1973 Legislative Session: 2nd Session, 30th 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)

FRIDAY, APRIL 6, 1973

Morning Sitting

CONTENTS

[ Page 2305 ]

Morning sitting

Introduction

Skating champions presented to House. Hon. Mr.

Barrett — 2305

Mr. Chabot — 2305

Mr. Brousson — 2305

Mr. Wallace — 2305

Routine proceedings

Corporation Capital Tax Act (Bill No. 63). Second

reading.

Hon. Mr. Barrett — 2306

Mr. Phillips — 2306

Mr. McGeer — 2313

Mr. Wallace — 2315

Mr. Williams — 2317

Mr. Morrison — 2319

Mr. Lauk — 2322

Mr. Brousson — 2323

The House met at 10 a.m.

Prayers.

MR. SPEAKER: Hon. Members, I ask leave of the House to have

the lights on and cameras in here in this brief ceremony. Is

leave granted?

Leave granted.

MR. SPEAKER: Mr. Premier.

HON. D. BARRETT (Premier): Mr. Speaker, I have the honour

today of presenting to the Legislature some very, very popular

and very, very important guests, not just to this House, but to

all the people of British Columbia.

MR. P.L. McGEER (Vancouver–Point Grey): Pretty, too.

HON. MR. BARRETT: Yes, Mr. Member, pretty, too. I would like

first of all for the House to welcome Karen Magnussen, the

world champion figure skater. Along with Karen are Barry and

Louise Soper, the Canadian dance champions. Along with Barry

and Louise are Glen Moore and Marian Murray who are the

Canadian Silver Pairs champions.

Shortly after we adjourn after hearing from the other

Members, we will have the opportunity of spending a few moments

with these wonderful athletes and these wonderful

representatives of Canada as well as British Columbia.

On behalf of the people of British Columbia, I would like to

announce today that we will be instituting a Karen Magnussen

Figure Skating Award. It will encompass six awards of $500 each

to be given to the three senior ladies and three senior men who

qualify from the British Columbia

section championship to

represent the Province of British Columbia at the divisional or

Canadian championship, whichever is applicable.

The British Columbia

section of the Canadian Figure Skating

Association is to notify the provincial government each year of

the winners of the senior ladies' and the senior men's events.

There are other details as bureaucrats always have to have in

any kind of award. But the awards are there, and they are

heartfelt. I want to say again how much we appreciate the

efforts, not only of Karen and Barry and Louise and Glen and

Marian, but of their parents who put in a tremendous amount of

time and energy to see that their children are as successful as

they have been.

I would like to say that in all of this province, because we have such a small

population, we are fortunate enough in feeling very,

very close to everyone's success. So if you don't mind, skaters, we are going

to enjoy your company on the basis of the great pleasure that all of B.C. has

had in your magnificent achievements.

MR. SPEAKER: The Hon. Member for Columbia River.

MR. J.R. CHABOT (Columbia River): Thank you, Mr. Speaker. We

of the official Opposition would like to join the Premier in

congratulating you, Miss Magnussen. We want to say how proud we

are of you, how proud we are of the distinction you have

brought back to Canada and to British Columbia as well. It is

not very often that we have the opportunity of congratulating a

world skater such as yourself. We do have people in here who

think they are the world's greatest debaters from time to time.

(Laughter).

AN HON. MEMBER: Order! (Laughter).

MR. CHABOT: We are very proud and we want to extend our

appreciation to you and wish you good luck and congratulations

again. Thank you very much.

MR. SPEAKER: The Hon. Member for North

Vancouver-Capilano.

MR. D.M. BROUSSON (North Vancouver-Capilano): Mr. Speaker,

it is my privilege today to speak on behalf of the Liberal

leader (Mr. D.A. Anderson) who is unavoidably absent this

morning. I think the people on the North Shore are especially

proud to have such a large representation sitting on the other

side.

I wish the Members of the House could have shared with some

of us the experience last Tuesday afternoon of the cavalcade

that travelled 30 miles through North Vancouver covering every

district, every neighbourhood and I think almost every school

with Karen and her parents and some of her friends. There was

an outpouring of love and excitement in that parade that I have

never felt, never experienced in any similar thing before. I

want to tell the House three things that I saw in that parade

that I think sums the whole situation up, Mr. Speaker. Early in

the parade we passed by the side of the road an old man who had

been wheeled out to the sidewalk in his chair by his daughter.

It has been said, of course, that Karen and her friends provide

a good deal of inspiration to young people. Well, I want to say

that she provides a good deal of inspiration to some of us

older people as well.

The second thing I saw, Mr. Speaker — many of the school

groups had brought out placards and

[ Page 2306 ]

banners and that sort of thing to wave to Karen saying

"Happy Birthday" and many different things. There was one I saw

on Lonsdale Avenue that said, "Karen you put North Van on ice."

I thought that summed it up very well for the people of the

North Shore.

Finally, we saw a sign many, many times in the different

groups we passed, over and over again, with the same words:

"Karen, we love you." I think that sums it up for all of

British Columbia.

MR. SPEAKER: The Hon. Member for Oak Bay.

MR. G.S. WALLACE (Oak Bay): Mr. Speaker, this party takes

great pleasure in welcoming Karen to the House and offering our

very sincerest best wishes in the future. We think that she

does, indeed, serve as a tremendous example to the youth of

Canada and the youth of the world. My personal impression from

watching television is to not only marvel at her grace but to

realize what a tremendous ambassador she is for Canada. Since

she is in the seat of legislation today I just would offer this

prayer that I hope she never has to skate on the thin ice that

we so frequently do. (Laughter).

HON. MR. BARRETT: Mr. Speaker, I would ask leave of the

House to declare a recess until 10:35 a.m. so we could go up to

the Ned DeBeck Lounge and enjoy the company of our guest.

Leave granted.

The House recessed at 10:10 a.m.

The House resumed at 10:40 a.m.

Introduction of bills.

Orders of the day.

HON. D. BARRETT (Premier): Mr. Speaker, I move we proceed to

Public Bills and Orders.

Motion approved.

HON. MR. BARRETT: Second reading of Bill No. 63, Mr.

Speaker.

CORPORATION CAPITAL TAX ACT

MR. SPEAKER: The Hon. Minister of Finance.

HON. MR. BARRETT: Mr. Speaker, this bill increasing the

corporation capital tax is in order to raise the contribution

of companies to the costs of providing government services to

the people of British Columbia.

This Act proposes an annual tax of one-tenth of one per cent

on the capital used by a company to carry on its business in

British Columbia.

An exemption is provided for small companies whose capital

is less than $25,000.

The Act will tax national companies operating both inside

and outside the province on a proportion of capital utilized

for their British Columbia operation.

In general, capital utilized would include paid-up capital

stock, surplus, revenues, loans and other indebtedness …

MR. G.B. GARDOM (Vancouver–Point Grey): Loans?

HON. MR. BARRETT: …such as bonds, mortgages, lien notes,

et cetera.

This tax is similar in principle to the one used by Ontario

and the Tories and Quebec by the Liberals, and has advantage

from a company's point of view that it is chargeable in full

against operating expenses prior to corporation income tax

being payable. (Laughter).

The anticipated revenue from this tax is $7 million

annually.

MR. SPEAKER: The Hon. Member for South Peace River.

MR. D.M. PHILLIPS (South Peace River): Thank you, Mr.

Speaker, and before I start discussing the bill I'd like to

congratulate the government, Mr. Speaker, for the wonderful

gesture on their

part in inviting the skaters here this

morning. I really think it was a very good gesture. It's

such a wonderful, sunny day outside, and it's Friday, and it's

maybe going to be a little difficult, Mr. Speaker, with

everybody's heart so full of goodwill to really concentrate on

this vicious piece of legislation. (Laughter).

I'm going home tonight, too, Mr. Speaker, and that makes my

heart full of goodwill.

However, as I look across the floor this morning, Mr.

Speaker, at these wonderful young citizens of this province, I

have to just think for a moment about the wonderful physical

fitness and amateur sports fund that was provided by the past

government in this province which helped to make, I'm sure,

some of this possible.

Another thing I couldn't help but think — and this has to do

with the bill, Mr. Speaker — I had to think of what made it

possible for this young skater to go and attain the top

recognition in the world; and it was the spirit of

competitiveness. The only competition the skaters had were

other skaters.

I think this is, Mr. Speaker, what makes business grow and

prosper — good competition. The only competition that they

should have, Mr. Speaker, is

[ Page 2307 ]

the competition from other businesses and not from punitive

taxation from the government holding an oppressing heavy hand

over them.

This does not make for winners in business, does not make

for a healthy business community, Mr. Speaker, and I would hope

that maybe the Premier would have learned a lesson when he had

this young skater here this morning and realizing what made her

such a success.

The only competition that business should have, Mr. Speaker,

is the competition from others in the same business.

Mr. Speaker, we've had some discussions during recent pieces

of legislation about the form of the bill. I want to condemn

the form of Bill 63. It's a 17-page bill, Mr. Speaker, with an

explanatory note of exactly 31 words including all of the

"the's, of's, is'es, to's and ah's."

Well, I could have done a better job of explaining this bill

than to limit it to a small 31 words. Even the Premier himself

the other night was just a little bit dismayed about the

Companies Act , Mr. Speaker. He thought there should have

been a better explanatory note on it. He said we couldn't

understand it.

Well, here we've got the same kind of thing. Then underneath

this little explanatory note, Mr. Speaker, it has the gall to

say that this is not part of the legislation, because if it had

of been it would have made for a not very much longer bill, Mr.

Speaker.

I guess, Mr. Speaker, that some of the thoughts behind

bringing in legislation in this way is that they don't want

people to understand — or to know what the true meaning is of

the bills that they are bringing in.

I would like to recommend, Mr. Speaker, to the Premier and

to all the Members of the council that when they bring in

legislation, for heaven's sake take some time and write a

decent explanatory note so that not only we on this side, but

their own backbench members can understand the legislation.

Mr. Speaker, there is one thing about this bill that I have

to disagree with and that is that it will definitely increase

the cost of doing business; not only the costs of the taxation

that is going to be paid by the tax levied under this bill, but

it's going to add costs in the filling out of the forms and the

submissions to the government.

