1994 Legislative Session: 3rd Session, 35th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

MONDAY, JUNE 27, 1994

Afternoon Sitting

Volume 16, Number 24

[ Page 12371 ]

The House met at 2:06 p.m.

Prayers.

Hon. E. Cull: A number of community nurses who work for municipal employers have been visiting members of the Legislature this morning and this afternoon. I would like to introduce them. Jean Greatbatch, Tricia Lesavage, Faye Welch, Dilys Sostad, Corinne Beauvais, Jacquie Clayton and Donna Halloran are all here in the public gallery today. I would ask all members to make them welcome.

K. Jones: Visiting today in the House is Jack Marsh, a long time friend and strong supporter of mine. With him are his daughter Elizabeth, her classmates and some of the parents of those classmates from Our Lady of Good Counsel School in Surrey. I'd ask the Legislature to please give them a warm welcome.

D. Symons: It is my pleasure to introduce to the House today Miss Ann Howard, who is the publicity and public relations officer with the Vancouver

chapter of the United Ostomy Association. She's here today to see presented to the government a petition, signed by people from around the whole province, that the association has gathered. Would the House please make her welcome.

Hon. D. Zirnhelt: I'd ask the House to please welcome Rick Barnes, my executive assistant, who is down from Williams Lake in Cariboo South.

Oral Questions

COST OF ISLAND HIGHWAY PROJECT

G. Farrell-Collins: This morning the Vancouver Board of Trade released a study done by BDO Dunwoody. It is a scathing analysis of the Vancouver Island Highway sweetheart deal negotiated by this government. That study shows that the costs of the Island Highway construction project have been increased by almost $73 million because of the collective agreement negotiated by this government and its friends in the building trades. Can the Premier tell us how he can justify a $73 million increase in costs at a time when school districts around this province are crying for money for capital funding?

Hon. M. Harcourt: That would have a little more force to it if the hon. member and the opposition had voted for capital construction projects for schools. They voted against the $1.5 billion that's been invested by this government in capital construction in our schools. That study follows on the heels of another study. They got up and spoke with some outrage about the $300 million extra in labour costs for the Vancouver Island Highway. We discovered that the total labour costs for the Vancouver Island Highway was $300 million out of a $1.2 billion budget.

So they keep relying on these studies that have, at least, improved from a 100 percent overrun to a 30-some-odd percent overrun. I'd be interested in hearing what the member has to say next.

The Speaker: The hon. member has a supplemental?

G. Farrell-Collins: I think the parents and students of British Columbia would like to hear an answer to the first question. The fact of the matter is that this government negotiated a sweetheart deal with the building trades unions on the Vancouver Island Highway that's going to cost the taxpayers an additional $73 million, which could be better spent providing capital infrastructure for schools for the students of this province. How can the minister justify that? How can the Premier justify a $73 million cost increase -- waste -- on the Vancouver Island Highway, when school districts and parents are crying to get rid of portables and to get their schools constructed in a proper way?

Hon. M. Harcourt: Again, this government has invested $1.5 billion in new school construction over the last three years. In 1984 the previous Social Credit government, which is now split into a whole series of wings --

part Liberal, part Reform and

part independent -- spent a total of $24 million on new school construction in this province. The record of our government is unparalleled in this country. I haven't had a chance to review the study that the hon. member has come up with, but I can say that at least the studies they keep putting forward are improving -- from $300 million to $73 million. The last study was thrown out because it had no substance to it whatsoever. I'd like to look at the study that the hon. member is talking about.

The Speaker: The hon. member has a final question?

G. Farrell-Collins: I'd be glad to let the Premier look at our research, and he could see how poorly his minister did on behalf of the taxpayers of British Columbia. I'd remind the Premier that the only study on the Island Highway that's been thrown out was the one done by his minister, which was proven to be absolute fabrication and had no merit whatsoever.

[2:15]

So can the Premier tell us -- can he please answer the question -- if he thinks that $73 million is being spent to the best advantage of the taxpayers and the students of British Columbia?

Hon. M. Harcourt: Hon. Speaker, I think the $1.5 billion that's going into new school construction is being spent to the advantage of the students and the parents in this province.

If the hon. member had looked at the due diligence that was done by this government on the Vancouver Island Highway, he would have seen that a study prepared by Lloyd Little Broder and Burley shows very clearly -- that having no strikes or lockouts, with the apprentice programs and with the advantage to Vancouver Island -- that this is a wash of zero, not $73 million. This project, which should have been built 30 years ago -- the Vancouver Island Highway project -- is going to be built on time and on budget to the advantage of the people of Vancouver Island.

FOREST JOBS COMMISSIONER

F. Gingell: During the Premier's smoke-and-light show last week, he did provide one new piece of information. The Premier said that the forest jobs commissioner would report directly to himself rather than to the Legislature as a whole. Can the Premier please tell us why he decided to have the commissioner report to his office in private? Does the Premier have so little faith in his own program that he is compelled to shelter it from open debate? Who is he afraid of?

Hon. M. Harcourt: The Liberal opposition voted against the forest renewal plan. They voted against a plan that is

[ Page 12372 ]

going to provide security for the forest workers and their families and the communities of this province. I said very clearly that forest workers would be able to continue working in the forests when the Vancouver Island land use plan comes down. There will be 50 jobs affected this year, and over 500 jobs are going to be provided this year through the forest renewal plan. If the Liberal opposition had their way, those 500 jobs would not be going ahead.

The jobs commissioner, Don Cochrane, who is known to the people of Vancouver Island and who has worked with the people of Vancouver Island, is going to work directly with me and the Minister of Forests to make sure that forest workers continue to work in the forests on Vancouver Island.

The Speaker: Supplemental, hon. member.

F. Gingell: Every day it's a different number -- fake jobs and false hopes. Last Saturday the new forests jobs commissioner was quoted as saying: "I am not sure we will be able to replace job for job, but I'm hoping that the jobs gained will be more than those lost." The Premier made a solemn promise that not one forestry job would be lost as a result of this government. Now the man appointed to carry out that promise says that he's not sure that he can come through. How can the Premier expect workers in forestry communities to believe him when even his own point man isn't convinced?

Hon. M. Harcourt: The Liberal opposition, which voted against the forest renewal plan, would make sure that forest workers don't have continued work in the forests. I announced that $52 million worth of work will be done on watershed restoration, road reclamation and intensive silviculture, creating 2,500 jobs across British Columbia and 500 on Vancouver Island, which will more than take care of the 50 jobs that are going to be lost in 1994 as a result of the Vancouver Island land use plan.

The commissioner will be carrying out the commitment I made, and that is that forest workers will be able to continue working in the forests, using their skills as fallers, as equipment operators and as people who know the forests and know how we can restore watersheds, reclaim roads and do a much better job on silviculture.

The Speaker: The final question, hon. member.

F. Gingell: That's not what his commissioner said. The Premier has appointed a jobs commissioner to report to him behind the backs of members of this Legislative Assembly. On his first day on the job, that same commissioner has already admitted that it may be impossible to preserve forest jobs on Vancouver Island. Given that this is the same Premier who promised no more friends and insiders, no new taxes, open and honest government, an end to patronage appointments.... After all that, and after your own commissioner doubting your word, why should anyone else believe you?

Hon. M. Harcourt: Well, the forest commissioner was not chosen for his political background; as a matter of fact, I don't know his political background. I think if you check it out, you may be quite surprised at his background. What you will find is a man who has decades of experience on Vancouver Island in working at the community level. He is committed to carrying out the commitment that I made that forest workers would be able to continue working in the forests.

He is going to have the resources of the forest renewal plan and the Forest Practices Code, which will result in far more jobs being created on Vancouver Island. As a matter of fact, if you look at the full extent of the job strategy that goes along with the Vancouver Island land use plan, there will be up to 5,000 new jobs created on Vancouver Island in the near future.

NEW PROVINCIAL PARKS AND LAND CLAIMS

J. Weisgerber: A question for the Minister of Aboriginal Affairs. Can the minister tell us if he has identified those areas on Vancouver Island that are under claim by first nations that now overlap with the 23 new parks that were announced, and can he tell us what effect these new park designations will have on those claims?

Hon. J. Cashore: The answer is yes, I have identified those parks where there are overlapping claims. Following the land use plan that came down from CORE, I met with Mr. Stephen Owen and the chiefs of Vancouver Island. Subsequent to that, I arranged for staff from the Ministry of Aboriginal Affairs to hold consultations throughout Vancouver Island, which have taken place, those consultations being with the chiefs of first nations and others of their people. The meaning of the statement "without prejudice" has been recognized in those consultations, as was recommended by Mr. Owen.

I met with the chiefs again the day prior to the government announcing its land use decision. I'm glad that Mr. Connaghan, the head of the Treaty Commission, is watching this today, because I reiterated that the main event with regard to those first nations....

Interjections.

The Speaker: Would the hon. minister please wind up his remarks.

Hon. J. Cashore: The main event with regard to those first nations was to follow through on the process that had been established through their filing statements of claim with the Treaty Commission.

The Speaker: Supplemental, hon. member.

J. Weisgerber: Maybe the question should be: will the minister tell us whether those new parks will be affected by land claims settlements or not? Are the lands that were set aside -- the 23 new parks -- subject to land claims, or are they going to be protected as parks for British Columbians for all time?

The Speaker: The minister.

Hon. J. Cashore: Thank you, hon. Speaker, and thanks to this hon. member for giving me an opportunity to explain this further.

I would commend the information that's in this booklet, "In Fairness To All," to the hon. member, which outlines much with regard to the development of the Treaty Commission process. "Without prejudice" is a phrase that is attendant to every one of these designations. Some concern has been expressed by first nations with regard to the efficacy of that clause; however, I believe they recognize that the government intends to negotiate government to government -- first nations and the government of British Columbia -- and that in that process at the negotiating table

[ Page 12373 ]

matters will be decided that relate to the future of those designations.

The Speaker: The final supplemental, hon. member.

J. Weisgerber: The government has said that private property, property fee simple, will not be affected by land claims. Will the minister make the same commitment for British Columbia parklands? Will the minister say that parks will or will not be subject to aboriginal claims? Will he quit the legal mumbo-jumbo and answer yes or no?

Hon. J. Cashore: The member knows full well that parks are not fee simple land. The answer is no.

DOCK AND CROWN LEASE FEES FOR FISHING RESORTS

C. Tanner: Could I address a question to the Minister of Municipal Affairs, and could she give me some assurance that her answers will be a little shorter than the last minister who spoke?

New dock permits and massive increases in 1994 property assessments and the consequent lease fees are causing hardship for many of B.C.'s fishing resorts. Business is down and taxes are up, and there is a sense of urgency that the minister and her officials obviously don't understand.

The Speaker: The question, hon. member.

Interjections.

C. Tanner: Mr. Speaker, let's have a little fairness here. I mean, you listened to the last minister.

The Speaker: Please proceed, hon. member.

C. Tanner: The industry needs answers now. Why has the minister shown no willingness to deal with the legitimate concerns of B.C.'s many fishing resorts?

Hon. D. Marzari: If the member is referring to B.C. Assessment Authority processes and assessments, that's one question. But if the member is referring to dock lease fees, I fear he's barking up the wrong minister here.

