2005 Legislative Session: First Session, 38th Parliament

HANSARD

The following electronic version is for informational purposes

only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

MONDAY, OCTOBER 17, 2005

Afternoon Sitting

Volume 2, Number 6

CONTENTS

Routine Proceedings

Page

Introductions by Members

Introduction and First Reading of

Bills

Civil Forfeiture Act (Bill 13)

Hon. J. Les

Statements (Standing Order 25 B )

International Labour Organization

ruling on labour rights in B.C.

C. Puchmayr

Trade issues for B.C. agriculture

V. Roddick

Child poverty

R. Chouhan

Blood donation

S. Hawkins

Earthquake in South Asia

J. Brar

Small business in B.C.

J. Yap

Oral Questions

Government role in teachers labour

dispute

C. James

Hon. G.

Campbell

J. Horgan

Hon. M. de

Jong

L. Krog

B. Ralston

Hon. S. Bond

J. Kwan

M. Karagianis

Standing Order 35

M. Farnworth

Hon. M. de Jong

Tabling Documents

WorkSafe B.C., annual report, 2004

Committee of the Whole House

Revenue Statutes Amendment Act, 2005

(Bill 2)

J. Kwan

Hon. C. Taylor

C. Puchmayr

Report and Third Reading of Bills

Revenue Statutes Amendment Act, 2005

(Bill 2)

Committee of the Whole House

Budget Measures Implementation Act (No.

2), 2005 (Bill 3)

J. Kwan

Hon. C. Taylor

M. Karagianis

Report and Third Reading of Bills

Budget Measures Implementation Act (No.

2), 2005 (Bill 3)

Committee of the Whole House

Greater Vancouver Transportation

Authority Amendment Act, 2005 (Bill 9)

D. Chudnovsky

Hon. K. Falcon

D. Jarvis

Standing Order 35 (Speaker's

Ruling)

Committee of the Whole House

Greater Vancouver Transportation

Authority Amendment Act, 2005 (Bill 9) (continued)

D. Jarvis

Hon. K. Falcon

V. Roddick

H. Bloy

L. Mayencourt

Report and Third Reading of Bills

Greater Vancouver Transportation

Authority Amendment Act, 2005 (Bill 9)

Second Reading of Bills

Northern Development Initiative Trust

Amendment Act, 2005 (Bill 6)

Hon. C. Hansen

M. Farnworth

D. MacKay

B. Simpson

B. Lekstrom

C. Wyse

J. Rustad

Hon. C. Hansen

Proceedings in the Douglas Fir Room

Committee of Supply

Estimates: Ministry of Community

Services and Minister Responsible for Seniors' and Women's Issues

(continued)

Hon. I. Chong

N. Macdonald

B. Ralston

B. Simpson

C. Wyse

M. Farnworth

S. Fraser

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MONDAY, OCTOBER 17, 2005

The House met at 2:03 p.m.

Introductions by Members

J. Horgan: In the precincts today we have many, many, many visitors, but I'd like to name just a few of them. From the Alberta Teachers Association, Frank Busker; the Saskatchewan Teachers Federation, Heather Vermicher; the Manitoba Teachers Society, Brian Ardern.

From the New Brunswick Teachers Association, Indu Varma; the Nova Scotia Teachers Union, Mary-Lou Donnelly; the Prince Edward Island Teachers Federation, Seana Evans-Renaud.

From the Newfoundland and Labrador Teachers Association, Kevin Foley. From the Northwest Territories Teachers Association, Amanda Mallon; the Nunavut Teachers Federation, Jimmy Jacquard; and the Yukon Teachers Federation, Sandra Henderson. I would like all of those in the House to make them welcome.

D. Hayer: It gives me great pleasure to introduce my daughter, Sonia Hayer. She is visiting here. She's the one who donated bone marrow for my son when he had leukemia. Would the House please make her very welcome.

K. Conroy: I have two groups I'd like to introduce today. The first group are teachers from my area: Brian Rigby from Twin Rivers Elementary in Castlegar; Fred Dattolo from J. Lloyd Crowe Secondary in Trail; Andy Davidoff from Trail middle school in Trail; Bob Rosicki from J. Lloyd Crowe Secondary in Trail; and Bill Gorkoff, Castlegar president of the Kootenay-Columbia Teachers Union. Would you please join me in making them welcome.

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I have another small group I'd like to introduce. Casey Haines is originally from Castlegar and is a student at Camosun. She's here visiting today. My son, Ben Conroy, is here. He's a student from Calgary, and he's here visiting today. Would everyone please join me in welcoming them to the House.

Hon. G. Abbott: I would like to acknowledge today the Canadian Blood Services, a not-for-profit charitable organization whose sole mission is to manage the blood and blood-product supply for Canadians.

Today in the reception hall of the Legislature, as you know, Mr. Speaker, government has partnered with Canadian Blood Services and is holding a blood donor clinic to launch B.C.'s second annual Blood Donor Week. I was delighted to see members on both sides of the House giving today in the rotunda.

I encourage every eligible blood donor in B.C. to call Canadian Blood Services and find a nearby clinic where they can give blood. The easy number is 1-888-2-donate. Even though they're in the reception hall, would the House please join me in making them welcome and thanking them for the wonderful work they do on behalf of British Columbians.

S. Simpson: I'm pleased to welcome a good community activist and friend of mine who is here visiting from the lower mainland — Pumi Carr and her daughter. They're here today with tens of thousands of other people to express their views in regard to the position of the government on teachers. I hope that we make her welcome.

D. Thorne: I would like the House to welcome today two of my constituents, Brenda Flynn and Eunice Parker. I just wanted to say that Eunice Parker was a city of Coquitlam councillor for almost 20 years, so many of you may be very familiar with Eunice. I would like you to make them both welcome.

D. Routley: In the precinct today I would like the members to help me welcome my wife Christine, a teacher from Cowichan-Ladysmith, and my daughter Madeline.

Hon. K. Falcon: Today in the precinct we are joined by several members of the Surrey Memorial Hospital Foundation. I would ask the House to join me in welcoming Krista Thompson, Genesa Wheaton and the new honorary chair of the hospital foundation, Herb Dhaliwal, who we all know, of course, as the retired Member of Parliament for the riding of Vancouver South–Burnaby. Would the House please join me in making them all welcome.

C. Trevena: I would like the House to welcome my husband Mike McIvor, who is visiting today. He's in the gallery. I hope the House will make him welcome.

S. Fraser: There are two friends of mine from Qualicum Beach in the precinct. Would you please help me welcome Judy Harty and Carol Bunch.

Introduction and

First Reading of Bills

CIVIL FORFEITURE ACT

Hon. J. Les presented a message from Her Honour the Lieutenant-Governor: a bill intituled Civil Forfeiture Act.

Hon. J. Les: I move that the bill be introduced and read a first time now.

Motion approved.

Hon. J. Les: I am pleased today to introduce the Civil Forfeiture Act. This legislation is being introduced to address serious issues in British Columbia. For some people, illegal activity is a business where profits are made at the expense of individual victims,

[ Page 764 ]

and ultimately all of us as members of society suffer the results.

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These people undertake thefts and fraud, exploit vulnerable individuals and supply the drugs that ruin so many lives — and all for their own gain. Society as a whole and the province shoulder the cost of drug addiction and rehabilitation. Public safety is also at risk. The number of meth labs and grow ops is increasing at an alarming rate. These operations cause fires and often harbour toxic substances, putting our homes, our neighbourhoods, our communities and our law enforcement officers at risk.

With this legislation we will attempt to take the profit motive out of this illegal activity. Other jurisdictions around the world are already using civil forfeiture. Many of these jurisdictions share historic ties with us in terms of the evolution of law and protection of rights of citizens, including the United Kingdom, Ireland and Australia. British Columbia will be the fifth province in Canada to pass civil forfeiture legislation.

This past spring my predecessor introduced the Civil Forfeiture Act to obtain input from interested parties in British Columbia. Over the summer we engaged in consultations with organizations that expressed an interest in this bill. Changes have been made as a result, and I will outline those in some detail at the next reading of this bill.

Our civil forfeiture process will be balanced, fair and efficient in recovering the proceeds of illegal activity, and in preventing and deterring unlawful activity and crime. All proceeds from and instruments used in unlawful activities will be subject to forfeiture by a civil court order. This process is not part of the criminal justice process. The civil standard of proof, the balance of probabilities, will be applied. The interests of secured creditors and uninvolved persons will be protected. In appropriate circumstances, the court may provide some relief from forfeiture.

Moneys recovered will be paid into a special account, from which payment may be made to eligible victims to prevent and deter unlawful activity and crime, and to recover the costs related to the administration of this act. I move that the bill be placed on the orders of the day for second reading at the next sitting of the House after today.

Bill 13, Civil Forfeiture Act, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Statements

(Standing Order 25

B) INTERNATIONAL LABOUR ORGANIZATION

RULING ON LABOUR RIGHTS IN B.C.

C. Puchmayr: In 1972, Canada and its provinces ratified convention 87 of the United Nations International Labour Organization, entitled freedom of association and protection of the right to organize. This document grants workers the right to associate and organize without interference by any public authority.

This government's actions towards working people were recently brought to the attention of the ILO tribunal that handles complaints and contraventions. British Columbia workers claim that their rights under convention 87 had been violated by Bills 18, 27 and 28, introduced and passed by this government, and the tribunal agreed with them.

Let me quote the decisions of the tribunal. On Bill 18, Skills Development and Labour Statutes Amendment Act, 2001: "The committee concludes the provisions of Bill 18, which make education an essential service, are in violation of freedom of association principles and should be repealed."

On Bill 27, the Education Services Collective Agreement Act: "The committee firmly requests the government to avoid in future having recourse to such legislation settlement."

On Bill 28, the Public Education Flexibility and Choice Act: "Such a unilateral action by the authorities cannot but introduce uncertainty in labour relations, which in long term can only be prejudicial."

These are strong words from an international body. As signatory to the convention, the government must listen to and respect the tribunal. In the coming months the province will enter into negotiations with a number of public sector workers. I strongly urge this government, in moving forward, to respect this agreement to which it is a signatory, and to honour the spirit of this convention and the recommendations of its tribunal.

TRADE ISSUES FOR B.C. AGRICULTURE

V. Roddick: Monday, September 12, 2005, was an extremely important day for our province. The Canadian International Trade Tribunal released its decision on the anti-dumping order on our most valuable local potato industry, upholding the order that was initially made in June of 1984.

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This order represents one of the longest running anti-dumping orders for any industry in Canada. To give you a graphic example of how instantaneously the farming industry can be affected by these tariffs, or the lack of them, there used to be 500 to 600 acres of beautiful, delicious onions grown in the B.C. lower mainland. The anti-dumping order was lifted in 1996. Within one growing season, our safe, viable, locally grown onion market virtually disappeared.

We should all be thinking about our food sources. If you destroy a city, it can be rebuilt. Destroy our farms, and grass will grow in the streets of every city in the nation. That is why our government is working on an overall agricultural plan for the entire province.

Instead of using farming as the butt of jokes or very amusing comments — as Vaughn Palmer did recently, referring to the electrifying content of question period — it's time that each and every one of us recognizes the

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importance of nutritious, safe food locally grown by our own talented, dedicated farmers.

This is agriculture week. Please, everyone, make a determined effort to buy B.C. now and forever. You cannot plan, you cannot build and you cannot prosper if you cannot eat.

