June 12, 2018 – Hon. David Eby, QC

David Eby, QC (born July 21, 1977 in Kitchener, Ontario, Canada) is a lawyer and Member of the Legislative Assembly of British Columbia, serving as Attorney General. He was elected the British Columbia New Democratic Party MLA for Vancouver-Point Grey in the 2013 provincial election defeating Premier Christy Clark by 1,063 votes.

Two years earlier, Eby came within almost 600 votes of derailing Clark’s bid to enter the legislature via a by-election in the same riding in a by-election on May 11, 2011. Clark had succeeded Gordon Campbell as leader of the British Columbia Liberal Party, and hence as Premier, weeks earlier.

Eby grew up in Kitchener, Ontario, the son of a lawyer. He worked at Pivot Legal Society from 2003 to 2008 in Vancouver’s Downtown Eastside before becoming the executive director of the British Columbia Civil Liberties Association from 2008 until 2012. He is adjunct professor of law at the University of British Columbia and also has served as president of the Canadian HIV/AIDS Legal Network and as a research associate with the Canadian Centre for Policy Alternatives.

He was called to the bar in June 2005, and is the author of The Arrest Handbook: A Guide to Your Rights.


Thanks very much, Justice Wong, for the kind welcome. I noted, before I came up, that there was no water on the stand, and Derek, from my office, kindly ran and got some for me, and Justice Wong leaned over, and he said, “You know, David, in my court, when we had a particularly long-winded lawyer come up, I’d ask the clerk to remove the water.” *Laughter*. You know, it’s a pleasure to be here to speak with Probus and when I told my family that I was coming to speak today, despite the pedigree of this group and your wide range of experience and knowledge that’s in the room, they were most impressed with what I was coming to speak. My son was very impressed that I was coming to the space centre to speak, he’s a big fan of outer space. My wife thought it perfectly natural, because she often believes I’m in outer space. So, everyone was very glad that I was coming here today, at my house. I’d like to begin by acknowledging we’re in the territory of the Squamish, Musqueam, and Tsleil-Waututh people, and bring official greetings to Probus on behalf of the premier and government of British Columbia. Justice Wong outlined my role as attorney-general within the government — can everybody hear me at the back, or we may need to get the mic up and running? No? There’s nothing worse for a politician, than speaking without a rapt audience. *Laughter*.

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Is it, are we still… Hey, are you there? Oh, fantastic! So, there are a number of priorities that the premier has assigned to me as attorney-general. Getting the big money out of politics, we passed legislation to ban union and corporate donations, and limit individual donations. We’re holding a province-wide referendum on proportional representation this fall, my office is charged with ensuring that that happens. Re-establishing the Human Rights Commission, increasing access to justice, as you heard in the introduction, and working with First Nations to address the over-representation of indigenous British Columbians in our justice system, and many other priorities. But there are two priorities that I’ve taken on, that I’d like to focus on today, and I understand there’ll be a Q&A at the end, and I want you to feel free to ask about anything that you’d like to ask about, including the school tax *Laughter*. First, is the issue of money laundering in the lower mainland, and you may know the premier has directed me to keep criminals and the proceeds of crime at other BC casinos, and the second is our action that we’re taking to address the fiscal crisis at ICBC that we face, and I’d like to review what our government is doing to address that.

So, first, on the topic of money laundering – some of you, I know, in the room, have experience in government, many of you may not. As a new minister, coming into the job, one of the things that happens to you is public servants come, and they provide you with a briefing on the files that you’ve inherited; they tell you about what you should expect in the job. And I had briefings from everybody, from the Ministry of the Attorney General, the different departments, and BC Lottery Corporation, and the Gaming Policy & Enforcement Branch. Now, the Gaming Policy & Enforcement Branch is the regulator for gambling in British Columbia, and at the beginning of that briefing, it was unique in this respect. One of the members of the public service said to me, “Get ready. I think we are going to blow your mind.” So, he was right; it was a very unusual briefing, but my mind was indeed blown. And I can’t share all the details with you, but I can tell you that the briefing outlined for me allegations of serious, large-scale, transnational money laundering taking place in BC casinos. Now, I’ve tried a couple of times to express to people how surprising it was to hear such a frank admission of the problem that we face in British Columbia come from a member of the public service. I was a critic on this file for a number of years, on the opposition side, keeping track of what was happening in gambling in British Columbia, and I had raised concerns about money laundering, given the size and volume of past transactions passing through BC casinos. And, you know, since this had become more public, there have been a couple of reporters that had done some good work, and Sam Cooper and Kathy Tomlinson are two. People have said to me, “Well of course, you must have known what was going on” You were talking about it in the legislature, but it’s not quite so simple; my many queries to the government about this issue were met with flat denials of any serious, let alone transnational, criminal issue. And I also had tours of casinos, where people assured me, charged with security for the casinos, that it was basically impossible to launder money through BC casinos. In response to the briefing, as part of the briefing, I also received a report. The report, then commissioned by the previous government on the Ministry of Finance, but never publicly released.

