2001 Legislative Session: 2nd Session, 37th 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, JULY 30, 2001

Afternoon Sitting

Volume 2, Number 5

CONTENTS

Routine

Proceedings

Time

Oral Questions

Negotiations

for nurses’ collective agreement

J. MacPhail

Government

hiring process for senior ministry staff

J. Kwan

Flooding

in Peace River area

B. Lekstrom

Meningitis

outbreak in Fraser Valley

J. Les

Economic

and Fiscal Update

Hon.

G. Collins

MacPhail

Taxation

Statutes Amendment Act, 2001 (Bill 2). Hon. G. Collins

Corporation

Capital Tax Amendment Act, 2001 (Bill 3). Hon. G. Collins

Balanced

Budget and Ministerial Accountability Act (Bill 4). Hon. G. Collins

Budget

Transparency and Accountability Amendment Act, 2001 (Bill 5).

Hon. G. Collins

Introduction

and first reading

[ Page 129 ]

MONDAY, JULY 30, 2001

The House

met at 2:03 p.m.

Prayers.

[1405]

Oral Questions

NEGOTIATIONS FOR NURSES'

COLLECTIVE AGREEMENT

MacPhail: Last week the Minister of Health Services called the potential for

mass resignations of nurses nothing more than a PR exercise. "And where do

they have to go anyway?" said he. Well, what he deems to be a little PR

exercise is rapidly becoming a full-blown crisis. Yesterday the nurses announced

that they have more than 5,000 resignations in hand, and counting.

To the

Minister of Health Services: is it all still a PR exercise, or is it time to

stop playing chicken with our health care system? What are his plans to

negotiate a settlement that will keep nurses here in B.C.?

Hon. C.

Hansen: First of all, I have never said that it was a PR exercise. I think

there was a media report that attributed sentiments of that nature to me, but I

have never said that. I fully recognize the frustration that nurses are going

through. I fully recognize that nurses have watched the health care system

deteriorate around them so that their ability to deliver care to their patients

has been eroded over the last couple of years.

We have

made it very clear that we have been more than fair — we have been very fair

— in terms of the offer that is on the table today, which will make nurses the

highest paid in terms of wages and benefits of any province in Canada. We want

to make sure that we can work with nurses in British Columbia to deal with the

other underlying causes of their frustration, so they can once again deliver

patient care in a manner they will be proud of as the professionals they are.

MacPhail: I certainly feel badly that this Liberal Health minister is

already being misquoted by the media. It is true that this minister said that there was no more new money, even though that was new information from the

election — that there would be a freezing of the health care budget and that

there would be no new money to resolve the nurses' dispute. That's new information

in the last few weeks.

This

government's Finance minister has managed to find $1.5 billion to fund tax cuts.

In fact, 208 million of those dollars are going to the wealthiest British

Columbians, who earn more than $250,000. In fact, the Minister of Finance

took the opportunity over the weekend — reported in the newspapers, but maybe

he's misquoted; it could be that he is misquoted on the front page of the

Province — that there will be more tax cuts for big business….

Oh, so

anxious to say: "Yay for the tax cuts for big business…." But what

he can't do is bring himself to put more money into the health care system and

resolve the dispute honestly and honourably now. So let me ask the Minister of

Health Services, given his responsibility for health care in this province:

what's more important — tax cuts for the wealthiest who earn more than

$250,000 a year or our health care system in this province?

Hon. C.

Hansen: During the election campaign we were very forthright with voters in

British Columbia, and when the NDP party was going around this province saying

we were going to cut health care spending, they were wrong.

Interjections.

Mr.

Speaker: Order, please.

Hon. C.

Hansen: We made it very clear in the election campaign that we were going to

maintain a health care budget in this province of $9.3 billion and increase it

as the economy increased. The one thing that's different in this government

compared to the previous government is that we actually have a plan, as you will

hear unfold later this afternoon, to improve the economy of this province so

that in future we can actually afford the health care system British Columbians

deserve.

[1410]

Mr.

Speaker: The Leader of the Opposition with a further supplemental.

MacPhail: We are now facing in this province an increasing number — beyond

5,000 — of nurses who will leave this system. The Minister of Health Services

said: "Where do they have to go?" Well, we know where nurses can go.

This minister is responsible for keeping our health care system not only

intact but improving as the pressures increase on them.

Let this

minister rise today and tell the public: will he or won't he negotiate a fair

settlement, even given what we anticipate is coming in this budget — massive

tax reductions for his corporate backers? Will he stand up today and say that he

will allow the nurses to share in some of that backing, even though he misled

them during the election?

Hon. C.

Hansen: It is not my job to negotiate the collective agreement. But those

who are negotiating the collective agreement on behalf of this government have

already done exactly what the member is asking: provided for a globally

competitive wage for nurses in British Columbia that will make them the highest

paid in Canada. In addition, as a result of the measures to promote economic

growth that is necessary in this province, the nurses have also received the

biggest reduction in their personal income tax that has ever happened in Canada

and in this province, making

[ Page 130 ]

them, without a doubt, the best compensated in all of Canada.

