The B.C. government is disbanding its controversial Pacific Carbon Trust, along with the Provincial Capital Commission, as part of a sweeping review of all government agencies.

Today, Bill Bennett, the minister in charge of the government's CORE review, announced both will be absorbed into government ministries, saving the government $6.6 million a year.

The Pacific Carbon Trust was created to develop a carbon-offset program. As part of the controversial program schools, hospitals and health authorities paid into an account as a type of penalty for polluting.

In May B.C.'s Auditor General John Doyle issued a scathing report that said too much of the money was being spent on carbon offset programs that lacked credibility.

Bennett says staff at the Pacific Carbon Trust will be reduced from 18 to five, and the carbon offset program will be transferred to the climate action secretariat within the Environment Ministry.

The former agency has a $37 million surplus, from fees collected for carbon offsets. How that money will be spent will be decided in the next budget.

Provincial Capital Commission dissolved

Bennett says the government will also dissolve the Provincial Capital Commission because its cultural events and property management activities overlap with other departments.

The Provincial Capital Commission was the agency for heritage and cultural programs in Victoria. 

The functions of the Provincial Capital Commission, like its community outreach and heritage programs, will be transferred to existing ministries. Its waterfront real estate will come under the Ministry of Transportation

He says the government will continue the outreach programs, but closing the commission will save $1 million annually.

The two agencies are the first to fall under a sweeping core review process looking at 90 government agencies in an effort to find $50 million in savings by the fiscal year 2014-2015.

But Bennett insists their demise isn't just about the money.

"We have figured out a way to deliver those services in a more efficient and effective way," said Bennett.

Under the core review, every government agency and program now under scrutiny and announcements like the one today are expected in the future.

But Bennett says the documents that suggested changes to the Agricultural Land Commission were part of that review, but cabinet has no plans to dismantle the arm's length agency.

With files from The Canadian Press