1981 Legislative Session: 3rd Session, 32nd 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)

TUESDAY, MARCH 10, 1981

Morning Sitting

[ Page

4419 ]

CONTENTS

Routine Proceedings

Budget debate

Mr. Stupich –– 4419

Hon. Mr. McGeer –– 4428

Mrs. Wallace –– 4432

TUESDAY, MARCH 10, 1981

The House met at 10 a.m.

Prayers.

Orders of the Day

ON THE BUDGET

Interjection.

MR. STUPICH:

Mr. Speaker, I appreciate the Attorney-General's attempt at levity this

morning. May I just say that between the hours of 3 o'clock when I left

the building and 8 o'clock when I returned I didn't really have time to

shorten the speech. I think it was Abe Lincoln who first said — or at

least the first time I ever heard of it being said — that the length of

a speech varies in inverse proportion to the time that you have to

prepare it; and since I had little time, it's going to be very long.

Mr.

Speaker, it's been called Black Monday. I recall that when I rose to

speak in the budget debate two years ago it was the day after April

Fool's Day. I spoke on the Monday, and that evening the Premier called

an election. I think there's little fear of that happening after the

introduction of this particular budget. I say fear; the fear would be

in the minds of the government, but anticipation would be in the minds

of the people of the province: I think they would welcome an election

at this particular point in time. There's no question but that March 9,

1981 — my brother's birthday — will be a black day in the calendar of

most British Columbia citizens.

HON. MR. PHILLIPS: Black and beautiful.

MR. STUPICH:

The minister of whatever — small business development — says: "Black

and beautiful." We'll deal with that "black and beautiful" aspect of

his remark a little later in my remarks.

If it were needed —

and I'm not sure it is, Mr. Speaker — the budget presents the most

telling evidence yet that British Columbia needs a change in

government. The Social Credit government has shown that it is not the

least bit shy when it comes to picking the pockets of B.C. taxpayers.

This is significant, not merely for the damage done to household

budgets by Mr. Curtis' budget yesterday, but also for the attitude it

betrays. There is an attitude on the government benches that no matter

how tough things have been economically, the taxpayer can afford to pay

more — a terribly insensitive approach during a year of tough labour

negotiations. Workers will know that a big chunk of whatever they hope

to gain at the bargaining table — whatever gains they apparently make —

has already been taken away from them by the Social Credit government

opposite in the budget presented yesterday. It is significant because a

budget which has benefited from inflation to the degree that this one

has is now causing even greater inflation. Having virtually indexed

medicare premiums, hospital fees, ferry rates, the Minister of Finance

now announces he has indexed cigarette and tobacco taxes. Far from

fighting inflation, the government has been living off inflation for

years.

Take the specific example of sales tax. The minister announced a 50 percent

increase in the rate of sales tax, from 4 percent to 6 percent; but when it

works through the system, a 50 percent increase in tax amounts to an almost

80 percent increase in revenue from that source alone.

The

government has not been content to get fat from inflation; it has

decided to go out and cause more. This is surely the result of the

taxation measures announced yesterday.

Inflation is the

number one concern in the minds of people today, but how the Minister

of Finance and his colleagues have escaped noticing this fact is beyond

me. The people of this province, like any other, look to their

government for answers. What do they get? The very simple answer is

that they get a pounding. There is no question but that these budget

measures contribute to inflation. There is no question but that most

families in the province will be worse off. I estimate that a typical

family of four will be at least $850 poorer during the coming 12 months

as a result of the budget measures announced yesterday. Or, to put it

another way, the cost of living in British Columbia will be $850 higher.

I'd

just like to refer to page 6 of the budget this morning where the

minister is talking about the economy, the worker days lost, the

pressure on labour-management negotiations: "It is crucial at this time

for all parties in the collective bargaining process to exercise

restraint." At the very time when the minister is projecting to take an

additional $800 million out of the pockets of British Columbian

taxpayers, he has the gall to urge workers to exercise restraint. A 20

percent increase in spending on the part of government, and urging

individuals in the community to exercise restraint.

Not

content with benefiting from inflation, the Social Credit government

has institutionalized it and given it a shot in the arm to boot. It is

clear that the Minister of Finance has brought in a tougher budget than

is warranted under the circumstances. I suppose as an opposition party,

from a clearly political partisan point of view, we should be pleased

about this. But on behalf of British Columbia citizens we are anything

but pleased. Some of the old Social Credit politicians used to say that

if the people have not suffered enough, it is their God-given right to

suffer more. I suppose that is fundamentally true, but I, for one, am

saddened by the budget measures announced yesterday.

The

budget yesterday is that of a government which is over its head in

financial commitments. No one denies that we face financial

difficulties as a result of the downturn of sales of natural gas to the

United States last year. But the problems faced by the Social Credit

administration are not entirely external. Capital appropriations from

revenue surplus, which account over the years for grandiose schemes and

now for the northeast coal development, are taking their toll.

The

push is on to find more sources of revenue, and the government has

looked the taxpayer in the eye and said: "You're going to get it." I

guess, following the budget presentation yesterday, the B.C. taxpayer

can say that they have had it. They have had it with the Social Credit

administration. They have had it with election campaign tactics. They

have had it with mistakes. They have had it with tax increases. I think

they are ready for a change.

In my remarks today I intend to

deal at some length with the current fiscal position of the government.

I intend to examine briefly the spending priorities of the government.

Finally, I'll deal with some of the specific measures in the budget

tabled yesterday.

First, dealing with the fiscal position of

the government specifically with the 1980-81 provincial budget — it was

just a year ago that the same Minister of Finance who pre-

[ Page 4420 ]

sented

yesterday's budget brought down a record $5.5 billion operating budget.

The Minister of Finance proposed further expenditures of $600 million

for a total of $6.1 billion. He predicted a surplus of $250 million.

The 1980-81 budget was the latest in a series of what I call the "easy

surplus" budgets.

Because of booming markets for B.C.

resources, caused by world shortages and the decline in the Canadian

dollar, the provincial government had several fat years. To take a

simple example, natural gas revenues more than doubled during the

1979-80 fiscal year alone. Total natural resource revenue doubled

during the two-year period from April 1978 to March 1980.

Interjection.

MR. STUPICH: My colleague says "fool's paradise" — they expected that kind of thing to go on happening indefinitely.

defending the same Minister of Finance's budget address a year ago, the

hon. Minister of Universities, Science and Communications had this to

say: "Mr. Speaker, I note that some are even calling it lucky that

we've got such prosperity in British Columbia. Lucky. Well, to

paraphrase a former federal member who noted that when his party was in

power good times came, and when the other party was in power poor times

came — are you going to vote for good luck or bad luck?" The people of

British Columbia do not feel very lucky today. The budget measures

announced by the Minister of Finance (Hon. Mr. Curtis) yesterday are

going to take at least $850 annually from the average family in British

Columbia. I don't consider that good luck at all.

It is

evident that the good luck of the Social Credit government began to

turn sour during the last fiscal year. A simple glance at page 38 of

the budget presentation shows a capsule

summary of government

operations for 1980-81. The revised estimate tabled yesterday shows a

marked deterioration from the original forecast. Rather than a surplus

of $250 million on the operating budget, the minister now shows $84

million. This slide did not occur suddenly, out of a vacuum or out of

the blue. The minister, although he would not answer questions in the

House yesterday, was obviously aware of the problem during the sittings

of the 1980 session of the Legislature. He declared a freeze on hiring

in the provincial government, which was implemented in varying degrees

throughout the ministries for the balance of the year. I'll have more

to say about those particular savings later in my remarks.

addition the Minister of Finance implemented a number of revenue

measures quietly throughout the year. These include: two sets of ferry

rate increases; a $30 million boost in water rates levied against B.C.

Hydro, which was passed on to B.C. consumers by B.C. Hydro; increases

in all manner of vehicle licence and inspection fees; a host of new

fees for Crown land applications, and many others. It was only through

a series of measures implemented by the Minister of Finance on both the

revenue and expenditure side that the province avoided a deficit in the

current fiscal year. Let no one forget that we came close to having to

dip into reserve funds in order to pay 1980-81 expenditures.

Resource

dependency. I think it important that all members of this assembly

understand that what has happened during the last fiscal year is a

logical consequence of the fact that our economy and our government

depend to a large degree upon the exploitation and sale of natural

resources. I'd just like to again refer briefly to the budget. On page

5 it says: "Second, while export sales of lumber and natural gas to the

United States weakened, much of the slack was taken up by increased

sales" — and I want you to notice what the slack was taken up by — "of

pulp and paper to West Germany and Italy, coal to South Korea and

Brazil, and metals, coal and forest products to Japan." Then the

minister goes on to say: "The diversification of the British Columbia

economy paid dividends in 1980."

That's diversification?

Increasing the export of our raw materials and slightly processed

materials to more countries — that's diversification of the economy?

There's no diversifying in that. It's simply continuing the same

pattern and increasing our dependence upon the exploitation of our

natural resources.

Last year the government budgeted $764

million from petroleum and natural gas. The revised estimate according

to yesterday's budget is $447 million. This is a drop of $317 million,

which is a pretty sizeable sum in anyone's books. At the same time,

however, there was a greater than expected revenue from forestry.

The

point is that resource revenues are erratic, depending as they do on

world markets and other forces. Fluctuations in revenue from these

sources are inevitable. That is one reason why my colleagues and I find

the Canada-bashing which took place throughout the minister's speech

yesterday to be offensive and a totally misleading way to characterize

the current budgetary difficulties, This Canada-bashing on the part of

this administration didn't start this year; it didn't start last year.

You will recall a comment in the budget last year. Reading from the

March 1980 budget: "The federal election results could make this more

difficult." It's talking about negotiations with the federal

government. That early in the game the Minister of Finance was decrying

the results of the federal election and anticipating greater

difficulties in dealing with Ottawa. It runs throughout the 1981

budget. I've noted page numbers on which I noted Canada-bashing — pages

2, 8, 9, 10, 17, 23 and a whole

section from pages 28 to 31, devoted to

Canada-bashing at the very time that the government is talking about

entering into new negotiations.

It's like the

labour-management situation in my riding, where MIPEA and CUPE are at

loggerheads and where I'm told — I hope to find out from the minister —

that the MIPEA negotiator arrived at the meeting to negotiate and said:

"Let's sit down and negotiate. The last offer we made is where our

position is; now you proceed to negotiate to our position."

The

Minister of Finance said yesterday what British Columbia's position is,

and he's talking about going into negotiations. He's going to wait for

the federal government to show its cooperation by moving entirely to

the British Columbia position. It's the theme of the budget —

Canada-bashing. There can be no reason for it other than partisan

political gain.

