1987 Legislative Session: 1st

Session, 34th Parliament

HANSARD

The

following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

MONDAY, MAY 25, 1987

Afternoon Sitting

[ Page 1323 ]

CONTENTS

Routine Proceedings

Tabling Documents –– 1324

Oral Questions

Interruptible power to Vancouver Island.

Mr. G. Hanson –– 1324

Mr. Stupich

Soliciting practices of funeral homes. Mr.

Blencoe –– 1324

Open-heart surgery waiting-lists. Mrs.

Boone –– 1325

Canwood furniture factory. Mr. Miller –– 1325

Effects of free trade on wine industry.

Mr. Rose –– 1325

Native education funding. Hon. Mr. Rogers

replies –– 1326

Federal sales tax on food. Hon. Mr. Vander

Zalm replies –– 1326

Insurance (Captive Company) Act (Bill 21).

Committee stage. (Hon. Mr. Couvelier) –– 1326

Mr. Stupich

Third reading

Motor Fuel Tax Amendment Act, 1987 (Bill

13). Committee stage. (Hon. Mr. Couvelier) –– 1327

Mr. Stupich

Third reading

Miscellaneous Statutes (Finance Measures)

Amendment Act, 1987 (Bill 14). Committee stage. (Hon. Mr. Couvelier) ––

Third reading

Social Service Tax Amendment Act, 1987

(Bill 11). Committee stage. (Hon. Mr. Couvelier) –– 1327

Mr. Stupich

Third reading

Income Tax Amendment Act, 1987 (Bill 8).

Committee stage. (Hon. Mr. Couvelier) –– 1329

Mr. Stupich

Third reading

Homeowner Grant Amendment Act, 1987 (Bill

6). Second reading

Hon. Mr. Couvelier –– 1330

Mr. Stupich –– 1330

Mrs. Boone –– 1331

Mr. Cashore –– 1331

Ms. Marzari –– 1332

Ms. A. Hagen –– 1332

Mr. Lovick –– 1333

Mr. D'Arcy –– 1334

Mr. Sihota –– 1334

Ms. Edwards –– 1335

Mr. Blencoe –– 1336

Mr. G. Hanson –– 1337

Mr. Rose –– 1337

Hon. Mr. Couvelier –– 1338

Division –– 1338

Property Purchase Tax Act (Bill 17).

Committee stage. (Hon. Mr. Couvelier) –– 1338

Mr. Stupich

Mr. Sihota

Mr. G. Hanson

Mr. Clark

Mr. Miller

Division

Mr. Cashore

Mr. Lovick

Mr. Rose

Hon. Mr. Strachan

Taxation Statutes Amendment Act, 1987

(Bill 37). Committee stage. (Hon. Mr. Couvelier) –– 1345

Mr. Stupich

Mr. Rose

Third reading

Property Purchase Tax Act (Bill 17).

Committee stage. (Hon. Mr. Couvelier) –– 1346

Mr. Stupich

Third

reading

Appendix

–– 1347

The House met at 2:08 p.m.

Prayers.

HON. MR. DUECK :

Mr. Speaker, today it's my distinct pleasure to introduce to the

gallery and members of this House a British Columbian who has made a

significant name for himself internationally in the music industry.

David Foster, a Victoria native and graduate of Mount Douglas high

school, has won several Grammies, a BMI award and a Juno award. He's

worked with such stars as Barbra Streisand, Julio Iglesias and Chicago,

and co-written some of the decade's most popular songs, such as "St.

Elmo's Fire." The story of how David Foster left Victoria in his teens

to launch a career in the United States that has made him one of

today's most successful record producers is well known to many of you.

we can forget about David Foster the musician for a moment, I'd like to

make special mention of the humanitarian contributions this outstanding

British Columbian has made. In 1985 Foster produced the Canadian music

industry's contribution to the multimillion-dollar famine relief

program in Ethopia entitled "Tears Are Not Enough."

Of more

specific concern provincially is the David Foster Foundation. The

foundation is devoted to supporting families that face major

transportation and lodging expenses when a child has to leave B.C. to

receive a major organ transplant. A celebrity softball game and banquet

raised more than $100,000 last summer, and since that time some 13

families have been assisted. Mr. Foster became personally involved in

the case of Victoria's Rachel Sharma, who needed a liver transplant in

Los Angeles some years back. Foster made his house and car available to

the family while they were in Los Angeles, and now through the

foundation he is extending that kind of generosity to families

throughout the province. Perhaps this special interest in health was

handed down from his mother Eleanor, who retired in 1983 after 13

years' service with the correspondence and research division of the

Medical Services Plan.

On behalf of the members of this

Legislature, I'd like to extend the warmest thanks and appreciation to

Mr. Foster, and our best wishes for another successful fund-raiser here

in Victoria this July.

Mr. Speaker, accompanying Mr. Foster

today are Mr. Dick Ferguson, who is a member of the David Foster

Foundation board; Mr. Walter Creed, also a member of the David Foster

Foundation board; and Mr. Chris Earthy, David Foster's agent, of Los

Angeles. Please make them welcome.

HON. MR. VANDER ZALM :

Mr. Speaker, I just briefly want to add that all of us, I know, agree

with what has been said by the Minister of Health. Last Saturday we

certainly witnessed a tremendous event in Vancouver at the stadium,

celebrating the enormous success of the Man in Motion tour and all that

Rick Hansen has done for the disabled throughout the world. David

Foster made a tremendous contribution there, and I want to thank him

for that publicly.

MR. BLENCOE : I would like, on behalf of our

caucus and the member for Victoria, to certainly welcome David here

today and congratulate him on his great efforts on behalf of the

musical profession and of the community of Victoria.

Mr.

Speaker, David and I actually went to the same high school, but if he

doesn't tell any stories, I won't tell any stories. I happened to

graduate I think maybe one or two years ahead of David, but two years

ago, my year's –– 1965's - graduation class held our graduation reunion

and David took time to return, and we had a tremendous weekend.

But

one of the things we're really proud of about David Foster is that

often those who go on to great things in whatever profession they

choose sometimes forget their own community. They go south and get

great notoriety and do very well, particularly in rock and roll. David

has not forgotten his own community, Mr. Speaker. He comes back, he's

active, and he does great things for this town. Certainly, as the

member for Victoria, I join with my colleague from Victoria in thanking

David for all the great efforts that he makes on behalf of this

community and for the people of British Columbia.

MR. HARCOURT :

Mr. Speaker, I would like to add our welcome to David Foster, first of

all from the neighbouring high school of Oak Bay, where I attended; and

secondly, as the mayor of Vancouver when David was very deeply involved

with the theme song and his continuing involvement with the Rick Hansen

tour. I was very pleased to be the mayor, to help start off that tour,

and to represent our caucus and New Democrats around this province who

supported the Rick Hansen tour at that marvelous, deeply moving

ceremony at B.C. Place. I saw you there, David, right in the thick of

it. So on behalf of our caucus, I would like to pass on congratulations

from Oak Bay Senior Secondary School, from the city of Vancouver and

from the caucus. Welcome.

[2:15]

HON. MR. VEITCH :

In the members' gallery today we have several prominent dignitaries

from the People's Republic of China, representing a delegation in the

name of science, technology and friendship, from Hebei province. First

is His Excellency the Chief, Mr. Xie Feng, who is the governor of the

province. He's accompanied by the general secretary of the province,

Mr. Cheng Dongcai, who is the vice-director of the foreign affairs

office for Hebei province, and their interpreter, Mr. Li Jianping, who

is the interpreter of the foreign affairs

section of the science and

technology commission of Hebei province. They are accompanied by Dr.

Alan Tyler and Dr. Tom Suleiman, who are Canadian medical doctors who

have established close cultural relations with the People's Republic of

China, and of course with the people and their government. Also in

attendance is His Worship John Agnew of Mission. I would ask this House

to bid them a fond welcome.

MR. SIHOTA : I have a

number of introductions to make. First of all, from the wonderful

riding of Esquimalt–Port Renfrew, Teresa and John White, residents of

Esquimalt. Joining the Whites is Susan Ritter, visiting from Seattle. I

also notice that way back there in the members' gallery today is

Suzanne Steele, who happens to belong to the executive association of

my favourite NDP organization in this province, and that's my own

riding association. Would the House please welcome all four of my

constituents.

MR. PETERSON : Mr. Speaker, sitting in

your gallery is a very good friend and confidant of mine, Mr. Ben

Mitchell, and his wife Eleanore. With them are their daughter Janie

[ Page 1324 ]

Kerner

and granddaughter Tera Kerner, who are visiting from Alberta. I believe

Janie is out here to receive a degree from one of our fine

universities. Would the House please join me in making them very

welcome.

MR. SERWA : Mr. Speaker, in your gallery

this afternoon are two business women from the sunny Okanagan, Marilyn

Smiley and Glenna Gillan. They are here today to work with the Minister

of Tourism, Recreation and Culture on an innovative and new tourist

promotion to bring back a number of the visitors who came here for Expo

86. Would the House please make them welcome.

MR. LOVICK : I would ask the House to join

me, please, in welcoming a visitor from Qualicum Beach, Ms. Joyce Peck.

Hon. L. Hanson tabled amendments to Bill 19.

Oral Questions

INTERRUPTIBLE POWER TO VANCOUVER

ISLAND

MR. G. HANSON :

My question is to the Minister of Energy, Mines and Petroleum

Resources. As all members of the House know, in every provincial

election since about 1960, the people of Vancouver Island have been

promised cheaper energy in the form of natural gas through a pipeline.

The present minister was a rational voice, in the sense that he always

stated that the Cheekye-Dunsmuir had capacity to bring space-heating

over to Vancouver Island and put us in the same status as our friends

on the mainland who are on the natural gas pipeline. On Friday the

minister announced that there would be power coming to Vancouver Island

at discount rates, but the switch is going to flick off and on. Why are

we getting interruptible power?

HON. MR. DAVIS : The

policy announced on Friday had previously been cleared by the B.C.

Utilities Commission for fairness across the province and cost

recovery. There is energy currently available; surplus, in other words,

which won't be available indefinitely. This surplus energy is being

made available provincewide, on the same basis on the Island, for

example, as on the mainland. From time to time there will be surplus

energy. This energy is priced lower than firm energy. It's half-price

energy, but it can't be guaranteed all the time. Hence the

interruptible nature of the service and the lower price.

MR. G. HANSON :

Mr. Speaker, the minister talks about fair application across the

province. Hydro officials tell us that once the program reaches 60,000

household subscribers, it'll be cut off. There are approximately

200,000 households that would want to participate on Vancouver Island

alone, Mr. Minister.

My question relates to the fact that

as the price for our export sale of surplus power increases as the spot

market goes up, our industrial customers here in the province of

British Columbia can be cut off. Why would you want to afford that

opportunity for industrial customers across the line to get an

advantage of surplus power and cut off our own Canadian industrial and

commercial customers?

HON. MR. DAVIS : Mr. Speaker,

that's a strange

interpretation. Obviously the export market will be

the first to be cut off, then large industrial customers here, then

commercial and finally the homeowner, if there is indeed a shortage of

energy. But the priorities are well established, and they're the

reverse of those suggested by the hon. member.

MR. G. HANSON :

The point is that the people of Vancouver Island and everywhere in this

province who are not on natural gas want firm juice; they want firm

power, Mr. Speaker. The conditions that have been put on this program,

in terms of providing a backup heating source.... For example, if you

have an electrical furnace or heat system in your house, you have to

install an oil system to take advantage of it. Our numbers are that the

amortization or payback period for a subscriber.... It would take an

average of eight years before you'd start to make that up. Why don't

you go on to firm juice for the people of this province?

HON. MR. DAVIS :

Customers who have a firm supply have to pay for a firm supply, which

is a higher price than the interruptible service. Everyone has the

opportunity to put in an alternative system. It may be expensive in

some cases and very low-cost in others. The low-cost alternatives,

particularly in the outlying areas of the province, are the most

attractive economically, and they'll be served first.

