1977 Legislative Session: 2nd 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)

THURSDAY, FEBRUARY 17, 1977

Afternoon Sitting

[ Page

1021 ]

CONTENTS

Routine proceedings

Oral questions.

Backlog of WCB cases. Ms. Sanford — 1021

Government controls in forest industry. Mr. Gibson — 1022

Use of pep pills by long-distance truckers. Mr. Wallace — 1023

Human Resource's minister's statement about civil servants. Ms. Brown

— 1023

Payment of gratuity to public servant. Mrs. Dailly — 1024

Subsistence hunting permits. Mr. Nicolson — 1024

ICBC collection of premiums. Mrs. Wallace — 1024

Committee of Supply: Ministry of Finance estimates.

On vote 2.

Hon. Mr. Wolfe — 1025

Mr. Macdonald — 1026

Mr. Stupich — 1027

Hon. Mr. Wolfe — 1030

Mr. Wallace — 1032

Hon. Mr. Wolfe — 1033

Mr. Barber — 1034

Mrs. Jordan — 1039

Hon. Mr. Wolfe — 1042

Mr. Barber — 1043

Mr. Wallace — 1047

Hon. Mr. Wolfe — 1048

Mr. Nicolson — 1050

Mr. Cocke — 1051

Hon. Mr. Wolfe — 1051

Statement

Appointments to Workers' Compensation Board. Hon. Mr. Williams —

Routine proceedings

Committee of Supply: Ministry of Finance estimates.

On vote 2.

Mr. Cocke — 1053

Mr. Nicolson — 1054

Mrs. Wallace — 1055

Hon. Mr. Wolfe — 1055

Appendix — 1056

THURSDAY, FEBRUARY 17, 1977

The House met at 2 p.m.

Prayers.

MR. SPEAKER: Hon. members, it is with regret that I bring to

your attention the death of a former member of this Legislative

Assembly, Jacob Francis Huhn, who sat as a member in this House

representing the constituency of North Peace River from 1960 to 1966.

He passed away Tuesday at his home in Fort St. John. With your

permission, I will see that an expression of sympathy goes out to the

members of his family on behalf of the members of this Legislative

Assembly.

HON. J.A. NIELSEN (Minister of Environment): Mr. Speaker, I

would like to present to the members of the House and those in the

galleries today the Hon. Romeo LeBlanc, the federal Minister of

Fisheries and the Environment, who is our guest today and meeting with

members of my ministry.

MR. G.F. GIBSON (North Vancouver–Capilano): Mr. Speaker, I

would like to share the official welcome of the government to Minister

LeBlanc. Beyond that, I would like to welcome him personally as an old

friend and, at the risk of being embarrassing to him, one of the finest

men I have ever met in public life.

MR. A.B. MACDONALD (Vancouver East): M. l'orateur, je voudrais dire quelques mots au grand Ministre de Poissons. Bienvenu, et gardez votre dos! (Laughter.)

HON. P.L. McGEER (Minister of Education): Mr. Speaker, I take

great pleasure this afternoon in introducing in your gallery a class of

UBC political science students who are with their professor, Dr. Jerry

Christianson. I hope that the students won't be bored this afternoon by

too many lectures from the opposition.

MS. K.E. SANFORD (Comox): I would like the House today to

welcome the delegation from the B.C. Federation of Labour. The members

from that federation have been meeting with members of all sides of the

House all morning and expressing their very real concern surrounding

the Workers' Compensation Board. Would the House make them welcome?

MR. W.G. STRONGMAN (Vancouver South): Today it gives me a great deal

of pleasure to introduce a group of students from the Northwest Baptist Theological

College. I would ask the assembly to make them welcome.

MS. SANFORD: In addition I have two classes that will be

attending the House this afternoon from Georges P. Vanier Senior

Secondary School at Courtenay. At 3 o'clock we will be joined by a

journalism class from that school, accompanied by their teacher, Mr.

Brent Reid, and their sponsor, Ginny Cleary. But seated in the gallery

right now is a class sponsored by Crown Zellerbach from Georges P.

Vanier Senior Secondary School, accompanied by their teachers, Olive

Scott and Delbert Doll. I wish the House would make them welcome.

HON. H.A. CURTIS (Minister of Municipal Affairs and Housing):

Mr. Speaker, the priest who led us in prayer today at our opening is a

very highly regarded member of the church in the greater Victoria area.

I would like the House to welcome Father Hanley of St. Joseph's parish

in Saanich.

MR. D.G. COCKE (New Westminster): Mr. Speaker, visiting with

a number of MLAs in the House today are senior executive members of the

Canadian Universities Faculty Association of B.C. I would hope that

everyone will assist me in welcoming them into the gallery, as I notice

they're here. I do hope that the Minister of Education (Hon. Mr.

McGeer), particularly, welcomes them to the gallery today.

HON. L.A. WILLIAMS (Minister of Labour): Mr. Speaker, I would

ask the members to join me in welcoming Mr. George Johnston, president

of B.C. Federation of Labour, Mr. Len Guy, secretary-treasurer of that

organization, and a group of delegates from B.C. Federation of Labour

who met with me and will meet with others today to discuss matters that

are important to that federation.

Hon. Mr. Nielsen tabled, with leave, the Fraser River Upstream Storage Review Report.

Oral questions.

BACKLOG OF WCB CASES

MS. SANFORD: Mr. Speaker, my question is to the Minister of

Labour regarding the Workers' Compensation Board. Would the Minister of

Labour advise us how many cases are waiting to be heard before the

board of review at this time?

HON. MR. WILLIAMS: Mr. Speaker, I can't give the precise number at this time, but within the past month the number has been 1,100.

MS. SANFORD: Mr. Speaker, I wonder if the minister could tell us how long a time the backlog

[ Page 1022 ]

represents. In other words, how many months back does this 1,100 represent?

HON. MR. WILLIAMS: Mr. Speaker, I've asked for a specific

breakdown on that matter. The information is at my office now and I'd

be pleased to table a return because the number of cases over a period

of time varies greatly from half a month on up. That's why I'll give

you a complete breakdown as to the number of cases per month that are

awaiting consideration.

MS. SANFORD: I'm wondering if the minister is prepared to

appoint at this time an additional board of review in order to begin to

handle that backlog.

HON. MR. WILLIAMS: Mr. Speaker, I'm seeking a fourth chairman for the boards of review and I hope to be able to make the appointment very shortly.

MS. SANFORD: As a final supplementary, Mr. Speaker, I'm

wondering if the minister could also advise us if he has consulted with

labour groups prior to making the recommendations with respect to the

appointments to be announced tomorrow. If so, who were they?

HON. MR. WILLIAMS: I wonder if the member would be good enough to repeat that question so I can understand specifically what she wants.

MS. SANFORD: Mr. Speaker, I wonder if the minister would tell

the House whether or not he has consulted with labour groups with

respect to recommendations that they might have for appointments to be

announced tomorrow replacing those who were fired on Wednesday —

yesterday — at the Workers' Compensation Board.

HON. MR. WILLIAMS: Mr. Speaker, the member is wrong in some

of her assumptions. I didn't fire anybody yesterday — that's not my

authority. I'll be making an announcement later this afternoon with

respect to the composition of the new board.

Specifically, in answer to your question as to whom I consulted

with, I did not consult with any labour groups, but I did speak to

people in the trade union movement.

MS. SANFORD: I'm wondering then if the minister consulted

with employers' groups — specifically, the Employers Council or any

other employers' groups.

HON. MR. WILLIAMS: The answer is no.

GOVERNMENT CONTROLS

IN FOREST INDUSTRY

MR. GIBSON: Mr. Speaker, I have a question for the Minister

of Forests about an apparent telegraph signal that he sent to the

forest industry through the February 14 number of the authoritative Beale's Newsletter .

The quote here says: "Waterland tells us there's one sector of the

forest industry that worries him." Then it quotes the minister: "But if

this particular part of the industry fails to play the game, there will

be government control and I will implement it."

Would the minister identify, for the benefit of the House, the

sector of the forest industry that he plans to put under government

control?

HON. T.M. WATERLAND (Minister of Forests): Mr. Speaker, the

entire forest industry is under the control of the provincial

government in one way or another. I don't know if you could call it a

telegram or not, or a telegraph signal. I was speaking with Mr. Beale

of Beale's Newsletter , and I

don't think that I said any particular sector of the industry. I said

there are individual corporations within all sectors of the industry

which are not as good corporate citizens as they could be, and if they

don't improve their corporate citizenship then those existing rules

would have to be enforced more stringently with them than they probably

have been in the past.

MR. GIBSON: A supplementary then, Mr. Speaker, because this

goes further than I thought it does. Does the minister mean that all

sectors of the industry are going to be put under tighter government

control?

HON. MR. WATERLAND: Right now, Mr. Speaker, all sectors of

the industry are under government control. Those companies whose

corporate citizenship isn't what it should be are under the same

controls as everybody else, but the....

MR. COCKE: Who decides?

MR. SPEAKER: Order, please.

HON. MR. WATERLAND: The rules and regulations under which the

industry operates are enforced on all parts of the industry. Some

sectors of the industry attempt to get beyond the controls which are in

existence and, as the government becomes aware of them, then we enforce

them.

MR. GIBSON: A supplementary then, Mr. Speaker: is the

minister saying that there will be selective enforcement of regulations

based on his concept of corporate citizenship?

[ Page 1023 ]

HON. MR. WATERLAND: No, Mr. Speaker, the minister did not say that at all.

USE OF PEP PILLS

BY LONG-DISTANCE TRUCKERS

MR. G.S. WALLACE (Oak Bay): Mr. Speaker, to the Minister of

Education, responsible for ICBC, who also happens to be a physician and

would have an interest in this question, I'm sure: in light of the fact

that Mr. Keith Godfrey, the ICBC traffic research manager, stated to

the select committee of the Ontario Legislature on highway safety that

some trucking companies provide their drivers with pep pills to keep

them awake on long hauls, and in view of the vehement denials by the

B.C. trucking industry that this practice does go on, can the minister

tell the House if ICBC, in its role as an insurer, has come across such

cases? If so, how many?

HON. MR. McGEER: Mr. Speaker, I'm not aware of any but I'll take the question as notice and get the information.

MR. WALLACE: A supplementary, Mr. Speaker: since this is a

pretty serious allegation and rather a blanket condemnation of one of

the important industries in the province, will the minister be holding

any personal conversations with Mr. Godfrey when he returns from

Ontario?

HON. MR. McGEER: I'd be pleased to do so.

MR. WALLACE: Could I ask the minister if Mr. Godfrey was in

any way appearing before the Ontario committee of the Legislature as a

representative of ICBC or of any arm of the British Columbia government?

HON. MR. McGEER: Not to my knowledge, Mr. Speaker, but I'll take that as notice, too.

HUMAN RESOURCES MINISTER'S

STATEMENTS ABOUT CIVIL SERVANTS

MS. R. BROWN (Vancouver-Burrard): My question is directed to

the Minister of Human Resources. Would the minister tell this House who

authorized him to threaten the civil servants of this province with

being uprooted and sent to Fort St. John and Dawson Creek if they

criticized the government?

HON. D.M. PHILLIPS (Minister of Economic Development): What's wrong with the north? Are you against the Peace River country?

MR. SPEAKER: Order, please. The question is irregular in that

it draws an assumption, hon. member. Would you please rephrase the

question so that it's in a parliamentary manner?

Interjections.

MR. SPEAKER: Order, please. The hon. first member for Vancouver-Burrard has the floor.

MS. BROWN: I'm defending you. The minister does not even know

who his friends are! Mr. Speaker, I am quoting from a statement made by

the hon. Minister of Human Resources — who makes statements on

everybody's department over there — to the Chamber of Commerce

yesterday, indicating that any civil servants who criticized in his

department would find themselves in Dawson Creek or Fort St. John. I

want to know on whose authority he's threatening the civil servants of

Victoria. That's all.

HON. W.N. VANDER ZALM (Minister of Human Resources): I wish I

had been there. That sounds like a good speech. I never heard anything

like that. I don't know where the member got the information. I really

don't. There was nothing like that suggested.

