1988 Legislative Session: 2nd Session, 34th Parliament

HANSARD

The following electronic version is for informational

purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

TUESDAY, APRIL 5, 1988

Morning Sitting

[ Page 3645 ]

CONTENTS

Routine Proceedings

Budget Debate

Mr. Jansen –– 3645

Mr. Clark –– 3647

Hon. Mr. Savage –– 3650

Mr. Jones –– 3652

Mr. Chalmers –– 3655

The House met at 10:02 a.m.

Prayers.

Orders of the Day

HON. MR. STRACHAN: Mr. Speaker, adjourned debate on the motion that Mr. Speaker do now leave the chair.

Budget Debate

(continued)

MR. JANSEN: I'm pleased to rise in the House this morning to

add my support to the support of a vast majority of British Columbians

to the 1988-89 budget of the province of British Columbia. As I do that

I note, Mr. Speaker, that today when we commence this debate of this

good-news facilitator, we do this on the first few days of spring, a

time when we traditionally set our clocks forward to appreciate more

effectively the sunshine our wonderful province has to offer.

Yet listening to and reading the comments of our hon. members

opposite, particularly the first member for Nanaimo (Mr. Stupich), I

note that he has continued the traditional socialist outlook of turning

the clock backwards, trying to find reasons for the negativism of his

colleagues and himself, and relying on less substantial information to

do so. It is this, coupled with the very obvious absence of specific

alternative suggestions from that side of the House, that gives rise to

my comments today.

I have had the honour to serve this House for a relatively short

period of time. However, prior to that time I had the privilege to

practise my profession in the funding and accounting environment for

some 13 years. Yet I am challenged to the extreme to understand the

support the members opposite give to the willy-nilly financial

indirection of their party and the incredibly poor track record of

their government during their fiscal stewardship.

I can only conclude that this illogical support bears out a recently

released report which found that less than 10 percent of the general

adult population has enough knowledge and training to understand the

typical annual report, and that to most people financial reports are

truly just words and numbers. Add to that the apparent desire of those

members opposite to interpret the reports to say what they want them to

say, and we receive a truly distorted picture.

In fact, they became so desperate in their attempt to show financial

accountability that they took credit for a balanced city of Vancouver

budget –– I, along with every member of this House, like to take credit

where credit is due, but taking credit for a balanced budget that is

required by law to be balanced — that really takes the cake. In the

words of a famous historian: "Give me a break!"

It is this illogical reasoning I wish to respond to this morning and portray this budget, as it has been described by the Globe and Mail

newspaper, as one showing unusual leadership in financial management:

"This is good public management in the west, which has a lot to teach

the rest of Canada about financial prudence."

The first member for Nanaimo spoke at length in criticism of the budget stabilization

reserve, a fund that has been praised by such as Richard Allan of the B.C. Central

Credit Union, who is the chief economist, and who stated that this fund would

enable the government "to move away from an annually balanced budget to

a cyclically balanced budget, which is far more economically justifiable and

far more fiscally responsible."

The establishment of this fund recognizes the importance of treating

extraordinary revenue and expenditure occurrences through a special

reserve provision. This is not an uncommon practice and is indeed

referenced by the famous Clarkson Gordon report back in 1975. It is

this type of fiscal management that enables a balanced program delivery

from year to year. I regret that our opposition members either do not

understand it or do not wish to understand it.

Mr. Speaker, it is interesting to note the references made to the

Clarkson Gordon report by the first member for Nanaimo. At first he

went out of his way to explain the difference between an audit and a

non-audit engagement, as though this firm of accountants would have

some difficulty in understanding their terms of reference. I am sure

that this very fine firm of accountants understood their mandate; this

House understood that, and the people of British Columbia understood

that.

What is more interesting, however, was his explanation of the

deficit created by his government in 1975, specifically regarding the

funding required for ICBC. His comments in Hansard

were: "They didn't need that $181 million from the taxpayers, but the

government needed it to create a deficit." Reason escapes me to

understand that statement: "...the government needed it to create a

deficit." Can you believe that? Can the people of this province

understand that statement, particularly in light of the report from

Clarkson Gordon which indicated clearly an operating loss of some $175

million? "But the government needed it to create a deficit?" Do

deficits mean a different thing to the socialists than what they mean

to our government, our business community and the people of British

Columbia? One wonders.

Mr. Speaker, while I dislike referring to the past, I wish to

comment on what the first member for Nanaimo said about his government

and party's airy-fairy schemes of budgeting — if I recall, much to the

applause of his colleagues. One can only presume that they too share

the illogicality and the philosophies of that fiscal irresponsibility.

A great deal of self-praise was touted about the purchase of business

entities. Everyone knows that governments do not have any money, but

are simply stewards and trustees of taxpayers' dollars. Why then would

a government take those taxpayers' dollars to purchase a business

entity which would then compete against those very same taxpayers?

Reference was made specifically to Ocean Falls Corporation. The first member for Nanaimo is quoted in Hansard

as saying: "Under public ownership they became moneymakers...."

Strange. This almost suggests that unless you're owned by the

government, you don't make money. If we followed the fiscal policy of

the New Democrats, we would all be owned by the government.

But let me deal for a moment with the words "they became

money-makers," The Clarkson Gordon report says the following in

reference to Ocean Falls Corporation: "The estimated operating loss for

the year ended December 31, 1975, amounted to $310,000. The company

owes $5 million to the province on which there is interest accrued but

not paid, and has a bank loan of $1.7 million as at December 31, 1975."

If that is making money, then all the members opposite must be

millionaires.

Having not done enough damage to his credibility, he went on to say that his party's government left a surplus of

[ Page 3646 ]

some $45 million higher than when they came to

office. However, Clarkson Gordon estimated the deficit that same year

to be $541 million. I know accounting is an art and not a science, but

I think the member opposite has a loose grip on his paintbrush.

Enough said in response to yesterday. Let's talk about today and

tomorrow, because that truly is the focus of our government. Our

government has today in this document provided the initiatives and the

fiscal framework for a better tomorrow. This budget, while continuing

the fairness in the burden of taxation, provides a strengthened social

program for the people we serve, all of the people of British Columbia.

We don't seek inspiration in the events of the past, as the socialists

do. We take comfort in the facts of today, the faith in tomorrow and

the responsibility we as government have in that support.

Let's take a look at those facts. Seventy-five thousand more British

Columbians are working in February 1988 than a year ago, exceeding the

growth rate of Canada and even Ontario. Value of shipments for all

manufacturing industries in B.C. rose by 11.5 percent in 1987 over

1986. The forest industry has enjoyed the best year ever. Housing

starts are up 40 percent. Companies incorporating in B.C. from other

provinces are up 17.5 percent. Population through net migration from

other points in Canada increased by over 30,000 people.

[10:15]

Against this backdrop of positive economic indicators, through this

budget our government has provided a means to strengthen the social

fabric of our society and provided the basis for continued investment

optimism. This was done by increasing opportunities in many areas, not

by taking away from other programs but through relying on the growth

that our fiscal management encouraged.

Initiatives such as reducing our small business income tax to 9

percent, among the lowest in the country, emphasize our support for

this very key element in our economy and strengthens our competitive

position to attract investors. This favourable tax structure not only

for the small business sector but also for the corporate and personal

sectors, coupled with a strong incentive program, will ensure a

continuation of the positive growth we have enjoyed in the past year.

I am particularly pleased by the substantial funding increases our

government has provided in health and education. I note with pleasure

the more than 10 percent increase in the Ministry of Health's budget to

enable continued improvement of what is now already the best health

care system in the world.