This government has repeatedly offered its help to the tourism industry in this province. With the B.C. Assessment Authority and the Ministry of Finance, we have been looking at the lease fees and taxes exacted against commercial and Crown leases throughout this province. I believe the tourism industry has everything to gain from this kind of a reasoned approach. We're going to be looking at reasonable and appropriate lease fees under the appropriate assessments on docks and Crown water leases throughout this province.

The Speaker: The bell terminates question period.

D. Symons: I ask leave to table a petition.

Leave granted.

Presenting Petitions

D. Symons: On behalf of the United Ostomy Association, this petition requests that the deductible for Pharmacare be reduced for those with special needs. The petition reads:

"The present British Columbia Pharmacare plan is unfair when considering the needs of ostomates who require appliances on a daily basis. Without their supplies, ostomates would be confined to their homes. This petition forms a request to Pharmacare, asking that the deductible be lowered for people with special needs, such as ostomates. The present deductible is too high and is rising yearly. Many ostomates do not have extended medical plans and spend hundreds of dollars each year on supplies.

Obtaining ostomy equipment is becoming a hardship for many, and therefore something must be done to aid those who do not qualify for social assistance. We the undersigned place our signatures in support of this petition."

Hon. J. Smallwood tabled the annual report of the B.C. Housing Management Commission.

Hon. M. Harcourt: I rise to table the 1993-94 annual report of the B.C. Trade Development Corporation. It is contained in a very innovative way in a fine publication, the B.C. Exporter: Partners in Export, "1993-1994 -- The Year in Review."

Orders of the Day

Hon. D. Marzari: We have the Premier's estimates today, hon. Speaker.

The House in Committee of Supply B; D. Lovick in the chair.

ESTIMATES: OFFICE OF THE PREMIER AND CABINET OFFICE

On vote 7: office of the Premier and cabinet office, $4,310,000.

Hon. M. Harcourt: It's my pleasure to present the 1994-95 estimates for the office of the Premier, the cabinet office and the B.C. Trade Development Corporation, and to introduce staff -- if they will come in now -- who are responsible for administration in these areas.

I might say that I had a very mellow weekend celebrating my and Beckie's twenty-third wedding anniversary. I think we're all aware that our significant others are the ones who bear far more of the brunt of the trials of public life than we do. On behalf of all of us, I'd like to pay tribute to our partners, who contribute so much to public life. I tried to express that to Beckie on the weekend, so if I appear to be not my usual irascible self....

[2:30]

I'll present my staff, first of all, before I get on with my opening remarks. I have with me Lesley Wolfe-Milner, manager of finance and administration in the Premier's office, who can deal with all of the very detailed financial points that I'm sure members of the opposition will be bringing forward. As well, with me is Catherine Holt, assistant deputy minister of intergovernmental relations.

My other staff will be coming shortly from B.C. Trade, as well as my deputy minister and cabinet secretary, Doug McArthur. From B.C. Trade Development, to answer your questions when we proceed to that area, will be the chair, Mr. Wilson Parasiuk; the president, Oksana Exell; and the vice-president of finance and administration, Fred Kruberg.

I'd like to provide the Chair and members with an overview of the estimates and priorities for the office of the Premier and the Trade Development Corporation for the current fiscal year. I would be more than pleased to give explanations or to answer questions that eruptspontaneously from members of the House about the operations of the Premier's office, cabinet and B.C. Trade.

[ Page 12374 ]

Regarding the Premier's office and the cabinet office, these estimates, as members can see, have increased 2 percent overall above the restated 1993-94 budget. Members will be aware that growth and overall government spending have been cut to their lowest level in seven years, and even with this slight increase, British Columbia has Canada's lowest per capita expenditures in the Premier's office and cabinet office again this year. We're carrying on the tradition of keeping those expenditures to a modest but appropriate level.

The total staffing level across the eight branches of these operations is unchanged, with the same number of full-time-equivalent positions as in 1993-94 -- 65. The staff are there to help in the carrying out of my government's priorities, which is to ensure that British Columbia remains Canada's best-performing economy and the province with the highest quality of life. I'm sure members are aware that in May, British Columbia created 60 percent of the new jobs in Canada. Staff are there also to carry out the priority of preparing for a future of continued economic security for ordinary British Columbians.

These offices have an overall responsibility for the development and implementation of my government's strategic initiatives to ensure our continued economic security and a sustainable environment. The deputy and secretary to cabinet, Doug McArthur, is now here. I can assure you that the throne speech you heard and that you have received copies of mirrored the four priority areas that I wanted to see the Legislature concentrate on with regard to jobs and long-term economic development and to making sure we have the infrastructure in place to carry on the very optimistic future that British Columbia has.

The Skills Now initiative works closely with the new Ministry of Skills, Training and Labour that was created to focus on long-term economic development and job creation, and the new ministry responsible for B.C. 21 -- Employment and Investment.

As well, I have our government focused very actively and enthusiastically on renewing our forests and making sure that the number one industry in British Columbia, the forest industry, has a sustainable future as a sunrise, not a sunset, industry. Those who think that forestry is winding its way down can forget that. Forestry has a very positive, optimistic but changing future in British Columbia.

The fourth priority that my government, the Premier's office and the cabinet operations have focused on is the fiscal plan to eliminate the deficit and have a debt management plan, but to do it in a balanced way that makes sure that our citizens have access to the services -- health, education, social services and other amenities -- that we consider part of the high quality of life that British Columbians want and enjoy.

In regard to the revitalization of our forests, we have a plan to renew our forests that moves beyond the decades of confrontation, self-interest and uncertainty. In British Columbia we are making historic changes in partnership with forest workers, the forest industry, communities and environmentalists. We are securing jobs for forest workers through the very innovative, creative forest renewal plan that is reinvesting $2 billion of public stumpage funds to make sure that we secure family-supporting jobs while restoring the forest land base.

We will be creating many more value-added forest product opportunities and making sure that our workers are trained and retrained into the new opportunities opening up in forestry.

At the same time, we have brought down a plan which ensures stability and security for Vancouver Island, which was the first area that the Commission on Resources and Environment commissioner, Stephen Owen, looked at, after extensive consultation with the people on Vancouver Island. This land use plan protects our rain forests and secures jobs, as well as permanently protecting 23 parks -- magnificent areas of Vancouver Island that many generations are going to be able to enjoy. Visitors from around the world will be able to come and see the breathtaking beauty of Vancouver Island and these parks.

As well, as we heard earlier in question period, through the job link and jobs commissioner initiatives that are being set up, we will be able to provide economic and job security for workers, their families and communities.

We are utilizing the forest renewal plan and the Vancouver Island land use plan, which says: "Here's the decision. Here's where the parks and wilderness areas are. Here's the 3 percent that will go into agriculture and the 3 percent that will go into urban settlements" -- 81 percent of Vancouver Island has been put into a forest land reserve to preserve those lands against intrusions from either more parks or the urban development that is causing strip development up and down the east side of the Island in particular.

The new forest land reserve will create special management standards in terms of low-intensity usage in areas with important natural features, as well as more intensive silviculture in high-intensity areas. In other areas, new harvest and reforestation practices through the new Forest Practices Code will provide for sustainable harvests on Vancouver Island.

These initiatives are going to lead to a form of sustainable development that is unparalleled in Canada -- and probably in North America and most areas of the world -- with our forests being given the stability and predictability that British Columbians want to see for themselves and their families, and for communities that depend on our forest activities.

The second major initiative that our government undertook and described not only in the throne speech but in the budget and the estimates of the Skills, Training and Labour minister is the Skills Now initiative. We know that for the past three years British Columbia has enjoyed Canada's best economic growth and best job creation record. Last year, one-third of the new jobs in Canada were created in British Columbia. Over 60 percent of the new full-time jobs were created in British Columbia, in a rapidly diversifying economy.

To maintain this record, we have to continually improve our activities and initiatives by making sure we can adjust to structural changes in forestry, mining and fishing -- some of our most important industries -- and by giving British Columbia workers the training and education they need in a rapidly changing world of work.

I was able to address some of these areas of change with leaders in the province during the summits that I called on economic development and trade opportunities in 1992, and on skills and training in 1993. As a result of those summits and the input of business, labour, academic, government and community leaders, we have been able to focus on Skills Now and a number of other initiatives to give our workers the training they need.

As I said, despite our enviable job creation record, B.C. parents are concerned that their children may not have the same opportunities that the parents had when they left high school. It is a more challenging world for young people, requiring greater emphasis on hard work and on gaining skills during and after high school. The parents of British Columbia, the employers and others know that young British

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Columbians will need these new skills in order to compete in emerging industries in the global economy.

Skills Now will invest $200 million over the next two years to develop the skills needed for an adaptable, highly skilled workforce that is ready for the twenty-first century. Skills Now is going to do that by increasing the investment in our young people, workers, people who are unemployed and people who have been excluded from a number of economic opportunities, and by linking high school to the workplace. I think this is one of the more important changes we will be introducing during this legislative session.

Young people are going to be able to mix and match their skills more closely to the requirements of the market and of real enterprise. They will have real skills for the real work they face, by increasing work experience in 100 percent of schools within the next few years. We will be offering work experience by expanding apprenticeship preparation into high schools, so young people will have greater relevance, and by getting rid of that terrible pyramid of who's important and who isn't which has plagued our high schools for far too long.

Those in the top academic part of the pyramid were seen to be better or to have more opportunities than young people in the vocational, technical or commercial areas of interest.

We flatten that to say that every young person is valued and that all those skills are equally important. The academic skills to become a brain surgeon, an accountant, an engineer, a computer technician or a carpenter, or to run a small business and work in enterprise, are all very important skills we should be learning in the high schools. To encourage young people to stay involved, we're expanding the Stay In School programs to deal with the dropout rates in this province.

We're modernizing vocational and technical training. There's a series of initiatives in Skills Now that are going to encourage young people to stay in training and in high school in order to gain a broader range of opportunities and skills. After high school, we're opening more doors to college and university. This September we'll be tripling the number of student spaces in universities and colleges -- from the 2,600 to 2,700 we created in the last few years to 8,100 new spaces in our post-secondary institutions.

As well, we'll be expanding the number of institutions that can grant degrees, with the six new degree-granting colleges and institutes throughout British Columbia. There will be six new advanced technology programs in B.C. growth sectors.

[2:45]

The next area where Skills Now is going to provide a tremendous resource to British Columbians is in retraining workers, not by having to come to the big urban centres all the time but by staying in their own communities and being able to go to new community skill centres, the first ten of which are going to be established in next few months to train up to 10,000 British Columbians. As well, we will have 300 new apprenticeships in growing job fields. By developing 70 small business and 15 sectoral training partnerships -- for example, the forest renewal plan I talked about earlier, for example -- we will be able to share responsibility for retraining workers.

The fourth important area of the Skills Now program is to move people from welfare to counselling and training, and then to the workforce. We will be matching skills training to labour market demands so people don't go around in circles getting skills that don't lead anywhere, that are only half-baked or that don't help them get out into the real world and have a well-paying job to raise their families and support themselves.

