Excerpt from the Official Report of


May 27, 2014

Eastimates: Ministry of Justice

S. Simpson: So the minister will know, we're going to move to some discussion around liquor policy at this point.

I would note — and I want to make an introduction — that we do have a couple of guests here in the gallery. Markita and Victor Kaulius are here. The minister will know that Markita, in addition to being…. She's the president of Families for Justice, but also, as we'll know — and I know we all would extend our sympathies — Markita and Victor lost their 22-year-old daughter, Kassandra, in May of 2011 to an impaired driver.

We're going to start our questions here at this point with some questions related to issues around safety, addictions and other initiatives that link to decisions in the recommendations of the liquor policy review. I'm not sure whether the minister has the staff here ready to go now.


S. Simpson: When the report was done and the review was done by the parliamentary secretary, there was a whole array of groups that he spoke to. If you read the 73 recommendations and you read the report, it becomes very clear — the impetus and the initiatives that came from those in the industry. They were looking at ways to streamline. They were looking at ways to make changes that would improve the business model for them, and I understand and appreciate that.

However, we also know that there were a whole lot of other people who spoke to the review — the Vancouver Island Health Authority, the Canadian Mental Health Association, MADD Canada, the Centre for Addictions Research of B.C., the provincial health officer, Northern Health, Centre for Addiction and Mental Health, the Canadian Centre for Addiction, the Vancouver police, the B.C. Association of Chiefs of Police, the Victoria police, Prince George RCMP, and the Families for Justice were among the organizations that spoke to the review.

In those cases, every one of those organizations, on a variety of matters, whether it was around safety, whether it was around things like impaired driving, around addictions, around other related matters, expressed their concern for public safety and potential fallout from decisions to implement this set of recommendations.

The questions that I want ask are a couple of questions that relate to that, which I know are of great concern to our guests in the gallery here. When I read the liquor review policy, we see the government says they plan to continue to safeguard health and public safety. Yet if you read the 73 recommendations, there is no mention around resources, around funding to support that, and it's not free.

Can the minister tell us what is the expectation around funding and resource support to build and enhance those health and public safety programs to deal with potential additional fallout from relaxing of liquor laws or to simply deal with issues that we know are in front of us today from current laws that require additional attention?


S. Simpson: I appreciate the answer, but the question wasn't that. The question was support. The reality is these programs don't become effective and get realized if they don't have resources. If there isn't a commitment of funding around health and public safety, if there isn't a commitment of funding around prevention programs, then in fact they don't work. There have to be resources applied to this for them to be successful.

My question, again, to the minister is: what is the funding source, and what kinds of resources are we talking about here to support these programs?


S. Simpson: I think that view of a strong theme is not necessarily shared by many of the organizations that approached the ministry around this and who have looked at the review. I don't think that that's entirely accurate.

When I look at these programs and then I go and look at the service plan to see what the service plan has to say…. It has a reference around responsible alcohol consumption education and awareness and ministry efforts to continue to improve education and awareness. But when I read through, all I can find is production of a bi-annual newsletter and, in addition, the branch will continue to work on development of resources for parents of minors. That's the extent. Again, no numbers.

It's pretty easy for me to find the number that says how much revenue government gets from liquor. About $1.1 billion comes into general revenue when you include the profits and the taxes, give or take. The minister is able to provide in here, I'm sure, the information that tells me it's $1.1. billion that we take from liquor to pay for things.

Can the minister tell me, and I don't much mind whether it's money that comes through the agency or through the ministry, how much money is being spent on programs around prevention, around health and public safety related to alcohol?


S. Simpson: So I see about $2.5 to $3 million on what is $1.1 billion of revenue.

I've seen the minister's comments in regard to the immediate roadside prohibitions and administrative prohibitions and the minister talking about the estimates that are here of upwards of 190 lives being saved by the implementation of these programs and a reduction in fatalities due to impaired driving. But what we do know is that there are significant numbers of immediate roadside prohibitions and administrative driving prohibitions.

The first question…. I guess I have two questions. One is: could the minister tell us what her projections are as to how many of those prohibitions have we seen in the last period of time?

The other question I have is: based on the estimates of the ministry and of authorities, for every roadside prohibition where somebody is caught and an assessment is made and a prohibition is put in place, how many is it projected are not caught? Is it one in 50? Is it one in 20? Is it one in 75? What's the best guess?


S. Simpson: I understand that there have been over 6,000 immediate roadside prohibitions given out to impaired drivers in the first four months of 2014. Could the minister confirm that number?

Again, my question is: could the minister tell us what is the best estimate of the ministry and of her officials for every first four months of 2014 to impaired drivers. Could the minister confirm that number?

