lock them up and throw away the keyâ&#x20AC;&#x2013; approach, we do advocate for public policy in the areas of policing and the judiciary that emphasizes the protection of society and the responsibility of individuals for their behaviour. Understanding that criminal behaviour is often linked to social and economic problems, the Chamber strongly believes that systems and programs should be in place to assist individuals to re-direct their behaviour and integrate into productive society to the highest level of independence they are able to achieve. To accomplish this, adequate services should be available to assist with drug addiction, mental health issues, housing and employment training in a timely manner. The Chamber acknowledges that assessing the effectiveness of such social service interventions is difficult as the programs are delivered in a dynamic environment with a wide spectrum of individuals with diverse needs. Even so, the Chamber contends that the framework for the provision of social service intervention programs requires focus on a positive outcome for the whole community, with tangible and measurable results, and that programming should be economically feasible. The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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POLICE AMALGAMATION (2011) There has been much debate relating to the amalgamation and/or regionalization of police services in BC. At the present time, the Royal Canadian Mounted Police (RCMP) and 11 independent municipal police organizations provide service across British Columbia. Those include independent police departments in: Abbotsford, Central Saanich, Delta, Nelson, New Westminster, Oak Bay, Port Moody, Saanich, Vancouver, Victoria, and West Vancouver. This patchwork quilt of municipal police forces and RCMP detachments across the province is filled with departments that often manage their cases differently and lack the specialized training being provided to officers elsewhere. A number of police forces lack the resources to do day-to-day work, let alone commit officers to work on multi-agency teams. These types of obstacles have hampered major multi-jurisdictional investigations, like the case of dozens of missing women from Vancouverâ&#x20AC;&#x2DC;s Downtown Eastside. Two decades after Clifford Olson began abducting and murdering children on the Lower Mainland, BC police agencies still face major roadblocks when trying to catch organized, mobile serial predators. Such examples as the Olson case and Pickton trial have exploited the lack of guidelines covering how and when police agencies come together to form joint task forces when a predator begins crossing jurisdictions. When municipal police forces act alone, they can often miss critical information to an investigation that might have been detected under a wider coverage area. Issues of public safety are of particular concern in areas where municipal boundaries are immediately adjacent, sharing common boundaries. Municipalities are feeling the impact of provincial downloading and increased costs of police service delivery. Amalgamation of police services may provide uniformity of enforcement, specialization, better coordination of resources, ongoing, in-service training, fewer infrastructures, improved efficiency and the avoidance of duplication. Municipalities in British Columbia of more than 5,000 persons are required to bear the expense necessary to maintain law and order. The Police Act gives such municipalities three choices: they may establish their own police force, they may contract with the provincial police agency, or they may contract with another municipal police force. Ultimately in BC, the Attorney General is responsible for policing. Where it is evident that amalgamated, regional police services would field more effective policing than a multitude of local services, the provincial government has the power to legislate such action. The province demonstrated this power in January of 2003, when it amalgamated the Victoria and Esquimalt police departments. Arguably the most potentially disastrous police control continues to be found in the capital region of British Columbia, an area policed by four independent police forces and three RCMP detachments. Central Saanich, Saanich, Oak Bay, and the amalgamated Victoria-Esquimalt departments all run independently of each other in Greater Victoria. Divided police resources along city borders make little sense from a practical point of view. Few criminals or policing problems confine themselves within a municipality, and increasingly prostitution, the drug trade, organized gangs and violent serial offenders have regional, national, and international patterns, which require a coordinated solution.

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An example of the shortcomings of integration policy versus full amalgamation was found in 2009, when the Victoria Police Department withdrew from the regional integrated crime-fighting unit citing financial constraints and pressures on department resources. This reinforced the need for full amalgamation as regional demands continued to overly impact one municipal police force, forcing budgetary concerns to trump public safety. During the announcement, Police Chief Jamie Graham highlighted this issue, stating that, ―It should be a regional force, right from that ferry terminal to Oak Bay to the Western Communities." Since 2003, successive provincial Solicitors General have highlighted the need for regional police amalgamation. Most strongly, Solicitor General Rich Coleman stated that if municipalities in the Greater Victoria region did not further integrate police services, the provincial government should force them to merge into a single agency. No substantial integration has happened between the police departments since that statement even though a 2003 poll conducted for CHEK and the Times Colonist found police amalgamation was supported by 70 per cent of capital region residents, including a majority in every single municipality. These results are echoed in the public‘s continued concern sited in a 2008 report to the Vancouver Police Department1, which stated, ―A recent (November 10, 2007) Angus Reid survey found, for example, that 65 percent of residents surveyed in the GVR support creating a regional police service. This is a significant finding that should inform discussions of a regional police service going forward. It appears that public concern with the effectiveness of the police in responding to crime and violence in the region outweighs concerns related to the creation of a larger police service and the loss of ―no call too small‖ policing.‖ In larger urban and metropolitan areas police amalgamation would be beneficial for several reasons, including: Reduced policing costs - reduction in policing costs realized through integrated infrastructure and management Better integration and increased effectiveness – By amalgamating units such as serious crimes unit, sex crimes unit, financial crimes section, strike force, gang unit, dispatch unit, human resources, purchasing, K9, administration functions, forensic identification, and detention facilities Population shifts – Thousands of people work and live across municipal boundaries and are exposed to multiple police forces and jurisdictions More equal administration of justice – Each police department carries its own operational policies, leading to regional disparities in law enforcement Increased Quality of Life and Safety – when approached separately in the region as opposed to cohesively, it jeopardizes public safety and our quality of life

1 Options for Service Delivery in the Greater Vancouver Region: A Discussion Paper of the Issues Surrounding the Regionalization of Police Services, February 2008

The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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THE CHAMBER RECOMMENDS That the Provincial Government addresses the issue of regionalization of police services in the Province of British Columbia by: 1. establishing provincial standards for the integrated delivery of police services by police forces where municipal boundaries are immediately adjacent; and 2. where necessary, legislating amalgamation of police services in areas where established standards are not being met and where uniformity would benefit service delivery and public safety. ASSISTING THE REVITALIZATION OF THE URBAN STREET SCENE (2009) The desirability of the province as a place to live, work and invest is directly impacted by the degree to which its residents feel safe. The perception of crime and public safety is a priority for those who live here and for those interested in relocating to BC. Social issues, crime and public safety erode investor and customer confidence especially in those areas where the marginalized tend to congregate. Businesses are being negatively affected by the increasing number of ―street‖ or marginalized people and the errant behaviour they exhibit in public. Commercial areas lose viability when panhandling, drug dealing, loitering, low level crime and graffiti become so visible that the perception of a deterioration in public safety impacts customer comfort and investor confidence. As a society, we tend to focus on symptoms but are reluctant to invest in the causes of these problems. We are only beginning to understand, for example, how strategic investments in enforcement, capacity building and supported housing can reduce the costs for police, courts, corrections, insurance, health care and perceptions of public safety. Separating the profiles of the street-involved to determine the role of community partners to address these individuals is essential. Those with criminal backgrounds and profiles should be addressed through the enforcement services available in communities, and those experiencing social and personal barriers to inclusion need to be addressed accordingly. The provision of appropriate shelter, both short term and long term with appropriate supports, needs to be the mandate of all levels of government to ensure a healthy business climate. Poverty is a significant factor in the challenge to decrease the numbers of people on our streets. The level of benefits under BC Employment Assistance may need to be revisited, but an equally pressing issue is the fact that assistance dollars are ―clawed back‖ from individuals who enter the work force. Allowing recipients to retain any income earned through employment until their employment income surpasses their assistance level is an advisable implementation in enabling independence. With the success of many outreach programs in the province tackling homelessness in partnership with enforcement services, there is a corresponding improvement for the business community. Furthermore, the costs to the taxpayer of someone being homeless far outweigh the cost of providing supportive housing. A study from Prince George determined the cost of being homeless to be $196,000 compared to $57,000 to be housed The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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The resulting improvement in the business environment for housing the homeless has not been measured in this equation. THE CHAMBER RECOMMENDS That the Provincial Government restructure social assistance payments to build in incentives to work based on a formula allowing recipients to retain earned income and diminish reliance on social assistance over time.

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ESTABLISHING A REGISTER OF PROLIFIC OFFENDERS AND A REGISTER OF VIOLENT OFFENDERS (2009) The Chamber has previously commented on the need for tougher sentencing of repeat and violent offenders, and for government to devote greater resources towards addressing the causes of property crime. However frustration is often expressed with the manner in which information regarding prolific or violent offenders is shielded from public disclosure and not available to law enforcement in a coordinated manner. Prolific Offenders and Property Crime Many types of property crime (such as shoplifting and vandalism) disproportionately affect business, and result in increased costs for businesses which are ultimately passed on to consumers. Much of this crime is perpetrated by repeat, chronic or prolific offenders who have demonstrated a pattern of frequent and repeated convictions on similar charges. In recent years there have been a number of efforts aimed at specifically addressing the issue of prolific offenders. While all well-intentioned, there appears a distinct lack of coordination. The BC Criminal Justice Reform Secretarial has established a Prolific Offender Management (POM) pilot project in six pilot communities (Surrey, Kamloops, Nanaimo, Prince George, Williams Lake and Victoria) monitoring the activities of 190 identified prolific offenders. The RCMP has specific prolific offender management programs in five BC regions (Coquitlam/Maple Ridge/Port Moody, Courtney/Comox, Fraser Lake, Port McNeill and Penticton). The Vancouver Police Department has operated a Chronic Offender Register for a number of years. The Langley RCMP has established its own â&#x20AC;&#x2022;Prolific Offender Warrant List.â&#x20AC;&#x2013; Similar efforts can be found in other Canadian jurisdictions, such as the establishment by the Alberta government in October, 2008 of a project to track more than 60 individuals in Calgary and Edmonton who had been identified by police and Crown Counsel as engaging in repeat or habitual theft or property crime. The number of different local programs emphasizes the need to create a single national Register of Prolific Offenders which serves the needs of all Canadian communities. The system must recognize that prolific offenders may travel between and within Provinces, and that prolific crime is not limited to larger urban communities. While the principal function of a central Register of Prolific Offenders would be to facilitate the exchange among and between law enforcement agencies, Crown counsel and the judiciary, the Chamber is of the view that information gathered and stored in such a registry should also be made available both to the public in the case of individuals who, through their past conduct as evidenced by repeat criminal convictions, have demonstrated themselves to be prolific offenders. Violent Crime While the concept of a Register of Prolific Offenders may be seen as somewhat unique, such is not the case with violent offender registration. Many jurisdictions provide for the registration of certain violent offenders, and often make such information available to the public. In the United Kingdom, the Violent and Sex Offender Register (ViSOR) includes registration of offenders jailed for more than 12 months for violent offences, and un-convicted people thought to be at risk of offending. Several individual American States have violent offender registries, including Kansas,

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Montana, Indiana and Oklahoma,1 which provide for access both to law enforcement and to the public. The common element of each of these registries is the establishment of a central database of offenders who have been convicted of crimes of a violent nature, recognizing the greater risk that those individuals will commit similar offenses in the future. Since December, 2004, the Canadian National Sex Offender Registry (NSOR) provides for the discretionary registration of offenders who are convicted of sexual offences. Violent crime, including repeat violent crime, is not reportable unless there is a conviction on a related sexual offense. NSOR has been the subject of much debate and criticism, much of which is focused on the fact that information that is collected from the offender is confidential, often not kept up to date, and is not available to the public. The Chamber is of the view that it is reasonable and in the interests of the public that information is made available to the public and to law enforcement in the case of individuals who have been convicted of violent criminal offenses. THE CHAMBER RECOMMENDS: That the Federal Government: 1. in consultation with Provincial Governments, establish both a Register of Prolific Offenders and a Register of Violent Offenders (the ―Registries‖), based on the following key principals; a) that registration of a prolific or violent offender shall be required (and not subject to judicial discretion) where the nature of an offender‘s convictions (in the case of the Register of Violent Offenders) or frequency of offences (in the case of both Registries) falls within specified guidelines; and b) that the failure of a registered offender to advise of any change of name or address will be the subject of further criminal charges, the prosecution of which will be given priority by Crown Counsel; 2. in establishing the Registries, give paramount importance to the need to allow unimpeded and immediate electronic access to the Registries for any legitimate law enforcement purpose; and 3. determine a formula whereby the information contained in the Registries is available for timely electronic access by the public upon reasonable request, which endeavours to satisfy the public‘s legitimate ―need to know‖ without creating an unreasonable risk to the offender. INCREASED SENTENCES FOR PROLIFIC OFFENDERS (2009) Prolific offenders do not receive escalating sentences and in many cases receive reduced sentences as the number of offences increases. The Canadian justice system is plagued with repeat offenders who take an inordinate amount of both enforcement and legal resources. A reduction in the number of appearances by repeat offenders would greatly reduce the crime rate and burden on our justice system. The Federal Government should enact legislation that requires the number of repeat offences to be given greater weight in determining sentences.

1 (for example, see the Montana Sexual or Violent Offender Registry, http://www.doj.mt.gov/svor/search.asp) The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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Issues of crime and public safety are a significant concern for the business community and for British Columbian citizens in general. A recent report titled, Concern for Leniency: An Examination of Sentencing Patterns in British Columbia from Doob and Webster, showed that a greater percentage of British Columbians are concerned with lenient sentencing practices in their province than are citizens in other provinces (74% compared to 69%). Though the same report shows that sentencing practices in BC are not lighter than in other provinces across Canada in the aggregate, its findings highlight specific challenges in BC. While 41% of convicted drug offenders in BC are incarcerated, compared to 39% in Canada, only 50% of those receive sentences of more than 3 months (Canadian average excluding BC is 71%) and only 20% get more than 6 month sentences (compared to the Canadian average of 58% excluding BC). The report also does not examine the question as to whether repeat offenders receive increasing sentences. While the Doob and Webster study is encouraging in the aggregate, it is in stark contrast to studies from city police forces on specific problematic populations of chronic offenders, and does not examine the great increase in violent and gang crime. In addition, the business community continues to call for the use of crime victimization counts as a more accurate measure of the occurrence of crime, particularly property crime. It is the position of the business community that many incidents of criminal actively do not get reported to police and therefore counted in the statistics, which in turn skews the official crime statistics in a downward direction. A recent Vancouver Police Department study seems to support the second position. The study indicates that for the majority of chronic property offenders, custody sentences decrease after approximately their thirtieth conviction, averaging just 25 days per conviction. The report shows that offenders themselves indicate they can victimize up to 4,000 individuals or businesses per year, most often in support of their drug addiction. Due to very short sentences, the offenders are back on the street in short order, still in the grips of their addiction, and simply continue on with committing crimes to access resources to fund their habit. Persons who engage in repeat offences such as for property crime should be dealt with more seriously by the law. While a light sentence may be reflective of the particular incident in front of the courts, it does not reflect the ongoing harm to the community at large and the volume of property affected. It does not in any way cause the offender to stop their behaviour upon release as the sentence length does not allow adequate time for drug treatment with the goal of withdrawal and changed behaviour. In the long run, it is the community who suffers the harms of repeat offenders while offenders themselves are relatively unaffected. THE CHAMBER RECOMMENDS That the Federal Government amend the Criminal Code to support and encourage the judiciary to issue increased sentences for prolific offenders that better reflect their criminal history and the collective harm they have done and continue to do to the community, including by the imposition of consecutive sentences.

The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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STATEMENT OF POLICY Chambers of Commerce and municipal governments share the goal of creating communities that are healthy, vibrant and provide a high standard of living to all who live, work and invest in BC. However, there is growing concern within the business community that the current structure of local government presents an increasing challenge to a vibrant investment and business environment. BC currently has a patchwork of local governments with 28 regional districts and 160 municipalities. This presents a highly inconsistent structure, where rules vary from community to community and are subject to change based on local political considerations. When combined with the broad enabling governing legislation that is the Community Charter, this creates a challenge for business through a lack of certainty, particularly as we look to attract investment into communities. While the Chamber recognizes that the Community Charter provides local governments with considerable flexibility around economic development and revenue generation, the positive aspects of the Charter have not been utilized by the majority of municipalities and the Charter has proven to not be effective in enhancing BCâ&#x20AC;&#x2DC;s investment climate. Increasingly, regions will be the key driver of economic growth, yet the governance structure at the local and regional level does not lend itself to developing a regional brand and a regionally coordinated approach to economic development and to attracting investment. As creatures of the Provincial Government there is a fundamental role for the Province in continually evaluating the exercise of local government powers of taxation and fee collection against not only established and approved municipal plans, but also provincial objectives. In addition to powers of taxation, the Chamber is concerned about the impact local government regulation can have on economic growth and a communityâ&#x20AC;&#x2DC;s ability to attract investment. While the Chamber believes that there are a range of services and programs that are best provided and administered at the community level, that administration cannot be done in isolation of their cumulative effect on the provincial economy, or on the individual community. The Chamber has been consistent in its focus on government at all levels to put in place measures that ensure the equitable treatment of business through the consistent and transparent application of local government taxes and charges across the province. The Chamber supports all parties working towards addressing existing inequities and laying the groundwork for a more balanced and sustainable tax environment for all taxpayer groups in British Columbia.

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CALL FOR PREMIER’S COUNCIL ON MUNICIPAL INFRASTRUCTURE (2011) Urban and regional centres are playing an increasingly important role as engines for economic growth. In recent years, BC has become known as a world-class destination for opportunity, attracting new citizens to the province looking to enjoy the quality of life we value and enjoy. Unfortunately they do not bring their roads, bridges, schools or hospitals with them. This influx has brought a new vibrancy to the province, but with it, significant challenges for our municipal infrastructure, pressures that must be addressed if we are to continue along a path of economic prosperity. The Chamber calls for the formation of a Premier‘s Council on Municipal Infrastructure (PCMI) to provide a comprehensive framework for municipal infrastructure finance and investment. The infrastructure requirements of BC‘s urban and regional centers are growing, both in terms of new construction and maintenance of existing assets. The current methods of financing, delivering and maintaining infrastructure are not keeping pace, as witnessed by a growing infrastructure debt. Over the past quarter century this issue has only grown more acute, with the municipal infrastructure gap as a percentage of national GDP growing from 2.7% in 1984 to 5.0% in the early 2000s . For this reason, all orders of governments must take a hard look at new delivery options, funding arrangements and financing that can provide the required resources for infrastructure investment. The issue has come to a critical point as much of our infrastructure, the backbone of our economy, has eclipsed over 80% of its life expectancy. As Canada‘s Asia Pacific Gateway, BC is at the forefront of the pacific century. While this provides new opportunities for attracting talent and investment to the province, participation in this marketplace will demand a new look at the level of and commitment to infrastructure investment in the province. Competition amongst jurisdictions is growing and the businesses and individuals within the region are highly mobile, able to relocate to the most favorable environment. Jurisdictions that provide new and innovative solutions for infrastructure investment will experience gains in productivity and increases in their quality of life. While those that do not will find themselves increasingly sidelined and unable to compete. Starting in 2009, new accounting standards set by the Public Service Accounting Board, a national standards governing body, have required municipalities to inventory and better quantify their capital assets and asset management plans, reporting them in their annual financial statements. These guidelines will help provide increased accountability and will be powerful tools to inform the discussion on municipal infrastructure investment. Beginning in 2001, the Province has had a number of standing councils that provide potential templates to further the discussion and public profile of municipal infrastructure investment in the province. The Premier‘s Technology Council, which is comprised of 23 members from the private sector and academia, is one such example. The mandate of the council is to provide advice to the Premier on all technologyrelated issues facing British Columbia and its citizens. To date, the council has published 13 reports making a total of 205 recommendations to government, over 80% of which have been adopted or are being adopted. Another model for providing input to government on issues critical to our economic well-being is the Small Business Roundtable. Appointed by the Province, board members serve a term of at least two years. The Minister responsible for Small Business chairs the Roundtable, appoints new members and provides overall strategic direction to guide the board in the overall achievement of its mandate. Based on The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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information obtained during small business consultations and other activities, the Small Business Roundtable provides recommendations to government and the business community on ways to enhance the growth and success of the small business sector. These recommendations focus on increasing support for skills training and labour market development, leveraging new technologies to improve productivity, continuing the commitment to streamline regulatory processes and develop ways to further increase competitiveness. Both initiatives have proven to be strong platforms for the provincial government to solicit feedback from concerned stakeholders and provide advice and recommendations to government on how to best address the opportunities and challenges facing our province. Broad stakeholder representation is an important consideration in the establishment of the Premier‘s Council on Municipal Infrastructure. Membership could include, but is not limited to, provincial chamber of commerce representation, the Union of BC Municipalities, the Business Council of BC, municipal elected officials, infrastructure industry representatives and participation from academic and leading NGO experts. THE CHAMBER RECOMMENDS That the provincial government: 1. establish a Premier‘s Council on Municipal Infrastructure to advise on: • • •

The accumulated infrastructure debt and projected deficits; The net revenue required to pay down the accumulated debt and address future deficits, and; The establishment of benchmarks for debt reduction and enhanced accountability.

2. collaborate with the proposed PCMI to undertake a comprehensive environmental scan to review best practices in municipal infrastructure finance, including appropriate funding vehicles and enabling legislation. IMPROVING THE EFFICIENCY AND ACCOUNTABILITY OF LOCAL GOVERNMENT IN BC (2011) Communities across BC are expressing a growing level of concern regarding budgeting and spending decisions that are resulting in increased property tax bills. When we combine that with calls from local government for additional revenue streams to deal with pending infrastructure challenges the business community is expressing significant concern over the lack of transparency and accountability at the municipal level. This concern not only speaks to the lack of transparency within many communities but also across the province. With 160 municipal governments, 27 regional districts and 231 Improvement Districts it is critical that there is an arms length mechanism to review how they interact with the population, stakeholders or higher levels of government regarding how they spend taxpayers money. Many local government outputs - such as the services municipalities provide - are highly visible On the other hand, local government processes - how decisions are made - may be quite opaque. This situation is further exacerbated by the fact that the institutional incentives and information shortcuts that facilitate The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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accountability at the provincial and national level are largely absent. Challenges with the current system Over recent years the Chamber has passed a number of resolution that recognize the concerns of the business community regarding specific aspects of what should be viewed as a systemic problem. What has become apparent is that many of these challenges are truly provincial in that they are being expressed by communities of every size, in every region and irrespective of the economic base of the community profile. These issues are clearly systemic and can be broadly summarized as; ability of local governments to provide virtually any service they desire through the Community Charter with no recourse for the business community; lack of accountability – low voter turnout means very little public scrutiny of councils decisions capacity – facing increasingly complex issues (social issues, homelessness) and struggling to deal with the challenges of an open, global economy funding – limited funding sources, how do municipalities utilized alternate service delivery in a way that protects the service while also protecting the municipality from too much risk? Performance measurement Municipal decision-makers want to be efficient and deliver value for local services. Taxpayers need to know how their tax dollars are spent and how their services compare both year-to-year and in relation to others. The only way for this to occur is to determine what constitutes core services for municipalities and to provide a comparable cost for theses services – something that does not exist at present in BC. This does not mean that the Chamber advocates that local governments should only provide a static set of core services. Rather the Chamber believes that there are a range of common services that can effectively be measured based on objective, result based criteria. Performance measurement is not new. It has been in place for several years in different forms in many jurisdictions around the world. Every country in the Organization for Economic Cooperation and Development has a policy at the national level supporting performance measurement. In the United States, the federal government and more than 30 states have legislated performance measurement for their departments and agencies. In Canada, the federal government, eight provinces, (including BC), and two territories have formal systems of performance measurement. While the Chamber recognises that the Community Charter does place some reporting requirements under Division 5 – Reporting of the Charter1 these are extremely limited. Indeed, the Charter goes no further than to require that; 98 (2) The annual report must include the following: (c) a report respecting municipal services and operations for the previous year; (d) a progress report respecting the previous year in relation to the objectives and measures established for that year under paragraph (f); (f) a statement of municipal objectives, and the measures that will be used to determine progress respecting those objectives, for the current and next year 1 http://www.bclaws.ca/EPLibraries/bclaws_new/document/LOC/freeside/--%20C%20-/Community%20Charter%20SBC%202003%20c.%2026/00_Act/03026_04.xml#part4_division5

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The Chamber does not believe that this goes far enough in introducing a level of accountability and scrutiny to municipal decision making. Just as importantly it does not encourage best practices between municipalities, nor provide individual municipalities with the tools and resources they need to inform decision making to better serve their communities. While the Chamber recognises the difficulty in comparing municipality to municipality given variations in geography, economic base, population and a range of other factors there are â&#x20AC;&#x2014;coreâ&#x20AC;&#x2DC; services provided by local governments that can be benchmarked and measured against common goals and criteria. Indeed if we look to Ontario we see the development of a system that measures 54 performance measures across 12 core municipal service areas. These service areas are; Local Government Fire Police Roadways Transit Sewage Water Garbage Parks and recreation Libraries Planning Other. These service areas are then further broken down into sub-measures which are measured against objective criteria regarding their efficiency of effectiveness. Fire 2.1 a) Operating costs for fire services per $1,000 of assessment. b) Total costs for fire services per $1,000 of assessment. 2.2 Number of residential fire related civilian injuries per 1,000 persons. 2.3 Number of residential fire related civilian injuries averaged over 5 years per 1,000 persons. 2.4 Number of residential fire related civilian fatalities per 1,000 persons. 2.5 Number of residential fire related civilian fatalities averaged over 5 years per 1,000 persons. 2.6 Number of residential structural fires per 1,000 households.2 The province already has comprehensive performance measures across all Ministries. These measures ensure that government remains accountable to clients and the public. More importantly the information allows government to improve outcomes and inform and enhance decision making and the utilisation of scarce resources. The Chamber believes these outcomes would be beneficial to local governments as well. 2 Full list of measures under the Ontarioâ&#x20AC;&#x2122;s Municipal Performance Measurement Program can be found at http://www.mah.gov.on.ca/Page1642.aspx

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Local governments are correct to state that the financial challenges they face are significant and only going to become more acute as we look to upgrade our aging infrastructure. With limited financial resources and with only one taxpayer it seems critical that the first step to addressing local governments fiscal challenges is ensuring that they have the appropriate measures and tools to make well informed, focused decisions that are driven by outcomes and efficiencies within and between municipalities rather than simply providing additional revenue. The Chamber believes that this would be achieved through a mandatory reporting system on predetermined core services. Such a requirement would go a long way towards providing the tools needed by local government to better serve their communities while also developing a culture of sound fiscal decision making while promoting balance between the level of taxes paid and the services consumed. THE CHAMBER RECOMMENDS That the Provincial Government work with UBCM and the Chamber to develop; 1. benchmarking system that outlines core services that are applicable across municipalities of every size, of every economic base and of all regions of the province; and 2. core metrics based on appropriate measures (per population, per dollar expended etc) that allow for cross-municipal comparisons; REVIEW OF REGIONAL GOVERNANCE MODELS IN URBAN AREAS (2011) In 1966, the BC government established the â&#x20AC;&#x2022;regional districtâ&#x20AC;&#x2013; concept of local government in hopes of dealing with problems that transcended traditional municipal boundaries. These regional governments operate throughout the province as a local form of government, governed by the Local Government Act of BC. Prior to the introduction of the regional district, land use and planning were done directly by the BC government, whereas local services (such as fire protection and water management) were provided by independently incorporated improvement districts or municipalities under contract with the province. Today, there are 154 municipalities in BC, plus 27 regional districts. Most regional districts inhabit primarily unincorporated rural areas (electoral areas). However, some urban areas, which have been deemed regionally unregulated because of numerous neighbouring municipalities, have become dependent on regional districts for certain regional responsibilities. In the Greater Victoria area alone, there are 13 municipalities with one encompassing Capital Regional District (CRD), serving a population of over 350,000. The Greater Vancouver Regional District involves 21 municipalities and serves a population of two million. The purpose of regional districts is three-fold: they are regional governments that deliver regional services; they are inter-municipal and provide a political and administrative framework for the delivery of services on a partnership basis; and they can offer local government services for unincorporated areas. The CRD and GVRD are both somewhat considered regional district anomalies because of their highlypopulated urban areas. In these two districts, the regional governments primarily provide fully regional services like water supply and air quality management. In contrast, less populated regional districts are The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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more focused on providing local services like planning, and fire protection. While both the CRD and GVRD share regional problems, the province deals them with quite differently. Most notably, accessing capital and transportation management are two key issues handled legislatively in a different way from one another. In 1988, the Legislature adopted the Greater Vancouver Transportation Authority Act, which was the result of extensive negotiations between the province and the GVRD. This was significant in a number of respects: it gave the GVRD new powers in transit, major roads, air care and Transportation Demand Management; and provided revenue sources to match. Significantly, it removed hospital financing as a regional district responsibility as one of the swaps necessary to achieve a balanced and mutually acceptable package. In contrast, the CRD, which is experiencing significant transportation challenges, has no governing transportation body overlooking the region. The Municipal Finance Authority Act was created in 1971 and took advantage of the emergence of regional districts and mandated that all municipalities - with the exception of the City of Vancouver and special boards - had to borrow through their regional districts. This allowed local governments, through their regional districts, to pool their assets and borrowing requests and collectively approach the marketplace producing benefits in lower borrowing costs. Thus, while the CRD‘s primary city, Victoria, must borrow money through its regional district, the GVRD‘s primary city, Vancouver, is not mandated to do the same. Greater Vancouver‘s unique agreements with the province have allowed some of its main issues to be largely mitigated. Particular areas of BC have grown and will continue to grow at unprecedented rates since the establishment of regional districts, including the CRD, Regional District of Central Okanagan, Regional District of Nanaimo, and Regional District of Fraser-Fort George. As these urbanized regions escalate, they may also benefit from similar agreements that the province holds with the GVRD. A continuing concern of many residents in urban areas is the question of representation on regional district boards. Residents of electoral areas elect a representative to sit on the regional district board. Meanwhile, representation of municipal areas on the district‘s Board of Directors is supposedly ensured by directors who are members of municipal council and appointed by their councils for terms of three years. In other words, municipal voters have no direct voice in deciding which of their elected representatives will be on their regional district‘s Board of Directors. A recent example of this need for increased accountability and better local decision-making is the concern over the proposed property tax increases outlined by BC Transit and the Victoria Regional Transit Commission in coming the coming years, echoing the concerns raised in the lower mainland over tax increases by Translink in 2010. While other regions are also experiencing unsustainable increases, the CRD‘s example illustrates the problem most vividly. As published, the increases reflect a more than doubling of the property tax portion from just over $60 million in 2009/10 to over $124 million in 2013/14, increases that will hit businesses in the region particularly hard. While the business community supports the goals of public transportation and the principles of sustainability, there are significant concerns that such increases are financially unsustainable. This most recent example continues to call for the formation of a regional transportation authority, one that encompasses all transportation modes and provides for increased accountability and local decisionmaking.

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It appears the Regional Governance model does not serve the majority of districts well. The fine-tuning of the Regional Governance Structure to meet the needs of particular areas is too short term an approach and longer-term solutions are required. The regions need to be treated fairly and appropriately and review of this important governing body and its role is needed. THE CHAMBER RECOMMENDS That the Provincial Government reviews its concept of regional districts and their roles and the manner in which representatives are selected. THE NEED FOR A BUSINESS VOTE IN BC (2011) Under the Community Charter in BC, municipalities are being given significantly more authority today than in the past, with no commensurate level of accountability. Indeed, BC is unique in terms of the degree of power and autonomy provided to local governments. When this is combined with the fact that in BC business owners and operators do not have any voting rights in municipal elections we have seen the development of significant inequities develop between business and residential property tax rates. Business owners have become the silent taxpayers. They are the easiest group on which to increase taxes because they no longer have a vote3. Many business owners live outside their jurisdiction and cannot be part of the election process or vote in a referendum which may impact their business directly. This gives them no voice in the community in which they pay the highest taxes. It‘s taxation without representation. Local Election Task Force The issue of the corporate vote was recently reviewed by the Local Election Task Force created in December 2009. The Task Force was created as a joint, consensus-based group of three provincial government and three Union of BC Municipality members. The task force was mandated to review issues related to local government elections, including the introduction of a corporate vote. The committee received numerous submissions, including from the Chamber, calling for the introduction of a business vote. The Chamber was therefore disappointed that in the final report the task force recommended ―maintaining the existing voter eligibility rules on this issue and not establishing a corporate vote.4‖ The rationale given in the report for this position was that ―balancing the interests of businesses, local governments and the public is an essential consideration when contemplating a corporate or business vote‖. It went on to state that ―there was no approach evident to the Task Force that would ensure fairness among businesses, equity for electors and administrative workability.‖ A Fair, workable model During the consultation phase the Chamber partnered with the Canadian Federation of Independent Business and the Business Council of BC, in close consultation with key Ministry staff, to design a system for a business vote. This model included a set of principles that would define the business vote. These were;

3 A corporate vote existed in BC until 1993. 4 Full report available at http://www.localelectionstaskforce.gov.bc.ca/library/Task_Force_Report.pdf The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

EFORM OF LOCAL GOVERNMENT the business must have a business number issued by Canada Revenue Agency the business must have a non-residential real property address the business must be paying a business class property tax the business must appoint a designated proxy to vote on its behalf a registered business voter may only be registered to vote for one business in a given municipality

The Chamber believes this model constitutes fairness among businesses. In short, a legitimate business physically located within a municipality paying business property tax would be eligible for a vote. This system would require coordination between existing Canada Revenue Agency and BC Assessment Authority databases. This list, which would be maintained by the province, would then simply require a designated voter for the business. The issue of equity, often described as one person one vote, is problematic as a business vote will likely mean that one individual could be awarded the opportunity to vote more than once in a municipal election. Whenever we discuss the issue of principles and voting one principle that the chamber believes it critical to this discussion is the principle of ‗no taxation without representation.‘ This principle has been utilized within the BC local election act to allow for non-resident property owners to be allocated a vote in the municipality where they own property. This is an important point; there is already a clear exception to the principle of one person one vote. While we recognize that an individual does not currently have the right to vote more than once in a single municipality an individual can vote more than once in the same municipal election. Local Government Support The Local Election Task Force report stated that ―UBCM‘s policy position is not to support the corporate vote‖. The Chamber has expressed significant concern that in a joint, consensus based model as was used for the task force the position of UBCM was bound to lead to an outcome where the business vote would not be accepted within a consensus report. Further to this the Chamber has been consistent in expressing concern that the position of UBCM does not reflect the fact that there is considerable support within many municipalities for the re-introduction of the business vote. Indeed, CFIB issued a press release in May 2010 entitled ``CFIB commends mayors and councilors for supporting the return of the business vote5`` which listed four Mayors and four councilors as being supportive of the need to introduce a business vote. We believe it is worth noting several further points. Firstly this is an issue that continues to be raised with resolutions being presented in 1999, 2000, 2002, 2003, 2006 & 2008 and 2010 (full text of these resolutions can be found in the UBCM history document). This demonstrates a significant degree of recognition of the unfairness of this issue from local and regional governments across the province on an ongoing basis.

5http://www.cfib-fcei.ca/english/media_centre/british_columbia/121-tax_policy/1876cfib_commends_mayors_and_councillors_for_supporting_the_return_of_the_business_vote.html

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While these resolutions have always failed to pass on the floor of UBCM this does not necessarily reflect deep opposition by delegates but is at least partly a reflection of the fact that the Resolutions Committee has opposed these resolutions. This opposition is based on a 1998 policy paper drafted to address a number of issues around the 1993 reform of the legislation governing local government elections. This paper, under section B3, stated that ―like the results of votes on Convention on the same topic, there was a close draw between respondents for and against this issue.‖ In subsequent years the Resolutions Committee have stated in opposition to resolutions on this issue that ―the current UBCM policy dates back to the 1998 UBCM Convention when delegates considered a policy paper on elections issues. On this issue the delegates selected the option of no change to present legislation (no corporate vote). Further to this concern the Chamber also believes that the reality regarding the need for business to be representing in municipal elections has changed dramatically since 1998. Local governments continue to tell us that they are being expected to provide an ever increasing range of services through downloading from senior levels of government. The expansion of services provided by local government has a direct impact on the business community as the role of local governments in providing the foundation for economic growth is a key determinant of businesses ability to attract workers, service customers, and expand their businesses. While these services are also of significant importance to the resident of a community the significant difference is that residents of a community have the ability to hold their elected representatives to account through the exercise of their democratic rights every three years – business has no such right. The fact that businesses do not have the vote has led to some municipalities levying an unfair burden of property tax onto their business community. The Chamber is concerned that not only do studies suggest that business uses fewer services than residential and yet, they are paying so much more but as municipalities face increased infrastructure costs the current system will lead to municipalities continuing to hide the true costs from voting residential taxpayers by furthering the inequity by saddling business with ever greater levels of property tax irrespective of their ability to pay. THE CHAMBER RECOMMENDS That the Provincial Government allow business a greater say in municipal elections through the introduction of a business vote that allocates one vote to every business with a business number paying business class municipal property tax to be exercised by a designated individual CREATING EQUITY IN THE PROPERTY TAX SYSTEM OF BRITISH COLUMBIA (2010) The Chamber has expressed continued concern regarding the propensity of certain local governments to subsidize residential taxpayers by unfairly burdening business with property tax levies far in excess of the services they utilize. While we appreciate the challenges faced by local government with limited resources, raising those revenues by increasing costs to business is an unsustainable solution. The Chamber appreciates the efforts of a few municipalities, such as Powell River, Vancouver and Prince George, in addressing the concerns of business, however, we believe a more direct approach needs to be initiated by the provincial government in order to deal with the issue on a larger scale.

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Current Situation The tendency of local governments to apply an excessive tax burden to non-residential taxpayers has been well documented by experts in the field of municipal governance and taxation. Reports from the BC Chamber, MMK Consulting Inc., the Fraser Institute, the Canadian Federation of Independent Business, and Professor Robert Bish among others have clearly demonstrated that the level of property tax levied on the business class compared with the residential class is far beyond the level required to cover the cost of providing the services they consume. For example, the consumption study by MMK Consulting in 2007 showed that non-residential property owners pay tax far in excess of the services they utilize. Vancouver non-residential property owners paid 57.4% of the property tax burden while consuming only 24% of municipal services. Interpreted, this means that residential property owners pay 56 cents for each dollar‘s worth of service they consume, while non-residents pay $2.42 for each dollar consumed. This is a 4.3:1 consumption payment ratio. Industrial properties have an even greater burden with the business to residential ratio going as high as 20:1. Recently Catalyst Paper Corporation took the municipality of North Cowichan to court in an attempt to prove that the level of municipal taxation was unreasonable, using their rate of consumption as a basis for the argument. In October 2009, the Supreme Court of BC ruled on the case, finding that although the municipality was acting within its legislative discretion in setting their tax rates at such a high level, Judge Voith recognized that the discrepancy between the consumption of the municipal services and the Class 4 tax rates is a structural issue that has widely been recognized as a problem. However, he further noted that the pace at which, and the extent to which, the reduction in the Class 4 rate is to take place is within the discretion of individual municipalities. The finding of Judge Voith in the Catalyst v North Cowichan case resonates with the comments made by Professor Robert Bish that municipalities, ―have used their discretion to impose higher and higher taxes on business properties relative to residential,‖ and further, ―that the current taxing practices have not been successful in achieving the desirable balance of a favourable business climate along with municipal discretion.‖ It is a situation he notes, ―may contribute to a potential disaster for (a) community.‖ History Prior to 1984, the British Columbian Provincial Government regulated ratios between residential and other property classes. This restricted local government‘s ability to set arbitrary rates and restricted the difference between classes to between 2.6 and 3.5, depending on the class. The limits placed by the province did have the effect of restricting local governments in their decision and therefore provided at least a degree of fairness and stability. In 1984, the Provincial Government granted local government full autonomy in the setting of rates between the various classes. Property classes were then expanded to the current nine classes we now have in British Columbia, which allowed municipalities have the maximum flexibility to allocate tax collection to distinct property types. In addition to the 1984 change, the Community Charter introduced in 2003, provided local governments further control over the methods of tax collection and the services that they may choose to fund. This autonomy, combined with additional service pressures, has resulted in municipal governments becoming ever more reliant on property tax. Indeed, Canada now has one of the highest levels of dependence on property tax in the industrialized world. In terms of total tax burden, property tax

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represents 9.8% of all taxes paid in Canada and represents approximately 46% of total municipal revenues in BC. Structure It is important to note that the term property tax actually refers to a range of components levied on behalf of a range of different authorities; these are municipal, school, regional districts, hospitals, transportation authority, and others. It should also be noted that while these are all levied at the local level, only municipal components are fully under the control of the local governments, all others are set by the Provincial Government. The focus of this resolution is on the municipal portion. Municipal tax is calculated on the basis of the market value, or "assessment", of land, improvements or both (i.e. house, barn, garage, yard) and the municipal "tax rate". Most local governments calculate taxes using the variable tax rate system where tax rates are based on a dollar figure per $1,000 dollars of assessed property value (i.e. $1.02/$1,000). Using this example, the property taxes payable on a $300,000 property would be $306. Adding to this complexity is the structure of the tax itself. BC currently has nine distinct recognized classes of property. The autonomy provided to local government, the variety of recipients of property tax, the setting of the mill rate, and the number of classes of property all lend themselves to a complex system that does not encourage openness and does not even get close to a level of transparency that is critical to prudent spending, community involvement and most importantly, good decision making. Addressing the Problem The government of BC has identified that there are significant problems with the property tax system. They expressed concern that tax reductions at the provincial level were being negated by tax increases at the municipal level. The result being a failure to make BC business as competitive as it can be. In the 2009 Throne Speech it was stated that, ―more needs to be done to ensure that provincial tax relief is not negated by local property tax hikes,‖ and that Government committed to develop new legislation that would protect provincial tax reductions. The following Budget Speech stated that, ―In collaboration with the Union of BC Municipalities and its members, the government also plans to restructure current provincial/local funding arrangements to provide local governments with increased financial certainty in uncertain economic times.‖ As a result of the Catalyst vs. North Cowichan ruling in the fall of 2009, the provincial government is concentrating its focus on municipal tax reform to class four properties (major industry). While this is the most pressing area of concern and one that profoundly impacts the competitiveness of our province for investment in major industry, the Chamber maintains that the challenge for class four needs to be addresses within the broader context of all classes. Taken in isolation, there is the danger that changes made to improve the tax fairness for class four will result in a potential tax shift to other business classes while maintaining the protection of tax levels for class one. However, it must be recognized that both the immediate challenges of sustainable tax levels for class four, and the need to maintain equity to other classes, are essentially a short term approach to the much more complex problem of a tax system that is itself perhaps unsustainable. While necessary, a short term solution should be seen as a first step in a more comprehensive review of municipal taxation with the The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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vision of developing a system that provides a fair tax distribution across all property classes in a sustainable system. It is also important to recognize that while the tax system is unwieldy at best, with no similarly complex system anywhere in Canada, the environment in which municipalities must operate has itself become increasingly challenging. With the downloading of services to municipal governments and the infrastructure funding gap from senior levels of government, municipalities are pressed to provide citizen service and infrastructure maintenance and development with limited funding stream capacities. According to the Federation of Canadian Municipalities, only 8 cents of each tax dollar paid in Canada goes to municipalities. The rest goes to the federal and provincial governments. Yet within the current system, the Chamber has welcomed the commitment of the provincial government to address issues of concern regarding municipal taxation. Particular areas to be addressed are: Concern for Unsustainable Industrial Tax Rates While the Chamber is concerned about the tax fairness for all non-residential property classes, we are particularly concerned about the exorbitant tax rates on industry (class four) in municipalities where they are set at an unsustainable level. The method of property taxation has no connection with the business revenue and the ability of the company to pay. This is particularly troublesome in industrial properties, where, as previously stated, ratios can be as high as 20:1. With such high tax rates, a shift in economic conditions can lead to industrial closure. In municipalities that are largely supported by one industry, this can be disastrous. The Provincial Government has demonstrated its willingness to assist in addressing the issues of the industrial tax rate for eligible port properties, with the introduction of the Ports Property Tax Act introduced in 2004. This act set rate caps for designated port properties from its time of introduction until 2008. The Provincial Government paid cash compensation to the affected municipalities during that period, with the objective of the municipalities introducing phased tax adjustments to other classes, thereby relieving the government of compensatory payments at the end of 2008. Unfortunately, without a more structured program of tax changes, the Ports Property Tax Act and compensatory payment from the provincial government have had to be extended until 2018. While the chamber was pleased with the relief the Ports Property Tax Act gave to those industrial businesses, it is not advisable that the provincial government take on additional compensation payments to municipalities as a part of property tax restructuring in the future. Fair Tax Levels for all Business Classes The virtually unchecked ability of local government to tax non-residential classes with no recourse or relationship to cost of service has proven to lead to those classes being penalized with unfair taxation compared to the voting residential taxpayer. Though the Catalyst v North Cowichan finding has shown that while municipalities have full discretion in taxation, and that consumption rates are not the only issue considered, it did highlight that the current weighing of issues in taxation decision is producing unbalanced results. It is desirable for municipalities to set tax rates and be directly accountable to the electorate for doing so, but it is also unlikely that municipal government will on their own eliminate the current tax inequalities for non-residential tax payers. Thus some form of provincial regulation is required to achieve fairness. For example, tax reforms were introduced in Ontario bringing â&#x20AC;&#x2022;fairness ratiosâ&#x20AC;&#x2013; to ensure that large tax The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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rate discrepancies between classes could not occur. Alternatively, the Government may consider reducing the number of business classes to one class, providing municipalities with greater pause to the high taxes currently levied on industrial classes. These are but two suggestions for reform; more options need to be explored. Nonetheless, a mechanism needs to be established to ensure a more fair method of determining tax, including the consideration of services consumed and fairness between classes of tax payers. Transparency The complexity of municipal taxation makes it very difficult for taxpayers to compare one municipality to another. In addition, local governments are able to obfuscate the real amount of total taxation by shifting certain items to different taxing or fee schemes. The Chamber supports a clearer annual reporting system to taxpayers, outlining the overall cost to each category of taxpayer including property taxes, fee for service, consumption taxes, and parcel taxes as well as fees collected for other bodies including school, regional districts, hospitals, transportation authorities, and others. The reports should be consistently formatted to allow for comparisons between municipalities. The Chamber also supports re-instating a Municipal Auditor General to do regular comprehensive value for money audits of municipal spending. The Chamber believes this concept is applicable to all municipalities and warrants the development of a Provincial Municipal Auditor General to ensure an independent review of municipal programs, spending, community plans and services. Accountability While all municipalities in BC are required to have a financial audit and report this information publicly, the Chamber does not believe that this goes far enough in introducing a level of accountability and scrutiny to municipal decision making. The Chamber supports the notion of a Municipal Auditor General to do regular comprehensive value for money audits of municipal spending. The Chamber believes this concept is applicable to all municipalities and warrants the development of a Provincial Municipal Auditor General to ensure an independent review of municipal programs, spending, and services. Such an office would go a long way towards developing a culture of sound fiscal decision making while promoting balance between the level of taxes paid and the services consumed. THE CHAMBER RECOMMENDS: That the Provincial Government: 1.

embark upon a larger examination of the sustainability of our method of municipal funding with the goal of developing a more sustainable structure related to the tax-payers ability to pay;

provide control and oversight on the level of property taxation levied to all taxpayer groups to ensure fair and equitable taxation practices;

while introducing immediate relief to class four tax levels, provide equity to class four, six and one;

introduce a structured, clear and consistent annual reporting system to taxpayers that outlines the total cost of municipal taxes, fees and levies as well as the cost of taxes collected for other authorities by municipal governments;

establish a mechanism, such as a Provincial Municipal Auditor General, that allows for the continual review of local government taxation to ensure accountability and our continued competitiveness; and

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introduce changes with definitive timetables that provide certainty for taxpayers while allowing municipalities time to adjust and to ensure a smooth transition for the taxpayers.

MOBILE BUSINESS LICENCE FOR ALL MUNICIPAL GOVERNMENTS IN BRITISH COLUMBIA (2010) Since 2006, British Columbia‘s Provincial Government has taken progressive steps in easing the regulatory burden on businesses. In Canada, BC is leading the way in de‐regulation and is used as an example on what can be done in other Canadian provinces and territories. At the 2006 Union of British Columbia Municipalities (UBCM) Convention, Premier Gordon Campbell challenged local governments to develop a single business licence framework, becoming the first jurisdiction in Canada where businesses can operate freely anywhere in their province. The Ministry of Small Business and Revenue was charged with leading the Single Business Licence Initiative and was working closely with UBCM, the Ministry of Community Services and key stakeholders to develop a model that streamlines business licensing processes, while retaining municipalities‘ powers to set local standards for businesses operating within their boundaries. The Premiers challenge was predicated on a recommendation made by the Premiers Task Force on Community Opportunities (which was comprised of 6 local government representatives and two business representatives) who in 2006 stated that, ―local governments need to take steps to streamline and harmonize licensing regulations, initiate inter‐municipal and region‐wide approaches to business licensing.‖ This recommendation has further been supported by the Small Business Roundtable who in 2007 called on the government to, ―focus on saving time for business by streamlining and simplifying the regulatory environment for small business. This can be accomplished by continuing to implement BizPaL and a single business licence across the province.‖

It is important to note that with the exception of the Premiers Task Force on Community Opportunities, all the recommendations on this issue, including recommendations by the BC Chamber, CFIB and other business organizations have called for a single business licence program for the entire province. However, these calls were met with resistance from local governments which was typified by a resolution presented to the Union of BC Municipalities in 2007 which expressed concern over loss of revenue, loss of autonomy and ultimately over their ability to govern. The recommendation then called on the Provincial Government to, ―abandon the Single Business Licence Initiative and allow local governments to continue to issue and regulate business licences in each of their own communities.‖ While this recommendation did not become official policy of UBCM it clearly demonstrated a level of hostility to the concept of a single business licence within local government. Following the concerns expressed by local government the Provincial Government moved away from the introduction of a single business licence and beginning January 1, 2008 introduced a 12 month Mobile Business Licence pilot project (MBL) in the Okanagan‐ Similkameen area. While the Chamber has expressed concern over the lack of focus regarding a single business licence for BC, we recognise the fact that a MBL would still represent a significant improvement on the current The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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situation. The MBL allowed mobile businesses (e.g. contractors, trades businesses, photographers and caterers etc.) to operate across participating municipalities. Businesses within the participating municipal boundaries benefit by purchasing one licence to do business in all participating municipalities. Mobile businesses still purchase a business licence for their main location but instead of obtaining multiple licences for outlying municipalities, only one licence is needed. Local municipal governments in the participating areas benefit by lowered administration costs to process one licence and increased revenue due to more licences being acquired. The summarized results of the Okanagan‐Similkameen Mobile Business Licence Project have been clear, indeed the Ministries interim report states: ―Businesses report the Mobile Business Licence is cost‐effective and convenient; municipalities report the Mobile Business Licence has not increased the administrative workload and has increased revenue. There was expressed support for expansion of the Mobile Business Licence. Not surprisingly, businesses varied as to whether they would be willing to pay more for an expanded Mobile Business Licence. There has been a regional revenue gain of over $160,000. This is due to the strong uptake of Mobile Business Licences, with an increase of more than 750 Mobile Business Licences sold over the 2007 baseline. This can be attributed to increased compliance and the increase of regional economic activity.‖ The Mobile Business Licence pilot project has been used as an example of how to successfully apply this program in other areas of BC. Several local municipalities bordering the pilot project have recently adopted the Mobile Business Licence model too and thereby increased the existing boundaries within which businesses can operate under one licence. In the absence of a single provincial business licence, implementing Mobile Business Licences could be a more streamlined and cost‐effective way for municipal governments in all of British Columbia to operate. The success of the pilot project builds on evidence in other jurisdiction in the province that have shown the benefits of such a model. Prior to the pilot project inter-municipal business licence agreements existed in: Victoria Capital Region, Cowichan Valley, North Okanagan, North‐West Vancouver, Courtenay ‐Comox and the Trail Region. In each of these jurisdictions the Mobile Business Licence has also shown similar results to the MBL pilot project. For local governments there is a reduction in paperwork accompanied by greater compliance. For business it results in reduced time, cost and simplified expansion into new markets, while for residents it leads to more choice of contractors and service providers. Conclusion The benefits to local governments, business and residents of a Mobile Business Licence have been supported by the feedback and financial success of the Okanagan‐Similkameen MBL Project and by other Mobile Business Licence programs already in place. Yet despite these clear benefits we have failed to see other regions of the province introduce similar programs, this is unacceptable and increases costs for local government and for business which ultimately result in higher costs for the taxpayers in the community. The Provincial Government have made a firm commitment as part of its Straightforward BC initiative that, ―for business, this means you spend less time complying with government requirements, and more time expanding your business and creating jobs. For citizens, this means quicker access to the services and information you need.‖ The introduction of Mobile Business Licence programs in all regions of the The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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province would address both of these goals. The Chamber believes that even in the absence of support from local governments, the Provincial Government has a responsibility to act in the interests of business and residents and set a clear timeframe for regions to develop a Mobile Business Licence with any failure to meet this timeframe will result in the imposition of a Mobile Business Licence. The Chamber also believes that the introduction of Mobile Business Licence programs that cover the entire province is only an interim step towards the original stated goal which is a single, provincial licensing program for all business. THE CHAMBER RECOMMENDS That the Provincial Government: 1. recognize that Mobile Business Licence programs are an interim step and that the provincial government develop a plan, including timelines, for the introduction of a Single Provincial Business Licence program; 2. develop clear timeframes for defined regions to introduce Mobile Business Licence programs; 3. ensure that should any regions fail to meet these timeframes, a mandatory Mobile Business Licence will be introduced by the Provincial Government; and

4. work with local municipal governments to standardize terminology and procedures used when implementing Mobile Business Licence Programs. A PROVINCIAL ROLE IN MUNICIPAL AMALGAMATIONS (2009) There are a number of municipalities across the province whose borders are immediately adjacent and whose residents conduct their business and personal lives with fluidity across municipalities. Nonetheless, these neighbouring municipalities are individual units and are autonomous entities under the Local Government Act. Though some argue there is advantage to maintaining separate municipalities, there are instances where it would certainly be more advantageous for immediately adjacent municipalities to amalgamate. Emerging thoughts in this regard are that immediately adjacent urbanized municipalities may function better as a single unit.6 Section 279 of the Community Charter outlines the procedures for the amalgamation of existing municipalities. In short, the procedure requires a referendum question of residents with positive support of more than 50% of votes. The referendum procedure is to be instigated by the respective municipalities, though it can also be required by the provincial minister responsible on the minister's own initiative, if the minister is of the opinion that those persons should, in the public interest, be incorporated into a new municipality.7

6 (Patrick Smith, Simon Fraser University, 2004) 7 (Local Government Act, Part 2, section 8 (1) (d) The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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The Community Charter requirement for the question of municipal amalgamation to be self-generated is perpetuating a growing problem of inefficiencies in urban centres. Fractured governance has become entrenched in municipal self-interest and may be creating unfortunate circumstances for urban centres, as exemplified below. The federal government released its 2009 budget on January 27th of that year. The budget introduced $4 billion of infrastructure investment funds to be allocated through partnerships with provincial and municipal governments. While the successful acquisition of infrastructure dollars and resulting projects would supply immediate economic stimulus through household sustaining employment opportunities, the goal of the chamber is to have the selected projects also provide longer term benefits through lasting economic impact. Generally those types of projects are regional in nature and require a cooperation and partnership not always found in smaller neighbouring municipalities. The danger is that millions of federal dollars will be poorly invested due to fractured municipal structures and the inability of the smaller entities to come to the table with large scale, regional projects that provide lasting economic ripple effects. Another pertinent example of inefficiency is seen where the application of federal funding formulas come into play. These funding formulas are generally population-based using municipal boundaries. Yet challenges addressed through the funding programs, such as homelessness and transportation, are in reality regional issues in areas with immediately adjacent municipalities. Fractured municipalities in urban settings lose out on available funding to adequately address important social issues on a large scale and/or often fail to co-operate in the effective implementation of regionally beneficial investments of federal or federal/provincial dollars. Municipal amalgamations, to be fair, have been met with mixed reviews in Canada. Those that have been extensively highlighted in academic writings feature the outcomes in Winnipeg, Halifax, Ottawa, Quebec, Toronto, and other Ontario and Quebec settings. While the study of these outcomes is most useful, the relatively or extremely short timeframes of each of these examples, with amalgamation dates ranging from 1972 to 2003, is problematic. It is not surprising that outcomes of these examples are evidencing the challenges of significant organizational change. The Vancouver experience of amalgamation may be more useful to examine. In 1929, Point Grey and South Vancouver amalgamated with the City of Vancouver, making it overnight the third largest city in Canada. Today the amalgamated area is clearly a cohesive unit with distinct neighbourhood characteristics. Though research on the early days of the transition is not as readily available as more recent examples, one could reason that this area also went through significant organizational change. It may be that the positive outcomes associated with amalgamated municipalities need a longer time to become established. Short term pain for long term gain, as the saying goes. The growth of our urban areas in the province, their regional efficiencies and their international competitiveness are important issues to the continued evolution of the province. As municipalities continue to grow and butt into each other, and as their citizensâ&#x20AC;&#x2DC; work and leisure lives flow across boundaries, it becomes important to re-examine effective governance models. While some municipal governments may be willing to examine that issue on their own and seek long-term regional improvements, others will never seriously consider the question due to self-interest. Where municipalities fail to examine the greater community and business benefits of amalgamation, the Province should not be hampered from taking assertive action on amalgamation concerns where they believe it to be in the best interest of the province as a whole if municipalities fail to examine the possibility The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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THE CHAMBER RECOMMENDS That the Provincial Government amend section 279 of the Community Charter to include a third option for instigating municipal amalgamation; that being amalgamation by order of the province. DEVELOPMENT PERMIT TIME LINES (2006 – REVISED 2009) Significant issues with obtaining timely local government approvals on Development Permits (DP‘s) continue to hamper development opportunities in many communities across the province. With no oversight from the Provincial Government, local governments have the opportunity to withhold approvals until the applicant agrees to take on costs that may or may not be related to the specific project application. The process for the application of DP‘s varies dramatically between municipalities in BC. These variances cause confusion for the applicant and result in additional costs due to the uncertainty of the process. Currently, there is no incentive for municipalities to address these issues as the Community Charter provides local government with exclusive power over the Development Permit Process. Delays in application approvals are the result of a number of factors including, but certainly not limited to, staffing levels in the local government, and indecision by staff or politicians. These delays have proven costly to the applicants and may result in projects and development opportunities not being brought forward. The delays are costing jobs, Development Cost Charge fees and ongoing realty taxes. There is no incentive for staff or the politicians to move more quickly since they have all the say on the approvals. All provinces and territories, save BC and Quebec, have legislated mechanisms and protections which address all of the above concerns. In these uncertain economic times, it is imperative that the Provincial Government take action to ensure that the potential for development opportunities in our communities and the rights of applicants are protected. THE CHAMBER RECOMMENDS That the Provincial Government: 1. amend the Local Government Act to: a) establish reasonable timelines and focused guidelines for the approval of development permits by local government; b) provide standard requirements for the submission of development permits to local government such as specific drawing requirements, traffic surveys, etc; c) provide standard criteria for local government on which to approve development permit applications; and d) specify all costs which a local government may specifically attribute to a project; and 2. ensure that should a local government fail to meet the requirements as specified in the Act, the applicant should have a right of appeal through an independent tribunal.