There

may well be as many as 100,000 customers taking advantage of these

rates within three or four years' time; I think that Hydro will find it

has other surpluses, and the number may be 200,000 within the decade.

MR. G. HANSON :

Supplementary, Mr. Speaker. With the amount of surplus electric power

available within British Columbia that could be given to Vancouver

Island on a firm basis, the pipeline on the lower mainland and so on —

that's not on an interruptible basis; that's firm — will you not give

the people of Vancouver Island and the other unserviced areas firm

power on the same basis that they get firm natural gas?

MR. STUPICH :

Supplementary question to the same minister, Mr. Speaker. With one set

of transmission lines, how do you interrupt the power to one of two

meters?

HON. MR. DAVIS : B.C. Hydro has devoted some

nine months to the establishment of this rate, the manner in which

interruptions will take place, the two to three months' advance notice

for disconnection and so on. The hon. member can rest assured that our

public power company knows what it's doing.

SOLICITING PRACTICES OF FUNERAL HOMES

MR. BLENCOE :

A question for the Minister of Labour and Consumer Services, Mr.

Speaker. About six months ago, when the minister was just recently

appointed to the portfolio, I wrote to him about phone solicitation for

cemetery services and funeral homes. The minister wrote a long letter

back — and I thanked him at the time for that — indicating

that he

was going to try to resolve the distressing problem of telephone

solicitation for funeral services and cemeteries. This issue has raised

itself again in Victoria. What steps has the minister taken since I

wrote six months ago, and has he decided to introduce legislation to

curb telephone sales of cemetery services?

[ Page 1325 ]

HON. L. HANSON :

Mr. Speaker, the specific question the member is referring to came to

the attention of my ministry on Friday as a representation of the

Better Business Bureau. We met on Friday with her son to get the

details of the transaction, and this afternoon we are meeting with the

representatives of the business which sold her the goods and services

in question. It is not appropriate to report on the outcome of that

investigation at this point; I will do that later.

As to

the second part of the question, Mr. Speaker, my ministry staff

continue to meet with the task force that was put in place some time

ago. It's a task force which is representative of the cemetery owners,

the funeral directors and the consumer affairs or consumer-oriented

body — I believe it's called the Consumers' Association of

Canada

(B.C.). As a result of that, a submission for cabinet is being prepared

at this point for outlining some legislative options. As that is a

policy to be decided at that level, it will be announced as and when it

is appropriate.

MR. BLENCOE : Mr. Speaker, thank you

to the minister for his answer. I recognize that it is future

deliberations, but maybe the minister can comment. This is not a new

problem. Various ministers have tried to tackle this issue, and I've

documented for the minister, as others have, phone calls to those who

are seriously ill. I have one person in my riding who was going in for

open-heart surgery the next day and got a very distressing hard-sell

for cemetery services. To say the least, that was somewhat distressing.

Can the minister tell us today whether he has considered legislation

that will control this kind of phone solicitation? This is not a new

problem; this has been years. Can we get some kind of indication today

whether there is going to be some control on this kind of activity?

HON. L. HANSON :

Well, Mr. Speaker, it's very difficult to agree to that request,

although I can understand the reason for it. Certainly options for

control of it are being presented in a submission to cabinet, and

cabinet will make a decision on the policy of government and it will be

advanced at that time. So it's very difficult to comment specifically

on your question at this point.

MR. BLENCOE : Supplementary. Can the

minister tell us today whether he sees phone solicitation for cemetery

services — funeral services —

as a separate issue from other types of phone solicitation, and whether

he sees that this is a special, unique, sensitive area and that the

government can isolate that in terms of being able to deal with it and

bring down some changes?

HON. L. HANSON : Well,

again, it's not difficult for me, and I'm sure any member on the

government side, to acknowledge that death and the way it is handled

and the services that are related to it are a very special and a very

emotional circumstance, but I cannot comment on the future policy of

government until government makes that decision.

OPEN-HEART SURGERY WAITING-LISTS

MRS. BOONE :

My question is to the Minister of Health. The person from Victoria who

was awaiting open-heart surgery was one of the lucky ones, because many

of the hospitals in this area have had their open-heart surgery lists

cut down and the performance of their operations cut down by half. My

question to the Minister of Health is: can the minister indicate the

reasons for these severe cutbacks that will result in increased

suffering and sometimes death of people in this province? Is this a

funding problem or is it due to a shortage of critical care nursing?

[2:30]

HON. MR. DUECK :

Well, Mr. Speaker, it's actually both to a degree. There is a shortage

of critical nurses, for sure, and we're trying to remedy that. However,

it is also a problem with certain hospitals, where in fact they got

funding for x number of operations and did not perform those due to

various reasons. It differs from hospital to hospital. There are some

hospitals that are quite current; others have a waiting list that is

longer. But by and large if it is an emergency case, it will be looked

after in a very short period of time; so it's those where the doctors

themselves — their personal doctors — may in fact

elect that

this person can wait some period of time and there's no danger to

health and the waiting-period may be longer.

There is also

another point: there may be one particular physician who has a long

waiting-list because he's very popular and people will wait in order to

get that particular physician.

MRS. BOONE : My

indication is that hospitals throughout the province have virtually

been told that they must cut down the number of operations they do by

half. Vancouver General Hospital is already 50 cases behind last

year's. How does the minister propose to deal with this growing crisis,

and has the minister developed any plan to deal with the problem of the

shortage of critical care nurses, which is causing a problem in many of

our hospitals?

HON. MR. DUECK : Mr. Speaker, many

moves have been made by continuing education and other people, like the

hospital themselves, to try to attract more critical nurse care.

However,

I must mention at this time, since the hon. member brought it up, that

the Vancouver General Hospital in fact got quite a bit more funding

than they actually performed. In other words, there was more funding

available, allocated to them for open-heart surgery, which they did not

use.

CANWOOD FURNITURE FACTORY

MR. MILLER :

My question is to the Minister of Forests and Lands. Last week in

Penticton I toured the Canwood mill, which at the present time employs

about 85 people producing furniture components, principally for Ikea.

They are unable to add a second shift, which they want to do, because

of the shortage of raw material: that is, wood. What steps are you

taking to assist this enterprise to achieve this objective —

to add this second shift?

HON. MR. PARKER :

Mr. Speaker, I would like to thank the member for Prince Rupert for the

question. I wasn't aware of the problem, and we will look into it for

him.

EFFECTS OF FREE TRADE ON WINE INDUSTRY

MR. ROSE : My question is directed to the

Minister of Agriculture and Fisheries or the Premier; they can take

their pick.

[ Page 1326 ]

The

Association of B.C. Grape Growers, we learned last week in Penticton,

has estimated the free-trade treaty, if consummated, could lead to

2,000 part-time jobs and up to 500 full-time jobs in the wine industry.

I wonder what action the minister or the Premier has decided to take to

ensure that these jobs are protected. They are not a supply management

board.

HON. MR. SAVAGE : Mr. Speaker, to the hon.

opposition House Leader, we have had a delegation into my office, and

we are also expecting to have a meeting with Economic Development as to

the implications of a free-trade negotiated discussion between

bilateral countries, the United States and Canada, as it relates to

grape production and the manufacturing of wine. So it is very much

being looked after.

NATIVE EDUCATION FUNDING

HON. MR. ROGERS :

Mr. Speaker, I didn't want to take up the time of question period, but

I was asked a question by the Leader of the Opposition the other day.

I'll just paraphrase from the Blues: "We understand that the federal

Department of Indian Affairs has recently decided to no longer fund

post-secondary education for status Indians who have been accepted for

full-time study." The funds have gone from $8 million ten years ago to

$93.7 million this year. The number of full-time equivalents has gone

from 3,500 to 12,000 this year. So it's a very substantial increase in

the number of native people attending post-secondary educational

institutions, and the facts would seem to bear it out. I think the

member probably was given some faulty information in the first place.

FEDERAL SALES TAX ON FOOD

HON. MR. VANDER ZALM :

Mr. Speaker, I'd like to respond to a question which was given to me by

the second member for Vancouver East (Mr. Clark). The question was:

"Has the Premier decided to speak out on behalf of British Columbians

in opposition to the proposed federal sales tax on food?" I would like

to advise the House that the federal government is releasing a White

Paper on tax reform on June 18 which will give a clear indication of

the federal government's intentions. There has been no clearly stated

intent with respect to a tax on food. We'll await the paper, and at

such time will make an appropriate statement with respect to British

Columbia and its views on any tax, if in fact there is one proposed on

food. So we will give responsible comment in detail at the time.

Orders of the Day

HON. MR. STRACHAN : Mr. Speaker, I call

committee on Bill 21.

INSURANCE (CAPTIVE COMPANY) ACT

The House in committee on Bill 21; Mr. Pelton in the chair.

Sections 1 to 8 inclusive approved.

section 9.

MR. STUPICH :

I wonder if the minister can tell me who are approved as auditors by

the superintendent. Who may be approved as an auditor by the

superintendent? Professionals, I suppose?

HON. MR. COUVELIER :

I'm not quite sure I understand the question. I heard the words, but

there's no suggestion that we would attempt to inject ourselves into

the selection of an auditor as long as it was an appropriately

qualified firm or individual.

MR. STUPICH : What professional groups would

auditors come from? Chartered accountants? CMAs?

HON. MR. COUVELIER :

We have no thoughts of limiting the options, although qualifications

and capability would of course be foremost in our mind. But I have no

desire to inject myself into some sort of a debate between various

degree-granting institutions.

Sections 9 to 13 inclusive approved.

section 14.

MR. STUPICH :

I wonder if there's anything anywhere that gives the government the

authority to direct the investments. Are these funds to be invested in

British Columbia or outside of Canada? Is there anything at all

anywhere in the legislation that gives the minister the authority to

direct the investments of these captive insurance companies which are

operating in B.C.?

HON. MR. COUVELIER : No, Mr.

Chairman, it is not our intention to involve ourselves to that degree

in the investment-making decisions of these corporations.

Sections 14 to 19 inclusive approved.

section 20.

MR. STUPICH :

I'm reaching here because I don't know where else to ask it, but I

notice that the insurance premium tax does apply. I'm wondering whether

these companies pay corporation income taxes. I don't see anything

anywhere. I don't see it being excluded, so I assume they do, but I

wonder if the minister knows. These captive insurance companies do pay

insurance premium tax. What I'm wondering is whether or not they pay

corporation income tax.

HON. MR. COUVELIER : Yes, Mr. Chairman.

They're not exempted from any taxation measures that are in place at

the moment.

Sections 20 and 21 approved.

Title approved.

HON. MR. COUVELIER : I move the committee

rise and report the bill complete without amendment.

Motion approved on division.

The House resumed; Mr. Speaker in the chair.

[ Page 1327 ]

Bill 21, Insurance (Captive Company) Act, reported complete

without amendment, read a third time and passed.

HON. MR. STRACHAN : Mr. Speaker, I call

committee on Bill 13.

MOTOR FUEL TAX AMENDMENT ACT, 1987

The House in committee on Bill 13; Mr. Pelton in the chair.

Sections 1 and 2 approved.

section 3.

MR. STUPICH : Mr. Chairman, I just wonder

whether the minister would like to explain to us the way in which the

formula under 4(

c) works.

HON. MR. COUVELIER : No.

MR. STUPICH :

Mr. Chairman, at least on a previous occasion when he had a problem, he

offered to give me a memo afterwards; but I won't be waiting for this

one.

Sections 3 to 13 inclusive approved.

section 14.

MR. STUPICH :

Mr. Chairman, it's just curiosity, but I wonder why there's a sunset

provision here. What's the date? April 1, 1992? What's the connection?

I'm just curious.

