1976 Legislative Session: 1st Session, 31st 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)

WEDNESDAY, JUNE 30, 1976

Afternoon Sitting

[ Page

3347 ]

CONTENTS

Statement

Massey tunnel fire hazard. Hon. Mr. Fraser — 3347

Routine proceedings

Oral questions.

Performance of ICBC. Mr. Cocke — 3347

Teacher salaries settlements. Mr. Gibson — 3347

Construction industry dispute. Mr. Wallace — 3348

Ownership of B.C. Cellulose. Mr. Lea — 3348

Safety of Washington state nuclear generating station. Mr. Skelly —

Discontinuance of PNE dog show. Mr. Barrett — 3349

Future of White Lake observatory. Mr. Wallace — 3350

Mineral Resource Tax Act (Bill 57) Committee stage.

Amendments to

section 1.

Hon. Mr. Waterland — 3350

Amendment to

section 2.

Hon. Mr. Waterland — 3350

section 2 as amended.

Mr. Lauk — 3351

Mr. Barrett — 3354

Mr. Gibson — 3357

Mr. King — 3361

Hon. Mr. Waterland — 3362

Division on

section 2 as amended — 3362

Amendment to

section 3.

Hon. Mr. Waterland — 3363

Amendments to

section 5.

Hon. Mr. Waterland — 3363

Amendment to

section 6.

Hon. Mr. Waterland — 3363

Amendment to

section 2 1.

Hon. Mr. Waterland — 3363

Division on third reading — 3363

Mineral Amendment Act, 1976 (Bill 30) Committee stage.

Report and third reading — 3364

Guaranteed Available Income for Need Act (Bill 28) . Committee stage.

section 1.

Mr. Levi — 3364

Hon. Mr. Vander Zalm — 3365

Mr. Wallace — 3366

Mrs. Wallace — 3367

Ms. Brown — 3367

Hon. Mr. Vander Zalm — 3368

Mr. Levi — 3369

section 4.

Mr. Levi — 3370

Hon. Mr. Vander Zalm — 3370

Mr. Levi — 3371

section 7.

Ms. Brown — 3371

Hon. Mr. Vander Zalm — 3372

Mr. Levi — 3372

Hon. Mr. Vander Zalm — 3372

Amendment to

section 7.

Mr. Barnes — 3373

section 8.

Mr. Levi — 3373

Hon. Mr. Vander Zalm — 3373

section 11.

Ms. Brown — 3373

Hon. Mr. Vander Zalm — 3374

Amendment to

section 16.

Hon. Mr. Vander Zalm — 3374

section 16 as amended.

Mr. Levi — 3374

Hon. Mr. Vander Zalm — 3374

Ms. Brown — 3375

Mr. Levi — 3375

section 17.

Mrs. Wallace — 3375

section 18.

Ms. Brown — 3376

Hon. Mr. Vander Zalm — 3376

Mrs. Wallace — 3376

Hon. Mr. Vander Zalm — 3376

section 20.

Mr. Levi — 3377

Amendment to

section 22.

Hon. Mr. Vander Zalm — 3377

Amendments to

section 25.

Hon. Mr. Vander Zalm — 3377

section 26.

Mr. Levi — 3377

Hon. Mr. Vander Zalm — 3377

section 29.

Ms. Brown — 3377

Hon. Mr. Vander Zalm — 3377

Division on third reading — 3378

Motion

Sittings of committee to select an auditor-general.

Hon. Mr. Wolfe — 3378

Routine proceedings

Labour Code of British Columbia Amendment Act, 1976 (Bill 77) Committee stage.

section 2.

Mr. King — 3378

Hon. Mr. Williams — 3378

Mr. Wallace — 3378

Hon. Mr. Williams — 3379

section 3.

Mr. King — 3379

Hon. Mr. Williams — 3379

section 4.

Mr. King — 3379

Hon. Mr. Williams — 3380

Amendment to

section 7.

Hon. Mr. Williams — 3381

Division on third reading — 3382

Public Construction Fair Wages Act (Bill 83) . Committee stage.

section 1.

Mr. King — 3382

Hon. Mr. Williams — 3382

Division on third reading — 3383

Government Reorganization Act (Bill 59) . Committee stage.

Amendment to

section 1.

Hon. Mrs. McCarthy — 3383

section 1 as amended.

Mr. Macdonald — 3383

On the amendment to

section 1 as amended.

Mr. Lauk — 3384

Mr. Macdonald — 3384

Hon. Mrs. McCarthy — 3384

Mr. Lauk — 3385

Mr. Wallace — 3386

section 1 as amended.

Mrs. Wallace — 3388

Amendment to

section 9.

Hon. Mrs. McCarthy — 3389

Division on third reading — 3389

Public Service Benefit Plans Act (Bill 64) . Committee stage.

Amendment to

section 1.

Hon. Mrs. McCarthy — 3389

Report and third reading — 3390

Members of the Legislative Assembly Superannuation Amendment Act, 1976 (Bill

72) . Committee stage.

Report and third reading — 3390

Automobile Insurance Amendment Act, 19 76 (Bill 6 1) . Committee stage.

section 1.

Mr. Gibson — 3390

Hon. Mr. Gardom — 3390

Report and third reading — 3390

British Columbia Buildings Corporation Act (Bill 23) . Committee stage.

section 2.

Mr. Wallace — 3390

section 4.

Mr. Wallace — 3390

On the amendment to

section 4.

Hon. Mr. Fraser — 3391

Mr. Lea — 3391

Mr. Gibson — 3392

Hon. Mr. Fraser — 3392

Mr. Wallace — 3393

Mr. Gibson — 3393

Division on the amendment — 3393

section 4.

Mr. Wallace — 3393

On the amendment to

section 4.

Mr. Cocke — 3394

Division on the amendment — 3394

section 6.

Mr. Lauk — 3395

Amendment to

section 6.

Mr. Gibson — 3395

section 7.

Mr. Barber — 3395

section 13.

Mr. Gibson — 3396

Mr. Wallace — 3396

On the title.

Mr. Barber — 3397

Royal assent to bills — 3398

WEDNESDAY, JUNE 30, 1976

The House met at 2 p.m.

HON. A.V. FRASER (Minister of Highways and Public Works): Mr. Speaker, I'd like permission to make a statement.

Leave granted.

MASSEY TUNNEL FIRE HAZARD

HON. MR. FRASER: I'd like to make a report to the House on the fire hazard in the Massey Tunnel referred to in the press.

The Massey Tunnel was completed in 1958. It is 2,165 feet in length,

consisting of two traffic tubes with two lanes in each and 18-in.

safety curbs. It is equipped with a sprinkler system and emergency

doors, a fire extinguishing system and an emergency ventilating system.

The emergency doors and the fire extinguisher are in place, and to

the best of our knowledge are fully operative. These are serviced

regularly. The emergency ventilating system was used to clear smoke in

the tunnel from a recent automobile fire.

In 1969 the sprinkler system was put out of service. It was found to

be almost impossible to maintain it, due to deterioration and

inadequacy of design. Prior to 1969, when the sprinklers were

disconnected, discussions were held with the fire marshal's office in

Vancouver. Their opinion and advice was that the chief hazard in the

tunnel was rupture of a motor-vehicle gasoline tank following a

motor-vehicle accident, and they recommended the sprinklers not be

used, as they would serve only to spread the burning gasoline down the

gutters through the tunnel. The tunnel profile has a sag in the road

grade to the centre of the tunnel. The emergency doors provide access

between the northbound and the southbound tubes.

There are signs in advance of the tunnel notifying truckers about

the regulations concerning the transportation of dangerous goods

through the tunnel. These regulations are contained in regulations

pursuant to the Highways Act. This prohibition is enforced by the Royal

Canadian Mounted Police. It is most detailed and cannot be summarized

in this statement.

The accident which brought this matter up occurred June 12 at 8 p.m.

A gasoline tank on a truck came off and burst into flames. The tunnel

operator called the Delta fire chief and got response from the No. 10

road station who came to the scene, controlled the fire and put it out,

There were no casualties.

The Minister of Highways and Public Works, in a statement, has given instructions

that the safety features in the tunnel — safety doors, fire extinguisher, and

emergency ventilating system — are to be rechecked to ensure that they are working

properly. The regional highway engineer stationed in Burnaby is meeting with

the fire chiefs today to determine what their recommendations are to improve

safety in the tunnel. Everything possible will be done to ensure the safety

of the travelling public.

As far as I'm concerned, there is no cover-up as the press reported

this morning. It is a No. 1 priority to get this cleared up to

everyone's satisfaction. I have so far received no written

communication from Delta council on this matter, nor from any other

official body. The department is prepared to cooperate immediately with

the fire authorities and other related authorities to maximize the

safety of this facility for the travelling public.

Oral questions.

MR. G.R. LEA (Prince Rupert): I just wonder if there are going to be any more cabinet members here in a few moments.

MR, SPEAKER: Do you have a question, Hon. Member?

MR. LEA: Yes, but there's nobody to ask the question to.

PERFORMANCE OF ICBC

MR. D.G. COCKE (New Westminster): Mr. Speaker, I have a

question for the Minister of Education (Hon. Mr. McGeer) in charge of

ICBC. The Minister of Education has told us on a number of occasions

that he's having difficulty advising how many cars there are registered

in the province of British Columbia. Mr. Speaker, I think I can help

that minister....

AN HON. MEMBER: That's not a question, it's a statement.

MR. COCKE: I'll ask my question in good time. Don't you talk to me about statements.

Mr. Speaker, it was said on June 28 by Jerry Brown, supervisor of

the inspection service for B.C., that they haven't plugged in the

computer yet. They can't even tell what cars are tested and what cars

aren't.

Mr. Speaker, I ask the minister one question. The question is: when is this

businesslike government going to get down to business and produce, as they said

they would, with ICBC?

TEACHER SALARIES SETTLEMENTS

MR. G.F. GIBSON (North Vancouver-Capilano):

[ Page 3348 ]

Mr. Speaker, I also

have a question to the Minister of Education. Last Monday the minister

informed the House that the school boards had the choice of referring

or not referring teachers' salaries to the AIB. Is it not, in fact,

true that under the Act the school boards would be violating the terms

of the Act if they did not submit those salaries for settlement?

HON. P.L. McGEER (Minister of Education): Mr. Speaker, it is

the opinion of the legal counsel for the B.C. School Trustees

Association and the Attorney-General's department that that is correct

— that the school boards would be in violation if they did not refer

the settlements. The Department of Education is not responsible for

that.

MR. GIBSON: On a supplementary, then, if it is the legal

opinion of the BCSTA that the school boards must submit them, is the

minister aware that if the AIB orders a rollback of teachers' salaries

the school boards will then have a choice of violating the orders of

the AIB or violating

section 142 of the Public Schools Act, which

states that "an award of a salary arbitration board under this Act is

final and binding on the board and association to which it applies." Is

the minister aware of that direct conflict?

HON. MR. McGEER: Mr. Speaker, as with all cases involving the

anti-inflation legislation, it takes precedence. That is the opinion of

our solicitors. Presumably that contingency was taken into account at

the time the legislation was drafted.

MR. GIBSON: Is the minister then saying that a federal Act

can override a specific provincial Act in a field such as education

which is specifically provincial in jurisdiction? Is the minister

saying that?

HON. MR. McGEER: No, that's not what I'm saying, Mr. Speaker.

I am saying that the legal opinion of the Attorney-General's department

is that the Act takes precedence inasmuch as we have a provincial Act

and we have an agreement with Ottawa under that provincial Act.

CONSTRUCTION INDUSTRY DISPUTE

MR. G.S. WALLACE (Oak Bay): Mr. Speaker, through you to the

House Leader, could I ask if in the absence of the Minister of Labour

(Hon. Mr. Williams) one of the ministers is functioning as acting

minister during this question period? Both yesterday and today the

Minister of Labour has been absent at a time when we are eager to ask

questions about a very important matter.

MR. SPEAKER: The only thing I could suggest, Hon. Member, is

that the House Leader could take the question as notice on behalf of

the Minister of Labour.

MR. WALLACE: The other alternative is that the House Leader

can inform us whether there will be a statement likely forthcoming from

the minister, who, I can understand, is heavily committed with meetings

today. Could I ask then, through you, Mr. Speaker, if the House Leader

can assure us that there will be statement later today on the

construction industry dispute?

HON. G.M. McCARTHY (Provincial Secretary): Mr. Speaker, on

behalf of the Minister of Labour, I am sure that if the Minister of

Labour has something to report to the House he can be given leave in

the House later. I cannot confirm definitely that he will have a

statement, but if any progress is being made I am sure he will be

pleased to report to the House.