I suppose there have been people from every

political stripe in every part of this country who have from time to

time tried to blame Ottawa for some problem. I think the Minister of

Finance went too far in this approach yesterday. When he says British

Columbia's resources and wealth belong to British Columbians and we

will share this wealth, but we will do so because that is our choice,

not because Ottawa says we must, it does British Columbia a disservice.

That's no way to enter into negotiations, Mr. Speaker. British

Columbians want to remain Canadians, Mr. Minister, and I suggest that

there is a great peril for anyone who suggests otherwise. Sharing with

other Canadians is part of being a Canadian.

[ Page

4421 ]

Fluctuations in resource revenues are a part of a resource-based

economy. You cannot divide Canadians from each other, or the facts from

reality, by rhetorical sleight of hand. If the members of the Social

Credit cabinet spent as much time worrying about how to avoid tax

increases as they do about who to blame, then all British Columbians

would be better off.

In 1976 this administration introduced

a number of very repressive tax increases. They blamed the outgoing NDP

administration for the need to do this. Five years later down the road

— and I see the Minister of Agriculture (Hon. Mr. Hewitt) is applauding

that; his is one of the budgets that have been reduced substantially

and he's applauding it — in 1981, they're blaming the federal

government. Mr. Speaker, I would suggest that the people of British

Columbia want an end to excuses, want an end to this government looking

for scapegoats, an end to the kind of tax increases introduced

yesterday.

Capital funds, capital projects, capital

craziness. I shouldn't let these introductory remarks pass without

commenting on the myth of the balanced budget in B.C. There is a myth

perpetrated by the Minister of Finance that this government has been

remarkably successful in paying its own way. While it is true that this

government has not ascribed any debt to operating expenditure on

current account, it is far from true that we're self-financing. We are,

of course, liable for the borrowings of Crown corporations, school

districts, hospital boards and the like throughout the province.

According to information tabled yesterday, the net indirect debt of the

province at the end of the current fiscal year will be $8,570 million;

at the end of the coming fiscal year — that's the one we're talking

about in this budget — this total will exceed $10 billion.

HON. MR. BENNETT: Are you against Hydro?

MR. STUPICH:

What we're against is the unmitigated gall of the Minister of Finance

in standing up and saying: "We're balancing our budget." This is a

staggering sum to owe anyone, particularly looking at today's interest

rate.

I'd like to refer again to the budget. On page 1, in

the second paragraph, and I support this statement, it says: "The

budget is a total statement of the financial position of the province."

It must be a total statement, not just picking a little bit out of the

financial picture and saying this is where we are.

Then we

look at page 57 of the budget — Crown corporations financing — and we

see that in the fiscal year just about ended, the Crown corporations

guaranteed by the provincial government will borrow $1.06 billion, and

in the fiscal year under consideration now, the Crown corporations will

be borrowing $1.59 billion. And we talk about a balanced budget. Mr.

Speaker, it's like you going to your wife and saying: "I'm going to

balance my budget, and I'm going to help you balance the family budget

by guaranteeing loans so that you can borrow approximately one-quarter

of my annual salary. In total, we've got a balanced budget, because I

don't owe any of that money. I'm guaranteeing that you'll pay it back

out of the earnings that I'm going to give you." But it's still a

balanced budget. It's balanced except for $1.6 billion, roughly

one-quarter of the total budget. We're not against this borrowing;

we're against the Minister of Finance saying that he isn't borrowing it.

In addition, the provincial government is directly liable for some moneys borrowed

by the minister's predecessor following the 1975 election. It's interesting

that at this juncture the Minister of Finance was so anxious for scapegoats

that he went out and created a problem in order to create the need for a scapegoat

which he then found. This reference keeps coming up — it's in the budget

again this year — about the need to borrow money some five years ago.

Finally,

it says on page 12: "The government will have to finance a further

instalment on the debt resulting from the socialist administration

between 1972 and 1975." Mr. Speaker, I accuse the minister of joking

when he puts that in the budget, because I know he wouldn't be lying

and I know he's smart enough to know that isn't true. So he must have

been joking when he said that.

Mr. Speaker, I stood up in

this House a year ago and said that by the end of March 1980 the

government would have one billion dollars cash on hand invested in term

deposits. One of the members opposite says that I'm wrong. Yes, I was

wrong because the total in fact is $1.1 billion.

It took us

a long time to find out, but the financial statements for the year

ended March 31, 1980, were presented to this House yesterday, and the

total of the question that I put on the order paper a year ago, when I

asked how much the government had on hand in cash and temporary

investments.... That question remained unanswered until the end of the

session. We resumed sitting in December, and that question was still

unanswered, but yesterday we got the answer — in excess of $ 1.1

billion in cash and temporary investments. Some of these temporary

investments may be a bit questionable because of the $30 million

advance to B.C. Buildings Corporation, and I'm not sure that that

should really be considered a current asset. Nevertheless it's a very

small part of the picture.

On March 31, 1980, this

government was sitting on $ 1.1 billion in cash that it had taken from

the people of the province of British Columbia. By now, with the

surplus that we are currently experiencing, the guess this year is that

it will be at least $100 million. We will have in excess of $1.2

billion cash on hand on March 31, 1981. But we'll have to wait a year

to find out that I'm right. Last year I was told that I was wrong. I

recall the Premier saying that I was wrong, but he never did give us

the right figure. We have the figure now; I was short.

Certainly

Crown corporation debts must be considered as belonging to the province

of British Columbia, but the Social Credit government goes on boasting

of its surplus budget. In doing so, it's falling into a trap. By

shifting all of this debt to Crown corporations, the government has

created an illusion which perhaps it alone has fallen under. With the

illusion of budgetary surpluses has come a variety of capital projects.

Once taken in by the faulty premise that the provincial government is

not mounting debt, it became an easy decision to spend every dime that

came available beyond this year's current need on capital projects.

The

result, Mr. Speaker, has been one surplus appropriate bill after

another. Year after year we have been subjected to yet another speech

from the Minister of Finance on what a wonderful job the government has

done managing the province's finances. We have been told again and

again ad nauseam that the people of British Columbia are so lucky to

have a Social Credit government that we can create yet one more

monument to their vanity or establish yet another capital program.

Last year they were in such a good mood that they gave us two revenue surplus bills: Bill 5 and Bill 7 — one of them was

[ Page 4422 ]

really

an adjustment of the estimates of expenditures, but nevertheless there

were two revenue surplus bills. At the same time the Crown corporations

have been urged, prodded and in some cases ordered to take on major

capital spending projects which would drive them deeper and deeper into

debt. The BCR, for example, has not asked for the privilege of building

the Anzac spur. This is how we have wound up with the B.C. Place

project, together with Transpo '86. This is why the province seems on

the verge of taking over the Pier B-C project, which has escalated from

a $25 million capital cost to nearly $100 million. This is why we are

building a $130 million bridge on the Fraser River in a location that

residents at both ends are trying to stop. This is why the province has

jumped in with both feet and its eyes closed to invest nearly a billion

dollars on developing a coalfield which will lose more money for the

people of B.C. with every tonne of coal that is sold. Moreover, it is

the reason why the province has no fiscal reserves to fall back on when

times do get tough.

I say to the members opposite that they

expected the provincial government's finances to look rosy at every

turn. They should have kept their rose-coloured glasses on and stayed

at home. In this less than perfect world things sometimes go a little

awry. The people of British Columbia had no idea how far things could

go astray until they experienced five years of the present Social

Credit regime, but I have no doubt they are learning. So the government

went its merry way, appropriating surpluses for every conceivable

project, purposes which they might find politically useful at a given

point in time.

There is an interesting discussion in the

background papers to the budget on the idea of a resource revenue

stabilization fund. There is no question that such a fund would be

useful in British Columbia. The background paper contains these words:

"The government has been under pressure to spend revenue surpluses

quickly, rather than draw them down when revenue growth is weak.

Therefore the usefulness of that account has been limited." The

pressure, if any, for these surplus appropriations has come from within

the Social Credit caucus.

Where was the public clamour to

get the province committed to the Premier's dream for False Creek in

Vancouver, which he calls B.C. Place? Where were the lobby groups

demanding a commitment in excess of one billion dollars to produce the

Premier's vision of the city of tomorrow on that part of Vancouver's

landscape? Who was it who forced the Hon. Grace McCarthy to commit all

of her time and $100 million of the province's money to build a

glass-slipper convention hall on Burrard Inlet? Where was the

letter-writing campaign that forced the government to get us involved

in a world's fair at Transpo '86? Who was it standing over Don

Phillips' shoulder, forcing him to announce that the province would

underwrite northeast coal? Mr. Speaker, the government has been

spending like there was no tomorrow. Unfortunately for them, and for

all of us, tomorrow has come.

During the current fiscal

year, according to the Minister of Finance's presentation yesterday, we

came close to a deficit — that's the year ending at the end of this

month. The government has been caught short. It has bills waiting to be

paid from commitments made on capital projects in a headlong rush of

spending plans developed in the past few years. This, Mr. Speaker, is

the financial position of the government going into the 1981-82 fiscal

year.

Every government faces a decision on how it shall

appropriate scarce resources between competing priorities. Based on the

past five fiscal years, we can get some idea of the priorities of the

Social Credit government. The budget, on page 1, contains something

that I think everyone can endorse: "In this budget we demonstrate once

more this government's solid commitment to bold and imaginative

projects." That would be great if it were true. But where is the truth

of that statement in this budget? Brave words, but during this period

of, I think, chronic difficulties with the provision of human services,

particularly in the area of health, there continue to be unacceptably

long delays in getting hospital beds in this province. Open-heart

patients have to wait six months to get an operation; some die waiting.

The waiting time for a long-term care bed on the lower mainland still

approaches a year. The government's construction program lags behind

needs. Rural health care continues to be a shambles. The former

Minister of Health (Mr. Mair), who left the sinking ship opposite for a

new life, promised a rural health corps to deal with the situation. A

former Minister of Health, Wesley Black, detailed the deplorable

situation for all to read in his report on the healthcare system in

B.C. The throne speech for the current session promised such a measure.

Where is this item in the budget? Unfortunately, nowhere to be found.

human resources the government's lack of concern for the neediest among

us is legendary. Some minor — and, I might add, long overdue — measures

are included this year to help handicapped youngsters, but there is no

marked overall improvement in this area. To take just one obvious

example, the shelter allowance for a single person remains at $130 per

month. Our caucus research staff did a survey of 23 urban centres in

British Columbia and found that a $130 shelter allowance is inadequate

to meet the average monthly rent for a one-bedroom unit. For the

poorest among us it is another year of dipping into food money to pay

the rent.