And, so when I received the report, I released it to the public, so they had some understanding of what we were facing in BC, some understanding of what I had been briefed on, and I hired someone who knows more about this than I do, to come in and help clean up the mess: Dr. Peter German, who’s a former deputy of the RCMP in British Columbia. He is, literally, the author of the anti-money laundering textbook for Canada. He is a lawyer. He took on an investigation and review of what had happened, and what we can do to fix it, and his report to me will be released by the end of this month. Based on my briefings, I had reason to believe that the issue of money laundering was linked to other areas of BC’s economy, specifically real estate, and I asked Dr. German to look at those connections as well. After being retained to take on this job in December, our government received two interim recommendations from Dr. German. And I filed these under, what I call, “common sense recommendations,” and you’ll see why in a second. But I did direct the BC Lottery Corporation and Gaming Policy & Enforcement Branch to implement these as soon as possible. The first one was that gaming service providers, these are the operators of the casinos in British Columbia, that they have to complete what’s called, a “Source of Funds Declaration,” when people bring in cash, or monetary instruments exceeding $10,000. And what the declaration has to do, is it has to provide information, that’s verifiable, about where the money came from. After two consecutive transactions, a person can’t bring any more cash in, until it has been verified that the source of money is legitimate. Common sense. The second is, that government regulators must be present at casinos during primetime. Now, I’m sure that this group would never find themselves in a casino. But for those of us who have occasionally found ourselves in a casino, it is not Monday to Friday, 9 to 5, and that is when the regulator was present in the casinos in BC. *Laughter*. We’re working to ensure that the regulator would be present and available to casino operators on a 24/7 basis, and certainly during peak operating hours, which are on weekends. In early January, the BC Lottery Corporation implemented the first of these recommendations, that explain where the money came from. And, if they don’t, then they’re turned away. And, I can tell you, that we’ve already had a very significant impact; at its peak, in a single month, in the three largest casinos in BC, there were $20 million in suspicious cash transactions. The average, after that peak, which was in July of 2015, was $3 million to $5 million in suspicious cash transactions a month. Last month, the total was 100 times less than the peak, $200,000.

So, the backstory of how we got to this point in our casinos is interesting and significant, and I’ve been instructed that this is a non-partisan group, and I’m glad for that, and so there’s a fine line between interesting and non-partisan, so I will do my best to provide the facts as I see them, and I’m sure that there’s another side. In 2009, the province’s integrated gambling policing team, this was the team that was charged with doing policing in BC casinos, produced a report. And that report made a number of findings, including that, “known gangsters were gambling in BC casinos.” The report detailed ties to organized crime, loansharking, kidnapping, links to Hell’s Angels, Asian organized crime groups, and Italian crime groups, operating illegal gaming sites. The policing group proposed reforms, because it was widely recognized that they weren’t being particularly effective in addressing these issues. So, in response to this startling report about what was happening in BC casinos, the province of BC defunded the policing team, it cost about a million dollars a year to run it and shut it down. Fast forward to March 2016, a memo to a former finance minister, saying that there had been, “a significant increase in the use of illegal gaming hubs in the province, and legitimization of proceeds of crime through BC’s gaming facilities.” Now, this was not the first report received by the then-finance minister on the problem, there were countless red flags on this issue. This was the most explicit. It’s important to note that the same period was a time of exponential growth in revenues to the province in gaming. Although the activity behind the scenes of government was remarkable on the other side, on the public side, it was difficult to guess that there was a serious and growing problem. And the legislature, in response to a question I asked about the issue in April of 2016, just short of a year from the peak of suspicious cash transactions, the finance minister said, “I can tell you this: We take very seriously the obligation, on behalf of British Columbians, to ensure that the activities that take place within regulated and lawful gaming establishments are being conducted with proceeds that are not — I repeat, not — the results of criminal activity.” So, given the gap between public statements by the government, and the reality on the ground about becoming minister, in addition to hiring Dr. German, I took steps to release those documents, so that the public would understand the challenge we face.

What I want to do is really underline the scope of the challenge, and the breadth of the knowledge of the issue that we faced in Vancouver. In one of the more disturbing moments of becoming minister, I was briefed that the particular style of money laundering in BC, related to BC casinos, is being called, “The Vancouver Model,” in at least one international intelligence community. Since the documents have been released, by freedom of information request, I can tell you that international intelligence community is in Australia. There was a professor at Macquarie University in Australia, who is training anti-money laundering experts in Australia on the Vancouver Model. Which means that the previous administrations, in my opinion, I will acknowledge partisan opinion, their lax attitude towards this issue meant that BC developed its own internationally recognized model of money laundering. Obviously, this has serious consequences for our international reputation, and also for the encouragement of whatever illegal activity was actually generating the proceeds of whatever crime it was, it was generating those proceeds. Just so you that know how serious they were taking this, we actually budgeted for a financial impact of ending this activity in our casinos in budget 2018. We released a report, prepared by a group called, HLT Advisory, Inc., for BC Lottery Corporation. They looked at the impact on revenue of banning cash transactions over $10,000 at casinos. BCLC advised government that the impact on revenues within a provincial government could be as significant as $30 million. This possible reduction is one of the assumptions made in our budget for 2018, so they were able to make the decisions needed about this, without concern for fiscal consequences. In my opinion, it’s inconsistent to, on one hand, fund anti-gang measures, and on the other hand, take the proceeds of gang crime through casinos as a profit to the province.

But, we’re not just addressing money laundering. In December, we made the most significant increase, in more than a decade, for frontline service availability for British Columbians who are or may be at risk for gambling addiction. These protections include new and much-needed offsite resources, along with an expanded GameSense Advisor program to be rolled out by the BC Lottery Corporation. Most significantly, we’ve increased support for the Gaming Policy & Enforcement Branch to offer $1.2 million in funding to expand other casino services, like early intervention, counseling, and harm reduction.

I’d like to turn now to one of the most significant issues facing our government, both from the perspectives of affordability, and with regards to the impact it has on the province’s budget line, for all British Columbians. That issue is the financial state of ICBC. ICBC has announced that its year-end loss is now projected to hit $1.3 billion. In order to close the gap between premiums charged and the loss at ICBC, we would have to immediately increase rates by at least $400 or more for every driver in British Columbia, unless we took immediate action to keep rates more affordable. Now, again, I’ll do my best to walk that line between interesting and non-partisan, but in my opinion, there’s clear evidence that the previous administration knew about ICBC’s deteriorating financial situation and the action required to get costs under control. They took a billion dollars from ICBC’s reserves into provincial accounts. In 2014, they received a financial report from Ernst & Young. They told them that major reforms were required to ensure ICBC didn’t face massive deficits in the future. A future that we’re living right now. Instead of releasing that report as they received it, the previous finance minister has now admitted that the government removed 7 pages from that report, specifically those pages that outlined that action was needed. The previous minister responsible for ICBC says he didn’t know about the missing pages, but he introduced something called, “rates moving.” While it was designed to keep rates lower, coupled with the lack of reforms, that meant the gap between premiums collected, and amounts paid out at ICBC grew, and grew, and grew, to the point that we face today. That’s why we’ve had to move very, very quickly, to repair the damage.