Certainly, Mr. Speaker, if you add in today's business world

any additional costs of doing business, additional taxes, they

have to be passed on somewhere. So this, Mr. Speaker, is

automatically going to increase the already rapid rate of

inflation in our province and indeed in Canada.

This increased cost of doing business, Mr. Speaker, will,

I'm almost sure, be passed on to the consumer, because any time

there is an additional cost, an additional tax it has to come

from somewhere. So it is passed on to the consumer; and who

does it hurt most? It hurts those persons on fixed incomes.

Mr. Speaker, this tax will be levied on apartment blocks, so

the cost of rent will automatically have to be increased.

Running an apartment block is a business and this bill covers

most of them. It will increase the operating costs of the

British Columbia Telephone, something that every one of us

uses. So what's going to happen, Mr. Speaker? Up goes the cost

of your telephone.

So you see, all of these taxes that are added to business

end up costing the consumer more money and in the long run I

guess you could say that it is the consumer who really pays the

bill.

This bill, Mr. Speaker, will tax the majority of the service

industries in the province. Many of the service industries in

the province work on a very, very low profit margin — some of

them as low as .5 per cent. Any additional tax just serves to

make that business that much more uneconomic and sort of kills

the inspiration and the competitive spirit of that

business.

Mr. Speaker, as I look at this bill I have to ask myself,

and I've thought about it and thought about it, what is the

reason behind this tax? Why do we need this tax in British

Columbia? Certainly there is a good surplus in the province. If

business continues the way it is there will be a surplus next

year; so why do we need an additional tax in British Columbia?

I just can't understand it, Mr. Speaker.

It's not just to get at big business, Mr. Speaker, because

it's also going to get at small business. Regardless of what

the Premier says about deducting a business with less than

$25,000 employed — that's not much of a business nowadays with

the rate of inflation and with the dollar being devalued more

and more every day — and this bill adding to that. So it's not

just to get at big business.

If it were just going to get at businesses who employ

capital of, we'll say over a quarter-million dollars or a

hundred thousand dollars, Mr. Speaker, I could say, "Well,

there's that government, they're after the big business

fellow." But that's not the case. They are after all size

business. So why this tax? Why do we bring it in at this time

at all?

This tax is inclusive. It's going to be all-inclusive and

it's even going to tax professions. There are many professions,

dentists, for instance, who have a lot of money, Mr. Speaker,

tied up in their dental equipment. It's going to tax every

trade and, Mr. Speaker, it's even going to tax every

adventure.

I wonder, Mr. Speaker, if the Premier is going to tax the

MLAs because they're sort of an adventuresome group. They'll

raise their wages in one hand and take it back in the

other.

HON. MR. BARRETT: We missed that group, Mr. Member.

MR. PHILLIPS: Put it down, Mr. Minister. I'm sure you won't

miss it before long. Maybe newspapers

[ Page 2308 ]

will be taxed. All the Members of the Press gallery will

probably have to take a reduction in wages because radio

ventures are going to be taxed, TV enterprises are going to be

taxed. Lo and behold, Mr. Speaker, cable television enterprises

are going to be taxed.

MR. G.R. LEA (Prince Rupert: Car dealers?

MR. PHILLIPS: Cable televisions are going to be taxed.

HON. MR. BARRETT: If I exempt you, will you sit down?

MR. PHILLIPS: So, Mr. Speaker, this brings up a very

important feature of this whole bill. Maybe if the government,

through the regulations, will have them submit their financial

statements and all of this, maybe the Premier will see just

what a very profitable operation cable television is. Maybe

he'll go into the business. Who knows? He might even find, Mr.

Speaker, that newspapers are a very profitable business and

maybe he's going to go into the newspaper business.

HON. MR. BARRETT: We might do anything to change the staff.

(Laughter).

MR. PHILLIPS: Mr. Speaker, that's the Provincial Secretary

(Hon. Mr. Hall) that wants a change there. Maybe this is all

tied in together.

Well anyway, Mr. Speaker, another thing that bothers me

about this is that we're going to have to file a separate tax

return to this government. Now in the bill, Mr. Speaker, it

says "commissioner " — "commissar" we'll call it — and it says

you can use the income tax commissar, but not necessarily. The

Minister of Finance can set up his own commissar, which I'm

sure he'll do.

HON. MR. BARRETT: Commissary or commissar?

MR. PHILLIPS: Commissar. So we're going to have to file

another tax return, Mr. Speaker, to this unknown commissar who

will be a puppet of the Premier.

Interjection by an Hon. Member.

MR. PHILLIPS: No, it will be a complete new staff. I'll get

into that in just a moment; there's going to be a completely

new staff hired.

Now, Mr. Speaker, for anybody who knows anything about business, the more forms

you have to fill out and the more tax returns you have to do, the more you have

to pay the auditors. It's not only paying the additional

tax to the government, but it's the additional cost of preparing the tax.

AN HON. MEMBER: We'll employ more people.

MR. PHILLIPS: "Employ more people;" certainly employ more

people. All right then, Mr. Speaker, I should ask the Minister

of Finance if he's willing to pay back to this business — give

us a kickback for the additional cost of preparing all of these

forms. By heavens, pretty soon you are going to be running a

business strictly for the auditors and the lawyers and the

government. There'll be nothing left for the poor old guy that

works 24 hours a day.

Mr. Speaker, one other small point in this bill that really

bothers me is the power of the commissar. He can demand

information from any company, whether or not that company pays

tax under this Act.

There may be exemptions for any business that has under

$25,000 employed in capital, but that doesn't bother the

commissar because he can go in and say, "Prove to me that

you're just a little business here." I was going to say he had

a computer, but no, they're too expensive.

But you could be in a very small business where your

equipment is very, very expensive. The commissar can go in and

say, "Open your books to me, I've got word from the Minister of

Finance. I want to see your books. You say you haven't got

$25,000 employed here. I want to know." And the commissar will

have the right to walk right in.

HON. MR. BARRETT: You want to come and work for us?

MR. PHILLIPS: No! The answer's no.

MR. N.R. MORRISON (Victoria): I thought he was working for

you now. (Laughter).

MR. PHILLIPS: Mr. Speaker, this bill gives power to the

commissar to enter any business in British Columbia and make an

independent investigation.

Now, Mr. Speaker, is the true reason for this tax so that

the government can walk in and look at the books of any

company? These are Gestapo tactics, Mr. Speaker. They are, they

certainly are. They're an infringement on the rights and

privileges of an ordinary man in business in this province.

HON. MR. BARRETT: Under your legislation, you could do it

already.

MR. PHILLIPS: Awful, Mr. Speaker.

AN HON. MEMBER: That's your speech.

MR. PHILLIPS: The worst thing about it, the

[ Page 2309 ]

horrible thing about it is if they like this little

business, then they can take it over.

Mr. Speaker, this just adds one more snooper to the already

growing group of snoopers that we have coming into businesses

today. The Department of Labour, Mr. Speaker, can go in and

snoop around, open your books, look in your filing cabinet,

take a look in your safe, look at your bank account. Then when

he gets through, we can send in the S.S. and M.A. snoopers. And

they go through all the books and see that you've paid the tax

and through every voucher, every sale, and they snoop around.

That's snooper number two. That's a pooper-duper snooper.

HON. MR. BARRETT: Who passed that law?

MR. PHILLIPS: Well, that's all right. What I'm saying, Mr.

Speaker, is we've got so many now, that here's a bill that

gives us another. Then we have the federal snooper-poopers;

they come about the income tax.

Interjections by some Hon. Members.

MR. PHILLIPS: Well, I wish you fellows had stayed home;

maybe you wouldn't have brought in this bill.

MR. WALLACE: Why don't you give him an air pass?

MR. PHILLIPS: Now, Mr. Speaker, one more snooper. We've got

the labour snooper, the S. S. and M. A. tax snooper, the income

tax snooper, and now we've got the Bill 63 snooper.

AN HON. MEMBER: Super snooper.

MR. PHILLIPS: Super duper snooper. Yes, I'm telling you,

he's the worst of all.

HON. MR. BARRETT: You're incredible.

MR. PHILLIPS: So are you, Mr. Minister of Finance. As a

matter of fact, you must have stayed awake at nights to think

up bills like these.

Mr. Speaker, the true reason behind this bill is so that the

Minister of Finance can get his sticky paws into the cash

drawer of every business in British Columbia. That's the true

intent behind this bill, Mr. Speaker — his sticky paws right

into the cash drawer; that's what it's all about.

I'll tell you, Mr. Speaker, he's going to send out some officer. He'll send

out a flunkey of the NDP to put their hands on that awful business, that business

world. Suppress them, depress them. Mr. Speaker, under this bill he can send

out some young member of the radical left wing who can come snooping into

your bank account. (Laughter), Right into your bank account too, Mr.

Speaker, because you're a lawyer, I'll tell you.

MR. SPEAKER: I haven't got one.

HON. MR. BARRETT: We'll never use Einar Gunderson.

MR. PHILLIPS: Well, Mr. Speaker, this legislation smells

rotten to me. Really, there's no need for it. There's no need

at all for this legislation, Mr. Speaker, none whatsoever.

I'd like to ask, Mr. Speaker, if there's going to be a

companion bill so that the business world can send out some

snooper-poopers into the union offices and check out to see how

much money they employ and how much they make. What's tit for

tat, you know. What's good for one is good for the other. But

conveniently written in this bill it says that the unions are

going to be exempt. What did you say, Mr. Attorney General?

HON. A.B. MACDONALD (Attorney General): They're non-profit associations.

MR. PHILLIPS: Non-profit associations. Well, I wish I could

run a non-profit association and be as profitable, Mr. Speaker,

as some of the unions. I tell you, I'd retire tomorrow.

(Laughter).

Interjections by some Hon. Members.

MR. SPEAKER: Order, please.

MR. PHILLIPS: This little business of unions has, been

conveniently left out of this bill, Mr. Speaker.

MR. SPEAKER: Well then we shouldn't really be talking about

it.