MR. WALLACE: Mr. Speaker, to the House Leader again: Since it

appears that the session of this Legislature may well end today, and

since special legislation may prove to be necessary in the construction

industry, can the minister give us any indication whether or not

decisions have been made by the government to intervene in the dispute?

HON. MRS. McCARTHY: Mr. Speaker, I am sorry that I can't give

the hon. member that information. I will repeat that if there is a

statement of policy that can be made this afternoon on the pending

situation of the construction workers, it will be done this afternoon.

OWNERSHIP OF B.C. CELLULOSE

MR. LEA: Mr. Speaker, to the hon. Minister of Mines and

Forests. A few weeks ago I asked the minister if there had been any

action on the part of the government to sell B.C. Cellulose. In the

last couple of days Ray Williston, the new person in charge, has said

that part of his terms of reference is to look around for a buyer for

B.C. Cellulose. Does the minister have anything to tell the House at

this point?

HON. T.M. WATERLAND (Minister of Mines and Petroleum Resources and Minister of Forests):

Mr. Speaker, no, I don't have anything to tell the House. When I

answered that question in the past, there had been no moves made to

dispose of B.C. Cellulose. Whether there have been since the new

president took over, I do not know.

MR. LEA: A supplementary. Okay, let's get to the bottom of

it. Has there been any action? Is that the terms of reference for Mr.

Williston? You're the

[ Page 3349 ]

minister in charge. I would like to know whether to your knowledge

Mr. Williston has been told to look around for a buyer for B.C.

Cellulose. He says he has. What do you say?

HON. MR. WATERLAND: Mr. Speaker, to my knowledge the answer

is no. Mr. Williston, the president of B.C. Cellulose, is now reporting

to the Premier. Responsibility for the Crown corporations is best

thought not within the realm of the Minister of Forests when these

corporations deal with the forest industry.

MR. LEA: Is the minister on the board of B.C. Cellulose or Canadian Cellulose?

MR. WATERLAND: For the present time yes, Mr. Speaker.

MR. LEA: Supplementary, Mr. Speaker. The minister is telling

us that he is on the board. Has there been a meeting of the board of

directors in the last three weeks?

HON. MR. WATERLAND: No.

MR. D. BARRETT (Leader of the Opposition): Supplementary to

the member of the board of B.C. Cellulose, the Minister of Forests: as

a member of the board, has Mr. Williston been authorized to establish a

policy on his own without authorization of the board — that is, to go

ahead and look for a buyer for Can-Cel?

HON. MR. WATERLAND: Mr. Speaker, the policy of the government

in dealing with the Crown corporations will be decided by the

government. These policies will be initiated and carried out by the

president of British Columbia Cellulose Corp. As you know, policy

matters are not subjects that can be brought up in question period.

MR. BARRETT: Will the minister, who said that policy

decisions are made by the government, be in a position now to assure

the House that if Mr. Williston is making moves to seek a buyer of

Can-Cel, he will be dismissed for making the move without authority?

HON. MR. WATERLAND: Mr. Speaker, for a long time now prior to

the last election, during it and afterwards this government has said

that it is not going to continue ownership of Crown corporations in the

forestry sector. We've also said that we're not going to dispose of

these at any fire sale. These matters will be looked at over a period

of time and the ultimate decisions will be made by the government when

the time is right.

MR. LEA: Is the Minister of Mines aware that the Premier

during the election campaign sent a telegram to the Social Credit

candidate in Prince Rupert saying it would not be sold? Is he aware of

that?

AN HON. MEMBER: At a fire sale.

MR. LEA: No, no fire sale. He just said it would not be sold. Is the minister aware of that?

HON. MR. WATERLAND: No, I am not aware of that.

SAFETY OF WASHINGTON STATE

NUCLEAR GENERATING STATION

MR. R.E. SKELLY (Alberni): I have a question for the energy

minister. I have been informed that a nuclear generating station will

be built 32 miles south of the Canadian boundary at Sedo Woolley and

that it will be built nine miles from a seismic fault and a short

distance from an active volcano. I understand that hearings are being

held in July and August of this year, and that there is a danger to

Canadian citizens should anything happen at this nuclear plant near

Sedo Woolley. I'm wondering if the minister of energy will be making

any representation to the United States government at those hearings or

to the state of Washington with regard to the danger which that plant

constitutes for Canadian citizens in the metropolitan area.

MR. SPEAKER: Hon. Member, before the hon. minister answers, I

think I should point out to you that his official title is Minister of

Transport and Communications.

HON. J. DAVIS (Minister of Transport and Communications): Mr. Speaker, that matter is under active consideration.

MR. SKELLY: A short supplementary. Would the minister be

willing to meet today with representatives from groups opposing that

plant who are in Victoria today?

HON. MR. DAVIS: Possibly, Mr. Speaker, but it will depend on the progress of legislation in the House.

DISCONTINUANCE OF PNE DOG SHOW

MR. BARRETT: Mr. Speaker, this is a question to the

Provincial Secretary. It relates directly from an inquiry from a

constituent of mine concerning action taken by the PNE board, Mr.

Speaker, about the discontinuance of a dog show at the PNE. There have

been a number of people who are very upset over this

[ Page 3350 ]

decision. The amount of money that's involved is relatively minor.

These people have been concerned that a pattern that has been built up

is being interrupted. I know that it is not a major event, but it does

affect a large number of people, Mr. Speaker.

HON. MRS. McCARTHY: Mr. Speaker, I received a petition from

the same group of dog owners and also a visit in my office from the

president of the organization. He explained their problem. I have

suggested to him that he make representation to the board of directors.

I have asked the president to make that presentation available to him

where he can deal directly with the PNE board of directors and present

their case. We'll leave it with the PNE board to make the decision and

I think they'll act wisely.

FUTURE OF WHITE LAKE OBSERVATORY

MR. WALLACE: Mr. Speaker, in the absence of the Premier, I

would direct my question to the Provincial Secretary. I'm sorry that

she's getting all of the questions this afternoon.

There is a very serious situation developing at the astrophysical

observatory at White Lake near Penticton in which construction is about

to go ahead — on electrical appliances and other equipment — which will

seriously interfere with the functioning of the observatory. Millions

of dollars have already been spent on it, and it has a high rating in

the national scene.

I realize this is primarily a federal problem, but numerous

approaches have been made to the highest levels of the federal

government without response. Since time is of the essence, I wonder if

the Provincial Secretary would give a commitment that the government

will make an approach to Prime Minister Trudeau, who has already been

approached by the scientists at White Lake, seeking some intervention

to prevent what may be a permanent, serious impairment to the

functioning of the observatory.

HON. MRS. McCARTHY: Mr. Speaker, I would be pleased to look

into the problem. I'll get further information from your staff and from

my own department who will have some information on it. I'll make a

commitment to look into it before the week is out.

AN HON. MEMBER: Hear, hear!

MR. WALLACE: With leave of the House, I would be glad to table the document which outlines the....

MR. SPEAKER: I am sorry, Hon. Member, the question period is

terminated. If you wish to ask leave of the House to table a document,

I am sure that the House would perhaps consider that.

MR. WALLACE: Mr. Speaker, so the House knows exactly what I'm

tabling, it is a simple outline of the material as presented by the

astrophysical observatory committee, the chairman of which is Mrs.

Doreen Adams. It outlines the essential problem that has now come to a

critical phase. I ask leave to table this document.

Leave granted.

Hon. Mr. Vander Zalm files an answer to a question. (See appendix.)

Hon. Mrs. McCarthy files the annual report of the Department of the Provincial Secretary.

Hon. Mr. Davis files the auditor's report and financial statement for the B.C. Harbours Board for the year ended March 31, 1976.

Orders of the day.

HON. MRS. McCARTHY: Committee on Bill 57, Mr. Speaker.

MINERAL RESOURCE TAX ACT

The House in committee on Bill 57; Mr. Schroeder in the chair.

section 1.

HON. T.M. WATERLAND (Minister of Mines and Petroleum Resources): Mr. Chairman, I move the amendments to

section 1 standing on the order paper in my name. (See appendix.)

MR. CHAIRMAN: By the way, it should be drawn to the attention

of the House that there are three amendments to

section 1 and all three

are moved in one motion.

Amendments approved.

Section 1 as amended approved.

section 2.

HON. MR. WATERLAND: Mr. Chairman, I move the amendments to

section 2 standing under my name on the order paper. (See appendix.)

MR. G.V. LAUK (Vancouver Centre): Do you put the amendments prior to debate on the section? Is that the idea?

MR. CHAIRMAN: The amendments are moved on first and then we move on the

section as amended,

[ Page 3351 ]

Amendments approved.

section 2 as amended.

MR. LAUK: It seems to me that the minister has swung the

pendulum from one side of the taxation structure drastically to the

other. It seems to me that the old Mineral Royalties Act perhaps needed

some changes in the face of changing world market conditions, in the

fact of federal encroachment on resource taxation within the province.

But now, Mr. Chairman, by virtue of this

section and others, the mining

producers in this province who come under this Act pay less tax today

than they paid under the previous Social Credit administration — less

tax today. It is a total and complete sellout. I don't think it needs

to be repeated.

There are many things wrong with this statute,

section 2 being

perhaps the most fatal. It seems to me that the minister is overzealous

and overly accommodating to the mining industry. To rectify a small

problem he has overcompensated. I regret that very much because the

people of British Columbia are paying for his mistakes and his lack of

knowledge with respect to the industry itself.

What can you say when this

section was drafted by a representative

of the mining industry? What can you say when the government is not at

arm's length from that industry that is directly affected by this

taxation legislation? Who is paying for this kind of collusion, if you

like? The people of the province of British Columbia — they are the

ones who are paying. The tax that the mining producers do not pay, Mr.

Chairman, the people of British Columbia pay, by an extra 2 per cent

now on sales tax, by an increase in their income tax, by an increase in

their ferry rates, their insurance rates, their gas rates and so on.

What happens when this bill comes down and is finally passed and

section 2 is approved and assented to? There will be greater pressure

on the government to raise the taxes to the ordinary people of this

province even more.

It's not just a sellout. It's not just a giveaway of our resources

to the few major corporations that control the mining industry. It's

not just losing something from our government coffers. It is imposing a

pressure to increase taxes and rates even further on the ordinary

people of British Columbia. It's a sad thing indeed.

The minister has always argued, Mr. Chairman, that this increases

the number of jobs in the mining industry and that under the NDP

administration there was a loss of jobs. Let's rectify that statement

now, that myth that obviously he believes, among others, fed to him by

the mining industry through large dosages of "Jurgen Laution."

(Laughter.)

AN HON. MEMBER: That's terrible! (Laughter.)

MR. WALLACE: That proves it's time we should all go home.

Interjections.

MR. LAUK: Isn't that terrible? That is awful. I withdraw that

remark, not because it's unparliamentary but because it's a bad pun.

That may be a bad pun, Mr. Chairman, but the bad joke is on the people

of British Columbia.

I think that this pressure for increased taxation, being a sellout

to the industry, does not create the jobs that the minister talks

about. He talks a myth about the NDP administration destroying jobs in

the mining industry, In 1971 there were several thousand jobs fewer in

the mining industry than in 1973, during the administration of the NDP.

These are facts. He says that the policies of the NDP destroyed jobs.

There were more jobs in 1973 and 1974 under the NDP administration than

ever before in this province. There were more mines opened during that

short period of time in office of the NDP than during the several terms

of the previous Social Credit administration. There were many more

mines closed, and the minister knows this.

But, you know, when all you do is talk to the Jurgen Laus and the

mining executives of the world and not to a balanced group of people as

well, you're going to get this unbalanced view of the world. I think

the member for Revelstoke-Slocan (Mr. King) forgot to send that

minister a gift. He sent everyone a gift. He sent the Minister of Human

Resources (Hon. Mr. Vander Zalm) a shovel, and he sent other gifts. He

should have sent a gift to the Minister of Mines — a pair of

rose-coloured glasses,

MR. D. BARRETT (Minister of Opposition): With coal dust on the edges.

MR. LAUK: With a little bit of coal dust on them.

That minister really is one of the most naive, in terms of his

portfolio, in the cabinet benches. I think that the opposition has made

its position clear. It's regrettable that

section 2 is before us today,

Mr. Chairman — most regrettable. The real taxation paid is not 17.5 per

cent; there will be nothing paid. This is an elaborate Act,

section 2

being one out of — how many sections? — 53 sections, and when you come

down to the bottom end, the mining industry pays zero under this Act —

zero — and you know it, Mr. Minister, you know it. They are paying less

tax than they've ever paid before.