Over the last while, I’ve been having very difficult conversations with a wide variety of stakeholders. Some of you may have been at some of those conversations. They include those involved in the legal profession, on the personal injury side, as well as those within the auto body industry. There are many groups that benefit financially, under the current system, that will be, and are, unhappy with some of the reforms that we’re implementing. If the fixes were easy, obviously they would have been done sooner. The fixes would have been done, instead of pages being removed from reports. The message that I’ve been giving to everybody is the same: Facing the problems at ICBC means there will have to be compromises on all sides. Years of mismanagement at ICBC have created an environment where many people feel that the only way to get a fair settlement is by hiring a lawyer. And that reality is clearly reflected in ICBC spending: Delays in legal costs, such as those for expert reports, now count for 24% of ICBC’s total annual costs. This is greater than the cost of running ICBC itself and is simply not sustainable. But this is not our only area of concern. Injury clinics totaled $2.7 billion in 2016, an increase of 80% in just the last 7 years. Auto body repair costs have increased 30% in just 2 years, to a total of $1.5 billion in 2016 alone. To put it simply, the amount of basic premiums that ICBC collects is not covering the increasing amount that they’re paying out to cover costs. These costs must be reduced, and I don’t just come to the table today to present to you with the problems we face, we’re presenting solutions as well. We have two focuses, two foci, that we’re working on in our reforms at ICBC: The first is to ensure insurances are affordable for British Columbians, and the second is to provide adequate care for those injured in car accidents.

So, it starts with doing more to improve road safety, and reducing the number of accidents in our province. We started that by beginning the work to turn on those red-light cameras that you see at intersections, 24 hours a day, because we know that the intersections that host these cameras are the sites of serious and regular collisions. We need people to drive safely in these high-risk zones. Quick stat: An average of 70 accidents occur each year at each of those red-light camera intersections. These cameras also have speed capacity in them already. We will be turning on that speed capacity, and there’ll be giant signs that say, if you run a red light here, or if you speed through this intersection, you will get a ticket. We do not want to increase revenue through this measure; we want people to drive safely through intersections. In another change, we know distracted driving is a serious problem. I’m sure every single person in this room has had the experience of being cut off by someone, or watching someone drive terribly and looking over and seeing them on their cellphone. If your repeat distracted driver is caught twice in 3 years after March 1st, you’re going to be hit with fines and an ICBC insurance premium increase of almost $2000. We also believe ICBC could be more efficient in operation. That’s why we were pleased to receive a report, from a third-party business firm, on the effectiveness of ICBC’s operations, which projects savings of $60 million from restructuring how ICBC deals with vendors. Now, I anticipate there’ll be further savings to come, and recently we announced changes to ICBC’s windshield repair program, and will deliver $6 million in savings to ICBC, and further savings to come, working in partnership with the auto body repair industry.

Let’s go off-script here for a second to note the windshield repair policy that we changed, some car windshields have moldings around them, ICBC was paying to replace the molding regardless of whether or not the molding was replaced. In addition, windshields, you can get the manufacturer’s windshield, or you can get an aftermarket windshield replacement, and ICBC was paying the higher of the two costs in windshield repair, when typically, the manufacturer windshield was cheaper, they were paying for the higher aftermarket windshield. So, these are the kinds of reforms we’re making. If you’ve ever attended an auto body repair place, and said, “This is an ICBC repair,” versus “I’m paying for this out of my pocket,” you may have had the experience, as many people who write to my office have, of being quoted two different prices. These are the issues we’re trying to address. ICBC, in fact, as I understand it, pays the most for windshield replacement of private insurers and rental companies in British Columbia. When given the volume of windshields to replace, we should be paying, in my opinion, the least.

Regardless, in February, and if the biggest reform is $6 million when you’ve got a $1.3 billion deficit, obviously $6 million is small potatoes, but every potato counts at ICBC. In February, in the biggest reform, our government announced significant reforms to the system that compensates people for injuries and accidents, introducing a limit on pain and suffering payouts for minor injuries, and a creation of a new dispute resolution process for minor injury claims, instead of sending these claims to BC supreme court, which costs a lot of money, as Justice Wong pointed out. These two changes for minor injuries, strains and sprains, excluding all broken bones, concussions, and any disfiguring injury — those are not minor injuries — we are limiting pain and suffering rewards to $5500, and dealing with disputes for a tribunal, instead of BC supreme court. Pain and suffering awards are awards given by the court to recognize, not financial loss, those continue as they did before. This is the award to recognize the fact that you’ve been injured, and to provide you with some sort of recognition for the fact that you’ve been injured. And that is the award that’s being limited to $5500. The savings from these two reforms alone, are enough to get ICBC back into the black, and dramatically increase accident benefits for all people injured in collisions. We’re working to make these changes take full effect by April 1st of 2019. These are huge reforms that require significant retraining, and programming work at ICBC. In addition, we need to get the tribunal set up. Implementing the $5500 limit on payouts for pain and suffering for minor injuries is not without controversy, and is not a change I’m excited about, but obviously is a change that is necessary. Our new legislation recognizes that, if you don’t get better after a certain period of time, your injury is not a minor injury. Just as today, ICBC will rely on independent medical professionals, including the family doctor, to diagnose these injuries. These medical professionals will be chosen by the person that’s injured; they are not people who will be chosen or employed by ICBC. ICBC is now in the process of working directly with medical treatment providers to determine appropriate guidelines that can be put in place, so that we can work together and help people get better as quickly as possible. The costs to ICBC and rate fares of the average claim paid out for minor injuries has risen, from just over $8000 in the year 2000, to more than $30,000 in 2016; an increase of more than 250%. This is not a sustainable increase, unless it is matched with some more increases in premiums, for which there is no appetite in British Columbia. BC is the last province in Canada to take this kind of action, in relation to minor injuries. And $2.2 billion in losses over the last two fiscal periods strongly suggest that the change is overdue. That’s how I feel too.