MR. PHILLIPS: Well, it's mentioned in the bill though. I'm

suggesting that what's good for one should be good for

another.

Last week, Mr. Speaker, there was a meeting of the four

western Premiers. I wonder if their getting together was some

kind of a plot, and if this bill hasn't got something to do

with it. A plot maybe, Mr. Speaker, to set up a communist state

in western Canada. (Laughter).

MR. J.R. CHABOT (Columbia River): The three musketeers.

MR. PHILLIPS: This is the first province in western Canada

that this type of legislation is being brought into. Maybe Mr.

Minister of Finance is the

[ Page 2310 ]

anchor man. Then it will sweep to Alberta, Saskatchewan and

Manitoba.

HON. MR. BARRETT: Then we'll join Ontario and Quebec and

have a Confederation.

MR. PHILLIPS: It's all possible, Mr. Speaker.

Interjection by an Hon. Member.

MR. PHILLIPS: Now the other ironic thing about this whole

bill, Mr. Speaker — and this is inconceivable — the company

that loses money can be hit by this new levy. You could be

losing money and still pay tax to this government, Mr. Speaker.

If you don't make any money, you still have to pay this tax.

It's the price, Mr. Speaker, that any enterprise must pay if it

is going to exist, whether it makes a profit or not.

It could even be a non-profit business. Mr. Speaker. Some of

the service industries are this way. They're just there to

serve the public, but now they are going to have to pay for

providing that service.

Amounts, Mr. Speaker, can be changed by regulation. So we

get back in this bill, Mr. Speaker, to another group of terms

and references that cannot be clearly defined. This seems to be

typical of a lot of legislation that this Government has

brought down this year. Regulation. If we don't like it this

way, why we'll change the regulation. We make up our rules as

we go along.

The additional cost is probably more bothersome, Mr.

Speaker, to small businesses than to large businesses.

Under this bill, Mr. Speaker, the Government can demand this

and can demand that. No matter what the small businessman says,

"Big Brother" government will do the demanding and the small

businessman will jump or else.

This new tax, Mr. Speaker, reminds me of something like a

church tithe. You pay one-tenth of one per cent to your "Great

Creator," the government, to "Barrett the Benefactor,

" to the "Benevolent Dictator." You owe that to him

because you are doing business in this great province.

Mr. Speaker, everything that is solid or liquid or gas is

taxable and must yield up a tithe to this almighty socialist

government. That's what Bill 63 is all about, Mr. Speaker.

That's why I cannot support this bill at all.

Now, Mr. Speaker, in this bill we've got to make it

retroactive. It's got to go back to January 1, 1973. The

question in my mind is: why didn't we go back to August 30,

1972 — "D Day" in British Columbia?

MR. CHABOT: "C Day."

MR. PHILLIPS: Then, Mr. Speaker, the Minister of Finance

could have started his punishment of the business world

immediately. Why give him a four month hiatus? They might as

well have gone right back to August 30. After all, the business

world only left this Government a quarter of a billion dollars

of their taxes to squander, so they should go back and punish

them right from "D Day."

Mr. Speaker, because the business world has left so many of

their taxes for this Government, they must be chastised to the

limit for being so good. This tax is no more needed in this

province — it's not needed at all. Here, because of the

goodness of the business world in paying up their taxes,

leaving behind to this Government over a quarter of a billion

dollars, now they must be chastised again. This Government

wants to discipline the business world for being

successful.

AN HON. MEMBER: It doesn't matter whether they've been

successful or not. He still wants this …

MR. PHILLIPS: Yes, but the ones that left the money have

been successful. So they must be chastised. Mr. Speaker, this

Government wants to penalize the directors for working long

hours and going grey, trying to make a success of their

businesses. Penalize anybody that does a good job — that's

retributive justice, Mr. Speaker, as handed out in this

province.

That's the type of justice as seen through the eyes of a

Fabian socialist, Mr. Speaker.

This next tax is expected to yield up money; to draw blood

from the "fat lambs" in the province — so-called by the

socialists — to the extent in the budget of $25 million. But

now this morning the Premier says $9 million.

HON. MR. BARRETT: You're talking about two different

bills.

MR. PHILLIPS: Mr. Speaker, in Ontario with all of its

industry they have a $50,000 base exemption, not a $25,000 base

exemption. I want to set the record straight on that; that's

the difference between here and Ontario: they manage to find

$35 million at the same tax rate, one-tenth of one per cent.

Their corporate income tax revenues in Ontario are about $420

million, while in B.C. they're just under $110 million. On that

basis I can see only about, as the Premier pointed out this

morning, $9 million additional tax.

Interjection by an Hon. Member.

MR. PHILLIPS: He says seven. Well, it'll be closer to nine.

An additional $9 million is going to be

[ Page 2311 ]

plucked from the feathers of the goose. Mr. Speaker, this

bill should provide about 300 to 350 jobs for the party loyals.

The hack men. I say it'll cost about $5 million to administer

this because it'll be one of the biggest bureaucracies set up

in British Columbia's history. It'll truly be a great one.

Every business in this province will be analyzed and

psychoanalyzed.

AN HON. MEMBER: You're the one who should be analyzed and

psychoanalyzed.

MR. PHILLIPS: The ironic

part is this: we're going to take

in $7 million and we'll drive billions of dollars in investment

capital out of the province, leaving a net gain of a big, fat

zero when it's all done.

HON. MR. BARRETT: All right. I'll make a deal with you. You

let us tax windbags, I'll withdraw the bill. (Laughter).

MR. PHILLIPS: I suppose, Mr. Speaker, because I'm getting to

the heart of this piece of rotten legislation, that I'm a

windbag.

SOME HON. MEMBERS: Oh, no! Oh, no!

HON. MR. BARRETT: Who said that? Who said that?

MR. PHILLIPS: One great difference, Mr. Speaker, is this: in

Ontario the machinery for collecting this tax is already set up

because they collect their own income tax in Ontario. They have

the machinery all set up. Maybe the intention is for British

Columbia to collect their own income tax. They have the

machinery, Mr. Speaker.

We have to set up a complete new bureaucracy.

In Ontario, any money that is invested in mine mills is not

taxed. It's not so in British Columbia. They're not exempted at

all. We've got to tax those mining operations to the limit.

That's the new formula. Don't give them a chance to survive at

all. Snuff 'em out. Get the bloodsuckers. Scourge them and

purge them and get rid of them.

There's a big difference between Ontario and British

Columbia, Mr. Speaker, a big difference. In Ontario

manufacturing is wooed to that province by preferential freight

rates and has been so since the beginning of this great nation

of ours. But we in British Columbia were trying until this new

Government came along to persuade manufacturing establishments

to set up business here. Even this new Government has given lip

service to that by saying we should process our natural

resources and we should have more secondary manufacturing.

This bill, Mr. Speaker, is going to drive secondary manufacturing away from

the province. It's just one more sandbag on the barrier to keep manufacturing

out of British Columbia. Pretty soon the barrier will be so high that

no manufacturing outfit will ever be able to surmount that barrier.

This bill will not only keep manufacturing firms away from

British Columbia but it will drive many manufacturing firms

already established out of British Columbia. Because as I said

before, we do not have preferential freight rates. People

establishing work under that oppressive law already.

Maybe Bill No. 63 is to whip the existing manufacturers into

submission so that we can take them over. Mr. Speaker, even a

monkey won't come to the cage door without some nuts in the

hand. Anybody knows that. I wonder if the Government thinks

business is any less intelligent than the monkey in the cage?

Not only is this Government not putting any nuts in the hand,

but it's extending the hand with the threat of a slap!

AN HON. MEMBER: Oh!

MR. PHILLIPS: There's a big difference, Mr. Speaker.

AN HON. MEMBER: To trap them. A trap in the hand.

MR. PHILLIPS: A trap in the hand — a trap in the hand is

worth two in the bush. That's what this Government thinks.

Mr. Speaker, what we need is to encourage business and to

help those that are here to grow and prosper in a healthy

atmosphere. Then the taxes of what we already have will swell

the coffers of this province, Mr. Speaker. But not the punitive

taxation by this bill — that does not create a healthy

atmosphere at all, Mr. Speaker.

Columbia Cellulose would have had to pay an additional

$150,000 to $200,000 in taxes had they remained in business.

They were a losing proposition, Mr. Speaker; they were losing

money. But had they stayed in business, they would have had to

pay an additional $150,000 to $200,000 in taxes per year. No

wonder they gave up the ghost.

Interjection by an Hon. Member.

MR. PHILLIPS: What happened? The Government slipped in and

… You know what happened. There's legislation; I can't talk

about it.

Mr. Speaker, the Premier seems to be elated by recent

statistics on unemployment. He stood up in the House the other

day, elated. One of the reasons that we have employment is

because there's been a healthy atmosphere for employment to

grow and there's been none of this punitive taxation.

The second reason, Mr. Speaker, is that the lumber industry

is experiencing one of the greatest booms in

[ Page 2312 ]

the history of British Columbia. Mr. Speaker, the reason the

employment figures are growing is not because of anything this

Government has done.

Mr. Speaker, I wonder if our Minister of Finance could see

what would happen if things in the lumber industry would just

return to normal. I'm not saying take a dip or go into a

depression, but if they would just return to normal.

Mr. Speaker, also in Ontario they allowed deductions in the

mining industry for amounts held or used in the survey for

exploration and the development of minerals. They also allow to

be deducted the amount that is invested in the mine and

associated plant and works. They allow for deduction the amount

invested in the ore-refining plant and works. None of that, Mr.

Speaker, is allowed in Bill 63.

If these deductions were allowed for the mining industry in

this bill, Mr. Speaker, the Waffle wing would term it bribery

and corruption. That's what they'd term it. That would be a

stimulus to the mining industry and that, to the Waffle wing,

would be a vice. This Government would be committing a vice if

they had any stimulus whatsoever. Mr. Speaker, their objective

is to trample on, overburden, weigh down, oppress, persecute

and victimize any industry that they eventually want to take

over.

