2025-09-03 Special General Meeting

The video recording of this meeting is on the Trustees Upcoming Meetings page. The following does not transcribe all recorded material from the meeting.

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Special General Meeting, September 3, 2025

Chair Mercier welcomed attendees and made the land acknowledgement. He then explained the reason for the meeting.

CHAIR: At the first session of the 2025 AGM on June 18th, a motion was made by the landowners to choose Doane Grant Thornton as the auditor of 2025. The right to choose the auditor belongs to landowners as set out in the Letters Patent, where a purpose of the Annual General Meeting is to have the landowners choose an auditor for the ensuing year. This means that the deliberative body for the resolution is the landowners, which is the general assembly present at the general meeting of the landowners. There is some dispute, I understand, but my understanding is that this is the correct interpretation of the Letters Patent. [Interjection by Trustee Moher: “We will discuss that.”] That said, it is the responsibility of the trustees to appoint the auditors. This responsibility is set out in the Local Government Act section 692 (1): “An improvement district court must appoint an auditor for the improvement district.” The landowners choose, and the board appoints.

Doane Grant Thornton was chosen by the landowners at  the AGM. This choice was formalized by the trustees at the general meeting of July 2, that issue was resolved

THAT the GFPID confirm the appointment of Doane Grant Thornton as auditor for the current fiscal year, in accordance with the decision of the landowners at the 2025 Annual General Meeting, subject to the receipt and board approval of a written proposal outlining scope of work, estimated cost, and expected deliverables for the current fiscal year audit, and that the Corporate Officer be authorized to initiate contract discussions accordingly.

AND that the results of those discussions be reported to the board, and be brought back to the landowners for reconsideration, if deemed necessary.

We received a quote from Doane Grant Thornton for $15,260 at the August 6th meeting of the board of Trustees, the quote was assessed, the board voted that the difference in price between the Doane Grant Thornton quote, and the quoted cost for the 2024 audit by KMA with a ballpark of $10,000, made it necessary that the matter be brought back to the landowners. The corporate officer was asked to secure quotes from KMA for the 2025 audit and to secure a third quote from a suitable third auditor and to return to Doane Grant Thornton with a request for revised quote in light of the comparison shopping.

Which brings us to September 3rd, 2025, where we present that information to the landowners. The landowners of the General Assembly must now choose the auditor, as is their duty and right. The Board will then act to appoint the auditor so chosen.

Chair Mercier next explained that the Letters Patent define who is entitled to vote:

At any general meeting every person shall be qualified to vote who is a Canadian citizen, is eighteen years old or older and is an owner of land in the improvement district, or the authorized agent of any board or corporation that is an owner of such land, or legal representative of any owner of such land who has died, become insolvent or insane and is entitled to be registered as a voter under the Election Act.

Specific procedures had been put in place to ensure that all who voted were entitled to do so, and these were explained in detail. Chair Mercier then turned the floor over to Corporate Officer Marjorie Colebrook, who explained that three companies of six contacted had responded to a request for quotes. The quotes given were provided in hardcopy format to the assembly and noted on the whiteboard. The quotes received, including GST, were:

• Anna Jones for Doane Grant Thornton: $16,023
• Cory Vanderhorst for MNP: $19,294
• Doug Parkhurst for KMA (previous auditor): $20,947.50

Trustee Moher indicated that she wished to speak regarding the quotes.

TRUSTEE MOHER: First of all, I want to thank everybody who's come, and I want to thank you all for allowing us to do this properly and with proper procedure, because basically, we are supposed to put a tender out and have more than one person for you guys to vote on. That is how we are supposed to do this. We had a meeting with Municipalities [ed: Inspector of Municipalities], and we were told in that meeting, and I know that our chair disagrees with me, and I'm trying to get it in writing. And we will clarify this as we amend our Letters Patent, that when we are doing something like this, there should have been notice before the AGM, that there would be a change in the auditor, and then we would have three names there for that AGM for you guys can pick from, and we would have had all this work done. So I appreciate the fact that you've allowed us to do this, so that it's been done properly and that we can vote on it, and that we have freedom to do so, and that we will be moving forward to make sure that any and all language around your rights and privileges with regard to to appointing an auditor is done in accordance with the rules and regulations that we have to follow, which is [?] and getting it put together and then put before you. Thank you for this.

