1988 Legislative Session: 2nd Session, 34th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

MONDAY, MAY 2, 1988

Afternoon Sitting

[ Page

4177 ]

CONTENTS

Routine Proceedings

Oral Questions

Questions on Premier's possible corporate involvement with P. Toigo. Mr. Harcourt –– 4177

Sale of Expo lands. Mr. Harcourt –– 4177

Provision of AZT to AIDS victims. Mrs. Boone –– 4178

Tabling Documents –– 4179

Notice of Motion. Mr. Harcourt –– 4179

Hon. B.R. Smith

Mr. Rose

Committee of Supply: Ministry of Finance and Corporate Relations estimates.

(Hon. Mr. Couvelier)

On vote 37: minister's office –– 4180

Mr. Sihota

Mr. Clark

Mr. Williams

Mr. S.D. Smith

On vote 39: compensation stabilization program –– 4188

Mr. Clark

Horse Racing Tax Amendment Act, 1988 (Bill 3). Second reading. (Hon. Mr. Couvelier)

Hon. Mr. Couvelier –– 4188

Mr. Stupich –– 4188

Mr. Clark –– 4188

Mr. Rose –– 4188

Hon. Mr. Couvelier –– 4189

Income Tax Amendment Act, 1988 (Bill 4). Second reading. (Hon. Mr. Couvelier)

Hon. Mr. Couvelier –– 4189

Mr. Stupich –– 4189

Insurance Premium Tax Amendment Act, 1988 (Bill 5). Second reading. (Hon. Mr. Couvelier)

Hon. Mr. Couvelier –– 4189

Mr. Stupich –– 4190

Land Tax Deferment Amendment Act, 1988 (Bill 6). Second reading.

(Hon. Mr. Couvelier)

Hon. Mr. Couvelier –– 4190

Mr. Stupich –– 4190

Mr. Sihota –– 4190

Hon. Mr. Couvelier –– 4190

Mineral Resource Tax Amendment Act, 1988 (Bill 7). Second reading. (Hon. Mr. Davis)

Hon. Mr. Davis –– 4191

Mr. Clark –– 4191

Mr. Stupich –– 4191

Hon. Mr. Davis –– 4191

Mining Tax Amendment Act, 1988 (Bill 8). Second reading. (Hon. Mr. Couvelier)

Hon. Mr. Couvelier –– 4192

Mr. Stupich –– 4192

Motor Fuel Tax Amendment Act, 1988 (Bill 9). Second reading. (Hon. Mr. Couvelier)

Hon. Mr. Couvelier –– 4192

Mr. Stupich –– 4192

Hon. Mr. Couvelier –– 4192

Social: Service Tax Amendment Act, 1988 (Bill 10). Second reading.

! (Hon. Mr. Couvelier)

Hon. Mr. Couvelier –– 4192

Mr. Stupich –– 4193

Mr. Lovick –– 4193

Hon. Mr. Couvelier –– 4193

Taxation (Rural Area) Amendment Act, 1988 (Bill 11). Second reading.

(Hon. Mr. Couvelier)

Hon. Mr. Couvelier –– 4193

Mr. Stupich –– 4193

Tobacco Tax Amendment Act, 1988 (Bill 12). Second reading. (Hon. Mr. Couvelier)

Hon. Mr. Couvelier –– 4193

Mr. Stupich –– 4193

Hon. Mr. Couvelier –– 4194

Tourist Accommodation (Assessment Relief) Act (Bill 13). Second reading.

(Hon. Mr. Couvelier)

Hon. Mr. Couvelier –– 4194

Mr. Stupich –– 4194

Education Excellence Appropriation Repeal Act (Bill 15). Second reading.

(Hon. Mr. Couvelier)

Hon. Mr. Couvelier –– 4194

Mr. Stupich –– 4194

Mr. Lovick –– 4194

Hon. Mr. Brummet –– 4195

Mr. Jones –– 4195

Mr. Rose –– 4197

Hon. Mr. Couvelier –– 4198

Health Improvement Appropriation Repeal Act (Bill 16). Second reading.

(Hon. Mr. Couvelier)

Hon. Mr. Couvelier –– 4198

Mr. Stupich –– 4199

Hon. Mr. Couvelier –– 4199

Special Accounts Appropriation and Control Act (Bill 18). Second reading.

(Hon. Mr. Couvelier)

Hon. Mr. Couvelier –– 4199

Mr. Stupich –– 4199

Mr. Cashore –– 4199

Hon. Mr. Couvelier –– 4200

Provincial-Municipal Partnership (Taxation Measures) Amendment Act, 1988 (Bill 19).

1 Second reading. (Hon. Mr. Couvelier)

Hon. Mr. Couvelier –– 4200

Mr. Stupich –– 4200

Hon. Mr. Couvelier –– 4201

International Financial Business (Tax Refund) Act (Bill 22). Second reading.

(Hon. Mr. Couvelier)

Hon. Mr. Couvelier –– 4201

Mr. Stupich –– 4201

Hon. Mr. Couvelier –– 4201

International Financial Business Act (Bill 23). Second reading. (Hon. Mr. Couvelier)

Hon. Mr. Couvelier –– 4201

Mr. Stupich –– 4201

Hon. Mr. Couvelier –– 4201

Budget Stabilization Fund Act (Bill 14). Second reading. (Hon. Mr. Couvelier)

Hon. Mr. Couvelier –– 4202

Mr. Stupich –– 4202

The House met at 2:06 p.m.

Prayers.

MR. JONES :

I'd like to introduce to the House today a constituent of mine, who is

also the staff representative to the UBC board of governors. I'd like

the House to join me in welcoming George McLaughlin.

HON. B.R. SMITH :

Mr. Speaker, I have the pleasure today to introduce the

Solicitor-General of Canada, Mr. Jim Kelleher, who is also the Member

of Parliament for Sault Ste. Marie. Jim was a lawyer in the Sault for

many years: he was the local mayor, and he's had a number of years'

experience in politics and government. He's out here today holding a

session on drug-combating strategy in Vancouver; he's speaking here

today, and he has kindly agreed to hear question period. I assured him

that unlike the House of Commons, we don't do this quite as long as

they do in Ottawa, but that in our question period, although it's

shorter, in 15 minutes there's higher drama and better use of time and

more fun than the long sessions in Ottawa. I have great pleasure in

introducing Jim Kelleher.

MR. SIHOTA : I don't mean

to tip my hand here, but unfortunately I won't be asking any questions

of the Attorney-General. Had I known that Mr. Kelleher was going to be

here, I would have prepared a couple of questions for him so that we

could let him have some insight into the judicial issues of the day

here in British Columbia. Certainly it is a pleasure for us on this

side to see Mr. Kelleher here. On behalf of our party, I would also

like to extend a warm welcome to him on his visit to Victoria.

MR. ROSE :

1 take pleasure in welcoming back from his long vacation — where is he?

Is he gone? — the member for Vancouver South (Mr. R. Fraser). I hope he

enjoyed his vacation, and I congratulate him on his wonderful tan. I

just ask, Mr. Speaker, if he received his tan from standing too close

to his burned bridges?

HON. MR. COUVELIER : Mr.

Speaker, it's my pleasure to introduce three constituents from Sidney,

who are in the gallery this afternoon to observe our proceedings. I ask

the members of the House to extend a warm welcome to Mr. Don Eby, Ms.

Mary Eby and Ms. Toni Graeme.

Oral Questions

MR. HARCOURT : I'd like to welcome the Premier back from his vacation from the House.

SOME HON. MEMBERS : Oh, oh!

MR. SPEAKER : Order, please.

QUESTIONS ON PREMIER'S POSSIBLE

CORPORATE INVOLVEMENT WITH P. TOIGO

MR. HARCOURT : As the Premier is undoubtedly aware, last Monday I gave

notice of a question of privilege arising from some contradictory responses

he gave to questions raised in relation to his dealings with Mr. Toigo. The

Premier told the House he had no financial obligations to Mr. Toigo nor any

corporate involvements. The Premier appears to have misled the House, because

subsequently he admitted Mr. Toigo's company, Shato Holdings, leases a restaurant

in Fantasy Gardens, where the Premier has at least a 30 percent share. Has the

Premier decided to make a ministerial statement on this matter so that he can

clarify the responses given to the House'?

HON. MR. VANDER ZALM :

With respect to the opening comments by the Leader of the Opposition, I

did see him over the weekend. We did run into one another at the Greek

food festival in Vancouver. I was on my way to a busy weekend in the

Okanagan, meeting with grape-growers and tree-fruit growers and other

people, and he told me that he was on his way, with Beckie. to one of

the Gulf Islands. So I don't know about this holiday. I'm not saying

that to suggest there's anything wrong with this, and that it's

necessarily a poor choice. I commend him for his choice. But I would

suggest that there's much to be done around the province and that the

Premier visits all parts of the province and meets with people

everywhere — and the reception has been fantastic.

With

respect to the question of whether I'm prepared to make a statement on

what I would consider to be a very frivolous notice of motion, the

answer is no.

MR. HARCOURT : It saddens this side of

the House that the Premier thinks that his statements were frivolous. I

think this House deserves better. and I will give the Premier — because

we waited until he returned to the House — a chance to clear the air.

He has said that he is not prepared to clear the air on the question of

his relationship with Mr. Toigo, so I will ask him one more time and

hope that I will finally receive an honest and forthright answer to a

question about the Expo lands.

HON. MR. BRUMMET : I

think, Mr. Speaker, that there are different ways of using derogatory

terms in this House and that the Leader of the Opposition has just said

he would like, for a change. an honest answer, which by implication

means that there's dishonesty on this side. I think the member is

making a serious allegation that he should withdraw.

SALE OF EXPO LANDS

MR. HARCOURT :

I'll withdraw the word "honest." We'll give the Premier opportunities.

We're tolerant people on this side of the House. We hope that he will

think about the response he gave. But I would like to ask the Premier

about the Expo lands, because he has made a public and a personal

commitment that before any deal was approved there'd be no chance of

flipping the Expo lands. Will the Premier confirm that a no-flipping

provision is now included in the written agreement with Concord Pacific?

[2:15]

HON. MR. VANDER ZALM :

I'm satisfied that the agreement, as negotiated between the B.C.

Enterprise Corporation and the Concord corporation, has sufficient

protection to prevent the flipping process.

MR. HARCOURT :

Just to clarify that, are you making a commitment that there was a

no-flipping provision included in the written agreement with Concord

Pacific?

[ Page 4178 ]

HON. MR. VANDER ZALM :

I'm saying that I'm satisfied that the agreement has adequate

provisions to prevent the flipping, although I should go on perhaps to

say — and if the Leader of the Opposition doesn't know, he might refer

to someone in his caucus with respect to what flipping means or how

it's done — that there's no way by which you can in law prevent someone

from selling a property once they have title to it. But there are

adequate provisions, and certainly all of the people who have worked on

the agreement have advised me that they too are satisfied that we have

sufficient protection.

MR. HARCOURT : I'd like to

again try to clarify the Premier's response. He was saying that before

the agreement was made he was going to be 100 percent sure that there

be no chance of flipping whatsoever. Now he's saying that you can't do

that in law. Mr. Premier, we're asking you to protect this most

valuable land in British Columbia. Is that provided for in this

agreement: yes or no?

HON. MR. VANDER ZALM : I'm

satisfied that we have a good agreement. I'm satisfied that all of the

points that were of concern to myself and others have been met and that

in fact there is adequate provision in the agreement to prevent the

flipping.