In the area of education the province's share of

school costs has continued to decline. According to recent information

published by the B.C. School Trustees Association, the provincial

contribution will drop to 33 percent from 37 percent last year. The

effect — and I'll deal with this later — will be higher property taxes

at the local level.

In the crucial area of housing the

performance can only be described as dismal in the extreme. The $200

million mortgage program announced with such fanfare a year ago has

gone. There was no announcement, as was generally expected yesterday,

that there would be a repeat during the current year or any new effort.

Expenditures on housing grants actually drop from $13.4 million

estimated last year to less than $12.5 million this year. I don't know

whether you're aware, but there is a housing crisis in the province — a

real one. Yet expenditure priorities of this government do not permit

them to respond in any coherent fashion. We have been advised that the

Minister of Lands, Parks and Housing (Hon. Mr. Chabot) will be

presenting a White Paper later this month. All I can say is that the

minister has a lot to make up for. If this budget is any indication of

the priority this government places on housing, then British Columbians

are in trouble.

These are a few examples of the spending

priorities in this budget which my colleagues and I find objectionable.

Over the next ten days of the budget debate and throughout the

consideration of the estimates my colleagues will be pointing out all

of the various areas where action is needed, where

[ Page 4423 ]

priorities

should be rearranged and where waste can be eliminated. The government

made some attempt at this last year. Reading from page 2 of the budget:

"Early last summer I imposed a freeze on hiring and on all new

consulting contracts. This prompt action enabled us to implement a more

carefully designed program of cutbacks in consultation with individual

ministries."

Well, let's just take a look at page 62 of the

budget to see which areas were cut back and how effective the

minister's freeze on hiring and employing consultants was. Page 62 is a

table of general fund expenditures by principal services. I've marked

the ones where there was some reduction. In general government there

was actually an increase. In protection of persons and property — and

one has to look at Public Accounts to get the definition of that, but

it's police costs and that sort of thing — there was a reduction there

of $19 million. The Minister of Transportation and Highways (Hon. Mr.

Fraser) was no doubt pleased to make his contribution to this new

efficiency, to this freeze on hiring, because it was his estimates that

were cut back. There is a saving of $86.8 million in the Ministry of

Transportation and Communications. So the freeze on hiring and the

cutback on hiring consultants, credited with saving us so much money

and expenditures last year, came almost entirely out of the Ministry of

Transportation and Highways.

But there were a couple of

others. Natural resources and industries. The Minister of Forests (Hon.

Mr. Waterland) made a contribution to this as well, because the

Minister of Forests cut back on his expenditures by $9.8 million,

according to the revised estimates. I assume that in order to balance

the budget presented by the Minister of Finance he asked the Minister

of Forests to cut back on hiring, tree planting and research. Certainly

the Minister of Forests made a significant contribution to the small

surplus we have this year by cutting back $9.8 million. If there's any

ministry that should not have cut back.... With the fanfare that was in

the budget last year about what the government was going to do to

rebuild forestry in this province and then for that ministry to

experience a cutback of $9.8 million.... The government should take no

credit for that kind of cutback on expenditures. The next ministry to

experience a cutback is Housing. The government talks about what a

great job it has done for housing and what a great job it's going to

do. There's less in the budget this year than last year, and one of the

ministries that experienced a cutback during the year was Housing with

a cutback of $5.7 million. The largest by far was the Ministry of

Transportation and Highways. The second largest, aid to local

governments, was cut back by over $20 million.

The budget

talks in different places about this secure revenue for the

municipalities, yet when the shoe starts to pinch, one of the areas

that is cut back significantly is aid to local government. The Minister

of Finance talks about the success of his hiring freeze and the success

of his attempts to control expenditures. Where did he get the money

from? He stopped highway construction, cut back in reforestation and

reduced aid to local governments. Those are the three areas. Is that

something to be proud of in an economy that we are told is booming?

cannot help but notice the inclusion of efficiencies achieved to

control government growth as a line item in each ministry's estimates.

It appears that the government has done nothing more than print the

last round of cuts at Treasury Board in the estimate book as if they

should somehow be voted on by the Legislative Assembly. It reminds me

of the previous minister's brainwave of including recruitment savings

in each ministry to again show some alleged savings brought on by

action on the part of the administration. Three years ago it was

recruitment saving; now it's efficiencies achieved to control

government growth. I predict this latest gimmick will go the way of

recruitment savings and be cast upon history like so much discarded

rubble.

I say to the Minister of Finance that the people of

British Columbia want policies and not gimmicks. The introduction of

such a gimmick would be merely funny if it did not occur alongside the

massive, unwarranted tax increases of this current budget; and it

assumes a character bordering on the obscene when viewed alongside the

profligate spending of this government on monuments and other capital

projects that British Columbia neither needs nor can afford. A very

quick calculation shows that the government has capital requirements

close to $10 billion in major projects in the next five years — roughly

what our contingent liability totals at this time doubled in the next

five years.

If there is no hint in this budget as to where

the money was coming from — other than from borrowing at the same time

as we're talking about a balanced budget — are these sound spending

priorities? Can these be considered efficiencies achieved to control

government growth? I think not. Somehow, somewhere along the way,

they've gone a little astray. The people of British Columbia have found

themselves with a government they didn't quite expect, and they cannot

quite afford.

Most British Columbians are concerned today

about the escalations of strikes, lockouts and protests which currently

characterize the labour scene. Certainly I'm concerned. I'm concerned

about the effect in my own community. I'm concerned about the long,

drawn-out CUPE, MIPEA situation; I'm concerned about the one-day work

stoppage. We're all concerned, I think, about what's happening in the

province. At any given moment of time, one can only argue about the

degree to which government is responsible for inflation, or responsible

for this situation. I think the Minister of Finance was remiss in not

discussing this problem in his speech, just as I would be remiss in not

mentioning it in my remarks today.

The current labour unrest

does not occur in a vacuum; it didn't happen out of nowhere. It's a

direct result of four or five years of really tough times for working

people. In several of the last few years, wage increases have lagged

behind the inflation rates. This means that the workers — many of them

— have suffered real drops in purchasing power. In tight economic

times, a drop in purchasing power is a difficult thing for any family

to manage. Where has been the voice of the Social Credit government in

protesting, or even in coming to terms with this situation? Have they

recognized the beating that working people are taking? Did they take

swift and responsible measures to maintain a balance between wages and

prices? Did they recognize the consequences of labour unrest which

would inevitably occur because this situation continued? Obviously they

did not. In fact, the Social Credit government took steps to inflict

even more damage by increasing taxes and user fees to the point where

they wrecked the average working family's budget.

Because

prices were increasing faster than wages, the corporations managed to

increase their share of our gross provincial product during the last

few years. Because of tax increases and increases in the value of

shipments of nonrenewable resources, the government increased its share

[ Page 4424 ]

our

gross provincial product. Yesterday's further tax hikes will add to the

problem. One major union has already said that the budget will come to

the bargaining table. It could not have been otherwise. There is no

doubt that the Social Credit government experiment is taking place at

the expense of working people in the province.

Recently we

heard the Minister of Agriculture running around calling for an

immediate provincial election, hoping that the Social Credit government

would somehow benefit from the current labour strike. The hon. minister

somehow believes that the current labour unrest will help his political

party get re-elected. A more blatant form of political opportunism

would be hard t imagine. A government that allows and even encourages

the trade union movement to fall into a position where a catchup in

wages is required is a government that refuses to understand the need

to find a balance in our society. And that government has the gall to

believe that they can go to the electorate campaigning against a

troubled labour-management climate and get re-elected on that basis.

[Mr. Davidson in the chair.]

How

stupid does the Minister of Agriculture think that voters of British

Columbia are? Does he really believe that British Columbians will

re-elect his party to clean up a mess of its own creation? My

colleagues and I are certainly prepared to accept the challenge — if

indeed that is what it is — because we believe that no matter which

party is in power, we cannot have a stable labour relations climate

based on a low wage policy. Prosperity in this province can never be

built in a climate where wages continue to fall behind prices. It may

be difficult for members of the Social Credit government to understand

this point, because they so often believe that money in the hands of

the car-dealers, millionaires and corporate treasuries is somehow

better than money in the hands of working families. We need a

government in British Columbia which treats all sectors in our economy

with some fundamental respect. We need a government which is prepared

to listen and understand reasonable demands, whatever their source.

Above all, in the present climate, we need government which can

understand and talk to and with the trade union movement. The need for

social harmony demands this. The needs of our economy demand this.

say to the members opposite, if you believe confrontation with labour

is going to help you politically, you'd better wise up quickly. My

colleagues and I intend to win the next election, but not at the

expense of economic growth, and certainly not at the expense of the

social bonds which are necessary for a healthy society.

Before

I leave the subject of labour, I note on page 12 of the background

papers that the government is predicting that between 1980 and 1982 the

unemployment rate will rise by almost 20 percent to 8.1 percent and

continue to increase thereafter to an average of 8.4 percent in the

years 1983-85. Nobody is expecting miracles from this government, but

for the Finance minister to boast extravagantly about our economy, to

undertake no programs to increase employment except a speedup in the

export of a depleting resource, and to simply accept an ever-increasing

unemployment rate is quite unacceptable.

Recent studies by Dr. Harvey Brenner of Johns Hopkins University indicate that

for every long-term increase of 1 percent in the unemployment rate, the mortality

rate increases by 2 percent. Similar increases are observed in suicides, divorces

and emotional breakdowns. One can readily paint a graphic picture of the human

costs associated with the trend so casually predicted in the minister's

background papers.

Influences

beyond the reach of provincial governments affect unemployment rates,

but that fact cannot be used to defend this government's abject

surrender. Unemployment is a curse. We should do everything possible to

alleviate it.

Dealing with tax increases, the 1981-82 budget

will be remembered above all for these tax increases. These increases

are sizeable, without doubt. They are also, for the most part, very

unfair.

Mr. Speaker, if I may.... This is something a little

different; I have to have your attention this time. I'm going to ask

for a moment for me to sit down, because the Leader of the Opposition

has an announcement that will be of great interest. I'm asking leave

for the Leader of the Opposition to make a brief statement.

Leave granted.

MR. BARRETT:

Mr. Speaker, I don't intend to take much time of the House. I want to

apologize to the House for missing most of the minister's speech

yesterday.