The next change I want to highlight is our plan to enable the Civil Resolution Tribunal to help resolve certain motor vehicle injury disputes. The Civil Resolution Tribunal adjudicators are completely independent of ICBC. They’ll provide fair and fast resolution, without requiring the involvement of a lawyer, although, if you want to bring a lawyer along, you can; lawyers are not barred from appearing in the Civil Resolution Tribunal in relation to minor injury disputes with ICBC. The Civil Resolution Tribunal has already been established, and it’s been dealing with strata claims and small claims less than $5000 and freeing up court time. Currently, the Civil Resolution Tribunal aims to resolve strata disputes within 60 to 90 days, on average, whereas the average legal claim with ICBC can take up to 30 months to resolve. So, as I said, these changes of using a Civil Resolution Tribunal instead of using BC supreme court processes, and the limit on the pain and suffering awards, will also increase money available for benefits, for people care* [00:24:46], for people injured in a crash. That’s more money for treatments, and more types of treatments will be covered. If anyone in this room has ever been in a car accident, and attempted to use your accident benefits, you’ll realize very quickly that the amount of benefit that ICBC pays hasn’t been changed since the 1990’s. The out-of-pocket cost for physiotherapist appointment or massage therapy appointment, is far in excess of the amount paid by ICBC. Which means that people don’t go and get the treatment that they need to get better, and their injuries last longer and are more severe. ICBC will, for the first time in a long time, now pay the fair market rate for necessary treatments. We’ll also expand the categories of treatments covered, to include counseling; many people, after an accident, have difficulty getting back to life because of psychological injury, and making sure that people have access to counseling should, hopefully, reduce some of the expenses associated with that. The additional treatment providers, in addition to counseling, that will be covered, include kinesiology, acupuncture, and massage therapy. And, one of the most important changes that we’re making here that is critically important, is the change for the lifetime benefit. If you’re injured in a one-car collision, like that woman who hit a moose, the maximum lifetime benefit that you can receive from ICBC is $150,000, that were called Part 7 benefits. For her, that meant buying a van, because she was rendered quadriplegic, buying a chair, and retrofitting her bathroom, and then she was done. No more benefits. We are doubling the amount of lifetime benefit to $300,000 so that people are not dependent on public services for their very serious injuries that arise from a car accident. Collectively, the changes that I don’t mind are projected to save about a billion dollars each year in claims costs, even after the enhanced benefits are paid for.

There’s one additional major reform that we’re making to ICBC, and a number of people have written to my office and to me, expressing concern about how British Columbia operates in this regard, but we’re engaging in a revenue-neutral process to ensure that higher-risk drivers pay more, and lower-risk drivers pay less. Our current system rewards high-risk drivers in our system for having multiple at-fault accidents and receiving multiple serious driving infraction tickets with lower rates than they should be paying, based on the current cost of their driving in our system. To shift the balance, to reward good drivers and ensure the risky drivers are paying more, we invited British Columbians to share their thoughts with us during engagement process on auto insurance rates, so that any changes we made were based on feedback that we received. We had a month-long public engagement and, if you can believe it, 35,000 British Columbians participated. They told us overwhelmingly that they don’t think high-risk drivers are paying as much as they should. Now, obviously, we did a survey in this room, about who believes that they’re a good driver, the vast majority of people in this room would put their hands up. So, the challenge is, how do you define who is a high-risk driver, and who is a low-risk driver, in terms of who should be paying more, and who should be paying less. There were specific directions that we received from British Columbians in that regard, as well as specific reforms, including a driver-based system, an insurance system where insurance is based on who is driving the vehicle, rather than who owns the vehicle, where insurance follows the driver. They also supported an increased impact on insurance premiums based on driving convictions, and we’re looking at all of that feedback as part of a redesign process that will also roll out by June of 2019.

We have much work to do before these changes can be implemented, but we’re one step closer, because the legislation enabling these various reforms passed this past session, and I won’t be partisan and point it out who voted for and who voted against it. Although we have some way to go, it’s clear to me that everyone will benefit if we drastically cut down on the administration costs of sending every single claim to BC supreme court, if we provide increased care for those with injuries, and keep insurance affordable and make the rates more fair. So, both of these topics are matters that, obviously I’m taking very seriously, and a key part of the work that I’m doing in government, and I’m very proud to do on behalf of the government, and I look forward to sharing more information with you, and with all British Columbians, as work progresses. As I said, Peter German’s report will be out by the end of the month, and the ICBC reforms implemented in the spring of 2019. Thank you very much, everybody, for the opportunity to be here today, and I look forward very much to your questions, on any topic, as I said, that you wish to address. Thank you!

Questions and Answers

Question: Mr. Eby, thank you very much for your comments about money laundering and ICBC. I think that you’ve described them that’s a clear saving benefit for all of us potentially. I would like to talk, though, about the so-called school tax *laughter*. So, first of all, calling it a “school tax” seems a bit disingenuous, because of course the money is going into general revenue. But then suppose, for a moment, that the moneys will find their way into better revenues for schools. Since we all benefit from our kids being educated in the public system, if follows, to my mind, that therefore the costs for that education should fall more evenly on the taxpaying population. Why, then, would you not consider increasing, by whatever amount necessary, the provincial rate of income tax, which, as you know, is applied as a percentage of federal income tax but is progressive in its nature. So wealthier people that keep on making greater incomes, at least, will pay more, just as is anticipated in the so-called school tax. But it falls unevenly on the population. If you really, seriously, want to get at people’s wealth, ought you not to consider reintroducing the succession duty, as we had years ago, instead of applying this tax. Well, at least that’s an honest way about going about the wealth tax, straight on. Anyway, so let that help the schools, but the population as a whole, seems to be far fairer.