I think that by this pendulum moving the other way you've also

created another problem. The minister has argued that

section 2, among

other sections in this Act, is clearly going to avoid the high-grading

caused by a royalty system when in fact the major resource economists —

not the mining

[ Page 3352 ]

executives but the major resource economists — of this country say

that this Act will do the opposite. It will do the opposite. When

you've got taxation holidays in the first few years of operation, there

is high-grading like you've never seen, and little villages that

are.... Oh, don't frown at me! You just came out of the bush, Mr.

Minister. Listen to the resource economists. They know.

You get little villages all over this province set up under

section

2 to support small mining operations and large mining operations. The

high-grading takes place. There is no balance of production over the

years, and the villages close down during the busts and open up again

during the booms. There is nothing sadder in this province than to go

through village after village and town after town where the schools are

closed, where the streets are empty. Under

section 2, those schools are

closed and the streets are empty.

It seems to me, Mr. Chairman....

HON. D.M. PHILLIPS (Minister of Economic Development): Do you want my handkerchief?

MR. LAUK: Oh, listen to the arrogance of the Minister of Economic Development! He says do I want his handkerchief.

Yes, the people are crying now, Mr. Chairman, I say through you to

the Minister of Economic Development. But they're going to take action

at the next general election. They're crying now because of your 19th

century economic policies. No wonder you run out of the House — you're

embarrassed; you're ashamed. The people are paying increased taxes and

insurance rates, and it's all right for the millionaires' club to sit

there and say: "Do you want my handkerchief?" The Marie Antoinettes of

British Columbia. "Let them eat cake," says the Minister of Economic

Development. He's all right; he's a millionaire.

Interjection.

MR. LAUK: Mr. Chairman, would Neale Adams lie? (Laughter.)

HON. MR. PHILLIPS: Why did you fire Hart Horn?

MR. CHAIRMAN: And now

section 2, Hon. Member.

MR. LAUK:

section 2 says clearly: "Would Neale Adams lie?" (Laughter.) Sorry, Mr. Chairman.

The problem with you millionaires is that you have no sensitivity to

the ordinary people of British Columbia, the families who are

struggling trying to pay increased taxes and rates in this province

while you're letting the major resource industries go off scot-free.

Who owns that resource? Who owns the copper? Who owns the copper that

is taxed under

section 2, Mr. Chairman? Is it Cominco? Bethlehem?

Barrier Reef?

Interjection.

MR. LAUK: And what stocks do you own again?

Not those people, but the public, the people of British Columbia. We

own those resources. Bethlehem didn't pay for those claims; they just

staked them. They didn't pay the millions of dollars they should pay

for our copper that's shipped around the world. Where is the justice,

Mr. Chairman? Where is the justice when you let major multinational

corporations come into this bush-league territory controlled by a

bush-league government and strip the land of its mineral resources and

leave laughing. The flim-flam boys — they're coming in here laughing at

you. I can imagine in the board rooms of New York, of Chile, they're

sitting around telling themselves: "Hey, let's go up to British

Columbia; there's a bunch of rubes up there."

MR. BARRETT: IT&T.

MR. LAUK: IT&T — they can come in and say: "Have you read

section 2 of the Act?" They're going to say: "We can strip the province

clean. They say they're going to create jobs. What do you think of

that, Harry?" With their cigars and their bamboo canes they come up

here with their beads, their wampum and their firewater (laughter) and

they take that.... You know, the minister says: "I'm from the bush." Oh

boy, are you ever from the bush! I'll tell you that. Army and Navy

special minister, I'll tell you. I mean, this guy will sell anything;

he doesn't know the value of anything.

AN HON. MEMBER: City slickers.

MR. LAUK: Well, I'll tell you: I'm not for city slickers, Mr.

Chairman. It's the city slickers that are taking that government for a

ride. We went through the whole deal about how this minister got a

member of the mining industry to draft

section 2. We talked about that.

The minister wasn't candid with the House, and we talked about that.

The major point about this section, Mr. Chairman — and this is the

whole reason why the opposition is opposing — is the burden and the

pressure of taxation placed on the ordinary people of this province

when there's absolutely no economic reason to sell out to the major

corporations.

You know, it's easy.... And that minister isn't a millionaire — I

know he isn't. I wish he was; he's a nice fellow — but he isn't. But

he's surrounded by a cabinet of millionaires — the millionaire club.

They don't know what it means to have to pay an extra

[ Page 3353 ]

$200 in car insurance, an extra $30 or $40 in a weekend just to get

over to Vancouver Island or to the mainland. They don't know what it

means They don't know what it means when you have to pay in many cases

essential services for a family, an extra 2 per cent in sales tax, or

an extra 2 points on income tax — or 1 point or whatever it is.

They don't know what it means to be a really small businessman

struggling against impossible odds to keep the few people on his

payroll going, and yet be totally ignored by this millionaires club.

They're insensitive. This Act — the Mineral Resources Act, and

particularly

section 2 — is the most cynical

section of them all,

because they're cynical people, Mr. Chairman, and they don't care.

MR. CHAIRMAN: I must draw the member's attention to the fact....

MR. LAUK: You have been very indulgent, Mr. Chairman.

MR. CHAIRMAN: Yes, and purposely so, Hon. Member.

MR. LAUK: And I hope you've recovered from the flu. Have you? Are you feeling better?

MR. CHAIRMAN: Yes, but I must remind the hon. member that the

purposes of committee are not to recanvass subjects perhaps already

covered in previous debates, and also the scope of debate must....

MR. LAUK: Mr. Chairman, can I interrupt for a moment? I read

the Blues of the second-reading debate and, do you know, I don't think

one of the points I raised was raised. Isn't that strange?

MR. CHAIRMAN: I'm reminding the hon. member that committee is

not designed to raise subjects already covered in previous debates.

Also, the area of coverage in committee is far narrower than it is in

second reading. Therefore if you have a subject you want to refer to,

perhaps you could refer to it in particular rather than in generalities.

MR. LAUK: I will refer to

section 2(1) where it says: "Every

operator shall pay a tax of 17.5 per cent of his income derived from

the operation of a mine of which he is the operator during the fiscal

year. Then it outlines what that 17.5 per cent is of. That's after they

pay off everything. You know, they pay off the mortgage and the gas and

the electricity and for the shoes and the hats....

AN HON. MEMBER: Campaign contributions.

MR. LAUK: ...campaign contributions, and then at the end after the depletion allowances...

AN HON. MEMBER: They can apply for welfare.

MR. LAUK: ...and so on and the tax holidays and the loopholes

and the dropholes and the barn doors are open and so on, they pay their

17.5 per cent. Well, you know that 17.5 per cent of zero.... I wonder

how many people in British Columbia would like that as their personal

taxation base. Wouldn't it be nice if before you paid any tax you took

off your mortgage, your payment for household expenses, your grocery

bill, your electricity, your kids' school books, the fees that you have

to pay, the gasoline allowance, the automobile expense and your holiday

expense? Then you had to pay 17.5 per cent on that. Wouldn't it be nice

if the ordinary people of British Columbia, the people who are ignored

by the government over there, by the millionaires' club, could come

under

section 2, Mr. Chairman?

AN HON. MEMBER:

Section 2 for everybody.

MR. LAUK:

Section 2 for everybody.

AN HON. MEMBER: Freedom from taxes for people.

MR. LAUK: Don't they need an incentive too, Mr. Chairman? We talk about incentives for IT&T and Noranda.

AN HON. MEMBER: Cominco.

MR. LAUK: The boardrooms of Chile and New York and Leaf Rapids, or wherever.

AN HON. MEMBER: Giveaway gang!

MR. LAUK: But what about the incentives for ordinary British

Columbians who have staked themselves in this province, who work every

day in this province, who produce the wealth of this province? What are

their incentives? What are the incentives provided by that minister, by

that government — higher insurance rates, higher ferry rates, higher

income tax, higher corporate tax for small business, sales tax?

Interjection.

MR. LAUK: That's it. Let them eat cake. We're taking care of

the boys in the boardroom though, aren't we, Mr. Chairman? Yes, sir,

we'll take care of them. The minister, I know, is an honest man. He's

not getting anything out of this.

[ Page 3354 ]

AN HON. MEMBER: Experience.

MR. LAUK: I bet you don't even own shares in British

Columbia. Oh, I pointed that out. That's right. You do own some shares.

But surely you can't have that much to gain.

Why the sellout? Why

section 2? You know, we're going to vote

against

section 2, Mr. Chairman. I mean that. We're going to vote

against it and we don't have any confidence. We don't have any

confidence in that minister. Nothing personal; that man is a decent

man. He's a little bit naive and out of the bush, but he's a decent man

and I like him personally very much, nothing against him at all.

AN HON. MEMBER: However....

MR. LAUK: However, as a Minister of Mines he's a disaster. He's a failure. He's inept and he's sold us down the river.

MR. BARRETT: I'm glad to see that you've recovered your

health, Mr. Chairman, because you have a strenuous job, especially in a

debate like this. Because, as you know, in second reading the debate

was narrowly confined to one point of view.

Mr. Chairman, I want to say that the member for Vancouver Centre

(Mr. Lauk) certainly did stay within the confines of

section 2 because

this is the most scandalous

section of a scandalous Act. It's a

straight giveaway.

It's like writing a law for the mining companies saying "Anything

goes. Do anything you want and we'll help you as long as you don't have

to pay taxes." It's the snakes and ladders of taxation legislation. No

matter how you shake the dice in this section, Mr. Chairman, the mining

companies won't have to pay anything.

Now, Mr. Chairman, we were told that there was no free lunch in

British Columbia. We were told that everybody has to pay their way,

that everybody has to contribute something to the overall economy. We

were told that there would be huge increases in all services that are

directly related to people and the costs — ferries, as catalogued by my

colleague the member for Vancouver Centre. Everybody was expected to

pay their way or increase paying their way except the mining companies.

Now, Mr. Chairman, I have to know why under this

section the mining

companies are getting a free lunch. Why do the mining companies have

the protection, the succour and the comfort of this government that

says not only is it free lunch, it's free breakfast, it's free supper

and we throw in the hors-d'oeuvres as well.

Under this

section it does away with the Mineral Royalties Act. It

says that the mining companies are sacrosanct, that they are blessed,

that they don't have to be meek. They just come in here and grab and

they can rig up the books. You even suspect them of rigging up the

books — but that's another section, Mr. Chairman — when you give them

powers under this bill and the Public Inquiries Act to go in and check

them. But in actual fact they're getting away without paying a proper

share of taxes.

Mr. Chairman, we have been told by the Minister of Mines and by this

government that a royalty is a disincentive and that's why this

section

is in here. Well, there is a difference between a royalty and a basic

commodity price. The argument is given to this House and to the people

of British Columbia that when the price is depressed on the world

market, a royalty is a disincentive to mining companies to compete in

the world market for sales of that particular commodity. Under this

section they have been given subsidies, because they will be able to

write off losses on other tax years. Is that not right, my friend the

lawyer from Vancouver Centre?

Interjection.

MR. BARRETT: They can accumulate losses during the times when

the international price is down and then pile those losses on the years

when the price is up, so no matter what, they are guaranteed a system

of avoiding paying tax.

If we take the philosophy of the Minister of Human Resources (Hon.

Mr. Vander Zalm) who says "Give them a shovel," then we have to agree

that that is the philosophy: They've given the mining companies a

shovel and said: "Go to it; it's free." Welfare for the mining

companies — no taxes for the mining companies — but punish the ordinary

people.

Mr. Chairman, what was it that the Mineral Royalties Act

established? A basic royalty that is now going to be abolished. What

was that basic royalty?

Interjections.

MR. BARRETT: Mr. Chairman, if the ordinary people of this

province have to pay a 7 per cent sales tax, why don't the mining

companies have to pay a 7 per cent commodity charge? Why not? Is there

a difference between the ordinary citizens paying for goods or services

on 7 per cent and the mining companies not paying that? We are the only

jurisdiction that I know of in the world that is going backward in

terms of mining royalties. In the Latin America countries, Mr.

Chairman, where the state has intervened in terms of their resources,

some of them operate on a 50-50 basis. Venezuela for one — 50-50.

We are going to be the happy hunting ground of every fast-buck mining promotion

that was ever developed in North America, The Howe Street miners are happier

with this bill than any other group — the stock market. More money is lost and

manipulated up

[ Page 3355 ]

and down on Howe street than there is in the ground in British Columbia, Mr. Chairman.