My constituency is particularly pleased with the emphasis this

service has received, in light of our needs and given our community

profile. With a significant number of seniors in our community, I find

it particularly encouraging to see the development of an integrated,

community-based system for the delivery of health services.

I am also pleased to see the significant increase in funding that

makes possible an expanded alcohol and drug education, prevention and

treatment program. As the liquor policy review traveled throughout

British Columbia, we heard of the need for such a program. I am pleased

to see that we have today, with this budget, implemented the

recommendations of that report relating to this very important social

responsibility. While revenues for alcohol are in the order of $450

million, it has been estimated that the cost to society is in the order

of $1.5 billion to $2 billion. While these revenues and the increases

provided for in the budget address in part the significant cost to

British Columbians, it is essential that server-training,

treatment-facility and public-awareness programs be enhanced.

In keeping with our philosophy of supporting our most valuable

resource, our youth, I am pleased indeed to see the substantial

increases for the Ministries of Education and Advanced Education and

Job Training — an increase of some $200 million, or 7.6 percent.

Of particular interest to students in our area will be the 123

percent increase in student assistance. This, together with the

Passport to Education initiative, will provide significant opportunity

for those students seeking post-secondary education.

I am also pleased to see the funding provisions of the commitment

made to the independent school system in British Columbia, a commitment

that was made in previous years. I know that in spite of opposition

from the members across the floor, the independent school system has a

very significant role to play in our education system.

Because of the importance of tourism to our local economy, my

constituency will benefit significantly from the change in assessment

for property taxation, which will enable a deduction of $150,000 from

assessed value. Tourist facilities in British Columbia are vital to our

strengthening economy. Through this initiative our government

recognizes that importance and enables the burden of year-round

taxation to be lightened.

My constituency is also pleased to see the continuing support our

government has for agriculture, because agriculture is the bread and

butter force in providing a stable growth potential in our communities.

In spite of reducing demands through stabilization programs as a result

of favourable pricing, our Agriculture ministry has had its budget

increased by 16.9 percent.

I also note the continuing importance our government places on

highways construction and maintenance, and I look forward to continued

upgrading of our major routes throughout British Columbia. It is

particularly important that the portion of Highway 1 through the Fraser

Valley be upgraded to full freeway status as soon as possible to

improve safety and access.

I am pleased to see the continuing support of a key element of our

economy — our forests. A crucial part of our commitment to that

resource is our silviculture program, which we have indicated will

increase not by a nominal percentage but fivefold. This year alone our

Minister of Forests and Lands will spend more than $210 million for

silviculture. Together with our enhanced small business and forest

enterprise program and our contribution to forest research at UBC

through Forintek, this makes a clear statement of our support for this

vital component and ever-growing economy.

Members opposite have been loud in their criticism of our regional

initiatives. They have through their non-support sent a clear message:

they are not going to be part of a process that capitalizes on the

economic growth potential of each region. They do not wish to be part

of the process that will assist the economic growth of our regions, and

through that growth, jobs for unemployed. They do not, regrettably,

wish to be part of the solution. But let me tell you, Mr. Speaker, that

as we travel the regions to meet with our local governments, our

chambers of commerce, our school boards, our hospital boards and our

regional governments, the message is very

[ Page

3647 ]

clear: they appreciate the initiative from this government to provide as much

assistance as possible to realize the economic and social objectives that those

communities have identified. I find it regrettable indeed that politics from

socialists precludes an interest in the bottom line for our province, employment

opportunities.

This government is proud of its accomplishment and its objectives,

and takes pride in knowing that we will not create a millstone of debt

that will destroy the future for our children. Our fiscal policies of

the elimination of the current deficit, the reduction of accumulated

debt and the stabilization of revenue, together with our long-term

planning process, will ensure continued confidence in achieving an

economy of continued growth and providing a balanced social program, a

program that stays within the reach of our purchasing power. I support

this budget because, together with our colleagues, we believe in

British Columbia.

MR. CLARK: I'm delighted to have the opportunity to oppose

this regressive, unfair and in many ways cruel budget. The budget

really is the government's opportunity to affect the direction of the

province. It sketches out the government's agenda. It's their chance to

put financial reality behind their agenda for British Columbia. From

the budget, we should see how the government intends to improve life

for British Columbians, how they intend to make things better for the

average family in British Columbia. Surely that's the goal of

government: to move ahead, to constantly be improving the quality of

life of British Columbians.

Unfortunately, in this budget we see that the government intends to

help very few people — in fact, I would say, a privileged few. We see

very little for average British Columbia families.

MR. R. FRASER: What about the kids at school?

MR. CLARK: To the first member for Vancouver South, I think

of some people I've met over the last year, and I try to see how this

budget helps them –– I think of a woman I met in Penticton. She's 59

years of age, working as a homemaker for slightly above minimum wage,

literally struggling to put food on the table and to pay the rent. I

asked myself: how does this budget help that woman — that widow — make

ends meet? Mr. Speaker, it doesn't help her at all. In fact, there's

nothing in the budget for her. But it's worse than that, for this

budget actually hurts.

The huge increase in medical premiums — almost 40 percent — hurts.

It is money out of her pocket. It means in her case, literally, less

money for food. I don't say that lightly. For someone struggling to

survive, as does this woman in Penticton, this budget actually hurts,

because the medical premium paid by her is exactly the same as that

paid by the wealthy in British Columbia. In that sense, it's the most

regressive form of taxation.

I think of the young, single Vietnamese woman in my riding whom I met when

I was canvassing. She has two young children. She has a big, industrial sewing

machine in her living room on which she sews caps, for which she receives 50

cents. That's her livelihood — a woman struggling to survive in a new country,

a country she has chosen. How does this budget help her survive? It doesn't.

There's nothing in the budget for that woman. It doesn't help her get

training for adults that she so desperately wants. There's no increased

children.

She's struggling to survive on an industrial sewing machine, in a

very small rented house in east Vancouver, in a foreign country, with a

foreign language, with real problems. This budget does not do anything

to help her. But worse than that, once again, this budget makes her

poorer. A wide assortment of user fees.... An increase in bus fares is

coming, as we know — probably Thursday night. And again, the cruel

increase in medical premiums. For her family now, $700 a year is paid

in fees for medical premiums. Where should this woman get the money to

pay for these new and onerous taxes? That's $700 in user fees for

medical premiums — only three provinces in Canada charge medical

premiums — and these are one of the highest in Canada. This budget does

nothing to help that woman.

I think of some other people: young people I've met over the last

year who are out of work: thousands of young men and women who have

gone sometimes several years without work; a lost generation, really,

of British Columbians to productive work. Those people desperately want

work, and they want to contribute to society. What does this government

say to them? What does the budget mean for young people who are out of

work? It says absolutely nothing. But again, it's worse than that,

because on top of the fees that those young people who have been out of

work for several years have to pay.... They too have to pay the medical

premium fee increase, just as well as the rich people; as a matter of

fact, exactly the same as those better off.

[10:30]

What does the budget say about unemployment? The budget actually

brags that unemployment has dropped to 10 percent –– 14 percent for

young people. Is that what we've come to in this rich province of ours

— an implicit acceptance of one in ten people out of work? It's

absolutely outrageous that for those thousands of young people in this

province who are doomed to unemployment, this budget does nothing to

help. In some regions like Kamloops and the West Kootenays, the

official unemployment rate still stands at over 20 percent, and among

young people it's closer to 30 percent. And this government has the

audacity in the budget to claim that things are looking up in British

Columbia, that we're doing better, that one in ten people in British

Columbia out of work and two in ten young people out of work are fine.

But aside from being silent once again, the budget hurts because

those user fees are across the board. The unemployed young person in

Vancouver East pays exactly the same medical premium that an affluent

businessman pays. It is absolutely outrageous.

