1981 Legislative Session: 3rd Session, 32nd Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

WEDNESDAY, MARCH 18, 1981

Afternoon Sitting

[ Page

4609 ]

CONTENTS

Routine Proceedings

Tabling Documents

Royal Commission of Inquiry into Uranium Mining report.

Hon. Mr. Wolfe –– 4609

Oral Questions

Northeast coal development. Mr. Barrett –– 4609

Alleged oil company overcharging. Mr. Macdonald –– 4610

Milfoil control. Mr. Skelly –– 4611

Budget debate

Hon. Mr. Phillips –– 4611

Mr. Levi –– 4612

Mr. Hall –– 4618

Mr. Howard –– 4622

Mr. Brummet –– 4626

Mr. Mitchell –– 4628

Hon. Mrs. Jordan –– 4631

Tabling Documents

Assessment Appeal Board of British Columbia report for the calendar year 1980.

Hon. Mr. Curtis –– 4632

Criminal Injury Compensation Board of B.C. annual report for the year ending

December 31, 1980.

Hon. Mr. Williams –– 4632

Law Reform Commission of British Columbia annual report for the year ending

December 31, 1980.

Hon. Mr. Williams –– 4632

WEDNESDAY, MARCH 18, 1981

The House met at 2 p.m.

Prayers.

HON. MRS. McCARTHY: There are four

people in the House today who are associated with our Ministry of Human

Resources. Diane Alexander is from Sidney, Nancy Buritt and Linda Irish

are Burnaby financial assistance workers, and Dawn Wright is from

Vancouver. They are participating in an information exchange, and I

would ask the members of our House to welcome them.

MR. LORIMER:

I ask the House to join with me in welcoming 30 students and their

teachers from Moscrop Junior Secondary School, along with 30 exchange

students and their teachers from Louis Hébert School in Quebec who are

here on an exchange program.

HON. MRS. JORDAN: I know

you'll be pleased to know that we have fine citizens from Vernon in the

gallery today. Mr. Joseph Nagy, barrister and solicitor; Alderman Ken

Danchuk; Mr. L. Ehrlich, who was formerly a deputy minister to the

Minister of Agriculture of Hungary; and Mr. Bill Clark. They are mature

in experience but are students of the Legislature, and I know that

you'll all want to give them a very warm welcome and a sound

performance.

MR. LAUK: Visiting with us today are

students from Capilano College who are seeking a meeting with the

Minister of Education (Hon. Mr. Smith). They are Stephen Howard, Mike

Miller, Catherine Ludgate and Stuart Morris. A member of the faculty of

that post-secondary institution, Arnie Tomlinson, is along, lending

support to their cause. I ask the House to welcome them all here this

afternoon.

MR. REE: Being a member from the North

Shore, Mr. Speaker, I'd like to add my welcome to the students from

Capilano College. I've been informed that a delegation will be meeting

with the minister later, as they have requested. I ask the House to

welcome them again.

MR. BARNES: On behalf of the

first member for Vancouver Centre (Mr. Lauk) and myself, I'd like to

ask the house to join in welcoming 40 grade 10 students from Britannia

Secondary School in Vancouver who are presently touring the precincts.

HON. MR. ROGERS: I'd like the House to welcome a visitor from Ottawa. Mr. Ian Waddell, MP for Vancouver Kingsway, is with us today.

MR. BARRETT:

Even more important, with the Member of Parliament, Ian Waddell, is his

able executive assistant, Sharon Olsen. I ask the House to welcome her

as well.

Mr. Speaker, as a graduate of Britannia Secondary School I learned long ago never to forget the workers.

HON. MR. BENNETT:

In the precincts today are a group of students from Ladysmith who are

here on the Crown Zellerbach tour. I had an opportunity to meet them

this morning in my office, and I would ask the House to join me in

bidding them welcome.

HON. MR. HEWITT: I'd like to

ask the House to welcome Mr. Joe Rogers, who is a commissioner of the

Agricultural Land Commission. With Mr. Rogers is Mr. Everett Lew, a

staff member from the Land Commission. I'd ask you to bid them both

welcome.

Hon. Mr. Wolfe filed the report of the Royal Commission of Inquiry into Uranium Mining.

Oral Questions

NORTHEAST COAL DEVELOPMENT

MR. BARRETT:

Mr. Speaker, I would like to ask a question of the Minister of Industry

and Small Business Development in his capacity as the cabinet

representative on the B.C. Rail board of directors. Can the minister

advise whether or not the British Columbia Railway has negotiated a

full commercial freight rate with Teck Corp. and Denison Mines

regarding carrying coal from Tumbler Ridge to market?

HON. MR. PHILLIPS:

Mr. Speaker, I'd be quite happy to answer the Leader of the

Opposition's question. Both Teck and Denison had negotiated a rail

freight rate with both the British Columbia Railway and the Canadian

National Railway. However, since those negotiations were finalized

there has been an increase in tonnage to Denison of one million tonnes,

and it is my understanding that Denison is also negotiating at the

present time for an additional two million tonnes and will be

renegotiating with both the Canadian National and the British Columbia

Railway for a freight rate to look after the additional tonnages.

MR. BARRETT:

I would ask the minister to tell the House exactly what the freight

rates are that have been negotiated for the known contracts at this

point, and I would ask as a supplementary what they are negotiating for

in the future. What has been negotiated up to this point regarding the

freight rates that the minister said have been negotiated?

MR. SPEAKER: The first part of the question is in order.

HON. MR. PHILLIPS:

Mr. Speaker, I haven't got the exact figure here, but I believe it's

$15.86 minus $2, and that $2 was negotiated as an incentive rate with

both the British Columbia Railway and the Canadian National Railway.

MR. BARRETT:

Mr. Speaker, the minister has now informed the House that the freight

rate negotiated by Teck and Denison was $15.86 with the $2 reduction

for incentive. Is the minister telling the House that the CNR has also

negotiated a $2 reduction of freight rate for an incentive?

HON. MR. PHILLIPS: It was $2 — $1 from BCR and $1 from CNR. That was

a commercial negotiation and was down from the original freight rate.

MR. BARRETT: I want to thank the minister for being so candid. We're getting there.

a supplementary. Is the minister telling us that the freight rate of

$15.86 is not being reduced by $2, as he said in an earlier answer, but

is a $1 reduction by BCR, as he said in his second reply?

[ Page

4610 ]

HON. MR. PHILLIPS: No, what I am telling the Leader of the

Opposition is that in the original negotiations between the coal

companies, both Teck Corp. and Denison Mines Ltd., and British Columbia

Railway and the Canadian National Railway, the coal companies were able

to negotiate a better rate. That better rate consisted of a $1

reduction from the original quote for both CNR and BCR for a period up

to 1989, which is normal commercial practice.

MR. BARRETT:

Mr. Speaker, I have a supplementary to the minister. Is the minister

saying that the BCR freight rate, originally negotiated at $15.86 per

tonne, is now $14.86 per tonne, pending further negotiations as he

stated in his earlier answer?

HON. MR. PHILLIPS: In

answer to the member's question, I said that I think it's $15.86. I'd

be quite happy to get the exact figure. What I'm saying is that that is

the gross rate for movement both over the BCR and the CNR. The gross

rate was reduced by both railways by approximately $2 a tonne through

commercial negotiations.

MR. BARRETT: To be perfectly

clear, Mr. Speaker, I was under the impression, perhaps erroneously,

that the minister was telling the House that there was a $1 reduction

CNR and a $1 reduction by BCR. How does that add up to a $2 reduction

by BCR's freight rate?

HON. MR. PHILLIPS: Well, Mr.

Speaker, I didn't say that the British Columbia Railway reduced their

rate by $2 a tonne; I said it was both railways. It was reduced $1 by

CNR and approximately $1 by British Columbia Railway, and one plus one

makes two.

MR. BARRETT: I would ask the minister

this. If B.C. Rail is reducing its freight rate from $15.86. what is

the reduction? Is it to $14.86 or to $13.86?

HON. MR. PHILLIPS:

I think that I shall have to draw the Leader of the Opposition a small

diagram. I am talking about the gross rate to move the coal from

Tumbler Ridge on the spur line to Anzac, and from Anzac to Prince

George, where they interchange with the Canadian National Railway,

which then moves it to Prince Rupert. The gross rate is in the vicinity

of $15.86 and was reduced by approximately $2: $1 off the Canadian

National Railway portion and approximately $1 — it wasn't quite $1 —

off the British Columbia Railway portion. Now that is for a period up

to 1989. However, during that period — and I want you to get this

perfectly clear, Mr. Speaker, through you to the member — approximately

80 percent of that gross rate will be increased to keep up with

inflation — 80 percent of the $15.86, not 80 percent of the $13.86.

Does the hon. Leader of the Opposition understand that?

MR. BARRETT:

Yes, Mr. Speaker, in regard to the gross rate, I along with every other

citizen of British Columbia understand that minister clearly. If there

is confusion out there, it is not my fault. Mr. Speaker, I'm trying to

ask the minister how much of that gross rate of that total of $15.86 is

BCR's charge.

HON. MR. PHILLIPS: I think, Mr.

Speaker, that I would really like to take that question on notice.

[Laughter.] I want to be perfectly honest and candid with the House,

and I don't want to quote a freight rate here in this Legislature that

isn't exact. I have the papers laying right on the top of my desk. If

you'll just give me a moment, I'd be quite happy to run up and get it.

I'd be quite happy to give it to you. Maybe if somebody is listening on

the squawk-box upstairs they can bring it down to me.

MR. SPEAKER: Order, please. I think the question was taken as notice.

MR. BARRETT: Mr. Speaker, I'm under the same impression.

While

he takes the previous question as notice, would the minister also

inform the House whether or not a published rate of $4.88 minus $1 is

the B.C. Rail charge, and if the statement of Mr. Andras, the former

federal cabinet minister, is correct that the reduction is from a

charge of the commercial rate of BCR alone, rather than CNR as well?

HON. MR. PHILLIPS:

Mr. Speaker, that is not my understanding of it. There is $1 off both

CNR and British Columbia Railway. I want to add further, for the House

and all the great citizens of British Columbia, that one of the main

beneficiaries of hauling this coal is going to be the railway. Just

like CPR, they don't want to haul any more coal, yet 60 percent of

their income comes from hauling coal. They say, "Don't haul coal,

because you're going to lose money," yet they want to haul more coal. I

can't understand the CPR saying that.

MR. BARRETT: In

light of the minister's statement, can he guarantee this House that

B.C. Rail will not lose any money in hauling coal, considering the

costs of the construction of the Anzac line and the two tunnels?

MR. SPEAKER: The question is beyond the scope of question period.

ALLEGED OIL COMPANY OVERCHARGING

MR. MACDONALD:

Mr. Speaker, I have a question of the Minister of Energy, Mines and

Petroleum Resources. In light of the combines investigation report

which indicates that the people of this province and other provinces

have been grossly overcharged in terms of gasoline and home-heating

oil, and in light of the Utilities Commission Act, which the minister

is familiar with, as is the member for Omineca (Mr. Kempf), and the

broad powers in

Part IV of that act, which are at once inquisitorial,

regulatory and empowered to roll back prices, I ask the minister

whether he has referred this matter to the commission to hold an

inquiry and make such orders as are necessary to recoup the people who

have overpaid for these products.

HON. MR. McCLELLAND:

Mr. Speaker, I would refer the member to the Blues for yesterday, in

which the Minister of Consumer and Corporate Affairs (Hon. Mr. Hyndman)

answered the question quite clearly, especially in regard to vilifying

and slandering people before they have had their chance to have their

day in court.

The answer to the question about the Utilities Commission is no.

[ Page

4611 ]

MR. MACDONALD: I just want to be clear and leave alone this

business of this kind of thing. I am asking the minister why he has not

decided, as a matter of public policy, when you have the power in that

act, to refer this matter at once to this commission, in terms of a

rollback. Has the government taken no decision to do that, when you

have set up the commission?