Mr. Speaker, their mischief-making will ruin the business

world in British Columbia. Don't kill the goose that laid the

golden egg, Mr. Speaker, but pluck it and pluck it and pluck

it. This Alice-in-Wonderland Government, Mr. Speaker, should

not look on business as Snow White and the seven dwarfs.

Business is not the seven dwarfs. The worship and adoration for

Snow White just are not there. As a matter of fact, they take

the attitude of the witch, Mr. Speaker. They want to be the

most prosperous of them all. Alice in Barrettland should be

helpful.

Mr. Speaker, a tax a day keeps the business away. A tax a

year keeps the business in fear. That's the new motto of our

Minister of Finance. Why does he have to wait until the walls

come tumbling down to recognize the signs of decay that are

setting in in the business world? Bill 63 starts that decay,

Mr. Speaker. The Premier doesn't seem to know much about rot

and decay. If he did, Mr. Speaker, he would recognize that a

tomato is always the ripest before it starts to rot.

You, Mr. Premier, may only plan on being here for two terms, Mr. Speaker. But

that gives him no right to bring in legislation like Bill 63. I know the Premier

won't last that long but that's what he thinks. By the very nature of the Premier's

cybernetics, he is not planning for the long-range betterment of British Columbia.

Mr. Speaker, he's planning the business and the government of this province

on a here-today-gone-tomorrow basis. Evidently he doesn't know much about psycho-cybernetics,

Mr. Speaker, or he'd know that his policies are all aimed at this very thought.

That won't work, Mr. Speaker. This bill might serve the

Premier's purpose now. It might serve to placate the Waffle

wing of the party. But it will not, Mr. Speaker, be good for

the province in the long term.

Interpretations in this bill

will also be a factor, Mr. Speaker. But there's one thing about

it — it will be more work for the lawyers.

Another thing about this bill, Mr. Speaker, is that at least

it does provide for a full course of appeal through the courts.

That's a new twist for legislation in this province since

August 30 — a completely new twist.

When we come to exceptions under this bill, Mr. Speaker,

it's not too clear. Moneys borrowed or put up by banks for

operating capital or capital works are not really designated as

to whether they're going to be taxed or not. There is no

designation whether they're going to be termed as operating

capital or whether they're going to be turned into capital

works. But as I said, Mr. Speaker, there is the right of

appeal.

Mr. Speaker, due to the fact that the business world not

only in Canada but in British Columbia is facing many problems

these days — inflation is rampant — and due to the fact that

this bill is not needed and the tax revenue from it is not

needed, I would like to ask the Minister of Finance to withdraw

this bill and take a second look. If he can prove that the

additional tax is required and urgently needed to run the

affairs of this province, then we would have to agree that it

might not be a bad tax — if it is needed.

But there are other ways of increasing the tax revenue, Mr.

Speaker. I would like to ask the Minister of Finance to take a

second look. He said he wasn't going to kill the goose that

laid the golden egg but I don't know how many more feathers he

can pluck from that goose. The goose is going to get pretty

cold one of these days and it's going to drop over dead.

Mr. Speaker, I cannot support this legislation. Nor, Mr.

Speaker, can anybody in our party support this legislation.

HON. MR. BARRETT: Oh, a new leader, eh?

MR. PHILLIPS: Nor, Mr. Speaker, can any business in this

province support this legislation.

HON. MR. BARRETT: They're all in favour of it.

MR. PHILLIPS: Mr. Speaker, that statement by the Premier

that all the business world is in favour of this legislation

just proves to me once more that the Minister of Finance (Hon.

Mr. Barrett) really does not understand, has no conception, Mr.

Speaker, of what is going on out there in the real live

business world.

[ Page 2313 ]

He has no conception whatsoever. Maybe some day, Mr.

Speaker, the Minister of Finance will come back down to earth

and I hope it's not too late.

MR. SPEAKER: The Hon. First Member for Vancouver-Point

Grey.

MR. McGEER: Mr. Speaker, the former speaker unleashed an

army of words there on the general field of taxation and

occasionally he took an idea prisoner; and I really think it

died from overwork before he completed his remarks to the

Assembly.

I want to offer nine reasons why I think this is an

unfortunate and regrettable move by the new Government.

The first of these is that this particular tax, however

appropriate and desirable it might be, in the provinces of

Ontario and Quebec, is inappropriate to the Province of British

Columbia. The reason, Mr. Speaker, is that our industries are

already too heavily dependent on resources and are too weak in

the area of manufacturing.

Resource industries must be located in British Columbia

because here is where the resources are. But where there is a

choice in the location of an industry it is very clear from the

pattern of our industrial development that the choice is made

to go elsewhere.

We have nearly 100,000 people unemployed in British

Columbia. Our industries are not labour intensive. They are

becoming less labour intensive as time goes on because this is

the only way that resource industries can survive.

The industries that have located in British Columbia by and

large have located here out of obligation because we have the

resources and not because we have had intelligent management in

the industrial sphere. That goes for the former government as

well as the present one. The industrial strategy in British

Columbia has been abysmally bad in the past.

It is all very well for that Member to come up and speak

against tax increases in this province now, but how many of

those Members in the past spoke in favour of such tax increases

when they were every bit as inappropriate as this one but

brought in by the former Minister of Finance?

The second reason, Mr. Speaker, why this tax is

inappropriate …

Interjections by some Hon. Members.

MR. McGEER: Well, I heard the people who sat in that…and

you too, Mr. Member, arguing in favour of tax increases in this

House, when they were showing record surpluses. Remember your

own inconsistencies.

MR. SPEAKER: Order, please. Would you kindly include me in

the debate and address the Chair?

MR. McGEER: I am sorry, Mr. Speaker.

HON. MR. BARRETT: How about us, Mr. Speaker?

MR. McGEER: Mr. Speaker, if you and I may get back to the

principle of the bill.

MR. SPEAKER: Yes, talk to me.

MR. McGEER: The second reason why this is an inappropriate

tax is because it is regressive. One of the consistent

revelations that the socialist Government has made has been its

inability to perceive exactly when a tax is regressive.

May I refer the Premier to the latest study by the Economic

Council of Canada — that is, when he has had a chance to go

through those interim financial reports of the B.C. Hydro and

the B.C. Railway and table them in the House; that should be

his first matter of reading — then perhaps to go on to the

study by the Economic Council of Canada which shows that

corporation taxes get passed on to the consumer.

This kind of tax, which is a corporation tax whether or not

those corporations make a profit, has to be passed on directly

to the consumer. If it is our objective to encourage

manufacturing as a labour intensive form of industrial

activity, then we don't want to have the kind of taxes imposed

directly on those corporations that they must place directly on

the consumer — and therefore have the lower income individual

hit hardest.

So the tax, Mr. Speaker, I am sure the economic council

would agree with this analysis, is a regressive one.

The third reason, Mr. Speaker, why this tax is inappropriate

is because it isn't needed. Only yesterday, the Premier

the way of taxes — has increased at a rate of 12 per cent per

year compounded annually.

We have stood up and presented budgets in this House —

Liberal shadow budgets — year after year, which have been

completely balanced, which have provided for much higher

expenditures than have been provided for by the Government

without any tax increase.

The Member for Columbia River (Mr. Chabot) laughs but, Mr.

Speaker, he hasn't any conception at all of what is involved in

a budget or what is involved in provincial financing.

MR. CHABOT: Where is Benson now?

[ Page 2314 ]

MR. McGEER: That is why he sat for so many years on the

backbenches and that is why his future in British Columbia as a

politician is on the backbenches, if it is anywhere at all. We

have, Mr. Speaker, ample tax revenues in the Province of

British Columbia at the present time. Our crying need is not

for more revenues to government but more jobs for people. This

particular tax will hurt jobs for people and will not help that

much in bringing revenues to government.

[Ms. Young in the Chair.]

HON. MR. BARRETT: Thirty thousand new jobs in one month.

MR. McGEER: The fourth reason, Madam Chairman, why this is

an inappropriate and unnecessary tax is that it will promote

further financial difficulty for businesses that are already in

financial difficulty. The Government has moved, already this

year, to bail out two corporations in northwest British

Columbia that were unable to carry on their businesses and were

prepared to write off a capital investment as a total loss.

The Member did correctly state — the Member for South Peace

River (Mr. Phillips) — the difficulties in trying to kill the

goose that laid the golden egg. I absolutely agree with him

because if you take taxes off the top, whether or not a firm

makes money, then if that firm begins to get into financial

difficulty so that it wonders whether it can continue to employ

the people that are already on its payroll, then a tax of this

kind is contributing directly to its downfall.

I would hope the efforts of the Premier to collect the extra

bit of tax off the top, whether or not the firm takes money,

will not place us in this Legislature in the position of

continuing to vote on legislation for rescue operations of

failing corporations.

The fifth reason, Madam Speaker, why this bill is an

unfortunate bill is that it will encourage new manufacturing

enterprises to establish in the Province of Alberta rather than

the Province of British Columbia. In the Province of Alberta it

will be easier for them to assemble the necessary capital to

build their plants. They will not be faced with a 5 per cent

tax on the new machinery they bring in to get their operation

under way. They will not have to pay taxes until such time as

they show a profit. They will have lower freight rates to the

great markets of North America.

Madam Speaker, can the Premier tell us, in the face of these

obvious circumstances, why a new manufacturing industry should

prefer the Province of British Columbia when the economic

attractions are quite clearly in other provinces across Canada

- who quite clearly wish to have manufacturing industries just

as badly as does this province?

The sixth reason, Madam Speaker, why this bill is

unfortunate is that it is a complex one in a technical sense. A

whole bureaucracy will need to be established to provide for

its administration. It isn't simple and straightforward in its

application and therefore it will be difficult for the

government to administer it properly.

That means the overhead in the collection of those taxes is

going to be much higher than in the simple kind of taxes that

we've had in the past.

I refer to such things as the sales tax — where the tax

collectors are really everybody in business, rather than the

Government — the income and corporation taxes, which are

collected by the federal government.

Now what we're doing is establishing a new provincial

bureaucracy tax collection — something that we should be very,

very reluctant to do.