GOVERNMENT HIRING PROCESS FOR

SENIOR MINISTRY STAFF

J. Kwan:

Last week the government placed an ad in the Vancouver Sun seeking

applications for deputy and assistant deputy ministers. The ad, in part, read

that successful applicants must be able to "thrive in an environment of

ambiguity and risk." Apparently just….

Interjections.

J. Kwan:

Apparently, that's just another way for the government members to say:

"Pay close attention to question period to find out how we're doing."

My question is to the

Premier. Will the Premier today table the ad that his

government has placed seeking applicants to fill the position of Deputy Minister

of Intergovernmental Affairs — which, as we know, went to the president of the

B.C. Liberal Party?

Hon. G.

Campbell: The risk that British Columbians faced is, I think, obvious after

the last ten years of NDP government. The risk that British Columbians have

faced because of that former government's incompetence, the risk that they faced

because of huge, multimillion-dollar investments like fast ferries that don't

work, the risks that they faced because of the last government bailing out

hundreds of millions of dollars for businesses that will never be successful,

will be removed when we replace political appointments with professional,

non-partisan people with talent and ability. That's what every deputy

minister will have in this government.

Mr.

Speaker: The member for Vancouver–Mount Pleasant with a supplemental.

J. Kwan:

I have no doubt that Mr. Wilkinson possesses considerable skills and

talents. Just look at the corporate funding that the Liberal Party has

overflowing in their coffers. Can the Premier assure British Columbians that his

office undertook a nationwide search to fill this position?

[1415]

If the

Premier is unable to table any documents with respect to Mr. Wilkinson's

appointment, could he please inform the House what search process was conducted

prior to the appointment of Ms. Kathryn Dawson — the former managing director

of the Liberal caucus and a former executive assistant to someone named

Stockwell Day — to the position of assistant deputy minister?

Hon. G.

Campbell: I agree with the member that in fact Mr. Wilkinson has

considerable skills and talents. It's not easy for us, after searching across

the country for excellent civil servants who want to come and serve the people

of British Columbia. But when you find someone who is a physician, who is a

previous medical health officer, who is a lawyer, who is a Rhodes Scholar, and

they're willing to serve British Columbians, we're going to bring them here

every single time.

Mr.

Speaker: Further supplemental, the member for Vancouver–Mount Pleasant.

J. Kwan:

The question to the Premier is: what search did he do, and will he table the

documents today? It is clear, it seems to me, that there has been no extensive

search. You simply owe the Liberal insider a favour. What better way to show

appreciation than a plum job that vaults both Mr. Wilkinson and Ms. Dawson into the

upper reaches of the non-partisan civil service that the Premier is so fond

of…? Will the Premier just do the right thing today: admit that there was, in

fact, no search — never mind a nationwide search — and use question period

today to remove these two political appointees from their comfortable patronage

appointments?

Hon. G.

Campbell: No, hon. Speaker.

FLOODING IN PEACE RIVER AREA

Lekstrom: My question is to the Minister of Transportation. The heavy rains

and flooding in the Peace River area have caused much widespread damage to our

area. Many of the roads and highways have been flooded and washed out. Having

just visited the Peace region, can the minister tell me what her ministry is

doing to make sure that this hardship being created by the floods is being

looked after for the residents of this region?

Hon. J.

Reid: Indeed there was a very significant flood event in the last month,

month and a half. Being up there this past weekend, looking at the damage,

there's barely a road that hasn't been impacted by this. The provincial

emergency program has been working with the province and with local governments

to identify the most serious areas to help the residents. With my ministry we

have put additional resources of people up there to start working on these

problems, resolving them. The new construction and the repairs are underway

right now, and we expect that all the major routes will be reopened within the

next few days, if they aren't already. They're trying to get them opened for

today, and that construction work will continue on.

Mr.

Speaker: The member for Peace River South with a supplemental.

Lekstrom: My supplementary is to the Solicitor General. Minister, I

understand that the provincial emergency preparedness program is designed to

respond to provincial disasters. Can the Solicitor General tell us what steps,

if any, the PEP program is taking to assist the residents of northeastern

British Columbia?

[ Page 131 ]

Hon. R.

Coleman: Our officials were on the ground immediately, right at the

beginning of the issues that happened in the north with regards to flooding.

They had already assessed it. They had been coordinating all the ministries,

including highways, and all the environmental issues to make sure things

happened.

We've got a

very good provincial emergency program in this province, with over 20,000

volunteers coordinated by the centre. They've done an excellent job in the

north. They'll continue to coordinate it and continue to make sure that the

solutions are found for the north in this province.

[1420]

MENINGITIS OUTBREAK IN

FRASER VALLEY

J. Les:

My question is to the Minister of Heath Services. Currently, we in the Fraser

Valley face a serious situation with respect to an outbreak of meningitis C.

All members of the House will know that this is a very serious illness. I've

personally had experience with this many years ago, when one of my sisters had

meningitis. Thankfully, she recovered fully, but I saw at first hand how serious

and devastating this disease can be. Can the minister tell the House today what

steps he is taking to ensure that British Columbians at risk are protected by a

provincewide vaccination program?

Hon. C.