HON. MR. McCLELLAND: Mr.

Speaker, the report to which the member refers is a federal government

report, seven years or so in the making, which did not come to any

conclusions about charges being laid. I understand further inquiries

are being held, perhaps for the next seven years. It's in the proper

competence at the present time, I believe. The government has not

referred it to the Utilities Commission, nor does it intend to.

MILFOIL CONTROL

MR. SKELLY:

I have a question to the Minister of Environment. The ministry has used

Aqua-Kleen, a 2.4-D ester formulation, in the Okanagan milfoil control

program over the past several years, and additional permits have been

issued for the application of Aqua-Kleen this year. A federal research

program has discovered that all 2.4-D ester compounds tested to date

contained dioxin impurities, with possible long-term toxic effects. In

view of the federal government's concern over the possible long-term

toxic effects of dioxin in such compounds, has the minister decided to

suspend the use of Aqua-Kleen in Okanagan Lake until research on its

chronic toxic effects has been completed and assessed by the federal

government?

HON. MR. ROGERS: No, Mr. Speaker, I have

not, but I will take the member's statement under advisement and try to

bring an answer back to the House as to why this matter is even being

considered.

Orders of the Day

ON THE BUDGET

(continued debate)

HON. MR. PHILLIPS:

After I speak maybe I should get the opportunity to answer the member's

question. because I don't want to take time out of my speech. To be

brief, it's $15.86 per tonne. Well, I'll be! It isn't broken down

between the CNR and CPR. I'll have to get back to you.

Interjections.

HON. MR. PHILLIPS:

The total is $15.86. I haven't got the breakdown. I'm almost positive

it's $4.88, but then again I wouldn't want to mislead the Leader of the

Opposition. I will certainly be most happy to get back to you.

Yesterday I was saying that the socialists were chastising us in this government

for building monuments. I had to go on and say that yes, indeed, this government

was building, monuments to the people, for the people, with the people and by

the people of this great province of British Columbia. I was talking about the

great monument at Roberts Bank to serve commerce and industry; Duke Point; the

remaking of downtown New Westminster; Lonsdale Quay; the new floating drydock

at North Vancouver; and new pulpmills too numerous to mention springing up all

over the province. Certainly they're monuments to the workers in

those mills.

also want to say that there are monuments being built all over the

province, in the form of new sawmills; in the form of new mines being

opened up; in the form of that great petrochemical industry up in

Kitimat, Ocelot Industries; and new metal processing facilities in

Trail. Yes, they're all monuments. They're monuments to this

government; they're monuments to the people of British Columbia. People

have faith in this government and in this province. Yes, those are the

kinds of monuments we're building all over the province.

talked about the great new grain facilities at Prince Rupert; I talked

about new manufacturing plants that are springing up all over and new

industrial parks that are being built in practically every sector of

the province. I talked about the new ski facilities at Hudson Bay

Mountain in Smithers and a new world-class recreation village in

Whistler. It's a monument to the people in Whistler: its a monument to

all British Columbians — it's not a monument to the Social Credit

government. Although I must add that it's because of the dynamic

leadership of this government, certainly, that that little $400 million

or $500 million project is going ahead. It will be a shining example to

all recreational villages anywhere in the world — built right here in

little old British Columbia.

Yes, that's the kind of

monuments we're building. There's another world-class ski area being

built up at Panorama, outside of Invermere.

Interjection.

HON. MR. PHILLIPS: Have no fear, my friend, we'll make the snow.

There's

expansion at Big White and at Hemlock Valley and what have we got going

on down there in that great little area of Kimberley? We didn't do it,

but we certainly assisted the people of Kimberley. There's a new

village, a new ski area, a new golf course and there are new year-round

recreational facilities to assist our tourist industry. Yes, those are

the kinds of monuments we're building. Expansion at Hemlock Valley, new

hotels and restaurants being built all over the province — those are

the kinds of monuments that the people of British Columbia are

building. New highways, new bridges, new airports, new hospitals, new

schools, new extended-care facilities, new colleges — those are the

types of monuments being built today.

The people of British

Columbia have faith in the future and in the policies of this

government. That's why these monuments are being built all over British

Columbia. They're monuments to and for the people of British Columbia,

because they have faith. All of those monuments will provide the

much-needed jobs for our young and growing labour force, so that those

young people and the people presently employed can look to the future

with security, knowing their jobs are going to be there. That's the

type of leadership and those are the types of monuments being built

because of the policies of this government.

want to compare the record. Mind you, we've been government for a

little over five years and they were only government for three years,

but I want to compare the record.I want to talk about the monuments

they built when they were government. I can name them on half of one

hand. What were their monuments? What was their record compared to

ours? Let me see. They had Panco Poultry. They bought it from

[ Page

4612 ]

somebody else. That was one of their monuments —

turkeys all over the place. Then they had another monument — I think it

cost the people of British Columbia something like $12 million — Swan

Valley Foods. So help me, I've searched and searched and I can't find

any more monuments to that government anywhere in the province.

AN HON. MEMBER: Casa Loma.

HON. MR. PHILLIPS:

Oh, yes, Casa Loma. I remember Casa Loma, yes. There are three, and all

of them were failures. I want you to compare the monuments that they

say we're building, which I've outlined in my talk, with their

monuments. When they came to government the kitty was full; the

treasury was overflowing. When we came to government we were in debt

because they shovelled all the money out of the back of a truck. Yet

this is what is happening today. They left a memory for the people of

British Columbia when they left government though — the memory of

unemployment, despondency, no faith in the future and people moving out.

I've

mentioned a few of the monuments that are presently under construction,

and I didn't even mention northeast coal and that great port

development at Duke Point and the hundreds of millions of dollars that

are going to be invested by the private sector.

Just for the

record, I want to talk about a few more monuments that will be coming

onstream or are being constructed at the present time: Sam Goosly mine,

a silver, gold and copper mine with an investment of $129 million;

Alice Arm molybdenum, with an investment of $135 million; Granduc

copper, with an investment of $50 million; Highmont copper, with an

investment of $150 million; Similkameen Mines, a copper mine, $23.4

million; Lornex expansion, copper and molybdenum, $160 million; and

Boss Mountain expansion, $12.5 million. They're not monuments, but I'll

tell you what they are. They are private investments by the private

sector that will provide hundreds and hundreds of jobs for our growing

workforce here in British Columbia, jobs, expansion and profits that we

can tax to provide the social services that the people of this great

province have come to expect and, indeed, should have. They are

services that can only be paid for by a growing economy and by taxing

profits, because I don't know of any government that ever taxed a loss.

What

else do we have, since we're talking about the economy? What else have

we proposed? I'm sure most of these will come to fruition: a

ferrosilicone processing plant to process metals, Kamloops, $60

million; a magnesium ferrosilicone plant for Kimberley, $60 million; a

shipyard — to start our own shipyard here in British Columbia has been

the dream of people for years; Dome Petroleum proposed investment, $250

million; an LNG plant proposed for the province, $1,000,400,000;

petrochemical industries, proposed, $2 billion; Highland Valley,

copper, $500 million. There are as many aluminum smelters as we want to

come in knocking at the door; we could have as many as we want.

I haven't mentioned coal mines, and I won't even mention the two major

ones up in the great northeast. But what about Greenhills proposed expansion

and new project for B.C. coal, $200 million; Lime Creek, $180 million; Fording

Coal expansion, $115 million; and Byron Creek, $25 million? Because I don't

have that much time, I've just touched on a few of the proposals for this

great province — investment by the private sector that will keep our economy

rolling along.

the two or three moments I have left I just want to make one point. I

want to quote a person. I won't say who I'm quoting but I want you to

pay attention to this quote: "With the trains came industry, towns,

economic opportunity and a system of transportation that has survived

despite increased competition from many other, both bolder and newer,

transportation modes."

Who said that, Mr. Speaker? You might

have thought that I was talking about northeast coal when we're putting

in new railways. You might think that it was some far-sighted

politician from years ago when they were building and opening up this

country. No, that quote is from the Leader of the Opposition when he

was promoting his way out to build a railway to Alaska. But now that

we're building a railway that has a firm contract to haul British

Columbia products — contracts that will open up the great port of

Prince Rupert and upgrade our second railway, our railway from Prince

George to Prince Rupert — what do the Leader of the Opposition and his

gang over there say? He says: "We're against it. You're going to be

subsidizing." What did that same man say not too long ago when he was

proposing his way out? Oh, Mr. Speaker, he said that with the railway

would come towns, mineral exploration, some tourism and facilities to

service the people who would be required to set up and maintain

transportation systems. My, how they change.

I want to give you one more quote: "Not only would the construction employ

many people, but there would be many residual full-time jobs." The reason

that I'm giving you these quotes is to point out to you, the Legislature

and all the people of British Columbia that when the Leader of Opposition wanted

to spend some $2 billion to build a railway to haul Alaska oil through British

Columbia to the mainland of the United States, my, it was a great deal. He

spoke glowingly of all the spinoff economic benefits that would accrue to the

people of British Columbia: towns, economic development, spinoff jobs, and how

we should still build railways even though other modes of transportation had

come in. That was just a few short years ago.

went to Washington to try and sell it. He had a meeting with the

Governor of Alaska. While he was trying to promote this $2 billion

deal, the construction of railways to open up new areas and to create

new economic activity was a tremendous deal, he said in Hansard , "even, Mr. Speaker, if we have to subsidize it." Yes, he said that, but that's when he was promoting something.

Now

we have a different deal in northeast coal. We have firm contracts and

more to come. It's just the beginning. And what are the Leader of the

Opposition and his socialist gang trying to do? They're trying to

scuttle it. As I've said before in the Legislature, they've been

against everything that's been good for British Columbia. They always

have been and they always will be. On that high note, Mr. Speaker, I'm

going to say thank you very much.

MR. LEVI: Well, Mr.

Speaker, I don't know whether to start this way or this way or this

way. It's remarkable. Here is the man who is the minister of economic

development and small business and small ideas, and yesterday, he took

off with his mouth at full throttle for 24 minutes and told us all

about monuments. All he had to do this afternoon was to answer two or

three simple questions about northeast coal — just two or three simple

questions. Yesterday it was "hun-

[ Page 4613 ]

dreds

of millions of dollars!" All he was asked by the Leader of the

Opposition was: "Was it $14, $15 or $30?" In that enormous space, that

receptacle, that he has between his ears, he somehow couldn't get his

cash register going to figure out exactly what it was. That's the very

issue with this man in terms of northeast coal. He has yet to tell us

what the facts are. That's all we're asking.

He had a go

this afternoon and it was absolutely abysmal — his performance in terms

of those figures. His office even sent him down some aides because he

couldn't even read it. We still don't know from that minister if there

are signed agreements, how much it's going to cost to ship the coal and

if there are rebates. Those are three simple questions. He goes off

into full flight and tells us absolutely nothing. He doesn't want to

tell us anything because he 's got himself into a real mess with this

coal thing, and he's telling us that we're against it. The only thing

we're against at the moment is your inability to tell us exactly what's

going on. If you had anything good to say you would have said it. You

have nothing good to say.

For 40 minutes we had flimflam

about monuments. Well, I want to talk about a monument that the

Minister of Finance is responsible for — and he will shortly become

responsible for an even bigger monument. The other day when I attempted

to elicit some facts from that know-nothing minister in respect to the

Systems Corporation, he gave me exactly the same answers this year as

he gave me last year.

HON. MR. CURTIS: You weren't here when I answered.

MR. LEVI:

No answers! You haven't got a clue what's going on over there, so we're

going to start from the beginning and see whether we can teach you

something. Perhaps you might know by the time your estimates come

around how to tell us exactly what's going on in the Systems

Corporation, because you don't have a clue. He told us the other day

that he hasn't been to a meeting of the board for months. During that

time he said to us: "I have not been to the board of directors meeting

for some months.'' That's what you said. He shakes his head; agrees,

Mr. Speaker.