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STATEMENT OF POLICY BC business and industry can become, and remain, competitive only by the continued investment in, and maintenance of, the highest standards in the development of human capital. These standards must effectively meet international levels of competitiveness reflecting the changing needs of the world economic activity to keep BC business and industry competitive for the future. No longer ―looming‖, the shortage of skilled workers and new job entrants is now having a direct impact on British Columbia‘s economy and the well-being of business, industries and communities throughout the province. As an issue, the skills and labour shortage is impacting the viability of small businesses in BC. While solutions to the skills shortage will need to be driven by the business community, Government has a critical role to play in ensuring an adequate supply of workers, as well as providing the structure and resources to encourage training of the workforce, particularly for small business. Also, having a highly skilled, adaptable workforce is critical if BC industries are to improve our labour productivity performance. While there is a need for a focused and structured plan of action from all stakeholders, there is a longerterm need for a fundamental realignment of thinking in our collective approach to the development and implementation of education, training and labour market policies, programs and strategies. This is particularly true for small businesses, the cornerstone of BC‘s economy, in all regions and in all communities. The Chamber believes all stakeholders need to embrace the following principles as a cornerstone of their policy and decision-making processes: Small business specific policies and programs; Comprehensive strategies that address the needs of small businesses in all sectors, regions and occupations; Labour demand-driven development and implementation of strategies; Balancing small business short-term and long-term skills priorities; Strategies that can be adapted to the needs of small businesses in various regions; Strategies that can be adapted to the needs of small businesses in various industry sectors; and Programs and tools which are readily accessible and practical for use by small businesses.

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ADDRESSING BRITISH COLUMBIAâ&#x20AC;&#x2122;S TECHNOLOGICAL AND ENGINEERING SKILLS SHORTAGE (2009) With reference to the 2008 resolution on Skills and Labour Shortage of Technologists and Engineers, the following is an update and requires urgent attention, especially in the North of our Province for the benefit of all of BC. There are more people than jobs in the north of our province. However, there are an increasing number of professional jobs that cannot be filled due to the lack of qualified personnel, a problem that will not go away unless tackled soon. In May 2008, the Prince George Chamber of Commerce was asked to chair a consortium of more than 45 corporations whose only interest was, and is, to lobby for more technical and engineering education. The movement of the Applied Technical and Engineering Education Consortium (ATEEC) has been well recognized and can be considered to be an industrial and corporate grassroots movement clearly identifying the demand for more technology and engineering in the North of BC. The many ATEEC members and other corporations cannot find or retain the required technical personnel to bid on the many projects in the North. Surveys show that young people who study and graduate from a university or college, find employment afterwards with a very high probability within a 200 km radius of the education institute. Subsequently they are not available for the North as required. Research undertaken by the ATEEC clearly shows that the number of students in the North with eligibility for an enrolment in science and engineering related faculties is very low, which causes an insufficient supply of technologists and engineers for the future. Students are often not aware of the fact that they cause a foreclosure of many exciting and interesting professions to choose from by not enrolling in mathematics and physics during the last year in school. We are aware of the fact that professionals, school councillors and parents advise their children with regards to options of courses and possible professions, as well as post secondary education opportunities. However, the ATEEC survey has shown that sufficient information regarding technical education options is not available to the advisory bodies. It also includes information that there is a tremendous shortage of technologists and engineers both within Canada and worldwide, and that the professional outlook is a very positive one for many years to come. In the end, this is not a northern problem but something that affects all of BC and its economy. If the North prospers, all of BC benefits and prospers. The very detailed and recently commissioned ATEEC report on post secondary education in the North versus the Lower Mainland clearly highlights the lack of technical personnel in the North and the projects that cannot be started or finished in time. This analysis is independent of the current state of the economy, and it should be considered independent of it, because the situation will not be different in 2010 or 2011 when we hopefully experience a global recovery. According to the ATEEC study, based on statistical data and input from the many northern corporations, the gap between supply and demand of technical personnel last year was 1,000. If one would focus on the planned power production facilities alone, including independent power production, capital costs of approximately $15 Million would have to be considered, while pipeline The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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projects of the magnitude of $10 Million are waiting to be implemented. These projects do by no means include required innovation or the many other projects and programs including bio-energy, transportation infrastructure, and the Prince Rupert Container Terminal expansion (phase 2). Allowing for more technical and engineering education in the North would increase the availability of the technical personnel in the North, and with that benefit all of BC. Based on the ATEEC report the northern post secondary education institutes are currently in the planning phase. THE CHAMBER RECOMMENDS That the Provincial Government: 1. encourage professional bodies to work with education systems to lobby for increased participation and preparation of students in mathematics and science and to inform the students about the many available and future jobs in the field of Technology and Engineering; 2. provide funding for technology and engineering programs and their implementation at Colleges and Universities in all regions of BC where the need and demand of the respective programs has been documented in the very comprehensive ATEEC report on post secondary education; and 3. provide funds to cover capital and operating costs for the extension of facilities where those are absolutely necessary to provide and deliver the much needed programs THE NEED FOR CONTINUED REFORM OF THE CANADIAN IMMIGRATION SYSTEM (2008) The chamber movement has been the leading voice calling on governments and businesses to realize the scope of the challenge facing the province through a looming skills shortage in every sector, every industry, and in every region of BC. Until recently this call has been unheard. Scope of the challenge Employment in BC has risen by 371,400 jobs since December 2001, almost 90% of which are full-time positions. BC has had the highest employment growth rate in Canada during this period. BC‘s unemployment rate dropped to an all-time low of 3.9% in February 2007. Seven out of ten occupational categories had unemployment rates ranging from 0.5- 3.3%, well below what is considered the ―full employment‖ level of 4-5% unemployment. The numbers speak for themselves as to the need for skilled labour injection into Canada in order to maintain a competitive business climate. With baby boomers starting to retire, there will be a net increase in need to fill positions in both the white and blue collar sectors. In short, BC is facing a demographic time bomb that will see the province‘s labour force participation rate fall from 72.8 to 67.3% by 2015. Perhaps more worrying is that this shift will occur as the province creates 1,000,000 new jobs over the next 12 years, with only 650,000 students in BC finishing grade 12 during the same time frame. The Chamber will continue to work with government and businesses to enhance business‘ ability to access under-represented groups such as aboriginals, youth at risk, and the disabled. However, the most important element of addressing this challenge will be immigration. Net international migration is now The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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the single largest contributor to population growth in BC and it is estimated that by 2011 a full 100% of the net labour force growth will be through international immigration. The challenge is the fact that the current immigration system is simply not ensuring that we attract the quality of immigrants required, and those that are attracted are not being used to their full capacity. Quite simply, the current immigration system is not capable of attracting ready-to-work immigrants with the required skills base to BC in a timely manner. With this in mind the Chamber must congratulate the Provincial and Federal Government for beginning to address the concerns of business, particularly those in the west. We have seen: A new Canadian Experience Class; New Expedited Labour Market Opinion program; The overdue launch of the first phase of the Foreign Credentials Referral Office; and Expansion of the provincial Nominee Program that will see BC accept 15,000 high demand occupations by 2010/11. While these initiatives have been welcome, they have been dealing with elements of the challenge and have so far ignored the core issue â&#x20AC;&#x201C; the process itself. The Chamber believes that amendments to the Immigration and Refugee Protection Act, as outlined in Bill C50, will go a long way towards addressing this missing piece. As many other industrialized countries are finding themselves grappling with the same demographic crunch, they too will be competing for the same limited pool of skilled immigrants. Canada will face increased competition in attracting and retaining skilled workers that are essential to our international competitiveness. The Chamber believes that the significant progress we have seen from both the Provincial and Federal Government represents a rebalancing of the system with economic priorities becoming the foundation of the immigration system. However, the needs of the economy today will not be the needs of the economy tomorrow. As we have seen with the institutional refusal to undertake changes to the point system, without a more flexible approach we will almost inevitably return to a situation where the system quickly falls behind the needs of the economy. The Chamber believes that we need to attract immigrants with managerial and professional skills. The province and our country are facing a skills shortage from the boardroom to the shop floor. Any system that does not recognize the need to address this simple reality at all levels is failing to address the needs of the economy; the intended focus of the immigrant program. At present, the pass mark for qualifying as a skilled immigrant to Canada is 67%. This is assessed by reviewing education, skills, language and family. Conducting a quick test on the governments self assessment tool shows that a skilled tradesman with high school education, fluent English, and three years experience will not qualify as a skilled immigrant unless he has French language skills and immediate family already in Canada.

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In addition to these limitations, immigrants applying for a working visa are also challenged with the Federal Government‘s process. First, an individual must apply for a working visa which is a lengthy process (6 months). Unless the individual can make a case that their skills are in demand and a Canadian is not available to take the position, the immigration case is rejected. The problem with this system is the process involves Human Resource and Development Canada (HRDC) as well as Citizenship and Immigration Canada (CIC). If HRDC statistics show a lack of demand, the case is lost. Unfortunately, the statistics do not factor in localized or specialty needs. They are based solely on surveys and reports which are often flawed as CIC and HRDC do not collaborate with firms that require the skills. THE CHAMBER RECOMMENDS That the Provincial Government work with the Federal Government: 1. overhaul the permanent immigrant system by reviewing the point level required and by restructuring the allocation of points to emphasize the skills required by the economy; 2. enhance the overall training strategy to ensure that visa officers receive sufficient and appropriate training and have the necessary tools and means to assess immigration applications more effectively and efficiently; 3. provide education overseas to better prepare immigrants for integration into Canada; 4. review the connection between HRDC, CIC and business desiring a specific skill and seeking to hire an immigrant due to lack of local talent to ensure the process is driven by a true reflection of supply and demand, rather than process driven; 5. review the permanent and temporary immigration system with a view to enhancing small businesses ability to find and recruit foreign workers; and 6. continue to expand the Expedited LMO Program to include other occupations where an identifiable shortage exists. FOREIGN CREDENTIAL ASSESSMENT AND RECOGNITION (2005 – Revised 2006) The Chamber undertook a project to identify challenges in this area and possible solutions. The project resulted in a report that was published in 2002, entitled Closing the Skills Gap. The report correctly pointed out that the, ―quality and creativity of the workforce has become the single most competitive factor in the industrialized nations. The degree to which skills shortages are averted by stakeholders will be a large determinant of BC‘s economic prosperity and social health.‖ One of the many recommendations in the report was the need to develop a fast-track foreign credential assessment and recognition service in BC. As the Canadian Chamber stated in its most recent Policy Resolutions report, the ―best and brightest‖ of the world are increasingly mobile. While we must ensure that we keep our home grown talent, it is equally important that our immigration system enhances our chances of attracting individuals with the skill sets that Canadian industries require. At issue is the nature of our future population demographic, and our ability to improve productivity relative to other modern economies.

The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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By 2015, it is estimated that 100% of the growth in our labour force will be derived through immigration. A recent study by Statistics Canada revealed that by 2017, around 50% of the population in our three major urban centres will consist of visible minorities, many of whom will be newly settled immigrants. Immigration of foreign and inter-provincial skills, limitations have been identified to include: professional associations not recognizing or appropriately testing externally trained skills; the lack of collaboration between professional associations and education institutes to provide testing and skills upgrade where needed; lack of collaboration between Immigration Canada and professional associations; and professional associations limiting the workforce to maintain higher demand and wages for members beyond economic reasonable limits. Many skilled immigrants who come to BC are finding it difficult to obtain employment in the profession or trade in which they hold foreign credentials because such credentials are not recognized by Canadian employers, and/or professional associations. This presents a significant obstacle in attracting skilled immigrants and significantly undermines our competitiveness. Furthermore, faced with having to incur costs to repeat their studies or undertake additional training, some simply give up, resulting in productivity loss to our province. According to a study by the Conference Board of Canada, an estimated 500,000 Canadians were underemployed and could earn an additional $5 billion per year. They could contribute to the economy if their education and skills were formally recognized. Another study by Jeffrey Reitz of the University of Toronto found that the under-utilization of immigrant skills represents an earning deficit of $15 billion in 1996. THE CHAMBER RECOMMENDS That the Provincial Government: 1. initiate the development of a fast-track foreign credential assessment and recognition service for BC; 2. work with professional and trade associations, educators, and immigrant service organizations to implement the service; 3. ensure professional associations are assessing and suggesting credential upgrades to balance the need for highly skilled workers with the need to fill skills needs in Canada and BC; 4. act to require professional associations and education institutes to ensure skills upgrade courses are available as needed and testing of skills is available in a timely fashion at a local facility; 5. study the inter-provincial as well as immigration limitations and propose or legislate necessary changes to streamline processes and eliminate unnecessary red tape; and 6. review the mandate of all professional and tradesâ&#x20AC;&#x2DC; associations to ensure there are no systemic impediments to fulfilling skills needs while maintaining the highest standards of safety and competency.

The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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STATEMENT OF POLICY Government at all levels must take a far more strategic approach to streamlining the movement of goods and services province-wide. This approach must address the connectivity of small, more remote communities, as well as providing the necessary infrastructure to facilitate the continued contribution of our resource industries to the provincial economy. Finally, governments must take a proactive and imaginative approach to managing transportation demand in our growing urban centres. To achieve these complex goals, government must establish clear direction and policy around the importance of the provincial transportation network, as well as clear direction on the method and structure for funding and governance of transportation projects and regions. The establishment of long-term integrated transportation strategies are essential to our economic and social development. These strategies must recognize the inter-relationships and inter-dependencies which exist between all modes of transportation and their attendant infrastructures: airlines, highways (and the concomitant bus lines and trucking systems), pipelines, railways, urban transportation (including both passengers and freight handling systems), and coastal shipping (including ferry systems). If these strategies recognize these factors, all modes will be allowed an equal opportunity to find their most effective role in the overall system. Historically, we have tended to concentrate on one mode as the principal means of achieving government policy. This, in turn, has tended to exclude or at least hinder other forms of transportation which have played, and can play an important role in our economic and social development. If financial assistance must be provided in order to achieve an economic or social objective, then it should be provided to the parties directly concerned with the achievement of the objective. This would enable the parties – industry or government – to purchase land transportation from the mode offering the best deal in a truly commercial and competitive environment. The economics of transportation will be a key element in determining the magnitude of future economic expansion and our competitiveness in both the domestic and export markets. Recognition must be given to this important role. Both the Provincial and Federal Governments must recognize the absolute necessity of integrated long-term planning as opposed to a system which functions on the basis of shortterm plans based on political expediency. Conclusion The Chamber is concerned that transportation, provincially and nationally, lacks broad policy goals and objectives. Since transportation – air, land and water-borne – is so critical to the economic and social development of Canada in general, and BC in particular, it is essential that decisions and policies be made in recognition of long-term growth and needs projections and the most effective and efficient use of one or more modes of transport.

The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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COMMERCIAL DESIGNATION OF ALDERGROVE PORT OF ENTRY ESSENTIAL FOR FUTURE CROSS-BORDER TRANSPORTATION NEEDS (2011) Based on 2008 northbound truck volumes, the Aldergove-Lynden crossing is the second busiest U.S.Canada commercial crossing in BC (after Pacific Highway)1. The importance of this crossing will only increase in light of anticipated volume increases due to population growth, escalating economic activity into the eastern environs of the Fraser Valley and projected expansion of Asia-Pacific trade through the Port of Vancouver. Existing and projected growth rates indicate that by 2030 the population in Metro Vancouver will reach 3 million, with similar growth in neighbouring Fraser Valley communities. The Port of Vancouver is expanding with container volumes anticipated to double within the next 10 to 15 years. While 70% of containers are transported by rail, doubling of containers to be transported by truck is still significant. During 2008, the Aldergrove-Lynden port saw $496 million USD of goods exported from Washington and $38 million USD of goods exported from BC. In 2008, this border crossing saw 74,040 commercial vehicle trips northbound and 57,155 truck trips southbound2. Based on 2008 GDP statistics, 21% of BC‘s annual economic output ($32 billion CAD) and 15% of Washington‘s annual economic output ($49 billion USD) is generated by industries that produce exportable goods. These sectors individually, and the export sector collectively, depends on effective international connections, including access to land border ports of entry like Aldergrove-Lynden. To illustrate the interdependence of the regional economies on both sides of the border, the wood, metal, and mineral goods that enter BC at Aldergove-Lynden represents sectors (manufacturing and forestry) that comprise 12% of Washington‘s economic output and are inputs into sectors (construction and retail) that make up over 12% of BC‘s economic output. Recent comparisons of observed crossing choices and shortest-path traffic-model assignments, show that Aldergrove-Lynden is not an ―overflow route‖ for higher-volume crossings in the area. Rather, Aldergrove-Lynden serves a distinct population of carriers and shippers for whom the crossing is the most efficient route. Analysis of an Aldergrove-Lynden closure to trucks estimates that the current population of users would need to drive an additional 198,433 km per month. In addition to fuel and time costs, this has implications for increasing greenhouse gas emissions both as a function of increased drive distances and more frequent idling at other, now more congested, crossings. Cumulative truck travel added by loss of the Aldergove-Lynden route (in both directions) would generate an estimated 3.85 kilo tonnes of GHG emissions per year. In terms of BC‘s Climate Action Plan goals, this hypothetical route closure would cancel out 0.51 percent of the annual GHG reduction that the freight road transportation sub-sector is expected to attain by 2015 (761 kt). Moreover, prolonged trips have negative safety benefits by increasing the exposure risk of crashes and contribute to unnecessary

1 The statistics and analysis contained in this briefing note are based on the June 2010 Technical Assessment of the Aldergrove-Lynden Port of Entry prepared by the Whatcom Council of Governments for the International Mobility and Trade Corridor Project. 2 The southbound US Lynden Port of Entry is a permit port that only allows low-risk, repetitive truck-load shipments by prior permission from the Customs and Border Protection area port director. The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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congestion and noise, both of which can be disruptive to local communities and businesses. The Aldergrove-Lynden Port of Entry is one of three cross-border truck routes between the Lower Mainland in BC and Western Washington State. In addition, the Peace Arch crossing is available to passenger traffic only. Because of land constraints at the Pacific Highway and Sumas / Huntingdon border crossings, the only viable option for adding infrastructure and processing capacity for commercial vehicles is through Aldergrove. Increased congestion on the part of commercial traffic at these land border crossings would also frustrate the ability of passenger traffic to access these border crossings and add to wait times and congestion. Even the passenger car-only crossing of Peace Arch could be negatively affected if passenger car drivers choose to avoid crossings that have become congested due to increased commercial traffic volumes and divert to Peace Arch. THE CHAMBER RECOMMENDS That the Provincial Government work with the Federal Government to: 1. in conjunction with impending border infrastructure replacement review the current designation of the Aldergrove Port of Entry to remove any limitations to its ability to serve as a full commercial traffic Port of Entry; 2. fund, design, and build the necessary infrastructure to support full commercial operations at the Aldergrove Port of Entry; and 3. establish service levels that would denote when additional resources, including hours of operation, should be increased. IMPROVEMENTS TO TRANS CANADA HIGHWAY (2011) The section of the Trans Canada Highway stretching from Kamloops to the border of Alberta; east of Field, BC is renowned as a windy, narrow, and extremely dangerous transportation route for. It is the main thoroughfare for vehicular traffic entering or exiting the province of BC from the east, linking the province with the rest of Canada. For many communities this is the only access or egress for road travel. Frequent closures, poor maintenance and dangerous conditions on this highway drastically impact the economy of BC. All southern BC communities rely on tourism and related commerce throughout the year. The Trans Canada Highway is a vital conduit for the movement of goods, services and people to and from BC. This part of Canada's national highway was finished in April 1962 and the Three Valley and Kicking Horse pass sections were not built to safety standards of the day. There have been no major improvements since then even though the amount of traffic now using this section of the highway is more than five times what it was almost 50 years ago. That includes not just family cars, but also heavy freight transports and tour buses. Data has been correlated to demonstrate the negative impacts this dangerous highway has on the local Revelstoke economy. Statistics from the Ministry of Transportation and Infrastructure indicate in 201011 key sections of the Trans Canada Highway east and west of Revelstoke were closed for a total of 27.51 days, or 659.7 hours. The key attraction in Revelstokeâ&#x20AC;&#x2DC;s tourism industry realized an approximate loss in The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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revenue of $200,000 due to these closures, which in turn has a trickledown effect on numerous local businesses; such as accommodation, restaurants, retail and more. Furthermore, local shipping and industry have realized losses of $255,000 and greater due to highway closures. When viewed from a province wide perspective, it is clear that closures of the Trans Canada Highway have immense negative impacts on the bottom line for tourism, shipping, manufacturing, forestry and more. Despite the importance of this highway for provincial connectivity, the lack of suitable infrastructure has led to dozens of deaths, hundreds of injuries, and frequent avalanche closures each year. These incidents choke off delivery of goods and services and cripple industry. The government must realize that now is the time to improve this crucial highway and commit to adding four lanes, highway dividers, paved shoulders and improved lighting to bring it up to acceptable travelling standards for the 21st century. THE CHAMBER RECOMMENDS That the Provincial Government; 1. work with the Federal Government to cooperate and work together to upgrade Trans Canada Highway #1 by widening and straightening from Kamloops to the BC/Alberta border; 2. that safety features such as increased highway lighting and snow sheds be installed thereby improving the Trans Canada Highway to a standard that is safe, efficient and mitigates closures; and 3. acknowledge the importance and urgency of this project by publicly announcing an action plan detailing immediate steps to improve and enhance this essential transportation link. THE NEED FOR AN INNOVATIVE APPROACH TO TRANSPORTATION FOR AN INCREASINGLY URBAN PROVINCE (2011) Urban productivity is highly dependent on the efficiency of its transportation system. The ability to move people and goods efficiently and smoothly between multiple origins and destinations is the cornerstone of successful urban regions. As BC continues to grow, the ability to improve the flow of people, but more importantly goods, in our urban centres will require a range of measures, from new infrastructure to demand management tools. Trend Towards Urbanization Census 2006 clearly demonstrated that Canada, and BC in particular, are becoming highly urbanized. In fact, the Census demonstrated that 85.4% of the provincial population now resides in urban areas. BC‘s largest urban areas are at tidewater where a considerable number of our transportation bottlenecks are located. This affects transportation movements originating from outside these regions, and economic activity generated within. The successful alleviation of bottlenecks will facilitate the movement of resource-based exports from the regions to international export markets, while ensuring local ―supply chains‖ move fluidly. Importance of the Transportation System The Provinces Asia Pacific Strategy is a highly ambitious plan to place BC as the gateway for the huge increase in trade traffic from the fastest growing economic region in the world. The overall strength of The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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the economy and significant population growth are placing a noteworthy strain on our entire transportation system. All levels of government has committed significant funding for the expansion of transportation infrastructure across the province, as an investment in transport as the next big driver of growth for the province. There are many areas of the province that have significant congestion which results in lost productivity, increased costs, and deleterious effect on the environment. BC needs to address these issues in order to remain prosperous. The Chamber believes that new and innovative approaches to transportation in our urban centres are required to address these challenges now, and for the future. A Crisis in the Lower Mainland While the issue of funding for transportation is of critical importance across the province it has reached a crisis point in the Lower Mainland. On November 9, 2010, TransLink's Board of Directors recommended a number of improvements to the region's transportation network, based on public input, which were contained in two approved supplemental plans for consideration by the Mayors' Council. These Supplemental Plans detail the investments in services and capital which the Board deemed necessary to meet the immediate needs of the region. It also identified the required incremental new revenues and the proposed sources to fund each of the plans. A starting point for both these plans was a statement from the Mayors Council that property tax was not to be increased to fund any supplemental plan. Unfortunately, due to the limited funding streams available to Translink under its legislative mandate the Translink Board were unable to budget for any other revenue mechanisms, as such property tax was contemplated in the plans. As a result the Mayors' Council chose not to vote on the two 2011 Supplemental Plans and as a result the Plans expired in early February 2011. This has resulted in Translink having to revert to its base plan which does not allow for any expansion of the system. This is not a new situation; the discussion around sustainable funding for Translink has been a feature of the region for as long as the organization has existed. Indeed, one of the disappointing aspects of the current crisis is that all parties knew this was coming and yet no party took a long-term, strategic approach to the issue. While we have seen some progress with the signing of an MOU between the province and the Mayors Council that commits all parties to reviewing all potential funding mechanism the Chamber remains concerned that the ability to reach a common solution seems no closer. Lack of Demand Management Techniques Road infrastructure in BC, as in many other jurisdictions, is considered a public good and therefore, is heavily financed by the taxpayer. In the absence of effective price signals such as road pricing, as well as other mechanisms to influence behaviour such as HOV lanes, and appropriate and available transit options, there is inevitably an increase in single-passenger vehicles and use which then leads to

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congestion and bottlenecks. In short, simply investing in new capacity will lead to the vicious cycle of congestion. The Chamber has been consistent in its support for projects such as the Lower Mainland Gateway Strategy and the need for transportation infrastructure investments in other regions of the province. Underpinning this is a firm belief these projects can only be successful if they improve the flow of goods now, and in the foreseeable future. A key to our long-term success will be strategic and long-term investment in high-quality public transit. The Chamber recognizes that transit investments by themselves will not reduce roadway congestion. However, they become more effective at reducing congestion as a critical component of a comprehensive strategy that includes complementary road pricing, mobility management strategies and smart growth land use policies. Numerous studies, along with empirical evidence from around the world, clearly demonstrate that simply building new roads and other infrastructure in the absence of demand management techniques, including quality public transit options, will not alleviate congestion in the long run. In other words, in the BC context it is not one or the other but both. The Chamber believes this presents a unique opportunity for the province to remove politics from transportation planning, and to create a vision that provides clean, efficient, accessible and reliable public transit covering the entire region, while introducing innovative mechanisms to ensure the efficient movement of goods and services. The Chamber believes that the Provinces current tolling policy must be reviewed. Under the current policy, the province will only introduce road pricing to pay for new construction on specific pieces of infrastructure and when a viable, free alternative is available. The Chamber believes this policy is not in the provincial economic, social or environmental interest and puts at serious risk the success of the Asia Pacific strategy. The benefits of investment in transportation depends on good traffic speed, and in the long term, there is widespread agreement that the only way to preserve this, is to ensure that there are appropriate price signals placed on the use of the road across the region. The Chamber believes that the global trend is towards an acceptance of the necessity of road pricing as both a provider of long-term sustainable funding for transportation and transit investment, within the concept of ensuring that the user pays, as well as the most efficient traffic demand management system that is available. The Chamber understands there is likely to be significant public resistance to comprehensive road pricing. However, we also believes that public acceptance of road pricing would be possible if quality transit options are made available from the start. Initial road pricing can fund the inevitable start-up costs, and can be adjusted to keep traffic at targeted performance for the benefit of the public and business. Vehicle road pricing would be appropriate in instances where alternate means of transportation are available and the entirety of the charges collected is allocated to improve transportation infrastructure in the region in which is being served. In circumstances where road pricing are approved, a comprehensive traffic demand strategy should be created to ensure that transportation solutions are integrated.

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BC stands at a transportation crossroads. As we embark on significant investments in transportation infrastructure and transit options, The Chamber believes the Province must ensure we embrace new ways of thinking about transportation from an integrated economic, social, and environmental perspective. THE CHAMBER RECOMMENDS That the Provincial Government: 1. commit to funding transportation infrastructure investment through mechanisms that are equitable, efficient and reflect basic traffic demand management principles; 2. make as a prerequisite of these visions the need for investment in public transit to provide viable alternatives to single passenger vehicle travel; Further that the Province work with the Mayors Council and other urban municipalities to; 3. provide funding streams that address the long-term needs of the region and enshrines traffic demand managements as a key principle; 4. create, in conjunction with business, a road pricing strategy as a foundation for sustainable regional transportation funding; and 5. negotiate with the federal government to allow the gas tax revenue to be utilized for operational support of public transit as well as transportation infrastructure funding in the region. COORDINATING HIGHWAY INCIDENT MANAGEMENT (2010) Traffic accidents on highways and roads in and around major urban centres often cause major gridlock. The cost of time and money to emergency services is no doubt high when those services complete legal investigation process at the scene of an accident, and attend to the personal and property needs of individuals directly affected. During these incidents the cost to many businesses and regional residents caught in the gridlock often for several hours, if measured, would no doubt prove to be many times higher. There is no single authority in British Columbia to oversee the processing of highway incidents and develop an integrated approach among emergency services. An incident management system under the coordinated direction of a single agency is needed. Such an agency needs to seek ways to reduce the overall costs related to highway incidents through an integrated emergency services approach. Background Agencies responding to even a relatively minor traffic accident, or stall, on primary traffic corridors in the Lower Mainland â&#x20AC;&#x201D;however proficient their service may be in emergency response â&#x20AC;&#x201C; appear to assign little, or no, priority to reopening the roads following these incidents. Necessary equipment to complete the task of clearing wreckage is generally not available for two or more hours after the incident. There appears to be no critical traffic incident management plan that is exercised during highway incident events. Traffic left paralyzed for hours and hours is left to resolve itself during and after the incident. During periods of heavy traffic, or if a major roadway, bridge or tunnel is involved in an incident, the The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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entire road network in the Lower Mainland rapidly becomes paralyzed. Traffic cascades to alternate routes with insufficient capacity to deal with the demand during what is often an inordinate amount of time to clear the incident. The ensuing delays exasperate an already strained road network and contribute to significant losses to trade and commerce in the Lower Mainland, which is heavily dependent on road vehicles for the movement of goods, services and people. President & CEO of the BC Trucking Association, Paul Landry, says, ―A robust incident management system is one element of a policy toolkit that would help to preserve priceless existing infrastructure capacity and reduce the demand for new investments. Other elements include managing/restricting on street parking during peak periods, enhanced left hand turning bays and truck-only lanes in key corridors.‖ Using information from the transportation industry it is not unreasonable to value the loss of productivity, created by inordinate delays in reopening roadways after an incident, across all industry sectors, into the hundreds of millions of dollars. Among agencies involved in highway incident management none is charged with the responsibility to execute a coordinated and effective management system to address the entire impact of any incident. The consequences resulting from the interruption of the free flow of traffic from accidents on roads throughout the Lower Mainland are rapidly becoming more serious. Suburban and industrial growth infrastructure development in border, sea and air ports contribute to the number of traffic units moving around the area. These units, in general, exceed the designed capacity of the existing route structure as it is without the further complication of traffic incidents. Following one of several major gridlocks of many hours over the past year a top police official in the Lower Mainland indicated that not only was emergency response of paramedic, fire and police services a top priority, so was the investigation by police and other authorities. With little apparent regard for the chaos and massive expense of time and money in terms of commercial loss throughout the entire region, the police official added that he was far less concerned about whether a number of people caught in the gridlock were ―home late for dinner‖. The point is not to be critical of emergency services, rather to indicate that simply handing the challenge over to existing authorities without direction is not sufficient. It would only deal with a portion of the problem. There needs to be a system of priorities and protocols developed, and direction given, to emergency service authorities which encompasses the full systems response to major traffic incidents. ―Incident management should go beyond crashes involving large commercial vehicles to consider any incident that constricts traffic such as fender-benders and police enforcement of rules of the road,‖ according to Mr. Landry. ―In both these cases, there can be partial blockages and rubber-necking that can create backups.‖ Not only do agencies responsible for reopening the roads following serious traffic incidents in the Lower Mainland assign little or no priority to their task outside of immediate emergency response, it is a challenge to determine which of the range of federal, provincial, regional and municipal authorities, actually has the primary authority to effect control of an incident at any given point in the system. The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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Observed issues Lack of reliable statistical information: Reliable statistical information relating to the numbers of incidents that resulted in the interruption of free flowing traffic movement along arterial roads is difficult to obtain for the province. International research has demonstrated the significant costs to the economy of these incidents. In all likelihood there is little to no reliable or consistent information for recording incidents in a given location and correlating them with the time it took to reopen an affected roadways. Furthermore, there is no system now in place which measures the impact of an incident on adjacent components of a route system or larger area of the Lower Mainland. Major route system disruption: Even a minor incident can completely block an entire route system through a community and its adjacent municipalities, causing problems which can include: significant losses to commercial operations because material or people necessary for normal business activities are unable to reach their respective destinations; loss of emergency access to ambulance, fire/rescue/hazmat and police vehicles; environmental damage from idling vehicles; wasted fuel from idling vehicles; public transit schedules being disrupted. Businesses and the economy suffer, and many personal lives are affected by these gridlock traffic incidents. Collectively they are of sufficient severity to warrant a determined effort to address them. Lack of identified responsibility: Ownership of the routes in question can include federal, provincial and municipal authorities, and responsibility for their management may include all of the above together with police forces, private contractors and, in the Lower Mainland, Translink. No one agency has the overall authority, and no protocols appear to be in place to govern situations where two or more agencies have conflicting jurisdictions. It certainly appears that no agency sees it as a priority to reopen roads in an expeditious manner following a traffic incident. On scene control and traffic management; For the most part, control at the scene is exercised by a police officer. Jurisdiction appears to be limited to the scene and its immediate surroundings. While most police vehicles are well equipped with communication and data capture equipment, none of it appears equal to the task of implementing a route management plan or damage recovery task in a timely manner. The accident scene also needs to be protected through coning off the area, in accordance with recognized engineering guidelines to protect those personnel attending to the scene of the accident, those involved in the accident, and those approaching the accident to ensure there are no secondary accidents to further exacerbate the situation. Investigation: Often the need for authorities to complete a full process of investigation at the scene of an incident is advanced as the reason for extended road closures. In the case of fatalities or serious injury, this may well The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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be a valid explanation. In other cases, however, it would appear that the use of advances in technology such as air photographs, computerized measuring techniques and other data assessment devices have not been considered let alone used. Equipment: In the case of some incidents involving large vehicles, such as overturned dump trucks or semi-trailer trucks, one explanation given for time required to process an accident scene has been equipment of sufficient size not being readily available to move damaged vehicles or other obstructions from the roads. Efforts to insure that a proper inventory of suitable equipment is immediately available to clear scenes of traffic incidents and protocols are in place to obtain them on a priority call basis are more than overdue. This also includes the necessary equipment to quickly restore the area to its original condition before reopening, such as restoring concrete barriers that might have moved, debris or hazardous materials left on the roadway, etc. If this is not done, the reopened roadway could contain new dangers to motorists as a result of the roadway and roadside damage caused by the accident. Detour management: A key technique to the maintenance of route systems is the identification of detours that divert traffic away from blocked roads for the duration of the incident. Effective initiation of alternative routing requires previously positioned advisory signage and a comprehensive manpower servicing plan, especially to facilitate the additional traffic movement on these routes through intersections. This also entails a communications plan, whereby information on the accident and alternative routes is quickly and effectively communicated to the traveling public, supported by the use of air observation facilities. While techniques of this nature are not necessarily always available or practicable, the analysis of a route system to determine their potential for the elimination of locations subject to blockage will, at the very least, assist in the planning process for new facilities. Objective That all British Columbia highway administrators adopt as a principal objective, routes blocked for any reason be restored to fullest possible use in the shortest possible time as an incident management system. These procedural issues are offered for consideration in addressing the recommendations of this resolution: the adoption of improved protocols covering the coordination of two or more agencies affected by any adverse situation affecting the use of the route in question; a review of investigation techniques employed in the analysis of vehicle accidents be reviewed and where possible altered to accommodate the requirement to reopen the route rapidly; the identification of legal or regulatory issues that prevent the timely reopening of a route and the initiation of any appropriate modifications; a review of inter-agency communications facilities to insure that information with respect to incidents occurring in one jurisdiction is rapidly passed to other affected areas for the purposes of generating route management action;

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THE CHAMBER RECOMMENDS That the Provincial Government: 1. request that the Minister of Transportation and Infrastructure direct an appropriate agency within the province to accept responsibility for the management of operation of its highway system. 2. ensure that protocols are developed which require agencies that respond in the management of highway and road incidents have definitive operational plans to rapidly clear incident areas or when appropriate invoke alternate traffic management situation plans to effectively offset the effects of major roadway blockages. 3. ensure that major roadway incident management plans include the rapid deployment of suitable heavy rescue and recovery equipment to mitigate the term of the incident and the subsequent effects on regional traffic flows.

4. develop, through the responsible agency, highway and road incident management exercises, involving all appropriate agencies dedicated to implementing the management plan, to ensure a high standard of real life execution. EAST-WEST CONNECTOR BETWEEN ABBOTSFORD AIRPORT & HIGHWAY 99 (2010) Transportation is a major barrier to business and investment in south western BC, and it must be addressed on a regional basis. While each municipality has specific challenges with the movement of people, goods and services, transportation and traffic concerns go far beyond individual municipal boundaries and must be considered on all fronts. The province of BC is promoted internationally as a world-class destination, with the Greater Vancouver Region as the gateway to the province. It is vital for this region to have facilities and infrastructure to handle the existing and future demand to alleviate transportation gridlock and to protect our air quality. Currently, passenger and commercial carriers en route to or from Highway 99, the US border and destinations in the southwest sector of the Fraser Valley are commonly directed to travel on Highway 1. Residential and commercial development throughout the lower Fraser Valley and additional service and capacity at Abbotsford Airport continue to add to the stress and gridlock on Highway l. There is a demonstrated need for development of a provincial southern connector to link the Abbotsford Airport and Canada/US border crossings with Highway 99, Delta Port and Vancouver International Airport. At the present time commuter and commercial traffic are utilizing inadequate municipal arteries to travel through Abbotsford, Langley, Surrey and Delta. Based on the Chamberâ&#x20AC;&#x2DC;s understanding of continuing development in the Fraser Valley, this corridor will be urgently needed.

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Engineering consultant reports continue to confirm the need for a major east-west Highway south of Highway 1 so as to connect Highway 99 in Surrey/Delta to join Highway 1 east of the Abbotsford International Airport and facilitate future traffic growth in the entire lower mainland. This secondary high-capacity route south of the Fraser is also deemed necessary for both capacity and safety reasons in the event of incidents that shut down Highway 1. Recently, the Abbotsford International Airport is reported to have acquired title to the property west of their facility, extending westward to Bradner Road in direct alignment with 16th Avenue. This property could provide a direct east-west connection to Highways l3, 15 and 99 along such a corridor. Further property acquisition on the part of the Abbotsford International Airport is in planning stages to facilitate an eastward direct connection with Highway 1. Recognizing prevailing common utilization of an incomplete route and on the basis of information currently available, 16th Avenue appears to be the primary choice for an east-west connection. However, the parties are open to other options if such can be reasonably devised, within the limited geographic restraints, as a better alternate. The objective should be to immediately explore and designate an east-west connector route that can ultimately be developed to highway standards, while enabling municipalities the ability to align their planning and route access via a protected route in an orderly fashion. Thus, timely Provincial â&#x20AC;&#x2022;designationâ&#x20AC;&#x2013; of an east-west connector will serve to protect the right-of-way and facilitate development of such a route on the basis of harmonious regional planning. It is incumbent that an east-west connector route be designated and subsequently developed over time to significantly improve access, reduce congestion, enhance safety and reduce stress on the environment. THE CHAMBER RECOMMENDS That the Provincial Government: 1. commence planning immediately for the designation, development/confirmation of the alignment for a southern east-west connector between Abbotsford Airport and Highway 99. Such planning should identify a desirable timeframe for completion of portions or all of this corridor; and 2. following completion of the alignment selection, commence protection and/or purchase of the required right-of-way in conjunction with affected municipalities. MOVING FORWARD ON OPEN SKIES POLICY (2010) Airports and the services they provide are critical to the economy of British Columbia. Canadian air policies need to be brought into the 21st century; current air policies encourage secrecy and unfair agreements. Specifically, the Federal Government must be called on to recognize that the current approach to air agreements is having a negative impact on the economy of BC and Canada. As such, the Federal Government must move beyond the current Blue Skies policy and embrace a true open skies approach to air agreements. Included in this approach should also be a focus on allowing right of establishment for foreign domiciled carriers in Canada. Background In November, 2006, the federal government announced the Blue Skies International Air Policy. Further to this Canada negotiated an Open Skies treaty with the US which, while concluded in November of The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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2005, was not fully implemented until March of 2007. Both of these announcements were welcomed by the BC and Canadian Chambers. The benefit to both of these agreements is seriously impaired by the lack of truly Open Skies. It should be noted that air agreements alone are not the panacea in terms of growing international markets. The one-off agreement with China in 2007 was relatively liberal, but the lack of Transit-Without-Visa (TWOV) for Chinese Nationals, coupled with other visa issuance, issues initially contributed to China withholding Approved Destination Status (ADS) for Canada, thus seriously undermining the potential market. Further complicating the issue is the lack of alignment between federal government departments to deal with an Open Skies policy. For example, there are very few airports in Canada that offer 24/7 Canada Border Services for the arrival of an international passenger or cargo flight. In establishing negotiating priorities and mandates, the Government should take into account the needs of the broader stakeholder community. Over the past year, the Federal Government placed its focus to an Open Skies agreement with the European Union. While concluded, the implementation structure remains challenging given that implementation is structured in four phases with open skies not coming into existence until phase 3 of the agreement. While the restrictions remain concerning, the agreement does move us forward in that it removes all previous restrictions on direct service between the 27 EU member countries and BC. The Chamber welcomes the opportunity with the EU, but is concerned that this will again mainly benefit Eastern Canada. This in turn undermines Canadaâ&#x20AC;&#x2DC;s ability to move forward on the Asia Pacific agenda, which is an important avenue for both the British Columbian and Canadian economy. It was originally stated that the agreements would cover the following elements for all scheduled passenger and cargo service: Third, fourth, fifth and sixth freedom rights; Seventh freedom rights will apply to stand alone, all-cargo service No limit to the number of airlines permitted to operate; No limit on the permitted frequency of service or type; and Openness and flexibility of code-sharing services. The Chamber continues to support these foundations to all air agreements. However, the conditions which are placed on the negotiating priorities of the Federal Government are a concern. In particular, both the negotiating calendar and the process itself, with two exceptions, are problematic. With respect to the U.S. and E.U. negotiations, two representatives of the Canadian Airport Council have been afforded the opportunity to participate as observers. Canadian observers have been limited to Canadian airline and the pilots union. The Chamber believes that this policy needs to evolve similar to the U.S., whereby any airport may sit as an observer/representative of its community. The Chamber is also concerned with the lack of transparency in the Open Skies policies. Canada has, as of March 2007, adopted an Open skies agreement with the US. In addition, Canada claims 9 Open Skies agreements with Barbados, Costa Rica, Dominican Republic, El Salvador, Iceland, Ireland, South Korea and the United Kingdom. These treaties are confidential with access granted only to government officials,

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airlines and airports. Business stakeholders and the general public do not have access to the details. An example of this is the agreement with China, signed in April 2005. Details such as frequency entitlements and destinations served are still confidential. As well, Iceland has signed an Open Skies agreement with Canada, the details of which have never been disclosed to the airport community, stakeholders or the general public. As Iceland's agreement was not totally disclosed and most of the expanded freedoms did not occur for many years to come, this is not truly an Open Skies agreement. The Chamber is concerned since bilateral agreements are still being negotiated and are never made public. By contrast, the U.S. is not legally permitted to enter into such agreements without public disclosure. A lack of urgency placed on the need to immediately enter negotiations with key markets is also of concern to the Chamber. BC has a history of suffering under the legacy of restrictive agreements with some of our most important markets for tourism and trade. The Chamber believes it is incumbent on the Federal Government to move beyond the current Blue Skies International Air Policy and develop a 21 st century true open skies policy, placing significant emphasis on the Asia Pacific region, as well as the United Arab Emirates. The Chamber is also disappointed by the lack of action on the issue of rights of establishment in Canada‘s approach to air policy. The Chamber continues to believe that rights of establishment are the most effective way to immediately introduce significant new investment and competition into the market. The granting of rights will increase competition and choice as companies look to establish a Canadian presence. This increased investment will inevitably increase employment as the sector grows, helping to re-establish the British Columbian economy. THE CHAMBER RECOMMENDS That the Provincial Government aggressively lobby the Federal Government to: 1. move responsibility for air agreements from Transport Canada to Foreign Affairs and International Trade Canada; 2. move beyond the current Blue Skies International policy and aggressively pursue true open skies agreements in all bilateral transport negotiations, both in passenger and cargo; 3. focus governments efforts on key markets as identified by community and industry stakeholders; 4. adopt a balanced approach to stakeholders, recognizing the needs of Canada‘s air carriers as well as taking into consideration community stakeholders. Individual airports as well as community representatives must be granted observer status to that of the airlines, thus ensuring against confidential addendums and MOU‘s in the process; 5. adopt a policy of negotiating open, transparent air agreements; 6. immediately allow the establishment of foreign-owned but Canadian-domiciled carriers (the right of establishment) in Canada; and 7. undertake a proactive, aggressive and unified strategy across all departments and jurisdictions in order to fully leverage the gateway potential of British Columbia‘s airports.

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ISLAND TRANSPORTATION STRATEGY (2009) Vancouver Island transportation planning is dominated by municipalities who manage the infrastructure within their boundaries. The Regional Districts have varying roles in transportation. An overall plan for the island would provide valuable input to all levels of government and ensure that when infrastructure spending is considered, strategic projects for the Island are given equal consideration to municipal projects. Vancouver Island is heavily reliant upon efficient transportation links to facilitate a prosperous economy and a good quality of life for residents. The island has a robust tourism industry as an economic backbone, with a rapidly growing high tech industry. Each of our major industries relies upon a high level of efficiency and options in transportation connections. The entirety of Vancouver Island would benefit from an integrated transportation plan, with more efficient connections to, and between, communities on the Island. Business organisations from across the Island cite the need for considerable improvement in the movement of people and goods around the Island. However, the most beneficial means of achieving that goal for the benefit of the whole Island are not easily identified as each community is responsible for its own transportation planning with the province holding responsibility for the highways in between. In order to fully benefit from the economic opportunities of the future, Vancouver Island needs to coordinate its transportation strategy. The province can take a lead role in creating economic vitality by facilitating a study that would identify the transportation gaps to the Island and amongst Island communities. Some of the strategies to be considered in this study would include: an integrated Island freight strategy designed to limit the environmental impact of moving freight at the same time as making the system more efficient. An integrated strategy would make greater use of rail and container mixed with trucking. A road transportation strategy setting priorities for major road projects and their economic opportunities is required; and the development of island airports should be considered as an intra-island transportation option THE CHAMBER RECOMMENDS That the Provincial Government commission an Island-wide transportation study, identifying service gaps and opportunities for economic advancement through transportation development. SECOND VANCOUVER / SEATTLE PASSENGER TRAIN (2009) Necessary Vancouver-area border infrastructure improvements have been made in the form of a secondary rail siding facility at Colebrook, so as to facilitate the operation of a second passenger train in conjunction with freight train utilization within shared common rail trackage. The escalation of passenger train service to include the second train has since been stalled over Canadian Border Services Agency (CBSA) cost recovery policy. A recent announcement indicates a â&#x20AC;&#x2022;temporaryâ&#x20AC;&#x2013; reprieve that will facilitate the operation of the second train, at least during the 2010 Olympics. Timely confirmation of effective dates is necessary to accommodate appropriate advance marketing. This is an important international

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corridor and the escalated service needs to be expanded on a permanent basis to serve the interests of both the Province Government and Washington State as transportation interchange points between Canada and the United States. The existing daily passenger train service between Seattle and Vancouver has been operating since 1994 without any passenger clearance fee application - similar to other international entry points where no such fees exist. Transportation is an economic engine for growth in enhancing trade, commerce, tourism and public mobility, all of which are significant contributors to the provincial economy. This escalation of service is unquestionably important to the cruise ship industry, forthcoming 2010 Olympics and to the tourism generally. A recent study by the Border Policy Research Institute of Western Washington University concluded that a further $18 million could be expected to be expended by U.S. visitors to Canada with the addition of a second train which, in turn, would increase corresponding taxation revenues for various levels of government in Canada. A significant elevation of services has been implemented to serve general border, port and airport operations, including containerization at Prince Rupert and the Gateway program in the Lower Mainland of British Columbia, without imposition of CBSA cost recovery clearance fees. Similarly, following a Core Service Review of the air mode, CBSA has recently concluded that the Abbotsford Airport will be eligible for new or enhanced publicly funded CBSA services. Additionally, with the current U.S. stimulus initiatives, rail and highway infrastructure qualify for substantial funding on upgrading infrastructure, some of which could enhance the important Seattle Vancouver rail corridor for both passenger and freight operations. Lack of supportive Canadian initiatives, or delays in implementation, could jeopardize growth in the expansion of this important international rail corridor. As a matter of principle, Customs and Immigration services, to facilitate entry and clearance of visitors, returning citizens or residents and/or commercial commodity trade, should be implemented at international points of entry without charge wherever it can be demonstrated that a viable transportation facility either exists or can be implemented. This is a necessity in the interests of national security, tourism and international trade. THE CHAMBER RECOMMENDS That the Provincial and Federal Governments work together: 1. in conjunction with the Washington State Department of Transportation, Amtrak, the Burlington Northern Santa Fe Railway and/or others to expedite a continuous and enduring Canadian exemption from the cost recovery initiatives of CBSA for an expanded operation of passenger rail service within the Vancouver / Seattle rail corridor; and 2. to encourage the CBSA to continue the escalation of their Core Service review process for all transportation modes to ensure that employment levels are maintained to adequately serve the needs of national security, tourism and international trade, with the objective that such should be administered in a manner similar to or consistent with other essential services.