MR. HARCOURT : I'd like to ask the Minister

of Finance a question about the Expo lands. Will the minister tell the

House if the property purchase tax will be paid on the purchase of the

Expo lands? Or has it been waived by the province'?

HON. MR. COUVELIER :

The negotiations went through many combinations and permutations, so I

am happy to advise the member that to the best of my knowledge, tax

will be paid. I will be happy to confirm that upon passage of a little

more time. Let me study the documents.

MR. HARCOURT :

We are pleased to hear that the minister thinks the property purchase

tax will be paid. That will certainly be welcomed by the new homeowners

across British Columbia, who have to pay it every time. I'd like to

know what price the property purchase tax will be based on.

HON. MR. COUVELIER :

Therein lies my hesitation, Mr. Speaker. In any event, to the best of

my memory there were no particular arrangements provided in that

respect. I think the hon. member, by virtue of his previous life, of

all the individuals in this House, would be most aware of the fact that

those lands had a very heavy cost associated with them in order to

reclaim them so that they were usable. This hon. member who asked the

question would, by virtue of his peculiar knowledge, appreciate the

enormity of that necessary reclamation. Therefore the issue of the

pricing, of the terms, of necessity had to recognize those unusual

aspects of the sale. To a large extent, much of this information has

come to light during a relatively recent few years, and the member who

asked the question would be one best able to understand the

complexities of the issue I described.

MR. HARCOURT :

What we have is a Minister of Finance who can't tell us the price the

lands were sold for; that's basically what we have. Let's try something

less complex, so as not to press the Minister of Finance on financial

matters. Heaven forbid!

Will the minister confirm that

following the $50 million down payment, no payments will be made by the

buyer for at least seven years and no interest will be paid at all?

HON. MR. COUVELIER :

As I mentioned, it's rather ironic that these questions should come

from the individual who mouthed them, insofar as much of the

requirements of the purchaser that must be met will be, and are,

necessitated by impressions, requests and historical points of interest

expressed by the city of Vancouver by the hon. member while he was

associated with that enterprise. Nevertheless, as the Premier has said,

the property was advertised internationally, there was an active

bidding process, and the minister responsible and the B.C. Enterprise

Corporation board of directors got the very best deal that could

possibly be obtained. The best justification for that statement is the

fact that it was internationally recognized and we took the best offer.

MR. HARCOURT :

The costs of the Expo and B.C. Place lands are already being written

off, so those costs aren't there. I know the cost of the Cambie Bridge.

I know the cost of the roads and the servicing. Those have already been

paid for. That makes it easy for the minister to know the cost of the

lands, if they've already been written off. There is nothing in the

Property Purchase Tax Act which says that the tax will be paid on an

uncertain price. Mr. Minister, what is the price on which the tax will

be based on the Expo lands?

HON. MR. COUVELIER : The

hon. member seems to have some difficulty following the perfectly lucid

answers I've been providing on this question. I'm very happy to repeat

myself. The issue is one that largely requires close examination, by

virtue of actions taken by the city of Vancouver during the hon.

member's position of stewardship of that jewel in British Columbia's

crown. I think it's fair to say that if any of the answers provided

this afternoon prove to have been misleading, we will so advise the

House shortly thereafter.

PROVISION OF AZT TO AIDS VICTIMS

MRS. BOONE :

A question to the Premier. On Friday the ombudsman said there was

considerable doubt about the fairness of the government's policy to

make AIDS patients pay up to $2,000 for AZT. The Health minister (Hon.

Mr. Dueck) responded by saying that he doesn't think an exception

should be made for AZT and that that is what he will be recommending to

cabinet. Will the Premier tell the House if he has reviewed his

minister's response to the ombudsman's recommendations and, in the

interest of fairness, is prepared to recommend that all AZT costs be

covered entirely by Pharmacare?

HON. MR. VANDER ZALM :

I have not yet seen the report. Nor have I had an opportunity to talk

about this with the Minister of Health. I assume these discussions will

be held following receipt of the report. It will then come to cabinet,

and if there's a decision to be made, it will be made by cabinet, so

it's a matter of future policy.

MRS. BOONE : We agree when the Health minister says an exception shouldn't be made for AZT, and that's exactly

[ Page 4179 ]

what

the minister has done. He's made an exception to exclude AZT from

universal health care. The Premier was prepared to admit unfairness of

his government's policy when it came to cyclosporin. As the ombudsman

points out, B.C. is the only province which does not fully fund AZT,

and the patients are participating in an experiment which will

potentially benefit others. Is the Premier prepared to do the right and

fair thing and include all AZT costs as Pharmacare — as recommended by

the ombudsman?

HON. MR. VANDER ZALM : Mr. Speaker, I

believe my first answer definitely applies to this particular question

as well. But I will say that we have one of the best Pharmacare

programs in the whole country. We obviously, as the people responsible

in government, are constantly and will be.... So perhaps it's good too,

because we're looking for new drugs to help some of those afflicted by

various diseases, and we are constantly having to face new drugs on the

market — many very expensive and some experimental. These are dealt

with by government very fairly.

MR. ROSE : I rise on

a point of order. All of us should remember, as MLAs here, that it's

been the practice for some time not to raise questions of privilege or

parliamentary language during question period, and that these things

are available right after question period, if anyone feels strongly

enough by that time to want to move them. If those are not the rules,

then changes might be made over here. I think the way they've been

functioning in that these matters are not raised during question period

— in view of the 15 minutes — is probably the most desirable.

HON. MR. STRACHAN :

The standing order that refers to questions or points of order during

question period states that Mr. Speaker shall make that reference or

defer the points of order to a time other than question period.

However, the government has, from time to time, made its own decision

and waited until question period was over before raising a point of

order. I can only suggest, sir, that if you review the Hansard

Blues, you will see that the Minister of Education was so incensed by

the comments made by the Leader of the Opposition, and the most

regrettable and unparliamentary reference to another member, that he

could not contain himself.

HON. MR. BRUMMET : On the

same point of order raised by the Leader of the Opposition. If I follow

his statement to its illogical conclusion, that would mean that if we

are not to raise a point of order at any time for the 15 minutes, that

opens the door for any member on that side to keep making allegations

and using unparliamentary language for 15 minutes before they can be

challenged, and I have a difficult time accepting that.

MR. ROSE :

I was provoked when someone said: "You lost that one, Mark." I would

just like to say that if I become equally obsessed and angry over here,

does that also give...?

Interjection.

MR. ROSE :

Incensed. Does that mean that each of us on both sides has the perfect

right to destroy question period over some squabble over name-calling?

I think that all these things can be easily handled right after

question period. I would invite the hon. Minister of Education to be a

real educator, to be patient and hold his temper.

MR. SPEAKER :

I'd just like to suggest that if members were to keep to parliamentary

language, you wouldn't have to have these exchanges during or after

question period.

HON. MR, ROGERS : I was just going to suggest that perhaps the two of them could settle it outside.

Hon. Mr. Rogers tabled the annual report of the British Columbia Railway.

Mr. Speaker tabled the 1987 annual report of the ombudsman to the Legislative Assembly.

Hon.

Mr. Couvelier tabled a statement of temporary borrowing by the

government pursuant to

section 43(2) of the Financial Administration

Act and a statement of borrowings, including off-lending. pursuant to

section 41.6 of the Financial Administration Act.

[2:30]

MR. HARCOURT :

I gave notice last week that I had a motion of privilege that I would

like to place before the Legislature. I also said that it would only be

fair and appropriate that the Premier have an opportunity to make a

ministerial statement on my notice of privilege. The Premier has said

that he will not take advantage of that opportunity. Therefore I sadly

will proceed with the motion of privilege that I have prepared.

Along with that motion, I shall be tabling extracts from Hansard

of April 25 and, dealing with the subsequent remarks of the Premier.

extracts from the Province of April 27 and a news

summary prepared by

the Premier's office communications staff of the CBC news report for

that evening. Full tapes of the TV coverage are available to you, Mr.

Speaker, through the Premier's office.

I have an

appropriate motion prepared, in the event that Your Honour rules that a

prima facie case has been established, but again, it would seem fair

that to clear the air, the Premier should apologize to the House in a

forthright fashion and place on the record a correction of his

erroneous statement in question period last Monday. Accordingly, I

hope, Mr. Speaker, you'll ask the Premier to address the apparent

conflict between his statement here and to the media subsequently.

I move the motion. seconded by the opposition House Leader, that a special committee of privilege....

MR. SPEAKER :

I would advise the member that the motion is not moved: the material is

tendered. If the Chair finds there is a question of privilege, then the

motion that you prepared would be moved.

MR. HARCOURT : I'm prepared to move it and will tender it.

MR. SPEAKER : I will take the question under advisement and report back to the House.

HON. B.R. SMITH : Mr. Speaker, on the question of privilege, this side of the House would like to reserve its right

[ Page 4180 ]

to make some comment on the appropriateness of the motion. I think the House Leader will be doing so.

MR. ROSE :

I would like to know what is actually intended by that. Is the

Attorney-General telling the House or advising the Speaker that he's

reserving his right to make a response to the information put forward

on behalf of the prima facie case at some subsequent date? Is that what

he's telling us? Would he also like to tell us when this will occur? As

everyone knows, the Speaker's role is to look at all the evidence

presented in the prima facie case, but the Legislature itself — not the

Speaker — determines whether or not a breach of privilege does in fact

exist.

HON. B.R. SMITH : I'm talking about the first

stage of it — that is, whether there is a prima facie case — which is

not determined by the House, but is determined by the Speaker. We wish

to reserve some response to that issue. I don't know whether it would

be tomorrow, but it would be at the earliest opportunity. Our House

Leader was considering this matter. We were not sure when or if you

were going to proceed with your motion, hon. Leader of the Opposition,

although you gave notice of it, and it's come today. But I think it's

only appropriate that this side would have a chance to address the

prima facie issue. That's the one I'm talking about.

Orders of the Day

HON. MR. ROGERS : Committee of Supply, Mr. Speaker.

The House in Committee of Supply; Mr. Pelton in the chair.

ESTIMATES: MINISTRY OF

FINANCE AND CORPORATE RELATIONS

(continued)

On vote 37: minister's office, $293,411.

MR. SIHOTA :

Mr. Chairman, since we are on the Finance estimates, I want to ask the

Minister of Finance a couple of questions that flowed out of question

period.

Just as a matter of interest, it seems to me from my recollection....

MR. CHAIRMAN :

Hon. member, you must be finding some difficulty with the noise level

in the chamber at the moment. Perhaps we can wait for a moment, until

everyone settles down. Would you please proceed, hon. member.

MR. SIHOTA :

I was wondering, as a consequence of the questions which were raised

during question period to the Minister of Finance, if he could confirm

my understanding — and I stand to be corrected on this matter — that a

sum must be specified in order for the provisions of the property

purchase tax to apply. It would seem to me that the act could not be

triggered if the sum is not stated, because you wouldn't know what to

calculate the percentage against.

HON. MR. COUVELIER :

Since the question was put during question period, the government staff

have responded with alacrity. We can tell you that property purchase

tax will be paid. We are aware of what our legislation says. When the

documents are filed, you will see the universe unfolding as it should.

MR. SIHOTA :

I'm trying to ascertain how much property purchase tax would be paid

according to the provisions of that act. Now that your staff are here,

and they can tell you with some precision what's involved here, perhaps

you could tell us.