Answer: Thanks very much for the question. So, when the finance minister was putting together her proposals around dealing with various issues that we face in the housing market, part of that was the school tax proposal. So, two pieces to your question: The first is, why is it called the “school tax?” The tradition in British Columbia is that the provincial share of property taxes shows up on your property tax form as the school tax. It was the school tax when it was increased in 2003 by the previous government, it’s the school tax now and it’s being increased by our government on the value of homes. For those of you who haven’t been following this as closely as I have, the value of home is about $3 million, between $3- and $4 million is a 0.2% tax, and from 4 and above, it’s a 0.4% tax. And so, that’s why it’s called the school tax. The estimated revenue from this is between $200 million and $250 million, and just for perspective, the government is increasing the funding in schools in British Columbia by half a billion dollars above and beyond the previous administration’s initiatives related to education. So, well above and beyond what is being gathered from the school tax is being spent on schools. So that’s just about the name, and why it’s called the school tax, and whether the money is going to schools. The second piece is, is this good policy? So, the issue of, “Is this good policy?” has been addressed on both sides by a number of economists, and they raised a number of points. On the pro side, people have raised the point saying in Metro Vancouver, we have lower property taxes than many other jurisdictions in North America. And as some of the issues that I raise with you today relate to money laundering. The lack of controls are present not just on the casino side, but also on the real estate side. If you own property, without having to declare who you are, without anybody knowing where the money is coming from. You can own property, residential property through a numbered company where a lawyer is the sole director, and there’s no way to know who truly owns the property. And so, because of an ability to conceal the fact that you’re purchasing real estate, and a lack of controls, and low property taxes, and constrained geography; mountains, ocean, agricultural land reserve. Land has made a very wonderful investment for people from around the world, to put their money into housing in the Metro Vancouver area. As a result, there’s been an increase in value in properties, very significant in my constituency, somewhere in the order of about 400% in the last 10 years since 2008, about 100% percent in the last two years. And so, the idea is two-fold. One is, instead of going to income tax and perpetuating this issue of the fact that we have higher income taxes and lower property taxes, which disadvantages local purchasers, and advantages absentee investors relating to property tax. The second piece is to recognize that there’s been a very significant increase in value of property, and that the relative tax rate is quite small compared to the appreciation in the value of the property. That’s the policy argument behind it.

Question: There’s have been a lot of local criticism of the government’s position. And you can see it in this group here about the school tax, and how it’s part of it. And you’ve just given us an illustration that you’re worried about foreign investments in real estate, that’s pushed this value up significantly in the last two years. It seems to me that the government could have considered the situation that you`re targeting a lot of this tax on seniors, not people that are bringing money from overseas. These are people that have lived in our homes for the last 30 years. Under speculation tax, you’ve exempted people that break? *[00:35:31] their properties, which makes a little bit of sense if you don’t lose multiple properties. But in this particular case, the opposition you see in meeting after meeting, is coming from a group of people that have lived in their homes for the last 30 years. Fortunately, bought homes that were built in 1929, 1930, and are still living there. Why are you targeting this to this group, and not say that exempt people that are 55 and older as you do with the deferred tax and say “We won’t target you guys because you’re on a limited income, on pension income, and you will pay the tax for people that are not in the age bracket. We will target you guys, because you are the guys that have pushed up the real estate I’m benefiting?” So, why don’t you use the example of what this is doing to seniors, and not bring in the outside influences?

Answer: Sure. So, a couple of responses. But first to the issue around the international money in the housing market. One of the challenges that we faced, is that a lot of the international money is coming in through permanent residents or citizens. So, people say “Well, why don’t you ban non-residents from buying property like they did in Australia and New Zealand? We have a system in Canada where you can buy citizenship through the province of Quebec, by lending $800,000 to that province. And then the vast majority of those millionaires, the data is very clear… David B–*[00:36:57] has done some very good work on that, come and live in Metro Vancouver. And so, a simple measurement of… Or trying to address the issue by saying there are no international residents buying property here, it also has the unintended effect of through immigration, we’re trying to attract highly skilled people from around the world to come here, especially in the constituency of Vancouver Point Grey, UBC, to teach, to do research, and to help grow natural and constructive industries, like technology and so on in the lower mainland. And so, if you put that kind of ban in place, it can have unintended consequences. So, what we’ve done is, we’ve linked it to income tax. We say “If you are paying your income tax in British Columbia. Don’t worry about it. But if you’re buying property here and you’re not paying tax, this isn’t a place where you’re paying your income tax, then you’re going to have to pay the speculation tax.” And the speculation tax is significant. I talk about the point 2% on $3 to $4 million. It’s 2% on the entire value of the home, so it is a very significant tax. So, the school tax issue is not happening independent of any other measure by government, there are other measures that we’re putting in place, including a beneficial property registry. Did you know that fifty of the most expensive properties in Vancouver, residential properties, we don’t actually know who owns them? They’re owned by beneficial owners, like students or housewives, they are owned by their trusts, they are owned by a number of companies. We don’t know who owns them. And so, we will have a beneficial property registry, so that tax authorities and police as well know who is buying property, and where the money is coming from. And the second part of your question relates to why are we targeting seniors? And these are the people who are showing up at the events. A couple of pieces. One is I’m really concerned about low-income seniors in my community that will have to pay this for tax. I met a guy, I mentioned him in my address to the Point Grey Residents Association. His name is Frank… I call him Frank, his name’s not Frank. He came to my office, he’s in his eighties, and he said “I’m not deferring my taxes, and I’m living in poverty. He lives in a $7 million house. And his main concern was “I want to leave this to my kids. I want to leave this money to my kids. And the school tax is going to take more of my money away, and I’m already living in poverty.” So, we have a deferral program in BC, where he can defer his taxes. It’s highly subsidized, it’s a 1% simple interest rate for him to defer his taxes. It is a fraction of a fraction of the appreciation of the wealth of his home. He does not have to live in poverty. And the issue has been that the people who have been showing up at the meetings are people like Frank, who are in this situation where my office needs to help and ensure that the Finance Ministry knows about their stories. And also, unfortunately, there were people bused in from Richmond to the Point Grey Residence Association meeting. There were developers who were distributing signs. There were realtors that were buying ads in the Courier, because of some of the reforms they were making around real estate. And so, I really need to hear from my constituents, and I need to advocate for them. And I’m very frustrated by the fact that some people have been benefiting from the current system, are using this as an opportunity to exact political vengeance. And so, it’s a combination of factors. So, if any seniors you know of in that situation, my office needs to hear their stories, I want to help them. And any developers who want to get me, more power to them. *Laughter*