During the past seven months that board has

made a number of interesting decisions which presumably, because the

minister didn't attend the meetings, he was not a part of. First we

deal with the option to go to the main-frame IBM.

You don't

shake your finger at me. You haven't got a clue what's going on. We

listened to three hours of audition the other day for you to go into

the radio business when you guys get defeated.

MR. SPEAKER: Order, please. Would the member please address the Chair.

MR. LEVI:

We want to listen to the facts, and see if we can elicit from this

member some facts on what's going on in our Systems Corporation.

HON. MR. CURTIS: Your figures the other day were wrong.

MR. LEVI:

Never mind that. All you have to do is to come back and tell us what

the facts are, and frankly you've never done that. He will not tell us

how many people work for the Systems Corporation. He will not tell us

about the tenders for the IBM. He didn't come back last year and he

hasn't come back this year.

MR. SPEAKER: Order, please. On a point of order, the Minister of Finance.

HON. MR. CURTIS:

The undertaking to a take a question as notice is, in my view, a

serious commitment to return to this House with answers. The imputation

is that there is a refusal to answer a question. and that is not the

case.

MR. SPEAKER: Order, please. The Hon. minister,

although he may have a real concern, does not have a valid point of

order at this point of time and should not be interrupting the member

who is speaking.

MR. LEVI: You see. Mr. Speaker — perfect example of how little that minister knows.

Let

me just go through something from April 29, 1980. The member — myself

—said: "I have a question for the Minister of Finance regarding the

Systems Corporation. Will the minister inform the House whether it's

still the practice of the B.C. Systems Corporation to hold an open

tender for new equipment?"

The minister replied: "Insofar as

I know, they do. If there is a specific problem which he wishes to

bring to my attention, here or in writing...." I don't write to that

minister — takes too long to get a reply, and when I get the reply I

finally forget so I have to wait for the House to sit. "To reiterate,

as far as I'm informed, the practice is that tendering is utilized

whenever practical."

Then he goes on. I asked him: "Can the

minister advise the House whether he was informed by the Systems

Corporation of a recent lease of a second IBM 333 computer at a cost of

approximately $4 million? Is he aware of that?" He says: "The B.C.

Systems Corporation is expanding its equipment on a continuing basis. I

don't want to give a straight yes or no at this moment. I'm trying to

learn the language that is associated with the business of that

corporation. I could take the question as notice." That was on April

29, 1980. This is the minister who provides all sorts of information.

On July 24, 1980 I asked the minister another question.

I have a question for the minister.... I asked the minister on April 29 about

the IBM, but I guess he hasn't found out about that, so I have another question.

Two years ago the minister's predecessor told the House that the government

has renegotiated the Honeywell computer contract for $6,488,000 ending on December

31, 1982. At that time, the Honeywell was split and sent to Vancouver at great

expense. Now I am informed that the Honeywell part that was in Vancouver is

back in Victoria.

Then

the minister replied: "Mr. Speaker, first of all to the member

opposite. I'm sorry if I did, in fact, take a question as notice on

April 29 and not respond. That was an oversight on my part." It's very

nice of the minister to admit that it was an oversight that he didn't

give us an answer. But again: "...not without most careful

consideration by the directors, who, through me, are responsible" for

the minister. The decision taken was a careful decision. All right.

Then he goes on.

I asked him: "Mr. Speaker, to the minister,

the contract is $6.4 million, still has 18 months to run, and there's

probably another $2 million to $2.5 million that has to be paid. What's

going to happen in respect to that payment?"

The minister

replied: "I think we have now reached the point where I would want to

take the question as notice." There he goes again — no information.

He's got to take it as notice. So he took it as notice and we never

heard anything else.

[ Page

4614 ]

The other day — on Monday — I again asked the minister about the

Systems Corporation. That's no little corporation. I'm going to enlarge

on that in a minute. On Monday I asked the minister a series of

questions:

I have a question for the Minister of Finance.... Last year

I tried on three different occasions to get an answer from this minister on

the Systems Corporation, and I'll try again this year. Last July the B.C.

Systems Corporation announced they were opting for IBM main-frame architecture,

and I'd like the minister to tell the House what steps have been taken to

dispose of the $11 million worth of Honeywell equipment that presumably will

become surplus to the needs of the Systems Corporation.

The

minister replied in a little

preamble: "I think I did assist the member

to the fullest possible extent last year." I think the minister has to

accept that he didn't assist me at all. I just quoted what he said last

July. He didn't tell me a thing. He said: "In order that I can deliver

an absolutely complete and correct response to the hon. member, I'll

take the question as notice." So I asked him four other questions and

he took them all as notice. Today he takes umbrage at the fact that I

say to him that I don't think he's going to come back with any answers.

He's got to find out something. He's got to find out what is going on

at the Systems Corporation.

The reason I say that it's a

monument.... You have to go back three years to when the Systems

Corporation was set up in 1977. At that time the minister's predecessor

told us the objectives of the Systems Corporation. We didn't disagree

with the objectives of the Systems Corporation. We wanted to be sure

about two aspects of the operation. One was that the government did not

enter into the operation of the Systems Corporation in the way that

they wanted to do it, which was to take over everything and centralize

it in order to save money and be more efficient. That's what they

started out to do with the Systems Corporation.

The minister

of the day, who is now the Provincial Secretary (Hon. Mr. Wolfe), said:

"It will cost $22 million to operate the system." When the first public

accounts came in, in 1978, we found out that it cost $29 million to

operate the system. When we went into the second year, we found it cost

$36 million to operate the system. Last year, we're told, it cost $40

million to operate the system. But what the minister, who knows nothing

about the Systems Corporation, has not been able to tell this House —

and it may very well be that he is reluctant to tell us.... Last year,

when the Systems Corporation announced they were going to deal only

with the IBM main-frame architecture, the president said at the time

that this is the way large operations are going, opting for one main

frame. I presume that's why: they don't have to train two sets of

people in different machines; they just have to train them in one. So

the question I asked the minister this week was: "What is going to

happen to $11 million worth of Honeywell equipment?"

We know

the story of the Honeywell. We know that the government split it. They

sent half to Vancouver; they kept half here. The minister's predecessor

went out and negotiated a new contract, which he was so happy to tell

us about. He saved the people $311,000 when he renegotiated the

contract. Then they announced that the IBM main-frame architecture

proposal was where they were going, and suddenly the Honeywell became

redundant. It is gradually being phased out. That Systems Corporation

is now embarked on a conversion. They're going to convert from the

Honeywell to the IBM.

I asked the minister the other day:

"How much is it going to cost?" He hasn't come back yet. I said to the

minister: "It's going to cost up to $25 million." Just so that the

minister can have some idea how we arrive at the $20 million to $25

million, I'll tell him this: in order to rewrite all the programs that

are on the Honeywell system and put them on the IBM, it's certainly

going to take longer than September 1981. During that period of time

there's going to be a delay in the delivery of service and it's going

to cost $5 million. On top of that, you have to talk about $11 million

worth of equipment. What are they going to do with the Honeywell

equipment? It's surplus to their needs. They're gradually converting

it. Are they going to sell it?

First of all they've got to

buy it from Honeywell, then they're going to have to sell it. We don't

know who they're going to sell it to. The people who use the Honeywell

at the moment are the Health system. They've spent a great deal of

money putting in a one-line system, a responsive system, and to convert

that to the IBM is going to cost almost $5 million — $11 million and $5

million is $16 million. They have a contract with Honeywell. The

contract with Honeywell runs out at the end of 1982. This is the

contract that the present Provincial Secretary (Hon. Mr. Wolfe)

negotiated in order to save $311 million. Now he's going to lose $2

million, because he's got to pay right up till the end of the contract.

begin to get some idea. We listened this afternoon to the Minister of

Industry and Small Business Development (Hon. Mr. Phillips) who can't

tell the difference between $12, $13 or $15. Now we've got a minister

who's inherited the idiocy of renegotiating a contract which shortly

afterwards was thrown down the drain, because the government was going

out of the Honeywell business into the IBM. Those are the published

facts; those are the announcements by the president of the corporation.

That's how they've been running this system. The Crown corporations

committee last year felt serious enough to say: "It's time somebody

looked at the Systems Corporation to see what's going on." It was an

all-party committee and we all agreed that it should be added to the

schedule of the Crown corporations reporting committee so that people

can get all of the necessary explanation of exactly what's going on.

want to talk about something else for a moment; I want to talk about

something that's been built in the riding of the Minister of Finance.

About eight months ago a piece of property was negotiated by the

Systems Corporation for $1.7 million. They bought some land, and that

land is where they are going to build a Systems Corporation building

where they're going to attempt to concentrate most of the people in the

Systems Corporation who are spread around the Victoria area in some

seven locations.

Mr. Speaker, that government went to a

great deal of trouble to form the B.C. Buildings Corporation. They said

that that corporation would handle and expedite all of the construction

needs of the government; they would see about the acquisition of land,

about design and about contractors. So the Systems Corporation engaged

the B.C. Buildings Corporation as the construction manager. They didn't

deal with them on the purchase of land; the purchase of land was simply

something that the B.C. Systems Corporation did itself. They didn't go

to the experts; they decided to do it themselves. So they acquired the

land, then they spoke to the B.C. Buildings Corporation about doing the

construction management. Well, evidently things did not go very

smoothly, because now the B.C. Buildings Corporation is no

[ Page 4615 ]

longer

involved in the construction of this building. This building, by 1983

when it's completed and housed, will have more than 1,000 staff of the

B.C. Systems Corporation in it. The other day, Mr. Speaker, I asked

that minister how many staff were in the Systems Corporation. I said:

"Can he confirm that the staff of the Systems Corporation has ballooned

to some 600 people, not counting the contract people who are hired

through what is known as body-shop operations — private contractors who

supply people for the systems work?"

What we are talking

about here with the Systems Corporation is the way this government has

managed the development of a Crown corporation, a Crown corporation

that started out with some very reasonable ideas, except for one thing

that we had great difficulty with and never did secure: the report on

which the idea for the Crown corporation was based, the so-called

McMinn report, which apparently nobody has ever seen. William McMinn is

long gone from this province. The basic idea was to centralize it, put

it together, have a user committee and allocate the needs of the

departments. That was the objective. Bear in mind that there was one

disadvantage to the corporation: within one year of its operation the

Premier went to the president of the Systems Corporation and said,

"Look, I've got a little job for you to do," and they dumped the BCRIC

issue right out on the table and said: "That's a major priority."

During that period of time the services available to departments were

completely confused, so much so that six deputy ministers of the major

ministerial users of that signed a report which I released in 1979, in

which they complained about the operation of the Systems Corporation.

The

reason I'm going through this with the minister is that I don't want to

be in the position when his estimates come up that everything I say

will be a big surprise to him; then he'll be able to go through the

Blues and he'll find all the facts to refute what I've said. He has yet

to refute one thing that we've said, but nevertheless he should have

this opportunity. I would hope that when his estimates are up he won't

just sit there by himself attempting to answer questions of his

department, but that he'll have the good sense to have the president of

the corporation sitting along beside him so that we can get some

answers. His predecessor, who knew nothing about the B.C. Systems

Corporation, only did that once and then decided to wing it, so to

speak. We got no information from him, and we're not getting any

information from this minister.

What we're looking at with

the B.C. Systems Corporation is not dissimilar to the kind of

fascination that that government, once it became the government, found

it had with ICBC. We can remember what they said about ICBC. If they

got in they were going to open up the system to private enterprise and

make it compete, and if it didn't compete it would have to fall by the

wayside. Suddenly they got on the inside of ICBC and became completely

fascinated with the operation. It was a very large insurance company

that they found was running very well. Sure, they started to tinker and

make all sorts of messes with it, but the thing was running very well.