In that light, I would like to talk a little bit about tax fairness,

We've seen how the budget does not help the 59 year-old widow in

Penticton that I talked about, and we've seen how the budget does not

help the young Vietnamese woman in my riding struggling to get by,

working at piecework with an industrial sewing machine in her living

room. We've seen that the budget doesn't help young people who are out

of work, and we know it doesn't help older workers who have been thrown

out of work because of technological change. The government is, in

fact, proud of this 10 percent unemployment rate.

But what does it do? If the budget doesn't help those people, and if

the government isn't prepared to put money behind programs to help

those people, who does the budget

[ Page 3648 ]

help? Where do we see the Social Credit government

taking us in terms of who benefits by their policies over the last ten

years or so?

Successive Socred administrations in British Columbia have made the

tax system here one of the most unfair in the country, one of the most

regressive. In 1985 the former minister, Hugh Curtis, embarked on a

perverse form of tax reform. This is the only place in North America

where we've seen this kind of tax reform. He called it that: tax

reform. It amounted to a shift in the tax burden away from

corporations, away from those who are able to pay, and onto

individuals, average families and those least able to help themselves:

a shift away from the rich and onto average British Columbians.

It's kind of funny. We have a situation where the government says:

"We have an economic problem. The poor have too much money and the rich

don't have enough. We have to increase taxes on the poor and cut taxes

on the rich. That's how we're going to succeed in British Columbia."

That's the agenda of ten years of Social Credit in this province.

The current government continued the sort of reverse Robin Hood

approach that we saw with Hugh Curtis. I want to read you a list of the

business tax cuts and how much they cost British Columbia this past

year.

This one, the small business employment tax credit, cost us $68

million this past year. Of course, that's one of the few tax cuts that

many people could support, because it was about $300 on average per

small business. What did the government do there? They eliminated that

last year, so we now see that that tax cut will not continue.

Reduction of the tax rate on non-residential school machinery cost

us $168.8 million last year. Reduction of the non-residential school

tax for industrial and commercial properties cost us $87 million last

year. Reduction of off-road motor fuel and aviation fuel tax — that's a

surprising one — cost us $62 million last year. Phase-out of the

corporation capital tax cost $60 million last year, and when you add on

the last budget's corporation capital tax cut to banks, another $6

million, it was $66 million that we lost in revenue because of that tax

cut.

Specific items purchased for use in aquaculture exempted: that cost

us $400,000. Tax exemption for specific goods consumed or used by firms

in the manufacture or servicing of exempted goods cost us $3 million.

Venture capital tax credit for purchasers of newly issued common shares

in small business venture capital corporations: $10 million. Reduction

of non-residential school taxes from new industrial improvements in

non-municipal areas: $1 million. And a freezing of water rental fees

for the generation of hydroelectricity: $43 million.

When you add it up, Mr. Speaker, last year alone we saw in business

tax cuts $503.2 million, and when you add up this three-year giveaway

to businesses in this province, the cumulative tax loss to British

Columbians was $1,024,200,000. That's how much we've given away to

businesses in the last three years. That is in the context of a

government saying we have no money to provide any new services; in

fact, we don't even have money to provide the services that we have

now. That's in the context of user fees for Pharmacare. That's in the

context of user fees for physiotherapy. That's in the context of

increased medical premiums. That's in the context of charging long-term

care recipients 85 percent of their disposable income. The government

cannot plead poverty when it has given over $1 billion to corporations

in the last three years.

It gets worse, because in addition to those specific measures over

the last three years we saw the reduction in the corporate income tax

rate from 16 percent to 15 percent and then, under this administration,

from 15 percent to 14 percent. Each tax-point cut in corporate income

tax costs us approximately $32 million. So we've seen corporate income

taxes cut $64 million at the same time that we've seen massive

increases in personal income taxes for individuals.

When you add it up and you prorate the $64 million to this fiscal

year, it's over $1,058.2 million in tax cuts to corporations over the

last three years. And this government have the audacity to say that

they don't have the money to feed hungry schoolchildren; they don't

have the money to pay for a first-class medical plan. It's absolutely

outrageous.

Now that's the cumulative of the last three years, but even if we

look at the annual tax loss, we see close to $600 million. In addition,

we saw last year the wealth surtax brought in by Mr. Bennett — a 10

percent tax on those who are wealthy in British Columbia. What happened

with this government? We saw that eliminated. So we saw $34 million

given to wealthy individuals. In addition to this over $1 billion in

corporate tax cuts, we now see $34 million in tax cuts for wealthy

individuals. So if they couldn't shuffle the money off into dividends

so they would avoid taxes, we saw an absolute tax reduction for wealthy

individuals, at the same time, again, that we saw all kinds of user

fees and increased costs put on the shoulders of average working

families in British Columbia.

We know that every cent in corporate taxes that are cut must be made

up somewhere else. That's how it works. You can't simply cut the

corporate income tax and lose $32 million in revenue unless you make it

up somewhere else. Where has the current government made up the money?

They've shifted more and more of the burden onto average families, and

worse, onto the elderly and those in society least able to protect and

defend themselves.

AIDS patients aren't popular; let's make them pay. Senior citizens

aren't that organized, especially in long-term care facilities; let's

make them pay. Users of public transit are generally poorer organized

and poorer economically; let's make them pay. Seven hundred dollars in

increased taxes and user fees this year and $700 last year: $1,400 out

of the pockets of average British Columbians every year while those at

the higher income levels saw their taxes cut and corporations are

paying less and less a share of the burden.

Perhaps the cruelest increase is the medical premium increase — $192

a year for families and $108 per year for individuals. The rich pay

exactly the same as the poor, and the wealth surtax certainly more than

makes up for this small increase for them. But for those who are

struggling to get by — I talked about the Vietnamese woman in my riding

or the widow in Penticton — that user fee on medical premiums hurts.

Only three provinces in Canada have medical premiums at all. How do

they do it in Manitoba? How do they do it in Saskatchewan, Mr. Premier?

Poor prairie provinces have no medical premiums, but this rich province

has to jack them up and jack them up so that the poor have very great

difficulty paying medical premiums.

I checked with Reach clinic on Commercial Drive, and currently,

before this latest increase, 6 percent of the people that go to Reach

clinic don't have any medical coverage. We like to think we have

universal health care. Well, it's being eroded. Six percent of the

people who use that clinic can't afford the premiums. So what they do

is lie; they're forced to

[ Page 3649 ]

lie. They go in and give them their old card. Then

Reach clinic finds out later that they're not eligible and that they

haven't paid.

In case the members think that's just Reach clinic, it's not.

Someone checked with an Arbutus doctors' clinic –– 4 percent. The

government's own authority says 2 percent of British Columbians don't

pay premiums. Two percent means about 40,000 or 50,000 British

Columbians are not covered by any medical care at all — in this rich

province. With these kinds of increased user fees, there is no question

that that will rise dramatically, because we've had no increase in the

standard of living in this province to commensurate people with an

increase. We've had no increase in the minimum wage; yet we have $100 —

or in some cases $200 a year — in increased premiums for those who can

least afford it.

So we are going to see — we are already seeing –– 6 percent of the

population, certainly in East Vancouver, not paying premiums and not

covered by the medical plan. We're going to see that rise to at least

10 percent and probably higher. The erosion of universality is what is

behind this budget, I submit.

Mr. Speaker, we need tax reform in British Columbia, and certainly

not the kind we've seen under Mr. Curtis and under this current

minister. While the government pleads poverty and claims that it must

raise taxes to balance the budget, the same government has been

shovelling money to its corporate friends. The percentage of the budget

paid by corporations in the 1950s used to be 50 percent. In 1981, only

seven years ago, 25 percent of the revenue the government received was

from corporations. But in 1987, only 17 percent will be paid by

corporations.