CHILD POVERTY

R. Chouhan: Hon. Speaker, today is the United Nations International Day for the Eradication of Poverty. As part of the Make Poverty History campaign, I would like to take a moment to discuss the serious issue of child poverty.

One in five children in British Columbia is living in poverty. To put that in perspective, that's 167,000 children — almost three times the population of my riding of Burnaby-Edmonds. Instead of leading the country, British Columbia's child poverty rate is the third-highest in Canada and significantly higher than the national average. More than 15 years ago the House of Commons unanimously resolved to eliminate poverty among Canadian children by the year 2000.

It is now 2005, and the issue is far from resolved. The issues surrounding child poverty are complex. I am concerned that this government's policies in the area of affordable housing, health care, education and income assistance are taking us in the wrong direction. This government's most recent budget provides little support for thousands of British Columbians, many of them children, without stable housing. Nor does it address the people in our province who rely on food banks, 42 percent of whom are children. When we scale back hot lunch programs in schools or when we forgo improvements to our affordable housing programs in British Columbia, we miss an opportunity to diminish child poverty.

There is hope on the horizon. Jack Layton and the federal NDP have negotiated a housing allocation through the federal government that will help British Columbians. Over $200 million in housing will come to B.C. in the next few years. This is a positive first step, but we need to do better. It's my hope that the B.C. Liberal government will work with a variety of groups — aboriginal people, women, immigrants, minorities and youth.

BLOOD DONATION

S. Hawkins: Mr. Speaker, would you give one hour of your day every 56 days if you knew it could save a life? Today we kicked off our second annual B.C. Blood Donor Week. As the Minister of Health mentioned, we are running a blood donor clinic right here at the Legislature. I am appealing to all our MLAs, to our staff, to our government employees: please roll up your sleeves and give the gift of life that only you can give.

The importance of being a blood donor really hit home for me this last year, because without that precious donated blood that sustained me through my leukemia battle, I wouldn't be standing here with you today.

As a cancer nurse I hung a lot of blood on my patients, and I used to be a blood donor too, but I never imagined that one day it would be me that needed blood to save my life. Believe me, I was lying in a hospital bed day after day, wondering if there would really be enough blood for me when I needed it, because we do end up using massive amounts of blood.

[1420]

Last September I attended a blood donor awareness day in Vancouver, where the Premier took the lead in appealing for more blood donors. At that time, not knowing if I would fully recover, I said I wanted to live. I wanted to get back to the work I love. I wanted to get home to Saskatchewan to see my nieces and nephews and all my family for Christmas. I was able to do all of that because people like you cared. You became blood donors. You became the everyday heroes who donate blood to save lives like mine.

It really is wonderful to see the excellent working relationship that we do have here in B.C. with our ministry and Canadian Blood Services, and I think the blood donor clinic today is a very good example of that. We are the only province in Canada, as I mentioned, that has a blood donor week, so today I am asking everyone to please talk to your friends, your neighbours and your colleagues about becoming regular blood donors.

EARTHQUAKE IN SOUTH ASIA

J. Brar: I rise to honour the memory of those that lost their lives in the earthquake that rocked parts of Pakistan, India and Afghanistan and to recognize the efforts of those that took it upon themselves to rise to the occasion and organize relief efforts. The earthquake struck at a time when the horrible images of Hurricane Katrina and the Asian tsunami were still fresh in our minds. It is estimated that between 54,000 to 60,000 people died in Pakistan alone. Near the Pakistan-India border, over 2.5 million people became homeless in their own country.

In British Columbia a thousand people with their roots in India and Pakistan are mourning the loss of their families, relatives and friends. The pain and grief that I have come across is indescribable. My heart goes out to all those families that were affected. In my community of Surrey, people have once again shown the remarkable spirit of generosity. Two radio stations, Radio India and Shere Punjab Radio, ran a radiothon for days, raising $1.5 million to aid the victims of the tragedy. I truly appreciate and applaud their efforts.

The federal government stepped up to the plate and committed $20 million towards relief efforts as well. I am pleased to acknowledge British Columbia's pledge of $500,000. I would further like to encourage the Premier, the ministers and every member of this House to do everything in their power and within their means to send help to our sisters and brothers in need, so we can deserve to say that British Columbia truly cares.

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SMALL BUSINESS IN B.C.

J. Yap: I rise today to honour British Columbia's small businesses — this being, as we know, Small Business Week. Small businesses in our province contribute tremendously to our economy, and this week we're celebrating those successes with the 26th anniversary of the first Small Business Week. One of the five great goals that our government has laid out is to create more jobs per capita here in British Columbia than anywhere else in Canada. We're well on our way to achieving this, as small business employment grew by 35,000 jobs just last year.

Small businesses are most commonly defined as businesses with fewer than 50 employees and businesses operated by a person who is self-employed. They're the engine behind our thriving economy, employing nearly one million people and accounting for approximately 98 percent of businesses in B.C. Of that, 36 percent are owned by women — the highest rate of business ownership by women in Canada.

B.C.'s small businesses lead all other provinces when it comes to gross domestic product. In 2003 almost 30 percent of B.C.'s GDP was attributed to small businesses. They also accounted for about one-third of exports in our province — nearly $10 billion worth of merchandise. Approximately 75 percent of small businesses in B.C. operate in the service sector, but high technology, information and cultural services have also experienced growth lately.

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Government has worked to reduce income taxes, streamline regulations and cut red tape for small businesses. We've reduced regulatory burdens by over 40 percent, and now other provinces are following in our footsteps. For example, after researching the regulatory reduction projects in other jurisdictions, the province of Newfoundland and Labrador have announced that they have chosen B.C.'s model to emulate.

We've got the entrepreneurial spirit here in British Columbia, and I say thank you to all small businesses in our great province.

Oral Questions

GOVERNMENT ROLE

IN TEACHERS LABOUR DISPUTE

C. James: Just this morning the Premier admitted that the lines of communication are open between his government and the labour movement. In the same breath, we heard the Premier say that his government will not talk to teachers.

So my question to the Premier is a very simple one. Are the lines of communication open to settle this dispute, or are they not open to settle this dispute?

Hon. G. Campbell: I'm sure the Leader of the Opposition had the opportunity to look at the comments that I made. The first and primary comment is this. The rule of law is the foundation of any civil society. This of all places is a place for lawmakers. This is a place where the lawmakers should stand up and say to people who are breaking the law that that is not something we can condone.

What we have said as a government is that we will continue to keep lines of communication open with the B.C. Federation of Labour, but it is critical to note this. The way forward is for the B.C. Teachers Federation to stop breaking the law and to stop holding the courts in contempt. It is to actually have teachers back in the classroom where we can work together to solve the challenges which they have identified around class size and around class composition at the learning round tables, where all the partners in education can work to provide the best possible public education system to our students in British Columbia.

Mr. Speaker: Leader of the Opposition has a supplemental.

C. James: I'd like to remind that side of the House that in fact, we wouldn't be in this situation if the government had taken a different approach during this dispute. Nevertheless, we are here.

I'd like to remind the Premier and his government that only a year and a half ago in a similar dispute with the Hospital Employees Union, the Premier spoke with that union through the B.C. Federation of Labour to avoid a crisis.

So my question is simple, again. You acted then. Why won't you act now to find a settlement to ensure that 600,000 students can get back to school?

Hon. G. Campbell: I think it is important to note that a law has been passed. There is a legally binding contract in place.

The government has maintained communication with the B.C. Federation of Labour, and so the Leader of the Opposition understands this: this is exactly the process that we followed during the HEU dispute. We dealt with the B.C. Federation of Labour. I at no time spoke to a representative of the HEU while they were illegally striking.

Our position is no different than the NDP's position was when they were in government. As former Premier Dan Miller pointed out, there is an order from the labour board; there is an order from the courts. We fully expect responsible trade unions to comply with the law of this province. There is nothing we are saying that is new.

[1430]

In a civil society, if we do not live according to the law, we cannot maintain our democratic institutions. The rule of law is supreme. Of all places in the province, certainly we should understand that here in the Legislature, where laws are made.

Mr. Speaker: The Leader of the Opposition has a further supplemental.

C. James: Sadly, we continue to hear from the government that they aren't showing leadership, that

[ Page 767 ]

they're taking a hands-off approach. We heard that last week from the Labour Minister. We hear it again from the Premier — that he's not interested in sitting down. We haven't seen any leadership from this government during this dispute.

We see this government playing politics with our kids, so I again ask the Premier: will he show some leadership, open up the lines of communication and personally commit to sit down with teachers to get our children back to school?

Hon. G. Campbell: The government has been very clear with the BCTF, with classroom teachers across the province. First and foremost, the rule of law must be supreme. We can't have one group choosing the laws they're going to obey because they like them and the laws they're not going to obey because they don't like them.

I would encourage the Leader of the Opposition to join with us and encourage the BCTF to have their teachers go back to the classrooms, provide our kids with the education they want, then sit with the government at the learning round table and talk about class composition with trustees, parents and vice-principals, because we all want to deal with that; sit with the government at the learning round table, talk about class sizes and tell us how they believe we could improve the School Act, because we all want to do that; and join with Vince Reddy as he looks at a new bargaining structure, so that when this particular contract is completed at the end of nine months we have a new bargaining relationship that allows us to negotiate a contract, which we have not been able to do with teachers in British Columbia for over ten years.

This is important to all of us. I would encourage the opposition to say to their friends in the BCTF: "Obey the law. Go back to the classroom, and we will work with the government to make sure we have the best education possible for our children in British Columbia."

J. Horgan: I listened carefully to the Premier's remarks with respect to picking laws that one cares to support and laws that one does not, and I'm reminded of the Premier's comments today at his press conference where he said: "As legislators, we have a responsibility to stand up for the courts."

So that I can educate my children at home about just where the line is drawn here, could the Premier explain to me why in 2004 his government overturned a Supreme Court decision? How is that standing up for the courts?

Hon. M. de Jong: This is rather extraordinary. It does not surprise me that we are having this discussion during question period. It does surprise me that the first words out of the mouth of the Leader of the Opposition weren't, "And we recommend that our friends in the BCTF follow the law" — that the first words out of her mouth weren't that following the law is not negotiable in British Columbia.

It's a remarkable discussion that's taking place, because it gives us a clear sense of what society would be like under the NDP where, apparently, it depends on who your friends are politically as to which laws take precedence — that the sovereign jurisdiction of this body is surrendered if you just have the right connections politically.

That is not the society that I want to live in. This government, this Labour Minister and this Premier will defend the right of law today, tomorrow and well into the future.

[1435]

Mr. Speaker: The member has a supplemental.

J. Horgan: Although I'm comforted by the enthusiasm of the Minister of Labour, it doesn't help me explain to my children how it is that if a government disagrees with a law, it has every right and authority to change that law. But if individuals in society have concern, that's a different matter.

I'd like to again put my question to the Premier. Today the Premier said: "You don't get to say you disagree with the courts. Sorry." Again, in 2004 this government had a ruling from the Supreme Court of British Columbia. It disagreed with that ruling, and it changed the law. My question is: what laws does the Premier live by, and what laws should the people of British Columbia live by?