MS. BROWN: The Daily Colonist ,

that great newspaper, Mr. Speaker, that fights for the people of this

province, dated February 17, 1977: "Chamber Laps Up Talk." There it is,

Mr. Speaker. Now is he accusing that great newspaper of not telling the

truth in reporting his speech, Mr. Speaker? That's my supplemental.

HON. MR. VANDER ZALM: I haven't read the article. I don't

know what the

article says but I don't believe it says anything like

the member has mentioned.

Interjections.

MR. SPEAKER: Order, please.

MS. BROWN: When one takes into account the various groups

that have been attacked by that member, to be attacked by that

minister, too, is indeed a rare honour. So I am not disturbed by the

fact that he accuses me of playing games with the truth.

However, the exact quote is: "'There is room in my ministry for

people poking fun at the minister. There's room in Fort St. John,

there's room in Dawson Creek....' he said, interrupted by loud laughter

and applause." Now were you misquoted?

MR. SPEAKER: Could I draw to the hon. member's attention Beauchesne at page 147? It is

[ Page 1024 ]

irregular to inquire whether statements made in a newspaper are true, hon. member.

PAYMENT OF GRATUITY

TO PUBLIC SERVANT

MRS. E.E. DAILLY (Burnaby North): Mr. Speaker, to the hon.

Provincial Secretary, 16 days ago the Provincial Secretary took as

notice my question on the gratuity which was paid to Mr. Broadbent and

informed the House that she would give us a full report on the reasons

for that payment. Could we have it now?

HON. G.M. McCARTHY (Provincial Secretary and Minister of Travel Industry): Mr. Speaker, when the information is available to me, it will be filed in the House.

SOME HON. MEMBERS: Oh, oh!

AN HON. MEMBER: Coverup!

MR. SPEAKER: Order, please.

MRS. DAILLY: A supplemental. She says "when the information

is available." As I've waited 16 days, could she give me some

determined time date when we can expect this?

HON. MRS. McCARTHY: I was trying to save time for the hon. members so more questions could be asked on the floor of the House.

SOME HON. MEMBERS: Oh, oh!

HON. MRS. McCARTHY: Let me explain to you. The person who

processed the order that the hon. member brought to the attention of my

ministry was away, and that person is going to file the report on

return. When that information is available we will certainly bring it

before the House.

SUBSISTENCE HUNTING PERMITS

MR. L. NICOLSON (Nelson-Creston): A question to the Minister

of Recreation and Conservation concerning subsistence hunting permits

normally granted to native persons at this time of the year: has the

minister instituted a new policy of requiring that these people submit

to a needs test at the Department of Human Resources before his

department will grant a subsistence hunting permit?

HON. S. BAWLF (Minister of Recreation and Conservation): I thank the member for the question. I'll have to take that as notice.

ICBC COLLECTION OF PREMIUMS

MRS. B.B. WALLACE (Cowichan-Malahat): Mr. Speaker, my

question is for the Minister of Education relative to ICBC. I myself

and other members of our caucus have received literally hundreds of

complaints from car owners who are receiving bills for additional

premiums that they are supposed to owe on last year's Autoplan premium.

MR. L.B. KAHL (Esquimalt): File the letters.

MRS. WALLACE: They have receipts that indicate these premiums were paid in full. Why are they being billed a second time, Mr. Minister?

HON. MR. McGEER: Mr. Speaker, these would be cases where the

amount put on the form and charged by the agent was incorrect. So in

cases where people overpaid, money is returned; in cases where they

underpaid, then they pay the same as everybody else. We do our best,

but we can't be responsible for all the errors that are turned in.

MRS. WALLACE: I have a supplemental, Mr. Speaker. You know,

that sounds very fine on the surface, but in the cases that I have had

pointed out to me, the figures that they paid last year and the figures

they are being billed for this year are relative. If they have paid,

say, for six months last year or paid half the premium that this year's

premium is, they're still being billed for $30 to $60 additional for

that half-year. It doesn't make sense, Mr. Minister. Would you look

into it?

HON. MR. McGEER: Please send any that are incorrectly billed to me and we'll get them straightened out.

MR. GIBSON: On a point of order, Mr. Speaker, during the

question period the Minister of Labour (Hon. Mr. Williams), if I

understood him correctly, indicated that he would be making a statement

on the Workers' Compensation Board later on this afternoon to a press

conference. I wonder if leave might be granted for him to make the

statement to the House right now, as it should be.

MR. SPEAKER: Hon. member, speaking to your point of order,

you know it's irregular and out of order for one member to ask leave on

behalf of someone else to make a statement to the House.

Orders of the day.

The House in Committee of Supply; Mr. Schroeder in the chair.

[ Page 1025 ]

ESTIMATES: MINISTRY OF FINANCE

(continued)

On vote 2: minister's office, $95,034 — continued.

HON. E.M. WOLFE (Minister of Finance): Having used all of the

list of expletives that were distributed yesterday, I'm surprised that

we are once again back here today. However, as a backdrop for further

discussion of the estimates of the Ministry of Finance, in which a

budget has been presented with estimates balanced with expenditures, it

might be interesting to challenge the members of the House to see if

they can recognize who said these words:

"We used to think that you could spend your way out of

a recession and increase employment by cutting taxes and boosting

government spending. I tell you, in all candour, that that option no

longer exists and that, insofar as it ever did exist, it only worked by

injecting bigger doses of inflation into the economy, followed by

higher levels of unemployment as the next step. That is the history of

the past 20 years."

Mr. Chairman, that statement was made within 30 days, and I would ask any member to offer whom the quotation comes from.

MR. N. LEVI (Vancouver-Burrard): Karl Marx's grandson.

HON. MR. WOLFE: It comes from Prime Minister James Callaghan, the leader of the Labour Party government in Great Britain.

Mr. Chairman, yesterday the federal minister, the Hon. Robert

Andras, tabled the estimates for the coming year in the House of

Commons. Having had a brief look at these figures and news reports on

them, I thought a comment might be appropriate on behalf of the

Department of Finance.

In presenting the federal budget estimates in the House of Commons

yesterday, the Hon. Robert Andras, president of the Treasury Board,

reported a saving of $970 million in the 1977-78 expenditures for the

federal government under the new federal-provincial cost-sharing

agreement. Mr. Chairman, this saving comes from the fact that the

federal government is no longer meeting its obligation towards hospital

and medicare expenditures by the provinces entirely through cash

payments from its budget. Rather, it is replacing some of the cash

payments with transferred personal income tax points — namely 8.143

points. Federal revenue from the personal income tax will be

accordingly reduced.

While on the face of it it would seem the reduction in expenditure is offset

by a reduction in revenue, I pointed out yesterday in the House in reply to

a question from the Member for Oak Bay (Mr. Wallace) that the federal government

is unilaterally reducing its contribution from the 50-50 principle of sharing

which they initiated in the first instance and is leaving the provinces the

major responsibility of risk and coping with the excessive cost increases in

the established programmes of hospital and medical care and post-secondary education.

What is not evident in the reports from Ottawa on the federal

estimates for 1977-78 is the payment under the revenue guarantee to the

provinces. While the federal government did meet the provinces part way

on this matter, the saving for the federal government between the old

and new arrangements on the revenue guarantee is about $500 million in

1977-78, of which the loss to B.C. is approximately $60 million.

Mr. Chairman, throughout the entire discussions on these new fiscal

arrangements, the provinces consistently hit at this fiscal dividend

the federal government was obtaining at the expense of the provinces as

a result of the federal proposals. In a nutshell, Mr. Chairman, what

we're saying is that the ongoing viewpoint of the impact of these

changes causes a dividend in favour of the federal government in lieu

of the gap which will widen between the exposure to provincial costs in

these programmes as opposed to the potential money being transferred

and the growth allowed for it.

So in viewing the initial statements made yesterday with regard to

the reduction in the federal estimates of $970 million, I'm simply

saying that until we see the revenue side and know what compensating

difference there is in the transfer of tax points and know also what

has been worked into this in lieu of revenue guarantee, it is difficult

to view whether this is to the advantage of the provinces or not. At

the outset it would seem doubtful.

Mr. Chairman, following on some questions yesterday, I'd like to

offer some brief information regarding grants in lieu of municipal

taxes in the place of federal or provincial government buildings. I

think there is a fact of life here which is not appreciated in the

debate which takes place from municipal leaders in the ongoing

discussion about the 15-mill grant. The point I wish to make is that

although assessments were frozen beginning in 1974 for all other

purposes, they have not been frozen for the purposes of the valuation

of provincial government buildings.

As an illustration, the grants between 1974 and 1976 in lieu of

provincial government buildings have increased 88 per cent from $1.4

million in 1974 to $2.699 million in 1976. The reason for this is that

the full assessed values of provincial land and buildings have been

revised in each year. The comparable figures are: in 1974 the full

assessed values of provincial land and buildings is $118.3 million; for

1976, it is $214 million. That's an increase in these assessed values

of 81 per cent. I think this fact has to

[ Page 1026 ]

be appreciated. What it amounts to, Mr. Chairman,

is that with the freezing and other tax assessment levels, the impact

of these increased assessments is that rather than viewing it as the

15-mill rate presently, it's more like 28 to 30 mills, on a comparable

basis.

Mr. Chairman, one of the members — the member for North

Vancouver–Capilano (Mr. Gibson) — yesterday brought up the subject of

negative income tax. For the benefit of the members of the House, there

is some information here that might be of value in support of the

ongoing review of this matter. We all know that the proposition for

guaranteed annual income, using a negative income tax system,

presupposes the removal of a multitude of other plans and social

benefit plans across Canada, the administration core of all of this,

and the saving in the staff structure. So breaking this down into three

major elements, first of all, there are an estimated 200 federal Acts

which, in one way or another, provide transfer payments to individual

Canadians. Even on the provincial level, we have programmes as diverse

as GAIN or the shelter allowance for elderly renters which are also

forms of transfer payments. So it will be necessary to examine many

pieces of federal and provincial legislation with an eye to their

individual appropriateness for integration into a guaranteed-income

scheme.

First of all, there are the income-maintenance pieces of

legislation. These would be integrated into a guaranteed annual income

scheme. Programmes here include, at the federal level, family and youth

allowance, old-age security and guaranteed-income supplements. In

1974-1975, Ottawa paid out approximately $5.2 billion to 5.4 million

recipients, an average of $971 per recipient.

In the case of social insurance legislation, these programmes

include unemployment insurance, workers' compensation, Canada Pension

Plan and, during the same period, the federal government paid out to

Canadians $1,610 per recipient. Then under the heading of the Canada

Assistance Plan, under the proposed social services Act, with few

exceptions, all allowances paid through the Canada Assistance Plan

would be stopped and incorporated under such a guaranteed annual income

plan. So during the same period of time, 1974 to 1975, an approximate

$800 per recipient was paid to Canadians. I think, Mr. Chairman, this

will primarily provide some background statistics in support of the

kind of money which was paid out, on average, across Canada some two

years ago now.

Mr. Chairman, a final matter which I don't think was appreciated in

comments made yesterday is the nature of the economy and the retail

business during the past 10 months. I reported to this House yesterday

that although arguments might be to the contrary insofar as the impact

of taxation and other policies put in place by this government are

concerned, in fact over the past 10 months in British Columbia retail

sales showed an overall growth of 12.1 per cent. Then in the case of

retail sales, excluding food, in a 10-month period ending December,

these showed an increase of 13.0 per cent. Then in the case of

department store sales — we have heard some gloomy predictions about

department store sales — there was an increase of 10.6 per cent. These

are on real-dollar terms as obtained from Statistics Canada. Then we

have retail sales for motor vehicles in the same 10-month period,

ending December, 1976. Here there was an increase of 17.3 per cent.

Lastly, Mr. Chairman, we have here provincial government revenues for

retail sales tax, adjusted to 5 per cent, eliminating the tax increase,

wherein we reveal that in a 10-month period ended January 31, there was

an increase of 9.14 per cent.