HON. MR. COUVELIER : The government

has a philosophical bias toward ensuring that its legislation gets

periodic reviews, and its view is that the best way of ensuring that

that does occur is to put a sunset clause into effect after a

reasonable period of implementation.

[2:45]

Sections 14 to 16 inclusive approved.

Title approved.

HON. MR. COUVELIER : Mr. Chairman, I move

the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 13, Motor Fuel Tax Amendment Act, 1987, reported complete

without amendment, read a third time and passed.

HON. MR. STRACHAN : Committee on Bill 14,

Mr. Speaker.

MISCELLANEOUS STATUTES (FINANCE

MEASURES) AMENDMENT ACT, 1987

The House in committee on Bill 14; Mr. Pelton in the chair.

Sections 1 to 14 inclusive approved.

Title approved.

HON. MR. COUVELIER : Mr. Chairman, I move

the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill

14, Miscellaneous Statutes (Finance Measures) Amendment Act, 1987,

reported complete without amendment, read a third time and passed.

HON. MR. STRACHAN : I call committee on Bill

11, Mr. Speaker.

SOCIAL SERVICE TAX AMENDMENT ACT, 1987

The House in committee on Bill 11; Mr. Pelton in the chair.

Section 1 approved.

section 2.

MR. STUPICH :

Mr. Chairman, I said some things in second reading and I don't recall

the minister commenting. My question really was whether or not the

minister had many representations or was under a great deal of pressure

to reduce the sales tax; or did he just think that this would be the

right direction to go? He said philosophically he wanted to reduce it,

but I wonder whether there were many requests for such.

HON. MR. COUVELIER :

Mr. Chairman, I appreciate the question; it gives me a chance to

exhibit and comment on a very deeply held conviction of the government.

Given the state of our economy that we saw in the beginning of this

calendar year, and looking at the prospects for priming the pump in the

B.C. economy, we felt very strongly that an important element in

returning vitality to the economy of the province would be to reduce

the sales tax and, in effect, put in the pockets of British Columbians

a lot more discretionary spending power. The cumulative effect of this

reduction plus the restaurant meal tax elimination has the effect of

putting back into the pockets of British Columbians upwards of $275

million a year. We believed then, and do now, that that was a positive

thing to do in the interests of getting the economy moving again.

MR. STUPICH :

Mr. Chairman, my question was whether or not the minister was under a

great deal of pressure or persuasion to do so. Since he didn't comment

on that, apparently he wasn't; it was his own idea to do it.

next question is, if it's putting upwards of $275 million into the

pockets of people to spend, recognizing that almost half of that is

putting it back into the pockets of business and industry.... A little

less than half is being put back into the pockets of consumers. It

doesn't have as much impact on spending power by people as the

minister's remark would indicate. Beyond that, if the same amount of

money were made available to those in the lowest income brackets,

[ Page 1328 ]

that

would certainly put a lot of money into the pockets of people who would

spend it in their own communities, on goods being produced to some

extent in their own communities — certainly goods handled and

services supplied locally. Would that not have been a far better way of

injecting some action into the economy throughout the province, if the

minister had to make one choice or the other?

HON. MR. COUVELIER :

Mr. Chairman, there are many ways to approach a budget-setting

exercise, and I suppose, had we not increased the apportionments to the

handicapped and people receiving supplementary assistance this year,

then that might have been a valid suggestion; that is to say, put the

money from the social service into that area. But the truth of the

matter is that we did substantially increase the support for the Social

Services ministry, in addition to the Ministry of Health, student aid

and those kinds of things. I think we successfully worked the exercise

of looking after that element in our community that by virtue of

temporary difficulties needed some assistance, but at the same time

addressed the larger global issue of how to get some meaningful

activity back into the B.C. economy generally.

So I think we did both of those things with this measure, Mr.

Chairman.

MR. STUPICH :

Mr. Chairman, maybe we are going beyond

section 2, except that we seem

to be responding to each other. The minister talked about all the money

that he put back into pockets of people on low incomes. I would suggest

that the programs that he announced totalled something like $50

million — the total of all of those programs — yet he

has

extracted far more than that amount from the pockets of those same

people who are having to pay charges for prescriptions, people on

Pharmacare, people who are having to pay $5 for the use of ancillary

health services, people who are paying more for motor vehicle licence

fees, people who are paying more for leaded gasoline. All those things

are much more than the $50 million that the minister put back into

their pockets.

While he gave with one hand, he took away with three or four

hands —

or at least three or four times the volume that he gave with one hand.

And it didn't go to the people who need it most. That is my concern,

Mr. Chairman. Most of this is going to the people who could well afford

to pay sales tax on the large-ticket items they are buying. So I would

think it went in the wrong direction.

My question really

was whether the minister is under any pressure. My second question was

going to be whether that pressure was from business and industry or

from individuals. I take it from the minister's non-response to my

first question that there was no pressure from anybody, not even from

business and industry.

I think he answered the second question in second reading and

I just didn't catch it —

either he was speaking too quickly or I was listening too slowly; I'm

not sure which. You said, I think, something about your plan to reduce

it by another point later in the year. There was some reason for doing

that. Did I miss it, or was it something else? Why, if you were going

to put in a reduction, did you not do it all at once and get the impact

of a two-point reduction? That would, I think, have a positive effect

on sales and might not have lost nearly as much sales tax.

But

delaying the implementation of this second reduction, it seems to me,

would encourage people who are going to buy large-ticket items to wait

until the second reduction took effect, if they had that choice.

HON. MR. COUVELIER :

Mr. Chairman, the further reduction in the sales tax will be made this

calendar year. The annualized effect of a 2 percent cut plus the

elimination of the restaurant tax would approximate $600 million a

year, which is roughly 6 percent off the revenue side of our budget,

which would considerably reduce the spending options of the government

in this fiscal year.

As a consequence of that, it was

quickly realized that we literally could not afford to give 2 percent

right off the bat but that we philosophically wanted to convey the

message to British Columbians that we're moving towards a progressive

type of taxation which is based more on income, rather than a flat

consumption tax which is the sales tax. So it was our judgment that in

conveying that message in the budget speech, we alerted our citizenry

that there was further relief coming down the road and at the same time

indicated that the timing of that announcement would depend, in large

measure, on our ability to absorb it.

So we considered the

point raised by the hon. member and came down on the side of giving

advance notice and leaving the exact timing open for a later

announcement.

MR. STUPICH : I will let it go with

just one more comment, and that is that the last time a government

reduced the 7 percent tax to 5 percent, within two years they had

increased it back to 7 percent.

Sections 2 to 10 inclusive approved.

HON. MR. COUVELIER : Mr. Chairman, I move

the amendment,

section 10.1, standing under my name on the order paper.

[See appendix.]

Section 10.1 approved.

Section 11 approved.

Title approved.

HON. MR. COUVELIER : Mr. Chairman, I move

the committee rise and report the bill complete with amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 11, Social Service Tax Amendment Act, 1987, reported

complete with amendment.

MR. SPEAKER : When shall the bill be read a

third time?

HON. MR. STRACHAN : With leave of the House,

now, Mr. Speaker.

Leave granted.

Bill 11, Social Service Tax Amendment Act, 1987, read a third

time and passed.

HON. MR. STRACHAN : Mr. Speaker, I call

committee on Bill 8.

[ Page 1329 ]

INCOME TAX AMENDMENT ACT, 1987

The House in committee on Bill 8; Mr. Pelton in the chair.

section 1.

MR. STUPICH :

Mr. Chairman, we talked in an earlier bill about the minister's

philosophy. Will the minister admit that in this bill the

purpose — the intent, the design, the way it works —

is to increase the income tax payable by low- and middle-income

taxpayers and to reduce it for high-income taxpayers? If he says yes,

well, I guess that's the end of the story.

HON. MR. COUVELIER :

Mr. Chairman, surely the hon. member doesn't expect me to answer

categorically to such a broad question. We did look at taxation levels

for different income levels and we did ascertain that British Columbia

had the second-lowest personal income tax rate in the country. We did

wish to ensure that we remained the second lowest in the country, but

we had considerable room to move in order to maintain that objective.

[3:00]

I've asked the staff to pull off some comparable personal

income tax rates for a wage-earner with an income of $35,000 and with a

dependent spouse and two dependent children. The percent of family

income in British Columbia that would be paid for provincial personal

income tax is 6 percent, which is the second lowest in the country, the

lowest being Ontario at a rate of 5.8 percent. In terms of dollars,

which is probably more significant, Ontario's is the lowest provincial

personal income tax rate in that particular bracket. They would pay

$2,030 annual tax. British Columbia and Alberta are tied for next

lowest with $2,100 for each of those provinces. And the next lowest

goes up from P.E.I. and across the country. So the point is that

British Columbians are still not abused, compared to other taxing

jurisdictions in Canada, and that, by virtue of this relatively small

increase in personal income tax rate, our standing in terms of taxing

levels across the country has not changed. So we felt then and still

feel that the initiative we've embarked on here — that is to

say, the modest increase — does not abuse British Columbians

vis--vis what they would be paying elsewhere in the country, if that's

where they were unfortunate enough to reside.

MR. STUPICH : It's easy to say that about

anyone living anywhere other than B.C. —

today, especially, the way the weather has been lately. Anybody living

anywhere else is very unfortunate, apart from the politics of the

situation — I'm just talking about the weather.

The

minister is giving me more answers today with his non-answers than he

is by answering. Each time I ask a question, if he talks about

something else, I know that the answer that I expected is the right

answer.

The minister asked his staff to use certain figures —

$35,000. I put a question — several questions —

on the order paper, and the minister has answered every one of them.

May I compliment him right now on that. I've had questions in other

years on the paper from day one until the House adjourned —

not just for the end of that sitting, but until the next legislative

session was called in —

and they were just never answered. But the minister I think was the

first one to answer a question on the other side of the House. Some of

the answers were not that easy to obtain, I think; it took a little bit

of digging. But I want to compliment him and his staff on the speed

with which they answered the questions.

But I'm not sure

that he looked at the questions. I didn't start with $35,000; I started

with $60,000, because I knew that anybody in tax brackets of $60,000

and above — and according to the minister's answer, there are

102,500 in 1987 —

is going to be paying less income tax under this new taxation formula

than they were under the other. The minister didn't say yes to that,

and he said he couldn't be expected to say yes. Okay, so he didn't say

yes; but his question indicates to me that 102,500 taxpayers who are

reporting taxable income in excess of $60,000 a year will be paying

less tax. And the higher the taxable income, the more they're going to

save by this new way of calculating tax. This form is a little easier

to understand than the one we looked at in the motor fuel legislation.

The

minister compares B.C. with other jurisdictions. I'm not sure it's

anything to be proud of to say that we're the second lowest in the

whole country. He said in an earlier debate that the income tax is the

most progressive legislation that we have; that if we're going to raise

money from taxpayers, then the income tax is the most progressive way

to get it. That's the other way of saying that. So to say that we're

the second worst at collecting money from that source is not something

of which we should be proud. We should be saying that we're the highest

when it comes to income tax and the lowest in everything else; then I

would find it harder to argue with the minister.

When

comparing with other jurisdictions.... I don't know the extent to which

this has gone on; I know that some provinces have moved into it. The

federal government persuaded us to abandon succession duties and gift

taxes because they were moving into the taxing of capital gains. Once

everybody got into that bag, then they abandoned the taxation of

capital gains. Some provinces have started moving in to try to catch

some of that tax that's being missed on people who are no longer paying

tax on succession duties, gift taxes; and now, in effect, most of us

are paying nothing on capital gains. That's happening in other

provinces. One of the reasons the other provinces have higher income

tax than we do in B.C. may be that they're moving to close that

loophole that the federals created, which is costing our treasury money

as well and is letting off — not scot-free, but relatively

easy compared to lower-income and middle-income people — a lot

of people who should be paying more of their share of the cost of

government.

wonder whether the minister considered at all moving in the direction

of other provinces: that is, starting to get at some of that capital

gain that's being missed entirely, a tax on it.