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CONSULTATION ON PROVINCIAL PUBLIC TRANSIT PROJECTS (2008 â&#x20AC;&#x201C; Revised 2009) BCâ&#x20AC;&#x2DC;s public transportation needs are increasing significantly as communities across the province experience significant levels of growth that require new investment in infrastructure, particularly public transit. To encourage these communities to grow in a sustainable way there is also an increasing need to ensure that residential communities are connected with commercial areas. Provincial Government goals and incentives for reducing carbon emissions, along with the proliferation of traffic chokepoints in many communities, necessitate increased public rapid transit infrastructure to meet this need. In January 2008, the Provincial Government announced a $14.8 billion Provincial Transit Plan for public transportation infrastructure across the provinces. The plan is dedicated to a significant expansion of rapid transit. In February, 2009, the Chamber welcomed the Federal Government announcement that matched the commitment already made by the Province and by Translink to invest in the Evergreen line, the rapid transit project in the communities of Burnaby, Port Moody and Coquitlam. The Chamber recognizes that investments in transportation carry high provincial significance given the integrated nature of the transportation network for a jurisdiction that is the Gateway to the Asia Pacific. However, the Chamber recognizes that our success is only possible if the business communities which create the economic vitality of their communities are involved as key stakeholders, many of whom are dependent on a steady flow of customer traffic. The Chamber is concerned with the lack of consultation and strategic assistance from relevant stakeholders during recent rapid transit construction projects, especially in regards to the negative effects. Business owners need to be able to be apprised ahead of time of the possible impacts on their businesses as a result of infrastructure improvements. While rapid transit infrastructure is often installed near commercial and retail properties, the benefit of connecting the commercial properties to the rapid transit grid must not be allowed to be overshadowed by the negative effects of the construction and installation. To ensure this result, the Chamber believes that the stakeholder businesses in the community need to have a say in the type of transit that is built; whether it is above ground, at grade, or underground, and what construction method is used; cut and cover, or tunnelling, for instance. Should a construction project pose a risk of negatively impacting businesses in the area, there needs to be consultation with the businesses impacted ahead of time so that options for business can be considered, including for instance, promotion programs or other initiatives to help the businesses retain their vitality. In particular, the Chamber believes that in neighbourhoods that revolve around their key commercial clusters, and where there is little reasonable option for relocation as their clientele is neighbourhood based, such as along West Broadway in Vancouver, the Provincial Government must make all reasonable efforts to consult with area business owners to avoid impeding the successful operation of their businesses. The Chamber recognizes that this will be a significant issue for communities such as Kelowna, Vancouver, Victoria, Langford, Burnaby, Sooke, Coquitlam, Westbank and Port Moody, as all are either targeted or shown as strong interest in future projects. As a result, businesses in these communities would be affected.

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THE CHAMBER RECOMMENDS That the Provincial Government: 1. in conjunction with other bodies who have responsibilities for public transit, consult and engage with such stakeholders in the communities that are targeted for transit infrastructure upgrades, including the ones enumerated in the January 2008 and February 2009 announcement, so that, at a sufficiently early phase in the project work, the Government and stakeholders can devise the best plan that can reasonably accommodate and ease local stakeholder concerns; 2. in the event that significant changes to the design, structure and/or construction process is considered, those proposed changes must go through the same consultation process with all stakeholders prior to implementation of those proposed changes; and 3. prior to moving forward with any rapid transit infrastructure projects conduct a study to determine a fair and adequate mitigation plan and/or compensation structure for businesses who are negatively affected. DRIVING ECONOMIC GROWTH BY IMPROVING INFRASTRUCTURE AND ACCESS TO INTERNATIONAL AIRPORTS IN BRITISH COLUMBIA (2008) There have been many fluctuations in the world‘s economy recently, throughout which Canada‘s economy has remained stable. Clement Gignac, of National Bank Financial, mentioned in January 2008, that Canada has the lowest Debt to GDP ratio of all the G7 countries, and that our economy will stay strong. The Western Canadian provinces are leading the growth with its resources in high demand, fostering influx from North America and abroad. Surpluses are high, jobs are in abundance, and the migration from East to Western Canada helps the economy and housing market continue to grow. The 2008 GDP forecasted growth for BC was 2.6%. With a strong and stable economy comes recognition and interest from foreign investors in our province, which creates opportunities to host international events. This exposure in turn adds to growth which includes increased business travel, tourism, and immigration. Bringing the world to BC puts additional pressure on our airports to expand, in order to better support the expansions, and more efficient infrastructure to and from the airports is required. Improved infrastructure could provide safe, sustainable, and efficient transportation from the airports to move visitors, immigrants, cargo, goods and services to their final destinations, thereby strengthening tourism, the economy and the amenities for BC‘s businesses and communities. Lawrence Cannon, Minister of Transport, Infrastructure and Communities said at an Annual National Conference in 2006 that, ―Physical infrastructure is the basic building block of any economy – it supports everything, literally and figuratively. This is true for all countries, but even more so for Canada.‖ We are a trading nation, so it is essential to have efficient ports, airports, and border infrastructure. To be competitive, we must be extra-efficient at moving things around. Consider just our trade relationship with the U.S., everyday, some 36,000 truck travel in both directions, and close to 1,500 flights, 300,000 people, and $1.6 billion in goods and services cross the Canada-U.S. border. The provincial and territorial governments have estimated the need for capital investment in transportation priorities alone over the next 10 years at close to $100 billion. The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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If we do not keep pace with the need to replace and renew our ageing infrastructure, our quality of life and our economic prosperity will suffer. We need to think about our infrastructure with real objectives, such as improving the quality of our environment. The financing arrangements for the Canada Line in BC, an 18.5 kilometre light rail line from central Richmond to the Vancouver International Airport and downtown Vancouver, has won two awards from Project Finance magazine, the 2005 North American Transport Deal of the Year, and the 2005 North American Infrastructure Deal of the Year. The Government of Canada is the largest public partner in this project, with a contribution of $450 million. Other major public partners include the province of BC, Translink, and the city itself. In all, the public sector is contributing more than $1.2 billion of the $1.9 billion total cost of the project. Beyond winning awards, this project shows that P3‘s can work in the Canadian light rail market. With the growing need for efficient, sustainable transportation in our cities, the line sets an important example for the future. The Greater Vancouver area has seen a lot of growth in the last number of years, and addressing infrastructure needs to keep up with the growth, while reducing impact to the environment is important. Other cities and some smaller municipalities are also growing rapidly. Growth in smaller municipalities is partially due to immigration and emigration from larger urban centers, but also from other smaller municipalities. This growth puts pressure on these municipalities‘ infrastructural needs. The smaller municipalities may not have the comparative local funding available that major urban centers do, but may still have immediate infrastructure needs spanning distances similar to major urban centers. With local real-estate still more affordable than in Canada‘s major urban centers, visitors often decide to stay or to invest in recreational properties and businesses. This has generated rapid growth to the region resulting in increased traffic congestion and infrastructure overloads. Many visitors‘ final destinations are accessed by single lane rural roads and this increased traffic can incur high maintenance costs, traffic congestion and safety issues. Winter weather can be unpredictable in many municipalities and road maintenance, reliable transportation and safe roads are vital to transporting passengers safely and efficiently from airports to their final destinations. Public transportation does not currently play a major role in bringing people to and from BC‘s international airports, other than Vancouver International Airport. There are currently no regional bus systems to surrounding municipalities or to resort destinations. For investors to consider BC‘s municipalities viable for investment, the infrastructure requirements from international airports need to keep up with the increase in passengers and the movement of cargo, goods and services. Failure to make significant progress towards bridging the infrastructure gap could prove costly in terms of congestion, unreliable supply lines and growing environmental problems, with all the implications for living standards and quality of life this entails. Improvements for infrastructure surrounding international airports will vary from area to area, but could include: regional public transit systems featuring green busses, light rail systems and heavy rail systems and could also include road maintenance and upgrades. The transportation of passengers using transit systems benefits the environment and reduces traffic, and maintaining roads and modes of transportation adds to their safety and longevity. For many visitors, airports are their first access to new destinations. Investors and industry will view infrastructures for shipping and local traffic, and ask if it is efficient and organized adequately to support The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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the capital they are investing. They will be creating new jobs to run their businesses and need to know that the region is set up to handle the movement of services. Other considerations may be how to create less pollution when moving cargo, goods, services and people through an area. To find answers to these and other issues related to infrastructure, and to save on capital cost investments needed for infrastructure improvements, it is important to first create a workable plan for airport infrastructure needs. A national plan that can be tailored to the unique local requirements of each international airport in our country could save time and funds for future airport infrastructure projects. For airport infrastructure projects to be cost effective thorough groundwork is required and could include: Feasibility studies Actionable strategic plans Sustainable environmental plans Best practices Gathering available knowledge from successful infrastructure projects currently in place Research Long-term projections with work/management plans The Chamber can be a catalyst by recommending that our province support long term economic growth by addressing current and future infrastructure needs in areas surrounding our international airports. THE CHAMBER RECOMMENDS That the Provincial Government work with the Federal Government to: 1. allocate funds to develop a national strategic infrastructure plan that addresses safe, efficient and sustainable transportation requirements to passengers, cargo, goods and services moving to and from BCâ&#x20AC;&#x2DC;s international airports; 2. provide funding for infrastructure needs to connect international airports with municipalities that are experiencing and projecting a significant increase in visitors, emigrants and immigrants and where as a result, the municipalities are growing rapidly; 3. provide funding for infrastructure needs to connect international airports with municipalities that are experiencing and projecting a significant increase in the movement of cargo, goods and services as a result of rapid growth to their municipalities; and 4. facilitate municipalities with international airports that are experiencing and projecting significant growth in accessing infrastructure funding by working together with municipalities with international airports to identify their unique needs and to include those needs in effective strategic plans for their areas.

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RURAL AND SMALL COMMUNITY TRANSIT - THE MISSING PIECE IN BC TRANSPORT PLANS (2008) The lack of a coherent focus on planning and investment in transportation services for rural and small communities is having a significant impact on their ability to grow, attract new workers, and on their ability to be proactive partners in reducing the provinceâ&#x20AC;&#x2DC;s greenhouse gas emissions. Strong small and rural communities are an essential part of a vibrant province. BCâ&#x20AC;&#x2DC;s small and rural communities are characterized by several critical elements: committed people with a strong sense of community; creators of wealth; and guardians of our natural resources. In fact the economic success we enjoy as a province is a direct result of the strength and vitality of our small and rural communities. Transportation, more specifically transit connections between communities and regions, has increasingly come to be recognized as a primary responsibility of government at all levels, given its role as an integral part of community stability, growth and economic prosperity. Added to this is the increased recognition that transit services and the choices these alternatives provide to individuals, will play a critical role in BCâ&#x20AC;&#x2DC;s ability to reach the greenhouse gas reduction targets recently enshrined in legislation by the Provincial Government. The challenge we collectively face as a province is that small and rural towns in BC are characterized by a combination of low population densities and large distances between towns, as well as limited or no provision for public transport services. Some services do not connect with the nearest local service centre, and what services there are generally are so infrequent that they require an alternative form of transport for individuals to meet all essential needs. A new model of public transport is needed to support rural populations, particularly as the proportion of elderly people in rural and some regional areas will continue to increase. Funded, flexible transportation needs to be provided around smaller regional communities which do not currently have any adequate public transport service. Transit services in BC are divided between a number of bodies, and a variety of services. In terms of responsibility, the province is essentially divided into two parts, the Lower Mainland, under the auspices of the South Coast British Columbia Transportation Authority (commonly referred to as Translink), while BC Transit3 provides services to the majority of the rest of the Province. Both these transportation authorities have undertaken significant investments in transit. The Lower Mainland is extremely well served by transportation, both in terms of infrastructure and transit services. The newly reorganized Translink has significant financial resources which result in an annual budget in the realm of $925 million. These revenues come from a variety of dedicated sources, primarily transit fares, gas and property tax. Recently the Provincial Government announced a significant investment in transit services that focused on the Lower Mainland.4 The Provincial Transit Plan calls for the two levels of senior government and Translink to invest $14 billion up to 2020. The Chamber welcomed this investment as a critical 3 This resolution is only intended to address road transit services and does not therefore address BC Ferries or the Ministry of Transport who have responsibility for inland ferry services 4 Full details of the plan can be found at http://www.th.gov.BC.ca/Transit_Plan/index.html

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component in addressing transportation challenges for the region. The Chamber also recognizes that new investment in transit is not limited to the BC Transit Plan. Indeed, The Chamber congratulates senior levels of Government for their investment in transit services in a number of communities, including certain rural communities. Recent investments have included: $1.5 million in 16 BC communities from the Federal Government;5 $775,000 through the provincial Public Transit Infrastructure Program (PTIP).6 These targeted programs are in addition to significant federal investment through the Building Canada Infrastructure Fund, the Gas Tax Program, and Public Transit Capital Trust Public Transit Agreements. Further to this, PTIP funds are allocated primarily to existing public transit systems and may be used by eligible recipients in conjunction with funds allocated to them under the Public Transit Agreement (PTA) that was signed last year by U.BCM and the Governments of Canada and British Columbia. Despite what is an unprecedented level of investment by senior levels of government, Chamber members are concerned with the lack of two key elements in Government programming. First, the lack of a coherent plan for communities of all sizes, and second, a seeming inherent bias against providing transit service to rural and small communities based on the requirement for service and schedules to be based on a ridership and cost analysis. This is exemplified by the categorization of service as defined by BC Transit, which defines service under three primary categories: Conventional transit – serves urban areas utilizing larger vehicles on fixed routes and fixed schedules. Custom transit – serves those who cannot access conventional transit through either disability. Paratransit – offers flexible service using vehicles such as minibuses, taxis and vans. Throughout many rural communities, there are private companies that financially support and offer a transit option to the residents and tourists of the community. By way of private partnerships within the community, there are some transit options available. However, these options are often not adequate to address all the transit needs of the community due to the limited amount of funds private partners are able to contribute. There is no doubt that there is a market for service in all communities in BC. Indeed BC Transit fully recognizes the potential for growth in transit ridership. If we were to look at BC Transits Outlook for Public Transit in BC 2005-2010,7 we would see statements such as, ―community support for public transit is stronger than ever,‖ and, ―continued expansion of transit services is a priority to access to jobs, education and health services.‖ If we look at the Provincial Government we can see a corresponding level of commitment to public transit. Indeed, the Provincial Transit Plan states, ―our Transit Plan is a major element of our climate 5 This investment will be directed to the City of Merritt, Golden, the Regional Districts of Thompson-Nicola, East Kootenay, and Caribou 6 This investment will be directed to Bella Coola, Williams Lake, Salt Spring Island and North Island Communities 7 http://www.BCtransit.com/corporate/munsys/outlook2_web.pdf

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action efforts, helping achieve our greenhouse gas reduction goals by significantly increasing transit ridership, reducing automobile use, and providing a foundation of transportation infrastructure to support the development of healthier communities in the future.‖ The Plan goes on to state that, ―we can establish British Columbia as a global leader in innovative transit, providing all British Columbians with economic, social and environmental advantages for decades to come.‖ BC Transit has seen significant growth in ridership that places significant pressure on the provision of new and expanded systems. In 2007, BC Transit systems saw a total ridership of 42.5 million passengers, up from 40.7 million the year before. Culturally, we need to move to a European model of provision and regard for the role of public transport in our society. This might not be the primary issue raised by transport planners and engineers, but the social relationship to transport is an essential key to building ongoing investment in public transport across political cycles. THE CHAMBER RECOMMENDS That the Provincial Government: 1. develop a fully costed and funded rural transport plan to look into the creation of partnerships with private companies/organizations that will financially contribute to the success of the plan; 2. ensure that the plan include provision for both capital and operating funds for transit service where a definable need exists that cannot be supported under a user pay model; and 3. undertake an aggressive public relations campaign to highlight the availability and benefit of public transit in all communities in BC.

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POSITIONS ON SELECTED PROVINCIAL ISSUES 2011 – 2012

BORIGINAL RELATIONS AND RECONCILIATION

MORE SECURE PROPERTY RIGHTS ON RESERVE LANDS (2010) The First Nation Tax Commission (FNTC) is leading an initiative to create more secure property rights on reserve lands. The existing land tenure and registry system on reserves is a significant source of socioeconomic disadvantage because it contributes to high transaction costs related to investment, limits the potential property market, and in many cases prevents the securitization of land as a source of credit. Property rights are the bedrock of the market economy. Property rights are absent or poor on many reserves. The results are lower property values, less commercial development and higher incidences of poverty. Poor property rights contribute to high costs of doing business. One study recently quoted by the Auditor General of Canada suggests that it costs four to six times more to complete an investment project on reserve lands than off. The principle reason for these higher costs is that investors have to establish secure tradable property rights on reserve lands which they donâ&#x20AC;&#x2DC;t have to do off reserve lands. Proposed Solution The FNTC is proposing to resolve this problem by working on First Nation Property Ownership legislation (FNPOL). This legislation would create a similar property rights structure to the rest of Canada. The Chamber understands that land registration under the FNPOL would use a modified Torrens land title system. The Chamber understands that FNPOL would be optional for First Nations, that the legislation would ensure that the underlying title or reversionary right remains with the First Nation, and the First Nation would retain land management and property tax jurisdiction regardless of who reside there. The Chamber understands that this would effectively allow participating First Nations to issue fee simple title and provide guaranteed title through the Torrens system. The Chamber expects that the economic benefits from such an initiative would be large. As an example, an economic analysis conducted by Fiscal Realities Inc. for the FNTC estimates that if 68 First Nations, mostly rural, in BC converted their lands using this legislation, the benefits from increased property values, employment opportunities and increased revenue potential would be over $4 billion. THE CHAMBER RECOMMENDS That the Provincial and Federal governments work with the First Nations Tax Commission, and other interested parties, to develop legislation that would provide more secure and marketable property rights on reserve lands.

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PROVIDING THE RESOURCES TO GROW THE AGRICULTURE INDUSTRY IN BC (2011) BC‘s farmers and ranchers serve as the foundation for a diverse agriculture and food system which includes the production, processing, distribution and sale of food and other agricultural goods such as flowers and nursery products. This vital component of the BC economy generates over $35 billion in revenue and employs an estimated 300,000 people1. The industry is facing many challenges. Statistics Canada numbers show that net income for BC farmers and ranchers has been in negative territory for an unprecedented four consecutive years (Figure 1) 2, and several sectors have faced particular hardships resulting in significant downsizing.

BC has the second largest urban market in Canada in our own backyard, we have been experiencing a growing public interest in sourcing local agricultural products, and we have access to a sophisticated transportation network to help facilitate export market development. Industry and government must work in partnership to take full advantage of these market opportunities, thereby growing the agriculture and food sectors. Together with other representatives from BC‘s integrated agriculture and food value chain, including the processing sector, the distribution and retail sectors, and the restaurant and food service sectors, we are requesting a reinvestment in a provincial domestic branding program. Extension personnel and B.C. Ministry of Agriculture and Lands (MAL) industry experts play an important role in facilitating information exchange and supporting farmers in day to day decision-making. Particularly at a time when agriculture is under significant financial pressure, it is important that funding remains in place for these positions. The BC Agriculture Plan committed government to increasing 1 These figures include food services and food retail industries 2 Source: Statistics Canada – http://www40.statcan.ca/l01/cst01/agri02j-eng.htm

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extension support by $500,000 a year, but it would appear from subsequent MAL budget cuts that this was never fully implemented. The Chamber would recommend that funding for extension be given priority, and would offer to work with MAL to identify key priority areas for the agriculture sector. The Chamber, agrees with the industry has long held the view that we are missing opportunities to address health concerns through more direct linkages with agriculture and food production. The School Fruit and Vegetable Nutritional Program (BCSFVNP) is one initiative that has very successfully made this connection. There are clear indications of the programâ&#x20AC;&#x2DC;s successes in meeting both health objectives and benefiting the BC agriculture sector. We would recommend that funding for the BCSFVNP be provided at a level that would meet the objective of ultimately covering all BC schools in the program. We would note from Figure 2 that even if all of the requests for funding were met, the agricultural investments by BC would still pale in comparison to other provinces. It is time to invest in the future of agriculture in BC â&#x20AC;&#x201C; and we look to the Province for support.

THE CHAMBER RECOMMENDS That the Provincial Government; 1. live up to the BC Agriculture Plan commitment to invest $2 million per year into an industry-led marketing program that will increase awareness of local BC food products; 2. give high priority to funding for agricultural extension and that the Ministry work with the industry and key stakeholders to identify key priority areas for the agricultural sector; 3. reverse the decision to discontinue funding for the organic extension agent position; and 4. fund the School Fruit and Vegetable Nutritional Program (BCSFVNP) to a level that will meet the objective of ultimately covering all BC schools in the program.

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AQUACULTURE IN BRITISH COLUMBIA (2010) Aquaculture is the fastest growing agri-food industry in the world. The United Nations Fisheries and Agriculture Organization has estimated that global aquaculture production will outpace commercial fisheries by 2030. In Canada production has generally increased at 19% per annum. However, there are serious challenges to continued growth of the aquaculture industry in Canada in general and British Columbia in particular. As a relatively new user of our aquatic resources, aquaculture in British Columbia is challenged by an out-dated regulatory regime, lack of adequate programming and issues of public confidence around environmental performance and food safety. As outlined in a report by the BC Government, the aquaculture industry accounted for 60% of the total landed value of British Columbia seafood in 2008, and salmon farming makes up about 94 percent of the aquaculture value. Salmon farming has grown to take its place as the provinceâ&#x20AC;&#x2DC;s largest agricultural export, generating $800 million in economic output according to Price Waterhouse Coopers. It provides stable, year-round employment for 6,000 men and women, in direct and supply and service jobs, largely in coastal communities where other opportunities are limited. However, a recent study done by the Department of Fisheries and Oceans (DFO) concluded that aquaculture also has extensive economic linkages across Canada. The DFO report revealed that aquaculture in BC triggered economic activity across the rest of Canada valued at $1.2 billion. Until last year, aquaculture in BC had been a shared jurisdiction between the Provincial and Federal Governments, and involved a number of government agencies. For example, DFO is the lead federal agency for aquaculture but there are a number of other federal departments and agencies involved in the regulatory process, including Health Canada, the Canadian Food Inspection Agency, Transport Canada, the Department of Foreign Affairs and International Trade, Environment Canada, and Agriculture and Agri-Food Canada. This mix of government agencies has created, and continues to create, issues for the development of the aquaculture sector. A recent court decision concluded that aquaculture in British Columbia is a Federal responsibility. As a result of the Hinkson decision, the regulatory authority for the aquaculture industry will shift from the Provincial to Federal government, and the transfer of authority has revealed that there is a gap in legislation when it comes to aquaculture. To the extent that regulation is required, this gap may best be filled through the introduction of a federal aquaculture act. A federal aquaculture act could establish national environmental standards, clarify industry responsibilities and codify a proud legacy of environmental stewardship. Appropriate legislation would recognize in law the long-standing reality of aquaculture as a legitimate caretaker of Canadaâ&#x20AC;&#x2DC;s aquatic resources. It would support efforts to ensure a modern industry and build on an already impressive record of safety and sustainability. The introduction of this legislation could help facilitate the regulatory changes coming forward from DFO and would enable Canada to realize its full potential, creating new jobs and expanding opportunity in an industry that can be socially, economically and environmentally sustainable. The aquaculture industry has been the subject of strongly divergent research and opinions, not all of which is based on legitimate and responsible research. Incorrect and misleading information should not stop the further development and expansion of aquaculture farming in BC. The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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In February 2009, after four years of extensive consultation and research, the Pacific Salmon Forum released a report that concluded farmed and wild salmon can co-exist under certain strict conditions. While a number of the actions proposed in the report have yet to be implemented, the Pacific Salmon Forum‘s recommendations reflect the complexity of the subject and the range of factors affecting wild salmon. In its report the Pacific Salmon Forum notes that, to be effective, all British Columbians will need to work together to address all causes of adverse impacts to wild salmon. As an example, the Pacific Salmon Forum cites a provincial Auditor General‘s October 2004 Report, which identified 18 risks to wild salmon populations, of which five are attributable to aquaculture; the highest risk to wild salmon comes from agriculture, forestry, urbanization and water impoundments. Aquaculture is an economically and environmentally sustainable use of BC‘s aquatic resource that has the potential to provide economic benefits for rural coastal communities, the citizens of BC and nutritious, safe food for the local marketplace and for the world‘s growing population. THE CHAMBER RECOMMENDS That the Provincial Government work with the Federal Government to: 1. provide information and resources through the transition of the regulatory authority; 2. provide fair access to tenures for the aquaculture industry; 3. ensure that consultation with First Nations is appropriate and meets the needs to the industry for timely decisions; and 4. support efforts to build public confidence in aquaculture management and place a focus on science and solution. A POLICY FOR MAINTAINING A VIBRANT - SPORT FISHING INDUSTRY IN BRITISH COLUMBIA (2009) The Chamber is concerned about the management of fishery resources throughout the province, with special regard to the management of species and stocks of concern to sport fishing and its associated tourism industry. In regions like the Skeena, where sport fishing for steelhead and salmon are a multi-million dollar contributor to the provincial economy,3 poor fishery management practices have contributed to the decline of many salmon stocks. Moreover, valuable sport species such as steelhead continue to be negatively impacted. 3 Aggregate expenditures in BC attributable to Skeena salmon and steelhead fishing is $52.8 million. Source: Economic Dimensions of Skeena Watershed Salmonid Fisheries. Total direct economic impacts attributable to sport fishing for salmon and steelhead in the Skeena region is $30.5 million. Source: Economic Dimensions of Skeena Watershed Salmonid Fisheries. Freshwater Fishing generated $400 million in annual expenditures in the year 200. Source: Freshwater Angling in BC – An Economic Profile. G. Gislason & Associates. Sport Fishing gross domestic product of $288 million with sector revenue of $865 million in 2005. ($398 from freshwater, $467 from saltwater) Source: BC Government. Sport Fishing industry in BC: 7,700 directly employed in 2005 In 2008 Selective fishers caught 29% of the total harvest of sockeye while employing 45% of the total number of people involved in catching Skeena Sockeye.

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The steelhead sport fishery is a major economic contributor to many provincial regions, and the Province can further increase its value by protecting the Skeena steelhead run. The Skeena sport fishery is world renowned with 70 percent of fishing lodge and guides‘ customers returning annually. Statement of Issue/Problem There are a variety of problems province-wide for salmon and steelhead. A significant issue for Skeena steelhead is the continuing negative impact of the mixed stock fishery at the mouth of the Skeena River, where steelhead are caught incidentally by fisheries targeting sockeye and pink salmon. On average it sees from 1/3 to ½ of the returning steelhead in any given year killed unnecessarily as ―by-catch‖. This by-catch not only negatively impacts the individual stocks of steelhead but also the associated sport fishery that has grown to depend on a consistent supply of those fish. Of special importance are early returning steelhead as they arrive the earliest and stay the longest, thus providing a major percentage of the fish ―product‖ available to the sport fishing industry. A leadership opportunity exists in this situation for the Chamber to advocate that the Province strongly support a truly sustainable sport fishing tourism industry. The Chamber would also urge the Provincial Government to not only protect these valuable resources, but to enact measures that would maximize the benefits derived from sport fish like the steelhead. There are management options available to the Department of Fisheries and Oceans that would drastically improve the fishery situation in the Skeena region. In a paper titled Recreating Sustainable Sockeye Fisheries in the Skeena Watershed, Greg Taylor of the group ―Skeena Wild‖ proposes shifting the majority of the sockeye catch from the marine environment to upriver sites. In upriver locations more selective fish capture methods are available for use. These selective fishing techniques allow fishers to focus on the enhanced Babine sockeye and release non-target stocks and species with higher survival rates. This move to selective fishing would benefit Skeena summer run steelhead and local businesses dependant on those fish. And lastly, on a cautionary note, we see fisheries and fish stocks rapidly declining in the southern to midportions of the province. If we want to retain fish stocks and the tourism values associated with them, we need to act sooner rather than later. The status quo is only leading to an inevitable decline of wild salmon and steelhead stocks. THE CHAMBER RECOMMENDS That the Provincial Governments work with the Federal Government to: 1. acknowledge the importance of the sport fishing tourism industry in fisheries management throughout BC; and 2. support a Province-wide Steelhead Recovery Plan.

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AGRICULTURAL LAND RESERVE (2005) Up to the 1970's, nearly 6,000 hectares of prime agricultural land were lost each year to urbanization and other uses. The Provincial Government responded to the serious erosion of our agricultural land base by introducing BC's Land Commission Act (the Act) on April 18, 1973. A commission, appointed by the Provincial Government, established a special land use zone to protect BC's dwindling supply of agricultural land. This zone was called the â&#x20AC;&#x2022;Agricultural Land Reserveâ&#x20AC;&#x2013; (ALR). The ALR was established between 1974 to 1976 through co-operative efforts with regional districts and member municipalities. Local input on an ALR plan was gained through a public hearing process. Initially the ALR comprised 4.7 million hectares, or 5% of the province. Despite boundary changes over the decades, its area remains approximately the same. There have been questions raised concerning the effectiveness of BC's Land Commission Act. It is felt that after some 30 years in existence, that a review be conducted. THE CHAMBER RECOMMENDS That the Provincial Government form a committee to review BC's Land Commission Act, specifically to review: 1. that the objectives as specified in the Act are still appropriate; and 2. that the Commission and the administration of the ALR effectively accomplish the objectives of the Act.

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DUCATION

ADVANCING LITERACY (2009) In today's rapidly changing world, a solid literacy foundation, both for individuals and for our society, is more important than ever before. Yet according to a study released by Statistics Canada, 2 out of 5 Canadians over the age of 16 do not have the literacy skills they need to meet the demands of today's information-based society.1 A recent study shows that 48% of Canadians between the ages of 16 and 65 are below acceptable literacy levels. This is a national issue and demands national attention. The economic and social benefits to be gained from improving literacy are huge. A study by the Deputy Chief Economists for the Toronto Dominion Bank shows that a 1% increase in literacy will have an economic payoff to Canada to close to $80 billion.2 Also, literacy is key to addressing many of our most pressing social issues: contributing to better outcomes for children; lower healthcare costs; less poverty; safer communities; greater civic participation; greater equity for Aboriginal peoples; smoother integration of newcomers; and more. Despite the potential benefits, only a small percentage of Canadians who need help are getting the supports and training they need. Across the country, literacy organizations have been trying to address our literacy challenges with too few resources, and without the benefit of a coordinated national vision and strategy. Literacy is too important to our nation not to have national leadership, vision, and a comprehensive Canadian literacy strategy. The School Districts have been working under the Ministry of Education orders for the past two years to produce District Literacy Plans. These plans were prepared in conjunction with the Community Literacy Planning process. Currently, there are few government funded programs that literacy organizations can access. Many government Federal and Provincial programs do not specifically address literacy issues and thus literacy related organizations are often left struggling to find funding for literacy initiatives. Government also needs to increase funding for Community Literacy planning initiatives. This is a community driven process that has been funded by Legacies 2010 for the past three years. All organizations and agencies dealing with literacy have worked with the School Districts to produce these plans. In Fort St John, Legacies 2010 has provided $95,000 in funding to develop and implement the literacy plan. However, this funding is not long term and is in jeopardy after 2009. Currently the level of support for these plans is low, which leaves local community literacy planning at a bare bones level. THE CHAMBER RECOMMENDS That the Provincial Government 1. in conjunction with major stakeholders, create a provincial literacy champion to ensure that the provincial goal of having the highest literacy levels in Canada are met; 2. call for a comprehensive British Columbia literacy strategy with the resources necessary to make a difference; and

1 Dr. Satya Brink, Director National Learning Policy Research, Learning Policy Directorate, HRSDC, June 2006. 2 Craig Alexander, Deputy Chief Economist, Toronto Dominion Bank in 2007

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3. increase funding levels to community literacy initiatives to ensure long term sustainability for these plans. GETTING THE MOST FROM OUR EDUCATION SYSTEM (2006) BC business and industry can become, and remain, competitive only through continued investment and maintenance of the highest standards in the development of human capital. These standards must effectively meet international levels of competitiveness, reflecting the changing needs of world economic activity to keep BC business and industry competitive in the future. The Chamber believes that the provincial education system from kindergarten to elementary, secondary and post-secondary levels must provide equal opportunity for all students to develop to the maximum of their potential. As the needs of society, and our economy change, so too, must the educational system. It is critical to the economic future of the province that the elementary and secondary school system stress basic educational skills, at least equal to leading world standards in the prescribed criteria. The system must include critical and creative thinking, the ability to analyze, and the skill to communicate. It must also introduce students to the new educational technologies and provide means for students to become computer literate. At present, this is not occurring for the simple reason that there is a disconnect between the curriculum and the business community. The business community has been consistent in its call for a review of the curriculum to ensure that the skills being provided to students prepare them for the world of work. Programs such as the Conference Board of Canadaâ&#x20AC;&#x2DC;s â&#x20AC;&#x2022;Employability Skills 2000+â&#x20AC;&#x2013; should become a key component of the school curriculum. This program provides school children with the basic skill requirements all entrants to the workforce are expected to develop, and can further enhance as they progress through their career. The Chamber congratulates the government on recognising that there are challenges inherent in the school system, and on their commitment to work with stakeholder groups to address these challenges through the creation of the Learning Roundtable. Having said this, the Learning Roundtable will not succeed unless it includes all relevant stakeholders, in particular, the small business sector that represents 98% of all businesses in BC and employs a million people. The purpose of the education system must be to prepare students for later life, yet the business community is telling us that the system is failing to provide students with even basic employment skills such as basic numeracy and literacy skills. Education is the single most important investment in the future economic prosperity of the province. To not have the business community, the providers of that economic prosperity, represented at the Roundtable will simply ensure that it will not fulfill its primary function as future generations will remain ill-prepared for the world of work. Career, vocational, and post-secondary programs should afford students the opportunity to become involved in, and acquainted with, a variety of work and entrepreneurial environments. This requires a closer liaison and open partnerships between business, industry and the school system.

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In keeping with the ideal of an educational system which encourages and assists the lifelong learning that keeps an individual up to date in their chosen field, educational programs should also afford opportunities for those who are basically or functionally illiterate, including those who face the challenge of acquiring English as a second language, and those who seek a career in a non-academic field. With lifelong learning, the key to prosperity in our future vocational programs must be to prepare students to meet the challenges of the local, national and international workplace with the new skills required to make both the students and BCâ&#x20AC;&#x2DC;s economy strong and flexible now and in the future. BC colleges and universities (both public and private), and our private and non-profit trainers, can ensure the quality of their graduates only by the maintenance of high levels of academic excellence. For these students the business community has a critical role to play through such mechanisms as cooperative education programs, if the correct structure is put in place to encourage their participation. A province-wide co-operative infrastructure is already well established. Co-operative education programs exist in every region of BC, and are currently offered in 23 post-secondary institutions. In 2000 to 2001, private employers created approximately 5,600 co-op placements in the province for BC post-secondary students. In 2004, that number had declined more than 25% to approximately 4,100. During that same period, the provinces of Quebec, Ontario, and Manitoba recognized the need to stimulate the employment/economy cycle by initiating co-op tax credits to private employers to employ and train students. THE CHAMBER RECOMMENDS That the Provincial Government: 1. undertake a fundamental review of the school curriculum in concert with all stakeholders to ensure that students are being adequately prepared for the world of work; 2. designate a place at the education Roundtable for a representative of the small business community; and 3. ensure that small business and industry groups are provided access to schools on a regular basis to educate students to the expectations of the business community through the facilitation of events such as career fairs.

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NERGY AND MINES

PROTECTING OUR ENVIRONMENT AND OUR COMPETITIVE EDGE (2011) Just as a sustainable environment requires the world to manage our emissions of greenhouse gases (GHG‘s), sustainable industry requires that we manage the rate and methods used to reduce these emissions. In 2007, BC and the other members of the Western Climate Initiative (WCI) agreed on a strategy to control GHG‘s emissions in North America. Of the four provinces and seven states that belong to the WCI, BC, a relatively minor producer of GHG‘s compared to the rest of the world, took an unprecedented and still unmatched approach to problem of greenhouse gas emissions. The goal in BC is to reduce emissions by 33% by 2020. To achieve that objective, the province introduced the Provincial Carbon Tax, a broad based consumption tax equal to $15 per tonne of GHG‘s equivalent emissions as of 1 July, 2009 that is scheduled to increase $5 a tonne each year for the next two years to $30 per tonne by 2012. BC‘s carbon tax stands alone and apart from every other jurisdiction in the world both in the speed of implementation, the amount of the tax levy and its impact on business innovation. In a world of cross border trade and global competition, these distinctions have raised significant concerns over the extent to which this policy has left the province at a marked disadvantage. The Unlevel Field In Canada, six provinces and the three territories have no strategic tax plan aimed at reducing GHG‘s. Meanwhile, the three other Canadian provinces that are partners in the WCI have instituted fossil fuel taxes that apply only to industry and none come even close to the burden the BC Carbon Tax places on businesses and consumers. Look no further than Alberta, the number one GHG‘s emissions producer in Canada,1 to see the patchwork approach to carbon taxation in our domestic markets and jurisdictions. In 2005, exports between BC and Alberta totalled $22 billion. The Trade, Investment and Labour Mobility Agreement (TILMA) was negotiated to reduce provincial barriers, however Alberta‘s Climate Change and Emissions Management Amendment Act requires only 109 named industries to pay a $15 per tonne of GHG‘s levy to a technology fund for excess emissions over the established target. Quebec introduced its carbon tax in 2007 and applies a levy to approximately 50 large energy producers include Shell Canada, Ultramar and Petro Canada. Most of those costs are passed on to the consumer through increased costs. Furthermore, the other member provinces also have different targets for reducing emissions – all substantially lower than BC‘s 33% target. In Nova Scotia, the Energy Strategy and Climate Change Action Plan has a 10%reduction target by 2020. And in the United States, BC‘s partners in the WCI, with the partial exception of California have yet to even achieve the legislative power to even implement a strategy to reduce Greenhouse Gas emissions. 1 http://www.sindark.com/2008/01/19/canadian-emissions-by-province/ The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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Some have since scaled back their targets or even dropped out of the plan. And many states, including Washington State, our neighbour directly to the south have no plans to implement a carbon tax or cap and trade system. Competition Case in Point The cement industry in BC has been hamstring and undercut as a direct result of a tax that goes too far, too fast. Just south of the border, Washington State will not implement a cap and trade carbon emissions control strategy until 2012 and some observers believe that program will be delayed even further. As a result, BC cement manufacturers are being seriously undercut due to the competitive cost advantage Washington State cement companies enjoy. According to industry, cement imports to BC have increased by 16 percent in recent years due to BC‘s carbon tax. By 2012, Cement Association of Canada estimates industry losses due to the Carbon Tax to be $67 million. Global Trade Disadvantage China is the number one producer of GHG‘s, producing more than 22% of the world‘s carbon emissions. That compares to Canada, which is in 7th place, producing less than 2% of the world‘s annual GHG‘s2. China is building renewable energy resources through infrastructure investments. It places no burden on individual businesses meaning, critics say, it essentially amounts to a subsidy for business. Meanwhile, BC business is left to compete in this uneven world. The carbon tax levy further takes a bite out of industry‘s annual profit margins – further stressing its ability to find the money to invest in the innovations that could reduce emissions and costs of production. Underscoring these concerns, the Liberal government‘s consultant and a proponent of the carbon tax, Dr. Mark Jaccard, a professor of environmental economics at Simon Fraser University and president of MKJA Energy Policy Consults in Vancouver, concedes there is an issue with B.C.‘s solitary position. ―No jurisdiction can do this on their own. It is pretty hard to keep that tax going if you are sitting alone,‖ says Jaccard. Symbolic but not Significant Even within our Canadian borders, BC ties with Saskatchewan for fourth place in production of carbon emissions, well behind Alberta, Ontario and Quebec. Our leadership role while laudable does little to decrease emissions on a global scale - but does considerable damage to our provincial economy. In Conclusion Although controlling GHG emissions is necessary other jurisdictions have not followed the province‘s lead as was expected several years ago. As a result, the Province has no choice but to review its course of action.

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THE CHAMBER RECOMMENDS That the Provincial Government: 1. freeze the Carbon Tax at its current level of $20 per tonne; 2. take on an immediate review of BC‘s approach to its policy on Greenhouse Gas Emissions; and 3. work with other provinces and with the governments in the US to standardize and harmonize the costs of controlling carbon emissions. SUPPORT FOR BC GEOLOGICAL SURVEY (2011) The British Columbia Geological Survey (BCGS), a branch of the Ministry of Energy and Mines, is responsible for producing and housing public geological and geoscientific information about mineral resources and mineral potential in the province. Its core staff is composed of professional geoscientists who carry out the systematic inventory and assessment of the varied and complex geology of BC. Principal activities include geological and geochemical surveying, mineral, coal and industrial mineral inventories management, mineral potential assessments for land use planning, monitoring exploration activities, assessing geological hazards, publishing maps and reports, and providing geoscience expertise to support government‘s sustainable development objectives. Its role was initiated in 1895, and it functions today as a highly technical institution in answer to the continuing information needs of government, business and the general public. The inventory of information is used to attract industry investment, to assist government‘s stewardship of its rich mineral resource endowment and to help manage and protect Crown lands. For the last 116 years exploration and mining companies have relied on BCGS‘s data for the identification and development or ore bodies in BC. As a result mining activity in BC today is an important source of revenue that sustains our province. Unfortunately, recently, the BCGS has been starved of the funding necessary to properly fulfill its role inhibiting its ability to put adequate numbers of geologists in the field, to maintain its database, and to properly deliver information to exploration and mining companies and to the public. BC is well endowed with mineralization and BCGS has provided critical support for the exploration and development of revenue producing mines in BC. If the expectation is to continue to have a robust mining sector, BC must once again recognize BCGS and fund it appropriately to allow them to fulfill their fundamental role in the Province‘s future.

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THE CHAMBER RECOMMENDS That the Provincial Government; 1. provide increased, adequate and sustained funding for the BC Geological Survey, to ensure this agency is able to continue their work of providing a foundation of information around our mineral resources for future revenue generation in BC; and 2. immediately inject $2.5 million funding into the BC Geological Survey to stop the present erosion of their capacity to fulfill their role in developing BC‘s economic future. TIME FOR A REVIEW OF THE CLEAN ENERGY ACT (2011) The Clean Energy Act (CEA) was passed by the previous Liberal Government in April 2010. The CEA has a number of provisions which govern BC Energy Policy. The CEA self-sufficiency provisions really are provisions which mandate BC Hydro to generate a surplus. This is caused by provisions which do not allow clean renewable non-firm energy generated in BC to be used in BC and instead require the power to be sold into electricity markets. It is further caused by provisions which require BC Hydro to buy more power than it will need and therefore BC Hydro must sell the power into electricity markets. The prices in electricity markets ($40/MWh) are considerably lower than the prices being paid ($140/MWh) for the new firm shaped supply need to meet these provisions. In addition BC Hydro is precluded from buying cheap low load hour power from the markets for use in BC. This surplus is extraordinarily expensive for the province and for BC Hydro ratepayers resulting in approximately $1 billion per year1 degradation in the performance of the BC economy and about 20% to 30%2 future incremental rate increases for families and businesses, in today‘s terms of definition, out of about 100% rate increases forecast in the next 10 years. The self-sufficiency provisions are only partially implemented at this time and can easily be rectified through revisions to the CEA. The CEA also significantly restricts the use of natural gas, even in circumstances where it can be cost effectively used to generate benefits significantly in excess of its costs including its attributed GHG costs. Consequently the key values to the electric system of dispatchability, combined heat and power, distributed generation and rapid construction flexibility are being quite severely limited. The CEA also removes many facets of BC Hydro‘s projects, programs, contracts and expenditures from review by the BC Utilities Commission. It also removes a significant amount of control over BC Hydro‘s development of an export market. The CEA also imposes on BC Hydro requirements for implementation of greenhouse gas emissions reduction through electrification switching of fuel sources and requirements for economic development, requirements. The potential cost implications have not been projected or fully understood before the 1 BC Hydro‘s Integrated Resource Planning & 2008 Long Term Acquisition Plan Application show planning criteria changes leading to excess purchases of new supply (5000 GWh/year non-firm + 3000 GWh/year insurance + 2500 GWh/year market = 10500 GWh/year times a loss of $100/MWh for each GWh/year = $1 billion/year calculation by the Commercial Energy Consumers) 2 BC Hydro 2012-2014 Revenue Requirements Application shows each $36 million of costs or new revenue requirements leads to a 1% increase in rates

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requirements have been established. Given that the entire BC economy, Gross Domestic Product, is about $200 billion cost implication in the range of $1 billion/year become significant to everyone in the province. THE CHAMBER RECOMMENDS That the Provincial Government review the Clean Energy Act ELECTRICAL ENERGY BENEFITS FOR BUSINESS (2009) In BC the electricity rates have been increasing recently and more increases are expected over the next several years. Inexpensive hydro electricity has been a key component of the competitiveness of BC industry and commercial businesses for many years. The competitiveness of our industries and businesses in world markets depends in part on maintaining competitive cost structures. In particular those industries and businesses involved in exports, which are vital to the economy and well being of the province, can be affected significantly by increasing electricity prices. In order to maintain our attractive electricity prices, it is important to ensure that BC Hydro maintains the income streams developed either directly or indirectly from its electric system. These income streams can help to offset other costs and keep the level of rate increases lower. In particular, the income streams developed from trading power can and do provide an important source of income to keep electricity rates low and our industries and businesses competitive. It is important that electricity trading continue to grow and develop, and also that it continue provide the benefit of lower electricity rates. The following are a few of the issues which may limit or constrain BC Hydro‘s ability to keep electricity rates competitive for the BC business community, along with recommended resolutions to the issues. At the present time, BC Hydro‘s subsidiary Powerex exports surplus power, if any, for the credit of BC Hydro and its customers under a Transfer Pricing Agreement between the two entities. When Powerex is involved in trade transactions, buying and selling power to and from third parties, the income becomes ‗trade income‘. In addition the Transfer Pricing Agreement provides Powerex the use of the BC Hydro integrated electric system for the cost of transmission charges for any power moved over the grid. This gives Powerex access to the capability of the BC Hydro system over and above transmission use without any other charges. The capacity and capability of the BC Hydro system to shape power trades and, therefore, to develop ‗trade income‘ is available to Powerex without other charges, except that ‗trade income‘ goes to the benefit of customers up to $200 million. The BC Government under Special Direction HC2 to the BC Utilities Commission (BCUC), caps ‗trade income‘ at $200 million per year, after which the trade income accrues to the BC Government. The $200 million level was supposed to, at the time it was put in place, be set at a level which would not be exceeded except in unusual circumstances such as when electricity markets spike and create trade income potential in the billion dollar range. This cap was put in place without being indexed to inflation and without recourse to change in changing circumstances. BC Hydro‘s subsidiary Powerex has been exceeding the trade income cap with regularity. The following are results for the last few years. The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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(From page 28, Commercial Energy Consumers ‗CEC‘ Final Argument to BCUC in BC Hydro‘s Revenue Requirements Application for 2008) BC Hydro revised its estimates of trade income for 2009 from $136 million in its application to $197.1 million for the year, because it had already earned more than its application estimates on which it based customer rates. BC Hydro applied for ‗trade income‘ of $156 million in its application for the year 2010 and did not change this amount. The BCUC sided with the CEC and increased BC Hydro‘s forecast of trade income to $199 million for the year. This resulted in a significant lowering of rates to BC Hydro customers for the 2009 - 2010 period. The risk that BC Hydro‘s Powerex subsidiary will exceed $200 million is now approaching 50% or more. This is particularly problematic because BC Hydro and its customers are now investing in massive capital expenditures in the billions of dollars to provide additional capacities on the integrated electric system. Projects like Revelstoke #5 and Mica # 5 are to be constructed or are being seriously planned for. In addition, major transmission lines such as the ILM (Interior to Lower Mainland) 5L83 are being planned and pursued for construction. The recently announced Section 5 inquiry into the Northern Transmission Line, and all BCTC transmission planning, is likely to have significant implications for the capacities and capabilities of the BC Hydro electrical system. The capital expenditures are in the billions. Customers of BC Hydro will pay for the costs of the capital investments and the BC Government would benefit if Powerex is able to translate the additional capacities and capabilities into ‗trade income‘. Powerex is exceptionally capable of generating ‗trade income‘. As well, in these challenging economic times, to the extent that BC Hydro customers are not utilizing the capabilities and capacities of the BC Hydro electrical system, this will result in Powerex accessing these assets and making every effort to earn ‗trade income‘. Powerex ‗trade income‘ over and above the $200 million cap goes to the BC Government and displaces other sources of government revenue or becomes found revenue, because of its irregularity, and is spent as the government sees appropriate. The $200 million cap is obsolete because of increased use of the BC Hydro system by Powerex, increasing BC Hydro and BCTC investment paid for by customers, increased inflation since the cap was put in place, and increased electricity market prices since the cap was put in place. The problem with this potential displacement of taxes is that commercial customers, and small business customers in particular, are charged rates in excess of the cost of service and subsidize residential The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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customers significantly.

BC Hydro FACOS study 2008

Small general service customers (small commercial customers) are charged 23.8% in excess of the cost of service, and larger general service customers (larger commercial customers) are charged 6.2% in excess of the cost of service. Residential customers are charged 8.2% less than the cost to service them. The spread between residential customers and the small commercial customers is over 30%. Any income taken from BC Hydro falls disproportionately on the business community. The BCUC has ruled that this over charging is not fair, just or reasonable, but the BC Government has by Special Direction deferred any rebalancing of this until after March 31, 2010. It would be useful for the ‗trade income‘ cap to be increased now above the recent high levels of ‗trade income‘ earnings and indexed in the future so that the cap keeps pace with the market. BC Hydro is currently planning to file a Large General Service customer (Commercial Customer) rate restructuring to implement conservation rates. The rate designs are not yet complete and final, however, some early designs involved rate increases for some commercial customers increasing by over 40% over a number of years plus general rate increases, while other customer‘s rates decreased. This is caused by the adoption of revenue neutrality at the customer class level instead of at the customer level. Industrial restructuring rate designs were implemented on a customer level revenue neutral basis. If the above problems are not addressed, commercial business customers will be paying $100‘s of millions in excess of the cost to serve them and will be unfairly treated with respect to other customer classes and with respect to each other within the class. The following resolutions are proposed to redress these problems. THE CHAMBER RECOMMENDS That the Provincial Government: 1. increase the $200 million cap on ‗trade income‘ for BC Hydro immediately to $300 million; 2. index the cap on ‗trade income‘ to the BC Hydro rate increase percentages including the rate rider percentages from this year forward;

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3. ensure that the commercial customers‘ charges for electrical service in excess of their cost of service after March 31, 2010 are properly redressed over time to eliminate the overcharging; and 4. ensure that commercial customer rate restructuring designs are implemented on a customer revenue neutral basis, within a few percentage points. INVESTING IN THE INFRASTRUCTURE REQUIRED TO CAPITALISE ON BC’S MINERAL RESOURCES (2009) BC‘s mineral resources have the potential to provide a strong economic foundation for the province and make BC a leading global supplier of minerals. This can only be achieved if BC creates the infrastructure to attract investment in this sector. Two organizations working towards these goals are the BC Geological Survey (BCGS) and Geoscience BC (GBC). Each has different mandates but complementary goals. BCGS is responsible for producing and housing public geological and geoscientific information about mineral resources and mineral potential in the province. Their core staff is made of professional geoscientists who carry out the systematic inventory and assessment of the varied and complex geology of BC. BCGS functions as a highly technical institution to answer to the continuing information needs of government, business and the general public. The inventory of information is used to attract industry investment, to assist government‘s stewardship of its rich mineral resource endowment and to help manage and protect Crown lands. BCGS‘ 2009 budget has been substantially reduced from 2008. GBC‗s mandate is to encourage mineral and petroleum exploration investment in BC through the delivery of applied geosciences. It applies new data, new ideas and new technologies, and compiles and reprocesses existing data and applications of existing technologies in new areas. Geoscience BC seeks collaborative and partnership projects that come with supporting funding. GBC has only one more year of operating funds. If BC wants to realize the opportunity of our rich mineral resources it needs to invest in the infrastructure that makes this possible. THE CHAMBER RECOMMENDS That the Provincial Government: 1. reinstate BCGS‘s annual funding to at least the $5 million level, plus additional funds to cover expensive field costs and the costs to attract expertise in today‘s competitive market; and 2. reinvest another $20 million in Geoscience BC with the mandate, as before, to leverage these funds with funds from industry and other government agencies.