MR. MACDONALD: Mr. Chairman, I have two or three questions to

the minister relating to his responsibilities as Minister of Finance in

making representations when he attends federal-provincial meetings of

Finance ministers. The questions will be very brief. I'm referring

particularly to the Canadian income tax laws which, I suggest to the

minister, are very inequitable in that they provide dodges and escape

hatches for wealthy people in Canada with the result that the ordinary

people of Canada pay too much tax.

I am just going to refer to a couple of examples right now, and ask

whether the minister has made representations about them. One of them

is that wealthy people who have made their money in British Columbia

and in Canada depart for more than 183 days every year — because if

they sojourn in Canada for fewer than 183 days they are not residents

any more — for warm climes and tax shelters, and don't pay their proper

tax, although they are fully Canadian and they have made their money

here, into the national treasury of which we get a part. That's the

definition of "residence." It is very loose and means that all kind of

people — a handful, but these are big fortunes — have built a residence

outside and transferred their investments outside of the province. And

while they are still really British Columbians or Canadians, they don't

pay on their taxable income. They still have to pay on what's left in

Canada, true, but they don't pay regular income tax. It's a dodge and a

shelter. I am asking the minister whether he has made representations

on that particular matter at any federal-provincial conference, and

what his opinion of it is.

The second thing is a very good programme for those who need a first

house. That is the Registered Home Ownership Savings Plan. But there is

a dodge there, Mr. Minister, and I wonder if you have taken this up

with your counterparts in Ottawa. The dodge is that wealthy people who

have their home — and it

[ Page 1027 ]

might be jointly owned between them and their wives

— sign a quitclaim of this home in favour of their wives. But they have

plenty of assets. They quitclaim it to their wife so that they don't

have a home. The result is that they, of all people, qualify for the

$1,000 deduction for 10 years, making a total of $10,000 under the

Registered Home Ownership Savings Plan. Now the plan is good for those

people who need homes. But when it becomes a tax shelter for those who

already have a home and lots of money, then I say that's a dodge, and

the minister should be taking that up with Ottawa. I would like to ask

his opinion on that, which is a very widespread practice at the present

time in British Columbia and in Canada. In other words, a beneficial

social programme is being taken advantage of by wealthy people who

don't need that programme, in effect as a tax dodge. I want to know the

minister's opinion about that.

Question No. 3: I am asking the minister in relation to income tax

refunds which are sold off on Granville Street and on Hastings Street,

as the minister knows, at a tremendous discount to the moneylenders.

Lots of people are taking discounts of 50 to 60 per cent, and losing,

in effect. They are poor people who need the money right away. They are

selling their income tax refunds for cash, discounting them to

moneylenders at a substantial 50 to 60 per cent loss to the

individuals. Has the minister at federal-provincial meetings taken up

the position that all that has to happen in this field of undoubted

exploitation is that the Ministry of Finance in Ottawa has to make the

income tax non-assignable? It's a very simple turn of the pen, like a

UIC cheque. Has the minister taken up that position with Ottawa so that

we wouldn't have to try, far less effectively, to do it through our

consumer protection laws? If so, what is the federal response? Those

are the three questions.

MR. D.D. STUPICH (Nanaimo): I notice that the first member

for Vancouver East, Mr. Chairman, is asking if the minister wants to

respond, I am quite willing to....

MR. CHAIRMAN: I have to recognize the members as they stand, sir.

MR. STUPICH: Okay, Mr. Chairman. I have had an opportunity to review the Blues for part of yesterday afternoon, and I would like to comment on some of the items raised in the Blues .

First, just a partial response as opposed to the minister's quotation

from Prime Minister Callaghan about "spending our way to prosperity."

I'd like to renew — not my challenge, Mr. Chairman, this time — my

invitation. I think it would be good for the minister, good for me, and

certainly good for the public, if they had an opportunity to

participate in discussions between the minister and myself about

several things in the budget, such as this business about whether it

should be called "deficit financing," the way in which we manage the

provincial economy, the importance of government action — that is

government financial and economic dealings, and the importance to the

provincial economy. I would certainly welcome an opportunity to enter

into a public discussion with the minister on these issues.

The matter of succession duties I think is something on which I

would welcome an opportunity — not a challenge, Mr. Chairman, this

time, but an invitation if you would accept that — to discuss these

matters in a more public forum where members of the general public and

the press would also have an opportunity to enter into the discussion

with us about the wisdom of government action or government inaction in

these different areas — and in other areas if he likes — and the wisdom

on behalf of the people of British Columbia.

I note in the Blues from

yesterday that the minister, in talking about the reorganization of his

department, later on, I believe, credits at least some of this to

recommendations from the B.C. Savings and Trust report that was finally

paid for by the government. He mentioned the cost in one place. It was

around $140,000 or something like that. I got the inference when he

gave that figure that he thought it was a very expensive report.

It would seem to me that if any single one of these recommendations

was a result of having studied that report, then perhaps any single one

of these recommendations, or any single one of these actions, would

have more than paid for the cost of the report. I'd like some comment

from the minister as to whether or not he thinks the report was worth

the money that was put into it, or whether it was worth substantially

more or less, or what. I believe that simply dropping that figure and

leaving, in my mind, from the way he said it, the impression — perhaps

I just have a suspicious mind — that it cost us more than it should

have to get that report....

In my own opinion — and I haven't had the advantage of having seen

the report — from knowing the kind of people who were on that committee

and the kind of responsibilities that we gave to them, I would think

that the report was very worthwhile. But I would welcome the minister's

comments. He's certainly in the best position to discuss that since he

has had an opportunity to read what he described last year as a

two-foot-thick report.

He's chuckling. I don't know whether it was or not, but he did say

that it stood two feet high. Now whether that was on end or flat wasn't

said — it's not in Hansard .

HON. MR. WOLFE: We're on metric now.

[ Page 1028 ]

MR. STUPICH: Well, I'll let you translate that while I'm continuing to review some of the comments in the Blues . I'm reading again from the Blues :

"In the past year Treasury Board has been meeting on a regular basis

and giving careful scrutiny on all requests for expenditures." I'm

wondering just when that process started. It says during the last year,

but I hardly think it could have taken place during the whole year.

I suppose it's not quite explicit from this reading whether Treasury

Board reviews these requests after or before the fact. I'm sort of

guided into asking that question, Mr. Chairman, because of a newspaper

story as recent as November 23, 1976. The headline is: "Cominco Gets

Big Rebate." But why? The Minister of Mines and Petroleum Resources

(Hon. Mr. Chabot) was asked, and he said well, it happened before he

came so he doesn't know the reason. The Minister of Finance said he

didn't know the reason either although he signed the order-in-council

approving it and although, presumably, Treasury Board had looked at it

before, or was going to look at it afterwards, or was not operative in

that particular manner at that date.

Nevertheless he said that he would find out and he did. He found out

the next day and told us. But I just feel that if the staff was working

at that time, they let him down rather badly by not informing him why

he should sign this order for almost $1 million. If it wasn't working

at that time, of course, that's the explanation. Hopefully, the next

time the minister approves a payment of $1 million, or any sum, he will

know why that particular payment was being approved.

Mr. Chairman, as the minister anticipated, we did get into a

discussion yesterday of quarterly reports. I think we perhaps haven't

heard all we're going to hear about quarterly reports yet. I welcome

what the minister said in his opening remarks about quarterly reports

and the importance of them. "With this publication, residents of

British Columbia have the most up-to-date reports in all of Canada on

their government's finances." Well, that would be great, Mr. Chairman,

if we had them and if they were up to date. Certainly, as I pointed out

yesterday, I thought the first quarterly report came out in very good

time, the second one in nothing short of miraculous time but the third

one we're still waiting for.

He hasn't really told us, although he did talk about it yesterday in

answer to my question, about some of the reasons for it being late. But

he has not given any indication as to just when we might expect to see

the third quarterly report. He did say, as quoted in the Blues :

"Our current estimates indicate both revenues and expenditures will be

within 1 per cent of original forecasts." It would appear from that,

Mr. Chairman, that figures are available to the Minister of Finance. We

would like to have those figures; we should have those figures now as

we're discussing his estimates. I believe it was the hon. leader of the

Liberal Party (Mr. Gibson) who went one step further and suggested that

we should have those figures, we should have that third quarterly

report, even before we discuss vote 2, which we're on right now.

The minister did say that the information was before us in the form

of the nine-month statement. But, Mr. Chairman, that's different. You

appreciate that and I do but perhaps the minister needs some

explanation. There is a difference between the kind of nine-month

statement that has been the pattern in the province of British Columbia

and the quarterly report initiated by this government for the first

time ever. I give them full marks for that. It has full up-to-date

reporting and more up-to-date information than any other province, with

the exception of Ontario — perhaps it is even more up to date here.

Nevertheless, it's different because the quarterly reports are a

forecast as well as an historical record of money received and

disbursed. It's that forecast that is important to us in discussing

where the province really is. You can't simply look at the nine-month

statement and project from that what is going to happen. The minister

himself referred to this in part yesterday by saying that there was a

change.

Last year at the time of the sales tax money coming in.... It should

have been coming in at a certain time but it was held up because of the

post office strike. Perhaps, Mr. Chairman, we should be saying because

of a dispute between the management and labour of the post office,

because if there is a strike it's not one party that's to blame; it's

both.Something has happened in the negotiating process.

In any case, there was a breakdown in the service that distorted the

figures. The minister apparently has them, is saying roughly what they

are, is saying what the net result will be, but is not making available

to the members of this House — who are being asked to vote his salary —

just what information is available to him. He had promised to make it

available to the members of the House, he had promised to make it

available to the people of the province, but on this date, February 17,

some 48 days after the end of the third quarter, it is still not

available to us.

My question, again, is: when will this information be made available

to us? He made some reference to the fact that it is held up because of

difficulty in getting information from some of the Crown corporations.

Is it one of these reports that we are waiting for? Is it more than one

of them? Is it any one in particular? Just what is the hold-up, and

when might we expect to see the third quarterly report?

Mr. Chairman, I think the minister did get into, in his opening

remarks, a discussion of the anti-inflation programme. I want to say at

the outset that this government disagrees with the proposition that

this programme should be decontrolled or dismantled at

[ Page 1029 ]

an early date. British Columbia's position on the

timing of decontrol — that is, removing the wage-and-price controls —

reflects both the requirements of the provincial economy and the view

of the current economic management needs of Canada.

Mr. Chairman, I have to question that. I'm sure you can find

authorities who would agree with the minister's statement. For example,

the leader of the Liberal Party (Mr. Gibson) would agree with the

minister's statement with respect to an early end to controls. But when

you start getting out into the rest of the community, Mr. Chairman, you

find it more and more difficult to get people to agree with carrying on

the control programme, especially since the federal government is

indicating more and more that it is getting near the end of that

control programme. To pretend to maintain that control programme, all

of the time saying to the people who are entering into what everyone

agrees will be a very difficult year in the province of British

Columbia from the point of view of labour-management discussions,

because there are so many of them coming up, that we should maintain

the AIB controls programme in the face of these negotiations, in the

face of the threats or promises — depending upon your point of view —

coming from Ottawa, I think is nothing short of doing a disservice to

the province of British Columbia.

Mr. Chairman, when we talk about authorities saying we need the

control programme, the one province in Canada, I suppose, we might say

is milking the rest of the country — we might say that even B.C. is

paying a tithe — is the province of Ontario. Nevertheless the province

of Ontario is the economic province in the Dominion of Canada. That is

the province where most of our heavy industry is. That is the province

where our exports of manufactured articles emanate from. That is the

province that is really keeping this country going, economically

speaking. The rest of us ship out exports of raw materials generally,

but Ontario is dependent upon manufacturing to a much greater extent

than any other province.

Ontario has taken the lead in saying that we should abandon the

control programme, that it is hurting Canada's trade position relative

to the rest of the world. It's not just the province of Ontario. The

employers in the province of British Columbia are calling for an end to

the control programme because they believe that it's hurting them in

their attempts to get the economy of British Columbia moving again. I

could quote from the business page of the Province , February 3, 1977, referring to the Employers Council of B.C.:

"The council wants to see the controls removed as soon as

possible subject only to implementation of decontrol legislation, but they want

them removed as soon as possible. The government's objective should be a

rapid return to a soundly based economy with maximum freedom of decision for

individuals and groups and relative price stability."