The seventh reason, Madam Speaker, is because of the

vagueness in the rules as laid down in this legislation. I

predict that there will be many court disputes over this

particular Act. We will see dozens and dozens of

orders-in-council attempting to define ground rules, to

re-define ground rules, to re-re-define ground rules; we'll be

into interprovincial jurisdictional disputes, all of which will

take up the time of tax lawyers and accountants, be they hired

by the government or by private industry.

It's going to result in counter-productivity at a time when

we have far too much counter-productivity and inefficiency. All

of it for a fairly small sum of money, relative to the total

budget.

The eighth reason, Madam Speaker, is that this particular

type of taxation will work its greatest harm on infant

industries. There are fewer problems in obtaining working

capital if you're General Motors of Canada or Ford of Canada or

Bell Telephone of Canada or any of the great manufacturing

concerns that form the heart of industrial Ontario. But if

you're International Hydrodynamics or Glenayre Electronics or

any of the small, highly technical companies that are

attempting to get going here in the Province of British

Columbia, and which could form the basis of a new industrial

development in this province that would be the basis for a new

industrial strategy, the greatest difficulty those industries

have is in the accumulation of working capital. If they're

unsuccessful in doing that, they will not be able to

manufacture; they will not be able to employ; they will not be

able to provide jobs; they will not be able to provide the

other kinds of taxes which in sum provide a far greater amount

than will this capital tax.

Madam Speaker, the established industries that are earning

are already paying 50 per cent of their profits to governments — federal and provincial. We share at least 50 per cent in the

success of these corporations. Therefore, why put on the kinds

of taxes that throttle their very establishment and growth?

[ Page 2315 ]

If I could just underline this point particularly, Madam

Chairman, because I think it's the most critical of all the

nine points that I am making, and that is that this particular

tax is a tax which will hurt growth more than anything else.

Growth is what is essential if we are to provide jobs for the

people who are unemployed today, who are coming through our

schools and colleges and will be on the labour market tomorrow.

These are the people who will be most hurt by this particular

tax.

Lastly, Madam Speaker — and this is a political reason — the

new Premier and his Government have a political and economic

philosophy which has been more theoretical than practical, as

far as many people in North America are concerned. The

editorial in Barrons — which I decry, I think it was an

unfair one — nevertheless will be harmful to British

Columbia.

Madam Speaker, we just have to recognize this, that the

development of new industry in this province depends on private

investment running at about $4 billion per year, much of it

coming from savings outside the province. In other words, we

are unable to generate our own capital needs.

In these circumstances, Madam Speaker, it behooves the

Premier and his cabinet to do everything they can to build

confidence in this private sphere. Every single move that the

Premier has made since he took office has been one to tear down

confidence.

It's not that people who were in the business side were not

prepared to cooperate with him and give him advice. He was

very proud of the letters of congratulation he received — one

even, believe it or not, from J.V. Clyne. And when J.V. Clyne

can write a letter of congratulation, it gives you an idea of

how far the business community was really prepared to go in

order to extend the hand of friendship.

But Madam Speaker, the Premier wrote a warm thank you letter

back. He appreciated the sentiments. But he didn't take

advantage of what was behind that letter, which was the

willingness of the business community to work with that new

Government in order to retain confidence in British Columbia.

That's the point that the Premier and his cabinet missed.

Instead foolish moves, very, very foolish moves have been

made by a Premier and a cabinet whose experience in the

industrial world runs now to about five months. Confidence has

gone down — unnecessarily so — while this new legislation is not

socialist-inspired legislation.

The Premier is quite right. Similar legislation has been introduced in Conservative

Ontario and Liberal Quebec. Yet, coming as it does on top of so many other counter-productive

moves by the Premier and his Government, it's one more move to lower confidence

in the business future of British Columbia, to discourage people from taking

risks by breaking ground in manufacturing in British Columbia — because this

is what we really have to do, to break ground in the

future. For a few million dollars — lower confidence; strangle growth; promote

difficulty of the firms that are already struggling, and then, when they fail,

take them over to preserve the jobs.

Madam Speaker, it's all completely counter-productive,

completely wrong. I've given only nine reasons. I'm sure

careful thought would extend that total to 90. But surely,

Madam Speaker, this is enough to have the Premier withdraw this

bill at the present time, think it over very, very carefully

and, if he can offer better arguments than he's offered so far

for its introduction, bring it back.

For the moment, as you may have guessed, Madam Speaker, I

and my colleagues will be voting against this legislation.

DEPUTY SPEAKER: The Chair recognizes the Hon. Member for Oak

Bay.

MR. WALLACE: Thank you, Madam Speaker. This debate is

following very much the line of the many speeches on the budget

debate itself, but I will try not to be repetitive.

Most of the points that have been covered this morning have

been covered many times in the throne speech and the budget

speech debate, and there are just two or three very fundamental

points.

Taxation, per se, in the widest sense, this party certainly

believes should be avoided at all costs until there is some

real need shown. That doesn't mean that governments cannot tax.

Governments must tax to provide the services to society.

AN HON. MEMBER: But not over-tax.

MR. WALLACE: Yes, that's right, but not over-tax. A very

basic fact in this whole debate, and a basic fact which was

brought out in the budget debate, was this question as to

whether there was any need in the first place to increase any

taxes in the light of the very buoyant economy of the

province.

It has been established in debates that (1) there was a

substantial surplus of funds in the provincial coffers, and

(2) the figures still show a rising economy — and I give the

Government credit for the figures that still show the situation

at this point six months after the government changed hands.

From a philosophical point I'm not prepared to debate whether

that will continue, but the fact is that I'm trying to

establish one fundamental point and that is that there was no

need for any tax increase on the basis of the figures presented

to this House.

That being so, we shouldn't really have to be debating a

bill of this nature which, for other reasons I'll mention in a

moment, seems unwise.

But the Premier and Minister of Finance (Hon. Mr. Barrett)

has stated the very small amount of money,

[ Page 2316 ]

relatively speaking, compared to a billion dollar budget — I

think $7 million was the figure the Minister of Finance has

quoted. First of all, it is very questionable if this measure

of taxation is necessary. Secondly, if it is bringing in such a

small fraction of the total tax revenue, and on top of that is

wreaking tremendous harm to various areas of business, then

surely it would be a measure of the Minister of Finance's

wisdom and his stated belief in the second look that surely,

now that we've come through 12 weeks or more of debate on

various subjects, many of them inter-related to this basic

question of provincial taxation, the Minister of Finance should

indeed take a second look. He has also brought us up to date as

recently as yesterday with the rate of growth of the economy.

He has told us, Madam Chairman, that he budgeted for something

in the order of 9 per cent in the coming year, although he was

frank enough to tell the House that he anticipated a much

greater rate of growth, and the figures he gave us yesterday

prove his conviction that the economy would grow much faster

than the 9 per cent.

Now on top of that, Madam Speaker, we have to look at the

disadvantages of this bill per se. I've tried to point out in

general terms, first of all, that we don't think in this party

that the tax was necessary in the first place. Now I would like

to say that even if we disregard that fact, let's look at the

impact of the tax itself.

Again, we get back to something very fundamental. We get

back to the often- stated point by the Minister of Finance,

both in Opposition before he took office, and since that time,

that the number one problem in British Columbia is

unemployment. In trying to create employment, we are trying to

create secondary industry. My goodness, anybody who reads the

record of this House over the few years I've been here sees the

rather staggering irony that both the Opposition and the

government of that time were both screaming and shouting about

secondary industry — yet even at this point in time relatively

little has been done to encourage secondary industry.

Nevertheless, if creation of jobs is the main problem, I don't think we can

depend continuously on more roads and some of the rather temporary winter-works

programmes which are just patch-up jobs on the total challenge to governments

to solve unemployment. Therefore, if secondary industry is to be a large part

of the solution, and I think it is, surely a new tax is not needed on industries

trying to get going in this province, or any province, or on industries trying

to expand their enterprise and by expanding create more jobs, and worse still,

businesses in financial trouble who may be losing money having to pay this tax.

I feel very much a layman in business and corporation matters, but even to an

ordinary observer who just applies a bit of common sense, this to me seems a

very unrealistic and probably not a completely thought

out form of tax about to be imposed upon the business industry in British Columbia.

Judging from all I've read about the mining industry, and,

Madam Chairman, I've no wish to reflect on bills before the

House — here is another

section of our economy which will also

be further penalized by this bill. So we're talking about

industry in general, and the need for new industry, expanding

industry and a successful mining industry. Let us never forget

the small businessman either — I think the point was very well

made that an exemption on $25,000 of paid-up capital these days

is pretty small potatoes. There are many people in business and

relatively small businesses who indeed will find this just one

more cut out of their hard-earned revenue and cash income.

So when we look at those various areas one has to wonder why

this tax was proposed. I repeat that if the Minister of Finance

is the prudent and considerate kind of person that I believe

him to be, he can look at this and see that he's let his

philosophy get in the way.

With respect, Madam Speaker, it's our impression that the

socialist party has some kind of bugaboo about corporate

enterprise. The mere mention of the word "companies"…. . As

my Liberal friends on the right are well aware, I'm very

inadequately informed about the details of the corporate

enterprise. Nevertheless, one thing I do know just as an

ordinary plain Joe, is that corporations and companies employ

people. And if you are making it difficult for companies to

exist, expend, get started and survive, then indeed you seem to

be denying and contradicting one of the basic points to which

the Minister of Finance and this Government have dedicated

themselves from the moment they took office.

I've mentioned the small businessman, but regardless of the

small businessman we are thinking of the employees who work for

companies, particularly in the industries that I've mentioned.

Manufacturing of new products. I've also referred before to the

tremendous scope in the field of equipment and machinery and

all the latest devices that we use in the health field.

Electronics and small parts, and many other of the clean

industries.

Another point that we frequently discuss is that we do want

industry in British Columbia but we want clean industry. One of

the reasons we are apprehensive about trying to make our own

steel is that we do not want a steel mill belching sulphurous

fumes and particles and ash. Frequently both sides of the House

have recognized that the desire to develop secondary industry

is in the fields that the First Member for Point Grey (Mr.

