1977 Legislative Session: 2nd Session, 31st Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

TUESDAY, JANUARY 25, 1977

Afternoon Sitting

[ Page

269 ]

CONTENTS

Routine proceedings

Change of Name Amendment Act, 1977 (Bill 3) Hon. Mr. McClelland.

Introduction and first reading — 269

Psychologists Act (Bill 16) Hon. Mr. McClelland.

Introduction and first reading — 269

Assessment Amendment Act, 1977 (Bill 6) Hon. Mr. Wolfe.

Introduction and first reading — 269

Oral questions

BCR settlement with M.E.L. Paving. Mr. Lauk — 269

Aid to independent schools. Mr. Gibson — 270

Capital investment from Rhodesia. Mr. Wallace — 270

Salaries of executive assistants. Mrs. Dailly — 271

Farm Income Assurance Programme payments. Mrs. Wallace — 271

Brief on Labour Code from Employers Council. Ms. Sanford — 272

Applications for new railway charters. Mr. King — 272

Funds for Conference on the Family. Mr. Wallace — 272

Possible removal of trophy licence fees. Mr. Nicolson — 272

New Westminster building development. Mr. Cocke — 272

Tabling reports

B.C. lottery branch annual report. Hon. Mrs. McCarthy — 273

Commission of Inquiry on Property Assessment and Taxation preliminary report.

Hon. Mrs. McCarthy — 273

Public Service Commission annual report. Hon. Mrs. McCarthy — 273

Royal Commission on Forest Resources report. Hon. Mrs. McCarthy —

Budget debate

Mr. Stupich — 273

Mr. Gibson — 294

Psychologists Act (Bill 16) Hon. Mr. Williams on behalf of Hon. Mr. Wolfe.

Introduction, first reading and second reading discharged — 306

TUESDAY, JANUARY 25, 1977

The House met at 2 p.m.

Prayers.

MR. E.N. VEITCH (Burnaby-Willingdon): Mr. Speaker, seated in

the gallery this afternoon are 35 adult students from the British

Columbia Vocational School, together with their very capable

instructors, Mr. Smith and Mr. Butler. I would like this House to bid

them welcome.

MR. L. BAWTREE (Shuswap): Mr. Speaker, in the gallery today

are an old friend of mine, Mrs. Marie Lopaschuk from Enderby, and her

daughter Alice Verwolf, who lives in the Victoria area. I would ask the

House to make them welcome.

HON. E.M. WOLFE (Minister of Finance): Mr. Speaker, seated in

the gallery today is the chairman of the board of the B.C. Assessment

Authority, Mr. Don Morton. I'd like to ask the members to recognize him.

MR. C.M. SHELFORD (Skeena): Mr. Speaker, I'd like the members

to welcome Marge Gibson, chairperson of the Kitimat School District,

and Brian Graydon, secretary-manager.

MR. G. MUSSALLEM (Dewdney): Mr. Speaker, would the members

welcome a group of students accompanied by their teacher, Mr. Garry,

from the Hatzic Junior Secondary School at Hatzic, B.C.

Introduction of bills.

CHANGE OF NAME AMENDMENT ACT, 1977

On a motion by Hon. R.H. McClelland, Bill 3, Change of Name

Amendment Act, 1977, introduced, read a first time and ordered to be

placed on orders of the day for second reading at the next sitting of

the House after today.

MR. D. BARRETT (Leader of the Opposition): Does that cover the Liberals?

PSYCHOLOGISTS ACT

On a motion by Hon. Mr. McClelland, Bill 16, Psychologists Act,

introduced, read a first time and ordered to be placed on orders of the

day for second reading at the next sitting of the House after today.

AN HON. MEMBER: Now Dave can hang up his shingle.

ASSESSMENT AMENDMENT ACT, 1977

Hon. Mr. Wolfe presents a message from His Honour the Lieutenant-Governor:

a bill intituled Assessment Amendment Act, 1977.

Bill 6 introduced, read a first time and ordered to be placed on

orders of the day for second reading at the next sitting of the House

after today.

Oral questions.

BCR SETTLEMENT WITH M.E.L. PAVING

MR. G.V. LAUK (Vancouver Centre): Mr. Speaker, I wonder if

the Premier could indicate to me who the acting Attorney-General is

today. This question can be asked either of him or the acting

Attorney-General.

MR. SPEAKER: A question to the Premier.

MR. LAUK: With respect to the review ordered by the

Attorney-General (Hon. Mr. Gardom) in the M.E.L. Paving case, it is

traditional that when such a review is complete and it appears that

principals involved — individuals involved — have made contradictory

statements, then it is incumbent upon them to order a judicial inquiry.

Will tradition be followed in this case?

HON. W.R. BENNETT (Premier): Mr. Speaker, I'll take the question under advisement with the Attorney-General's department and report back to the House.

MR. LAUK: Supplementary.

MR. SPEAKER: Do you wish to ask your supplementary now, hon.

member, or when the Attorney-General comes back to the House with the

answer to your original question?

MR. LAUK: Well, just to save time for the hon. members of

this House, I would direct a further question that can be asked of the

hon. Attorney-General when the Premier meets him. I am thinking

particularly of public statements made by Mr. Williston, in view of the

fact that Mr. Broadbent said he acted in accordance with the board's

instructions in negotiating the M.E.L. contract. Mr. Williston has

publicly denied this. I would ask that both gentlemen be interviewed....

MR. SPEAKER: Order, please! It's obvious that that is not a proper question.

MR. LAUK: Oh, yes it is. This is the basis of the

[ Page 270 ]

contradictory statements....

MR. SPEAKER: Order, please!

MR. LAUK: You see, when statements are made all supporting each other....

MR. SPEAKER: Order, please! This is not a matter of debate

before the House at the present time. I have indicated the

incorrectness of the question and I believe that the member should now

yield to other members who wish to occupy time in the question period.

AID TO INDEPENDENT SCHOOLS

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

have a question for the Minister of Education. A careful reading of the

estimates book doesn't disclose any specific allocation for aid to

independent schools. Yet, according to some officials, it can be found

in the estimates. Could the minister please tell us how much has been

provided in these particular estimates?

HON. P.L. McGEER (Minister of Education): Mr. Speaker, this is a question that can be discussed in detail under the estimates of the department.

MR. GIBSON: Mr. Speaker, on a supplementary, if that's what

it is, this is not a question that can be discussed then. It must be

discussed now for the budget debate and we need that information for

the budget debate.

I would ask the minister again: how much has been provided for independent schools, if anything, or doesn't he know?

HON. MR. McGEER: Mr. Speaker, the details of each department

will be discussed in estimates. If we get into this in question period

it will consume weeks.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please.

MR. GIBSON: Mr. Speaker, I would ask the minister to say clearly that he doesn't know.

HON. MR. McGEER: Mr. Speaker, may I say that there's no

legislation permitting any moneys to be provided for independent

schools, but the Legislature will have an opportunity, we hope, to

debate legislation before the session has concluded.

MR. BARRETT: Is the minister intimating that there may be

further estimates in the fiscal year forthcoming that are not already

provided for in the budget?

HON. MR. McGEER: No.

MR. BARRETT: Supplementary, Mr. Speaker. If that is the case,

and this is the budget debate as I understand it is, and as the hon.

member for North Vancouver....

Interjections.

MR. BARRETT: The information for the budget debate is

necessary. Is there or is there not a specific amount in the budget for

the independent schools — yes or no?

MR. SPEAKER: The hon. member for Oak Bay.

MR. BARRETT: Well, no, Mr. Speaker — supplementary....

Interjections.

MR. SPEAKER: Order, please.

MR. BARRETT: Mr. Speaker, the minister has said that

legislation will be forthcoming. The member says that he wants to

discuss the information which has been mentioned in the budget speech.

Now is it there or isn't it? That's the question: is there going to be

money or isn't there?

MR. SPEAKER: Order, please. The matter can be certainly thoroughly canvassed in the minister's estimates.

MR. BARRETT: Okay, that's fine.

CAPITAL INVESTMENT FROM RHODESIA

MR. G.S. WALLACE (Oak Bay): I'd like to ask a question of the

Minister of Finance. With the emphasis in the budget speech on

attracting capital and investment to British Columbia, and in the light

of international events, particularly the collapse of the Geneva talks,

can the minister tell the House if there have been any inquiries in

particular from Rhodesia as to the investment of capital from that

country or the immigration of individuals bringing capital from the

country?

HON. MR. WOLFE: Mr. Speaker, I'll take that question on notice.

MR. W.S. KING (Revelstoke-Slocan): He doesn't know.

MR. WALLACE: Could I ask a second question,

[ Page 271 ]

Mr. Speaker? Since, as I said, the emphasis in the

budget is on attracting capital, and because of some of these

international events, is the minister taking any initiative in the

direction I've suggested of making investment opportunities known to

these countries, and, if so, what are these initiatives?

HON. MR. WOLFE: Primarily the initiatives taken are to

circulate our budget as broadly as possible to other countries and

financial institutions. It receives quite wide circulation.

SALARIES OF EXECUTIVE ASSISTANTS

MRS. E.E. DAILLY (Burnaby North): A question to the hon.

Provincial Secretary. Could the Provincial Secretary tell us what

method the government uses to determine the salaries which are paid to

the ministers' executive assistants?

HON. G.M. McCARTHY (Provinicial Secretary): Mr. Speaker, this

government took the same yardstick that was set as a precedent by the

former NDP administration in assessing executive assistants' salaries —

I believe they are the same. If I recall, I think it is $19,500.

MRS. DAILLY: A supplemental question, Mr. Speaker. If that is

so, then would the hon. Provincial Secretary explain to the House why

Mr. Arthur Weeks, who was an executive assistant, received $10,000 more

than the others?

Interjection.

MRS. DAILLY: Well, whenever we find out what he is.

MR. SPEAKER: Order, please.

HON. MRS. McCARTHY: Mr. Speaker, in response to the hon.

member's question, the gentleman whom she describes as an executive

assistant was not hired as an executive assistant.

MRS. DAILLY: A supplemental, Mr. Speaker.

AN HON. MEMBER: He was a friend of the Premier's.

MR. SPEAKER: Order, please. The hon. member for Burnaby North has the floor.

MRS. DAILLY: Could we then be informed by the Provincial Secretary just what his job classification was?

HON. MRS. McCARTHY: Mr. Speaker, he was hired as a special

adviser to the Minister of Economic Development (Hon. Mr. Phillips) —

under the category.

MR. LAUK: A supplementary arising from the questions asked of

the Provincial Secretary. Could the Minister of Economic Development

describe exactly what Mr. Weeks was specially advising the minister on

— in what areas?

HON. J.R. CHABOT (Minister of Mines and Petroleum Resources): On your files. (Laughter.)

MR. LAUK: There was $10,000 extra payment. You pay a man an extra $10,000 and you call him a special adviser?

MR. SPEAKER: Order, please.

MR. LAUK: He did not have any training; he had no background except running a weekly, except working for Mr. Clancy.

MR. SPEAKER: Order, please. This is not a period of statements; it is a period of asking questions.

MR. LAUK: You paid him an extra $10,000. He was a political hack!

MR. SPEAKER: Order, please!

FARM INCOME ASSURANCE

PROGRAMME PAYMENTS

MRS. B.B. WALLACE (Cowichan-Malahat): My question, Mr.

Speaker, is for the Minister of Agriculture. It relates to farm income

assurance. I would like to know, Mr. Minister, how much has been paid

out under the scheme for the 1976 crop year; and how much, if any, is

still owing to producers. Also, I would like to know whether or not the

scheme provides for specific dates when payments are to be made and, if

so, whether those payments have been made on schedule. It's a four-part

question.

MR. SPEAKER: Order, please. May I observe that you ask your

questions and then your supplementals — not all as part of one

question, hon. member.

MRS. WALLACE: Very well. Answer the first then, Mr. Minister.

HON. J.J. HEWITT (Minister of Agriculture): Mr. Speaker, I

would take all the questions on notice and I could provide the answers

that the hon. member wishes at a later date when I have that researched.

[ Page 272 ]

BRIEF ON LABOUR CODE

FROM EMPLOYERS COUNCIL

MS. K.E. SANFORD (Comox): Mr. Speaker, a question for the

Minister of Labour: Did the minister receive a representation earlier

this month from the Employers Council relating to the subject of the

Labour Code?

HON. L.A. WILLIAMS (Minister of Labour): Yes.

MS. SANFORD: Would the minister table in the House the brief presented to him at that time?

HON. MR. WILLIAMS: No.