Now, Mr. Chairman, we all want those things. Labour has argued from

the beginning that these things can best be accomplished by getting rid

of the control programme. Employers increasingly are arguing that we

should abandon the control programme. The province of Ontario is

arguing that we should abandon the control programme. The federal

government is promising or threatening to abandon the control

programme. For B.C. to be dragging its feet at this particular point in

time, as I said, Mr. Chairman, is doing a disservice to the people in

the province of British Columbia. Being as dependent upon economic

activity as we are, upon exports as we are, to be dragging our feet in

the face of the mounting evidence, the mounting pressure and the

mounting promises or threats that we will be abandoning the programme

in the relatively near future, B.C. should be joining that,

participating in it, and helping to work our way out of the control

programme. Since it is going to happen anyway, let's be a partner to

the programme to work our way out of the control programme rather than

insisting — and we can't do it anyway — that the programme carry on,

even after all the others have reached the decision that the programme

should be abandoned.

Mr. Chairman, I still have some concern about the prospects for 1976

and 1977. In spite of what the prospects are — 1976 as well, although

1976 is behind us — I still wonder what the public accounts are going

to show when we do finally see them. The minister quoted from an

economic report turned out by McLeod, Young and Co. talking about the

position of B.C. having substantially improved within the last fiscal

year. It talked about deficit financing, about the B.C. Ferries, the

B.C. Buildings Corporation and substantial borrowings.

I reminded him yesterday, Mr. Chairman, that this was one way of

taking out of the budget some $40 million to $60 million. It made it

easier to balance this year. But even with that, I have questions as to

whether or not we're really going to, and I will have questions at

least until I see the nine-month report.

The minister did answer one question I had about the deficit

repayment Act. The total amount borrowed was $181 million. This was a

question I put to him yesterday, Mr. Chairman, and he answered it.

All we borrowed, Mr. Chairman, was the exact same amount of money

that we gave to ICBC. We gave it to them and borrowed it back

immediately, and that was the maximum amount of money borrowed.

I'm a bit confused here, or the minister is — one or the other. He

probably has more and better advisers than I have, but he did say

something to the effect

[ Page 1030 ]

that the total

amount was $261 million authorized. Now as I recall, that particular

legislation authorized the borrowing of $400 million, not $261 million.

Bill 3, British Columbia Deficit Repayment Act 1975-76, authorized

borrowing of up to $400 million, I believe. The minister says $261

million. I have a question there and I didn't have an opportunity to

check it out this morning.

But, Mr. Chairman, my point is that all we had to borrow, in spite

of all of the criticism of three and one-third years of NDP government

in the province of British Columbia, was enough to make up for the

political decision of this government to give $181 million to ICBC. We

argued at the time that ICBC didn't need that $181 million and, Mr.

Chairman, I think we proved to you that ICBC didn't need the $181

million. Certainly the answer tabled in the House a few days ago would

prove to the people of the province that ICBC didn't need that $181

million because, by the end of December with just two months to go to

the end of their claims year, they had not only that $181 million still

available but an extra $92 million as well — 50 per cent more than the

amount we gave them. I believe the figure was $272 million still

available at the end of December. Obviously they didn't need the money.

But that's not what I'm coming to right now, Mr. Chairman. The

Minister of Finance, in response to the question yesterday went a

little further. He said the debt has been reduced to $150 million in

the meantime, "but we do anticipate further borrowings will be required

in the near future." And that's where he gets into the total authority

of $261 million.

Mr. Chairman, if all we needed at the end of March in 1976 was

enough money to give to ICBC because of a political decision to do so —

all we had to borrow was $181 million — and if things have gone so well

and the economy improved so much by the end of the second quarter that

they had turned what was going to be a $130-million deficit into a

breakeven position by the end of the second quarter, and if we were on

the upgrade to that extent, one would anticipate that we were going to

do even better in the third and fourth quarter. It's not necessarily

so, but there's that possibility. If we had recovered to the extent of

$130 million over the course of the year in one quarter, then what

happened in the next two quarters? That question is, of course, still

unanswered. Nevertheless, if things were going that well in the second

quarter, leaving open the question of the third and fourth quarters,

why is it we're going to have to borrow more money now? If we have

broken even or had the modest surplus, if we have managed through cash

management to reduce that $181-million borrowing to $150 million, then

why, Mr. Chairman, are we going to have to borrow anything further than

that $31 million? That would indicate a breakeven position completely.

If we had to go out and borrow $31 million, so that we were back

where we were at March 31, 1976, I can see that. That would mean we had

broken even completely. But I wonder: is that what the Minister of

Finance has in mind, that we might have to borrow back that $31 million

by which we had reduced the $181 million? Or if we are going to borrow

more than that, why are we borrowing it in face of his statement to the

effect that we will have roughly balanced in the fiscal period ending

March 31, 1977?

I think by now the minister may be able to respond to the questions of the first member for Vancouver East (Mr. Macdonald).

HON. MR. WOLFE: The first member for Vancouver East is always

interested in income tax payment problems. I can recall him raising

questions of this type in years gone by.

Dealing with the first one, he referred to the so-called

non-resident tax dodge of Canadian residents who might live across the

border, perhaps in Blaine or somewhere, or anywhere else and...

MR. MACDONALD: Hawaii, Puerto Rico.

HON. MR. WOLFE: ...record over 183 days to avoid Canadian tax.

Of course, there are reciprocal arrangements between the two taxing

authorities, the United States and Canada. If you live over the 183

days in the United States, you're still required to pay a proportionate

amount of your tax in Canada on a reciprocal arrangement.

But the matter, to answer your question, has not been brought up

recently in my term or memory, except that I can only say that there is

such a reciprocal arrangement. I can take the matter up at an early

opportunity, but I haven't recalled that it was under discussion at the

meetings which I have been at.

You also mentioned the so-called tax dodge of a home under the home

savings plan under the federal income tax of $1,000 a year, where a

person could put through some kind of a quitclaim to give the house to

his spouse and this kind of thing. Of course, this is the law as it

stands now — the tax advantage for home savings. I think, from what I

am advised, Ottawa is looking into this matter and are concerned with

this particular item you've mentioned. I'll be glad to look into that

as well.

You mentioned income tax refunds. This is a matter that gets a great

deal of attention — the exploitation of it by certain elements who want

to use excessive interest rates and so on. As you know, the Minister of

Consumer and Corporate Affairs (Hon. Mr. Mair) has been dealing with

this matter and I think that you should direct that question to him. It

was brought up at federal meetings recently and there has been no

resolution in terms of non-assignability

[ Page 1031 ]

of these refunds, but it has been under discussion. I think it might

be better, or more appropriate, if you addressed that question to the

Minister of Consumer and Corporate Affairs.

The member for Nanaimo (Mr. Stupich) mentioned, as he has

previously, that he would like to see a public debate between myself

and himself or anyone else, and that this would be much better to

discuss matters of our legislation and tax plans and, particularly, I

think, succession duties. My answer to him before has been, and is now:

what better place to debate these matters than right here? It almost

sounds to me that he doesn't want to debate the matter here. He wants

to debate the matter somewhere out in a community hall or something,

but you couldn't ask for a more public forum than this one, Mr. Member.

With respect, I think this is the place for matters of government

policy, tax policy and so on to be debated. Once again he brings up the

credit union report and this time he refers to the "two feet of

volumes" that was involved in that. He asks if it was worth it. Well,

as you know, we had some concern over paying for the bill as the year

went along. Having read the report and having had my officials look at

it, my answer to your question is: no, it's not worth it. In terms of

the value, translated into the money that was paid for the report, I

would say the answer is no. I am not criticizing the time and effort

that went into the report by the consultants and myriad of people who

were involved in it. They obviously did a dedicated job, but in terms

of what could be garnered from it, I would say that it has not been

worth the price that had to be paid.

You asked about Treasury Board meeting regularly. I can only tell

you again that they do meet regularly and we are, as you know,

enlarging our staff backup — which has been non-existent before — to

properly examine programmes on a continuous basis and to give more of

an opportunity to examine individual, daily requests for expenditures.

You mentioned the Cominco refund as an example of lack of attention to

these expenditures. The Cominco refund was a confusing result of a tax

audit that adjusted depreciation over a five-year period in which an

overpayment had been made. So it was a simple refund requiring, under

the Act, an order-in-council.

Interjection.

HON. MR. WOLFE: Once again, the quarterly report comes up.

I'll say, once again, Mr. Member, that it will be released very soon.

It's not quite ready but you'll be seeing it very shortly.

MR. STUPICH: A day? A week?

HON. MR. WOLFE: I mentioned yesterday that the nine-month

comptroller-general's statement contains within it basically what will

be in the quarterly report. If you take the 1976 and the 1975

nine-month statements through to December, you've got all the

information right there with the exception of the Crown corporations.

Now several of the major ones have already published their information.

Certain other ones are not available but as explanation for some of the

information I would offer this: that December 31 is a year-end cutoff

for certain corporations, which I would prefer not to mention, and

because of year-end adjustments, some of their information has been

delayed in being received. But this will be tabled at a very early date.

On the anti-inflation programme, you obviously disagree with British

Columbia's position with regard to wanting to sustain the programme now

that it is in place. I would say, Mr. Chairman, that in light of the

current debate surrounding the anti-inflation programme and the

anticipation people might acquire that this programme will be

dismantled and the discussion about decontrols, your policy indication

is doing a disservice to the problem we have in British Columbia. You

related the problem when you said that we were looking at a difficult

year. For you to be advocating that we agree with decontrol, I think,

does a disservice to the province of British Columbia. In fact, Mr.

Member, it's true that, of the provinces in Canada, there are only

about three which are really advocating the dismantling of the

programme. Only three. So that leaves seven that want to keep it on.

AN HON. MEMBER: Which three?

HON. MR. WOLFE: Well Ontario and Quebec are two of them. Once

again you reminded me of the deficit repayment Act. In fact you asked a

question yesterday to which I'd answered that there had been borrowing

of $181 million of which $150 million are now outstanding. I intimated

that we did anticipate further borrowing.

I would remind the member, Mr. Chairman, that the Act that was

passed originally authorized $400 million, based on the anticipated

deficit. So when the deficit was finally concluded, the amount was $261

million. That is the authority for the total borrowing that is involved.

MR. STUPICH: Is it $261 million? According to the legislation it was $400 million.

HON. MR. WOLFE: That's my understanding. If you'll follow

page.... "Our indication of the further requirement for the near future

for more borrowing is strictly based on the cash flow requirements at

this time and in the future." Because we can't make arrangements for

borrowing, you know, on a 24-hour basis, we have to provide for what

might be necessary. Even though sometimes it provides cash on

[ Page 1032 ]

hand, this can be reinvested to good advantage.

MR. WALLACE: Mr. Chairman, I just want to ask the minister

for a few more comments on this debate over anti-inflation decontrol

because I think the confusion which exists and the lack of federal

leadership deserves some discussion. On January 20, the Premier, in

answering a question that I asked in question period, said: "I'd like

to clear up some misunderstanding that the member for Oak Bay has." He

went on to say: "The First Ministers' conference that was concluded

just before Christmas reaffirmed that the programme would stay in place

until its conclusion in 1978." I'm quoting from Hansard ; that's what

the Premier said.

On January 24, Donald Macdonald, the federal minister, stated in a

speech in Toronto that he "would be happy to see controls end earlier

than the planned date." This was just a month after the conference to

which the Premier quite rightly referred.

Then on February 2, just two or three weeks ago, Donald Macdonald

again is quoted as saying: "If I were asked to lay a bet" — which, I

might say, seems a very strange turn of phrase for the federal Minister

of Finance to be using about inflation, the most crucial issue that

faces this country — "about the end of controls, I would think that

some time after January next would be a fair one." Then he went on to

say that a date may have to be set by Ottawa because the provinces

cannot agree on when to terminate the programme.