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RENTAL APARTMENT OWNERS IN BRITISH COLUMBIA (2011) Rental Apartment Buildings and other types of rental accommodation, manufactured home parks for example, in British Columbia are for the most part owned by small business owners. Their commitment and investment to the rental housing market is substantial. Through formalized memberships in the Building Owners and Managers Association of BC (BCAOMA) and the Rental Owners and Managers Society of BC (ROMS BC) well over 2,000 business owners are located throughout most if not all municipalities in British Columbia. These business owners are regulated by the British Columbia Provincial Residential Tenancy Act. Section 23, Items 1-5 of this Act identifies conditions in which rent increases may be determined. Greater rent increases equate to a greater return on investment for the business owner, and in many cases prevents the business owner from suffering a loss on their investment. For a variety of historical reasons the new construction of private rental housing units in British Columbia has virtually ceased. The existing return on investment compounds that serious problem and penalizes these business owners to an unfair degree. Challenges of Aging Stock The current rental housing stock in British Columbia can be characterized as follows: BC rental stock average age is 58 years old Aging rental stock requires increasing capital investment Current rent control system (based on engineering studies) acts as a disincentive to adequate investment in the maintenance in existing rental stock to ensure its viability Current rent control and HST policies act as a disincentive to new investment in the new rental housing units resulting in a downward pressure on supply As a consequence of the aging rental housing stock, the rental housing stock will necessarily decline in quality without policy changes. Current rent control and HST policies affecting rental housing provide disincentives to undertake capital expenditure. The BCAOMA believes that one of the best market stimuli available to the Province of British Columbia to maintain existing rental housing, encourage the development of new, purpose-built rental housing and to achieve the sustainability of the rental housing industry would be the mitigation of the impact of the planned HST on the rental housing owners. Neutralizing the impact of the HST on the rental housing industry will support the tenuous viability of a sustainable rental housing market in British Columbia, and will assist in the continued provision of safe, secure and well-maintained rental housing stock. As a result of the existing Rent Increase Calculation Formula that prescribes allowable rent increases in British Columbia, property owners do not have the ability to pass higher operating costs onto tenants. Consequently, property owners will be in the untenable position of facing higher costs, with no revenue capacity to recoup the costs directly related to the operation and maintenance of rental housing units. Essentially the BC HST will have the unintended consequence of acting as a further disincentive to property owners for the development of new rental housing units and the undertaking of capital expenditures for rental housing up-grading and maintenance. In short, the combined impact of rent controls and the BC HST has been to significantly increase costs without providing sufficient means for The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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property owners to recoup their costs. Even without the application of the added costs of HST, property owners and landlords are already challenged by increasing costs and controlled revenue increase potential, facing owners with a current or prospective negative cash flow. While accommodation for the cost impact of the BC HST has been made by the BC Government for other life necessities such as groceries, no accommodation has been made for the necessity of shelter. If the BC Government chooses not to provide HST accommodation to the Rental Housing Industry, then it must consider elimination of rent controls so that the BC HST can be passed through to consumers, and the industry has an opportunity to operate in a financially sustainable environment. In summary, the BCAOMA believes that the BC Government cannot maintain the burden of a ‗new‘ tax in the form of the BC HST, while at the same time not enabling the rental housing industry to pass through the cost of the new tax on to consumers, or otherwise earn more revenue, to make up for the costto-revenue shortfall. We appreciate that the government is being requested by many industries and sectors for some form of relief from the additional taxation represented by HST. No industry or sector is in the same position as the residential rental industry:     

Food and shelter are necessities of life. The provision of food is ―zero-rated‖, exempt from paying and collecting sales taxes. Our industry has only one source of revenue – rents. We are restricted by provincial legislation in the amount by which rents can be increased. Rents must continue to be exempt from formally GST/PST, and now HST. We are not asking to pass on this tax to tenants.  The introduction of HST will cause a significant increase in the net costs of providing rental accommodations, as there are no input tax credits available.

Left unresolved, the imposition of the HST on the rental housing industry will only serve to further increase the existing negative gap that results from the imbalance between allowable rent increases and actual increases in costs associated with operations and maintenance. Imposition of the HST has made an already negative operating balance more negative. Rental housing is already a scarce commodity in many regions of British Columbia. Therefore it does not make good sense – policy or otherwise – to impose further costs on the rental housing industry. It is critical that the government recognize that the residential rental industry is unique in that it is the only private industry in British Columbia that is restricted by government legislation from passing cost increases to its ―customers‖ through increased rents, since rents are controlled, unlike, other private/industry products. Further, a typical rental property owner‘s only source of income is rents. The current Harmonized Sales Tax (HST) – treatment of commercial real estate illustrates the anomalous situation of rental housing. Unlike rental housing investors, investors in non-residential properties (e.g office and retail projects) effectively do not bear the burden of HST. While HST is payable on the final value of a new non-residential building, the owners receive input credits for all HST paid – credits which can be applied against HST collected on rents from commercial tenants, or refunded if they exceed HST collected. The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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This difference between the HST treatment of rental housing and non-residential rental properties is not clearly understood by many observers. It arises from the fact that, when the GST was introduced, a decision was made to exempt residential rents, now also to exempt rents from HST. Since commercial rents are subject to the HST, any HST paid on inputs by the owners of non-residential properties can be deducted against the HST collected from rents. In contrast, since residential landlords do not collect HST on rents, they are required to absorb 100% of the HST on inputs because there is no HST collected to which HST paid can be applied as a credit. Therefore, because no HST is payable on residential rents, rental housing is an exception from the general rule that the HST paid by businesses can be recovered from the purchasers of its products and services. HST has expanded the tax base previously encompassed by the BC‘s PST by essentially adding PST to the broader range of goods and services upon which GST was previously payable. This change has a considerable – and totally negative - tax impact on the residential rental industry. The Impact of Harmonized Sales Tax Understanding that the average age of rental buildings in Vancouver is 58 years, rental housing owners are challenged by very real costs associated with required maintenance of older buildings – costs which are labour and input intensive and subject to the application of HST. Rental housing owners are also in the very difficult situation of facing real, increasing maintenance costs while at the same time coming up against the very real revenue barrier imposed by the new HST, which limit their ability to pay for maintenance projects, possibly placing owners in the unsustainable position of a negative cash flow. The implementation of the HST has a significant business impact on owners of residential rental housing in British Columbia. Under the legislation, owners are required to pay HST on all goods and services related to residential housing but are unable to recoup these charges as a result of the rent controls found in s.43 of the Residential Tenancy Act and s.22 of the Residential Tenancy Regulation. In effect, the owners are forced to bear an increase in operating costs equivalent to an estimated 1.5% - 3.0% of gross income, which cannot be passed on to tenants. As noted, this will have significant impact on an industry where margins are already limited, and will have a profound effect on the future quality and quantity of residential housing in British Columbia. Many owners are highly mortgaged, after which they may net only 5% or less of rents. A 2% gross income increase in costs that cannot be passed on would result in a 40% reduction in net income, a severe disincentive to further investment in rental housing. Rent Control Prevents Industry from Passing on HST At the present time, the landlords are restricted to rent increases by the Rent Calculation Increase Formula in British Columbia calculated as the Canadian Price Index (CPI) + 2%. If BC‘s rental housing providers‘ incur costs such as maintenance or operating expenses above the allowable rent increase, the landlords have no ability to raise rents to an equivalent increase. Existing rental housing stock is declining in quality and will continue to do so, without policy changes. Current policies affecting rental housing provide no incentives to undertake capital expenditure. Failure to proactively address this situation will of necessity force rental housing providers to reduce ―optional‖ spending, i.e. building servicing and maintenance, leading to building deterioration and tenant The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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unrest, plus upward pressures on deferred (controlled) rents will be exacerbated. THE CHAMBER RECOMMENDS TO: That the Provincial Government; 1. work with the federal government to designate the residential rental housing industry as zero-rated; 2. amend the current rent calculations formula to reflect current actual cost increases that impact the rental housing industry. RENTAL TENANCY ACT (2009) Rental Apartment Buildings and other types of rental accommodation, manufactured home parks for example, in British Columbia are for the most part owned by small business owners. Their commitment and investment to the rental housing market is substantial. Through formalized memberships in the Building Owners and Managers Association of BC (BCAOMA) and the Rental Owners and Managers Society of BC (ROMS BC) well over 2,000 business owners are located throughout most if not all municipalities in British Columbia These business owners are regulated by the British Columbia Provincial Residential Tenancy Act. Section 23, Items 1-5 of this Act identifies conditions in which rent increases may be determined. Greater rent increases equate to a greater return on investment for the business owner, and in many cases prevents the business owner from suffering a loss on their investment. For a variety of historical reasons the new construction of private rental housing units in British Columbia has virtually ceased. The existing return on investment compounds that serious problem and penalizes these business owners to an unfair degree. The business owner may increase rental rates using formulas, including an average of the past 12 months Canadian Price Index (CPI) plus 2%. Unfortunately the CPI does not accurately reflect normal CPI index factors for apartment buildings. For example, the flow through costs of natural gas can be an unmanageable expense as can a number of other building expenses. THE CHAMBER RECOMMENDS That the Provincial Government amend the Residential Tenancy Act to allow use of the true flow through cost of operations, rather than CPI plus 2%, when actual operational costs are in excess of CPI plus 2%.

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REPLACING BRITISH COLUMBIA’S COMMERCIAL TENANCY ACT (2009) ―No chattels being in or on any land that is or shall be leased for life or lives, term of years, or at will, or otherwise, are liable to be taken by virtue of any execution, unless the party at whose suit the said execution is sued out, before the removal of such chattels from the premises, by virtue of such execution or extent, pays to the landlord of the premises or the landlord's bailiff such sum of money as is due for rent for the premises at the time of the taking of the chattels by virtue of the execution, if the arrears of rent do not amount to more than one year's rent; and in case the said arrears exceed one year's rent, then the party at whose suit such execution is sued out, paying the said landlord or bailiff one year's rent, may proceed to execute his or her judgment, as he or she might have done heretofore; and the sheriff or other officer is empowered and required to levy and pay to the plaintiff as well the money so paid for rent as the execution money.‖ So begins Section 1 of the British Columbia Commercial Tenancy Act (the Act). The Act, which has not changed in many material respects since 1897, is badly out of date, leaving British Columbia in a position unique among Canadian jurisdictions, in that we have no contemporary statute dealing with the legal relationship between commercial landlords and their tenants. Noting the importance of commercial leasing to the British Columbia economy, the Chamber views with optimism the progress of the Commercial Tenancy Act Reform Committee, established in July, 2007 by the British Columbia Law Institute, and mandated to study the reform of commercial tenancy law in British Columbia. The final report of the Committee is expected in June, 2009, and the Committee has advised that the report will include draft legislation replacing the current Act with a new Commercial Tenancy Act reflecting contemporary legal and commercial realities. However, the Chamber is concerned that the reform of the Province‘s commercial tenancy law may be afforded little attention by the government, as it is far from a ―hot button‖ issue, and that despite the antiquity and ineffectiveness of the current Act, the government may not take action to reform it. THE CHAMBER RECOMMENDS: That the Provincial Government give urgent attention to the reform of British Columbia‘s commercial tenancy laws immediately upon the release of the final report of the Commercial Tenancy Act Reform Committee, scheduled for June, 2009, with a view to the prompt and timely replacement of the present Commercial Tenancy Act with a new statute.

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AFFORDABILITY OF SITE REMEDIATION PROCESS (2009) BC has a process for the government to ‗certify‘ sites as remediated. This process is expensive and is steadily getting more so, to the point where the value of land outside the Lower Mainland and a few other enclaves in the province will not support the cost. In many cases, the physical costs of remediation are less than the consulting and regulatory fees. Once $50,000 was expensive, but even the most basic certification now will generally cost over $100,000 exclusive of remediation costs. Without provincial certifications, lenders won‘t lend and municipalities can‘t permit redevelopment. The process, intended to reduce environmental risk, now seems driven by minimizing the risk of consultants, municipalities and fiduciaries. Unfortunately, there is no obvious solution to this continued slide. A Minister‘s Panel struck in 2003 recommended improved application of science and privatization as a partial resolution to what was already a problem. However, progress on science and increased privatization of the system has perversely seemed to have the inverse effect. In consequence, remediation of contaminated sites in many parts of the province makes no economic sense for the landowner, and is ruinously expensive for those who are defined as responsible parties where it has to go ahead. The current situation exacerbates the ability of small communities to revitalize downtown areas, discourages remediation, and drives development to green field sites, promoting sprawl. The Chamber does not believe there is any party at fault on this issue, but that the current situation has arisen as a result of all stakeholders pursuing their individual legitimate interests. The collective interest of seeing sites remediated and brownfields redeveloped will happen less and less, to the detriment of everyone involved. Addressing this formidable challenge is made more difficult by the fact that those with the knowledge to understand the problem and develop solutions also have individual commercial/institutional preferences that must be overcome. THE CHAMBER RECOMMENDS That the Provincial Government convene a stakeholders group, including representatives of the key technical staff at the Ministry (Land Remediation Group), staff from Ministries with related responsibilities, business representatives, municipalities, lenders, consultants to develop concrete and realistic strategies to make the land remediation program in BC work for the entire province. ECONOMIC AND ENVIRONMENTAL SUSTAINABILITY FOR BUSINESS (2009) Sustainable development is often thought to have three components: environment, society and economy. This is referred to as the ―triple bottom line‖. For today‘s businesses, industries and institutions to be economically sustainable it is prudent that they consider the environment and society. At the 2009 BC Economic Summit in Vancouver, speakers from every sector spoke of the inevitability of business, society and the future economy being determined by sound environmental commitments. It was stated that clean technology could drive the economy for the next 30 years. In order to move to an environmentally sustainable marketplace it is important to allow the market to tell the ecological truth by including the environmental costs to doing business. The main conclusions in the Stern Review on the Economics of Climate Change are that 1% of global Gross Domestic Product (GDP) per annum is required to be invested in order to avoid the worst effects of climate change, and that failure The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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to do so could risk global GDP being up to twenty percent lower than it otherwise might be. The report suggests that climate change threatens to be the greatest, and widest-ranging, market failure ever seen, and it provides prescriptions including environmental taxes to minimize economic and social disruptions. In June 2008, these projections were increased to estimate that 2% of GDP is now required to account for faster than expected climate change. At the World Future Energy Summit in Abu Dhabi in 2009, Kevin Parker, head of asset management for the Deutsche Bank said, ―the world needs investments of up to $45 trillion by 2050 in alternative energy to balance hydrocarbons and renewables in its overall energy mix.‖ He also went on to state that, "governments need to stimulate investment in clean energy through long-term policy initiatives." Parker said Deutsche Bank has currently $650 billion of assets under management, of which one per cent, or $6.5 billion, of assets are under management in climate change. One way BC could begin to commit to our future economy is through Ecological Fiscal Reform (EFR) policies. These policies are being used all over the world and involve using financial incentives to achieve sustainability goals. One example of EFR is a tax shift. These tax shifts are designed so that prices in the marketplace better reflect the environmental cost of production. This is accomplished by reducing taxes on products and services that protect the health of British Columbians and the environment, while increasing taxes on polluting activities. This kind of EFR is being used in Europe with great success, and could help make BC‘s economy cleaner and more environmentally sustainable. The Federal Government has identified sustainable development as an important economic direction for today‘s businesses, industries and institutions. In 1995, the Government of Canada started the Canadian Environmental Assessment Agency and established the Commissioner of the Environment and Sustainable Development within the Office of the Auditor General. Amendments to the Auditor General Act require Ministers to prepare ―Sustainable Development Strategies‖ that outline their departments' objectives and plans for action to further sustainable development, and that they update these strategies at least once every three years. That same year, the Federal Government also released A Guide to Green Government, which firmly states its belief that Canada's economic health depends on its environmental health. As the world responds to the environmental challenges in the early 21st century, those who anticipate and prevent environmental degradation could lead the way in developing new economic opportunities. Globally, Canada has retained one of the strongest economies of the G7 countries, within which BC has the benefits of a diversified economy plus a window to the world during the 2010 Olympics. This presents BC with more opportunities to recover economically than other regions worldwide and presents prime conditions to lead the way in how to do so. THE CHAMBER RECOMMENDS: That the Provincial Government work with the Federal Government to: 1. develop financial incentives to induce businesses to make environmental sustainability goals;

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2. create long-term policy initiatives to stimulate investment in alternative energy solutions; and 3. calculate the environmental cost of doing business in all sectors and develop economically viable solutions for business to make environmentally sustainable choices. FLOODING PREVENTION (2008) Flooding in BC has increased dramatically over the last five years with a trend towards more severe cases. Terrace, Smithers, Prince George, New Westminster, Fort Langley, and the Fraser Valley are just a few of the major affected areas. There are several reasons for the BC-wide issue. First, with the pine beetle infestation, moisture cannot be absorbed by dead trees anymore. A living mature pine tree absorbs approximately 50 litres of water per day. Much of this amount ends up in our rivers and will cause the flooding we experienced in the past, something we also will have to deal with for many years to come. Another reason for flooding is the increase in melting snow packs, which, arguably, is the result of global warming and causes more water to be available in rivers at certain times of the year. Lastly, the lack of dredging from ongoing silt migration into key junctions is raising the water table in key river systems. The cost of response and recovery during the Freshet flooding last spring, and summer in Vanderhoof, was $24 million provincially. Much of damage was in the Northwest Region. Costs for local government response include evacuation supports, emergency works to critical infrastructure and ―Disaster Financial Assistance‖ to impacted residents, local governments and ministries. Urgent mitigation work based on the flood risk analysis across the province cost $34.3m, shared with the Provincial Government. Another $9.4m was expended in readiness activities, including purchase of Gabion dikes, sandbags, safety and response training for local governments, first nations and volunteers. Last November's heavy rainfall in the Southeast and Central Regions resulted in flooding and landslides near Lytton and Bridal Falls, with damages to road infrastructure of appropriately $3.7m. Currently the estimated costs related to the Nechako Ice Jam and flooding in Prince George is $5.0m. These costs are mostly related to the City of Prince George‘s response, building temporary protective works, pumping, engineering assistance, and evacuation costs. The assessment phase for Disaster Financial Assistance for impacted residents and local government infrastructure is continuing and the final cost will likely rise. Additionally, the reduction in GDP due to flooding and the associated job losses has to be considered. In Prince George alone 250 jobs were lost for 3 month due to temporary layoffs. Products could not be delivered in time, and now several businesses are closing permanently as they cannot recover the lost sales and suppliers. THE CHAMBER RECOMMENDS That the Provincial Government work with the Federal Governments to: 1. conduct a study to achieve the following goals;

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a) a long term Provincial flood prevention plan for flood endangered areas to save jobs, property and allow for further planning and development in flood endangered zones; and b) a dyking and/or dredging analysis for flood endangered zones should be carried out and where identified, dykes should be built as soon as possible and dredging should be allowed to avoid the ever increasing damages to property, loss of production and danger to human life. 2. work with municipal governments to create a working group with terms of reference and governance that will respond to the short and long term flood planning and response issues. This includes forming a committee that will deal with emergency response and long term mitigation and funding of activities dealing with flooding and flood prevention. FRASER RIVER SUSTAINABILITY AND FLOOD MANAGEMENT (2007) The Fraser River is a vast business generator in the Province of British Columbia. Hundreds of thousands of residents work directly or indirectly on the river, or with businesses and industry that rely on this vital waterway. Recent abnormal weather events have served as a warning that ongoing efforts to maintain the elaborate system of dykes and pumps that protect farmland, industry and residents must be undertaken by all levels of government on a proactive basis. The Fraser Basin is a vast geographical area drained by the Fraser River and its 13 main watersheds. Beyond its geographic importance, the Basin is a vital component of the provinceâ&#x20AC;&#x2DC;s economic base. In addition to contributing a full 80% of the provincial economic output and 65% of total household income, it also contains 21 million hectares of forest. The Basinâ&#x20AC;&#x2DC;s farms, ranches and orchards compromise half of all BC's agricultural lands. Eight major mines in the Basin account for 60% of BC's metal mine production. In addition, some of the province's and the world's most spectacular natural beauty and 1 recreational opportunities abound in this area, contributing 67% of total tourism revenue. In addition, regular dredging of the main channel of the Fraser River must be undertaken to help avoid the threat of flooding, and to help keep the river open and navigable for shipping, commercial traffic, pleasure boating, and to further enhance the Pacific fishery. Each year, enormous amounts of debris in the form of root balls, full trees, forest trash, and other materials are swept down the Fraser River. Until the advent of the debris trap, situated near Agassiz, the lower Fraser River and much of its estuary became non-navigable following the annual freshet. The trap captures the equivalent of 600 to 2400 highway logging truckloads of wood (90 â&#x20AC;&#x201C; 95% of the debris is of natural origin). The net cost of operation of the trap is approximately $640,000 per year, including costs associated with the current funding approach. Funds are raised for the operation annually from a diversity of sources. Even with the trap in operation, approximately 5000 m3 of waterborne debris is generated downstream in the lower Fraser River. This study estimates that the annual cost to manage this amount of debris and mitigate its impacts is approximately $1.59 million per year. If the trap were decommissioned, the amount of debris flowing into the lower Fraser River, and the incurred costs to manage it, would increase 1

Data provided by Fraser Basin Council. Further details available at http://www.fraserbasin.BC.ca/fraser_basin/index.html

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by at least six times to $9.55 million per year. For an investment of $0.64 million per year, it is estimated that at least $7.94 million in costs per year are avoided. THE CHAMBER RECOMMENDS That the Provincial Government work with the Federal Government to: 1. create a program for regular maintenance of the dykes along the Fraser River estuary, and provide for regular dredging of the main channel of the Fraser River; 2. support funding for permanent dyking; 3. provide sustainable funding for these programs; and 4. establish a permanent fund for the ongoing operation and improvement of the debris trap at Agassiz, and investigate the establishment of an additional trap to be situated on the lower reaches to catch debris from rivers such as the Coquitlam, Pitt and Allouette, i.e., near the Port Mann crossing.

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HST MITIGATION FOR THE RITC FOR THE TOURISM INDUSTRY (2010) While the Harmonized Sales Tax (HST) to be introduced in British Columbia on July 1, 2010 is a sound economic policy for the province as a whole, it presents significant challenges for specific industries such as tourism and home construction. The government has introduced a mitigation measure to address some of the negative impacts of HST to the home construction sector. However, concerns from parts of the tourism industry have at this point been largely unaddressed. The Chamber continues to work with the government to find specific measures to ease the HST impact on tourism. Background The HST tax change will eliminate the embedded sales tax on products for business and ensure that value added taxes are added only at the point of consumption. In the HST environment, businesses will be able to claim Input Tax Credits (ITCs) on business inputs for the full HST. Currently they can only claim ITCs on the GST, and not on the PST. The detailed agreement between the province of British Columbia and the Government of Canada regarding the HST is a legally binding document called the Comprehensive Integrated Tax Coordination Agreement (CITCA). The removal of the PST from business inputs will save a significant amount of money for BC business. Government estimates note that there will be approximately $2 billion of savings to forestry, mining, oil and gas, transportation, construction, and manufacturing sectors. These same sectors will also benefit from being able to claim back their input tax credits on the provincial portion of the HST that they pay out in the course of business operations. Given the tax savings to business, the government has opted to restrict a small portion of the ITCs to larger businesses in the province for the first five years of the HST regime. This practice is called the Recapture of Input Tax Credits (RITC), and will apply to all companies with annual taxable sales in excess of $10 million or more. There are four areas of RITCs, these include specified road vehicles, energy, telecommunications services and meals and entertainment. The RITC will be phased out beginning July 1, 2015 by 25% per year until it is fully phased out on or after July 1, 2018. At that time all businesses will be claiming 100% of their ITCs. The RITCs listed above represent less than 3% of the total ITCs available to large companies. In budget 2010, the government gave an estimation of the revenue to government from RITCs. That revenue for the portion of the budget year 2010/11, to which HST will apply, has been estimated to be $118 million and for the full budget year of 2011/12 the revenue has been estimated to be $162 million. Given the nature of large and small business composition in the province, the majority of RITCs will come from businesses in sectors that also have significant ITC opportunities outside of those categories that are to be recaptured. For the majority of large business, the RITC model is not a concern. However, the benefits of HST and the added ITCs are not realized in the same way for the highly service oriented sectors of the tourism industry. Companies in the attractions, food and beverage, and tour operator sectors (for example) will charge HST to their customers on services that are now only subject to GST. However, the inputs to their business are primarily labour, which provides them with very few ITC opportunities. A further concern for the large companies in these sectors is that of the few ITCs they can claim, some are restricted until July 1, 2015. The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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The specific restriction of ITCs on the use of energy for the tourism industry is curious, as the use of energy for the production of products for resale is eligible to other industries. Yet the province has specifically excluded energy used in restaurants (for producing meals for resale) or hotels (for producing accommodation for resale) or other tourism businesses, as â&#x20AC;&#x2022;production.â&#x20AC;&#x2013; There is no BC HST ITC available to these businesses on that energy cost, though the use of energy in the production of resale product is a direct business cost. The combination of these three conditions, charging their customers more tax, not having substantial ITC savings, and restrictions on the minimal ITCs available to them, have resulted in a specific tax disadvantage to tourism businesses. As an example, the types of tourism businesses the RITCs impact are larger hotels across the province and large iconic tourism locations. Some icons include the Capilano Suspension Bridge, Vancouver Aquarium, Vancouver Art Gallery, the Butchart Gardens in Victoria, and potentially other larger scale tourism operations. It would also affect privately owned restaurant groups. These businesses are central draws for the tourism industry in their respective areas of the province and their role in the health of the tourism economy cannot be underestimated. For these businesses, the RITC is another hit in an already difficult business environment. While the dollar value of RITCs from tourism businesses no doubt represents a small portion of the projected RITC revenue to government, the dollar amount represents a significant hardship to the tourism businesses affected. RITCs to tourism operators are one area where the province has opportunity to provide a concrete and time bound mitigation measure. While the Chamber understands that there can be no changes made to the RITC model, which is written into Annex C of the CITCA agreement, the province can offer a provincial tax rebate or credit for specific types of tourism businesses equal to the amount of their RITCs. This provincial tax rebate or credit program could follow the same phasing calendar as the RITC schedule. Specifically, the tax rebate or credit could provide: 100% rebate or credit for the period from July 1, 2010 to June 30, 2015 75% rebate or credit for the period from July 1, 2015 to June 30, 2016 50% rebate or credit for the period from July 1, 2016 to June 30, 2017 25% rebate or credit for the period from July 1, 2017 to June 30, 2018 0% on or after July 1, 2018 Phasing out the RITC has been verbally committed to by the Provincial Government at the announcement of the HST and during budget speeches. The phase out schedule has also been written into the CITCA agreement. The Chamber calls upon the government to strengthen their commitment to phasing out the provision by drafting legislation reflecting the phased removal schedule.

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THE CHAMBER RECOMMENDS That the Provincial Government: 1. legislate the removal of the Recapture of Input Tax Credits; and 2. provide a provincial tax rebate or credit to tourism businesses subject to the recapture of input tax credits equal to the amount that they will be required to remit. PROMOTING HEALTH THROUGH ENCOURAGING PARTICIPATION (2009) Health care costs in Canada are skyrocketing and absorbing an increasing share of total Government revenue. Government spending on health has increased from $7.4 billion in 1975, or $324 per person to $120.3 billion, or $4,615 per capita in 2008. This rate of growth is unsustainable. Yet there is ample evidence that lifestyle changes offer substantial scope for improving the health of Canadians and reducing health care costs. Our life styles are becoming more sedentary and it is estimated that 60% of older Canadians are not active. Many diseases which could be prevented with proper nutrition, sunshine and exercise have become epidemic as a result of our lifestyles. Joining and participating in fitness programs can make a major contribution to healthy living and wellness. We need to focus more on preventative health measures and become more proactive toward overall health care. Physical activity is vital to a healthy life. Scientists have proven that an active lifestyle reduces the risk of heart disease, adult onset diabetes, osteoporosis, falls and injuries, stroke, arthritis, high blood pressure, depression, colon and breast cancer, and premature death. Studies have also shown that healthy living can delay problems like dementia and improves the quality of life for Canadians. Staying active provides more energy with fewer aches and pains, better posture and balance, reduced stress through greater relaxation, improves sleep patterns, helps us stay at a healthy weight and generally improves our mood and mental health. Many physical activities provide opportunities to meet new people, thus contributing to more confidence and self-esteem. Maintaining a healthy, active lifestyle for seniors helps them to keep their independence and live longer, healthier lives. Indeed, all the evidence clearly shows that physical exercise for 30 to 60 minutes a day provides numerous health benefits for the individual, the community, the province and the country. Canada‘s Physical Activity Guide to Healthy Active Living for older adults advises that a balanced physical activity program requires development of endurance, flexibility, and strength and balance. There are additional benefits in terms of improved productivity and a better quality of life for Canadians. Different types of costs are associated with physical inactivity, such as medication, hospital stays, physician compensation, workers compensation and lost productivity. These costs are divided into direct costs which include medical treatment of disease and indirect costs which include lost productivity. An investment in healthy Canadians goes directly to the bottom line in health care costs, and the cost of these credits would be more than compensated by reductions in health care costs. During the last federal election, the Conservative Party of Canada promised Canadians they would consider extending their Children‘s Fitness Tax Credit to all ages. The Federal Government stated it would save $2.5 billion over the next 21 years by extending the benefits of the current Children‘s Fitness

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Tax Credit program to adults, according to an economic study on the effects of the program provided for Fitness Industry of Canada. The financial incentive offered by a federal adult fitness tax credit will encourage nearly one million more Canadians to get active and healthier. Healthier Canadians will need less health care and miss less work due to illness. This study also suggests that it would take just three years for the health care cost savings resulting from a more active and healthier population to outweigh the net personal tax losses incurred by the credit on the eligible amount of up to $500 per person. Projecting 21 years outward, the report findings how the government would see cumulated health care savings of $9.1 billion, and cumulated net personal tax losses of $6.6 billion. This report also projects that by 2027 the total direct and indirect health costs associated with physical inactivity will be just over $20.6 billion in Canada, up from an estimated $7.3 billion in 2007. THE CHAMBER RECOMMENDS That the Provincial and Federal Government work together to create a Fitness Tax Credit Program to a maximum of $500 per person that encourages all Canadians, irrespective of age, to participate in sport and fitness programs. SMALL BUSINESS ACCESS TO CAPITAL (2009) In the fall of 2008, the global financial crisis began to impact on the Canadian economy. Since then, there has been a significant amount of concern amongst small businesses regarding access to capital. The banking environment has changed and issues regarding access to capital are multi-layered. More than a trillion dollars has been written off in the markets. Since Canadian banks leverage their capital at a rate of 10-20:1, the removal of a trillion dollars in capital on the world market has had the effect of removing ten to twenty trillion dollars from capital available to lend out. By law, Canadian institutions are not allowed to lend out funds that they do not have. Simply put, banks have less money to make loans and lines of credit available than they have in previous years. On top of this, because of the decreased amount of capital available on the world market, the cost to the bank for borrowing has increased. Those costs need to be reflected in higher interest rates on loans and lines of credit to borrowers. Finally, third party lenders have retreated from the markets, making capital for new innovations more difficult to access. Borrowers who would normally access third party capital are joining in competition for the decreased funds available through the banks. Notwithstanding the change in environment, commercial lenders indicate that they are actively lending to stable borrowers and that their lending policies have not changed, though they may be applying the rules more stringently then they may have been when the economy was more buoyant. Because of the nature of supply and demand, with increased demand for financing and decreased supply of capital, banks are picking the best deals they can find and taking care of existing clients with solid repayment financial dealings and good asset backing. All of this puts pressure on the smaller financial needs of small business. Small business represents 98% of private sector companies in BC, and of those 83% have fewer than five employees. These companies are a good portion of the provincial private sector and make up the bulk of chamber membership. Though they may have viable businesses, the change in market conditions is making it difficult or more expensive The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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for them to access the credit they need. All businesses require some access to credit. However, tightening credit conditions are restricting the entrepreneurship and flexibility of a number of small businesses at the very time that economic recovery is dependent on such attributes. The Federal Government recognized that there was a role for government to address the gap in credit availability. On November 27, 2008 the Federal Ministry of Finance announced that it would provide up to $3 billion in new credit to Canadian businesses most affected by the financial crisis. Such credit was to be made available through Export Development Canada and the Business Development Bank of Canada. The Chamber is confident that upon implementation of the Extraordinary Financial Framework, medium and large Canadian companies will have improved access to credit. We are, however, concerned that the program will not adequately address the needs of smaller businesses. Given the prominence and importance of small business to the economy of British Columbia, the Chamber calls upon the Provincial Government to work with financial institutions to develop a program that would ensure that established small business can attain the credit amounts below $250 thousand dollars that they need to continue uninterrupted business operations. Such a measure is important to maintain a stable business environment, employment security and may serve to significant increase British Columbiaâ&#x20AC;&#x2DC;s competitive advantage. THE CHAMBER RECOMMENDS That the Provincial Government develop a short-term program to ensure access to credit through existing financial institutions for established small businesses in British Columbia.

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DEVELOPING A SKILLED WORKFORCE FOR A GLOBALLY COMPETITIVE VALUEADDED WOOD PRODUCTS INDUSTRY (2009) The rising level of competition facing BC‘s companies, changes in production technologies, and changes in the nature and organization of work are all driving increases in the knowledge requirements of jobs in BC. Foreign outsourcing has reduced the domestic demand for unskilled workers, thereby increasing the relative demand for skilled workers. The growing prominence of information–communication technology industries has also fed the demand for skilled workers who can thrive in a knowledge-based economy. Many successful companies stay current with new technologies and commit to ongoing training and skills enhancement throughout their workforce. BC could commit to staying current in the value-added wood products market by building a globally competitive workforce, utilizing the research, development, and innovation information available through its many institutions, and by adopting best practices from successful industries locally and globally and by training a workforce in the latest technological advances. To develop a thriving value-added product industry, current and applicable technical training, innovative product development opportunities and highly developed product design skills are pertinent. Addressing BC‘s skilled labour shortage is important for the value-added manufacturing industry to expand and compete globally. Background The value-added wood products industry spans across all of Canada. Companies manufacturing valueadded wood products use some local wood but often import wood from other provinces or from international markets depending on the products they make. Training a skilled workforce and industry leaders to produce value-added product from our provinces‘ own wood resources could support our lumber industries, keep manufacturing jobs in BC, attract investment and strengthen our economy. Value-added wood products are items which have additiona l processing, beyond the commodity level and unlike primary and commodity forest products, value-added products are usually targeted at end-users (often consumers). An example of a value-added product is a garage door, where additional processing of primary commodities (lumber and panels) is undertaken to create a product with greater value than the sum of the primary products. Other examples are pre-fabricated housing panels and systems where complete walls panels are manufactured in a factory and the furniture and cabinetry industry where the end product is ready for retail sales. Global examples of value-added manufacturing are the Swedish housing industry and the Danish furniture industry. Sweden prefabricates over 90% of all new housing in factories. Swedish companies are more automated than North American prefabricated housing companies and have more flexible use of staff, employing highly trained workers at all work stations. Their labour costs are comparable to labour costs in North America and their housing systems have a strong global market. Factory built houses can be built year round in colder climates, they are more cost effective and quality control is easier to maintain during production. The furniture sector in Denmark is currently comprised of approximately 400 companies, which combined produced furniture to the value of DKK 19.4 billion ($ 4 billion) in 2006. The Danish furniture sector employs approximately 16,900 people and the combination of advanced technology and a high level of technical competence makes productivity in the sector very high. In relation to the population of Denmark, Danish furniture production and exports are global leaders. 83% The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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of the production is exported, making the Danish furniture sector Denmark's sixth-largest export industry. Every Dane employed in the furniture industry creates annual revenues of DKK 1 million ($183,000) on average - the second highest level in Europe, only bettered by Belgium. Profits average 4.1% of revenues, the 6th highest in the EU, ahead of countries like Germany, Italy and Sweden Locally the production of value-added products can generate additional jobs and income from the same resource supply base used to produce primary products. To provide for a continuous and predictable flow of economic and social benefits from Ontario‘s forests, Ontario monitors trends in value-added wood products as part of monitoring and supporting value-added products and services. There are currently over 2,500 value-added wood processors in Ontario. Fifty-five per cent operate with less than 10 employees, due to the low barriers to entry associated with wood processing. Most of these businesses are not owned or connected to Ontario‘s forest product producers, who generally concentrate on commodity products (lumber and pulp). However, even with primary and commodity producers there is a growing focus on value-added panels, boards, and engineered wood products. A recent study indicates that the share of Ontario-grown timber used by Ontario value-added wood manufacturers is less than 40%, often a result of a difference between specific species demanded by value-added industries, and those grown and harvested by the major forest companies. There are currently five trends affecting the value-added wood manufacturers of Ontario: Increasing offshore competition in traditional wood markets (e.g. furniture); A labour shortage in skilled manufacturing industries; The rising value of the Canadian dollar, which makes Canadian products more expensive in many international markets; New opportunities in bio-products, including energy, composites and chemicals; and New product and process opportunities in traditional markets (e.g. pre-manufactured housing). At the Maritime Lumber Bureau‘s 68th Annual Meeting and Convention on May 31, 2007, the Minister of Natural Resources, said: ―We're well aware of the achievements of the value-added industries, of leaders here like Marwood [Marwood Ltd.]. It‘s a great example of innovative and forward-thinking corporate strategies. Marwood has customers throughout North America and Europe with product lines produced from a variety of softwood species right across Canada. Using a leading edge technology and a lean-manufacturing strategy, Marwood has found a way to adapt to changing customer demands and scout out new markets. In the future, maintaining and extending the life of the forest will be key not just to survival but to continued prosperity. Pressure treating, secondary manufacturing (value-added manufacturing) and a focus on green energy are examples of initiatives to remain highly competitive in the marketplace. One of our biggest challenges as a country and as an industry in the next decade is, I think, going to be a skilled labour shortage. We're seeing it in certain parts of the country more than others, but when you look at the demographics of the population, it‘s something that we have to be keenly aware of. Fifty-four percent of Canadian CEOs are saying that they're having difficulty finding and recruiting skilled and talented workers, which is threatening the profitability of their companies.‖ The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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Roland Baumeister, Manager, Secondary Manufacturing Department for Western Canada, FPInnovationsForintek Division said that, â&#x20AC;&#x2022;the major focus of the Forintek program will be enhancing opportunities for Saskatchewan businesses in the wood products sector. The forestry and wood products sector is a vital part of the Canadian economy. At this time, the industry is being challenged from an increasing diversity of international competitors and changing consumer preferences in the markets it supplies." The objectives of this initiative are threefold: Increase business competitiveness and foster industry growth through improved productivity and quality control; Encourage innovation, product development and diversification into value-added production; and Sustain collaborative projects and improve the integration of investments made by the industry and governments. FPInnovations-Forintek Division will assist small operators to add value to their product lines, improve small mill operations, provide direction to down-stream users to make new or better uses of wood products, match new market opportunities to the value-added sector, and help bring new Saskatchewanbased technologies and products to market. The value-added wood products sector includes: millwork, kitchen cabinets, prefabricated buildings, engineered wood products, wood pellets and other uses for wood waste such as bark mulch. The Value-Added and Wood Technology Program 2007-2009 will build on the success of a previous program funded through the Economic Partnership Agreement by offering the technical and market knowledge base for a renewed wood products industry in the province. The program, which will also encourage industry-related business opportunities in northern and First Nations communities, will have eight elements: resource-based initiatives; research implementation support; product development & design activities; technology transfer activities; training and skills upgrading initiatives; business practices support; raw material supply and sourcing services; and market development, access & intelligence services. The following are recent developments in the Action Plan the Ministry of Forests and Range published that address some of the recommendations in this policy. Targeted Actions from the BC governmentâ&#x20AC;&#x2DC;s March 24th Action Plan are: Champion Wood First: Stimulate the domestic market by promoting the structural use of wood for commercial, institutional and mid-rise residential buildings; Maximize the use of wood in publicly owned and provincially funded buildings; Encourage the use wood as a design element in new construction; Showcase new and innovative wood building products and techniques; and Position British Columbia as a leader in international markets.

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Move Innovation from Lab to Market: Expand local manufacturing capacity and build technical expertise by piloting next generation products; Improve the flow of information between researchers, investors and manufacturers to promote commercial opportunities; and Provide hosting conditions that attract capital investment and encourage strategic alliances. Facilitate “Right Fibre to the Right Process”: Pilot new fibre merchandizing and sorting methods to get manufacturers the dimensions, species and grades of fibre they need without being burdened by material they can‘t use; Establish web-based mechanisms to streamline and facilitate the sale of fibre to manufacturers; Work towards a target where primary mills make 25 per cent of their products available for further manufacturing; and Work to increase the number and size of community forests, and encourage communities to direct some of their fibre to further manufacturing. Promote Wood Education and Culture: Increase consumer awareness about the climate-friendly attributes of wood products; Build a more knowledge-based workforce by retraining existing workers and attracting youth through education programs; and Address the shortage of wood design and manufacturing programs. In addition British Columbia could commit to generating the best economic value from our forestry sector by fast-tracking the skill and technology requirements to developing a globally competitive value-added wood product industry and by working extensively with federal and global interests on these issues. These steps could strengthen the province‘s current economy and build a viable and sustainable future for our forest industry. THE CHAMBER RECOMMENDS That the Provincial Government: 1. work with the Federal Government to develop policies and program initiatives that facilitate skills development meeting future value-added manufacturing industry needs through wood product industry learning at high schools and post-secondary education institutions; 2. promote fast-tracking initiatives to develop standards for the value-added wood products industry; 3. promote recognition and use of current reputable standards programs for trades training and quality control training; 4. work with the Federal and local governments to identify successful value-added wood products industries and assist them in promoting apprenticeship training through university under-graduate

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programs, with emphasis on transferability of credits and mobility between these two education programs; 5. work with Federal and local governments to identify leading edge research, development, technology and innovation initiatives and link those initiatives to educational institutions for training purposes; and 6. work with Federal and local governments in collaboration with industry organizations to develop marketing strategies to attract future workforces to the value-added wood products industry.

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HEALTH CRISIS – CANADA NEEDS THOUSANDS OF DOCTORS NOW (2011) The ability to attract business and their workers to a community is directly affected by the presence of medical services and doctors in the community. There are not enough doctors in Canada to service our existing populace let alone to service an increase in population that would occur with a relocation of workers to a community. From Tofino, BC across the country to Fogo Island, in Newfoundland and Labrador, there are simply not enough doctors. An estimated 4 to 5 million Canadians have no family physician or are ‗orphan patients‘. Even 70% of Canada‘s doctors, have no doctor, according the Canadian Medical Association. Although the urban areas are somewhat better served, the situation in rural and small town Canada is often described by health care experts as desperate. This has led to internal competition among provinces in an attempt to attract the limited number of doctors available. If this continues, it is only a matter of time until businesses feel the effect of their employees making decision about continued employment based not on the job or the salary but based on the quality of healthcare that they and their families will be able to receive in the community where the business is located. We are losing some of our brightest medical graduates of Canadian medical schools to other countries when they take the training we have provided them and leave Canada to practice medicine in another country. In addition, Canada‘s best and brightest, with excellent academic credentials, often leave the country to train elsewhere because our university medical programs are full. Once such students have been trained in another jurisdiction there is a greater likelihood of those students choosing to remain in that jurisdiction. Details of the problem Currently, Canada has 69,267 doctors for its 34.2 million people. According the Organization for Economic Co-operation and Development (OECD) Canada has about 2 doctors for every 1,000 people. That falls well below the OECD average of about 2.7 doctors per thousand people. In fact, Canada ranks 25th out of 30 in the number of physicians to population ratio. Just to meet the OECD average, Canada would need 20,000 new physicians. Canada‘s doctor shortage began in the mid 1990s. When the country should have been increasing the number of medical school graduates, provincial health ministers reduced medical school enrollment in 1997 by 10 percent. Although there have been significant increases in enrollment since then, Canada has still not recovered from the cuts. In fact, according to the Canadian Medical Association (CMA), had we continued to graduate doctors at the pre 1997 levels, we would have 1600 more doctors than we have now. We currently have 2742 first year medical students, but the country continues to lag when it comes to training new doctors. In 2005, Canada graduated 5.8 doctors per 100,000 people; again well below the OECD average of 9.8 doctors per 100,000. The low numbers of medical students in Canada has nothing to do with a lack of interest by Canadian The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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students in becoming doctors. Quite the contrary. There are hundreds of young Canadians in medical schools outside Canada â&#x20AC;&#x201C; not because they do not meet the standards of admission in Canada, but because there are not enough spaces available in Canadian medical schools. The doctor shortage has been further compounded by an aging population and changes to physician practice styles where doctors demand a better work/life balance and are no longer willing to devote the 70 hours a week to their practice that led to burnout and other health issues for their predecessors. The aging population is also affecting our existing doctors. 16% of our doctors are over the age of 65 and 38 percent are over the age of 55. Many will retire soon or substantially cut back their workloads. Many are not accepting new patients. Furthermore, improved treatments for diseases have resulted in long term chronic conditions placing more demands on the system and its physicians. The shortage of doctors often means that provinces compete with each other and with other countries for the limited supply of doctors and medical school graduates. They may offer financial or other incentives to secure physicians for their own needs. Currently, Canada tries to attract International Medical Graduates (IMGs) to cover the short fall of doctors in our country. Approximately 1 out of every 4 doctors is an IMG. In Saskatchewan, 50% of the doctors are IMGs. However, there are an estimated 1200 IMGs in Canada who have not been able to secure a license to practice. At the core of the problem for IMGs is a shortage of residency and post graduate positions. Completion of those educational requirements is necessary in order to meet the requirements of the Medical Colleges who regulate medical practice licensing. While Canada attempts to attract foreign trained medical graduates, the other countries of the world who share similar doctor shortages are not sitting idly by. Post secondary medical training within Canada is among the highest quality in the world and as such graduates of Canadian medical schools are actively sought by other countries. The migration of Canadian medical school graduates and doctors out of the province in which they were trained contributes to the shortfall of doctors as much as medical students leaving Canada to attend medical schools in other countries. However in the case of Canadian trained doctors and medical students leaving Canada they are leaving with education and expertise that has usually been financed by large student loans. These loans are sometimes in the hundreds of thousands of dollars with loan guarantees given by the Federal and Provincial governments of Canada. If medical students who choose to practice outside of Canada were enticed to instead practice in Canada by way of loan forgiveness or other forms of subsidization, then It would limit the drain of Canadian trained doctors to other countries and increase the number of doctors available for our communities. A requirement that newly graduated doctorâ&#x20AC;&#x2DC;s work in Canada for a period of 3-7 years before the loan was forgiven or the subsidization would vest, would allow for the establishment of many more doctors within our country. The time required to work would be a sliding scale to take into account the region of Canada in which the doctor chose to work. Rural areas and areas where the need for doctors was greater would require a shorter work period. Further delays in grappling with the doctor shortage and failing to address the issues indicated above will compound the crisis in the years ahead and could severely impact the ability of our country and provinces to attract new business and new workers to our communities.

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THE CHAMBER RECOMMENDS That the Provincial work with the Federal Governments to: 1. actively work towards increasing the number of physicians in Canada and finding solutions to the doctor shortage; 2. to implement incentives to keep Canadian trained doctors in Canada after their residencies and encourage those doctors to locate to areas with a need for doctors. Such incentives may include, but are not limited to, forgiveness of loans, grant programs and payment of living expenses; 3. clear the backlog of IMGs waiting to be licensed to practice and that Canada work towards establishing international licensing standards as well as reducing the general costs and administrative red tape currently required for provincial licensing; and 4. work to repatriate Canadian trained doctors working outside the country and Canadians who are being trained in medical schools outside the country. THE NEED FOR A COMPREHENSIVE CHRONIC DISEASE STRATEGY (2007) As the province looks to control the ever-escalating cost of providing quality healthcare to all British Columbians, a comprehensive Chronic Disease Management Strategy offers huge benefits for Governmentâ&#x20AC;&#x2DC;s ability to control costs, as well as provide improved quality of life for the people of British Columbia. Chronic diseases are those that can only be controlled and not, at the present, cured. Chronic diseases are those that occur across the whole spectrum of illness. They include, but are not limited to, diabetes, depression, mental health issues, asthma, arthritis, heart failure, chronic obstructive pulmonary disease, stroke, dementia and a range of disabling neurological conditions. Chronic diseases tend to be complex conditions and are often long-lasting. Unmanaged, they can produce a range of complications resulting in increased utilization of the healthcare system. The care for people with chronic conditions also consumes a large proportion of health and social care resources. People with chronic conditions are significantly more likely to see their family doctor, to be admitted as inpatients, and to use more inpatient days than those without such conditions. The World Health Organization has identified that such conditions will be the leading cause of disability by 2020 and that, if not successfully managed, will become the most expensive problem for healthcare systems. Good chronic disease management offers a real opportunity to address this challenge through providing improvements in patient care and service quality, while also significantly reducing healthcare costs. Chronic diseases are becoming increasingly common in BC, more common in marginalized populations and in our ageing population. As obesity and lack of activity increases, chronic diseases such as diabetes are becoming much more common. Many older people are living with more than one chronic condition and face particular challenges, both medical and social. While more prevalent in older people, these diseases apply to people of all ages with long-term conditions. Indeed in BC, chronic obstructive pulmonary disease was the leading reason for hospital stays for patients admitted via ER visits, the most expensive ways to treat a patient. The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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Another example of the impact chronic disease has on the sustainability of our healthcare system is diabetes. Diabetes is the number 1 killer in Canada today. Approximately 211,304 British Columbians live with diabetes, and studies project an additional 178,000 will be diagnosed with the disease by 2016; an 84.3% jump. The challenge with many chronic diseases, particularly diabetes, is that they often do not stop with the initial diseases. In the case of diabetes, without access to appropriate and timely treatment required to manage the disease many diabetics risk developing serious and costly complications such as heart attack, stroke, kidney disease, blindness and even amputation. These are debilitating and often fatal to people with diabetes, and the overall costs are borne by their families and by all of us in BC. The Chamber has welcomed the focus placed on addressing many of the risk factors associated with chronic diseases such as diabetes and cardiovascular disease through cross-government initiatives such as ActNow BC. These programs, along with the new Primary Health Care Charter â&#x20AC;&#x201C; A Collaborative Approach, are a welcome recognition that we must address the development of chronic diseases in order to mitigate their onset and the need for treatment. While identifying that common risk factors such as tobacco, healthy diet, remaining active and improved access to primary healthcare are important parts of a comprehensive solution, the missing element is the need for focused attention on ensuring access to the necessary proven drug therapies that are critical to our ability to both manage disease and costs on the system. As we look to address the unsustainable increase in healthcare spending, the key to our success will be looking at new ways to view healthcare. There must be a shift from the current practice of only treating the disease, to viewing healthcare as an integrated system where investment at the early stage will reap significant health and cost benefits in the future. As we look to this future we will need to ensure that there is a focus on both enhanced preventative services and diagnosis along with a need to view investment in proven drug therapies as two sides of the same coin. People living with chronic disease in our province continue to face the costly burden of these diseases, as well as the serious complications that come with not having full access to the appropriate treatments recommended by their doctor. Not being able to choose the appropriate medication or supplies to avoid or delay potential complications end up costing all British Columbia taxpayers, who ultimately pay for the ensuring hospitalization and healthcare treatment. THE CHAMBER RECOMMENDS That the Provincial Government: 1. continue to support a comprehensive chronic disease management strategy that encourages a shift in the balance of care from episodic to integrated, continuous care;

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2. as part of this comprehensive strategy, allocate funds for education relating to disease prevention (diabetes, etc.); and 3. amend the formulary to include newer drugs and approaches to the treatment of chronic diseases such as diabetes, and to include newfound/improved drugs that can provide measurable benefits. A NEW VISION FOR HEALTH CARE (2002 – Revised 2007) The Chamber supports many of the recommendations and strategies outlined in the Ministry of Health Service Plan 2006. The mandate of the Chamber is to advocate a policy framework that promotes a healthy and vibrant economy in which all British Columbians can grow and prosper. Given the importance of a viable, effective and efficient health system to the economy of the province, the Chamber makes it a priority to provide reasoned and meaningful recommendations on this most important issue. In 2002, the Chamber held a discussion forum with knowledgeable business leaders and professionals from key healthcare sectors to discuss the fiscal, human resources, legislative, political and structural challenges facing our health system. As a result of those discussions and, in consideration of the input of our health committee and individual members, the Chamber formulated a report entitled, A New Vision for HealthCare… The Need for Change. The recommendations contained in this report were presented to the then, Ministers of Health, and Health Planning. While some success was achieved through the implementation of our recommendations, significant and substantive issues remain to be addressed. On January 20th, 2005, a meeting was held with a knowledgeable and diverse group of health stakeholders to discuss current health policies, and what additional recommendations may be needed and appropriate. The outcomes of these discussions have resulted in a new version of the Chamber‘s earlier report entitled, A New Vision for Health Care… Striving for Excellence, and a refocusing on several key health policy issues. It is hoped that the report of the BC Conversation on Health will provide additional recommendations for improved access to and utilization of appropriate innovations and healthcare services. BC currently expends approximately 43% ($11.75 billion) of the provincial budget on health. The rate of growth in health expenditures cannot be sustained. A different approach must be identified to enhance the likelihood that our health system not only survives, but also thrives. Quite simply, the current model will not survive the changing demographics of our population, the explosion of technology, public expectations and current economic realities. The Chamber‘s key messages in the report can be summarized as follows: Prioritize health services based on a patient/resident/client basis; treat the patient, not the disease. In short, put patients first, and provide the right treatment to the right patient and at the right time; The importance of business in promoting healthy workplaces and preventative healthcare; Identify mechanisms to increase revenues from external sources; and Develop a strategic human resources plan that addresses the geographic diversity of BC and allows foreign-trained health professionals to play a role in BC commensurate with their skills. The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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The report details 20 specific recommendations in support of these messages which related to fiscal, human resource, legislative, political and structural issues. THE CHAMBER RECOMMENDS That the Provincial Government endorse and act upon the recommendations of The Chamber‘s 2005 report: A New Vision for Health Care... Striving for Excellence. HEALTH CARE (2000 – Revised 2007) Introduction Health care has traditionally been thought of as primarily a public sector, social issue, not a subject of serious interest to the business community. The Chamber, however, does have serious concerns about addressing healthcare issues for two primary reasons. First, healthcare in BC is under intense pressures and needs to be better prepared to address looming challenges. Despite annual increases to healthcare funding in BC, waiting lists continue to be an important issue, emergency facilities overflow and practitioners deal with frustrations that cannot help but divert their attentions from their primary focus of patient care. Secondly, the Chamber believes that a healthy economy, and the new investment needed to develop communities, requires an acceptable level of public services. That is why the seriousness of the current healthcare situation in BC is of paramount importance to the Chamber. Healthy communities lead to a healthy economy. Regional Healthcare Issues All communities in the province of BC share the need for efficient, accessible, accountable, transparent and cost-effective healthcare. In fact, the Canada Health Act specifies five principles for healthcare, including accessibility and comprehensiveness. Nevertheless, provision of services in many parts of the province does not provide reasonable access. There needs to be continued and greater recognition in government policy that non-urban areas have unique healthcare issues separate from those of urban centres. Through the government‘s approval and support for the start up of the Northern Medical Program and the Island Medical Program, recognition has been given that health programs such as these are the key to recruitment, retention and stability of healthcare throughout the province, and are critical to the success of the medical education process. There are many other initiatives that can be undertaken at the local level to provide better service to those in more remote areas. The BC Government is encouraged to continue improving and initiating the programs outlined in the Ministry of Health Service Plan for 2007. One example is ―First Call‖ which is a program in Vanderhoof and MacKenzie that allows people to see a nurse for minor ailments then be referred to a doctor if necessary. This program ensures that while patients are still able to make their own appointments with a doctor, the intervention system works only in the emergency department and allows a nurse to assess the patient‘s medical condition and determine whether a doctor needs to be called in. Healthcare services affect health status and the economy. Residents should receive appropriate and effective services and, equally important, such services are required to attract and retain investments and key personnel. Furthermore, many facilities are inadequate and outdated because of limited capital dollars. The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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Millions of dollars have been spent on restructuring the healthcare system, but dollars alone will not resolve many of the problems. It is clear that there is still significant work to be done in maximising and identifying the benefits of regionalization. The healthcare system can also be improved through better use of technology to improve quality and accessibility of healthcare services. Both the internet and telephone usage have proved successful in providing tele-psychology, tele-radiology and tele-trauma services. They not only reduce costs but also provide access to services not otherwise available in the rural or remote areas. The BC Government should be congratulated for prioritizing initiatives such as the ministry service plans. Another potential area for alleviation of the regional healthcare situation comes from the realization that even in the complete absence of other healthcare facilities, there are pharmacies in virtually every community in British Columbia. This is the best example of a "closer-to-home" healthcare system that we have. Government must seek ways to take advantage of this. In November of 2002, the federal Ministry Advisory Council on Rural Health released, Rural Health in Rural Hands: Strategic Directions for Rural, Remote, Northern, and Aboriginal Communities. This report gives a thorough analysis of the concerns raised above and makes a series of recommendations for addressing them. Many of those recommendations coincide with those made by the Chamber. THE CHAMBER RECOMMENDS That the Provincial Government: 1. in ongoing reviews of the regional health plans, ensure they contain strategies to advocate, and ultimately ensure accessibility of services to all communities in BC; 2. work with the regional health authorities to allow individual communities the flexibility to incorporate â&#x20AC;&#x2022;made at homeâ&#x20AC;&#x2013; solutions to health problems; 3. continue to fully support the programming and infrastructure needs of the five regional health authorities and the provincial health services authority, in particular, the Northern and Island medical programs; 4. continue to investigate and implement better use of communications technology to improve quality and accessibility in health services as per BCâ&#x20AC;&#x2DC;s e-health strategy; 5. continue to investigate options to enhance the utilization of existing community pharmacies to play a greater role in making fundamental primary care available to the residents of BC (examples include the Pharmacist Line, BC Nurse Line and the Northern Health Authority EPIC Program); 6. improve primary care and chronic disease management strategies as a means to improve outcomes; and 7. work in co-operation with the Federal Government to set the priorities for addressing rural health issues as per the recommendations addressed in the rural health study.