At this point the floor was opened for questions. Each individual was allocated a maximum of 5 minutes.

QUESTION 1

Q1:  I just have a question for clarification. You said you wanted to make sure that procedures—our rights and privileges are in accordance with the rules you have to follow. What does that mean?

TRUSTEE MOHER: That means that what should have happened is,  what is it that you are to appoint, you're to vote on the auditor. But it was our job to make the decision for the change, and our job to do the work ahead of time to have three auditors. And that was Municipalities that told us that. And then we bring those to you, and then we have you choose out of those people who you want us to appoint.

Q1: So you're saying that the landholders don't have the right to suggest an auditor.

TRUSTEE MOHER: What you, you would have given us, what I believe, but I'll get clarification on this, too, is that everything should be given to us at least 14 days before the AGM. So we will ask for clarification whether you can send us in a recommendation for new auditor. But we were told very clearly in a meeting, and I remember him very clearly saying, to us, "No, no, no, no, no, no, no, that's not the way to do that." And so we've been in the process of getting him to clarify that in writing for us and clarifying the process for us. And unfortunately, our Letters Patent are not very well written, and that's going to be clarified with that change. And because these things require the same amount of notice as everything else. And it's not that we don't want to do it, we just want to do it properly and having it handed to you at 11 o'clock at night at the end of very long day and a very long meeting, it was not [?] correctly, and that's why I'm saying thank you very much for allowing us to put the bids out, bring more people to the table for you guys to look at and make an assessment as to the money. And it could end up being the same person, but we put bids out for everything that we're doing, so it is, in that respect, proper process.

QUESTION 2

Q2: I guess on a follow up to that, because I was actually at the annual general meeting when the decision was made to change auditors, because it's a good practice. And then the motion included naming Doane Grant Thornton, Anna Jones to be that auditor. We did pass that, and that was a decision of the taxpayers and landowners at the time. So I think that everybody is learning new processes and understanding what is the process to do stuff. And I think when you have the clarification about what is the proper process, then you could inform us [?] or whatever, and that will be the process going forward. But I think there have been, and are, a lot of policies and practices that need to be kind of cleared up so that it's much easier to rely on what you're supposed to do as opposed to always having to invent the wheel. And that's one of the benefits of having policies and procedures so that you can do that. So I'm glad that you're moving forward to that, but we don't actually have the information yet. And in the meantime, we do know that the members said it should be Doane Grant Thornton, and they have come up with the lowest quote, so if I may say I'm also in favour of selecting...

CORPORATE OFFICER: I'd like to say if we don't have policy, that doesn't mean there is no policy that we have to follow. So we have to follow, in this case of no policy, we have to follow the Local Government Act. And so that says, “must appoint an auditor for the improvement district.” So once again, that's up to interpretation, but it is the district, that’s what that says, so that's what we have to follow in absence, and that Local Government Act can also supersede the Letters Patent. So whenever you have an [?] that’s illegal, or it's not right, then the Government Act supercedes.

Q2: And the annual general meeting did appoint an auditor.

CORPORATE OFFICER: But […]the board has to appoint it first, that's the issue.

Q2: First?

CORPORATE OFFICER: Not first, but get the call first.

[Multiple voices interject, which the Chair shuts down]

QUESTION 3

Q3: Thank you for holding this meeting. I appreciate the opportunity to come as a landowner to vote on this particular matter. I do recall the meeting in June was also a general meeting of all the landowners, but prior to the vote being called, I don't recall there being any process that determined whether those people who sat in that hall and voted were, in fact, landowners and were eligible.