This was despite the fact that in 1976 those idiots, if one might refer

to them.... That's the general not the particular, and we're talking

about a number of people now....

Interjections.

MR. LEVI: Don't get defensive now: it s a general, not a particular statement.

They

felt that the only way to deal with ICBC was to make the thing operate

right away like a business that had been operating for five years,

paying no mind to all the money that had to be laid out to start it.

You know, we went through all that process in this House. We had the

so-called accountants telling us this while smiling out of one ear and

telling us out of the side of the mouth another thing.

Now

they have the same fascination with the B.C. Systems Corporation, and

the B.C. Systems Corporation is an example of the classical way that

these people pour money down a bottomless pit in terms of trying to

make an operation work. There is nothing wrong with the idea of the

B.C. Systems Corporation, but I'm telling you that there is certainly

something wrong with the way it's being operated. There's certainly

something wrong there when you enter into a contract with Honeywell and

then a few months later you've changed over to IBM. Then you're talking

about conversion and reorganization. You go out to Saanich and build a

building. You don't deal with B.C. Buildings Corporation, but do it on

your own. You hire them to do the construction management and then you

fire them. The minister is not able to tell us anything about the

conversion schedule. I hope by Friday, when the minister gets his

report from Mr. Stanhope on how the progress of the conversion is

going, he'll have the ability to come into this House and inform us

about exactly what's going on with the B.C. Systems Corporation.

have had problems — we talked about them the other day — in terms of

what is going wrong with Crown corporations. It is that government that

has set up the Crown corporations reporting committee, which is a very

unique committee. For a period of two years. It's been that government

that has so far refused to attach to the

schedule of the Crown

corporations committee their ability to look at those two Crown

corporations, the Systems Corporation and the B.C. Buildings

Corporation. If anything made sense at the time when they created those

two Crown corporations, it would have been to make them available to

the Crown corporations reporting committee at the earliest possible

time. It's been a very difficult process for the members of that Crown

corporations committee to get a handle on the other Crown corporations

that have been established for some years. You don't simply go in and

learn overnight about B.C. Hydro, B.C. Ferries or B.C. Rail. We didn't

get a chance to learn too much about the Housing Corporation, because

it was dissolved, but we would have learned in very quick order what

was going on in the B.C. Systems Corporation and the B.C. Buildings

Corporation, because they were just being started. We could have sat in

and listened to what was going on, and we could have seen that and

acted in a watch-dog role to avoid the kinds of problems that they now

have.

Let me put it to the minister this way. You have in

the B.C. Systems Corporation, in terms of employees, some 360 people

who are in the collective agreement. You have another 80 people who are

excluded from the collective agreement. You have a number of

auxiliaries employed, and then on top of that you have contract people

who are hired completely from the outside. Why does the B.C. Systems

Corporation need to ask private contractors to provide them with

employees? You've got over 600 people working in that organization. The

building that's being built in Saanich envisions over a thousand

people. Yes, within two years they'll have a thousand people employed,

and they want to put most of them up there.

[ Page 4616 ]

Remember,

we started with the B.C. Systems Corporation in 1978. The first full

year of operation commenced on April 1, 1978. At that time the budget

was seen as $31 million. Now what I'm surprised about — what I'm having

a great deal of difficulty looking at — in terms of understanding the

financing of this corporation, is just exactly what is being spent, how

it is being spent and where it is being noted. Last year, 1979-80, the

total revenue of that corporation was $40 million. That was up from $26

million in the space of one year. This year they've come in with a

budget of $46 million, which is the same as the budget for 1980-81. The

budget for 1981-82 is going to be the same, within half a million

dollars.

I ask the minister — because we've got to find out

from him; he's not prepared, but we have to find out — who is going to

pay for the conversion costs. The total conversion costs and the

Honeywell problem is going to cost $20 million to $25 million. Where is

the money coming from to build a $30 million building? We don't have

any of these facts, and that minister refuses — and that's a gentle way

of putting it — to come to this House and tell us exactly what is going

on. We can't get anything from the annual report. All we have there are

some bald figures and that's it. All we want is to have the minister

take an interest in the Crown corporation that he is responsible for. I

don't think ministers should be responsible for Crown corporations,

frankly. It's too difficult; you don't have time to address yourself to

concerns about Crown corporations if you are running a ministry.

Nevertheless, that's the way it is set up. He is the minister

responsible; he has to answer the questions and he's shown no

willingness — no evidence of any accountability within this House at

the moment. I would ask him to tell us — we need to know — where this

$50 million that they need for the conversion and the new building is

going to come from.

Now the key question is this: every time

the cost of that operation goes up, the cost to the ministries goes up.

It becomes a key factor. You simply have to look at the Ministry of

Forests this year. The Ministry of Forests has almost doubled its

budget for computers; it's gone from 39 to 66.

Interjection.

MR. LEVI: Sit down. You don't know what you are talking about. It has almost doubled.

Interjection.

MR. LEVI:

Ah, he says: "Why don't you go and look at what's happening." You see,

he's so defensive he thinks there is something wrong with that.

Interjection.

MR. LEVI: If you want to talk, get up on your feet. Don't babble from the sidelines.

Interjection.

MR. LEVI:

Yes, that's one of the things. If they can put you into the machine and

you don't come out the other end, I think it will be worth $2 million.

The point is that we know why the Ministry of Forests has got more computer

services: because in 1978 you couldn't even send out the billing and you

were down $200 million in revenue — just read the auditor-general's report

on that. Yes, so you had to do that. You had to make it possible to send out

your bills before you could charge the interest if they were late coming back.

That's fair enough. But the point is, those are the kinds of things that

go to make up that problem.

The

minister got up and made a long speech about funding, and how they are

accountable. The other day he was quoted in the paper.... His answer to

the way he does his budget is very similar to the way the Premier says

that you can either go into debt or not go into debt, but you mustn't

pass anything on to the future. Then we got into the business of Crown

corporations and how they pick up debt. But of course the minister

says: "If only the NDP would understand the difference between

borrowing for operating and borrowing for capital." That's what he

said. There was a plaintive little plea that came from that little

minister. He was saying: "Please understand." We understand it but the

taxpayer doesn't understand it.

A debt is a debt. Don't tell

me that your $6 billion of contingent liability — which is a phrase

that you understand better — is not having to be serviced through light

bills and surcharges on B.C. Hydro for transit. That's all a tax. It's

no good telling the taxpayer that that's not creating future debt. Of

course it is debt. Everybody who uses hydro or purchases gasoline will

be paying that kind of debt for years. Within the next two years it is

more than likely that the B.C. Hydro debt will be of the order of $10

billion. That's a Crown corporation that we as a government endorse. We

have to back it up in terms of its investment. We are talking about $10

billion worth of debt. That's incredible. But don't tell us that you

are not running up any debt, unless you are telling us that nobody has

to service it. Don't tell us, for instance, that when B.C. Rail cannot

collect enough money to cover its operating expenses, you have to give

it a grant. We know about B.C. Rail — more than $700 million in the

hole. They insist on interpreting it that way, but you can't interpret

it that way to the taxpayers. That's why we've made the issue we've

made in this debate on the budget.

Last Friday morning the

Premier gave us a lecture on his brand of economics. The sum total of

it was that there is no continuing debt. But there is a continuing

debt. In 1976 the total debt in the province was in the order of $4.2

billion. It's the liability we had that we have to be concerned about.

Nobody disregards the fact that you have to accumulate some debt. It

does happen that you have to. That's how you run.... In the fiscal year

1979-80 it went up to $6.4 billion — a 33 percent increase. That

becomes part of the debt load of future generations. I don't subscribe

to his principle that somehow it's immoral to leave debts for the

future. We have to pay for debts of people in the past; they'll come

after us to pay for that. What do you expect to get — everything for

free? That's the kind of argument we've heard from these people for

years. When it's translated into some kind of inefficiency.....That's

why I've gone to the lengths I have with the Systems Corporation. There

is some unusual fascination with the way this corporation operates.

They are at arm's length from it. That minister is at more than arm's

length from it. He hasn't got a clue what's going on.

They

are incurring an expenditure that is way beyond what they envisioned

when they started it. We were told that it would be a straightforward

operation which would pay for itself. But now it's going to be a real

monument. We're going to have a building with $30 million-plus. It's

got to be at least $35 million to $40 million by the time they complete

it. It's going to have more than 1,000 staff. Then we have to ask the

[ Page 4617 ]

question:

what is the responsiveness of the system they've built? What is going

on in the corporation? Is it able to deliver the service they need? If

it works — and the minister should be able to tell us whether it works

well, what is going on, how it's being monitored — then they will have

been successful. But they are not going to be successful when they have

a minister who is not prepared to take any interest at all in the

operation.

If the minister is still mulling over the idea

that yes, he should give it to the Crown corporations reporting

committee, then let him do it, and we'll find out exactly what's going

on, what the objections are, whether they're being met and just how

much money is being spent. The great difficulty is that if that thing

is not brought under some control, that government is going to have

some serious trouble, and it will find this thing hanging around its

neck. It is the kind of thing that you can make a good election issue

about. After all, what are they telling us? They're telling us that in

the past five years only they have been able to manage the economy.

When they first came in they put up taxes; then when they got a deal on

the federal sales tax they put the taxes down. Now they've put them up

again.

It was the Sun that reported that after five

years of Socred government, they've had to put up the sales tax. What

does that really tell us? If the minister, as good as he feels about

the budget, were to go to the people tomorrow on the issue of whether

or not they support his budget, he wouldn't be in his job again, and

they'd be defeated. That's what's remarkable about the government. With

all the things they say in here, they've not been able to transmit to

the people out there anything other than that uneasy feeling that

exists among the people of this province that these people cannot

manage the finances of the province. They cannot give a feeling of

confidence to the people. They do not have the ability to get across to

people that there is leadership here. They know as well as we do that

in the past five years they've stumbled from one problem to another.

Just six months ago they created what could have been for them, had

they been candid about what they were doing in terms of the northeast

coal.... But all we've had since the announcement of that program is a

series of barriers and fabrications from which we've not been able to

extract from the minister responsible one piece of perfect information

that's unchallengeable. We saw this afternoon that he couldn't even

give us a candid answer about what it would cost to ship the coal.

That's the way they're managing the economy. That's the way the

Minister of Finance is managing the economy and the Systems

Corporation. I've been watching that corporation go through its

problems for the past three years.

I would hope that

minister is going to come into the House more prepared than ever to

answer some questions. not to tell us that he doesn't want to make a

statement right now and that he wants to be sure of his facts, so he'll

take the question as notice and never come back. He's never come back.

He's got to do that. It's no good looking at the Speaker. He keeps

looking at you, Mr. Speaker. What am I saying that's so terrible?

Interjection.

MR. LEVI:

Oh, you're looking at me; I thought you were looking at him. That's

good. Look at me. I would hope that he looks at me and listens to what

I'm saying. Answer my questions. That's all I want him to do. Come

back. Give us the answers.

HON. MR. CURTIS: If you go back to the office.

MR. LEVI:

No, no, I don't have to go back to the office, Mr. Minister. You

haven't come back and refuted one fact — not one fact. You're not

building a building in Saanich worth $30 million, you didn't fire BCBC

from being the contractors, you didn't suddenly go from the Honeywell

to the IBM and somehow you're going to find $11 million to buy the

Honeywell. What are you going to do — dump it on the Health ministry?

What are you doing there? You're not telling anybody anything. He sits

there with his benign smile, but he's told us not one fact about the

Systems Corporation in the time he's been Minister of Finance. This is

Mr. Cool of the cabinet. We're not talking about the other people that

are in the cabinet that don't have the ability. This guy's supposed to

have the ability. But we've had not one fact, and that's why we've got

to get his attention. I hope he'll get his executive assistant in the

next few days to go through the speech, cull out the things I've said,

and then during his estimates....