I'm pleased to announce that the federal Minister

of Labour responded yesterday to my telegram in terms of the current

dispute between the Telecommunications Workers Union and the B.C.

Telephone Co. I have submitted an idea to the federal minister that

both parties have agreed to discuss under the auspices of the mediator.

I hope, God willing, that this will be a basis of some movement in that

dispute. I thought it important to notify the House that the idea has

been accepted for discussion, and the federal mediator will call both

parties to discuss it.

MR. STUPICH: Mr. Speaker, I

don't mind the Leader of the Opposition missing the minister's speech

yesterday. I would like to have had him here this morning, but I'm

pleased that he brings that announcement to us.

HON. MR. WOLFE: He's gone again.

MS. BROWN: He's doing the job that Heinrich should be doing. Somebody's got to do your guys' job.

MR. STUPICH:

Mr. Speaker, it's been suggested that he's doing the job that the

Minister of Labour (Hon. Mr. Heinrich) should be doing. I suggest he's

doing the job that the Premier should have been doing. Yesterday the

Minister of Finance (Hon. Mr. Curtis) talked about labour unrest and

expressed concern about labour demands, urging them to be responsible.

Yet apparently this government has taken absolutely no interest at all

in a labour-management dispute that has been hurting the citizens of

British Columbia for some 14 months.

I think everyone on

both sides of the House is hoping that the negotiations that have been

prompted by the Leader of the Opposition will bear fruit within hours.

Certainly that is one dispute that is hurting not only the relations

between the employees and the staff of B.C. Telephone Co., not only the

customers of B.C. Telephone Co., but also the whole community. It is

also contributing a great deal to the kind of labour-management unrest

that we are experiencing in the province in other labour-management

negotiations. So my congratulations to him.

[ Page 4425 ]

It's

an anticlimax but I'd like to go on discussing yesterday's budget

speech. Getting back to this question of tax increases, as I say, this

budget will be remembered above all for the tax increases introduced

yesterday — very unfair tax increases.

On page 35 of the

budget, the minister boasts: "To ensure that tax increases are borne

fairly and equitably, I have placed great emphasis on ability to pay."

Well, that's a claim, but it's unfortunately a claim that cannot go

unchallenged. Of the $625 million net tax increase — that's in

additional taxes levied, or increases in existing taxes — only the

$15.4 million income tax surcharge is directly related to ability to

pay. The refundable tax credit, which will involve a revenue loss of

$70 million in the year after next, is also related to income. To the

extent that ability to pay is related to size of business, the increase

of $30.3 million in corporation tax and the revenue loss for small

businesses of $18.9 million, yielding a net of $10.4 million, also

qualifies. But the great bulk of the tax increase, involving some $500

million, was deliberately chosen to shift the tax load away from those

who can afford it to those who will be cruelly injured by it. To

increase regressive tax measures by $500 million is bad enough; the

reference to ability to pay is worse.

While on the subject

of rhetoric, I must touch upon the presentation of onerous gas taxes as

"conservation measures." For the British Columbia worker going to and

from his place of work, or the B.C. homemaker going to and from

shopping, what does this mean? Will the budget reduce their appetites

for gas and oil? Will the worker go to work less frequently or perhaps

not at all? Or will the worker and homemaker — convinced at last of the

error of their ways — cash in a few short-term deposits, of which this

government has so many, and buy a new super efficient $10,000

automobile? The budget itself predicts increased motor-fuel tax

revenues of about $157 million. Mr. Speaker, in order to reach that

prediction, some estimate must have been made of the conservation

effected by the tax increases. We wait with stretched patience for the

minister's figures on who will be induced to reduce gas consumption,

and by what amount.

Mr. Speaker, things would be bad enough

if the tax increases began and ended with yesterday's budget.

Unfortunately, our misfortune grows worse. Still to come, no doubt, are

this year's medicare and hospital fees; and there are the joys of

indexed liquor and tobacco taxes. Some stores at Christmas offered the

gift that goes on giving, and our Finance minister offers the budget

that goes on taking.

The next big take is going to come in

the field of property taxes. Mr. Speaker, we're dismayed to discover

that this government has once again chosen not to increase the

homeowner grant. No increase is a decline in real dollars. That grant

is the only mechanism that can be used to alleviate the very serious

imbalance that exists between municipal and provincial taxing ability.

No one can seriously doubt that the distribution of responsibility

between provincial and municipal governments is very seriously

mismatched against the distribution of taxing authority. For example,

the citizen suffers from that imbalance: transfers from the provincial

government to school districts decreased as a percentage of school

budgets from 37 percent in 1980 to 33 percent in 1981. As the Province newspaper said in its editorial of February 24: "Something has to give."

The bottom line after deduction of the $380 homeowner grant is that school

property taxes rocketed by 140 percent. Recent estimates are for increases in

school taxes to homeowners as follows: Burnaby, 196 percent; Coquitlam, 160

percent; Delta, 106 percent; North Vancouver, 77 percent; Richmond, 116 percent;

Surrey, 406 percent; Vancouver, 135 percent. If this government consistently

withholds revenue from local authorities — and, as I pointed out earlier, that's

one of the areas they cut back when things got tough — if it consistently refuses

assistance through the homeowner grant, the traditional device, then this government

is essentially legislating property tax hikes. The possibility of a California-type

taxpayers' revolt cannot be dismissed. I sincerely hope that is not what

the Social Credit government is after.

The

people of British Columbia are as anxious as any that their funds be

spent carefully. For that reason they will be outraged to discover that

while their provincial government proceeds doggedly with projects, the

costs of which increase daily, they refuse to provide any relief

whatever from the injurious property taxes.

To make this clear to the Minister of Finance I should quote some of his own remarks from Hansard dated March 5, 1975. At that time he wasn't the Minister of Finance; he was in opposition.

very simple choice facing local government in this province right now

is to pass along what has to be described as an absolutely intolerable

tax increase for general purposes and for education or to consider for

the first time seriously and severely cutting back on those services

which have traditionally formed part of municipal operation. It is that

serious for 1975. You pass along an increase which is not acceptable to

the people who pay the bill — the taxpayers. the property owners, the

tenants — or you cut back in services in a manner which has not been

seen in many years in British Columbia, if indeed it has been seen at

all in the past.

In that speech the Minister of Finance of

today expressed a clear concern for ratepayers and tenants. We can only

wish that he would read his old speeches and use his present authority

to do something about his previous concerns.

The people of

British Columbia hoped to see in this budget, for the first time, some

concrete measures to lead in the transition to a more mature economy.

The

province of Alberta set up a heritage fund in 1976 now totalling some

$8 billion to finance the shift from a resource-extractive economy to a

different kind of economy. The province of Saskatchewan started a

similar fund two years later. Working with much less in the way of

nonrenewable resources than either Alberta and British Columbia, it

will soon have a fund in excess of $1 billion. What do we have here in

British Columbia? We're told we have a booming economy. In Saskatchewan

they were told they had a booming economy. In Saskatchewan they reduced

the income tax rate. In Saskatchewan they have no medicare premiums. In

Saskatchewan they have a heritage fund. What do we have in British

Columbia?

First, there are no funds to finance any shift.

Second, there are no plans. Third, while everyone else in the world,

noting that natural resources and especially energy resources are

appreciating in value at a rapid pace, is husbanding these resources

very carefully, we have in British Columbia a government obsessed with

the fear that coal and natural gas are going out of style; therefore

selling such resources quickly, sometimes at a loss, is the thing that

has to be done for British Columbia.

I can recall a previous

apostle of Social Credit in this House, in the administration that was

voted out of office in 1972, saying at the time this government was

trying to start

[ Page 4426 ]

mining

in a park at Buttle Lake — Western Mines — that we had to get these

minerals out of the ground or they would go rotten. It would appear

that philosophy still rules in the Social Credit administration. "We

have to get rid of this coal; we have to get rid of this natural gas

today; we can't afford to leave it in the ground; it's going up in

value too much; it'll be worth too much to us later on; we have to get

rid of it before it becomes too valuable."

For an

established coal mine producing more than four years Alberta receives

minimal royalties of 5 percent of selling price. In British Columbia we

have invented negative royalties. We estimate that the northeast coal

structure, for which we are charging $3 per tonne for Denison Mines and

$2.50 for Teck Corp., will cost at least $10 per tonne, for a net

subsidy from the taxpayers, a net negative royalty, of at least $7 to

$7.50 per tonne.

HON. MR. FRASER: File the backup papers on that.

MR. STUPICH:

I wasn't going to do this, but the Minister of Transportation and

Highways asks me to file my backup papers on those figures. We've been

trying to get backup papers and information about the northeast coal

development for some time, and it's been regrettably lacking. They're

holding that very close to the chest. One wonders why they're afraid to

share this information with the people of British Columbia.

Let's

look at the budget speech itself, since we don't have any backup

papers. Let's look at page 19. "The project is awe-inspiring in scope.

It is by far the largest development in British Columbia's history,

with combined public and private investment exceeding $2.5 billion."

Yesterday we tried to find out from the Minister of Finance how much of

that would be provided by government and how much would be provided by

industry. We were told: "Wait until you hear the budget." We're still

waiting.

Let's look at that $2.5 billion figure. If we were

to amortize that over the term of the contract for the coal and if

we're looking at the coal target of 7.7 million tonnes — there's

absolutely no evidence that we are going to sell any more than that —

we find that, whoever's investment it is, simply to amortize that debt

of $2.5 billion over the term of the coal contract will take $55 per

tonne. There's nothing included in that for the operating costs of

mining of for the shipping of the coal. Simply to amortize the

investment in the structure will take $55 per tonne. I would suggest

that the subsidy figure which I have announced is much less than what

we are actually going to realize when the true story unfolds.

The

minister responsible for this fiasco declared that if the government

can only secure contracts for an additional 11 million tonnes per

annum, we might break even. We have contracts for 7.7 million. If only

we could get somebody to buy another 11 million tonnes, then maybe we

wouldn't have to pay them to take it away from us; maybe we'd break

even. We wouldn't get anything for it, but at least we wouldn't be

losing on the deal. He's dreaming about the day when suddenly somebody

will appear on the scene and say they want another 11 million tonnes

per annum. Does the minister realize we are talking of an energy

resource, the value of which in the ground appreciates annually? It's

going up all the time. Why this undue haste to hurry up and get rid of

it before it becomes worth enough to at least pay for the cost of

getting rid of it?

He wants the Japanese to take it from us.