HON. MR. COUVELIER :

Mr. Chairman, we are monitoring what is happening in other provincial

jurisdictions. The situation is somewhat complicated because at the

same time, as the hon. member knows, the federal government are

re-examining their taxation philosophies. As a consequence, it's

incumbent upon us not only to monitor what our provincial counterparts

are doing across the country, but also to be cognizant of the fact that

whatever further changes we may be implementing, they should be

complementary — if not complementary, at least

coordinated — with what the federal government may be doing.

the Premier indicated in his response during question period earlier

today, it is far from clear at this point exactly what the federal

government will finally decide to do vis-a-

[ Page 1330 ]

vis

their rewrite of taxation policies for the country. As a consequence, I

suppose I can only answer in a very general way at this point and say

that the hon. member makes a valid point. We have considered in the

past — and will continue to bear in mind — the

possibilities

there may be in other taxation bases; but all of this, of course, is

clouded and influenced by whatever the federal government finally

decides to do themselves.

MR. STUPICH : I think we're

going to wait some time to find out what the federal government is

going to do about taxation. They're getting too close to an election to

make any substantial changes.

The minister said we should

keep in step, we should watch what they're doing. And he said that as I

well know, they are working at this. I don't know very much; I know

what I read in the paper. All I can gather so far is that the federal

government is moving in the exact opposite direction to which this

minister is moving: the federal government is proposing to increase

sales tax and reduce income tax; this minister is proposing to increase

income tax and reduce sales tax. Exactly the opposite direction. So if

that's the kind of lockstep that we're in, there's something wrong with

one of us.

HON. MR. COUVELIER : That's a valid comment,

Mr. Chairman.

Sections 1 to 6 inclusive approved.

Title approved.

HON. MR. COUVELIER : I move the committee

rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 8, Income Tax Amendment Act, 1987, reported complete

without amendment, read a third time and passed on division.

HON. MR. STRACHAN : Mr. Speaker, I call

second reading of Bill 6.

HOMEOWNER GRANT AMENDMENT ACT, 1987

HON. MR. COUVELIER :

Mr. Speaker, this bill increases the minimum property tax payment

required of all homeowners as of January 1, 1987. For homeowners

receiving the basic $380 grant, the minimum payment is increased from

$200 to $350. For homeowners receiving the supplemented $630

grant — those over 65, handicapped or in receipt of a war

veteran's pension — the tax minimum is increased from $1 to

$100.

This

increase is consistent with the government's position that all property

owners should contribute towards the cost of providing local services.

It will serve to allocate those costs more fairly, particularly in

smaller municipalities where residential taxes are sufficiently low

that the majority of homeowners pay the minimum tax.

The new tax minimums will generate $16 million in additional

revenue in '87-88 through reduced homeowner grant payments.

Mr. Speaker, I move the bill be now read a second time.

MR. STUPICH :

Mr. Speaker, the opposition will oppose this legislation. We're not

talking big numbers in this, in total. The Minister of Finance is doing

this to pick up an extra $16 million from the people that he described:

the elderly, the handicapped and people who live in such modest

accommodation that their tax is very low. Because they can't afford to

do anything better for themselves, he's socking it to them. Everything

that he said about his philosophy of taxation earlier this afternoon,

in the budget debate and reading the budget debate sounds good except

that it doesn't read that way when you read Bill 6.

I'm

sure there are many ways in which the minister could have raised

another $16 million without going to the elderly and giving them a

10,000 percent increase in the property tax that they're going to have

to pay, even if he had brought it in over a period of years. To him, an

increase of from $1 to $100 is just being fair. The property owner is

going to pay a minimum of $100 property tax, and it's not very much.

It's not very much for him; he's a cabinet minister. It's not that much

for me; I'm an MLA. But to some of these senior citizens whom I've

visited, whom I have in my constituency, whom you have in yours, whom

all of us have in our constituencies, people who are living in the kind

of accommodation where they got their tax down to $1 . . . . They were

not really living high off the hog, and I don't think it's because they

were blowing the money on something else.

There may be some

of them who could afford it. Maybe some of them chose to live in such

circumstances by their own decision and prefer it that way —

prefer to do other things. But there are a lot of people living in very

poor accommodation, taking advantage of this homeowner grant, and I

believe they deserved it — the pioneers of this country, the

ones

who didn't manage to save, perhaps from circumstances out of their

control or perhaps from circumstances within their control. They didn't

do it; they weren't able to do anything about it. And yet we're going

to those very people and saying: "Well, we appreciate everything you

have done, and we're going to give you an opportunity to do a little

more, because from now on you'll pay a minimum of $100 rather than $1

in property tax." I just don't understand the thinking of the minister.

The

homeowner grant has been around for a long time. It was the practice of

the W.A.C. Bennett administration to increase it annually when it first

came in, I believe every year for a period; certainly in every election

campaign and I think even years before, the W.A.C. Bennett

administration increased the homeowner grant. Some of us used to say it

was simply a way of buying people's votes with their own money. But on

the other hand, one can't deny that it was helping some people who

found it difficult to pay their property taxes. I know a lot of those

people, and I'm sure we all do in our own constituencies.

[3:15]

When the NDP government was in office, the homeowner grant was

increased every year we were in. It was easy for us in the first three

years; it was not so easy in the last year. Yet we did put into effect

an increase in the homeowner grant. Since the Social Crediters have

been re-elected, the policy seems to have been: "Let's sock it to the

people who can't

[ Page 1331 ]

afford

it." Each year they have not increased the homeowner grant. They have

raised the minimum level, so that each year fewer and fewer people are

getting the maximum homeowner grant.

I just can't

understand why the minister has it against such people. You might think

that one day he'll be elderly. Maybe he'll be able to pay his taxes,

and it won't bother him — I don't know. But why, with all of

the

avenues at his disposal, with the reductions he's implemented in some

areas, with the many ways in which he could have made $16 million,

especially without taking it out of the elderly, the handicapped, whom

the minister described in his remarks, and generally those who, by

virtue of the fact that they were getting their tax down to the minimum

as it was, obviously don't have very much, or they wouldn't be in those

circumstances . . . . I just can't understand what possessed the

minister to go as far as he did with this.

It's been going on for years, as I say. Since the Socreds were

re-elected in December 1975 they have been gradually — and

"gradually" is the word —

increasing the lowest limit, each year a little. But here it's gone

from $1 up to $100 in one fell swoop, from $250 up to $350 in one jump.

Perhaps he doesn't intend to do it again until after the next election,

when the choice may not be his. I suppose it's the time-honored advice

of Machiavelli: if you're going to do something bad, do it all at once;

hit them hard at the beginning, then start letting up later on. I've

used that in my budget responses for two or three years. Maybe that's

what the minister is thinking. Maybe he feels that if he hits the most

defenceless people in our community very hard in 1987, he won't do it

again until after the next election, when they should get lined up and

wait for another hit. I can't see any sense in it. Maybe it's good

politics to do it that way — I don't know.

It makes no

sense from an economic point of view. The $16 million is pretty

inconsequential in terms of the whole budget, and it's $16 million that

the poorest people in our community will not have to spend on other

things in their communities. So it's not going to bring them a net of

$16 million — there's no question about that. And it's really

hurting the people most who can afford it least.

The opposition will oppose this legislation.

MRS. BOONE :

Mr. Speaker, I'd like to oppose this motion as well. I find it amazing

that just recently the Minister of Finance was saying that they're

reducing the sales tax, the social services tax, to put money in the

pockets of people so they have more money to put into the economy.

They're putting it into one pocket, and the other hand is reaching into

the back pocket and taking $150 from every person. I agree with my

colleague from Nanaimo that the worst one, though, is probably the

increase from $1 to $100.

I've had people in my office . .

. . I can relate a story about an elderly lady who was in my office,

and she was near tears because she had been hit by the federal level

and then by the provincial level. She was unfortunate enough to have

her husband pass away on her, which meant that she had her income as a

pensioner immediately cut in half. Then she had this situation whereby

$100 was suddenly put on her. She was also facing extra charges on user

fees for her physiotherapy. This woman, who lived out of town in an

area where she could not easily walk to places, or make do with busing

or any of those things, was used to paying and has paid for many years

her $1 tax. Quite frankly, she didn't know how she was going to make

ends meet. She didn't know how she was going to be able to pay her $100

tax, pay her $5 user fee and pay her dispensing fees on $525 per month,

in addition to trying to maintain her house, which was what she lived

in with her spouse.

This is common, I'm finding, and

generally speaking, a lot of these people coming to me are widows who

find a tremendous problem just in coping. I don't need to tell you that

I was just about in tears when I had to tell her: "There is nothing I

can do for you. There is no place you can go for assistance. There is

nothing I can help you out on. These are the realities that you face.

You face poverty as a senior citizen, particularly as a woman senior

citizen." To suddenly impose an extra $100 on somebody who has an

income of only $525 each month is nothing short of criminal.

really find this a terrible situation, and I find it incredible that

members on the other side can sit there and vote in favour of this,

knowing what it's going to do to the senior citizens in your riding.

Perhaps there are not numbers . . . . Perhaps you don't feel that they

are going to be strong enough to affect your vote or affect the next

election. But these are people who are concerned; these are people who

are having a tough time out there, and they are struggling to make ends

meet. Not all of them; I will admit that there are many seniors out

there who have an easy time of it, who are able to take off and go down

to Reno or to Nevada. But for those who aren't, for those who are

struggling, to suddenly have the imposition of a tax such as this seems

totally unfair and without reason.

You are putting money

into one hand, with the reduction of the sales tax, and you are taking

it right out of that back pocket with the other. I totally oppose this

bill, and I would urge members to look within themselves; look within

your conscience to the people in your riding before you vote in favour

of this bill.

MR. CASHORE : Mr. Speaker, the hon.

member for Prince George North has referred to some people speaking to

her about this situation, this additional burden especially on seniors.

I too have had a number of people coming and speaking to me. I guess it

was most dramatically brought home to me this past Saturday when I

dropped into the constituency office to meet somebody, because we were

going to be going and visiting a few homes, to find there a gentleman

who has been to see me in the past about his difficulty in meeting his

municipal tax bill. He had been in hospital, and he was home for the

weekend. But on his way home for the weekend, he stopped by my office

just in case I might be there, so that he could show me the tax notice

that he had just received.

To realize that he represents a

category of person in our society who seems to be constantly impacted

with ever-increasing ways of chipping away at their very modest and, in

many instances, minimal income is really very unfortunate and very sad.

In 1980 some 53.5 percent of B.C. families with heads aged 65 or over

had incomes under $15,000, while only 18 percent of families with heads

in the 50-to-64 age group had incomes that low. We also know that older

unattached people, especially widows and widowers, tend to be

concentrated in a very low-income area — people who can least

afford this kind of impact.

Sometimes

we go down into the legislative dining room, and we have a subsidized

meal there. That is kind of nice, to be able to go there and have

low-income meals while we are here working as legislators. For some of

us, at the end of a

[ Page 1332 ]

month

we might have $99 knocked off our paycheque for what we have consumed,

even though, were it not subsidized by the taxpayers, it would be a bit

more.

For these people, I submit that $99 is a far

different prospect than it is for any member of this assembly. I think

that we are in danger of becoming desensitized when we find that we

ourselves are not in a situation to know what it really means to lose

$99. For some people, it is the loss of being able to provide gifts for

their grandchildren at Christmas. For others, it is a loss that means

not being able to pay user fees and therefore eliminating certain

visits to physiotherapists or chiropractors. For others, it is a loss

of being able to drop in at a local coffee shop and have a piece of

apple pie and coffee once in a while. That is what this means to a very

large number of British Columbians who are the pioneers of our society.