HON. MR. COUVELIER : That

information will be made available in the fullness of time. The hon.

member should keep his shirt on — and his tie and his socks — and we'll

get back to him.

MR. SIHOTA : I don't quite

understand why I should be worried about my shoes and my socks and my

shirt. It seems to me that the Minister of Finance ought to be worried

about the amount of revenue that he's going to be gaining from a

particular tax, and he ought to have some answers at hand. I'm just

wondering if the minister would explain to us how the act is to apply

in this type of a situation, where it is indicated that the price is

$320 million, but it could be $500 million based on development

options. Given that is the tax to be calculated on $500 million, is a

rebate issued if the amount is less, or is it supposed to be calculated

on $320 million and a sum payable later if it works its way up to $500

million?

HON. MR. COUVELIER : I can assure the hon.

member, the House and all the citizens of B.C. that by virtue of the

international competition for that property, the interests of B.C.

residents are well served, and to suggest that the property purchase

tax issue is of critical import in terms of the merits of the proposal

is absolutely absurd. The fact of the matter is that evaluation will be

set, as I've said, as part of the process. That will be made public

once the process unfolds. While the hon. member may have a curiosity,

I'm not going to oblige it. That information will be forthcoming in due

course.

MR. CLARK : On the same point. This minister

gets his back up and tries to be aggressive whenever he gets defensive.

I simply want to ask a question. The scheduled payments that we know of

now are $50 million and $4 million a year for ten years, and so on.

Would it be when the company remits the $4 million payment or the $50

million payment when the 2 percent would be paid? Is that what has been

agreed to? Or is it on some other version, like the net present value

or something?

HON. MR. COUVELIER : No, the property purchase tax will be paid in total at the time the registration takes place.

MR. SIHOTA : Just for my information, when is the date that the lands are to be transferred?

HON. MR. COUVELIER :

As the process unfolds, it will be.... It's a relevant question, but

there are some 30 property titles involved and as the documents work

towards finalization, that question of valuation will be pertinent and

it will be addressed then.

MR. SIHOTA : I appreciate the fact that this is a complex transaction, that there will be a whole series of titles that have

[ Page 4181 ]

change. I didn't realize there were 30, but that's certainly an

impressive figure. I guess what I'm at a quandary at is that I don't

think the legislation was ever drafted for this type of sliding scale

agreement, whereby the quantum of funds for the final purchase price

could be anywhere between $320 million and $500 million. I don't think

the act was ever drafted in contemplation of that. The act was always

drafted in keeping a fixed price.

I'm therefore wondering

whether or not it is a matter of negotiation come registration as to

what the number is going to be, as opposed to agreeing to $320 million

or agreeing to $500 million. Maybe they'll cut the difference. I'm just

wondering if there are negotiations to determine the price upon which

the tax is to be paid?

HON. MR. COUVELIER : It's

always interesting to hear what the hon. member thinks about an issue,

and he takes full opportunity for these kinds of exchanges to express

his views, and I'm grateful for that.

MR. CLARK : We

don't want to belabour the point to the minister, but we would like to

know, because it begs the question as to whether we can all do this. In

other words, can we buy something today and pay the tax down the road?

The minister, in his answer, has raised more questions than he has

answered. For example, he said that there are some 30 titles to be

conveyed. It seems to me that conveyance could happen over time, and

the payment would be when the title is conveyed at each

schedule along

the way.

First of all, if the title is not conveyed. who

pays the property tax on the stuff that's still held by the Crown? What

security is there for the Crown as owner of the resource if they're

going to phase the title conveyances over time? It would be nice if we

could get a nice simple answer as to the direction we're moving,

because it does beg the question as to whether we can all play this

game to some extent. Not that I can.

HON. MR. COUVELIER :

It is not a game; it's a very serious matter. The government is

delighted with the successful conclusion of the entire process. The

hon. members opposite make a statement, and they build a thesis around

the statement. It becomes a house of cards based upon a false premise.

We've now got the case where they are bandying back and forth making

some grotesque mountain over what is in truth no problem whatsoever.

The

hon. member suggests that we didn't write the legislation on property

purchase tax in a way that recognized this eventuality, and I tell him

he's wrong. We did. The act does cover it. The hon. member suggests

that we're going to be transferring property piecemeal and therefore it

is suggested that there will be property purchase tax paid in pieces.

Clearly that's based on the first assumption, which was an error.

Obviously we're talking about a comprehensive development here. It

would be absurd to think that we'd be transferring — or the owner

acquiring — ownership piecemeal, phased out over a period of time.

The

whole proposal, the whole initiative, was to advertise internationally

to ensure that we got a comprehensive development that the city of

Vancouver and all British Columbians could be proud of. That's what

we've done. We're not going to transfer pieces of land piecemeal over a

period of months. The developer himself is going to want to make sure

that he gets title to all those properties concurrently, and so is the

city of Vancouver. Everyone's interests are obliged by ensuring that

the transfer takes place in total. That's what will happen.

I suggest that the question was prompted by the false assumption from the earlier questioner from the other side of the House.

[2:45]

MR. SIHOTA :

The Minister of Finance would rather engage in that type of comment

than deal with the issue. The basic assumption here, Mr. Minister, is

the question of whether the tax will be payable. The assumption that

we're making on this side of the House is that the tax will be payable;

that's upon which all the other arguments are founded. Since you have

confirmed that the tax will be payable, we're just trying to determine

on what basis it will be payable and how much tax is going to be paid.

The

thing the minister can't explain to this House is exactly how much

money is involved here. We don't know if it's $320 million or $500

million, and worse still, the minister — the Minister of Finance —

doesn't know. It seems to me that the minister ought not to be accusing

us of being in the dark on this matter. If the minister was forthcoming

in his answers, then we'd know.

If the figure is $500

million, we'd know what percentage is going to be calculated out, and

we're quite capable of doing the arithmetic. But both in question

period and now, the minister has been unable to tell us the amount. I

see he wants to get up, so I will allow him to respond to that before I

ask my question.

HON. MR. COUVELIER : I confirmed

during question period and reconfirmed during this discussion of my

estimates that property purchase tax will be paid. That's not an issue;

the issue is the sum. Evidently the issue was a sum in the minds of the

interrogators at least, and I explained that that will be a part of the

process that will unfold as the weeks proceed. That was envisaged, it

was recognized, it was part of the package and, indeed, every one of

the bidders would have had to follow the same process in any event.

am not in the position to tell the hon. member today what those sums

will be — that is, the sums of the property purchase tax or the

valuations. It was never envisaged that we would be in a position to do

that within a matter of days after the sale being concluded and the bid

accepted.

As I said earlier, Mr. Chairman, the hon. member

will be advised as the process unfolds. I find nothing unusual nor do I

feel any compunction to defend anything at all. I couldn't make my

answer any clearer, I think.

MR. SIHOTA : The

minister was doing well until he uttered those last two words. If the

minister is saying he doesn't know the sum. fair enough. It seems odd

to me that the minister wouldn't know the price upon which the tax will

be predicated, but let's put that aside for the moment. Let me come at

it from a different angle, although I must say this wasn't my original

intent in asking the question.

The minister talks about

process with respect to the payment of that tax. Will he assure the

House that there will be no forgiving or deferral of that tax in the

agreement? In other words, will you assure the House that you will not

forgive the tax in any way — for example, allocate a lower value or

attach a lower percentage? Similarly, for the matter

[ Page 4182 ]

of deferral, will you assure us that they won't be deferred beyond the registration date, whatever that is?

HON. MR. COUVELIER :

As I've tried to tell the hon. member, the process is unfolding as it

was designed to unfold. Once again, I am not going to allow the hon.

member to go on a fishing expedition with piecemeal answers to only

part of the equation. As much as he would like to have his curiosity

abated, I will not oblige him. The process envisages a series of steps.

That's in place, and they are unfolding. The interests of the B.C.

citizen are well protected by the process.

MR. SIHOTA :

Another question to the minister. The minister said in response to one

of our earlier questions that he was trying to build his house of

cards, and now that we've resolved the matter of the assumption, he

said that the act does contemplate a sliding-scale system. That is how

I described it. Could the minister explain just for my own information

how the act contemplates that?

HON. MR. COUVELIER :

With respect, Mr. Chairman, the hon. member made a statement. I told

him he was wrong. I think it's up to him to tell me what he doesn't

seem prepared to accept. I have told the House that property purchase

tax will be paid. I have told the House that the question of its amount

and the question of the valuation of the property is and was part of

the bidding proposals, and that all of the bidders were aware of that.

He has jumped around here trying to find some rock to cling to, and

he's having trouble. I don't intend to assist him in that effort.

Surely

the issue quite simply is whether property tax will be paid, and the

answer is categorically yes. As to its amount and method of

calculation, as I said earlier, that will be developed as part of the

completion of the process that was envisaged when we started the

exercise, and it's still in place now. Again, all the bidders knew that

that was part of the exercise.

MR. SIHOTA : The

property purchase tax, of course, is not in the new statutes, which I

guess is another problem; so we can’t see which

section would apply in

terms of how the act contemplates the sliding scale basis. I guess if

the act was here I could find it and ask the minister some questions on

it.

What I wanted to find out, if there is a sliding scale

agreement, was whether or not the price would attach to the higher

figure and then be rebated back if a lower figure was ultimately

realized.

It's not me who's floundering; it's this minister

who can't tell us what the final sum is and hence is unable to tell the

House exactly how the tax will be paid. That's fair enough. We'll leave

the topic and look forward to dealing with the minister a little later

on.

HON. MR. REID : It seems fair; it seems appropriate.

MR. SIHOTA : The member is right; it does seem appropriate, given that the minister can't answer the question.

Maybe

this is a question the minister can answer: how many votes did the

minister get in the Socred leadership convention? Just as a matter of

interest.

HON. MR. COUVELIER : If you subtract my mother and wife and immediate family, not very many.

MR. SIHOTA : Was it 12?

MR. CHAIRMAN : I'm having difficulty figuring out how this is germane to the subject at hand, vote number 37.

MR. SIHOTA :

You'll find out, Mr. Chairman, in a moment. I thought it was 12, and

I'll base it on that. If the minister says it's not 12, then fair

enough; we can amend it to reflect the actual figure.

want to conclude my comments on the stock exchange. We've had a fairly

thorough debate on this matter. I had intended to talk on it at some

length today, but in retrospect — probably to the relief of the

minister if not to everybody else in the House — I'm not going to. I

think we've canvassed the topic. I've made my point and the minister

has made his point. I do want to emphasize that whether the minister

wants to accept it or not, there is a problem, and the government

should move to address the problem.

In fairness, I've

listened to what the minister had to say, and I will act on some of the

points, recommendations and/or advice that he's offered during the

course of the debate; I would ask that he do the same with respect to

points I've made. But I think it should cause the minister a fair bit

of concern when I demonstrate to him, whether or not he likes the

forum, that people who are fairly senior within the exchange — people

who hold governorships in the exchange, who have chairmanships with

influential committees on the exchange — are involved in questionable

stock transactions. That should concern the minister. And I don't make

those comments lightly or frivolously. I'm not in the habit of standing

up in this House and making those types of comments on the exchange if

I can't make them outside. The minister may recall that last year I

made some statements in this House, and the minister took great

pleasure in pointing out that a lawsuit had commenced. I pointed out at

the time that I stood behind my comments, and indeed that suit was

dropped because it was recognized that I never made the comments along

the lines that were reported.