McGeer) has mentioned as part of an overall industrial strategy

to diversify the sources of our provincial revenue, and to do

that through the encouragement and expansion of clean

[ Page 2317 ]

industry, which as far as possible shall be

labour-intensive. With respect, Madam Speaker, these words have

been spoken by our Minister of Finance many times in this

House.

Mention has been made of the restrictive effects and the

depressing effect on industry and the economy of this province

of this philosophy of the Government. It's my impression at

this point, to be fair, that the figures presently before the

House or available in the Press have not appeared to have had

any substantial effect …

Interjection by an Hon. Member.

MR. WALLACE: I always try to be fair in this House, Mr.

Minister, and I am admitting the figures and the opinions

expressed in most business and financial publications so far —

and I emphasize the words "so far." However, one other

theme that comes across loud and clear by the same financial

pundits and economists is that there is very definitely a

wait-and-see attitude in this province at the present time.

Industrial concerns and businesses who at this time might

otherwise be in the process of expanding, developing expanding

programmes or taking new initiatives, are in fact apprehensive.

They wonder whether to invest their new assets or borrow money

to invest in their business in British Columbia or possibly

other parts of Canada or other parts of the world more inviting

and more secure from state interference.

I think, Madam Speaker, the very central point that I will

finish on is that this, first of all, is a tax that is not

required. It is not a fair kind of tax. When I talked initially

about taxation per se, I said I thought the first requirement

of any government imposing a tax is to try and make it a fair

tax. The socialists have always preached — and I agree with

their aim — that those who should be able to pay most shall pay

most.

I don't think there is anything just in taxing companies

that may even be losing money. If you are trying to tell me

that the people who can most afford it are paying it, then this

surely is a complete contradiction to the Minister of Finance

(Hon. Mr. Barrett) so often saying in this House that taxes

should be placed where they are based on an ability to pay.

Here we have a new tax in B.C. that is going to be imposed

against certain aspects of the business community that may even

be losing money. Certainly as far as the individual in society

is concerned, when he is losing money the last thing you try to

do is tax him.

Interjection by an Hon. Member.

[Mr. Speaker in the chair.]

MR. WALLACE: Yes, but if old age pensioners are taxed it's

because their income has been increased to a taxable level.

There is a big difference. It is partly based on the fact that

a dollar is a dollar is a dollar. However you come by the

dollar, if you reach the taxable level, you pay tax. While I

don't necessarily mean that the senior citizen or old age

pensioner is getting enough income, there has to be a taxable

level for every individual. I don't think that is a fair

comparison with what you are doing to the business industry by

this tax on utilized capital.

I have tried to remain as non-partisan as one can be when

philosophies are at such variance. In light of the arguments

and the fact that it will completely contradict your goal of

creating jobs and even in itself will provide such a relatively

small fraction of the total provincial revenue, why not at

least withdraw the bill and wait for a year? If on

reconsideration it still seems a desirable form of taxation,

bring it back to the House a year from now.

Better still, look around, take that second look. The

Minister of Finance, when he was the Leader of the Opposition,

used to frequently appeal to the then Premier to take that

famous second look. With respect, Mr. Speaker, I think this is

the most obvious example for our new Premier to take his first

second look.

MR. SPEAKER: The Hon. Member for West Vancouver-Howe

Sound.

MR. L.A. WILLIAMS (West Vancouver–Howe Sound): Thank you,

Mr. Speaker. I would disagree with the Member for Oak Bay (Mr.

Wallace) in one respect. This is not legislation that we would

withdraw and take a second look. I think this is legislation

which should be withdrawn and not brought back before this

Legislature until we in the Province of British Columbia have

expanded our industrial base sufficiently to take care of the

vast number of unemployed which we presently have and those

who will enter upon the labour force year by year.

When we reach or even approach the industrial base which is

to be found in the provinces in central Canada, we can then

think about this kind of legislation. A second look for a year

is not going to produce any changes which can make this bill

palatable to me or desirable in any way, either for the

Province of British Columbia or for its citizens.

I would like to correct one other statement made by the

Member for Oak Bay, and I'm not criticizing him for this

statement. It may have been that I heard him incorrectly.

The Premier in announcing the other day that revenues of the

province had increased some 14.5 or

[ Page 2318 ]

14.6 per cent over the previous year …

Interjection by an Hon. Member.

MR. WILLIAMS: In that same month, but a year ago. He was

indicating, Mr. Speaker, not the growth of our economy but

merely an indication of what the future may be for revenues to

this provincial government. There is a vast difference between

what is happening to the economy and what is happening to the

revenues of government. Indeed, the experience in Canada

generally has been that levels of tax income may indicate

directly the opposite when it comes to the growth of the

country's economy.

Let us also, Mr. Speaker, not forget that government

revenues are the consequences of actions taken many months or

even years before those revenues are realized. The growth in

provincial revenues which we are enjoying today is not the

result of actions of this Government or actions of the business

or industrial community in British Columbia since August 30,

but they are really the culmination of actions taken and begun

many, many years ago.

That is why it is so important that we consider most

carefully the implications of this particular legislation. The

implications of this legislation will themselves be reelected

in the economy of the province and in the revenues of the

government many, many months and years from now. It is this

concern which I think has been overlooked by the Premier in

Bill No. 63.

Mention has been made of taxation policies. The suggestion

has been made that it is a philosophical approach of the

Government party that those who can afford to pay the tax

should pay. This has been overlooked in Bill No. 63. Tax

economists argue, Mr. Speaker, as to the extent to which income

taxes paid by industrial undertakings by the large companies

are themselves reflected in the cost of the articles which

those undertakings produce and are therefore paid by the

purchasers of those articles.

Every man, woman and child in this country, it is

recognized, pays a significant part of the income tax levied

against our large corporations. The percentage, as I say, is a

matter of disagreement between tax economists. The one thing

about which there is no disagreement among those tax economists

is that the impact of such tax on the purchasers in our country

is regressive and that means the heaviest burden of sharing

that portion of the tax, falls upon those people in our society

who can least afford to pay it.

It is the low-income earner who feels the greatest impact

when tax is passed through to the product that that low-income

person buys. That's the case with an income tax.

But, Mr. Speaker, we are dealing here not with income tax but with a capital

tax — one which is levied by the Government and must be paid whether the company

makes any taxable income or not. Therefore this tax, small as it may be for

some companies, is a direct cost of doing business. All of this tax will be

reflected in the cost of the production of that undertaking and will, therefore,

pass directly to the consumer.

There is going to be no change in the regressive aspects of

tax. Mr. Speaker, the low-income earner, the pensioner, the

person on welfare in this province will feel the greatest

burden of this tax. Make no doubt about it.

Now I don't say that's right. Heaven forbid! But nothing in

Bill 63 is going to change that situation. We have had no

indication from the Minister of Finance, in the introduction of

this legislation or any of the statements that have been made

about it since it was brought in and read a first time in this

House, that there is need for this tax.

Truly, if the Government were to say we must have this

additional source of revenue; it is essential for the continued

operation of the services of government that we have this

additional tax, then maybe we could accept a proposition where

a corporation pays a tax and then passes it on to the

consumer.

But the Minister hasn't made the first point, Mr. Speaker.

He hasn't indicated clearly the need for the money. Therefore,

not only will this tax have the implications mentioned by

earlier speakers — the First Member for Vancouver–Point Grey

(Mr. McGeer) and the Member for Oak Bay (Mr. Wallace), on the

growth and development that must take place in this province —

not only do we have that, but we have a tax not needed by

government which is going to be paid by the consumer — Mr. and

Mrs. Average — or Below-Average Income Earner in this

province.

Now what will it do with regard to our growth? I'm not going

to repeat the debates that we've had before; but, Mr. Speaker,

let no Member in this House be confused as to the implications

of this and other legislation which is being brought forward by

this Government at this time. It is interfering with the plans

that must be made in industrial and commercial undertakings

which we have in the province today and those that we would

hope to attract to British Columbia.

Let no one be confused as to the time that must be taken in

establishing an undertaking. Let no one be confused about the

time it has taken even to plan the future of industrial

operations already here.

This legislation and others that we have before us at this

session, is having a serious effect upon the planning that is

being done by those people who are responsible for the

continued growth of industrial enterprise.

Let me give you an example — without naming names. In the

forest industry it has been the practice in years gone by for

capital improvements to be

[ Page 2319 ]

planned, forecasted and budgeted for on a three-year basis.

In 1973, in the past, they would have been planning their

capital budgets, their expansions, for 1976. That's how we've

had the growth in this province.

About two years ago a change took place and the forecast for

expansion and development was dropped to one year in

advance.

During the course of this debate this morning I went to my

office and phoned an acquaintance of mine whom I know to be in

the field of making capital loans in this segment of our

industry. He tells me that the situation today is such that the

forecasting has ceased altogether. We're on a month-to-month

basis so far as capital requirements are concerned in some of

our major forest industries — not solely because of this bill

but because of this kind of legislation and others that we have

before us this session.

Interjection by an Hon. Member.

MR. WILLIAMS: Of course there are other factors. That's

right. But this is not improving the situation. It is only

helping to continue …

MR. PHILLIPS: It's making it worse.

MR. WILLIAMS: …. . or to make it worse. That's the impact

that it's having.

HON. E. HALL (Provincial Secretary): That's not the

situation at all.

MR. WILLIAMS: Oh, you get up and make your speech. You give

us the information that you have from the advisers who have

urged you to bring forward this kind of legislation, Mr.

Provincial Secretary. You get up on your feet and tell us the

facts, the figures that make this kind of legislation

essential.

The fact of the matter is, Mr. Speaker, that this

legislation was brought in as a sop to the New Democratic Party

members to show that this Government could take a round out of

big business. There's no other justification for your bringing

this forward at this particular time.

There are other indicators as to what's going on. Major

exploration in this province has virtually ceased. If you don't

believe me, call up any of the drilling companies who usually

at this time of the year have their crews out and around the

province. Ask them how many they've got on the go today.

Interjection by an Hon. Member.