Often

these people have paid their dues, not only in the taxes that they have

paid over a lifetime, but in the way in which they have worked to open

up this province and make it acceptable and useful and prosperous for

those of us who are now able to enjoy its blessings. So I would very

strongly urge the Minister of Finance and his colleagues to think

seriously about this and about changing this hardship.

is absolutely unnecessary. When you consider the ways in which the

government has made it easier for the very rich in this province, it is

extremely unnecessary. I think it is cynical to enact a measure like

this at this time in our legislative term, only to soften it up as

you're going into an election . . . . If you really have any thought

that two or three years from now you might soften this up, you should

do the noble thing and do it now. You'd get rid of this measure. This

is detrimental to the people of British Columbia, especially to the

seniors, whom we should be honouring, not insulting with this type of

action.

MS. MARZARI : Mr. Speaker, I wanted to add a

few comments to the discussion on this particular bill. When we talk

about hardship to seniors in British Columbia, I think that we're faced

with a real deficit of concrete information. There doesn't seem to be a

data base there for us to really take a serious look. It's obvious to

me, as my colleagues have said, that many seniors are going to be

feeling the pinch. They are going to be seeing an additional $100 as

significant. When you're drawing up a bill, I can understand that you

would think that the $100 is not significant; people can get by without

$100. But as my friend the member for Prince George has suggested, it's

the cumulative impact. Having the user fees added to the Pharmacare

fees and an additional $100 on the home every year could well make a

difference to a senior.

[3:30]

What kind of a difference? It's difficult to say, but if you

were

faced with decisions, you might want to think of the individual who is

a homeowner over 65. There is every possibility that that person might

be female, that she might be a widow living in the family home. Over

the years different techniques have been introduced in municipalities

and through the provincial government to assist seniors living in the

family home by lifting taxes or giving some tax easement. But what I

want to put forward right now is the notion that what we should be

doing before we introduce bills such as this to raise money from

seniors is trying to coordinate a picture of what a senior's life is

like in British Columbia, and to coordinate those services and a

definition of what seniors' income patterns look like.

understand that in Ontario there is a department which coordinates

services to seniors and takes a look at the demographic patterns of the

communities throughout Ontario, consults with seniors groups and pulls

together an interdepartmental look at what the needs of seniors are.

Many seniors are living on OAS and GIS, with perhaps a little bit of

the Canada Pension Plan. This picture of seniors living at $600 to $700

a month, maybe $750 a month, is something that we might see a lot more

of in British Columbia if we took a serious look. I don't think we've

taken that serious look.

At this point, this bill is going

through, and I'm sorry that it is. My suggestion, though, is that the

government take a look perhaps at sending to one of its standing

committees on social services, perhaps, a mandate to pull together some

coordinated and integrated planning, to pull together a plan for

seniors' services and a demographic look at the rates seniors are

living at in this province now, with perhaps a few future projections

on our population as it ages to see what kinds of future needs we might

have.

I believe that had we taken this kind of look, we

wouldn't be faced with Bill 6 in its present form. I believe we would

be seeing some real needs there that we would be trying to address in

some other way, rather than really basically telling seniors that it's

time to give up their homes, which in many instances is the most

precious asset they have.

MS. A. HAGEN : I'd like to

pick up my comments today from the theme that the second member for

Point Grey has raised, and that is that when we are looking at taxes

that we are imposing, particularly with older people, we need to look

at a total picture. One of the reasons I think that we on this side of

the House are paying so much attention to issues as they affect older

people is because there is no overview of how taxes and programs do

affect the older person, as that person is seeking to maintain his or

her independence for as long as possible.

We all know that

our population is aging, and that people who are at the older range of

the age spectrum are one of the fastest-growing groups within our total

population. And it is true that many of these people live in their own

homes; something like 65 percent of them are still in homes that they

own, many of them owning those homes free and clear.

Let's

just look at some of the costs that older people have to incur while

maintaining those homes in the communities where they have lived. Many

of them have to look after costs of maintenance that they are no longer

able to manage on their own. We have within our health system a very

well-developed support system that provides for services for the older

person in his or her home. Within the long-term care mandate that

provides for those home support services there is a stipulation that

older people will be helped with handyman services — the kind

things that help them keep their lawns cut, that do minor repairs that

very often are very important from the point of view of safety.

When

I did some review of the extent to which this particular mandate of

long-term care was delivered in the province, I found that in very,

very few communities are handyman services available under the Health

ministry; and where they are available, they are being cut back. I have

a letter on my desk that I was just reading today from residents of

Hornby Island, for example, a very independent-minded community with a

significant number of older residents who

[ Page 1333 ]

are

concerned that their handyman services are no longer going to be

available to them. In Vancouver they were cut back two or three years

ago. In the community in which I worked with the seniors' population,

there are no such services, and they are very sporadically offered

throughout the province. The cost of those kinds of maintenance

services are ones that older people must pay out of their very limited

incomes.

When we consider that a very large number of

people who are living in their own homes are people whose incomes are

quite marginal — even those people who pay some modest tax do

have a very limited disposable income against their costs —

then we know that any additional maintenance costs are a burden indeed.

When they have to hire somebody to do that job, most older people

throughout the province want to pay a fair wage, want to pay the young

person who's going to cut that lawn or mend that fence or step a

reasonable wage, which means that they're looking at not less than the

minimum wage and are often trying to pay that person at least $5 an

hour. So those costs over any season add up to a considerable amount

for those people.

If we look, too, at the costs that are a part of running a

house — the cost of electricity, the cost of heating a home,

the cost of insuring a home —

all of us know that they have usually risen much more than the cost of

living. So these people are facing higher costs in order to maintain

their own homes.

Other policies of government, too, have

caused the shift of taxes to the municipal tax roll. We're seeing

education costs being shifted. Over the years this province has paid

less and less out of general revenue towards those education costs;

more and more of those costs have been borne by the individual

taxpayer. That particular situation has become even more noticeable

with the commercial and industrial tax having been moved to general

revenue, so that school boards, now that they do have the right to try

to rectify some of the deficiencies in education funding, have only one

place to go, and that is to the homeowner-taxpayer. In many

communities, that homeowner tax base is in very large measure still a

senior tax base.

I want to talk, too, not just about older

people, but about the increasing number of disabled people who are

living in the community and who are eligible — with a medical

certificate —

for the larger homeowner grant. Here again, then, at a time when we're

talking about disabled people and the recognition of their needs, we

find that with the added costs that they have of maintaining themselves

in their homes, they may very well be faced with an added tax.

Lest

it be thought that there's only a relatively small number of people who

in fact will not already be paying some tax in their own right over and

above the homeowner's grant, we find that this particular tax will have

a significant impact even in lower mainland communities, where people

may have moved out of their family home, and may have purchased a

modest condominium or apartment. Many of these people with apartments

in the modest range, having planned their financial affairs with an

anticipation of a gradual increase in their municipal taxes, are

suddenly going to find themselves faced with an additional

hundred-dollar cost that they had no forewarning of and that they

perceive as quite unfair.

This is a regressive tax. It is

not based on the ability of people to pay. It is a tax that is added to

the burden of being old. As I said at the beginning, that particular

burden is one which a number of ministries of government have chosen to

impact with the budget this year. Therefore older people are looking

with despair and with fear to the increased costs that they face for

the two things that are probably most important to them: the cost of

their health and the cost of their housing. In neither regard has this

government acted wisely, and in this regard that tax will add a very

significant burden to older people seeking to maintain their

independence, an independence that is one of the most cost-effective

gifts that they can give to the people of this province, one that we

should not in any way compromise or leave lacking. These people seek to

be independent and self-sufficient; and in the policies and taxation

programs that we put in place we need to recognize their commitment to

that, and their steadfastness in maintaining that independence. We

should not, in the various ministries of this government, be impacting

on their ability to be independent.

This burden is one that is ill-advised, and I will be joining

my colleagues in voting very strongly against it.

MR. LOVICK :

Mr. Speaker, I'm going to keep my remarks very brief today. We are

intending, I should tell members opposite, to move an amendment from

this side of the House, and I shall have occasion to speak at that

point.

This morning I enjoyed, with the rest of my

colleagues in the House, welcoming David Foster. I remember how all

members of the House joined in unison in recognizing the tremendous

accomplishments of that man. We talked about how what Foster had done,

perhaps above all else, was to give of himself and his talents to those

who were less fortunate and required help. I remember the refrain from

that wonderful song, "Tears Are Not Enough": "If we could pull

together, we could change the world forever."

I'm horrified

to think that here we are standing now, in this Legislature, talking

about a bill which, to put the matter not too charitably, seems

entirely punitive, insofar as the money raised, frankly, is not

sufficient to justify the harm and the misery that so obviously are

going to follow in the wake of this kind of legislation — to

take

those individuals in our society who are now at the end of their

working lives, who in many cases simply do not have the wherewithal to

function effectively in that society, and now to give them an extra

bill of $99.

Mr. Speaker, it's been said by a number of

people on a number of different occasions that if there is such a thing

as a leisure class in our society, let it be those individuals who have

spent their lives working in the society, who at the end of their

working lives ought then to be given some leisure and some protection.

would just like to say, to end my brief remarks here, that I had not

thought that we would have to have this kind of debate. I had thought

that by the time the members on the other side of the House had

listened to the cries of anguish from the seniors' community about the

various other charges which have been foisted and hoisted upon that

community, this particular measure would not have seen the light of day

in this House. Sadly, however, that is not the case. Sadly, it seems we

are once again having to stand up, when we ought not to have to, and

say that we are violating a very fundamental principle in taxation,

namely the principle of ability to pay. The main predicament with Bill

6 and what it spells out is that it is an indiscriminant tax. It's an

indiscriminant tax insofar as it says that whether you have $50,000

interest annually in debentures or coupons or some such thing, you

[ Page 1334 ]

get

the same charge as the individual who is virtually indigent. That's the

problem with this legislation. Indeed, I suggest that that's the

problem with all of the tax measures that have been introduced on the

other side of the House.

[3:45]

My colleague the first member for Nanaimo (Mr. Stupich) has

already pointed to the irony — if not, indeed, the

hypocrisy —

of the words that emanate from the other side of the House about a fair

tax policy, words that are sadly complemented and contradicted by

policies that go against the message of those words.

I am

pleased, then, Mr. Speaker, to be standing in opposition to this bill,

and I am pleased that my caucus sees it in the same way and recognizes

this as a measure that is simply not justifiable by any stretch of

imagination or intelligence.

MR. D'ARCY : Mr. Speaker, I would like

to — while supporting the remarks of my colleagues regarding

senior citizens —

speak on behalf of those people who have retired early. I know

"retiring early" is a subjective term, but it has become normal, I

would think, nowadays for both employers and employees, particularly in

my constituency, to encourage people to retire before the age of 65, if

that's what we can define as retiring early. In this bill there has

been a lot of emphasis on the fact that the minimum goes up by

$100 — well, $99 — if you're over 65, but the same

bill puts the minimum up by $150 if you're under 65.

I suppose

I'm rising here to speak on behalf of all low income people who own

their own homes but who are under 65, and especially on behalf of those

who no longer, for whatever reason, have a full-time

occupation —

full-time employment outside the home. Whether they have retired early

due to physical infirmity, whether they are in many cases

widowed — in my constituency it is unfortunate; it seems we

have more widows than widowers —

or whether individuals find themselves single for another reason such

as perhaps their marriage breaking up, a great many of these people not

only faced a higher minimum tax before but now face a $150 tax

increase. I would like to draw to the minister's attention that it is a

real, excessive hardship on these individuals, particularly since they

are working very, very hard — in some cases with physical

disabilities —

to maintain themselves in their own homes with some form of dignity,

without having to abandon the home that they've raised their children

in. I'm sure the minister will realize that also a great many of these

people spent many, many years working very hard to pay the mortgages

off, while in many cases on low income during that time.

[Mr. Pelton in the chair.]