Hon. M. de Jong: I'm hoping that it's because this member and this opposition are merely trying to play political games that they make these ill-thought-out statements and not because they have genuinely thought about what they're saying. There is a contempt order from the Supreme Court of British Columbia telling an important segment of our society, represented by professionals that people generally respect and want to respect, that they are obliged to do something.

They don't like it. We understand they don't like it. We didn't like having to introduce legislation in response to a failed bargaining structure, but that legislation came to this chamber. It enjoyed a week of debate in the parliamentary democracy that we have in this province, and then it went to the court to be enforced.

Now this member and this opposition, by choosing deliberately to ignore that fact, join people who are thumbing their nose at the very institutions that make up the rule of law in our society. One day when all the politics are over, I hope this member has an opportunity to reflect on just how irresponsible his position is.

L. Krog: The Premier is correct. The rule of law and respect for the courts is the basis of civil society, but as delighted as I am to receive a lecture on the law from the Minister of Labour, that doesn't really explain the discrepancy between this government's rhetoric here in this House today and this government's record.

Perhaps the Attorney General would fare a little better. He brings to this House a unique perspective as

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a former Supreme Court judge and as the minister responsible for the justice system. My question to him is: can he outline how overturning a B.C. Supreme Court ruling in 2004 showed respect for the courts?

Hon. M. de Jong: As astounding as the question was from the critic, coming from a learned member of the bar it's even more astounding. He surely is able to detach himself from the politics involved here to examine what is at stake in terms of society where we have a duly enacted statute of this chamber that, by the way, no one challenged the constitutionality of.

No one suggested in this chamber that this body didn't have the authority to enact that law. They made it clear what their views were about its advisability. It goes to the courts, and no one challenges the constitutionality in the courts. So we have a group that are ignoring this chamber, ignoring the courts and, as we've learned a few days ago, Mr. Speaker, apparently ignoring their own legal counsel. Now, you tell me: how can government surrender the jurisdiction that we have in this chamber to a group that says it is above the law? We can't, and we won't.

[1440]

Mr. Speaker: The member has a supplemental.

L. Krog: Perhaps I can provide a short history lesson to the government benches, to the Attorney General and the Minister of Labour in particular. In 2004 Mr. Justice Shawof the B.C. Supreme Court ruled that the government's move to strip class size and class composition clauses from collective agreements was "fundamentally flawed." Yet this government brought in a piece of legislation, Bill 19. It threw that decision out, and it protected this government from similar court rulings in the future.

Again, to the Attorney General: if the government is demanding teachers to respect rulings in 2005, why did this government refuse to respect court rulings in 2004?

Hon. M. de Jong: Let me return the favour as it relates to the history lesson. It was only a few months ago that I believe every single member in this chamber took an oath. That oath said: "I do solemnly affirm that I will be faithful and bear true allegiance to Her Majesty Queen Elizabeth II, her heirs and successors according to law."

Now, the members can decide whether or not standing by and encouraging action that is contrary to those laws fulfills their duty, according to the oath they took. That is something they will have to decide. But I dare say that the picture of a society that this member and his colleagues paint is one that I fear greatly.

We either have the rule of law or we don't. You don't get to pick and choose. The things that Madam Justice Brown said are there for all of us to see. I heard the opposition leader say to the government: "Well, you created the mess." It reminds me of the teenager that comes home and says to his parent: "I wouldn't have broken the curfew if you hadn't had one."

We have laws, and we have courts that enforce those laws. I know it's uncomfortable for the members opposite to have to show the leadership to say to their friends in the BCTF: "We don't support you. You're breaking the law. Go back to work."

B. Ralston: As we've heard, the government made the decision to strip class size and class composition from the bargaining table and overruled Mr. Justice Shaw of the B.C. Supreme Court in the matter. However, the government did nothing to fill the void. Class sizes beyond grade three have continued to go up, and special needs ratios have been getting worse.

The government now wants to take credit for a so-called learning round table that has no binding powers. To the Minister of Education: why did the government wait until the system was in crisis instead of taking action a year and a half ago when it first overruled the courts?

Hon. S. Bond: This government believes that class size is so important that we refuse to let it be left at a bargaining table where it could be used as a chip in terms of those discussions. We said we're going to put it in legislation, and in fact we're actually anxious to have the discussion about class size. More importantly, we're anxious to have a discussion about the composition of those classes. In fact, today we've said there's a date: October 24. There's only one thing standing between us and that discussion, and that is an end to illegal activity in the province.

Mr. Speaker: The member has a supplemental.

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B. Ralston: Let's just go back a little ways in history and look at what actually happened here. When the government first decided it wanted to move class size and class composition requirements, Eric Rice was appointed by the government as the arbitrator to make it happen. Mr. Rice is now a B.C. Supreme Court judge. In his report to government, he said: "…the provisions for special needs students, for example, it seemed to me were in some ways worth preserving." He also went on to say: "It seemed to me that the parties should cooperate and reconstruct parts of the agreement." That was several years ago.

To the minister again: why did the government refuse to work with teachers, follow the advice of this respected arbitrator appointed by the government and sit down and reconstruct those worthy provisions? Why did the government wait until this province was in this kind of crisis?

Hon. S. Bond: In fact, it was surprising to me, as well, that there have been opportunities for numerous years to have discussions about class size, including the education advisory committee. When I went back and reviewed all of the agendas — not just for months

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but for numerous years, in fact — the B.C. Teachers Federation not once placed the issue of class size in a venue where we could have a meaningful discussion about class size in this province. Not once was it placed on that agenda.

We believe that if there are classes that are too large in this province, we need to have a look at that. We know that classrooms are complex places. We want to have that discussion with teachers. You know, just on the weekend a teacher stopped me on the street and said: "Would you visit my classroom? Would you talk to me about the complexity?" I said: "Absolutely. We're waiting to do that. You must, though, go back to your classrooms."

In fact, it's time that the Leader of the Opposition stood up with us and stood behind the rule of law in this province.

Mr. Speaker: Thank you, minister.

Hon. S. Bond: As a person who has been involved in the public education system, she owes that to this system.

J. Kwan: Let us be clear. It is this government who took away class size and class composition from discussion with the teachers. It has been a year and a half since that has happened, and this government has done nothing to engage with the teachers in those discussions.

You know, the Minister of Labour's predecessor Graham Bruce said in this House that overruling the court's decision with Bill 19 would bring "closure and finality to this so the parties can get on to negotiate a new contract." We now know that he was wrong. There has been no closure because this government has refused to work with teachers.

To the new Minister of Labour: why did his government refuse to renegotiate or reconstruct the class composition and special needs provisions in 2004?

Hon. S. Bond: We have made it clear that we want to have a discussion — not just about class size. In fact, for the first time in the province of British Columbia — the first time — the members opposite had a chance, many of them, to actually look at this issue a number of times for a number of years. We're actually going to ask across the province of British Columbia, class by class by class, for information that would have us understand exactly what's happening with class size in British Columbia. We're going to have a dialogue. We're going to sit down and have that discussion. But you know, we actually believe that parents and trustees and others need to be involved in that discussion.

I was shocked the other day…. I would love the Education critic to stand up and look parents in the eye and tell them this, as he expressed on the Rafe Mair show: "What's quite perplexing is that the Education Minister, in a press release just last week, said she thought everybody should come and talk about class sizes — parent advisory committees and your grandparents and everybody else — and that, in my estimation, borders on the absurd."

Shame, Mr. Speaker. Actually, parents should have a role. So should trustees, and we're going to ensure that.

[1450]

J. Kwan: Mr. Speaker, I'll tell you what is perplexing. This government says one law for all, but when they don't like the law, what they do when they find themselves in contravention of the law is that they just go and change the law. When they say that they want to meet with the teachers…. The Premier made that commitment during the election, and then after the election he decides that he's not going to meet with the teachers. The government says they want to sit down and talk with the teachers. Then, instead of sitting down and offering to the teachers right now to sit down and talk with them, the government is saying: "We don't want to talk to you."

I'll tell you this, Mr. Speaker. I'd like to go back to another quote from April 2004. It's from my colleague Joy MacPhail, the former member for Vancouver-Hastings. She said: "I predict that Bill 19 has actually made the next round of bargaining more complex and has frustrated that round." She was absolutely right, and that was a year and a half ago.

Interjections.

Mr. Speaker: Order, members.

J. Kwan: This government was warned, and they have done nothing.

Mr. Speaker: Continue.

J. Kwan: Instead, they have actually made the situation worse.

My question is to the Premier. Why did he choose to ignore those warnings and let this crisis happen, when the warning was actually brought to his attention over a year and a half ago?

Hon. S. Bond: Mr. Speaker, as we've said over and over and over again, we look forward to discussion. But in fact — to the member opposite — there is one thing standing in our way, and I urge you and the Leader of the Opposition to actually stand up, take your responsibilities as a lawmaker in this province seriously and call for the teachers to go back to work, so that we can get our students back in classrooms and dialogue can take place.

Mr. Speaker, let's look at the record of a previous Premier of the NDP government, what was said in the Vancouver Sun on May 14, 1997. How times have changed. "Illegal work stoppages won't be tolerated by the government, and appropriate action will be taken." It's time to see that now.

M. Karagianis: Mr. Speaker, the media has already described the learning round table as a hollow political

[ Page 770 ]

gesture. I think that's fairly obvious by the fact that it was not even proposed until job action had taken place. In fact, if it was a solution that would have worked, it should have been proposed prior to the announcement of Bill 12.

I would ask the Minister of Education why in fact this round table was not proposed earlier in this process.

Hon. S. Bond: As has been pointed out before, there have been numerous venues to have this discussion. The BCTF had simply not ever once placed this issue on a standing body — in fact, brought in legislation.

We believe that the round table is an opportunity for us to bring parties together to talk about what happens in classrooms every single day in this province. We want to get down to work. We intend for it to be permanent, to be significant and to make changes. We need to have that discussion. We are ready to have that dialogue. We are excited about having it. We want to have it. We simply have to have the members of the opposition stand up, take their responsibilities seriously, and call for the BCTF to ask their members to go back to work and end illegal activity in this province.

Mr. Speaker: The member has a supplemental.

M. Karagianis: Well, it would seem that we're about 18 months too late with this round table. In fact, it seems to me that this is a political knee-jerk reaction. That's not what is needed in this situation. In fact, what is needed is commitment and leadership.

[1455]

The government has had numerous opportunities to bring forward this concept of a round table and to put it into action. They could have done it when they changed the School Act in 2002. They could have done it when they stripped the College of Teachers in 2003. They could have done it when they overruled the B.C. Supreme Court decision in 2004. But in fact they did not do that. The government waited until the province was in crisis.

Again to the minister: if the learning round table is her answer to solving the crisis, why was it not brought forward four years ago or 18 months ago or prior to this crisis right now?

Hon. M. de Jong: Well, we are coming to the end of the question period. I think it's important that the record show that through the course of the 30 minutes of discussion and debate that's taken place, not one single member of the opposition who has participated has contributed something that I would have thought to be automatic.

I get the politics. I get the politics, but I would have thought that one member of the opposition and, most importantly, the Leader of the Opposition would have said: "We begin and end with people following the law."

Interjections.

Mr. Speaker: Members.

Hon. M. de Jong: By their silence on that fundamental question, they not only bring this House into disrepute, but they bring our institutions of justice into disrepute. God forbid they should ever find themselves on this side of the House wanting to build that kind of society that really would take us on the road to anarchy. We stand for the rule of law, and we stand for the students who deserve to be in their classrooms — and should be, if people would start respecting the law.