MS. SANFORD: Supplemental, Mr. Speaker: I wonder if we may

expect those representations to be as successful as were the former

representations by the Employers Council, related to the Workers

Compensation Board.

MR. SPEAKER: Order, please. What is your question?

AN HON. MEMBER: What's the answer? (Laughter.)

MR. SPEAKER: It was a statement, hon. member, not a question.

MS. SANFORD: "May we expect" was the question. May we expect

those representations to be as successful as were the former ones made

by the Employers Council relating to the Workers Compensation Board?

HON. MR. WILLIAMS: Mr. Speaker, the question is speculative. I'm not aware of the success of any former representations of the Employers Council.

MR. BARRETT: We are.

APPLICATIONS FOR NEW

RAILWAY CHARTERS

MR. KING: A question, Mr. Speaker, to the Minister of Energy,

Transport and Communications: could the minister advise the House

whether or not any applications for new railway charters have been

received in his office?

HON. J. DAVIS (Minister of Energy, Transport and Communications): Not to my knowledge, Mr. Speaker, but I'll make inquiries.

MR. KING: I would appreciate it if, when the minister

investigates this question, he could advise whether or not any charters

have been granted or are pending presently.

FUNDS FOR CONFERENCE

ON THE FAMILY

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

Human Resources: At an earlier date he had declined to provide funding

for a co-ordinator and secretary dealing with the Conference on the

Family, and I see no reference in the estimates. I'm wondering if he

can tell the House whether any ongoing discussions are taking place

among departments to provide the funding that's been requested.

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

answer is yes, it is up for consideration. However, I am awaiting a

report from the conference with respect to the findings, et cetera,

that took place there.

POSSIBLE REMOVAL OF

TROPHY LICENCE FEES

MR. L. NICOLSON (Nelson-Creston): To the Minister of

Recreation and Conservation: In view of the fact that members of the

Nelson Chamber of Commerce were giving assurances to people at the

Spokane boat show that special trophy licence fees at Kootenay Lake

were to be removed and that they had undertakings from the department

to this effect, would the minister tell us whether or not such

assurances have been given?

HON. R.S. BAWLF (Minister of Recreation and Conservation):

Mr. Speaker, I thank the member for the question. I am not aware of any

such assurances being given and I'll take the question as notice and

look into it.

NEW WESTMINSTER BUILDING DEVELOPMENT

MR. D.G. COCKE (New Westminster): I would like to ask a

question of the Minister of Economic Development. I would like to ask

that minister whether or not all the announcements made by the member

for Burnaby-Edmonds (Mr. Loewen) in this chamber, and the day before to

the press in New Westminster, with respect to the utilization of the 8

or 10 or 12 acres, or whatever they are going to get from ICBC, on 8th

Avenue are from his department and are official. Now I am talking about

the hotel, the convention complex, the provincial office building, the

courthouse, and all the other aspects that that member so eloquently

described in this House.

[ Page 273 ]

HON. D.M. PHILLIPS (Minister of Economic Development): The

development in New Westminster is a cooperative venture between the

board of the Insurance Corporation of British Columbia and the board of

the British Columbia Development Corporation, working together to

help...

MR. COCKE: To do what?

HON. MR. PHILLIPS: ...that great city and to put in one of

the greatest developments there in that city that the province has ever

known. It is a cooperative venture and...

MR. COCKE: Like what?

HON. MR. PHILLIPS: ...it will invite cooperation between

governments, both provincial and civic, and private enterprise to go in

there and develop that great....

MRS. DAILLY: What? What?

MR. COCKE: Name one thing.

HON. MR. PHILLIPS: Well, now, there we go, Mr. Speaker, I've given him the answer to his question.

Interjections.

MR. BARRETT: There they go — wanting details again! (Laughter.)

MR. SPEAKER: Order, please. The bell terminated the question period.

The following reports were tabled by Hon. Mrs. McCarthy:

The annual report of the British Columbia lottery branch.

The preliminary report of the Commission of Inquiry on Property Assessment and Taxation.

The annual report for the Public Service Commission.

The report of the Royal Commission on Forest Resources.

Orders of the day.

ON THE BUDGET

MR. D.D. STUPICH (Nanaimo): Mr. Speaker, I'd just like to

thank the Premier first for waving a copy of my speech notes and making

the observation that it is "good stuff." I'd like to suggest to him,

Mr. Speaker, that I hope it will improve in the delivery. Perhaps he

would care to stay and listen to some of it.

Before I start on the notes that the Premier has....

Interjections.

MR. SPEAKER: Order, please. The hon. member for Nanaimo has the floor.

MR. STUPICH: We'll find out as we go along; we'll both find

out about the same time, I think, Mr. Premier. I'm not too sure myself

what I'm going to do until after I've done it. (Laughter.) I trust the

afternoon's good humour will continue for the next 15 or 20 minutes at

least, Mr. Speaker.

Before I get into consideration of the motion itself, I would like

to ask the House to join me in welcoming a number of friends who have

come down from Nanaimo to hear my brief remarks about the budget: along

with friends, a 26-year-old daughter who is here to listen to me; and a

mother whose age I would not dare say aloud, but if you were to say

three and a half times the age of my daughter, you wouldn't be far

wrong, and I'll be in trouble next weekend. Anyway, would you join me

in welcoming them.

Now for the budget. In the second paragraph in the budget we read:

"In the last 10 months much has been done by this government to restore

balance to the British Columbia economy." Well, Mr. Speaker, from where

they sit possibly much has been done. I can recall some of the things

that were done.

I can recall, for example, that the very first thing of consequence

they did was to increase ICBC premium rates by some 140 per cent. I can

recall talking to a news reporter, a girl from Nanaimo, with one of

the....

MR. L.B. KAHL (Esquimalt): That's an old story!

MR. STUPICH: It's old stuff? Sure it is. But very recently,

just six weeks ago, I was talking to a reporter from one of the Nanaimo

papers, who previously was a Social Credit supporter. She said to me

that in doing her Christmas shopping she was conscious of the fact that

this year in February she was going to have to lay out some two and a

half times what she had to lay out previously for her ICBC premiums

alone, and this was affecting her Christmas shopping that year. It's

still here. It's still a factor that has done nothing to restore the

balance that was in effect in the province of British Columbia prior to

the election on December 11, 1975. It's still affecting consumer

spending — the sales tax that went up 40 per cent.

I can recall talking to the newspaper publisher in South Peace, when

he told me that were it not for the advertising he's getting from

Alberta, from Grande Prairie, his newspaper would have had to shut down.

[ Page 274 ]

He also told me that a friend of his told him that on a weekend

shopping trip to Grande Prairie on the Alberta side of the border, this

friend had noticed that some 70 per cent of the automobile licence

plates were B.C. plates.

MR. LAUK: Shocking!

MR. STUPICH: He went there himself one Saturday, not to

observe this, but possibly to do his own shopping. He counted the

plates, and 70 per cent of them were B.C. licence plates. Not only

that, Mr. Speaker, but even one of the aldermen from the city of Dawson

Creek was there doing his shopping that same day.

MR. KING: Chabot shops in Calgary!

MR. STUPICH: Mr. Speaker, you can recall when we first

started talking about this 7 per cent sales tax increase. As the hon.

House Leader for the opposition (Mr. King) says, when the hon. member,

now the hon. Minister of Mines and Petroleum Resources (Hon. Mr.

Chabot), was asked where he bought his new suit, and when it was

suggested to him that he avoided the 7 per cent sales tax by going

across to Calgary, for the first time in my memory that hon. member was

silent. His face went red but he was silent.

HON. MR. CHABOT: That's a lie! That's a lie!

MR. STUPICH: You mean it's always red? Well, that day it seemed to be redder than usual. (Laughter.)

Interjections.

MR. STUPICH: Mr. Speaker, I appreciate your listening at least.

Mr. Speaker, you've heard much about the long lines of people

waiting to cross the border to shop in Washington state. It's

attributed to food costs. But if you talk to some of those people who

are shopping, they tell you about all the other things they are buying.

Food costs haven't changed that much between Washington state and B.C.

in the last one, two, three, five years. The one thing that did change

was that the sales tax in B.C. went from 5 per cent to 7 per cent. It

was when that happened that public attention became attracted to these

long lines of people who were accumulating every weekend to do their

shopping on the Washington side of the border.

Interjections.

MR. STUPICH: Some of you people maybe speak from experience. Perhaps

the hon. Minister of Health (Hon. Mr. McClelland) has been one of those in that

line-up on a weekend, I'm not sure. I said there was no....

AN HON. MEMBER: There's no sales tax on food.

MR. STUPICH: Exactly. That's my point, Mr. Speaker — no sales

tax on food. But that increase in sales tax drove them across the

border to buy other things, and while they are down there they buy

food. They weren't going down there to buy food two years ago. When the

sales tax was 5 per cent you didn't hear about people crossing the

border by the thousands on a weekend to buy food. It's only after the

sales tax was increased that you heard about that.

Remember the criticism of the former Minister of Highways (Mr. Lea),

who was accused of hurting the tourist industry by saying we didn't

really want them cluttering up our highways? It didn't really keep any

Yankees at home. But this government, Mr. Speaker, said in a very loud

voice, "Yankee stay home," when they increased the ferry rates by more

than 100 per cent, with disastrous results for the economy not just on

Vancouver Island but for the whole of British Columbia. I've seen

advertisements and I've seen stories in American papers warning people

not to travel to British Columbia for their holidays this year. "The

weather was bad." The weather's been bad before. "Alternative things to

do." There've been alternates before. But there were stories and

advertisements warning people not to travel to B.C., focusing on

increased ferry rates, focusing on higher motel rates, focusing on

higher food costs. The last two things have been there before. The new

factor was the more than doubling of ferry rates, and that's the thing

that hurt the tourist industry in the province so much last year.

Mr. Speaker, these are just the introductory remarks before I really

get going, but perhaps I'll quote from some of the people affected. For

example, I said that the ICBC premium rates were hard for business. Now

you might say: "That's just the opposition saying that." But you will

recall others in the community have said it. You may recall that in a

recent speech Mr. Woodward of Woodward's Stores said: "Higher ICBC

rates and sales tax took $500 million of disposable income from

consumers. Retailers could have expected 30 per cent of that total had

it been available for spending. Sales in B.C. are flat." And this is

June 30, 1976. I can't see an upturn, and I haven't seen Mr. Woodward

saying anything about that yet; I'm quoting his most recent remarks.

There are no indications that it will take place this year.

AN HON. MEMBER: Balderdash!

[ Page

275 ]

MR. STUPICH: Mr. Speaker, it's not just Woodward's Stores.

How about Kelly Douglas? Kelly Douglas & Co. Ltd., in a story

August 21, 1976, reported a $1 million drop in net income for the

24-week period ended June 19 compared to the same period last year.

They go on in this story to say: "The company said British Columbia

operations were adversely affected by the general erosion of the

provincial economy. Sales and profits in other areas of Canada showed

some improvement." But it's because of the depressed economy only in

the province of British Columbia that their profits, on the whole,

declined.

AN HON. MEMBER: Shameful performance.

MR. STUPICH: There have been quotations, and people have made

references to some sources that have said that things are going to

improve in B.C. Well, Bill Hamilton of the Employers Council doesn't

seem to have heard the same reports or, at least, he's not reading them

the same way. I have one quotation from him here:

"Instead of leading the economic recovery, as forecast

by the Conference Board of Canada, British Columbia will lag behind the

national average, William Hamilton, president of the Employers Council

of B.C. said. He said 9 per cent of B.C. businessmen surveyed expect an

upturn in the economy; 75 per cent expect conditions to remain the

same; 16 per cent expect things to get worse."

Mr. Speaker, earlier I made reference to the Premier himself and to

his own appraisal of what his government has done. I'm not surprised

that the Premier has felt that there are more things that he could be

doing today rather than listening to my speech, especially as he has a

copy of the speech notes. I'm disappointed that the Minister of Finance

hasn't found it convenient to be here this afternoon when the official

opposition is making its first speech on the budget.

MR. KING: Arrogance.

MR. STUPICH: Possibly the Minister of Finance has found something better

to do, too. Possibly he would rather not be here. The real Minister of Finance

is here, but I mean the titular one — the other Minister of Finance, the one

who holds that title. The real minister is here, but the other one is missing.

He apparently lacks the courtesy or has found something better to do or just

doesn't want to listen to the questions, the concerns, the problems of the

people of British Columbia, as put to him by the finance spokeman for the official

opposition. I'm disappointed; I expected more of him.

AN HON. MEMBER: He was just called out in the hall, Dave, to make a few denials.