Under Skills Now, individual training plans will be developed for 50,000 British Columbians over a two-year period; that's on top of the 80,000 per year who are presently -- quietly and effectively -- gaining counselling, training and the ability to go on into the world of work through the activities of the Social Services ministry and of the Skills, Training and Labour ministry.

We will be working in partnership with B.C. businesses, who will be given new training credits for training new employees. Again, this is a B.C. innovation, which I think is going to be a win-win-win for business, for unemployed people who will gain skills they need and for all of us to see our fellow citizens have a hopeful life and a better quality of life for themselves and their families.

The forest renewal and Skills Now initiatives are part of my government's priorities for this legislative session, and the third area we're focusing on as a priority, as I said earlier, is investing in long-term job creation and economic growth. We have a forward-looking and long-term strategy that forms part of building a diversified and prosperous economy. It's based on value-added, knowledge-based, specifically driven economic activities. It's starting to diversify and happen in all regions of this great province of ours.

We're building the foundation for an even stronger economy as our province enters the twenty-first century. I think that we've seen where that future is. It is indeed the best future in North America, not just in Canada. We are so strategically positioned and gifted with such magnificent people, geography and strategic location, in terms of time zones for the financial markets, air travel and shipping, that the opportunities are there for us to grasp and take advantage of.

We will be able to accelerate that by making strategic investments in public infrastructure to encourage private sector investments in all regions of our province. These investments in public infrastructure include transportation, higher education and health care.

As well as promoting training and local hiring to meet overall economic development and job creation goals, as we discussed earlier today, and to ensure that all regions and groups benefit from economic expansion and diversification and that we don't leave people behind in any area of this province, we're building -- with the new initiatives we've taken this last year or so with the B.C.

Transportation Financing Authority and other initiatives -- the ability to accelerate building new transportation links for our province in terms of new highways, bridges, ferries, routes and terminals; and to expand our public transit and commuter rail, the establishment of which I announced a few weeks ago.

As well, we will have a government partnership with the private sector that will expand science and technology industries and build B.C.'s electronic highway, as well as promote out-of-province capital and trade investments. In partnership with the private sector, we are coordinating job creation strategies and helping workers and communities in transition in the Elk Valley, in the forest industry and in other parts of the province.

The fourth area this session has concentrated on is fair taxation and sound fiscal management. B.C. has Canada's best-performing economy, and we have the lead in sound fiscal management. B.C. has the highest credit rating of any Canadian government and the lowest per capita debt. As members of this Legislature are aware -- we have said this on one or two occasions -- the deficit is down and waste is being cut. The deficit has been slashed by 60 percent in three years and will be eliminated by 1996-97.

In slimming down the government, we eliminated 20 major government agencies, as part of a debt reduction

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strategy. British Columbians have expressed concern about whether the services we were offering have been going to the people who are genuinely in need. That's why we have been combatting welfare fraud. We capped school administrative costs, and we have reformed collective bargaining in some of the areas that required reform.

Members of this Legislature have tightened their belts, literally and figuratively, with a salary freeze for MLAs that started with the previous government and has gone on under this government. We're into our fifth year now, which, if you add in inflation, means that we've all effectively taken a fairly substantial cut in our spending power, as have senior public officials. As well, I asked myself and cabinet to take a 5 percent cut in those areas.

We have been reviewing management salaries in the broader public sector and launched the Public Sector Employers' Council, which is finally bringing some sanity, common standards and accountability to MUSH -- the municipal, university, schools and hospital sector -- where we spend billions of public dollars without the kind of accountability that we should have had in the past. We have that now with the Public Sector Employers' Council.

As part of our fair taxation and sound fiscal management plan in the budget tabled by the Minister of Finance, taxes will be frozen for three years, maintaining the second-lowest taxes in Canada. As well, this year tax cuts of $112 million were in the budget. There is, for example, no property purchase tax for the first-time homebuyer. We extended the homeowner grant so that 95 percent received the full homeowner grant. There were tax breaks for 500 farms and cooperatives, and another 1,000 small businesses were exempted from the corporation capital tax.

Since 1992 over 5,000 have been exempted from the corporation capital tax. Also, the vehicle trade-in allowance was restored and the threshold increased for the vehicle surcharge. So all taxes -- including income, sales, property and fuel, and MSP premiums -- have been frozen for the next three years.

Hon. Chair, these are the four priorities my government has focused on and they have taken a prominent place in this legislative session with a focus on: first, jobs, infrastructure and long-term economic development; second, skills and training for our citizens; third, the forest renewal plan and various other initiatives we've taken; and fourth, a balanced fiscal plan to keep British Columbia in the forefront of getting rid of the deficit, of debt management and providing good-quality services for our citizens. These have all been part of our commitment to a prosperous, sustainable British Columbia with opportunities and security for the ordinary people of our magnificent province.

Before I sit down and welcome questions from members of the House, I would like to briefly introduce some information about the B.C. Trade Development Corporation, which I'm sure is of interest to members of the Legislature. Trade is a crucial part of B.C.'s economic success story. B.C. leads Canada in growth, job creation, retail sales growth, housing starts and new business starts.

Trade has been particularly strong in the last few years. The value of exports rose more than 16 percent last year. That was the best performance in Canada. In 1993, secondary manufacturing exports grew by 45 percent over the previous year. Growth in the value of value-added exports in 1993 -- and I think this is very encouraging -- was 23.6 percent. So we're growing in the right way; our economy is diversifying. Those value-added and high-tech areas are leading that export growth.

These are some of the highlights of the last fiscal year for B.C. Trade. First of all, we've been able to meet the challenges thrust upon the chair, president and board of B.C. Trade to absorb the international operations and the cooperative marketing strategy for the forest industry. They have been able not only to absorb those changes and have a very highly focused trade development corporation for the province -- which is leading in Canada -- but also to expand the international network while reducing costs by $1.1 million.

So we're in more places at a lower cost, with more result-oriented trade officers in place, working with B.C. business. We also have export advisers in other areas of the province, such as Kelowna and Nanaimo, to work with exporters or people who are thinking about exporting. They're in the interior, the north and on Vancouver Island. So we've expanded not only in Vancouver but also into other areas of the province.

Loan guarantees were committed, supporting $100 million in sales. There was $250 million in export sales, which was directly influenced by the promotional initiatives of B.C. Trade. We had another great year in film production. We're the third major film-producing area in North America now, with Los Angeles and New York, of course, being the leading two. There was $320 million spent in film production in B.C. last year. We're continuing to be a very fine place for people to produce films.

As members of the Legislature peruse copies of the Trade Corporation's 1993-94 annual report, I would like them to be aware of the following information for 1994-95. First of all, the budget of $17,940,000 is slightly reduced from 1993-94, by about $40,000. You should know that the Asia-Pacific will continue to be the number one priority for the B.C. Trade Development Corporation. Fifty percent of the resources of the Trade Corporation go into the west coast of the United States and Asia, and that area now accounts for 60 percent of B.C.'s trade. My guess is that it will account for 80 percent within the decade.

The opportunities are just astonishing in terms of the size and scope of the infrastructure investments alone in Asia.

I'm pleased to say that at two levels -- with the western and northern Premiers and with the federal government -- we are entering into a more cohesive and singular focus on Team Canada. Instead of provinces going out by themselves or individual companies ploughing up the same ground, with five or six companies from B.C. going in and competing for business, we're going in in strategic alliances, which B.C. Trade is pioneering. After some successful experimentation in Italy and Denmark, B.C.

Trade is leading the way with 17 strategic alliances, and we're entering into alliances with the western Premiers on a proposal to work together. I will have more to say about work at the federal level, about the Prime Minister and I going on a major mission to China with major B.C. leaders.

[3:00]

In conclusion, we will be building better ties with Southeast Asia and with Mexico, Central America and South America. There will be a continued focus on value-added, knowledge-based, Pacific-driven trade, which is the lifeblood of our province.

G. Farrell-Collins: The normal, historical process in this House is for the Premier's estimates to be responded to by the Leader of the Opposition. It was some six weeks ago, I believe, when I, as the Opposition House Leader, approached the Government House Leader and advised him -- at his request, as he started to indicate that we would be moving into night sittings in this chamber toward the end of the session -- that the opposition had two days in the upcoming six weeks when we had engagements in the evening. I advised him that we would be glad to work

[ Page 12377 ]

around those evenings and try to come to some sort of accommodation with the government by filling in time in later evenings, other nights, or whatever was necessary in order to get the work done in the appropriate length of time. At that time I, as the Opposition House Leader, was assured by the Government House Leader that he could accommodate that. One of those days was today, which, as the Premier is well aware, is a major dinner and speech by the Leader of the Opposition. I find it interesting to note that the Government House Leader and the Premier chose today to move into these estimates. Of all days of the 365 days in the year, they chose today. That's fine.

Interjection.

G. Farrell-Collins: The Minister of Municipal Affairs should read what her Government House Leader said when he was in opposition with regard to that before she raises her voice in comment.

We will be dealing with the technical aspects of the Premier's budget estimates today. The deputy leader of the Liberal caucus, the member for Delta South, will be dealing with that in his capacity for some length of time. I understand from the Government House Leader that the full policy position debate, if we can call it that, will now take place on Wednesday. We will move through the majority of these estimates today and pick that up at a later date. With that, I'll pass the floor to the member for Delta South.

F. Gingell: I wasn't expecting to be put in this position, and perhaps I haven't spent as much time thinking about these issues as I should have done. I've learned that one can't rely upon the word of government about how we're going to deal with these issues. There was a commitment, but....

An Hon. Member: Careful.

F. Gingell: Yes, I shall be careful. Nevertheless, there was an understanding, and I think that needs to be clearly stated.

The Premier, in his opening remarks, has talked about the province's debt management plan. As Finance critic, I have been waiting anxiously to hear about the province's debt management plan, and maybe this is my opportunity for the Premier to explain to the House exactly what the province's debt management plan is.

Hon. M. Harcourt: I'm sure the member, as well prepared as he usually is, had a chance to fully canvass this whole issue when he ruthlessly and persistently went through the estimates with the Minister of Finance. I'm sure he had a chance to pursue this very vigorously during that period and to bring up his concerns during the full debate that we had on the budget. I'm sure that a lot of those issues were canvassed at that time, and the member was made aware of the fact that the government's goal is to eliminate the deficit. We have done that this year on the program budget, which is $90 million in the black.

What we have left is the interest on and capital of the province's debt, which runs from the time of Amor De Cosmos to the present. That is about $898 million in interest on the accumulated capital debt of the province -- schools, hospitals, dams, rapid transit systems and the other assets that this province has built. I'm sure the hon. member for Delta South had an opportunity to pursue his debt management concerns during the Ministry of Finance estimates and the budget debate, which were the appropriate places to raise those concerns.

F. Gingell: During the course of the Finance estimates, the Finance minister didn't mention a debt management plan. But you have, so I think it's perfectly valid to ask you exactly what the debt management plan of the province is. You spoke about deficit management. I would be most interested in what your debt management plan is.

Hon. M. Harcourt: Again, when I read through Hansard and listened to the many questions that the member raised at that time, I think he did pursue the issue of debt and debt management. He did pursue the very questions that he has raised here today.