[End of question period.]

Standing Order 35

M. Farnworth: Mr. Speaker, as per my notice to you earlier, I rise under Standing Order 35. I move that the House do now adjourn to discuss a matter of urgent public importance — the dispute between the government and the teachers, which each day means greater hardship on British Columbia students, parents and teachers — and that we encourage the government to engage in meaningful negotiations with the teachers to immediately end this dispute.

I make this motion because the events of today and the events of the last week clearly constitute an emergency, and it's something this House needs to address at the earliest opportunity. That's why we believe this motion needs to be debated this afternoon at the earliest possible convenience, and we urge you to make a speedy resolution to ruling on it.

Hon. M. de Jong: Well, it's a remarkable motion, coming as it does on the heels of the week-long, in fact, extended debate that took place last week. I could make prolonged submissions around the rules — the fact that Standing Order 35(10)(

c) offers assistance to the Chair with respect to matters that have already been considered at length.

I could talk about the

definitions that this chamber and your predecessors, Mr. Speaker, have offered to this chamber around the question of urgency of debate versus urgency of topic. But really the essence of why I'm going to suggest this debate need not occur and should not occur is because the courts are in the position they're in because we have a body with tacit approval from the opposition, ignoring the will of this chamber.

[1500]

It is astounding that someone would come to the House, at a time when contempt orders have been issued by the Supreme Court of British Columbia telling the people involved to obey the law, and that we would be asked to embark upon a debate. Never mind that I am troubled by the prospect that this chamber would be engaged in that kind of discussion at a time when these matters are very much before the court. If the last reports I have heard — admittedly via the media — are correct, the matter is before the court as we speak. In those circumstances, I would suggest that it

[ Page 771 ]

would be inappropriate to avail ourselves of Standing Order 35.

M. Farnworth: Hon. Speaker, I will ask you in your decision to review two particularly relevant decisions by previous Speakers: in April 1992 regarding the Asian gypsy moth spraying; and again in March 1995 regarding a budget leak, where the emergency motion was moved by the opposition and again accepted.

This is a matter of public importance. The public say they want a resolution to this now — not a week from now, not two weeks from now. For the last 30 minutes we've been listening to the government ask us for leadership on this question. I can well understand why, because they have failed to provide that leadership.

Therefore, hon. Speaker, it is a matter of urgent public policy that needs to be dealt with. I ask you to review those two rulings and come back at your earliest possible convenience.

Mr. Speaker: Thank you, members. I will review the submissions from both sides and come back later today with my ruling.

Tabling Documents

Hon. M. de Jong: Tabling a report: WorkSafe B.C. annual report for 2004, which includes the '05-07 service plan for WorkSafe B.C.

Orders of the Day

Hon. M. de Jong: In this House, I call committee debate on Bill 2. For the information of members, in the other chamber, Committee A, continued estimates debate on the Ministry of Community Services.

[1505]

Committee of the Whole House

REVENUE STATUTES

AMENDMENT ACT, 2005

The House in Committee of the Whole (Section

B) on Bill 2; S. Hawkins in the chair.

The committee met at 3:08 p.m.

section 1.

J. Kwan: I thought that the minister might actually make some statements and introduce her staff, but she'll probably do that after I ask my first question.

Let me just recap a little bit here. Sections 1 and 2 of Bill 2 amend the Income Tax Act to lower the general corporate tax rate from 13.5 percent to 12 percent. This measure, of course, takes effect July 1, 2005. It is estimated to cost the provincial treasury $71 million in 2005-2006 and $143 million per year thereafter.

The public and the business lobby groups have never asked for this tax. What they did ask for, though, was greater investment in the areas of health, education and other social programs. It was never an issue during the Select Standing Committee on Finance and Government Services for the 2004-2005 budget year. It was not raised by the public during the campaign. It certainly was not raised by the Liberal Party during the campaign.

I would like to just canvass, I guess, this first question. Could the minister explain to this House how she determined that British Columbians believed that a corporate tax cut was a greater priority than other social spending areas?

Hon. C. Taylor: It is a very important part of our mandate, we believe, to ensure that we keep the taxes of British Columbia competitive. That means both business taxes and personal income taxes. You have seen a strong trend right from the very first day of this government towards reducing those taxes. The corporate tax, which is referred to in this particular bill, started out at 16.5 percent and was reduced to 13.5 percent. In the September update we've now reduced it to 12 percent, recognizing that we have competition from not only Canada but elsewhere, because this is a global economy.

For us to ensure that our businesses stay here, that they grow here — and, hopefully, we can encourage businesses from elsewhere in Canada to come and locate in British Columbia, so that we can create those jobs that are the basis of our economy — we believe that this is an important initiative. I would also say that it won't be the last initiative in terms of competitive tax rates.

[1510]

J. Kwan: The issue, of course, is about priorities. As the minister stated during second reading debate and during the budget debate, the issue is what British Columbians have been saying around what their priorities are. Nowhere out there amongst the business community…. They, I would imagine, would be the first advocates to come forward to say they needed a corporate tax cut from this minibudget, yet they didn't.

What they did say, though, was that they expected to see a greater investment in the areas of health care, education and some of the other social spending areas. But instead of seeing that, the government chose to invest the biggest dollar figure that's new money in this minibudget…. Thereby Bill 2, in sections 1 and 2 of this act, gives a corporate tax cut to corporations.

Who did the minister consult with that came up with this priority for the government?

Hon. C. Taylor: I think it is an important point that I should make right here in terms of the Minister of Finance and how I approach this. This is to build a budget that is balanced, and so that means that tax, spending and also debt are major considerations. You have identified the spending area as being an impor-

[ Page 772 ]

tant one. We recognize that it is. In fact, in this budget update, over the three-year plan, there's $1.5 billion of new spending going into health care. There's over $500 million new spending going towards children's services. There's $150 million towards education, plus many more initiatives that are important.

I would say to you that we did not neglect the social side in order to do an initiative that we felt encouraged job growth within our province.

In terms of consultation, I'm sure the opposition will remember that in the budget consultation process last year, there were three major points the community made to us. The first was, indeed, health and education, so we did honour that. The second was debt reduction, which we did do by dedicating the surplus of $1.3 billion towards the debt reduction. The third point was to reduce taxes.

So it has been in the public domain. It has been the grounds on which this government has managed to turn this economy around, and it will continue to be a priority on this side of the House.

J. Kwan: Yes, I did go back to review the Finance Committee document. In fact, I used that as the basis of my second reading debate, because I trust that in this House, many — especially from the government side — will say they don't want just to take my word for it but rather someone else's words.

So I went and did that work and brought it into this House in terms of the issues that were raised. I recall one area, for example, that the business community, amongst others, had called for, and that was greater investment in the area of apprenticeship. In fact, since the minibudget has been introduced, the business community has continued to call for that. They were actually surprised that there was no greater investment in the area of apprenticeship support.

The minister said there were significant dollars put into the areas of health care and education, but let me just be clear that those dollars were brought in by the former minister. Yes, the minister will say it was all rolled in, was part of the minibudget and so on, but what was new in the minibudget that this minister brought in…. The single largest expenditure actually comes from the corporate tax cut. That was the new thing that was not introduced at any point in time, certainly not in the February budget. That's the point I wanted to raise.

The minister says she actually consulted the Finance Committee's work to come up with this corporate tax cut. I dare say, and I stand to be corrected, that in the document itself, I don't recall anybody asking for a corporate tax cut to the tune of over $140 million a year. I do not recall that at all. So was there any other consultation process that the government and the minister embarked on with respect to this corporate tax cut?

[1515]

Hon. C. Taylor: This gives me the opportunity to talk personally, since you're asking it personally to me. In 1999, when we all realized what bad shape the economy of British Columbia was in at that time, the business community, in fact, set up a task force that travelled around the province, and I dare say I've spent more time travelling around the province and listening to the opinions of community leaders, business leaders and union leaders than many others in this House.

Our task was a simple one: how do we turn the economy around? The economy was in terrible shape. We were losing businesses. We were losing head offices. We were losing jobs. People were leaving our province, and that was our only mandate. Since I was co-chair, it was possible for me to set the tone of the debate, and what I did at every meeting was to start off by saying: "We're not going to blame anyone. We're not going to point fingers. All we care about is how to turn the economy of British Columbia around."

We did open town hall meetings where anyone could come. Anyone could speak. Many presented written documents to us, and at the end of that time, we wrote a report, which is on the record. You can check it.

There were a number of initiatives that were mentioned. The three that we felt were not controversial…. Therefore, whether it was an NDP government or a B.C. Liberal government, they could be adopted, because that's what we had heard from the people of British Columbia. The three things were, first, to reduce taxes. You cannot have a punitive taxation regime in this province and expect that jobs and people won't leave. We had punitive taxation. We had in this province the highest marginal tax rate. We had a corporate tax rate of 16.5 percent, and as a result, we were losing the jobs that are critical to our economy.

The second thing they said was regulation. You can't have regulations that are conflicting, competing, overlapping and so extreme that small businesses can't really cope with them. Big businesses with regulations can always hire somebody to look after it, but if you have an excessive regulatory regime, small businesses will go elsewhere where they are welcome and where they feel it's easier to do business in a proper way. The third thing was confrontation. They really wanted to have people stop pointing at each other and blaming each other for all the problems.

I took that report and presented it to the Premier at the time, Ujjal Dosanjh. I also presented it to the Leader of the Opposition at that time and just gave…. Those were the three points that were important and crucial to turn this economy around.

My innate sense of how important it is to have a competitive tax regime came from countless hours of listening to the people of British Columbia saying that was the only way we could turn the economy around and keep businesses and jobs here.

J. Kwan: The minister just replied to my question by basically advising this House that the data she used was six years old, that she gathered this information back in 1999. There have been two elections held since. In the last round of elections, nowhere during the cam-

[ Page 773 ]

paign did anyone say that corporate tax cuts would be their number one priority after that for the minibudget that would be introduced — nowhere. This government didn't campaign on it. The Premier didn't campaign on it.

Now, I have to say that's reminiscent of 2001, because the government then, when they were electioneering, didn't mention budget cuts, spending cuts, to the degree that the government embarked on in the last four and a half years. In fact, there was only one candidate who came forward and said that as a result of the big tax giveaway, there would be budget shortfalls. As a result of that, the member did not get elected.

That was Daniel Lee, who ran for Vancouver-Hastings. The seat was won by my former colleague, Joy MacPhail, for Vancouver-Hastings. Of course, during that campaign, he got yanked off the podium, right off the top, as soon as he started to signal that if the government was to give away the big tax cuts, there would be spending cuts in all sorts of areas.

That was 2001. Let's not revisit too much history, because that's water under the bridge, as they say. It's now 2005, and in this last round of elections, nobody mentioned it. But that's where the minister is saying she got her information from, not from current information, not from the most recent Finance Committee work — that is, the work that was done prior to the minibudget.

[1520]

So there you have it. For the 2001 election, the government didn't tell British Columbians what they were up to and how they planned to deal with budgetary priorities. The public were told there would be no cuts to programs, and communities all across British Columbia bled significantly as a result of those cuts.

Some members of the community and some communities continue to suffer as a result of those decisions. In 2001 — that was then. In 2005 the government said that after the election, they were going to bring forward a more moderate approach — a non-confrontational approach, as the minister herself just mentioned.