MR. STUPICH: Mr. Speaker, again, carrying on with this theme,

I pointed out earlier that it's not just the official opposition that

is concerned about the lack of growth in the province, but others. A

newspaper story in the Province ,

December 22, quoted a Mrs. Judith Maxwell of the C.D. Howe Research

Institute — and this is getting into the whole realm of the type of

financing we do here in the province. Maxwell's proposal is that the

federal and provincial governments agree upon a reduction in the

provincial retail sales tax, and that Ottawa reimburse the provinces

for the revenues lost. In this period when there is this recession in

the economy, province-wide, country-wide, a leading economist is

proposing the exact opposite of what this government proposed almost a

year ago when it increased the sales tax by some 40 per cent.

Mr. Speaker, perhaps one last reference to this, here in Victoria — the heading:

"The Glow Won't Last." It's very recent, Mr. Speaker — January

7, 1977. "Doldrums to return, merchants warn" — in the Victoria Times ,

Friday, January 7. That's not the message we got in the throne speech; that's

not the message we got in the budget speech. Apparently people are drawing on

different sources of information.

"Victoria merchants are basking in an afterglow of

optimism, but the glow, alas, won't last. Mr. Purdy says that

unfortunately there is very little to justify this optimism. Retail

sales can be expected to drop as soon as the special sales end. We can

expect a return to the doldrums during the last half of January and

most of February. The situation is not being helped by the massive

drain-off of funds by the Insurance Corporation of British Columbia."

The hon. Minister of Education (Hon. Mr. McGeer) quarrelled about

that, but in January retailers are still concerned about the massive

drain-off of funds in premium payments at this time of year.

Purdy said: "It could be a full year before there is significant

recovery in the local economy." Yarrows Shipyards, layoffs; forest

industry, back to work after the long Christmas layoff, but no sign of

a market surge for B.C. lumber despite the favourable placement of the

Canadian dollar at a fraction under par with the U.S. unemployment

continues to be in the range of 9.5 per cent to 10 per cent. There is

still evidence of an economic slowdown.

This is rather significant, Mr. Speaker, and I'll perhaps relate the

significance later on. "But there is a boom," he says, "in the things

designed for those people who have everything." There's still a boom in

[ Page 276 ]

sales for those who have everything, according to the retail merchants in Victoria.

The second reference I'd like to make to the actual throne speech

itself is the third paragraph. I don't intend to deal with every

paragraph at this length, but I would like to refer to the third

paragraph: "Our government have accomplished a substantial deceleration

in the annual growth rate in provincial government spending." Well,

that's just great, Mr. Speaker. Where is the virtue in accomplishing a

reduction in expenditures if it means the estimates show $5.5 million

less for services for families and children? Is that virtue, Mr.

Speaker? Where is the virtue in holding down government expenditures if

it means $20.4 million less for services for seniors and handicapped?

One area alone of that $20.4 million, the much-heralded GAIN programme

— remember that one, Mr. Speaker? — for senior citizens is less by

$19.8 million. That's $19.8 million taken from the senior citizens and

from the handicapped in the province. Virtue in that, Mr. Speaker? I

see little virtue in that.

When the NDP was in office there was progress; the economy kept

moving. During the three years for which we were responsible for the

finances of the province — the three complete fiscal periods, starting

with April 1, 1973, and ending with March 31, 1976 — there was a growth

in assets of almost $1 billion, a $910 million growth in assets in that

three-year period. We spent, but we grew. There was progress.

People talk about surpluses, perpetual funds, special funds. Mr.

Speaker, the total of capital surplus, revenue surplus and special

funds grew in that three-year period by $301 million. There'd be no

virtue in that if everything else was falling apart, but along with

that the whole conomy was moving and the employment record was better

than it is today after 13 months of this Socred coalition government.

In addition to that, non-budgetary expenditures — and I'll have more to

say about that later as well — transfers to Crown corporations and

investments in other corporations grew by $367 million in that same

three-year period.

Mr. Speaker, along with all those things — along with increases in

assets, along with increases in surpluses, along with increases in

special funds, along with more money for the Crown corporations,

transfers to them — the economy kept moving. There is virtue in keeping

the economy moving and looking after the needs of the needy people in

the province. That's where this government has failed so miserably.

MR. COCKE: They're bunglers!

MR. LAUK: You couldn't run a hardware store.

MR. COCKE: That's right. That's why they sent you out of Kelowna!

MR. STUPICH: Mr. Speaker, I will be speaking for some length

this afternoon about several aspects of the budget. I'd like to speak

about the fiscal and accounting practices of this government. We know a

good deal more about those practices now than we did a year ago. A lot

more information is available.

Secondly, I would like to speak about the financial activities of

the government since the last session, including the preparation of the

budget that is now before us.

Finally, I will discuss what I'd like to call the wider view: the

government's responsibility to be concerned not just about bottom-line

accounting for one column after another, but the government's wide

responsibility for the economics of the province. I'm going to try to

call to the attention of the treasury benches the fact that they are

responsible not just for keeping a single set of books; they are

responsible for the economy of the province of British Columbia.

First, Mr. Speaker, I would like to say something briefly about

their decision to cancel succession duties, and that is, I think,

perhaps one of the main items in this budget. There are a couple of

themes, and one of them certainly is this particular item. The revenue,

according to the budget speech, is said to be about $25 million a year.

We believe, Mr. Speaker, that the figures are substantially higher than

that for the 1976 fiscal period — something like $28 million. And in

the current fiscal period only nine months have gone by and there is

$32 million already. So we're talking about actually more than $25

million. It's in the neighbourhood. Perhaps a closer figure would be an

average of $30 million in recent years. It's not a major source of

funds, Mr. Speaker, but, nevertheless, a substantial amount when we're

thinking about some of the things that might be done in our economy if

we were to maintain that revenue or replace it with something else —

and the government has not offered anything there.

For example, there are some 250,000 people in the province over the

age of 65. There was legislation tabled today; I've just forgotten what

it was now. We haven't seen the legislation on Pharmacare — at least, I

haven't — but the rumours are that they are all going to be charged a

minimum of $25 per year. If that is the case, that amounts to

approximately $6.25 million that we're getting from those people — the

elderly, the people who have been on the NDP Pharmacare programme.

We understand that the expected increases in revenue from changes in

the emergency health plan will bring in a further $1.1 million. Those

two items alone, Mr. Speaker, come to some $7.3 million. Now we were

talking about $25 million minimum. We could have done away with both of

those increases, if you like — tax increases or user-charge increases —

we could have left the succession duties on, and we could have used the

balance of the money to provide 2,500

[ Page

277 ]

jobs at an average of $10,000 per year salary for

the people of this province who desperately need and want employment.

These would be useful, constructive jobs — jobs which would have helped

build our communities, build our province. Instead of that, we're

giving this $25 million-plus back to people who need it least.

Mr. Speaker, I've suggested that the succession duty tax, as it sat

until that announcement, is levied at a very modest level. I'm going to

refer here to a recent publication written by a man whose comments upon

budgetary matters in B.C. have received some widespread attention, a

former senior official in theDepartment of Finance, Mr. Stow, who released this weekend the first edition

of The B.C. Digest of Public Affairs . We haven't always agreed with Mr.

Stow. I can recall some statements that he made some 13 months ago. We haven't

always agreed with Mr. Stow, and we don't agree with everything that is

in this publication. Nevertheless, Mr. Speaker, we recognize his area of expertise

and certainly, with respect to his comments about succession duties, I think

there is something there that the government would do well to heed. We welcome

— regardless of whether or not we always agree with him or will always agree

with him — this new and non-partisan commentary on B.C. public finance and hope

that it continues to be published. I would suggest, Mr. Speaker, that the

Premier and members of the cabinet might subscribe to it to help this publication

continue publishing and in the hope that perhaps they might learn something.

In any case, Mr. Speaker, in this first edition there is an

article

on succession duties. Mr. Stow points out that fewer than one-seventh

of the 13,300 estates assessed — in 1975, that is — paid any tax at

all; less than one in seven out of 13,300. Less than 2,000 paid any tax

at all. Only 450 of those required direct-line inheritors to pay any

tax: that is, to spouse or to child, to grandchild, and as far down as

great-grandchild — that far. Only in 430 of those estates where there

was direct-line inheritance was there any tax paid at all. The

direct-line inheritors with estates of less than $200,000 approximately

— because there were various exemptions — generally escaped taxation

completely.

I'm not sure how many of us are interested in that figure of $200,000;

I'm not sure how many of us are affected. Perhaps that's something to

go into later. But the incidence of the tax on estates greater than the figures

I've quoted is, in all cases, considerably less than the sales tax — even

less than the sales tax before it was increased, but certainly less than the

sales tax now. Moreover, the amount of money raised from succession duties in

British Columbia, which has been approximating 0.6 per cent of our total budget,

is in line with the average for the whole of Canada. I recognize that some provinces

don't have it, but the larger ones do and our average is in line with the

Canadian average. The Canadian Tax Foundation's Provincial and Municipal

Finances for 1975 describes it as a modest tax — I might say perhaps too modest,

although we weren't proposing any changes in it.

Mr. Speaker, the eyes of British Columbia were upon the government

yesterday. About 100,000 British Columbians currently unemployed can't

find jobs. The accusation might be made that some of them aren't

looking very hard, but certainly a lot of those 100,000 are anxious to

work, want to work, but can't find jobs. Many of them are finding it

very difficult to make ends meet. About 0.25 million people in the

province of British Columbia are past their normal working age: they

find their circumstances very strained. All of these people were

interested in yesterday's budget, wondering what it would do for them.

By contrast, the people in B.C. who will be receiving inheritances

of more than $200,000 hardly need the help of the people of British

Columbia, hardly needed the government to intercede on their behalf. We

find it hard to believe that more than a small fraction of those

people, if any, and in times as difficult as we are now experiencing in

the province of British Columbia, would begrudge paying that tax.

Has anybody come forward and said to the government that they would

prefer to see aid to the handicapped reduced — that is, any of these

people with these large estates — that they would rather see ambulance

charges tripled, increased charges for prescription drugs required by

the elderly, jobs denied to those needing them? Have any of these

people come to the government and said that they would rather see all

that than pay the modest taxes that are levied on very large

inheritances? I haven't heard of any of these people, Mr. Speaker. I

wonder if the government has heard from any of these people. I wonder

who these people might be.

I wonder if there are any in the government caucus who have put

pressure on government, saying: "Look, we want this changed, because

our heirs are going to suffer when we pass on our million." We've heard

figures varying from eight up to 17 millionaires in the Social Credit

caucus. Have any of those members come to the government and said:

"Change the succession duties because it's going to hurt our heirs"? If

so, I would like those people to stand up and say that those are good

arguments, and that they were threatening to leave — not only were they

threatening to leave but they were threatening to take their heirs out

of this province — because to escape paying this tax they would not

only have to remove themselves, but also they would have to remove

their heirs.

Mr. Speaker, I would be very interested in having anyone on the

other side of the House stand up and say that yes, he or she was

threatening to leave the province unless this change in tax was made.

[ Page 278 ]

MR. BARRETT: Give them some time to think it over. Stand up, fellows.

MR. STUPICH: Mr. Speaker, in an earlier discussion I quoted

from people other than NDP supporters. I'm going to try once more, in

pushing this argument, in putting this argument before the government,

to quote from someone who, to the best of my knowledge, was never

described as a supporter of the CCF or the NDP — a former Premier of

the province. His name happened to be Mr. Bennett. He had this to say

while defending the imposition of the succession duties and retaining

succession and gift taxes, as reported in the Sun , February 17, 1967, in a story headlined: "Bennett Declares Province Won't Be Tax Haven of the Rich."

MR. KING: But he didn't need his dad's money.

MR. STUPICH: Okay, he was not a potential heir; the point has

been made. But, Mr. Speaker, you remember the House at the time that

that Premier said that. He went on to say: "Premier W.A.C. Bennett said

Thursday that B.C. will never be a tax haven for the rich while he is

around." Well, I guess he's around, but not quite close enough. Further

down: "Bennett said B.C. welcomes people who come to the province to

help develop resources, but the province does not want drones in the

economy who reap the benefits and try to escape their share of taxes."

Mr. Speaker, I would ask those drones in the community to identify

themselves — the people who want to reap the benefits and escape their

share of taxes.

It is also important to point out that the things that I have been

quoting, the quotations from Mr. Bennett Sr., were said in relatively

prosperous times when things were going well in our economy: services

were not being savagely slashed; people were not experiencing massive

increases in insurance and ferry rates — auto insurance rates were

going up but not as massively as the rates instituted by this

government over a year ago; B.C. Hydro had not just announced what

amounts to a poll tax.