I'm sure the member is fully aware that part of the fiscal plan that I talked about earlier was to bring down the huge spending increases of 12 to 13 percent that we saw previously. They were almost at the level of overspending by the previous government. They were quite unsustainable, along with the Liberal David Peterson government in Ontario. When your economy is growing at 3 to 4 percent a year, to have 12 to 13 percent increases in health, education, social services and other expenditures is unsustainable.

To have sustainable finances, our government brought the rate of spending down from 12 to 13 percent a year to where it is now, which is about 3.5 percent. That's basically driven by 100,000 new British Columbians coming into this province every year who require health, education and social services. That was an important step.

The second step was to reduce and absorb the federal off-load under the Tories, which was quite a burden on the people of British Columbia. The federal government basically welshed on contracts that they'd entered into to provide fifty-fifty sharing of health, education and social services costs. That cost B.C. taxpayers $6.5 billion, on top of the $3.5 billion of overspending from the previous government that we had to squeeze out and squeeze down. Our citizens have had to absorb $10 billion by cutting back on spending and cutting out waste. We have successfully been able to accomplish that.

Over the last three years, there has been tremendous pressure to get that financial house in order, and we have. We're at the point now where we're in the black on our program budget, with $90 million for the cost of health, education and social services.

Within the next 24 months we will be in the black on all of the interest and capital payments on the debt in this province, and we are starting to pay down the dead debt -- that is the over-spending by the previous government, which, unfortunately, the Liberal government in Ottawa has kept going by adding $200 million on top of the tax dump of the former Tory government in Ottawa. We've been able to absorb that and are now proceeding to deal with the dead debt, which isn't asset-based. As we announced earlier, we will be applying B.C. Endowment Fund benefits against that dead debt when those benefits are sold.

We're going to continue to pay down that dead debt, while having an appropriate level of asset-based debt to build for a growing province.

F. Gingell: I guess I'm not explaining myself properly. I was most interested in the Premier's vision -- the vision of the chief executive of this government -- of a debt management plan. You've spoken about it, but in this fiscal period the province is planning on borrowing about $2.5 billion -- another $2,500 for every family, if we count a million families in this province. I'm sure you appreciate, Mr. Premier, that borrowing $2.5 billion in '94-95 is increasing our total provincial debt by about 10 percent. This year our provincial debt is going to go up by about 10 percent before we take the $300 million that we suggested should be

[ Page 12378 ]

realized from the sale of the B.C. Endowment Fund and use it to reduce the debt. Could we talk about the manner in which you think it is appropriate...? What do you believe is the right way for the province to deal with its $25 billion debt? What sort of time frame is there? How do you think we should be dealing with it? What is the plan?

Hon. M. Harcourt: The area that the member for Delta South leaves out is that the debt is, by and large, based on assets: it's based on ferries and schools being built, and on new highways and new transportation systems. It's like a house: you don't pay for it on your credit card; you don't pick up your wallet and say: "Here, I'm going to pay for a rapid transit system," or "I'm going to pay for a new University of Northern B.C. out of yearly operating expenses." You build dams, highways and rapid transit systems through mortgaged debt, but you're building an asset, a benefit for British Columbians.

W.A.C. Bennett established borrowing abilities for B.C. Hydro, B.C. Rail and Crown corporations to build assets for the people of British Columbia. That's why there is a Municipal Finance Authority, and that's why there's an authority to build the universities and hospitals that this province needs. The vast majority of that $25 billion debt is asset-based. As a matter of fact, the assets are worth twice the debt against them. So the people of British Columbia have something they can utilize and that lasts for many decades. The member is talking about a province that has the lowest per capita debt in Canada, and we're going to keep it that way.

In the meantime, as well as billing out those assets, we're getting rid of the deficit. We're absorbing the $10 billion that Ottawa dumped onto our taxpayers for health, education, social services and other costs. We're bringing spending levels down to appropriate levels from overheated expenditure increases under the previous government.

The commitment I made to a balanced budget in this term by getting rid of the deficit is happening. Sixty percent of the deficit that we inherited was driven by overspending by the previous provincial government and by cost dumping by the Tory government, which was accelerated by the present Liberal government in Ottawa. We've done that. We're now in the black on our program budget. We will pay off the interest on and capital of the accumulated $25 billion debt that the member talked about -- the debt of the province from Confederation to the present day.

[3:15]

Some of that, though, is not what I call asset-based debt; it's dead debt. It's there for two reasons.... We had to absorb $10 billion in the last three budgets. Approximately $2.5 billion.... We're applying $600 million from the B.C. Endowment Fund against that.

Other measures will be taken over the rest of this decade to pay that down and to pay that off so we're left with asset-based debt -- so British Columbians can enjoy the assets they're entitled to; so there are buildings to provide services to our citizens and the 100,000 new people moving here every year whose children require schools under the School Act, who are entitled under the Canada Health Act to access to medicare and good health facilities, and whose young people are entitled to good-quality post-secondary training and skills; and so people aren't caught in gridlock in the congested areas of the province, but there are highways, bridges, commuter rail, rapid transit systems, ferries and the transportation resources that the people of this province need.

I hope that answers some of the queries that the member for Delta South has about the government's fiscal plan, which was gone through very thoroughly in the throne speech and budget debates and the estimates of the Minister of Finance.

F. Gingell: I in no way argue with the manner in which this province for many years has funded the construction of schools, hospitals and universities. To me, it's a logical and sensible way of doing things. But from an accounting and an ethical viewpoint -- and as a professional lawyer you will appreciate this -- to me it is always critically important that we recognize the world the way it is and make comparisons in a true and fair manner. This government is continually talking about this year's deficit being $898 million.

But what you've done this year for the first time is take $300 million out of expenditures that would normally be included in the budget of the Ministry of Transportation and Highways and push it off into a new Crown agency, which is what I think the organization is. Will the Premier, at least during this estimates debate, agree that the true comparison is that this year's deficit is going to be $1.2 billion when you go back and compare it to previous years?

If you're going to go back and compare it to previous years, then you have to go back and take out all the capital cost expenditures that would have appeared in all the other ministry budgets and that this year will be financed through the Transportation Financing Authority.

Hon. M. Harcourt: To fix on a pessimistic figure like $1.2 billion probably isn't a good idea. Last year's deficit was $300 million less than we had put into the budget, because of our maintaining a very tight handle on expenditures and of the B.C. economy performing quite well. The deficit was quite a few hundred million dollars below what we had originally predicted it would be. So I certainly would never accept the premise that the deficit of $898 million this year will be more like $1.2 billion; it could well be less.

The member -- and I know he has a great deal of experience in accounting and accounting procedures -- is talking about a special agency to help long-term transportation financing in this province. We are doing pay-as-you-go and long-term financing. I think that's prudent when you are dealing with very large assets that many generations of British Columbians are going to enjoy -- to not just have the present generation pay for an asset that many generations will have the benefit of.

So the Transportation Financing Authority was established with its own revenue stream, being 1 cent per litre on gas, and the tax on rental vehicles was established in 1993's budget to finance that long-term borrowing to build assets for the people of British Columbia. I think the member is seeing the utilization of a financing instrument, that's all. No large bureaucracy is being set up.

There is a very small number of employees to arrange that financing, which I am sure the member would agree is needed to build new highways, bridges, transit systems and a commuter rail system, which people can enjoy for many generations.

F. Gingell: My argument is purely with the way in which we speak about it. If we make comparisons we have to compare apples with apples and oranges with oranges, and I am critical of this government for not making the comparisons in a meaningful way that everybody will believe to be true. You will still show that you have brought the deficit down. You will still show that you have done a lot better than the Social Credit administration did. But you're playing with numbers, and that concerns me.

Moving on from that, in his responses the Premier has also spoken about the fact that the federal government has

[ Page 12379 ]

changed the original deal and that you -- and the Social Credit administration before you -- have had to deal with the problems of having to fund larger portions of education, post-secondary education, social services and health care costs. But if you look at the amounts of money received from the federal government in the form of all transfer payments in the last three years -- the three years for which this government is responsible -- the amounts of the transfers have in fact gone up every year, and you have actually received more money than you expected.

I know the amounts are somewhat different, but the same relationship that exists between you and the federal government exists between the provincial government and the municipalities. In fact, the transfers from the provincial government to the municipalities for the purposes of helping the municipalities pay their costs have remained static. While transfers from the federal government have gone up -- and you have complained about this -- your transfers to the municipal governments have remained static.

Do you not think that you have been treating the municipalities in the same fashion that you are complaining that the federal government is treating you?

Hon. M. Harcourt: Not at all. The amounts from the federal government have actually gone down. If you look at the amount in 1992-93, it was approximately $2.435 billion. The revised forecast for 1993-94 is down to $2.281 billion. So that has gone down. The amount for 1994-95, based on 1992-93 again, has gone down from $2.4 billion to $2.35 billion. The actual amounts have gone down. You have to remember that there are 100,000 people added to our population every year, 50,000 being other Canadians wanting to come to British Columbia -- and who can blame them?

But that means there are costs involved in providing basic services to them. There are 25,000 new British Columbians being born every year. There are immigrants coming to British Columbia, and they have to have services provided to them.

In fact, the federal government not only decreased the amount coming to us but they broke the original contract, which was that Canadians from coast to coast to coast were entitled to a basic level of services across the country. The federal government's job was to make sure that that happened, with the fifty-fifty cost-sharing of those programs. Well, they capped the amount they would increase to welfare at a 5 percent increase. The rest has to be picked up entirely by the people of British Columbia. It's quite unfair. It's the same thing with health care and with post-secondary education.

To the hon. member for Delta South, the amounts from the federal government have gone down. They have not provided, on a fifty-fifty basis, for new people coming to the province. We're having to pick up almost 100 percent of those costs.

On top of that, the hon. member should be aware that we have dealt more fairly with our municipal governments than any other government in Canada. If you look at the record of the other governments in Canada and the cuts that they have made, you will see that they are huge cuts. Next door in Alberta, it's 15 or 20 percent. In Saskatchewan, 52 hospitals closed down, and there are 10 percent cuts in Manitoba. There are cuts, cuts, cuts to municipalities right across the country;

whereas we have not only maintained the conditional and unconditional grants to municipalities, and the revenue-sharing, but increased it in some instances. We have added on a program that I have worked at for well over a decade: significant new funds for municipal governments to participate in the municipal infrastructure program. Over two-thirds of a billion dollars will be going to upgrading of our sewer and water systems and making our water cleaner through proper sewage treatment, water purification and other measures like that.

Our municipalities have been treated fairly and, in fact, better than in any other province in the country. In the genuine partnership that I talked about when I first became Premier, we have involved local governments more than they've ever been involved before -- in these fiscal arrangements, in land use planning, through CORE and other means, and in the regional growth management strategies that the Minister of Municipal Affairs is developing in partnership with local governments.

So I can't accept the premise that (

a) the federal government has given more money to the province, because it hasn't -- it's giving less; or (

b) that this government is treating municipalities unfairly, because we're not. As a matter of fact, we're treating municipal governments better than in any other area in Canada.