I could hardly believe my ears. Look at our situation now with the teachers. Is that a non-confrontational approach to addressing the issue of education? I dare say not, and I don't have to visit all of the happenings around the education situation. People know what they are. The government changes the law when they feel like it. They can pick and choose which law they like.

The Chair: Member, please keep your comments relevant to the bill and the

section before us.

J. Kwan: Sorry, I was only responding to the minister around the issue of confrontation and the approach of government that she heard in her consultation pro-cess. I'm only highlighting the discrepancies between what the minister has said and the reality, and just sort of doing a bit of a reality check here on that front. Let me just say this: the government has been confrontational in its approach.

Getting back to the issue around the tax, the business community most recently, just prior to the introduction of the minibudget, were on record saying that they are not asking for a corporate tax cut. Since the minibudget, the business community were on record saying that they hadn't expected this corporate tax cut from the government. In fact, they said that they were surprised by it.

What I did hear and continue to hear from the business community was that they had hoped for and asked for greater investments in the area of apprenticeship, for example. In fact, they raised the issue that if we want to ensure that B.C.'s economy continues to grow, we need to make sure that the skills shortage is addressed, that the trades are maintained, that people are trained up for the retiring people and to fill the skills-shortage demand.

I looked at this minibudget to see whether or not that priority is being addressed and elevated to the degree it should be, and the answer is no. Instead, the government chose, in this minibudget, the single largest line-item that is new since the February budget: the corporate tax cut.

We know that the minister consulted, albeit back in 1999, two elections ago. Did the minister consult with anyone more recently — after the election, for example — before she introduced the minibudget in September and heard from members of the public that asked specifically for corporate tax cut?

Hon. C. Taylor: It's interesting that the focus seems to be so anti-business, as if there isn't an awareness that when you encourage businesses to locate in British Columbia, that means jobs. Since December 2001, some 238,000 new jobs have come back because the economy of British Columbia has turned around.

I know you don't want to think about it, but in fact, this budget is the February budget and the September update budget. The bones were from the February 15 budget. When we revisited some of the numbers and saw some improvement in commodities, we realized we could make some additional things.

Hon. Chair, you mustn't say that the corporate tax break was the biggest part of this budget, because when you look at the taxes overall, there were three major initiatives. Perhaps the most important one was the B.C. tax reduction. In that one, we reduced taxes for the bottom two income tax brackets in this province, to the point that we now have the lowest provincial income taxes for those two categories of any province in Canada. From my point of view, I would say that's a major, important tax initiative.

[1525]

We also have done an incentive — and we will talk about this, of course — to try to keep our biotech companies and our life science patents here. The corporate tax rate being reduced is also another part of that initiative, but that's the taxation side, and the spending side

[ Page 774 ]

has been just as important as we've focused our priorities on things like health care, education and children.

If you want to focus just on the September update, even there the spending is greatly larger than the tax measures. The spending is $566 million, and the tax measures, $397 million. What we have tried to do as government, what I am trying to do as Minister of Finance and will try to do again in February, is be evenhanded and be thinking about all sides of how you build a budget — that is, the taxation side is critical, the spending side is critical, and so is debt reduction.

J. Kwan: That's exactly what the government would like and the minister would like: to pit this into an issue of being anti-business. The reality is this: it's about priorities, and the minister herself acknowledged this in her own budget speech. It's about priorities, and it's about what we heard from British Columbians during the election campaign.

The point is that during the entire campaign, not once — not from any candidate and certainly not from the Premier, who led the team and who had said the corporate tax cut would be their number one priority after the election in terms of new items to be introduced in the budget — did they campaign on it, and not once did I hear anybody say that was their number one priority.

The issue here, Madam Chair, is that it's an issue of trust. It's about what you say you will do during the campaign and what you will do afterwards. What I heard British Columbians say was that they wanted to ensure that the communities that have been hurt the most by this government would see some benefits go to them, and that where there are successes in our economy, those successes flow back through to those communities and to members of our community.

The women's centres and the $1.7 million that the government cut off their funding, which funded 47 women's centres across the province — not a cent in this minibudget was targeted toward women's centres. Women's centres, with 47 women's centres across the province, serve over 300,000 British Columbians a year. I'd say that's value for money. We heard that during the campaign. We heard that in the Finance Committee, but did the government put that as a priority of action? The answer is no.

Instead, the government chose to put forward a corporate tax cut that nobody asked for, that the business community didn't ask for. The business community themselves said they were surprised that the government had brought it forward in the September minibudget. That's what I find shocking. It isn't an issue about anti-business, as the minister would like it to be. It isn't that old way of politics, but it is about telling British Columbians what you will do and doing what you told British Columbians you would do. That's the issue here.

Getting back to my question, though, what I heard from the minister is that basically, there were no new consultations done with the government. That's what I heard. Yes, she'd done some work in 1999, but since then, I haven't heard from the minister about who she met with, who asked for the tax cut, or when and how those consultations were conducted.

Was the exact amount of the tax cut, the 1.5 percent for corporate tax cuts, discussed with any stakeholder groups? Had they recommended a specific amount that they wanted the government to come forward with? No, I didn't hear any of those answers, save and except for a bunch of rhetoric.

Let me then ask this, because I expect we're not going to get anywhere except for more rhetoric, so let's move on. What analysis was undertaken to weigh the benefits of a general corporate tax cut versus a tax cut for small businesses?

Hon. C. Taylor: Actually, I'm so pleased you mentioned that, because that also was included in the budget, and I neglected to say it before. For small businesses, we also raised the threshold there so that more companies around British Columbia would be able to access the 4.5-percent small business tax rate. We helped small business as well as low-income British Columbians and as well as larger corporations.

[1530]

I'm sorry the member opposite wasn't at more of my all-candidates meetings, because I promise you that I did say wherever I spoke — and it's important that you hear this — that a competitive tax regime is essential not only to keep the economy of British Columbia going but to grow it even more.

It has been the mantra and the mandate of the B.C. Liberal government since they came in to turn this economy around, and they have constantly said that a competitive tax regime is essential. If we're talking about what was specifically said in election campaigns, I would just ask the member opposite if the NDP in the '90s went to people and consulted and asked and promised in public that they would bring back the corporate capital tax.

J. Kwan: Let me just say this. The minister says there's a piece within the minibudget that deals with the small business community, and that's technically true, because that was introduced in terms of lowering the threshold with the former minister, the former Minister of Finance, back in the February budget. So it is technically true that it is there, and I won't dispute that point.

But the point is this: it is the new budget that the new Minister of Finance brought in, in September after the election, the first post-election budget that was supposed to be brand-new and shiny. You look to see what is brand new and shiny in that new minibudget introduced in September, and lo and behold, the brand new thing that is bright and shiny, that shines the brightest, happens to be the corporate tax cut. It is the single item that has the largest expenditure attached to it, yet nobody, not one person I heard during the campaign, asked for that.

The minister will cast it in the light of the more general approach of the government that says a tax cut

[ Page 775 ]

is always good, that they want to be competitive. Well, let us be very clear. How competitive has this brought us? To exactly the same place where we were, behind Alberta. It didn't advance us in advance of Alberta. Exactly the same place.

But that is not really the issue. The real issue here is, of course…. I go back to what the business community has said about this corporate tax cut, and I heard distinctly before the September minibudget was introduced that the business community wasn't asking for corporate tax cuts. In fact, I had a meeting with the Business Council, and they told me they weren't expecting a tax cut.

They were shocked and surprised. So too are many British Columbians, I might say. The threshold that was raised for the small business community…. Let us be clear. We know that the small business community is the backbone of our economy, yet the threshold that was raised barely covered the new cost of living, or the cost of doing business, if you will.

Instead, the big corporations got the single biggest line item in terms of benefits accrued to them from this minibudget. I ask the minister, and I'll repeat the question again: what analysis was undertaken to weigh the benefits of a general corporate tax cut versus a tax cut for small businesses?

Hon. C. Taylor: It's just important that I keep saying, and I will keep saying it over and over again, that you must have a balanced approach when you're doing a budget. It's not just about spending, even though the opposition might like to think it's just about spending. It's about initiatives that will keep our economy competitive in British Columbia, that will encourage jobs to our province, and it is also about making sure we don't grow the debt in a way that our children can't afford to pay it, because debt is after all just a bill for our kids.

[1535]

This budget that I presented, which I said is the first of five you'll see during this mandate, can't do everything we want to do all at once. We're going to do it step by step. Our seniors initiative, which is $242 million in this first budget update, was an important start. It is not the whole story, but it was an important start. We, for instance, managed — and we will talk about this later — to increase the SAFER allowance for elderly seniors who are renting. It hadn't been raised since 1990, and every single person here knows what happened to rents in that time.

We also managed to bring back the income supplement, and we had put $150 million of new money into the transition that many older people make — from living independently and being able to completely take care of themselves until they finally reach extended care beds. Besides the new beds, which have been budgeted for, planned for and are being built at this very moment, we did have to look at some of the older beds that had fallen into disrepair under previous governments and had to be upgraded. Equipment had to be purchased, so that $150 million is part of that as well.

J. Kwan: I'm going to try this one last time: what analysis was undertaken to weigh the benefits of a general corporate tax cut versus a tax cut for small businesses?

Hon. C. Taylor: I will say again, and I will keep saying it every time you ask: it is the responsibility of a government, the responsibility of the Minister of Finance to build a budget that is balanced and answers all of the needs we have in a community. A competitive tax regime is an important priority. We ran on it last time, and I want you to know that we will certainly run on it next time.

J. Kwan: Was any analysis done at all?

Interjection.

J. Kwan: I wasn't clear. The minister just said she answered the question. I did not hear an answer, and I don't think I'm losing my mind — at least, not just yet. I asked the minister what analysis was done, and she got up and gave some rhetoric about how wonderful it is that this government is engaged in the practice that they are with corporate tax cuts, but the question was: "What analysis was done?"

Then I asked a question. I asked that several times, and I asked the question: "Was there any analysis done?" The minister actually just didn't respond to that question at all, so that leads me to this conclusion that the government did not do any analysis. They have not done any analysis with respect to the benefits of a general corporate tax cut versus that of a tax cut for small businesses.

I asked the question earlier around what consultation was done, and the minister responded that back in 1999 she'd done some consultation around that. That's the basis in which the corporate tax cut — the biggest line item in this new, shiny minibudget — that is new, which this new Minister of Finance had introduced postelection….

And there you have it, Madam Speaker. That's the approach the government has taken, and the government says: "Trust us." The minister says: "Trust us." The minister then goes on to say: "Oh, but wait. Now I'm going to tell you. I'm going to give you a heads-up. I'll give you a heads-up that there will be further tax cuts coming." And they won't be the last, this biggest giveaway that the government did not campaign on. There will be more coming.

Let me just give this a shot. What else is the minister planning? How much more in the next five budgets she says she's going to introduce? How much more in corporate tax cuts can we anticipate?

Hon. C. Taylor: As someone who has either watched from a distance or been part of previous NDP governments, I would assume, you do know that the Finance Ministry in British Columbia is a very strong ministry. In fact, they are constantly doing analysis. To try and suggest that analysis is not going on all the

[ Page 776 ]

time would be extremely incorrect. I am saying publicly every time I am asked this question: "We are looking all the time at all of the taxes that we have in this province. We are looking to see if they are competitive. We are looking to see if they're doing the job they're supposed to be doing."