Question: I’m a lawyer. And so, I am hoping that when you’re looking at ICBC, you’ll take a look at how their legal department functions. Because I see two problems. A simple accident, two people in each car, and somehow ICBC will involve eight different law firms, because they’ve got everybody suing everybody. And secondly, just the attitude of both the lawyers and the staff treating the insured like the enemy. And so, this is now forcing people to get their own law firms to protect them from the ICBC law firms, supposedly acting for them. So now you’ve got 10 law firms involved in some stupid little accident, and it’s no way to run anything. I’ve got the feeling from that humble Saskatchewan thing, that somehow in Saskatchewan, the insurer operates very, very differently from ours, and they’re actually helping people within hours of the actual accident.

Answer: So, they do things very differently in Saskatchewan, they have a full fault system. We are not going in that direction. We definitely have a problem with lawyer help in BC, and it was a specific policy, the direction within ICBC in the mid 2000s. It was called the “Gown? Down? *[00:42:02] Up Strategy.” And it was that every single claim would be contested by ICBC as a means of saving money. And the result of that, was that claims plummeted for the first couple years, because the court delays that were occasioned by that, meant that claims weren’t… You didn’t see judgments from courts for a couple of years. And so, everyone looked like a genius for saving so much money, claims were way down, ‘this is fantastic”. And then the judgments started coming in. And the judgments had to paid anyway, they had to be paid on day one. They were just being now awarded by a court after an extensive process, multiple expert reports, everybody lawyered up, a huge problem. And that is one of the pieces. There are legacies about that we’re dealing with at ICBC to make sure that people are treated with respect. When they call, that they have access to adequate benefits, and that they don’t feel like they have to go and hire a law firm immediately. They represent a great for people making claims at ICBC has gone up significantly. And you’ll see when you leave, and you see on a bus, an ad by one of these firms, that literally has hired an actor to play a lawyer on their sign that is actually based in Ontario. That will take the phone call and refer you to a local lawyer. There are two major firms at Ontario that are operating in BC as their *[00:43:10] plaintiff mails, but that’s where you call the 800 number, and then they’ll refer you for a fee to another local lawyer. That is the kind of system that we’re operating… We have to pay for all that overhead… For the bus ads, for all those things, those all come out of the fees in the broken system that we have right now. So, there’s a bunch of reforms that we’re doing. And actually, I’m grateful that the Trailer Association of BC, we’ve had a rocky start, but we’re trying to work together now on some common-sense reforms to bring costs down that aren’t advantaging anyone. The number of experts, the length of time these hearings take, the possibility of specialized court roles for accident claims that expedite processes. Because the longer the claims go, ICBC and everybody else knows that the administration costs go up without increasing any benefit to anybody. So, thanks very much.

Question: I’ve read in the newspaper that ICBC have paid out already $87,000 to repair a car. And how is ICBC dealing with situations like that?

Answer: Yes. There were a couple very famous files in the news. One was a guy who owned a vintage Ferrari, some of you might have heard about that one. And generally, there’s a lot of concern about luxury cars generally, and their impact on ICBCs bottom line. I can tell you that the luxury car segment I have insured several times is revenue positive for ICBC. ICBC makes money on the luxury car segment. I can’t talk about any specific file, but there is a judgment in the Ferrari case, if you’re so inclined to read it, that can outline some of the details of that file for you. The concern that I continue to have, and that ICBC has, and that all of us as ratepayers should have, is that as cars get more specialized with sensors in the windshield and various automatic driving functions, until we get to the point where these are actually reducing the number of accidents, they increase our motor repair costs. So, a fender-bender that has a camera in the fender, is significantly more expensive than a fender-bender that does not have a camera in the fender. The Tesla’s that are driving around, are basically a write off when they get in an accident, because they’re so hard to get replacement parts for. And so those drivers are paying significantly more for their insurance. It’s revenue positive, but it’s an example of the trend line of where we’re going with cars… Increasingly specialized and increasingly niche, with more and more technology in areas that are often injured in collisions. There’s an upside to it. We’re looking at the possibility of reducing insurance for people who adopt things like automatic emergency braking and blind spot avoidance, where you try to steer your car over into a car that’s travelling beside you, and it brings the wheel back, or where it automatically stops for you if you’re coming up on another vehicle in a hurry, because there are both proven technologies to reduce collisions. And so, we’re looking at those kinds of things to incent people to adopt more quickly. There’s also a number of road safety initiatives that we’re looking at… new technologies, road surface treatments for example, to reduce the number of collisions. Thanks for asking.

Question: First of all, I agree the approaches you’re taking to the money laundering at ICBC are common sense, which just frustrates me more in terms of the school tax. I’d say first of allowing a tax to be deferred, doesn’t mean it isn’t a tax. It’s a tax. And we’ve grown up with three main ways of taxation. One is income tax, the one is a consumption tax or consumption taxes, and three is for government. And what you’ve done is a profound change in moving to tax on a basis other than assessed values across the province, to targeted areas in the province tax. And I think that’s totally unfair. You’re a minority government, it isn’t something that you had on your platform, so how do you think you can introduce fairly to the constituents?