D. Mitchell: I think the questions that have been raised by the member for Delta South are extremely appropriate. Given the Premier's opening statement in this set of estimates, which was very broad-ranging, I'm looking forward to the debate during the Premier's estimates. Clearly, latitude will now be given to ask questions in all of those areas.

It almost sounded like a reiteration of the throne speech, and maybe the Premier had the wrong speech -- I'm not sure. But one thing that was conspicuous by its absence in the Premier's remarks in his opening statement was any reference to the federal-provincial relations component of his responsibility that arises out of the recent government reorganization and cabinet shuffle that took place last fall.

[3:30]

My understanding is that at the time of that very broad-ranging cabinet shuffle, the portfolio of constitutional affairs was taken from the previous minister responsible and appropriated by the Premier's office. I'd like to ask the Premier why that change was made at that time? As a result of that, this set of estimates is the opportunity to raise questions about federal-provincial relations, because the Premier is now effectively responsible for all federal-provincial relations in the province. Why did he make that move?

It's certainly an extremely poor reflection on the person who held that portfolio previously. The previous minister was criticized publicly and across the country for his performance over the course of the last year. Maybe that had something to do with it, but I'd like to ask the Premier why he now feels that it's more appropriate to have that portfolio within the Premier's office. And specifically, how much of the estimates that we're reviewing in this committee as the spending for the Premier's office is devoted to the aspect of constitutional relations?

Hon. M. Harcourt: I can give a very quick answer to that: zero.

D. Mitchell: You're hiding it.

Hon. M. Harcourt: I'm not hiding anything. There is zero; there's not a penny, not a cent.

There is no desire among any British Columbians that I can think of, except maybe two, to go back to talking about the constitution. British Columbians have made their decision, and that's it for dealing with the constitution. I respect the decision of British Columbians. We are now dealing with more important issues that I outlined earlier in my remarks, such as job creation, getting our financial house

[ Page 12380 ]

in order and the other priorities that my government has been focusing on, particularly during this session.

The intergovernmental relations office has always been in the Premier's office, and that is going to continue. It has a staff complement of about 15, which is basically tied with Manitoba for the lowest expenditures of any provincial government on intergovernmental relations, about 34 or 35 cents per capita. The office is dealing with a range of very important financial issues, mainly around getting a fair share in Confederation, which British Columbia has not traditionally received. I think the best description of that was given by Gerry McGeer, who I'm sure is familiar to a number of you here.

He was an ex-mayor, MP and MLA who once said that the problem with this country is that it's 2,500 miles from Vancouver to Ottawa, but 25,000 miles from Ottawa to Vancouver.

So I'm sure the members would agree that it's important for us to have a presence in intergovernmental and especially in federal-provincial relations, and we have a good presence. Catherine Holt, the assistant deputy minister, is experienced in intergovernmental activities in a variety of roles that she has played in the past and in the present. Lorne Seitz, who is in charge of B.C. House in Ottawa, has very good contacts and is working on behalf of British Columbians in dealing with the very important issues of our economy, trade and fiscal arrangements between the federal and provincial governments. These are bread-and-butter issues that are very important to British Columbians.

There is no inclination among British Columbians to deal with the constitution. They made a decision on the last round of constitutional proposals. British Columbians want us to focus on real bread-and-butter issues -- jobs, skills and training, renewing our forests and getting our financial house in order -- and that's what my government is doing.

D. Mitchell: I'm somewhat puzzled by the Premier's response to the question. I was simply asking how much the government is spending in the Premier's estimates on intergovernmental affairs. He stood up and said that the answer was zero.

Interjection.

D. Mitchell: I was referring to the intergovernmental affairs portfolio.

If the Premier wants to suggest that all intergovernmental relations and all matters of federal-provincial diplomacy, if I can call it that, are matters of the constitution, I think he's mistaken. I'm not talking strictly about constitutional matters. The Premier raises it in an interesting way. He raises it in a way that reminds British Columbians of the statement made by our Prime Minister in Ottawa, who is trying to tell Canadians who even want to raise the word "constitution" that it's inappropriate and that he wishes the issue would go away.

Maybe our Premier also wishes the issue would go away -- and maybe we all do, hon. Chair -- but the fact is that we have an election coming up in Quebec this fall. That election may or may not lead to a referendum in that province, which may decide whether or not we go towards a situation where Canada may break up. So this Premier may wish that the issue would just go away, but I don't think we can afford to ignore it.

I have more I'd like to ask the Premier on this particular issue, but apparently the member for Delta South has not yet finished his line of questioning, so I will gladly defer to him. But I'd like the Premier to know that I would like to get back to this issue, and if he'd like to provide a short answer to that, I'd appreciate it.

Hon. M. Harcourt: I answered the question from the member about how much we were spending on constitutional matters and discussions, which I took to be constitutional negotiations. The answer is zero; we're not involved in any constitutional negotiations or discussions. In terms of the budget of the intergovernmental relations office, $1,132,868 goes into the intergovernmental relations staff, which is a 2 percent decrease from last year. British Columbia House in Ottawa has a budget of $295,452, which is a 1 percent increase over last year.

An Hon. Member: Which vote is that under?

Hon. M. Harcourt: That would be under the cabinet office, under the office of the Premier.

F.

Gingell: If we could go back to the issue of the federal-provincial transfer payments, I'm aware of what these numbers say, but I'm under the clear impression from earlier discussions that the additional funds that were received in the year '92-93 were an adjustment for a prior year -- but the government doesn't bother to pull out adjustments to prior years -- and that for our established program financing, our Canada Assistance Plan and our education, which are the three programs of which you speak, the transfers have gone up in each individual year, but the total package was higher in the end, in '92-93, because of an adjustment.

I think that was caused by the census, if I remember correctly. But perhaps the Premier could respond to that matter and deal with the dollars on the basis of the actual dollars for the year, not the different sums that come jumping in because B.C. has a larger population than had previously been used in the earlier transfer payments.

Hon. M. Harcourt: The actual figures are in table G5 on page 86 of the B.C. budget for 1994. It says the EPF -- the established program financing -- went from $1.463 billion in 1992-93 to $1.275 billion in 1993-94, and to $1.295 billion in 1994-95. So there has been a decrease in the EPF funds. That's with a tremendous increase in population in British Columbia, as I said. The Canada Assistance Plan was capped at a 5 percent increase.

With people coming from all over the country, we know that for every three people that come here looking for work, two find work and one doesn't, and our citizens have to pick up the vast majority of the costs of welfare and social programs for those citizens until they can find work. So those are the figures in the budget.

F. Gingell: I'm sorry I'm not explaining myself particularly well, but I suggest that the truth of the matter is that the $1.527 billion that we received in the year '92-93 contained a very large adjustment that went back to a prior year. Remember that your original budget estimate for that year was $1.096 billion, and you actually received some $431 million more than that. That additional $431 million, paid under the established programs financing, dealt with an adjustment from a prior year.

In fact, the amounts of the transfers, just as you admitted in the matter of the Canada Assistance Plan, which has gone up 5 percent every year.... So if you take out a one-time adjustment for an early year, your payments under the established programs financing have gone exactly the same way. I'm not saying that we didn't get these funds, but they didn't apply to that year. The issue that I wanted to deal with originally was that the

[ Page 12381 ]

payments you are getting from the federal government are, in fact, going up, if you treat them on a sensible measurement. But your payments to the municipalities -- who have suffered the same problems of inflation and population growth -- for unconditional grants have remained level. Shouldn't you at least give them the same kinds of increases that you have in fact been getting from the federal government?

Hon. M. Harcourt: I am sure the hon. member is not suggesting that British Columbia is being treated fairly by the federal government -- whoever that federal government is. Our province is being shortchanged to the tune of $2.6 billion this year, $3 billion next year -- to which the present federal government has added $200 million, so it's $3.2 billion next year. If we had had the fifty-fifty cost-sharing on those basic services, which are driven by population growth in this province, we wouldn't have any deficit.

As a matter of fact, we wouldn't have had any deficit the last two years if we had stuck to the social contract in this country, which is fifty-fifty cost-sharing on those basic services. Unilaterally, the federal government has dumped those costs onto B.C.'s taxpayers. So I'm sure that the member is not arguing that we are being treated fairly by the federal government, nor would he disagree that we have experienced....

If we were getting a fair share of federal procurement, cultural spending, CIDA funding, science and technology and aboriginal programs to add to the basic ones I'm talking about, we would receive another $1.33 billion -- if we were treated like Ontario and Quebec. I am sure that all members of this House would agree that we are being treated badly in Confederation right now in terms of getting our fair share of funding in these areas.

[3:45]

I think members realize that in 1991-92, B.C. suppliers had 7.1 percent of federal procurement, for a population which is basically 12 to 13 percent of the country's, which is a shortfall of $653 million -- if we were getting our fair share of federal procurement. In 1990-91, B.C. received only 5.3 percent of federal cultural funding, which is a shortfall of about $123 million. There's the cancellation of KAON, a billion-dollar project that was going to be a flagship in western Canada. In the shipbuilding industry, $11 billion has gone to eastern Canadian shipyards.

We had one federal minister out here who said he wasn't going to rush in and save the B.C. shipyards, when we've had zero dollars going into shipbuilding in this province in the last ten years -- and into new construction. So we're keeping the B.C. ship-building industry alive with a tremendously ambitious building-out of the ferry fleet, two new superferries, the new docking facilities that are being prepared and other new initiatives that are being included in areas up and down the coast.

I hope that in this discussion we would all agree that British Columbians have not been treated fairly in Confederation and that the cost-sharing that....

Enjoy tonight's activities, hon. member for Delta South -- through the Chair. Enjoy the dinner tonight. I may say that we did cooperate by agreeing to adjourn the House early tonight so that members opposite could enjoy the fund-raising dinner in Vancouver. So I don't understand why there's some sense that something happened here that shouldn't have happened. We agreed to adjourn the House today at 7 o'clock to accommodate the Liberal opposition's efforts to raise money and for their leader to be able to say what's on his mind -- whatever is on his mind from day to day.

I think we have been very fair in terms of accommodating the fundraising activities of the Liberal members, who want to scoop it before the independents or the Reform Party or others. It's a very vicious competition going on.

I think I answered the member's questions before he left. I think we're all in agreement that British Columbia has been financially shortchanged in Confederation. We're just trying to get our fair share, and that's what my government's intergovernmental relations office is trying to do.

[J. Beattie in the chair.]

The Chair: Shall vote 7 pass?

D. Mitchell: Hon. Chair, it'll be a few minutes before we get to the vote, I'm sure.

The Premier has noted the magnanimous gesture of adjourning the House early tonight for the Liberal dinner. I would be prepared to stay behind, actually, and debate the Premier's estimates. I would note, for the Premier's benefit, that I'm going for dinner tomorrow night, and if he wants to adjourn the House tomorrow night, that would be nice. But I won't request that or demand it.

I think the Premier has hit the nail on the head, and he's clicked into mental gear here in terms of federal-provincial relations. Although he didn't mention that in his opening statements, I think he can get the flavour that this is one of the themes we would like to explore with him during these estimates. The Premier has talked about getting a fair share, and he mentioned a few of the issues, such as KAON. Earlier in the session, the Premier actually made a ministerial statement in which he talked about Via Rail perhaps taking over the E&N Railway on Vancouver Island.