People in other countries are prepared to pay the very high and rapidly

escalating prices for coal and petroleum and natural gas. More than any

other single factor, it is upon these energy resources that the ability

to provide manufacturing jobs depends. That is why the Japanese are so

happy to have us spend $2.5 billion — it's in the minister's own speech

in the background papers — to facilitate the movement of coal to their

economy. Aren't we great benefactors! We are going to put up $2.5

million to ship them coal that they will use to develop their economy,

and they will send the manufactured products back to us. The Japanese

know that at any time when sellers can be induced to sell prematurely,

real windfalls are experienced by the buyers.

Canada has

gone through this before. You'll remember Canada's rush to export 1.7

billion barrels of oil between 1970 and 1974 for $7.4 billion. It was

great to have that $7.4 billion come in in those years. On average it

was $4.35 per barrel. Its value in the world market today is almost ten

times that. It's costing us almost ten times that amount to buy back

the oil that we were in such a hurry to export.

The same

thing could happen in the not-too-distant future with respect to

natural gas and perhaps even coal. Its value to us as an essential

catalytic ingredient for new manufacturing employment is incalculable.

The only thing that can be said of that sale of the oil is that at

least we didn't have to put up a combined $2.5 billion public and

private investment in railways and the like. Corporations don't care

about these concerns. That's not a criticism; it's just not their

business. They operate on margins. The cost to society of premature

resource depletion is irrelevant to corporations. The recently tabled

federal report showed that the oil companies did very well while we

were taken on oil export leases.

The worst case of resource

mismanagement before us is the forest industry, which should be a

renewable resource. The forest industry provides 50 percent of all the

value-added factor in B.C. manufacturing industries; 15 percent of

capital and repair expenditures; 65 percent of provincial exports; from

15 to 25 percent of provincial revenues; about one quarter of the total

employment in the province.

Earlier I spoke of the

consequences of a resource-based economy in terms of provincial

government revenue. The Social Credit government has been a little

reticent about collecting its share of resource rents, to be sure, but

any resource-based economy must face the prospect of fluctuations. On

page 8 of the forest and range resource analysis report, in that vital

industry the minister responsible banally predicts the loss of 12,000

hectares — more than 25 percent of our forest land. At current rates of

direct and indirect employment, that represents a loss of 70,000 jobs.

Indeed,

if we may assume that the present pattern loss of the best land

continues, the figure could be even higher. As if to ensure that the

Forests Minister (Hon. Mr. Waterland) does not prove wrong, the

Minister of Lands, Parks and Housing (Hon. Mr. Chabot) immediately set

about selling off 15,000 hectares of forest land for summer cottages

and hobby farms.

As we sell our minerals, our coal, our

natural gas, we diminish the fundamental economic base of the province.

While this happens, we are losing our timber-growing capacity. By

diminishing our present economic base without firm and disciplined

plans for new industries the government commits the most irresponsible

of public acts. The real capital by which British Columbia prospers is

not to be found in government coffers; it is to be found first among our

[ Page 4427 ]

people,

second in our bounteous inheritance of natural resources. A government

which hacks away at the fundamental economic fibre and declares to the

public that all is well because its books are balanced is guilty of

misleading advertising to say the least.

You may recall that

we in the NDP established a railcar manufacturing plant which, for a

brief while, made some real contribution to this province. It was

aborted by the Socreds. It could now be building the rolling stock that

will be needed as part of this northeast coal development. Such a plant

would also provide a substantial demand for steel. It would be an

important part of the industrial infrastructure for a fully developed

economy.

It is possible not just to reserve funds to finance

a shift away from natural resources, as Alberta does, and Saskatchewan

does, but to fill strategic vacancies by government planning and

initiatives. Why is there no requirement in any of our natural resource

licences to secure some minimum of the hardware used from B.C.

resources? We do assemble a little forest industry equipment, but

precious little. We manufacture even less.

A study recently

done by the IWA shows that for one large U.S. firm the high technology,

well-paid spinoff jobs are to the greatest extent possible, kept in the

U.S., with the Canadian jobs limited almost entirely to the hands-on

variety; and that, of course, has very serious implications for the

research and development sector.

The record in the mining

industry, offering great potential in associated hardware, is far

worse. That situation can be readily addressed, but it cannot be done

by repeating vague promises about a resource revenue stabilization

fund. It won't be helped by the northeast coal deal. It requires firm,

disciplined planning and a solid commitment to diversifying our economy.

page 25 of the budget address the Minister of Finance devoted half a

page to describing the need for economic diversification and his

government's general resolve to accomplish it. This was followed by

vague references to the tourist industry and, searching hard for

specifics, a blurb about the feature film industry.

In the

budget there is some further reference to this, page 26: "The province

will continue its commitments under the industrial development

subsidiary agreement, which has proven to be an immense success since

its introduction in 1977, This province will contribute more than $18

million to the program, specifically for community industrial park

projects in...." Mr. Speaker, it was rather interesting as I listened

yesterday to the minister tell us where those industrial parks were

going to be built.

First on the list: Kamloops. Now I guess

I can't say who represents the riding in Kamloops; no one does at the

present time. But certainly after the most recent election it was a

Social Credit riding. I expect that will change, but for the time being

we can only assume that this was planned for a Social Credit-held

riding. The second place: Cranbrook. Mr. Speaker, I ask you, who

represents the Cranbrook area? Certainly not someone on this side of

the House. Campbell River: one for the NDP. Two to one so far.

Squamish: Mr. Speaker, who represents the Squamish area? No one on this

side of the House. Three to one for the government's side. Elkford:

four to one. Invermere....

Out of six places where

industrial parks are going to be built, five are in Social Credit-held

ridings. What a coincidence. It is a sign of the lack of progress by

the Social Credit government that capital investment from January 1980

to June 1980 was four times as great in the commercial sector as it was

in the manufacturing sector. I thought it was just in Nanaimo that

everybody was building shopping centres and nothing else, but

apparently it's happening all over the province. It is for that reason

that manufacturing continues to decline as a relative provider of the

value-added factor and of employment.

Interjection.

MR. STUPICH:

Mr. Speaker, the Minister of Agriculture and Food (Hon. Mr. Hewitt)

likes to interject. I think I'll throw in at this point, as I said

earlier, that his is one of the estimates that has actually been

decreased. There is a nominal increase in terms of dollars for

operating the Ministry of Agriculture and Food, but included in the

estimates for the Minister of Agriculture and Food is $6 million that

is being given to ICBC. It's been turned over to ICBC. This is the

administration that said when it was in opposition: "There should not

be one dollar of taxpayers' money going to ICBC." The moment they were

re-elected in December 1975 one of their first acts in government was

to give $187 million of taxpayers' money to ICBC and to borrow it back

the same day because ICBC didn't need it. Now there's a further gift of

taxpayers' money to ICBC. The Minister of Agriculture and Food would be

better to stand up in the House and tell us why his ministry, in terms

of real dollars, has experienced a decline under his stewardship of 40

percent in the money it has available for servicing the needs of what I

consider to be one of the most important industries in the province.

Certainly his Premier doesn't. It was his Premier, I believe in

Terrace, who said: "Why should we save agricultural land in the

province of British Columbia? We don't have to worry about raising our

own food. We can import all the food we need." That is the expression

of concern that this government has for agriculture. Its attitude

towards the preservation of agricultural land is that the sooner we can

get away from the embarrassment of having agricultural lands, the

better off British Columbians will be. Let's get rid of all the

farmland; let's cut back on the estimates for the Ministry of

Agriculture and Food. Most important of all, let's get rid of the

Minister of Agriculture and Food.

Going back to my remarks,

Mr. Speaker. It's for that reason that manufacturing continues to

decline as a relative provider of the value-added factor and of

employment. It is for that reason that the manufacturing workforce has

dropped from 15.9 percent of employment in 1978 to 14.7 percent in

1980. It is largely for that reason that projected unemployment is so

tragically high.

If there is one theme that I feel is

appropriate to this budget it is the nerve or the gall of the Minister

of Finance. He's a Minister of Finance who tells us in his budget that

people should be responsible in their demands at the same time as he is

telling them that the government is going to take an extra $1 billion

out of the economy. He's a Minister of Finance who proudly boasts about

producing a budget that is a balanced budget and not a deficit at the

same time as he is telling us that he is going to borrow approximately

25 percent of the budget. He's a Minister of Finance who persists in

Ottawa-bashing at the same time as he is going to go to Ottawa and try

to negotiate a better deal for the people of British Columbia. He's a

Minister of Finance who talks about a booming economy at the same time

as he introduces in-

[ Page 4428 ]

creased

tax measures to increase his budgetary revenue in excess of 10 percent.

The gall of the Minister of Finance to stand up and do all these things

to us on black Monday!

The people of British Columbia had a

fading hope of finding in this budget substantial relief against the

endless series of surcharges imposed by this administration. Quite

apart from the tax increases announced in the budget, there are the

increases in hydro and natural gas costs, the increases in ferry rates,

the increases in hospital insurance and ICBC increases. They have gone

on, it seems, forever. The people had a right to hope that this

government would have discovered that royalties for coal could have

been increased at least to the planned 1976 level. We announced the

increase in 1975, effective April 1, 1976. That increase has yet to be

implemented. Every tax and every cost in doing business with this

government has been increased regularly since that time, but there's

been absolutely no change in the revenue coming to the government from

the depletion of that particular natural resource. The people of B.C.

hoped that this budget would at long last reveal effective measures to

catch up on the tragic backlog of hospital bed construction. They hoped

to see an end to long waiting lists for surgery in hospital beds. They

had a right to hope to see a substantial reversal of the shifting of

education costs to homeowners. They have watched the provincial

government's share of local government costs shrink. They have watched

the municipal governments, out of desperation, hiking the property tax

again and again.

Unlike the provincial government, local

authorities have no alternative. They can't get money from resources as

this government can; they don't have any resource revenues to give

away, as this government did. Remember the giveaway of Canadian

Cellulose; remember the giveaway of Plateau Mills; remember the

giveaway of Kootenay Forest Products; remember the giveaway of Panco

Poultry; remember the giveaway of Ocean Falls. Most of these

enterprises were producing revenues for the people of British Columbia.

We no longer have those sources of revenue. We don't have this revenue

coming from our natural resources, as they do in Alberta, as they do in

Saskatchewan.