Again, my question is: could the minister tell us what is the best estimate of the ministry and of her officials? For every one of those impaired roadside prohibitions that's put in place, how many people slipped through the cracks and did we miss? What's the best guess?


S. Simpson: That is a large number.

The question was…. It's my understanding there have been over 6,000 impaired roadside prohibitions — not administrative driving prohibitions but immediate roadside prohibitions — in the first four months of 2014. The question is: for every one of those immediate roadside prohibitions or administrative driving prohibitions — and the couple of hundred thousand, or close to it, that the minister named there — how many people, as the best guess, did you miss who made it through without being stopped? What's the estimate? The police must have an estimate about what they think the best guess is.


S. Simpson: I guess, then, the question that I would have is in terms of just moving now a little bit to some of the treatment issues related to expansion. When we look at the Centre for Addiction and Mental Health and their recommendations, they recommend the government expand public education on health and safety risks related to alcohol use, with particular emphasis on harmful effects of binge drinking by youth and post-secondary students.

We now have 73 recommendations. These are recommendations that the expectation is will then generate additional revenues for government. Then the question becomes what additions, over and above the $3 million or so that is being provided through public awareness through the LDB…? Is there an expectation that there will be additional dollars and resources applied to health and safety, to public awareness, to treatment over and above what's expended today out of the couple of billion dollars of direct and indirect money the government gets?


S. Simpson: I've got just one last question, for the moment, in regard to some of these matters. It's from a report by the Centre for Addictions Research of B.C. One of the things that the report says is: "B.C. does not have an alcohol-specific provincial strategy. The issue of alcohol consumption is significant enough in terms of public health and safety and has ramifications for policy and practice across multiple sectors of government to warrant a focused and overarching guide to strategy."

Could the minister tell us: what is the strategy of government to deal with issues related to alcohol and all of the complexity that comes with that? What is the strategy?


S. Simpson: It continues to be a problem. The minister referenced a number around 100,000, a little more than 100,000 that would have been affected by prohibitions and taken off the road. You've got to believe…. I think that we're all happy and pleased that the estimate is that 190 lives were saved by those initiatives. We all would want it to be more.

We also know that if there were 100,000 out there, I'm going to say that if I just pick the number of ten or 20 people who slipped through the cracks for every one that was caught, I don't think I'd be far out. Matter of fact, I'm probably conservative. That tells me we're talking about a couple of million people on the road who probably shouldn't have been there because they were drinking.

This initiative has captured some of that, and I'm not sure that you can go and do a ton better than that. But the reality is that there have to be ways to get at those other people who are doing this and putting lives at risk — their own lives and the lives of others at risk. That's got to be a consequence there.

I'm pleased to hear the minister talk about some of these matters. As I'd said, Mr. and Ms. Kaulius are with us today. They are committed to this issue. They certainly understand this issue far more than I do, and I know they've told me earlier today that at the federal level they've gathered 65,000 signatures to look at increased penalties and sentencing around impaired driving, to deal with under the Criminal Code. They'll be advancing those initiatives in Ottawa.

I don't have the time, and it's unfortunate I don't have the time, to pursue these matters further. So my question to the minister would be: not necessarily today, but would the minister make a commitment to sit down with Mr. and Mrs. Kaulius and some of their colleagues, parents of other children who have lost their lives — or they have family members who have lost their lives — to impaired drivers, and have a conversation with her officials and with the Kauliuses and with others around these issues so that they can ask the questions that they would ask better than me and satisfy themselves that the initiatives of this government, in fact, are going to be valuable and worthwhile? Maybe the ministry will be able to learn some things from their experience and their knowledge to help create improvement around this area.

My question to the minister is: will she make the commitment that she and her officials will meet with the Kauliuses and others they're working with?


S. Simpson: Thanks to the minister for that commitment. I'll look forward to hearing about this meeting, hopefully, being arranged by the minister's officials and the family to happen soon so that there can be some positive work done, moving forward, to get a better handle on these things.

I'm going to move now to other areas related to liquor and deal with some specific matters. The first question is…. We know that there's been discussion around turning the liquor branch, largely, into a Crown corporation and using the Crown corp model. Could the minister tell us what the status of that is?


S. Simpson: It's my understanding, and the minister can correct this if it's not accurate…. We know we had the legislation that was brought this spring. It's my understanding from the minister's officials that there is a more substantive and significant rewrite planned for next spring. Could the minister tell us: is that in fact correct? Would we expect a change around the governance model or the structure model, if one is to occur, to be in that legislation?