MR. WILLIAMS: No, no. I'm not talking about oil lease sales. There's

no question as to the desire of energy-seeking enterprises

to get their hands on the opportunity for the resource. But, Mr. Speaker, may

I ask the Premier through you: tell me how many people are in the field today

actually doing drilling. Phone Boyle Bros. and find out how many crews they've

got out in the field today as compared to what they had a year ago.

MR. PHILLIPS: That's right.

MR. WILLIAMS: Recollect that the exploration work that is

done in these areas today is reflected in jobs, in economic

advance and in government revenues — not tomorrow, not the day

after — but in months and years to come. That's why I suggest,

Mr. Speaker …

Interjection by an Hon. Member.

MR. WILLIAMS: Yes, I have. You, Mr. Minister of Mines,

should be on the phone to them every day.

You know I think it's significant…I happen to have here

the tax form that the Province of Ontario uses for similar

legislation, similar tax. It's interesting to note that in

Ontario they allow exemptions to those industrial undertakings

which are to us virtually the lifeblood of our economy. They

exempt those from the implication of tax. They place a tax upon

those undertakings which are not solely dependent upon the

natural resource extraction from the Province of Ontario.

I think there is a significance in that which we in British

Columbia should not overlook.

Yes, I'm opposed to this legislation. It is

counter-productive. It produces a tax we do not need. It

produces a tax which will have a regressive impact upon the

consumers of this province. Most seriously, it will not enable

us — not by itself — it will not encourage the expansion and

growth which, yes, the government must control but which

government must nonetheless encourage.

MR. SPEAKER: The Hon. First Member for Victoria.

MR. MORRISON: Mr. Speaker, before I begin I must confess

that I am president and operating director of five limited

companies in the Province of British Columbia. Therefore I have

some definite interest in this type of legislation.

On my own companies this additional tax will be rather

sizable. Some of the companies are, in any man's language,

small businesses. They are capital intensive companies and

therefore the tax can be rather sizable.

[ Page 2320 ]

HON. MR. BARRETT: How much capital would be in any one

company?

MR. MORRISON: I don't think I want to disclose that at the

moment.

HON. MR. BARRETT: A million dollars? Any of them a million

dollars?

MR. MORRISON: Yes.

HON. MR. BARRETT: It's $1,000 on $1 million worth of

capital.

MR. MORRISON: That's right. But when you relate that money

to the income of the same company, it becomes a sizable

percentage.

HON. MR. BARRETT: That's less than the lawyer's coffee

money.

MR. MORRISON: It may be your lawyer's coffee money but it's

certainly a great deal more than my lawyer's coffee money. I

believe that this tax is a completely new departure for the

Province of British Columbia. There must be more reason behind

this than the small amount of money that the Premier is

suggesting we're going to raise.

He also seems rather proud of the fact that it is a

tax-deduction expense, which means that some of that money

would have flowed through to the federal government. Instead of

that you're going to lift it off the top.

I concur with all the other men who have spoken, that this

tax is not needed, that the revenue is not needed. But what

this really is, is an indication of the NDP's policy of

anti-business. It is a bias of this Government. This tax

affects not only big businesses, but very small businesses.

There aren't many limited businesses today in the province of

British Columbia who do not use, either through borrowing or

other means, $25,000 of capital.

It also affects holding companies — those companies which

bring capital to this province — and will be a deterrent to

people of other provinces who are considering moving to this

province.

And if it is only one-tenth of I per cent today, what will

it be next year? Or the year after? As I sit in this House and

listen to the type of legislation which has been proposed, it

is obvious to me that the NDP Government does not understand

that an entrepreneur is the last man to get paid. He only gets

what's left over, if any. Everyone else gets theirs first.

I think that is an extremely important part of this legislation. And most small

businesses will be saying, as we've said in the past, that this is not a charitable

institution by choice. "We didn't start out in business to end up as

a charitable institution, but every time we turn around, someone else has their

hand in our pocket."

Now this bureaucracy, which may or may not be required, but,

if we have it, will obviously be a duplication of what is done

by the. federal government. Our income tax is now collected by

the federal government. The information which the federal

government collects is reasonably secret, although I cannot let

this opportunity pass without saying with some surprise that

our Premier mentioned in this House, in this session, about a

particular company who had paid no income tax. I'm curious to

know how that information came to him, and if it came from the

tax department, why he made it public. Because although he has

privileged information, I believe that that information should

not have been passed on to the public in this manner.

One of the things that seems to have been missed by people

who don't understand business…and I think it was best said

on August 31, and I think I read it in the Vancouver Sun . It

said: "there is nothing more nervous than cash."

Cash can flow anywhere. We don't live in a society, yet,

where cash is restricted into the directions it may move in

this province. I suggest that many businesses that are probably

based outside this province are being very careful in looking

at the future here — the future of additional investments — that

cash which might otherwise have been available, at this moment

is being spent in other provinces of Canada and in other parts

of the world, and that business everywhere is taking a "wait

and see" attitude. They want to see exactly what is going to

happen. They would like to see some experience in this

province, but they're not going to invest.

Now I'll concur that they're probably not going to withdraw

their money at this moment either, because businessmen, for no

other reason, are optimists — they must be or they wouldn't be

in business. They have an idea that if they invest, they are

going to get some kind of return for themselves and for their

shareholders. And the shareholders are optimists because they

intend, when they invest in shares in a company, that they are

going to have a return on their investment and that their

investment is going to be reasonably sure, certainly should

keep up with inflation and bring them an additional return on

top of it.

Now this bill, Mr. Speaker, is quite complicated. I've

studied it thoroughly. I have a number of items here which I

would like to quote, but because of the complexity of the bill

I do not want to say them haphazardly. I would like your

permission to read some of these things so that I can be sure

that what I want to say is said.

[ Page 2321 ]

Some of the highlights of this bill, to me, are the rate of

capital tax. It is to be one-tenth of 1 per cent of the taxable

paid-up capital or the taxable paid-up capital employed in

Canada, as these terms are defined by the Act. These

definitions say that the tax is to be computed on the basis of

the taxable paid-up capital or "taxable paid-up capital

employed in Canada" as determined at the close of the fiscal

period of the corporation. The tax is payable by all

corporations, wherever incorporated, which have a permanent

establishment as defined in British Columbia.

And this is the first point where we find so much of this

Act is by regulation. The

definitions of some of these things

are not in the Act. A corporation maintaining permanent

establishments, both within British Columbia and outside

British Columbia, may deduct from the capital tax, otherwise

payable, an amount equal to one-tenth of 1 per cent of the

taxable paid-up capital deemed by the regulations — and those

regulations are not yet issued — to be used in jurisdictions

outside British Columbia.

"A capital tax will be payable for all fiscal years ending

after December 31, 1972, with provisions for apportioning the

tax in 1973 in relation to the number of days from January 1,

1973, to the end of the 1973 fiscal year over 365 days. In

addition, the capital tax will be apportioned in the case of

short fiscal periods. The minimum capital tax payable by

corporations for the fiscal period of 365 days, will be a

minimum of $25 and as corporations with taxable paid-up capital

of less than $25,000 are exempt from the capital tax; however,

a deduction of $25,000 is not permitted a corporation whose

taxable paid-up capital is greater than $25,000. And two or

more corporations which are related as defined with an

aggregate taxable paid-up capital of $25,000 or more will be

subject to the capital tax even though each corporation has

less than $25,000 of taxable paid-up capital.

"The capital tax will be payable at the time the return is

due for filing. Such date is to be prescribed by the

regulations" — and those regulations, Mr. Speaker, are not yet

issued.

"Failure to file a return on the prescribed date will result

in the imposition of a penalty equal to 10 per cent of the tax

unpaid at that date. Additionally, interest at the rate of 8

per cent is payable on any unpaid tax from the date the return

was due to the date of payment of the tax. However, there is no

provision for payment of interest on any overpayment of

tax."

So if you should by some chance make a mistake and overpay

it, the government will have the use of that money without any

interest payable.

The paid-up capital of a corporation is computed at the end of its fiscal year.

It includes the following: the paid-up capital stock of the corporation; it

includes all surpluses of the corporation, including earned capital and any

other surplus. It includes all reserves of the corporation except reserves allowed

as a deduction under the Income Tax Act of Canada.

HON. MR. BARRETT: It's not in committee stage now — still

on the principle.

MR. SPEAKER: On a point of order, I think the Hon. Member

should not deal too closely with any section. Try to stick to

the general principle that you either approve or disapprove of

in the bill.

MR. MORRISON: Well, I think it must be obvious, Mr. Speaker,

that I disapprove of the bill.

MR. SPEAKER: I gathered that.

MR. MORRISON: And since the bill is as long and as

complicated as it is, it is rather difficult to deal with it

without trying, in some logical manner, to start at the front

and go to the rear.

HON. MR. BARRETT: But we have a committee stage for

that.

MR. MORRISON: Very well, I shall skip some of those parts.

I'm disappointed that you have accepted that manner.

HON. E. HALL (Provincial Secretary): A point of order.

MR. SPEAKER: Excuse me, on a point of order?

HON. MR. HALL: I have been listening very carefully to the

Member and the Member just simply read

section 11 out. Your

last two minutes, Mr. Member, you just simply read

section

MR. MORRISON: I wanted to make a point as to what

section 11

implied.

HON. MR. HALL: Do us a favour — we can read

section 11

ourselves.

MR. SPEAKER: I would point out that it is generally the rule

of the House, and always has been — it is the rule of course

that we do not deal with specific sections in any discussion

here other than to touch only lightly on them as they affect

the general principle of the bill.

The Hon. Member could reserve his criticism to particular

sections and citations of sections to committee stage and deal

generally with the principle of taxation in this matter.

[ Page 2322 ]

MR. MORRISON: The Act appears to be all embracing, and the

information required to be supplied provides the Minister with

very far-reaching powers, powers which I believe are absolutely

unnecessary in this province. I probably at that point will

withdraw and cover it in the sections, but it must be obvious

that I feel that this tax is unnecessary, it is undesirable, it

will not accomplish the encouragement of capital to this

province and it will not bring in additional employment.

I'm satisfied that it is merely the beginning step, that the

one tenth of 1 per cent which is proposed now is simply the

start of a tax which will grow over the years and become more

and more onerous.