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Human Resource Planning The need for a highly qualified workforce within the health industry is fundamental to the effective delivery of care services. Instances have occurred, and seem to be growing in frequency, where a shortage of skilled health workers, be they doctors, nurses, pharmacists or technicians, have had a direct affect on the availability of health services. Furthermore, continuity is an important facet of healthcare, and the significant turnover of physicians and the increasing reliance on locums seriously impairs that continuity. Although this is a problem for the province as a whole, human resource issues are once again of particular concern in non-urban areas where the challenges that have led to this situation are exacerbated. In 1997, the Royal College of Physicians and Surgeons of Canada, in consultation with Provincial and Federal Governments, restricted the licensure of foreign specialists to favour Canadian and Americantrained specialists. This is discrimination and does not ensure competency or availability. Many nonurban communities need specialists but are unable to recruit them. Restrictions on visas issued to physicians and spouses are counter-productive to encouraging long-term residency by physicians in the community. In addition, in some communities it is difficult for physicians to cope effectively with the volume of patients requiring services. The extreme ―on call‖ requirements are a significant factor in physicians leaving communities. Additional physician capacity in these communities, consistent with the community's Medical Manpower Plan, would result in an enhanced level of care provided. The increased utilization of locums to provide staged relief from workload issues should also be considered. One way to reduce the workload of physicians is to examine alternative modes of delivery. Part of the physicians‘ problem is the fact that much of their capacity is taken up seeing to non-critical or ―lowerlevel‖ health services that could be easily addressed by other health professions such as nurses and pharmacists. Things like immunizations and prescription refills, for instance, need not occupy a physician's time. The severe shortage of nurses and pharmacists is another area where the lack of skilled healthcare workers has attracted significant public and media attention. This shortage, in part due to a lack of training spaces for nurses in BC, and in part due to funding challenges is leading to ―burn-out‖ and reduced service. Currently there are also at least 150 vacancies for pharmacists in BC, primarily in rural areas. There are many examples where such shortages exist. While much attention has been focused on nurses and physicians, other important professions and support workers are equally short in supply. Community colleges and universities are now looking at courses that will offer training and encourage work experiences in rural areas. This is particularly critical in the healthcare industry. As an example, Selkirk College has identified one area in healthcare that has a verified, but largely unrecognized, need throughout rural British Columbia. This need is for combined laboratory x-ray technicians, specifically in small health centres and clinics. The need for an integrated overall health human resource strategic plan has been identified for many years. That need has never been more acute than what exists today. The ability to meet the care needs of British Columbians is at significant risk if a strategic plan is not formulated, approved and implemented. Although the Ministry of Health has committed to work with the Health Employers‘ Association of BC (HEABC) and other healthcare providers to develop health human resource strategic plans, the need for a comprehensive plan for equitable geographic distribution of health professions in a wide range of The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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disciplines continues to be an issue of immediate importance. THE CHAMBER RECOMMENDS That the Provincial Government: 1. work with associations, professional bodies, colleges and universities to develop, implement, continually update and publicly report on progress on a comprehensive human resource strategic plan for the health industry in this province that, in particular, includes a recognition of the need to recruit from outside BC and train within BC additional physicians in specialty disciplines; 2. ensure that a key component of a comprehensive human resource strategic plan addresses the rural health issue of skilled workforce training in rural communities; 3. work with the Federal Government and professional associations to amend immigration and licensing policies to support its physician supply measure initiative, and to facilitate the retention of physicians in rural areas; 4. act with the Federal Government and the Royal College of Physicians and Surgeons to implement a competency model for licensure of specialists, rather than one based on the origins of the specialist; 5. expand enrolment at the University of BCâ&#x20AC;&#x2DC;s faculty of pharmacy; and 6. continue to take steps to address the shortage of nurses and other health service providers, including but not limited to, expansion of educational seats in all universities and colleges as outlined in the most recent Ministry of Health Service Plan. Prevention One of the most effective ways to reduce costs within the healthcare system is through prevention. Provision of an acute-care hospital bed is one of the most expensive aspects of the healthcare system. Government should focus efforts on keeping the population healthy and ensuring the most appropriate point of access to the health system. The most basic method of prevention is through education. It is also recognized that responsibility for one's own health is the best way of addressing the utilization of health services, especially in the areas of sexual practices, nutrition, exercise, accident prevention, road safety, and habitual use of alcohol, drugs and tobacco. The Provincial Government should integrate programs of public education which demonstrate to the individual the benefits of good health habits. A key method of prevention is through appropriate screening of the high-risk population for a variety of diseases where early intervention can reduce costs. For example, one of the reasons BC has some of the best outcomes for cancer treatment is screening and early treatment. BC should continue to try to improve access to screening tools to improve the early detection of other chronic diseases. Chronic disease management programs prevent complications, emergency room visits and hospitalizations through national and international guideline approved care and treatment. Socio-economic issues, such as poverty, also affect the health of people. It has been found that there is a direct relationship between poverty and ill health. Good housing has a direct influence on healthcare and The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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there is a need for properly planned housing for the aged, handicapped and disabled. This, combined with other outreach programs, would have the effect of keeping this group of citizens in their own housing as long as possible. All these factors have a direct influence on health and, if action were taken, there would be fewer demands for expensive hospital and medical services. THE CHAMBER RECOMMENDS That the Provincial Government: 1. in concert with health authorities, community healthcare providers and individual school boards, continue to work with parent and/or social groups to expand significantly its wellness education programs on sexual practices, nutrition, exercise, accident prevention, and habitual use of alcohol, drugs and tobacco â&#x20AC;&#x201C; ACT NOW is a great example; 2. ensure that there is accessible, province-wide screening particularly for high-risk populations; 3. ensure province-wide immunization implementation plans for children and the elderly as per the 2007 Ministry of Health Service Plan; and 4. improve the community-based healthcare initiatives for people below the poverty level in the province by, for instance, encouraging the development of adequate and affordable housing facilities and programs for the poor. The Ageing Population There is little doubt that one of the key cost drivers for the future of our health system will be the ageing of our population. The ageing of the war and post-war babies over the next four decades will result in an increase in spending on the 65-plus age group from its current 54% of total provincial spending to 68% by 2040. In 1998, provincial health spending on this age group totalled $4.3 billion. By 2021, under the assumption of constant age specific health per capita spending and in constant dollars, spending on the 65-plus age group will be $8.0 billion; the same currently spent on all age groups in the province. That is approximately 70% of the total health budget today, and it will increase from that point. There is little doubt that the key to paying for these increasing costs is stronger economic growth. Nevertheless, it is also incumbent upon the healthcare system to find better and more cost effective ways to treat our aged. One of the keys will be long-term care, as our population ages there will be an increase in the number of patients who require care. Unfortunately, many long-term care patients occupy beds in acute-care hospitals when they might not need one. This creates an apparent need for more acute-care beds, and increases the cost of caring for these long-term patients. The increased use of day care and home care should not only reduce the need for acute care and long-term hospital beds and, hence, reduce their inherent costs, but would provide a better environment for these long-term patients. Finally, it is also important to note that 80% of the cost of healthcare costs occurs within the last six months of an individualâ&#x20AC;&#x2DC;s life.

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THE CHAMBER RECOMMENDS That the Provincial Government: 1. provide further funding for research and services for the study of gerontology in order to address the problems, and opportunities, arising from the increasing numbers of elderly citizens; 2. encourage the University of BC medical faculty to place more emphasis and funding on teaching and research of geriatrics and to provide post-graduate work in that speciality area; 3. continue to support chronic disease management programs to ensure appropriate care and keep people from needing to use emergency services; 4. initiate additional policies to enable the aged to remain in their homes as long as possible through, for example, the use of senior citizensâ&#x20AC;&#x2DC; centres and outreach programs; 5. develop more home care and adult day care programs and facilities such as will result in a decrease in use of residential and hospital beds; 6. optimize the utilization of acute-care hospital facilities, extending further encouragement and support to non-government and voluntary agencies involved with adult day services and home care programs; 7. work with municipal governments to continue and expand the provision of congregate-life facilities, providing low-rental housing accommodation with access to medical and nursing monitoring, dietary and housekeeping services and social, recreational and spiritual opportunities; 8. encourage further development and construction of day hospitals and short-stay assessment units as a method of reducing admissions to expensive hospital beds and services; 9. expedite construction of multi-level care facilities and encourage greater use of facilities operated by the private sector, and that the Federal Government encourage the private sector, rather than just government or non-profit societies, to bid on the construction and operation of multilevel care facilities; 10. ensure that all multilevel care facilities and community agencies be accredited to ensure that quality standards are being met. An inspection process is not sufficient because it addresses minimum, rather than optimum standards; 11. continue to promote greater co-ordination and communication between governments and institutions on research, studies and services being offered across Canada; and 12. work with healthcare and community counsellors to investigate ways to educate British Columbians with regard to end-of-life decisions that focus on less intervention wishes expressed in advance by the critically ill.

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Health Costs The five principles of medicare in Canada as enshrined in the Canada Health Act are: comprehensiveness; universality; portability; accessibility and public administration. The Chamber believes the Federal Government should include sustainability, accountability and transparency. The Chamber is concerned with the effectiveness and, in some cases, the appropriateness of health expenditures. Given the current importance of maintaining fiscally responsible government, and the ongoing concern surrounding our healthcare system, it is an appropriate time to analyze where and how health dollars could be more effectively expended and/or reduced. The MoH should be encouraged to see the cost effective benefits of cross-department coordination within the ministry. Increased expenditures in one part of the ministry may have significant benefits in other parts of the ministry, and these efficiencies should be encouraged and rewarded to eliminate silo budgeting. The Chamber believes that a foundation of this analysis must be an objective assessment of the services removed from the Medical Service Plan (MSP) such as, physiotherapy, chiropractic, massage therapy, and optometry coverage to determine whether it is cost effective to have these remain uninsured. It must also be recognized that when health services are de-insured, private health plans typically are forced to extend coverage for those services. As a significant number of British Columbians have employer-paid health benefits, the increased premium costs devolve to employers. Offloading of costs as a policy of government cannot be seen as the panacea to meeting the escalating demand for health resources. The Chamber also believes a significant number of emergency hospital visits could be reduced if there were more economical alternatives available. Such alternatives might include 24-hour ambulatory care centres; this ties into the issue of prevention. Our healthcare system must strive to provide the most appropriate care by the most appropriate practitioner at the most appropriate time and at the most effective cost. It is recognized that health is a labour intensive industry in that around 75â&#x20AC;&#x201C;80% of health expenditures are wage and wage-related costs; therefore, any discussion about health expenditures must be cognizant of this area. Recent agreements continue the trend of adding costs to the system. Because there is little support in BC for an additional tax burden, the Chamber believes that all health expenditures must be analyzed to ensure value for money is being received for each dollar expended. THE CHAMBER RECOMMENDS That the Provincial Government: 1. either directly, or through delegated authority, ensure the appropriateness and effectiveness of healthcare expenditures; 2. commit to any further increases in labour costs being tied directly to corresponding increases in productivity within the health industry; 3. conduct a cost-benefit analysis to determine the true cost of de-insured services and, where a clear benefit is found, return services to insured status; and 4. treat the health system as a whole so that expenditures which benefit other parts of the system can be credited for savings in other parts of the ministry; known as cross-silo accounting. The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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A LEVEL PLAYING FIELD FOR BC’S SHIPBUILDING INDUSTRY (2011) This century has been deemed the ―Pacific Century‖, highlighting the importance that Canada‘s relationships in the Pacific Rim will play in our continued economic prosperity and as a focus of our international policy and military operations. The opportunity and challenge presented to Canada will be the country‘s ability to capitalize on the new opportunities being presented in Asia, and particularly in China. China is now the world‘s second largest economy after the United States, as measured by the purchasing power of GDP. In 2003 alone, it rose three places in the World Trade Organization‘s (WTO) ranking to third with 5.3% of global imports, behind only Germany (7.7%) and the U.S. (16.8%). Within the lifespan of the NSPS program, China will overtake the United States as the world‘s largest economy1, and will continue driving significant activity amongst the ASEAN group of countries. Our ability to maximize these new relationships is contingent on the building the required capacity around transportation, and in particular, marine transportation. The NSPS program is uniquely positioned to signal Canada‘s commitment to fostering these ties and to providing a platform that will help leverage significant additional private sector investment in the marine and ocean space industries. The cluster of companies, capital and human resources it will support will act as a continued catalyst for the province‘s technology sector, including such companies as MacDonald, Dettwiler and Associates Ltd, providing new opportunities for knowledge transfer between our postsecondary institutions and fostering the next generation of marine industry and technologies. With this in mind the Chamber believes it is critical that all parties work towards securing BC‘s National Shipbuilding Procurement Strategy (NSPS) bid, and the 3000 jobs and $20 billion in economic activity it will bring to the Province of BC. The NSPS is a 30-year, $30 billion federal program to rebuild Canada‘s Navy and Coast Guard. The Provinces of Quebec and Nova Scotia have strongly stated support for their bids. This support includes resolutions in the Provincial Legislatures, public statements of support from the Premiers, and promises of financial assistance to support the bids. The City and District of North Vancouver, and Esquimalt have supported the bid, and talked with MPs and federal officials. Responses under the RFP process are due in Ottawa by July 7th, and a decision is scheduled to be made by late summer. Seaspan Shipyards, owned by Seaspan Marine Corporation, is one of four qualified bidders for the federal government‘s National Shipbuilding Procurement Strategy. Seaspan Marine Corporation is a major marine transportation company serving the West Coast of North America. Seaspan also provides shipdocking services to the Port of Vancouver, Victoria Esquimalt and other BC ports.

1 Vivian Chen, Abhay Gupta, Andre Therrien, Gad Levanon and Bart van Ark (2010), "Recent Productivity Developments in the World Economy: An Overview from The Conference Board Total Economy Database," International Productivity Monitor, Spring, pp. 3-19.

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An independent economic impact study of a successful bid by Seaspan Shipyards shows that 3000 jobs would be created and sustained and the province would benefit from more than $21 billion in economic activity. This project would have an economic impact on Metro Vancouver, Vancouver Island and the province as a whole. This includes other BC shipyards that will participate with Seaspan Shipyards plus suppliers of everything from pipe to professional services. Seaspan shipyards are experienced in new construction, conversion, repair, and maintenance projects, work for the Canadian Navy, repair and maintenance work on deep sea vessels and containerships as well as new construction and repair work on ferries, tugs, fishing vessels, Arctic Class and research vessels, barges and yachts of various sizes. British Columbia currently accounts for approximately 25% of the shipbuilding activity in Canada, and this investment would strengthen and grow this vital industry. We believe this major new capital investment would re-establish shipbuilding on the West Coast as a highly productive, world class industry that will serve the marine industry and British Columbians for the next 50 years. Establishing a new hightech, high-skill marine industry is possible if Seaspan can deliver a highly competitive bid. We know from the experience of northern European shipyards that shipbuilding is a significant revenue and employment generating industry that incorporates world class technologies, knowledge, and processes. New shipbuilding facilities can thrive in advanced economies and this opportunity exists for British Columbia. Moreover, high-tech shipbuilding would enhance the marine sector in BC. This marine sector includes ship builders, naval architects and engineers, academic and training institutions, and the growing number of British Columbian and other Canadian businesses that would form part of the extensive supply chain for this 35-year shipbuilding program. THE CHAMBER RECOMMENDS That the Provincial Government: 1. maintain and strengthen support for the importance of this project to British Columbia, and the importance of a successful NSPS bid for Seaspan Shipbuilding to the provincial economy, 2. communicate this view directly to the Prime Minister and cabinet, and; 3. consider supporting the BC bid through vehicles that ensures BC is able to compete on a level playing field with other jurisdictions.

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ENSURING THE BC PROPONENTS (2011)

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The provincial economy is built around the development, extraction and movement of natural resources. The nature of these activities requires a combination of actions to occur to support the investment. It is this interaction, or lack, of the market place and government policy that supports, encourages and sometimes inhibits these investments. The vast majority of Projects in Northern BC are billion dollar plus ‗mega projects‘: Pacific Trails Pipeline, Kitimat LNG, Northwest Transmission Line, Rio Tinto Alcan Modernization, Northeast Power Line, Horn Basin Development, Fairview Terminals & Ridley Island Port expansions. On top of that there are the more traditional projects critical to the development of BC in the Independent Power/forestry sectors; Red Chris Mine, Prosperity, Forest Kerr etc. (investment ranges of $100 - $600 million). All of these have complex public policy, aboriginal and regulatory as well as marketplace timing issues. All of these projects move through a variety of regulatory processes both federal, provincial and sometimes with local municipal governments. The challenge for the Project proponents has been in the area of dealing with multiple government agencies at all levels in moving their projects forward. By reviewing their progress and any barriers to development, BC can identify if there is a need to adjust public policy in a way that continues to improve the competitive advantage for an industry in the Province. With this in mind the Chamber was pleased to see the commitment from Premier Clark in her Liberal Leadership platform to ―create a BC Investment Board, comprised of experienced and respected business people from across the province, to measure how successful major projects are moving through the multiple regulatory and environmental processes from all levels of government.‖ While this is a welcome commitment the Chamber is concerned that without authority to assess and make public recommendations on ways to improve the system the Board will not be leading to any marked improvements in the investment climate of BC. The Province needs to determine if it is deterring investment due to an inability of major projects to move through the multiple levels of regulatory requirements or if government policy is actually supporting them. The Board would provide a place for proponents/investors to go to articulate their challenges and issues and in some way can act as an industry Ombudsman. THE CHAMBER RECOMMENDS That the Provincial Government in the same way the Progress Board gives a grade and makes recommendations, this Board would do the same and provide recommendations for improving the system ensuring that BC creates and maintains a competitive business climate for investment and project development

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FILLING LABOUR SHORTAGES IN NORTHERN BC - OBSTACLES TO INTERNATIONAL HIRING (2011) Canada is emerging from the worse global economic recession this generation has ever seen and the demand for labour will skyrocket throughout the next decade. As Northern BC experiences unprecedented growth in its already burgeoning natural resource industries, faced with severe recruitment and retention challenges, the ‗breadbasket‘ of the province is beginning to panic. One of the few available sources of skilled labour in the future will be from beyond Canada‘s borders. As the demand for temporary foreign workers increases, government must accommodate the changing needs of businesses, which are looking to fuel their accelerating human resource needs, by increasing support for immigration services in order that the Canadian economy may flourish. There are several hurdles and challenges that make international hiring particularly difficult for Northern employers: 1) Lack of an Immigration Office Located in Northern BC. As immigration services have been pooled into call centres located in the Lower Mainland, northern communities lack direct access to immigration services which make telephone and online requests for application updates, information, and processes a frustrating experience often leading to exhaustion and dead ends. Without specific northern representation, immigration officers often lack an understanding of the regional issues faced by northern employers, which differ greatly from those in the south. 2) New Canadian Workers Settle in Metropolitan Cities The waves of newcomers arriving in BC only go so far as the shores, to cities like Victoria and Vancouver, where ethnic cluster communities exist. The ability of northern communities to attract and retain new Canadians and/or Temporary Foreign Workers is hindered in part by our vast geography which physically separates the few new Canadians we have living in the region, as well as the lack of services for Immigrant and Multicultural residents which may encourage them to make northern British Columbia their home. While positively noting the recent announcement by the Province to inject a $15-million boost to community gaming grants from BC Lottery Corporation proceeds, it is imperative that some of these funds be used to support the settlement, multicultural, and labour market participation services in Northern BC. THE CHAMBER RECOMMENDS That the Provincial Government: 1. work with the Federal Government to re-open a northern immigration office; and 2. place greater emphasis on labour market information and integration by informing immigrants of labour opportunities throughout the province through the Welcome BC program.

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FURTHER IMPROVEMENTS TO THE PROVINCIAL NOMINATION PROGRAM (PNP) (2011) With current and forecasted economic growth in BC, it is apparent that the demand for skilled labour will outweigh the need. Temporary foreign workers are a source of skilled labour and the rate of applications is on the rise. In order to hire a Temporary Foreign Worker, the employer must first request a Labour Market Opinion (LMO), as part of the PNP, through Service Canada. The LMO process is the government‘s way of ensuring that hiring a foreign worker isn‘t taking away opportunities for Canadians and Permanent Residents. There are two major challenges with regards to the LMO process: a. Over the past few years, we have seen the processing time at Service Canada balloon from three weeks to its current processing time of up to six months for labour market opinions. Service Canada can‘t keep up with the demand for foreign workers. The processing times at Canadian Consulates have, on average, slowed slightly but not nearly as much as they have at Service Canada. Companies simply can‘t wait six months for a new employee to arrive, especially when they actually needed them ―yesterday‖. Trying to keep a prospective employee interested over the sixmonth waiting period is equally difficult in this hot global employment market. b. LMOs may only be requested for full time work when often employers have need for part time workers and there are no local sources of labour to fill the position. Because the number of employed hours is deemed more important than any other factor, such as the level of pay or the demand for particular qualifications, employers looking for part time workers are ineligible for a LMO. The absurdity of this situation becomes evident when we recognize that employers may apply for an LMO for a full time minimum wage-paying position as a cook at McDonalds but not, for example, a .8 position working as a registered nurse for $32.40 per hour, more than 3 times the amount per hour than the cook would receive. THE CHAMBER RECOMMENDS That the Provincial Government: 1. work to shorten the processing time for PNP applications ; 2. work with the Federal Government to remove restrictions for full time employment on the LMO application.

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PREDICTABILITY FOR PROVINCIAL AND REGIONAL DESTINATION MARKETING ORGANIZATIONS (2010) The global tourism environment is rapidly evolving, and in order to remain competitive British Columbia must have demand generating systems in place to convert our province's unparalleled comparative advantages as a destination into competitive advantages. According to BC Stats, tourism is now the largest ―primary resource industry‖ in British Columbia, contributing $6.6 billion in real GDP in 2008 with visitor expenditures equalling $13.8 billion for the year. The industry is the backbone of the economies of many communities throughout BC. A progressive marketing plan with adequate and stable funding is a basic necessity for the health and growth of the industry. While this is always true, it is especially important in order to leverage the immense international exposure the province received during the 2010 winter Olympic Games. Capitalizing on this opportunity will only be realized by converting the new awareness of British Columbia as a destination into new visitations. British Columbia‘s Destination Marketing network consists of the Provincial Destination Marketing Organization (PDMO), six Regional Destination Marketing Organizations (RDMO) and 37 Community Destination Marketing Organizations (CDMO). Many or perhaps most of marketing agency activities related to product development, pricing, supply chain management, and promotions require multi-year agreements and predictability in order to undertake their most core functions. Funding for the provincial and regional marketing system has been provided through the dedication of three points of the eight point tax on accommodation purchases in British Columbia. RDMOs have historically been funded under contract with the PDMO to deliver various tourism programs, to the benefit of tourism stakeholders within their respective regions. CDMOs have been funded in part through the Additional Hotel Room Tax (AHRT) at up to 2% of accommodation fees. For the 2008/09 fiscal year, destination marketing funding in the form of the Hotel Room Tax and the Additional Hotel Room Tax equalled $85.5 million. This was then leveraged with more than $100 million in additional business expenditures for co-operative marketing, as well as partnership funding with the Canadian Tourism Commission. The funding environment for all three levels of the DMO network has changed significantly with the announcement of the Harmonized Sales Tax (HST) set to be implemented in British Columbia on July 1, 2010. The HST was proposed to replace both the 5% GST and the 8% Hotel Room Tax, and essentially does away with the stable, predictable and dedicated stream of funding for tourism marketing in British Columbia at all levels. After announcement of the HST, the Council of Tourism Association of BC released a paper titled The Impact of Sales Tax Harmonization on the British Columbia Tourism Industry, which clearly articulated concerns of the industry related to the new tax model. The BC Government quickly acknowledged the concerns of the industry related to continuity of marketing programs, and extended the AHRT until June 30, 2011 to allow time to plan for a replacement funding model for the community level of DMOs. In Budget 2009, the extension of the AHRT beyond 2011 was announced to ensure stable, long-term and dedicated funding to CDMOs, but concerns still remain as to the stability of funding for the provincial and regional marketing organizations.

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In a parallel process, the BC Government announced the dissolution of the Crown Corporation, Tourism British Columbia (TBC), and assumed direct control of all provincial marketing efforts as of April 1, 2010. Concerns over the uncertainty of future marketing endeavours and direction are top of mind for the industry professionals. The Chamber supports a funding formula for tourism marketing that provides a stable, reliable, and performance driven pool of funds allocated specifically to tourism. It is critical that funding for tourism marketing not be a part of the government annual budget appropriation cycle in terms of competing funding requests. Rather that the performance based formula is protected in legislation, making the funding levels predictable for industry. It is imperative that funding levels as per previous amounts allocated to TBC be committed to tourism funding to the Ministry of Tourism, Culture and the Arts. The unpredictability of annual appropriation outside of legislative protection would bring a level of uncertainly to funding stability. Such instability would jeopardize the ability of DMOs, both the internal provincial body and the six regional bodies, to implement long-range marketing initiatives necessary to achieve marketplace recognition and industry growth. It is imperative that the funding be predictable so that the industry can execute marketing necessary for success. In addition to having a stable and secure source of funding, it is important to maintain the attributes that industry experience shows will support an effective PDMO, such as: Adequate funding relative to potential market share and competitor marketing agency funding levels; Performance targets and overall guidance of the organization through a qualified group of independent tourism professionals; and A commitment to utilizing market research and analysis as the basis of program expenditures. THE CHAMBER RECOMMENDS: That the Provincial Government: 1. set funding for the provincial and regional destination marketing organizations at a minimum funding level as per previous amounts allocated to TBC; 2. protect the performance-based formula through legislation; 3. ensure that the executive leadership of the PDMO be comprised of a majority of independent tourism professionals; 4. ensure strategic goals flow from independent market research and provide flexible program development to meet market demands; and 5. establish measurable performance targets for the PDMO and conduct regular performance reviews in a comprehensive and transparent manner.

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ECONOMIC RECOVERY THROUGH DEVELOPING EFFECTIVE PROCESSES FOR THE INNOVATION AND TECHNOLOGY SECTORS TO REACH LOCAL AND GLOBAL MARKETS (2009) In Industry Canada‘s 2007 document Mobilizing Science and Technology to Canada's Advantage it states that, ―talented, skilled and creative people are the most critical element of a successful national economy over the long term.‖ In addition, supporting our talented, skilled and creative people to successfully market their abilities locally and globally is an important factor in a successful economy. Innovation and technology in Canada and British Columbia It is important to gauge Canada‘s progress when looking at BC because universities are aiming to build knowledge infrastructure for innovation and technology that spans across the country, and much of the available funding to BC comes from both governments. Canada has a higher percentage of talented people in the innovation and technology sectors than most other G7 countries. BC too has a strong innovation and technology sector and is a world leader in environmental technologies with approximately 1,300 companies active across the province. These companies generate revenues of $1.9 billion and employ about 18,000 people. In addition to BC‘s corporate activity, the province has significant capacity for research and innovation and is home to 15 research centres of excellence and other clean technology research institutes. In Mobilizing Science and Technology to Canada's Advantage it states that, ―despite these achievements, we face very real economic and environmental challenges that require a new level of effort and success. Canada's productivity gap relative to our largest trading partner, the United States, is widening. For Canadians to continue to enjoy a high quality of life and standard of living, we must improve our productivity and competitiveness through innovation. At the same time, our economic activity must be sustainable over the long term.‖ Some of these comparisons between Canada and the United States have changed since the latest global economic developments, but the Canadian productivity gap is still lagging behind its international counterparts. The Conference Board of Canada suggests that, ―innovation is the ability to turn knowledge into new and improved goods and services.‖ It further states that, ―Canada‘s performance on innovation over the past three decades rates a consistent ‗D‘. Canada is above the 17-country average on only two indicators: scientific articles published and the export market share of the aerospace industry. The indicators selected measure a country‘s capacity to innovate by assessing the stages of knowledge production, how that knowledge is transformed, and market shares of knowledge-based industries.‖ How are companies doing globally? At the Canadian Chamber Annual General Meeting in October 2008, James Milway stated that Canada is lagging behind in productivity compared to other G7 countries. Milway also spoke about the importance of Canadian companies going global to succeed, and with the following graph emphasized that Canadian companies have been taken over by global interests that had much less global presence to begin with.

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Graph created by Competitiveness & Prosperity Milway suggested as part of a prosperity and productivity agenda Canada needs to: Focus venture capital efforts on quality, not quantity; Continue to expand innovation policy to include building management capabilities; and Pursue the reduction of barriers to investment and trade. At the 2009 BC Economic Summit in Vancouver February 3-4th, United States speakers spoke of US Canadian collaborations. The US hosts an awards event for the best US - Canadian collaborations and mentioned that most typically the, ―innovation and brilliance component of the collaboration comes from Canada and the marketing and business end from the United States.‖ Through this program the Canadian start-up company is supported in finding venture capital and obtaining US bank financing. ―Plug Power‖, using the Ballard Fuel Cells from BC, was one of the successful collaborations mentioned. One way British Columbia could bridge the production gap could be to similarly assist its innovation and technology sectors to collaborate with its marketing and business sectors. The biotechnology example BIOTECanada states, ―an increasingly large gap has emerged in Canada between funds needed to commercialize products and the actual investment provided. This is especially true for small and medium sized biotechnology companies (SMEs) in Canada, three quarters of which have fewer than 50 employees.‖ The recently released BIOTECanada–PricewaterhouseCoopers Canadian Life Sciences Industry Forecast 2007 highlights that more than 40% of these companies are looking to secure more than $20 million in their next round of financing. Unfortunately, Canada‘s capital market is too small and too risk adverse to provide this assistance directly; thus, the SR&ED program needs to be an effective tool to prevent the

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hollowing out of the emerging technology sector in Canada. If Canada does not act, we not only risk losing the biotechnology industry to competing jurisdictions, we also risk not getting the return on investment back from research in the emerging technology sector in Canada. This sector provides a forum for employment for many of our advanced science graduates from universities in Canada whom taxpayers have subsidized throughout their education. If we have no jobs for these graduates and lose them to foreign employers, we will also lose this return on our investment. With every student and innovation lost to greener pastures Canada is giving out its tax dollars to benefit other countries. BC Biotech is a private, not-for-profit industry association representing BC's growing biotechnology sector. It states that: ―BC's biotechnology sector is Canada's fastest growing biotech region, and the third fastest growing in North America. It is also Canada's third largest centre in terms of research and development, the number of organizations involved in biotechnology and the number of people employed. Ninety-one biotechnology firms reside in BC; 65 privately held and 26 publicly traded companies. Success of the biotech industry in BC is a result of well-trained and knowledgeable workforce, access to several large hospitals, medical schools and educational institutions, and the ability of biotechnology companies to commercialize their products.‖ The Conference Board of Canada says that: ―Canada has some strong innovation initiatives. But, in the main, these programs create a supply of scientific discovery rather than go the extra step of fostering demand for innovative products. The result is good science faculties and lots of relatively small companies without much prospect of success on a globally efficient scale. The upshot is that Canada moves ahead far more slowly than other countries that enjoy greater innovation policy coherence.‖ Credit Conditions ―The balance of opinion on credit conditions reached a record-high level in the winter survey, as nearly two-thirds of firms reported tighter credit conditions over the past three months relative to the previous three months. The majority of these firms characterized the change as being significant and felt that it was driven mainly by a market-wide adjustment in risk premiums. Most firms reported that the tightening came in the form of higher borrowing costs. The deterioration in credit conditions is widespread across sectors.‖ These same restrictions, as discussed by the Bank of Canada above, could deter new ventures in the innovation and technology sectors from entering the market. ―The Business Outlook Survey summarizes interviews conducted by the Bank‘s regional offices with the senior management of about 100 firms selected in accordance with the composition of Canada‘s gross domestic product. The survey‘s purpose is to gather the perspectives of these businesses on topics of interest to the Bank of Canada (such as demand and capacity pressures) and their forward-looking views on economic activity. The winter 2008–09 survey was conducted from 14 November to 12 December 2008.‖ Bank of Canada Survey on Credit Conditions: Balance of Opinion*

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Survey question: Over the past three months, how have the terms and conditions for obtaining financing changed (compared with the previous three months)? Tightened: 63% Not changed: 31% Eased: 6% * Percentage of firms reporting tightened minus percentage reporting eased. For this question, the balance of opinion excludes firms that responded ―not applicable.‖ How can British Columbia become a global leader in innovation? The Conference Board of Canada states it best: ―Countries that regularly outperform others on innovation all have coherent strategies. These strategies differ from one country to the next but they all stimulate their country‘s capacity to innovate—from the creation of ideas to the transformation of those ideas into new products and services for the domestic and world markets. Canada invests in university research and development but fails to support highly innovative companies to become successful on a global scale.‖ Other steps could be: training a workforce in new innovations and technologies; more access to venture capital; affordable credit; start-up collaborations with the marketing and business sector; ease of regulatory burdens and a strong global presence. THE CHAMBER RECOMMENDS That the Provincial Government: 1. with the Federal Government develop coherent strategies to bring the innovation and technology sector first to our local market then to the global market; 2. with the Federal Government develop incentives for collaborations between the innovation and technology sectors and the marketing and business sectors; 3. provide streamlined processes with the Federal Government for the innovation and technology sectors to access government funding and/or venture capital; 4. work on behalf of the innovation and technology sectors to avail them access to affordable credit; 5. work with the Federal Government to develop an infrastructure to bring the results of research and development in the innovation and technology sectors to the current market, and; 6. provide solutions to retrain the existing workforce in the new technologies of future markets while retaining their jobs in the current market.

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ENHANCING BRITISH COLUMBIA’S FILM INDUSTRY (2009) BC has become well-established and internationally renowned over the last forty years as a viable, competitive and cost effective production centre. The film industry in BC has grown to become the third largest centre for film production in North America. It is an industry whose full-time workers number in the tens of thousands. According to the British Columbia Film Commission‘s most recent information, the film industry in BC in 2008 is estimated to have generated over $1.2 billion in production spending through filming over 260 motion pictures in the province. In support of this work, the BC film industry is estimated to have employed more than 20,000 people directly, and another 15,000 - 20,000 indirectly. Industry Profile BC continues to lead nationally in total foreign (mainly U.S.) production but economic factors, such as the fluctuating value of the Canadian dollar, can have a significant impact on demand as it impacts the amount of US-based production coming to BC. Past experience has demonstrated this vulnerability. Financial market volatility underscores the need to create a broad-based sustainable domestic film industry. However, locally owned BC based production decreased in 2008. This reliance on foreign production underscores the need to train new entrepreneurial film makers in support of the domestic film industry. In order to at least maintain, and even increase, BC‘s third-place status in domestic production, additional, talented and well-trained new film makers are required. This conclusion was arrived at by the 2004 Motion Picture Production Industry Association (MPPIA), sponsored, industry-wide forums on the state of the industry. First-rate education and training facilities focusing on production values and commercial viability are an essential part of maintaining BC‘s film industry and achieving a solid foundation in domestic film production. Adding to this need is an aging work force. Individuals who entered the film industry in BC as it began to emerge in the early 1970‘s are now starting to retire at an increasing rate. New and properly-trained workers will therefore be required to maintain the industry‘s vitality in a rapidly changing industry. ―The film and television industry is changing at a phenomenal pace,‖ said David Paperny, president of Vancouver-based Paperny Films. ―The ability of BC companies to respond quickly and adapt to both economic and technological change are the defining characteristics of our industry and they will drive the industry's success over the long term.‖ Knowledge Infrastructure Program The ‗Federal Knowledge Infrastructure Program‘ is a two year, $2 billion economic stimulus program to support infrastructure enhancement at post-secondary institutions across Canada. In BC the first of these projects have been announced and the film industry has seen no direct benefit. THE CHAMBER RECOMMENDS That the Provincial Government work with the Federal Government to enhance the existing capacity for film industry education and training with the goals of maintaining and enhancing the skilled BC workforce, and that encouraging and increasing domestic film production be made a priority for current and future knowledge infrastructure projects.

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SKILLS TRAINING FOR A NEW ECONOMY (2009) Introduction: Many British Columbians are being laid off in various sectors across our province. To recover from this crisis the 2009 BC Budget has made provisions for additional Employment Insurance (E.I.) durations, training possibilities and allotted money for infrastructure and community projects to create more jobs. Global job loss has brought communities, countries and Heads of States together to find solutions for a quick recovery of our economies. Most meetings, conventions and summits have concluded with financial solutions that include strategies of low carbon growth and green jobs. Provincial and Federal job creation plans: We just have to look around us to find evidence of the effects of job loss due resulting from the economic downturn. E.I. claims are up and some companies are suggesting reduced salaries so people can weather these times without losing their jobs. The provincial E.I. benefits have been extended and there are training programs available for recipients. Provincial, Federal and global budgets are including funding for infrastructure and community projects attainable to many sectors so people have opportunities to work when companies are downsizing and workers are laid off. Budgets are also including incentives and grants for energy reducing activities and all governments are recognizing that the new economy is focused on low carbon growth creating new green jobs and environmentally sustainable economies. On March 13, 2009, in London Ontario, Prime Minister Stephen Harper spoke of budget initiatives that support and assist Canadian workers. Prime Minister Harper said that, ―Canadian workers who have been affected by the current global economic crisis will receive support and assistance through initiatives contained in Canada‘s Economic Action Plan. Canadians who are looking to open up new job opportunities by upgrading their skills deserve every opportunity to succeed.‖ At the same meeting, Human Resources and Skills Development Minister, Diane Finley, in highlighting the budget measures said, ―Investing in training is one of the best measures any government can take, not only to protect our country and its workers today, but also to ensure that Canadians can take full advantage of the jobs of tomorrow.‖ In looking at highlights pertaining to BC‘s 2009 Budget incentives that support and assist BC‘s workers and BC‘s Economic Plan, it is important to acknowledge that our 2009 provincial budget works together with Canada‘s 2009 Budget and Canada‘s Economic Action Plan. Canada‘s Economic Action Plan comprises five main elements: Improving Access to Financing and Strengthening Canada‘s Financial System. Providing up to $200 billion through the Extraordinary Financing Framework to improve access to financing for consumers and allow businesses to obtain the financing they need to invest, grow and create jobs; Action to Help Canadians and Stimulate Spending. Providing $8.3 billion for the Canadian Skills and Transition Strategy. This will help workers directly affected by the economic downturn with enhancements to Employment Insurance and funding for skills and training. As well, the budget proposes $20 billion in personal income tax relief over 2008–09 and the next five fiscal years that will benefit all Canadian taxpayers, including doubling the tax relief provided by the Working Income Tax Benefit to make work more financially attractive for low-income Canadians;

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OBS, TOURISM AND INNOVATION Action to Stimulate Housing Construction. Providing $7.8 billion to build quality housing, to stimulate construction and enhance energy efficiency. Measures include: a renovation tax credit providing up to $1,350 to an estimated 4.6 million Canadian families; funding for energy retrofits; investments in social housing to support low-income Canadians, including seniors, persons with disabilities and Aboriginal Canadians; as well as low-cost loans to municipalities for housing-related infrastructure; Immediate Action to Build Infrastructure. Accelerating and expanding recent historic investments in infrastructure with almost $12 billion in new infrastructure funding over two years for the construction and repair of roads, bridges, small craft harbours, broadband internet access, electronic health records, laboratories and border crossings across the country. This will support economic growth and employment this year and next, while also bolstering Canada‘s long-run productive capacity; o BC‘s Budget 2009, promises to invest almost $14 billion in infrastructure projects in every region of the province. $2 billion is cost shared with the Federal Government for new projects to be accelerated over the next three years. Another $10.6 billion is for approved projects within the Province‘s capital plan for the next three years. And $1.4 billion in local infrastructure projects are being built in partnership with local governments and the Federal Government. These new and accelerated investments will generate as many as 88,000 jobs across British Columbia; and Action to Support Businesses and Communities. Addressing short-term economic challenges facing sectors, regions and communities as a result of the global economic crisis and helping sectors position themselves for long-term competitiveness; o The BC Budget 2009 invests $294 million in operating funding over four years to support economic activity in communities throughout the province during the economic downturn, providing confidence and stability that is critical for a strong future.

At the both the 2009 BC Economic Summit in Vancouver, Feb. 3-4, and the Northern Economic Summit in Prince George, January 2009, it was stated that clean technology could drive the economy for the next 30 years. Speakers from every sector spoke of the inevitability of business, society and the future economy being determined by sound environmental commitments. Details of the federal and provincial budgets contain funds for developing new green technology, environmental clean-up efforts, construction grants and tax incentives, developing carbon capture projects and creating green infrastructure. There was no mention of funding to assist and support the workers who will be implementing this new economy. Global job creation plans: The Leaders of the Group of Twenty‘s Global Plan for Recovery and Reform April 2nd, 2009, urged that every country must join together to resolve today‘s challenges to the world economy. Some of the points in their Global Plan speak of job creation and continuing expansionary policies as long as needed to help the economy rebound. British Prime Minister, Gordon Brown said as part of the economic recovery plan ―the G20 leaders were committed to continue to promote low carbon growth and to creating green jobs.‖ Under Restoring growth and jobs in the Global Plan for Recovery and Reform, point 6 states, ―We are undertaking an unprecedented and concerted fiscal expansion, which will save or create millions of jobs which would otherwise have been destroyed, and that will, by the end of next year, amount to $5 trillion, raise output by 4 per cent, and accelerate the transition to a green economy. We are committed to deliver the scale of sustained fiscal effort necessary to restore growth.‖ The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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Under Ensuring a fair and sustainable recovery for all in the Global Plan for Recovery and Reform, point 27 states, ―We agreed to make the best possible use of investment funded by fiscal stimulus programmes towards the goal of building a resilient, sustainable, and green recovery. We will make the transition towards clean, innovative, resource efficient, low carbon technologies and infrastructure. We encourage the MDBs to contribute fully to the achievement of this objective. We will identify and work together on further measures to build sustainable economies.‖ Point 28 states, ―We reaffirm our commitment to address the threat of irreversible climate change, based on the principle of common but differentiated responsibilities, and to reach agreement at the UN Climate Change conference in Copenhagen in December 2009.‖ Conclusion: If our leaders are promoting a future economy driven by low carbon growth and new green jobs, commitments could be made under many of the budgetary plans to include training, assistance and support for British Columbians to gain skills in all aspects of green technology. Future industries, developments and infrastructure projects could also be assisted and supported to include as many green plans and technologies as possible. Since British Columbians are oftentimes compelled to retrain in order to retain or re-enter the job force in our province, BC has great opportunities to identify and plan for future low carbon industrial practices and the green jobs needed to support growth for those industries. Training programs may need to change quickly to keep up with the new green economy and by addressing this opportunity our provincial government could lead the way for quick economic recovery. THE CHAMBER RECOMMENDS: That the Provincial Government work with the Federal Government to: 1. identify future green technologies and industries; 2. identify the workforce needed to support future green technologies and industries; 3. develop training programs to create a future workforce in green technologies and industries; and 4. provide assistance and support for workers to train for jobs in future green technologies and industries.

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LABOUR AND EMPLOYMENT (1998 – Revised 2011) The vast majority of employment and economic development in BC is generated from the small and medium sized business sector (SME). SME‘s currently account for 80% of job creation in Canada and their employees represent nearly 50% of all workers in the province. A disincentive to investment and killer of jobs is over regulation by government of SME‘s. Labour and employment regulations underwent significant changes under the previous government. In most cases, the changes made it more difficult for SME‘s to operate, and significantly hindered job creation in BC during that period. The current Federal Government has taken significant steps to address the concerns of business, and has indicated that further measures will be introduced. While the Chamber supports the majority of changes introduced to date, further reform is necessary if SME‘s are expected to cope with the economic realities of the 21st century in BC. Although there are many government regulations in this field, the key labour and employment regulations addressed by the Chamber‘s Policy and Positions Manual at the provincial level are: Labour Relations Code; Employment Standards Act; Workers' Compensation; and Human Rights Code The Chamber is not the only organization that advocates further reform. The Coalition of BC Business (the Coalition) continues to monitor and speak to labour and employment law reform. The Chamber remains very active in the Coalition and the Business Council of BC in monitoring and promoting change. Labour Relations Code In 2001, the Government amended the Labour Relations Code (the Code) to restore the mandatory secret ballot vote in all certification applications, to provide that educational programs to students and eligible children under the School Act be designated as essential services. This would eliminate sectoral bargaining in the construction industry, and clarify the basis upon which votes, including a strike vote, must be conducted by secret ballot. In 2002, the government introduced further amendments to the Code that were intended to ―provide a framework for labour and management to build healthy workplace environments and enterprises that compete in a modern world economy,‖ and that would, ―send an important message to the labour relations community and to investors that BC is open for business and that we are prepared to make sure labour relations in BC are balanced, fair minded and support growth and prosperity.‖ Changes included amending the Purposes Section 2 of the Code to rename it ―Duties‖ and to emphasize their overall importance. The list of such duties was expanded to recognize the rights and obligations of employees, employers and trade unions under the Code and foster the employment of workers in economically viable businesses. The Government also introduced significant amendments to employer free speech by expanding the right to communicate under Section 8 of the Code.