[1540]

Right now in the public domain we have at least three different requests for different kinds of tax reduction that, like everything else, we will analyze within the Ministry of Finance. That's an ongoing process. It will continue, and it is an important part of trying to build a budget to know — if we have the funds to do it — where we can possibly make our economy stronger and where we can make ourselves more competitive and keep jobs here instead of driving jobs away.

J. Kwan: If there's analysis done on this specific point around the tax cut, then I ask the minister to table that information in this House. Will she table that information — the analysis that was done and its findings?

Hon. C. Taylor: I'm advised that we do not table inside tax analysis in the House. But the point is that the question was asked: is analysis done? Of course it's done within the Ministry of Finance. It's an important issue for us. We are currently looking at the PST and analyzing it as well.

J. Kwan: I was asking for a specific set of analyses done related to this tax cut. The minister said that there are ongoing analyses being done. Well, then, be specific: what specific analysis was done? If the minister refuses to table them in this House, then tell us specifically in this House what analysis was done. And what findings did the government come up with on the issue around corporate tax cuts versus small business tax cuts?

Hon. C. Taylor: Hon. Chair, it would be highly prejudicial to everything we do, in terms of competitiveness policy and analysis, to start revealing everything in the House in terms of the pros and cons of different tax regimes. You will see every time we present a budget exactly what we have decided is possible to do in terms of tax competition, and you will see the next results in February.

J. Kwan: I've got to tell you this, Madam Chair. The minister is refusing to provide information around what work was actually done on a comparison, for example, of what corporate tax cut benefits would be and how that juxtaposes toward a specific tax cut in the small business area.

The minister says, though: "But don't worry. We've done the homework." The minister said, though, during the election campaign that they're going to bring balance to the Legislature, that they're going to listen to your priorities. Yet throughout the entire campaign not one person said, "More tax cuts" — that I heard. Since the election, not one business community spokesperson said that they wanted a tax cut from the government on the corporate tax cut side. In fact, they said they were surprised to get the present from the government in the middle of summer. Normally you get presents, I guess, at Christmastime. They said they were surprised. But the minister says: "Don't worry. Trust us."

The minister says that the government will engage in a consensus-building approach rather than a confrontational approach to governing. So far to date, I dare say, we have seen no such approach, certainly not in the education sector. I would say amongst other sectors as well, but I'll just leave it at that. But the minister says: "Trust us."

Well, you will pardon me if I find no comfort — no comfort whatsoever — in the government's approach to date, because it's been contrary to what they said they'd do. So, no analysis that the minister can table, nobody she can identify that she consulted with post-election, but the minister maintains that this is the best policy. The minister says: "Wait, though. At least we get that on record now, that there will be further tax cuts, corporate tax cuts for the big corporations." That is now on record. It certainly wasn't prior to the election or during the election.

[1545]

Let me ask the minister this question. The minister often compares B.C. to Alberta. I'd like to know whether or not there have been any specific discussions with B.C. corporations that talk about relocating to Alberta because of our taxation policy and whether or not the minister can recount specifically those discussions for the members of this House.

Hon. C. Taylor: I am going to insist that the member opposite tell the truth. I never said that corporate tax rates would be cut.

Point of Order

J. Kwan: Point of order. The language which the Minister of Finance just used is unparliamentary, and I would ask her to retract that unconditionally.

The Chair: The Chair agrees.

Hon. C. Taylor: I retract those words and will say it in a different way.

Debate Continued

Hon. C. Taylor: I will insist that the member opposite accurately record what I have said. I did not say that, guaranteed, there will be corporate tax cuts. You can check Hansard for that.

What I did say was that we are constantly looking at our taxation regime. This is not the end of the story in terms of what tax cuts may come in the next five budgets. We are looking at all forms of taxation. We constantly do that. We will continue to do that. I will not say that this is the end of the story and that now

[ Page 777 ]

we're fine and all of our rates are competitive. We are not there yet. Whether or not we're able to move will depend on the economy and will depend on our judgment and other priorities.

The second thing is that either the hon. member is misunderstanding my answers or I'm misunderstanding the questions. I never said that there was no analysis. In fact, if you look in the budget, pages 118 right through to 121 will show you various comparisons of our tax regimes, various analyses with other provinces.

What I understood you to be asking, and perhaps I was incorrect, was to see the internal analysis and comment that a finance department does as they work through all of these numbers. In terms of the analysis and where we stand compared to all of the other provinces, it's there, pages 118, 119, 120, 121. In fact, it's a very useful and powerful weapon for those who are looking at where British Columbia stands in Canada.

J. Kwan: That wasn't the question I asked. The answer that the minister is finally forthcoming with is around analysis. The analysis that the minister refers to is a general analysis. I asked a specific question around analysis, with corporate tax cuts versus the small business tax cuts. I'm not asking for comparisons of the provinces in terms of where we stand. So far, in this House, I've heard nothing from the minister that gives me the reassurance that, in fact, analyses have been done on that specific question. Let us be clear about that.

Thank goodness for Hansard, for they do do wonderful work. I just travelled the province to some communities with the Finance Committee, and goodness, the amount of things that they carried with them just so that they could get members' words and the public's words on record is astounding. They work hard. I'm delighted that the former Premier, Dave Barrett, brought about the notion of Hansard so that one could go back and look at the record and see what one said. I very much appreciate Hansard and their work. Make no mistake about that.

I never used the word "guarantee" either. If we're going to pick and choose words, then we'd better know what we're talking about, and we'd better choose those words carefully, because nobody in this House used the word "guarantee."

[1550]

The minister, once again, though, getting back to the question…. I have to work hard here to stay on track. No answer was given on the question around discussions with B.C. corporations around taxation policies.

I'm going to move on, because I sense that we're on futile ground, that the minister would rather talk rhetoric than answer questions. So I'm going to move on to the next question. How many and what type of corporations are affected by this tax cut?

Hon. C. Taylor: Approximately 20,000 companies will benefit from the change from 13.5 percent down to 12 percent.

J. Kwan: What type of corporations?

Hon. C. Taylor: That would cover every conceivable kind of corporation in every region of the province.

J. Kwan: What is the type and size of these corporations?

Hon. C. Taylor: To the best of our knowledge, just here with the experts, about half of them would qualify for the small business tax.

J. Kwan: Half of them will qualify for the small business tax. That means the other half would not qualify for the corporate tax cut.

Hon. C. Taylor: That doesn't mean that they are all big corporations. They could be public corporations. There are other

definitions and characteristics of the ones that do apply, and I'd be very happy to get the technical description of the different categories for the member if she likes.

J. Kwan: According to the budget update 2005 document…. Let me quote from it. It says: "The general corporate income tax rate applies to investment income; income of public and non-Canadian-controlled private corporations; income of Canadian-controlled private corporations with paid-up capital in excess of $10 million; and active business income of Canadian-controlled private corporations in excess of $400,000."

What I gather from this, then, is that small businesses would not — would not — qualify for this corporate tax break.

Hon. C. Taylor: If small businesses, in fact, have income over the $400,000 rate, then they qualify for the lower 12 percent.

J. Kwan: How many small businesses fall into that category?

Hon. C. Taylor: That would be 10,000.

J. Kwan: How many small businesses are there in British Columbia?

Hon. C. Taylor: We haven't got an exact number, so we will provide you with that information.

J. Kwan: I would appreciate that, because I'd be very interested in knowing the ratio of the small business community that would actually be able to benefit from this corporate tax cut. I suspect that's not a very large portion of those small businesses, but I could be wrong, and I look forward to that information.

The minister earlier said that about 20,000 corporations will benefit from this corporate tax cut. Again on that question, how many corporations are there in Brit-

[ Page 778 ]

ish Columbia that don't fall into the small business category?

[1555]

Hon. C. Taylor: We estimate it would be that 10,000 again, but there are, of course, some corporations that aren't paying tax at all because they're not in a profitable situation currently.

C. Puchmayr: Recent reports show that a raise in fuel in the gasoline prices by one cent a litre will net a profit of over $2 million a day. Would the fuel oil distribution companies also benefit from this additional windfall of the corporate tax cut?

Hon. C. Taylor: We can't say for sure, but we will find that information for you, if you would like, as well.

J. Kwan: Could the minister please advise…. With the numbers that she provided to this House in terms of the numbers of small businesses across British Columbia — which she'll get back to the House on and provide that information — and with the information she provided about the large corporations that don't fall into the small business category…. I would also be interested in knowing how they're distributed throughout the province. In other words, on a region-by-region basis, how many small businesses are in the heartlands, let's say, and how many are in the lower mainland and so on? So we get a sense of the breakdown of the small business community and the corporations throughout B.C.

Hon. C. Taylor: We'll see if we can do that breakout for you, but of course, when companies register, they tend to use Vancouver as the base. We'll see if we can get a regional breakdown for you.

J. Kwan: I would appreciate if the minister could provide that information to the opposition.

The minister says, though, that smaller operations will grow as a result of this corporate tax cut. I wonder if the minister could provide specific evidence to support this claim.

Hon. C. Taylor: It is our belief — and we have seen the experience from what happened between the '90s and the beginning of the 2000s — that when you, in fact, do reduce taxes and when you can be more competitive, businesses and jobs do come back to the province.

J. Kwan: It's all very well and fine to say one thing is related to another when, of course, the minister has nothing to back that up. What we know is that the circumstances were also different in the 1990s — not to mention global conditions. I'll leave that aside because I don't want to engage in a debate about that. Rather, I'm very interested in knowing what specific evidence the minister has to support this claim which she has made and the government has made on several occasions — that, in fact, smaller operations will grow as a result of this corporate tax cut.

Hon. C. Taylor: We just absolutely believe that it is essential to have a competitive economy and competitive business taxes in order to encourage businesses to locate here and in order for those that are here to expand and to bring new businesses in. We have evidence, in fact, if you look at the corporate income tax that's now on our books — and you would see it in the September update — that the economy has turned around. We are now pulling in more tax from the corporate sector because of that success.

J. Kwan: Let me be very specific. The minister said that smaller operations will grow as a result of this corporate tax cut. What I'm looking for…. Outside of the minister's word that says, "Trust me; it's true," outside of the government's word that says, "Trust me; it's true," I would like to actually see some evidence to back it up. Will the minister provide that information to this House?

[1600]

Hon. C. Taylor: For anyone who has run a small business, you know that if your taxation is too high, you've got very little money left to reinvest or to hire people, and you will go to regimes, whether it's other provinces or other states, where it is possible to make the same widget, to employ the same people and still have extra money, because the taxation regime is lower, to reinvest in your business or to hire more people.

J. Kwan: That's a general statement that the minister makes; it's not evidence. It's not information that the minister is providing to this House to back up her claim. It's yet another claim that the minister has made.

I'm only asking for information to back up the minister's claim. I don't think it's that difficult a question. After all, this government says time and again that they want to rely on empirical data. I'm only just going down that route to make sure the facts back up what the minister is saying, so I ask, again, for the minister to provide that information to this House.

Hon. C. Taylor: When you lower taxation — particularly for businesses, because you're hoping to encourage the economy — you do not do it so there's one line in the budget next year that says, therefore, that that was the benefit. You do it because it creates a climate wherein businesses want to come to your province, want to grow in this province and, in fact, where we bring businesses from other provinces and other states to locate here. The reason we want those businesses, of course, is because it means jobs for our community, jobs for our people. The success of the lower taxation regime is clear in the fact that we have 238,000 new jobs since December 2001 in this province.