So,

Mr. Speaker, I would hope that the minister would take into account

this particular factor. It's one of the reasons that I am opposing this

particular bill.

MR. SIHOTA : Mr. Speaker, I want to talk a

little bit about this legislation from the perspective of the mobile

home owners in this province, because I happen to have a good number of

mobile home owners living in my riding, and I think that others of us

have quickly come to note that an ever-increasing number of mobile home

owners are moving into their ridings. I think that that type of

lifestyle is one that ought to be encouraged. Certainly among the

senior population of this province more and more of our seniors are

moving into mobile units. Therefore I want to talk a little bit about

the situation of seniors and people in general living in manufactured

homes.

Before

I do that I should point out that I think the minister, having been

previously involved in the municipal level like I also was, is well

aware of the fact that it's at this very time of the year that all of

us begin to receive our assessment notices and begin to realize just

how bad the news is, and I must say that my constituency office in the

last few days has been deluged — I think that's probably the

best way to put it —

by calls from people who are only now beginning to realize the full

impact of the measures that came down with the budget and the full

impact of the legislation that's before us. If the minister thinks that

this whole matter had evaporated after the message of the budget got

lost in the message that followed in Bills 19 and 20, I want to assure

the minister that he's wrong in that regard and that indeed people are

only now beginning to realize the effect of this legislation.

But

I want to talk particularly about the effect it has on those who reside

in manufactured homes, because in the budget speech for 1987 the

Minister of Finance said, in introducing a higher level of taxation on

residential property: "To allocate more fairly the cost of local

government services, the minimum property tax payable after application

of the homeowner grant will increase from $200 to $350. For senior

citizens and others who receive the supplementary homeowner grant, the

minimum property tax will now be $100 per year." The intent of that, I

take it — if I understand the thinking of the minister

correctly —

was basically to try to place a higher burden and greater

responsibility for these local government costs upon the residential

property owner. But I would have assumed that the government wanted to

do this in a fair and equitable way. However, as my colleagues have

pointed out, the actions of the government ought to be criticized in

general terms because of the decision to increase the minimum tax

payable, particularly to the $100 per year for seniors from the $1 that

it was.

Specifically, I think there's a concern in the

minds of the manufactured-home community of this province. In order for

someone to take full advantage of the homeowner grant, the tax for

those under age 65 would be $730 or more. That's $350 of the minimum

property tax plus the homeowner grant of $380. In order for senior

citizens to take full advantage of the homeowner grant, the tax payable

would be $730. That's the $630 plus the $100. I've been provided with

the text of a letter sent to the minister from the United Mobile Home

Owners' Association, using Surrey as an example and applying the 1986

mill rates. The Minister of Municipal Affairs, who also happens to

represent that area, may be interested in this.

Using the

Surrey example, the assessment on a residential property, which would

generate a tax of $730, is $730 divided by the mill rate, resulting in

a figure of about $53,000. For any lesser assessment there would be a

corresponding reduction in the homeowner grant. Many of the

manufactured homes in this province are assessed at $25,000 or less.

For owners under 65, the tax at that mill rate in that municipality

would be $342. Recognizing that the minimum property tax of $350 is

payable by this person and that no homeowner grant is paid to the

municipality on his behalf, the tax paid is the same as that paid by

the owner of property assessed at $53,000, with the $380 homeowner

grant paid by the province to the municipality on behalf of the owner.

Therefore in that type of example the province ends up

[ Page 1335 ]

treating

a $25,000 property in the same way that it treats a $53,000 property.

In other words, a senior citizen owning a mobile home assessed at

$25,000, and with a tax payable of $342, would pay a minimum of $100;

the homeowner grant would reduce that to $242. Another senior citizen

living in a home assessed at $53,000 would pay the same minimum tax of

$100, with a homeowner grant of $630 payable to the municipality

remaining intact.

So it seems that the province has quite

frankly fouled up its intent to be somewhat fair when it begins to

treat people alike in those two instances, despite the fact that the

value of one residential property is less than half the other. The

example I've just provided would seem to reverse the common practice of

providing a greater subsidy for those less able to pay. In Surrey the

taxes to be paid for municipal services by living in the accommodation

assessed at $53,000 or more are subsidized through the provincial

treasury. A lesser subsidy for municipal services, or none at all, is

paid on behalf of those living in less expensive homes. So it would

seem that the contention that all those living in a municipality should

pay a share of the cost of services is something of a contrived

philosophical explanation to justify a difference in subsidy on the

part of the government, and I want to congratulate those in the

manufactured-home industry for having pointed that fact out.

Having done that, I should also add that if there is any

debate as to whether or not their assumptions — and hence my

assumptions —

are questionable, I note that the minister, by way of a letter dated

April 22, 1987, corresponded with the president of the United Mobile

Home Owners' Association and acknowledged that their detailed

examination of the homeowner grant structure was quite correct, and

recognized indeed this very inequity. He said, and I found this very

difficult to accept from the minister: "Although tax minimums can

appear to affect owners of mobile-home and similar properties (e.g.,

condominiums, townhouses and floating homes) in an inequitable manner,

I do not feel it unreasonable to require a basic contribution from all

homeowners." Let's put aside the question of whether that's reasonable

or unreasonable, because many of my colleagues have already dealt with

that issue; but certainly it is inequitable. The minister himself

recognizes that it's inequitable.

Yet in the legislation as

it sits here today in the House, the minister has done nothing to

remedy that inequity, despite the fact that this inequity was pointed

out to him by way of a letter dated March 25, 1987. He apparently had

close to a month to analyze it and respond to it. He recognized that

there is this inequity and has refused to correct it. I pointed out in

earlier speeches in dealing with the situation of residents of mobile

homes that there have been petitions that I have brought to the

attention of the minister; there have been letters from right across

the province. People who reside in these manufactured homes realize

that they are being hit in a far more direct way than regular

homeowners. They're being required to pay a greater share of taxes when

indeed it appeared as if the government's intention was to be

equitable. But we now have an admission from the minister, by way of

the letter, that indeed this tax is inequitable, and I think that tends

to undermine all the rhetoric that the minister has been tossing across

the House as to the government's intent to introduce a program of fair

taxation.

So it falls far below that standard of fair

taxation. It affects seniors, it is unfair to those in manufactured

homes, and people in this province are beginning to realize that that's

the case. Like I say, I've been flooded in my office with letters from

people who live in manufactured homes, and I received one today that I

thought was of particular interest because, although he's not here, it

was addressed to the member for Mackenzie (Mr. Long). But I think it

would be appropriate to read this letter and put it on the record. It

comes from someone who's 74 years of age and lives in Powell River. The

letter states:

"I wish to express my utter disgust over

the recent move to revise the minimum amount of...tax from $1 to $100,

especially in one year. I only wish my pension would increase that

amount in one year. Never have I voted for NDP-CCF, but this latest

move on seniors has pushed me and many of my senior friends over the

line. I now feel sure, because of the many controversial increases the

Social Credit government has recently placed on seniors, that you have

absolutely no chance of forming the next government. I am 74 years old

and will not accept this latest decision on the above atrocity against

the seniors. I await your involvement and results within 21 days."

[4:00]

So this couple who wrote to me from Powell River —

which of course isn't in my riding —

has given the government, the Premier, the Minister of Finance, 21 days

to remedy the situation, to remedy this inequity, to remedy this

assault on owners of manufactured homes, to remedy — to use

the words of the writer —

this atrocity against seniors. The challenge is now before the

government to demonstrate just for once a level of political

leadership, a recognition that this legislation is wrong, that it is

unfair, that it is inequitable, and to withdraw it. And if not, well,

the crystal ball is before you in the form of this letter that came

across my desk today, and I quote again: "You have absolutely no chance

of winning the next provincial election." At least, that's according to

this one resident.

So I would encourage the minister to

recognize these unfairnesses, to recognize the particular plight of

those living in condominiums, townhouses, float homes and manufactured

homes, and withdraw this legislation. Because if he doesn't, then he'll

be defeated not only on this legislation, but come the next election as

well.

MS. EDWARDS : I really want to go on and

talk a

bit about how this particular legislation would affect the people in

the rural areas of the province rather than the more urban areas,

because the place that seniors live in the rural areas of the province

is very different in the sense that far more of them live in houses

than do in the cities, and there are a couple of reasons for that.

First of all, in our area, in many of the mining towns — and I

know this is not unusual, because throughout the province this

happens —

many of the houses that the senior citizens are living in were built by

the very people who are still living there. If the men are still living

there, they might have built the house themselves or there may be

widows living in a house that their husband built. I have been amazed

at how many of these houses are still there and how many of them were

in fact built by the citizens and residents themselves. In fact, I was

told one time that it was no problem for a miner to go in and dig a

basement — that was just sort of half a day's work.

Many of the houses in which the people find themselves these

days are houses that were built in years gone by and

[ Page 1336 ]

houses

in which they may have brought up their families and houses that they

still live in because . . . . There are several reasons for that, too,

but one of the reasons is that it's the least expensive place to live.

Now that these people are seniors, now that they are living on reduced

incomes, they are still living in their own homes, because it's less

expensive, if they're not paying a mortgage fee and so on; the house

was paid for years ago.

But besides that, I think the

minister should remember that there are not the number of apartments .

. . . It's often said that seniors should get out of these houses if

they're going to be too costly, and just move into an apartment,

because it's a better place for old people to live anyway. They are

closer to neighbours; they also will find that if they can't afford

their own house, they can certainly afford an apartment. Well, I've

made this point before, Mr. Minister, but the fact is that there are

very few apartments in the rural towns and small villages and

communities in our province. There are very few apartments in the first

place, and there are also very few of them that have elevators. If you

find an apartment building where a senior might go, and find that the

only apartment available is the one on the third floor, that senior is

certainly not going to be able to make it upstairs and downstairs

carrying groceries, and so on and so forth.

So in fact, for various reasons, many of the people in the

rural areas of this province — many of the seniors —

are living in their own homes. A number of studies have found that it's

much less expensive to care for seniors in their own homes than it is

to care for them in institutionalized care, and there is study after

study that shows that if any of them went anywhere outside of their own

home, they would perhaps need a very high level of institutional care;

in other words, a fairly expensive level of institutional care. So what

we are looking at are a number of people who will do practically

anything to stay in their own home for any number of reasons. They

don't suffer the kind of isolation that they might suffer in their own

home, if they stay, in a city, and they are there to our benefit as

well as to their own benefit.

What is happening to them is

that more and more of the load of the services that are provided in

British Columbia is loaded onto the backs of residential taxpayers.

There is a noticeable and deliberate thrust to move the taxation base

for property from commercial more onto residential taxpayers. If we put

this all together, and put it onto the backs of senior citizens, some

of whom exist on an income of approximately $700 per month and still

live in their own home, despite the idea among some folks that that

doesn't happen . . . . It does happen. It happens frequently, and it is

simply not a situation in which it is easy to accept another $100 every

year for taxation.

If for no other reason than this one, I

would ask, Mr. Minister, that you please take consideration of where

the effect of these taxation measures is going. I will certainly be

very adamant about my vote, which goes against this bill.

DEPUTY SPEAKER : The Chair recognizes the

second member for Victoria.

AN HON. MEMBER : Are you the final speaker?

MR. BLENCOE : I don't know whether I'm the

final speaker; however, my comments will be brief.

Mr.

Speaker, most of the things that I wish to canvass this afternoon have

been covered very capably by my colleagues, but I thought it was very

important that the Victoria MLAs speak on this particular issue,

because if there is any riding that is perhaps more dramatically

affected, it's Victoria. I think in excess of 19 percent of Victoria's

population is over 65 or retired, and many of those people are managing

to continue to hold onto their homes or their condominiums. This

legislation, Mr. Speaker, dramatically impacts on thousands of people

living in our riding.