That goes against the trend of tax reform, even in Ronald Reagan's

United States. If we had the same tax rates on business that existed

three years ago under the Bill Bennett administration, we would have

about $600 million more in revenue to deal with things that need to be

done in British Columbia.

If we went further and had real tax reform that raised more money

from the corporate sector, like Ronald Reagan, then we would have

another $200 million, because there's roughly a billion dollars in

corporate profits that escapes any form of taxation at all. So if we

had Ronald Reagan's 20 percent across flat tax on corporate profits, we

would raise another $200 million in British Columbia. That means a

billion dollars annually to deal with the problems we have in British

Columbia and to deal with the problems of the people I talked about

earlier.

Mr. Speaker, this is a rich province. We needn't have medical

premiums, and we needn't have special fees on senior citizens. If we

simply restored the taxes we had three years ago and embarked on a

modest Ronald Reagan-like tax reform, we would have over a billion

dollars in revenue to improve the quality of life for British

Columbians, to deal with the tragedy of unemployment, to create jobs,

to improve our education system, to enhance our medical coverage — not

cut it back and privatize it — and to deal even with the deficit and

even to pay our public sector employees a decent and livable wage.

To conclude, I'd like to make a couple of comments about some other

things in the budget. The government, in this budget, is proud of the

fact that it has been attacking the federal government: we're not

getting our share. But what is the biggest problem we have right now

with the federal government? It is interest rates, because interest

rates are too high. They're higher than in the United States by 3

percent or 4 percent, and that's causing our Canadian dollar to rise.

Every cent the dollar rises relative to the Americans' costs the forest

industry — let alone every other industry — $150 million.

[10:45]

Why is the interest rate high? Because the federal government is

worried about inflation in Ontario. What has this government said about

the federal government's monetary policy? What has this government said

about high interest rates? Nothing. They want more subsidy from the

federal Government, but the real economic problem we face in British

Columbia that should be dealt with is high interest rates and the high

Canadian dollar. We haven't heard a peep from this government to deal

with that very real problem, because the federal government's policy on

interest rates is driven by their fear of inflation in southern

Ontario. In British Columbia we haven't even recovered from the

recession.

MR. WILLIAMS: Not with these guys.

MR. CLARK: That's correct. We have barely started to recover.

They think 10 percent unemployment is good, Mr. Speaker. But nothing

from the other side about the real problems of the economy and the

federal government's response to it. All they want is more gravy from

the federal government.

I'd like to wrap up with two other things that I have to mention.

The first is this $450 million shell game, this cynical attempt to fool

the voters. They'll see through this transparency: it's absolutely

ridiculous. The first member for Nanaimo (Mr. Stupich) made the point

better than I can: why didn't they simply add another zero? There's

nobody there. It's phony, and everybody has seen through that. Of

course, the Minister of Finance is quite concerned because the press

didn't even buy this silly game of trying to pretend that there is

money there for a rainy day. The rainy day is now. We still have a

deficit, and they still haven't dealt with it, and they still haven't

dealt with the problems in British Columbia.

One last point: college funding. I was phoned over the weekend by

several people in the community college system, because the government

bragged about all the money they are spending for universities and the

education system. But what's happening to community colleges? By the

way, they are the most accessible form of education for people. We

have, as everybody knows in this House, an abysmal rate of university

participation, an absolutely atrocious rate, one of the worst in Canada

— surely one of the real problems for the long-run health of British

Columbia. And that's in universities. But one of the best, most

accessible places for people to attend in order for pre-university

entrance or for two-year programs to help get decent jobs in this

province is the community colleges.

What did the budget say? There's a 0.89 percent increase for

community colleges. Enrolment is up to 70,000 people in community

colleges, and they've had a 2 percent increase over the last seven

years. We've seen inflation at about 45 percent over the last seven

years, and only a 2 percent increase in community college budgets. Why

is that? Is it because it doesn't tend to be the sons and daughters of

the wealthy who go to the community colleges? Is that why? I don't know

why. A 0.89 percent increase is simply not acceptable.

We already have seen hundreds of people last year — everybody remembers — lined up and being turned away

[ Page 3650 ]

from community colleges in this province. How does

the government deal with that? They give this 0.89 percent increase.

The lineups will be even bigger, because fewer people will be able to

attend because the community colleges' only recourse is to cut courses,

faculty and staff and to cut the number of students who will be

eligible to attend community colleges.

This government has stacked the boards — I noticed Hope Wotherspoon

is on the board of directors of Langara community college — so maybe we

won't hear anything from the colleges. It really is scandalous that

this government raises the grant program for people to attend

universities, talks about increased money for the education system, and

then really savages the community college system, which is the most

accessible form of education for working people in British Columbia.

[Mr. Pelton in the chair.]

In

summary, the budget is regressive and it's unfair, and it taxes

those who are least able to defend themselves. It tells you that the

government's agenda is that we have an economic problem in British

Columbia, which appears to be that the poor have too much money and the

rich don't have enough. And corporations have been taxed too high, so

let's cut them and make it up on senior citizens and those least able

to protect themselves. It's a shocking reverse Robin Hood; it's a

shockingly regressive and cruel budget. I'm proud and delighted to

stand here and oppose it as hard as I possible can, and I know my

colleagues will as well.

HON. MR. SAVAGE: I stand, obviously, to speak in favour of

what I believe to be one of the most responsible budgets delivered in

this decade in this House. This is the second budget that has been

delivered since our government came to office a year and a half ago,

and I am very pleased to praise what is being promoted in this budget.

In our first budget we set out the economic and — I remind you —

fiscal policies needed to give our province a fresh start. The policies

and principles contained in this year's budget are proof that we have,

in fact, made a good start and that we are on the right track. This

budget actually takes us a lot farther. It does look to the future. It

looks to the kind of British Columbia that we want our children to

inherit and be proud of. It is a future based on economic prosperity

and a responsible sharing of the social benefits of that prosperity. No

government can be successful if it acts in isolation from the people it

is elected to serve. It is important to know that this budget is about

listening to people, which we have done. It is about learning from what

they have to say. It translates the grassroots message into a vision

for the future of this province.

We have worked with and heard from many British Columbians. We've

listened to people from business, universities and colleges, labour and

the professions. People from every corner of this great province have

made comments about the future of this great province. The message we

have heard comes loud and clear, time and time again. The message

contained in this budget is that we must set a clear and firm course

for the future of everyone — that includes all British Columbians — and

we must provide that future with a great degree of confidence.

Last year we set out on three challenges: labour relations, economic

diversification and strengthening the Pacific Rim connections. By

working together as a government, we have progressed very well in all

three.

I would point to the new Industrial Relations Act...

MR. CLARK: Oh, that's great!

HON. MR. SAVAGE: It is great.

...our emphasis on

regional decision-making and our Pacific Rim education initiative as

positive steps in the right direction. The key to success will not be

government by panacea, but the key will be British Columbians all

committing and working together.

We've seen economic growth and job creation that has been beyond all

expectations. The signs are positive and the momentum will continue.

British Columbia's success has not gone unnoticed. In February the

prestigious Investment Dealers' Association of Canada stated: "Access

to U.S. markets, combined with the added benefits of high productivity,

international competitiveness and an attractive social and political

climate, will draw substantial amounts of investment capital" to this

province,"particularly from Asia and Europe, to expand the

manufacturing infrastructure." For this success to last, we must

continue to work together for the challenges ahead.