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In December 2003, the Minister of Skills Development and Labour announced the formation of a Section 3 Committee to provide advice on 14 policy issues related to the Labour Relations Code. The changes were aimed at returning balance, flexibility and individual accountability to the Code, for both employers and employees. A number of the issues assigned to the Section 3 Committee addressed aspects of certification, decertification and fair representation. Others include: Definition of Picketing, Definition of Employee – as it pertains to exclusion from a bargaining unit; and Successor Rights and Obligations, as they pertain to ―contracting out.‖ The Chamber actively participated in the development of a submission from the Coalition which, since 1992, has spoken for small and medium-sized business employers with respect to regulation of employment matters in the province, including labour relations, employment standards, human rights and Workers‘ Compensation Board (WCB) issues. The Committee filed its report in April 2003. The Committee analyzed the issues before it, ―to assist the Minister in making decisions about how to proceed.‖ However, Government has yet to act on the Committee‘s report. Other items not mentioned in the report that were not subject to review include the following: Section 5(2)(a) This Section requires the Labour Relations Board (LRB) to schedule a hearing into certain unfair labour practice and complaints within three days of its filing. This creates significant problems for employers preparing their response to the complaint. It also creates a problem for the LRB in arranging hearings in such a short time period. Elimination of Employment Due to Loss of Membership in a Trade Union Under Section 5.1 of the former Industrial Relations Act, unions were prohibited from expelling or suspending membership unless the employee failed to pay the periodic dues, assessments and initiation fees uniformly required to be paid by all members of the union, or having engaged in activity against the union contrary to the statute. This Section limited the circumstances under which unions could require employers to terminate employees under collective agreements that required union membership as a condition of employment. The Chamber submits that this protection should be restored. Replacement Workers – Section 68 The Chamber was most disappointed to see that the Government has not decided to deal with Section 68. The Chamber maintains its position that Section 68 must be repealed in all its forms. Section 68 restricts the right of an employer to carry on operations during a lawful strike or lockout. The Chamber has consistently maintained that Section 68 is manifestly unfair, especially insofar as it affects small-and medium-sized businesses in BC. Where such an employer is involved in a labour dispute, it typically finds that the balance of power is tilted significantly in favour of the trade union because of the impact of Section 68. Often an employer is unable to continue its operations in any form due to the labour dispute, the striking employees on the other hand are able to obtain alternate work during the labour dispute which greatly reduces the employer's ability to counteract the union's economic pressure. Moreover Section 68 discourages investment as it is a provision that does not appear in the labour legislation in most other Canadian jurisdictions. Eliminating Section 68 would send a strong message to the global business community that BC has finally balanced the playing field in a way that opens up the many business opportunities that are available in this province. Elimination of Remedial Certification – Section 14(4)(f) It is the Chamber‘s position that the remedial certification power in Section 14(4)(f) should be repealed. The amendment to the Code, which re-introduced mandatory secret ballot votes in certification The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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applications, was designed to ensure that trade unions are not forced on groups of employees who do not want them. Remedial certification is inconsistent with this principle, and can result in significant damage to a workplace. Moreover, Section 14(4)(f) is unnecessary, as the LRB has sufficient powers elsewhere to fashion appropriate orders to remedy violations of the Code. The Chamber believes it is important for BC to take this step, consistent with other jurisdictions, which would ensure that workers' democratic rights are preserved. Essential Services There is a perception that when the government designates a service as essential, the service will continue to be delivered as is. This is not the case, however, and service levels in essential undertakings are often set by the LRB at relatively low-levels. The recent BC Ferries dispute demonstrated the harm caused to innocent third parties by setting relatively low-levels of service, and the Government was soon required to step in. The Chamber recommends that essential service levels be set high enough to prevent loss to SMEâ&#x20AC;&#x2DC;s. Issues discussed by the Committee which the Chamber believes require attention include the following: Partial Decertification The Chamber joins the Coalition in recommending that the Code be amended so that rules governing decertification are the same as for certification. A group of employees must have the right to decertify if they no longer want union representation and they should not be confronted with difficult rules or unnecessary roadblocks in doing so. Successorship and Bankruptcy The Chamber recommends that the Code be amended so that employees have a choice about union representation when a bankrupt business is restarted. The new owners should not be required to inherit the previous union certification and collective agreement. Picketing The Chamber recommends that a new definition of picketing be introduced to provide clarity in terms of what constitutes picketing and what type of labour activities will be included and exempted from the LRB's regulations. A recent decision of the BC LRB traditionally has provided clarity by providing a bright line test between picketing consumer leafleting which would remain exempted from regulation by the LRB pursuant to the Supreme Court of Canada decision in K-Mart. However, the Government could still consider enacting a new definition in light of the K-Mart decision to ensure a clear and pragmatic approach balancing the right of people to express themselves versus right of businesses to operate without illegal picketing. THE CHAMBER RECOMMENDS That the Provincial Government act on the recommendations included in the Chamber submission of April 10th, 2002, and furthermore: 1. consider legislation emanating from the report of the Labour Relations Code Section 3 Committee;

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2. that Section 5(2)(a) be eliminated, leaving it in the LRB's discretion to schedule expedited unfair labour practice hearings as it deems appropriate, considering the interests of the parties and the Board's available resources; 3. restore the limitations of Section 5.1 of the former Industrial Relations Act such that trade unions be prohibited from forcing employers to dismiss employees who have been expelled or suspended from membership in a trade union, or who have been denied membership in a trade union; 4. that Section 68 be eliminated; 5. that Section 14(4)(f) on remedial certification be repealed; and 6. that the Labour Relations Board be directed to set essential services at higher levels to minimize disruption to the public. Human Rights a) General Policy Recommendations On March 31st, 2003, amendments to the Human Rights Code came into effect, most of the changes being procedural. The Human Rights Commission, with its cumbersome investigation and complaint vetting model and its advocacy component, was eliminated. A direct access complaint model was put in place with complaints being filed directly with the BC Human Rights Tribunal. In addition, the limitation for filing complaints was reduced from 12 months to 6 months. At the same time, the Ministry of the Attorney General created a new complainant representation system. Prior to the demise of the Commission, all complainants whose complaints had been referred to the Tribunal by the Commission for hearing were entitled to free legal aid representation through a lawyer appointed by the Legal Services Society, without a means or merits test. Now, a Human Rights Clinic represents all complainants before the Tribunal, without a means or merits test. The Clinic is made up of two entities, the BC Human Rights Coalition, a human rights advocacy organization, and the Community Legal Assistance Society (CLAS), which provides legal aid services especially on poverty and human rights issues. The Coalition represents human rights complainants up until a hearing. CLAS represents complainants at the hearing. The Ministry of the Attorney General contracted with the Law Centre in Victoria, a legal-aid clinic operated by the University of Victoria, to provide advice to respondents before the tribunal. There is, however, no system of free legal representation for respondents, even on a means test basis. Many of the respondents before the tribunal are small businesses, who have little, if any, financial resources to defend human rights complaints. The Law Centre acts on behalf of very few respondents, as it is based only in Victoria. There is no system for legal aid representation for respondents throughout the province. While there were problems with the Commission in the speed of their process, and with their apparent lack of neutrality, only about 10% of the complaints filed with the Commission were referred to the Tribunal for hearing. The current adjudication system before the Tribunal is a very paper intensive and litigation-focused system. The Tribunal vets very few complaints, being only those complaints clearly out of time or not The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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within the Tribunal's jurisdiction, prior to sending them out to the respondent for a written response. The Tribunal has very limited power to award costs. Under s. 37(4)(a) of the Human Rights Code, the Tribunal can award costs only if a complainant, ―has engaged in improper conduct during the course of the complaint.‖ The Tribunal has awarded costs only five or six times. Respondents must make applications to dismiss the complaint prior to hearing within seventy days of the date of the Tribunal‘s notice that it accepted a complaint within thirty days of the date on which information or circumstances, which formed the basis of the application, came to the respondent‘s attention. Additionally, the respondent must file the dismissal application at the same time that they file the Response to Complaint Form, where the Tribunal has added a respondent or, if the Tribunal has extended the time for filing, a Response to Complaint Form. As a result, respondents must make considerable effort to dismiss marginal complaints. Given the formality of the Tribunal's system, and as the complainants are represented by a free advocacy and legal services, the respondents must usually hire a lawyer. While the Tribunal encourages early mediation, and also mediation prior to the hearing, many respondents feel that mediation of a marginal complaint amounts to blackmail; i.e., pay me or you will go through a lengthy and costly hearing. The Tribunal hearings average between three to five days. The bottom line is that the playing field is not level for respondents. The track record of the Tribunal since its inception has been varied in terms of disposing of complaints in an efficient and cost effective manner. On one hand many cases are dismissed on preliminary applications brought by employers under section 27 of the Human Rights Code. Many complaints are dismissed because they do not establish a prima facie case of discrimination. The Tribunal has dismissed complaints on a preliminary application in a number of cases where there was ―no reasonable prospect of success‖. In other areas the Tribunal will dismiss a complaint if it is filed out of time and it is usually very reluctant to exercise its discretion to extend that time limit. If there is no point in proceeding with the complaint, or if it does not further the Purposes of the Code the Tribunal can dismiss it without a formal hearing on the merits. As well the Tribunal will, on occasion, defer a human rights complaint until another proceedings is completed or may dismiss it if the substance of the complaint has been dealt with in another proceeding thus avoiding a duplication of effort and unnecessary time and expense. The extent of the Tribunal‘s powers to avoid lengthy hearings and resolve matters at an early stage are seen in the Carter v. Travelex Canada Limited decision of the BC Court of Appeal. That decision confirmed the scope of section 27 of the Code which allows the Tribunal to dismiss a complaint on the basis that the complainant failed to accept a reasonable settlement offer. Generally the Tribunal‘s mediation efforts are fairly successful. On the other hand there are significant problems with the adjudication of many human rights complaints in British Columbia. Those problems include the following. First, many hearings simply get out of hand in terms of the length of the proceedings and the cost. In the Brar and Others v. the College of Veterinarians of British Columbia proceedings the Tribunal has already held (wait for it) 200 days of hearing since September 2007. The Respondents, following the closing of

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the Complainants case, brought an application to dismiss but were unsuccessful. The Tribunal member hearing the case was not reappointed and her five year term expired in July 2010. It was anticipated at that time that the case would take at least another 150 hearing days before the complaint would be fully addressed by the parties. There were numerous court proceeding including a recent decision of the Court wherein the Respondent College sought to exclude Tribunal member Parrack from hearing the balance of the case because it alleged there was a reasonable apprehension of bias. The Court dismissed the application and Tribunal member Parrack will now complete the case. It is noteworthy to consider the Court‘s disposition of the cost issue: ―I am, however, sufficiently concerned about the words and actions of the respondent complainants that gave rise to these events as well as the unsubstantiated and speculative allegations advanced by the petitioners and their counsel in response that I have concluded that no award of costs should be made that would reward the conduct of either party.‖ (para 93.) The second problem that is very much at the forefront of concerns for employers [especially small and medium sized enterprises (SME‘s) that make up the bulk of businesses in BC], is the fact that the Tribunal believes it has jurisdiction to award legal fees to complainants. There is no doubt that there has been an explosion of human rights litigation following the Supreme Court of Canada‘s 1999 Meiorin decision which reformulated the duty to accommodate. Despite the direction of the Supreme Court of Canada that a ―common sense‖ and practical approach must be taken, many human rights tribunals, following Meiorin seem to have ignored or minimized that direction. Lengthy and costly hearings often follow. The BC Human Rights Tribunal has held that it does have authority in certain cases to award legal fees. The uncertainty created by this area of the law makes it very difficult for employers to decide whether to defend themselves from human rights complaints that may be without merit. How expensive can it get? In one case UBC claimed legal fees it incurred in successfully defending a complaint that was outside the time limit. The case was complicated but never went to a hearing on the merits. UBC‘s legal fees were in excess of $150,000. A third area that causes concern is the importance the Tribunal places on the procedural aspects of the Duty to Accommodate (―DTA‖) even where there is no substantive breach of the Code. As a result there are decisions where the employer has not violated the substantive aspects of the DTA but has failed to follow the proper procedure to assess its obligations under the DTA. In one case involving the government paramedics the complainant, with the assistance of his union, successfully prosecuted his complaint before the Human Rights Tribunal even though the employer had not violated the substantive rights under the Code. The paramedic in question had MS and as a result he had a diminished sensation in his hands resulting in an inability to palpate pulses. Paramedics are required as part of their jobs to palpate pulses. Following a 22 day hearing and after hearing extensive expert evidence, the Tribunal dismissed the substantive part of the complaint. It found that the employer had established that the requirement that paramedics be able to manually palpate pulses is a bona fide occupational requirement and it was not reasonably possible to accommodate the complainant by allowing him to work as an attending paramedic in light of his inability to do so. That, however, remarkably was not the end of the analysis. The Tribunal went on to consider whether or not the government had treated the complainant fairly and ―with due respect for his dignity throughout the accommodation process‖. It held ―a failure to do [so] may result in a breach of the procedural aspect of the duty to accommodate, notwithstanding the fact that the standard the employer applied to the employee was otherwise justified.‖

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The complainant was awarded $22,500 for injury to dignity, feelings and self-respect and the manager involved was also found jointly and severally liable for the damages. The chilling effect of such a decision on a manager‘s ability and desire to act on behalf of an employer in a unionized setting cannot be overstated. Other remedies were claimed and the complainant was awarded an additional $35,000 in damages. In another case involving McDonalds the breach of the procedural aspects of the DTA resulted in an order for 2 years wages and $25,000 as compensation for injury to dignity and self respect. While the fair treatment of complainants is a laudable goal these types of damage awards are inconsistent with the purposes of human rights legislation where an employer can be found to act contrary to the Code even though there has been no substantive violation of the Code. Finally, there have been serious questions raised regarding the structure of the Human Rights Tribunal. The government has sought feedback on the proposal for a ―Unified Workplace Tribunal‖ which would deal with workplace related disputes and other matters currently overseen by the BC Labour Relations Board, the Employment Standards Branch and the BC Human Rights Tribunal. The proposal is that the Unified Workplace Tribunal would merge these agencies on matters relating to the workplace. The Chamber, through its affiliation with the Coalition of BC Businesses, supports the creation of the Unified Workplace Tribunal. THE CHAMBER RECOMMENDS That the Provincial Government: 1. amend its contract with the Human Rights Clinic so that complainants must meet a means and merits test in order to receive free legal aid; 2. create a legal aid clinic or system for human rights respondents; 3. amend the Human Rights Code to give the Tribunal more vetting power for marginal complaints on their own, prior to sending the complaint to the respondent; 4. strike a committee to consider ways in which hearings may be streamlined and conducted in a much more economical and fair manner; 5. consider the creation of a Unified Workplace Tribunal; 6. amend the Human Rights Code to specifically preclude the Human Rights Tribunal from awarding complainants costs including legal costs; amend the Human Rights Code to eliminate or limit the circumstances under which an employer can be found in violation of the Human Rights Code due to a failure to follow ―procedural‖ as opposed to ―substantive‖ provisions of the Code. The Tribunal should be restricted and precluded from finding a violation of the ―procedural‖ aspects of the duty to accommodate where there has been no substantive breach of the Code and no remedies should be allowed for procedural breaches

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b) Abolition of Mandatory Retirement and Age Discrimination In the 2007 Chamber Policy, it was noted that changes were being proposed to the BC Human Rights Code to abolish mandatory retirement and prohibit age discrimination for those over 65. The Chamber recommended and supported a number of initiatives and recommendations with respect to the proposed legislative changes. On January 1, 2008, the Government amended the Human Rights Code by changing the definition of age. These amendments to the Human Rights Code extended protection against age discrimination to employees and others who are 65 years of age or older. As a result of the amendments, employers in British Columbia will no longer be able to implement mandatory retirement policies through corporate policies, collective agreement provisions or individual contracts which require retirement at age 65. The amendments reflect many of the concerns of the Chamber, resulting in a measured approach to the elimination of mandatory retirement and age discrimination. For example, employers will still be able to rely upon age based distinctions which may be contained in bona fide retirement, superannuation or pension plans, or bona fide group or employee insurance plans. Therefore, although the change in the law will give employees the right to work beyond 65 years of age, there will be no requirement that the benefits, which are provided to older workers, will necessarily be the same as those which are provided to employees who are younger than 65. The amendments also allow for age discrimination where other statutes specifically provide for same. Therefore, WCB restrictions based on age 65 remain in force. In addition, the Human Rights Code still allows exceptions based on bona fide occupational requirements to allow employers to institute a blanket mandatory retirement policy at a particular age. Realistically, however, it will be difficult for employers to justify establishing such mandatory retirement policies. The amendments potentially create problems for employers who can no longer retire employees at age 65. Employers will now have to make individual assessments about the capabilities of employees if they wish to terminate employees. Accordingly, employers will need to pay more attention to performance management over the entire course of an employeeâ&#x20AC;&#x2DC;s career in order to gauge and monitor changing levels in performance or capacities. If employers wish to encourage older workers to retire then they will have to consider developing attractive voluntary retirement packages, thus avoiding the necessity of dealing with employees who may have simply decided to remain working for too long. While these changes are consistent with changes elsewhere in Canada, the Chamber remains concerned that it will be difficult for employers to terminate senior employees who have chosen to work beyond age 65. The duty to accommodate requirements under the Human Rights Code have not been modified to allow a more reasonable accommodation balance between the needs of the employee with the financial and infrastructure resources available to small and medium sized employers. Further, the exemptions regarding benefits and other government policies such as WCB may, at some point, be challenged under the Charter of Rights. THE CHAMBER RECOMMENDS That the Provincial Government maintain careful consideration and monitoring of these changes to ensure that the exemptions remain in place. The Chamber also encourages employers to educate themselves regarding the advantages of maintaining employees in the workplace who are beyond the age of 65.

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Employment Standards The Employment Standards Act (the Act) affects all business in BC but notably small businesses are the most affected as they do not have collective agreements. The Act has been amended several times in the last couple of years. Several of those amendments are of concern, notably: Averaging Agreements An employer and employee can now agree to average the schedule work hours over a period of 1, 2, 3 or 4 weeks. Averaging agreements must be in writing and have a start and an end date. While large employers have the capacity to create written averaging agreements in advance, small businesses often do not. They are generally scrambling, as the ultimate multitask employer. A written average agreement adds another dimension which is often confusing and difficult to create. Penalties Effective November 30, 2002, the Director of Employment Standards can add a $500 monetary penalty for each violation of the Act, a $2,500 penalty for the violation of the same section of the Act or regulation at the same location within three years of the first violation, and a $10,000 penalty for the violation of that same section at the same location within three years of the second violation. Typically, the Director will add penalties for each section of the Code that is alleged to have been violated. For example, where a business closes due to financial circumstances, penalties can be added for every section of the Act that has not been met; i.e., unpaid statutory holidays, unpaid vacation pay, or failure to pay wages within the time limits of the Act. Furthermore, if there were two employees who were owed wages, the Director could issue a penalty for $2,500 for that second employee and then $10,000 for the third employee. The Director has no discretion under the Act about issuing penalties. There is no due diligence test to the issuance of penalties. A penalty is often issued where an employee has been fired for what the employer feels is just cause. Ultimately, just cause is a judgment call which may or may not be held up on review. Yet there is at least a $500 penalty for that determination. Investigation and Adjudication: The Director rarely investigates complaints of unpaid wages. Instead, the Director has created a SelfHelp Kit and an adjudication process which is conducted before one of the Director's officers. While in some circumstances, that adjudication process may be helpful, in other cases it is not. An investigation can be simpler, less costly and time-consuming for the employer. Often the hearings are long and formal. They are conducted before an officer who often has little experience or training in adjudication. The Director has founded its adjudication process on very little statutory power to do so, s. 76(2). Director's Role The Director has a statutory neutral role, BWI Business World Inc. BCEST #D050/96 and Mitchell v. Director of Employment Standards, Dec 28, 1993 decision of Justice Vickers. The exact nature of that role is often very uncertain, and neither the Director nor the BC Employment Standards Tribunal (the BCEST) has a policy statement or pamphlet on the Director‘s role before the BCEST. There is no consistency as to whether or not the Director will appear on Appeals, or whether the Director takes a neutral or aggressive role. That lack of clarity and consistency is problematic for appellants. The Director‘s neutral role also dovetails with their statutory obligation under s. 112(5) to disclose the full record to the Tribunal. This is not consistently done; JC Creations Ltd BCEST #RD317/03.

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Failure to Follow BCEST Decisions There have also been several instances recently where the BCEST has upheld appeals on the basis that the Director has failed to follow its previous decisions. This has notably occurred in decisions involving commission sales. For example, in Parklane Ventures Ltd., BCEST # D211/03, the Director argued that it may ignore BCEST decisions. The BCEST Tribunal member said that that view "smacks of an abuse of the decision-making and appeal processes established by the legislature." The business community is caught in this tension between the Director and the Tribunal. The Tribunal has set law and the Director is failing to follow it, either in its decisions, in providing the record to the Tribunal, or in its role before the Tribunal. THE CHAMBER RECOMMENDS That the Provincial Government amend the Employment Standards Act by: 1. removing the penalty provision entirely, or placing a broad due diligence style defense, and clarity around the circumstances when a penalty may be issued; 2. providing clear statutory direction on the role of the Director in investigating and determining complaints, and in its role and obligation before the BCEST; 3. giving clarity and simplicity to the Averaging Agreements; 4. binding the Director to decisions made by the Tribunal; and 5. awarding costs against the Director for failing to provide a record to the Tribunal and in failing to follow directions and decisions of the Tribunal. WorkSafeBC – Introduction In late 2001 and early 2002, the then Workers Compensation Board underwent a pair of Core Reviews conducted by Alan Hunt and Alan Winter. Government has taken some initial steps to address concerns raised but more needs to be done as WorkSafeBC, with its costly administration and weighty regulatory burden, continues to represent a challenge to conducting business in BC today. The Chamber recognizes the work the Provincial Government has done to date but advocates further measures to reform WorkSafeBC. WorkSafeBC – Occupational Health and Safety For nearly a decade the Chamber has consistently advocated a regulatory regime better suited to the needs of small business. Although progress has been made in many areas of the WCB, there are still some basic challenges presented by Occupational Health and Safety regulations as they currently stand. These include: Complexity – Neither SME operators nor many of their employees have the expertise to understand a host of complex regulations, all formulated by experts in a variety of fields. Large organisations and government have the resources to keep such experts on staff but this is not an option for SME‘s. This leaves small businesspeople with two options. They can run the risk of being unknowingly in violation of the regulations, or they can hire a series of experts to ensure The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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ABOUR, CITIZENS’ SERVICES AND OPEN GOVERNMENT their workplace is not in violation, a near prohibitive expense for an average SME; Cost of compliance – One of the largest expense concerns of SME‘s is directly related to the complexity of the regulations. In order to comply with the regulations as written, SME‘s would have to hire a battery of consultants. They would need toxins experts, engineers and architects just to determine if they are in violation. This expense alone precludes compliance. There are also regulations that create unnecessary direct costs both by arbitrarily assigning to employers responsibility for issues that are not legitimately their concern, and by being so vague they can be interpreted as all-encompassing. Furthermore, there is no evidence that these regulations will actually decrease the number of workplace injuries. Until a cost/benefit risk analysis can be conducted there is no way to justify such expense. Prescription and inflexibility – The problems described above are all caused by the approach taken within the regulations. The regulations are prescriptive in nature and attempt to regulate every single activity that may or may not occur in a workplace. The regulations are aimed at the lowest common denominator, those few employers who do not follow regulations. These few employers, however, will not follow regulations, regardless of how restrictive or all encompassing the WCB attempts to make them. The Chamber believes that this approach is ineffective and, indeed, unrealistic. Compliance instead must be encouraged through positive means.

WorkSafeBC should set clear and consistent health and safety standards and leave businesses with the flexibility to determine how best to meet those standards. This approach would allow the employers to spend time and resources addressing potential problems rather than spend that time and those resources following needless and complex regulations. This approach would also put pressure on employers to produce results as they would be unable to hide behind the loopholes and red tape inherent in any attempt to create such comprehensive regulations. Through the Industry Services Branch, WorkSafeBC has attempted to address some of these issues. Initiatives they have undertaken include the production of sector-specific guides that would help employers in certain sectors to better understand what regulations apply to them and how best to comply. Although this incremental approach has not had the revolutionary impact the business community has consistently advocated for, we wish to continue working with the ISB to further implement businessfriendly amendments to the current regime. Despite the further work required within this report, there are several recommendations supported by employers, including the recommendations to fine workers who knowingly breach safety rules and the recommendation that regulatory review be continuous and completed every three years. THE CHAMBER RECOMMENDS That the Provincial Government: 1. revise the current Occupational Health and Safety regulations to introduce a goal-based model that will allow the employer the flexibility to achieve the required safety targets, and emphasize a preventative and proactive approach that encourages education for employers and workers about their rights and responsibilities;

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2. continue to rescind the provisions that create unnecessary bureaucracy such as requiring health and safety committees, and the appointment of safety representatives for small, low risk workplaces; 3. continue to implement the Commission recommendation to fine workers who knowingly breach safety rules to recognize that both employers and employees are responsible for workplace health and safety; 4. implement the Commission recommendation to complete a regulatory review every three years to reflect the constant pace of change in the workplace; and 5. ensuresthat WorkSafeBC do a better job of educating employers about their rights and responsibilities by ensuring that communications are in plain, simple language. WorkSafeBC – Rehabilitation Costs One of the major objectives of the workers compensation system is to assist injured workers in a timely return to productive employment. The Chamber strongly supports this goal and believes that more must be done to help make it a reality. Early intervention by WorkSafeBC is the key to achieving successful rehabilitation results. Unfortunately, the experience of many employers is that WorkSafeBC‘s administrative processes in adjudicating and monitoring claims may result in lengthy delays before any vocational rehabilitation services are considered. In too many cases, the disabled worker has been away from work for such a lengthy period of time before vocational rehabilitation services become involved, that there is little chance of successfully returning the employee to any form of productive employment. This is evidenced by the massive increase in the number of days to return an employee to work over the past two years and the corresponding increase in costs. THE CHAMBER RECOMMENDS That WorkSafeBC encourage timely return to work for injured employees by improving the practices of the compensation division and the delivery of vocational rehabilitation services.

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LEVELING THE PLAYING FIELD FOR OIL AND GAS SERVICE COMPANIES (2010) British Columbiaâ&#x20AC;&#x2DC;s Oil and Gas industry generated the single largest source of revenue to the province in 2008 at $4.09 billion. In fact since 2001, the oil and gas industry has invested almost $38 billion in BC. 1 The Chamber understands that the Province is attracting new investment through innovative infrastructure and royalty programs, and that this has been key to the growth of the industry. Most exploration companies are based outside of British Columbia. Given north-eastern BC's close proximity to Alberta, and the large number of oil and gas service firms based there, BC-based oil and gas service firms feel great competitive pressure from Alberta-based firms for work that is completed on British Columbia land. The TILMA agreement further enables cross-border work as many regulations have now been streamlined. With the increased volume of Alberta-based companies coming into BC, the number of Alberta trucks on our roads has increased. These trucks may not meet the BC Ministry of Transportation requirements. And without adequate enforcement these out of province companies may be operating with a competitive advantage. While the implementation of the HST greatly improves the chances for BC companies to stay competitive, there is risk that out-of-province firms will not remit the full amount of the HST, especially when they are invoicing other out-of-province firms for work performed in BC. In order to ensure a level playing field for BC-Based Oil and Gas companies with their primarily Alberta-based competitors, British Columbia regulations must be enforced at the same standards for both out-of-province firms and BC-based firms. This would include, but not be limited to, Commercial Vehicle Regulations and HST tax collection. THE CHAMBER RECOMMENDS That the Provincial Government: 1. implement a regulation system to ensure BC regulations are followed by out of province firms conducting work in BC by: 2. establishing a very active presence of Commercial Vehicle/Law enforcement on the highways between the Alberta and British Columbia border; and, 3. encouraging the Canada Revenue Agency to develop systems to ensure all work performed in BC is invoiced with the full 12% HST regardless of the province or state where the company's offices are located.

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CREATING A RESPONSIVE MECHANISM TO PROTECT COMMUNITIES’ SHARED USE OF RIVER WATERS (2009) Jurisdiction for BC‘s rivers is currently shared by a number of departments and agencies. While this is understandable given the multiplicity of opportunities and threats to which our rivers are subject, the overlap of responsibility has produced a labyrinthine process for enabling communities to create or modify legislation pertaining to the shared use of our rivers. As a result, it is nearly impossible for communities to ensure that river use balances and respects the competing needs of private enterprise, public infrastructure, ecological stewardship, and recreational use. There is a need for increased collaboration among the responsible agencies, leading to the creation of a streamlined mechanism responsive to community needs. In the absence of this coordination, our rivers will continue to be managed by multiple agencies such that there is no single, effective, and efficient means for communities to ensure that shared river use occurs on the basis of mutual respect for competing needs. A ―single window service‖ akin to FrontCounter BC or BizPal, which would enable municipalities to address local concerns regarding public waterways, would provide a suitable model for emulation. Moreover, the amendments to the Navigable Waters Protection Act (NWPA), passed as part of the last Budget Implementation Act, will threaten the public right to navigation and the principle of shared use of public waters, particularly for recreational users. The amendments empower the Transport Minister to exclude certain classes of projects and bodies of water from environmental assessment; ―minor works‖ and ―minor waters,‖ respectively. While the Chamber supports the principle of reducing government redundancy, and acknowledges that the amendments purport not to disrupt existing inter-departmental assessment triggers, the public right to navigation, which is central to the principle of shared use of our waterways, is a federal responsibility which does not fall within the purview of the other interdepartmental assessment triggers. The Federal Government‘s authority to conduct environmental reviews includes, within its scope, unique functions and the protection of a principle which cannot be reassigned, let alone abrogated. THE CHAMBER RECOMMENDS That the Provincial Government authorize its Intergovernmental Relations Secretariat to lead negotiations on the inter-jurisdictional control of BC‘s rivers, with the goal of developing a responsive ―single window service‖ mechanism to enable communities to create and modify regulations on the shared use of public waterways effectively and efficiently.

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ENHANCING BCâ&#x20AC;&#x2122;S CHARITABLE GAMING POLICY (2011) Many communities have been hit hard with the reduction of gaming funds to non-profit organizations and ultimately the community itself. As we look at what supports the social fibre of all communities and what draws families to these communities; it is obvious that it is what those communities have to offer. People seek out communities that have family friendly neighbourhoods that offer employment, safe environments, arts, culture, recreation, childcare, and social programming. This in turn builds healthy economic and sound communities. Gaming funds provide many services that have a huge impact on the quality of life in most communities. The non-profit organizations that receive gaming funding also provide much employment in their respective communities where other government programs are not available due to size and location. Many non-profits are members of local Chambers of Commerce. Without charitable gaming more and more fundraising pressure will be placed on businesses to support non-profit charitable organizations and their functions and make it harder for those businesses to attract the needed workforce. On June 17, 1999, the Province, the Union of British Columbia Municipalities (UBCM), and the British Columbia Association for Charitable Gaming (BCACG) signed two memoranda of agreement, formally crystallizing the permanent revenue sharing formula of the three parties with the White Paper on Gaming. In 2002 the Province enacted the Gaming Control Act. Although the Memoranda of Agreement with the UBCM and the BCACG concerning revenue sharing were not statutorily codified, both the Act and Regulations are consistent with them. No superseding legislation, enactment, or agreement extinguishes the 1999 Memoranda of Agreement between the Province and the BCACG and UBCM.

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Charity Share of BCLC Net Income 2000-2010

($ millions)

*Totals for net payout to charities for 2000/01 and 2001/02 are incomplete and do not include independent bingo.

THE CHAMBER RECOMMENDS That the Provincial Government: 1. revisit eligibility criteria for community gaming grants; and consider reinstating grants for three years to provide stability, predictability and consistency; 2. honour the 1999 Memorandum of Agreement between BCACG and the Province, which allocated 33% of gaming profits to the charitable sector; 3. request that funding levels be returned to those previously established by the government as of 2008 â&#x20AC;&#x201C; that is $156 million since 2008; and 4. that the responsibility for establishing eligibility for gaming funding to charities and non-profit organizations be reviewed at armâ&#x20AC;&#x2DC;s length from government.

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EQUITABLE POLICE FUNDING (2011) Overview of Policing in BC Residents of BC receive police services from an RCMP provincial force, 60 RCMP municipal forces, 11 independent municipal police departments, one First Nations Administered Police Service (FNAPS), and the RCMP federal force. Municipal, Provincial, and Federal Integrated Teams, the Combined Forces Special Enforcement Unit (CFSEU, formerly known as the Organized Crime Agency of British Columbia), and the Canadian National and Canadian Pacific railway police forces also provide specialized law enforcement within the province. In the Lower Mainland area of the province, the South Coast British Columbia Transit Authority Police Service (SCBCTAPS) was established as a designated police unit under the Police Act in late 2005. There are also enhanced police services at the Vancouver and Victoria International Airports. Under the BC Police Act, municipalities with a population exceeding 5,000 persons are responsible for providing police services within their boundaries. These municipalities may contract for the services of the RCMP to provide municipal policing or they may form an independent (non-RCMP) municipal police department. The RCMP provincial force polices municipalities with a population below 5,000 persons, as well as unincorporated (usually rural) areas. Independent police departments, First Nations Administered Police Service and provincial and municipal RCMP detachments provide police services to specific geographic locations within the province. RCMP Federal Force The RCMP federal force enforces federal statutes across the province. Examples of federal policing programs include border integrity, national security, commercial crime, international proceeds of crime, drug enforcement, and protective services. In 2009, the authorized strength of the federal force in BC was 1,034, including 185 protective policing positions. RCMP Provincial Force In BC, the Province contracts with the Federal Government and the RCMP to provide policing services to municipalities under 5,000 population, as well as to the unincorporated areas of the province. If a municipality is under 5,000 population, the provincial force polices not only the municipality but also any unincorporated or rural area surrounding it. If a municipality is over 5,000 population, the provincial force polices the surrounding unincorporated area and a municipal police unit polices the municipality. The RCMP provincial force also maintains the policing infrastructure for the province. This infrastructure includes centrally provided police functions that serve all communities. In addition to capital-intensive items, such as boats and planes, the provincial force provides specialized units such as unsolved homicide, hate crime, commercial crime and traffic enforcement that serve all jurisdictions in BC. In essence, the RCMP provincial force is the umbrella for all policing in the province.

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The cost of the provincial force is shared between the federal and provincial governments under the terms of the Provincial Police Services Agreement (PPSA). The province pays 70% of the contract costs and the federal government pays 30%. In 2009, the RCMP provincial force served 90 municipalities with populations below 5,000 persons in addition to the unincorporated areas. In 2009, the provincial force had an authorized strength of 2,306 officers providing police services to a population of 685,596. Until 2007 municipalities with a population of less than 5,000 did not make a direct contribution toward the provincial police services they receive. Rural property owners paid a rural property tax, but the amount raised from this tax did not make a significant contribution to policing. In 2007, a new police financing model was introduced which requires municipalities with populations below 5,000 persons and unincorporated areas to pay a more equitable share of their policing costs. Under the new model, less than 50% of the total cost for the provincial force is collected from property taxpayers in these communities. The RCMP provincial force detachments are usually named after the municipalities in which the detachment offices are located. For example, the Houston RCMP provincial unit polices not only the Town of Houston but also the rural areas and other communities within the detachment's boundaries. Where both municipal and provincial units are located in the same detachment or integrated detachments, the RCMP members from each unit report to one commanding officer and provide police services to the combined provincial and municipal policing areas. Municipal Police Under the BC Police Act a municipality must assume responsibility for its police services when, as a result of a Canada Census, its population reaches 5,000 persons. These municipalities may form their own independent police department or contract for the RCMP as a municipal police service. In 1996, there were 67 municipalities with populations exceeding 5,000 persons. This number increased to 71 in 1997 following the release of the 1996 Canada Census results, and remained at 71 following the release of the 2001 Canada Census results. In 2009, there were 72 municipalities exceeding 5,000 persons as a result of the 2006 Canada Census. RCMP Municipal Forces In 2009, there were 60 municipalities with RCMP municipal police services. Each of these municipalities has signed a Municipal Police Unit Agreement (MPUA) with the provincial government for the provision of RCMP police services to the area within their municipal boundaries. Under this agreement (contract), the cost of policing these municipalities is shared between the municipality and the federal government. There are two different MPUA cost-sharing formulas. Municipalities with populations exceeding 15,000 persons are responsible for 90% of the cost of their RCMP police services. Municipalities with populations between 5,000 and 15,000 persons are responsible for 70% of the cost of their RCMP police services. The federal government pays 10% and 30% respectively. Municipalities are responsible 100% of their accommodation and support staff costs.

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Independent Municipal Police Departments Twelve municipalities in BC have formed their own police departments and are policed by 11 independent municipal police departments. These police departments are referred to as 窶品ndependent and are responsible for 100% of their policing costs. The independent municipal police departments include City of Abbotsford District of Central Saanich District of Delta Township of Esquimalt (in contract with Victoria) City of Nelson City of New Westminster District of Oak Bay City of Port Moody District of Saanich City of Vancouver City of Victoria District of West Vancouver The Problem The current provincial policing contract with the RCMP is scheduled to expire in early 2012 and negotiations are currently underway to renew the contract. One of the most noteworthy requests from the UBCM is that Federal and Provincial subsidies for communities with a population over 15,000 go from the current 10% subsidy to 30%. Throughout the negotiating process no mention has been made of the gross inequity that currently exists between communities contracted with the RCMP through the provincial government and those with municipal police forces. In 2009, Federal and Provincial Government contributions to policing totalled $517,604,970. It is patently unfair that, collectively, the communities with municipal policing represent over 1.26 million residents, 28.3% of the BC population, and tens of thousands of businesses, received absolutely no funding from senior governments towards policing costs. Individuals, and businesses, in municipalities with municipal police forces pay 100% of their local policing costs. These costs, without exception, are the single largest part of the total municipal tax bill. Exacerbating the problem, the residents, and business owners of these municipalities, also directly subsidise the costs of policing in neighbouring communities using the RCMP through our provincial and federal personal and corporate income taxes. While the required funding structure was known to each of these municipalities when they created their own police force all other aspects have since changed. The complexity and the challenges facing modern policing are dramatically different from those facing communities only a few years ago. Whether it is the huge challenge organized crime is presenting to many communities or the challenge of addressing cyber crime the nature and complexity of policing has changed dramatically. This all comes with a significant cost to police forces that could not have been seen at the time they created their own municipal force.

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The growth in the cost to municipalities comes at a time when municipalities are facing significant cost pressures in areas such as transportation and infrastructure. As the Chamber addresses in other resolutions in the policy manual this has led to a trend towards unfair levels of property tax being levied onto the business community. With the single biggest line item in these communities being protective services the impact on business is of significant concern to business. Crime doesn’t recognize, or stop at, geopolitical boundaries. The majority of communities with their municipal forces have international points of entry (border crossings, harbours, airports, etc). Organized crime tends to move towards areas of least resistance. The Chamber believes public safety is a foremost concern of communities and their respective business members and residents. The Chamber find it unacceptable that both the Provincial and Federal Governments deem the public safety of our citizens to be of secondary importance when it comes to the allocation of dollars. To create silos of policing inequity is detrimental to all of the communities of BC due to the geographically fluid and predatory and opportunistic nature of crime. THE CHAMBER RECOMMENDS That the Provincial Government work with the Federal Government to: 1. urgently address the issue of equitable police funding by developing an equitable funding program for all BC municipalities; 2. have senior levels of government provide the same cost sharing to those communities using a municipal police force as to those contracting the services of the RCMP; And further 3. That the Provincial Government not entertain or sign a new contract with the RCMP for policing in the Province of BC that creates inequity in policing throughout the province. LEVELLING THE PLAYING FIELD FOR LIQUOR RETAILING IN BC (2011) In July of 2002 the Province announced a decision to privatize the liquor industry in BC. The accompanying news release stated that ―the government brings no special talents or purpose to retailing, warehousing or distributing alcohol. Increasing opportunities for private-sector involvement will result in improved services, consumer choice and access, and better use of Liquor Distribution Board (LDB) resources.‖1 In the nine years since this announcement was made, the business case for such a transition has only strengthened.

1 2002 BC Government news release: http://www2.news.gov.bc.ca/archive/2001-2005/2002CSE0054-000575.htm

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The intended privatization never occurred, even though the announcement attracted individual private sector involvement. In October 2003, the Province negotiated a contract with the BC Government and Service Employees‘ Union, and in 2004, announced a reversal on their Cabinet decision, and unveiled its current approach, leaving the private sector in the lurch. Premable The Province holds a monopoly on the distribution, warehousing and price of liquor sales in this province. The Liquor Distribution Act (―the Act‖) gives the LDB the sole right to buy alcohol, either imported or produced in BC, and the sole right to distribute that alcohol within the province. 2 The LDB is responsible for retail sales from all Government Liquor Stores (GLS), and for sales to private liquor stores, restaurants and bars. However, some licensees must still buy alcohol from a GLS branch at the retail price3, and private liquor stores receive a 16% discount when purchasing from the LDB. 4 Only the government truly buys wholesale from producers located in BC or abroad. The current model pits private and government liquor stores in direct competition, with the LDB being able to out-compete any private liquor store on price. Private stores are able to compete on hours of operation and refrigerated products, but the playing field is far from level, particularly on price and selection. The LDB 2011/12 – 2013/14 Service Plan clearly shows the costs to government associated with being involved in the liquor distribution industry. Operating expenses and cost of sales combine for $1.8 billion, leaving a net income for 2010 of $877.3 million dollars.5 Solution The role the LDB plays is an important one, but not best served in monopolizing distribution and retail. By amending the Act, the LDB would be able to focus on the inherent strengths of government in the areas of public safety, regulation, revenue collection and promoting a viable BC liquor industry. The overhead associated with retail operations, and partial costs of distribution and warehousing, would be removed. The liquor industry in this province is disadvantaged by the government having sole right to dictate pricing in this area. The growth of the industry, and its ability to create jobs and contribute to the provincial economy, would see a significant increase if private sector outlets were allowed true price parity and competition. If private business sectors could purchase liquor wholesale, competition, not government policy, would dictate the price and quantities sold. Additionally, removing the single government distribution and warehousing system would create a more nimble, responsive system that could support industry growth in line with demand. Consumers and the private sector would both win, and government revenue would be protected and costs significantly reduced. The revenue lost by removing LDB control from liquor retail could be generated through the income tax and licensing of new distributors, warehousers and retailers. The Chamber recognizes that HST and these revenues alone will not cover the $877 million currently generated. As such, any potential new liquor tax or duty collected should be collected via government‘s mark up policy. This would allow:

2 Liquor Distribution Act: http://www.bclaws.ca/EPLibraries/bclaws_new/document/ID/freeside/00_96268_01 3 The Act, 10(a) 4 2010 BC Financial and Economic Review, http://www.fin.gov.bc.ca/tbs/F&Ereview10.pdf, p. 94 5 LDB Service Plan, p. 19

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BC‘s liquor producers to be unfettered in their expansion to meet market demands, retail markets to set their own competitive prices, end consumers the option for lower prices and product selection. This would expand the number and range of businesses in this industry, create jobs and increase the contribution to the economy, and it would also assist the struggling on premise businesses. The move to a HST has been fully supported by the Chamber as a boon for the provincial economy, but a few sectors have not seen the direct benefits as, for example, those in the natural resources, oil and gas or export industries. The HST increased the end prices for consumers in the restaurant and bar sectors by 7%. The effect was a reported decline in revenue for the food and alcohol services sectors, with little to no way for restaurant and bar owners to combat the increased pricing and customer aversion. One of the most straightforward ways the government can assist these two sectors of the economy is to give them the ability to purchase liquor directly from the producers at competitive prices, allow them to dictate their own retail price and give customers an incentive to support these service sectors. THE CHAMBER RECOMMENDS That the Provincial Government; 1. amend the Liquor Distribution Act to allow private businesses to purchase and warehouse liquor at wholesale prices directly from producers, in equal retail competition with GLS locations; 2. focus the role of the Liquor Distribution Branch on security issues such as underage consumption, public safety, regulation, revenue collection and promoting a viable and stable BC liquor industry; and 3. ensure that any new liquor tax on purchases from producers places no constraints on future industry growth and allows the retail industry to use price as a competitive tool. TACKLING THE IMPACT OF METAL THEFT ON BC’S ECONOMY (2011) While metal theft is not a new problem for businesses and communities in BC, it is escalating due to the fact that it has not been affectively addressed. Prices of many metals on the black market continue to increase, in conjunction with the criminal activity that accompanies this activity. Many of BC‘s key industries in communication, transportation and energy are the most heavily impacted. Businesses and consumers face increased costs as a consequence of the high levels of vandalism and black market activity involving theft and re-sale. Damaged infrastructure needs replacement, public safety is at risk, and the lives of many BC residents are negatively impacted. There have been many attempts by local governments to curtail these activities, with modest success. Bylaws are in effect in Vancouver, Surrey, Kelowna, Chilliwack and Richmond. However, having individual municipalities create their own bylaws on an ad-hoc basis creates an inconsistent and porous patchwork that is unable to prevent this underground economy from thriving and expanding. The real need for province-wide legislation is still missing.

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The Chamber believes that only provincial legislation can effectively address the issue of metal theft in BC, and that municipal bylaws cannot effectively deal with this problem. Provincial legislation would remove the current patchwork system and approach which many are able to exploit, and replace it with a comprehensive system that could address this problem at its root. The key is to interdict the problem at the scrap yards. Many metal operators are legitimate, but there are many who will buy suspicious, if not obviously stolen, materials. A major aspect of many bylaws currently in place is to require that cash payments are withheld at the point of sale, and to require the scrap yards to retain the goods for periods ranging from 6 to 21 days before processing. This approach, however, does not go far enough, nor is it consistent across municipal boundaries. Through consultation with our membership across a number of sectors, the Chamber has identified several initiatives that would directly address this issue: License all companies and individuals buying and selling scrap metal, with the requirement for criminal records checks; Prohibit cash sales. All remuneration for purchases should be made electronically to established bank accounts held by licensed scrap agents or dealers; Introduce a waiting period before payouts are made; Allow special circumstances for contractors wishing to sell scrap products from their building sites; and Increase the penalty for intentionally stealing any or all metal products. THE CHAMBER RECOMMENDS That the Provincial Government assign ministry staff to work with representatives in sectors currently feeling the brunt of metal theft, with the goal to developing a comprehensive strategy, including draft legislation, to coordinate a comprehensive approach to combat this problem. LIQUOR DISTRIBUTION BRANCH CHANGES TO SUPPORT INDUSTRY CHOICE FOR BRITISH COLUMBIA (2010) The licensing for all liquor providers is mandated by the Liquor Distribution Branch (LDB) in the Province of British Columbia. When comparing the regulations that govern breweries, wineries and distilleries, the inequities of the LDB regulations become more apparent and are somewhat disabling to particular industries. These regulatory imbalances are industry specific, meaning the regulations are not standardized across each facet of the industry. The Chamber believes that the all sectors of this critical industry should have the opportunity to compete on an open basis, to allow for fair and equitable opportunities to sell and distribute their products under similar regulations granted to other sectors which are not impeded by the current regulatory environment, such as the BC wine industry. The Chamber believes that a particularly pertinent example of the negative impact the current system has on new growth sectors of the economy is that of artisan distillers, a relatively small sector which is unable to reach its full potential given the current regulatory system.

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Background British Columbia has all of the necessary resources to become the premier artisan distilling region in Canada. At the current time, there are Artisan Distillers located in Vernon, Penticton, Hornby Island, Cobble Hill, Victoria and Oyster River on Vancouver Island. Clean air and water, diversity of agricultural products and a skilled workforce are all necessary components which BC has in abundance. Craft spirits are handmade in pot stills, requiring continuous input from a master distiller. Although BC is the Canadian leader in artisan distilling in at present, the distillers are fighting an uphill battle due to the LDBâ&#x20AC;&#x2DC;s distribution and mark-up policies for spirits in general. Current Regulation for the Sector The licensing for distillers in British Columbia is mandated by the Liquor Distribution Branch. Both Winery Licenses and Distiller Licenses are controlled by the LDB, which has set separate yet very specific guidelines for each of these industries. Referencing the BC Ministry documents, Winery Licenses-Terms and Conditions and Brewer, Distiller and Agent Licenses-Terms and Conditions, the Distillers of BC are only permitted to sell their products off-site to LDB stores and any other retail stores designated by the LDB, provided they have an Agentâ&#x20AC;&#x2DC;s License. Additionally, Distillers can set aside an area within their respective manufacturing facility as a sampling room, where free samples can be served to the public, as well as operate one on-site retail store, provided they have an on-site operating agreement with the LDB. Distillers under the current LDB regulations are: Not permitted to sell directly to the food and beverage industry; Not permitted to charge a fee for samples provided during tastings; Not permitted to hosts events at the manufacturing facility; Not permitted to set aside an outdoor area on their property to host patrons for outdoor picnic events; and Not permitted to operate a lounge. Why this Agricultural Industry should be developed. Distillers provide an opportunity to develop a new green, sustainable industry providing new jobs, enhanced agri-tourism and culinary tourism, while producing a product that is desired throughout world markets. Artisan distilleries are striving to achieve a high end culinary delight from agricultural side products that otherwise are not marketable. Growers have very few secondary markets where they can direct product that would otherwise be considered a profit loss or waste. As a result, the goods produced by Artisan distilleries provide an avenue where BC raw materials and/or waste agricultural products can be processed to top shelf merchandise, thus producing a value-added industry contributing to the BC economy. Research by the Canadian Tourism Commission and the International Tourism Association show, that culinary tourism is the fastest growing sector in the tourism industry. In fact, the BC Tourism Ministry is in the process of facilitating the formation of the Food and Beverage Alliance of BC which would complement the BC Artisan Distillers Guild. British Columbia Distillers will help to provide new destinations as their craft, and the equipment they use, is not only extremely attractive, but also provides the patrons with a unique environment where emotional bonds to a region are developed through the expertise exhibited through traditional craftsmanship. Visitors and locals alike can witness how The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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agricultural goods are being turned into top shelf products that are being recognized internationally. Additionally, farmers and First Nations groups who harvest wild fruit would benefit immediately. Providing product directly to the customer The LCB and its internal structure create difficulties in how the â&#x20AC;&#x2014;small nicheâ&#x20AC;&#x2DC; producers of distilled products deliver their products to market. This results in extremely long delivery times for customers. For example: If a local liquor store in the Okanagan orders a case of a registered product from one of the Okanagan distilleries, the following steps must occur for a legal sales transaction to take place: 1. The order will have to be placed with the LDB in Vancouver 2. The LDB orders the one (1) case from the distillery in the Okanagan 3. The distillery has to physically ship the one (1) case to Vancouver to the LDB Warehouse From the Warehouse, the one (1) case will be shipped back to the Okanagan to the liquor store that ordered the product. This results in a 900km plus journey with a turnaround time of between four and nineteen weeks. This reduces the choice available to the consumer, the ability of businesses to get their product to receptive markets and unnecessarily and arbitrarily imposes punitive costs on the producer. This is particularly concerning given that this situation and process must be followed even when the liquor store ordering product is in the same community. Keeping Local Industry Local Keeping the opportunity for green business initiatives in communities throughout BC is of paramount importance at a time when the local economies are only starting to emerge from the global economic crisis. One BC distiller derives 65% of their products sales from their storefront location. In order to create a financially viable operation, this distiller will either need to expand its wholesale operation or relocate into a more densely populated centre to increase sales volumes. Such moves may cause artisan distillers to relocate away from the smaller communities, which will be problematic for many of these communities who are looking to continue to diversify for future economic stability in their regions. Conclusion The BC wine industry was virtually non-existent, before the current distribution policies were introduced that now support and enable BC wineries to thrive. Today, the wine industry has the privilege of marketing its products via 60-70% of the available floor space in a BC Liquor Store. In speaking with managers of BC Liquor stores, this is a dramatic shift from 20 years ago when the LDB regulations were changed for the wine industry. A strong artisan distilling industry is the next obvious step and would be a fitting compliment to the very successful, internationally recognized wine sector. However, the current LDB regulations are restrictive and debilitating to the growth of the artisan distilleries and a range of other producers in our province. Although Artisan Distilleries in BC are in their infancy, as noted previously, the quality of distilled products has already been recognized with numerous gold medals at international and North American competitions. In addition, the production of 149 million litres of spirits in Canada in 2009 clearly indicates there is an industry with which to work from.

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THE CHAMBER RECOMMENDS That the Provincial Government review the legislative and regulatory structure with respect to alcoholic beverage manufacture, distribution and sale in BC to ensure fairness and balance among components of the industry, including the Artisan Distillers. LIQUOR REFORM POLICY (2010) The Chamber believes that competitive markets, where various vendors can ensure efficiency by competing on an open-basis, best serve the needs of British Columbia‘s businesses and consumers. If private businesses are obligated to compete with government-run entities, those government-run entities should not be able to abuse their privileges to distort competition. However, the province‘s Liquor Distribution Branch (LDB) is not only a government-run vendor of alcohol, but it is also the entity that can unilaterally set the terms of the industry. The LDB, as the monopolist in terms of sourcing for retailers, sets the wholesale prices for retailers, often at a rate far above what the LDB itself pays. Unlike other provincial-government influenced sectors, such as ferries or hydro, there is no regulator or overseer that can limit the risk of monopoly pricing. Independent of market trends, the LDB can also impose higher prices, through ―social reference pricing‖ (SRP), in order to discourage drinking. However, SRP it has not necessarily been successful, as binge drinking has not exactly decreased. Consequently, while the goal of SRP has not been met, BC consumers still end up paying higher prices than in most jurisdictions. Sometimes, the LDB also acts in a manner that abuses its dominant position. For instance, the LDB can use ―cross-docking‖ to confiscate a retailer‘s supply. The LDB can also prevent retailers from transferring stock between locations. If a retailer has a complaint about LDB practices, there is no industry regulator that can adequately respond to such complaints. The BC Chamber believes that the current LDB model is broken, antiquated and in need of reform. While the LDB‘s annual consumer visits have fallen 14% since 2004, the LDB‘s operating expenses have risen 19% over the same time period. The fear is the LDB will use its price-making authority to recover its potentially inefficient operating model, making British Columbian consumers and private retailers the most impacted; paying higher than normal liquor prices. In these tough economic times, where many private retailers and local business are trying hard to remain profitable, the Chamber believes that some of the LDB‘s anti-competitive practices and potential should be curtailed. THE CHAMBER RECOMMENDS That the Provincial Government: 1. consider introducing a new model, or reforming the current model, for liquor distribution and retail in the province that recognizes the efficiencies of a competitive free-market. Analyze and clearly communicate if it costs government more to sell liquor itself than having liquor sold through private liquor outlets;

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2. address the conflicting motives between distribution (revenue) and control (regulation) which currently exist by separating them under different Ministries; 3. work towards reducing the distortion in price advantage that the Liquor Distribution Branch (LDB) can avail itself of. For instance, the BC Government must make a major commitment to regulating the LDBâ&#x20AC;&#x2DC;s price-making power, in order to achieve more competitive pricing; 4. consider the elimination of unnecessary limitations and practices such as â&#x20AC;&#x2022;cross-dockingâ&#x20AC;&#x2013; and the limit against retailers transferring between locations. Private retailers should also have a more robust review and appeal mechanism for complaints against the LDB; 5. ensure full governance and operational transparency so that the public in British Columbia can be assured that the entity is well governed, well managed and that issues such as pricing models accurately reflect true costs; and 6. review the social reference pricing (SRP) initiative and consider whether it is actually meeting government objectives. Based on the review, the BC Government should determine the future of SRP.

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HIGHWAY TRANSPORTATION IMPROVEMENTS IN THE NORTHEAST REGION OF BRITISH COLUMBIA (2011) Efficient transportation systems are critical to building modern, robust and diversified economies. Communities in Central and Northern BC along Highway 97 corridors are at the heart of the provincial resource economy and accounted for over $4.09 billion in revenue to the Province in 2008. The Province has made substantial investments in the stretch of highway from the Alberta Border to Fort St. John in the past decade. However, serious accidents and deaths along this stretch of highway are a common occurrence and further, the amount of Heavy industrial traffic on the road is substantial and would be considered above-average when compared to other major corridor highways in the province. Given the continued industry activity in the Northeast and the bright outlook of the oil and gas industry and the entire growth prospects in the Northeast, BC needs to immediately begin plans to twin the stretch of Highway 2 and Highway 97 between the Alberta Border and Fort St. John including dealing with the substantial challenges of the North and South Taylor Hill as well as the Bridge crossing the Peace River. The economy of the Northeast is dependent on the efficiency of highway 2 and Highway 97 north; as both routes are the only primary transportation link between communities and the busy oil and gas exploration areas. The route is heavily used by the energy industry, tourists and by local traffic. Although the Minister of Transportation and Infrastructure has identified improving this stretch of road as one of his three top transportation priorities in BC, there are no plans currently in place to twin the highway in the near or long term. THE CHAMBER RECOMMENDS That the Provincial Government develop a plan and timeline to twin the route along Highway 2 and Highway 97 from Fort St. John to the Alberta Border within the next 5 to 10 years and begin immediate improvements to the most serious spots. PROVINCIAL AIRPORT INFRASTRUCTURE INVESTMENT PLAN (2011) BC is fortunate to have several international airports, as well as many smaller regional airports. Naturally, airports are critical transportation links between our communities and are major economic drivers. There is a large demand for infrastructure investment dollars for airports across the province and funding from municipal, provincial and federal sources. Currently, there is no master plan either provincially or federally that outlines infrastructure priorities for the provinceâ&#x20AC;&#x2DC;s airports. Currently, spending decisions by governments on airport infrastructure is done on a local needs basis and guided by local lobbying efforts. Further, there does not appear to be any guidelines or criteria for investment towards airport projects by the Federal or Provincial Government. Most spending by either level of government is made under the justification of infrastructure and economic development spending. The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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Collectively, the Provincial and Federal Government should work together to develop a plan that will consult with businesses, residents, airport authorities and provide solid research from users from around the province and neighboring districts that will encourage the most effective use of taxpayers dollars on airport improvements. Criteria should be established that differentiates between spending on critical basic vs. Nice to have improvements. In the interest of realizing the greatest economic impact and responsibility for taxpayer‘s dollars in relation to airport infrastructure, future decisions should be made based on the areas of highest demand and economic impact to the entire province. THE CHAMBER RECOMMENDS The Provincial Government, work with the Federal Government and airports around the province to develop a long term strategic plan to guide future investments in the province‘s airport infrastructure with guidelines and criteria established for spending on airport infrastructure. QUALITY OF SERVICE STANDARDS AND ENFORCEMENT FOR THE TAXI INDUSTRY (2011) Background Taxis are an essential part of the transportation infrastructure and many businesses are particularly sensitive to the tie between taxi service quality and their business success. Businesses in many industries rely on the flexible transportation provided by Taxi‘s to enable their customers to easily get to and from their place of business. Several communities in the province including Oliver, Dawson Creek and Fort St. John have all had serious problems with their taxi operators. In the case of Fort St. John, one operator has 23 of the 24 licenses but chooses to only put 6 vehicles on the road. Applications for a new taxi licenses by possible new market entrants have been denied by the Provincial Passenger Transportation Board due to the number of licenses already issued in the community per capita. In Fort St John, The Fort St John Tourism Board has received complaints from businesses and residents that the poor state of Taxi Service in the community is having a detrimental impact on their business. In Oliver, The local city council was forced to pull the business license from the only taxi operator in the community after many complaints about unsafe service. 2 In Dawson Creek, City Council and the community have come forward with several concerns and complaints about the primary taxi operator. In protest, the only cab operator cut all overnight taxi service in the community for a period of about three weeks in the summer of 2010.11 In all of these situations, the local governments were virtually powerless to force any type of improvement on their cab operators.