Mr. Speaker, just before I came into the House, an old-age pensioner

came to me. She told me that she was single, living alone in an

apartment, and that she had just received her hydro bill. All she has

to live on is her pension. She is finding it tough to make ends meet.

She doesn't use her electricity more than she has to; she doesn't have

expensive appliances. She is paying $19.50 for two months' hydro —

that's before the recently announced increase, before the poll tax.

That person finds it very hard to sympathize with what Mr. Bennett Sr.

described as the "drones who want to reap the benefits and escape their

share of tax." That person is wondering what can be done to change

this, to change the government's mind. I promised that person I would

do my best to change the government's mind, but I was not very

confident in my ability to change their mind.

MR. COCKE: Talk to Bob Bonner. Poor little Bob! The biggest recipient of social welfare in the province, or one of them.

MR. STUPICH: There was no call, Mr. Speaker, in the B.C.

Hydro budget for British Columbians to accept an increase smaller than

the Canadian average; there are no ties on B.C. Hydro at all. Whatever

increase they want to put in, they put in — no appeals to anyone. If

they want to put on a service charge of an extra $3, go ahead and do

it, fellows. Never mind the AIB; never mind what is happening to the

people who have to pay these rates. Go ahead and do it, because we are

going to pay off the prospective heirs of millionaires. Don't worry

about what you do with your hydro rates.

I began my remarks, Mr. Speaker, on succession duties, not simply

because these stand out alone as the only item in the budget, but

because they typify the attitude of the government of the day.

According to the same Mr. Stow whom I've been quoting, in 1975 there

were 22 direct-line estates — that is, to children, grandchildren,

great-grandchildren or to spouses — valued at more than $1 million.

There were only 22 in the whole of the province. They paid $8.6 million

on an assessed value of $28 million, so the heirs received, on the

average, about $1.3 million, and paid an average of about $400,000. As

I said, in some cases that goes down to the great-grandchild.

This is a modest tax, but one that would have enabled the government

to continue giving some of the services that are being taken away in

this budget because it is what the government calls "a time of

restraint," a time when the people on the most modest incomes are urged

by this government to accept less and less, but at the same time pay

more and more on government-imposed charges.

While increasing the direct-user charges for everything and

increasing taxes — not in this year's budget, but in last year's budget

— this same government gives this year's crop of millionaires a gift of

approximately $400,000 each. What will this stimulate, Mr. Speaker?

That's the argument: is it going to stimulate economy?

MR. BARRETT: It'll stimulate campaign funds.

MR. COCKE: Back to the days of the robber barons.

MR. STUPICH: Perhaps, Mr. Speaker, it will stimulate the

construction of second swimming pools for people who already have one,

more frequent trips

[ Page

279 ]

to faraway places. A number of the cabinet

ministers have been to Hawaii and like it there. Perhaps these

millionaires will be able to go more often to Hawaii.

I heard one story of someone who has a Mercedes Benz so they can do

more shopping across the line. Is it going to stimulate the economy to

do this kind of thing, Mr. Speaker? I would like to hear the arguments

from the Minister of Finance as to just how that kind of gift to the

rich or to the prospective heirs of the rich is going to stimulate the

economy. But we will be talking more about that later. I may even get

into that discussion myself.

I would like, at this point, Mr. Speaker, to turn to other matters,

fiscal events and non-events that have transpired in British Columbia

over the past 12 months. Just to review, we talked about this last year

but at that time we did not have the advantage of the information that

we now have. You'll recall February 20, 1976: the famous, or the

infamous, Clarkson Gordon report and the Premier's statement

accompanying it. In that report there was a lot of cautious warning

about what deficits really were and explaining that the Clarkson Gordon

company had not really done an audit. All they had done was accumulate

and add up certain figures that were given to them by the government.

On the basis of the figures given to them and the additions that

they properly did, they predicted a deficit of $541 million. A lot of

money, Mr. Speaker. But less than a month later, on March 19, 1976, the

budget came down. And while the Minister of Finance stuck tenaciously

to his figure of $541 million — he had to — his figures showed a

shrinking. You may recall me talking about that at the time. There was

already apparent within the short space of probably one month of

government operations a shrinking in that deficit of some $30 million.

I recall saying at the time that if the deficit continued to shrink —

and I invited the Minister of Finance to tell me whether or not the

indications were that it would shrink further or that it would expand

and I got no answer; that was just one of the questions he didn't

answer....

MR. COCKE: Oh, what's thirty million bucks!

MR. STUPICH: I recall remarking that if it continued to

shrink that way, then certainly there would be quite a hole made in

that projected deficit of $541 million. Well, we now have the wisdom of

retrospect. We now have the figures before us and it was obvious that

the deficit did continue to shrink, and not just because ICBC was so

busy counting all the money that it received when premiums went up by

140 per cent that it just didn't have time to cash that $181.5 million

cheque.

Last year's budget predicted 1975-76 revenue of $2,919 million, and

total expenditures, including non-budgeted, of $3,430 million. Those

were the revised estimates presented in the budget last year, of our

fiscal period: a shortfall of $510.3 million. Public accounts, Mr.

Speaker, as submitted by the comptroller-general, show the actual

1975-76 budgetary expenditures of $3.112 billion, revenue $2.97

billion. It left a budgetary deficit of $140 million.

Even to achieve that budgetary deficit, Mr. Speaker, the government

had to do a number of things. You may recall that last year special

warrants were introduced to the extent of $84.2 million. As I can

recall, I believe only $2 million of those special warrants were

introduced during the life of the outgoing NDP government. A balance of

over $82 million in special warrants introduced by the new government

in an attempt, partially, to make that deficit for that period look as

large as possible. I am sure some of these would have been necessary

had we remained in office, but some of them were accounted for by a

number of things.

AN HON. MEMBER: How about the $10 million that they surprised the hospitals with?

MR. STUPICH: Mr. Speaker, there's a suggestion about the $10

million they surprised the hospitals with. I seem to recall some civil

servant losing his job or being demoted or shunted aside somewhere

because it was the civil servant who made the mistake. He got caught.

He got found out.

Interjection.

MR. STUPICH: Universities got $7 million more than they expected.

MRS. WALLACE: Beef growers.

MR. STUPICH: There were advance payments on restructure

grants that surprised the cities receiving them. The hon. member for

Cowichan-Malahat — beef income assurance was thrown in a couple of

months earlier than what was expected. In spite of doing all these

things the deficit, Mr. Speaker, was built up to a little less than

$140 million.

There are other things, Mr. Speaker. Revenue was reduced below the

figure that we had projected. The Minister of Economic Development

(Hon. Mr. Phillips) isn't here right now and I don't know what's

happening on the rail agreement. Nevertheless, a negotiated railway

agreement with the federal government, and the correspondence on this

has been made public previously, would have yielded $30 million in that

fiscal period. Apparently this was delayed, postponed, put off, on the

basis of the advice that the hon. Minister of Economic Development was

getting from his staff. I understand

[ Page 280 ]

there's been a change in advisers since. Perhaps

that change came too late, or the government would have been $30

million better off.

They neglected to recover advances from the B.C. Harbours Board of

$25 million. You recall, Mr. Speaker, that last year legislation was

introduced in this House setting the ball in motion to recover that $25

million. Then the legislation was left to sit and was not proceeded

with. Mr. Speaker, they neglected to recover advances from B.C.

Cellulose of $16 million; from Ocean Falls of $4.5 million; the steps

had been set in motion to recover $1.5 million from Panco Poultry; the

minutes are available and have been made public to make it perfectly

clear that BCR recognized that it was going to repay these grants of

$35 million. These various items of revenue that were not recovered

total $82 million.

MR. COCKE: You mean they were lying?

MR. STUPICH: That, along with the $30 million on the BCR, is

$112 million which, Mr. Speaker, would have gone a long way to

recovering that deficit of less than $140 million. In addition to that

there were the references to non-budgetary expenditures — some $265

million. These are listed in public accounts for the fiscal year March

31, 1976, on page C11.

I think, even without reading, everyone will recall what one of

these was. Remember, Mr. Speaker, the rubber cheque to ICBC for $181.5

million? I've never heard before, and I wonder whether anyone else has,

of a Canadian jurisdiction issuing a bad cheque because they didn't

have the legal authority to issue that cheque at the time it was

issued. But, Mr. Speaker, there is no cause to be alarmed — ICBC didn't

need the money and they didn't cash it, so no real harm was done. The

accounts were not overdrawn.

MR. BARRETT: Just games.

MR. STUPICH: There are other items in those non-budgetary

expenditures: $25.3 million for transit, and the special warrant says

for capital expenditures. Now this government says in the budget that

they don't believe in deficit financing for operating expenditures. On

the other hand, they make the distinction in some cases — not in all

cases, but in some cases — that it's okay to debt finance for capital

expenditures. Yet this $25 million was charged against last year's

non-budgetary expenditures in order to increase the deficit, although

even the special warrant clearly identifies it as a capital expenditure.

MR. COCKE: Shame!

MR. STUPICH: Some people, perhaps, don't make that distinction, but the distinction was made in the special warrant.

Twenty million dollars to BCR: whatever you want to call it, whether

it was coming back or not, certainly a capital item, Mr. Speaker —

something to do with the construction of an extension of the railroad,

I believe.

MR. BARRETT: A $200 million overrun.

MR. STUPICH: Pacific Northcoast Native Co-op: $3.5 million —

another advance, and certainly capital — capital going into the

building of that plant. A contribution to B.C. Central Credit Union:

$2.5 million — a deposit — a further capital expenditure, Mr. Speaker.

If we're going to, and if this government does admit that in some

cases it's all right to, finance capital in the long term, then all of

those items, except for the rubber cheque, were capital items. The

rubber cheque was a political item, and that's in a different category.

MR. COCKE: That's a pretty heavy political item.

MR. STUPICH: Mr. Speaker, you may recall that in December,

1975, the former Premier and I held a news conference. At that time we

revised our original budget estimates and predicted that revenue for

1975-76 would come in at $2.98 billion. That was three months before

the end of the fiscal year. Then some six weeks later we were presented

with a budget which had revised figures in it. And one would expect —

it having been prepared later and having more information to feed into

the calculations — that the more recently prepared figure, the one that

was printed in the budget, should be more accurate. That's what one

would expect, Mr. Speaker, but it's not the way it worked out. Perhaps

it's just that the former Premier and I are better at predicting, at

estimating. Our estimate was out by 0.245 per cent of the actual

figures, as certified by the comptroller-general. Less than a quarter

of 1 per cent. But the Premier's estimate — or the estimate based on

the figures that the Premier and the Minister of Finance gave to

Clarkson Gordon — was out by 2.5 per cent, which is over 10 times the

discrepancy, although it was based on information that was more up to

date.

MR. COCKE: Oh, those holy businessmen!

MR. STUPICH: Mr. Speaker, it's no wonder they have trouble

with some of their estimates.

MR. BARRETT: That's known as a fib in polite circles.

[ Page

281 ]

MR. STUPICH: It's no wonder they feel it's necessary to

curtail some services to people. It's no wonder people have to suffer

when people like that are running the government in the province of

British Columbia.

Our December estimate on budgetary expenditures was $3.06 billion.

The March 19 budget predicted $3.17 billion. Once again, Mr. Speaker,

and even though, as I've outlined in my remarks earlier, there is a

deliberate overexpenditure at the tail-end of the year, even with that

deliberate overexpenditure in some areas, our estimates were within 1.7

per cent of the final total while the estimates presented to us in the

budget, and again based on later information, were out by 1.9 per cent.

Mr. Speaker, they were either deliberately out or mistakenly out: I

certainly wouldn't accuse them of deliberately trying to mislead the

House or the people of the province, so I have to fall back and say

that it's simply incompetence. There's no other way to account for it.

Later on in my remarks, as I go through them, I want to say that

it's important that the Minister of Finance be more than a bookkeeper,

more than a senior government minister responsible for making good

predictions. It wouldn't hurt any of my arguments to concede that he

can add and subtract well — whether he can or not, I could concede that

and it wouldn't spoil any of my arguments — or even that he can make

simple projections. My argument at this point is that even if he could

do these simple sums and make these simple projections, he wouldn't

know what to do with them. That's the real tragedy of the government of

the province of British Columbia today. They talked about socialists

being doctrinaire. Mr. Speaker, he and his government are so blinded by

their doctrinaire fiscal theories they just cannot see the simple

truths.