I took the trouble to get the federal Hansard . As recently as

February 7 in question period in the federal House the minister did the

most incredible waffling in response to questions about what the

federal government believes it should or should not do about removing

controls and instituting the decontrol programme. I'm quoting from the

federal Hansard of February 7. The federal minister says:

Mr. Speaker, I have asked the provinces to continue their

participation. In the meantime a group representative of several

the purpose of discussing the provisions which we set before the

meeting last week and seeking their support in particular for a general

agreement in which the private sector would participate to restrain

inflationary expectations after controls.

Mr. Stevens of the opposition asked the minister how many contacts would be

sent out from the federal government. Mr. Macdonald replied: "Mr. Speaker,

each of the provinces will be visited by the group representative of the Anti-Inflation

Board, my department and the Department of Labour."

Later on in the same series of answers, Mr. Macdonald, answering on the second occasion Mr. James Gillies, said:

The general economic climate would appear to favour decontrol. But

the ambiguous and difficult thing is that there is not that reduction

in expectations necessary. If we can get a commitment on the part of

all the major decision-makers in the community to restrain expectations

after controls come off, indeed we could look to do so at an early

date.

Later on he says:

Naturally the economic situation may change over time. That is all

the more reason that not only the provinces but the business sector and

the union movement should agree on participating with this government

in effective decontrol and post-control measures so that we can indeed

take advantage of getting controls off as soon as we can.

These answers so delightfully run in opposite directions at the same

time that I'm not surprised that unions and employers and the man in

the street wonder just what on earth is really happening in regard to

the national programme for continuing to deal with inflation and

provincial participation in that programme.

Although the member for Nanaimo (Mr. Stupich) and I disagree on the

time at which controls should be removed, I think he made the point

very well that the federal government is creating additional problems

by appearing not to know what it wants to do and when. If you read

these answers in federal Hansard as recently as 10 days ago on February

7, what Mr. Macdonald is really saying is: "Maybe we will and maybe we

won't; in the meantime we need agreement from the provinces."

I think that this province, at least, deserves credit for making

itself plainly in favour of pursuing the programme to December 31, 1978.

In the meantime we should communicate with these other decision-makers,

as Mr. Macdonald refers to them, in an attempt to ensure that when the

controls do come off, there just won't be some sudden surge of

inflation all over again.

There are so many contradictory headlines. We've got Mr. Joe Morris,

the president of the Canadian Labour Congress, saying that controls

will end pretty soon. One of the consequences of that kind of

statement, of course, is that labour negotiations are going to be

incredibly difficult this year in British Columbia because unions want

to know when controls will end or if they will end shortly and what

kind of attempt to restrict their expectations will be imposed after

the official controls are removed.

I would like to know, Mr. Chairman, if the minister can tell if our

government is participating in the kinds of consultations which Mr.

Macdonald described in the federal House 10 days ago. He said there

would be representation from the AIB, the Department of Labour and his

own ministry, the Ministry of Finance.

I wonder if I'm assuming too much when I refer to

[ Page 1033 ]

the minister's statement yesterday. I've checked the Blues , and the

minister said: "It is becoming increasingly apparent that the federal

government will terminate the controls programme this year, perhaps

even as early as July." The minister made that statement in the House

yesterday, and I'm wondering if he's come to that conclusion as a

result of these meetings that are taking place in every province with

representatives of the AIB, the Ministry, of Labour and the Ministry of

Finance federally.

It seems to me that for all the disadvantages of the controls

programme — and anybody has to admit that there have been some

inequities.... I would do my former national leader (Mr. Stanfield) the

credit of pointing out that even when the national Conservative Party

fought the 1974 election on the issue of controls, he admitted it would

be a rough kind of justice. I don't think anyone denies that the

controls programme has not been applied completely fairly or evenly and

that wages have been in many respects controlled much more severely

than profits. That is one major reason why we can expect some measure

of continuing unrest in industrial relations.

If you look at the figures, the 1976 consumer price index, excluding

food prices, rose 8.6 per cent. Actually, at that point in time, Mr.

Macdonald admitted publicly that the slowing of the inflation rate in

1976 had been due almost entirely to food prices. But on the other hand

— and he seems to be very good at saying opposite things at the same

time — he acknowledged very readily that in the months ahead there

would be much higher prices for food and that in fact there might be

another surge of inflation which would exceed the 8.6 per cent that had

been attained in 1976.

If there is that much uncertainty to our capacity to control

inflation, is this the time to talk about taking off the controls? In

my view as a layman in these economic matters, I think it would be very

foolish to take off controls in the near future, particularly in light

of the kind of statements we're seeing from the large labour unions.

They are delaying the negotiation of contracts as much as possible

because of the uncertainty; and if they do negotiate, they will

certainly negotiate a one-year contract. So the whole aura around the

anti-inflation measure issue is immensely confusing — almost as

confusing as the transfer of tax points in cost-sharing agreements. Not

quite as confusing, but almost.

I just would like to make the point, Mr. Chairman, that in the

overall scope of controls I think they have been remarkably successful.

They have certainly slowed inflation from double-digit, as the minister

mentioned yesterday, to 8.6 per cent in 1976. That's no mean

accomplishment. It seems that the conditions which justified this kind

of massive interference by government in the marketplace are just as

evident today as they were — maybe not quite as much, but they are

certainly clearly in evidence today.

The statements that we read by various groups about wanting to catch

up after controls are removed, I think, should scare every one of us

into realizing that for all the disadvantages of the control programme,

and some of the inequities, perhaps for the greater good of the whole

country removal of controls must be tackled in a very cautious and

extremely careful manner. I would like to support the minister

completely in this regard. What we are really saying is: do we want to

gamble with another surge of inflation and even worse unemployment than

we have today, or do we feel that if we all make a little bit of a

sacrifice in restraining our demands on the economy as a whole, the

very least we might accomplish is to prevent unemployment getting

worse? That is a pretty limited goal in itself.

The last point I just wanted to make, Mr. Chairman, is to ask the

minister if, from the discussions to this date with the federal

government, he can tell us whether it appears likely that at least the

federal government will soon be making an announcement one way or the

other as to whether there will be an end to controls in the near

future, or are they proposing to go on waffling around, one day saying

it might be January, the next day it might be July, or the next day

something completely different. It seems to me the confusion and the

conflicting statements from the top financial man in the country is

just making the whole climate for employers and employees immensely

more difficult. Since the minister made the statement yesterday that he

felt they might end as soon as July, would he care to elaborate why he

made that statement? Is it based on those consultations which are now

going on with Mr. Macdonald?

HON. MR. WOLFE: I share the member's concern over the

conflicting information. What I said yesterday about it becoming

increasingly apparent that the date will be soon is strictly conjecture

on our part, based on a variety of statements which have emanated from

Ottawa. I happened to attend the press conference that you referred to,

where he was asked the question. The federal minister was pressured to

answer when they might come off. Could he give them a date? He finally

came forward with the answer that you quoted, that if you wanted to

flip a coin, or if you wanted to bet, it would be early 1978. There

were other dates mentioned, but they were all sort of thrown out very

loosely.

We have the growing opinion in British Columbia that they do have a

date in mind, but that is strictly conjecture. Therefore I think we

want to reiterate our position, and that of many of the provinces in

Canada, that we do think this is premature to talk about it now. Some

900 employees have been

[ Page 1034 ]

established and have developed experience in how to handle these

matters, and to simply throw all that into the trash can would be

foolish. In any event, as far as the date goes, we just simply do not

know. We are continuing to urge — as we hope they will hear — that it

will carry on to the conclusion of the original three-year period.

I might say that reference has been made to an ongoing discussion

with meetings to be held in the provinces. Members from the

Anti-Inflation Board are here at meetings today — which I was supposed

to attend and was not able to attend...

MR. WALLACE: They should be in here listening.

HON. MR. WOLFE: ...with Mr. Pepin, the chairman. The purpose

of these meetings right across Canada is to discuss not the date of

dismantling but the subject of decontrol. We are making our position

very clear once again to the AIB people of how we feel about the

premature elements of discontinuing the programme. But it is, after

all, going to be a decision of the federal cabinet, not of the

Anti-Inflation Board. Therefore, in my view, acting on instructions,

we'll have to abide by whatever the political decision turns out to be.

Interjection.

HON. MR. WOLFE: That's another matter to be decided, Mr.

Member, but I could say this: for individual provinces to develop

different programmes in isolation would be fraught with a lack of

success.

MR. C. BARBER (Victoria): I rise to speak on a number of

subjects and, first of all, to talk about the failure of this

government to honour one of the most significant campaign promises they

made to the people of Victoria. That promise was that they would pay

their fair share of property taxes on the buildings they own in the

city of Victoria. That promise is, among others, one of the direct

responsibilities of the Minister of Finance. It is a promise which was

not kept, has not been kept, and shows no signs of being kept.

One of the more laughable advertisements that appeared in the last

campaign, Mr. Chairman, is an advertisement that appeared in the Times

on November 27, 1975: "The Team That Works." I'll table it if anyone

wonders about it. I would like to read it, although I don't mean to be

unkind because I really do consider my colleague from Victoria a

personal friend. We've known one another for a long time and I worked

on his very first campaign as alderman, although not on his second, I

must confess. "The Team That Works — They'll work hard for this

community and its people. They'll work hard for a return to responsible

government. On December 11, put them to work for you."

They go on and on and talk on a line that I think is extremely

important and is, again, the responsibility of this minister. "More

ways they'll work for you." They promise to fight for fairer taxes for

Victoria by making the provincial government accept its fair share of

property taxes. I'm sure no one denies that that party — that coalition

— campaigned repeatedly throughout that entire campaign in our capital

city on the promise to correct a historic inequity. During the same

campaign our people made the same promise because we recognized

similarly, for the same reasons being put forward then, that it was

unfair and unjust and could not, in any sense, be made rational by the

previous procedures. I wish that our government had done more. I'm

embarrassed that they didn't. I think they should have.

Interjection.

MR. BARBER: Well, I don't care what the former Premier said.

I'm concerned about what this Premier said, because our Premier lost

and yours is in power. Yours is the one who made the promise and so did

you. It's your responsibility to keep your promises. If they were made

honestly, they should be kept immediately without fail or hesitation or

reserve, because they were made without reserve.

The fact is that the previous government was defeated. That's right.

They were defeated. The fact is that this government now in power was

elected — how obvious and how banal. Do we need to talk about that any

more? Probably, politically, I suppose so. The fact is also — and this

is the one that's most crucial now because you won and we lost — that

one of your responsibilities is to honour your promises. Mr. Chairman,

this Minister of Finance has been in power going now into his second

year. They have hopelessly failed to honour this promise. They have

failed to honour a most significant promise to the people of the

capital city and I think they have no excuse.

During our administration the McMath report was commissioned. During

that administration, recognition at least was taken of the fact that

this historic inequity, inherited over many years, could no longer be

rationalized or justified. That report, of course, was cut short by

this government. That report was suppressed for six months. That report

was finally released when finally they realized they had a legal

obligation to do so and could find no further excuse for suppressing

it. The report contains substantial and reasonable recommendations in

favour of the province paying its property taxes on virtually all of

its holdings in the Province of British Columbia. We'll be debating

that report at some length later on in this debate. But particularly

now,

[ Page 1035 ]

I'm concerned about the failure of that coalition and that minister to honour its promise.

Is it not fair to ask, Mr. Chairman, whether that promise was made

honestly, whether it was intended that it be kept? Certainly the people

of Victoria believed that the promise was made honestly. They believe

that the promise was intended to have been kept.

This government has won the unique distinction of having been

described by the mayor of Victoria as "the biggest welfare bum in

British Columbia." One presumes that's no great source of pride for

that government. They certainly don't quote him very often. The biggest

welfare bum in British Columbia is the provincial government that, in

the capital city, fails to pay its fair share of property taxes. I want

to introduce some figures into the debate. They were provided to me by

the B.C. Assessment Authority and by the City of Victoria itself. The

figures from the Assessment Authority date from its publication of

March 8, 1976. The figures from the City of Victoria were released by

the mayor of Victoria in correspondence, in public debate and through

local newspapers. I'd be happy to table them if there is any doubt.