Mr. Speaker, it's important to recognize also that there are many in

society who generally require assistance that we have committed

ourselves to — for example, social programs, education, etc. The

caseload of people — if I may bounce back to income assistance — has

declined by some 11 percent since February 1985. The average number of

employable people on income assistance has dropped by almost 20

percent, which is a good sign. We fully expect that continued reduction

of this caseload will continue as a result of growth in the economy.

The Minister of Social Services and Housing (Hon. Mr. Richmond) is in

fact restructuring programs to improve the delivery of those programs.

These changes will save taxpayers $25 million and will promote equity

and consistency across this entire province.

The budget contains a number of measures to enhance other social

services measures in our province as well. It commits money to

enforcement of court maintenance orders on behalf of income assistance

recipients or others needing the programs. It commits money to aid

victims of crime. Money will be committed for programs to strengthen

the family, as we will be hearing today. We'll be expanding the program

called Project Reconnect, which links street kids with education,

family, medical and employment services. Last June we increased GAIN

support allowances for families; in December we increased maximum

shelter allowances. This increased support will add approximately $38

million to this year's budget.

Between the Ministries of Social Services and Housing, Education and

Health, we will spend $540-some million on services and programs for

the disabled. Let me assure you, Mr. Speaker, that the budget

identifies where we must continue our efforts to relocate the disabled

and people convalescing from mental institutions to appropriate

community care.

We also recognize that the issue of health care is an important one

to every British Columbian. Our province is well served by its health

care system, and we do recognize that we have highly trained and

absolutely committed health care workers.

Rising health care costs and the large percentage of taxpayers' dollars which health care consumes are major

[ Page 3651 ]

challenges for any government. But rising health

care costs and the large percentage of taxpayers' dollars which health

care consumes must be recognized and dealt with. In B.C., one-third of

the budget of the province goes to health care. That's more than $1,300

for every man, woman and child in this entire province. In other words,

it's about $3.9 billion.

Notwithstanding these pressures on the taxpayers' dollars, we can in

fact maintain the universal health care system that we now enjoy. The

obvious answer is to have effective management. We must be prudent

users of our health care system. We must lead and encourage healthy

lifestyles; that's the ultimate goal for any of us. Health care

practitioners must provide cost-effective care.

It's also important to recognize that we have more doctors relative

to our population than many other provinces. In a competitive market, a

high number of doctors would be a good feature. In theory, lower prices

should really result. In a totally subsidized system such as ours, no

such reductions do in fact occur.

[11:00]

To balance out the equation and inject a small amount of common

sense, the budget calls for medical insurance premiums to actually

reflect more the cost of the health care system and medical services.

Even with the increases that were announced, from $29 for individuals

up to $58 for families of three or more, the payments that are being

made on those premiums are still well below those that are being

charged in Ontario. Let me make it clear: we'll still be sheltering

those who can least afford it. This will be done through improvements

to the premium assistance program.

We're taking other measures to control rising health care costs. No,

these statements aren't bills which the patient must pay, but they will

alert the patient to the cost of services and encourage responsible use

of publicly funded health services.

Our senior citizens are a valuable resource requiring special

attention and services. Over the next two decades the proportion of

seniors in our population is expected to increase significantly. We

obviously recognize that we must provide for that growth and its

obviously increased costs or put our excellent system at risk, so we

are in fact making provisions for the future.

Two significant reports on alcohol and drug abuse have been released

in the past year; they add to an already chilling knowledge that we

have gained. Ten percent of all health care costs are alcohol-related.

One in five British Columbians consumes enough alcohol to risk health

damage. Over 70 percent of all male inmates in correctional facilities

were under the influence of alcohol at the time of their crime. One

third of time served in provincial correctional centres is for drinking

and driving offences. In an average year, drinking and driving results

in over 200 deaths and over 7,000 injuries.

Alcohol and drug abuse in British Columbia have immense social cost.

More of this cost must be borne by and met from the products whose

consumption contributes to the problem. That is why the social service

tax on alcoholic beverages is being increased from 6 to 10 percent, and

this rate will also be imposed on draft beer. The 5 percent liquor

purchase fee paid by licensees will be eliminated. Funds in support of

government programs will increase by $80 million as a result of these

changes. Last year our province spent $25 million on substance abuse

programs. In 1988-89, Mr. Speaker, we will almost double the funds for

programs aimed at alcohol and drug education, and prevention and

treatment.

thought that comes to mind is of a government with no social

conscience, a government with no heart. Nothing could be further from

the truth. No government could build and preserve a strong,

compassionate social safety net like the one we have here in B.C.

without strong and responsible management. The greatest enemies to our

social safety net are deficit and debt.

As the Finance minister noted in his budget address, deficits can be

dangerous. It's easy to borrow and the interest doesn't seem all that

threatening at the time you borrow. But let me tell you. each dollar we

borrow does carry a burden of debt and it must be paid. As the debt

builds, growing interest payments mean fewer dollars that may be passed

through to education and social programs. We've talked about a fresh

start, but there will be no fresh start for our children, as I said in

my opening remarks, if we continue to mortgage their future. It is not

right for us to pass on a legend of a mortgage for our children to bear

the brunt of. We must end the addiction of spending far beyond our

means. It cannot happen.

You've heard talk about our long-range economic plan; well, this

plan acts as a framework. It will be dynamic, changing when conditions

change, but the goals will be constant. We must eliminate the deficit.

These goals may seem ambitious. but they are in fact realistic.

Achieving them will be vital for our children's future. The 1988 budget

that the Finance minister presented to us on March 24 gives us the

means by which we can achieve those goals.

This year we will be looking for a deficit less than half of what

was forecast and also an improved debt picture. All the while, we are

still maintaining a high level of services from government. It all

really boils down to good government and responsible management. This

government was elected on responsible management. Responsible

management does mean making and facing very tough decisions. It also

means facing them head-on and building a budget process which takes

into account the cyclical nature of the economies of this province, as

we all know can happen very often.

To achieve these goals we have to take new, innovative steps. We set

out to privatize based on the experiences here and abroad which

realistically show that when programs are privatized, costs fall and

services do improve. Private firms find better ways to do business and

they do expand and create jobs. As you know, we've been reviewing

government programs. We're discontinuing those that are no longer

relevant, and we are privatizing where it does make sense.

The government will receive substantial proceeds from privatization

in the sale of assets, but in my view it would be a mistake to use the

proceeds from these sales to pay for ongoing programs, just like it

would be to sell the furniture to pay your rent. Instead we will put

these proceeds into a new privatization benefits fund. The money in

this fund will earn income. Good management also means getting value

for the taxpayers' dollar. Government is doing its part by eliminating

programs that no longer serve a useful purpose, and privatizing those

than can be done more cheaply and more appropriately by the private

sector is the right way to go.

We're tightening up income assistance programs so only those in need

will benefit. Also in this day and age, surely it is not too much for

government to ask individuals and businesses to pay a more reasonable

share for the use of the services that are benefiting them. Matching

government revenues to the cost of services is also the reason why some

[ Page 3652 ]

taxes and licence fees have been increased. For

example, rural area property taxes for homeowners and businesses have

been increased by $39 annually. Even so, the average rural tax bill

still remains well short of what it really does cost government to

provide those services to the rural communities.

Added to our challenges to remaining competitive is an especially

heavy collective bargaining calendar year. Almost half the unionized

workforce will be negotiating collective bargaining agreements for the

first time under the new Industrial Relations Act this year. There are

a total of 385 agreements that will expire this year which are expected

to affect some 212,000 workers. Wage increases in both the private and

public sector must be tied to productivity in keeping our competitive

edge.

The year 1987 was a banner year for British Columbians. Our province

experienced economic growth in the order of around 4 percent. Economic

indicators have been looking great. All the arrows that should be

pointing up are up, and those that should be pointing down are down.