Hansen: Since the meningitis outbreak was identified in the Abbotsford area

in April, certainly the work that has been done by the local medical health

officer has been extraordinary in getting the word out to young adults between

the ages of 18 and 29 to get vaccinated. That is a free program that is being

put together. Any British Columbians between the ages of 13 and 29 who may have

had any contact — being saliva exchange — with any 18-to-24-year-old

residents in Abbotsford are also provided with the free vaccination. In

addition, that has been expanded to include the Mission area, as a result of one

case that was identified that originated in Abbotsford.

The

provincial health office is monitoring this on a daily basis. They're in contact

with the health officials in the Fraser Valley. They are looking at it with the

public safety and public interest in mind. It is their determination, as a

result of a very comprehensive meeting that was held last Thursday, that a

provincewide program of vaccination is not required at this time.

So I think

the message to British Columbians is that if they are in those risk groups,

living in Mission or in Abbotsford, they should be concerned. They should take

advantage of that free vaccination. If they live outside of that area, the best

medical advice is telling us that there is not cause for alarm, but certainly it

is being monitored on a daily basis.

[End of

question period.]

Orders of the Day

Hon.

G. Collins: Hon. Speaker, I move that this House at its next sitting resolve

itself for this session into a committee to consider the supply to be granted to

Her Majesty.

Motion

approved.

ESTIMATES OF SUMS REQUIRED

FOR THE SERVICE OF THE PROVINCE

Hon. G.

Collins presented a message from His Honour the Lieutenant-Governor: Estimates

of Sums Required for the Service of the Province for the fiscal year ending

March 31, 2002, and a supplement to the estimates for the fiscal year ending

March 31, 2002, recommending the same to the Legislative Assembly.

Hon. G.

Collins moved that the said message and the estimates accompanying the same be

referred to Committee of Supply.

Motion

approved.

Economic and Fiscal Update

Hon. G.

Collins: Mr. Speaker, I move, seconded by the Premier, that the Speaker do

now leave the chair for the House to go into Committee of Supply.

On May 16

of this year, after a decade of decline, British Columbia elected a new

government and sent a clear signal. They wanted change. They wanted their

province to move in a new direction. They voted for a new era of hope and

opportunity, and this government is going to deliver.

British

Columbia has incredible strengths, vast resources and the most talented people

anywhere. British Columbians told us on May 16 that they were tired of seeing

those advantages squandered. This province started the last decade as an

economic powerhouse, but within ten years we moved from the front of the pack to

the back of the pack in almost every category that counts.

[1425]

We went

from one of the fastest-growing economies in Canada to one of the

slowest-growing economies in Canada. We went from a competitive tax environment

to one that was uncompetitive in many key areas. We watched as British

Columbians' real disposable incomes fell year after year after year. Not

surprisingly, the mood across the province went from hope and enthusiasm to

disappointment and even despair.

The

families in our communities deserve better. Our history and our future demand

it. This government committed, during the election campaign,

[ Page 132 ]

to return British Columbia to its rightful place as a leader in Canada and

around the world.

The Premier

promised bold and innovative change. We promised a new era of hope and

prosperity, and today we take the next steps in fulfilling those commitments.

Today we begin to build that new era of hope and prosperity for every British

Columbian. But before we move forward, we need to establish a starting point, a

baseline for future accountability. So I'd like to present the House with an

update of this year's economic and fiscal status.

I want to

be clear that this is just an update today. We will deliver our first full

provincial budget on February 19, 2002, including a comprehensive three-year

fiscal plan. The update I'm about to deliver is only an interim step, based

initially on the provincial budget that was introduced to this House on March

15. However, since then much has changed. To revive our economy for the long

term, on our first day in office we cut personal income taxes by 25 percent, and

I'll be announcing further tax reductions today.

As well,

the economic outlook for the United States, Europe and Asia has weakened, and

that has had a negative effect on British Columbia's exports, including energy

and electricity.

Since March

15 we have seen our revenues decline by $1.85 billion, to $22.7

billion. At the same time, expenditures have risen by $455 million, to $24.75

billion, mainly because we have chosen to include a number of expenditures that

weren't fully recognized in the March budget but are expenditures we are going

to face nonetheless.

As well,

Crown corporation income has strengthened very slightly, with a net gain of $23

million. In all, this means that our spending exceeds revenues by $2.28 billion.

After the forecast allowance of $500 million and a one-time-only

joint-trusteeship agreement benefit of $1.28 billion, the overall

summary

accounts deficit is $1.5 billion. And that's where the province's finances stand

today.

Clearly,

with those numbers we face a challenge, a very serious fiscal challenge. It

must be overcome, and it will be overcome, because we just can't afford to

continue down the old road of poor planning, overspending, overtaxation and

economic decline that we've seen for the last decade.

Last week

the fiscal review panel concluded that British Columbia has a structural fiscal

imbalance. If we did nothing, if we kept doing what we've been doing as a

province for the last decade, even without tax reductions, British Columbia

would face a deficit of $3.8 billion in the next three years. The panel said

that if we kept doing what government did for the last decade, we would be in

significant trouble.