Answer: Thanks. Thanks for the question. So, the progressive property taxes that are based on the value of the home, they’re not a profound change, they exist in many other jurisdictions across North America, including Canada. When you compare what a $10 million home’s property tax would be in Metro Vancouver with a similar home in Calgary, Toronto, Montreal, our taxes are much lower. Our property taxes are much lower. And I know that that is not a recipe for people to be excited about the school tax. But I also think that the arguments about the exceptionalism of this tax are not entirely grounded either, in the fact that this exists in other jurisdictions in Canada. And beside your other points, I take it that you’re not excited about the tax or the government, and I understand that. It passed with a majority of the votes in the legislature.

Question: Can you give us a short overview of Proportional Representation, and which part you would favour? And I’m interested, is it similar to the New Zealand kind of Proportional Representation that I’ve had some experience in? And what happens to your coalition when it’s passed, supposing it gets passed?

Answer: Sure. So, my job in the proportional representation piece was to do an engagement with British Columbians. It was the biggest engagement in British Columbia’s history. More than 90,000 people filled out a survey about things that they wanted to see in a ballot coming forward in the referendum process, how they wanted the referendum process to be run. And they spent an average of half an hour on the website; 15 minutes reading about the materials, and 15 minutes completing the survey. In addition, we had more than 40 organizations provide written submissions about what they wanted to see on the ballot, what systems they thought should be considered. I put those together in quite an extensive report. And to be fair I didn’t do it, the Public Service did it. And put forward a number of recommendations that I backed to my colleagues in Cabinet about the rules that should be in place for the referendum. And they are quite specific. They’ve been accepted by my colleagues in government, even though it wasn’t their specific recommendation. The first question is, do you want to keep the current system that we have, or do you want to change to a system of Proportional Representation? And the second question is, if the majority chooses to… And I’m paraphrasing this as I don’t have it in front of me… If the majority chooses to shift to a system of Proportional Representation, which of the three systems listed here would you like to see in British Columbia? And there are three systems listed. Dual Member PR, which is I am simplifying, and I encourage everybody to read more about it. It’s basically a constituency in Vancouver would double in size. There would still be two MLA’s. One would be elected from a list to ensure proportionality, and one would be vocally elected through First-Past-The-Post. A system called “Rural Urban PR,” which is, you remember the Single Transferable Vote System that was on the last referendum? That is how members would be elected in urban areas. And in rural areas it’s a list system again. And then the third is “Mixed Member Proportional,” which is the New Zealand system you were talking about, which is a mix of First-Past-The-Post elections, and list systems through proportionality. Some principles that I recommended as well, is that there shouldn’t be more than eight MLA’s added to the legislature, because clearly there was a message from the public that they didn’t want to see a significantly expanded legislature, that no party be elected with less than 5% of the vote. And the reason for that was, there was a lot of concern about the Nazis, or Nazi-like far-right party getting a foothold in a proportional system. And so, at a threshold of 5%, we thought that was a reasonable safeguard to recommend. And the third, was that people were really concerned, in rural areas particularly, rural representatives, that their representation would be diluted somehow, that they wouldn’t have local representation. So, as a principle of all the systems that are on the ballot, a local representation is preserved. For my role in it, I won’t be taking any part in the campaign, either pro or con either of the systems. I’ll be the Election BC’s contact if they need assistance. They’re providing information to the public about the systems, and if they need resources, or if they need regulatory change to do their job, then they’ll contact me. And that will happen through my office. The NDP and the Greens will be campaigning in favour of proportional representation, the BC Liberals will be campaigning against. It should be a very interesting vote. It’s happening at the end of November, right? The vote is happening by the end of November, and it’s a mail-in ballot.

Question: My question is based on two hypothetical assumptions. If the organizers of the apparent recall for your seat in Point Grey are successful, and if you ran in a by-election as a result and lost that, do you think the Premier might ask you to try to stay on in cabinet without a seat? *Laughter*

Answer: It’s a wonderful question, thank you. You know I do, I fully support the Recall Legislation. I think it’s good, I think it ensures that MLA’s are accountable to their constituents. And if the organizers of that campaign… And I support the right to organize it, I support the right to a free speech, are successful in getting 40% of my constituents to sign that ballot. That I think I absolutely should be part of that campaign. I think if 40% of my constituents are that unhappy with me, then I look forward to that campaign. And I think I’ve got a pretty good story to tell about the work that I’ve done in the legislature, and I think I would be successful. But if I were not, I would not continue on as Attorney General, as a strong supporter of democratic rights, including the Recall Legislation, and that I would recognize that. I have to say that that feels pretty speculative, but I do thank you very much for the question. *Applause and Laughter*

Question: My question is about the Speculation Tax. And I think many of us would agree with the idea of it. And I think most of us would also agree what the target of it is, the intent of it is. Where – in Metro Vancouver, Vancouver in particular. So, my question is, why do you think it is necessary to include in that tax Kelowna, West Kelowna? You’ve exempted the Gulf Islands, and you’ve exempted Qualicum. What is the rationale for applying that tax to the Okanagan?

Answer: The Finance Minister in implementing the tax identified areas of the province that are in a particularly acute housing crisis. The way to avoid paying the tax is to rent your place out, that’s the additional property that you have. You can avoid the tax entirely. Kelowna has a less than 1% vacancy rate. And the same with the Victoria area, that was also identified, and will be subject to the tax. A very straightforward reason why Kelowna was included.

Question: Okay. Could you give us some background, because I think it’s very interesting…? The Civil Resolution Tribunal, that’s a very interesting organization, and it’s a very recent tribunal. Some background would be very useful.