We talked about a whole range of other issues; he referred to shipbuilding. We talked about electoral redistribution. There is a whole range of issues where British Columbia is not getting its fair share. The question I'd like to ask the Premier is: what are we doing about it?

At the time of the last cabinet shuffle, the Premier took the portfolio of intergovernmental relations from the minister who had responsibility for it. He took it away from him -- and I think correctly -- because the minister wasn't doing a very good job of standing up for British Columbia. I think it's widely agreed that that minister wasn't doing a good job, and we need to have somebody else defend British Columbia within Confederation. The Premier took responsibility for intergovernmental affairs.

What I'd like to know is: how is British Columbia better off, seven or eight months after the major government reorganization, now that the Premier has assumed direct responsibility for federal-provincial relations? What tangible results can he point at to show that we're doing better than we were under the previous minister, who was a disaster for our province?

Hon. M. Harcourt: Well, first of all, we got two more seats in the House of Commons because this government and the members of this Legislature took a leadership role in overcoming the bloody-mindedness of the federal Liberal government, which was going to deny British Columbia the two seats we were supposed to get in the redistribution that was supposed to take place. Through a combination of members of this Legislature, Tory Senators and pressure from British Columbians, we were able to reverse Bill C-18. We reversed the decision of the federal government not to grant B.C. the two seats that we should have had.

As a matter of fact, under some of the proposals that we were looking at over the last couple of years, we were going to get seven seats.

[ Page 12382 ]

The member has been saying that there has been a change in the intergovernmental relations office. There hasn't; there's been no change at all. The intergovernmental relations office has always been part of the Premier's office. For the first six months of our government, when we were establishing a new government and initiating a number of changes in this province, the Minister of Labour at the time was asked to take on the preliminary discussions about the constitution, and he did. He had the initial file on constitutional dialogue. But the intergovernmental relations office has always been in the Premier's office.

D. Mitchell: The one noteworthy contribution that I can think of since the Premier assumed responsibility for constitutional affairs as well as intergovernmental relations is that he recently indicated that if Quebec were to separate, Quebeckers would be British Columbian's "worst enemies." I'd like to ask the Premier if he could explain that statement, which was widely quoted not only in our province but right across the country. The Premier said that we were going to spend zero on constitutional affairs this year because British Columbians didn't want to discuss it.

That may be the case, but events might take hold in the rest of the country that might force all Canadians to focus on their citizenship in a new and special way. We don't hope for this to happen.

The Premier may want some recommended reading material for the summer when the Legislature finally adjourns. He may want to take a look at a book that has just been published -- written by a former member of the Legislature, Gordon Gibson -- called Plan B. Mr. Gibson argues that there's a need for people to think about a contingency plan should the unthinkable happen: should Quebecers not only elect a separatist government but subsequently vote to secede from Canada.

If that should happen, I wonder if British Columbians have a plan B -- or even if we have a plan A. It's not clear to me, from what the Premier has said, that we even have a plan A. He's spending zero on constitutional affairs this year; he doesn't want to think about it. In fact, his statement earlier suggests an approach taken by our Prime Minister, Jean Chretien, which is that it's irresponsible to even talk about these questions, because it's fanning the flames of separatism. I think that's wrong. I think British Columbia should have a contingency plan.

What would British Columbia's position be should the unthinkable happen in Quebec? Has the Premier's office, which is responsible for intergovernmental affairs and the constitution, as he has indicated, given any consideration, prepared any background studies or done any research on this issue?

Hon. M. Harcourt: First of all, I was delighted to hear about the new book you mentioned by Gordon Gibson Jr. As a matter of fact, a lot of his background material came from talking with members of my intergovernmental relations staff. He acknowledged that information.

The remarks I made a few months ago were in response to questions I was asked by the B.C. media about a visit by the leader of the separatist party in the federal Parliament. I was asked what I thought of his remarks when he said, here in British Columbia, that separation was inevitable, that it would be easy and that it would be handled in a logical way. I said very clearly that the people of British Columbia don't believe that separation is inevitable and don't believe that he can make a statement like that, that separation would be easy or logical -- it wouldn't be.

I'm working on a united Canada. That's my plan: to keep this country united. I believe that's where the vast majority of British Columbians are and where the people of Canada are. It's the finest country in the world. I believe that all of us in this province and the vast majority of Canadians want to see this country stay together. I believe we can do that through changes to Confederation: by B.C. getting its fair share in Confederation; and by making sure that we can change the way we govern ourselves -- getting rid of waste and duplicating federal bureaucracies. There are about 13 to 15 federal bureaucracies that could be eliminated and run much better by the provinces.

I believe those kinds of changes are what we're working toward, and those plans are already underway with the federal government. Marcel Masse, the minister responsible for federal-provincial relations, and our officials are talking about a number of ways of getting rid of that waste and duplication. I've told you that my intergovernmental relations staff, my ministers and I are working on other areas where we're trying to get a better deal for British Columbia, such as my direct discussions with the Prime Minister on the countervail on softwood lumber and taking that on very aggressively.

That countervail is unfair to British Columbia, and we're fighting in Washington, D.C., to see that tossed out for the third time this July 14.

There's also very active cooperation going on between our Minister of Agriculture, Fisheries and Food and the federal Minister of Fisheries on the Pacific Salmon Treaty. It's a very aggressive, unified approach to make sure that British Columbia's interests in a sustainable fishery on this coast are maintained: that we're getting a fair share of that fishery; that the U.S. fishers aren't overfishing, as they are now. They took $65 million more than they should have last year; it's anticipated to be $100 million this year. We're now starting to be heard with some very strong actions, such as the $1,500 fee for U.S. fishers coming up the Inside Passage to go fishing in Alaska.

Those are the kinds of practical intergovernmental initiatives that the people of British Columbia want to see, in the attempt to make this country work even more successfully than it is now, rather than speculating about it splitting up.

D. Mitchell: The Premier has indicated that he has a plan A, which is to try to keep the country united. He's also indicated that part of his plan A is to attempt to get a fairer share for British Columbians. I don't think anyone would disagree with that.

My only disagreement would be that he needs to take a much more aggressive stance with respect to putting British Columbia first. There is a need for that. The Premier is responsible for the intergovernmental relations between the province of British Columbia and Ottawa. The Ottawa system itself has not served British Columbia very well historically, and it certainly is not doing so today. The Premier knows what the list of grievances is; he's recited it many times. The Premier is a British Columbian and he's also a Canadian. But I would hope the Premier wouldn't disagree that it's time to put British Columbia first in a more aggressive fashion than he has.

He referred to Lucien Bouchard, the Leader of Her Majesty's Official Opposition in the House of Commons, coming out to British Columbia and making some statements. It's deplorable that we have a Leader of the Opposition in Ottawa who's committed to breaking up our country. But when he came out to British Columbia, presumably promoting a book that he had written, did

[ Page 12383 ]

anyone from the government of British Columbia meet with him? Did the Premier seek to meet with him to let him know what British Columbians' views were with respect to his views? Did any minister of the Crown meet, or seek to meet, with Lucien Bouchard when he came to British Columbia? It's not apparent that such a meeting was even sought. So what role is British Columbia really playing in federal-provincial relations?

[4:00]

The Premier says he would prefer to concentrate on his plan A rather than even contemplate a plan B or -- what to many is unthinkable -- the idea that in the very near future British Columbia might belong to a country that is no longer the old Canada cherished in most of our dreams and ideals. That country may no longer exist, because the Ottawa system holding it together right now may be unsustainable. Surely the responsible thing for the government of British Columbia to do would be to consider that if our plan A isn't going to work, we should have a contingency plan.

Is the Premier saying that no thought is being given to that? The message he seems to be relaying to the committee here today is that no thought or consideration is being given to the possibility that Quebec may want to leave Confederation. If that happens, British Columbia will have to re-evaluate its role in Confederation. British Columbians will be forced to reconsider their citizenship, in fact. Is the Premier saying that that's not even being given any consideration and that we should simply stick our heads in the sand and not think about these things?

If that's the case, I think that's a sad position for the Premier -- who is also responsible for all federal-provincial relations -- to be taking.

Hon. M. Harcourt: The speculation about this is entirely appropriate in the media by commentators and others. Plan A is the status quo in Canada, and that's unacceptable to British Columbia. I've said that.

My government is aggressively pursuing plan B, which is for a fairer share for British Columbia and the system of federalism, where bureaucracies are duplicated and decisions are made in Ottawa instead of out here in British Columbia, being changed substantially. Those matters are now being pursued with the federal government -- the duplicating in environmental assessment, food inspection, energy, forestry and all of those areas where there are duplicating bureaucracies, to simplify, streamline and get rid of that duplication and get the decisions out here in British Columbia. So we're actively pursuing what the member is talking about, which is to change Canada.

The thinking going on -- this book by Gordon Gibson and others -- about what is or is not going to happen in Quebec is a healthy part of democracy. I've said that we want to work to keep this country together. That's my opinion and, I think, the opinion of most British Columbians. We believe that opinion is shared right across the country, even though it's not shared with separatist leaders. I very clearly distinguish between separatist leaders, whether they be in the west or in eastern Canada. I don't share their wanting to tear this country up. I don't believe the vast majority of British Columbians share that desire to see this country torn apart.

Therefore the people of British Columbia want us to work on changing and renewing our Confederation. And it can be. It's one of the most decentralized and effective federations anywhere in the world. That's what the people of British Columbia want me to concentrate on: changing Canada and renewing the federation. I've just outlined a number of areas where we are.

We're not just cooperating with other provincial governments across the country and with the federal government to do that; we're undertaking a number of initiatives that show we can make decisions in the interest of B.C. -- for example, the tremendous success we had in reaching within months an infrastructure agreement that's putting over two-thirds of a billion dollars into British Columbia to upgrade our municipal water and sewage systems and clean up our water in British Columbia. That's one-third, one-third and one-third cost-sharing.

The agreement among the western and northern Premiers on not reducing our tobacco taxes and increasing our enforcement dramatically -- so we don't have our young people being enticed into smoking, which is what happens when you decrease the cost of cigarettes -- produced very successful and vigilant policing of the smuggling of cigarettes into western Canada. That kind of cooperation is going on right across the west and the north.

Those are the kinds of practical initiatives that the people of British Columbia want to see, not speculating about western Canada or Quebec breaking away, or about joining this idea of Cascadia. British Columbians don't want to join the States; they want to stay part of Canada, a united Canada that's changing in the ways that I've just outlined in order to give a fairer deal for British Columbians.

G. Wilson: Following up on that, I don't think anybody would argue -- certainly I haven't heard the argument in this House -- that the first choice of British Columbians is to be a strong and equal partner in a strong and united Canada. I think that's something all of us would struggle toward and try to maintain. If factors come about in Quebec that may take Quebec out, that is going to require some rethinking and some renegotiation.

Because the Premier's office is very much involved in trade, and we've looked at aspects of Southeast Asian trade -- the Premier alluded to some of the initiatives that are underway there -- we know what effect this province has felt from the FTA and NAFTA. Right now, as we debate these estimates, there is a very aggressive trade negotiation going on with respect to internal trade barriers.