Or hopefully he'll do the

right thing and after question period ask leave to answer some

questions, because he hasn't answered one question. I know he's touchy

about it. After all, if you don't go to a board meeting in eight

months, how can you know what's going on?

Interjection.

MR. LEVI:

Several months. I would say several months could be anything from five

to eight months. If I'm wrong and it's six months I will humble myself

before you.

HON. MR. CURTIS: You're still wrong.

MR. LEVI:

Still wrong, Well, you see, we're going to play a kid's game. "It's not

six, it's five; it's not five. It's four." What we need is some

maturity from that minister.

HON. MR. CURTIS: Your information is wrong.

MR. LEVI:

He keeps telling me my information is wrong and he hasn't had the

temerity to come into the House and disprove one fact. Not one fact

have you been able to disprove.

HON. MR. WATERLAND: You haven't given any facts.

MR. LEVI: Oh, quiet.

MR. SPEAKER: Order, please. The member has only a few moments left. Let's not interrupt him.

MR. LEVI: Why are these people so touchy, Mr. Speaker?

HON. MR. CURTIS: When did you ask the question? Monday?

MR. LEVI: I asked the question last April and last July — read Hansard — and you've come back with nothing. You said you would. but you didn't.

HON. MR. CURTIS: You didn't bother to be here....

MR. LEVI: I was in Winnipeg on a parliamentary conference.

[ Page 4618 ]

MR. SPEAKER:

Order, please. Hon. members, let's have orderly debate. The member will

address the Chair, and other members will not interrupt him.

MR. LEVI:

Yes, Mr. Speaker. I've obviously pricked something in the minister. I'm

not sure what it is and I hope it's something that's going to be very

practical. If he says he has facts to dispute what I say, I'd be

delighted to hear them; that's what I've been asking for the last 18

months. Tell me the facts. The one thing that keeps me quiet is when

somebody says "these are the facts" and they show me the information.

But we've been waiting since April of last year and we haven't had one

fact. Don't tell me about your estimates — we're starting fresh. I was

a minister; I knew when we got questions. You could answer them or not

answer them. If you wanted an answer you got it the next day. Here we

are on Wednesday. I hope that tomorrow, which is the last opportunity

the minister will have, unless he wants to do it Friday.... He can

do it Friday, of course. He can just get up and ask leave of the House.

I'd prefer he did it in question period so I could rebut him. It would

be much nicer.

The minister has got the message. That's been

my objective this afternoon — to call his attention to what I think is

a very serious problem. Nobody is disputing the future value of that

corporation. It's valuable, it has all sorts of possibilities, but

somebody's got to take a look at it. That's all I've been intending to

do in my remarks. If the minister can dispute what I say I'll be

delighted, but that's what the objective is. That's part of the

attitude. The facts — that's what this whole debate's about. You

haven't given us any facts to substantiate that we should support this

budget, and that's why we're against it. That's the way you've been for

five years.

MR. HALL: Mr. Speaker, I was expecting a

government spokesman, in the normal way, to be the next speaker. There

not being a government speaker to speak in favour of the budget, I'll

do my best to see what I can do.

The first thing I want to

say refers to the remarks made earlier today by the member for South

Peace River, the Minister of Industry and Small Business Development

(Hon. Mr. Phillips), who appears to be something of a tease. He likes

to go on television and radio and tell us what a great and wonderful

affair the development of the northeast is going to be under his

stewardship, but when given an opportunity to prove it by presenting

some figures, he always neglects to do so.

I'm a student, I

think, as well as a practitioner of politics and representation. It

seems to me more than passing strange that a minister and a

representative would say so much in favour of such a good idea and yet

never give us the facts so that we could all applaud that good idea

that he spends so much time talking about. His reluctance to give us

the figures, in my view, actually does his own cause more damage than

he himself does. That's saying a great deal. If I could give that

minister some advice — and I'm not too sure whether he'd take it — it's

simply, why fool around any longer? Why not give the public of British

Columbia the simple facts?

I have known the minister since

1966. For the minister to sit in his chair and tell us that he can't

remember whether it's $12, $13, $14 or $15 really is beyond belief. I

know that he doesn't expect us to believe it. That's what is probably

galling the press and the opposition more than anything else. If the

minister gets some kind of obscure, somewhat medical — if not clinical

— kick out of that, that's his problem. I can assure him that the

public's getting no kick out of it. His constituents aren't getting any

kick out of it. I just can't understand why that minister simply

doesn't lay the facts on the table when they're asked for instead of

playing silly devils with the figures.

I have some general

comments on the budget which was tabled and delivered by the member for

Saanich and the Islands almost two weeks ago. It is interesting what

has happened since, because whether or not one can applaud the

minister's performance that day, one can honestly say that he was given

a task to do that would have bedevilled some of the giants of the past,

both in fiction and in politics. One thinks of jobs of cleaning out

stables and all sorts of classical references, but certainly I think he

made a good job of it. I want to congratulate him for making a long

speech as well as he could and for delivering some unpalatable

information as sweetly, nicely and well mannered as he did. I think we

all owe him a debt of gratitude for that. He may have sent some of his

guests out of the chamber, but I'm sure he can always charm them back

in again with his own ineffable style.

However, he didn't

charm the editorial writers the following day. I don't suppose he

expected to, because any minister that's going to announce the kind of

palliatives and increases of taxation that he did must expect a fairly

rough go. That may be, indeed, why there wasn't a speaker between

myself and my colleague from further down the row. The Province opened

up the following day with a headline which calls it a "tax

smokescreen." I suppose one could characterize the Province as being a

socialist newspaper. I don't think one could characterize the Province

in the same words that the Minister of Industry and Small Business

Development would like to use to characterize this side. They call it a

"tax smokescreen" and say that the Minister of Finance, "as with

Finance ministers before him, has been unable to resist a temptation to

heap blame on the federal government while administering a pill that

many British Columbians may find distasteful." The editorialist also

went on to say: "The government should be prepared to deal with its

cost problems as they arise, rather than try to build in automatic

revenue increasers." In fact, the whole editorial says that the

government has taken the wrong approach to solving its financial mess.

the evening edition of the paper the heading is even more to the point.

It says in large print: "The Money Grab." The Sun , which on its

masthead says it owes no political favours to anybody, calls this

budget a "money grab." It says: "Who would have thought that our

forests, our mines, our gas and oil, would fail us and that in the

coming year they would provide substantially less money than before?"

Anybody who stood in this chamber and listened to the stewardship

accounts of the ministers of resources from the other side as I have

done since 1966.... Who would have thought, Mr. Speaker, that we'd

have so comported ourselves that that paragraph could ever be written

about a government? Who would have thought that our forests, mines and

gas and oil would fail us? It's difficult to imagine that forests,

mines and gas and oil can fail you. Really, it's the stewardship about

those resources which have failed us.

[Mr. Davidson in tire chair.]

It goes on to say: "The government, in retaliation, has increased taxes on almost everything. Finance Minister Cur-

[ Page 4619 ]

tis

said that he had placed great emphasis on the ability to pay." Yet the

major increase in taxes, the increase in sales tax, will affect

everybody and thus bear hardest on the poorest. And, of course, the

sales tax has no relationship at all to the ability to pay. It also

goes on to say that the Finance minister would have us believe he blew

a surplus in last year's budget. Again, that particular myth is

punctured and the Finance minister knows it — as he leaves — because as

the Sun points out, it would appear as though we had a budgetary surplus of at least $105 million.

That's

not all. The Finance minister talked about setting up a

resource-revenue stabilization fund next year because we can't afford

it this year. In fact we've already got another $1.24 billion stashed

away in what's called special purpose funds. So you see they're saying

one thing and doing another. The editorial writers don't believe the

smooth, honeyed words of the Minister of Finance.

I want to

go through three of the taxes that were increased last Monday. They're

either imposed or increased in the budget, and I want to look at them

individually.

First I want to look at the sales tax — a 50

percent increase in sales tax which we know will produce an 80 percent

increase in revenue because of the multiplier effect. It's a regressive

tax. It hits the people hardest who are the least able to afford it.

What are the past statements of both the current Minister of Finance

and his predecessor on the question of sales tax? I also think of the

statements made by the Premier when the sales tax has gone up and down

in the years since 1976 in this on-again, off-again behaviour of the

government as far as this easily applied tax is concerned. When it was

cut to 4 percent the Premier said it was a permanent cut. The Minister

of Finance said it was a reduction. Now I think that we're entitled to

take from those statements that that was it. The Minister of Finance

said that that 4 percent would be the reduction and that was the end of

it and we could expect that 4 percent to stay there. That was the clear

message that he gave us, taken in the context of his speech. The

Premier said it was a "permanent" cut. While the member from the north

may take some exception to what I'm saying, he can't wriggle his way

out of the fact that the Premier said it was a permanent cut.

What's

more important is why that cut took place. That cut took place because

the federal government transferred $115 million to the province because

the province cut the sales tax by 2 percent. I think most of the

members seem to have forgotten about that. As we go into this

Canada-bashing exercise that the Minister of Finance and other members

on that side love to do, we seem to forget that the last reduction in

sales tax took place because of the Canadian government's actions in

offering this government $115 million in transfer payments if it

reduced its sales tax 2 percent. We reduced the sales tax 2 percent,

picked up the $115 million, said thank you very much, then put it back

up again and decided to attack Ottawa. That seems to me — and I will

take second place to nobody in my dislike of the Liberal

Part in Ottawa

— to really be having it both ways. You may want to take your hatred of

the nation's government to paranoiac standards, but I certainly don't.

was those terrible people in Ottawa that Eave Lis that 2 percent cut,

that enabled the Premier to go around the province saying: "Look what a

good boy I am. I reduced the sales tax 2 percent." Now he's trying to

avoid the political implications of putting it up. Mr. Speaker, you've

been around in politics a short length of time, not as long as some of

us, but you know you're not going to get away with that so easily. I

think you know that even the Premier, with his noted fleet-footedness,

won't get away with that for as long as he'd like to do. Of course,

it's catching up to him. They, meaning the federal taxpayers, paid for

that 2 percent reduction to the tune of $115 million or more. That

amount was transferred and provided by that government to this

government to be able to reduce the sales tax 2 percent.

The

gas tax. This increase is now part — and I want to make this abundantly

clear — of this government's surrender to inflation, which is the

trademark of this particular minister. This government can only thrive

and succeed on inflation. It's built into its budget now. They can't do

it any other way. They have produced no other ideas at all.

indexed tax — and they've now indexed more that side of the revenue

picture than any other government in the history of B.C. — is an

affront to the legislative process, the legislative practice and the

history of this province. It's another step towards the centralization

of all our decision-making.

In my view, Mr. Speaker, it

seriously impedes and goes to the very root of why we have parliament,

why we have a legislative assembly. The Premier went around this

province talking about "not a dime without debate," and then sees in

the budget of his Minister of Finance a method to get lots and lots of

dimes without any debate: by indexing taxes. So the old tradition of

the government having to come to this place for supply is no longer

valid. no longer true.

While you may think this is a

technical point, I think it goes very deeply to the heart of

parliamentary democracy. I for one am certainly against taxes being

indexed in this way, and I want to place my voice and my vote on record

as being against the ability of the government to tax in that way

without scrutiny and debate each time another penny is taken from our

taxpayers. The departure of that kind of decision-making to the cabinet

by indexed decisions, by regulatory process, is something which I can't

support. We've already seen the proliferation of orders-in-council,

proliferation of sections of statutes of this province going that in

direction, and I don't think we should support anything which makes it

any easier for the control to depart this chamber. Mr. Speaker, "not a

dime without debate" wasn't a bad slogan, but it has certainly been

dropped by the party opposite, as we're now taking this basic question outside the chamber.