I told the minister that I was going

to read every single letter I have had from seniors living in Victoria,

and I won't do that. I suspect the minister has had copies of those

letters, or indeed has had many phone calls from seniors who are

affected by this legislation. Needless to say, Mr. Speaker, we in

Victoria, like the rest of our colleagues, really do oppose this Home

Owner Grant Amendment Act. We not only oppose the principle of the

bill, raising property tax from $1 to $100.... We just can't support

that. Those seniors who are on fixed incomes, who are finding it

extremely difficult to meet the rising costs today . . . . To affect

them dramatically in one year is totally unacceptable to us. Not only

in terms of financial figures do we oppose this bill, but we oppose the

short-sightedness of this kind of legislation. Many of the senior

citizens do remain in their homes and try to hang on through family

members. They don't become a drain on the public purse because they

don't utilize long-term care facilities or the health facilities. They

are saving the taxpayer a lot of money by continuing to live in their

homes and not utilizing the public facilities or the long-term care

facilities that are available.

Mr. Speaker, it's just so

short-sighted for the government to raise revenue in this way. I think

it's about $16 million, I believe, for 1987-88 and a further $17

million for 1988-89. The long-term effect is that those seniors, by

this bill and by other raises in taxes or costs, are forced out of

their homes and have to go to other facilities. Often those facilities

are supported by the provincial government. It doesn't make sense, and

it really is short-sighted.

Mr. Speaker, we would hope that

this government would consider the fact that most senior citizens have

contributed to their community, their country and their province. In

the last years, they want to live in peace and in dignity and want to

be able to pay their bills and stay in their homes. But it's becoming

far more difficult to do that when we have the kind of budget that we

had and now this amendment act. We all know the budget had a major

impact on senior citizens. A dispensing fee for Pharmacare was imposed,

along with user fees for chiropractors and other such services under

medicare. Life is becoming tougher and tougher for senior citizens.

Mr.

Speaker, why the government would want to do this totally escapes us.

We would hope the minister and the government would reconsider its

position and support senior citizens in their attempts to stay in their

home. The minister has all the information about how many seniors this

will affect. I know in our riding it's literally thousands. We would

hope that the government would think through on its policies,

particularly when it's trying to curtail costs in other areas. This

kind of measure could only increase costs in other areas.

Mr.

Speaker, on behalf of our constituents in Victoria, we have the highest

number of seniors per capita of any riding, not only in British

Columbia but in Canada. We very much oppose this legislation and hope

that the government would reconsider its position.

[ Page 1337 ]

MR. G. HANSON :

Mr. Speaker, I rise to oppose this bill. As my colleague the second

member for Victoria has indicated, there are many senior citizens

within this region who maintain their own dwelling and when I visit

them on the doorstep they often tell me that they would like the

support services necessary to live in their own homes as long as they

possible could. I think all the studies indicate that that's a very

wise move from a public administration point of view because it's a lot

more cost-effective for a society to have people happily living within

their own homes with the necessary support services and home care

programs, rather than having people institutionalized when there's

really no need for that to occur.

This government has been

embarking upon a program over the last number of budgets, not just this

particular budget. This is a piece of the puzzle, Mr. Speaker. They

repealed the low-income tax credit, which hurt seniors and low-income

earners. They have repealed the rental tax credit, where tenants had a

break, and now, in a one-shot deal, the homeowner grant provisions that

were in place protecting seniors for many years in this province are

now altered so that a senior this year has a surprise tax essentially

of $100 when they expected and budgeted for no increase at all and were

paying a token $1.

[4:15]

Mr. Speaker, there are symbolic implications to this. It has

always

been recognized that when people reach the age of 65, in most

instances, they have had a lifetime of paying personal income tax,

property tax, school tax; and society recognized that through its

legislation and provisions such as the homeowner grant, which allowed

seniors the opportunity to pay a token $1, as opposed to this bill

which slaps a $100 fee on them. It was recognized that seniors had paid

their fair share, that they'd done their bit, and it was time for the

young workforce — the young families and middle-income

earners —

and

the corporations and the industrial properties to pick up the slack and

pay theirs. That's the way the system works. People come through the

workforce; they retire; and there are certain benefits society grants

seniors, in terms of reduced fares, fees and so on.

But

this government is moving in the opposite direction. I wouldn't be

surprised if we saw in a future budget that rather than $100, it will

be repealed and replaced with $150, $200 or $250. It's really unfair,

and it adds to the burden of the person who's trying to maintain

himself in his own home. Those support services are being cut away, and

all the low-income tax credits that I referred to are now gone. And now

we're slapping onerous burdens on the seniors.

I know that

the Provincial Secretary (Hon. Mr. Veitch), in his own riding of

Burnaby-Willingdon, knows there are many seniors barely making ends

meet. But because they're not in a hospital, from society's point of

view . . . . They don't require all the support services within an

institution. All they require is to make sure that their roof is sound,

that their house is maintained; if they need extra support services,

they are properly evaluated so that they get that home care support

they need. All of a sudden, in their property tax bill, the homeowner

relief that was granted way back when W.A.C. first envisioned the

homeowner grant and brought it in . . . . You're violating everything

he really stood for in this chamber.

HON. MR. VEITCH : My home needs some support.

MR. G. HANSON :

But your income of $75,000 a year, plus credit cards, plus cars, plus

government planes, plus .... If you want to extend . . . . I know we

shouldn't be having this cross-House debate, but if the Provincial

Secretary wants to extend the generous provisions afforded members of

this House . . . .

HON. MR. VEITCH : I just want you to mow my

grass, that's all.

MR. G. HANSON : Mr. Speaker, the Provincial

Secretary is attempting to derail my line of argument.

we were to have an audio-visual display in this chamber showing the

income structure within our province, we would find that the

lowest-income people tend to be seniors. Certainly if you are living on

Canada Pension and GAIN and so on, and if you're managing to live in

your own home, you have marginal surplus income. And you don't need

this kind of surprise taxation. It's post-election surprise taxation.

What used to be a dollar is now a hundred. To project from your own

circumstances . . . . The Provincial Secretary is in the prime of his

earning-capability years. If we look at the mean income in the

province, it's certainly not what a cabinet minister is making.

Mr.

Speaker, I'm rising in my place to vote against this. It's an onerous

tax. It's a hardship tax on the seniors. As my colleague the second

member for Victoria (Mr. Blencoe) said, we have the privilege of

representing a very beautiful region of the province; but it's also a

retirement community, and has a large percentage of seniors. Many of

those seniors are not tenants. They're living in their own homes, and

they want to do that. This particular tax makes it more difficult for

them to do so. Therefore I'm voting against it.

MR. ROSE :

I'll be very brief. I agree with most of what was said here by my

colleague from Victoria. What I object to is that it tends to be a tax

on the poor. It's all very well to say: well, the poor don't own their

own homes anyway, so they're not being taxed. But some will be taxed

out of their homes. Here's just a little figure. Of the people over 65

in this country 60 percent get the supplement. Many of them, of course,

are women. You're not eligible for the supplement unless you're broke.

We can therefore say that 60 percent of Canadians over 65 are broke. In

other words, they have no income other than their old age pension. If

that isn't a tax on the poor, I don't know what is.

suppose it could be argued that if they were poor, they wouldn't own

their own home; or else, they shouldn't own their own home if they're

poor. But the point is that if there were some way of making this a

progressive income tax, based on income, I think it would have much

more validity, and it would be less oppressive and more progressive. I

wonder if the minister — I know this isn't committee stage,

and we can

perhaps ask him these questions in committee — has considered

any way

that this could somehow reflect income, rather than just possession of

a home. In that way certain provisions are used to keep people in their

own home.

To personalize this, my mother just left her home

for intermediate care at the age of 87. I think there was far less

charge on the state — the Crown, if you like — in the

fact that she

stayed in her home, besides all the psychological and family benefits

of being there. But there were programs to help her. There was the

homemaker service. If she needed the

[ Page 1338 ]

roof fixed, there was RRAP. These are

all programs designed to assist seniors, and not wealthy seniors.

chief objection to this, besides the fact that it is a surprise, is

that it discriminates, but it makes no discrimination between those who

are wealthy and those just hanging on by their fingernails. I would

like to get to this in greater detail a little further down the line. I

will perhaps raise it again during committee stage.

DEPUTY SPEAKER : The House is advised that

under standing order 42 the minister closes debate.

HON. MR. COUVELIER :

It has been alleged that Bill 6 imposes a hardship on many British

Columbians. The government does not agree, of course, given the

existence of so many other support programs to ensure that those who

truly need help get help. Generally speaking, we have raised user fees

in a variety of programs with this budget. In every instance that I am

aware of, Mr. Speaker, those increases in user fees were complemented

and supplemented by additional assistance to those who truly needed

additional assistance. To the best of our ability, we tried to ensure

that those British Columbians who can afford to make some small

contribution towards service provided do so, and that those British

Colombians who are not in a position to make that small contribution

are not expected to. That philosophical thrust has been contained in

all of our taxation legislation.

I am proud of that

approach and that thrust. I think it puts the lie to those criticisms I

have heard here for the last hour or so — that the government

does not

recognize the plight of those who might need a little bit of extra

help. The fact of the matter is that for senior citizens and the

handicapped the homeowner grant is $250 more than for those British

Columbians who are not in that category. So we have already recognized

special need by increasing the grant.

I think it is also

true that whenever we introduce a taxation measure that imposes an

additional increase in cost, it is never a popular thing to do. I

recognize that, and obviously many of the speakers were making comments

for the folks back home. That will be useful to pop in the mailer and

show that they have some heart and some interest in their constituents'

affairs.

But the fact of the matter is that there is

presently in place a program by which senior citizens can defer their

taxation bills. If you deal with the rural homeowner, who is presumably

living in a lower-valued home, we are asking that homeowner to pay $100

a year. Let's say it's a home valued at $30,000. At that rate, I

calculate they can live 300 years in their home before they are forced

to pay back the loan. Clearly there is enough opportunity in that tax

deferment package to ensure that no citizen is put out of his home

because of this increase from $1 to $100 per year.

We are

talking about equity. What about the other side of that equity coin?

The opposition members would have us believe that rural British

Columbians who have traditionally got by with paying only $1 a year in

property tax were happy with the thought that they were being

subsidized by their neighbours who were paying the full property tax.

If we are talking about equity, it seems to me fair to expect every

citizen receiving some services to make some small contribution towards

those services.

Everybody in this Legislature knows full

well that the property taxation measures contained in our property tax

laws do not even cover the cost of policing in rural British Columbia.

The cost of policing per capita in British Columbia exceeds the

property tax, even that portion of the property tax that is imposed on

them. They are not even covering the cost of policing — not

counting

the roads, the land use policies, the cost of regional districts and

all the other costs of local government.

I think that if we

are talking about equity, it is about time there was some recognition

of the fact that there are basic inequities in the existing taxation

structure. It is true that it is easy to criticize the measure, but I

think that on the philosophical basis, given the fact that there is a

safety net underneath those who can't afford to pay, the suggestion

that people might pay $100 a year for the privilege of living in their

own home, as a contribution towards the cost of services, including

policing, is quite easy to defend. In my conversations around the

province with people who live outside the urban areas, I don't find any

great argument with that. So I would invite members of the opposition

who evidently have constituents who are troubled to make application

under the property tax deferral scheme, and we will be happy to process

it as we do with all others.

I move the bill be now read a second time.

[4:30]

Motion approved on the following division:

YEAS — 35

Brummet

Savage

L. Hanson

Reid

Dueck

Richmond

Michael

Parker

Pelton

Loenen

Crandall

De Jong

Rabbit

Dirks

Mercier

Peterson

Veitch

S. Hagen

Strachan

Couvelier

Davis

Johnston

R. Fraser

Weisgerber

Hewitt

Gran

Ree

Bruce

Serwa.