To date, no one has taken

that type of recourse behind the comments that I've made, and I'm sure

— and confident — that the comments I've made in the last few days will

not invite that type of litigation either. I'm very careful and very

select with respect to the evidence that I provide. I think with that

type of background in mind, the minister should go back and reflect on

the comments I made with respect to senior individuals who seem to be

involved in some questionable transactions. I would hope that the

regulators will take action and that appropriate sanctions will be

forthcoming.

I also trust that with respect to those

companies I have named that are not currently under investigation....

That includes the Axiom example, where there are no sanctions to date.

It includes the Lionheart example, where no insider report actions have

been taken. I hope to read in the next few weeks and months that the

superintendent of brokers office has moved with dispatch on those

matters, as well as on the matters relating to the Carter-Ward trial

and the Cumo Resources trial.

Particularly with respect to

the Carter-Ward trial, I can assure the minister that the significance

of that decision has not yet filtered down and hit with the impact that

it's going to hit. I would venture to say that in the coming weeks and

months we will hear more and more about the Carter-Ward situation —

before the judgment, let alone after the judgment. I don't have any

particular knowledge on this, but I'm

[ Page 4183 ]

confident

that those responsible for reporting on the activities of the exchange

will be paying more mention to the CarterWard situation after the

transcripts are available, so that they can quote what transpired with

the type of exactitude that's necessary given the appropriate legal

pitfalls all of us face when we attack matters on the exchange. I look

forward to action flowing both from the Cumo Resources case and the

Carter-Ward situation.

I want to emphasize.... Axiom,

Lionheart, CarterWard, Cumo and all the other ones — and I don't have

the Blues here in front of me, but 1 know that if one were to add them

up, there are least 25 instances I have referred to that clearly

involve violations of the Securities Act, and I think one could follow

them through really easily.

I also want to share with the

minister a bit of a trade secret, because the comment that he makes

with respect to the points I raised in this House is, I think,

ill-founded. The minister has a habit, if he can't make any other

argument, of suggesting that the information that I bring to this House

is street tips and rumour. It's not. I'm going to tell the minister

where I do get the information, in part, because it is the very thing

your own regulators ought to be doing. That is simply by going through

the trading blotters. I think if one just sat and went through that

information as regularly as I do — and I don't do it more than once a

month — it doesn't take much time to be able to figure out which

matters ought to be investigated and which matters ought not to be.

stand on my record. Every instance that I've raised in this House to

the Minister of Finance, prior to these estimates, is a case in which

there has been some action taken. There hasn't been one stock that I've

referred to in this House during the course of deliberations on the

exchange, whether it be in question period or previous estimates, where

I was wrong in terms of violations of the act. I've yet to be proven

wrong, and I stand by that record when one takes a look at what I've

had to say in the last two or three days, and when the minister's

regulators, as I'm sure they will now, take a look at those.

I'm

very careful in terms of the material that I present, and it's well

researched. I just don't think that it is appropriate.... It may be

appropriate in this forum, but in the confines of the minister's own

office, I would like to think that the minister takes a moment to go

through or gets somebody to go through what I've had to say in Hansard and has a check done on it, so it comes back to the minister and forms some type of report.

It's

fine in this House to take the odd shot — and I would say the minister

does more than that — but it's another to ignore what I've had to say.

I would consider it an affront to what I'm trying to do if the minister

took that attitude, because, like I say, you look at my record, and you

look at what I raised last year, and you look at how bang-on I was. I'm

telling you that you don't need a crystal ball. I've already told you

how you can find this stuff out, and I'm amazed that your own

regulators don't do it, or don't do it with the type of commitment

that's necessary to be able to find it.

I've made that

point. I've revealed to you, in part — and I'm certainly not going to

say everything — where I'm getting the information. I do that because I

want to make sure this government moves on what I would like to see it

move on: cleaning up the image of the exchange. We can get into a

political debate as to whether it's a personal vendetta or whether it's

an appropriate forum to raise those things. But that aside, I think the

government has to begin to do the same type of scrutiny I do, and it

would come to inevitably the same type of conclusions, and the minister

could avoid all sorts of embarrassment — whether he likes it or not, or

whether he thinks it as such or not; I think it must cause the minister

some discomfort to have me raise these matters over and over again.

[3:00]

I'm

also going to make it clear to the minister that I'm not going to

cease. I've said that I have listened carefully to what he's had to

say, and some of the advice he has provided I'm prepared to act on, but

not all of it. I would venture to hope the minister would do the same

with respect to my advice. I am putting this government on notice that

I intend to pursue these matters again and again in the House. I don't

think that the points I'm making are that far off the mark. I've never

stood up in this House — and I'm pleased to say this, Mr. Chairman —

and said that the exchange should be closed, because I don't believe

that that's the solution at the end of the day. I have a belief. which

I've articulated in this House, that the exchange ought to be cleaned

in order to ensure that this province moves toward something which we

on this side of the House would also like to see: the establishment of

a good financial centre in British Columbia.

I think — and

this is the point of departure — that our own view of what that

financial centre ought to consist of is different from what the

minister says. We haven't had the philosophical debate in this House on

the role of capital and how capital ought to be utilized to ensure

economic development. I'm not too sure that our greatest level of

success lies in attaching ourselves to some magical overseas investor

who's just sitting offshore, dying to come into British Columbia to

solve all our economic problems. I don't believe that's the way it

works. I believe we've got enough people in this province who can

demonstrate otherwise, because I put a far greater faith in the ability

of people in this province to do the best for economic development in

this province.... I put more faith in the entrepreneurial skills of

people in this province than I do in anybody who is not a part of this

province.

I want to conclude my comments, then, by putting

the minister on notice that we will continue to pursue the matter of

the exchange, and that I'm asking the minister to make a commitment in

this House to apply additional resources to the exchange as well,

because they are much needed.

I see that the minister has

some documents in his hands. I don't know if they apply either to the

property purchase tax or my comments on the exchange, but I'll stop for

a moment at this time and see if the minister has any responses with

respect to the comments I made. Otherwise, there is another topic I'd

like to raise, Mr. Chairman.

HON. MR. COUVELIER : I

think, Mr. Chairman, that the hon. member's views and my own are well

known. We've been repeating them now for the last three days, so I

don't see much point in going through it yet again. I just want to

remind the hon. member, though, because he seemed to make mention of it

again today.... He said, and I believe I have the quotation right: "The

government should begin doing the same kind of scrutiny" as the hon.

member does — I believe that's verbatim. If ever we needed an

illustration of the kind of problem we have — the hon. member and I —

in relating with each other, it's that comment. He seems to work under

the assumption that we are not doing anything in the regulatory field.

Of course, nothing could be further from the truth.

[ Page 4184 ]

There

are over a hundred active files being investigated at any one time.

When one remembers that in order to do the investigations, due process

must be followed — all the legalities and interests of those affected

have to be recognized in a legal sense — then their performance, I

think, is very credible and very good, and furthermore, has improved

dramatically since we've made the changes I've talked about over the

last three days.

The hon. member seems to think that we

don't have the capacity or desire on the regulatory side to do the job.

I tell him categorically once again: we do have the capacity and the

determination, and we are making good progress. But unlike the hon.

member, when we make allegations, we have to be able to prove them in a

court of law or in a disciplinary process. That requires due process,

proper evidence and documentation. Unlike the hon. member, I do not

have the freedom to comment on issues that are, or might be, under

examination. So I find myself unable to deal with the specifics. But

for the member to suggest that we should start doing the same type of

scrutiny he does I find offensive. We've got qualified, dedicated staff

— one of them is with me here this afternoon, by the way. Let me

introduce to the House Mr. Wade Nesmith, manager of compliance for the

Securities Commission. Mr. Hyndman, who was with me last week, is in

eastern Canada today with the superintendent of brokers, continuing to

cement our relationships and our exchange of information with the

exchanges and security officials in central Canada.

In any

event, I think everything that could possibly be said on this matter

has already been said, Mr. Chairman. I thank the hon. member for his

concern; I must say that I deplore his choosing the public arena to

express them. I have indicated constantly a desire to deal with issues,

to solve problems. I'm offended by the thought that we take public

platforms to mouth these concerns in the way that's been chosen,

because all that happens as a consequence is that the reputation of the

institution is put at some risk.

The hon. member must be

well aware of the fact that this issue has now been reported nationally

and is the subject of comment in some of the central Canadian financial

papers. I find that deplorable, and I find it serves no useful purpose

other than elevating the profile of certain personalities involved. In

any event, the initiatives that are underway can only result in

continued refinement of the process, and I am confident that as the

months go by, a year from now the hon. member will have far less to

talk about, unless, of course, he wants to resurrect 10-year-old cases,

which I can't prevent but I would hope that that does not occur.

MR. CHAIRMAN : Before we proceed, the first member for Vancouver South would like to make an introduction. Shall leave be granted?

Leave granted.

MR. R. FRASER :

I'd like to introduce to the Legislative Assembly today some students

from Churchill Secondary School, which is in that great riding of

Vancouver South, served by my colleague, the Minister of Highways (Hon.

Mr. Rogers). These students are from grade 10. About half of them are

from the province of Quebec, Chicoutimi. I would like the House to

welcome all these students from Quebec and from Vancouver South to the

assembly this afternoon.

MR. WILLIAMS : I'd just like

to say that the statements by the minister over the last few minutes

are really disturbing in terms of putting down the member for

Esquimalt-Port Renfrew. These are serious matters that he's brought to

the House consistently, and they've always been found to have

substance. And then to complain about the fact that they're brought

into the public arena! What, Mr. Minister, do you think the

Legislature's all about? It is the place to air these grievances.

HON. MR. COUVELIER : Except for the fact he's trying to.... solving a problem when we cannot solve the problem.

MR. WILLIAMS :

If you let that outfit be run like a slot machine haven in Nevada,

you're going to have the problems dumped here in the Legislature.

HON. MR. COUVELIER : There's more money from outside the....

MR. CHAIRMAN : Hon. members, the minister will be recognized after the first member for Vancouver East has completed his statement.

MR. WILLIAMS :

Your own studies have shown very clearly where the money goes. It

doesn't go into genuine risk capital. It doesn't go into

entrepreneurial activities. It goes into the pockets of your supporters

on Howe Street. If you were really serious about it, you'd see that

that changed. These matters have consistently been brought forward by

the member for Esquimalt-Port Renfrew. They are valid. They are

genuine, broad concerns of the public, and they must be aired here

because you're not doing the job over there.

MR. S.D. SMITH :

Frankly, I had not intended to join this discussion, because I don't

think I disagree with the Minister of Finance. I don't think there's a

whole lot that can be added to it, but there have been a couple of

comments made today that I think should be ferreted out, for what

they're worth.

First of all, the Minister of Finance is

correct when he says that the primary place to raise these issues — and

they're legitimate issues — is the place where the due process that has

been set up to look after them can be indulged in and can be used in

the way it was intended. The reason they are raised in this House is to

use the place to score political points. There is no intention on the

part of that member to seek truth and to develop an understanding of a

system to help the people in this province who use that exchange.

MR. SIHOTA :

The second member for Kamloops, in his own way, is trying to impugn a

motive. If I remember the rules correctly, that's not proper, and I

would ask him to withdraw his comments, given what he's trying to do

here,

MR. CHAIRMAN : Before we continue, I'll just

mention to the hon. member for Esquimalt-Port Renfrew that I was

listening very carefully and I don't think there is any impugning of

anybody's veracity. I think the terminology used was "seeking the

truth."