Really, Mr. Minister, through you, Mr. Chairman, what is wrong with

saying that if there is a 7 per cent commodity for ordinary citizens

there should be a 7 per cent commodity charge for a mineral resource,

especially a non-renewable mineral resource? 'What's wrong with saying

that? If the 7 per cent is the margin between being viable and not

viable, isn't it more sensible to leave the product in the ground until

the people at least get a more direct benefit?

Mr. Chairman, what about the cost ratios related to public funds

under this

section that have to be spent? Who pays for the schools, the

hospitals, the roads and the whole infrastructure that has to go into a

new community when a mine is being opened? When the major investment is

from the United States, what is the limitation on a profit escaping to

the United States or to Great Britain or to Japan? Under this

legislation the people of British Columbia could be net losers even if

there was a maximization of employment, because the taxation to support

the initial capital cost of schools, hospitals and roads may not be

paid off under your new borrowing legislation over the length of the

life of the mine.

What's wrong with a government that says, oh, they're going to be

businesslike? The life of a mine may be 20 years, but the borrowings

for schools and hospitals and roads under your new legislation to put

the people in debt may go over 30 or 40 years. It means that the

taxpayers of this province end up paying, on high-cost loan money for

capital expenses to allow the mine to develop, what may be two or three

times more the value of the mining that actually took place.

AN HON. MEMBER: The whole town profits.

MR. BARRETT: Mr. Chairman, it is a matter of record that

there is no place in the world where once you dig the ore out more

grows in the empty hole.

MR. A.B. MACDONALD (Vancouver East): The minister says it does.

MR. BARRETT: I know. He was trying to tell us the other day

that the more you dig up, the more you find, because it gives you an

incentive to look up for the reserves. Now 300 years ago there were

heresay cases on this basis of logic, but now it has come about in

Social Credit. (Laughter.) This is the philosophy under this section:

invite them to dig a hole, take out the ore and by that process more

ore will grow in the fertilized ground.

AN HON. MEMBER: A plus B.

MR. BARRETT: A plus B.

MR. L.B. KAHL (Esquimalt): You fertilized it well.

MR. BARRETT: Well, Mr. Member....

MR. W.S. KING (Revelstoke-Slocan): The Major Douglas theory.

MR. BARRETT: I keep on forgetting that fellow's name. It doesn't really matter; he's only one of those one-timers anyway. Mr. Chairman....

MR. KING: He's from Esquimalt.

MR. BARRETT: Esquimalt — the member for Esquimalt, thank you.

AN HON. MEMBER: I think he's a two-timer.

MR. CHAIRMAN: Order, please, hon. members.

MR. BARRETT: Mr. Chairman, under this

section what is really

happening is that the mining industry of British Columbia is being

given a free ride, is being given welfare. They are being told they

don't have to pay a basic commodity tax while every citizen in this

province is told they must pay a 7 per cent sales tax. It's

irresponsible. As the member for Vancouver said, they are laughing in

the boardrooms. It's hicksville; Hicksville — British Columbia!

Interjection.

MR. BARRETT: Oh, it's not a question of him. I don't blame

this minister, through you, Mr. Chairman. It's unfair to blame this

minister; it was a commitment to the mining industry two years ago by

Social Credit when they wanted to claw their way back into power. They

were willing to say anything to anybody, and promise anything to

industry. This is the payoff bill.

AN HON. MEMBER: Pay-off-Bill Bennett.

MR. BARRETT: It's why ordinary people of British Columbia

have had to pay more money, because they've been told there's no free

lunch, the mining industry has been given a feast, free and at the

taxpayers' expense. Come in and get it, gang! Any way you want it, any

way you add it up, at the end it's 17.5 per cent off the bottom, not

the top.

Mr. Chairman, if you believe that there was incentive to produce

because of this legislation — and that's what we were told; it's

incentive to produce — if you believe it's incentive to put in more

effort and more capital, if you really believe that, then, as the

member for Vancouver Centre said, let every citizen of British Columbia

have the same opportunity to

[ Page 3356 ]

produce, the same opportunity for incentive to get more involved,

the same opportunity for incentive to spend more time on the job, and

let them have the same accounting system so they don't have to pay

income tax, sales tax, high ferry charges and anything else that you

have soaked the people with.

The "millionaires club" is appropriate. The gold-mine gang. All

kinds of labels can be put in that coalition group over there, but it

is part and parcel of the 105-year history of this province, which was

only interrupted for three and a half years, wherein the mining

industry got its own way from any government, anytime in British

Columbia — except for those three and a half years. They came to the

Liberals; they came to the Conservatives; they came to coalition; they

came to Social Credit, and they got legislation in their favour.

Mr. Chairman, this

section is abominable! It is a giveaway; it is

scandalous and it makes a mockery of every penny that you're wringing

out of the people of this province by saying that there's no free lunch

when you're giving the mining industry everything they want.

Mr. Chairman, I want to tell you that the member for Vancouver Centre is incorrect

in one thing: no one single person wrote this Act. This is an accumulation of

orders from the mining industry; that's what it is. The mining industry

said: "We'll spend $100,000 taking out ads." The mining industry

paid for demonstrators to come on the lawns to this Legislature against Bill

Interjection.

MR. BARRETT: Yes, they did. The mining companies paid

demonstrators to get on the plane, bought them a free lunch...there

were even a couple of drunks out there on the lawn....

HON. R.H. McCLELLAND (Minister of Health): Socialists.

MR. BARRETT: No, sir, my friend. They admitted to the

newspaper that they had been paid by the mining industry to come here

and demonstrate against this government. They all had a day off at the

expense of the mining companies, and the mining companies are being

paid back today.

AN HON. MEMBER: How much did you pay them to say that?

MR. BARRETT: Mr. Chairman....

MR. KING: Gold mines in the sky.

MR. BARRETT: Mr. Chairman, there's no gold mine in the sky;

the gold mine has arrived. Have you heard that expression, "I'm waiting

for the day my ship comes in"? Well, that's the song they're singing in

Vancouver today, in New York and in London, in the mining company

offices — "Our ship has come in, gang, under

section 2."

Interjections.

MR. BARRETT: It's our own happy little minister who says to

the ordinary people, who are kind of dumb because they have an

education system in this province that says you must go to school to

age 16, but never discuss resources.... Not like Latin America, not

like the Arab states, not like other jurisdictions where proper

taxation is being made, but here on the raw frontier the giveaway gang

says to the mining industry: "Every operator shall pay a tax of 17.5

per cent of his income derived from the operation of mines in which he

is the operator during the fiscal year."

AN HON. MEMBER: After.

MR. BARRETT: After they deduct every single expense, including campaign funds.

MR. KING: Slush funds to the coalition.

MR. BARRETT: Mr. Chairman, the only way this can be described

is as a sellout. How in the world can you face people on the street and

say, under this section, that you've got to pay everything for

everything you get in the province, but the mining companies don't? How

in the world can you face a young couple who are trying to save enough

money to buy a home and say: "There's no free lunch for you, but we'll

allow mansions for the mining companies."? How do you tell the senior

citizens who got the idea they were getting a free ride on the ferries

if they carried the bus on that they too have to pay for the mining

companies under this section?

Mr. Chairman, there are some in this House who are more appropriate

to and more aware of the quoting of the Bible than I. I don't want to

name any names. But, Mr. Chairman, I'm very familiar with the long

warnings given in the Bible and I leave it to the Chairman of this

House to tell the government the particular

section in Ecclesiastics

that warns....

AN HON. MEMBER: Ecclesiastics?

MR. BARRETT: Yes, and some sections of the Old Testament that

some of us are more familiar with than others, Mr. Chairman (laughter)

— some sections of the Old Testament that, even to this day, some of us

are more familiar with than the others — that warn of those in power

governing with an uneven hand, oppressing the poor, unfair distribution

[ Page 3357 ]

responsibility and wealth, because it will come to haunt you. I will

not be the first to remind you of your sin because, Mr. Chairman,

others in this province know today that this is a sellout bill.

The God-given resources of the people of this province are being

handed over, holus-bolus, to the mining companies and they're saying:

"Gang, go to it. Don't pay a dime. Don't even smile. We hope you buy a

ticket on the way through. Spend the money anywhere you want in the

world. Make a buck in British Columbia while the people suffer." And

all on the basis of some kind of myth that we're going to create jobs.

AN HON. MEMBER: Hallelujah!

MR. BARRETT: Nonsense! Nonsense, Mr. Chairman. It's a

complete sellout by the millionaires club who have no understanding of

what they've done to the ordinary people.

MR. LAUK: Order! The hon. member is not directing his remarks to the

section that.... (Laughter.)

MR. CHAIRMAN: Order, please. On

section 2 as amended, please.

MR. G.F. GIBSON (North Vancouver-Capilano): Mr. Chairman,

I'll attempt to stay as close on target as the other speakers in this

debate. I would have been more impressed by the two previous speakers

had we been dealing with an industry that was making a lot of money.

SOME HON. MEMBERS: Oh, oh!

MR. LAUK: Let's hear about IT&T and Noranda.

MR. GIBSON: I also would have been more impressed had we been

speaking about an industry with rising employment, but the fact of the

matter...

MR. BARRETT: Cominco, Fording....

MR. GIBSON: ...is that the rate. of return on the copper

companies last year was 2 per cent on invested capital, and only when

you added in the coal companies — which the former Premier (Mr.

Barrett) is talking about — did it come up to about 10 per cent...

AN HON. MEMBER: Flim-flam.

MR. GIBSON: ...and that's a total! That's after those coal company profits....

MR. LEA: Do you believe that?

MR. GIBSON: Yes, I believe it, Mr. Member. You'd believe it too. You'd believe it too, if you did some research.

MR. LAUK: You're a millionaire.

Interjections.

MR. CHAIRMAN: Order, please, hon. members. The member for North Vancouver-Capilano has the floor.

MR. GIBSON: Mr. Chairman, there can be....

MR. LAUK: Liberal jolly numbers game. (Laughter.)

MR. CHAIRMAN: If other members wish to make a speech, then let them stand in their places and address the Chair.

MR. GIBSON: There can be no doubt, Mr. Chairman, that

employment is down in the mining industry — seriously down in the

mining industry — from the point where it was three years ago. In the

operating mines it's about the same. But anybody who thinks that is the

future of the mining industry, or even the present of the mining

industry, doesn't understand that business. It's the exploration field

that's the future of the mining industry, and employment in the

exploration field went down to about one-quarter of what it used to be.

It went down by thousands of people during the term of that former

government in office and during the term of mineral royalties

legislation.

AN HON. MEMBER: Playing with figures.

MR. GIBSON: I wouldn't be saying these kinds of things, Mr.

Chairman, except for the kind of nonsense that's been talked here for

the last half hour.

Interjections.

MR. GIBSON: This new rate of taxation, Mr. Chairman, while

it's too low in some bonanza times and some bonanza mines, it is too

high in ordinary times and for ordinary mines.

MR. LAUK: Oh, balderdash!

MR. GIBSON: Here's the total tax take: 36 per cent federal

tax abated by 25 per cent on the resource grant; total federal tax, 27

per cent of the profit. Provincial corporation tax, 15 per cent; we're

now at 42 per cent.

[ Page 3358 ]

AN HON. MEMBER: Of what?

MR. GIBSON: Add in the tax under

section 2 of 17.5 per cent

and you're up to 59.5 per cent. Abate the amount for the resource

processing allowance, which is allowed under a later section, and

you're back down to 56.75 per cent once you have used up your capital

cost allowance, Mr. Member.

Interjections.

MR. CHAIRMAN: Order, please, hon. members. The member for

North Vancouver-Capilano has the floor. Hon. Member, would you please

address the Chair and not be so easily detracted by other members in

the House?

MR. GIBSON: Thank you, Mr. Chairman. Sometimes I get too

emotional when I'm worried about the jobs that are being lost in the

mining industry ...

SOME HON. MEMBERS: Oh, oh!

MR. GIBSON: ...because of the previous legislation we had.

MR. LAUK: I like this too much to listen to this, Mr. Chairman. I've got to go out.

MR. GIBSON: Now, Gary, I listened to you. I didn't even chuckle very much. (Laughter.)

Mr. Chairman, there's an obvious first principle. The thing you tax

is profits. Royalties is the wrong way to tax in the mining industry.

MR. BARRETT: After write-offs they don't make any profits.

MR. GIBSON: The speakers for the New Democratic Party have

said that the profits would all be gone by the time the tax collector

gets there. Well, then, hire better tax collectors.

SOME HON. MEMBERS: Ohhh!

MR. GIBSON: These arguments are arguments against any kind of

corporation tax at all. I never heard the New Democratic Party say

they're against the corporation tax.

MR. BARRETT: The way it's structured now we are.

MR. GIBSON: You didn't change it.