British Columbians through their hard work, as the minister pointed

out, have created more than 90,000 jobs between January of last year

and January of this year. People are finding productive and stable

employment. But that's not to sit on our laurels. While people have

seen things improve, we all recognize that more needs to be done.

That's why this year's budget takes aim at improving on that success.

The philosophy of this government, when it comes to building a

healthy economy, is straightforward: simply give our businesses the

tools to do the job and let them get on with it. British Columbia

business is the backbone of our economy. There is no doubt about that.

Government's role should not be to interfere. Government should not be

in the way of business, nor should it be in the business of business.

First and foremost, we've got to lift the burden of taxes on business.

Consequently, the budget announced breaks for the different sectors.

Forestry remains the foundation of this economy. The policy in the

announcement from the Forests ministry will give British Columbians a

fair return from this most valuable resource.

In closing I'd like to say that if we are to have a positive future

for the residents of this province, it is important that we recognize

in our budget, as we have, that we provide leadership and incentive for

people to continue to invest in this great province. I wholeheartedly

support the efforts of our Finance minister in bringing forth the 1988

budget.

MR. JONES: Mr. Speaker, it's a pleasure for me to rise and

speak on behalf of the vast majority of British Columbians who are

either disappointed, frustrated, angered or even outraged by the budget

that we saw introduced last week. In the spirit of typical British

understatement, my friend the second member for Victoria (Mr. Blencoe),

when he saw the budget said: "Well, this isn't an election budget.

It certainly isn't an election budget.

One of the leaders of the financial community and, I believe, a

friend of the government House Leader from Prince George, said when he

saw the budget: "I give it a 5.8 for artistic impression and a 3.8 for

technical merit. " To me, that says it's charisma without substance. It

is, as the second member for Vancouver East (Mr. Clark) said, a Robin

Hood in-reverse budget; it's a Sheriff of Nottingham budget. It's

moving us back to the days of the head tax. It's an unfair and unjust

budget, and it's a smoke-and-mirrors budget.

I'm pleased to see the Minister of Education (Hon. Mr. Brummet)

rise, because I know one of the terms that he's very familiar with and

that he incorporated into Bill 20 was — this was the idea that was

paramount in education during the restraint period, and it's still

paramount in terms of arbitration — "ability to pay." Yet we see a

budget here that pays absolutely no attention to the people's ability

to pay, in terms of how this government generates its revenue. In fact,

it's become a Socred tradition in this province that we hit those who

are least able to pay; that we pick on those who are most vulnerable,

the weakest, those least able to fight back.

This is the regressive approach that we've seen for a number of

years now. Rather than following the history and tradition of taxation

that we've moved to in modern times, taxing those who can afford to

pay.... Those who can afford to pay should pay more than those who are

less able to contribute to the funds that the government collects on

the revenue side. The poor, the sick and the low- and middle-income

families in this province are the most vulnerable and are the victims

of Socred budget planning.

I think they see the world in terms of winners and losers and

victims and those who are going to benefit. Who are the victims?

Certainly everybody that pays medical insurance premiums. Those who

smoke or drink are victims. Everybody who drives is a victim. Average

families are victims. Small businesses are even victims. Rural property

owners are victims. Most particularly, seniors in this province who

don't deserve to be victims are victims of this budget.

[11:15]

We had an increase in medical service insurance premiums last year

of 10 percent. That was what this government, which the Minister of

Agriculture (Hon. Mr. Savage) calls responsible management, thought was

an appropriate increase last year, Well, the thinking has changed

dramatically between last year and this. Obviously there must have been

some confusion last year; I think there's more confusion this year. On

top of that 10 percent, we see another 40 percent increase in those

premiums: $192 per average family. As the member for Vancouver East

indicated, thousands and thousands of people in this province were

unable to pay in the past. They could not afford those premiums and, as

a result, suffered in terms of their ability to protect their health.

What we're going to see after this whopping increase is many more

families in British Columbia unable to pay for those premiums,

unprotected by the kind of protection you and I take for granted. We

can afford those increases, but many people in this province are unable

to.

We haven't yet seen the effect the increases in those premiums is

going to have on a number of businesses, institutes and other

organizations in this province. Something like one-third of this year's

meagre increase in the budget for colleges will go to pay increased

premiums for medical insurance. They have suffered over the years;

we've seen years and years of restraint. Now they get a meagre less

than-l-percent increase, and a third of that goes to pay for medical

insurance premiums. Shame on this government! Shame on those who are

going to attack people in terms of paying their medical premiums!

We saw more sin tax in this budget. The government obviously doesn't

like sinners, but some it likes less than others. In particular, we saw

draft beer being more sinful than other alcoholic beverages. Draft beer

is now experiencing an increase of 10 percent in sales tax. I didn't

see any increase for pipe- or cigar-smokers in this budget. Perhaps

they're not as sinful as other kinds of tobacco.

[ Page 3653 ]

Everyone who drives in this province is going to suffer — is a

victim — as a result of this budget. Last year we saw a

2-cent-per-litre tax increase on gasoline; this year we see a further I

cent. Are we going to see this every year? Are we going to see 2 cents,

I cent? Is there no sort of predictability in the kinds of increases

this government wants to foist on drivers in this province?

Drivers are also going to suffer through a tax increase on their

insurance rates. We want to go from 3 percent to 4 percent now — a $6

million increase to the Insurance Corporation of British Columbia. No

wonder the rates have to go up, when they're continually being taxed

more and more. Last year we thought 3 percent was the appropriate rate.

If you look at the rates across Canada in terms of taxing automobile

insurance premiums, you will see that 3 percent is a pretty typical

rate. In fact, eight of the ten provinces have 3 percent; and last year

the government thought that was the appropriate rate. One province,

Newfoundland, charges 4 percent. So in the typical tax grab of the

Minister of Finance, British Columbia now has the highest tax rate on

automobile insurance premiums in Canada. We raised an additional $25

million last year. That rate increase would raise $27 million this

year. On top of that, we're going to add another I percent ' and raise

another $6 million on the backs of every motorist in British Columbia.

This government saw fit in last year's budget to add $600 in taxes

to the average family and $100 in fees; in this budget, something like

$300 in taxes and $400 in fees. At least last year much of that

increase was based on income tax, a progressive kind of taxation. But

this year we're back to the old days of the Sheriff of Nottingham.

We're back to a head tax.

Small business is still a victim of this government in terms of

taxation. In last year's budget the Social Credit government of this

province thought 8 percent was not an appropriate rate for small

business to pay: "Let's jack it up to 11 percent, and let's raise $25

million by doing that." This year this confused government thought:

"Well, we must have made the wrong decision last year, because now

we're going from 11 percent down to 9 percent. We were going to raise

$37 million this year from that increase in tax, and now we're only

going to raise $19 million. So in two years we have increased taxation

to small business by $25 million plus $19 million — $44 million. Small

businesses are victims of this government; they are not friends of this

government.

Rural property owners are victims in this budget. They saw their tax

rates increase $2 million last week. Again, this government is very

confused about the kind of rate that these rural property owners should

pay. Last year, the increase went from $1.40 per $1,000 assessment to

$1.70. A brief year ago it was considered the appropriate rate that

rural property owners should pay. I guess there's been some confusion

and rethinking over there, because now rural property owners should pay

$2.30 per $1,000 assessed value on their property.

I would like to see a free vote on this particular one. The Minister

of Agriculture said that this was due and responsible management. I

would like to see the rural members of this Legislature vote for this

one. I'd like to see them explain to their constituents why this

government thought that two years ago $1.40 was appropriate, last year

$1.70 was appropriate, and this year $2.30 is appropriate. What is an

appropriate rate of assessment for rural property owners? Is it $1.40,

or $1.70, or $2.30?