MR. CLARK : On the same point of order. With all due respect to the Chair, the second member for Kamloops said

[ Page

4185 ]

that the member for Esquimalt-Port Renfrew has no intention of seeking the

truth, and therefore does impugn his motives and says that he's been misleading

the House or that he's been lying or deliberately attempting to mislead

the House. I think it's quite appropriate that he withdraw that statement.

MR. CHAIRMAN :

Perhaps we might resolve this matter if I would just ask the second

member for Kamloops if he was impugning the character of the member.

MR. S.D. SMITH :

I most certainly was not impugning the character of the member. I was

pointing out that you can use this place to seek truth about a matter,

or you can use this place, in my view, in order to enhance your

political currency by taking a piece of information and using this

debating forum for that purpose. In my view, this member seeks to use

this place for that purpose when he raises questions about the

Vancouver Stock Exchange, rather than using this place to seek truth.

If he was interested in seeking truth about these matters, there is a

process in place that can be used, that protects individuals and also

lets us get at the truth in a dispassionate, honourable and fulsome

way, and that has not been undertaken.

I thought that the

most interesting comments were the ones by the first member for

Vancouver East (Mr. Williams), who stood up towards the end of this

debate and said that really what was going on here was that the

minister was not prepared to enter into investigations because it

involved his political friends. Of course, that comment in and of

itself is a typical scurvy comment on behalf of that member. But what

is important about it is that it discloses the real motivation here.

The real motivation here is not to seek information and truth about

this issue. The motivation here is to impugn the character of

individuals who happen to be in business in this province and who, from

time to time, may have indicated their support in the political process.

The

second part that was interesting was that the member for Esquimalt-Port

Renfrew (Mr. Sihota) began a discussion about the role of capital — and

that really is the issue. They don't like the role of capital in

helping to enhance our economy and in creating jobs. They don't like

the role that is played by the Vancouver Stock Exchange. They do not

believe in the notion of people being able to earn profit on the risk

of their capital. That's why they sit here continuously since 1933, and

we, in various forms, have sat over there during that period of time.

[3:15]

Mr.

Chairman, in the interior of the province of British Columbia, in the

constituency of Kamloops and in Okanagan South and in Cariboo and other

places, there has been a continuing positive relationship for jobs and

for workers between the ability to raise risk capital on various forms

of exchange in Vancouver, and the ability to risk that capital seeking

mines in the interior of the province, as well as on Vancouver Island.

When the first member for Vancouver East was in power in this place — for a

very short period of time — he did everything he could to diminish and damage

that process. He was able, through the stroke of his little planning pen, to

destroy the mining industry in this province — not during a period of time when

prices were going down, but when prices were going up.

MR. CHAIRMAN :

Hon. member, I must stop you there because we were getting to the point

where it was becoming a personal attack on another member of this House.

MR. S.D. SMITH :

Mr. Chairman, I won't attack that member personally, but I will tell

you that there are mining communities in the interior of the province

where Socreds can get re-elected simply by putting up the first member

for Vancouver East's poster.

Let me say very quickly. in

closing, that we need that risk capital exchange. It is an exchange

which serves a very important purpose for mining in the province of

British Columbia and beyond; it has for a long time. It has grown to

the point now where it creates the opportunity in Vancouver to

accumulate capital from all over the world and to expend it in other

places all over the world. It is a place where the players themselves

would tell you there is room for improvement of its measures. its rules

and its regulation. That improvement will come as a result of

establishing processes that are honest, understood and fair. It will

not come by chattering little individuals sitting in this House, with

their scurvy comments, attacking individuals and the role of capital

and getting into the little game of politics that the first member for

Vancouver East does. That old movie has for too long been the measure

of their attitude towards capital in this province.

On the

one hand. I am happy to hear that it continues to be the measure of

their attitude towards capital, but on the other hand, it saddens me to

see that a new member coming into this House would pick up on the old

ways of the has-been from Vancouver East. It just isn't good enough,

and I can tell you, Mr. Chairman, that when you allow those comments to

be made in this House in the way they are, they do not enhance British

Columbia's ability to develop its potential as a risk capital

marketplace. They hurt British Columbia. His comments are intended to

hurt that part of British Columbia, and he ought to be doggone-well

ashamed of himself.

MR. SIHOTA : Talk about old ways!

The comments of the previous member are in keeping with the old ways —

the old line of when you don't have any facts to back you, you just

come out with the rhetoric and negative, demeaning innuendo. It's just

rhetoric: pure, unadulterated — I won't fill in the blank — from that

member. He hasn't participated in this debate. he hasn't listened to

facts. and those sheep over there who want to clap away haven't

listened to the facts. Let's share some of those facts. let's talk

about process, let's talk about what's happening on the exchange, and

let's talk about the role of capital; but let's do it in a way that

provides this House and the minister. who chooses to smirk his way

through this debate, with some concrete examples of what's happening as

a way of underlining our intent of wanting to clean up the role of the

exchange in this province.

The purpose is not simply or

exclusively to deal with matters of political currency. ~f the minister

would give us a moment of his time. perhaps he could listen. The

members opposite say: "There is a process and one ought to exercise

that process." What happens when that process doesn’t, work, Mr. Second

Member for Kamloops and Mr. Minister?

MR. S.D. SMITH : Have you ever tried to make it work?

MR. SIHOTA :

Yes. 1 have tried to make it work, Mr. Second Member. I'm going to tell

you exactly what's happened here, and we'll deal with the facts.

[ Page 4186 ]

I'll

just pick one example, because we've dealt with 30 of them in the last

two days. Let's pick the example of Lionheart again, because the second

member for Kamloops doesn't know it. He resorts to rhetoric instead of

dealing with fact. Let's talk about the Lionheart Resource facts. The

Ministry of Finance, through its superintendent of brokers office.... I

don't have the letter here in front of me, but I brought it in the

House before; I didn't think we were going to get into this debate

today. On October 22, 1986 — and you can check these facts, Mr. Second

Member — after Mr. Harry Moll had violated the insider-trading

provisions of the Securities Act for 13 or 14 consecutive months, he

was sent a letter. Do you know what that letter said? It said: "Mr.

Moll, if you continue to violate the insider-trading provisions of the

act, you're going to be taken to court." For the next 15 or 16 months

none of the insider-trading reports were filed in compliance with the

act. They were filed two or three months later.

That's not

rhetoric, Mr. Chairman; that's fact — and the second member for

Kamloops is now going to slither his way out of this chamber. He won't

sit back in his seat and listen to the debate now; he doesn't want to

deal with fact.

The question to the Minister of Finance is:

what are your regulators doing, when they're sending letters to people

saying, "You'd better comply with the provisions of the act, " and

not...? It's legitimate, when the process isn't working, to stand up in

this House and ask the Minister of Finance why his regulators aren't

doing the job. Is that improper, I ask you? Of course not. That is

showing due respect for the process, and it's asking why the process

isn't working. That's not rhetoric; that's fact. And it's a fact that

the minister has yet to respond to, and it's a fact that the second

member for Kamloops, who tries to come to the defence of this

indefensible minister, never answers. Let's deal with fact. Why is that

process not working? Why did the regulators allow that to happen? Why

can't the Minister of Finance even answer that basic question, when

he's got his bureaucrats sitting right next to him?

It's

not inappropriate for members on this side of the House to ask those

types of questions of the Minister of Finance, and it is wholly

appropriate for the Minister of Finance to begin to respond and to give

us some answers to those very basic questions as to how you can allow

this type of situation to exist. That's a simple question designed to

protect the interests of investors, and to date we have not heard one

answer from the minister to explain the inactions of his. regulators in

that regard. I invite the Minister of Finance to do it today. He

couldn’t do it on Thursday; he couldn't do it on Friday. Let's see if

he's had a chance to think about it over the weekend.

you want to deal with negative rhetoric, like that negative second

member for Kamloops, who obviously came out with the "bad BCers" slogan

when he was assisting Mr. Bennett.... The member says: "Information and

truth." The second member for, Kamloops says that I don't come in here

and ask questions based on information and truth. I invite the Minister

of Finance once again to point to one example where I was wrong. I've

come in here with every bit of evidence that can be backed up in court.

I am as prepared to make those statements outside the room as I am in

here.

The first member for Vancouver East (Mr. Williams) says "friends of

the government." We have a legitimate right to stand up in this House

and ask the Minister of Finance why, after the evidence — and, again,

fact, not rhetoric — of the Carter-Ward trial, which pointed to three

cases of Mr. Peter Brown of Canarim Investment violating

section 68 of

the Securities Act, the Ministry of Finance has not taken any action.

It's not sufficient

for the Minister of Finance to stand up and say: "That's a matter that

we may investigate." He didn't have any difficulty standing up in this

House a month and a half ago when I asked him questions about American

Canadian. He said that I had hit upon one — and I am quoting him — that

was under investigation. If he could say it then, why can't he say

today that situation is under investigation? I will tell you something,

Mr. Chairman, through you to the minister and to the second member for

Kamloops: it's not under investigation.

There have been

three violations of the Securities Act, and I defy the minister to

begin to take actions against his own friends. It is quite within form

for us to stand up and say to the Minister of Finance: "Why haven't you

taken actions against your friend Mr. Brown? Why are there no charges

under the Securities Act, in light of the evidence that has come out of

the Carter-Ward trial?" I don't have the list of all the companies. I

know one of them was Bart Resources. I gave you the names of the other

two; I've put them in Hansard already.

It's

legitimate for us to ask the Minister of Finance why he is not

enforcing the provisions of the Securities Act. No, this member will

not, under any circumstances, quietly go to the Minister of Finance and

tell him in his own room that he's not doing his job. The people of

this province have a right to know that the Minister of Finance is not

doing his job, and we have a responsibility to tell the people of this

province that the Minister of Finance is not doing his job.

It's

not rhetoric, Mr. Second Member for Kamloops; it's not rhetoric, Mr.

Minister and Mr. Chairman. It's fact, with respect to the evidence that

came out during the course of the Carter-Ward trial and the factual

inaction of this minister and his ministry on the matter of that

situation.

Then the second member for Kamloops says: "Well,

in our interior ridings we want mines. We want venture capital for

these mines." Is the second member for Kamloops saying that we have no

right to stand up in this Legislature and raise the example of Starfire

Resources, a situation which I raised and brought to the attention of

the minister a year ago when he said to me: "Give us something new that

we can work on"?

We don't have any problem with money going

into legitimate mine operations, but we have a lot of difficulty with

money going into fraudulent mining claims. We have trouble supporting a

situation.... I don't have my file here on Starfire, so I am working

from memory. I won't talk at length about how the stock went up and

down. It was a sulphur stock, and money was supposed to go into some

sulphur development in the interior of this province. Investors were

ripped off through all sorts of false claims.

We raised it

in this House. What we were doing was protecting the investors, whether

they were from the interior, the mainland or the Island. We're saying

that investors have a right, and this ministry has an obligation to

protect the interests of those investors and not to provide succour and

comfort to fraudulent manipulators of stock in this province.

[3:30]

we gave the minister the example of Starfire, and I want the second

member for Kamloops to understand that. We don't support those types of

mining actions. If the second member for Kamloops wishes to support

fraudulent mining activities on the exchange, that's his prerogative.