I'd like to be able to concede to him his capacity to add, to

subtract, to forecast, make projections, but I can't really, Mr.

Speaker, for I'd have to conclude then that he had massively erred in

many of his predictions. But even at that, he was just starting — he

hadn't really hit his stride. To see the real story of fiscal

incompetence you have to look at this whole sordid ICBC mess that

probably people are tired of hearing about. But it was a mess, Mr.

Speaker, it was sordid, and it's evidence of the incompetence of this

administration.

You will recall that ICBC was, on March 31, 1976, a Crown corporation so desperate

for cash that it had to induce a senior Canadian government to issue an NSF

cheque for $181.5 million. We were told there was no money to pay the salaries

of the employees. We were told there was no money to pay claims. It was a Crown

corporation that was supposed to be in such grave trouble that it had to more

than double its premiums. That was followed, Mr. Speaker, by a statement by

the hon. Minister of Education (Hon. Mr. McGeer), the minister responsible

for ICBC...

MR. BARRETT: And university hospital.

MR. STUPICH: ...as quoted in the June 23 issue of the Province , denying that ICBC planned to lay off employees. Then on June 25, the Sun — I suppose a competing newspaper — said: "McGeer Plans Layoff." This was just two days later.

The story in the Province ,

June 26, said: "McGeer sees no large surplus." The same paper reported

exactly one week later on July 3 that ICBC had a first-quarter profit

of $9.5 million.

On September 16, the Province

reported that ICBC was hiring 200 more employees to correct errors. The

minister confirmed that there was an error backlog and that it might be

necessary to take extra help. Then he went on to say: "But we're

cutting down on the permanent staff." So we have 200 extra employees to

correct the errors that the permanent staff had made, and then he was

going to cut down on permanent staff.

MR. BARRETT: If it had been the NDP it would have been the headline.

MR. STUPICH: Incidentally, this story appeared just under a

statement of the Premier's that: "B.C.'s image is now better in the

United States." It's interesting, isn't it, how we can get a better

image from all those things? All those contradictions coming so closely

on each other, and he tells us that our image is better.

AN HON. MEMBER: That's what Arthur Weeks was supposed to do.

MR. STUPICH: News about ICBC must be very scarce down there.

MR. LAUK: Is that Olympia, Washington?

MR. STUPICH: I don't know how this fellow Arthur Weeks keeps getting into my speech, but....

MR. BARRETT: He kept on getting into the Premier's office.

MR. LAUK: The Premier didn't see him.

MR. STUPICH: On October 8, the Province

advised us that for the six months ending August 31, ICBC had a surplus

of $25.8 million. Mr. Penhall, asked if that reflected a drop in

collision coverage, said: "I suppose so." The Sun of November 5 reported: "Motor-vehicle branch figures show a 4 per cent increase in the number of motor vehicle accidents

[ Page 282 ]

in B.C. and a 12 per cent increase in property

damage." Both the Premier and the Minister of Education had attributed

the surplus to a decline in accidents. These are contradictions, Mr.

Speaker.

On November 16, ICBC vice-chairman, Ralph Gellen, reported an

estimated distributable surplus of $52 million. The premium income was

up 14 per cent over expectations, and total income up 40 per cent.

MR. KING: Sock it to the people!

MR. STUPICH: Part of the good news that day was that ICBC,

evidently giving up on trying to teach the minister and the Premier the

difference between a decrease in claims and a decrease in accidents,

got a corporation official to make the announcement. He got it

straight, Mr. Speaker.

On the same day the resignation of Mr. Byron Straight was announced.

You will remember, Mr. Speaker, Mr. Straight warning the government in

the beginning that it was setting its rates too high — higher than

necessary to meet the anticipated costs of ICBC.

MR. LAUK: Shame!

MR. STUPICH: On the day that the $52 million distributable

surplus was announced, Mr. Straight resigned. He couldn't take it any

longer. ICBC, under this administration, is no place for someone who

correctly calls attention to government overcharging, because this is a

government, Mr. Speaker, that's very prone to overcharging when it

comes to the poorer people of the province.

MR. LAUK: Where was that reported in the press?

MR. KING: Profit from the monopoly.

MR. STUPICH: The Province

of January 11, 1977, published a letter from ICBC general manager,

Norman Bortnick, apologizing for goofs. The letter reads in part:

"The service provided was very poor. Our estimator

made errors. Our communication manners were abysmal, and the

corporation systems and procedures were not followed."

This is the government that was going to straighten out ICBC. After a year

in office, this is what the general manager has to say about the corporation

under Social Credit coalition mismanagement. That's the record of ICBC.

That's the ICBC that was rescued — we were told was going to be rescued.

It was rescued by a rubber cheque on March 31, 1976. That particular rubber

cheque, Mr. Speaker, of $181.5 million represented about 70 per cent of the

$265.5 million non-budgetary expenditure reported in public accounts.

I could go on about the arbitrariness, the irrationality, of this

government's accounting for fiscal 1975-76, but perhaps that point is

best made and best captured by the Royal Bank's Survey of Provincial Finances, 1976-77 .

That publication was issued in August, 1976, but they hadn't received

the good news about the deficit shrinkage of $121.8 million, a

shrinkage which took place after the fiscal year in question. But the

report did make a useful comment upon non-budgetary expenditures. For

anybody who cares to read it, it's on page 70 of that newsletter: "In

addition, the present government" — that's this Socred coalition

government before us — "deemed" — deemed, Mr. Speaker; I want you to

note that word — "that another $250 million on non-budgetary

expenditure should be included in the budget figures." That's hardly a

ringing endorsation of Bennett-Wolfean fiscal theory, Mr. Speaker. They

"deemed" that another expenditure should be included — much the same

language as Clarkson Gordon used.

MR. KING: Cook the books.

MR. STUPICH: In the 101 pages of that document, Mr. Speaker,

that's the only case in which they feel called upon to use that kind of

tentative language. Every other fiscal decision of every other

jurisdiction in Canada is reported straightforwardly, as though they

regarded every other decision as arising from solid principles of

public financing. They reserved that particular language, that word

"deemed", for one case only — that is, the government's decision to

include that entire $265 million as non-budgetary expenditures in

1975-76.

The decision to inflate the budgetary deficit by $122 million, more

than could be sustained six months later; the decision to issue a bum

cheque for a corporation that didn't need it, that eight months later

found itself with a current-year surplus in excess of $50 million; the

decision not to receive certain revenues; the decision to charge items

which they themselves classified as capital expenditures wholly against

the current account — all of these decisions were used as justification

for massive increases in taxes and direct-user charges, everything that

the government could imagine it could get away with by way of

increasing charges.

Mr. Speaker, I don't want to keep gnawing this old bone, but I think

it's important in describing the attitude of this government. The point

isn't whether these charges should be made against 1975-76, or whether

the income should have been included in '75-'76 or '76-'77. If that's

all there was to it, I'd be quite content to let the matter rest with

what my colleagues and I said last year in this debate. The point is

that all of these partisan political decisions, indefensible economic

decisions, were used to justify

[ Page

283 ]

a fiscal assault upon this province the like of

which has never been seen in the western world. Worse, this same

nonsense is being used in this second budget of the government, another

viciously restrictive budget visited upon an economy that is already

far too restrictive.

I recall, I believe, just about a week ago, the hon. leader of the

Liberal Party (Mr. Gibson) saying that this government felt moved last

year in its budget to have revenge, not revenge against the NDP

government, but revenge against the people who dared to throw out of

office the previous Social Credit administration, and to warn them

never to do the same again. It was and it is wholly unnecessary, Mr.

Speaker. The unemployment, the poverty, the ruined businesses, the

slashes in services — all the sacrifices that were visited upon British

Columbia in the name of that contrived deficit were wholly unnecessary.

I have a newspaper clipping that I neglected to bring into the House

from my own community of Nanaimo, showing pictures of a number of

businesses that have either gone out of business or moved to another

location. The premises are empty. Nanaimo is the Hub City. It reflects

what's happening in the whole northern part of the Island — everything

north of the Malahat. That's the kind of thing that's happening on

Vancouver Island.

Mr. Speaker, it was unnecessary. They have not turned the economy

around, other than to have turned it down. We had maintained, even

throughout the very difficult 1975.... 1975 was difficult for the whole

western world. You'll remember there was no real growth in Canada as a

whole, although the publications, the economic review covering 1975 put

out by this present government, showed that B.C. had fared better than

the rest of Canada. In spite of the fact that 1975 was difficult, we

managed to maintain an AA bond rating.

Up to 1975 we had, in each year of our administration, improved our

capacity to service debt — improved it by all of the standard measures.

Even if there had been $400 million, which there wasn't, but even if

there had been $400 million of new debt incurred in fiscal 1975-76,

that would have been considerably smaller than the amount we are being

asked, on behalf of B.C. Hydro, to allow it to increase its debt by in

this one year — $650 million for B.C. Hydro alone.

AN HON. MEMBER: And $500 million last year.

MR. STUPICH: Five hundred million dollars last year and $650 million

this year to keep one corporation going. Even if we needed $400 million to keep

the economy of British Columbia going, it would have been a small price to pay

to keep it going. But it wasn't necessary; the figure was much less than

that. If a single Crown corporation can in one year acquire $650 million more

debt, debt that is guaranteed by the people in the province of British Columbia,

and can do so without any great fuss, why would the alleged need for the entire

province to borrow $400 million require the adoption of fiscal measures that

increased unemployment, damaged small businesses, slashed essential services

and increased so many user charges upon the people of the province of British

Columbia?

This year's budget, on page 3, contains a gratuitous remark about

the theorists who continue to press for deficit financing. These

comments are a slur upon the NDP, but not only upon the NDP; they are a

slur on every jurisdiction in the western world — and I don't know

what's happening in the eastern world — every jurisdiction except this

one. Every other jurisdiction understands the advisability of prudent,

responsible debt.

We are not advising that they borrow everything they can borrow and

gobble it all up, use it all up, but prudent, responsible debt. This

province has always carried debt. Every family that has a mortgage

understands the advisability of prudent, responsible debt. What would

we say of parents who refused their children decent housing until they

could write a cheque to pay for the cost of the whole residence? Would

we call them being fiscally responsible? Worse, what would we say of

them if they refused to carry a mortgage while accepting debt through a

device as artificial as a contingent liability? What would we say of a

businessman who, irrespective of his capacity to carry a debt, refused

to do so? Would that be a good businessman?

Does the Minister of Finance in his private business never borrow

money? If he is in that position, I suggest he is the only car dealer

in the province who is. Does he encourage all of his customers never to

borrow for an automobile until they can pay for the whole cost of the

automobile?

MR. BARRETT: Let's hear that again.

MR. A.B. MACDONALD (Vancouver East): Ask him.

MS. SANFORD: I don't think he's listening.

MR. BARRETT: He only sells cars to people who have cash.

MR. STUPICH: Prudent, responsible debt. Mr. Speaker, there

are times when perhaps it's not prudent to go into debt to buy an

automobile. But I ask again: does the Minister of Finance, in his

business, advise his customers never, under any circumstance, should

they borrow to buy an automobile?

[ Page 284 ]

MR. KING: Evan help us!

MR. BARRETT: If you don't come with cash, don't buy at Wolfe's — is that it?

MR. KING: Beware of the big, bad Wolfe!

MR. BARRETT: Let's take out an ad to that effect.

MR. STUPICH: We have a tax in this province, Mr. Speaker, the

corporation capital tax, and it is levied at the rate of one-fifth of 1

per cent of the corporate debt, including surpluses and capital

shareholders' credits, and those sorts of things, and it is levied on

corporations with over $100,000 of that kind of investment. Last year

this corporation capital tax yielded $35 million, which means that B.C.

corporations alone — not counting partnerships, not counting

proprietorships, but B.C. corporations alone with that kind of debt

and shareholder investments in excess of $100,000 — are carrying $17.5

billion in debt. Are all of these corporate businessmen fiscal madmen?

Mr. Speaker, where is the rationale in that argument?

We've maintained a charade in B.C. for far too long. Perhaps while

we were in office we should have done more to expose this charade, Mr.

Speaker. For too long the government of British Columbia has pretended

to be debt-free when indeed it wasn't. We maintained thereby a public

climate which renders ordinary common-sense discussion of debt

impossible and perpetuates a set of public policies that are ludicrous.

The government recognizes some of this. I read on page 6 a reference

to B.C. Ferries — or at least I tie in a remark on page 6 as a

reference to B.C. Ferries — because in talking about fiscal management

and debt financing, at the top of page 6 it reads: "Over a 20-year

repayment, at 10 per cent interest, the amount repaid is 2.3 times the

original borrowing." Isn't that terrible, Mr. Speaker?