But as you

know, the panel wasn't entirely pessimistic. It also said that our fiscal

problems can be solved with fundamental changes in the way government operates.

We are taking that advice to heart.

You heard

the Premier speak about a core review of all public sector programs to assess, in

a logical and systematic way what government's business is, how we are going to do

it, and how we can do it better. We expect to begin to see results from that

review in the next few months, but that does not mean we are going to wait to

take action. Frankly, British Columbia has waited long enough. We know what we

have to do to solve our fiscal problems.

Number one,

we need to make our tax system competitive, as our first step to revitalizing

economic growth. Number two, we have to bring some discipline to spending,

with strong, accountable fiscal management. I'm announcing action on both fronts

today, starting with a series of measures to get our economy growing again.

[1430]

Mr.

Speaker, over the last decade it's no news, I think, to most British Columbians

that their standard of living has declined. While other jurisdictions have

enjoyed record growth, the average British Columbian's real disposable income

— that's the money they take home at the end of the month, the end of the year

— has fallen by more than $1,700 a year. Investment growth has lagged behind

almost every other province in Canada. Too many business owners and too many

skilled workers have felt compelled to leave the province, and British

Columbians won't stand for that any longer.

British

Columbians won't stand by and watch what they've seen for the last decade as all

the investments, all the good jobs and all the businesses go to competing

jurisdictions like Alberta and Washington State. If we don't do something now,

over time British Columbia will wither away and end up being a have-not province

without the economic strength to support the quality of social programs that

everybody wants to provide. That's not what British Columbians want, and that is

not what they deserve. It's not what this government wants either, Mr. Speaker,

and we've already begun to make that clear.

During the

election we promised dramatic personal income tax cuts within 90 days of taking

office. We delivered on day one, our first full day on the job, cutting personal

income taxes by an average of 25 percent for every single British Columbian who

is paying personal income tax. Starting January 1, 2002, a little over five

months from now, British Columbia will have the lowest tax rates of any province

in Canada for the bottom two income brackets, which apply to all taxable income

under $60,000.

During the

election we also promised to make British Columbia a more competitive place to

invest and to do business. Today I'm pleased to announce a new series of tax

reductions designed to increase investment; to begin to revitalize industries

like logging, mining and transportation; to strengthen the emerging sectors,

such as high technology; and to break down other barriers to economic growth.

It's time to get British Columbia moving again.

Some of the

barriers that we face, some of the barriers to growth in British Columbia, are

tied to complex, sensitive issues that can only be resolved over time. For

example, a lack of certainty around aboriginal

[ Page 133 ]

land claims and questions about long-term land use planning continue to

impact economic growth and investment. Those issues will be addressed in the

months ahead as part of our broader strategy to bring prosperity back to British

Columbia.

In the

meantime, we must address the tax issues responsible for driving investment and

business away. For example, for many years British Columbia has been the only

Canadian jurisdiction to charge provincial sales tax on production machinery and

equipment without offering any significant offset for business. In a world where

there is stiff competition for every single investment dollar, that makes no

sense. So effective midnight tonight, we are axing the tax. We are eliminating

the PST on production machinery and equipment bought by eligible manufacturers

and by businesses in the logging, mining and energy sectors.

That tax

change will save businesses in British Columbia $87 million this year and allow

them to put that money back into investment both in traditional resource

industries and in emerging sectors such as high technology, manufacturing and

software development.

[1435]

Our next

major tax cut will also encourage new investment, especially from overseas, and

it will make a real difference for British Columbians here at home. In 1992 the

NDP introduced the corporate capital tax on non-financial institutions. It sent

an immediate and intense negative message to Asian investors and other potential

investors around the world. But this tax doesn't just affect investors outside

British Columbia. It is also paid indirectly by small businesses and startup

companies through their rent and lease arrangements in the form of triple-net

leases where they pay those taxes.

That won't

be the case for much longer. We are phasing out the corporate capital tax on

non-financial institutions. The rate will be cut in half, from 0.3 percent to

0.15 percent, on September 1 of this year, and the tax will be eliminated in its

entirety on September 1, 2002. This move will free up more than $100 million and

leverage significant new investments in our province from within British

Columbia and around the world. It will also bring B.C. back in line with most of

the rest of the developed world, where capital taxes are recognized for what

they are: disincentives to growth.

As well,

B.C.'s general corporate income tax rate is currently amongst the highest in

Canada and is also a significant deterrent to people doing business in British

Columbia. As a further step to make our tax competitive, we are going to reduce

the corporate rate by a full three percentage points, to 13.5 percent, effective

January 1, 2002. This message is also important. We intend to strive to make

sure that that rate remains competitive in the years ahead as our economy grows.

I am also

announcing today a series of tax changes to strengthen the transportation and

mining sectors. These include cutting the tax on domestic jet fuel from 5 cents

a litre to 2 cents a litre. That will bring our domestic rates in line with what

is currently on international flights and with the rates charged by our

competitors. That tax reduction will also apply to aviation fuel, which will

also be reduced to 2 cents per litre.