But it's not

[ Page

4187 ]

ours, and we don't think that's an appropriate use of capital. You

want to talk about the role of capital. We don't have all day to talk about

it, but we can get into a nice debate about this. We on this side of the House

don't think that venture capital ought to go to scams on the stock exchange

that tell people to buy a nasal spray that will get rid of AIDS on contact in

three minutes. If people want to invest in that, that's their prerogative.

But the people who invest have a right to know whether or not that stock is

being manipulated — as it was; whether or not insider trading provisions were

being violated — as they were; whether or not there were false news releases — as there were.

Interjections.

MR. CHAIRMAN :

Order please, hon. members. This whole thing is getting grossly out of

hand. I understand that the hon. member feels very strongly about this,

but maybe he could moderate his voice. And maybe we could do away with

the interjections from the government side, and we'll get on with the

debate on vote 37.

MR. SIHOTA : I'll say this with

some risk, but it's not the level of my voice that's a problem here;

it's the level of intelligence on the other side with respect to their

commitment to deal with the problems.

MR. CHAIRMAN : Hon. member, that is completely inappropriate. That just is not on.

MR. SIHOTA :

I'll rephrase it, Mr. Chairman: it's not a matter of level of voice on

this side, but level of commitment from the Minister of Finance to

enforce the provisions of his own Securities Act, which we say is

seriously in question.

Interjection.

MR. BLENCOE :

On a point of order, Mr. Chairman. We earlier were treated to the

member for Kamloops (Mr. S.D. Smith) and his I think scandalous attack.

He continues to abuse the rules of the House by shouting and calling

from another member's seat. Perhaps you could bring that member to

order, Mr. Chairman.

MR. CHAIRMAN : The point is well taken. If the member wants to participate in debate, he will have to take his own seat in the House.

MR. SIHOTA :

I see the second member for Kamloops has chosen not to go back to his

seat. Having made those improper comments, he now wishes to divorce

himself.

We don't believe venture capital ought to go into

nasal sprays for AIDS. We don't think venture capital ought to go into

a Gametek situation where they say they're producing some 60,000

arm-wrestling machines that will be put in a ferry boat to be converted

into a luxury cruise liner. We wonder where the regulators were when

it's then discovered that the cruise boat was sunk off the coast of

Washington state three weeks prior to the floating of the issue. We're

just asking the Minister of Finance what type of job his regulators are

doing in the Gametek situation.

The Minister of Finance has the unmitigated gall to stand up

in this House and say: "Don't tell me publicly in this House about

these types of things; they're embarrassing me. If you want to

embarrass me, come and tell me privately instead of publicly." What

kind of attitude is that from a Minister of Finance? I gave a lot of

other examples, and I don't want to go through them. We just don't

believe, on this side of the House, that this is the appropriate role

of venture capital. Certainly, if the second member for Kamloops wants

to support fraudulent claims on mining options, if he wants to support

nasal sprays for AIDS. I guess he's entitled to do so. We don't think

that's an appropriate way to do it. If people want to float those

issues, then the government has an obligation to protect the investors.

Mr.

Chairman, I was going to move that the amount provided in this vote be

reduced from $293,411 to $12 to reflect $1 for every vote that the

Minister of Finance got in the Social Credit leadership convention, but

I'm told that that's out of order, although highly appropriate. Was

clear from this side of the House that it was perhaps a worthy vote.

Instead, I move that the amount provided for in vote 37 be reduced from

$293,411 to $1.

MR. S.D. SMITH : Mr. Chairman, I rise

on a point of order. The member for Esquimalt-Port Renfrew suggested

that I supported fraud in a number of ways, and I would ask that he

withdraw that remark categorically.

Interjections.

MR. S.D. SMITH :

Mr. Chairman, he quite clearly did say, three minutes ago, that I

supported fraud in the sale of certain kinds of stocks. He very clearly

said that, and 1 would ask that he withdraw, and withdraw straight away.

MR. CLARK :

On the same point of order, Mr. Chairman, surely it's incumbent upon

members to rise in their place at the time and not several minutes

after an alleged comment is made. Members in the House have no

knowledge of that comment being made. He was in the House at the time.

If the comment was made and he found it offensive, he should have risen

at that time and not after the fact.

MR. S.D. SMITH :

Mr. Chairman, on the same point of order. I rose as quickly as I could.

When he made the comment he was in full breath, and as soon as he got

rid of that breath, I rose.

MR. CHAIRMAN : This is

developing into an argument between hon. members, which is not

permitted. I overheard the comment made by the member for

Esquimalt-Port Renfrew, and it seems to me — we can check the Blues —

that it wasn't completely within the terminologies as used by the

member who has taken exception. In respect to bringing some decorum and

some order back to this debate this afternoon, perhaps the hon. member

for Esquimalt-Port Renfrew would retract what he said with respect to

the supporting of fraudulent deals.

MR. SIHOTA : With all respect, I never said that.

Interjections.

MR. SIHOTA :

Well, if the members have something to add. I'd like to read the Blues,

if indeed I said that, and then I'll make the comments after the Blues

come out. I know what I said. I'm quite confident in what I said, Mr.

Chairman.

[ Page 4188 ]

1 did not say that the member opposite was involved in any type of fraudulent activities at all. I didn't say that.

MR. CHAIRMAN :

All, right, hon. members. Inasmuch as the member for Esquimalt-Port

Renfrew has stood in his place and made the statement that he did not

impugn the motives of the second member for Kamloops, I think that

should be acceptable, and we can get on with the motion that was

presented by the member. The motion is in order. We'd like you to hand

that in too, please, hon. member, if you could.

Amendment negatived on division.

Vote 37 approved.

Vote 38: ministry operations, $61,464,197 — approved.

On Vote 39: compensation stabilization program, $256,677.

MR. CLARK :

Just a couple of questions on the debt. Could the minister inform the

House what the total accumulated debt of the province of British

Columbia is, effective in the last day or two?

HON. MR. COUVELIER : 1 think the issue is vote 39. Is that not vote 72 that the hon. member is asking about?

MR. CHAIRMAN :

This matter came up the other day. Mr. Minister, and I think it was

agreed at that time that we would proceed in the manner that has become

the custom in the House over the past number of years that the....

We're dealing with Vote 39, which is the compensation stabilization

program. All right?

Vote 39 approved.

Vote 72: management of the public debt, $605,000,000 — approved.

Vote 73: contingencies (all ministries), $50,000,000 — approved.

Vote 74: new programs, $90,000,000 — approved.

The House resumed; Mr. Speaker in the chair.

The committee, having reported resolutions, was granted leave to sit again.

HON. MR. REID :: I call second reading of Bill 3, Mr. Speaker.

HORSE RACING TAX AMENDMENT ACT, 1988

HON. MR. COUVELIER : Mr. Speaker, Bill 3 amends the Horse Racing Tax

Act to provide additional revenue to the B.C. Racing Commission to upgrade racing

facilities in British Columbia. The increase in the Racing Commission share

from 3 to 4 percent of the 7 percent parimutuel tax rate will stimulate

the industry and create additional employ ment. The provincial share of the

rate will decrease from 3 to 3 percent. The amendments allow the new revenue

to be used for the establishment or improvement of horse-racing facilities and

related research costs. These improvements are required to ensure that the B.C.

horse-racing industry remains competitive with those in neighbouring jurisdictions,

and continues to provide substantial economic benefits to the provincial economy.

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

MR. STUPICH :

We have no particular concern with Bill 3, but it's my understanding

that the spending of the extra revenue that's going to be left in the

hands of the Racing Commission will really be controlled by the

Lieutenant Governor-in-Council, as I read a later section. Even that

may not concern us terribly; but when the minister talks about it

providing more employment and providing more for the racing industry

and Racing Commission, if their hands are going to be tied on the

spending of this — as I read it — I wonder how much it's really going

to help them. However, at this stage, Mr. Speaker, we have no concern

about the bill.

[3:45]

MR. CLARK :

Very briefly, I have no problem supporting this act. The horse-racing

industry is located at the moment in my constituency — over 12,000 jobs

associated with that industry; many of them of course in the breeding

industry in the valley and other places, but many of them in my

constituency. I want to go on record as saying that while I have no

problems in supporting this act, we're very concerned about some of the

actions of the provincial government, and the Attorney-General (Hon.

B.R. Smith) in particular, in causing great instability in that

industry by talking about all kinds of proposals for Colony Farm and

other places in the province. For the PNE grounds, contrary to

promoting investment, it's causing the owners of the jockey club to

contract in their investment in that facility. And it needs investment.

It needs enhancement, but because of the other actions the government

has taken, it hasn't seen the kind of investment we might like. So we

support this act, but we also support — I certainly do, anyway — the

racetrack staying at the PNE and being enhanced, and accommodating to

that amenity that's in the city of Vancouver now, and I hope it stays

there.

MR. ROSE : I'd like to take this opportunity,

Mr. Speaker, to say that I agree with much of what my colleague has

said in terms of the health of the horse racing industry and how it

makes a reasonable contribution to the province in terms of revenue. It

does other things as well.

I think it can be fairly said

that the activity on the breeding farms and out in the valley is of

immense benefit to places such as Langley and Aldergrove. I wish them

nothing but the best, but 1 don't want them in my riding — the

racetracks, that is. But bring on the race horses. I think there is

lots of excellent land other than, say, on Colony Farm for this very

important British Columbia industry. I wouldn't want to think that we

would use probably the finest agricultural land right in an urban

centre, where we're already crowded, to put in another big development

such as the PNE.

The PNE has certain plans for expansion; I

don't know how practical they are, but at least they're trying. There

are 27 years left of their racing — by the way, the racing days are

awarded nationally. There are 21 more in Cloverdale at the flat track,

the trotters' track. So it seems to me that any development on Colony

Farm that involves a racetrack is at

[ Page 4189 ]

best

premature. While I think that the breeding industry, the racetrack and

all those people associated with it are legitimate, make a contribution

and we'd like to see them continue, we know they're in certain

difficulty.

For instance, the parimutuel betting has

levelled off, according to a brief I recently got from the president of

the PNE. Therefore we can't expect an anticipation of increased revenue

from that very popular sport — and, if you like, gambling venture —

unless we improve our existing tracks, or build others.

Mr.

Speaker, I think that if we're going to relocate — and I don't think we

need to — racing facilities in areas other than where they are now —

Victoria, Cloverdale and the PNE — we should make certain that such

facilities are put in appropriate land which doesn't erode, defame or

defile what little agricultural land we have in British Columbia.

MR. SPEAKER : Pursuant to standing orders, I advise the House that the minister closes debate.

HON. MR. COUVELIER :

We can get into some of those details — I think one question was put —

in third reading. I now move second reading of the bill.

Motion approved.

Bill

3, Horse Racing Tax Amendment Act, 1988, 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. REID : Second reading of Bill 4, Mr. Speaker.

INCOME TAX AMENDMENT ACT, 1988

HON. MR. COUVELIER :

Mr. Speaker, this bill makes two amendments to the Income Tax Act.

First, the bill lowers the small business corporate income tax rate

from 11 to 9. A key principle underlying the system is that income

earned in a small business and paid as dividends to shareholders should

bear the same total tax burden as income earned as wages or salaries.

This ensures equitable tax treatment, and as a consequence, that

explains that initiative.