The people of B.C. hoped to discover in this

budget some indication that this government is at last coming to

understand that we can't go on living forever on our natural resource

capital. They had hoped to see some mechanism like Alberta's Heritage

Fund or the instruments of the Saskatchewan government designed to find

and encourage alternatives to our resource-extractive industries. The

people of B.C. hoped to see a declared end to the building of Social

Credit monuments. The people of B.C. hoped for some assistance in

dealing with devastating interest rates, particularly in the housing

market. But this Minister of Finance, Mr. Speaker, couldn't even find

the time to go to a meeting to deal with these ruinous interest rates.

Mr.

Speaker, you will recall, when I tried to get an emergency debate on

this question of rising interest rates, I was assured by the Premier

that everything was in good hands, because the Minister of Finance was

going to attend a meeting of Ministers of Finance where that would be

discussed with the governor of the Bank of Canada. And then, three days

later, we were told that the Minister of Finance just didn't bother

going to the meeting. I think he didn't even say he didn't have the

time; he simply didn't bother going. That's the extent of their

interest in this problem of ruinous interest rates.

Unfortunately,

all of those hopes were dashed by the Minister of Finance speaking

yesterday. Instead British Columbians were pounded by further tax

increases — the obvious ones in the budget and the ones that are hinted

at: the increase in medicare premiums, for example, that is being

hinted at; the increase in property taxation in rural areas that is

spoken about in the budget. Instead came the sober realization that the

government intends to continue with this capital binge. This government

is prepared to finance the big-ticket projects out-of the taxpayers'

pockets. Inflation is to become a way of life — fed rather than fought

by this Social Credit administration.

Mr. Speaker, it is a

disappointing budget, one which the loyal opposition will fight in the

days, in the weeks and in the months ahead.

HON. MR. McGEER:

Mr. Speaker, I'm surprised that the chief financial critic for the New

Democratic Party should have terminated his speech so early, because

had he spoken longer, we might have been able to hear one or two

positive thoughts for the people of British Columbia as to how we might

move ahead, perhaps an alternative budget which that member has

occasionally presented in the past.

MRS. WALLACE: How about you writing one?

HON. MR. McGEER:

Well, I used to do that when I was in opposition, Madam Member. And the

reason why is that it would be impossible to improve upon the budget

that our Minister of Finance has presented to the province of British

Columbia. I can tell you this, that no one would have wished more

passionately to be able to bring better news in a financial sense to

the people of British Columbia than our Finance minister. But the

province is well served that in times of some financial trouble in our

country — not brought in any measure, Mr. Speaker, by the policies of

the government of British Columbia — we have as responsible and

far-sighted a Finance minister as we have in British Columbia today.

would commend all British Columbians, including the opposition, to read

that document carefully, to reflect upon it and perhaps on second

reading, Mr. Member for Prince Rupert (Mr. Lea), to understand it.

Because there is an important message for the future in that budget.

The message is that British Columbia and Canada can be a province and a

country of enormous potential for the future, but that can only happen

when there are wise and far-sighted financial policies. If such

policies are practised and practised well at the provincial level but

are abandoned at the federal level, then we are all in trouble.

was intrigued at the one brief appearance of the Leader of the

Opposition in this chamber, since he found it necessary neither to

listen to the presentation of the budget nor to the presentation of his

own party, but instead offered to us the prospect of his good offices

to mediate some of the labour problems in British Columbia. I can

vividly recall the last act of that Premier and his government before

they were justifiably turned out of office, which was to call a special

session of the Legislature to take away labour's bargaining rights.

Perhaps it's a deathbed repentance for their own days in power when

their mismanagement of the economy as well as their mismanagement of

labour-management relations left this province in tatters, with a debt

that regrettably, despite all the difficulties, we're still having to

pay off.

[ Page 4429 ]

want to congratulate the Minister of Finance because, faced with the

alternative that we have in British Columbia today to run a deficit,

which was the route chosen by the New Democratic Party — and they were

running it up awfully fast, hundreds of millions of dollars in one

year.... We'd be in the poorhouse in British Columbia today had we

persisted for any length of time with those irresponsible policies to

cut the services and make the people suffer for the mismanagement. This

is the part that hurts the Minister of Finance, hurts the government

and hurts us all: we must, if we are to continue with fiscal

responsibility in British Columbia and to continue to supply the

general and generous level of services that we have, for the moment

burden ourselves with increased taxes.

The economy is

strong, our potential is great, but we have had to give up, at least

temporarily, the privileged position we have had in British Columbia

with respect to taxes. However, if we manage our affairs well and

wisely, we will still be able to enjoy prosperity and growth and

continue to give the substantial social advances that this province has

been able to enjoy in the past five years — advances in the social

sphere that would not have been possible were we left with the dismal

financial management that was characteristic of the NDP during those

unfortunate years when they were in power in British Columbia.

One

only has to look at the federal policies with respect to provincial

natural resources to understand the difficulty that British Columbia is

in today and how those difficulties would have been compounded had we

had a socialist government in British Columbia at the same time as we

have a socialist government in disguise in Ottawa. You only have to

look at the precipitous drop in our income from natural gas to

recognize that of the 2 percent increase in sales tax which has become

necessary to support services in British Columbia, 1 percent of that

alone can be equated to our decreased income from natural gas as

opposed to two years ago. The other 1 percent can be accounted for by

what we might reasonably have been able to anticipate in growth from

those resources had not the federal policy eliminated our opportunity

to benefit to the extent that is possible here in British Columbia.

What

have we done? There has to be some glimmer of understanding over there

in the opposition before we can even have a debate in this Legislature,

much less be faced with the dreadful prospect that the NDP would ever

again have power in this province. Why do I say that? I say it because

when the NDP was in power in this province, the Premier of the

province, backed by the NDP caucus, went to Ottawa and offered to give

up our natural resources here in British Columbia if the federal

government would socialize them.

SOME HON. MEMBERS: Shame!

HON. MR. McGEER:

How many remember that? Yes, they remember it, and how well they

remember it. You know they can't wait to get the opportunity to do that

again. Yes, they would give away our resources to the federal

government if the federal government would only nationalize the oil and

gas industry here in British Columbia. The federal government has now

embarked on that policy, and what are they waiting for? They're waiting

for the NDP in British Columbia to get into power so they can get it

all. If that were to happen, where would the income be derived from to

support these services in the future? Would we increase income taxes on

individual people by another 30, 40 or 50 percent because we would no

longer have the income from our resources? What alternatives do the NDP

suggest should be the case for British Columbia if their policy of

giving away our natural resources to the federal government were to be

implemented in exchange for the whole program being nationalized across

Canada? Well, I can tell you, if there is anything that would make me

want to stay in politics and fight, it would be to protect British

Columbia from that kind of a disaster.

What has been the

consequence of the national energy policy? I'm sure that the Minister

of Energy is going to speak much more eloquently to this point, but it

cannot be repeated too often. We have pursued the course of maximum

regret in Canada as a result of that national energy policy. The

exploration rigs, which are our heritage for tomorrow, are leaving this

country in numbers even greater than they left when the NDP was in

power. The NDP and the Liberals have similar policies with respect to

exploration — the kinds of policies that would drive the future right

out of Canada.

That's what their policy was. We saw the

effects of their policy. It's a policy that has been adopted on a

national scale by the Liberal Party with the same disastrous results

for western provinces. I want to tell you how bad those results have

been. They're so bad that the Premier of Saskatchewan and four federal

NDP MPs have climbed out of bed with the Liberals. Why did they get out

of bed with the Liberals when Ed Broadbent won't get out of bed with

the Liberals and when Dave Barrett wants to get into bed with the

Liberals? I know the Liberals, and I would advise against getting into

bed with them if I were in the NDP. You've got to know who the bride is

and who the groom is.

MR. LEA: What was it like? You were in bed with them for years?

HON. MR. McGEER: Well, Mr. Speaker, not as a member of an opposition party.

can tell you that the Premier of Saskatchewan is a lot smarter than the

Leader of the Opposition in British Columbia or the leader of the

national NDP, because he can see the necessity of resources being

managed by the provinces. He can see the cost that has come to the NDP

government in Saskatchewan because of that national energy policy. He

knows that it is badly hurting every single citizen of Saskatchewan in

the same fashion that it is hurting every single citizen of British

Columbia.

I can tell you that if there has been some change

in the NDP policy, if they believe that resources should be owned and

managed by the province, now is the time for them to say that. Now is

the time for them to declare whether or not they want these resources

managed here in British Columbia or want — which is their official

policy — to give them all away to Ottawa and let Ottawa manage them the

way they're managing them now. We're demanding a price for our gas

which makes it non-competitive with other fuels, and so we shut down

our gas plants and we let our pipelines remain at minimum capacity.

set unrealistic ground rules for the exploration of oil and gas that is

driving the drilling rigs out of British Columbia-Canadian

drilling-rigs-to search for oil and gas in the United States. Is that

helping us achieve any self-sufficiency? Is that building for the

future of British Columbia? No sir, Mr. Speaker, that's the worst

possible result we could have. If one were to set a policy in Ottawa

that would bring about the worst imaginable result in every aspect,

what has been done

[ Page 4430 ]

Ottawa today would be the perfect policy: decrease oil and gas

exploration; compromise the future; buy foreign oil that you don't

need; subsidize what you don't have — oil; tax what you do have —

natural gas. That's the way to put us in the worst possible position

five and ten years from now.

That's the policy that you

people in the opposition like. They're only following what you offered

to do for them some years ago. The only New Democratic Party leader in

Canada who understands that is Blakeney, the Premier of Saskatchewan.

He's been able to persuade a few of the MPs from that province, but he

hasn't yet been able to get it into the head of your national leader or

your provincial leader. It's disaster for Canada. We only have to look

at the budget, examine the revenues past and present and project these

into the future to recognize the disaster it's bringing for British

Columbia. It's totally unnecessary, because the resource is there in

abundance.

I listen not just to your policies with respect to energy, but your policies with respect to all of the resource development.

Interjection.

HON. MR. McGEER: We'll come to land and your land policies, but before we do that I want to come to coal and your coal policies.

Interjection.

DEPUTY SPEAKER:

Order, please. Honourable members, all members will have an opportunity

to participate in this debate, but only one member will participate at

a time.

HON. MR. McGEER: The New Democratic Party

policy is solidly against development of northeast coal in British

Columbia. You've opposed it at every turn. The member for Coquitlam,

the member for Prince Rupert, the Leader of the Opposition and now the

finance critic have all been against the development of the northeast

coal.

MR. LEA: Nonsense! We're against giving it away.

HON. MR. McGEER:

In the time that they were in office here in British Columbia they

never laid the groundwork for any resource development policies in the

future. All they did was mess up what we already had. If you're in

favour of the development of northeast coal, stand up and say so, but

don't get up here and say we're giving it away, because all you've done

is place yourself solidly against this development.