The third tax, Mr. Speaker, is the

hotel room tax — 8 percent for certain rooms and 6 percent for other

rooms. I can't imagine, nor have I heard yet, any rationalization for a

two-level tax system on a hotel room, I've certainly not heard the

Minister of Tourism (Hon. Mrs. Jordan) stand up and talk about this

tax. I don't know whether she's going to do it; I hope she does. But

certainly there has been no measurement of the effect of this tax on

the tourist industry in this province. There was no worrying of the

problem with the industry beforehand. Now I know there is no way in

which a Minister of Finance can tell any

section of the industry that

there is going to be such and such a tax — that would not be correct —

but there is a way in which you can worry these problems out with

people, get their feedback, get their input: find out, for instance,

when the best times to apply taxes are; find out whether indeed a

two-level tax would be administrable. Nothing like that was done in

this case.

The day after the budget, promoters all over the

world — and we frequently hear the member for South Peace River (Hon. Mr.

Phillips) talking about "all over the world" —

[ Page

4620 ]

were removing from the shelves their brochures and their packages on

British Columbia. Because you see. Mr. Speaker, in many places there is

consumer protection legislation which will prevent that tax being

passed on to the consumer, and the promoters whom the tourist minister

should be working closely with will have to absorb this tax increase.

Many of them are only working on the kind of tax increase — the kind of

percentage points — we're talking about. There is no way that a package

tour promoter in West Germany, in the U.K. or in the eastern United

States is going leave all brochures on the shelves and be promoting

British Columbian tours when there is a tax of this nature that he's

going to have to absorb.

Where was the minister when that

went on? What has she done to answer the concerns? This hotel tax will

produce far more than is now spent on tourism. Now I don't believe that

you should necessarily equate the income from any one industry with the

expenditure into that industry; that would be foolish. What is needed

to be spent on the promotion, the development or the encouragement of

the industry is what it really takes, what really should be spent. But

there is no getting away from the fact that if we remove from the

budget of the Minister of Tourism the production and other associated

costs of Beautiful British Columbia , for instance, the annual budget of

Tourism is very, very small indeed when one compares it to the income

that's derived from this hotel tax. Not a very salubrious performance

by the Minister of Tourism, who — I'm reluctant and sad to say — seems

more interested in her own travel experiences than in her department.

Mr.

Speaker, other criteria speak volumes about the mind-set and the

motivation of this government. Let's look at some details and take, for

instance, the advertising program. A week ago, when I was going through

the estimates, I noticed some of the figures for advertising. I noticed

that the 1980-81 estimates contain an increase of $4.7 million for

government publications for a total this year of almost $20 million.

The government is going to spend $20 million telling people about

itself. This is an increase of almost $5 million. They now have

ministers going onto half-hour prime-time programs with complete

production facilities. They've hired advertising and promotional

experts. I presume they've wound up their mailing machines — household

mailers are now the order of the day. They are sending Hansard to the

U.K. by air cargo. I don't know how many were sent, but we'll find out

about that in question period. In the field of print advertising, the

quotes are going out of sight.

Let's look at some of the big

increases. We have a fairly new Attorney-General (Hon. Mr. Williams)

and he feels that he has to double his advertising budget in the

administration and support branch from $185,000 to $325,000. This is

just for one department of the Attorney-General. I'm not talking about

advertising in court services, police services, corrections, legal

services to government, B.C. Parole Board, Law Reform Commission, Fire

Commission, B.C. Racing Commission, or film classification. I'm just

talking about the advertising budget for the Attorney-General's office,

which he is going to increase from $185,000 to $352,500. The total for

his whole ministry goes up from $400,000 to well over half a million

dollars.

What could the previous Attorney-General (Hon. Mr.

Gardom) have done with that budget? What is he going to get? He's not

doing too badly though on Intergovernmental Relations. After

all, after the wedding's over — after all the fuss and mess is all over

— Intergovernmental Relations.... You'll never have as busy a year

again, Mr. Minister for Intergovernmental Relations, because there

never will be another constitutional debate. Your advertising budget

has gone from $34,500 to $55,500, which is a huge percentage increase.

HON. MR. GARDOM: That's information, not advertising.

MR. HALL:

You know what it's all about; it's to smarten up your image. I don't

know why, because you're not going to run again. You know it and I know

it.

HON. MR. GARDOM: I'll run against you in Surrey.

MR. HALL: Anytime you like.

Mr.

Speaker, Consumer and Corporate Affairs has gone up 33.3 percent in its

budget, but the interesting thing is that there has been a reduction in

the advertising allotted for consumer services and a huge increase in

the advertising for corporate affairs. That might give you some idea

about the mind-set of this government. I don't know if the corporations

need much protection with you over there, but I do know that the

consumers in this province need an awful lot of protection and need to

know an awful lot about your programs when you're prepared to spend in

proportion almost $2 for every $1 you spend looking after the

corporations in terms of advertising.

What's the next one?

It's Forests, and the minister has just come back. The amount of money

spent in advertising in the provincial forest and range resource

management vote has been increased by four times. In the general

administration branch of the Ministry of Environment, the advertising

budget has been increased from $148,000 to $227,000, which is twice the

amount. In Energy, Mines and Petroleum Resources, advertising has been

increased by three times, from $135,000 to $355,000.

Where

are the reductions? There are occasionally reductions. There is a

reduction for advertising in the Ministry of Health. The Minister of

Health (Hon. Mr. Nielsen) isn't with us. They decided to reduce the

advertising on direct community-care services. There's an interesting

item. Spend more money on the corporate affairs side of the budget, but

reduce it by three-quarters when it comes to direct community-care

services. Where you used to spend a dollar, you now spend 25 cents to

look after direct community-care services.

What about small

business services? There's the minister sitting over there. They've

reduced their advertising information services on small business.

They've been using so much, there's nothing left at all. They've wiped

the program out altogether.

Another reduction is in safety

engineering in the Labour ministry. I'm sure our labour critics will

have something to say about that. There was no advertising at all of

$138,100 last year — no advertising of information at all about safety

engineering by this government which is increasing its budget by $4.7

million.

Municipal Affairs is the only department of

government that shows any modesty at all. You may think, ah, he's the

member from Surrey — he's looking after his buddy in Surrey.

[ Page 4621 ]

MS. BROWN: Yes, I think you are.

MR. HALL:

Well, maybe I am, but it's understandable, because the Minister of

Municipal Affairs (Hon. Mr. Vander Zalm) doesn't need an advertising

budget. He announces everybody else's programs any time he goes past a

camera. He doesn't need an advertising budget. He's into agriculture;

he's into all sorts of things. He doesn't need it.

Then, of

course, the government information services itself, under the

Provincial Secretary and Minister of Government Services (Hon. Mr.

Wolfe), that mild, modest and quiet pillar of rectitude sitting at the

end of the chamber, has increased its budget from $8,000 to $403,000.

It's scandalous what this government will do to win votes back. There's

an increase of $4.7 million in advertising. When the government of

which I was a member had an advertising program he used to stand up in

the House all the time and talk about it. They were modest little

advertising programs; I've got all the figures here in case anybody

wants to know. But your $20 million puts you in the top figures in

Canada. You know what you're doing. You're doing it callously, coolly

and coldly to try and restore your image from right down at the bottom

to where you're trying to get to a year from now.

The next

criterion in terms of government performance is staff. Mr. Speaker, I

know that you're interested in staff. Here are some figures — again

worked on since the budget speech the other Monday. The tax breakdown

of the figures shows a total in the 1981-82 estimates of 34,847

established positions in the public service, an increase of 1,058 in

one year — over 3 percent in one year. A government that's committed to

reducing government spending to taking government out of the lives of

more and more of our citizens and out of our day-to-day existence in

British Columbia — the member for Omineca (Mr. Kempf) knows all about

that; he makes speeches about it all the time — a government that's

free, a government that believes in free enterprise, free-wheeling,

free-spending, free-flying and, some say, free-loading has budgeted

for an increase of over 1,000 established positions in staff this year

— to be exact, 1,058 positions. That's better than a 3 percent

increase, which if continued, and it certainly looks as though it will

be, because you went way over 3 percent of establishment...

MR. KEMPF: How many did you create from 1972 to 1975?

MR. HALL: You just listen; you make your own speech.

...will see the public service alone, regardless of those removed by

statute, which you've already done, go from over 34,000 to way over

40,000 established positions, and that doesn't include other people who

get paid. I'm talking about established positions. If you add the

payroll up as well, because you always have two sets of figures over

there, if you include the people who get paid as well — that's always

another 10,000 to 12,000 people — there will be over 60,000 employees

in direct government service alone by 1986. That doesn't include Crown

corporations other than B.C. Hydro and ICBC. That doesn't include B.C.

Buildings, B.C. Systems and all the other quasi systems you've set up.

That was the government, you remember, that came to power in 1976

saying they were going to act the payroll down, get people out to work,

and doing a day's work, and reduce the public service. The member for

Yale-Lillooet (Hon. Mr. Waterland) remembers all about that. You

remember all those kinds of slogans. All you've done is to make that

load heavier and heavier on the very taxpayers that elected you and put

you into office. You've just got bigger and bigger.

I raise

this only to compare those words against their deeds. They were going

to get government off the people's backs, they said. They produced all

sorts of public relations gimmicks to give support to that

announcement. Deregulation was one. The net effect of deregulation was

to assassinate overnight an insurance company. The net effect has been

a $6.4 billion budget that will probably be $7 billion before this year

is out. Those kinds of figures that I've mentioned, and after they

called the administration of 1972-75 every name in the book for being

bureaucratic big-spenders!

I did speak at some length on

advertising, as you know. I didn't include, of course, all the

organizations that are close to government and controlled by government

that are presently spending ever-increasing amounts of money to

repolish the tarnished image of the government. The Minister of

Consumer and Corporate Affairs (Hon. Mr. Hyndman) has disappeared, but

I know he watches a number of the television programs that I watch.

Take for instance what happens every Saturday during the hockey game or

on a Sunday during the soccer — game of the week. On those particular

high-profile, prime-time programs we see the glamorous, well-produced

ads of the Development Corporation. You all remember the Development

Corporation, I'm sure. There must be some 10 ads altogether. I strain

my eyes to see any mention of the author of the legislation that saw

the corporation formed. I strain my ears to hear any recognition that

it was formed in 1972-75. I know I'm straining your credulity to think

that I would expect any mention of this government on the television. I

just say that in passing. In case anybody might be listening to my

words — to remember which government it was that set the Development

Corporation into action. You might think, on a Saturday evening about 6

o'clock, somewhere between the first and second periods, they might

slip in an ad that it was this little group on this side that set that

corporation going. Somewhere in between the half-time scores on the

game of the week on Sunday on CKVU, they might slip in that it was the

member for Vancouver East, my colleague Mr. Macdonald, who introduced

that legislation.

I thought maybe I didn't remember this too well, so I went to Hansard .

April 11, 1973. I think we can quote Hansard in this House now. The

Hon. A.B. Macdonald, Minister of Industrial Development, Trade and

Commerce had introduced Bill 102, the Development Corporation of British

Columbia Act. He introduced this bill, which was modelled on a number

of other statutes across the country — a modest enough bill at the time.

The spokesperson for the other side, the then Social Credit opposition,

was the member for Okanagan North (Hon. Mrs. Jordan). The member for

Okanagan North then took maybe nine or ten pages of Hansard in telling,

us how bad the bill was. She was really complaining and upset about

the bill, really pulling it to pieces. She got into terrible trouble

with the Speaker, she got into some trouble with the party to her left

and she was interrupted frequently. However, once she decided that

everything about the bill was bad.... She even talked about the

fact that she understood this bill was so that we could buy an airline

— that the Barrett government was going to buy an airline....