S. Simpson: Could the minister tell us: should the initiative, which I know was broached and at least mused about around the Crown corporation, go forward at some time in the future, is the minister prepared to commit that there will be a significant consultation process before the governance structure of liquor distribution was made?


S. Simpson: I understand it may be premature to dot the i's and cross the t's, but I would hope the minister could say: "Yes, we will talk to people before we go and make a substantive change."

I want to move to the pricing question. The minister may well recall that I asked this question back in February of 2014 of the minister in the first round. Or I should say, I asked it back…. Yeah, that's what the date would be there.

The question was: "Is the thinking about a new pricing system and a one-wholesale-price system still something that the ministry is considering, or has that gone by the wayside?"

The minister's answer was: "It would have been extremely disruptive to the industry and very complicated, so the decision was made not to go there. The question of 'should we try again at this point?' is not under consideration at this point." That was the minister's answer.

Could the minister tell us what the position is today? Why has it changed?


S. Simpson: Well, we need to be clear that, in fact, the report of the parliamentary secretary didn't deal with this matter at all. In fact, the parliamentary secretary was very clear in saying pricing was outside of his mandate and his purview and he wasn't able to deal with that. So that's a matter that fell out of the blue.

There are those of us who would believe at the cabinet table that the minister's predecessor, who was an enthusiastic fan of a single-pricing system and tried to do this before to no avail, probably was strongly encouraging that at the cabinet table. But I won't ask the minister that, because that would be a cabinet confidentiality.

So that's the challenge. The question I have, then, for the minister regarding the pricing matter is…. There are a couple of options. The option that has been talked about, the option that I have heard about from people in the industry who have talked to people in the ministry and around the branch, is that the current price does not change for the private operators, and the price adjustment will be in the government stores.

If that in fact is accurate, it would appear to me we're talking about potential lost revenue among other issues. Has the ministry done an analysis of the financial impacts of any changes to pricing?


S. Simpson: Well, if it hasn't settled on a model, then maybe we'll back up to a more basic question here. Has the government and has the minister settled on a one-price model? Not the specifics of what that might look like, about how the dynamics of that might work or the detail of that, but has the government settled on a one-price model?

I ask that because the government has said it's adopted all 73 recommendations and will proceed. I recall in the releases that came out that pricing was referenced, though we know it was never one of the 73 recommendations, but it was added in. So is there agreement by the government that there will be a one-price model — without getting to the detail of what that one price looks like?


S. Simpson: I'll try again. I don't want to know what the model looks like. I want to know whether we're talking about a one-price model, not what it looks like. I'm asking no detail. But the government issued press releases, this minister issued press releases, saying we're going to a single pricing. If that's the decision of government, that's fine. I'm just trying to confirm: is the government locked in on one price?


S. Simpson: I guess I don't know what to make of the press release that said we got one level of pricing and a minister who can't tell me that. The minister clearly is able to tell us that 73 recommendations have been embraced — even though, when you look at the list, so many of them are shallow, to say the least, as the report is shallow in terms of any evidence or due diligence that's been done to support them.

But I accept the fact that the minister and the government have chosen to accept all 73 regardless, knowing there's a whole body of work to be done on most of those recommendations, if not all of them. Certainly on some of the key ones like grocery stores, which we'll talk about in a minute, there's a lot of work to be done.

The government didn't seem to have a problem in saying: "We're going to embrace all 73, even though we don't know what that means when we actually get to doing it." I thought the government had said we're embracing single pricing at the same time, but apparently not — or maybe not. I'm not sure.

I'm going to move to the grocery stores that the minister has spoken about on a couple of occasions here. Can the minister tell us what is the current status of the move towards the sale of liquor in grocery stores?


S. Simpson: The report. Clearly, I understand folks that came forward and, obviously, a number of people who were surprised by some of the recommendations — people in the industry. It was a bit of a wish list of folks in and around the industry, and I appreciate that.

The challenge comes in how to implement it, and the grocery store plan is one of the more challenging ones. Is the minister still committed to the store-within-a-store model? That has been talked about pretty consistently up to this point, where it would be a unique entity within the store; i.e., that would not be a matter of, as with many of our American friends, just loading liquor on the shelves, and you come up to the regular cashier and cash out as you do with the regular groceries.

The store-within-a-store model that I know the minister has spoken about on a number of occasions — is that still the plan, some form of that?


S. Simpson: Is it the expectation still at this point…? We know, and we've read in the media that one of the challenges that many of the major grocery chains would have is the one-kilometre rule. I believe I read a story in the Vancouver Sun that of the 53 major shopping facilities in Vancouver, 52 of them couldn't put a liquor store in today. They couldn't put a store within a store because they are within close proximity, less than one kilometre away from another liquor outlet — presumably a private outlet, unless they purchased that outlet or that licence and moved that in.