Do you remember what we did with B.C. Ferries? You'll remember, Mr.

Speaker, that the previous, outgoing NDP administration, as a current

expenditure, paid some $30 million for the construction of new ferries.

You'll recall, Mr. Speaker, that in the calendar year 1976 the present

administration sold those ferries, got that money and put it back into

public accounts, sold them to eastern money-lenders and has contracted

to lease them back over a period of 18 years — and to pay during that

18 years, instead of the $46.5 million original cost of the ferries,

$83.4 million.

MR. KING: Oh, what good business sense. Is that the way you're going to run Daddy's hardware?

MR. STUPICH: Fiscal management, Mr. Speaker? And they say that's all right. But that isn't all.

MR. KING: Help the eastern financiers.

MR. STUPICH: After they have finished paying $83.4 million —

18 years — the ferries still don't belong to us; we still have to buy

them back!

MR. KING: I never read that in the paper.

SOME HON. MEMBERS: Oh, oh!

MR. STUPICH: And they're guessing — although they admit that

this is subject to the income tax department's rulings on this question

— that the eastern money-lenders will sell them back at $11.6 million.

So, in effect, ferries that we had largely paid for under the previous

NDP administration out of current revenue, that cost a total of $46.5

million, because of this grand, glorious deal with no debt, no

deficits...in the course of 18 years we're going to pay to buy those

ferries back some $95 million — or more if the income tax so rules.

MR. BARRETT: You've got to stay awake nights figuring those ones out.

MR. STUPICH: Fiscal management.

MR. KING: Boy, what good businessmen! Now they give it away without getting anything.

MR. STUPICH: What has this set of policies done for us in the

past year? I had some quotations from a number of people — I've read

them already — people who are concerned about the economy in the

province. Quotations also from a Professor Laudadio of UBC....

AN HON. MEMBER: UVic.

MR. STUPICH: I'm sorry, UVic, published in the Colonist , August 13, 1976.

AN HON. MEMBER: He used to support McGeer.

MR. STUPICH: Probably if he used to support McGeer he doesn't any longer.

"The recent statement by the finance minister about

the health of the British Columbia economy would give substantial

reason to worry — not necessarily about the economy, but certainly

about Mr. Wolfe's understanding of the situation."

The whole

article is a criticism of the fiscal policies of this

present administration and of their estimates of revenue and

expenditure.

[ Page

285 ]

MR. BARRETT: He only sells cars for cash. No credit at

Wolfe's. Only cars for cash; everybody else stay away. He doesn't

believe in deficit financing.

MS. SANFORD: Let them walk.

MR. STUPICH: We're told, Mr. Speaker, that we can expect that

for the fiscal period 1976-1977 we'll break even, or there may even be

a small surplus. We're told that, Mr. Speaker, but where's the

evidence? Where's the evidence for this statement that there will be a

small surplus or even a break-even budget?

Mr. Speaker, you recall something that the NDP government did in an

attempt to keep the people informed — the open government. You recall

that in the last budget speech that we introduced — that the Minister

of Finance, Mr. Barrett, introduced — we included in that budget speech

the most up-to-date estimate of revenue expenditures that we could get,

and put that right in the budget so that the people of the province

would know what was happening on an up-to-date basis.

We were told by this government that they were going to be open and

honest and revealing — they would show all. And they did come out with

a first-quarter report, a first-quarter report that indicated to the

people of the province that unless expenditures were heavily curtailed,

or unless there was some unexpected growth in revenue, there would be a

deficit or we would have to curtail expenditures. That was the first

quarter. That was bad news.

Then it came to Thanksgiving, and a decision was made ahead of time

that the Premier would deliver the report for the second quarter.

MR. BARRETT: $900 worth of make-up. (Laughter.)

MR. STUPICH: It was ordained, Mr. Speaker, that the second

quarter would show better results than the first quarter, in spite of

the fact that the economy was depressed during the summer, in spite of

the fact that there were shutdowns in major industries in the province.

It was ordained that it would be a better report and scheduled ahead of

time and that the Premier would deliver that one since it was better.

And it was ready by the 11th of the month following the end of that

second quarter. On the 11th of October that speech was delivered.

What about the third quarter? Mr. Speaker, we're told that we will have

a balanced budget this year, or if not a surplus. We're not given any indication

as to what the revenue will be, what the expenditures will be, where there will

be savings and expenditures or gains in revenues to make up for other losses.

We're told none of that. In the usual type of Social Credit coalition arrogance,

we're simply told that "we have ordained it will be so and therefore

it will be so; there will be a balanced budget." No figures. No third-quarter

report, although today is the 25th of the month and the report for the second

quarter was ready by the 11th of the month.

MR. COCKE: Did the press cover that?

MR. STUPICH: Mr. Speaker, if indeed there is a slight surplus

in the present fiscal period, it'll be in part because of the $31.4

million revenue from the sale of the ferries that we paid for the year

before.

AN HON. MEMBER: Right on!

MR. STUPICH: In part, $28 million by recapture of special

funds, which is a one-shot deal. There were some savings in the

operation of the ferries — you'll recall how badly the service has

deteriorated, Mr. Speaker — so some savings there.

MR. BARRETT: Bring your own sandwiches.

MR. STUPICH: In times of economic decline such as we are now

experiencing, it's rather hard to see what comfort a distressed citizen

can gain from a genuinely balanced budget. The real choice for such a

citizen is between prudent, manageable debt on the part of his

government and unmanageable debt on his own personal part. That's the

choice he's offered.

MR. BARRETT: It's a sense of relief for the millionaires.

MR. STUPICH: Relief for the millionaires. Even less comfort

is available when the balances are contrived for the deficits, or the

deficits are contrived.

AN HON. MEMBER: Did Jim Hume cover that yet?

MR. STUPICH: This year we are being asked to approve another

balanced budget, a budget which speaks of balances as though they were

the simple criteria against which budgets are to be judged. In the same

session, we are asked to extend the borrowing power of B.C. Hydro by

$651 million. All that lies between us and a fiscal policy appropriate

to the times is the silly myth that a contingent liability is not a

debt.

Mr. Speaker, the budget before us is barren of any attempt to

stimulate our depressed economy. Page 6 of the budget says that the

province's economy needs stimulation, and with that we can agree. With

that one statement in the budget we heartily agree. But where is the

stimulus in the budget, Mr. Speaker?

[ Page 286 ]

MR. COCKE: $28 million to the millionaires.

MR. STUPICH: As an illustration of this government's view,

and an illustration that their responsibility in their minds is limited

to the keeping of public accounts, I know of nothing better than the

previous state-of-the-province address issued at the end of the second

quarter. I refer to that again.

There are a number of interesting features in this second-quarter

report, Mr. Speaker. I mentioned one of them: that is, the change of

great magnitude from the first quarter, evidently reflecting the

benefits available from changing the spokesman from the Minister of

Finance to the Premier. It had to be better. But the feature I want to

examine here, Mr. Speaker, is the contrast between the title, "state of

the province," and the actual contents of that address.

There was no mention in the address of the tragic unemployment

problem in the province. What does that mean, 100,000 unemployed? Is it

not noteworthy of a mention in the state-of-the-province address?

There's no mention of the increasing small-business failure rate...

AN HON. MEMBER: You're all right, aren't you, Evan?

MR. STUPICH: ...now running, according to federal sources, ahead of the rate for last year.

MR. BARRETT: Well ahead.

MR. STUPICH: In the Premier's view, even this isn't worth

mentioning in his state-of-the-province address. These are serious

concerns; not worth mentioning in the Premier's address.

MR. BARRETT: The bankruptcy crew.

MR. STUPICH: There's a very brief mention of an increase in

mineral exploration, but no mention of the rate of activity in mining

proper, Mr. Speaker. I can understand that the present government

managed to persuade people during the campaign, and before the campaign

got rolling, that it was our legislation that was responsible. But

while they persuaded voters in the Province of British Columbia, they

didn't persuade everybody.

I have a photocopy here of something from Executive

magazine, dated October, 1975 — certainly not an NDP publication by any

stretch of the imagination. It's talking about mining trends. It's

talking about exploration, claims staked, exploratory drilling. And it

shows the figures for 1970, '71, '72, '73, '74. It goes on to make

projections, Mr. Speaker. "Projecting the trends, there will be no

drilling...." — not in British Columbia. This, of course, was put out

before the election. It doesn't say British Columbia — "...no drilling

in Newfoundland by 1976, none in New Brunswick by 1980, none in

Ontario, Manitoba, Saskatchewan or British Columbia by 1982. By 1986,

only Nova Scotia and the northern territories will be seeing any

action." That's in Executive , and it's not blamed on governments. It's blamed on international

market for the kind of materials that we're producing in the province of

British Columbia.

Mr. Speaker, with any intelligence, any respect for the truth, from

that

article and subsequent information, the decline in mining activity

experienced during 1975 and continuing to this day had to do

not with legislation, but with the drop in world prices and in world

demand. These same circumstances prevail today despite the new mining

legislation, despite the promises to the mining companies, despite the

promises to say to them that they will even be charged the sales tax

rate for the minerals they are taking out of the ground, despite the

promises in the budget yesterday that they will be getting further

relief. Until there is some upturn in the international demand and

price for the products there will be no increase in mining in the

province of British Columbia or in other Canadian provinces.

MR. KING: That's why they dumped a loser in that portfolio.

HON. MR. CHABOT: It's tripled exploration, and you know it.

MR. STUPICH: Exploration claims staked, but not drilling, and that's what counts, Mr. Speaker.

That it goes on today is amply demonstrated by the B.C. Employers

Council's figures of exports, demonstrated by Granduc's decision to

further curtail production and to lay off another 80 miners — not

before the election, Mr. Speaker, but in March of 1976. Four months

after the election they were still curtailing production and laying off

miners.

The B.C. Employers Council in their most recent statement on this,

and quoted in the Province of January 5, 1977, tells it best: "B.C.'s

economic growth this year will be equal to or marginally below that in

Canada as a whole. Continuing low levels of consumer and business

confidence are providing no buoyancy to the domestic outlook."

MR. BARRETT: Down the tube with your Calgary suit.

MR. STUPICH: "The unemployment rate in B.C. in 1977 is

expected to remain about 8.5 per cent, well above the forecast of 7.4

per cent for the whole of Canada. Its actions early" — these are all

[ Page

287 ]

quotations, Mr. Speaker — "in 1976 in increasing income and sales

taxes, auto insurance premiums and other user fees eroded consumer

confidence and spending." That's from the B.C. Employers Council.

[Mr. Veitch in the chair.]

"B.C.'s mining industry is in a transition phase."

"B.C.'s mining industry awaiting increase in world demand and prices to

boost the profitability of existing operations and to stimulate the

development of potential mines" — awaiting these things before there

will be any stimulant to the development of potential mines.

"Estimated return on investment in metal mining was

below 3 per cent in both 1975 and 1976. Copper industry spokesmen say

that they cannot see even a breakpoint arriving in 1977" — the B.C.

Employers Council, Mr. Speaker.

But strangely enough, although this was the third-largest industry

in the province, none of this was mentioned in the Premier's state of

the province address. They weren't important, Mr. Speaker — not to the

Premier, apparently.

MR. G.R. LEA (Prince Rupert): Right. He was interested in getting those succession duties off.

MR. STUPICH: How about the tourist industry? The only thing

the government has suggested about the plight of that industry —

especially on Vancouver Island, but in the whole province — was the

Provincial Secretary's (Hon. Mrs. McCarthy'

s) brilliant conception that

we ought to smile more at tourists. (Laughter.) I have a file of

clippings on the tourist industry, and I would just like to share a few

of the headlines with you, Mr. Speaker.

MR. BARRETT: Smile, it will feel better.

MR. STUPICH: Wednesday, November 3, 1976 — you know, that's

almost 11 months after the election: "Restaurants Going Broke Faster

Than Ever." This is in the Province .

MR. BARRETT: It'll feel better if you smile.

MR. STUPICH: Again from the Province , November 5, 1976: "Tourism Drop. Fares Hit Ferry Figures."

MR. COCKE: Smile though your heart is breaking. (Laughter.)

MR. STUPICH: "Vancouver Island tourist industry officials agree

that fare increases are not the sole reason, but suggests they were a greater

impediment than the Ferries Service admits."

And the one to which I referred: "Let's Smile at Tourists, says Grace."

MR. BARRETT: The millionaires are smiling today.