J. Kwan: Well, then let me try this another way. Could the minister please advise this House how many and what type of small operations are relocating to British Columbia as a result of this tax cut? Could the

[ Page 779 ]

minister be specific in telling us those numbers to back up her claim?

Hon. C. Taylor: We do know, for instance, not only that 238,000 new jobs have been created, but also that in-migration has grown. The numbers that we're seeing from our independent Economic Forecast Council are large — net in-migration coming into this province, in part because of the now competitive tax regime.

J. Kwan: That wasn't my question. I'm not asking how many people came to British Columbia. I'm asking how many small business operations and what type of operations are relocating to British Columbia as a direct result of this tax cut, as the minister has claimed and this government has claimed that this tax cut will bring new operations into British Columbia.

Hon. C. Taylor: We do not track specific companies, because many of them are registered federally, as I'm sure you know, but we do track business activity. The way you do that is through increase in jobs, increase in economic revenue, increase in corporate taxation that's now coming into the province because more business activity is happening here and because people want to locate here and grow their jobs here.

[1605]

J. Kwan: On that basis, the claim that the minister makes may have something to do with other factors like the global demand, lower interest rates and so on. I would then assume you would be hard-pressed for the government to make such a broad statement as it has made to date when it has nothing to actually back that up.

The minister says she doesn't know how many and what type of small business operations are relocating to British Columbia. There's no analysis done that she could table in this House around how a corporate tax cut would fare better for the economy versus, perhaps, a tax cut for the small business sector. The consultation work that the minister has done dates back to 1999. That's what we've got so far from the minister. I wonder: does the minister have any information about what regions would stand to benefit in terms of increased small business operations — or operations, for that matter — relocating to British Columbia?

Hon. C. Taylor: Regions throughout B.C. are benefiting from an improved economy — some areas more than others. It's our effort as government to constantly try to improve the environment so that, wherever possible, we increase the job opportunities and business opportunities throughout the province.

J. Kwan: Could the minister please be specific about what regions, what communities, what towns are benefiting, and on the flip side, could the minister please advise which communities are still struggling?

Hon. C. Taylor: Jobs are up in every region of the province, and we will give you our economic analysis if you wish it. We track it regularly.

J. Kwan: Does the minister have any analysis linking this specific tax cut to economic growth, as the minister has suggested?

Hon. C. Taylor: I will keep giving the same answer, which is that you cannot have a punitive taxation regime and expect businesses to stay in this province when it is too easy for businesses to move. We saw it happen in the '90s. We lost head offices in the '90s. We lost jobs in the '90s.

When we improved the competitive taxation regime, it was one of the issues that helped encourage businesses to come back to British Columbia. We see that by the increase in jobs, which is quite extraordinary — 238,000 new jobs since December 2001 in this province. We will continue to analyze our taxation regime, and if it's possible and if it's necessary at some time in the future, there may be changes either to the personal income tax, PST, corporate income tax or small business. Whatever the range of taxation measures is, we will constantly analyze them and constantly be moving towards making this province more competitive on a personal and a business basis.

J. Kwan: The minister keeps on going back to her lines and her message box about competitive taxation regime. Now, I don't want to dispute that, except to say this. Prior to the election campaign the government overspent $7 million of taxpayers' money on an advertising campaign to say how great things are going in British Columbia.

In fact, I believe that at the Liberal convention their slogan was: "B.C. is back." If that is the premise on which one entered into the election and that's the premise on which the government is stating that the economic situation is such that things are just going hunky-dory…. We heard from no one, including the business community, during the election campaign that a corporate tax cut was their number-one priority and that the first order of business in this minibudget must be to give yet another corporate tax break. We didn't hear any of that.

[1610]

If the premise is that B.C. is back and so on, then I've got to ask the question: why is this the number-one priority in this minibudget with respect to it being the largest line item that is new since the February budget was introduced?

I don't understand. When we heard from British Columbians, overwhelmingly, they said that their priorities centred around social spending — health care, education and so on. Instead of doing that in this new minibudget, with new moneys introduced in this budget, the government chose not to do that, to reflect those priorities.

The Chair: Will

section 1 pass?

[ Page 780 ]

J. Kwan: Well, let me just try this with the minister this way. How will the effectiveness of this tax policy be measured?

Hon. C. Taylor: Madam Chair, are we on

section 2?

The Chair: We're still on

section 1.

Hon. C. Taylor: The success of a competitive taxation regime is when you have a strong economy so that you have the dollars coming in on the revenue side to pay for your priorities. That means businesses doing well in British Columbia, and it means jobs coming back. That's how we will be measured.

J. Kwan: Does the minister take into account other factors, or is it just the corporate tax cut? If so, what other factors does the minister take into account?

Hon. C. Taylor: I am pleased that in this budget…. In fact, we looked quite broadly at the taxation regime, and one of the most important initiatives was the B.C. tax reduction. In that B.C. tax reduction we have now lowered provincial income tax rates for the low- and modest-income earners. The bottom two tax brackets are now the lowest of anywhere in Canada, which is a significant, important income tax initiative.

The second was that for small businesses we raised the threshold at which they have to start paying the higher tax. Now there are small businesses throughout the province that are able to only pay the 4.5 percent.

As well, with the corporate income tax, which is what this particular bill is about, we have managed to lower that from 13.5 percent to 12 percent. I recognize that Alberta is still lower, but it's essential — even if we can't go head-to-head with Alberta — that we are at least in the same game, that we're competitive, so that businesses can make a very positive choice to locate here and bring jobs to British Columbia.

J. Kwan: Those are the only factors that I heard the minister mention, and it all centres around the government's policies. What the government is saying, then, is that economic growth in British Columbia has got nothing to do with global forces. It's got nothing to do with commodity prices, and it's got everything to do with how great the government's policies are. I asked for other factors that the minister could highlight that might impact economic growth. She didn't name any other factor at all, except for all of the government's policies. Well, let's just wait and see and use those selective measures to see whether or not it adds up.

Let's go and see the economists and what they might say about that. I'm not an economist. I'll admit that right off the top. I'll say I'm not an expert on this, but I'll bet you dollars to doughnuts that there'll be others who say: "Hey, guess what. There are other factors that you've got to take into consideration that impact economic growth or decline, for that matter, in the province."

[1615]

Let me be very clear that the opposition will not be supporting these sections of the bill, sections 1 and 2, I may add, because those two go hand-in-hand — and it ties into the reduction of the corporate tax cut — not because we don't support the business community. Rather, it is a question around priorities and what we heard during the election campaign. British Columbians sent us a different message and sent the government a different message. They wanted to make sure health care, education, social spending were prioritized by the government.

I know that the minister will say: "Oh, but we have, and look at how wonderful we are, and look at the February budget." "That's my budget too," the minister will say. Technically, it is true, but I'll say this. Since the election, what people looked for were signals from the government that they'd heard the message so they could trust this government to do things differently.

Instead, what British Columbians got was a tax cut nobody asked for. Instead of actually directing dollars into the small business community, more specifically, in terms of tax cuts, the government went elsewhere. Instead of putting moneys in the apprenticeship area, where the business communities say they need that for economic growth to address the skill shortage issue, the government didn't invest in that area where the business community, the students themselves, the families in British Columbia, had hoped the government would.

That's just to name a couple of areas. I won't go into all the other sectors like health care — Surrey Memorial, for example — because we'll save that for estimates debate, but I'll be very clear about this. What we heard in this section-by-section debate was that from the consultation the government and the minister had done dating back to 1999, the government cannot table any analysis with respect to how a corporate income tax cut versus a small business tax cut would benefit and what the difference would be.

Even when asking specifically on the breakdown of how many new operations will come to British Columbia as a result of this one factor, the corporate tax cut, the minister couldn't provide that answer.

Hon. C. Taylor: As this particular

section winds down, I will just put on the record exactly what my position has been. It's odd that the member opposite is disparaging about the fact that I went around the province and talked to individuals and businesses and community leaders and union leaders to see what their ideas were. I am a very good listener, and I did listen. One shouldn't discount people just because I spoke to them in town halls around the province. It was a very important and intensive consultation period.

To say that nobody in business asked for these tax cuts — if you look at page 37 of last year's budget consultation report, you will find that businesses said: "A clear message from the business community was the need for a more competitive tax regime." We ran on this. We ran on it the first time, and we ran on it the

[ Page 781 ]

second time: the power of a strong economy. The reason why we were so insistent that we have a strong economy is so we can spend on our priorities, but we do not believe in taxing-and-spending people to death. We've seen what happens to an economy when you do that.

The final thing is that the analysis, to be on the record again, is on pages 118, 119, 120 and 121 in the September update. You will find an analysis that shows where B.C. stands on various taxes compared to other provinces in the country, and therefore, the very clear reason there is for us to be competitive, because business can move so easily, as we saw in the '90s. In terms of the jobs and companies that this corporate income tax will help, we estimate that it's about 20,000 companies.

[1620-1625]

Section 1 approved on the following division:

YEAS — 40

Falcon

Reid

Ilich

Chong

Christensen

Les

Richmond

Bell

Bennett

Roddick

Hayer

Lee

Jarvis

Nuraney

Whittred

Cantelon

Thorpe

Hagen

Oppal

de Jong

Campbell

Taylor

Bond

Hansen

Abbott

Penner

Neufeld

Hogg

Sultan

Krueger

Lekstrom

Mayencourt

Polak

Hawes

Yap

Bloy

MacKay

Black

McIntyre

Rustad

NAYS — 31

S. Simpson

Evans

Farnworth

James

Kwan

Brar

B. Simpson

Cubberley

Hammell

Coons

Thorne

Simons

Puchmayr

Gentner

Routley

Fraser

Horgan

Lali

Dix

Trevena

Bains

Robertson

Karagianis

Ralston

Krog

Chudnovsky

Chouhan

Wyse

Sather

Macdonald

Conroy

Section 2 approved on division.

section 3.

J. Kwan:

Section 3 refers to a correction to the Income Tax Amendment Act, 2005. I wonder if the minister could just advise this House what that is referring to. It corrects what exactly?

Hon. C. Taylor: It just corrects what was basically a typo initially. Where it says "1 and 2," it should have said "8 and 16."

[L. Mayencourt in the chair.]

J. Kwan: Sorry. It should be "1 and 2" instead of "8"?

Hon. C. Taylor: Where it refers to "sections 1 and 2," it should have said "8 and 16." It was a typo.

Section 3 approved.

section 4.

[1630]

J. Kwan: Sections 4 to 7 basically deal with the amendment to the International Financial Activity Act. It expands the international financial activity program to include refunds of provincial corporate income taxes paid on income derived from the commercialization of intellectual property in the form of life science related to patents. This measure takes effect on January 1, 2006, and is expected to cost the provincial treasury about $20 million per fiscal year.

I want to be clear that the opposition supports targeted tax cuts that help industries grow to develop new markets and to create new jobs. The stated reason for this tax refund is that research is done in B.C., but once it gets to the commercialization stage, it then moves offshore to take advantage of tax incentives that exist in other jurisdictions. Could the minister please explain again, on this piece of the tax cut, what consultation did the ministry or the minister embark on?