Let me quote:

There's talk of a publicly owned British Columbia airline,

Mr. Speaker, and that this should be a top priority of the British

[ Page 4622 ]

Columbia Development Corporation.... Mr. Speaker, the third

largest airline in Canada is Pacific Western Airlines. It's a British Columbia

company. It's a growing company and it's a good company and it has good

management.... It would be a disaster.... There is no way that the taxpayers'

money...should be funnelled into a...airline which is really just to

serve cabinet ministers....

Now

she can't remember what it is that she really wanted, but when she

finished up she said: "Mr. Speaker, we will support the act."

SOME HON. MEMBERS: Who said that?

MR. HALL: The member for Okanagan North. I quote:

MRS. JORDAN: ...enough is enough. Enough government intervention is enough government intervention, Mr. Speaker.

Here's

the bill, Mr. Speaker. Use it wisely but use it on the basis of

incentive and don't play British Columbia roulette with the poor,

overworked press gallery and the initiative and industrious attitude of

the people in British Columbia.

We will support the bill.

That

took everybody by surprise. Then it went on and on. Premier Loughheed

of Alberta bought the airline, by the way. Then all of a sudden up

jumped the member for Langley (Hon. Mr. McClelland). I think he

straightened out the member for Okanagan North very, very quickly,

because by the end of the day the ten Socreds in the chamber were not

going to support the act at all. They changed their minds and voted

against the act. In fact, not only did they vote against the act; they

voted against every single

section of the act. They voted against it on

second reading and they took an incredible step that's hardly ever used

in the parliamentary process: they even debated and voted on third

reading of the bill.

One of the members who voted against

the act is seen on those television ads. An elegant gentleman with

papers around his desk is seen making split-second decisions: "Get that

bulldozer over there; drop that weight over here; drill here; fly

there; save this; cut that red tape." He voted against every single

aspect of the B.C. Development Corporation. Newell Morrison, head of

the B.C. Development Corporation, voted against every single section.

just want to refer to another couple of things. The member for Okanagan

North moved amendment after amendment. She was obviously the critic of

the official opposition at the time when economic development.... While

she was doing her homework on the bill and, I'm sure, developing a

Social Credit position on the bill, the only trouble was that it was in

direct conflict with the Kelowna charter, which they'd just enunciated

in Kelowna. It was also in direct conflict with a private member's bill

that the member for South Peace River (Hon. Mr. Phillips) had just put

on the order paper. The homework wasn't too good. There were also a few

exchanges between the member for Point Grey — I don't know which member

for Point Grey it was, to tell you the truth; I guess it was the

Minister of Intergovernmental Relations (Hon. Mr. Gardom) — and the

member for Okanagan North, which were not very pleasant. I was going to

remind the minister of that, but perhaps that would be taking advantage

of time. But if the minister wants me to I shall certainly show her the

reference. It shows you how politics can make very strange colleagues.

I strain my eyes to see any mention at all of any authorship of the B.C. Development

Corporation. That's the kind of cynicism of the mind-set of a government

that's determined, by the expenditure of the moneys it controls in Crown

corporations like B.C. Development and others, to start to spend its way out

of electoral trouble. The corporation, which was fought against and blocked

every step of the way by the Social Credit opposition, is now a corner-stone

of their advertising campaign. As I say, whose face is seen on the screen but

the then first member for Victoria, Mr. Newell Morrison, who voted against every

single

section of the bill.

review of the budget, as we look at the 1980-81 fiscal year — which was

better than expected, as the minister said — the thing that bothers me

was how we squeezed through with the conflicting statements made from

different departments to government about revenue and how we've made

decisions in the past to appreciate every surplus as it became

available. It left us in a position with no financial reserves, and

we'd have had to have borrowed to cover up any deficit.

we debate the estimates next week, I'm sure we'll see other speakers

will deal with the shortcomings in the priorities — examples of

specific problems to follow from that kind of attitude. One thing which

I think is very important is what plans the government has to deal with

the potential decline in terms of revenue from natural resources and

the decline in federal transfer payments. The decline has already been

announced and hinted at. In fact, it's a decline that they all support

and applaud when they talk about the government getting out of activity

with the federal government. So the silence in answer to those

questions indicates failure. That means that I can't support this

budget.

MR. HOWARD: I guess if no one on the

government side wants to rise to support the budget, I'll take

part in

the debate and have a few words to say about it — not to support it, of

course. From the outset I want to tell you how much I enjoyed

listening to the Minister of Industry and Small Business Development

last night and again today. I enjoy him because he enjoys it. He just

glories in that type of bombast and blarney — no facts and no hard

information, just froth and foam and fury. I enjoy listening to that

and watching that, because I don't get much chance to see some of the

comedy shows on television. I can take

part in them here.

would have thought that last night or today the Minister of Industry

and Small Business Development, with all the interest exhibited in this

northeast coal deal, would have come in with some facts, figures and

statistics about it and said: "Here's the case. Here it is in black and

white." You'd have thought he could have taken the general public into

his confidence and related to the citizens of British Columbia what

that deal is going to be all about. He didn't. I guess we'll have to

wait for his estimates and hope that when they come, he will be in a

position then to present facts and figures and information about the

northeast coal deal to British Columbians. I rather suspect, Mr.

Speaker, using the old slogan, that figures don't lie, but there's a

reverse reference there as well.

What the minister is doing

is having his statisticians, public relations people and writers in his

department putting together a package that will be so confused and

confusing that nobody will understand it — in other words, a

manufactured document of sorts to present to the House a case about

northeast coal which may not be in accordance with the facts, Anyhow,

we'll wait for that time.

I listened intently to what the

member for Surrey had to say about estimates of expenditure for

advertising, propagandizing and promotion. "Public relations" is a

euphemistic

[ Page 4623 ]

term

for it. Something in the neighbourhood of $20 million this year for

propaganda — government propaganda. I'm reminded when I heard that of a

statement the Premier made just prior to Christmas at some function he

attended in Vancouver. He was reported to have said that he would not

call an election in this province until he, the Premier, was sure in

his own mind that his Social Credit Party would get re-elected as the

government. I immediately thought he was going to bring in an amendment

to the constitution to eliminate the five-year period so that it could

be some indeterminate period into the future. But he didn't. He made

that statement that he, the Premier, would call an election when he

thought it was best for Social Credit.

What that means in

the context of the attitude of the Premier towards politics — and we

know it never has been at a very high level or a level very respectful

of the general public in this province — is that to this government,

Mr. Speaker, politics comes first — crass partisan politics on behalf

of Social Credit comes first — and the public interest comes at some

other level, second or third, but certainly not the prime interest.

That's what it means.

To those of you who have an

opportunity to see television advertising about the government

programs, there's a very subtle psychology involved in what's taking

place. This $20 million this year fits into it. You can bet your last

dollar that if we don't have an election in the next year....

You're shaking your head in disbelief, Mr. Speaker, or is it a negative

response to the question? If we don't have an election next year and we

have another budget presented, we will find that $20 million escalated.

You watch the subtle, gentle and bland advertising that's taking place

at the moment from government departments and government agencies.

Psychologically it is creating in the minds of the television viewers

and those who read newspaper ads the feeling of: "Isn't this a lovely

government, not hammering at me about anything intense but just saying

that things are going along nicely!"

It's laying the

groundwork psychologically as we get closer to an election for those

same agencies, once having established themselves in the viewers' minds

as being gentle folks, to be able to inject something a little bit more

direct and advantageous to Social Credit — to be able to inject even in

a subliminal way, propaganda advantageous to Social Credit — and using

the taxpayers' money to do it. That I foresee as happening. Knowing the

Premier and his level of respect for high-honour politics; knowing the

Minister of Human Resources (Hon. Mrs. McCarthy) and her level of

respect for honourable politics, I can very easily see that happening.

I'd

like to spend a moment or two dealing with an aspect of the budget

which I find very disturbing. That is the aspect of it that has a

pro-separatist stance and a pro-separatist flavour to it — that aspect

of the budget which talks about federal-provincial relations and

which goes on, paragraph after paragraph, attacking the federal

government. There may be good grounds for doing that, but it's there.

The thing that disturbs me and the thing that should disturb all

British Columbians about that is that after nearly four pages of

condemnation of the federal government there is a paragraph on page 31

that says: "It is because of these problems that I have notified the

federal government of British Columbia's intention to withdraw from the

Tax Collection Agreement. If absolutely necessary we shall administer

our own tax system."

Well, for one thing, if that does take

place I think we should all appreciate that it isn't going to alter one

whit the level of taxes that British Columbia taxpayers are going to

pay to the federal government. The federal government has the

constitutional authority to levy taxes by whatever method it so

desires, and it will continue to levy them as it sees fit, or from its

point of view, whether we like it or not. So withdrawing from the

tax-sharing agreement isn't going to change that.

I'm not

talking about whether or not the minister thinks there is a bona fide

rationale for withdrawing from the tax-sharing agreement, but once

having said that they intend to withdraw from the tax-sharing agreement

and levy taxes in the province on personal and corporation income tax

separate from the federal government, I think it is incumbent upon the

Minister of Finance and this government to level with the public of

British Columbia and tell them what's involved.

[Mr. Strachan in the chair.]

One

thing that is involved if they do that — and you should recognize this

and realize what will happen — is that we will set up within the

province another bureaucracy to collect taxes. We'll have Revenue B.C.

We'll have a group of additional public servants to administer the tax

collection system of personal and corporate taxes in this province — a

duplication. The general public should know that that's going to cost

some money.

Secondly, the general public should know that if

the government goes along with its intention to levy its own personal

and corporate income taxes and collect them, it will mean residents in

this province will have to fill out two separate, individual,

distinctly different income tax returns. Many of us have enough

difficulty filling out the one we have to fill out now, without having

to fill out two of them. But that's what we should expect will happen,

and that's what we should be told will happen by this government. There

is one province in Canada that now exercises the right — and it is a

right — to levy its own direct personal and corporation income taxes

combined. That's the province of Quebec. Residents of Quebec are

required to fill out two income tax forms, one for the federal

government and one for the government of Quebec. That should be

recognized.

It should also be recognized that if we do

embark upon this road of separate income tax collections in this

province, the taxpayers in this province can expect to pay a higher

level of tax. Not only are they given the information in the current

budget in which taxes are raised nearly all across the board at a

variety of levels, but they should expect and will have to pay a higher

level of personal income tax than is being paid now.

One of the appendices to the budget speech, Table E7, gives comparative provincial

tax rates, March 1981. In the one column on the left-hand side there is personal

income tax, corporation income tax, capital tax, insurance premiums and so on:

and it allies them all across the nation, with the various provinces. Personal

income tax — this is a provincial tax rate — is shown as a percentage of federal

tax payable: British Columbia, 44 percent. In other words, personal income tax

in this province — its marginal rate or whatever it is — is 44 percent of the

federal rate. Those of you who doubt that can get a hold of your current income

tax forms and you'll find it laid out right there — when you work it all

out, there is that 44 percent figure. There is a footnote to that which, of

course, refers to the proposal in the budget to impose a surcharge of 10 percent

tax on provincial tax pay able over $3,500. So I guess that 44 percent is really

a low figure.

[ Page

4624 ]

Then we go across the top of the table looking under the provinces —

Alberta, Saskatchewan, Manitoba and so on — and we come to Quebec.

Under Quebec there is another footnote — 2. Look down below — in fine

print, hidden away here — under footnote 2 it says: "Quebec levies its

own tax, which has an approximate range of 50 to 60 percent of the

federal tax." If this government has its way — sets up its own personal

and corporation income tax structure — and duplicates that which is

already in effect, not only will it set up a duplicating bureaucracy to

collect the tax, not only will it force people to fill out two

distinctly different income tax returns, but it has its eye on

elevating that provincial tax as a percentage of the federal tax up

into that 50-60 percent range. They're money grabbers. That's all

they're interested in. It's separatism, in order to be able to grab

more tax dollars. It's implicit and clear in the budget, as far as I

can read it.