They wouldn't be able to bring an additional licence in under the current rules. Is there any contemplation of removing the one-kilometre rule?


S. Simpson: Then, if I'm to understand correctly, should a retail food chain that was determined eligible to have a liquor store want to do that, if there was another private store, for example, adjacent, they would have to purchase that licence or whatever and make the decision to move that facility into their store in order to accomplish their objective. Would that be accurate?


S. Simpson: Is it contemplated? I know that the thinking has been that this would look at private stores, the 670 or whatever private licences that are out there. It would involve one of the groceries buying one of those licences and putting it in the store. Is there any contemplation of moving government stores into these facilities?


S. Simpson: One of the other models that's talked about and has been talked about by the minister is the VQA model. I believe that the thinking here is to be able to put VQA products, wines —I know there has been some discussion about the growing craft beer industry — and being able to put craft beer in as well.

My understanding from what little I've been able to garner about this is that might well be a situation where that's on a shelf in the store itself and not part of the store-within-a-store permit but a unique permit that's around the VQA products.

Could the minister tell us would that be the case — that if the VQA permits go forward, they would be unique in that way, in that they would allow the product onto a shelf in the store itself, regardless of whether they had a store-within-a-store liquor licence?


S. Simpson: Is the suggestion here that the one-kilometre rule may not apply to these permits? Is that what's being contemplated?


S. Simpson: Could the minister tell us what work has been done around trade policy. The immediate question that's raised around the VQA model, because of our trade agreements with our friends in the United States and our other friends, is that if I'm a California winery and you tell me that you're going to put B.C. wine into that Save-On-Foods on the shelf, and then I don't get that same access, you're breaching that trade agreement, in all likelihood.


S. Simpson: And it's not just a trade matter, for that matter. I mean, the other concern here is if you look at the VQA model, depending on what's decided about size and scale…. One of the challenges with VQA — it's a challenge, certainly, if the craft beer is entertained as well — is if you were to get a number of stores….

The thing that becomes pretty clear is that should the government make the decision that the 1-kilometre rule doesn't fit and that the VQA option is available and it suits the needs of those stores much more…. Most of them probably would much rather put this on a shelf in the regular store than build a store within a store with all the implications of that and the additional staffing requirements and security. The idea that they could just put it on a shelf in their store and sell it like they sell the rest of their merchandise would sound pretty appealing.

Once you do that, one of the things we know is that, first of all, VQA — the supply…. You know, we produce a fabulous product, but we don't produce mass amounts of that product. Craft beer even more so. It's limited amounts and limited runs of that product. So you're going to have a situation where the stores may have trouble getting the product.

At the same time, are you going to be saying to Molson in Vancouver…? They will say, "We brew lots of beer right here in Vancouver. How come we can't put our beer on that shelf along with Parallel 49 and Driftwood? We produce that beer in Vancouver and British Columbia just like everybody else, and you've got shelf space because you don't have enough craft product to fill it." How does that get dealt with?


S. Simpson: Well, then that kind of brings me to the real issue here, the issue that has been raised to me by numerous people in the industry, the private-store owners. The liquor store industry has raised this with me. They almost to a person say that the scenario they play out is the scenario that says you can't get a store within a store because of proximity of other liquor stores. You apply and get the VQA permit, whatever that looks like. You've got that. Not very long down the road, there's pressure around trade agreements. There's pressure from other products. Pretty soon the rule changes, and you've essentially created a liquor store because you broaden the capacity to add other product, not just VQA product.

The question I have for the minister…. She has been very clear, as has the government, that this was a unique model that would be used to advance B.C. craft product, whether it's VQA wines or craft beers, and would be limited to that.

The concern now is if you can't get around the 1-kilometre rule, this is a back door into liquor in your grocery stores and may be broader than just VQA product. Is the minister committed that this will be VQA or craft beer product and will not turn into a back door to allow expansion to simply the creation of liquor stores that end-run the 1-kilometre rule and all of the machinations of a store within a store?


S. Simpson: On the broader policy question — because it is complex and it has a bunch of layers — could the minister tell us what her expectation around a timeline is to land on some policy here that presumably allows regulation to be written? She can correct me if I'm wrong as to whether this requires new legislation or if it can be done by regulation. But what's the expectation of a timeline here before the government lands on how to proceed, whatever that might mean, and then to put in place regulation or legislation in the fall or the spring, if that's what it requires?


S. Simpson: I might have missed that. Is the minister saying that now the legislation that was adopted earlier this session enables this to be done by regulation and not by further legislation?