1. 1 http://www.dawsoncreekdailynews.ca/article/20110118/DAWSONCREEK0101/301189994/-1/dawsoncreek/major-changes-in-store-forlocal-taxis

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We recognize the Taxi Industry study done in 1999 (Study of the Taxi Industry in British Columbia) that corrected several of the taxi issues in the lower portion of our province; however, in reviewing the document, there have been no studies that include areas north of Prince George. The complaints that the Fort St. John & District Chamber of Commerce as well as the Tourism Fort St. John board have received include, but are not limited to are: Waits of up to several hours for a taxi to be dispatched. Because of these extended delays and the resulting frustration, these extended waits for taxi service mean that people that otherwise were planning on taking a safe ride home with a taxi, may be led to operate their own vehicles when they may be intoxicated. Inadequate taxi service at the airport, leaving travelers stranded with no way to get into town No Taxis equipped with Handicap service Unclean Taxis Drivers Smoking in taxis with and without passengers in the vehicles Drivers treating customers abusively and using foul language Business people missing appointments because of long delays in taxi service Provincially, the restaurant industry is already facing challenges with the tougher drinking and driving regulations introduced in late 2010, including revenue losses of between 15-20%2. Having a reliable taxi service is essential to patron safety and to the economic vitality of the hospitality industry. Local municipal authorities as well as large institutional consumers like airports and hotels are particularly sensitive to the tie between taxi service quality and their cityâ&#x20AC;&#x2DC;s image and reputation. Poor treatment of tourists, business people and corporate visitors by taxi drivers can tarnish the cityâ&#x20AC;&#x2DC;s reputation and drive away business. The city is then viewed as an undesirable place to do business. The effect on business is also significant with the retail sectors. Some shops and businesses are reported to be heavily affected, both in terms of lost sales due to reduced services and sometimes no service at all. Without reliable taxi service between the airport, hotels and merchants, potential patrons will not be able to access the businesses. Taxi and private hire vehicles are an essential form of transportation for the blind and the less mobile. One in seven people in a sample of over 500 stated that regulated taxis and private hire vehicles were their most frequently used form of transport.7 The British Columbia Passenger Transportation Board is the regulating body in charge of granting taxi licenses in all communities across the province. Once a taxi license is granted, there is no local input into renewals, proof of performance or quality of service. Further, it is virtually impossible to remove a taxi license from an operator unless the operator is convinced of a criminal offence.3

2 http://www.theglobeandmail.com/news/national/british-columbia/bc-town-pulls-its-only-taxi-off-the-road-after-a-flood-ofcomplaints/article1713024/

Passenger Transpiration Board presentation slideshow to Tourism Fort St. John, Jan 11 th. 2011

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The Passenger Transportation Act was amended in the summer, 2010 to provide the authority for the Registrar of Passenger Transportation (Registrar) the tools needed to ensure that only individuals of suitable conduct and character provide commercial passenger transportation services. The amended act allow the Registrar to conduct an investigation into whether any applicant, licensee or permit holder is a fit and proper person to provide the service, however, it cannot be anticipated that the Registrar will unilaterally initiate these reviews. The Registrar will not conduct a ―fit and proper‖ assessment unless they are responding to information of concern, which may come to light in association with license applicants or General Authorization licensees. Some of the circumstances that may trigger a fitness review are: unsavory/illegal activities, serious criminal convictions, continually disregarding conditions of the license, has transferred its license without prior approval from Registrar, and licensee has no control over the business, drivers or other aspects of the business. (Section 39.1 – British Columbia Passenger Transportation Act) While these new changes are a step in the right direction, there are still no provisions to enforce or encourage proper taxi quality of service in a community. The Passenger Transportation Branch has a framework for Passenger Transportation Audits of License holders, however these audits are focused more on vehicle licensing, and driver records than quality of service. There are no provisions in the audits for quality of service or recourse if there are public complaints about the service. Taxi service is similar in nature to a public utility. (According to the Study of the Taxi Industry in British Columbia, done in 1999, the Utilities Commission once regulated taxis in BC)4. The Ministry of Transportation and Infrastructure consulted with the Metro Vancouver and other key stakeholders to develop a Taxi Bill of Rights. This Taxi Bill states the rights of both a taxi passenger and taxi driver, and to support the Taxi Bill, the Ministry of Transportation and Infrastructure partnered with the Consumer Protection BC5. All though this partnership helps keep the Taxi service in Metro Vancouver compliant with standards and regulations, the bill of rights does not apply to areas outside of Metro Vancouver. Taxi Bill of Rights: As a Taxi Passenger you have the right to: Be picked up and transported to your stated destination by any available on duty taxi driver Pay the posted rate by cash, or accepted credit card or TaxiSaver voucher A courteous driver who provides assistance, if requested Travel with an assistance dog or portable mobility aid A taxi that is clean, smoke free and in good repair Direct the route, or expect the most economical route 4 Study of the Taxi Industry in British Columbia in 1999 and submitted to the Minister of Transportation

8 http://www.th.gov.bc.ca/taxirights/index.html

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As it stands, the Passenger Transportation Board, The Ministry of Transportation and local municipalities are basically powerless to enforce quality of service guidelines in their community. The Passenger Transportation Board will grant licenses, but once those licenses are in place, there is very little that can be done to attract new cab companies to communities, Taxi companies have stated in the past having a hard time with the length of time it takes for drivers to obtain a chauffeur‘s license from the RCMP or Local Police. The Passenger Transportation Board stated that it can take anywhere from 1 to 30 days for approval, and Taxi operators have difficulty holding on to new employees that are otherwise ready to work except for waiting for the Chauffeur‘s license to clear.5 THE CHAMBER RECOMMENDS That the Provincial Government work with the Federal Government to: 1. review the legislative and regulatory structure with respect to the licensing and enforcement of taxi companies to ; a. grant the Passenger Transportation Board the jurisdiction to monitor and enforce quality of service guidelines and conditions of license. b. increase minimum operating standards for taxi operators, including fleet, customer service and mechanical standards and maintenance guidelines. c. adopt the ―Taxi Bill of Rights‖ program that is in place in Metro Vancouver across the Province. 2. expedite the process for processing Chauffeur‘s Permits 3. establish measurable performance targets and minimum standards for taxi operators and conduct regular performance reviews about their adherence in a comprehensive and transparent manner that allows the public to review the records of taxi operators.

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SOUTHERN BC TRANSPORTATION INFRASTRUCTURE: HIGHWAY 3 (2011) Highway 3, (Crowsnest Highway), stretches across southern BC from Hope to the Alberta border. It is a principal access route to major tourist centres in the south Okanagan, the Kootenays, and the BC Rockies directly serving many communities such as Hope, Princeton, Keremeos, Osoyoos, Grand Forks, Castlegar, Creston, Cranbrook, Fernie, Sparwood and many others not directly on the Highway. Many of these communities are becoming increasingly dependent upon tourism; if these communities are to reach their full potential as tourist destinations better transportation links are crucial. With the proliferation of golf courses, resorts and subdivisions in the East Kootenay, traffic from Alberta into BC has increased exponentially over the past 5 years. Alberta is making improvements on the highway on the Alberta side of the border, in recognition of the increasing trade, tourism and amenity migrant traffic. Recognizing recent investments in Highway 3 by government, BC should continue to do the same. Highway 3 also provides an alternate route to the Trans Canada Highway for truck traffic, thus easing the burdens on that overcrowded route. Indeed, traffic loads on Highway 3 are said to rival those on the TCH, and Highway 3 is the most traveled route for commercial traffic from the rest of Canada into the Kootenays and to the coast due to close proximity to the United States. Crossing several mountain ranges Highway 3 can sometimes be termed ‗an adventure‘, especially in winter conditions. There are many steep hills, bridge crossings and sharp, blind corners to negotiate, with relatively few passing lanes in sections where they are badly needed both to facilitate traffic movements, and for safety. Several major industries in the region served by Highway 3 would benefit from improved highway access – an example is Teck Corp in Trail which sometimes is forced to rely on the Highway because of a shortage of rail cars. A group called the Highway 3 Coalition (previously considered a ‗mayor‘s committee‘), made up of local government representatives from communities and Regional Districts along Highway 3, has been in place for many years, (although inactive for a number of those years). In 2009 the Okanagan-Similkameen Regional District spearheaded reinstatement of the committee to discuss issues of common interest respecting the Highway 3 corridor from Hope to the Alberta border, and to present a unified position to Ministry of Transportation regarding the importance of upgrading this important highway corridor. All Mayors and Regional District Chairs along Highway 3 recognize that the economic viability of their communities relies on the safe and efficient movement of traffic. The Highway 3 Coalition (representing 23 communities and Regional Districts on or near the highway) has developed a set of four priorities for Highway 3: 1. Realignment – Sunday Summit to Whipsaw Creek 2. Passing lanes – Cranbrook to the Alberta border (work has begun) 3. Creston Alternate Alignment 4. Elko Chicane The Coalition is also hoping an economic impact study on the highway will identify current economic constraints, assess opportunities for investment and quantify economic impacts and benefits, including The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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possible net increases in employment and productivity, positive impacts on trade and on private sector investment. It is our understanding that Terms of Reference for such a study have been drawn up by Ministry of Transportation and Investment, with a reporting target for mid-September 2011. THE CHAMBER RECOMMENDS That the Provincial Government: 1. place a priority on the timely completion of the proposed economic impact study; 2. continue aggressively investing in Highway 3 improvements both to facilitate economic growth, and to improve transportation safety in southern BC; 3. accept the Highway 3 Coalition‘s recommendations to improve Highway 3 safety and traffic flow, and give priority to their implementation. A LONG TERM STRATEGIC APPROACH TO TRANSPORTATION IN THE SOUTHERN INTERIOR OF BRITISH COLUMBIA (2010) The need for transportation infrastructure that encourages and supports economic growth is a fundamental element of a prosperous economy. However, the infrastructure that exists in many parts of the province does not support economic growth, and in many areas results in a deterrent to the prosperity of the surrounding communities. Nowhere is this more evident than in one of the fastest growing regions of the province; the Southern Interior of British Columbia. The Southern Interior of BC roughly falls south of the Thompson River and Shuswap Country, corresponding mostly to the post-Oregon Treaty remainder of the old, original, Hudson's Bay Company Columbia District. When used directly, it generally means the Okanagan and adjoining areas, particularly the Similkameen, southern Monashees and Boundary Country. With a growing and diverse economy, the region holds particular importance for the province as a considerable engine of growth. From manufacturing, agriculture, construction, education, tourism, hightech as well as strong commercial and institutional development, the economic strength of the region has driven significant in-migration, both from other provinces and abroad. This growth has had a profound effect on the region and on the transportation infrastructure that needs a continuing, long term strategy. As with any region in a province as vast and geographically distinct as BC, the viability of the local and regional economy is directly linked with the transportation network which serves it. This network includes provincial highways, local roads, transit service, cycling and pedestrian corridors. This network is not only critical to the larger urban centres in the region but is also important to the small communities and rural areas that are an integral part of the social, environmental and economic fabric of the province. The Chamber believes that along with the ―traditional‖ highway corridor expansion projects, opportunities for innovative projects and initiatives exist, such as public transit and other initiatives directly and indirectly related to transportation issues.

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In addition to the economic challenges the transportation network brings, there are also significant safety issues relating to narrow and often meandering roadways from high mountain passes to indirect routes around water bodies. In recognition of these challenges, in 2004 Western Economic Diversification Canada partnered with the three regional districts in the Okanagan and Similkameen Valleys to produce the report, Okanagan Valley Transportation Corridor – An Assessment of Select Projects and Initiatives. This report delivered a comprehensive prioritized list of transportation infrastructure projects, focused on the corridors between Osoyoos and Enderby, and along the corridor between Osoyoos and Princeton; in essence, Highway 97 and Highway 3. The Chamber welcomed the recommendations of the report which focused on highway expansion and enhancement projects as well as public transit options. The Okanagan Transportation Panel also welcomed the efforts made by the report‘s authors to prioritize the projects using a benefit-cost analysis to balance the benefits which a project produces against the costs of producing that benefit. The Chamber has noted the significant improvements to the highway 97 corridor by the provincial Government since 2007. While the Chamber has welcomed this initiative, it should be noted that these projects do not fully deliver on all of the importance on the improvements required. It is recognized that the footprint of the 2004 study does not address the entire region. As such a new report should be commissioned that includes the 2004 report as a base of information noting improvements that have been made since that time in order to establish a long-term strategic vision for transportation in the Southern Interior of British Columbia. THE CHAMBER RECOMMENDS That the Provincial Government: 1. review and take immediate action to update the Okanagan Valley Transportation Corridor – An Assessment of Select Projects and Initiatives report; 2. develop an integrated, multi-modal transportation vision for the Southern Interior region that builds on the Okanagan Valley Transportation Corridor – An Assessment of Select Projects and Initiatives report; and 3. develop this vision by working with municipalities and regional districts to include the tributary highways of the Southern Interior of British Columbia CAPITAL FUNDING STABILITY FOR BC’S INTERNATIONAL AIRPORTS (2010) BC‘s International Airports are rapidly evolving from regional transportation hubs into large-scale, multimodal, international airports. As BC continues to grow, international airports will play an increasingly vital role in the economic growth of the province by providing the connectivity essential to keeping companies competitive in a global economy, and by facilitating significant job creation within the province

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Growth in the province will necessitate a need to reduce pressure on YVR and, as such, will drive significant growth in airport activity through BC‘s other international airports on an annual basis. Increased access from the entire province, by road and air, will allow BC‘s international airports to play a greater role in relieving the pressure on YVR‘s already challenged air and ground access network. Infrastructure upgrades and improvements are required to support airport operations and airside land development at all of BC‘s international airports. Current federal funding is provided through the Airport Capital Assistance Program (ACAP). ACAP is a line-budget item and, as such, is subject to changing governments, ministers, budget constraints and capital funding burden shifts between government priorities. BC‘s international airports have significant capital expenditure programs relying on ACAP funding. They are forced to institute business plans based on uncertain capital funding to complete the plan. The objective of running BC‘s international airports in a generally accepted free-enterprise business model becomes extremely onerous under this funding model. This financial hurdle is commonplace among airports across Canada. It is significantly more pronounced at larger, rapidly expanding, provincially significant airports. THE CHAMBER RECOMMENDS That the Provincial Government work with the Federal Government to identify and allocate a consistent and predictable annual funding model for British Columbia‘s International Airports. EXTENSION TO THE VICTORIA INTERNATIONAL AIRPORT RUNWAY (2010) Transportation connectivity is the key to prosperity. Commercial and general aviation is a significant aspect of transportation in BC. Improvements to airport facilities are important projects which will help realize our province‘s economic potential. The Victoria International Airport is Canada‘s 9th busiest airport, and has the shortest runway of all major Canadian airports and provincial capitals. The airport has seen year over year growth, averaging 5.7% annually since 2002. The Victoria Airport Authority (VAA) has successfully completed a major terminal expansion and is setting the stage to attract additional international air service. To promote economic growth and sustainability for Vancouver Island, the VAA is proposing a 1400 foot runway extension. This $41.2 million dollar project will enable non-stop air service to international destinations such as London. A three-way equal partnership between the Airport Authority, Province of British Columbia and the Federal Government would allow this project to begin almost immediately. The project will extend the airport‘s main runway from 7000 feet to 8400 feet. Over the last five years, the provincial government has contributed funding to a number of airport facilities across the province. The most recent contributions include $22 million towards the extension of the main Prince George runway, $1.35 million towards the extension of the Kelowna Airport runway in 2008 and $6 million to help extend the Nanaimo Airport runway. There is also $10 million committed to a taxiway and apron extension project at the Abottsford Airport in 2010. The Province also contributed to the extension of runways in Smithers, Cranbrook, Abbotsford, Terrace and Kamloops.

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The Victoria International Airport, in the province‘s capital city, has not yet secured a funding partnership with the province to implement its $41.2 million runway extension. The Victoria Airport Authority estimates that the ability to land jumbo jets will add another $37 million dollars to Greater Victoria‘s economy annually. Research to date from the Victoria Airport Authority shows a ready market from key European destinations, including France, London and Germany. These markets have some interest in one stop flight packages, but the prospect of direct connections is highly desired. VAA estimates that with the extension, they will see 36,000 new international movements from London in the first year with an increase to 48,000 within five years, and 75,000 movements from France in the first year with an increase to 100,000 within the first five years. Economic growth, particularly opportunities related to post-Olympic benefits and the provincial goal of doubling tourism revenues by 2015, depend on transportation connections that can host the world. An extended runway at the Victoria International Airport fits is an important part of bringing those provincial goals to fruition. THE CHAMBER RECOMMENDS That the Provincial and Federal Governments provide monetary support for the extension of the Victoria International Airport. KOOTENAY COLUMBIA NORTH SOUTH CONNECTOR (2010) British Columbia is reliant on transportation infrastructure for economic sustainability, growth and diversification. Quality transportation infrastructure can act as a catalyst for economic health by providing inter-regional access to economic opportunities throughout the province. In addition to inter-provincial access, it is important to recognize the need for effective North American transportation access to capitalize on the close economic ties to the USA in support of economic sustainability and expansion opportunity. Efforts are being made south of the border to recognize the importance of infrastructure work on HWY 395; the Canada - US North South Corridor. The U.S. Senate Transportation Appropriations Committee and Washington State Governor recently announced that the North Spokane Corridor project will receive $35 million under the Transportation Investment Generating Economic Recovery (TIGER) grant program from the American Recovery and Reinvestment Act (ARRA). The $1.5 billion TIGER program funds transportation projects to boost local economies and improve transportation infrastructure that is vital to regional job growth and economic competitiveness. The $35 million investment includes the northern development of HWY 395. The Provincial Government clearly recognizes the importance of improved transportation infrastructure. The Provincial Transportation Service Plan 2009/10, states one of its goals to, ―expand and strengthen the roads, rails, ferries, bridges, ports and airports that tie our communities together and link us to the world.‖ During this period we are investing over $2 billion in the future of British Columbia. In order to increase opportunity for sustainable growth and diversification of regional economies, including tourism, resource sectors and manufacturing, there must be support with infrastructure investment for a north-south corridor.

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With the completion of a highly successful 2010 Olympic and Paralympic Games and the Provinces‘ commitment to tourism growth, as per the Tourism Action Plan February 2007, Government has committed to grow the tourism industry from ―good‖ to ―great‖, and double tourism revenues by 2015. The North South Connector will be an important part of achieving this goal by acting as a new gateway for tourism in BC. Studies have shown that low elevation routes reduce carbon emissions by more than 30% as compared to high elevation routes. This in turn makes this low elevation corridor an alternative to reduce BC and Washington‘s carbon footprint. A low-elevation route between the Canada-US border and the TransCanada highway to a southern route HWY 395 connector would provide an important alternate route that would allow greater access to new economic markets within BC and enables shipping trucks to avoid high traffic volume and bottlenecked highways; reduce idling time, fuel consumption and carbon emissions. The Chamber believes this resolution will reduce the carbon foot print in BC by providing a direct route to economic markets. This in turn would improve economic strength by increasing global competitiveness through direct access for shipping of goods. Through the development of an additional north/south transportation corridor there will be elimination of highway and border bottlenecks, the North South Connector would be a direct route to support the massive Prince Rupert terminal expansion. THE CHAMBER RECOMMENDS That the Provincial Government: 1. develop a comprehensive transportation plan that will align with the USA North Spokane HWY 395 infrastructure investment; and 2. work in collaboration with economic development offices and local government in the North South Corridor area to explore economic development opportunities that would be created through the completion of the North South Corridor. US CUSTOMS PRE-CLEARANCE SECURITY (2010)

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INTERNATIONAL

TERMINAL

Canada‘s economic trade viability relies significantly on a number of gateways and major land and sea border crossings, where transportation networks converge to connect centres of economic activity. Gateways to Canada include approximately 300 commercial sea ports, over 20 major airports, and a large number of land border crossings, 18 of which are major trade gateways. The Belleville International Terminal in Victoria, BC is one example of a gateway connecting the leisure travelers of the United States and Canada. It is of paramount importance to ensure that appropriate capacity and infrastructure improvements are adopted at all necessary crossings. In the post 9/11 world, appropriate capacity includes not only infrastructure considerations but also high-level security measures. The United States is Canada‘s primary trading partner, and as such, it behooves the Canadian Government to work in harmony with US officials and Provincial Governments on security measures. Ballantyne and Canada Place in Vancouver, both cruise terminal sites with US preclearance service, each have modern facilities with adequate pre-clearance services with no expressed concerns from the US The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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Customs and Border Protection Agency. While important at commercial crossings, it is equally important to be vigilant in border security and infrastructure investment at gateway locations with a concentration of leisure travelers. The US Customs and Border Protection Agency (CBP) have a number of Preclearance locations around the world, one of which is the Belleville International Terminal in Victoria, BC. In a letter written on the issue of the terminals condition in 2006, the US CBP advised that the terminals in Victoria currently ―lack an infrastructure necessary to maintain passenger sterility and vessel security,‖ and expressed concern that this situation has been a long standing issue in Victoria without a proposed solution, in regards to both increased security and passenger sterility. In the event that the Belleville Terminal is not upgraded and brought into compliance with international safety standards and requirements of the Department of Homeland Security, the Agency has stated that ―a withdrawal of Preclearance services at Victoria must be considered.‖ Clearly, the status quo at this terminal site is untenable and clearly does not support a strategic alliance with our US partners. The potential loss of pre-clearance services at Belleville International Terminal would have a significant impact on the economy of Vancouver Island and the tourism industry of British Columbia. The terminal, which covers a land mass of 6.5 acres, provides international foot passenger ferry service to various destinations in Washington State, and international vehicle ferry service to Port Angeles. In 2005, the terminal welcomed 1.1 million return foot passengers and 175,000 return vehicle trips. A marine transportation study done in that same year by Moffat and Nichol showed an increase in traffic projections for 2010 to be 1.2 million return foot passengers and 188,000 return vehicle passengers. The Belleville Terminal pre-clearance site is one of only a few marine based sites in the country. The majority of CBP pre-clearance locations in Canada are at International airports. The airport facilities were all originally built and funded with initial investment by the Federal Government with some costs recouped through airport improvement fees. Airports were subsequently transferred to Airport Authorities. In contrast, the Belleville International Terminal has operated with little government support from any level. Unfortunately, its current status reflects that funding reality. The responsibility for re-development of the Belleville Terminal is a complicated issue. Since the property itself was fully devolved to the province of BC, and is now managed by the provincial crown corporation called the Provincial Capital Commission, the Province has a significant role to play. However, as the Belleville Terminal is an international border crossing, its infrastructure and security requirements are clearly within the mandate of Federal responsibilities. Finally, the terminal is in the middle of the City of Victoria, which means much of its redevelopment would be subject to municipal land use requirements. There have been numerous studies concerning the redevelopment of the terminal over the last decade. One study in 2005 put the infrastructure redevelopment cost estimates between 40 and 50 million dollars, with real estate development on top of that. Another task force put forward a proposed vision with similar cost projections. However, the concept of redevelopment has never been sent out as a request for proposal with concrete cost projections. The redevelopment of Belleville International Terminal is a project of considerable size and would need to be accomplished through a partnership with the Government of British Columbia. For its part, the project may qualify for federal funding under the Building Canada Fund, a fund for federal investment of The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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$33 billion dollars over seven years, through to 2014. Canadaâ&#x20AC;&#x2DC;s commitment to security is an important indication of our strategic partnership with the United States. In order for Belleville International Terminal, which poorly represents the capital of British Columbia, to be an international standard transportation portal and safe gateway, infrastructure and security investment is hastily required. A partnership is required between the Federal Government of Canada on this international border crossing and the Provincial Government of British Columbia, who owns the terminal property to bring the facility up to date and ensure many more years of secure service for Vancouver Island. THE CHAMBER RECOMMENDS That the Provincial Government partner with the Federal Government to develop the Victoria marine pre-clearance site at Belleville International Terminal in collaboration with the municipality as a model for future marine facilities in Canada. NORTH COAST FERRY OPERATIONS CRITICAL TO BRITISH COLUMBIA ECONOMY AND INFRASTRUCTURE (2009) As a coastal province, BC is reliant upon ferry transportation services to supplement transportation options, and in some cases provide essential service to island and remote communities in Northern and Southern BC. The Chamber considers ferries to be an extension of the public highway system, enhancing tourism opportunities, providing critical transportation links, and providing reliable commercial transport for all manner of goods to communities and vital transportation of commercial products to market. The Chamber recognizes the efficiencies generated by the governance and operations model of the BC Ferry Services Corporation Inc., as governed by the Coastal Ferries Act, supports the idea of efficient taxpayer support of the ferry system to ensure critical services are maintained. This includes the concept of the system being largely supported through user fees, but recognizing this is not a realistic expectation in all areas of operations at all times. The present financing levels of BC Ferries undermines the ability of the organization to fully meet community needs and develop business opportunities. It is imperative to consider the overall economic impacts and opportunities provided outside the present business model to achieve a net gain to the economy of BC in consideration of service levels and rate structures. In order to compensate for a historical shortfall of capital investments for fleet development, BC Ferries has embarked on a muchâ&#x20AC;?needed rebuild program. When combined with the capping of transfers from the Ministry of Transportation and Infrastructure in 2003, the result has been significantly higher user fares over the second performance term (PT2), constraints to sailing frequencies and scheduling inflexibility. This has been particularly evident on the lower capacity northern routes. The Chamber understands that not all routes and systems will produce line profit and that some services, while critical to the sectors they serve, will not support complete user pay structures the northern strategy, specifically the northern rural routes.

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Fixed annual schedules for the northern routes must be ensured in order to negate negative economic impacts realized when changes are made. The changed schedules cause delays to the shipment of goods and the provision of services, and the economic impacts are far reaching. THE BC CHAMBER RECOMMENDS That the Provincial Government: 1. ensure that the BC Ferries governance and financing model continues to promote operational effectiveness and efficiency, while recognizing the Corporation as an extension of the BC public highway system, thus enhancing the Corporations mandate as a key driver of coastal community economic development, from a net gain viewpoint; and 2. make amendments to the coastal ferries act to allow for enhanced transfers which: a) result in average fares that are comparable with those established in the first performance term (PT1) plus inflation and that are firmly set 18-24 months in advance; b) provide the Corporation with resources to continue with fleet development plans without adding the full burden of rebuild costs on the user rate structure; and c) maintain an annual schedule fixed date of September 1 for the coming 12 months. REGISTRATION, LICENSING AND MANAGEMENT OF OFF-ROAD VEHICLES (ORVâ&#x20AC;&#x2122;S) (2009) One of the avenues available for economic development in the tourism sector is the development of allseason motorized sports opportunities. Precedents have been established in the eastern provinces and in various states within the US. The proven potential is in the hundreds of millions of dollars when the potential for all-season sports is recognized. The key is the creation of safe and environmentally sustainable opportunities, both locally and within the backcountry. Part of the creation of these opportunities is the ability to identify riders of motorized recreational off-road vehicles (MRORVs), with the emphasis on those riders who choose to damage the environment or ride in unsafe manners. Currently the only off-road vehicles that are registered within the province are snowmobiles. BC is the only jurisdiction within North America that does not register ORVs. In 2005 an initiative was completed by the Coalition for Licensing and Registration of Off-Highway Vehicles in BC and the Provincial Government in providing recommendation for the licensing of ORVs. This coalition was made up of a variety of user groups, both motorized and non-motorized, and all the recommendations were unanimously supported by all participants. To date none of the recommendations have been implemented by the Provincial Government, including the minimum of basic safety and registration. In order to take advantage of the potential economic benefits of summer motorized sports tourism, the business community is insistent that they be able to recognize or identify any machine that is using the back country for motorized recreation.

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Specifically for motor sport dealerships, the number of stolen ORV‘s in BC is at a crisis point as British Columbia has become a dumping ground for stolen units from across Canada and the United States. BC‘s reputation as being the place to ―off load‖ or to purchase stolen used units continues to seriously impact new unit sales for legitimate businesses in British Columbia. The financial impact of stolen ORV‘s in British Columbia is expected to be $5-10 million. This translates to increased insurance claims resulting in the small business owner paying excessive amounts for ICBC garage policy insurance and minimum deductible amounts are now becoming unreasonable. THE CHAMBER RECOMMENDS: That the Provincial Government immediately institute the registration of motorized recreational off-road vehicles and explore the options to implement the remainder of the recommendation developed and submitted by the Coalition for Licensing and Registration of Off-Highway Vehicle in British Columbia.

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The BC Chamber of Commerce

POSITIONS ON SELECTED NATIONAL ISSUES 2011 – 2012

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LEVELING THE PLAYING FIELD FOR OIL AND GAS SERVICE COMPANIES (2010) British Columbiaâ&#x20AC;&#x2DC;s Oil and Gas industry generated the single largest source of revenue to the province in 2008 at $4.09 billion. In fact since 2001, the oil and gas industry has invested almost $38 billion in BC.1 The Chamber understands that the Province is attracting new investment through innovative infrastructure and royalty programs, and that this has been key to the growth of the industry. Most exploration companies are based outside of British Columbia. Given north-eastern BC's close proximity to Alberta, and the large number of oil and gas service firms based there, BC-based oil and gas service firms feel great competitive pressure from Alberta-based firms for work that is completed on British Columbia land. The TILMA agreement further enables cross-border work as many regulations have now been streamlined. With the increased volume of Alberta-based companies coming into BC, the number of Alberta trucks on our roads has increased. These trucks may not meet the BC Ministry of Transportation requirements. And without adequate enforcement these out of province companies may be operating with a competitive advantage. While the implementation of the HST greatly improves the chances for BC companies to stay competitive, there is risk that out-of-province firms will not remit the full amount of the HST, especially when they are invoicing other out-of-province firms for work performed in BC. In order to ensure a level playing field for BC-Based Oil and Gas companies with their primarily Alberta-based competitors, British Columbia regulations must be enforced at the same standards for both out-of-province firms and BC-based firms. This would include, but not be limited to, Commercial Vehicle Regulations and HST tax collection. THE CHAMBER RECOMMENDS That the Federal Government develop effective systems which ensure all work performed in BC by out of province firms is invoiced with the full 12% HST, regardless of the province or state where the company's offices are located.

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FLOODING PREVENTION (2008) Flooding in BC has increased dramatically over the last five years with a trend towards more severe cases. Terrace, Smithers, Prince George, New Westminster, Fort Langley, and the Fraser Valley are just a few of the major affected areas. There are several reasons for the BC-wide issue. First, with the pine beetle infestation, moisture cannot be absorbed by dead trees anymore. A living mature pine tree absorbs approximately 50 litres of water per day. Much of this amount ends up in our rivers and will cause the flooding we experienced in the past, something we also will have to deal with for many years to come. Another reason for flooding is the increase in melting snow packs, which, arguably, is the result of global warming and causes more water to be available in rivers at certain times of the year. Lastly, the lack of dredging from ongoing silt migration into key junctions is raising the water table in key river systems. The cost of response and recovery during the Freshet flooding last spring, and summer in Vanderhoof, was $24 million provincially. Much of damage was in the Northwest Region. Costs for local government response include evacuation supports, emergency works to critical infrastructure and ―Disaster Financial Assistance‖ to impacted residents, local governments and ministries. Urgent mitigation work based on the flood risk analysis across the province cost $34.3m, shared with the Provincial Government. Another $9.4m was expended in readiness activities, including purchase of Gabion dikes, sandbags, safety and response training for local governments, first nations and volunteers. Last November's heavy rainfall in the Southeast and Central Regions resulted in flooding and landslides near Lytton and Bridal Falls, with damages to road infrastructure of appropriately $3.7m. Currently the estimated costs related to the Nechako Ice Jam and flooding in Prince George is $5.0m. These costs are mostly related to the City of Prince George‘s response, building temporary protective works, pumping, engineering assistance, and evacuation costs. The assessment phase for Disaster Financial Assistance for impacted residents and local government infrastructure is continuing and the final cost will likely rise. Additionally, the reduction in GDP due to flooding and the associated job losses has to be considered. In Prince George alone 250 jobs were lost for 3 month due to temporary layoffs. Products could not be delivered in time, and now several businesses are closing permanently as they cannot recover the lost sales and suppliers. THE CHAMBER RECOMMENDS That the Federal Government work with the Provincial Government to: 1. conduct a study to achieve the following goals; and a) a long term Provincial flood prevention plan for flood endangered areas to save jobs, property and allow for further planning and development in flood endangered zones; and b) a dyking and/or dredging analysis for the flood endangered zones should be carried out and where identified, dykes should be built as soon as possible and dredging should be allowed to avoid the ever increasing damages to property, loss of production and danger to human life.

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2. work with municipal governments to create a working group with terms of reference and governance that will respond to the short and long term flooding planning and response issues. This includes forming a committee that will deal with emergency response and long term mitigation and funding of activities dealing with flooding and flood prevention. FRASER RIVER SUSTAINABILITY AND FLOOD MANAGEMENT (2007) The Fraser River is a vast business generator in the Province of British Columbia. Hundreds of thousands of residents work directly or indirectly on the river, or with businesses and industry that rely on this vital waterway. Recent abnormal weather events have served as a warning that ongoing efforts to maintain the elaborate system of dykes and pumps that protect farmland, industry and residents must be undertaken by all levels of government on a proactive basis. The Fraser Basin is a vast geographical area drained by the Fraser River and its 13 main watersheds. Beyond its geographic importance, the Basin is a vital component of the province‘s economic base. In addition to contributing a full 80% of the provincial economic output and 65% of total household income, it also contains 21 million hectares of forest. The Basin‘s farms, ranches and orchards compromise half of all BC's agricultural lands. Eight major mines in the Basin account for 60% of BC's metal mine production. In addition, some of the province's and the world's most spectacular natural beauty and 1 recreational opportunities abound in this area, contributing 67% of total tourism revenue. In addition, regular dredging of the main channel of the Fraser River must be undertaken to help avoid the threat of flooding, and to help keep the river open and navigable for shipping, commercial traffic, pleasure boating, and to further enhance the Pacific fishery. Each year, enormous amounts of debris in the form of root balls, full trees, forest trash, and other materials are swept down the Fraser River. Until the advent of the debris trap, situated near Agassiz, the lower Fraser River and much of its estuary became non-navigable following the annual freshet. The trap captures the equivalent of 600 to 2400 highway logging truckloads of wood (90 – 95% of the debris is of natural origin). The net cost of operation of the trap is approximately $640,000 per year, including costs associated with the current funding approach. Funds are raised for the operation annually from a diversity of sources. Even with the trap in operation, approximately 5000 m3 of waterborne debris is generated downstream in the lower Fraser River. This study estimates that the annual cost to manage this amount of debris and mitigate its impacts is approximately $1.59 million per year. If the trap were decommissioned, the amount of debris flowing into the lower Fraser River, and the incurred costs to manage it, would increase by at least six times to $9.55 million per year. For an investment of $0.64 million per year, it is estimated that at least $7.94 million in costs per year are avoided.

Data provided by Fraser Basin Council. Further details available at http://www.fraserbasin.BC.ca/fraser_basin/index.html

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THE CHAMBER RECOMMENDS That the Federal Government work with the Provincial Government to: 1. create a program for regular maintenance of the dykes along the Fraser River estuary, and provide for regular dredging of the main channel of the Fraser River; 2. support funding for permanent dyking; 3. provide sustainable funding for these programs; and 4. establish a permanent fund for the ongoing operation and improvement of the debris trap at Agassiz, and investigate the establishment of an additional trap to be situated on the lower reaches to catch debris from rivers such as the Coquitlam, Pitt and Allouette, i.e., near the Port Mann crossing.

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INDEXING OF GST/HST NEW HOUSING REBATE (2011) A number of organizations, including the Canadian Home Builders Association (CHBA), have identified the failure to adjust the new home GST/HST rebate to current housing prices as a major concern to home builders and associated businesses throughout Canada. It also poses a significant deterrent to housing affordability in Canada. When the GST was introduced in 1991, the new home GST rebate threshold was set at $350,000 for a full rebate of 36% of the GST. Between $350,000 and $450,000 the rebate was progressively reduced. Over $450,000.00 no rebate was available. The federal government committed to reviewing the thresholds every two years to adjust for the likely upward change in home prices. Since then, Statistics Canadaâ&#x20AC;&#x2DC;s new home price index shows a 54.78% increase between 1991 and 2010 and in some markets prices have increased well beyond that. Meanwhile the rebate thresholds have not changed. The governmentâ&#x20AC;&#x2DC;s original intention was that 90% of new home buyers would receive the full GST rebate, and an additional 5 percent would receive a partial rebate. However, according to the CHBA only an average of 43% of new home buyers purchased homes at a price point that qualified them for the full GST rebate. While market conditions are the primary driving force behind the sale of both new and used housing, the sale of entry level new housing is predominantly aimed at new home buyers who have very little equity and for whom the GST rebate plays a significant role in their decision to purchase. An increase in the thresholds could add up to $3500 to the purchasing power of a new home buyer. That addition to purchasing power is reflected in the business community by the concentric rings of home builders, subcontractors, suppliers and wholesalers all of whom would benefit by the addition of more buyers to the new home building market. The failure to index the new home rebate is compounded by the introduction of HST in five provinces where now the federal governmentâ&#x20AC;&#x2DC;s failure to index the threshold has resulted in a two pronged calculation of rebates applied at the federal threshold (in relation to that portion of HST that represents the GST) and a different threshold to reflect the application to that portion of the HST that represents the provincial portion. Reviewing the Rebate In Vancouver, where the average price of a detached home is $760,000, less than 1% of new home buyers qualified for a new home GST rebate in 2009. Compare that to 1991, when 75% of buyers in Vancouver qualified. If the rebate thresholds had been adjusted to accommodate the 54.78% increase in the cost of housing to the end of 2010, the lower and upper thresholds would have increased in 2011 to $545,000 and $700,000. The economic contribution that new home construction brings to markets has been severely dampened due to failure to index of the thresholds.

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THE CHAMBER RECOMMENDS That the federal government: 1. in the next Budget act on an outstanding commitment to adjust the GST/HST rebate thresholds to reflect new housing price increases by reviewing the threshold every 2 years in relation to the Statistics Canada New House Price Index; and 2. acting in consultation with the provinces, that participate in HST, create a combined HST New Housing Rebate that is administered by the HST department and provides for a single rebate based on indexed thresholds that includes the GST portion of the HST and the provincial sales tax portion of the HST. MARKETING CANADA AS AN INTERNATIONAL DESTINATION (2011) Marketing Canada as an international travel and tourism destination is critically important to maximizing economic benefits for provinces but there is a downward trend in the level of core funding for the national tourism marketing agency, the Canadian Tourism Commission (CTC). This trend of declining core funding needs to be reversed to ensure Canada can effectively compete in the international marketplace and by extension drive incremental visitation to provinces. Background The global tourism market continues to increase and is forecasted by the World Tourism Organization to reach 1.6 billion international tourist arrivals worldwide by 20201. Many jurisdictions are vying for market share because the sector ‗provides significant potential for economic growth and development2‘. In 2009, total tourism revenue for Canada was $69.5 billion. 80% (or $55.4 billion) came from tourism domestic demand and 20% ($14.1 billion) from tourism export revenue3. Over the last 10 years the contribution from international travellers to Canada‘s total tourism revenue has dropped from 35% in 2000 to 20% in 2010. Revenue generated from international travellers represents new dollars for the Canadian economy and this remains a primary focus of our national marketing strategies. According to the CTC‘s research, domestic travellers spend on average $91 per day while international traveller spend $129 per day on average4. Dependence on the domestic market is a concern with limited growth potential available from Canada‘s relatively small population base. In order to capture a significant portion of the tourism market, Canada must remain competitive with other destinations. Between 2002 and 2009, international tourist arrivals to Canada declined from 20.1 million to 15.8 million, a 21.5 percent decrease5. In 2002, Canada ranked 7th in the world for international arrivals but in 2009 Canada ranked 15th behind new competitors like Malaysia, Turkey, Ukraine and Russia. The global tourism marketplace is increasingly competitive.

1 UN World Tourism Organization - Tourism 2020 Vision 2 World Economic Forum, The Travel & Tourism Competitiveness Report 2009: Managing in a Time of Turbulence. https://members.weforum.org/pdf/TTCR09/TTCR09_FullReport.pdf 3 Canadian Tourism Commission, 2009 Annual Report 4 Statistics Canada, Travel Survey 2009: Residents of Canada and International Travel Survey (ITS). 5 Statistics Canada International Travel Survey, December 2009

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Part of Canada‘s declining competitiveness stems from limiting travel policies. For example, stricter visa and passport requirements dampen demand. When Canada imposed visa requirements on Mexican nationals on July 14, 2009 the market, already under stress from the global recession, contacted sharply. August 2009 customs entries to Canada decrease 50.1% compared to August 2008, and 2009 year-end Mexican travel to Canada was down 36.6% compared to 20086. Likewise, the short-haul United States drive market has been negatively impacted by new passport requirements. Air access continues to be a limiting factor on international travel to Canada. Greater liberalization of air service agreements combined with complementary visa policies would contribute to a more internationally competitive tourism sector in Canada. Some situations are beyond immediate control and/or require negotiating complex agreements with other countries. Marketing, on the other hand, is totally within our control and represents another critical area of our international competiveness. In this area Canada is falling behind. By allocating the necessary resources for international tourism marketing, the government can ensure that Canada competes on a level playing field with other long-haul destinations. Canada is currently ranked 20th in the world in terms of national tourism organization funding. The Canadian Tourism Commission‘s core funding has declined from nearly $100 million in 2001 to an anticipated $70.7 million in 20127. By means of comparison, Tourism Australia receives an annual base investment of $147 million CDN from the government of Australia and Tourism Ireland receives a base investment of $211.3 million CDN8 In early 2010, the United States created the Corporation for Travel Promotion, which will oversee the development and implementation of a global marketing and promotion campaign aimed at increasing the number of international visitors to the U.S. The corporation‘s annual budget is projected to be $250 million CDN, making it one of the largest national tourism communications programs in the world9. The Canadian Tourism Commission The marketing of Canada as a destination is the responsibility of several groups including the CTC, provincial, regional and city Destination Marketing Organizations (DMOs) and private sector companies. The CTC is the lead entity and works to coordinate Canada‘s promotional efforts abroad in order to drive visitation. To achieve its strategic goal of growing tourism export revenues for Canada, the CTC focuses on markets where Canada‘s tourism brand leads and the return on investment highest. It stimulates and promotes tourism through joint public and private marketing initiatives based on an industry-led and market-driven approach. The tourism industry‘s role within the CTC is to define industry needs and goals, contribute to strategic planning efforts, and invest financially in marketing initiatives. The tourism industry believes that the CTC is the appropriate entity to lead the Canada branding and marketing file and that its current strategies, informed by solid research, are the right ones to pursue as we go forward. Investments in CTC‘s promotion of Canada as a tourism destination produce significant returns on investment. For example in 2009, CTC produced a return on investment of 101:1 on its core marketing

6 Ministry of Jobs, Tourism & Innovation, Overnight Customs Entries to B.C. and Canada, August Bulleting, and December year-End Bulletin. http://www.jti.gov.bc.ca/research/IndustryPerformance/pdfs/intl_visitor_arrivals/2009/International_Visitor_Arrivals_August_2009.sflb.pdf 7 Canadian Tourism Commission, main estimates 2011 8 2009 Annual Reports for Tourism Australia and Tourism Ireland 9 Looking to 2020: The Future of Travel and Tourism In Canada. White Paper produced by National Travel & Tourism Coalition. http://www.tiac-aitc.ca/english/press/2010/NTTC_PR_Oct27_2010_en.pdf

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activities. Canada10

The demand created by this promotion directly created or protected over 15,000 jobs in

In spite of strong business results, since its creation as a Crown Corporation in 2001, the CTC‘s core funding from the government has declined from nearly $100 million to an anticipated $70.7 million in 201211. This decrease in funding comes at a time when Canada faces increasing competition from existing and mature tourism markets and from new exotic market entrants. Canada‘s overall global market share has eroded in recent years, in large part, as a result of competition from new entrants. Since 2000, Canada‘s overall market share of global tourist arrivals has decreased by approximately 24%, while overall global tourist arrivals to all countries have increased by approximately 24%12 Given the CTC‘s declining resources and intense competition, the CTC has had to sharpen its strategic focus and invest where Canada‘s brand has greater recognition and impact than the provincial and major Canadian city brands. It has reduced the number of long-haul countries where it targets highyield travellers. For example, the CTC no longer invests in consumer marketing in the United States. This has been a difficult decision but a necessary decision given reduced core funding. While this strategy is producing excellent business results for the markets and the amounts invested, growth will be difficult to achieve and Canada will be hard pressed to reach the stated goal of $100 billion in tourism revenues by 201513. While CTC‘s base budget has been in steady decline, CTC has attracted some one-time or special project funds. For example, The CTC invested $26.0 million between 2008 and 2012 to leverage the 2010 Winter Games tourism opportunity for Canada, and $48.0 million in 2009-2011 as part of Canada‘s Economic Action Plan. These one-time funding injections are very useful in delivering short-term specified marketing programs for which the CTC has provided significant returns on investment (e.g. 43:1 ROI)14. However, the long-term stability provided by core, or A-Base, funding allows for improved market development and sales strategies, increased partner contributions, and phased campaign implementations. As previously referenced, core investments produce significantly higher returns on investment for the Canadian economy than short-term one-time funding initiatives (e.g. $101 in tourism revenues generated for every $1 invested in the CTC‘s 2009 core campaigns compared to $43 to $1)15. Conclusion Canada faces increasing competition from existing and mature tourism markets and from exotic new market entrants. Canada‘s overall global market share has eroded in recent years as a result of competition from new entrants. The CTC, Canada‘s national tourism marketing agency, produces significant business results for the dollars invested. The tourism industry needs the CTC better resourced. 10 Canadian Tourism Commission, 2009 Annual Report 11 Canadian Tourism Commission, main estimates 2011 12 United Nations World Travel Organization, Annual Compendium 13 In September 2009, Canada‘s federal, provincial and territorial tourism ministers set a new national tourism revenue target of $100 billion by 2015, representing an increase of approximately $29 billion over 2009 revenue. 14 Canadian Tourism Commission, 2009 Annual Report, pg 34, Insignia Research: advertising tracking and conversion study 15 Canadian Tourism Commission, 2009 Annual Report, pg 34, Insignia Research: advertising tracking and conversion study

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THE CHAMBER RECOMMENDS That the Federal Government increase investment for tourism marketing efforts of the Canadian Tourism Commission by increasing their current A-Base funding levels to a minimum of $100 million annually. THE LOCKED-IN ESTATE TRUST - A RESPONSE TO CANADA’S COMING PENSION CRISIS (2011) The Chamber recognize the severity of the pension reform problem in Canada and in 2010 at their AGM adopted a policy titled ―The Base Principals of Pension Reform‖. There looms a pension crisis for Canadians in the near future. The federal government will be unable to fund the pension requirements of the baby boomer retirees let alone the requirements of subsequent generations of retirees. A Locked-in Estate Trust (LIET) is one of the many required solutions that would allow for individuals to privately fund LEIT‘s with the money being held in trust for the future benefit of the named beneficiaries of the LEIT Federal and provincial finance ministers are seeking solutions to protect older Canadians from income shortfalls during their retirement years, but there are few solutions on the horizon. At the same time, many older Canadians, through hard work and extraordinary windfalls in the housing market, find they have accumulated a great deal of wealth, but ironically, have little cash flow to supplement their own retirement. It is estimated that as much as $1 trillion will pass to the next generation of Canadians through estate transfers. Acutely aware of the value of their estates, many older Canadians have concerns about the wisdom of passing on such large lump sum estates to children and grandchildren. Creating a new financial instrument could provide seniors with income now from their valuable estates and at the same time allow them to utilize family wealth to ensure that their children and grandchildren are able to receive private pension income when they retire. This could be fashioned similar to the Charitable Remainder Trust which is widely used and promoted in the United States. A LIET would provide a creative solution to our specific demographic quandary where the size of the retired population will soon far outweigh the working population. It also has the potential to remove some of the well documented and anxiously anticipated strain on the government‘s ability to provide Old Age Security and Guaranteed Income Supplement funding to Canadian seniors as the baby boomer bulge exits the workforce. Furthermore, a LIET would provide an investment vehicle that could ensure financial independence for subsequent generations of Canadians. In recognition of the importance of responsible federal fiscal policy, the federal tax revenue will actually be enhanced by this account on a deferral basis. Typically, contributions to the LIET will result in a deferral of capital gains tax of which only 50% of the gain is taxed, whereas the subsequent withdrawal can and will be taxed as 100% regular income at the current marginal tax rate resulting in incrementally larger revenue tax stream. Furthermore, this account could be used for the generational transition of small business interests similar to a ―Family Trust‖ with this inclusion of limiting access to the revenue and pension income by the beneficiary until the beneficiary is at age 55. The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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Large pools of wealth in private portfolios transferred to a LIET would have the potential to significantly reduce the drain on government pension resources. It could also represent significant tax savings to individuals who make a decision to move wealth into a LIET. The LIET would work similar to already available trust vehicles (Charitable Remainder Trust) but with tax advantages to the donor or the settler, such as a non-refundable tax credit based on the amount transferred into the LIET. Funds inside the LIET would be allowed to accumulate tax free and be professionally managed and guided by a conservative investment strategy. The donor would be permitted to access a percentage of the income generated by the LIET while they remain alive. Named beneficiaries of the LIET would only be allowed to withdraw a legislated percentage of the capital and income of the LIET after age 55, similar to Locked in Retirement Accounts. This would ensure the long term viability of the LIET for future generations. Because of the tax advantages, the decision to create a LIET would be made by the donor before death and would be an irrevocable decision or the LIET could be created as a Testamentary Estate Trust (After Death). It is anticipated that the tax foregone (by the granting of a tax credit to the donor and by a deferral of a valuation of the donor‘s estate) is far outweighed by the reduction of costs related to pension benefits over the long term and the reduction in the benefits payable under Old Age Security and other government programs such as income tested health care and Guaranteed Income Supplement. THE CHAMBER RECOMMENDS That the Federal Government work with the Provincial Government to: 1. introduce an amendment to the Income Tax Act creating the ―Locked In Estate Trust‖ as a step toward solving the Pension Reform problem in Canada and allowing a mechanism for business and Canadians to offer a more stable financial future for generations to come; and 2. amend relevant provincial legislation and regulation to allow for the implementation of a LIET ELIMINATION OF CANADA’S CAPITAL GAINS TAX (2010) Canada‘s Capital Gains Tax represents less than one percent of the country‘s total tax revenue and has been described by leading economists as being of marginal worth.16 To the businesses that pay the tax, the levy represents a huge burden that has a stultifying affect on their capacity to innovate and expand. Our partners in NAFTA, and indeed our competitors around the world, have substantially lower capital gains taxes. Countries such as Germany, Turkey, Mexico, New Zealand, Belgium and others, have a zero

16 Niels

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capital gains tax.17 By comparison, Canadian business shoulders an unfair tax that frustrates its ability to unlock the capital needed to update manufacturing plants, invest in new technology and keep pace in a competitive global environment. According to the National Angel Corporation of Toronto in their report dated October 12, 2004, $1 invested in an SME at early stages creates $10 of economic activity, and a further $5 of later stage investment. Thus, a $1 investment can lead to $50 of economic activity. According to the autumn 2000 Stats Canada Perspectives study for the year 1997, the latest date such comparisons were reported, taxes were 36.8% of GDP. This would mean that $50 of economic activity would generate $18.40 of tax. Details of the Problem In 2005/2006, the Federal and Provincial Governments collected approximately $443.1 billion in tax revenue. The bulk of the revenue came from personal income tax (37.2%), corporate income tax (11.1%) and sales income tax (24.2%). Additional sources of revenue accounted for 26.7 % of the country‘s total tax revenue. The Capital Gains Tax represented just .08% of that amount, or approximately $3.5 billion of the country‘s total tax revenue. Numerous economists, including Alan Greenspan, the former chairman of the Federal Reserve in the US,18 as well as several leading Canadian economic thinkers have derided capital gains as detrimental to entrepreneurs, business and the communities that depend on businesses to create jobs. Taxpayers who benefit from these tax reductions will usually do 1 of 2 things. They will spend the savings or invest them. Using a normal multiplier of between 2 and 3, and the OECD percentage of tax generated per dollar of economic activity of 36%, the revenue to government should be about the same. However, if the funds are invested, studies indicate that a dollar of new investment generates $50 dollars of economic activity, which using the same OECD statistics would generate about $18 of tax revenue. A study completed by Grant Thornton concerning the BC Investment program found that a dollar of tax credit from the system generated $1.30 of payroll, income and sales tax revenue. This excludes federal taxes. Grant Thornton found the payback period to be 2.8 years. A dollar tax credit from this program is similar to a dollar of reduced tax from capital gains. In 2006, the Federal Government committed to relieving Canadian businesses of some of that tax burden. It was a prescient plan that might have served to offset some of the difficulties currently being experienced by small and medium sized business in the current tight lending market. The reductions however, were never achieved. Capital gains, or losses, occur when the value of the asset at the time of sale differs from its value at the time of purchase.19 In Canada, 50 percent of any capital gain, with exception of principle residences, is subject to the Capital Gains tax. Canada does not have a separate Capital Gains tax. Any increased in the value of an asset are considered income and the tax amount is calculated based the taxpayer‘s marginal rate of income. The provincial capital gains tax varies between provinces, however the western provinces have the lowest 17 Newt Gingrich and Emily Renwick. Journal of the American Enterprise Institute. August 13 2009. 18 Remarks by Chairman Alan Greenspan on Current Monetary Policy. Haskins Partners Dinner at the Stern School of Business. New York University. May, 1997. 19 Canada Revenue Agency (2010). Calculating and Reporting your Capital Gains and Losses. www.cra.gc.ca .