There is another indication that this

provincial government is looking at grabbing hold of more taxes from

the residents of this province. Towards the middle part of the

background papers to the 1981 budget — another document that the

Minister of Finance tabled that day — there is a rather intricate

examination made and definition given of tax expenditures, limitations,

caveats, foregone revenues and all that sort of thing. Then there are

some tables — tax deferral matters and major British Columbia tax

expenditures under the income tax system — and they give an estimate of

foregone British Columbia income tax revenue. You read it all the way

through and look at these tables — the dollar figures that I'm going to

give you here, basically say: "If we had in the province of British

Columbia our own income tax collection system, then we'd be able to get

our hands on all this extra money; we'd be able to levy some more

taxes." And what do they identify as some of those things?

Look

at page 33; this should shake the financial budgets of any homeowner

today; this is a new one. It's called: " Non-taxation of imputed rents

on owner-occupied homes — $253 million." That's lost revenue — foregone

revenue — from an imputed rent on an owner-occupied home. Now what that

means is this — the government in putting forward this document is

saying to everybody who owns their own home: "You're living in a home

and it has some rent value to it to you as an individual; you own your

own home, but if you didn't own it, you'd be paying rent somewhere."

That amount — that's what they call "the imputed rent" — of money in

your pocket should be taxed; that's what they're saying. It should be

taxed, and they identify it as being a loss of $253 million on the

personal income tax level. So homeowners — Mr. Speaker, I'm sure you're

a homeowner; when you get out of the chair and down in the chamber here

in your place and vote for this budget, remember you're voting for the

possibility of this government grabbing hold of your pocketbook and

extracting tax because you own your own home.... Is that a good

deal? That's what it says.

They've got another one in here

for homeowners. Pay attention to this: "Foregone revenues. Non-taxation

of capital gains on housing...$171 million." That means that if you

own your own home, live in it, sell it, move to another house and you

make a capital gain on the home that you sell, it's non-taxable, because

you're not in the business of buying and selling homes. It's non-taxable

at the federal level. The provincial government looks upon that as

being a lost revenue, so are they contemplating levying, at the

provincial level, a capital gains tax on homeowners who sell their own

homes simply because they want to move into a different area or

district, or have to move? Is that what they're talking about?

all the way down the list, and there's a whole range, on page 33, of

those questions of income tax exemptions and non-taxable income that are

identified as foregone revenue to this province. It says at the

heading: "Estimated Foregone British Columbia Income Tax Revenue." The

total of all the categories — age exemptions, old-age pensioners over the

age of 65.... "We're going to nail you too," says Social Credit. "We

could get $12.7 million out of you if we could just eliminate that age

exemption." Those of you who have children, working mothers and working

families that have child-care expenses, you can deduct that on your

federal form. You get a personal income tax system in effect with this

government here and you're going to pay $2.7 million, because that's

what the government says, in this table, they're losing in revenue now.

There's the exemption to the blind and disabled, the marriage

exemptions and a whole range of them. The provincial government has

said there's a foregone potential British Columbia income tax revenue

in 1981-82 of $871.4 million. So those of you who intend to vote for

this budget and have spoken in the House and said what a beautiful

thing it is, please, at the same time....

The other day

I heard the member for Prince George South (Mr. Strachan) telling us

what a glorious, lovely thing it was and how he was going to explain

that to the people in Prince George. Tell them about the foregone

taxes, the two income tax returns, the 50 percent to 60 percent of the

federal tax that the Minister of Finance has got his eye on, the

imputed rents of people who own their own homes, and tell the old-age

pensioners about the potential that is going to be effected on them.

I'd suggest to the member for Prince George South that he tell his

constituents in Prince George that side of the story as well.

The

other day I had made some comments about an attempt to borrow $100

million in the U.S.– Eurodollar market. An

article appeared in the Vancouver Sun

about that, and part of that

article quoted the Minister of Finance as

having said something. I don't have the

article in front of me to give

exactly the quotation, but the sense of it was this — and I'm sure if

I've got a word missed in it or something like that, the minister will

correct me. What he said was that the NDP doesn't understand the

difference between borrowing for capital and borrowing for operational

expenses. That was the essence of what the minister said. He gets

caught in a corner on something and back he comes with that

overbearing, supercilious attitude of his that says oh, those guys

don't understand this sort of thing. That was his response.

But

what was he saying? Was he saying that $100 million he attempted to

borrow on behalf of B.C. Rail was for operational purposes of B.C.

Rail? Is that what he was saying? Was he saying it was for capital

borrowing? What I said it was for was borrowing in order to find the

money to pay this year's interest on the debt B.C. Rail has, plus maybe

a retirement, a rollover of $10 million or something, that's coming due

this year. Is that what the minister was saying — that he was borrowing

it for B.C. Rail for operational purposes? It certainly wasn't for

capital expenditure for northeast coal; he's made that clear on at

least three occasions. The capital budget for B.C. Rail this year,

apart from northeast coal, isn't $100 million; it isn't anywhere near

$100 million.

So is the minister saying he was attempting to

borrow that money for operational purposes of B.C. Rail? If he is

saying that, then he should not be Minister of Finance, because you

[ Page 4625 ]

don't

go out on the money markets — and I've tried to get this thought across

to the minister to indicate what knowledge we have about differences in

borrowing for different purposes — of the world to try and borrow $100

million for 15-year terms if it's for operational purposes. If there

are operational purposes and you need money, you do like any other

business does and you establish a line of credit at the bank. You get

your cash flow and borrowings in that form for operational purposes. As

you get income coming in, you seek to retire the debt to the bank. What

was the minister talking about when he made that comment in the Vancouver Sun ?

Maybe he was just trapped: it was found out that he had tried something

not quite on the line of full disclosure of information to the general

public.

Since I spoke the other day, I've been advised of

some other pieces of information about that attempted borrowing. I

think I should outline them here. I was told by officials in the

minister's department that January 15 of this year was the first time

the investment firm of Wood Gundy had shown up as being involved in

syndicate operations with respect to borrowings by the provincial

government. How did Wood Gundy get into the scene on this for the first

time in January of this year? The other day I said that Wood Gundy was

the lead manager trying to borrow that money in Europe. What were they

doing? Here I'm told that just 15 days before they tried to get the

money, Wood Gundy showed up as a participant in the syndicate.

The

two traditional investment houses — and there's a third one that has

been in and out of it — the two traditional long-standing investment

firms in Canada that have been involved in the syndicate handling

British Columbia government borrowings have been A.E. Ames and Co. and

McLeod, Young and Weir. I talked with both of them at their head

offices in Toronto to try to find out what was going on. McLeod, Young

and Weir people told me — and this is common knowledge of anybody in

the market — that once the syndicate is formed and establishes an

ongoing relationship with whoever it's borrowing money on behalf of —

in this case the government of the province of British Columbia — 99

percent of the time that is the syndicate that handles all borrowings.

Why? Because they know what the desirabilities are of the person doing

the borrowing. There's faith and trust on the part of the borrower with

the syndicate. They know each other's historic attitude about

borrowing. They're in constant touch finding out what the market is

doing, what funds are available, what the interest rate is — a regular

continuous relationship.

With respect to that abortive

attempt to get $100 million (U.S.) in Europe without anybody over here

in Europe knowing about it, A. E. Ames and Co. told me that Wood Gundy

was the new entrant into the syndicate. And A.E. Ames and Co. also told

me that they, a part of the traditional syndicate, were not even

invited to participate in this issue.

Why? Was the minister

trying to block them out? Was the minister trying to establish another

relationship with Wood Gundy? Was he trying to bring a new investment

firm into the field? Is there some politics going on in this? Is that

what it was? What happened to the old traditional houses? Did they do

something wrong? Haven't they been serving the interests of the

province? If they haven't, it's up to the minister to disclose that

information. Was A.E. Ames or McLeod, Young and Weir doing such a bad

job that the minister had to identify them as lacking in professional

activities? Were those the ones he was talking about in the quotation I

read to him the other day? As long as that statement of the minister's,

smearing the whole investment community in Canada, sits there without

any identification of who he was talking about, he has created an awful

lot of enemies in the investment business.

I tried to

outline that the other day, Mr. Speaker, when I spoke to indicate that

that sort of activity is going to cost the taxpayers of this province

millions upon millions of extra dollars in unnecessary interest charges

when Crown corporations go to the market in the future. The investment

business, both here and in the United States — Solomon Brothers and

Kuhn, Loeb are also participants in the syndicate on the U.S. market —

knows what happened. They'll be wary of dealing straight-on with this

minister and this government from now on. Who's going to lose? The

taxpayers, Mr. Speaker. The minister doesn't care too much about that.

He was trying to pull the wool over somebody's eyes with that manoeuvre

and it backfired.

I'm told further by the investment community and people I know in it that

two days after that attempt in Europe failed, the lead manager of the attempt

in Canada tried to set up a mechanism to borrow the money in New York. Half

of the paperwork was done when they were told by former members of the

syndicate, which had operated before and been left out, not to bother. There's

a sour taste left after that stupid attempt to enter the money markets in Europe

for some unknown purpose and reason. An injury took place, and the only people

who are going to suffer are the general public. I know the minister doesn't

care much about that, but I happen to, and so do members on this side, which

is why we're relating what we can about this at the moment. I would hope

the minister would come clean if he has an opportunity to do it now, as he did

the other day and will in his estimates. I would hope he would 'fess up

and say what happened, or just relate what happened and set the record straight,

if he thinks the record has not been properly put forward. Let him clear it

up if he wants to. If he doesn't, that's his business.

want to talk for a few minutes about the Anzac development of northeast

coal. I may not have time to go through all of this within the time

limit. First, the budget says that the Anzac line for northeast coal is

going to be financed out of debt, backed by the government, borrowed by

B.C. Rail. They use a figure in the budget of $310 million — 1980

dollars. I don't know why they didn't use 1960 dollars to make it look

better. They could have built the line for maybe $50 million then.

Being the simple kind of guy that I am, I just take an ordinary 10

percent figure as an inflation factor. It's a round figure that's easy

to work with and not too far off the mark, and I compound that over

into 1983 when the line is scheduled to be completed, and I get $412

million. With that simple kind of arithmetic progression that's what it

will be. But I won't rely on my computations as to what will happen.

I'll take those of the president of the railway, Mac Norris. He knows

more about what's going on in that railway than most other people. He

sure knows more than the Minister of Finance does about it. Mac Norris

says a conservative estimate of that line is $485 million. That's not

the $310 million 1980 figure that the minister is trying to fob off on

the general public. I believe Mac Norris over the minister any day on

this matter. He spent years working on this.

Now what I've

done is be conservative and generous in my figures here. I assume that

money will be borrowed at 12 percent. which is a very generous

percentage figure in today's conditions. The minister said that on

March 11, B.C.

[ Page 4626 ]

Hydro

borrowed $100 million. They had to pay 14.5 percent for it, but I'm

using a 12 percent figure. I'm using a figure of $2.50 surcharge to pay

back the capital money — $2.50 a tonne for Teck Corporation and $3 a

tonne for Denison Mines. Those are the only figures I can find, and I

take them to be accurate figures. They've been touted enough, even

though the minister has not told us about them. These are set figures

for five years. I've assumed that from then on there will be a 9

percent rate.

Let me tell you the worst case in taking these

figures over the life of the contract — 6.7 million tonnes. Now at the

time of doing this, there was doubt as to whether or not that other

million tonnes of thermal coal was actually nailed down. I heard the

minister saying in answer to a question today that Denison has just

signed a contract for a million tonnes. Now I don't know if that's the

same million that was left out of the earlier figures or not, but I

took it to mean that. I took 1.7 million tonnes to be delivered

annually by Teck — and that's what they'll be delivering — 5 million

tonnes by Denison, put them all together and multiplied th