MR. STUPICH: "Local hotels suffering financially from severe

drought of tourists" — July of 1976. I recall driving down the Island

the first weekend in August, and every motel I passed between

Parksville and Nanaimo — where usually the "no vacancy" signs are out

and they are booked ahead — had a "vacancy" sign up in the height of

the tourist season. It's serious, Mr. Speaker.

MR. BARRETT: They would even have rented a room to a Socred.

MR. STUPICH: How can you smile at the tourists when they are not there to be smiled at?

Mr. Speaker, I have files on all of these — a file on the forest

industry. All we learned from the quarterly reports on the forest

industry was that revenues from these sectors were lower than

anticipated. That's really all that was said in the quarterly reports.

Does a disappointing performance of the forest industry in B.C. not

warrant some comment, some analysis in what purports to be a state of

the province address?

The same goes for agriculture. Once again, I have correspondence, I

have newspaper stories and I have files on this. Circumstances in the

agricultural industry in this province are desperate and we'll

certainly have a good deal more to say about that at a later date. But,

Mr. Speaker, not a single word in the Premier's state-of-the-province

address.

Mr. Speaker, this all recalls the government's view that if they

just balance the budget — all they have to do is make the figures come

out even — by however artificial a process they achieve this balance,

they will have done all for which they are responsible. Their attitude

towards fundamental parts of the infrastructure of our economy is

perhaps the most tragic illustration of their blindness.

Mr. Speaker, I can recall the hon. Minister of Energy, Transport and Communications

(Hon. Mr. Davis) in one of his speeches, or in several of his arguments, saying

that the users of the ferries should pay the difference between the cost of

running those ferries and the cost of an equivalent mile of highway. Mr. Speaker,

if you carry that argument a little further, then you come back to tolls on

bridges: to the extent that it costs more to build a mile of bridge than it

costs to build the average mile of highway, then you should charge the users

of those bridges...

MR. KING: Exactly.

MR. STUPICH: ...and different bridges should

[ Page 288 ]

be charged different amounts. Mr. Speaker, why take an average for

highways? Take a look at the Upper Levels Highway and just imagine, for

one moment, what it cost to build a mile of that highway. Should we not

be saying that since it costs more to build a mile of highway in that

location, and even more for one mile than for another mile, then we

should be charging the users of any particular mile of that highway

whatever the difference is between the cost of that highway and the

average cost of highway in the province? It's absurd, Mr. Speaker.

MR. BARRETT: And give them rebates on the cheaper roads.

MR. STUPICH: What about the bridge across the Okanagan Lake at Kelowna?

MR. COCKE: Yes!

MR. STUPICH: Put a toll booth on that, too?

AN HON. MEMBER: Not on your life, partner!

MR. KING: A pontoon bridge.

MR. STUPICH: Not on your life? And nobody would even promote

that and no one would suggest it, I think, but it's the logical

extension of what the hon. Minister of Energy, Transport and

Communications is suggesting.

The point he's missing, Mr. Speaker, is that we're all users of all

of these services, whether we use them every day or not, by virtue of

the fact that we are members of the community of the province of

British Columbia, and by virtue of the fact that there is something

going on in all of these areas, every day, we are all, to some extent,

users of the whole infrastructure. You can't fundamentally alter the

financing of such an infrastructure without profoundly affecting the

whole economy, and certainly that was brought very much home to the

government when they more than doubled ferry rates — or at least it

should have been.

MR. LAUK: Did Jack Davis know that?

MR. COCKE: No. Jack Davis hasn't come home from Ottawa yet.

MR. STUPICH: Mr. Speaker, if they had done it in ignorance

that would have been one thing, but they knew better. They had a report

that told them what would happen if they simply increased ferry rates

by 50 per cent, and yet they went ahead and more than doubled them — in

spite of that report. Mr. Speaker, as I say, if they were just simply

guessing and had nothing to go on, there might be some excuse — not

much, but a little bit. But when they had a report that warned them

what would happen and, in spite of that, went ahead in an attempt to

artificially balance the books on that one aspect of government

finance, then, Mr. Speaker, there can be no excuse for them.

Let's for a moment think of a few more examples. Let's look at a

multi-level department store with an escalator. Is the department store

going to calculate the cost of running that escalator and then put a

slot machine there for you to put coins in so that you can travel the

escalator? Otherwise, the escalator isn't paying. It's the same thing,

Mr. Speaker. The escalator is part of the total operation and they

recover the costs of that part of their total operation in their whole

business. But if you're going to operate it like the hon. Minister of

Energy, Transport and Communications wants to operate our ferry system,

which is a part of our total business, then you should put a slot

machine, you should put a coin machine at the foot and at the head of

the escalator.

MR. BARRETT: They did put slot machines on the ferries.

MR. STUPICH: Stores wouldn't carry a single item unless that very item was profitable in itself.

MR. LAUK: Did the government have the same attitude toward the CNR freight rates?

MR. STUPICH: How long would such a store remain in business, Mr. Speaker?

I want to pursue this idea of fiscal mismanagement and fiscal

responsibility just a little further. Perhaps you can recall, Mr.

Speaker, Can-Cel, one of the first steps that the NDP government took

when we were in office, and the reason for it. We didn't go into

Can-Cel because we wanted to get involved in the forest industry. We

got involved in Can-Cel because the people who were going to take over

Can-Cel — Weyerhaeuser — had said that they were going to close down

completely the pulp mill at Prince Rupert. We recognized that if they

closed down the pulp mill at Prince Rupert it would mean the loss of

jobs not only for the people in Prince Rupert, but for all of the

forest industry in the Pacific northwest of the province that depended

upon that outlet for pulp chips. Without the pulp chip outlet, no

lumber production. It would have been a disastrous blow to the whole

northwest of the province to have allowed that to happen.

Mr. Speaker, we were fiscally responsible. We felt, on behalf of the

people of the province of British Columbia — the Pacific northwest in

particular, but only because they are a part of the total community —

that we could not stand by idly and let that happen.

So we moved in, Mr. Speaker, and for the price of

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$1 and a guarantee of the bonded indebtedness that at that time

totalled some $60 million we, on behalf of the people of British

Columbia, acquired assets by way of sawmills and pulp mills, and timber

rights that Weyerhaeuser said were worth $0.5 billion. It cost us

nothing. It cost us $1 to acquire assets worth $0.5 billion, assets

that have earned for the people of this province, $112.5 million in the

three and a part years since we assumed ownership.

AN HON. MEMBER: Some peanut stand!

MR. STUPICH: Some peanut stand! Mr. Speaker, I say again: we

didn't do that because we wanted to get involved in the forest economy,

but we recognized our responsibility to the total economy, our

responsibility to continue employment. We recognized that, we accepted

our responsibility and we acted.

What was the first action on the part of the present administration,

Mr. Speaker, that comes to mind? Normally when I ask that in

conversations, I'm hit right away with the fantastic increases in ICBC

premium rates. Simply because they wanted to make that one particular

column of figures balance, without any consideration at all for the

effect on the whole economy of taking, in unanticipated costs, $0.25

billion out of the pockets of motorists in the province of British

Columbia within a period of two and a half weeks....

Mr. Speaker, we were fiscally responsible when we acted to save

those jobs, to keep the economy moving, when we moved in and took over

Can-Cel. The present administration was fiscally irresponsible and

showed its lack of business management when it increased premiums by

140 per cent, and struck a disastrous blow to the economy in the

province of British Columbia.

Mr. Speaker, another move we made: Ocean Falls, and that's been scoffed

at.

AN HON. MEMBER: Hear, hear!

MR. STUPICH: Mr. Speaker, we didn't move into Ocean Falls

because we wanted to take over another pulp-and-paper mill. We moved in

there because jobs were going down the drain, and because under the

previous Social Credit administration the plant was already being shut

down, people were already laid off, and people had already moved out of

the community, and the tremendous cost of the social capital of

housing, schools, hospitals, swimming pools — all of these things, that

social cost — would have been lost. We moved in, Mr. Speaker, and we

bought it.

MR. KING: It was advertised in American papers: "Town for sale.

B.C. town for sale."

AN HON. MEMBER: $10 million.

AN HON. MEMBER: Are you proud of that?

MR. STUPICH: We bought it, Mr. Speaker, for something less

than $900,000, and in the first six months of the current fiscal period

it made a return on that investment of 10 per cent. At that rate,

projected over a whole year, it would be 20 per cent of the cost. But

again, we didn't go in because we wanted to earn money with that

pulp-and-paper mill. We went in because we recognized our

responsibility to the economy of the province not to waste the

tremendous social capital that had been invested in that community,

capital that was provided by the people of British Columbia. Whether it

was owned by some other company or not, it was still capital provided

by the working people in the province of British Columbia.

AN HON. MEMBER: Hear, hear!

MR. STUPICH: And those assets are still in use; those houses are lived in; those hospitals are being used; and the schools are being used.

What was the second move on the part of the Social Credit government

that comes to mind? To my mind, it's the sales tax increase of 40 per

cent, and I've already talked about the effect that had on the economy:

the economy in Dawson Creek; the economy in Golden; the economy in the

lower Fraser Valley where people are moving out of the province to do

their shopping — a tremendously bad effect on the economy of the

province.

Fiscal management. They should have known — certainly we told them

when they introduced the legislation — the effect this would have on

the economy, that you just don't do things that way if you're trying to

build up an economy. I quoted earlier from the C.D. Howe Institute

where the recommendation is that sales tax be reduced in order to give

the economy a spurt now, the spurt it needs with unemployment as high

as it is.

Mr. Speaker, one that is often laughed at — another move that the

NDP administration made — Panco Poultry. And it's laughed at again, Mr.

Speaker, by the people who are too ill-informed to have bothered to

acquire the information. We didn't move into Panco Poultry because we

wanted to go into the chicken-processing business.

Mr. Speaker, we were approached by the owners of Panco Poultry and

given a week in which to say whether or not we were prepared to buy

this enterprise and retain employment for some 450 people who would

find it extremely difficult to get any kind of employment anywhere

else. They could do that kind of work but they were trained for nothing

else.

[ Page 290 ]

AN HON. MEMBER: They could have bought cars at Kerster's.

MR. STUPICH: The alternative was to close down the whole

operation, to dismantle the whole operation and to sell the properties

off one by one.

We were told we had a week to make up our minds.

We wanted to maintain that employment. It wasn't just the

employment; Panco Poultry was processing a lot of chicken in the

province. It would have meant buying all of that agricultural produce

from some other jurisdiction. It would have been a disastrous blow to

the agricultural industry in the province.

We could have been fiscally irresponsible, just as was the previous

Social Credit administration when they were allowing Ocean Falls to

close down. We could have said that this is none of our business; it is

private industry, free enterprise. Mr. Speaker, we were fiscally

responsible, we moved in. We did not do it in a week; we said we'd have

to have a month to look at it. We negotiated the price, and Panco Poultry, in the first six months of this current fiscal period,

again made an income at the rate of 10 per cent, in six months, of the

original cost invested.

Again, I emphasize that it wasn't to earn an income for the people of the

province at the rate of 20 per cent of the cost of the investment; we were moving

in there to keep the economy going. We were moving in there to maintain employment

and, in that particular instance, we were moving to save agriculture.

What was the third thing that comes to mind with respect to the

present administration? Something I've talked about already — ferry

rates. I don't think I need to say any more about that. They knew what

would be the effect of the tremendous increases they made. They knew

when they increased ferry rates by more than 100 per cent that they

were in effect killing off a substantial portion of the tourist

industry, particularly on Vancouver Island, but also in the rest of the

province. But because they wanted to make that one column of figures

balance, they said: "We have no responsibility for what's happening in

the province; our only concern in this instance is to make those two

columns of figures balance."

Mr. Speaker, I'd like to draw your attention to page 25 of the

budget and I would like to pose some questions, questions that concern

me and perhaps questions that will concern you as well.

Take a look, for example, at the budget estimate for sales tax. To

actually get the breakdown of the figures we should be looking at not

just the budget but at estimates themselves because the figures here

don't really have a breakdown of sales tax as such.

But if you look at sales tax, which is, admittedly, the best barometer of the

economic health of the province of British Columbia, and if we look at the sales

tax revenue projected for 1976-77, comparing it with the estimates for 1977-78,

we see that the increase proposed is 4 per cent. If we look at revenue from

natural resources, in particular the forest industry, we see that they project

a downturn in the revenue from the forest industry — in spite of the glowing

remarks in the budget about the improved economy, downturns in those two very

significant areas.