MR. SPEAKER: The Hon. Second Member for Vancouver Centre,

followed by the Member for North Vancouver-Capilano.

MR. G.V. LAUK (Vancouver Centre): I'm sorry, I didn't hear

you, Mr. Speaker.

I will be as brief as possible, I just wanted to cover a few

points, thoughts, that occurred to me while I was listening to

the Member for West Vancouver–Howe Sound, (Mr. Williams) and

the Member for Oak Bay (Mr. Wallace).

Briefly, I am in support of this bill, second reading of

this bill.

MR. PHILLIPS: Sure, more business for the lawyers.

MR. LAUK: I think it's a move towards fairer taxation in

this province. If you'll notice, over the past several years

you could see that the personal income tax revenues to this

province have increased,

whereas the corporate income tax

revenues to this province have decreased. When one looks at the

reasons, it's not because of lack of growth in the corporate

industries of this province. On the contrary, the increase has

been substantial. It is for that reason that this party has

embarked upon a move towards fairer taxation.

When it is mentioned that resource industries will be

discouraged, it should also be pointed out that the resources

are here. They belong to this province and to the people of

British Columbia. The resource industries are here because the

resources are here. I think it rather specious, with great

respect, to argue that they're here for any other reason. They

won't leave, and I think the Opposition Members who mentioned

that know it.

This tax is rather gentle. There will be support in the

future, and I can assure everyone that if they just read the

proposed programme of the New Democratic Party, there'll be all

kinds of support for fledgling industries in this province.

The largest single bar to secondary industry, Mr. Speaker, is our population.

The Hon. Leader of the Opposition (Hon. Mr. Bennett) stated that several times.

We recognized that; it's a fact of life. The second most important bar to secondary

industry, and it is known on that side of the House, is the freight rate situation

that exists in this country. This has been mentioned so many times I'm not going

to go into it in detail, but it has a very great bearing on the fact that we

cannot encourage secondary industry as well as we would like to.

Interjection by an Hon. Member.

MR. LAUK: Now, industry is not complaining. Mr. Speaker,

they are still taxed lower in this province than they are in

any other industrial and rich province in this country. Jobs

are expanding, and capital is continuing to pour in. The first

Member for Vancouver–Point Grey (Mr. McGeer) mentions Barrons

magazine. I just thought that I'd as an aside, remind him —

perhaps the Hon. Member for North Vancouver-Capilano (Mr.

Brousson) can remind him that that magazine described Pierre

Elliot Trudeau as a communist at one stage.

Interjection by an Hon. Member.

MR. LAUK: The second point that I wish to raise is that I

was rather amused at the comments made by the Member for Oak

Bay (Mr. Wallace), Mr. Speaker. Was it not the leader of the

Conservative Party that advised people outside of this province

not to invest in this province?

Interjection by an Hon. Member.

MR. LAUK: Well, didn't that happen? I say, Mr. Speaker, that

did more damage to bringing in investment to this province than

a dozen taxes like this. What we are really talking about, Mr.

Speaker, are people on that side of the House who are really

industrial anarchists.

MR. PHILLIPS: Ooooh!

MR. LAUK: Last night, one of the Members of the Liberal

bench wanted us to give over the Liquor Control Board to

private enterprise. What kind of industrial strategy is the

First Member for Point Grey (Mr. McGeer) talking about when he

mentions these kinds' of things? We are for a planned economy.

I've never seen the Member for West Vancouver–Howe Sound (Mr.

Williams) more forceful, more articulate than when he supports

large corporations.

You know I think we have to move towards fairer taxation. Every tax goes to

the consumer. Is that an argument for not taxing corporations, but to continue

to tax other people? It's not an argument,

[ Page

2323 ]

Mr. Speaker; it's a specious argument.

I note with interest that the Opposition side votes for all

of our social services …

Interjection by an Hon. Member.

MR. LAUK: …all of our good programmes that we're bringing

in this session. Yet this tax that can be written off against

their federal tax, and is totally meaningless to the

corporations…that's why corporations are not complaining;

their lackeys are; only their representatives here are

complaining. They're not complaining because they know they can write it

off on federal taxation.

Those are the points that I wish to make and I ask every

Member of this House to support this move towards fair

taxation.

MR. SPEAKER: The Hon. Member for North

Vancouver-Capilano.

MR. BROUSSON: Thank you, Mr. Speaker. I would follow the

example of the first Member for Victoria (Mr. Morrison) and

declare my personal interest as a shareholder and active

participant in business in British Columbia, both in secondary

manufacturing and in the service field.

I want to say, Mr. Speaker, that this is not big business,

it's small business. The difference in the background from

which I speak and some of the other Members in this House, is

the fact that that business started as a one-man operation.

It's grown from there into something that — it's still not very

big, but it's surviving with difficulties.

Interjection by an Hon. Member.

MR. BROUSSON: But believe me, Mr. Speaker, one of the

problems in this Legislature is the fact that there are far too

many people sitting around this room that haven't had the

responsibility of a payroll on their shoulders which has to be

met on the first of every month. There are too many social

workers and union organizers and teachers and professional

people — who I do not criticize, I respect them and I'm glad

they're in this House — but there's far too large a percentage of those in this relationship.

Interjection by an Hon. Member.

MR. BROUSSON: It's one thing, Mr. Speaker, to collect income

tax based on profits and income; but there's a very, very

difficult principle in this bill. It's tax on every company whether it makes any money, or whether

it's losing its shirt trying to survive.

Interjection by an Hon. Member.

MR. BROUSSON: The Minister of Finance talks about getting

money from big business.

We heard the talk just now from the last Member about the

big corporations. But the insidious thing about this bill is

that it's going to collect from every small, one-man business —

not every one, but many, many small businesses — with only one

or two people working for them, and on up.

My whole business life, Mr. Speaker, has been in dealing

with those kinds of small business, both myself and in selling

to and dealing with hundreds of others. I know something of the

problems they face. I know just how serious this kind of bill

… the Premier, Mr. Speaker, says, "Well, you know, it's only

$1,000 on $1 million capital." But this is just one more straw

packed on the backs of a lot of business people who are going

to eventually shrug the whole thing off.

Interjection by an Hon. Member.

MR. BROUSSON: It's bad legislation and it's punitive

legislation. It shows the true view, Mr. Speaker, the true view

of this side of the House toward any kind of private

business.

I'd like to give one or two specific examples if I might,

Mr. Speaker. Let's take for example a fishing lodge in northern

British Columbia. Perhaps it has a bad year. You know, if you

get a bad summer and fall, people don't go fishing in northern

British Columbia.

That's a business that doesn't usually have a great deal of

cash resources. It's heavily capital intensive in terms of its

buildings and its land and its facilities and equipment, but if

you have a bad summer and a bad fall, your cash flow is pretty

low. But this tax is going to apply to that fishing lodge

whether or not he has a good year. I hope the Members will

remember that example.

There are similar examples one might use. You could use the

examples of people in the refreshment, ice-cream business. I am

sure there are similar examples there one might develop.

I'd like to use the example of people building apartment

blocks. If a corporation owning an apartment has to pay this

tax, it is suggested by the Pacific Apartment Management

Association that on a highrise containing 100 suites, this

would probably work out to a tax of about $15 per suite per

year.

Now that's not very much, I suppose, Mr. Speaker. That's

what the Premier would say. Fifteen dollars a year. But it is

just one more little increase in the cost of living, in the

cost of shelter, and of course that applies in a lot of smaller

buildings — in a lot of buildings that are rented by senior

citizens and a lot of other people.

How about the cooperative kind of apartment block, where

perhaps 15 or 20 people or so band

[ Page 2324 ]

together to own jointly a company which has no other

objective but to own that little block of apartments which they

occupy? They have no other business. But under the present

terms of this Bill No. 63, those people, that company, are

going to have to pay this tax. So their cost of shelter is

going to go up.

Surely, at the very least, Mr. Speaker, the Minister of

Finance would want to find some way to amend this bill to

remove the tax on residential apartments of this sort.

Let's look at secondary industry for a moment, Mr. Speaker.

I had occasion on Monday of this week to meet with a young man

from North Vancouver who came to talk to me to ask for advice.

In the past year or year and a half he's built a business in

the manufacturing field which is unique in Canada. He is the

only manufacturer of this product in Canada. Formerly it was

imported from the United States.

He's managed to get his business going. He's doing well in

British Columbia. He's now getting business from eastern Canada

and he's getting larger orders from the Ontario and Quebec

markets.

He came to me and said, "I've got to make a decision. I'd

like to stay in British Columbia with my small plant, and grow

here. I'd like to stay here, but I'm getting these orders

coming from Ontario. What am I going to do? They want me to go

there and open up in Ontario."

We talked over the pros and cons and the pluses and minuses,

and this is one of the subjects that we had to talk about — the

effect of this. It's one small minus for this young man to

consider as to whether he tries to stay operating in North

Vancouver with a small clean business, or does he move lock,

stock and barrel down east.

MR. R.T. CUMMINGS (Vancouver–Little Mountain): Where he gets the same

tax.

MR. BROUSSON: Certainly. But there are other advantages in

the east. He's got lower wages, and a number of other things.

He wants to stay here. So when you add all the other things on

this is one more problem that he has to fight; not only the

problem of freight rates, not only the problem of wages, but

now this additional tax on a small business that's fighting for

its life.

I wonder if the Minister of Finance, in preparing this bill,

first had any consultation with the Minister and with the staff

of the Department of Industrial Development. I wonder if he

asked their advice and how they would feel about this

subject.

We've had so many debates in this house in recent years when

we've criticized the former Minister of Industrial Development

because he wasn't doing enough for secondary industry.

We say we're going to encourage secondary industry. Why not

encourage them first and tax them afterwards?

Mr. Speaker, this legislation is punitive, it's regressive,

and it's unnecessary. It's bad legislation, and I urge its

defeat.

Hon. Mr. Strachan moves adjournment of the debate.

Motion approved.

Hon, Mr. Barrett moves adjournment of the House.

Motion approved.

The House adjourned at 12:50 p.m.

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