The assessed value of land owned by the Province of British Columbia

in the capital city at 100 per cent is $18,189,220. Improvements to

the buildings there on that land, again assessed at 100 per cent, is an

additional $31,792,570. The taxable assessed value, therefore, is

$42,033,647.

HON. MR. BAWLF: Is that 100 percent?

MR. BARBER: That's what I said: 100 per cent. That's the

basis on which the Assessment Authority publishes those figures from

which I'm quoting, March 8, 1976. It's not another trick from the

Chamber of Commerce or the tourist bureau. It's the Assessment

Authority saying so. Let me repeat, the taxable assessed value at 100

per cent is $42,033,647 on land and improvements held by the

provincial government in the capital city. Now the mill rate, of

course, is applied to that figure. The province last year actually paid

a mill rate of 15 and, applied to that figure, contributed to the city

of Victoria the sum of $630,504.70. That's information directly from

the mayor's office.

HON. MR. WOLFE: Did you say $42 million?

MR. BARBER: Yes, I'll give it again. The total assessed value

of the land and buildings owned by the province in the capital city is

$42,033,647. The mill rate was applied to that figure. The mill rate

of 15, which is the only one that the province presently honours,

produced, therefore, as a payment to the city of Victoria, the sum of

$630,504.70.

Now in fact the general mill rate last year was 48.56. It was not

15 mills but rather more than three times that. On the basis of the

general mill rate, rather than the special one which only the province

pays, the total tax at 100 per cent assessment should have been $2,038,631.

[Mr. Rogers in the chair.]

I'm well aware of that, and I'll get to that. I want to know what

your position is and I want to know how much longer it's going to be

frozen. I want to know what you're going to do to honour your campaign

promise to pay your full and fair share of property taxes in the city

of Victoria.

Because it should have been $2,038,631, the people of Victoria

suffered a loss of $1,408,127. Again, those figures are provided to me

by the Assessment Authority and by the mayor of Victoria.

There's an interesting coincidence, Mr. Chairman. The loss, on that

basis, to the city of Victoria was $1,408,000. The increase this year

in taxation required by the city of Victoria to conduct its business

just happens to be $1,487,154. It's quite remarkable, and surely an

unpleasant irony for the treasurer of the city of Victoria, that the

amount that the city has to raise this year — an extra $1.4 million —

is almost identical to the amount that the province failed to pay, had

they honoured their campaign promise. The difference between this year

and last year for the city of Victoria — the extra amount that they're

required to raise — is 14.7 per cent.

Because the amounts are so nearly identical — $1,487,154 that was

increased; $1,408,127 that was not paid — the city of Victoria was

required to increase its taxes by 14.7 per cent. They could have been

reduced by 14.7 per cent. This province, had it honoured its campaign

commitment, would have seen that there would have been virtually no tax

increase whatever in the city of Victoria. None. Zero. Had they

honoured their commitment, the tax increase about to be faced by the

taxpayers of the city of Victoria would not have been met at all.

Now in the city of Victoria that's no small matter because, as you

know, Mr. Chairman, we're in the position in my riding of seeing that

better than 60 per cent of the people who live here are tenants. Of

those, I understand, more than 45 per cent are retired persons on

pensions, low and fixed incomes. Those people pay property taxes. They

pay them through their landlords; they pay them through their rent.

They're affected by these increases.

The unhappy irony is the fact that this province, having failed to

honour its campaign promise, sees the city of Victoria having to raise

taxes to the equivalent of $1.4 million when it just happens that it

was the same $1.4 million that the province failed to pay. It tells us

that either the promise was not meant

[ Page 1036 ]

honestly...

HON. MR. BAWLF: Your figures are wrong.

MR.BARBER: ...or will only be kept prior to the next election when it serves their political purposes.

If these figures are wrong, then they have been wrongly provided by

the mayor of Victoria, by one of the aldermen, Mr. Hays, and by the

B.C. Assessment Authority.

HON. MR. BAWLF: You're assuming that the province has paid nothing.

MR. BARBER: If they are wrong....

MR. CHAIRMAN: Order, please, Hon. members. The second member for Victoria has the floor.

MR. BARBER: I'm not making any such assumption. The province

actually paid last year, at 15 mills, $630,504.70. They should have

paid $2,038,631, had they honoured their promise. The difference is

$1.4 million. Is that clear?

AN HON. MEMBER: Say it again, Charles.

MR. BARBER: I'll say it again.

MR. CHAIRMAN: Hon. member, kindly address the Chair.

MR. BARBER: The mayor of Victoria, describing this government

as the biggest welfare bum in the province, says the maximum loss — he

has said it; I have said it; they said it during the campaign and they

didn't much quibble on that detail during the campaign — was $1,408,127.

Now what if they had paid at the present rate, Mr. Chairman? The

loss to the people of Victoria would still be this year, I am informed,

slightly better than $200,000. Do you dispute that figure? I ask the

Minister of Finance: does he dispute that figure? If he does, then I

suppose I'd better get back to the mayor because that's what I

understand from the city of Victoria is the figure. If I'm misinformed,

I apologize. I'm simply quoting from public authorities that I am sure

are telling the truth.

HON. MR. BAWLF: Nobody pays 100 per cent assessment.

MR. BARBER: I'm well aware of the arguments about assessment....

MR. CHAIRMAN: Hon. member, kindly address the Chair. You're aware of the rules.

MR. BARBER: I'm aware of the rules, and I'm aware of the

argument, and I'm aware of the promises that this group has failed to

keep. They came into power having made that promise. They've been in

power going into their second year and they've failed to keep it. What

is their excuse, Mr. Chairman? What is the reasonable excuse? Was the

promise phony? Was the promise not intended to be kept or even

remembered? Is the promise about to be kept and does the Minister of

Finance have good news for the people of Victoria? If so, I will be

happy to hear it.

MR. KAHL: Move the capital to Vancouver.

MR. BARBER: On the basis of the old and much-argued-about

assessment, the minimum loss is better than $200,000 last year. On the

basis of 100 per cent assessment — which is what that party has argued

about for a long time, and what we understand the legislation they are

shortly to introduce will in fact bring into reality in this province —

the loss is $1.4 million. A loss of $200 is unfair, a loss of $200,000

is not going to be forgotten, a potential loss of $1.4 million cannot

be excused. These guys have no excuse, Mr. Chairman. They made the

promise. The people of Victoria insist that they keep the promise or

admit to the people of Victoria that it was a phony promise from

beginning to end. I'd be happy to hear what the minister may say in

defence of his failure to keep the promise. However, there are a couple

of other matters I also wish to raise.

MR. KAHL: Read that phrase again about the failure to keep their promise.

MR. BARBER: The people of Victoria are listening.

MR. KAHL: Not to you.

MR. BARBER: I want to talk about the Assessment Authority,

Mr. Chairman. I want to talk about a problem with legislation. I want

to talk about the fact that assessment to municipal government has been

increased by $3.1 million this year because of the failure of that

government to maintain a pattern and to honour an expected financial

commitment to municipal government. I'll get to that in a moment.

I'm first of all concerned with the failure of legislation and the

failure of the minister to act in the face of an obvious and grave

loophole in the Assessment Act. I do so on behalf of the member for

Prince Rupert (Mr. Lea) who raised this matter earlier in the House,

who is at the moment working on a fairly important project which will

shortly be drawn to the attention of this House, and who therefore

cannot be here today. Accordingly, on behalf of the

[ Page 1037 ]

member for Prince Rupert, I wish to trace the curious history of

Can-Cel's application to reduce its assessment in the city of Prince

Rupert. I want, using that case and tracing that history, to

demonstrate, Mr. Chairman, that there are indeed loopholes — one most

significant one is in

section 24 of the Act — that the minister has

failed utterly, even on the advice of the Assessment Appeal Board

itself, to take any action on whatever.

MR. CHAIRMAN: Hon. member, I must remind you that you can't discuss legislation during Committee of Supply.

MR. BARBER: I'm discussing the course of a particular

assessment, the significance of that in this minister's debate, and our

call on the minister to accept responsibility, to take action here and

now by making a commitment to take action later when discussing

legislation, to take action as a member of those benches to tell the

people of British Columbia that the obvious inequity....

MR. CHAIRMAN: Hon. member, that still involves discussing legislation and therefore it's out of order.

MR. BARBER: Well, Mr. Chairman, I wonder if you would be so

good then as to tell me when, if not now under the minister's general

responsibility, as I was advised that one could discuss his general

responsibilities under his own office vote....

MR. CHAIRMAN: Hon. member, you can discuss his administrative responsibility at this time.

MR. BARBER: Well, as you know, Mr. Chairman, the Minister of

Finance is responsible for, among other things, the Assessment

Authority. Would you tell me when I may discuss failures of that

minister to deal responsibly with problems of the Assessment Authority

and with the problems of the people of Prince Rupert in regard to this

particular piece of decision-making that has occurred?

MR. CHAIRMAN: Well, it's only the duty of the Chair to advise you what is in order and what is not in order, and I've advised you.

MR. BARBER: Well, is it unfair to ask what is in order, Mr. Chairman?

MR. CHAIRMAN: It's the duty of the Chair to advise you when you are in order.

MR. BARBER: Well, I'll just keep going anyway. I believe that

this minister should be responsible, and if I may therefore phrase it

somewhat more generally and philosophically and not attempt at this

moment to tie it to a specific piece of legislation, thus not offending

the apparent rules of the House, I will do so.

The minister is responsible for seeing that fair play and fair

treatment is accorded all levels of government throughout this

province. I wish, therefore, to trace a particular case and draw a

general conclusion, which I believe will persuade the minister to do

his job. He has failed to do it in this instance. I'm sure he will do

it after this most excellent tracing prepared for me by the member for

Prince Rupert.

Can-Cel, as you know, was ordered by the Pollution Control Board a

number of months ago — actually, there were several orders, I

understand — to install several million dollars worth of clean-up

equipment at its sulphite plant at Prince Rupert. This equipment was

important and immediately necessary in order to improve environment

quality in Prince Rupert.

Can-Cel, having been ordered by the Pollution Control Board to do

so, then attempted to have its 1975 assessment reduced retroactively.

At first, Can-Cel was turned down by the Assessment Authority. Their

appeal for retroactive consideration was denied. On September 8, 1976,

Can-Cel went to the Assessment Appeal Board, for which this minister is

responsible. Can-Cel went to the Assessment Appeal Board. Sitting for

the board was Mr. W.M. Anderson, chairman; Mr. J.Y. Gardner, member;

Mr. M.J. O'Connor, member. The appellant was, of course, the Canadian

Cellulose Co. Ltd., largely owned by the people of British Columbia.

The respondent was the assessor of area No. 25, otherwise known as the

northwest assessment district, Mr. H.R. Jones.

The appeal was considered beginning on September 8, 1976. The appeal

was considered exhaustively, in our opinion, and they rendered a

judgment on December 31 that found in favour of Canadian Cellulose. The

significance of that, Mr. Chairman, for which the minister is indeed

responsible, is precisely this: Prince Rupert is now stuck with making

good a loss of $784,000 in tax revenues which they should have been

accorded. They should have been paid by Canadian Cellulose Ltd. They

are stuck for more than $750,000 because of a problem. I'll go into

that problem later.

Now the basis of the judgment issued on December 31 by the

Assessment Appeal Board may be found in

section 24(6) of the

Assessment Act. If I may quote it briefly:

"Notwithstanding subsection (1) or anything to the

contrary in this Act, (

a) except as provided in paragraphs (b), (

c) and

(

d) in sections 25 and 27, land and improvements shall be assessed at

the same value and on the

[ Page 1038 ]

same basis at which the land and improvements

were assessed for the calendar year 1974; (

b) where a change in the

value of land and improvements occurs by reason of (1) a change in the

physical characteristics of the land or improvements or both, or" — and

this is the most key part, Mr. Chairman — "new construction or new

development thereto, thereon or therein, or changes in zoning and

reclassification."

That's the key piece of legislation for which, as you know, that minister is responsible.