Mr. Speaker, I ask you to consider three possibilities. These are

very important resources of revenue. The fact that sales tax is

increased by only 4 per cent could indicate that the original figure,

the figure for 1976-77, is too high — the base is too high. If that is

the case, substantially, then I have serious doubts as to how this

government is going to balance the budget, balance the revenue and

expenditure for 1976-77, especially when we know that the forest

revenue is down below estimate. That's the first choice.

The second choice is that in this area where the real barometer is

the government is projecting not a growth in the economy — in spite of

some of the words in the budget — but in saying that revenue from sales

tax will increase by only 4 per cent, they are saying that in terms of

real dollars, because our population is going up about 2 per cent and

inflation is carrying on at about 8 per cent, there will be negative

growth in the province of British Columbia in the year ahead. That's

the second choice.

There is a third choice. The third choice is that this

administration, presenting this budget to us yesterday, is falling into

the same pattern that the government of the previous Social Credit

administration did successfully — politically, that is — for almost 20

years, a pattern of deliberately and significantly underestimating its

revenue so it would suddenly find that fortuitously it had accumulated

large surpluses which were available to use at election time.

Mr. Speaker, I would ask you which of those three choices you think is the

correct one. But I'm not going to ask you that question because you'd

have to guess — you don't have that third quarterly report. This government

that was so anxious to be truthful, to tell us everything that was happening,

to keep us abreast of revenue and expenditures, to carry on with its quarterly

reports, the government that was going to do all that, has so far declined to

present the report for the third quarter which would give us some information

on which we could say whether it's likely to be choice one, choice two,

or choice three. We can't guess; we don't know.

HON. P.L. McGEER (Minister of Education): It'll be out very soon.

MR. STUPICH: Mr. Speaker, I am assured by the minister responsible for ICBC — and I was told once

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by the Premier that he thinks that minister is on the Treasury Board — that

it will be out very soon.

I would remind you that today is the 25th of the month, exactly 14 days later

than the report for the six months was available. Now what's holding it

up that extra time? I don't know. Possibly it's because they feel it

might interfere with the discussion of the budget.

Mr. Speaker, to me and to the members of this group, yesterday's

budget confirmed the sorry fact that the Finance minister we now have

will stoop to any depth of political partisanship in presenting the accounts of this province to the House.

Last year there was a general revulsion at the unprecedented low set

by the budget speech in this chamber in its attempt to denigrate the

people programmes of the New Democratic Party administration. It

contained so much distortion, so much vitriol, that the Queen's

Printer, for the first time in history, did not reprint the verbatim

version.

It was that bad, Mr. Speaker. Once again the minister has

manipulated words and figures to misinform the media in the hopes of

misleading the public, only it is more shameful this time, because

all the Machiavellian malevolence of the millionaire club opposite has been

turned against the old, the handicapped and the helpless citizens of

our province.

This budget reeks of Socred coalition callousness.

It's a cruel hoax to trumpet a $50 increase in homeowner grants for

senior citizens and also quietly slash the funds for construction of

homes for the elderly citizens from $10 million to $4 million. It is

arrogant and revealing of priorities to boast of reducing taxes on

mobile homes while virtually wiping out the Provincial Home Acquisition

Act, chopping its funds from $16 million to $3 million.

It's worse than cynical to rename the Mincome programme to GAIN with

such ballyhoo, and then cut it back to far below its level of two

years ago, in spite of inflation. Mr. Speaker, it is emotionally sick

for a government to turn G-A-I-N into an appalling $20 million 1-o-s-s for the elderly and for the handicapped in the province of British Columbia.

It is cynical to offer only $15 million for employment opportunity

grants at a time of high unemployment, when contributions from

government enterprises — that is, net liquor profits — are predicted to

grow by at least $15 million.

It is cynical to introduce Pharmacare premiums, to continue

exorbitant sales tax rates, medicare premiums, car insurance premiums

and ferry rates at a time when world demand for raw materials continues

its recovery, yet multinationals exploiting public resources in B.C.

are expected to contribute about $77 million less to the provincial

treasury.

MR. BARRETT: Shame!

MR. STUPICH: The budget talked about improvements in all these

things, yet the budget forecasts $77 million less for the people of

British olumbia.

SOME HON. MEMBERS: Shame! Hang your heads!

MR. STUPICH: But, Mr. Speaker, I think the most cynical

passage of all is the four pages devoted to discussing this phoniness in

defending the millionaire club's decision to cut its own taxes on the

estates they themselves, or their heirs, expect to inherit, as well as

those they will pass on.

Mr. Speaker, that cabinet is riddled with millionaires, we're told —

the press has counted them — who were born to wealth, sold, or

speculated their way into wealth. Every one of them stands to gain

thousands of dollars from inheritances, or to pass on larger estates

because of the legislation that was introduced yesterday. Every one of

them now stands personally to gain, or to pass on, thousands upon

housands of tax-freed wealth. For themselves and their fellow

millionaires they made a windfall; for the average citizen in the

province of British Columbia they preach restraint.

MR. KING: They wrote their own windfall!

AN HON. MEMBER: What hypocrisy!

MR. STUPICH: How heart-wrenching, how misleading, those four

pages! But perhaps the Minister of Finance should be excused because he

wasn't in this House when the New Democratic Party administration

amended this legislation. We're talking now about the farm programme.

Remember the comment that "now the farms could be passed on"?

Interjections.

MR. STUPICH: Gross distortion, Mr. Speaker.

MR. BARRETT: That's not a distortion; that's a falsehood.

MR. STUPICH: At the same time as he was talking about taking

off the succession duty, documents were tabled that showed $28 million

collected last year. During the first nine months of '76 more than $32

million were collected — in nine months only. I suppose he thought that

this would go by without notice.

In another tortured paragraph the minister tried to pretend that the

rationale for this action was not to save the super-rich — including

himself and his colleagues — these paltry sums, but rather to save the

family farms out there in British Columbia from

[ Page 292 ]

having to be sold for taxes. Well, Mr. Speaker, I guess he just

wasn't here when we changed the legislation so that could be

accomplished.

But that same Finance minister who yesterday condemned hypocrisy in

his speech sat as a backbencher and pounded his desk in this chamber

March 13, 1972, approving the populist succession duty and gift tax

legislation brought in by his former leader.

MR. BARRETT: He voted for it!

MR. STUPICH: He voted for it. He thumped approval when the

NDP official opposition helped the previous Social Credit government

pass those bills, over the vehement objection of the Tories and

especially of the Liberals who sit in that coalition government on your

right, Mr. Speaker.

AN HON. MEMBER: There they are now.

MR. BARRETT: They're the ones who are wheeling and dealing.

AN HON. MEMBER: Who's calling the shot over there?

MR. BARRETT: There they are now.

MR. STUPICH: Who won the election, Mr. Speaker?

AN HON. MEMBER: Who's calling the shot?

MR. BARRETT: The old Liberal group won the election.

MR. KING: The Howe Street gang! (Laughter.)

MR. STUPICH: I quoted earlier from former Premier Bennett in

this respect. I think I would just say again that he wound up his

rallying cry when he was discussing this legislation at that time, to

show the difference between his brand of Social Credit and the Liberals

who now sit in that government and the Tories: "We're not a party of

the classes; we're the party of the masses!"

AN HON. MEMBER: Ha!

MR. STUPICH: What happened to that party, Mr. Speaker?

MR. BARRETT: The masses of millionaires!

MR. STUPICH: "This," he said, referring to the Succession

Duty Act, "is a fair tax." What happened to the fairness of that tax,

Mr. Speaker? The former Premier of this province was loudly applauded by the present

Minister of Finance, but he was opposed by the Liberals who now form a

very important part of that government. Who won the election, Mr.

Speaker?

AN HON. MEMBER: The Liberals!

MR. STUPICH: The recorded vote on second reading of that day

shows that the present Minister of Finance, along with the NDP and

Socred members, voted in favour of that succession duty.

MR. KING: What price did you demand for joining, Pat?

MR. STUPICH: The bill passed with an overwhelming majority,

Mr. Speaker, of 44 to 6. That's just less than five years ago. And

among the handful who were holding out — among the six who were holding

out — were present members of this Legislature: the hon. Minister of

Education (Hon. Mr. McGeer), the hon. Attorney-General (Hon. Mr.

Gardom), the hon. Minister of Labour (Hon. Mr. Williams).

SOME HON. MEMBERS: Oh, oh!

MR. STUPICH: Mr. Speaker, how times have changed. Today we

have a Liberal-dominated coalition, and the present Finance minister,

who supported the succession duty as a Socred backbencher, is now being

forced to be the spokesman for his opponents.

MR. BARRETT: If the backbenchers become Liberals will they make it into the cabinet? (Laughter.)

AN HON. MEMBER: You're upsetting the backbenchers.

MR. STUPICH: Nothing better measures the extent of sordid

cynicism in yesterday's budget. It stands as a glaring indictment of

this coalition government's pretence that it is loyal to Social Credit

populist ideals. Mr. Speaker, there must be some of those people still

in the Social Credit caucus. What happened to their Social Credit

populist ideals?

MR. KING: Smile, though your heart is breaking!

MR. STUPICH: The budget is a contemptible grab for even more

personal wealth by a handful of fat cats who have the hypocrisy to

preach restraint in a province they have already bludgeoned with

economic absurdities in taxation.

Mr. Speaker, the Minister of Finance, in discussing this in the media yesterday, said that there were

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studies proving the harmful effects on our economy of the succession

duty. Mr. Speaker, I challenge the minister to recall to us some of the

information from some of those studies — to table that study in this

Legislature.

AN HON. MEMBER: Table it! Produce, then we'll all discuss it.

MR. STUPICH: Mr. Speaker, neither my colleagues nor I have

switched our colours or our tune from the position we took in 1972 on

this question. For that reason alone we are proud to oppose this

tragically callous and cynical budget.

AN HON. MEMBER: Hear, hear!

MR. COCKE: Where is Evan Wolfe?

AN HON. MEMBER: He's down in the treasury.

MR. STUPICH: Mr. Speaker, one last reference to the budget.

The front page, the frontispiece: "This government is demonstrating its

commitment to restraint by presenting a budget which calls for a

restrained spending programme. Such restraint is necessary if we are to

regain our competitive trading position and strengthen investor

confidence in doing business in British Columbia."

Mr. Speaker, the unfortunate part of this whole budget is that this

government really believes that statement. It's unfortunate for the

people of British Columbia.

The government should be aware of the implications of its spending

and taxing plans. This government is labouring under the assumption

that, as a government, they have absolutely no responsibility for the

economics of the whole community. This just isn't so, Mr. Speaker. You

know that, I know that, but this government really doesn't understand

that. As a British Columbian I'm disappointed. I'm unhappy. I'm

concerned that we are being governed by a group so inept, a group so

wrapped up in the myth that balanced budgets and prosperity go hand in

hand. How old is that myth, Mr. Speaker?

This government's role seems to be to replay the visionary planning appropriate

to decades, or even centuries ago. They see the road to prosperity as one paved

by a determination to exploit and to export our resources — even at the cost

of subsidizing that exploiting of resources; even if it means building roads

and railroads to get rid of these resources. They consider that prosperity and,

in the short term, it is. It's great politics for the next election but

it's very poor economy when the people following are left with picking up

and paying the social costs of abandoned communities, of reclaiming land that

has been destroyed.

Mr. Speaker, it's a totally unsatisfactory budget; a budget prepared

by a government which seems to believe that they can achieve prosperity

by paying off election debts to millionaires at the expense of social

programmes to the elderly and the handicapped.

MR. BARRETT: Shame!

MR. STUPICH: Mr. Speaker, it is a hypocritical budget. It

talks about an upturn in the economy but projects revenue increases

that indicate a downturn in terms of real dollars. It follows the old

Social Credit policy of secretly planning surpluses that will be

available at election time. Much has been said about deficit financing,

and there is widespread misunderstanding about the necessity to remove

succession duties to build our economy.

Mr. Speaker, I can recall travelling this province and opportunities

I had during a discussion on the Land Commission debate some four years

ago, opportunities in many parts of the province and on the media, in

different ways, to present the arguments in favour of the Land

Commission and for the opposition to present arguments against them. We

went out into the public where members of the public and members of the

press had an opportunity to enter into discussions with us in large

meetings and in small meetings. I think this was good. I think that was

the turning point in the misunderstanding about the Land Commission —

when we had that opportunity to get out into the public and talk about

these programmes.

Mr. Speaker, I think there is the same misunderstanding about

deficit financing and about the removal of succession duties. I'd like

to challenge the Minister of Finance to meet me out in the community to

discuss these two