Hon. C. Taylor: The B.C. Innovation Council, I believe in 2003, recommended that this be looked at and done. As well, the International Financial Centre also recommended…. This was before, of course, I was elected, but it's been going on since 2003. The situation is one that we nurture and help and promote and bring in these biotech companies, but when they're working in life science patents, it's a long, long research process. So it sometimes takes ten or 15 years before they finally have a successful patent.

What we are trying to do is be proactive and keep our companies here rather than have them, once they've got something successful, leave B.C. because of the international commercialization of the patents. So this is a proactive measure that we believe will meet those needs, and it is a partial tax refund, not a complete tax refund.

J. Kwan: Could the minister please advise what industries and specific companies will actually potentially benefit from this taxation relief?

Hon. C. Taylor: Because this is new, what we are using is the life sciences patent designation, which is an

[ Page 782 ]

international category. So we will have to bring in regulations that very specifically say what will fit under this. What we've got on our website right now is our proposal for the kinds of companies that would be able to access this tax refund. We are consulting with the public and asking for people's opinion about it.

So it's not yet set, but before December 31 we're asking for people to make recommendations or comments on our website as we look for exactly what life sciences categories…. To the best of our knowledge at this point, it's certainly the health ones. But there are patents in agriculture. There are patents in mining that will apply as well. It's a new area for us. That's why we're putting these regulations on the Web first of all, so that everyone can comment on them if they've got suggestions before we actually write them down as regulations.

J. Kwan: I can imagine in the health sector what some of those patents might be. But in the agriculture and the mining sector, perhaps the minister could advise this House: how would they utilize the tax incentive for the industry? Is it for the processing part of the agriculture industry or the mining industry perhaps? I'm not sure, and I'd just like to have that information from the minister.

[1635]

Hon. C. Taylor: That is exactly what we were struggling with — to make it as broad as possible but do the job that we wanted. For instance, in mining reclamation projects there are some there that would apply — the biological treatment of water, wastewater, sewage and organic chemistry, for sure. In microbiology there's fermentation, enzyme-using processes that synthesize a desired chemical. What we've got — this is on the Web. You can have a look at it, and various companies are now letting us know if they think we've hit it exactly right.

The life sciences patent is an internationally recognized category. That's why we used that one. Because it's dealing with living organisms, that's the one that usually takes so much time before you finally get to the point that it's successful.

J. Kwan: On the question around the $20 million, the government came up with an estimate of $20 million, but yet we don't know what all the categories might be. We therefore, I assume, do not know exactly what the participation rate will be. So how did the government come up with that $20 million?

Hon. C. Taylor: That's exactly correct. Because we're breaking new ground here, we are not sure what the takeup will be. Within the Finance Ministry we have done an assessment of what companies we think probably have patents that would apply. What we are saying is that it's a maximum of $8 million per company and up to a 75-percent tax refund. We're thinking initially $20 million should cover it, but we will be very happy if, in fact, there are more companies that will use this, and we raise that amount. Starting in September, brand-new…. We put in our best estimate of $20 million, but it's quite likely that there will be more companies, and we'll raise that money.

J. Kwan: Does the minister have a list of the companies that she now knows would qualify and would be interested in this tax incentive?

Hon. C. Taylor: No, we don't have a list of companies, because it's in the future. We had to do…. A lot of this is private information — what kinds of patents are in various companies. It was our experts in Finance trying to make an estimation. We will know more clearly once we see what the uptake is in the new year.

J. Kwan: Once the minister has that information, could she provide that information to the opposition? I'd be interested in knowing, as well, what it looks like out there in the business community, what sectors would be interested and how many companies exactly would be interested. If the minister could provide that information to the opposition, I would appreciate that. I see the minister nodding, but I'll just get her to put that on record.

Hon. C. Taylor: As soon as this is, in fact, in process and we have a program out there, the information that we put forward will be available, but I would imagine that we will have to be a little bit careful in terms of confidentiality in terms of the nature of patents. But whatever information is proper to release, privacy aside, we'd be happy to do that. I really would encourage all of the opposition to look at this list that's currently on the Web. If you see something that you think we're missing, bring it forward because there's time before the end of December to firm up that list.

J. Kwan: The minister said the end of December to firm up that list? Once the list is firmed up, I presume the government would move on to put that in regulation, and then those would be the sectors that would qualify for this tax incentive. Am I understanding the process correctly?

Hon. C. Taylor: It is our intention to get these regulations organized by the end of the year. We've said to people who are looking at the website before December 31, because the start date, of course, is January 2006.

J. Kwan: I would presume, though, even after that time line, if there's a sector that's missed for some reason or another, there's nothing that stops the government from actually adding that by regulation at a later time.

Hon. C. Taylor: That's absolutely correct. We can add afterwards, and it also can be retroactive. If the list isn't completely finalized by the first of January because there has been a lot of discussion, we will just

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make it retroactive because that's when the tax incentive starts.

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J. Kwan: The biotech sector. Does the minister know where the biotech industry is clustered in British Columbia, in what region?

Hon. C. Taylor: Because it's involving so many industries, including mining and agriculture and others, I would expect it's throughout the province. The biotech companies that you referred to are probably mostly in Vancouver — in the lower mainland is a safer way to say that. I haven't looked up addresses of these corporations, but because we're involving other areas of life science, it should be throughout the province that there are companies that will be able to use this.

J. Kwan: I assume that the ministry will also track that information, once the ministry knows and the program is up and running — where the companies are coming from, who's applying for this tax incentive. I wonder whether or not that information could be provided to the opposition, as well, once the information is available.

Hon. C. Taylor: All of these companies will have to register with the International Financial Centre, so that's where the information will be gathered.

J. Kwan: I take it that the minister will actually get that information. My question is: when the ministry receives the information, can the minister provide that information to the opposition?

Hon. C. Taylor: As I said before, as long as it doesn't violate privacy issues, we will have that information.

J. Kwan: With this change, how will B.C. compare with other jurisdictions in terms of competitiveness?

Hon. C. Taylor: Doing our math here, we believe that it should work out to about 10 percent lower than the United States, and no other province that we know of is doing it. So we think it will be a good incentive.

I spoke to a businessperson from England in the last week, and he was saying that he knows that industry somewhat in England and felt that it might start to draw some business from England here as well. I know we have been hearing stories that the biotech industry is now strong enough in British Columbia that we are able to recruit from the United States, from England, from other areas. So this isn't, you know, the whole answer, but we think it's one of the pieces that make this a good environment for these new companies to locate.

J. Kwan: What jurisdictions are companies licensing their patents in once it gets to the commercialization stage?

Hon. C. Taylor: More information than we need.

It has to be a B.C. company, first of all. The patents can reside in various places internationally, but there will be a list of qualifications in order for a company to register with the International Financial Centre and then to qualify for this.

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J. Kwan: Has the ministry done any analysis with respect to how this tax incentive would actually help industry grow and create jobs? Does the minister have anything specific in terms of projections?

Hon. C. Taylor: The idea of this is to be proactive, so we're out there before companies have started to leave. It came from the B.C. Innovation Council in the first place. They felt that a lot of these companies that had been nurtured here were just getting to the point of being successful and were starting to talk about where they would go with their patents — to a taxation regime that worked for them.

In being proactive, we, first of all, aren't sure how many companies will actually be able to use this. We will see that more clearly over the next few months. We've tried to make it as broad as possible to pull in the mining, the agriculture and some other biological patents as well. But if you are asking if I can tell you how many specific jobs as a result, I can't do that.

I can say that we believe this is an incentive package that will encourage our biotech and our innovative companies to stay here once their patents are commercially and internationally viable.

J. Kwan: What would the government use to determine success or failure of this program?

Hon. C. Taylor: I would say to you that it's a success if we get more uptake than we expected.

J. Kwan: It's not necessarily tied to jobs, for example — how many jobs are created in British Columbia, how many new companies. Rather, the $20 million is spent, and then that's deemed to be a success?

Hon. C. Taylor: Our idea of success is if we can keep our companies here that are now becoming internationally successful. That will be part of what we're looking at to see if this program works, to see if the regulations are exactly right.

We have great hopes that it…. We had indications when this was announced publicly that in fact this is a good idea, and I think that you even said yourself that you felt it was a good incentive for these companies.

It's very important to us as we try to diversify the economy. This is one of the sectors we'd really like to grow. We're trying to be proactive here in trying to keep them here, especially once they become successful.

J. Kwan: I would hope that there would also be tracking, if you will, from the government on this program with job growth and also increased corporations

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or companies who wanted to participate in this program in terms of their participation in British Columbia.

Aside from the uptake of $20 million, I would hope that there are other measures and, more specifically, job growth in this sector. I assume, though, that the government and the ministry will be looking into that in terms of how many jobs, how many new companies are being brought to British Columbia as a result of this incentive.

Hon. C. Taylor: It's bigger than new jobs. It's keeping the jobs we've got here. We felt, and the Innovation Council certainly told us, that there was a real threat of us losing jobs. That will be one of the measures that we'll be watching.

J. Kwan: I'm wondering whether or not there's been dialogue with, let's say, the Ministry of Health on the issue around patents, especially around life sciences. I'll use one example that I'm aware of, around hereditary colorectal cancer. We know that such a cancer can be detected and that measures to address that could be addressed in a variety of ways — through DNA testing and so on and so forth.

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Yet I know that sometime in the last four years there were issues related to treatment and testing with various forms of cancer relative to the pharmaceutical companies. In fact, at one point a court case was threatened with all the provinces in that regard. British Columbia, as far as I am aware, stepped back from the tests for this particular type of cancer because of the legal threat from the pharmaceutical company. As a result, patients were not able to access the testing they wished to have.

To my knowledge, Alberta — and I don't have that file with me, so I'm just going by memory here — is the only province that said: "Hey, if the pharmaceutical companies want to sue us, go ahead. We are going to continue the service which we provide to Albertans." But British Columbia, under the former Minister of Health in the last four years, did not take that position. So I'm interested, and I wonder whether or not there's some linkage with this tax incentive, particularly on the issue around life sciences relative to health policies and direction of government. Is there some linkage?

Is there a table to which the government's talking about that, and how do we actually overcome those issues?

Hon. C. Taylor: Certainly the Finance Ministry talked with the Health Ministry in terms of getting the definition right in life sciences, but this particular program is for private companies that are successful now and are internationally selling their patent. In that sense, we're not saying it has to be a patent that fits in with our particular health policy. But if you want to — I'm sure you will — ask the current Health Minister in terms of the issue that you mention. I'm not familiar with that particular one.

What we were trying to do is get as broad a definition as we could, so that any living-organism research or biological research that results in an internationally successful patent would come under this particular category.

J. Kwan: My issue is that I wouldn't want to see companies, where they're successful with their patent, then turn around and use it against the government, in which case, in the example that I cited, it ties into the health care arena and, at the end of the day, it's the patients and their families who end up losing out. Therefore, I know it's a broader policy question and may not necessarily fall within this area for the minister, but I think that there are some linkages here to the Ministry of Health because of the significance of it and potential policy ramifications.

I certainly would not want to see companies benefiting from a tax credit which they could then turn around to use against British Columbians in service delivery. That's the point that I wanted to make: to make sure that some steps are taken to address that, and that there's dialogue. There may well be measures that need to be taken into account to address that — legislation that may need to be brought in to prevent those kinds of, in my view, punitive