The phrase in dispute, therefore, was "new development." The first

time around they were turned down because the phrase "new development"

was not construed or understood to include the order by the Pollution

Control Board to compel Can-Cel to upgrade its pollution, its cleaning

and its filtering facilities. Upon appeal, that definition, which does

not appear anywhere in the legislation and is not otherwise provided

for, was found to be at fault. The Assessment Appeal Board, in its

ruling of December 31, did, therefore, interpret that the new

development met the requirements placed by the PCB on Canadian

Cellulose to clean up its act, so to speak. This has established a very

major loophole, Mr. Chairman. The loophole is obvious to you, I'm sure.

What it means is that any agency of government — the Pollution Control

Board, the Workers' Compensation Board — which compels an industrial

concern to install equipment or in any other fashion alter its

facilities so as to bring that equipment or those facilities up to

safer standards, may cause local taxpayers to bear the entire burden of

that cost.

It was not the city of Prince Rupert that expected to have to pay

for the installation of this anti-pollution equipment, Mr. Chairman.

AN HON. MEMBER: But that's the way it worked out.

MR. BARBER: But that's certainly the way it worked out. What would

happen, Mr. Chairman, to the city of Victoria if the Pollution Control Board

decided to force B.C. Forest Products on Gorge Road to install cleaning and

scrubbing equipment? Could B.C. Forest Products go back to the city of Victoria

and say: "Hold on a minute! We've been compelled to establish a new

development under the terms of

section 24 of the Assessment Act. We're not

going to pay our assessment; we're going to appeal it"? On the basis

of this precedent they would have every expectation of winning. On the basis

of the failure of this minister to comprehend the significance of this decision,

municipal councils throughout British Columbia are now wondering who's next.

First of all, Prince Rupert got it; the city of Victoria might get it next.

I suppose it's just possible that the minister's own riding might get

it sometime, and then maybe we'll see some action.

Through no fault of its own, Mr. Chairman, the city of Prince Rupert

has been stuck with making up $784,000 because the minister has failed

to act responsibly, or even knowledgeably, or even interestedly, to

close an obvious loophole. This is an extremely important failure —

there are others. I will get back to tracing the events.

On January 14, 1977, the Assessment Appeal Board itself told the

Minister of Finance that he had better get off his chair and take some

action. It's clear to me from the reading of their 1976 annual report,

signed by its chairman, Mr. Anderson, that they themselves were not

satisfied with the fairness of their decision in regard to the Prince

Rupert case, because they recommend to the minister that action be

taken. The minister, as usual, has failed to even respond, much less to

take positive action. Their own annual report tabled in this House says

in the third paragraph:

"A large percentage of appeals heard during 1976

involved

section 24(6) of the Assessment Act" — parenthetically, Mr.

Chairman, the one to which I've just been referring — "and included

appeals from a number of major industries arguing questions of law,

rather than appraisal problems per se. In interpreting this

section the

board requested the assistance of the supreme court, by way of stated

case and for instances."

They continue in another paragraph:

"The board has previously submitted to the Minister of

Finance, the Hon. Evan Wolfe, its recommendation that

section 24(6),

(7), (8), (9), (10), and (11) of the Assessment Act be repealed due to

the inequities in assessment which magnify themselves each year."

They continue with their advice:

"The board must request that

section 11 of the

Assessment Act be amended with the insertion of 'by the Assessment

Appeal Board' in place of 'under the provisions of

section 67.' The

obvious reason for this request is that the present wording allows for

appeal to the courts without reference to the board. This

section as

written, in effect, does away with the necessity for the Assessment

Appeal Board."

There are some significant problems here. The one we're debating

today is the failure of leadership on the part of that minister to act

on competent advice from agencies of the Crown to close a loophole, the

failure of leadership to close that loophole and to protect municipal

government throughout British Columbia. We're concerned about the

failure of leadership on the part of that minister to act sensibly,

rationally and quickly to prevent every municipal council from being

stuck in the same way that Prince

[ Page 1039 ]

Rupert has been stuck by this decision.

Let me repeat, Mr. Chairman, that because the minister has failed to

act, the Assessment Appeal Board itself has tried to act. They made a

decision on December 31 of last year. On January 14 of this year they

indicated their obvious dissatisfaction with the fairness of that

decision, which they felt they had to make by virtue of the legal

interpretation of the language of the Act, and recommended to the

minister that those sections be repealed all together. I think they've

taken a very fair and very reasonable approach.

AN HON. MEMBER: Hear, hear!

MR. BARBER: The problem is that the minister has been totally unreasonable and hasn't acted at all.

However, it's not just the Assessment Appeal Board which has acted

in a responsible manner. Other jurisdictions have as well. On January

19, the mayor of Prince Rupert sent — at least, we received it in our

office then — the following telegram:

CANADIAN CELLULOSE COMPANY LIMITED, THE GOVERNMENT-OWNED FOREST

PRODUCT CONCERN, HAS WON AN ASSESSMENT APPEAL BOARD JUDGMENT ON ITS WATSON ISLAND

SULPHITE MILL WHICH, UNLESS OVERTURNED BY THE SUPREME COURT, WILL AWARD THE

COMPANY A REFUND OF $784,000 ON ITS 1976 TAXATION. THIS AWARD BY THE BOARD WAS

BASED ON AN

INTERPRETATION OF

SECTION 24 OF THE ASSESSMENT ACT. 'WE CONSIDER

THE ACT, AS PRESENTLY WRITTEN, TO BE AMBIGUOUS LEGISLATION WHICH CAN RESULT

IN A NUMBER OF SUCCESSFUL, LARGE CORPORATION PROPERTY TAXATION APPEALS FOR MILLIONS

OF DOLLARS.'"

MR. CHAIRMAN: Hon. member, once again I must draw your

attention to the fact that you are discussing an area of legislation,

and we are here to discuss the estimates of the minister.

MR. BARBER: And I'm here to discuss the responsibility of

this minister, Mr. Chairman. He is responsible for all of those things,

and the people know it. He is responsible for the Assessment Appeal

Board and the Assessment Authority. He's responsible for acting on the

reasonable and legitimate requests of municipal governments in British

Columbia for protection. He's responsible to tell us what he's going to

do. He's responsible to answer these questions. I think this is a very

reasonable debate and I am proceeding quite cautiously.

MR. CHAIRMAN: Hon. member, I will quote from Sir Erskine May's Parliamentary Practice .

MR. BARBER: Oh, I've read that bit, Mr. Chairman.

MR. CHAIRMAN: Oh, you have? That's fine if you have. I'll

read it again. It's on page 725. It says: "Legislation, and matters

involving legislation, can only be discussed in supply under a

substantive motion." I bring that matter to your attention.

MR. D. BARRETT (Leader of the Opposition): There's no legislation. You've got your radar on backwards.

Interjection.

MR. BARBER: That's right; it has been passed. I'm urging the

minister to consider acting on his responsibilities, to act on the best

advice he seems to have received from his own agencies, and from us, to

close a loophole. I have read the bill very carefully.

MR. CHAIRMAN: Hon. member, now I must bring your attention to the fact that you have three minutes left.

MR. BARBER: I was watching that. I'll continue with the

telegram. I don't think the people of Prince Rupert would particularly

enjoy your apparent willingness to get off the topic. The people of

Prince Rupert have been hit with a bill for more than $750,000 thanks

to the failure of that minister to act responsibly. I'll continue with

the telegram and, later on, jump up again and continue with my remarks.

The telegram ends as follows:

ALTHOUGH PRINCE RUPERT MAY NOT BE ABLE TO ACCEPT BENEFIT FROM

NEW LEGISLATION, WE BELIEVE THAT THE ASSESSMENT ACT SHOULD BE REVISED TO PROTECT

OTHER MUNICIPALITIES AND SCHOOL DISTRICTS.

Before I sit down, observing the time limit, I ask the minister if

he would care to respond to any of the advice that's been given and

care to tell us whether or not he intends to exercise any leadership

whatever to protect the municipalities of British Columbia from being

stuck in the way that Prince Rupert has been stuck. If the minister

declines to answer, I'll be up again.

MR. CHAIRMAN: The hon. member for North Okanagan.

MRS. P.J. JORDAN (North Okanagan): Ski capital of the world,

Mr. Chairman. If I might add, it's the only place I know of in British

Columbia now where they are skiing happily every day. Accommodations

are at half price, if anyone would care to go.

Mr. Chairman, that act that preceded me is a hard

[ Page 1040 ]

act to follow, not because we are unsympathetic to the plight and

the problems of people in Prince Rupert, but it's his total involvement

of what he calls total debate with totally sweeping statements which

generally are totally wrong that we particularly enjoy. I do understand

that rumour has it that it is a total authority on the totals of

welfare.

Without interfering with the minister, who I think is quite capable

of answering his own charges, I would like to address myself just for

one moment, before I bring up a couple of matters of concern to the

people of the constituency of North Okanagan, to some of the comments

that were made by the hon. member for Victoria (Mr. Barber). I would

suggest to him, if he would like to listen, that if the people of

Victoria are unhappy with Victoria being the capital of British

Columbia, there are many other communities that would very much like to

have it. We would be very glad to bid on it. In fact, I am not sure I

wouldn't recommend to the Minister of Finance that if the unhappiness

continues, we recommend to the Premier that we put the capital of this

province and the seat of government up for tender throughout the

province.

I assure you, Mr. Member, while there is always room for more, your

figures were totally out of context. Victoria has received, in lieu of

taxes from the government of British Columbia in the last few years, in

1972, $300,000; in 1975, $400,000; and this year, Mr. Member, $750,000,

well over a 100 per cent increase since 1972 and, in fact, nearly a 100

per cent increase since last year. That's a very sizeable amount of

money which goes a long way towards helping the city of Victoria

balance its budget.

MR. BARBER: The mayor doesn't think so.

MRS. JORDAN: And I would say again, if the people are unhappy

about this in Victoria — not that we wish them any ill will — I believe

there are many other communities that would like to have the seat of

government there. I think the member should also be aware that while we

don't begrudge it in other parts of the province because we are very

proud of our capital city and we do want to give it many benefits, the

Capital Regional District has recently had $400,000 per year to spend

solely on the beautification of the city of Victoria and the area

encompassed in the Capital Regional District.

MR. BARBER: That was the same grant we gave them.

MRS. JORDAN: I am sure that Prince Rupert would like to have

that, Mr. Member. I would also advise the member that there is over

$500,000 of capital moneys in the works within the city of Victoria and

slated for next year. Mr. Member, $750,000 in lieu of taxes in the form of a grant; $400,000 a year

for the Capital Regional District; and $500,000 worth of works in

progress within this year — I think that's a very handsome contribution

towards the city of Victoria.

As I say, there is always room for more. But looking at it from the

other parts of the province, Mr. Member, as we have a responsibility to

do, we think you are, indeed, getting a great deal of assistance. I say

we give it with pride, but we must remember the problems elsewhere.

O would also remind the hon. member that the Minister of Municipal Affairs and Housing (Hon. Mr. Curtis)....

MR. CHAIRMAN: Hon. member, kindly address the Chair.

MRS. JORDAN: Through you, Mr. Chairman. This no doubt would

interest you, Mr. Chairman, because you have some serious housing

problems in your area. You might recall that the hon. Minister of

Municipal Affairs and Housing issued a forgiveness of $100,000 for

subsidized housing in the city of Victoria, a great relief to the

individual taxpayers of this area. Again I say, we give it willingly

because those moneys come from the rest of the province. But we do feel

that the member is doing a disservice to the constituency he represents

when he doesn't bring forth the total truth.

I also might just add that the cost to many of the municipalities

throughout this province and many people in coming to Victoria to

present their problems to government is an extreme burden. We feel that

it costs our aldermen, our regional district representatives, our

hospital board representatives, our community service representatives,

our industrial representatives, our tourist representatives and the

many other people who must come to Victoria to transact their business,

at least $50 a day minimum for the barest necessities of food and

shelter, plus their transportation. That, Mr. Member, goes directly

into the economy of Victoria. That's why you're able to have some

beautiful hotels and some beautiful buildings here, because the rest of

the province is contributing daily to the direct economy of Victoria.

We do so gladly, but I assure you happily that if you continue to

complain, the other members from this province will seek to have the

Premier put the capital or the seat of government out for tender

because many of us would like to have it.