Vant

Long

Huberts

Messmer

Jacobsen

S.D. Smith

NAYS — 17

G. Hanson

Marzari

Rose

Stupich

Boone

D'Arcy

Gabelmann

Blencoe

Cashore

Smallwood

Sihota

Miller

A. Hagen

Jones

Clark

Edwards

Harcourt

Bill

6, Home Owner Grant Amendment Act, 1987, read a second time and

referred to a Committee of the Whole House for consideration at the

next sitting of the House after today.

HON. MR. STRACHAN : Mr. Speaker, I call

committee on Bill 17.

PROPERTY PURCHASE TAX ACT

The House in committee on Bill 17; Mr. Pelton in the chair.

section 1.

[ Page 1339 ]

HON. MR. COUVELIER : Mr. Chairman, I move

the amendment to

section 1 standing in my name on the order paper. [See

appendix.]

Amendment approved.

Section 1 as amended approved.

section 2.

HON. MR. COUVELIER : I move the amendment to

section 2 standing in my name on the order paper. [See appendix.]

Amendment approved.

section 2 as amended.

MR. STUPICH :

Mr. Chairman, when we were in second reading and we were talking about

this outrageous impost, the minister said at one point that it's the

vendor who pays. Of course, the Premier as well said at one point that

he was going to amend the bill so that it would be the vendor who pays.

As I read the bill, the very first — well, actually the

second — line

section 2 says the transferee shall pay tax. Now which is it?

HON. MR. COUVELIER :

The transferee pays the tax, Mr. Chairman. My comment during second

reading dealt with the fact that it's a dynamic process. To the extent

then that the seller would recognize any deficiency on the purchaser's

part, it would be reflected in the dynamics of that transaction. So

that was the meaning of the reference in the second reading debate.

MR. STUPICH : I find that logic to be

strange. The whole business of buying and

selling, when there is negotiating like that going on, is a dynamic

process. The seller is trying to get as much as he or she can get out

of the purchaser, and the purchaser is trying to get the property at

the minimum price. So there is bargaining back and forth. It doesn't

make sense for the minister to say that since it is such a dynamic

process, it will be the vendor who actually ends up paying.

When

it comes to having to have the cash to actually buy property, the

purchaser has to have enough for the down payment, which is generally,

I would think, 10 percent, as a reasonable figure. You wouldn't sell a

property unless you got a payment of let's say 10 percent. The amount

going to the government has to be in addition to what the purchaser

requires for the purchaser to believe that for the vendor . . . . It

has to be in addition to whatever the vendor feels he has to get out of

the deal to make sure that the purchaser is on the hook and is going to

go through with it. That's where the down payment comes in. The vendor

wants to make sure the down payment is sufficient to make sure that the

purchaser is going to go ahead. But on top of that, the person

purchasing has to come up with 10 percent of the total purchase price

in cash, or be able to finance it in some other way. The amount of

financing available often is taxed to the limit already. It seems to me

that in many instances it's going to at best slow down transactions

while people scurry around and try to find the money that the Minister

of Finance wants out of this deal — at best slow it down, and

in some

cases it may mean that there is no deal.

MR. SIHOTA :

Mr. Chairman, I want to get this clarified. Is it or is it not the

government's intention to have the vendor pay? That's the question, if

the minister would like to answer that.

HON. MR. COUVELIER :

The purchaser, being the only party to the transaction to whom

registration would be beneficial, will be the party that pays the tax.

was delighted to hear the earlier question and the earlier admission,

Mr. Chairman, that a real estate transaction is a dynamic process, and

that the seller's ambition, of course, is to get what the market will

bear. That seems to confirm my comments during the second reading that

was conducted earlier. It sounds like we're unanimous on that point.

Interjection.

MR. SIHOTA : So did I. I lost something in

that point as well.

Let me ask this, then. Is the minister saying that it is the

purchaser who will pay?

HON. MR. COUVELIER : That's correct.

Section 2 as amended approved.

section 3.

HON. MR. COUVELIER : I move the amendment to

section 3 standing in my name on the order paper. [See appendix.]

Amendment approved.

section 3 as amended.

MR. STUPICH : Mr. Chairman, I move the

amendment standing in my name on the order paper. [See appendix.]

On the amendment.

MR. STUPICH :

I'd like to say a little bit about it. I have some trouble following

the minister's amendments, and he doesn't tell us what they mean,

either. But I think the intent of this one is quite obvious. We were

trying to look for an easy way to amend the legislation so as to

provide for an exemption. During second reading, several of us on this

side of the House made the point that what we wanted to achieve was

that the first-time buyers in particular would have an exemption

available to them, on the assumption that people who are buying for the

second or third or fourth time have some equity in property and have

something to help them make it. That's the first consideration.

trying to find a neat way of amending the legislation, it would seem to

be easier to deal with the situation that it's not always the

first-time buyer who is having trouble, and perhaps a more efficient

way of amending the legislation would be simply to say that the tax

would apply to the second $100,000, the implication being that there

is no tax applicable to the first $100,000.

I would commend that amendment to the minister's attention.

[ Page 1340 ]

MR. G. HANSON :

Mr. Chairman, I rise to support the amendment. As the minister knows,

there is a pent-up demand . . . . It's very hard to amend a bad bill

and make it a good bill, but what we would like to commend to the

minister, as the member for Nanaimo indicated, is that there are a lot

of people in the market under $100,000 for the first time. My

understanding is that the median price of houses presently being sold

within the CRD is about $98,000, so that half of all the sales would

be above that, and half below. We are saying that people in that

category — up to $100,000 — entering the market for

the first time

should not be faced with another surprise tax from this government.

This

amendment is a friendly amendment. We know the minister, the member for

Saanich and the Islands, would certainly agree, being within the CRD,

that many first-time home-buyers really can't be faced with this kind

of tax. Another aspect is people trying to move through the housing

stock into a new home from a starter home. Sometimes they've

experienced growth in their family size with one or two children, and

they're looking for more commodious housing stock and more commodious

circumstances to accommodate their family. Because of the breakdown in

terms of down payment and tax, people are being faced with having to

reduce their scope in terms of the market.

[4:45]

Let me give you an example: a person looking for a home priced

at,

say, $80,000. It is a high-ratio situation — a high ratio

mortgage —

and the buyer has $10,000, and they find a home of suitable space to

accommodate their children. This tax of $800 on that $80,000 home

means that the bank is forcing them to look down. They can't afford to

look at that $80,000 house any more. They are going to have to find

one that meets their needs for $74,000 instead. That tax alone has

reduced their scope in the housing market from what they had projected

as their need prior to this tax. In other words, there's a $6,000

difference in the market available to them based on the tax alone. It's

an unfair tax; it's a surprise tax.

You would have seven

seats in this House if you'd gone to the people in October of last year

and said this was going to be part of the program — other than

the

smile, style and sizzle option. That minister was a leadership

candidate. If he had stood up at Whistler and said to those delegates

that it was his suggestion to put a 1 percent sales tax on the purchase

of all homes, he would have had one delegate vote instead of 12. We

oppose this bill.

MR. CLARK : Mr. Chairman, I'll be

very brief. Everybody knows in this chamber that at 29 I'm the youngest

member of the Legislature, and I feel a special obligation to speak in

favour of this amendment.

Interjection.

MR. CLARK : The second member for Kamloops

(Mr. S.D. Smith) thinks I've aged since I've come into this chamber.

feel a special obligation to speak in favour of this amendment because

first-time home-buyers are very often in my age group, and I have had

many letters and phone calls from young people attempting to buy their

first home who feel this tax is an onerous one that makes it very

difficult to achieve that dream of owning a home.

I just

want to reiterate briefly what the first member for Victoria (Mr. G.

Hanson) said, because it's an important point. If the tax on $100,000

is $1,000, and your down payment is a third of the cost of the home,

then that $1,000 comes off your down payment and reduces the amount

that you can pay for a home by more than $1,000, because it's a ratio.

So it effectively reduces the amount you can pay for a home by several

thousand dollars, rather than just the $1,000 tax. It's compounded and

takes away from the capital that's available to put on a down payment

for a home. I think that's an important point.

Even though

members on this side of the House disagree with the entire bill, and we

have some real problems with the onerous nature of the taxation,

particularly with respect to first-time home-buyers, eliminating it up

to $100,000 is a very modest amendment which I don't think would

impact significantly on the revenue generated by government. Therefore

it is a very reasonable and modest amendment that deals with our very

serious concern about first-time homebuyers, who are in the most

vulnerable position, getting into the home market. We ask that all

members of this House support this amendment.

MR. SIHOTA :

Mr. Speaker, I happen to be the second youngest member in this House,

and relatively recently married and acquired my home before this tax

was introduced. I also live in a riding where, I think it's fair to

say, there's a fair bit of low-income housing. As the minister and most

people in this House know, I've also practised as a lawyer, and during

the course of my practice I've done a fair bit of conveyance work,

which we continue to do in my practice. I can tell you that in that

portion of the market that Esquimalt finds itself in — and

there's a

lot of housing in Esquimalt between the $50,000 and $100,000

range —

for a lot of people that additional $500 does make a lot of difference,

because they've scrimped and scraped to save up money not only to

acquire the house but to save additional money to buy the new carpet or

draperies or the appliances that they have to get afterwards. That's

where that $500 was intended to go. Either it was going to go towards

the down payment or towards the buying of those items. It has delayed

the decision to buy. In other cases, it has resulted in deals falling

apart. We have seen that come through my law office.

The

minister was saying the other day that real estate deals in the

province this year, particular in the greater Vancouver area, have been

very good, which is evidence of the fact that the tax imposed by this

legislation has not had an effect on the market. The free market, as he

called it that day, continues to work. The minister clearly did not

check out his statistics.

I happened to be in the House the

afternoon of the day that the minister was speaking on that. That

morning I was on an open-line radio show in Vancouver, and one of the

individuals I interviewed during the course of that show was the

president of the Real Estate Board of Greater Vancouver. He told the

audience that before the introduction of this tax on March 31 of this

year, the ratio of sales to listings was 75 percent. In other words, 75

percent of the homes that were listed in the greater Vancouver area

sold. Since this tax has come out, the ratio has fallen to 40 percent.

So 40 percent of the listings resulted in sales. I am not so naive as

to suggest that that has happened only because of the imposition of

this tax, but one of the variables they pointed to was the fact that

Bill 17 had been introduced, which was going to result in people paying

a tax.

[ Page 1341 ]

it's not fair for the minister to stand up here and say: "Everything is

wonderful, we're having a booming real estate market." We're fortunate

that interest rates have fallen. If interest rates rise, much as they

are expected to do, then clearly the variable in the overall payment

that this tax creates is going to play a larger and larger role in

decisions not to buy a home, particularly in the case of first-time

home-buyers, as I'm sure all members of this House have now recognized.

The exemption that we're putting forward in the course of this

amendment is an exemption that applies to $100,000 right across the

board, whether it's first-time home-buyers or not. In the case of the

average price in Vancouver, which is $125,000, they would pay tax on

the $25,000 instead of the $100,000. That is not unprecedented. Other

jurisdictions have that kind of tax-free price zone — for

example,

Manitoba has $30,000. But recognizing the cost of housing here in

British Columbia, particularly in the Vancouver area, the $100,000

figure is to me quite reasonable.

I think it should also be

kept in mind that the assistance which the provincial government

provides for first-time home-buyers in the form of the B.C. second goes

as far as the $85,000 figure. So although the minister may argue that

a lot of these people will have assistance from the government, given

the average price of housing in both Vancouver and Victoria, that is

simply not going to apply if you take a look at when the second

mortgage program is triggered.

I haven't pointed out in the

House before — and I think it should be a matter of

record — that a

gaping loophole still exists in this legislation, in that it attaches

to property transfers but not to share transfers. The minister has

allowed that loophole to continue to exist in the legislation;

accordingly, it seems to me that the minister has chosen to allow for

an exemption for those people who have companies that sell property.

They can avoid the tax