I thank

heavens that people with the vision and imagination of this group over

there weren't in charge of Canada at the time of Confederation. We'd

have never built the CPR. You wouldn't be in favour of building roads

or railroads or any other kind of development into any of the resources

of British Columbia or Canada. All you can hope to do is to nationalize

something that free enterprisers had developed before to try to get

more for yourselves and wind up ruining the whole thing. That's been

the record of socialism. It doesn't matter whether it's in Europe,

Great Britain or North America, it's characteristic. Never develop

anything; only try and grab what someone else has done and mismanage it

when you get it. That was your record here between 1972 and 1975.

That's

what happened to our mining industry. All mining exploration in British

Columbia vanished; all the drilling rigs in northeast British Columbia

left; no new mines opened. And what did they want to do after they had

ended all the exploration and got all the people out of British

Columbia? They offered to give it to the national government if only

they would socialize it. That's the attitude and approach to resources.

Your

policies haven't changed. You only have to listen to the speeches on

the other side of the House to recognize that they're still against all

development. There are billions of tonnes of coal in the northeast part

of British Columbia. Not one sack of coal will come out of northeast

British Columbia to benefit the people of our province or of Canada

until you have a powerline in there to run the machinery, until you

have a townsite in there to house the miners who go in, until you have

a railroad to take the coal out and a port from which to ship it.

you're against all of those things you're against the development. The

coal can lie there forever, just as the western part of North America

would have lain forever dormant as far as Canada is concerned unless

someone had the courage and vision to build a railroad. The first step

in resource development is to have vision and the next step is to have

courage. And when governments have those two characteristics, then

groundwork is laid for the future. Since the NDP have neither of those

characteristics, never will they be able to develop for the future.

Only will they be able to run down what we have at the present — if

they have office. That's been their record.

I say that this

budget was not only a realistic one, but it was one that had the

essential vision and courage which is the necessary ingredient for the

people of British Columbia to be able to enjoy in the future the rich

level of services that has been brought to them by Social Credit

governments. It starts with hospitalization, medicare, SAFER,

denticare, chronic care. In your time of office, may I ask, what social

developments did you bring in? What social developments did you have

the resources to bring in? You never brought any in, because you didn't

have any money to bring them in with. Why didn't you have any money to

bring them in with? Because you never had any policies to develop the

wealth of British Columbia, which until this point in time has been

dependent upon our resources. Our gas, an important resource for the

future — totally undermined by the national energy policy; retrievable,

but not without a government in British Columbia that is prepared to

fight for our rights.

Why should resources belong to the

provinces and be managed by the provinces? Because it's the heart of

the economy of the western half of this nation. If you have a

government in Ottawa that mismanages the resources, as the federal

government is doing with its national energy policy, there is no way a

provincial elector can defeat that government if the majority of the

votes are coming from the central and eastern parts of Canada that

don't have the resources and therefore don't care if they're managed

badly or well. For them it's an abstract exercise: they can indulge

their political science theory and their socialism. But for us in the

west it's our bread and butter, and we've got to have wise management

of those resources. If the policies that produce that are not coming

from Ottawa, as they should, then there must be a provincial government

that will stand up for the rights of the citizens of this province and

look after their vital interests. That's something that you weren't

prepared to do when you were in office.

The Minister of Finance made the wise decision: that is, to protect the high level of services to people, their health and

[ Page 4431 ]

security,

their education for the future. These are costly services. I want to

tell you how costly, because the Minister of Finance reminded us.

Education is so costly that at $1.5 billion a year it equals the amount

of money British Columbia has to pay to service its share of the

national debt, that's how costly it is. It costs $1.5 billion a year,

and health is even more costly.

So we are going to have to

have sources of income within our province to protect that tremendously

rich social dividend that is characteristic of our free enterprise way

of life here in British Columbia. Part of building for that future —

and I hope the opposition will listen closely to this — is laying the

groundwork so that income will be earned in the future to protect that

level of services. Our natural resource revenues this year will not

produce the income to protect that level of services.

That's

why we've had to take this step, which is deeply regretted, of

increasing our social services tax. With wise management of resources

that step would not have been necessary. With wise management of

resources in the future that social services tax can be reduced, but

not if we give away our resources, not if we continue with that stupid

resource management policy in Ottawa, and not if we fail to lay the

groundwork for expansion in the future. That's what the northeast coal

development is all about, billions of tonnes of coal lying in ridges as

far as the eye can see to the horizon. All that's required to start

bringing those rich resources into production so that every British

Columbian can enjoy the fruits is to lay in the power, build the

townsite, construct the railroad and produce the port. That's all

that's required, and you people are against it. Shame on you!

won't see the benefits for some years. Yes, there'll be some immediate

turnover as the investment begins to produce sales tax, jobs and all

the things that go with construction, but the real solid meat of the

dividend — the real, solid part of it — is down the road a few years

when the sales are not just a few million tonnes, as these initial

sales have been to get the project underway, but are many times that.

And then, Mr. Speaker, let it be remembered what the people in the

opposition had to say now; let it be remembered what their vision of

the future is; let it be remembered the extent of their courage; and

especially, Mr. Speaker, let it be remembered what their record was in

office.

MR. LEGGATT: They'll have to clean up your mess.

HON. MR. McGEER:

Well, Mr. Speaker, I recall the mess the NDP sought to clean up when

they took office in 1972 with a surplus of several hundred million

dollars, no debts, and money coming in so fast the Premier couldn't

even count it. That's the mess they had to clean up. And they sure

cleaned it up fast — left us with a debt that we're still trying to pay

off.

[Mr. Speaker in the chair.]

There is a

different kind of infrastructure being laid in British Columbia today,

Mr. Speaker — also for our industrial future, for which I would like to

particularly thank the Minister of Finance and the government — and

that relates to our Discovery Parks and our thrust to commence

high-technology manufacturing in our province. Historically, in British

Columbia we've relied on our resources — our coal, our gas, our lead,

our zinc, our copper, our lumber, our pulp. All of these resources have

provided jobs, security and wealth; but we have exported in relatively

unprocessed form most of our resources. We carried through the

processing up until the point where reciprocal tariffs were erected

against goods from Canada, and then we have left the labour-intensive

part to the nations who have imported the wealth of our forests, our

mines and our waters. Now the government is embarking upon a new set of

policies in which we will use our ingenuity to put labour content into

goods which do not necessarily have a high resource component in them.

These are the industries that have grown nine fold faster than the low

technology industries in the past 25 years. These are the industries

that not only British Columbia but also all of Canada have found

themselves virtually excluded from since World War II.

One

example is the trade deficit that Canada runs up in the computer

industry that has increased from $500 million three years ago, $900

million two years ago, $1.9 billion today, and estimated to be $5

billion three years from now — all coming from components that have

virtually no natural resource value to them.

We're going to

use computers and the other high-technology goods, that are now being

produced by the advanced nations of the world, in Canada. If we carry

on with our present industrial policies in Canada, we will discover

that our natural resources must be sold off at an accelerated rate just

so that we can break even. Escalations of this kind in some of the

natural resources that we possess are virtually impossible. Therefore

we have little choice in Canada but to become part of the new

industrial revolution and, therefore, set our policies that will allow

us to participate in this new industrial revolution and thereby give

our Canadians the opportunities for both careers and wealth that stem

from success in this highly competitive area.

In order to do

this we must recognize that high-technology industry is not based upon

resources; it's free to locate wherever. Ingenious labour and

inventiveness can be found. Therefore, Mr. Speaker, if we're to

participate, we must be in a position to prepare our young people to be

able to use their minds with the same ingenuity as is found elsewhere

in the world. We must as well recognize that when people manufacture in

the high-technology realm, they're not doing so for a tiny, protected

market, whether it's Canada, Korea, one of the small European countries

or any of the disadvantaged nations of the world. They manufacture on a

world mandate basis, and therefore before they roll their sleeves up

they must know that the product they have can be sold around the world

and beat the competition wherever it might be found. If our taxation

policies and trade policies are out of step with the world, we can

survive in the resource industries because the resources are here and

not elsewhere. But we cannot survive in high-technology industry. It

merely means that the high technology industry will go to where the

taxation and trade policies are competitive with the rest of the world.

We must get in step in British Columbia and Canada with whatever the

world polices are that permit these new industries to flourish and grow

at the rate which today is nine times greater than the traditional

industries of British Columbia and Canada. Our Discovery Parks and high

technology policies represent the initial steps British Columbia is

taking to place us on a competitive basis with these other nations and

other areas of the world. But we cannot have in British Columbia and

Canada taxation policies which are non-competitive. It's the ultimate

route to failure, because those industries will locate

[ Page 4432 ]

elsewhere and our foreign trade deficit will escalate beyond all manageable proportions.

it's not simply an option that we should pursue this course of action

in British Columbia. In my opinion, it is a requirement — one that has

to be practised not just by a province like our own but by the national

government. It was for this reason that I had the pleasure to testify

last week before the Senate Foreign Relations Committee on the steps

that need to be taken by Canada to allow us to be an equal partner with

the other nations of the world in high-technology goods. I'm hoping

that our national government will recognize the trouble that Canada is

in with respect to its diminutive research and development policy, its

non-competitive taxation structure, its failure to perform in this area

since World War II and the deepening trend of our trade deficit. That

insight must come through in Ottawa with respect to this aspect of our

industry, just as it must develop with respect to natural resource

policies.

We are approaching the lunch hour on our first day

of sitting. We have three members of the opposition surviving beyond

the noon break. I don't know if they blow a whistle here for socialists

to go to lunch.

I will say this: the New Democratic Party in

British Columbia is not just out to lunch in the dining room now;

they're out to lunch on the future of British Columbia. Let it be known

that their policies were bankrupt when they had power in this province.

Let it be known that they were prepared to climb into bed with the

federal Liberal government — give away our resources — and that they're

in bed with them today. Let it be known that they're not fighting for

the future of British Columbia, whether it comes to gas policy or coal

or any of our other natural resources. Let it be known, Mr. Speaker,

that they are just against development in British Columbia. They have

never had any vision for the future, nor any courage. They're not fit

to be the opposition in British Columbia, let alone the government.

MRS. WALLACE:

Mr. Speaker, I would seek your guidance. I would expect, from the last

speaker's closing remarks, that you would be prepared to accept an

adjournment at this point in time.

Interjections.

MR. SPEAKER: Order, please. Is there a motion?

MRS. WALLACE: If the House Leader is not prepared to accept an adjournment, then certainly I'm prepared to carry on.