Interjection.

MR. CHAIRMAN: Hon. member, I'm having some difficulty in

relating this to the estimates of the Minister of Finance. Perhaps we

could get back to his budget.

[ Page 1041 ]

AN HON. MEMBER: Hear, hear!

MRS. JORDAN: I suppose you weren't in the chair, Mr.

Chairman, when the subject was discussed. The reason that I did stand,

though, was to bring to the minister's attention just a couple of

points which are of concern to the people in the North Okanagan

constituency.

Interjection.

MRS. JORDAN: As a matter of fact I hear it's quite good, Mr. Member.

They are concerned about the philosophy that our government has, and

that they hope will have, in terms of assessment of home property and

taxation of home property. Our philosophy, Mr. Chairman, is to

encourage and to recognize the need and the opportunity for individuals

to have private home ownership — to own their homes, to own their own

farms. In this time of high costs it's a very difficult process

although the government has done well in stimulating this opportunity.

But the second phase of this philosophy is the inevitable picture of

taxation through assessment and the resulting costs of the taxation

policy adopted by the government and the municipalities. I would ask

the minister to bear in mind — as legislation is being drawn, as

policies through the finance department are being drawn and as he is

hearing representation from and in conversation with the assessment

authority — that the people of British Columbia want to see a

philosophy, reflected in our assessment and taxation policies, of

encouraging people to take the benefits and have the opportunity to be

in their own homes. They don't want to be moved out of their homes by

taxation or have their homes confiscated by taxation.

As a companion to that, it's always been a matter of concern to me

and to many people that — perhaps not intentionally — the general

philosophy of people who have been in municipal governments for a long

time, often provincial governments, and those who work within the civil

service or the bureaucracy of these areas, is to feel that home

taxation is a very legitimate form of taxation. It's a form of taxation

that can be used fairly liberally. I propose to the minister, through

you, Mr. Chairman, that this is a wrong philosophy. When we relate the

cost of housing today to taxation, there is simply no real

relationship, because the value of your property is only real when you

sell your property. I don't want to get into the matter of assessment

at this time. I only want to speak in a philosophical sense. But there

has been a tendency to use this as a punitive form of taxation. People

tend to want to improve their homes and the resulting fact is that

their taxes increase.

The same is in place with industry. If an industry comes in and buys

an old building, fixes up the building and then landscapes in order to

contribute to the community, it results in higher taxation. I feel that

we should entertain a policy whereby we could offer incentive taxation

— to homeowners particularly, although I'd like to see it also for

industry — whereby if people fix up their homes so that they are an

addition to the community, then they don't receive a punitive tax

increase. In fact there may be a level from which we can work where

they would receive an encouragement. I'm glad we're together on that,

Mr. Member. It's nice to be together on many things. I think we have to

recognize that a nice residential area or a nice industrial area in a

community not only increases the value of the individual piece of

property, but that that value is only reflected, as I mentioned, when

the land is sold.

The second thing is that I think we have to recognize that this type

of development improves the value of the community itself — not in

terms of dollars and cents, but in terms of being a nice place to live,

a place where people want to go and a type of environment that is

stimulating to people, rather than depressing.

The third thing is that we are spending a great deal of time and

energy, as we should, on environmental management today. I believe we

must recognize through incentive taxation for homes that this type of

management of home property is part of environmental management. It

provides green areas. You can get into the whole biological balance and

all sorts of areas. But it is a very major and contributing part of

environment. Again, it should be an incentive rather than a punitive

approach.

I feel also that this applies to industry. I believe that if you

look at the figures, you will find that industrial developments don't

change hands that much. In other words, a company will go into a

community and make a major investment. It is established there, and it

may remain there for many years, almost ad infinitum. These companies

should be encouraged by the municipal officials to upgrade the

appearance of their property, to landscape, to put their parking at the

back, where possible, so that our industrial areas can be, should be

and will be an aesthetic advantage to the community in terms of the

benefits to the local community people and, secondly, in terms of

environmental management. Once again, once their basic assessment is

established and they are there and they continue these improvements,

then I believe we should entertain a policy whereby there would be an

opportunity to offer them some form of incentive to keep it up and to

improve it.

Speaking of the Assessment Authority, Mr. Chairman, I would like to

mention this. I don't want to sound overly critical. I certainly am a

great respecter — and I have said it many times in this House — of many

of the professional civil servants.

[ Page 1042 ]

But there is a problem with public relations and public courtesy in

the Assessment Authority. I don't know how widespread it is in terms of

every individual, but I do know there is enough concern on the part of

the public that several members are having this brought to their

attention.

This is the attitude of some of the assessors when they go on to

people's private property, into their homes: either, "So what are you

complaining about your taxes for? You're rich"; or, "Aren't you lucky

to have this? You should be willing to pay your taxes." In other words,

it is a negative attitude, it is a discourteous attitude, and it is an

attitude of adjudication, which is not their prerogative or their

business.

No one knows when one sees a person's home that is a nice home, and

well cared for, and beautifully landscaped, whether this is the result

of the fact that they have wealth and they can afford a gardener and a

repairman, or, in fact, the result of their priorities. The assessor

himself may like to frequent the pub three nights a week, have a boat

and a number of other things,

whereas the private homeowners may have

their priorities as their home. It may be really financially very

difficult for them to develop this home. That is where their family

priorities are, and they shouldn't be punished for it, nor should they

be the subject of ridicule, rudeness or adjudication by someone who is,

in essence, their employee.

So I would ask the minister, without in any way damaging the whole

reputation of the Assessment Authority, if he would ask them to embark

upon a public courtesy and public information programme. If it is not

acknowledged by individual members of the Assessment Authority, then

the public should have the right to make this known and name the

individual, and that individual should be probably removed from that

position. I would think that would be fair justification for movement

to other employment.

The last point that I would like to bring to your attention, Mr.

Minister, is again in the area of assessment and zoning. That is the

problem we are having in many areas of the province — certainly in the

North Okanagan. I think it has been mentioned by others, but I would

like to draw your attention to it today.

You have people who have agricultural land in small parcels. They

are zoned into agriculture in terms of the regional plan or the

municipal zoning, and they are in the agricultural land freeze. Yet

they are taxed as either improved properties or development properties.

In other words, there is a false taxation in effect in certain areas of

British Columbia. There can be no justification for this approach.

At this time there is no avenue through which the municipality can

make alterations. So I would ask the minister if he would be prepared

to see that there are provisions so that land that is in the land

freeze, that is agricultural, that is zoned into agriculture, can be

assessed on that basis rather than as improved property or development

property.

The second point of concern — and I don't know the solution — is

where there may well have been commercial land which has been

down-zoned in order that the municipal council can bring in land-use

contracts or bring in other types of development tools. This property

is down-zoned, but its use hasn't changed. The use it was in may well

have not been compatible with its taxation then, but is still

compatible with the use that it is down-zoned to. But in fact, the

taxes and the assessment are not reduced accordingly.

So we have two rather grievous movements in this area: (1) the use

of zoning and downzoning to gain control, which may well reduce the

capability and the capital value of that land, as well as the income

value; (2) there's no adjustment of the assessment or taxation of that

land.

I would hope the minister could advise whether there is some avenue

through which these people can have a more equitable situation.

HON. MR. WOLFE: Mr. Chairman, dealing with some of the last

questions raised first from the member for North Okanagan (Mrs.

Jordan), she mentioned the need for incentive for improvements by

householders and how it worked against the system for this kind of

effort would produce increased assessments. This is certainly a problem

in the entire system of assessing homes particularly, and we've given

this a lot of thought. All I can say at this stage is that we're

studying it, but what you suggest does fly in the face of the basics of

the assessment valuation system where, if one home is better than

another one, it's worth more on the assessment roll, it's worth more in

the marketplace, and so on. But I certainly agree with your

proposition. We should not be providing a disincentive to people to

improve their properties both externally and internally.

You mentioned the Assessment Authority and the indications of

improper attitude in certain places. I know that the head of the

authority is aware of this; you've made him aware of this. He is

following up, and I certainly will see that that is done.

You referred to the matter of land in the land freeze. This is a

concern of many members. As you and all members know, there is further

legislation proposed which the House has not had an opportunity to

review yet. I mentioned this yesterday; it is in the system and we hope

to be bringing forward this legislation at an early date. Perhaps that

is something we could discuss further at that stage. What you're

actually saying is that this kind of property involved inside of a land

freeze

[ Page 1043 ]

should be separately treated from normal farmland, rural property, et cetera.

I certainly would not want to sit down without referring to the

member for Victoria (Mr. Barber) and his comments earlier. I don't know

where to start except to compliment him on his performance; it was

academy award stuff.

AN HON. MEMBER: Oh, come on!

HON. MR. WOLFE: Yes, I want to compliment him.

Interjection.

HON. MR. WOLFE: He's a little way away from facts — almost 180 degrees.

Interjections.

HON. MR. WOLFE: No, no. First of all, he's referring to the

fact that the grants have not been increased. At least he tried to

transfer the fact that grants, based on 15 mills, should have been

based on $2 million rather than on $630,000. So what he's suggesting, I

think...

MR. BARBER: You haven't kept your promise.

HON. MR. WOLFE: ...is that we should be paying Victoria for

grants in lieu of taxes on provincial properties based on 100 per cent

of the values of those properties. That's exactly what your formula

suggested, Mr. Member. On comparison that would say that any local

resident should pay on the basis of 100 per cent of his property. A

property worth $100,000, at 48 mills, would mean taxes would be $4,800.

Now is that what you're proposing?

You're nodding your head. I think what you're suggesting is that the

provincial government pay on the basis of 100 per cent but local

residents don't. You're proposing a different system than would apply

to anyone else. Far, far greater.

MR. BARBER: Neither I nor the mayor said that.

HON. MR. WOLFE: In this whole debate regarding treatment of

local municipalities, we shouldn't ignore what has taken place in

estimates this year because I think, by and large, municipalities have

received better than average treatment to other people involved in the

provincial budget. I would suggest that the member look at vote 197 —

grants to municipalities, including the per capita grants, revenue

sharing — which shows an increase of $15 million, or 12 per cent. So to

be fair, one has to consider that Victoria, like any other

municipality, is enjoying, or will enjoy, the benefits of those

increases in terms of other things than the grants in lieu.

Furthermore, I'd like to mention, before leaving this continuous

debate on grants in lieu of taxes, that often reference is made that

the federal government pays on the basis of the full mill rate and the

provincial government does not. Keep in mind, Mr. Chairman, two

important facts. The federal government exempts far more local

properties than does the provincial government in calculation of the

assessment base for this purpose. For instance, in the city of

Victoria, the federal government, in the calculation of what they pay

in lieu of local properties, exclude wharves and docking facilities. In

greater Victoria, just as examples, they do not include Royal Roads

school or the naval yard drydocks. These are just examples of local

properties owned by the federal government which they do not include in

their assessment base.

Furthermore, in the calculation of the grant that they pay, they

base theirs on one-half of the value applied to provincial government

properties. So they do not pay on the basis of assessment, as is

allowed to take place in the case of the provincial argument.

I might say also, as has been said by the other ministers, that in

this coming year Victoria has enjoyed certain other subsidies. For

instance, the Minister of Municipal Affairs and Housing (Mr. Curtis)

has reduced the requirement for subsidized housing. This was eliminated

at a saving to Victoria of $100,000. Then $400,000 a year goes to the

Capital District Commission. No other municipality receives this type

of benefit.

There's $500,000 in works in the Inner Harbour. No other city

receives these kinds of benefits. Mr. Chairman, the member referred to

the Assessment Authority and the fact that we failed to take action. I

can only say that we did — this entire House — approve a bill that was

passed amending

section 24 which, in effect, for the year 1977, opens

the door to reduction of assessments. He didn't point this out in

mentioning the actions that have been taken with regard to the current

situation.

Coming down to the last item you mentioned, Mr. Member, which was

Can-Cel, this matter is before the supreme court in the nature of two

appeals, one by Prince Rupert, one initiated by the Assessment

Authority, and just now the government has extended the time limit

allowed for t