The second initiative refers to

the rate of tax on the first $200,000 of active business income of

Canadian-controlled private corporations, which will be reduced

effective July 1. The second amendment contained in the bill is a

technical amendment affecting certain small businesses. At the present

time, small business corporations who earn income both in British

Columbia and outside Canada receive the benefit of the B.C. small

business tax rate on an amount of income less than the amount actually

earned. This amendment will ensure that the B.C. small business rate

will apply to the first $200,000 of active business income allocated

to British Columbia for small businesses earning income in British

Columbia and outside Canada. I move the bill now be read a second time.

MR. STUPICH :

As far as the technical amendment is concerned, that doesn't concern

us. Although the minister rationalizes what he's doing by saying that

he's trying to keep the flow of income equal, whether it's coming from

corporate sources or wages, there's the politics of the situation too,

and also the psychology of it. As far as small businesses are

concerned, they're still paying a higher rate than they were when this

government was first elected, and people don't start looking to see

what they would have been paying had they not been corporate owners. So

it's still one point higher than it was when this government was

elected some 18-odd months ago, and the rate for corporations above the

$200,000 figure is 2 percent less. So it looks, to small business

people — who everybody claims are the ones providing job opportunities

in the province; the ones who are really moving the economy right now —

that they are paying a higher rate of corporate tax than they were when

this government was first elected, and they see the larger corporations

paying less. According to the budget. the reduction for small business

will save them $7 million,

whereas the reduction for large business

will be in the order of $68 million, and again, the people who are

creating the jobs in the province look at those figures and think that

the government really isn't treating them fairly.

I made

this point in the budget debate and I'm making it again: there has not

been a comprehensive study of tax expenditures in B.C. The former

Minister of Finance took a shot at it. He tabled a brief document in

the budget delivered in 1981, but we have never really examined just

what it is costing and what the cost benefits are of the various tax

changes that the government makes. When the government increased the

small business tax and then reduced it, and now they're reducing it

again, it looks as if they're flying by the seat of their pants rather

than doing something that's calculated to do the best thing for the

economy of British Columbia. We'll certainly support the legislation.

We favour the reduction in tax for small businesses. There's no

question about that.

Motion approved.

Bill 4,

Income Tax Amendment Act, 1988, 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. REID : Mr. Speaker, second reading on Bill 5.

INSURANCE PREMIUM TAX

AMENDMENT ACT, 1988

HON. MR. COUVELIER :

Mr. Speaker, this bill has two purposes. First, it increases the rate

of tax on motor vehicle insurance premiums under the Insurance Premium

Tax Act from 3 percent to 4 percent, effective April I of this year.

This tax rate is being increased in order to apply the same tax rate to

motor vehicle insurance premiums that is applied to other property

insurance premiums. Other property insurance premiums are taxed at an

effective rate of 4 percent — 3 percent under the Insurance Premium Tax

Act and 1 percent under the Fire Services Act. Motor vehicle insurance

premiums are currently taxed only at 3 percent because the Fire

Services Act specifically excludes vehicle insurance from the tax. A

rate of 4 percent for vehicle insurance premiums will ensure that all

insured property in the province is taxed at a similar rate.

The

second purpose of the bill is to clarify the taxation of premiums paid

to reciprocal exchanges. A reciprocal exchange is a group of persons or

organizations who agree to insure one another. This form of insurance

has not been used to a great extent in the past but is now becoming

popular.

[ Page 4190 ]

Insurance

premiums paid to reciprocal exchanges are currently subject to tax

under three different statutes. Due to the wording in these statutes

and the way reciprocal exchanges are regulated, premiums currently

being paid to an exchange could conceivably be subject to tax at an

aggregate rate of 10 percent as compared to rates ranging from 3 to 5

percent for other licensed insurers. This is clearly punitive and

inconsistent and we therefore are suggesting this change.

This

bill therefore amends both the Fire Services Act and the Insurance Act

in order to ensure that premiums paid to reciprocal exchanges are for

tax purposes treated in the same manner as premiums paid to general

licensed insurers.

I move the bill now be read a second time.

MR. STUPICH :

In the course of his budget speech, the Minister of Finance argued that

this change will make the tax on vehicle premiums the same as that on

other property insurance. In fact, what he's done is to create a

special category for motor vehicle insurance and has added over $20 to

the cost of insuring an average vehicle.

Mr. Speaker, when

we were talking about fee increases earlier in this session, the

minister said that fees should bear the cost of the service associated

with those particular fees. But in the case of motor vehicle insurance,

what we were supposed to be coming up with was a plan where drivers

paid together to create a pool of capital from which driving accidents

would be reimbursed — to cover the costs of driving accidents and the

administration of the auto insurance plan. It was not supposed to be

another sneaky way of building up government revenue. In fact, what the

minister is doing is increasing government revenue in this one stroke

by another $6 million.

Are we really so hard up that we

have to go after the automobile drivers who have been hit pretty hard

with increases in premiums since the reduction that was implemented in

election year? Since then we've had two increases. Is it really so bad

that we have to go after them not just to cover the cost of the

insurance plan — accidents, providing reserves and administration — but

also to get another $6 million to cover other purposes of government?

The minister in no way justified that. It's another grab for revenue.

He gave no justification for that at all. He simply said that they were

making it the same as something else with which it's not associated at

all.

The opposition is opposed to this increase in the

impost on auto insurance for drivers for purposes that have absolutely

nothing to do with auto insurance.

[4:00]

Motion approved on the following division:

YEAS — 32

Brummet

Savage

Rogers

Reid

Dueck

Michael

Pelton

Loenen

Crandall

Rabbitt

Dirks

Mercier

Long

McCarthy

Vander Zalm

B.R. Smith

Couvelier

Davis

Johnston

R. Fraser

Weisgerber

Jansen

Gran

Chalmers

Mowat

Ree

Bruce

Serwa

Vant

Campbell

Huberts

S.D. Smith

NAYS — 13

G. Hanson

Barnes

Rose

Harcourt

Stupich

Boone

Gabelmann

Blencoe

Cashore

Lovick

Sihota

Jones

Clark

Bill 5, Insurance Premium Tax Amendment Act, 1988, read a second time and referred

to a Committee of the Whole House for consideration at the next sitting of the

House after today.

MR. ROSE : I notice the Clerk read Hon. Jack Davis, the

Minister of Energy. I can understand that it's difficult to tell

whether people like me are standing up or sitting down, but not for the

minister. He did not vote with the government on this bill. He

abstained.

AN HON. MEMBER : You're facing the wrong way, Mr. House Leader.

HON. MR. ROGERS :

Since everyone's in such a good mood, I'd like to call motion 64 on the

order paper, a move by my colleague the regular House Leader (Hon. Mr.

Strachan), that says that Mr. Ree be substituted for the Hon. R.M.

Johnston on the Select Standing Committee on Public Accounts.

Motion approved.

HON. MR. REID : Mr. Speaker, I call second reading of Bill 6.

LAND TAX DEFERMENT AMENDMENT ACT, 1988

HON . MR. COUVELIER :

This amendment extends eligibility for property tax deferment to

qualified owners of mobile homes. All other sections amended are

consequential to this change in eligibility. I move the bill now be

read a second time.

MR. STUPICH : It's a good bill.

It would not have been necessary a few years back because such property

had a tax of one dollar levied against it rather than the $100 that was

introduced by the Social Credit government. But now that the tax rate

on such property has been increased to $100, it's necessary to bring in

this particular amendment. The opposition supports this bill.

MR. SIHOTA :

Mr. Speaker, since I've got so many mobile homes in my riding I

certainly also want to go on record as saying that this is much needed,

and I concur with the comments of our Finance critic. I don't think

this government has any idea of the hardships faced by people who live

in mobile homes, many of them on fixed or limited incomes. I know this

was a matter that they've lobbied for and certainly are relieved to see.

HON. MR. COUVELIER :

This option allows the deferment of property tax payments for mobile

homes and therefore should be a benefit to all citizens residing in

mobile homes. I consider it a positive piece of legislation and am

pleased to move second reading.

[ Page 4191 ]

Motion approved.

Bill

6, Land Tax Deferment Amendment Act, 1988, 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. REID : Second reading of Bill 7, Mr. Speaker.

MINERAL RESOURCE TAX AMENDMENT ACT, 1988

HON. MR. DAVIS :

I move second reading of the Mineral Resource Tax Amendment Act.

Essentially it reduces the rate of the tax from 17.5 percent to 15

percent. The main reason for changing this legislation and also

changing the Mining Tax Act by a similar amount is to trim the total

tax on mining in British Columbia to a point where it is no longer the

highest in Canada but on a par with the highest in Canada.

this case, as a result of this bill, we are reducing a profits-type

tax. It's really a tax on the so-called economic rent generated by the

industry or available in the industry. It's a substantial tax; it's

still one of the highest in the country. It's a type of tax that was

unknown in the industry a decade or so ago when the tax was essentially

on the gross value of sales or, alternatively, on the quantity of the

mineral mined. It was changed to a profits-type tax in the late 1970s,

and the rate was set at 17.5 percent. The 15 percent rate is

recommended in order that our tax rates be in line with the highest in

the rest of the country but not be the highest in the country.

MR. CLARK :

We will be opposing this bill, and I'd like to briefly go through some

reasons for that. This is a government that says they have no money.

That's the rationale for taxing people to the extent that they have,

for putting medicare premiums up, for putting personal income tax up.

They've got no money to feed hungry school kids in Vancouver, to reduce

the lineups for heart patients, to provide AZT to a handful of AIDS

patients. They have no money for BCIT or for post-secondary education

in this province.

But what do they do? The only thing they

do have money for is metal mines in British Columbia. Here we have, for

the first time in many years — and the minister knows this — the metal

mining companies making a profit, and now they're going to reduce the

tax on those profits. If they really wanted to deal with help to the

mining industry, they would do one of two things. Firstly, they would

reduce fixed costs and not a profits-based tax and, secondly, they

would do what the previous administration did in one of the rare

instances where I agreed with the previous administration: selectively

reduce taxes, or the burden, on specific mines or specific communities

that were suffering because of the recession in order to maintain

employment.

But no, nothing so clearly demonstrates the

difference of priorities between the members on this side of the House

and the members on that side of the House. The minister said they have

one of the highest tax rates in Canada. I'm not an expert on this, but

I reviewed very briefly the same tax rate across Canada. It appears

that Ontario has a 20 percent rate and most of the Prairies have an 18

percent rate. In the Maritime provinces it is 18 percent. We had 17.5

percent; we're now reducing it to 15 percent.

Very clearly,

those who are doing well in British Columbia are now going to see their

tax cut, and everybody else, particularly the working poor, are going

to see their tax burden increase dramatically because of two successive

budgets by this administration.

We're opposed to it; we

don't think it's going to help the industry at all, anyway. If they

want to help the industry, they should deal with those very onerous

fixed costs that this and the previous administration have placed on

the mining industry.

MR. STUPICH : I don't expect the

minister to have any detailed information today, but I wonder if, in

second reading, he could bring back the information as to just how many

companies paid this tax in 1987. 1 expect the information might be

available then. I expect it's very few. It's only those companies whose

net income, according to the formula, exceeds $50,000 that pay any tax

at all. I would be interested in finding out just how many are paying

it.

The Minister of Finance, during debate of his

estimates, was going to bring me some information about the way the

formula for mining and logging tax fits into the corporate tax

administered by the federal government. I understood that information

was ready to come to me, but I haven't seen it — unless it's buried in

my desk, and I admit that possibility.