MR. SPEAKER: Please proceed, hon. member.

MRS. WALLACE:

It's always interesting to listen to the minister of science,

technology and all those grandiose things. When he talks about the

building of the CPR I wonder whether or not he realizes that it was his

former affiliate party that gave away the great part of the land base

of Canada in return for the building of that railway. Now it would seem

that this government is moving in the same direction, giving away our

coal resource, not even in return for the building of a railway. They

are preparing to tax the people of British Columbia and Canada to cover

the costs involved in the construction of the infrastructure for

northeast coal and yet are prepared to sell that coal at a cost less

than will give a return — even anywhere near an amount that will give a

return — just for the costs of getting rid of that coal. That is a

giveaway, if I ever saw a giveaway. It has nothing to do with economics

or good business judgment or anything else.

Certainly, if we

look around the world to what's happening when Japan is dealing with

other countries — for example, Australia, where they have offered

concession after concession to the Australian government.... The most

recent offer was to contribute $5.5 million to contribute towards the

port construction there, and still Australia is playing it cautious and

saying, "No, let's just take it easy," because they value that resource

and recognize that that resource means jobs for Australians. It means a

return to Australia rather than a giveaway to the Japanese, and that

whole facet I intend to deal with later.

To begin with, I

just wanted to quote very briefly from page 2 of the budget speech,

where the Minister of Finance told us that they recognized that they

were in trouble some months before, and they made a fast survey of the

various ministries to see where cutbacks could be made. They brought in

a hiring freeze. As we know, this affected ministries that provide

services to the community, such as Health, Human Resources, the

agricultural industry — which is a resource industry, of course.... But

many of those ministries were hit by that hiring freeze and by the

cutbacks that were initiated in a desperate attempt to try and balance

this year's budget.

Then on page 8, at the bottom of the

page, the minister says that "the province will be working to some very

fine financial tolerances in 1981-82, leaving little margin for error.

I cannot overstate how difficult this makes budget planning." Well, if

past performance is any example of the fine tolerances to which this

government is able to work in budgeting, then I don't look for anything

in the line of a balanced budget next year — or anything even close to

what the minister spent three hours telling us about yesterday —

because all you have to do is pick up one of the documents that he

filed yesterday with that budget to get some kind of grasp of the

tremendous errors that have occurred in budgeting over the past fiscal

year.

He talked about causing various ministries to cut

back, and I'll certainly talk about that too. But what I'm speaking

about right now are the special warrants that this government has

issued. These are expenditures, as you well know, which are beyond

anything discussed within this Legislature — completely beyond the

scope of any of the debates and discussions that occupy a lot of time

and cost the taxpayers a lot of dollars in discussing how moneys will

be spent and what priorities will be given. Votes are passed in this

Legislature and then the government proceeds to ignore those votes.

They go around and ask ministers how they can cut back on votes

legitimately passed by this Legislature. On top of that, they pass

special warrants to cover expenditures that are not included in those

budget estimates.

There will always be margins of error, but

when the Minister of Finance talks about working to fine tolerances and

trying to come up with very precise figures.... The fact that he turns

in, along with that budget, a statement of special warrants passed in

January, February and March of this year in excess of $225 million —

$227,877,000, if my addition is correct.... If that's the kind of

tolerances that minister is talking about, then we can expect a very

different kind of performance during 1981 and 1982 than is outlined in

the budget which he has presented to us this year.

[ Page 4433 ]

That

budget means nothing if he is prepared to have that kind of money

issued under special warrants over and above anything discussed in the

estimates and the budget debate in this Legislature. At the same time

he is prepared to go to ministers and ask them to cut back on their

expenditures, to put on a hiring freeze and to curtail services that

have been passed in this Legislature. Then we know that the budget

document that's presented in this House really is meaningless and the

time and effort spent in debating it is not worth the cost to the

taxpayers, because they really don't intend to abide by those budget

guidelines in any way, shape or form. In reviewing the table which you

attached to the budget on the operating budgetary expenditure by

ministry, we see a whole lot of revised estimates. Many of those are

revised downwards.

Transportation and Highways has been

curtailed something like $20 million from the amount of money that was

voted during this last legislative session. Provincial Secretary has a

$19 million reduction. Municipal Affairs is down by $5 million. I'm

just picking the ones that are rather excessive. Industry and Small

Business is down by nearly $8 million. Human Resources is down by $9

million. Agriculture is down by $6 million. Reductions that have been

made in the spending of this province are contrary to the decisions of

this Legislature, just as the special warrants are increased

expenditures contrary to the decisions of this Legislature. That's

high-handed cabinet government. It simply ignores the democratic

process. It doesn't give due credit to the process that takes place in

this Legislature. In fact, it borders on contempt for this very

institution. It's shocking!

I mentioned that the Ministry of

the Provincial Secretary was cut back — a cutback of $9 million. When

we look at the budget statement, it doesn't show that revised estimate.

It shows the original estimate, and makes a comparison in the amount

that's being expended this coming year related to that original

estimate rather than what was actually expended. The same is true for

Human Resources.

I have some grave concerns about what is

happening in Human Resources. My colleague for Nanaimo (Mr. Stupich)

has mentioned the problem with the shelter allowance for people on

social assistance. It's estimated by officials of that ministry in my

constituency that over 50 percent of the recipients of social

assistance are spending some portion of their support allowance to

cover shelter. I submit, Mr. Speaker, that when an agent of this

government in the person of the rentalsman allows rental increases

ranging from $35 to $65 in various apartment houses in the Duncan and

Cowichan area, and then another agent of this government responsible

for funding shelter for the less fortunate people in that area is

obligated to ensure that that allowance increases accordingly.... Those

allowance increases are not happening.

Rental increases are

evident all around this province and perhaps more evident in the larger

centres. But I'm talking about a relatively small community where I

know, in fact, that those rental increases have gone up as much as $35

to $65 in one particular apartment. It means that many seniors living

there and many people in receipt of social assistance are using the

money that should be allocated for food and clothing and

transportation. They're eroding that amount and putting it into

much-needed shelter, because there are no alternatives. I've had people

come into my constituency office practically in tears. They have been

looking and looking and Human Resources have been looking. There are no

alternative accommodations. Those people are forced to use money that

should be allocated to feed themselves and their families — to buy

milk, eggs, other protein, fresh vegetables and fruit — and they're

having to use that money and put it into shelter.

Then we

wonder why our health costs are so high and why they keep escalating.

We've just passed nutrition week, Mr. Speaker, and March is nutrition

month. If we don't allow enough funding to allow people to provide an

adequate diet for themselves and their families, then we can expect our

health costs to continue to escalate.

It's very true that

what we eat has a great influence on our state of well-being, and if

there's not money to buy milk for children, the denticare program is

going to be flooded with children with problems with their teeth. And

if we don't have money to buy protein, fresh vegetables, vitamins and

minerals, then the medical profession is going to be flooded the same

way. That's what's happening and it's going to continue and to be

escalated.

The policy of Human Resources — and they're

always Ottawa-bashing, Canada-bashing, but they're not above accepting

any grants that come from Ottawa. I'm speaking in this particular

instance of the old-age pension. I have a couple in my constituency —

the husband is a senior citizen, the wife is much, much younger. She's

handicapped; she's in receipt of GAIN. They have a child. Every time

the husband's senior citizen pension increases with the cost-of-living

allowance that the federal government grants, the wife's GAIN allowance

decreases accordingly. So now, in 1981, the wife's receipts are less

than they were back in 1975. Those are the kinds of steps being taken

by the Ministry of Human Resources.

They talk about giving

adequate care and caring about people, and yet in order to keep a few

more dollars in the kitty they're prepared to cut back, cut back and

cut back, and they're prepared to accept that Liberal government

funding from Ottawa. They tie it to the cost-of-living allowance given

to a senior citizen in this province, and because his wife is not a

senior citizen and is in receipt of GAIN her allowance is cut back

every time his increases. I think that's a shocking attitude and a very

wrong way for that ministry to proceed. When we see that it's

underexpended this year by an amount of something like $9 million, then

my concerns are very grave for the unfortunate people that find

themselves in this position.

Another announcement that has

concerned me very much in the Cowichan Valley, where we have a very

high percentage of unemployed in the 18-to-25 year bracket, is the

discontinuance of the youth employment program. When the announcement

was made, the Minister of Finance went to the paper and said: "Well,

the opposition is talking about something they don't know anything

about. They should wait until they see what I have for them in the

budget." Well, yesterday we saw, and what we're facing is increased

taxation and nothing to assist young people.

It was

interesting that the very same edition of the paper that carried the

announcement about the cutbacks and the wiping out of the youth

employment, program carried another

article in the second

section which

detailed the difficulties young people have in getting summer

employment. It was interviews with university students at the

University of Victoria outlining the problems that they face and the

lack of opportunity there is for young people trying to get employ-

[ Page 4434 ]

ment,

trying to enable themselves to continue with their education. Yet this

government sees fit to wipe out that youth employment program.

That's

a callous move. It's disheartening to young people, discouraging, and

it means that we're going to see more and more young people on the

labour market. Because if they are not able to afford to continue their

education, they're going to become permanent or temporary dropouts from

the higher educational institutions, and we're going to find them out

in the permanent labour market. And in spite of what the minister says

about the employment in the north, there is not enough in this budget

that will be meaningful enough at all to affect those young people

about whom I'm so concerned.

Another thing that was

mentioned in the budget is the reduction in the percentage of the

assessed value for property tax from 14-something down to 11. Now

that's a very creditable move, and I agree that that probably will work

very well in the larger centres. But there are many small communities

around this province — two of them have come to my attention; one is

Lake Cowichan and one is Ladysmith — where assessed values have not

escalated in the same way that they have escalated in other areas in

this province. That means that because the assessment base has not

escalated, the reduction to the 11 percent in those small areas is

putting those communities in the position where, in order just to

collect the same amount of tax — without anything for inflation — as

they collected last year, they would have to have a special

dispensation from the inspector of municipalities in order to increase

their mill rate by that amount. I think that is something that the

Minister of Finance and the Minister of Municipal Affairs (Hon. Mr.

Vander Zalm) overlooked when they were doing this particular portion of

the budget.

The Minister of Finance isn't here, but I would

very strongly urge the Minister of Municipal Affairs that they have a

second look at that 11 percent assessment base in small communities

where the assessment rate has not escalated with inflation, because it

is working a real hardship on some of those small communities.

Mrs. Wallace moved adjournment of the debate.

Motion approved.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 12:28 p.m.

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