[Discussion and clarification that the rolls were used for voting for trustees but were not used for the vote on the auditor at the AGM. Explanation of challenges faced by improvement districts.]

Q3: I feel reassured that a process now is in place to determine that the validity of the vote will be maintained, and that the decision be made actually as a decision that represents landowners, not any person who could have walked in off the street and attended that meeting and would have been able to vote. There was no question, there was no way of determining that people there were eligible to do so. So thanks for the care taken to make sure that the democratic process […].

QUESTION 4

Q4: I’d just like to comment that there hasn't been any evidence that's been put forward that the previous vote that occurred at the AGM was in any way improper. There is no evidence that people that voted at the AGM were not eligible to vote.

I'd submit to the board that it made an error, after the auditors had been chosen, in reconsidering the issue. It is 100% the responsibility of landowners to elect the auditor. They did so and the only way this should have been brought back into this meeting in the way it was, is if for some reason, the auditor which had been chosen by the landowners was unable to fulfil that obligation. It was the duty of the board not to question what the landowners had already decided. It was the duty of the board to implement it. And so it was improper to have a motion when the board convened a couple of months ago to say, “Let's talk to the auditors, the proposed auditors, and if their their quote is acceptable, then we'll go forward. If it's not, then we may have to come back in front of the landowners.” That's improper. The decision had been made, it was the duty of the board to implement it. So I'm glad we're having this meeting so we can put an end to this.

CHAIR: So thank you for your comment.. I guess what I would to ask both you and anyone else who shares similar feelings […]— it's clear, I think, to all, that there's some degree of novelty to this process, as we haven’t switched auditors in approximately a decade, and the institutional knowledge of how to do that is not all reported. So we're working together here.

QUESTION 5

Q5: First just a quick question for information— the eligibility of landowners to vote, is it also true that one has to be here and present, present here to vote, or can there be proxy votes?

CHAIR: Proxy votes are only permitted if you are [repeats qualifications from the Letters Patent]. There's neither legislative requirements nor procedure for proxy voting. You have to be here.

Q5: Okay, thanks. And also just wondering for this jurisdiction, does the landowner have to be resident in B.C?

CHAIR: The statutory language doesn't address residency, only ownership.

Q5: Not residency of the owners. I know for some—

CORPORATE OFFICER: For the election itself, the […] for the entire six months.

[Multiple voices, the Returning Officer from the last election clarifies some points around requirements and process]

Q5: So then my question to do with the direct topic here is, What information was sent to the companies for them to use to develop their quote?

CORPORATE OFFICER: Doane Grant [Thornton] used the journal from last year.

Q5: In other words, 2024.

CORPORATE OFFICER: Yes. So they got all the documentation from last year's auditors so they could look at what was included. And the other two, I just asked for it. They didn't ask for anything. Any verification.

AUDIENCE: They didn’t even ask how many millions of dollars a year go through the books?

CHAIR: The third quote is from Doug Parkhurst at KMA. He's our auditor of record for many years and so came to the table with a lot of knowledge.

CORPORATE OFFICER: [some overlapping voices, but this seems to refer to MNA] And he does the North Cedar District, they've done quite a few of the improvement districts, so maybe not ours […] but really familiar with the—

Q5: But they didn't—

CORPORATE OFFICER: They did not anything from us.

Q5: And just a couple of corollaries, I’m just learning. The financial statements of improvement districts, are they public documents or not?

[Summarized, the answer is that the financial statements and auditors opinion are public, management letters are confidential for a specific period of time. Note that statements back to 2020 are available from gabriolafire.ca.]

Q5: These are quotes, right? So if whoever we choose, my understanding is that they have a right to, when it comes to doing the work and then saying, “Actually, we need to charge you more,” they can, right?

CHAIR: Yes.

Q5: This is this is not a set price? Am I correct on that?