Interjection.

MR. CHAIRMAN: Order, please, hon. members!

Interjection.

MR. GIBSON: I pleaded with the former Minister of Finance

(Mr. Barrett) for two years in this chamber: "Will you set up our own

provincial corporation tax system so that you can plug any of those

loopholes you see?" He never did it. I don't know why not.

But I'll tell you, I'm not too worried about those flinty-eyed

corporate tax collectors. They come around and they get their pound of

flesh pretty well. But you know where the misconception comes in all of

this? Corporations don't pay taxes; people pay taxes. Corporations

aren't people. They're not flesh and blood. The only people that the

money comes out of are the customers in the form of higher prices or

the employees in the form of lower take-home pay or the owners in the

form of a lower return on their investment. Those are the only people

that the money can come out of.

Interjection.

MR. CHAIRMAN: Order, please! I would like to remind the hon.

member for Prince Rupert (Mr. Lea): if the member wishes to make a

speech, then let him stand in his place and address the Chair and make

is speech in an orderly fashion.

MR. GIBSON: Corporations are legal fictions, Mr. Chairman,

they are convenient tax collectors. That's all they are. The important

thing in looking at the mineral resource in this province is how we

best administer it for the public interest; and the public interest

relates not just to the return that we get out of the ownership of that

resource. It relates to jobs in this province and it relates to

taxation from those jobs and sales tax from those jobs and all of the

secondary downstream benefits that come out of that employment.

Now I heard the Leader of the Opposition (Mr. Barrett) stand up here

and say: "If 7 per cent is the difference between being a viable mine

and a not viable mine, isn't it better to leave it in the ground until

the people can get something out of it?" That's a more or less

written-down quote. Does he know the unemployment rate in this

province, Mr. Chairman? Is it better to leave that ore in the ground

and leave those people unemployed?

MR. BARRETT: Oh, nonsense!

MR. GIBSON: Because that's the other side of the question.

Any time you render something uneconomic by putting a flat-rate royalty

on it, then you render those jobs not there too.

[ Page 3359 ]

MR. BARRETT: What about the capital costs, the schools, the roads, the infrastructure costs? We'll be more in debt in the long run.

MR. CHAIRMAN: Order, please!

MR. GIBSON: That's what I wrote down, Mr. Chairman, the

question of the capital costs of infrastructure, schools, and roads and

that kind of thing. Obviously that kind of social infrastructure cost

should not be incurred unless the Crown can see in the first place that

it's going to do more good for the people than not doing it at all.

That's obvious. That's an obvious equation.

MR. BARRETT: They're eliminating the production leases. They can go ahead and do anything they want. Don't you read the legislation?

MR. CHAIRMAN: Hon. members, order, please! Order, please! Let

me also remind the Leader of the Opposition that we listened very

carefully to the Leader of the Opposition while he made his speech.

Perhaps he could afford the same courtesy to the member who now has the

floor.

MR. GIBSON: Mr. Chairman, I don't mind. I appreciate that I

am provoking the Leader of the Opposition mightily and I'm sorry about

that. But on this particular issue of mineral taxation, we have a

slight disagreement and I don't know any way of avoiding it.

Now another thing the Leader of the Opposition said is: "Why not pay

7 per cent on this commodity that you take out of the ground, because

you pay it on everything else?"

AN HON. MEMBER: Right on!

MR. GIBSON: Because, Mr. Chairman, that's not the best way to

get the most out of this resource. Did the previous government back in

the days when there was 5 per cent sales tax charge 5 per cent on

trees? No. Did they charge 5 per cent on carrots? No. Did they charge 5

per cent on fish? No. That's a funny thing.

MR. D.G. COCKE (New Westminster): We charged stumpage, my friend.

MR. GIBSON: Stumpage is not a royalty. Stumpage is a profit-variable levy.

Interjection.

MR. GIBSON: No. No, this is a flat-rate royalty. This is not

a profit-variable levy. Stumpage, as a matter of fact, is the

theoretically ideal way of taxing mineral deposits because, first of

all, you allow the company's rate of return on ordinary investment in

ordinary times and then you say when there's an extraordinary time that

we take a very large chunk. That's exactly what stumpage is. The former

Minister of Finance knows that. That's a good way of extracting

economic rents.

MR. BARRETT: Why does it have to be the only outside millionaire that's giving this argument?

Interjections.

MR. GIBSON: This is attack.

AN HON. MEMBER: Count your own.

MR. GIBSON: Mr. Chairman, the fact of the matter is that the

7 per cent flat rate, or 5 per cent, or whatever you might call it, is

not the best way of doing it.

Let me try and illustrate this. Let's say with trees...trees are easier to visualize. Let's say there's a stand of trees...

AN HON. MEMBER: Renewable.

MR. GIBSON: Let's say there's a stand of.... It's the same

thing. It's a stand of trees, see, and they're all mixed up and there's

1,000 trees there and there's 100 trees that are worth $ 1.10 and 100

worth $ 1.20 and so on up to $2. Now it costs you $1.05 per tree to log

these trees and the logger comes along and he takes out all the trees

because he makes a profit on every one of them. Now all of a sudden you

put a royalty on these trees, a flat rate royalty, not a profit tax but

a flat rate royalty — 10 cents a tree it's going to cost to take them

out, All of a sudden the logger isn't going to take out those $1.10

trees anymore, is he? Because his basic costs are $1.05 plus 10 cents.

So it's $1.15 to take out a tree.

MR. BARRETT: Trees are renewable; once cut, they grow again.

MR. GIBSON: Well I'm just trying to help you visualize, Dave.

MR. CHAIRMAN: ' Order, please! Hon. Members, let's keep order

in debate in this House. I remind the Leader of the Opposition for the

second time....

MR. BARRETT: Well, he's wrong.

MR. CHAIRMAN: The rules do not provide right or wrong. They

only provide for orderly debate, Hon. Member, and I remind you now for

the third time, please do not interrupt the member who has the

[ Page 3360 ]

floor. Would the member for North Vancouver-Capilano please continue?

MR. GIBSON: That was going quite well, I think. It doesn't

bother me. I'm just trying to explain that by putting on that flat-rate

royalty in that particular situation of a graduated fall-off in the

value of the resource, in that case you lost 10 per cent of the

production, because it's not worth taking out after you put that

royalty on. So that's what a royalty does and that's why a profit tax

is the right way to do it.

Now the first member for Vancouver Centre (Mr. Lauk) seemed to be

recommending in his talk some kind of a turnover tax or a value-added

tax, and you could look at that, too, if you wanted.

But, again, he seemed to be arguing against corporation taxes,

because he seemed to be saying that there's no way you can collect

them. Well, then, how is it, Mr. Chairman, that billions of dollars

worth of corporation taxes are paid every year in this country?

MR. LEA: It's going down every year.

MR. GIBSON: It's because, in fact, corporation taxes are

collected. This is a levy on what is left after expenses are paid. Let

me remind you, those expenses that are paid, they are payments, first

of all, to the people who work in the mines or the exploration areas.

Secondly, they are payments to people who are suppliers to those

companies, generally speaking B.C. operations. That's where most of

those payments go. They all pay taxes, too. So don't worry about that

money escaping taxes. The former Minister of Finance (Mr. Barrett)

knows how things go round and round in our economy, because he used to

take a little cutoff every time it went around and got a little more

sales tax

AN HON. MEMBER: He wanted the whole thing.

MR. GIBSON: He knows how it goes around.

Interjections.

MR. GIBSON: Mr. Chairman, the charge made by the first member

for Vancouver Centre (Mr. Lauk) that this proposal would accelerate

high-grading is not correct, because the way a mine will go after its

deposit, in any event, is one that maximizes cash flow in the earlier

years. This is only natural. This is a good thing for our society. You

want to maximize the rate of return on your capital as long as you're

not following a wasteful mining pattern. The presence of a royalty, in

fact, does encourage high-grading because of the explanation I made,

getting back to the analogy about the trees. It raises your cut-off

grade and therefore causes you to leave a certain amount of ore in the

ground.

Mr. Chairman, the effective rate of this particular

section will

vary over the life of the mine. It will be a very minimum rate during

the years when some capital cost allowance is available, and that

doesn't bother me at all because mining is a risky business. The faster

that capital can be recovered in a mining operation, the faster it can

be ploughed into some other mining operation in this province or in

this country. Then once the capital is recovered, the taxation rate

goes up very quickly to the full level of something in excess of 56 per

cent.

Indeed, Mr. Chairman, that's more than the average manufacturing

outfit. Generally speaking, there is a higher risk on the mining side

than the manufacturing side. I am a little bit disappointed that the

minister put the rate that high. Nevertheless I will support this

particular section. But I ask him for future years to pursue that

theoretical way of more sensitively capturing the economic rent, which

is to say a look at the stumpage approach in the mining field. It's not

a problem that is going to come up in the next year or two gauging by

the kinds of prices that we have in most of our metals at least. It's

even unlikely in the coal field after the last couple of years we've

had which were years of extraordinary profits. But now the capital

costs are up so high that the profits aren't going to be extraordinary

there either,

My opinion is that the elimination of the flat-rate royalty is going

to be of inestimable value to the mining industry in this province. The

elimination of the super-royalty which is done under a different

section is really not a matter of consequence, because once you have a

basic tax rate of over 56 per cent, you've done as well as the

super-royalty in any case. The return to the public treasury is going

to be about as good as it would have been under the old system in terms

of direct returns, and it's going to be much better in terms of jobs,

in terms of income tax paid, in terms of sales tax paid, municipal tax

paid and all the direct and indirect contributions to our economy.

Mr. Chairman, we have an unemployment rate in this province of

almost 10 per cent. Our unemployment rate in the month of May was

higher than in any May since 1954 and I believe any May since the great

Depression, although I haven't checked the 10 years before that

specifically. We are in a very serious position in this province. We

need to do the things that are necessary to create the jobs. They have

to be our first concern, and if a change in our taxation system, back

to what is common sense in any case, can help to do that, then I say

amen.

I will say the major obstacle standing now in the face of

revitalization of employment in the mining industry in British Columbia

is the nonsensical, dogmatic, continuing, stupid approach of the New

Democratic Party which is continuing to terrify

[ Page 3361 ]

people in the mining industry in this province and I fear will do so

for years to come. I beg them, as I begged them before their last

convention, to take it up again at your next convention, hon. members.

Look at it seriously and, hopefully, come to some kind of accommodation

between your dogma and the facts of life in terms of how we create

employment and productivity for our province. That has to be the basic

concern of all of us and I believe that this bill is a step forward in

that direction.

MR. KING: I just want to make a few fairly brief comments

about this bill. I think it's a bill that points out the basic

differences between our party and all of those others in the

Legislature. Perhaps it points up the reason that members of all the

other parties find it so comfortable and convenient to cross party

lines and to toddle back and forth from one party to the next with no

compunction and with no problem in terms of rationalizing their

principles, because the government of the day, which proposed this bill

and this particular section, the Liberal Party and the Conservative

Party, are all in accord.

Where we differ and where we depart in terms of approach to

royalties, in terms of approach to the wise utilization of resources in

this province, is that we believe basically that if the viability of

the mining industry is so narrow that it requires that the commodity,

the resource, be virtually given away, then it's not in the public

interest to develop that resource now.

We believe that there's another question to be asked, aside from

the profitability to the company which is involved in the development.

As I stated on another occasion, we do not object in any way to a

reasonable profit margin for those industries. But we say they are

developing our resource, a resource which belongs to all of the people

of the province, and surely the public who own the resource are

entitled to a fair degree of profitability also, a fair return on a

resource that is not replaceable.

Where we depart is clearly spelled out by the Liberal leader's (Mr.

Gibson'

s) comments, when he directed his whole attention to the

imposition of a tax which guarantees that company, that corporation, an

adequate level — of profitability by his criteria. We believe that that

is not the only consideration. The second consideration should be — or

perhaps the first consideration should be — whether or not it is

profitable for the people at this time to develop and exploit that

irreplaceable resource.

We suggest that when we have to cut the level of return to the

people of the province to the degree that this bill and this

section

particularly trims that return, then we believe the benefit to the

public is negligible.

The discussion about employment opportunity generated through mining

activity is a bit of a red herring in this day and age. The employment

opportunity from mining is very negligible and very low in British

Columbia, and it's being reduced constantly by new technology which

allows industry to strip and to mine with modern, sophisticated

machinery that used to require manpower but no longer does.

Studies that have been done show an ever-decreasing employment

factor in the mining industry in the province of British Columbia.