As well, we

are going to eliminate the 7 percent tax on bunker fuel used to run large ships,

opening opportunities to supply more fuel to ships visiting British Columbia

ports and helping attract more cruise ship business. I expect that the member

from Prince Rupert and those others who come from areas that rely on the

shipping industry as part of their community's economic activity will be pleased

to hear about that kind of change.

As well,

one of the industries that has been almost devastated by ten years of the

previous administration is the mining sector. Today I'm introducing a new 20

percent flow-through share credit for mineral exploration modelled on the

federal tax credit. People who don't use flow-through shares will still be able

to use the existing mineral exploration tax credit. That will help to drive

exploration here in British Columbia and to make sure the mining sector

continues to provide high-paying jobs and revenues to government to pay for

health care and education.

Another tax

that the NDP introduced in 1992, which I think was part of the attack that the

then Minister of Finance placed on a number of people in British Columbia, was what he called the luxury tax on vehicles. As Finance critic over

the last number of years, when I travelled around British Columbia, particularly

rural areas, it was the single issue I heard the most from people who live

in rural British Columbia. So we are reducing the surtax on new vehicles that

penalized people for buying the cars and the trucks that they need in rural

areas for work, business and family use. This tax is added over and above the 7

percent PST that everyone pays when they buy a new vehicle in British Columbia.

The tax currently kicks in at $32,000, placing an unfair burden on people who

need larger vehicles for work and safe travel, not to mention people who have a

disability and need a larger vehicle just to get around.

I've heard

from community care nurses around British Columbia who find it astonishing that

the government would punish them for having a vehicle that will make sure

they can safely get to their patients to deliver the patient care that they need in

some of the most demanding terrain and most demanding climate anywhere in North

America. So effective midnight tonight, we're lifting some of that burden by

raising the threshold from $32,000 to a more realistic level of $47,000.

[1440]

In total

these tax changes will put $248 million back into our economy this year alone.

Combined with our personal income tax cuts and other policy and regulatory

changes, which will be spearheaded by the Minister of Competition, Science and

Enterprise and the Minister of State for Deregulation, these moves to a more

competitive tax system will start to renew our economy this year and set the

stage for even more significant growth next year. Anyone who doubts that

[ Page 134 ]

need only look as far as the impact of our personal income tax reduction. We

announced it less than two months ago, and it took effect less than a month ago.

Already people are seeing our province in a new light. Business confidence is up

dramatically, and so is consumer confidence.

In fact,

after a decade of decline and despair in private sector investment, the

Conference Board of Canada has just reported a huge 20 percent increase in its

B.C. consumer confidence index, compared to a rise of just 3 percent nationwide.

We believe this confidence will translate into growth of 3.8 percent in our

economy next year, up significantly from the 2.2 percent expected this year. Tax

cuts will allow businesses to once again create jobs, compete and attract

investment. They send a message here at home and around the world that B.C. is

back and ready to lead again.

Leadership

is about responsibility. It calls for bold, decisive action like we're taking

here today. It also calls for humanity, compassion, understanding and empathy

for people's needs and priorities: health care and education. These are the top

priorities that the people of this province have identified again and again, and

they're our priorities too. But I have to ask: how does a province with the

slowest-growing economy afford the best social programs in the country? And the

answer is: if we don't change anything, we can't, not in any sustainable way.

But in a province with a vital, vibrant economy, we can afford high-quality

public health care and education. That is why it's so essential to get our

economy back on track.

British

Columbians will also want a top-notch education system. We want our schools to

be at the leading edge of educational achievement and excellence, and with the

innovative ideas being put forward by our Minister of Education, we will achieve

those goals.

We also

want a public health care system to guarantee all patients the care they need

where they live and when they need it. I know the Minister of Health Services

and the Minister of Health Planning are working every waking hour trying to make

that happen.

This

government has an unflagging commitment to these objectives. Despite some of the

comments that were made by members of the NDP during the election campaign, I'm

pleased to reaffirm here today that as promised by the Premier and the members

of our party, we will maintain funding for both health care and education.

The health

care budget will be up $9.5 billion this year. That's up $1.1 billion from last

year. The budget for K-to-12 education is $4.8 billion; that's up from last year

as well. We will increase those levels in the future as we reap rewards of new

growth and prosperity in our economy.

[1445]

Mr.

Speaker, the tax cuts I've just announced will help achieve prosperity, but tax

cuts are only part of the answer. It's just as important to properly manage the

$68 million a day that the government of British Columbia now spends on behalf

of the taxpayers. We must ensure that every single one of those dollars is spent

wisely, and we have a strategy to make that happen.

Mr.

Speaker, our strategy includes a core services review, which the Premier will be

making further comment on in the very near future. It's a top-to-bottom

examination of every government program and service to make sure we focus

resources where they're needed the most. Once we've done the review, we'll

publish three-year budgets and service plans that tell people clearly what they

can expect from our government. On budget day next year,

beginning February 19, we will set out what we're going to do, how we're going to do it, what

results we expect to achieve and how much it will cost.