CHAIR: Correct. So, for instance, last year's quote from KMA was $8 or $9,000, and then there was $3000 or $4,000. These numbers are very mucky. But on top of that, for various reasons, it's reasonable, I think to expect some bumps in the road with the 2025 audit because of the situation with financial oversight at the beginning of the year being muddy. So it's a fair assumption that these may not be the topmost limit.

Q5: That's partly why I asked, because if if Doane Grant [Thornton] is looking at 2024 numbers, if they don't know anything about what's been going on in ‘25, the ultimate fee for them might be higher than what they’ve quoted. […] I just wanted to know what documents we use, thank you.

QUESTION 6

Q6: So I just wanted to thank you for coming back with the three quotes. I felt that we—I know because I seconded the motion, I acted in good faith, thinking all we had to do was nominate somebody. We'd never been told differently. So my question to the board is, will you be coming to the public next year with three different auditor quotes for us to choose from at the AGM?

TRUSTEE MOHER: Can I answer this?

CHAIR: With the corollary that we haven't made a decision, but you can advocate for the decision.

TRUSTEE MOHER: My understanding is, in talking to our long term corporate officer, they've changed auditors about six times, and each time they did it, there was a reason for it. [Discussion of some details around changes; Trustee Moher thinks KMA was the auditor for 6 years, others think longer.]

Q6: But that’s not my question. My question is—

TRUSTEE MOHER: Each time they made a change, a notice from the fire hall that the AGM laid out that they would be changing auditors—

Q6: But—

TRUSTEE MOHER: —a notice to the landowners saying, we are putting out a set for a change of auditors. This is what I was told. And then that meant that a request was going to be made for auditors. And that then they brought to the AGM a list of auditors and folks from different people. And then as before, people voted on the lines that that they want.

Q6: Would that be in the past minutes? But my question really is, Will you be bringing us three people to choose from every year?

TRUSTEE MOHER: I [don’t] think that changing auditors every year is a good idea, because as was pointed out, each auditor has to relearn your business.

Q6: That's a personal opinion. I just want to know whether we will have a choice every year.

CHAIR: We haven't made a decision, so no one can give you an answer that says yes or no.

Q6: I understand that.

CHAIR: And I think the point in general is valid, I also think there's a lot of value to the idea of keeping an auditor around for a period of time. So I would expect, though I can't predict with any certainty, that whether or not the board suggests a change in auditor would be very much influenced by the experience board has with any auditor that's selected this time. And I think that if there is an appetite among the landowners to change auditors, then that's something that the landowners should express in the advance of the meeting, generally.

Q6: Can I ask how? We can't judge how the auditor has done until we're at the actual AGM and we get the financial report. It would be nice to get it a week ahead of time, so that we can ask the questions that we want to ask. I mean, you know, we've always been sort of several steps behind. We don't know what we're getting until the AGM. We might be dissatisfied with the next auditor or whatever, but there there's got to be a little bit more information, I think. But anyway, it's for another meeting and let's vote.

CHAIR: What I’m advocating in general, for you or anybody else who has similar concerns is […] if we have correspondence, then it exists in the form that we can look at it. If we get 9 million letters saying that the next auditor should be a zebra, that's perfect compelling that we should probably start looking at ungulates.

CORPORATE OFFICER: Can I just say that the landowners, you get the vote to approve it.

CHAIR: The landowners “choose.”

CORPORATE OFFICER: But at the meeting, if […] and you guys just say, this is […]. At the meeting, you can vote no. And then the board will have to figure it out.

Q6: Vote not to accept the report you made.

CORPORATE OFFICER: No, either not to accept the report or not to appoint the auditor.

CHAIR: Past practice has been inconsistent. So.. communicating, it’s always hard really at the crunch when things are happening, there was the election happening, there was the audit happening, there was the general meeting in general. And it's easy for people to pay attention in the four to six weeks leading up to that. But the other 44 or 48 weeks of the year are really valuable for communicating your views. And that it gives us, as a deliberative body, time to like ingest them and process them.