I think what's appropriate in terms of the Social Credit Government

is whatever the traffic will bear: we'll victimize all these people and

squeeze every last cent out of them; we'll nickel and dime them to

death.

But probably the greatest victims of all in this budget are the

seniors of this province. On top of last year's budget, where we saw

them have to pay the dispensing fee for their Pharmacare bills, where

we saw them have to pay user fees for certain medical services, where

we saw an increase in their minimum property tax — probably the most

mean-spirited, vicious and unconscionable act of this budget.... And if

there were just this one single item in the budget, it would override

any of the decent measures that may have been attempted, this one item

whereby we see the after-room and-board expenditures of seniors in this

province cut in half — a 40 percent reduction. Reduced by 40 percent

what they're paid after room and board.

MR. MICHAEL: What is it in Manitoba?

MR. JONES: I don't know what it is in Manitoba. You tell me.

I think it's unconscionable no matter where it is, and I can't believe

it's the same in any other province in this country, other than Social

Credit British Columbia.

We increase the taxation on those people and reduce their income by

$816 a year. That*s $816 that goes to buy their toiletries, clothing,

telephone, presents for their grandchildren at Christmastime. We want

to reduce that — the little bit that they had left over — by 40

percent. We want to take $816 out of the pockets of those people. This

is a province whose government can afford $7.5 million for a Challenger

jet, yet you want to reduce the after-room-and-board income of seniors

in this province. Those pioneers of this province who have paid their

tax over the years, who have built this country and this province, who

have given us the opportunities that we have today, you want to nickel

and dime to death.

I want to tell you that many families who have seniors in extended

care homes are absolutely outraged, and I think you know it as well as

I do, because I'm sure your phone has been ringing off the hook as mine

has.

It's a travesty. The Minister of Finance wants to live up to his

nickname of Dr. No. Well, I think we know the kind of sinister,

negative, dishonest character that Dr. No was. I think many seniors in

this province would have some suggestions on what he could do with that

budget necktie he buys every year.

So British Columbians in general are the victims of this budget.

They're the losers. The families, the smokers, the motorists, the small

businesses, the rural property owners and, most particularly, the

seniors are the victims. But who are the winners? Who profited from

this budget and previous Social Credit budgets? I guess some farmers

did. The government of responsible management opposite thought last

year that we should increase the definition of a bona fide farmer to

having a farm revenue threshold of $5,000. We've changed our minds

again. We can't make up our minds on what these taxation rates should

be or what the definition should be because now we're back to $1,600 as

the definition of a bona fide farmer. However, I don't think the

farmers are all that happy, because we've reduced the exemption on

pesticides in this province.

Who else are benefactors? We've got the B.C. Racing Commission. They must be friends of government. I'm sure

[ Page 3654 ]

it's appropriate that their taxation level be

reduced or that they benefit more from taxation. So we've got gentlemen

farmers and the Racing Commission. Who else are the friends of the

Socreds? Who else are the benefactors of this budget? It's not the

doctors, because we've seen teacher-bashing in this province and I

think we're into a spate of doctor-bashing. It's the corporations that

are the real benefactors of this budget, the last budget and the budget

before that, as my friend from Vancouver East indicated earlier.

In last year's budget, which of course impacts as well on this

year's loss of revenue, we lost $29 million by reducing the wealth

surtax. We lost $7 million to banks and trust companies in reduced

taxation. We lost $15 million by eliminating the school tax on

utilities. We lost $11 million to mining corporations last year and the

same this year, plus what we've seen of the cumulative effects over

several years of tax giveaways to corporations. There must be some

theory on the other side that throwing money at corporations in this

province is somehow going to assist the economic well-being of British

Columbia, because we saw a reduction of school tax on non-residential

property that was predicted to be $90 million in 1988-89; and the

confused government opposite has changed its mind again and now it's

going to increase the tax a little bit to those non-residential

property owners.

We saw property taxes reduced on machinery and equipment. That was

projected to be $177 million in 1988-89. We saw corporation capital

taxes eliminated. That was predicted to be $90 million in 1988-89. And

we saw progressively the corporate income tax reduced from 16 percent

to 15 percent to 14 percent. That was earlier estimated to be $64

million annually; now the projection, for some reason, from the

confused government is $25 million. What we have in this province is a

corporate tax haven and an individual tax hell.

It's an anti-people budget. It's a budget that unfairly attacks

individuals in a regressive manner. At the same time, pleading poverty,

we see massive tax giveaways to corporations. In last year's budget,

these giveaways were estimated to be worth $600 million annually. Six

hundred million dollars annually is roughly double what the deficit is.

We could have a balanced budget this year and still have $150 million,

$250 million left over. The budget can be balanced now if we didn't

want to create a corporate tax haven in British Columbia.

[11:30]

It's amazing that we have the lowest corporate tax rates. Only

Prince Edward Island and Alberta have reduced corporate income tax in

recent years; and the only province that has a lower corporate income

tax than British Columbia is Quebec, and Quebec has been increasing it

in recent years.

So what we see in this budget is winners and losers. We see average

British Columbian families, seniors, motorists, and sinners who like to

smoke and drink, pay the price of corporate tax giveaways. Six hundred

million dollars annually, double the annual deficit, is thrown at

corporations. I guess it's the trickle-down theory: you throw this

money at corporations and you hope the benefits will trickle down to

the population. Well, I don't think the British Columbia populace has

been trickled down on lately. I don't think the 10 percent unemployed

and the tremendous number of people on welfare and unemployment

insurance are really experiencing the great economic boon that this

continual $600 million annual giveaway to corporations promises in

Socred thinking.

There is absolutely no stimulation in this budget. What happened to

JobTrac? That was such a great idea a year ago, a wonderful idea. No

mention in this budget. JobTrac has disappeared. Quiet death of JobTrac.

The confused government was really keen on JobTrac last year, not so

keen this year. We had an idea what business tax should be last year;

we have a different idea this year. We had an idea what the tax on ICBC

premiums should be last year; a different idea this year. Rural

property taxes changed; they're confused about that. Within a couple of

weeks we were not going to fund cyclosporin, and now we're going to;

they're very confused about that. It's a strange sort of thinking.

Prior to the last election we were going to have television in the

Legislature, and then.... I guess that was not calculated before,

because after the election it was too expensive. Now perhaps it's going

to be done again by private industry. The Minister of Education (Hon.

Mr. Brummet) wanted to fund Quebec exchanges, then he didn't want to;

now he wants to again. The government is confused.

So we have a $350 million deficit but somehow we're going to create

a $450 million rainy-day fund; a budget stabilization, a BS fund; some

sort of Keynesian economics where we lay aside money for a rainy day

for our children and for our children's children. Yet the Minister of

Finance indicated a couple of days later that it really could be used

in an election. But there's no money there; there is not a cent in that

fund. I think many economists in this province.... When you set aside a

fund, they automatically assume there's going to be money there.

Certainly our Finance critic from Nanaimo saw through that very

quickly, as did most of the media.

Even if there were money in that fund, we would still be losing

about $10 million annually, because we would be paying the difference

between the rate of debt servicing in this province and whatever

interest we could generate on the fund, which would be about 2 percent

— which would amount to, on a $450 million fund, about $10 million

annually. So even if there were money in the fund when we had this kind

of debt, there would be a $10 million loss.