Therefore it becomes more and more essential that if we are going to

allow our resources to be exploited, then there has to be good and

reasonable return to the public treasury to assist in the financing of

all the social programmes government has an obligation to provide and

extend to the people of the province.

I just wanted to emphasize that yes, this is the difference between

our approach and that of the other parties in this House, in this

province, and in this nation. We are all essentially the same anyway,

Mr. Chairman. We find the Conservatives departing to join the ranks of

the Social Credit coalition. We find three former Liberals making the

same journey. I think at the outset of this session, Mr. Chairman, the

Liberal leader (Mr. Gibson) said the road to Damascus lies through this

Legislature. I'm beginning to think, by looking at the Liberals

standing in the cabinet, that the road to Damascus lies through the

Liberal Party rather than just through the Legislature, because they've

done very well in that new coalition group.

Mr. Chairman, the first member for Vancouver Centre (Mr. Lauk)

presented the case very well. We think it's inequitable, We think it's

unfair. We think that it's absolutely inadequate that we should grant

these special concessions to the mining industry which allows them the

many opportunities that are available to such corporations to write

off, through deflation allowance, through depreciation, through various

other cost factors, the real net profit which they enjoy at the end of

the year, and simply tax them on the basis of that net profit.

[Mr. Rogers in the chair.]

No other individual in this province — and certainly the

manufacturing sector does not — enjoys that kind of advantage. They

must, in the first place, buy their commodity before they go into

production. They must buy their commodity and they must exist on the

margin of profit which lies between the cost of purchasing the

commodity and the cost of refining it and retailing it. What we are

doing is extending to the mining industry virtually free resources and

taxing them on a net profit, which is in no way realistic in terms of a

measurement of their income from the development.

So, Mr. Chairman, I just want to say that I

[ Page 3362 ]

recognize and I certainly say "vive la difference" between the

Liberal approach and the coalition approach. We understand clearly what

the issue is. We do not, under any circumstances, support this giveaway

to the mining industry. It once again clearly identifies on

philosophical grounds the basic, fundamental difference which exists

between the government of today and the official opposition in this

House.

Nothing is more fundamental to the economic and social objectives of

this province than wise management of our resources. Mr. Chairman,

despite the Attorney-General's (Hon. Mr. Gardom'

s) impatience to get

this gift to the mining industry through, I suggest that this is

something that cannot be overemphasized, because wise resource

management lies at the very heart of the difference in philosophy

between our party and the government. Certainly it's one that should be

understood, and I intend to make it understood, by all the people of

this province.

HON. MR. WATERLAND: Mr. Chairman, carrying on with second

reading of

section 2 — it seems like second reading. The first member

for Vancouver Centre (Mr. Lauk) spoke of all the mines that were opened

up during the term of the NDP government. I know of none. Gibraltar

Mines opened during that period, because they had committed to

construction and were almost ready for production when the government

changed. There may have been the odd very small short-term operation

that came and went during that period. In spite of the fact that during

the time that that government took over there were in the order of 20

proven ore bodies in this province, none of those mines committed to

production.

MR. KING: So what?

HON. MR. WATERLAND: None of the mines that have been

committed to production in the last 15 years in British Columbia, which

is the major part of our mining industry today would have, or could

have, gone into production under the terms of the royalty legislation

brought down by that government.

The first member for Vancouver Centre (Mr. Lauk) remarks about

"profits escaping the province." This is one of the big complaints that

people in the mining industry have about this legislation, because we

have made it impossible for this to happen. We're taxing each mine

separately so that they cannot pool their incomes with other areas. We

are preventing them from selling their concentrates to associated

companies at less-than-arm's-length deals. We can deem prices so that

the province cannot be escaped in that manner.

The member also mentioned the fact that Bethlehem Copper...all they

had to do to find their mine was stake the claim. That member, I'm

sure, Mr. Chairman, told me that soon after he became the Minister of

Mines and he took a five-day course in mining at the board-room level

and thereafter knew all about the mining industry. A brilliant man

indeed! Five days and he knows all about the mining industry. I wonder

if that man's ever worn a hardhat.

Interjections.

HON. MR. WATERLAND: I was raised in the bush. (Laughter.)

Mr. Chairman, the mining industry has been paying a basic royalty of

5 per cent. We have been working in the last year to a copper price in

the order of 60 cents a pound. It costs the mining industry about 55

cents a pound these days to produce copper. A 5 per cent royalty on 60

cents amounts to 30 or 40 per cent of the profit margin which they have

to work on. That is just the beginning, They must also pay federal tax

on that amount. They must pay provincial mining taxes and provincial

corporate taxes.

Mr. Chairman, I mentioned at the second reading at which the members

opposite did not attend, although they were cordially invited, that a

study was made of 70 different real mines in Canada. A comparison was

made — the net revenue to government over the life of these mines under

profit-based tax and under a royalty tax system such as we had in

British Columbia, and at varying rates of taxation. It was proven that

the maximum return to the people for their resource is gained by a

profit-based tax. More of the resource is used and the resource lasts

longer because ore is not converted to waste by a royalty.

Mr. Chairman, many other points were raised here by the new member

for Vancouver East, and I know that the people cannot possibly believe

the nonsensical way of reasoning that they have brought forward here

today because it just does not make sense. It's been especially proven

over the last three years in British Columbia that the resource of the

people of B.C. will not be developed and will benefit no one if it

stays in the ground,

Section 2 as amended approved on the following division:

YEAS — 33

McCarthy

Gardom

Bennett

Wolfe

McGeer

Phillips

Curtis

Calder

Shelford

Chabot

Jordan

Schroeder

Bawlf

Bawtree

Fraser

Davis

McClelland

Williams

Waterland

Mair

Nielsen

[ Page 3363 ]

Vander Zalm

Davidson

Haddad

Hewitt

Kahl

Kerster

Lloyd

Loewen

Mussallem

Strongman

Veitch

Gibson

NAYS — 14

Barrett

King

Stupich

Dailly

Cocke

Lea

Lauk

Levi

Skelly

D'Arcy

Barnes

Brown

Barber

Wallace, B.B.

Mr. Lauk requests that leave be asked to record the division in the Journals of the House.

section 3.

HON. MR. WATERLAND: Mr. Chairman, I move the amendment to

section 3 standing under my name on the order paper. (See appendix.)

Amendment approved.

Section 3 as amended approved.

Section 4 approved.

section 5.

HON. MR. WATERLAND: Mr. Chairman, I move the seven amendments to

section 5 standing under my name on the order paper. (See appendix.)

Amendments approved.

Section 5 as amended approved.

section 6.

HON. MR. WATERLAND: Mr. Chairman, I move the amendment to

section 6 standing under my name on the order paper. (See appendix.)

Amendment approved.

Section 6 as amended approved.

Sections 7 to 20 inclusive approved.

section 21.

HON. MR. WATERLAND: I move the amendment to

section 21 standing under my name on the order paper. (See appendix.)

Amendment approved.

Section 21 as amended approved.

Sections 22 to 53 inclusive approved.

Title approved.

HON. MR. WATERLAND: Mr. Chairman, I move that the committee rise and report the bill complete with amendments.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 57, Mineral Resources Tax Act, reported complete with amendment.

DEPUTY SPEAKER: When shall the bill be considered as reported?

HON. MR. WATERLAND: With leave of the House, now, Mr. Speaker.

Leave granted.

DEPUTY SPEAKER: When shall the bill be read a third time?

HON. MR. WATERLAND: With leave of the House now, Mr. Speaker.

Leave granted.

Bill 57, Mineral Resources Tax Act, read a third time and passed on the following division:

YEAS — 33

McCarthy

Gardom

Bennett

Wolfe

McGeer

Phillips

Curtis

Calder

Shelford

Chabot

Jordan

Bawlf

Bawtree

Fraser

Davis

McClelland

Williams

Waterland

Mair

Nielsen

Vander Zalm

Davidson

Haddad

Hewitt

Kahl

Kerster

Lloyd

Rogers

Mussallem

Loewen

Strongman

Veitch

Gibson

NAYS — 12

Barrett

King

Dailly

Cocke

Lea

Lauk

Levi

Skelly

Barnes

Brown

Barber

Wallace, B.B.

Division ordered to be recorded in the Journals of

[ Page 3364 ]

the House.

MR. LEA: Mr. Speaker, you may have thought you fooled us, but

you didn't put a hat over your left breast when you passed that bill.

(Laughter.)

DEPUTY SPEAKER: The bill is legal.

MR. LEA: Okay.

AN HON. MEMBER: You don't know left from right.

HON. MRS. McCARTHY: Mr. Speaker, committee on Bill 30.

MINERAL AMENDMENT ACT, 1976

The House in committee on Bill 30; Mr. Schroeder in the chair.

Sections 1 to 36 inclusive approved.

Title approved.

HON. MR. WATERLAND: Mr. Chairman, I move the committee rise and report the bill complete without amendment.

AN HON. MEMBER: Well done, Tom. Good speech.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 30, Mineral Amendment Act, 1976, reported complete without amendment, read a third time and passed.

HON. MRS. McCARTHY: Mr. Speaker, committee on Bill 28.

GUARANTEED AVAILABLE

INCOME FOR NEED ACT

The House in committee on Bill 28; Mr. Schroeder in the chair.

section 1.

MR. N. LEVI (Vancouver-Burrard): Mr. Chairman, I'm being

obstructed by the first member for Vancouver Centre. I just want to

make a couple of brief comments. One of them relates to the fact — and

I think it should go into the record — that second reading on this bill

was completed at midnight. The opposition were not here, but I was

interested in the....

MR. COCKE: Behind closed doors.

MR. LEVI: Yes, behind closed doors. I was interested that

only one member of the government got up to speak on it. He apparently

had some good things to say about the previous government. He also had

something to say about the $100 million overrun. I would like to say

now that the $100 million overrun amounted to putting money into

people's pockets. We cannot be accused of putting our hands into the

taxpayers' pockets to take out $147 million of unnecessary money.

In respect to the bill itself, this was to be — as I understood when

it was introduced, Mr. Speaker — the shining jewel in the crown of

social policy for the government, and it's coming very much at the end.

It should have been brought on a lot earlier so we would have been able

to have a good go at this thing, because there are some aspects of this

bill which, from the point of view of the public, become somewhat

misleading. We're faced with a piece of legislation which is not passed

and yet we're faced with a leaflet which is being put out by the

department — and it seems to be full of inaccuracies — giving out

information to the public which has no basis in fact. I would quote,

Mr. Chairman, from the one

section that says "60 to 64." This is in

the leaflet that's being put out by the minister.

"Similar benefits to those 65 years and over are also available on application."

But this is not the case; this is not the case at all. It's not the case

that benefits for 55s to 59s are going to be the same as those 65 and over.

Mr. Chairman, the minister keeps insisting that somehow the

opposition is creating a lot of trouble out there by telling the people

the truth. Well, I would hope that when we get to other sections in

this bill that the minister will be able to tell us very specifically

what people are going to get.

We asked during second reading: are there going to be any

regulations made available? They haven't been brought down. There's

been ample time to bring down regulations. After all, the only

regulations you have to bring down are to set the levels of pay,

because at the moment there is a difference in the levels of pay; it's

quite specific. We do not have the regulations that, presumably, once

the House has adjourned until the fall session, will come down fairly

quickly.

Mr. Chairman, it's GAIN legislation, but the way it's set up it goes

all the way back to 1972 on an asset-tested programme. And it's really

"Gainsburger" legislation; it's not GAIN legislation. You are not going

to keep people off a programme they have every entitlement to be on if

you were to follow the Mincome programme, which you're not doing. You

[ Page 3365 ]

have instituted an asset test, and by instituting an asset test you

will leave out, under the 55 to 59 age group, approximately 15,000

people who should qualify for it if, as you have said, it's the same as

Mincome.

If it was the same as Mincome, we have in the province almost 20,000

people who are making less money than the people who are on Mincome.

Yet the minister has said that only 5,000 people are going to get on

it. Of course, only 5,000 people will get on because there will be an

asset test. They will ask people to spend all of their assets down to

the qualifying asset level and then they can qualify. That was not the

style of Mincome. We looked at people's incomes; we looked at what kind

of income they derived from what assets they had, and they came on if

they qualified.

We did not expect that people would penurize themselves down to the

last nickel before they were qualified. And this is what this

legislation does, because it's based very clearly on the concept that

every programme that government is going to introduce is going to be

cost-shareable or else. Well, of course, if it's cost-shareable we're

back to 1972.