We recognize that our economy, which the Premier has already discussed today, is going to be profoundly affected -- potentially, at least -- by whatever negotiations and agreements are made with respect to the removal or changing of internal barriers to the movement of goods and commodities. We recognize how that might affect commodities that have been protected in British Columbia through marketing boards and how trade might be altered by a change in transportation regulations and in outright prohibitions, which currently exist.

[D. Lovick in the chair.]

There seems to be a two-edged sword on this question, as there is on all trade questions and as there was under the FTA and NAFTA. While there may be opportunities for gaining, there's also a potential for losing. When we're dealing with an internal negotiation, it's important that we recognize that whatever is agreed to internally will profoundly affect our ability to compete internationally and to compete with our principal competitor to the south, the United States.

I wonder if the Premier might shed some light with respect to the current operations within his ministry on this matter of trade and on exactly what's on the table from the B.C. point of view with respect to these internal negotiations. Clearly they're going to affect our ability to operate over the next number of years.

[ Page 12384 ]

Hon. M. Harcourt: I welcome the question from the member for Powell River-Sunshine Coast. There's tremendous interest among British Columbians in trading openly in the world and across our own country. We are probably better situated than any other province in terms of being good traders. We're used to international prices and international markets. Whatever our politics, we believe in expanding trade and in aggressively promoting theexpansion of trade. The previous government helped establish, and we voted for, the B.C. Trade Development Corporation.

I think the issue of trade enhancement is a non-partisan issue in this Legislature, because people understand that it's the lifeblood of our economy.

On the question of trade deals, our government has looked at the specific trade deals, the free trade agreement and the North American Free Trade Agreement, and found them to be not particularly good for British Columbia -- seriously flawed.

The free trade agreement, for example, didn't deal with the issue we're plagued with now of the U.S. misuse of congressional, countervail and other trade sanctions that the U.S. can utilize -- such as very tough anti-dumping laws and the huge penalties they can instantaneously put in place -- compared to Canada's wimpy little anti-dumping laws that take years to launch and carry a very minuscule penalty. We don't want to see unfair or unbalanced trade deals.

We think we have that with the free trade agreement and the North American Free Trade Agreement, and we have said that loud and clear here in this House and outside.

On the question of internal trade barriers, the first ministers have agreed that we're going to work to eliminate as many of those internal trade barriers as possible, and they said June 30, 1994, is the deadline for doing that. We reached this agreement in March 1993. We've had our trade ministers working very actively on that. As a matter of fact, at this moment Minister Clark and his parliamentary secretary are in Toronto dealing with the question of internal trade barriers.

It's the position of British Columbia that the internal trade barriers, and the information on which they're based, have to be handled with prudence. Some of the provinces and other interests in the country -- for example, the Canadian Manufacturers' Association -- have overstated the problem dramatically. They've overstated it tenfold, as a matter of fact. They have said that the internal trade barriers are about $7 billion. That's just not true. Our government, the B.C. Federation of Labour, the B.C.

Business Council and our academic community -- Brian Copeland, in particular, who has done a study on internal trade barriers -- say that trade barriers are one-tenth of that; they're $750 million. The vast majority of those involve agricultural procurement -- marketing boards -- and that is being dealt with through GATT. They were dealt with through the last round of GATT and phased out over ten years. Those are international trade barriers, not interprovincial trade barriers, by and large.

For the real interprovincial trade barriers, it's about $750 million, or 0.2 percent of the Canadian economy. Two-thirds of that $750 million is being removed by way of reciprocal agreements on wine and beer. With the balance of the remaining $250 million -- which, as I said, is 0.2 percent of the Canadian economy of $700 billion -- we are looking at ways of removing as many of those barriers as possible. For example, I think that one of the most offensive forms of interprovincial trade barriers is the use of investment incentives.

Our government is being far more small-c conservative and open-market in this area than just about any other in Canada. One of the worst in the country is Alberta, right next door. Under previous governments there, they've had giveaways to bring in investment, whether it be CP Air or NovAtel or...

Interjection.

Hon. M. Harcourt: Not the Oilers; no, they're trying to keep the Oilers.

...Gainers. They blew billions of dollars in giveaways, interfering in the marketplace. We disagree with that. We want to see an investment protocol, whereby we let private market forces prevail. We don't want to see people making investment decisions because of who's giving them the biggest bribe to come into their province, with the cash usually being found through equalization payments or through the Alberta Heritage Fund. That's a terrible interference in the market. We want to see an investment protocol on those kinds of giveaways. That's a significant part of the $250 million that remains to be dealt with through these sets of negotiations.

These negotiations have already excluded areas of significant interest to Atlantic and central Canada. Our purpose in these negotiations is to make sure that British Columbia's interests -- in utilizing Crown corporations, in regional economic development and in using partnerships with the public and private sector to expand our trade -- is not diminished by these sets of internal trade negotiations.

[4:15]

I hope the hon. member for Powell River-Sunshine Coast agrees with the British Columbia position, which is widely held, that it's an important area, but it's a modest amount that we're dealing with -- about $250 million of the $700 billion in the Canadian economy. If we put the same energy that we're putting into flogging internal trade barriers -- and some people want to set up a huge bureaucracy to deal with this modest amount in trade barriers -- into external trade deals, such as energy projects in, say, China or India, one of those deals would more than make up for the trade barriers that exist between the provinces.

D. Symons: I ask leave to make an introduction.

Leave granted.

D. Symons: I would like to introduce some people from the sunny Okanagan: Arnie Louie is a councillor with the Osoyoos Indian band, John Morrison is with First American Consulting Inc. and His Honour Mayor Tom Shields is the mayor of Osoyoos. They are in Victoria to discuss gaming with the provincial government. They are also down here to see that sunshine shines on the coast as well as up in the Okanagan. Welcome.

G. Wilson: I don't disagree with the thrust of what the Premier was saying. What I do concern myself with, and what I think others are concerned with, is that, while on the scope of the large economy it may be a fractional amount that some would argue doesn't deserve the attention that we pay to the removal of internal trade barriers -- and whether or not you agree with the CMA on the $6.5 billion figure.... That is not really the thrust of my question. The concern I have relates back to the comments made by the member for West Vancouver-Garibaldi.

If we look at the history of this country, we see that the nation of Canada has been built by resisting, in large measure, continental economic forces that have from the very beginning of time attempted to erode the sovereign and political base that we hold over our destiny -- or our ability to develop a sovereign status that allows our

[ Page 12385 ]

economic, social and political destiny to be determined north of the 49th.

The concern I have is that the overwhelming momentum taken by the Conservative Party, which now seems to be followed by the Chretien Liberal government, is continuing the policies of the FTA and NAFTA and, at the same time, restructuring the freight rate arrangements, knocking out the Crow agreement and having an open-skies policy -- which may have a much greater effect than just on international carriers; it might have a devastating effect on local regional carriers. All of these policies are opening North America up with respect to greater freedom to trade.

Yet within Canada itself, there seems to be some kind of thought process that suggests we are going to be able to stimulate economic growth and development within the country itself by removing internal trade barriers. That's my concern; I'm not certain that that's so.

I think we should start to get rid of those internal trade barriers. Without a doubt, we need to have greater freedom to trade, but we also have to recognize that Canada has historically remained strong and sovereign by resisting those continental forces and by making sure that we have within the distribution of wealth within the country.... I couldn't agree more with the Premier on the comments he made earlier with respect to British Columbia not receiving back its fair share. But with an equal devolution of power and an equal divestment of wealth within the country, we have been able to keep regional economies relatively sound.

Three things are now working against us in that proposition. One is GATT, which has clearly had some serious effects on the British Columbia economy. One might simply look at the fishing industry as one example and at the agriculture industry and its potential impact. The second thing is the seeming unwillingness that we have with respect to the federal government -- this and the previous one -- on anti-dumping legislation. You just have to go and talk to the apple growers in the Okanagan to see how the government has reneged on its promise to them, and now they're faced with that kind of dumping problem.

The third one is a question of the transportation tariffs that exist across the country. They often force producers to ship south and then east, or south and then west, which eliminates the possibility for Canada to maximize its investment within the country. The fact that we are not investing in our railway lines is one more example of that.

I wonder if the Premier might tell us what his thinking is with respect to negotiations on those kinds of issues, because they will affect labour and rates of labour and opportunities for investment and trade in this province. It clearly is going to have an impact on the thinking British Columbians have with respect to their equal share within this confederation we call Canada.

Hon. M. Harcourt: I want to stress again that whatever our politics, British Columbians are traders, and we're good at it. The reason that some of the provinces in central Canada are having problems is that the props that they've had holding up their economies, with the national policy of the Conservatives back in the last century, followed through to a whole series of areas where central Canadian manufacturers have been protected by tariff barriers.

British Columbia had to buy those more expensive manufactured goods and at the same time trade very aggressively into the outside world. Our basic economy of the last 120 or so years, which has been essentially natural-resource-based, is now becoming more balanced in terms of value being added to those natural resources and, as I said earlier, in moving up the ladder into high technology and telecommunications, satellite imaging, subsea vehicles, computer software and electronic manufacturing. There is a whole area where British Columbians are becoming very skilled in the high-technology-based industries, and we're more and more into the Asia-Pacific.

So we're good at trading, and some of the provinces aren't as good. When the props were removed that held up their economy -- as the free trade agreement and NAFTA did and are doing -- the bottom fell out of the economy in central Canada, and branch plants went across the border or even further south.

B.C. has never had that. We've always been able to aggressively sell our pulp, paper, lumber, minerals, gas, fish and other basic commodities on the market. As you heard in the figures that I gave earlier about the expansion of value-added and high-tech sales, that's where we're growing even more dramatically. So the problem exists for most other parts of the country in terms of being able to trade aggressively out into the world economy.

On the question of the position we're taking on internal trade barriers, we're saying that as much as possible we would like to see the elimination of unnecessary trade barriers. I've given you two or three areas where I think we need to be eliminating artificial incentives: paying people to come and invest; here's a grant, here's a loan, here's an interest-free loan; we'll forgive you the loan, we'll give you free land.

We think that that distorts the market, that people should make investment decisions on the basis of putting up their money for risk, and we will provide the environment -- and British Columbia can and does -- for people who want to come to live in the best part of the best country in the world, which is British Columbia.

So we're trying, hon. member, to get rid of the $750 million of trade barriers. As I said, $500 million of it is wine and beer. We signed a protocol with Ontario to eliminate the barriers there, and we'll continue to expand that. We're involved in a procurement agreement that the previous government started, and. we're successfully carrying on with the western provinces to open up procurement.

It's working very successfully. As a matter of fact, Alberta is getting $3 out of that for every dollar that they put in; that's how we're opening up procurement opportunities. We'd like to see that expanded across the country. We pioneered it here in western Canada. And there are a number of other practical ways that we think we can remove these internal trade barriers and still maintain our ability to have Crown corporations and regional economic development activities take place throughout the province.

For us as a province to be able to have the logs that we cut here in this province processed here, so we don't ship logs out of the province.... We have laws that have been in place since 1906 to deal with restricting log exports. We don't want to see that interfered with. As a matter of fact, we're fighting the countervail in the United States on that point, as we talk, and jeopardizing that would be very harmful to British Columbia in our attempt to get more jobs created in the forest industry by going up the ladder into more value-added manufacturing.