We will

also provide health authorities, school boards and post-secondary institutions

with three-year funding commitments so that they can finally plan and act with

the certainty that only comes with long-term secure funding. Finally, we are

implementing an all-out attack on red tape, business subsidies and waste. Thanks

to our new waste-buster website, we'll have four million sets of eyes looking

for and reporting on government waste across the province. These steps will

ensure that we get the maximum value from every dollar.

Today I am

also tabling two pieces of legislation that will form the legal framework for

our fiscal plan. The Balanced Budget and Ministerial Accountability Act mandates

a balanced budget by 2004-05 and for every year thereafter. It also makes us

more financially accountable by tying ministers' salaries directly to our budget

targets. [Applause.] Mr. Speaker, I noticed more applause from that side of the

House than this side.

Starting on

April 1, 2002, the government will automatically withhold 20 percent of cabinet

members' ministerial salaries. Ministers will be able to earn back 10 percent by

meeting their ministry budget targets. The other 10 percent will be paid out

only if we meet our provincial budget target, providing a new level of both

individual and collective political accountability — as well as spousal

accountability, I might add.

Mr.

Speaker, the second piece of legislation I'm tabling today amends the existing

Budget Transparency and Accountability Act to ensure we move to fully implement

generally accepted accounting principles so that government keeps its books the

way people keep their books. In addition, it eliminates the traditional use of

special warrants. Unlike previous governments, we don't believe in spending the

people's money without due process and debate in this, the people's Legislature.

We will

eliminate the use of special warrants with the exception of two very rare

circumstances: in the case of a natural disaster such as an earthquake, where

for some reason the Legislature couldn't be recalled to pass supply; or in a

very brief period following a new election, where a new government needs to

provide services to the public. Mr. Speaker, this is one more

[ Page 135 ]

measure of this government's commitment to accountability.

understand that what we call government revenue comes from the pockets and the

purses of British Columbians. We understand that the money isn't ours to spend

however we please. It belongs to the people we serve, and we have a duty to

manage it wisely. We have a duty, also, to deliver on our promises and our

commitments to re-establish British Columbia's leadership role in Canada — to

have the leading economy in Canada and the highest level of private sector

investment anywhere.

Will it be

easy? The answer, clearly, is no. There are going to be bumps along the way, and

we will face difficult and contentious choices. But nothing of real value comes

without a challenge. And I can't think of a challenge more deserving of our

efforts than the challenge of rebuilding the province of British Columbia.

[1450]

Mr.

Speaker, I was born and raised in Saskatchewan, and every summer my family would

come and visit B.C. As far back as I can remember, this is the place where I

wanted to be. It wasn't just the mountains and the rivers; it wasn't just the

cities or the beaches or the forests. What I felt as a young person visiting

this province was a sense of hope, a sense of incredible opportunity, a sense

that this was a place where great things could happen.

It's

saddened me in recent years, just as I know it's saddened so many British

Columbians, to see that sense of opportunity evaporate and see the mood of the

people turn from hope to cynicism. Over the last ten years they've seen their

paycheques shrink, their tax burden rise, their opportunities narrow. So who can

blame them for feeling cynical?

A few

people console themselves by saying, "Oh well, we're not as badly off as

some other province," because if you look hard enough, you can always find

some other jurisdiction that's faring a little bit worse. But is that the way we

want to measure ourselves in British Columbia? Is that as good as it gets?

British

Columbians deserve better, and the fact is that we haven't been living up to our

full potential for some time now. Our resources are immense, and our people have

unlimited talent. With sound fiscal management, clear priorities and bold,

innovative changes, we can sweep aside that sense of hopelessness and despair

and create a new sense of optimism and energy that is British Columbia. We can

build on the rubble of the last decade and re-establish this province as a place

of opportunity, and we can truly deliver on a promise of a new era of hope and

prosperity for all of us in the best province in the best country in the world.

Once again we can be proud to say we are from British Columbia.

MacPhail: I rise today in response to the Liberal government's first budget.

It is clear that as we bring forward our budgets, we make choices. As all of us

know, whether in our business lives or our personal lives or our political

lives, choices involve the assumption of risk. I think today is the first day

that the Liberal government must take responsibility for its actions. Today is

the day that you must look forward and say: "We have changed things so

radically that it is now our responsibility." It will no longer be

available to the Premier to look back and blame the last ten years….

Interjections.

Mr.

Speaker: Order, please. Order, please.

MacPhail: It truly is the day that you will stand up and take responsibility

for your actions, and of that you're very proud. Seventy-seven of you sit here,

and you're very proud. I accept that.

I know that

today's the day that you have to take responsibility for all aspects of it —

that you take responsibility for the economy and you take responsibility for

your guardianship role as providing public services for those in need. I

actually wish you well; I wish you the best.

I see that

you're taking massive, massive risks in this budget, and for the sake of British

Columbia, I hope that you're right. This budget isn't balanced; it's not

balanced in any way. It has the second-largest deficit in B.C. history, and it

has taken a very one-sided approach to how to stimulate the economy. It has

taken an approach that favours the wealthy and businesses, and it has taken an

approach that says: "There will be no risk taken on behalf of people who

need health and education services, who may need improved health and education

services."