QUESTION 7

Q7: I just had a question about KMA, that's sitting for six years. […] But I think it's more like ten, isn’t it?

TRUSTEE MOHER: Yeah, I just confirmed with Paula [Mallinson, former Corporate Officer] that it was [?] before that, [?] and then for ten years it’s been KMA.

Q7: Going back to the original motion of the change in auditors, it was just to get a fresh look. And it’s been not six years, but at least ten years now.

TRUSTEE MOHER: But I'm talking process, and I would clarify that, and I will bring it back to the board for approval, and it will be moved along properly.

QUESTION 8

Q8: So I have a different recollection of what happened on this discussion at the annual general meeting. I recall a proposal to go for a new auditor. There was quite a bit of back and forth around that. We did decide to go for a new auditor, but in the course of that conversation, there was the question, What it's really expensive. And there was quite a bit of agreement. I don't know whether there was any formal vote, but there was, I recall, quite a bit of agreement that if it's really expensive, then we'd need to have a special general meeting, and we'd want to have the trustees find some other quotes. So that's exactly what happened. So to my recollection, what's happening today is exactly what was discussed at the annual general meeting.

CHAIR: My recollection matches very much with yours, but it's also true in my recollection that that wasn't formalized. The question was raised and there was was a lot of talk about how to manage that eventuality and the conclusion that was, as I recall, informally reached in the assembly was a process like this. But that wasn't formalized, which is a gap in procedure. But we're figuring it out.

QUESTION 9

Q9:  In addressing [?]'s question about how the heck do you know that the person that put their hand that was the landowner, if you already have the register there when we vote, a few hours later when you come in the door, couldn't you hand us a voting card? You put your hand up, and you're holding a pink piece of paper that says, "Yes, I've been checked again at the door and I can vote.”

CHAIR: [asks the Returning Officer to comment]

RETURNING OFFICER: That’s exactly what I have written down for future AGMs for the landowners to have a vote, is that we, because we just had the ballots and the voting, we will have an existing roll of current land owners that we make them register and give them a piece of coloured paper. It simplifies the process, and we know it's a done deal. So that's in my notes for [the Corporate Officer].[…] I'll talk to them and keep an eye on the process of making a current, an updated package on process and procedures, and how we see things going forward. So there will be something in black and white for whoever takes over to follow.

QUESTION 10

Q10: I just want to address the thought that we might want to appoint a new auditor every year. Any new auditor gives a quote that they kind of hedge their bets a bit, right? They're not going to assume we can do things well. But if we do a really good job for two or three years, we can negotiate down the price. So unless you think there's a problem with them, I would encourage you to try to stick with one for a little while. Not ten years, I get that.

QUESTION 11

[Calls the question. Discussion clarifies that this means the assembly needs to vote on whether to end discussion. A motion is made and seconded, the vote is held, the motion is carried and the meeting moves on to voting.]

VOTING

The doors are closed and the assembly is counted. Twenty nine eligible voters are in attendance. The vote is taken with a show of hands. The results:

• 22 votes for Doane Grant Thornton
• 7 votes for MNR

APPOINTMENT OF THE AUDITOR

Debate

TRUSTEE MOHER: I would only make sure that we are very clear in [?] that we do with our vote that we understand that most of our materials will probably be going, possibly down to Victoria, and as long as we are clear about that, and the timeline that that can cause, is documented.

CHAIR: I think that it’s fair that the fact that choosing Doane Grant Thornton means that the financial records leave the island should be reflected in the minutes.

Motion:

THAT the Board appoint Doane Grant Thornton as the auditors of 2025.

Six votes in favour, one against. The motion is CARRIED.

AUDIENCE MEMBER: I'd just like to thank all of the trustees and [Corporate Officer] for the hard work that you do. I've been attending meetings only recently in the last four or five months, and I'm just so impressed with how much work you do on our behalf. Thank you. [applause]

Meeting adjourned.