So there are areas, hon. member, where British Columbia is prepared to continue to get rid of barriers. I've mentioned three or four. But there are areas where we're going to take care of British Columbia's interests: adding more value, having a level playing field for investment decisions.

G. Wilson: I have just a couple more questions on this, but I find it interesting that the Premier would suggest that

[ Page 12386 ]

that's true with respect to incentives for investment, that we need to try to somehow stop the idea that we'll pay them to come, and that kind of thing. One of the greatest disincentives for investments is tax. A corporate capital tax, for example, is a significant disincentive for investment in British Columbia. I think the Premier would acknowledge that that's true.

Historically, one of the reasons British Columbia has had a more sound economy is that it's primarily based on primary extractive resource economies and secondary processing that's directly related to that or to a cheap energy source that would allow that processing to take place. British Columbia has not had comparatively as strong a manufacturing sector as we might like to have had -- and I believe we could have had it and probably would have had it if we didn't have such a high degree of centralization in thinking in terms of national monetary policy, which has concentrated on Ontario and Quebec.

That said, with respect to this trade question, can the Premier tell us whether or not labour is going to be free to move across borders and take up labour contracts in British Columbia in this negotiation on the breaking down of barriers and freedom of movement of goods and services? Is this government going to draw the line? Is that one of the places where this government is going to say, "No, we can't have that; we're going to have to have labour operating within British Columbia"? I understand that exactly what we do with respect to the freedom of labour to move is a hot topic of debate right now in the province and among negotiators.

Hon. M. Harcourt: One of the benefits British Columbia has gained from the positive attitude that we have here, which is picked up on by many other Canadians, is the migration to British Columbia of 40,000 to 50,000 people a year. A lot of them are looking for work and opportunity. It's shown that by and large those people have more post-secondary education than the general population here in British Columbia. They bring capital and a tremendous amount of benefits. As a matter of fact, they have twice the number of post-secondary degrees. They bring that training and talent here.

It doesn't cost us a cent; their training and skills have already been paid for. They bring life experience and working capital to British Columbia. That mobility is very important. As I said in my opening remarks, for every three people who move to British Columbia looking for work, two find work and one goes on welfare. Sometimes they come with a one-way Greyhound ticket to come out to British Columbia from a province that is on the other side of us.

The fact is that those people who migrate here bring tremendous assets to us in terms of their training and skills, life experience and the funds they bring to invest. It's the same with a lot of the immigrants who come here.

I don't think the member is saying that one wants to restrict those immigrants and other Canadians who are moving here from bringing those talents to this province. We as a government certainly wouldn't want to restrict other Canadians from being able to move across this country. One of the rights of Canadian citizenship is being able to live anywhere you want in Canada. Why wouldn't people want to live in the best part of Canada -- British Columbia?

G. Wilson: I think maybe the Premier missed the point of my comment. I have just two questions, and then I would yield to somebody else with respect to this. I was talking about labour coming out of Alberta and bidding on and taking on contracts in British Columbia for capital construction. I was asking if we're going to guard against that within the removal of interprovincial trade barriers. Are capital construction projects funded by British Columbia going to be open to bidders from Oregon, Washington, Idaho and Alberta, and let go to the lowest bidder?

Or are we going to look at those capital construction programs and use B.C. labour first? That's question one. I'll stop there, and with the indulgence of my colleagues, I will have one question to finalize this.

Hon. M. Harcourt: The workers are coming from other parts of Canada, from neighbouring provinces, and are bidding on work here and succeeding. We have an agreement on procurement in the western provinces, doubling the size of B.C.'s market and dramatically increasing the size of markets for provinces like Manitoba and Saskatchewan. So that's already happening.

[4:30]

During this set of negotiations we are not looking at putting restrictions on what presently exists. We are looking at areas where we can, in a practical way, eliminate unnecessary trade barriers, and that's what we have asked our negotiators to do. That doesn't mean get rid of all trade barriers, because some of those barriers are good social policy. We don't want to lower our environment standards, and we don't want to lower the way workers are treated.

We don't want to take away the ability to deal with the very serious problems that the tree fruit growers are having in the Okanagan right now as we go through a transition in the tree fruit industry. We don't want to take away the ability to deal with the miners and their families in the Elk Valley, who are going through some difficult changes. We want to make sure that the people in the Kootenays are treated fairly. Some of those areas in the Kootenays have unacceptable employment levels.

We are committed to B.C.'s traditional use of Crown corporations, regional economic development activities and to making sure that local citizens can benefit as much as possible from the economic initiatives that taxpayers finance to build public assets in this province. We have a fair-wage law to make sure that workers aren't exploited and that we get quality contractors to participate. As I have learned over many years, the low bid isn't necessarily the best bid at the end of the day.

It may be the most costly, unless the contractor has a good track record, can deliver a high-quality project, is using trained workers and is helping to train new workers with proper apprenticeship requirements. We are making sure that those standards that the vast majority of British Columbians want to see in place will be there at the end of the day when this internal-trade-barrier set of negotiations is concluded.

G. Wilson: I have one final question on this

section of issues. It's interesting to note that the Premier is saying he is not going to change what already exists. But there is some discussion that what already exists should change. I hear the Premier saying that by legislation and/or regulation, in the interests of social good, we are going to protect the workers in the province. I don't want to get into a protracted debate on this, but my guess is that if the issue of fair wages and issues like it.... I don't doubt that sometimes the low bid is not the best bid. In fact, I know for certain it isn't, because I have seen examples where it hasn't been.

If that were put to a tribunal of sorts that would look at fairness of trade, that would be something we might not be able to hold onto. It is, by any other measure, a barrier to movement of workers into this province if they are coming from an organization that's chartered outside of B.C.

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Having said that, the other issue that I want the Premier's comment on is the question of dumping and the violation of existing trade regulations. I draw specific attention to the Okanagan apple growers, because they have been really badly served by the federal government, which, in my judgment, has turned a deaf ear to their concern. I don't see anything happening with respect to a strong movement coming from within this province to come to their assistance. This is a blatant violation, in my judgment. Others who are more legally attuned to the agreement than I am advise me on this question.

There's no question that what's taking place is dumping and a violation of the agreement. While it is first the obligation of the federal government, failing the federal government dealing with it, surely the province should take a strong and aggressive stand on that question of trade practice. If we allow it to happen in the apple industry, if we allow the feds to renege on it -- which they did, because I suspect they don't care too much about what happens in the Okanagan Valley -- it's a great shame and a great tragedy. If that's the case, then this government has to act.

Can the Premier tell me, in the overall strategy around trade, what this government is going to do with respect to protecting British Columbia investors, farmers and workers from those kinds of blatant violations of trade practices that are largely negotiated by the federal government and then dumped on us to have to deal with?

Hon. M. Harcourt: The member for Powell River-Sunshine Coast has very clearly put his finger on the reason why our government has been so critical of the free trade agreement and the North American Free Trade Agreement, which exacerbates the flaws of the free trade agreement.

It didn't cover off the imbalance of anti-dumping legislation in the U.S., which is full of muscle and can clobber anybody it wants to with huge penalties right off the bat, making it almost impossible to trade into that market, versus the wimpy anti-dumping laws we have here in Canada. It's ridiculous. I've seen it happen over and over again. It's not just the tree fruit growers, but Western Canada Steel and other steel fabricators were complaining about Mexican steel and steel from a number of other countries being dumped into British Columbia. So you're right. There is an imbalance there that wasn't dealt with in the free trade agreement.

Look at the number of countervails: against softwood lumber, wheat, hogs and a whole series of other areas that were not covered in the free trade agreement. We're not just pestered; we're getting harmed. Citizens in Canada are being harmed because the last federal government didn't take care of business, and this present federal government, after saying it was not going to go along with the free trade agreement, has gone along with the North American Free Trade Agreement. So we're stuck with the results of those two.

In terms of the tree fruit growers of the Okanagan, it's important for us to put it in that context: the Minister of Agriculture and Fisheries and the MLA for the area, who's now the Minister of Small Business, Tourism and Culture, have been very aggressive in discussions with the federal government to have even the weak anti-dumping laws, which they have applied without a heck of a lot of success. It's not very neighbourly of the United States, and Washington State in particular. Through the downstream benefits in the Columbia River Treaty they have benefited dramatically.

Those treaties were signed in the 1960s to stop flooding in eastern Washington and allow irrigation to take place. That created one of the most prosperous apple and tree fruit growing regions on the continent. Then what do our Washington neighbours do? They flood those apples back onto the B.C. market to try to collapse it. That's a terrible way for neighbours to behave, and a terrible way for our tree fruit growers to be dealt with.

So I couldn't agree with you more, hon. member. It is a serious flaw in our relationship with the United States that needs to be corrected. I hope our federal government has the gumption to take on those awesome and terrible anti-dumping, countervail and other measures that the U.S. takes, at a moment's notice, to protect its citizens. We're not getting a fair deal for our tree fruit growers as we go through a very aggressive, cooperative program to help the tree fruit industry adjust to the post-GATT realities and other realities.

We're investing over $20 million in that industry to help lower the acreage, to increase the yields, to go to more exotic and attractive varieties of tree fruits, to go to insecticide- and pesticide-free methods, and to go into very aggressive marketing programs, like the Buy B.C. program and some of the other programs we're involved in with the industry to help it get through these tough times. But it's hard to do when you have a neighbour with a huge tree fruit industry that we've helped create by being good neighbours and dealing with the flooding by allowing the irrigation to take place. What do we get?

We get a flood of apples back from south of the border, which seriously harms our tree fruit growers, and that's unfair.

J. Weisgerber: I'd like, first of all, to comment on some remarks by the Premier in answer to questions raised by the member for West Vancouver-Garibaldi.

I was disappointed, although not particularly surprised, to hear that the Premier, through the intergovernmental relations office, hadn't been dealing with any contingency plans that this province may have in place should there be some dramatic constitutional changes with respect to Quebec. It seems to me that the Premier, having been as poorly prepared for Charlottetown as he was, would have come back to British Columbia and said: "We are going to be prepared for the next round of constitutional issues that arises. We're not going to simply react.

In fact, we're going to put some plans in place." He should do some planning and some long-term thinking about this issue, which no one likes to think about -- some dramatic change within our country. The reality is that in the interests of British Columbia, I believe the government has an obligation. The Premier, as the minister responsible for intergovernmental relations, has an obligation to put in place some contingency plans.

Would the Premier confirm that he is committed to doing no planning? That was what I heard the Premier say: he doesn't believe it is appropriate for the government to do any contingency planning, except to perhaps buy a copy of Mr. Gibson's well-put-together book; beyond that, we should leave this issue and see what evolves, then we'll go back and react to it. Is that the stance taken by the Premier with respect to intergovernmental relations?

Hon. M. Harcourt: This country has been together for 120-odd years, and I anticipate that it's going to stay together for a long time. I think one of the worst responses to the continual strains and stresses in Confederation is to run around playing Jimmy Chicken and create imaginary scenarios that may or may not happen. We have provincial elections that may or m