Answer: Sure. So, the civil resolution Tribunal was experimented at a previous administration, that’s been quite successful. There’s the non-partisan part of the speech. *Laughter*. They implemented this. It’s an online tribunal process, they can meet in person, if necessary. You can do it from a computer or from your phone. You don’t have to sit in provincial court waiting for your matter to be called. It has baked into the rules, dispute resolution mediation process to try to avoid getting to a full hearing on the merits. Only a fraction of the cases that are scheduled to be heard proceed to a full determination by the adjudicator. Some are around 5% of small claims actions that are started, and some are in the neighborhood of 25% of strata actions. They’ve been very effective at resolving disputes in a short period of time, 60 to 90 days on the strata side. And what we’re hoping to leverage is a couple things. One is that the adjudicators who are appointed, they don’t have judicial independence, in a sense of the courts that they are independent of government in the sense that they are appointed through a merit-based process by the head of the Civil Resolution Tribunal. That they make determinations independent of both government and the ICBC. We wanted a way for people to be able to resolve their disputes that was proportionate to the size of the claim that they had. So, for minor injuries, that they didn’t need this huge process, the Supreme Court process. That there could be a more proportionate process that was more affordable and more streamlined, and yet still independent, and that people could have confidence. And also, there’s still a right to appeal to the Supreme Court if you wish, but it is a narrowly constrained ground of appeal. So, it won’t be like everyone’s going to appeal anyway, it won’t be like that, because of how the grounds for appeal are defined, how judicial review is defined. It is going to be a very significant piece of work, to hire up the necessary adjudicators, and for the claims in the CRT, and for them to scale up. But we are advised that they are ready, and they’re working on it right now. So, we’re building on the success of the strata claims and so on. And we’re also adding in a non-profit side of it. So, if Probus ever had a membership dispute, you wouldn’t have to go to BC Supreme Court anymore, you could go to this more streamlined online dispute resolution process. Thanks.

Question: You know, we understand that gangsters use casinos as an ATM machine, and now you’re using us as an ATM machine. David Eby: I’m not going to comment to this area any more *Laughter*. Once we get that out of the way, let’s get down to things that probably really count, and that really make a big difference to people. What’s happening on the 99, what’s happening with the pipeline, and what’s happening with the dam?

Answer: Okay, so the Site C dam is still under construction, and will be for a number of years to come. It’s a huge project. Audience Speaker: You didn’t shut it down? Audience Member 2: No. Oh God, no. David Eby: One name off the recall campaign *Laughter* I’m not going to answer the other two. No, okay. The Minister of Transportation is evaluating various options in relation to the Massey Tunnel, and the congestion in that area, and we will be addressing that issue. So, yes, the Minister of Transportation is looking at that. And it is important to weigh the future transportation needs of the region, which is obviously important there, as well as the cost of any proposed solution. And then the third is the pipeline. So, a very good question, where is the pipeline at right now? We know that the Federal Government is going to buy it, we don’t know how they’re going to buy it. We don’t know whether it’s a Crown Corporation, or whether it’s a transfer… Maybe a school tax *Laughter*. So, we don’t know exactly the mechanism by which they are going to do that, and we are not totally clear about whether or not they are going to dispute that they have an obligation to follow provincial environmental regulations in relation to that. And we’re not totally clear about what implications, if any, it will have on their consultation obligations in relation to First Nations, whether that will shift at all, because now it’s a Crown project instead of a private project. And so, it’s very much in the air right now. There is one very significant piece that everybody is watching for, which is why we’re starting… They made the move before this was decided. But the Federal Court of Appeal is currently evaluating judicial review of the National Energy Board process that was started by the Tsleil-Waututh First Nation. All the argument was complete, and the judges had reserved and were waiting on the decision. This is the decision whether or not the whole environmental assess process has to start back at square one again, because it was an inadequate process, as argued by the Tsleil-Waututh. And so, it’s a very significant one. So, if the courts come down and say, “You know you got to start at square one again,” the Federal Government chose an unusual time to buy the pipeline project. But the second piece is, that during the time that the judges had been reserved, a number of documents came forward that the Tsleil-Waututh alleged showed that the Federal Government had made the decision about the pipeline before the consultation process was complete. And they made an application to reopen the case, and the judges said “No, we don’t want to hear any additional information,” which I’ve heard people interpret 15 different ways. But the bottom line is, they said they didn’t want to do it. So, the Tsleil-Waututh actually could appeal that decision or refuse to accept the additional documentation. So, this big federal court case is looming out there. This is the really big one that could set everything back to square one, and that’s the one that people are watching closing. Audience Speaker: If it does go through, your government hates it so much, I hope it goes through and rules out lots of money that you will not touch very much. David Eby: Well, you know what, we’ll need all the money to clean up the spill. *Laughter*

Question: First-Past-The-Post already delivers a form of Proportional Representation, in that low population ridings in the north carry an equal weight of membership in the government as do high population in the city. So, that’s already a by-product of the existing system.

Answer: Yes. So, the question was in relation to voter parity, and this is my last question. I can see, I am getting the sign here. So, the question was, does First-Past-The-Post deliver proportional results anyway? There’s a great case, for those of you that are inclined to do additional reading called “Dixon v. BC.” Some of you may even know John Dixon, I worked with him in the Civil Liberties Association. He challenged this issue, that rural communities, “Your vote counts for more,” because it takes more of your people to elect an MLA in rural communities than it does in urban communities. So, your vote is essentially, the argument goes deluded, in that this is unconstitutional because the constitution says every Canadian gets a vote. So, you can’t have someone’s vote count for any more in a rural area than it does in urban areas. There was a decision made by the previous administration in a bill that was supported by then-opposition – NDP around rural representation, ensuring that it continues at the current level of vote parity. And that decision hasn’t been challenged in court. And arguably your point is correct, that does deliver a form of proportional representation in a way that it increases role representation in the legislature. Thanks very much.

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