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combined capital gains tax while Quebec, Nova Scotia and Newfoundland and Labrador have the highest rates. Generally speaking, as a nation Canada has a high capital gains tax when compared to other countries in the OECD. Canada in fact ranks as having the 9th highest capital gains tax rate. The Capital Gains Tax was first introduced by the Liberal government in 1971, and there is wide spread agreement among economists that is represents an ‗all pain-no gain‘ tax. For example, it discourages business from reallocating capital. Business owners are more likely to hang on to outdated investments even if better opportunities arise. Economists call this the locked-in effect. Since business still must find ways to raise money, and can‘t access the gains they have made without being taxed, they are forced to find other ways to raise cash. This means businesses must incur borrowing costs in order to make new investments in their businesses, further stressing their capital. The Capital Gains Tax also has a negative impact on entrepreneurship. For example, start up businesses searching for high quality talent may offer shares in the business or a partnership agreement. However, when they wish to withdraw that investment they are taxed. There is a mound of academic research that indicates capital gains taxes run counter to entrepreneurship and to the creative, risking-taking and innovative environment that strengthens both economies and communities. It is argued that by eliminating the capital gains tax, the resulting economic impact of reallocation of capital will more than offset the .08% reduction in tax revenue.20 THE CHAMBER RECOMMENDS That the Federal Government eliminate the capital gains tax. RESTRUCTURING THE FCTIP FOR INCREASED TOURISM COMPETITIVENESS (2010) Tourism is a $74.9 billion industry in Canada. More than 1.8 million people in Canada were employed in tourism jobs in 2008. Keeping the industry healthy and competitive requires that governments address a number of concerns that pressure its viability. One such concern is the way in which Canada exercises it value added tax (VAT) rebate program. Value added tax rebates are common internationally in the tourism industry. These programs allow for out of country visitors to be rebated the value added taxes for purchases during their visits to the country. VAT rebates are used as a competitive factor in the marketing efforts of tourism organizations. VAT rebates are common because international tourism is seen as an export industry, the same as manufacturing. Export industries are rarely able to pass on consumption taxes to overseas consumers since those consumers will simply divert their consumption to another source. Spending on international tourism is highly subject to this sort of consumer elasticity, which in Canada is 2.7-2.8%. An effective VAT rebate system in Canada is needed to remain competitive. Up to 2007, Canada‘s VAT rebate program was called the Visitor Rebate Program, which applied to both individual travelers as well as tour and convention travelers. That program was cancelled in 2007 and the 20 Niels Velduis, Keith Godin, Jason Clemens. The Economic Costs of Capital Gains Taxes. Fraser Institute. Studies in Entrepreneurship Markets. Number 4/ February 2007 The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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Government of Canada introduced a new program called the Foreign Convention and Tour Incentive Program (FCTIP). The primary reason for the cancellation of the former program was due to administrative cost inefficiencies and concerns from Government about accountability. The new FCTIP has different rules for rebate application and applies only to tour organizers and conventions. A limited number or type of group tours are eligible for only a 50% GST/HST rebate. It does not apply to individual travelers. It is meant to keep tourist packages competitive with other countries and encourage foreign tour operators to sell Canada as a tourism destination. It is also meant to be delivered in a more cost effective manner, while at the same time increasing the accountability of government tax rebate expenditures. However, the changes in process have resulted in a program that is too cumbersome to benefit the industry. Despite best intentions, the FCTIP is not meeting its objectives due to program complexities, and the administrative burden it places on international tour operators. The Tourism Industry Association of Canada (TIAC) has found through a commissioned survey of US tour operating companies that ―those who regard the rebate process as burdensome outnumber those who do not by a ratio of more than 7:1.‖ Further one in four operators claim that they will simply absorb the GST and adjust their price of Canadian tours upwards to recoup the GST costs rather than be bothered with the rebate process. This makes Canadian tour options less competitive. The tendency to price in a further 5% on the tour cost to avoid the rebate process is significantly concerning, and especially so as the introduction of a Harmonized Sales Tax (HST) will be introduced to two of the country‘s major tourism destination provinces in the summer of 2010. There is concern that a move from 5% tax to 12% and 13% in British Columbia and Ontario, respectively, will have an immediate negative effect on a system that is already not being embraced by users. The concern of industry is that, upon introduction of the HST, tour packages to British Columbia and Ontario will essentially increase as operators ―cost in‖ the additional tax, making BC and Ontario even less competitive in the international tourism market. A second concern of the industry is that the new FCTIP program does not apply to individual visitors to Canada, rather only to convention and tour travelers and operators. The industry asserts that in disqualifying individual visitors from the Canadian VAT rebate program, Canada is placing itself at a considerable disadvantage to other attractive locations across Europe and South America that offer tax rebate programs to their independent travelling visitors. Independent travelers are a growing segment of the travel market. The substantial increase in the price of tourism goods and services to this market with the introduction of the HST will reduce independent travel to Canada, and negatively impact the sale of retail goods such as accommodation, meals, attractions, and recreational activities. A study done by CRA International in 2007 on the estimated impacts of the cancellation of the GST rebate to individual visitors projected the following: an estimated decline in tourism spending of $213 million per year; a decline in GDP of $114 million per year; and the loss of 1,900 jobs. Using similar elasticity estimates, one could assume a similar loss in revenues and jobs with the increase in cost to tourism products and services by 7% and 8% in BC and Ontario, respectively.

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The Chamber acknowledges the importance of the tourism industry to Canada‘s economy. Adjusting Canada‘s GST/HST rebate system for foreign travelers is imperative to attracting a higher share of the global tourism market and placing international inbound tourism on equal footing with other Canadian export markets. THE CHAMBER RECOMMENDS That the Federal Government: 1. eliminate the excessive administrative burden on international tour operators that hampers the uptake of the FCTIP program; 2. ensure that the full HST be eligible for rebate in BC and Ontario under the FCTIP as the GST currently is; and, 3. develop an individual traveler GST/HST rebate program that is industry-run but subject to certification and regular audit by the appropriate federal agencies, for use by individual non-resident visitors on eligible short-term accommodation and goods purchased for personal use. ABOLITION OF THE CUMULATIVE NET INVESTMENT LOSS (2009) The reasoning behind the Cumulative Net Investment Loss (CNIL) provisions, particularly where they apply to loans advanced to Canadian Controlled Private Corporations (CCPC) and small and medium enterprises (SME‘s), does not reflect the new realities and the needs of CCPC‘s and SME‘s for financing. Publications have indicated that the purpose of this provision was to insure that individuals cannot incur deductible expenses (e.g. interest) in connection with the purchase of low income producing assets, and then utilize their capital gains exemption when the assets are sold at a gain. Since it applies mainly to the sale of shares of a CCPC, farms and fisheries, it has a detrimental effect on the small business sector which is the largest employer in Canada. The CNIL concepts are no longer aligned with the goals of the government and for this reason, the provisions should be removed. It is also an opportunity to reduce the complexity of the Tax Act. Canada as a whole, and particularly small businesses, are in desperate need of investment capital. This has been a larger issue in the past 6 months, with the chartered banks being reluctant to lend. This fact has been recognized by the Ministry of Finance and the Bank of Canada. Anyone investing in the CCPC by way of a loan is often advancing the funds because the company cannot obtain the financing through traditional channels. The provision of these funds should not have a negative effect on the person providing the funds. We believe that this was not an intended effect of the original legislation. SME‘s employed 64% of the private sector in 2007. They have a faster rate of job creation than mature firms. The survival rate of these companies is quite low, with about 145,000 entries per year and about 132,000 exits. These businesses usually are under financed and need assistance from informal sources such as personal savings, personal credit cards, personal lines of credit, loans from family and friends, loans from employees, and loans from other parties. These loans are often advanced interest free, while the lender has actually borrowed the funds and is paying the interest. This creates a Cumulative Net Investment Loss. The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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THE CHAMBER RECOMMENDS That the Federal Government repeals the sections referring to Cumulative Net Investment Loss in the Income Tax Act. ESTABLISHING ALLOWABLE CAPITAL LOSS ON IN-KIND PENSION CONTRIBUTIONS (2009) Within the Income Tax Act, there exists an inequity between claiming capital gains and losses when making in-kind contributions to Registered Retirement Savings Plans (RRSP). A commonly used RRSP tax strategy is to contribute investments in-kind, the pure investment form like stocks and bonds vs. Cash, to one‘s RRSP. The main reasons for the ‗in-kind contribution‘ would be to possibly conserve cash outside the RRSP or because there is a shortage of cash. The purpose of the inkind contribution is to prevent having to sell a good investment to make an RRSP contribution. Selling would create unnecessary brokerage fees to sell, contribute the cash and repurchase when in the RRSP. It should be noted that selling also triggers a capital gain or a capital loss for tax purposes. While allowing an investment to be moved into an RRSP without having to sell and incur fees, the Government still requires that any capital gains on that investment must be recognized at the time of the contribution, also known as deemed disposition. However, if the investment was in a capital loss situation, if the cost is greater than the current market value, Section 40 (2)(G)(iv) of the Income Tax Act states that the ―losses are deemed nil‖. Otherwise stated, you do not get to claim the capital loss. Recognizing that the Government is moving toward a fairer and more usable taxation system, this is inconsistent. There should be a balance on the tax liability if the Act is trying to prevent unusual superficial loss. It is easy enough for the investor to simply sell the investment, crystallizing the loss to offset any capital gains. It would, for consistency, practicality and investor efficiency, make sense to simply allow the loss as a result of an in-kind transfer or contribution. THE CHAMBER RECOMMENDS That the Federal Government remove Section 40 (2)(G)(iv) from the Income Tax Act in order to allow recognition of capital losses as a result of an in-kind contribution to an RRSP. INCREASING RENTAL INVENTORY THROUGH FAIR TAX TREATMENT (2009) A healthy rental market is important to business operations as the rental inventory provides housing for employees at all levels of the employment spectrum, and most importantly, for entry level employees. Employers are increasingly finding the issue of rental availability to be a hurdle to the task of recruitment and retention. In some areas, the extremely low vacancy rates may affect the ability of business to grow. For example Saskatchewan and BC, currently two western provinces with strong economic performance, have average vacancy rates of 1.2% and 1% respectively, with rates lower than that in most of their major cities. Tax changes introduced over the last twenty-five years have disadvantaged the treatment of investment in real property, and rental housing in particular. The tax changes have created inequitable taxation on these The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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investments when compared to other forms of investment. The result has been decreased activity in the rental housing market, such as less property turnover and revitalization, and less purpose built rental property construction. This has been reflected in an erosion of the availability of rental units, which according to the Canada Mortgage and Housing Corporation, has fallen from an average Canadian vacancy rate of 4.5% in 1994 to 2.2% by the fall of 2008. In the 1990s, investments in real property were eliminated from the lifetime capital gain exemption. The rationale for the tax move was to direct investment dollars to more ―productive‖ investments. The capital gains tax formula on the sale of rental property is applied immediately upon the disposition of the asset, whereas capital gains on other assets, such as ―former property‖ or ―former business property‖ are eligible for tax deferral when a replacement property is purchased within a specific time frame. Rental property, curiously, is specifically excluded from the definition of ―business property‖. In addition to the capital gains tax, property owners must also pay tax at their full tax rate on the recaptured amount of capital cost allowance depreciated over the period of their ownership tenure. Together these two tax measures result in a significant lock-in effect, where owners of real property hold on to the assets rather than re-invest in more productive properties. The tax measures also act as a disincentive to maintain or revitalize the overall quality of both commercial and residential assets as doing so would result in higher capital gains tax payment upon eventual disposition. Since it was introduced in 1991, the Goods and Service Tax (GST) has discriminated against rental housing by providing a rebate for ownership housing but none for rental units. In addition, because residential rents are classified as exempt rather than zero-rated, landlords are unable to recover tax paid on the purchase, repair or improvement of residential buildings (zero rated would mean that because landlords cannot charge GST on rent they would be able to claim GST on their input tax credits). The Canadian Real Estate Association, through the services of Dr. Thomas Wilson, a leading authority on taxation and the University of Toronto‘s Institute for Policy Analysis, has determined that the cost to government to introduce a deferral on capital gains for real property is minimal. The approximate cost in the first year is estimated to be $415 million to the Federal Government and $208 million in total to Provincial and Territorial governments. They assert that the cost would actually decrease in subsequent years as the deferrals of gains would come into play, and that increased business activity from newly freed capital would more than compensate through increased tax revenue. All taxes induce people to behave in certain ways. It is clear that the changes in tax policy of the last 25 years applying to investment in real property, and specifically rental property, have resulted in a lock-in effect, less actively in the rental housing industry, and an overall decrease in rental accommodation availability. Yet as noted at the outset, a healthy rental market is important to business operations since rental inventory provides housing for all levels of the employment spectrum. THE CHAMBER RECOMMENDS That the Federal Government: 1. enact deferral of capital gains tax on the sale of real property, including rental property, when the proceeds of sales are reinvested within a twelve month period into other real property investments; 2. defer the recapturing of the value of depreciated capital cost allowances on real property; The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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3. allow a 100% refund of GST paid by businesses investing in rental housing; and 4. zero rate rental housing operations to allow landlords to claim ITC‘s on the expenses CANADA BORDER SERVICES AGENCY | CUSTOMS & IMMIGRATION PROGRAMS (2008) As a result of the implementation of the Treasury Board External Charging Policy, the Canadian Border Services Agency (CBSA) was required to ―freeze‖ border services at the level provided when the policy was introduced. Any requests subsequent to that policy were to be treated on a direct cost recovery basis, or not provided at all. While these costs have been applied to all new facilities, such as the Port of Prince Rupert, these will also impact plans for expansion of existing facilities such as the Belleville Terminal. The Chamber believes that the most significant challenge of this policy is the impact on new, or expanded, air services across the country. Smaller airports are being unfairly penalized by this policy since service levels are not adjusted to reflect current demand. Where airports are obliged to contract with CBSA for additional scheduled service, they either lose a large portion of the benefit from the new trans-border and international traffic, or must increase aeronautical fees to cover the cost. Carriers and passengers both suffer from this inequitable treatment as the costs are passed on to users and the ability to attract new service for the community suffers. The economic benefits resulting from increased international air traffic can far outweigh the cost of providing Customs services. Direct tax benefits to the Federal Government alone should justify the additional cost. Where it can be demonstrated through pre-determined criteria that the benefits of this service extend beyond a single user or supplier, the system should adjust to accommodate the need without additional cost to the airport operator. Existing services should be reviewed and more appropriately allocated to meet demand. As an example, Kamloops has an international service operated by Horizon Air to Seattle. This service is provided on a daily basis during the four-month winter ski season. Horizon Air uses a Q-400 (Dash 8400) 70 seat aircraft for the service. A 70% average load factor for the flight translates to 49 inbound seats. At a charge of $14 each, that comes to $686 for Customs Clearance as a direct charge to the air carrier. This goes directly to the carrier‘s bottom line rather than as a surcharge for each passenger, and adds costs to the operation that are solely attributable to the Kamloops operation. In Kelowna, customs clearance service is provided at no cost to Horizon Air. In order to offset the customs charge in Kamloops, Horizon Air needs to give away up to four seats per flight to compensate. While Customs Clearance in Kamloops costs $686 in the example, the average daily spending of $225 totals $11, 025, times an average length of stay of four days comes to a directly local economic benefit of $44,100. That results in tax to the Federal Government of $2,206 (@ 5% GST).

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THE CHAMBER RECOMMENDS That the Federal Government move immediately to remove the inequitable cost recovery mechanism for new or expanded Customs and Immigration services where a legitimate business case exists and provide these services on the same basis as they are provided in other areas of the country and at the same cost to Canadians.

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A POLICY FOR MAINTAINING A VIBRANT - SPORT FISHING INDUSTRY IN BRITISH COLUMBIA (2009) The Chamber is concerned about the management of fishery resources throughout the province, with special regard to the management of species and stocks of concern to sport fishing and its associated tourism industry. In regions like the Skeena, where sport fishing for steelhead and salmon are a multi-million dollar contributor to the provincial economy,1 poor fishery management practices have contributed to the decline of many salmon stocks. Moreover, valuable sport species such as steelhead continue to be negatively impacted. The steelhead sport fishery is a major economic contributor to many provincial regions, and the Province can further increase its value by protecting the Skeena steelhead run. The Skeena sport fishery is world renowned, with 70 percent of fishing lodge and guides‘ customers returning annually. Statement of Issue/Problem There are a variety of problems province-wide for salmon and steelhead. A significant issue for Skeena steelhead is the continuing negative impact of the mixed stock fishery at the mouth of the Skeena River, where steelhead are caught incidentally by fisheries targeting sockeye and pink salmon. On average it sees from 1/3 to ½ of the returning steelhead in any given year killed unnecessarily as ―by-catch‖. This by-catch not only negatively impacts the individual stocks of steelhead but also the associated sport fishery that has grown to depend on a consistent supply of those fish. Of special importance are early returning steelhead as they arrive the earliest and stay the longest, thus providing a major percentage of the fish ―product‖ available to the sport fishing industry. A leadership opportunity exists in this situation for the Chamber to advocate that the Province strongly support a truly sustainable sport fishing tourism industry. The Chamber would also urge the Provincial Government to not only protect these valuable resources, but to enact measures that would maximize the benefits derived from sport fish like the steelhead. There are management options available to the Department of Fisheries and Oceans that would drastically improve the fishery situation in the Skeena region. In a paper titled Recreating Sustainable Sockeye Fisheries in the Skeena Watershed, Greg Taylor of the group ―Skeena Wild‖ proposes shifting the majority of the sockeye catch from the marine environment to upriver sites. In upriver locations more selective fish capture methods are available for use. These selective fishing techniques allow fishers to 1 Aggregate expenditures in BC attributable to Skeena salmon and steelhead fishing is $52.8 million. Source: Economic Dimensions of Skeena Watershed Salmonid Fisheries. Total direct economic impacts attributable to sport fishing for salmon and steelhead in the Skeena region is $30.5 million. Source: Economic Dimensions of Skeena Watershed Salmonid Fisheries. Freshwater Fishing generated $400 million in annual expenditures in the year 200. Source: Freshwater Angling in BC – An Economic Profile. G. Gislason & Associates. Sport Fishing gross domestic product of $288 million with sector revenue of $865 million in 2005. ($398 from freshwater, $467 from saltwater) Source: BC Government. Sport Fishing industry in BC: 7,700 directly employed in 2005 In 2008 Selective fishers caught 29% of the total harvest of sockeye while employing 45% of the total number of people involved in catching Skeena Sockeye.

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focus on the enhanced Babine sockeye and release non-target stocks and species with higher survival rates. This move to selective fishing would benefit Skeena summer run steelhead and local businesses dependant on those fish. And lastly, on a cautionary note, we see fisheries and fish stocks rapidly declining in the southern to midportions of the province. If we want to retain fish stocks and the tourism values associated with them, we need to act sooner rather than later. The status quo is only leading to an inevitable decline of wild salmon and steelhead stocks. THE CHAMBER RECOMMENDS That the Federal and Provincial Governments: 1. acknowledge the importance of the sport fishing tourism industry in fisheries management throughout BC; and 2. support a Province-wide Steelhead Recovery Plan.

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REALLOCATING FEDERAL FUNDING TO DEVELOP A NATIONAL PLAN TO END HOMELESSNESS (2011) Homelessness is bad for business and the federal government does not have a national plan to end homelessness in Canada. Homelessness has a direct financial impact on businesses as it deters customers, damages employee recruitment and retention, harms tourism and discourages companies from setting up offices in areas with a visible homeless population. For many municipalities and business communities in Canada, homelessness is a real problem that requires expenditures on security upgrades to maintain the safety of staff and property. Businesses cannot realize their full potential while homelessness exists in their areas, due to reduced revenues through lost sales. Since the federal government needs to contain spending on programs, and because it would not be socially and economically prudent to cut funding for homelessness initiatives, a viable course of action would be to reallocate funds from the federal budget to develop a national plan to end homelessness. While solutions to homelessness exist and efforts are being made by communities to implement solutions across the country, the government has been unable to reduce the total number of homeless in Canada. In fact, over the past two decades, the federal government has spent considerable tax dollars to address the national crisis, but the problem continues to grow. Significant federal spending on homelessness has not yielded a positive return on investment. A national plan to end homelessness will clearly set the goals, objectives, metrics and outcomes for all homelessness initiatives and will provide the proper mechanisms to more effectively address the issue. Without a clear strategy to direct national efforts to end homelessness, businesses will continue to be negatively impacted by the growing crisis. For these reasons, the federal government needs to develop a new approach which includes the reallocation of resources to develop a national plan that mandates the federal government to end homelessness within a reasonable timeframe. Canada is the only G8 country without a national housing strategy. It is estimated that homelessness costs Canadian taxpayers between $4.5 and $6 billion annually, inclusive of health care, criminal justice, social services and emergency shelter costs. 1 Between 1993 and 2004, homelessness cost Canadian taxpayers an estimated $49.5 billion, across all services and jurisdictions.2 It is estimated that the homeless population in Canada ranges between 150,000 and 300,000.3 Local surveys in communities like Calgary, Vancouver, Edmonton, Ottawa and Victoria all report that homelessness continues to be on the rise.4

1 Gordon Laird. â&#x20AC;&#x2022;SHELTER: Homelessness in a Growth Economy: Canada's 21st century paradox.â&#x20AC;&#x2013; Sheldon Chumir Foundation for Ethics in Leadership, Calgary, Alberta, 2007 p. 87. 2 Ibid. 3 Homelessness Partnering Strategy, http://www.hrsdc.gc.ca/eng/homelessness/index.shtml. Last accessed May 31, 2010.

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A 2008 count in Metro Vancouver indicated a 22 percent increase since 2005; a 2009 count in Toronto indicated an 8 percent increase since 2006; a 2008 count in Calgary indicated a 15 percent increase since 2006; a 2008 count in Halifax indicated a 370 percent increase since 2004; a 2007 count in Victoria indicated a 16 percent increase since 2005.5

Homelessness is a business deterrent that negatively affects commercial activity, harms tourism and deters investment. In fact, many businesses have incurred extra costs in response to increased homelessness activity in their area. The Downtown Vancouver Business Improvement Association (DVBIA) references aggressive panhandling, open drug use, trespassing, and sleeping on private property as business deterrents.6 More specifically, the DVBIA estimates that Vancouver hotels have lost convention contracts worth $500,000 due to increased homelessness and visible poverty. Vancouver Civic Theatres, the City of Vancouver and business associates have had to spend money to increase private security to guard against aggressive panhandling. 7 Hotel Vancouver has spent $60,000 to upgrade hotel security systems and increase outdoor lighting. Bathrooms available to the public have been closed after dark due to homeless people using them as a place to sleep or use drugs.8 A national plan to end homelessness will provide the necessary leadership to allow the federal government to measure the success of investments on homelessness programs. In 2009, the federal government invested a total of $3.57 billion in direct spending on homelessness and affordable housing initiatives, but Canada lacks a framework to assess the overall value and impact of these investments.9 Without a national homelessness plan, efforts to meet the needs of the 1 in 4 Canadian households at risk of becoming homeless remain fragmented and uncoordinated. Effective performance management and accountability begin by setting a clear direction and assigning accountability for results. Defining goals and objectives to address homelessness establishes a frame of reference where programs can be appropriately designed and integrated, and roles and responsibilities can be defined. These are typically set out in a comprehensive plan.10 The Conference Board of Canada insists that Canada must engage in more precise targeting and establish more achievable objectives in addressing homelessness. In 2009, the Board called for a reduction of the homelessness from approximately 150,000 to 100,000 by 2015.11

4 UN Human Rights Council, Report of the Special Rapporteur on Adequate Housing as a Component of the Right to an Adequate Standard of Living, and on the Right to Non-Discrimination in This Context, Miloon Kothari : addendum : mission to Canada (9 to 22 October 2007), 17 February 2009, A/HRC/10/7/Add.3, 5 Data gathered from the Metro Vancouver Homelessness Secretariat, 2010. Differences in methodology may vary between different cities and year the count took place; these are typically one-time counts performed in a 24-hour period and may not represent the true extent of homelessness nor does it track the â&#x20AC;&#x2DC;hidden homelessâ&#x20AC;&#x2122;. 6 Downtown Vancouver Business Improvement Association. 2009. 7 Ibid. 8 Vancouver Sun. â&#x20AC;&#x153;Beggars, drug dealers kill convention" August 18, 2006. 9 Wellesley Institute. Canada needs a national housing strategy that engages key partners from the community up. November 2009. p. 2-3. 10 Auditor General of British Columbia. Homelessness: Clear Focus Needed. March 2009. 11 Conference Board of Canada. Building From the Ground Up: Enhancing Affordable Housing in Canada. March 2010.

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Housing the homeless as a first priority is a cost-effective approach to reducing homelessness. Case study evidence shows that vulnerable and at-risk homeless families are more responsive to interventions and social services support after they are in their own housing, rather than while living in temporary/transitional facilities or housing programs. A national plan to end homelessness should adopt a housing-first approach as a best-practice model for reducing homelessness. On average, each homeless person in British Columbia costs the public system in excess of $55,000 per year, while the provision of adequate housing with supportive services is estimated to reduce this cost to $37,000 per year. This results in an overall cost avoidance of about $211 million per year in BC alone. 12 o The cost avoidance in health care and provincial corrections institution costs are more than sufficient to offset the capital costs and the costs of providing housing supports to those who are absolutely homeless.13 In the absence of a purposeful, planned response, chronically homeless individuals consume services in the emergency and institutional systems: police, ambulance, psychiatric hospitals and emergency wards. Costs of these emergency responses are four-to-ten times higher per day than the cost of providing transitional or supportive housing. 14 A cost analysis on the effectiveness of emergency, institutional, shelter, supportive and permanent housing services for the homeless in Vancouver, Toronto, Halifax and Montreal indicate a consistent pattern of cost-avoidance; that acute emergency, tertiary psychiatric care and incarceration involves significantly higher costs than various forms of transitional, supportive and permanent affordable housing.15 Federal leadership involves providing a clear vision about what government aims to accomplish with respect to Canadaâ&#x20AC;&#x2DC;s homelessness issue. Without a clear direction that outlines what government wants to achieve for the homeless, we can only expect limited progress. The sooner the federal government commits to ending homelessness in a reasonable time frame, the sooner Canadian businesses and citizens will benefit from the resulting increase in Canadaâ&#x20AC;&#x2DC;s economic productivity and quality of life. The development of a national plan to end homelessness is the necessary first step toward fulfilling this commitment.

12 Michelle Patterson and Julian Somers, Housing and Support for Adults with Severe Addictions and/or Mental Illness in British Columbia, Centre for Applied Research in Mental Health & Addiction, October 2007, p.11. 13 Ibid. 14 Federation of Canadian Municipalities. Sustaining the Momentum: Recommendations for a National Action Plan on Housing and Homelessness. Jan 2008, p. 12. 15 Steve Pomeroy, Regional Municipality of Waterloo. Pro-Active Versus Reactive Responses: The Business Case for a Housing Based Approach to Reduce Homelessness in the Region of Waterloo. 2007. p. 5.

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THE CHAMBER RECOMMENDS That the Federal Government 1.

reallocate funds from within the existing federal budget envelope to develop a national plan to end homelessness;

establish a reasonable target for the reduction of homelessness in Canada and set a reasonable timeframe to accomplish this goal;

maintain the housing-first approach of creating and sustaining affordable and supportive housing as a first priority, in the development of the national plan;

consult with other levels of government and community partners in the development of federal benchmarks for a national plan; and

support provincial, territorial, and lower-tier governments in their implementation of a nationally benchmarked plan.

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MORE SECURE PROPERTY RIGHTS ON RESERVE LANDS (2010) The First Nation Tax Commission (FNTC) is leading an initiative to create more secure property rights on reserve lands. The existing land tenure and registry system on reserves is a significant source of socioeconomic disadvantage because it contributes to high transaction costs related to investment, limits the potential property market, and in many cases prevents the securitization of land as a source of credit. Property rights are the bedrock of the market economy. Property rights are absent or poor on many reserves. The results are lower property values, less commercial development and higher incidences of poverty. Poor property rights contribute to high costs of doing business. One study recently quoted by the Auditor General of Canada suggests that it costs four to six times more to complete an investment project on reserve lands than off. The principle reason for these higher costs is that investors have to establish secure tradable property rights on reserve lands which they donâ&#x20AC;&#x2DC;t have to do off reserve lands. Proposed Solution The FNTC is proposing to resolve this problem by working on First Nation Property Ownership legislation (FNPOL). This legislation would create a similar property rights structure to the rest of Canada. The Chamber understands that land registration under the FNPOL would use a modified Torrens land title system. The Chamber understands that FNPOL would be optional for First Nations, that the legislation would ensure that the underlying title or reversionary right remains with the First Nation, and the First Nation would retain land management and property tax jurisdiction regardless of who reside there. The Chamber understands that this would effectively allow participating First Nations to issue fee simple title and provide guaranteed title through the Torrens system. The Chamber expects that the economic benefits from such an initiative would be large. As an example, an economic analysis conducted by Fiscal Realities Inc. for the FNTC estimates that if 68 First Nations, mostly rural, in BC converted their lands using this legislation, the benefits from increased property values, employment opportunities and increased revenue potential would be over $4 billion. THE CHAMBER RECOMMENDS That the Federal and Provincial governments work with the First Nations Tax Commission, and other interested parties, to develop legislation that would provide more secure and marketable property rights on reserve lands.

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SCRUTINY OF THE PAYMENT INDUSTRY â&#x20AC;&#x201C; BENEFITTING THE ECONOMY AS A WHOLE (2009) A number of recent and troubling developments related to credit card merchant fee rates and proposed changes to debit card services raised significant concern among retailers, consumers and the business community. The convenience of debit and credit cards is being overtaken by predatory practices and the emergence of an effective monopoly in the credit card market that is threatening to fundamentally alter the nature of the debit card market. What is at issue is something called interchange fees, which are the percentage of the total purchase price businesses pay so their customers can make a credit card purchase. These fees are among the highest in the world and can total more than two per cent per transaction. These charges have risen 4 times since October 2007 and totalled more than $4.5 billion in Canada in 2008. The introduction of premium-type cards, which offer lavish incentive programs and benefits, have driven costs even further. Last spring, Visa launched its new Infinite premium card, which was marketed as adding valuable benefits for cardholders. Eligible Visa cardholders were automatically sent the new card. At about the same time, MasterCard reclassified some of its cardholders into a premium-type category, this time without even issuing a new card to existing cardholders. Premium Credit Card Fees Major credit card companies and banks offer premium cards with more perks for users. The cost for these benefits to the users is born by the merchants who are charged higher fees to process premium cards. These fees are not disclosed to the merchant and the merchant does not have the option of refusing to process the higher fee cards. Currently, as a result of this campaign, the Senate banking committee is conducting hearings on the credit card industry, a House of Commons committee is launching a sweeping probe of credit and debit card industries, and the Competition Tribunal is investigating whether credit card networks are violating the law by charging high fees to businesses for transactions. In addition to interchange fees, last Wednesday's Senate hearings zeroed in on the high rates of interest being charged by credit card companies. This issue prompted Ringuette to observe that, "when the bank interest rate in the '80s was in the vicinity of 16 per cent, the credit card interest rate was at 21 and 22. Now the bank rate is at 0.5 percent, and they are 19.9 per cent. There is no rhyme or reason, except greed." Interac Debit card services are currently supplied to Canadians by a not-for-profit company called Interac. Interac operates on the basis of a Consent Order issued by the Competition Bureau, which allows its charges for service â&#x20AC;&#x2022;transaction feesâ&#x20AC;&#x2013; to be at a flat rate calculated to recover all operating costs only. The level of controversy has moved beyond the credit card industry with a proposed restructure of Interac from its current not-for-profit structure to a for-profit operation which would most likely result in a new fee structure leading to higher fees for retailers, in the form of transaction fees on a percentage basis. The end result would permit Interac to bring in billions of additional dollars, all of which would be borne by the consumers making purchases with debit cards. In 2007, Canadians made 3.451 billion purchases with debit cards, and between 60 to 70% of all groceries in Canada are purchased with debit cards. The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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Smaller merchants and retail chains apart from their consumers will suffer the most in a system that exploits their lack of negotiating power, relative to the larger chains and box stores, in establishing transaction fees for their businesses. The Chamber recognises that there is significant competition in the market that would normally drive both innovation and drive down prices. However, this does not seem to be the case in the payment card industry in Canada. If there is one lesson to be learned from the recent banking meltdown in the U.S., a lack of an appropriate regulation in financial services is not a healthy environment for consumers or business. There are times when government oversight and regulation is needed to protect the wider economy, and it is the Chambers view that this is clearly such a time. THE CHAMBER RECOMMENDS That the Federal Government ensure fairness in the payment card industry by: 1. stopping further fee hikes for premium credit cards until the fairness and value can be reviewed; 2. ensuring Canadians know the distribution of fees, the nature of changes and the justification for fee hikes prior to any changes; 3. ensuring that new cards must be requested by consumers, not automatically sent to them without any request; 4. delay any proposal to charge fees as a percentage of the sale through credit card companies until the full impact on the Canadian market can be assessed; 5. working through the offices of the Competition Bureau to reject the application for change to the Consent Order as it pertains to Interac and their current systems of transaction charges; and 6. amending the Credit Business Practices Regulations to prohibit extraordinary charges, born by merchants, to process premium cards.

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FEDERAL LEGISLATION FOR THE CURRENT GAS TAX FUND PROGRAM (2011) Economic Issue Statement In the absence of a legislative framework, infrastructure investment in Canada has waned since the 1940s, resulting in lower levels of productivity and reduced economic performance. Often taking a back seat to entitlement and program spending, the country‘s infrastructure is now a major concern for multi-national corporations and detraction to foreign direct investment. Legislation reinforcing the commitment to infrastructure investment is urgently needed to provide for a predictable and positive business climate. An environment where businesses and communities can confidently make long-term investment decisions that will propel our country into a new era of prosperity. Background Following the Second World War Canada was among the strongest nations in the world in terms of public infrastructure investment, enabling an environment where Canadian and multinational corporations leveraged additional capital investments and significantly improved the country‘s economic growth and productivity of the Canadian economy for the decades to come. By the late 1960s and into the 1970s, public infrastructure investment had started to slow, as different orders of government deferred maintenance on the country‘s infrastructure system and focused on program spending at the cost of new capital investment . During the 1980s and 1990s, provincial and federal budget deficits continued to exact a toll on infrastructure investment as the governments of the day sought to balance budget deficits, which had grown to record proportions when measured against the GDP of the country. During this time the municipal infrastructure gap as a percentage of national GDP grew from 2.7% in 1984 to 5.0% in early 2000s . Starting in 2005, the federal government recognized this challenge, announcing the New Deal for Canadian Cities, pledging to commit funds raised through the national gas tax to infrastructure investment. This pledge was reaffirmed in 2008, when the federal government committed to extending the program and providing $2 billion annually for investment that supports sustainable municipal infrastructure. This was an important and welcome decision. Unfortunately, the municipal infrastructure gap is growing by approximately $2 billion per year2. This funding stabilizes the gap, but does not address the accumulated infrastructure deficit, which stands at roughly $123 billion, and the additional $115 billion in projected demand . he issue has come to a critical point as much of the country‘s infrastructure, the backbone of our economy, has eclipsed over 80% of its life expectancy . In short, the communities in which our businesses operate can no longer afford any deferral of the issue or any policy reversals if we are to remain competitive in the global market place. More than 80% of foreign multinational executives surveyed indicated that the poor state of business infrastructure has adversely affected Canada as a destination for foreign direct investment. One of the key concerns is the state of the country‘s physical infrastructure when compared to other G7 countries. While the federal government‘s pledge of $2 billion is a step in the right direction, more needs to be done. Progress made in restoring infrastructure investment through the Gas Tax Program is encouraging but efforts must be made to protect the value of the $2 billion allocated from the effects of inflation. As competition for infrastructure continues to increase in jurisdictions such as China and India, so do the prices of construction materials in Canada. In the United States, the Construction Cost Index , a gauge of infrastructure expense, grew by 3.5% in 2010 and is projected to grow by an annual rate of 3.3% in 2011, or two and a half times the rate of consumer inflation. As part of the legislative framework, it is The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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imperative that the appropriate Canadian cost index be identified, with particular consideration paid to those supported by the national Public Sector Accounting Board. Without a provision to index infrastructure investments through legislation, the current rate of investment will likely fall by half in real terms within 15 years, effectively returning to levels of that prior to 2005. In addition, legislation is an imperative to ensure that year over year program/entitlement expenditures no longer compete with and displace critical infrastructure investment, which is required to help set the stage for a new era of prosperity and productivity. Legislation will provide a more predictable investment climate, the absence of which would incent further deferral of these investments, ultimately adding cost and increasing the burden on taxpayers , in particular, the business community. This legislative framework can further act as a tool to help ensure that the tenants of good tax policy are followed, namely; efficiency, equity, accountability, and ease of administration. Current provincial agreements vary greatly in their implementation and the framework for accountability in each jurisdiction also varies. THE CHAMBER RECOMMENDS That the federal government: 1. Establish

federal

legislation

secure

the

current

federal

gas

tax

program;

2. Index the annual investment in the program to the appropriate infrastructure cost index; and, 3. Require consistency in the legislative framework that strengthens the programâ&#x20AC;&#x2DC;s efficiency, equity, accountability, and ease of administration

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REMOVING INTER-PROVINCIAL TRADE BARRIERS FOR CANADIAN WINE DELIVERY (2011) Issue As international competition increases for Canadians, the issue of inter-provincial regulations, which prohibit many national businesses and industries from increasing their domestic market share, becomes a pertinent one. Macro discussions relating to inter-provincial trade have been held in recent years by provincial and territorial governments: These discussions have explored areas of common interest for national businesses and industries and looked at where the removal of barriers has the potential to provide and strengthen competitive advantages. This approach is a good first step in fostering a more competitive national marketplace, however the more immediate action of directing energies towards targeted regulations would provide a powerful means of demonstrating the positive impacts that removing trade barriers can have on industry and economies. A prime example of where this immediate action would prove useful is the Canadian wine industry. As it stands, Canada‘s domestic wine industry produces world-class, 100% made-in-Canada wines, yet because of current regulations that prohibit the direct delivery of wines to consumers across provincial boundaries, wineries are faced with an unfortunate handicap. By removing these prohibitive wine-related regulations, a perfect case study into the benefits of further reducing inter-provincial barriers as a means to strengthen domestic industries would be born. Background In Canada the direct delivery of alcohol across provincial borders in illegal, whether to an individual or to a business which is not affiliated with or representing that province‘s liquor board or approved seller: The regulation has been in effect since 1928, when the Importation of Intoxicating Liquors Act began preventing the direct sale of liquor across provincial boundaries. Currently there are wineries that ignore the rule, or even attempt to outsmart it by using Canada Post transport their products, yet others will not direct deliver beyond their provincial borders in accordance with the regulations in place. Additionally, the current regulations actually prohibit an individual from taking even one bottle of wine across a provincial boundary. The current regulations were designed long before internet sales became a viable option for wine distribution. As the Canadian wine industry expands, it is crucial that every domestic opportunity to market its products is explored. Direct inter-provincial sales, for personal use, would afford small to midsized wineries an important and competitive way to sell their wines, and in turn would create more national choices for Canadian wine drinkers. Furthermore, it would allow Canadians who visit Canada‘s wine regions the opportunity to be able to enjoy wines from those regions in their homes – a mutual benefit for both domestic wine sales and domestic tourism. The growth of both the B.C. and Ontario wine industries is extremely beneficial to Canada. Aside from creating jobs, preserving valuable agricultural land, and creating vibrant tourism destinations, the wine industry also adds value to the economy in many other ways: A 2002 study conducted by the KPMG and commissioned by the Wine Council of Ontario, found that the sale of one litre of Ontario wine added $4.29 in value to the Ontario economy compared to $0.56 in added value from the sale of an imported wine. Until recently similar prohibitive regulations hindered the domestic wine industry in the United States from delivering directly to consumers over state borders. In 2005, the U.S. Supreme Court ordered The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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regulations to be adjusted to allow for domestic wines to be direct delivered across state jurisdictions, deeming the current regulations of the day to be unconstitutional. Consequently, in 2006-2007 U.S. wineries reported a 31 percent increase in direct sales to consumers: By affording consumers more domestic choice, in all markets, the entire domestic industry has benefited. It is safe to say that any changes to Canadaâ&#x20AC;&#x2DC;s inter-provincial trade regulations could have the same positive impact as has been demonstrated in the U.S. By removing federal and inter-provincial barriers to domestic wine delivery, for personal consumption, an important agricultural commodity will gain access to a larger domestic market that will in turn improve the financial stability of the industry and thus have an overall positive impact on the economy. THE CHAMBER RECOMMENDS That the Federal Government: 1. demonstrate commitment to reducing inter-provincial trade barriers by working with all provinces and territories to remove prohibitive regulations related to the direct sale and deliver of 100 percent Canadian made wines for personal consumption. 2. immediately amend the Importation of Intoxicating Liquors Act to make it legal for 100 percent Canadian made wines to be transported across provincial borders by consumers, and remove barriers for the direct sale and delivery of 100 percent Canadian made wines across provincial borders to consumers for their personal use. ACKNOWLEDGMENT OF THE BASE PRINCIPLES OF PENSION REFORM (2010) While some Canadians are prepared and will be sufficiently funded for retirement, either through private or public service pension plans or through their own prudent planning, it is generally acknowledged that many are not. Within the next decade, Canada will see millions of baby boomers enter retirement, many without sufficient savings to sustain a reasonable standard of living. Although the impact of this shortfall is unclear, the risks to our economy and the stability of government funded old age benefits are so significant that immediate action is warranted. The Chamber agrees that the fundamentals of the retirement income system are strong. However, there are significant challenges that unless addressed, will impact the ability of many retirees to live out their retirement in dignity. The Chamber believes that Government must continue to engage business in developing recommendations to ensure that it can provide for seniors without putting stress on government budgets and forcing business and younger Canadians to carry the burden through increased taxes. Details of the Problem Over the next two decades, Canada will see an unprecedented number of people enter retirement. Dealing with shortfalls for underfunded senior citizens is a complex problem, and one that requires Government attention immediately. Not every Canadian has had an opportunity to participate in a private or public sector pension plan, and the Canada Pension Plan will not meet the needs of many seniors. The stock market upheaval of 2008 saw The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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many Canadians sustain heavy losses in their personal retirement portfolios. Further exacerbating the problem is the disparity of retirement preparedness for different groups of Canadians. Civil service pensions have traditionally been richer than private pensions. Self-employed Canadians, or those without any kind of pension plan, are being left far behind even though they have may worked longer and harder than their fellow retirees. Asking Canadians to endure a tax hike in order to close the gaps is rightly seen as unfair and represents an excessive burden to younger generations. The Chamber congratulates the Federal Government for recognizing the importance of this issue and their efforts to solicit input through the Ensuring the Ongoing Strength of Canadaâ&#x20AC;&#x2DC;s Retirement Income System. The Chamber was particularly pleased to see that this consultation process was underpinned by a set of principles: â&#x20AC;&#x2022;The system should remain affordable for individuals and businesses; Costs incurred by governments should be appropriate and affordable, as well as sustainable over the long-term; The system should function so that it does not transfer costs from one generation to another; There should continue to be an appropriate balance maintained between individual and government responsibility for retirement savings, and an appropriate level of individual choice; and The system should remain accessible to all Canadians.â&#x20AC;&#x2013; The Chamber endorses these principles as the foundation of any recommendation for change, and is also pleased to see that efforts are being made to find solutions on a partnership basis with the provinces and territories. However, the Chamber is concerned that there is a lack of clarity regarding next steps and timelines. The Chamber believes it is critical that to ensure this process moves forward in an expeditious manner, a clear and binding timetable be developed for the publication of recommendations, that these recommendations be open for public and stakeholder input, and that a timetable for legislative changes be introduced. There may be reforms related to estate issues, the employment insurance program or other initiatives to reduce government overhead that could mitigate the pension funding issues. There may be a need for a retirement education program to help Canadians prepare for retirement costs, or there may be a need to create a mandatory individual retirement plan directed by accredited planners. There may be some immediate reforms that can be made, and there may be some longer term solutions to be found. The important fact is that we begin to approach the situation. THE CHAMBER RECOMMENDS That the Federal and Provincial Governments: 1. continue to engage Canadian business in a dialogue around any potential recommendations; 2. make a public commitment to providing draft recommendations within one year; and 3. amend existing pension legislation within the next 5 years The BC Chamber of Commerce 2011-2012 Policy and Positions Manual

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RELOCATION OF FEDERAL GOVERNMENT OFFICES (2009) The availability and accessibility of government services through local offices contributes to the quality of life in communities, and has a significant impact on retaining people in their community. In the last five years, many communities have experienced the closing and/or moving of Federal Government offices out of their community. In federal effort to centralize many Government services, small and medium sized communities have experienced the loss of well paid jobs and valuable government services. In one case the head reporting office for BC had moved to Alberta. Some of the Federal Government departments and programs that have been effected are: Service Canada, (Labour Market Information, Canada Pension), RCMP Call Centersâ&#x20AC;&#x2DC;, and Canadian Citizenship and Immigration. While the Chamber recognizes and approves of Governmentâ&#x20AC;&#x2DC;s achieving cost effective and efficient service provision, there needs to be greater consultations with communities that are impacted by service reductions. If the Federal Government is investigating the move of a service delivery office out of a community, it is crucial that the community be consulted ahead of time in order for that community to have time to work with the Federal Government in addressing concerns of its citizens. THE CHAMBER RECOMMENDS That the Federal Government: 1. conduct a review of the centralization of Federal Government offices in British Columbia and its effect on service delivery to its citizens; 2. in consultation with the Provincial Government, investigate ways to ensure that service delivery structures respond to the needs of all communities and is done in a fair and equitable manner; and 3. consult with local communities prior to relocation of government offices that provide front line services in order that the communities have an opportunity to provide input on any planned service reductions.

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CAPITAL FUNDING STABILITY FOR BC’S INTERNATIONAL AIRPORTS (2010) BC‘s International Airports are rapidly evolving from regional transportation hubs into large-scale, multimodal, international airports. As BC continues to grow, international airports will play an increasingly vital role in the economic growth of the province by providing the connectivity essential to keeping companies competitive in a global economy, and by facilitating significant job creation within the province Growth in the province will necessitate a need to reduce pressure on YVR and, as such, will drive significant growth in airport activity through BC‘s other international airports on an annual basis. Increased access from the entire province, by road and air, will allow BC‘s international airports to play a greater role in relieving the pressure on YVR‘s already challenged air and ground access network. Infrastructure upgrades and improvements are required to support airport operations and airside land development at all of BC‘s international airports. Current federal funding is provided through the Airport Capital Assistance Program (ACAP). ACAP is a line-budget item and, as such, is subject to changing governments, ministers, budget constraints and capital funding burden shifts between government priorities. BC‘s international airports have significant capital expenditure programs relying on ACAP funding. They are forced to institute business plans based on uncertain capital funding to complete the plan. The objective of running BC‘s international airports in a generally accepted free-enterprise business model becomes extremely onerous under this funding model. This financial hurdle is commonplace among airports across Canada. It is significantly more pronounced at larger, rapidly expanding, provincially significant airports. THE CHAMBER RECOMMENDS That the Federal Government identify and allocate a consistent and predictable annual funding model for British Columbia‘s International Airports. EXTENSION TO THE VICTORIA INTERNATIONAL AIRPORT RUNWAY (2010) Transportation connectivity is the key to prosperity. Commercial and general aviation is a significant aspect of transportation in BC. Improvements to airport facilities are important projects which will help realize our province‘s economic potential. The Victoria International Airport is Canada‘s 9th busiest airport, and has the shortest runway of all major Canadian airports and provincial capitals. The airport has seen year over year growth, averaging 5.7% annually since 2002. The Victoria Airport Authority (VAA) has successfully completed a major terminal expansion and is setting the stage to attract additional international air service. To promote economic growth and sustainability for Vancouver Island, the VAA is proposing a 1400 foot runway extension. This $41.2 million dollar project will enable non-stop air service to international destinations such as London. A three-way equal partnership between the Airport Authority, Province of British Columbia and the Federal Government would allow this project to begin almost immediately. The

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project will extend the airport‘s main runway from 7000 feet to 8400 feet. Over the last five years, the provincial government has contributed funding to a number of airport facilities across the province. The most recent contributions include $22 million towards the extension of the main Prince George runway, $1.35 million towards the extension of the Kelowna Airport runway in 2008 and $6 million to help extend the Nanaimo Airport runway. There is also $10 million committed to a taxiway and apron extension project at the Abottsford Airport in 2010. The Province also contributed to the extension of runways in Smithers, Cranbrook, Abbotsford, Terrace and Kamloops. The Victoria International Airport, in the province‘s capital city, has not yet secured a funding partnership with the province to implement its $41.2 million runway extension. The Victoria Airport Authority estimates that the ability to land jumbo jets will add another $37 million dollars to Greater Victoria‘s economy annually. Research to date from the Victoria Airport Authority shows a ready market from key European destinations, including France, London and Germany. These markets have some interest in one stop flight packages, but the prospect of direct connections is highly desired. VAA estimates that with the extension, they will see 36,000 new international movements from London in the first year with an increase to 48,000 within five years, and 75,000 movements from France in the first year with an increase to 100,000 within the first five years. Economic growth, particularly opportunities related to post-Olympic benefits and the provincial goal of doubling tourism revenues by 2015, depend on transportation connections that can host the world. An extended runway at the Victoria International Airport fits is an important part of bringing those provincial goals to fruition. THE CHAMBER RECOMMENDS That the Federal and Provincial Governments provide monetary support to the extension of the Victoria International Airport. US CUSTOMS PRE-CLEARANCE SECURITY (2010)

–

BELLEVILLE

INTERNATIONAL

TERMINAL

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project may qualify for federal funding under the Building Canada Fund, a fund for federal investment of $33 billion dollars over seven years, through to 2014. Canada‘s commitment to security is an important indication of our strategic partnership with the United States. In order for Belleville International Terminal, which poorly represents the capital of British Columbia, to be an international standard transportation portal and safe gateway, infrastructure and security investment is hastily required. A partnership is required between the Federal Government of Canada on this international border crossing and the Provincial Government of British Columbia, who owns the terminal property to bring the facility up to date and ensure many more years of secure service for Vancouver Island. THE CHAMBER RECOMMENDS That the Federal Government partner with the Provincial Government to develop the Victoria marine pre-clearance site at Belleville International Terminal in collaboration with the municipality as a model for future marine facilities in Canada. CABOTAGE - A NEED TO INCREASE THE NUMBER OF EMPTY CONTAINERS AVAILABLE TO CANADIANS (2009) The conditions under which international container equipment may be imported tax-free into Canada from non-NAFTA countries, and used to move freight within the domestic market, is known as ―cabotage‖. The principle of how cabotage is applied must be changed in order for Canada‘s businesses to remain competitive internationally. The customs tariff on international container equipment in Canada has a negative impact on Canadian shippers, the environment, intermodal surface transportation service providers and Canadian retailers. There is a natural imbalance in Canada‘s containerized trade, with roughly three import loads to Central Canada for every export load. It is in the interest of the shipping line which owns the international container to move the empties back to Asia as quickly as possible for another load of high revenue imports. Unfortunately, there is little economic incentive for the owners of international container equipment to serve Canadian producers. Commodity producers advise that, despite an increasing number of empty international container equipment moving through BC ports to Asia, there is a shortage of empty containers for them to use. Canada‘s customs policy towards international container equipment contributes to the shortage of empty container equipment available to Canadian commodity producers. Canada‘s customs tariff on international container equipment also has a negative impact on the number of empty containers available to domestic producers. Tariff Item 9801.10.00 sets out cabotage tax exemptions for point-to-point freight movements in Canada, incidental to an international move such a return to the port of origin, but only if used within 30 days of entry into Canada. As such, there is a disincentive for the owner of the international container equipment to allow the containers to be used in a manner that does not qualify for the exemption, because duty and the GST on the assessed value of the container would apply. In contrast, U.S. cabotage rules respecting international container equipment allow 365 days of unrestricted duty-free freight movement in the United States, and the container does not have to leave by the port where it entered.

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Not only would relaxed cabotage rules provide for greater availability of container equipment to domestic producers, it would also generate environmental benefits associated with fewer empty container movements. Empty container movements take up as much capacity and create nearly as much pollution as full containers. Fewer empty container movements would lead to reductions in fuel consumption and emissions from container transportation, and would create surface transportation capacity without any additional investment in infrastructure. The impact on the Federal Government of relaxing the cabotage rules is not expected to be significant. The revenue from the tariff item appears to be minimal as most containers leave the country before the exemption expires. The increased economic activity generated by a more relaxed container cabotage regime, however, would more than offset any tax losses that might be incurred by the loss of federal revenue from customs duties. Representatives from both Class 1 railways agreed that more relaxed cabotage regulations on container equipment would make Canada more competitive for North American containers. The Committee was told that more flexibility for cabotage movements could allow the railway to load a container with domestic freight back to the coast and mitigate the cost for steamship lines. Apparently, such a regulatory change would be of particular benefit to Newfoundland, which is expensive to service with international containers under the current regulations. THE CHAMBER RECOMMENDS That the Federal Government: 1. harmonize its container regulations with those of the United States, in order to increase the supply of empty containers to Canadian shippers; and 2. amend Customs Tariff Item 9801.10.00 to match the U.S. Cabotage rules on the point-to-point movement of containers in Canada in order to increase the number of containers available to domestic shippers.

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