[1455]

But having

said that, it is a clear stamp. There's no question. It is a Premier Campbell,

Liberal stamp on this budget. And the ad in this "advertising for

people" is now accurate. People who come to this province will have to be

able to work in an atmosphere of ambiguity and risk. That was the intent. You

knew you were going to bring in this budget, and that's why you've put this ad

in place. It actually turns out to be a very, very honest and accurate ad.

People

coming here to manage our public services and our economy now will be in a

situation of risk. Today there was risk added to British Columbians in the form

of about $250 million more in tax giveaways to corporations and big business.

Fair enough. But what is at risk because of that? What have you put at risk?

Well,

you've put our nurses at risk — not only our nurses but our doctors staying

in this province — and that was clear in this budget. Were there other aspects of

the risk, perhaps — that you could have added maybe a little bit of trickle-down

for those who aren't part of big business and corporations?

The

trickle-down theory of economics which this government espouses has made sure

that all the potential benefits of that risky theory are paid up front to big

business. Today you delivered hundreds of millions of dollars to big business.

You took the risk. You don't know whether it's going to work or not, but

[ Page 136 ]

you took the risk and you delivered for your corporate backers.

Did the government share any of the risk for people who aren't

big business and didn't pay large amounts of money to re-elect this government?

Perhaps the government could have actually contributed just a tiny bit in

advance of the risky outcomes on the trickle-down theory, for those who aren't

their corporate backers. But indeed, not only do people who are not big

corporate givers not get any of the advance benefits in a risky situation, but

they were actually put even further at risk.

We already

mentioned nurses. We mentioned doctors and health care professionals. But what

about youth? I actually remember some outstanding comments from some of the

members on behalf of youth, and today the labour market programs for youth are

put at risk. Children and family services…. The Premier himself, when he was

Leader of the Opposition, espoused passion and compassion for those that were

beholden to the Ministry for Children and Families, and today we see no risk

taken on their behalf — absolutely none.

Big giant

risk, hundreds of millions of dollars, for the corporate world, and not one iota

of risk was taken for those families that the then Leader of the Opposition was so

passionate and compassionate about. People on welfare. It's true they probably

didn't contribute much in the election, but the Human Resources budget is cut

today.

Aboriginal

education. The Minister of Education has a very, very aggressive program for

education. Not once are aboriginal children mentioned, even though we know

that our aboriginal children are the ones at greatest risk for success in the

province. Gains have been made in the last decade, but there's much more to be

done — not one iota of contribution to eliminate their risk.

Sexual

assault centres. The Ministry of Community, Aboriginal and Women's Services had

their budget cut. Sexual assault centres are put at risk now as well. I do laud

the government. I do laud the Minister of Finance for continuing to fund the

Child Care B.C. Program. He didn't mention it in his budget. Clearly, it's not

something this government feels the necessity to advocate for people, but

nevertheless, the money is there for that budget.

[1500]

So there is

much risk. The business community will rise up today and say: "Thank

you very much for taking that risk. Don't worry about whether it will come true.

We're very happy that you said the economic forecast is going to be 3.8 percent

for next year," although no one else in the entire world, including their

own fiscal review panel, is suggesting anything even close to an

economic forecast of 3.8 percent.

Even though

the forecast for the United States economy is going down, down, down, as

recently as last Friday, this government is taking all of the risk.

My gosh,

what did they say when others took that kind of economic forecast risk? What

were the words? Their own fiscal review panel said, "Worry about the

economic downturn," and gave an economic forecast that wasn't even close to

what this government has done. But why risk being able to give your corporate

backers big taxes?

It will be

interesting to see whether the

legislation for which this government pats itself on the back because they're

going to be taking a salary cut actually does anything for British Columbians in the next eight

months or so. I expect, when the legislation is tabled, we'll find out that it

doesn't even come into effect until next year's budget. Certainly, there's

absolutely no requirement for this government to balance the budget before the

year 2004 or '05.

Secondly, there is absolutely no requirement for them to even attempt to reduce

deficits. There's no requirement whatsoever for the next budget,

the budget after that or the budget after that to do anything in reducing

deficits. The government is let off the hook completely. And

there's a reason for that. It's because they know the risks they are taking.

Providing services and keeping our books balanced are put at great risk by their

massive tax cuts to the corporations and the wealthy.

I do know

who their model is. We know full well that the Premier of this province has

taken a page out of the southern hemisphere — the great Douglas experiment

from New Zealand. Just a couple of comments on how well that experiment has

worked.

Tax cuts were paid for by reducing public spending on education,

health and welfare. In fact, eventually the rates were raised on low- and

middle-income people. The bottom 80 percent of New Zealanders have seen their

standard of living fall after 15 years of these extreme forms. There's more

poverty in New Zealand today than there was when the experiment began. Workers

in New Zealand also face reduced social protection. For many of them, their real

wages fell; their working conditions worsened. Most importantly, the revenues

did not return to the government coffers.

Let's just

talk about what's happening around the same "let's make big tax cuts for

the corporate and the wealthy, and that will be the way in which the economy

grows." Let's look at what's happening in Texas.