This was the perfect time for a decent government, a government that

was a responsible manager, to increase the minimum wage and to bring in

pay equity legislation, and to do some progressive things that would

really help the citizens of this province. This government will be the

last province in Canada to bring in pay equity. Even the newly elected

Premier of New Brunswick has promised pay equity legislation. But you

guys will be last — and I say "you guys" because there are only guys

opposite in their seats. Instead of real legislation that would benefit

the people of this province, we get BS funds.

But I've seen funds before, and I think I've seen another BS fund.

In 1986, we saw a fund introduced — it was called the fund for

excellence in education. It came in with a bang — great hoopla — but it

went out with a whimper. In this budget, we saw the quiet death of the

fund for excellence. That was a program introduced by the government in

1986 that said: "The fund for excellence in education will provide....

a minimum of $600 million over three years. If economic circumstances

improve sufficiently, more will be provided in the second and third

years. This money will be used to place computers in classrooms, to

upgrade teaching skills and support.... " — other programs.

So we had a fund — and I think there was money backing this fund up

— which promised to be at least $600 million, promised to be a

three-year fund, and promised to be for computers, for in-service

training and for other instructional

[ Page 3655 ]

equipment. Did the Socreds live up to their word?

No. Did they live up to $600 million? No. Did they live up to a

three-year fund? No. Was it used for what it was intended to be used?

No, it was not used for those purposes. I suppose if it was a $600

million fund for excellence in education, that should translate into

roughly $300 million for the Minister of Education opposite. Well, I

think what we saw, rather than $300 million.... The last figure I saw,

which was in the last Ministry of Education annual report from last

summer. was $153.6 million allocated. I presume that if it's

"allocated," that means it will be spent, but I have no accounting of

that. Rather than the $300 million, we see maybe half Of that being

expended by this government. Was it a three-year program? No, it died

after two years, leaving a lot of people waiting with high expectations

that will be unfulfilled. Was it for computers, in-service instruction

and instructional equipment? Well,80 percent of the funds for

excellence in education in the first year went for general operating

expenses: teachers' salaries, textbooks, the normal things that should

be funded properly. Of that $153 million, how much was used for

computers, which was to be the main item of that $300 million proposed

fund, another BS fund? From what I can figure out, only $19 million was

used for computers.

An excellent committee was struck by the former Minister of

Education, a broad-based committee that represented a wide spectrum of

people knowledgeable about computers in the province of British

Columbia. That committee recommended that $125 million be spent over

five years. What we have to date, after two years, is $19 million. I

think we're going to fall a little shy of the mark. The Minister of

Education does promise another $15 million in computers this year, so

we'll have $34 million over three years. Still, I think we're going to

be tremendously shy of the mark.

I see the Minister of Education taking notes. I know he'll be

interested that if we look at expenditure by ministry, the Minister of

Education, with his budget last year, promised an increase of 11.4

percent. Then I look at this year's budget, and I see a promise of only

7.4 percent. I know he'll want to explain that to me, because obviously

the minister would not like to see an 11.4 percent increase go down to

a 7.4 percent increase.

If we look at what has really happened in education expenditure, we

have seen the school system ravaged by years of restraint that put us

very near the bottom of the barrel in terms of our financial commitment

to education. It put us at the bottom in terms of per-pupil

expenditure, west of New Brunswick. I was hoping this year the minister

would do something about that. He's heard me raise this point before. I

was hoping we might at least move up one notch — at least go from the

bottom, west of New Brunswick, to maybe the second from the bottom.

But this year's increase has done nothing to change our relative

position. To get from our position to the top, which I certainly

wouldn't expect in one year, would require something like seven times

the increase in this year's education budget. In 1982-83 we were in

second place in terms of per pupil commitment to education. To get from

where we are today to second place would require an increase of more

than four times what this minister has allocated to education

expenditure. To move up one notch we would require an increase of more

than two times what this minister has promised.

I'm basing that on expenditure in provinces last year without any

increase, so there is no way that we're going to make any dent in our

relative position in terms of education commitment in this province.

What we see in this budget is an increase in head tax; we see throwing

money at corporations and, on the expenditure side. unfulfilled

expectations. For these reasons there is no way that I could ever

support the government's introduction of the budget last week. Thank

You.

MR. CHALMERS: I rise today in this Legislative Assembly to

speak in support of our government's budget. I think I will I be adding

my voice to many thousands of people throughout the province. As is

well known by all the citizens of British Columbia, the worldwide

economic recession of the early 1980s did not pass this province by. In

many ways, because of the nature of our economic base, this province

experienced economic dislocations that challenged the imagination and

innovative spirit of all British Columbians.

By all British Columbians, I mean exactly that: those in industry

and those in government. those who are employers and those who are

employees, those citizens involved in the more traditional sectors of

our economy such as forestry, mining, fishing and agriculture. and

those people involved in the more recently important sector of tourism.

Indeed, the reputation of British Columbia as a place for people from

around the world to visit cannot be disputed, be it for the traditional

outdoor seasonal recreational pursuits or for the new international

destination resorts that abound throughout this province.

Also, tourist attractions such as the Okanagan Wine Festival must

never be underestimated. Perhaps the Okanagan is not yet the Napa

Valley of the north, but maybe it can be with the proper commitment; it

is an achievable goal in the very short run. Indeed, in 1987 the

Okanagan Wine Festival was ranked as one of the top 100 events in North

America by the American Bus Association. I commend and will continue to

support the Okanapri-Similkameen Tourist Association, community tourist

organizations, the grape and wine sectors, and all those who contribute

to the success of that very important wine festival.

Of course, it should be remembered that only a few short years ago

the concept of Hollywood North was not thought to be possible by those

who still question the imagination and the spirit of the people of

British Columbia. On the topic of Hollywood North, the film industry is

an area that is growing yearly in importance. Indeed, our government

has not overlooked these areas, with a strong commitment to the British

Columbia Film Commission and the new film development fund known as

Film B.C. Film B.C. will encourage British Columbia-based writers,

producers and directors, and will dramatically strengthen marketing and

distribution opportunities for British Columbia talent.

[11:45]

Our province is quickly gaining a worldwide reputation in the field

of advanced technology and in the electronics industry. Programs of our

government such as the Discovery Foundation and the discovery park

program are solid initiatives to encourage advanced technology in this

province. In fact, the electronics industry in our province today is

the fourth-largest industry and boasts more than 200 flourishing

businesses which generate $700 million in revenue each and every year.

The British Columbia Enterprise Centre is another example of a

practical initiative of our government to assist new and established

businesses. The Enterprise Centre assists

[ Page 3656 ]

businesses. It is not an example of a gift that

involves a standard-form government grant to industry. The Enterprise

Centre is an example of helping businesses to help themselves by

providing sound information on such everyday issues as product

development and government procurement contracts.

With the proper legislative commitment from the federal government,

the city of Vancouver can readily be established as an international

financial centre. Our government has already drafted the necessary

complementary provincial legislation to establish the city of Vancouver

as an international financial centre, and of course we await

legislation from the federal government.

The establishment of the British Columbia International Commercial

Arbitration Centre adds to a list of growing international activities

in the financial sector of this province.

Also, with the continuation of the exemplary enforcement policies of

the B.C. Securities Commission, the Vancouver Stock Exchange will

continue to gain increased worldwide notice as a stock exchange of

reputation, especially as a venture capital market.

I would not for a moment imply that this list is exhaustive.

Nonetheless, the industries named are illustrative of the energy, the

enthusiasm and, above all, the resourcefulness of the citizens of

British Columbia.

Mr. Speaker, I have much more to say today in support of the budget,

but I think, with time pressing on, it would be appropriate for me at

this time to move adjournment of the debate until the next sitting of

the House.

Motion approved.

Hon. Mr. Brummet moved adjournment of the House.

Motion approved.

The House adjourned at 11:48 a.m.

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