British Columbia’s Minister of Finance, Colin Hansen, discusses retirement savings, healthcare issues and workforce challenges in the province.

What solutions are in place to help B.C. attract and retain skilled workers?

We are looking at population segments that are under-represented in our workforce. We see that new immigrants are not working to their levels of training, and we want to get them into the labour force where they can be most productive. Also, the Aboriginal population in B.C. is under-represented in the labour force. We’re doing a lot of work around training programs and economic development opportunities for First Nations people.

B.C. has frozen its minimum wage for some time—will this be a 2009 election issue?

B.C. has had the highest minimum wage in Canada for some time now, even though it’s been at $8 an hour—that was the highest until recently. We’ve focused on generating jobs in B.C. and we’ve seen an increase of over 430,000 jobs since 2001, which is by far the highest increase of any province in Canada. On a percentage basis, in the 1990s we had the highest youth unemployment rate west of Quebec. Today we have the lowest. As provinces jack up the minimum wage rates, there is a price you pay. We want to ensure that whatever minimum wage is set at, it doesn’t result in more people unemployed. In B.C. we’ve seen significant increase in the average hourly wage—it’s now at over $21. If you look at the youth between 15 and 24 they are making, on average, $13 an hour. There aren’t many people earning minimum wage in the three western provinces.

Is private medical services delivery still a big political issue in B.C.?

It’s a big issue everywhere in Canada. In B.C., we have contracted some privately owned clinics to deliver publicly funded surgical procedures to help free up time for hospitals to do more of the complex procedures and for the clinics to do some of the smaller procedures. Clinics still only do a small part of the surgeries. I think it’s less than 2% of all surgeries performed in the province.

Are there any changes on the horizon for B.C.’s pharmacare and paramedical plans, or any other public benefits plans?

In the last couple of years we have made some pretty big changes. We overhauled our pharmacare to allow the benefits to flow based on ability to pay. So, low-income families benefited significantly from the changes we brought in. The same for our medical service plan—we have significantly reduced the premiums for lower income families in B.C. There have been some changes that I think have helped a lot of families. We did have a pharmaceutical task force that produced a report for us last year and I know the Ministry of Health Services is now looking at which elements of the report can be implemented.

Would the B.C. government support the establishment of a national catastrophic drug plan?

We’ve actually been a big proponent of it. In fact, in 2004, when I was health minister, there was a conference on health at our national premiers’ conference and B.C. was one of the strong proponents of a national pharma plan. It’s still being actively discussed. I don’t know if there is a lot of progress being made on that file but it’s something we think makes a lot of sense.

Has the recent market volatility had an impact on B.C. pension plans?

The latest actuarial reports for our public sector pensions show that they are generally well funded. These public sector plans are independently managed and administered by joint boards of trustees. We have not received any indication from the reports that the market volatility is having an undue negative effect on these plans.

When might we see public policy changes from the Alberta/B.C. Joint Expert Panel on Pension Standards?

If the report comes down in November, I think both governments will be looking at possible changes during 2009. It really depends on the complexity of the changes that might be agreed upon. If there are matters that can be done by simple regulatory changes, those might be able to be implemented sooner. If legislative change is required, it might be a longer timeline.

Has the shift of responsibility for administration of pension standards from the Labour Ministry to the Financial Institutions Commission had a positive impact on plan sponsors and pension coverage in B.C.?

Now that the pension oversight falls under FICOM…they look at the whole range of financial institutions. They really have the mandate and the staff to provide that expertise. I think it’s been a very beneficial move.

What would be required to improve pension coverage in Canada?

One of the fundamental questions the Joint Expert Panel will be looking at is what we need to do to make it more attractive for employers to offer pension plans to their employees. We agree that the current percentage of workers in the province [with] pension coverage is too low.

Could pension matters be an issue for the 2009 general election in B.C.?

I don’t see anything on the horizon that would make it a big election issue. With some of the unions and others I’ve talked to that have been, in the past, quite anxious about the vulnerability of their pension plans, I think they now recognize that the strong B.C. economy has resulted in a lot more work for their members, and hence, more revenues flowing into those pension plans. This has allowed them to stabilize some of those plans.

Has socially responsible investing had an impact on pension investment in B.C.?

That’s difficult to say because that’s not something we monitor directly. We hear anecdotally about various pension plans who’s trustees have looked at socially responsible investing. I understand there are some plans that have established pilot programs in that area. We will be interested in what comes out of those pilots but it’s not something we monitor on a plan-by-plan basis.

What impact might the tax-free savings account have on retirement savings?

It’s too early to tell right now. It will be interesting when that comes into effect next year. Having said that, B.C. is moving forward in some areas of increased flexibility for those who are in existing plans. We recently passed legislation that permits pension plans to offer phased retirement. We hope that this change will help provide more flexibility and more options in the workforce.

Would B.C. support the creation of a national financial services regulator?

We’ve made some progress on the securities side with the passport system, which has been agreed to by all provinces, with the exception of Ontario. I think, as far as pensions go, the work we are doing with Alberta to harmonize pension administration between the two provinces is going to become a model for other parts of Canada as well.

B.C.’s carbon tax was imposed while oil and gas prices were high. In hindsight, would public acceptance have been better if the tax has come when prices were low?

We should have done a better job of communicating to British Columbians that at the same time the carbon tax was introduced, they got a significant reduction in their personal income tax. The carbon tax is totally revenue neutral—every dollar we collect, by law, has to be returned in the way of a tax reduction. So when you think about the added cost to fuel, it leaves more money in people’s pockets. More importantly, from our view, it’s more money to fund some of the changes that may be needed to reduce their fuel consumption—like making sure their car is fully tuned up, [better] insulation for their homes or tuning up their natural gas furnace.

What reaction did the recently released reports that outlined the major elements of compensation for the top five ranking public sector executives receive?

It didn’t get a lot of coverage at the time, but this is the first time any province has put out the total compensation for its senior public service executives. What it showed is that our top public sector employees are paid well, but not compared to the private sector. In the case of our assistant department ministers and deputy ministers, for example, it showed that B.C. ranked 10th out of 10 provinces. We subsequently announced increases in the ranges of pay for these positions. That decision has caused lots of controversy in the province, more than the actual listing.

How will the 2010 Winter Olympics benefit B.C.’s economy?

It’s going to be a big economic generator in itself. We estimate about $4 billion worth of direct spending and the economic spin-off from the hosting of the Games would be over $10 billion. The biggest benefit from hosting the Olympics will come from us taking advantage of the marketing opportunity that it presents. We will have an opportunity to showcase B.C. and Canada to an estimated three billion viewers around the world. We will be using the marketing power of the Games to attract visitors, investors and workers.

Alyssa Hodder is the managing editor and April Scott-Clarke is the assistant editor of Benefits Canada.

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© Copyright 2008 Rogers Publishing Ltd. A shorter version of this article first appeared in the October 2008 edition of BENEFITS CANADA magazine.