S. Simpson: The question of the 670-odd licences that we have currently and the decision of this policy, which…. The minister can clarify whether in fact this has now been done by this legislation that we've adopted. It used to be…. As we know, the policy was if you bought a private liquor store, you couldn't move it more than five kilometres from its current location. So people bought liquor stores. Now it's more portable, and you can move that permit or that licence anywhere you want in the province. Instead of the actual store being of value, the piece of paper is now what's of value.

Could the minister tell us: is there any thought about what this does for the valuation, and any thought about what this potentially does around compromising access in smaller communities that could lose a licensed facility because the potential of the value of that in a relocated, higher-population area is very real? What assessments have been done of that possibility, and how does the government plan to address that?


S. Simpson: Is the branch monitoring sale of licences? And has there been any significant activity around sale of licences since this was announced?


S. Simpson: Maybe just for down the road here, just so I'll be able to get a handle on this, could the minister tell us: what's the range for typical change of licences in a given year? If I see it doubles or triples, I'll kind of know that's what it's done.


S. Simpson: Just a bit of a diversion here to a specific case, a letter I received from a gentleman I know, a fellow by the name of Paddy Treavor, who's a craft beer aficionado and lives in the Powell River area. He's the president of CAMRA Powell River, which is one of the regional groups that promotes the craft beer industry.

He wrote to the minister about a month ago in relation to an agency store on Savary Island. There was an application by the Savary Island General Store and Trading Co. for an agency store status. That status was declined because the store is within ten kilometres of another liquor store. However, that other liquor store is in Lund on the mainland, so you'd need a boat to get to the other store versus the one that's on the island.

There was a letter written to the minister, I believe, around this, asking for some consideration since this wasn't simply a matter of jumping in your car and driving down the road to the liquor store. You'd have to travel to the mainland from the island.

I'd ask whether the minister is aware of this correspondence, or her officials may be aware of it, and whether she would commit to responding to Mr. Treavor and hopefully trying to find a solution.

I think what we would all agree is that if there are communities in the province that have legitimate access issues, then you should address those issues. It seems to me this question of having to get on a boat to get off the island to go and buy your bottle of wine is a bit problematic. And whether there could be some attention paid to that, to see if a resolution can be found, either to licence this agency store or to move forward with another solution.


S. Simpson: I appreciate that. Hopefully that can happen in a timely fashion and the people on Savary Island can get their access if it's warranted.

I want to move, in the last few minutes we have here — just 15 minutes or so left, maybe — to the question of liquor distribution and the warehousing situation. Could the minister give us an update on the warehouse relocation off of Broadway, how that's going and what the plans are?


S. Simpson: We know, if we go back into not that distant a history…. Actually, I'm going to go a different place with the question.

The consultant. I believe that Sedlak is the consultant. Could the minister tell us: what exactly is Sedlak's job as the consultant? Where are they in their term? My understanding is that the agreement was that they were contracted for a year, with the ability to have a number of six-month extensions subsequent to that if it was decided that that was warranted.

Could the minister tell us: what exactly are they doing, have they produced any reports on these issues, and why are they in place?


S. Simpson: We know back previously that there was an effort to essentially privatize the liquor distribution aspect of the business. That was withdrawn, I believe, around collective bargaining with the B.C. Government and Service Employees Union. There may have been other reasons, but we know that was one of them, and we know that agreement locked in I think 185 stores, at least for the rest of the term of the collective agreement, and that at least 185 government stores would be maintained and not potentially privatized.

I don't know and the minister can maybe tell me whether there were commitments around the future of distribution as part of that collective agreement — I'm not aware of that — and what the status of that is.

Really, the key question here is that.... Sedlak, we know, has worked previously with Exel, which was the company that was enthusiastically looking to encourage the privatization model when it was in front of us. Mr. Kinsella, a good friend of some of the minister's colleagues, was doing work with them on that matter.

The question I have now is: is part of Sedlak's mandate to look at optimizing liquor distribution models, and could that model and that recommendation include revisiting the privatization of the distribution system?


S. Simpson: To be clear, I appreciate that answer. It's pretty definitive. So we can be confident that the options, whether they involve new warehouses built to spec warehouses, whatever — that that will all happen somewhere. Hopefully that will be a good thing. But under no circumstances, at least as of today, is privatization of the warehousing and distribution system again a live topic on the table.


S. Simpson: I just have one short request — not a question so much as a request.

We'll be completing the liquor aspect of these estimates now. There were some other questions that time just did not permit to get to, and I would ask the minister that if I was to put those questions in writing to the minister that I could expect written responses to some of those questions that we simply haven't had time to get to today.


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