Texas,

under Governor George Bush, is doing exactly the same thing that the Premier

advocates — exactly the same thing. He pushed through a $1.85 billion tax cut.

The state's budget had a surplus, actually — the same thing that this

government was given: a surplus.

Yes, there

was one thing that this government was handed: two years of a balanced budget

and the largest

[ Page 137 ]

surplus in history. And they've now turned it into the second-largest

deficit.

But let's

look at what happened in Texas. The latest Texas budget forecast shows that they

can expect a $700 million deficit after their $1.85 billion tax cut. In fact,

they're now facing a discussion of possible new tax increases.

So it is a

budget of great risk, and it is a budget where the choices are clear. It is now

a time for the Liberal government to take complete responsibility for the

present and future of British Columbia, because this budget drew the line in the

sand. The budget….

Interjections.

[1505]

Mr.

Speaker: Order, please.

MacPhail: The line drawn in the sand is very clear. Above the line, all of

the risk will be managed on behalf of big business, the corporations and the

wealthy in this province. Below the line will be people who need more services,

certainly don't need their services reduced, can't afford to have their welfare

reduced, need better help for children and families — probably what people

thought they were going to get after listening to the then Leader of the

Opposition — better resources for aboriginal children in our education system,

better environmental protection as the world takes on the huge battle around

global warming, better protection for our forests and better protection for small

businesses, none of which was acknowledged in this budget.

It will be

interesting to see, as the days unfold and the public takes account of the

agenda of the Liberal government, how they personally view what they were told

during the election and what the results are. I will watch with great interest,

because the risks taken today were uncontemplated just 90 days ago. It's up to

the government to prove that these risks will benefit all British Columbians.

All of the eyes that they want to watch so intently on their great agenda will

be watching them, will be watching to see how this budget delivers for the single mom, the small business

owner, the transit driver, the nurse, the health care worker, the environmental

technology small business person, first nations, the multicultural community.

They'll all be watching them. I will have a great

deal to say as we go through it, line by line, over the coming days.

I now would

move adjournment of the debate until the next sitting after today.

J. MacPhail

moved adjournment of debate.

Motion

approved.

Introduction of Bills

Hon. G.

Collins presented a message from His Honour the Lieutenant-Governor: bills

intituled Taxation Statutes Amendment Act, 2001; Corporation Capital Tax

Amendment Act, 2001; Balanced Budget and Ministerial Accountability Act; Budget

Transparency and Accountability Amendment Act, 2001.

Hon. G.

Collins: Mr. Speaker, I move first reading of the bills I've just given you.

Motion

approved.

Hon. G.

Collins: These bills will provide legislative authority for many of the key

initiatives announced in the economic and fiscal update. They also provide the

legislative framework to fulfil four of the government's 90-day commitments: to

introduce a dramatic cut in personal income taxes, to introduce real

balanced-budget legislation that requires a balanced budget by 2004-05 and that

makes ministers individually accountable, to introduce real truth-in-budgeting

legislation that requires the province's finances to be reported under generally

accepted accounting principles, and to establish a fixed day for the tabling of

future budgets.

[1510]

The

amendments in Bill 2, Taxation Statutes Amendment Act, 2001, support the

government's June 6 announcement to cut British Columbians' personal income tax

by 25 percent. The bill also contains the tax cuts announced in the economic and

fiscal update that are designed to return British Columbia to a position of

economic leadership. They include the phase-out of the corporate capital tax; a

3 percentage point reduction in the general corporation income tax rate; a new

provincial sales tax exemption for production, machinery and equipment purchased

by eligible manufacturers and producers — the exemption will replace the

existing 3 percent investment tax credit; a new 20 percent flow-through share

tax credit to encourage mining exploration in British Columbia; an increase in

the threshold at which the vehicle surtax comes into effect; and several

measures designed to strengthen British Columbia's transportation system.

Bill 3, the

Corporation Capital Tax Amendment Act, 2001, repeals the sections of the act

which will no longer be required once the capital tax on general corporations is

phased out. These repeals will be effective on September 1, 2003.

Bill 4, the

Balanced Budget and Ministerial Accountability Act, repeals the existing

Balanced Budget Act and establishes new requirements. This bill prohibits annual

budget deficits commencing in 2004-05, and through the establishment of a 20

percent salary holdback for ministers and the Premier, it enhances collective

and individual accountability for the achievement of expenditure and performance

targets.

Finally,

Bill 5, the Budget Transparency and Accountability Amendment Act, 2001, makes

amendments to the Budget Transparency and Accountability Act and the Financial

Administration Act regarding the overall government accountability framework. It

also repeals the Environment and

[ Page 138 ]

Sustainability Statutes Amendment Act, 2001. The key amendments to the

accountability framework are to eliminate the use of special warrants except in two

very specific situations, provide for the adoption of generally accepted

accounting principles in establishing government accounting policies, set the

annual budget date, increase disclosure in budget documents and require

individual ministerial accountability for service plans.

Bills 2

through 5 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.

Hon. G.

Collins moved adjournment of the House.

Motion

approved.

The House

adjourned at 3:13 p.m.

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2001: British Columbia Hansard Services, Victoria, British Columbia, Canada

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