There's a real irony, Mr. Chairman, that we just finished Bill 57,

which was a giveaway bill. Well, I think this one can be characterized

as a take-away bill because fewer people in the future are going to

qualify for this programme, and this is the great tragedy because the

previous government set the standards for income maintenance for senior

citizens in this country — not the previous Social Credit government,

as in the kind of garbage the party like to trot out, but the previous

government. The previous government led the way in terms of getting

other provinces to bring in Mincome-type legislation, but they still

did not go the complete income-test level.

One has to be committed, in terms of the senior citizens in this

province, that the taxpayers of British Columbia are going to have to

carry the load for income support for people over the age of 65, or

over the age of 60, or over the age of 55. It's on the backs of the

taxpayers of this province if we can not get the federal government to

be involved in the sharing. It would be nice if they would, but they

are not prepared to do that. But that does not take away from the need

that people over the age of 60, or over the age of 65, and 55 to 59,

have in terms of income support. If they're no longer part of the work

force they simply have to have that kind of assistance.

If you're going to say that if we can't cost-share the programme

they won't get that kind of assistance, then you've taken this province

back four years into the Dark Ages. You've taken us back anyway because

you've rewritten history; you've taken away Mincome and you're going to

call it GAIN.

Mr. Chairman, specifically in the first section, which deals with

the kind of income assistance that will be available to the sick and

the elderly, perhaps the minister will explain to us very carefully

what as income assistance has he got in mind for people over the age of

55, over the age of 60 and over the age of 65. Because by this bill,

certainly the total impact of what's going to happen by this

legislation is that all people in this province, whether they are on

what used to be the Mincome programme or the handicapped programme or

the social assistance programme, are now going to become welfare

recipients. That's simply what is going to happen; they're going to

become welfare recipients.

I'm going to ask the minister, under this section, to tell us what

levels of income people who are the sick and who are the elderly can

expect in terms of the programme if the legislation is passed. Is each

category of person going to get the same money, or are the people over

65 going to get a different amount, the 60 to 64 get a different

amount, the 55 to 59 a different amount?

What levels, Mr. Minister, through you, Mr. Chairman, are people going to get in terms of this legislation?

HON. W.N. VANDER ZALM (Minister of Human Resources): Mr.

Chairman, I think I should briefly reply to the questions raised by the

member. The member commenced his comments by saying that the $100

million overrun which has been mentioned so often in the Legislature

and elsewhere was putting money in people's pockets. Certainly I don't

argue with this in part. But you can't, as a government, put money in

people's pockets without taking it out of someone else's pocket first.

We don't have a money tree. We can't print it or manufacture it. It

must come from somewhere.

We too this year certainly have shown that we care for people by

introducing the GAIN legislation and also by backing it up with

additional funds — the largest budget ever in the area of Human

Resources. We're telling the people that certainly this money comes

from you but it'll be going back to areas of need. What concerns me a

little — and I'm sure the hon. member won't take offence if I point it

out to him — is that each and every time he stands up — and he has a

good many times, and so he should — speaking to matters of human

resources he begins by Mincome, Mincome 60 to 64. That's all that's

ever mentioned.

I'm sure, Mr. Member, if you were to go back over the records you'd

see that every and each of your references has started out this way and

has centred around this group of people. I think there are an equal

number of people in that age category that take exception to the fact

that you appear to single them out as the only and one category of

people in need.

Mr. Member, I see a far greater need beyond that

[ Page 3366 ]

one single age category. I recognize there's a need in that age

category but it isn't limited. It doesn't stop there. When I go back

over the last two years and see that people in need, single-parent

families, individuals in families, haven't seen any increase at all —

no increase in their welfare payments, in their benefits.... Yet

repeatedly we keep hearing about Mincome, Mincome, 60 to 64, and we

tend to put aside these other areas. I say that's wrong. I'm sure that

the people age 60 to 64 will agree with that.

There are other people in need, and we must give fair consideration

to all those people. As long as I'm minister I intend to give fair

consideration to each and every category, to speak out not only for

that one category, but all the categories. That's what we intend to do

in this legislation.

When you say that an asset test shouldn't be necessary and the

people of British Columbia should be prepared to bear the burden on

their backs in providing for those between the ages of 60 to 64 that's

fine, except I think it should be recognized also that people are

prepared to bear only so much and can afford to bear only so much.

There comes a time when the back will hold no more. I think we must

recognize that, and having recognized that we should then say: "How

much do we have, how much can the people pay and where do we provide?

Do we see and recognize all the needs and do we then make the moneys

available in those areas of need?"

If in doing this we can devise a way by which we can get back the

tax dollars that we have, in bearing the burden, paid to Ottawa, I say

all the better. If we can get back millions of dollars from Ottawa to

help people in need in British Columbia, so we should. I'm sure the

average British Columbian doesn't mind paying, as you say, for those

between the age of 60 to 64, 65. On the other hand I'm sure these same

British Columbians are saying: "Look, there are as many people in that

age category that have such assets that they may somehow be able to

provide for themselves far better than that single-parent family down

the street where the woman must stay home with three kiddies because

her husband took off some place and she's having to provide for

herself."

When we consider need let's look at all need and let's deal with all

people fairly and be totally honest and above board and not use one

particular age category politically time and time again.

MR. G.S. WALLACE (Oak Bay): Mr. Chairman, I presume that

under

section 1 we have a fair amount of latitude to discuss the whole

ramifications of this bill, but I don't intend to do that, you'll be

relieved to hear. I very much welcome the minister's comments in

response to the member for Vancouver-Burrard (Mr. Levi) because this is

a very new and untested piece of legislation that depends a great deal

on regulations. There are numerous sections of the bill which make it

very plain that until we have the regulations we will not be in a

position fairly to judge whether the minister's goal as he just stated

it a moment ago is being fulfilled. I couldn't agree more with him that

it is a question of trying to provide fair and reasonable assistance to

all categories in our society.

Not too long ago the former Minister of Labour (Mr. King) went even

further and pointed out that there are so many types of need which are

met through different forms of legislation, whether it's medicare or

workers' compensation or various other kinds of coverage and, as the

minister pointed out, sooner or later the money to provide these

benefits comes out of tax revenue raised by one means or another, and

that the key in a rapidly changing society is to have flexible

programmes with varying techniques which not only take cognizance of

the changing situations that apply to families and parents and

parentless children and so on but also, as this bill does, relate some

of the benefits to consumer price indices and such other techniques to

relate payments to the changing value of the dollar.

I think it has been very clearly pointed out in this session of the

Legislature that the whole federal-provincial situation of fund-sharing

is at a very sensitive stage, and that the next five-year period from

1977 to 1982 is to be negotiated with the federal government, not only

in relation to the Canada Assistance Plan but also in relation to

medicare and hospital costs and post-secondary education and so on.

My feeling on this bill, Mr. Chairman, is that it does appear to

offer the flexibility which I think is all-essential. I am very much

reassured in the course of this session and by the minister's comments

today that he does, indeed, set out, at least in the introduction of

this bill, by trying to hit a balance between providing need where it

is obviously demonstrated that need exists but, at the same time,

remain aware of the fact that the needs of society change and the needs

of families change and also that the responsibility of the government

always is to ensure that revenue, which has to be raised from the

taxpayer in the first place, is spent in a responsible and balanced

manner and responsibly disbursed to recipients.

I hope that by the fall session the minister will, perhaps, be able

to report back with any amendments that do seem to be appropriate in

the light of the ineffectiveness or lack of success of some of the

sections of the bill. It is a pity, in my view, that so much has to be

left to regulation. I am told by my advisers that this isn't very

different from what the practice has been in previous governments, but

it makes it very difficult to debate a bill

section by

section where

the word "regulation" is mentioned in almost every section.

[ Page 3367 ]

With these reservations I feel that the responsible thing to do is

give the minister and his department a chance to implement this

legislation. If the kind of overall goal that he's announced this

afternoon is even met I would say 80 per cent of the way, then we will

certainly continue to support this legislation.

MRS. B.B. WALLACE (Cowichan-Malahat): I find it very

difficult to discuss this bill

section by

section for some of the

reasons that have been outlined before. It is a very vague piece of

legislation. We don't really know where it's going. I hoped when the

second member for Vancouver-Burrard (Mr. Levi) asked him specific

questions about amounts and how it was really going to function that we

might have had an answer from the minister. Instead, we had a very

stirring speech with some very fine philosophy but, really, no answers

to the specifics that are involved here.

Because of this, while the minister is indicating some very fine

ideals, we can only judge according to what has been happening in the

past month or so. While the regulations are not set out and while the

bill is not yet

an Act, we have had some changes in the approach that

is being taken to things like Mincome. I would point out the asset test

which is in fact now being applied.

It is a difference in attitude. It's a change in approach. It is

now, as it says, for need, and that need is a much narrower terminology

because it relates to the assets you may have, regardless of whether or

not there is any return you are gaining from those. Before it was

simply on a statement of income. Maybe it was more on an ideology of

trust that people would declare the amount of income they had. I said

this to the minister before and I repeat it: I think that in 99 cases

out of 100 you get a truthful answer.

I have had people in my office very concerned because maybe now

there has been a change. They have heard there's been a change and

maybe they shouldn't cash their cheques. All I can do is send them to

the local worker and tell them to ask the local worker what those

regulations are now. We just don't know, Mr. Minister. When it is as

wide open as this is, it is very difficult to discuss it clause by

clause and

section by section.

The people who are in receipt of various kinds of allowances are

concerned about forthcoming changes. They are concerned about the

position they are going to be in. They are concerned about what they

can do so that they will still qualify. This is making people look for

loopholes almost.

You know, this is the thing that is coming across my desk, Mr.

Minister, and this concerns me because I don't like to see this. I wish

that you could indicate to us, for example, if a wife is 55 and if her

husband is 65, what is she entitled to if she has no income, if her

husband is 65 and in receipt of some form of guaranteed annual income

supplement or some form of provincial assistance but perhaps has some

assets or some income that reduces that by a certain amount. Perhaps he

doesn't. Perhaps the wife has a few dollars in the bank with a little

bit of interest.

This is the thing that people are asking me, Mr. Minister. This is

the thing that we don't know, and until these regulations are drafted,

and until there is something set up, it is very difficult to have an

intelligent debate about this bill, Mr. Minister. If you have any

answers, I, for one, would certainly appreciate having this kind of

information now in third reading.

MS. R. BROWN (Vancouver-Burrard): I would certainly like to

add my remarks to those made by the other members while trying to

debate the bill without the regulations.

I ask the minister specifically: where are these regulations going

to be ready? Is anyone working on the regulations now? The bill was

brought down a number of weeks ago and there certainly has been ample

time. There's been more than six months that you've been the minister.

I think it has been six or seven months. Surely that's long enough to

work out....

Interjection.

MS. BROWN: I'm sorry, I didn't hear you.

HON. H.A. CURTIS (Minister of Municipal Affairs): Six months and nine days.

MS. BROWN: Six months and nine days, the Minister of Housing

tells me. Surely that's long enough to have worked out the regulations

and given us some indication as to just what kind of rates you are

talking about.

You know, I think it's a very interesting thing for the minister to

stand up and speak about the improvement in rates and the increases

that are going to be given to single-parent families and other groups,

but without actually using any figures.

By the time the regulations come down, this House will have

adjourned or prorogued or whatever, and it will be too late for us as

an opposition to make our position known on those rates, Mr. Minister.

So if you have any figures I think this would be as good a time as any

for you to share them with us.

What I want to say specifically about the bill under this

section 1

has to do with the whole business of means testing. As long as the bill

demands that what you get in terms of your payment under this

legislation is tied to your filling out a form — and I have one of the

means test forms that is presently being used by your department — then

we have to oppose this piece of legislation, because we believe

[ Page 3368 ]

that there is something basically humiliating and degrading about having to take a means test. We really do believe that.

Specifically, when the second member for Vancouver-Burrard (Mr.

Levi) talks about Mincome, you say you're tired of hearing about

Mincome, but certainly one of the greatest things about Mincome is that

it was not tied to a person's means or to their assets. If someone got

Mincome who also had a large income, they ended up paying it back in

income tax anyway. But what it meant was that people between the ages

of 60 and 65 did not have to sit down and fill out these humiliating

forms in terms of what their assets were and their means or whatever.

I want to talk specifically about one senior citizen, a woman, who

said to me that she has in her savings money put aside to pay for her

funeral. Now for some reason or another this is very important to her,

that she be able to pay for her own funeral. And over the years that's

all that she'd saved, $1,000 to pay for her funeral, and she

absolutely refuses to apply for any form of support if she's going to

have to declare this $1,000 which she has stashed away somewhere to pay

for her funeral.

If she's called upon to spend it before she's eligible for her

pension, she's just going to go without. You know, that is her attitude

— all of her life she's saved absolutely nothing but her funeral is

going to be paid for. She does not want to be buried by the state.

Now along comes a piece of legislation — and we really don't know

what it is because we haven't got the regulations — in which she's

going to have to fill out a form, you know, which asks questions about

savings and one thing and another. If she has to go through that, she's

made it absolutely clear that she's then going to have to survive

without her pension.

Now I'm sorry that we bragged so much about Mincome, but the fact of

the matter is that under the previous Social Credit government

everybody who was poor was treated badly, but senior citizens were

treated worse than anyone else. They really were, and that is the

reason why our very first commitment when we became the government was

to introduce a programme that righted that particular wrong, and that's

the reason why we said everyone who has served, lived, worked and

contributed to any part of this country, is entitled to some kind of

dignity in their old age.

We guaranteed that — that they wouldn't have to go without, that the

phenomenon of old people in this province eating cat food and dog food

would come to an end.

If it upsets you that we continually brag about Mincome, that's too

bad, because in fact it was a disgraceful situation in this province as

far as old people were concerned. We did make a commitment. We did live

up to that commitment, and that programme was called Mincome. We are

very distressed that through this legislation you are now beginning to

reverse things again and we are going to go back to the system where

there are going to be some old people in this province, some people

between the ages of 60 and 64 or whatever, who are going to feel that

rather than fill out one of these forms, they are prepared to go

without, they're going to be prepared to start eating cat food and dog

food again.

You made a brilliant speech about where will the money come from.

Five minutes ago we passed a piece of legislation which allowed the

mining corporations to opt out of paying any decent kind of share —

that's where the money comes from. When the resource industries and

corporations pay their fair share of taxes, there is enough money:

there is enough money to see to it that single-parent families have a

decent income; there is enough money to ensure that senior citizens in

this province can spend their years in dignity and without want. But

when your government introduces legislation that allows them to not pay

their fair share, then of course you are right, there isn't enough

money, and in fact what we have is the single-parent mothers and senior

citizens subsidizing the mining companies and the corporations. That is

precisely what is going on.

Mr. Chairman, what I particularly want to hear from the minister is

whether the regulations are nearly ready. Can he give us some hard,

cold figures as to what the rates are going to be and also deal with

some of these

definitions? He's given himself a lot of leeway in terms

of what is to be covered by regulations. We'd like to know something

about those things.

HON. MR. VANDER ZALM: Mr. Chairman, first I should mention

that I think the hon. member should be aware of the fact that a mine

that's closed doesn't pay taxes; a mill that's shut doesn't pay taxes.

So when you make reference to the previous bill, please do not do so

without us both being able to debate that particular issue separately.

I don't think we should get into that right now.

Also, I think it should be noted that a piece of legislation is

certainly there as a statute on the books for all to see and for

members to be aware of, so we can inform the public as to what exactly

might be available to them in times of need in this particular

instance. We have taken three Acts and combined them into one. We have

done away with two Acts which were completely redundant. If the member

isn't already aware, I would ask that she check with any member in the

administration if she won't take my word for it and she'll find out

that up until now, last year or the year before, it was no different —

Mincome was regulated by regulation. It was not a pension; it was never

a pension. It was a social assistance and it was regulated by

regulation. If you

[ Page 3369 ]

won't take my word for it, check this out and you'll find this is so.

MR. LEVI: That's nonsense! That's absolute nonsense!

HON. MR. VANDER ZALM: That's how it was. Frankly, I should

also point out that there was a similar, identical supplement available

in 1972, 1971 and 1970. It was a supplement over and above the pension

and the GIS.

MS. BROWN: Do you know what you're talking about? We don't, because we haven't seen the regulations.

MR. CHAIRMAN: Order, please!

HON. MR. VANDER ZALM: I must correct these wrongs you

mentioned in your address, Hon. Member, because otherwise it will be

on the books without correction. I won't go into detail, but again you

made mention of $1,000 that the lady was concerned about because this

was money she wished to keep for her funeral. These moneys are exempted

in the asset test. So please, again, before you advise the lady, check

these regulations.

MR. LEVI: Mr. Chairman, just to put the record straight, the

minister keeps insisting that Mincome was paid out under the same

social assistance regulation. It was paid out under the same....

Interjection.

MR. LEVI: You're wrong! You're quite wrong. Just listen.

MR. CHAIRMAN: Please address the Chair.

MR. LEVI: It's paid out, Mr. Chairman, under the social

assistance vote. But in terms of the social assistance regulations,

they were different, because there was no asset test on Mincome. Well,

sir, don't shake your head and say: "Yes, you're right, " and then tell

me that you are right. You're wrong! It's different, that's what we're

saying. You can't come here to whitewash and tell us that it was the

same when it was in fact different.

He asks us: "Where will the money come from?" We knew there was a

problem about getting the money. That's why the member for Vancouver

East...that your government and the people of British Columbia this

year will benefit by $200 million of new revenue that we created, that

we went looking for. We were fed up with subsidizing the Americans at

the expense of senior citizens in this province. That's why we

introduced the petroleum corporation and charged higher prices for the

export on gas — for revenue to pay for the programme.

You can't come in here and tell us that because a mine is

closed...as though they are the great revenue makers in this province

in terms of taxation. That's nonsense. They're not. So don't use the

example of the mine — 700 mines on the stock exchange and 22 producing

mines. So what you are talking about in terms of that kind of revenue?

The thing is that the programme is different.... What interests me is

that he gets up to say that he's upset and he's almost fed up with

hearing about Mincome.

Here's his own pamphlet — GAIN — and what has he done in the middle?

He's got a picture, not of some little dancing girl and a single

mother, but three old people. Right in the middle he's got "65 plus, 60

to 64, 55 to 59." What's he so twitchy about? When they pick it up, he

wants them to be assured that Mincome is safe, so that's how he

presents it. Well, it isn't safe and they're not conned by that sort of

thing. They won't be conned. Right now there is a feeling in this

province...and every member of this Legislature, Mr. Chairman, is

getting letters from senior citizens who are in a complete blue funk

about what's going on.

Now if you wanted to give credibility to this legislation, follow

practice — come in with legislation and let's have a look at the

regulations; at least tell us the levels, When we introduced changes in

terms of the social assistance rates, we always brought them into the

House — always. We made statements right from over there telling

people what the rates would be. You haven't told us this. We have asked

you time and time again: "What are the levels going to be?" I've asked

you: "Are the 65 people going to get the same as the 60 to 64 and the

55 to 59?"

Interjections.

MR. LEVI: Exactly, you haven't told us this.

MR. KING: On a means test, he'd never make the cabinet.

MR. LEVI: Oh, no, no. Listen, he's got the right kind of rhetoric to make that cabinet. That's the way it goes.

You've simply got to lay it out for people to really settle them

down out there, because they don't know. You say that you want to

create an equality of balance. You are doing it at the expense of other

senior citizens who are not going to qualify for your programme. That's

the great tragedy of the theory that you have that you want to create a

balance. We know, for instance, with the single people who are on

welfare that they go through the system at about 50 per cent every

month. We know that there is some rollover in terms of the

single-family people because

[ Page 3370 ]

of the day-care programme, because of the special services for children — there are a range of options.

But senior citizens have no options — no options. They can't work

because nobody will employ them; they can't even qualify for

unemployment insurance any more. The thing is, you talk about a

balance, but you have made it unbalanced. You are going to cut off a

large number of people who should qualify, simply because you are using

an asset test which you say, because you're going to get cost-sharing

from Ottawa, you'll be able to apply somewhere else.

Now, Mr. Chairman, to the minister: this is not the way you deal

with human beings. We are a wealthy province. We had to make the

position very clear to the citizens of this province that we have to

assist the people who can't help themselves. Certainly we put a burden

on some of the people in this province, but they paid and they paid it

willingly. For you to suggest that they won't continue to pay it is

wrong. It may very well be that now it's more difficult for them to

pay....

You've raised every possible tax there was to raise; you've raised

the ferry rates. Obviously they are under a burden. But don't tell me

that what you're trying to do is to be fair and have a balance, because

that doesn't work. Have you got an agreement with Ottawa on the 55 to

59s? You've got an agreement which will allow you to pay the same level

as the 65 and overs on the 60 to 64s? The minister doesn't nod his head.

I'm suggesting to you, Mr. Chairman, that what we're going to get is

varied levels of payment. You're going to have a bureaucratic battle

over there in terms of the department having to work out asset tests,

having to chase up people — an enormous bureaucracy, very frustrating.

What you're going to achieve is the thing you said you didn't want to

achieve: you did not want to prevent people from coming forward who

needed it. They're already scared out there. They're already scared

because, as the first member for Burrard (Ms. Brown) said, it's true

that the funeral expenses are exempt, but people don't know that

because the rhetoric that has been taking place in this province is

scaring every body. They think if they've got any money at all they are

not going to qualify. Later on, when we get into the other

section —

the witch-hunt section, as I call it — where you can go back five

years, what's going to happen to people there?

The thing is, it's the rhetoric, the lack of information, Mr.

Chairman, that that minister...he has not given it to us, and

consequently it's very, very difficult. We must be sceptical because

the action that have taken place up to now make us sceptical. You have

knocked out the kinds of qualifications for day care. You have knocked

out the kinds of qualifications for special needs. You have changed the

level of the handicapped pension. You have change the 60 to 64 to an

income test.

We have to look at performance, and the performance, Mr. Chairman,

is that we cannot gain from the information in this bill whether, in

fact, it will work the way the minister says. We have every indication

that it will not, because based on the amount of money that you have in

your budget, you can't possibly deliver the same level of pay to the 55

to 59s and the 60 to 64s and the over-65s, and we are not including the

single-parent people. I am sceptical, and unfortunately, Mr. Chairman,

the minister is not assisting us, particularly in relation to this

section.

Sections 1 to 3 inclusive approved.

section 4.

MR. LEVI: I'd like to ask the minister: in respect to the agreements with Canada — the Canada Assistance Plan — the three areas of meetings that the federal and

provincial ministers had were attempts to bring in an

income-supplementation programme to the working poor and particularly

to the single families. Perhaps he would explain to us what kind of

agreements has he got at the moment in terms of cost-sharing that will

assist him in the 55 to 59.

Now as I understand it, it's not yet concluded, but perhaps he would

inform us, because we only have the information from the federal

minister who indicates that that legislation probably will not be on

the books until probably next spring and probably will not be operable

until the fiscal year starting in 1978. Now does the minister have some kind of an arrangement for cost-sharing? Perhaps he could tell us that, Mr. Chairman.

HON. MR. VANDER ZALM: Well, Mr. Chairman, I think we're speaking of two different issues here. But certainly the one with respect to a guaranteed income supplement

programme is being pursued by the province and we're hoping that

perhaps we may enter into an agreement with Ottawa, even if only on a

trial basis for some areas of the province.

We believe that the guaranteed income supplement programme has a lot

of potential in making it far more profitable for people to work as

opposed to, say, welfare or other means of assistance. It provides

incentives and this is certainly in keeping with our philosophy and

policy.

Regarding the other matter of concluding with Ottawa the figures that might

be paid to those 55 to 60, we are still and were up until half an hour ago,

when I was in my office, negotiating with Ottawa the figures that we can use

within the regulations. All has not been finalized, but I can tell the member

this: I received today or just now a copy of a news release from the Manitoba

government with respect to what they have done to their rates.

[ Page 3371 ]

I can assure the member that in all categories our rates will far

surpass the Manitoba rates. I can assure the member also that the

increases will be sizeable and far beyond what might be discussed when

we're talking in terms of AIB and suchlike. They'll be sizeable

increases and they'll be provided in the areas of greatest needs.

I know that much of what is normally spelled out in the regulations

would be of help to you if it were available now. Regulations with

respect to social assistance are not something new. Up until now we had

two pages of Social Assistance Act and 23 pages of regulations.

The former minister knows that he had the same 23 pages of

regulations to contend with. We will again have 23 pages of regulations

in all probability. They'll be different. They'll vary and we're

negotiating these variables with Ottawa right now, but there's no

change in that respect. It's a whole lot clearer now in the Act as to

what the intentions of the government are than what was previously

spelled out in the old Social Assistance Act, which has been there a

long time.

MR. LEVI: I was going to try once more to see whether we can get some inkling as to what the levels might be. Now at the present time....

MR. CHAIRMAN: Hon. Member, we're on agreements with Canada.

MR. LEVI: Yes, that's true. Rates are something that have to

be checked with Canada because you have to get agreement on sharing,

providing they're not too high and there's an earnings exemption, Mr.

Chairman. It's very much within this. But I won't be very long.

MR. CHAIRMAN: Proceed.