[4:15]

HON. MR. DAVIS :

Hon. members opposite have been saying that this tax cut is substantial

in terms of lost revenue to the government. One of the reasons I was

able to get a concession from the Minister of Finance is that the loss

to the treasury — if this didn't result in any more mining — would be

in the order of $1 million to $2 million, which is obviously a drop in

the bucket compared to the total revenue requirements of the

government. Hopefully our addressing the exceptionally heavy tax load

in the province, at least in this nominal way, might encourage a little

more mining activity. It wouldn't take much mining activity to offset

that $1 million to $2 million loss to the treasury.

The

hon. member for Vancouver East referred to reducing other taxes which

he referred to as direct taxes. I assume he means the social services

tax or water rentals. The industry's main complaint is that those

taxes, in total, amount to about 90 percent of the tax bill of the

industry. I agree that were we to address any one of those taxes and

reduce it by a relatively minor amount, the relief the industry would

incur would be much greater than its so-called reduction in tax loads

as a result of this bill. This is a very marginal change in terms of

taxes paid by the mining industry.

Nevertheless, I think

it's important at this time to at least be in a position where we

aren't pointed as the highest tax regime in the country. I move second

reading, Mr. Speaker.

Motion approved on the following division:

YEAS — 32

Brummet

Savage

Rogers

Reid

Dueck

Michael

Pelton

Loenen

Crandall

Rabbitt

Dirks

Mercier

Long

McCarthy

Vander Zalm

B.R. Smith

Couvelier

Davis

Johnston

R. Fraser

Weisgerber

Jansen

Gran

Chalmers

Mowat

Ree

Bruce

Serwa

Vant

Campbell

Huberts

S.D. Smith

[ Page 4192 ]

NAYS — 10

G. Hanson

Barnes

Rose

Stupich

Boone

Gabelmann

Cashore

Lovick

Jones

Clark

Bill

7, Mineral Resource Tax Amendment Act, 1988, 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. REID : Mr. Speaker, I call second reading on Bill 8, Mining

Tax Amendment Act, 1988.

MINING TAX AMENDMENT ACT, 1988

HON. MR. COUVELIER :

The purpose of this bill is to improve the competitiveness of B.C.'s

taxation of the coal industry. Some provinces have reduced their mining

taxes in recent years, and this bill will restore B.C.'s ability to

attract new investment in coal mining. I move the bill now be read a

second time.

MR. STUPICH : Our coal industry must,

indeed, be in very bad shape if we have to bring a bill into the

Legislature to reduce the tax impost on it by $200,000. It's estimated

that the revised estimates for 1988 show a total revenue from this

source of $700,000. After we go through the exercise of bringing in

this bill, it's going to be reduced to $500,000. 1 think the forecast

is that it's going to reduce it by $1 million in the second year. I

don't know how it can reduce a $500,000 figure by $1 million, but I'll

deal with that perhaps when we get to committee.

I don't

know why we're bothering. Why are we going through the business of

administration of a bill that's raising only $500,000, unless there's

some explanation the minister has?

Interjection.

MR. STUPICH :

We're not going to oppose it. It's not worth taking up any time

opposing it. We're not going to call a division; it's not worth the

time; $500,000 is all it's bringing in.

Motion approved.

Bill

8, Mining Tax Amendment Act, 1988, read a second time and referred to a

Committee of the Whole House for consideration at the n ext sitting of

the House after today.

HON. MR REID : Mr. Speaker, we call second reading of Bill 9.

MOTOR FUEL TAX AMENDMENT ACT, 1988

HON. MR. COUVELIER :

Mr. Speaker, Bill 9 contains two amendments to the Motor Fuel Tax Act.

The first amendment increases the tax on leaded and unleaded gasoline

and diesel fuel, effective April 1, from 20 percent of the pre-tax

selling price to 22.5 percent. The 2 cents per litre surcharge on

leaded gasoline imposed last year for environmental reasons and the 44

cents per litre surcharge on diesel fuel will remain in effect. This

measure is expected to generate $45 million to fund essential

government programs and help reduce the provincial deficit.

Even

with this increase it is noteworthy that the provincial tax payable in

cents per litre actually decreased on April 1. This demonstrates the

responsiveness of the quarterly indexing adjustments to fluctuations in

gas pump prices.

I move the bill now be read a second time.

MR. STUPICH :

It's another tax grab. And it's another grab that's regressive in the

sense that it costs the poorest as well as the richest another cent a

litre for this type of fuel.

The thing that distresses me

about it as well is that during estimates I discussed with the minister

the progress or lack of progress on negotiations with the federal

government on their new approach to consumer taxation in Canada —

whatever it's going to be called, however it's going to be applied. I

feel we shouldn't be tinkering with things like this in advance of what

the minister hoped would be something that would happen perhaps in

about a year's time. I have to speak in opposition to a bill that has

no justification other than to raise essential government revenue at

the same time as we're reducing tax for large corporations. In last

year's budget we reduced the income tax for the highest income earners

in our province. If we can afford to reduce taxes for the large

corporations, which are doing very well right now, and if we can afford

to reduce taxes for the highest income earners in our province, then it

shouldn't be necessary to increase tax on everyone, including the

poorest people, through this measure. So I'm opposed to the bill.

MR. SPEAKER : Pursuant to standing orders, the minister closes debate.

HON. MR. COUVELIER :

Mr. Speaker, the hon. members — a couple of them now — have made

reference to the fact that we're reducing corporate income tax rates

and increasing personal income tax rates. I think it's important to get

the record straight, although, I suppose, we'll have a chance to do

that again in third reading.

The fact of the matter is that

when you can look at the total revenue being contributed by the private

sector in terms of resource taxation, and roll that into the total

corporate income taxes paid, it clearly is true to say that corporate

income taxes are paying their share under this government's taxation

administration.

I'm pleased to move second reading, Mr. Speaker.

Motion approved on division.

Bill

9, Motor Fuel Tax Amendment Act, 1988, 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. REID : Mr. Speaker, we call second reading of Bill 10.

SOCIAL SERVICE TAX AMENDMENT ACT, 1988

HON. MR. COUVELIER :

This bill contains, Mr. Speaker, a number of measures which were

announced in the 1988 budget speech, an adjustment on the tax rate on

liquor for the purpose of funding additional programs in terms of

alcohol and substance abuse. It also amends the social tax

[ Page

4193 ]

rate exemption for pesticides. And as the House is aware, there will be an

amendment on the question of applicability to farmers. Third, it improves the

equity of the tax — that is, the exemption for used clothing and footwear will

be limited to sales of less than $100 per item.

I'm pleased to move second reading.

[4:30]

MR. STUPICH :

Mr. Speaker, there's one item the minister didn't mention: it's

increasing the sales tax to 10 percent on alcoholic beverages and

bringing in a new tax of 10 percent on draft beer. I thought the

Premier might have wanted to say something about this in this debate,

but maybe he felt it would be better to be other places right now.

After all, he was the one who promised, during the election campaign,

to reduce the price of bottled beer. To the best of my knowledge, there

has never been any reduction in the price of bottled beer, and

certainly the price of draft beer is going to be increased to reflect

this new tax. It's not an increase in this case; it's a brand-new tax

of 10 percent on draft beer.

The minister mentioned the

forthcoming amendment, and he said in response to concerns expressed by

the agriculture community: "It's my understanding that the change will

affect the forest industry to a much greater extent than it will the

agriculture industry." I was under the impression that it was not

representations by farmers that moved the minister to change his

position on this, but rather representations from the forest industry.

He may want to say more about that in committee stage.

MR. LOVICK :

I certainly don't intend to make a speech, but I remember vividly that

the first time I ever spoke in this chamber had to do with the price of

beer. I was asking a question about promises made being debts unpaid,

and I wondered if the government would indeed set about to fulfil the

promise it made.

I want to ask the minister to consider —

if not now, certainly in committee stage — whether there has been any

kind of study, preliminary analysis or investigation to find out who is

going to pay that tax. As we all know, the stereotype is that that

particular beverage is consumed. in a great number of cases, by working

people who are not necessarily the most wealthy consumers of alcoholic

beverages. I would like some assurances from the minister that some

analysis and investigation did indeed occur. We're not talking about

simply focusing on one particular sector of the alcohol-consuming

public that perhaps should not be singled out to bear this extra cost.

So I'm just asking the minister to take that under advisement — if not

answer it now.

HON. MR. COUVELIER : I'm always

impressed with the euphemism "workers" that is embraced in the verbiage

coming from the members of the opposition. I would like to think that

I'm a worker; indeed most British Columbians would like to think that

they are workers. I might advise the hon. member that I have taken a

liking to beer myself, so I don't know whether he would categorize me

as one of those he's referring to in his all-embracing reference.

Mr. Speaker, the issue clearly is that all types of alcoholic beverages are

subject to alcohol abuse, and as a consequence, it is appropriate that they

all make a contribution towards our education programs. Furthermore, let me

tell the House that were they to drink beer in any other province in Canada

other than Alberta, they would be paying more than they'd be paying in B.C.,

based on our markups and taxation policies.

In any event, I am pleased to move second reading, Mr. Speaker.

Motion approved on division.

Bill

10, Social Service Tax Amendment Act, 1988, 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. REID : Second reading of Bill 11, Mr. Speaker.

TAXATION (RURAL AREA)

AMENDMENT ACT. 1988

HON. MR. COUVELIER :

Mr. Speaker, this act allows calculation of the rural tax levy to

include assessed values in supplementary assessment rolls which are

prepared subsequent to the December 31 authenticated assessment roll

for the purpose of correcting assessment errors and omissions.

I move the bill now be read a second time.

MR. STUPICH : In this instance, I accept the minister's explanation totally. It sounds good, and we'll support it.

Motion approved.

Bill

11, Taxation (Rural Area) Amendment Act, 1988, 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. REID : Second reading of Bill 12, Mr. Speaker.

TOBACCO TAX AMENDMENT ACT, 1988

HON. MR. COUVELIER :

Bill 12 contains two amendments to the Tobacco Tax Act. The first

amendment increases the tax on cigarettes from $1.04 for a package of

25 to $1.13 per package effective March 25. The second amendment

corrects an inequity by imposing a maximum tax of $2.50 per cigar

effective March 25. 1 move second reading,

MR. STUPICH :

Where is the former member for Mackenzie when we need him, the one

member in the House who would vote against this on every opportunity,

whereas everybody else would just say...?

Interjection.

MR. STUPICH :

Is the member for North Vancouver Capilano (Mr. Ree) going to vote

against it? I've never seen a Socred vote against a Socred bill yet.

The

minister really didn't give much reason for this. There is no question

that it is another revenue grab. I'm not going to vote against it. I

remember on a previous occasion — I don't think it was last year; I

think perhaps it was before the current Minister of Finance entered the

House — I had a book from the library that explained the procedure by

which governments increase taxes on alcohol as well as on tobacco. It's

a very careful calculation to make sure that they don't

[ Page 4194 ]

affect

the consumption too much, lest they reduce their revenue. They increase

revenue from such sources just enough to optimize the amount of revenue

they're getting from those sources. I'm not going to vote against the

bill.

HON. MR. COUVELIER : Mr. Speaker, if it gives

the hon. member any comfort, our taxation policies are not intended to

increase consumption of these products. Being one who both drinks and

smokes, I can assure the hon. members that there is clearly not a

conflict of interest involved in this issue. I am pleased to move

second reading.

Motion approved.

Bill 12,

Tobacco Tax Amendment Act, 1988, 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. REID : Mr. Speaker, I call second reading of Bill 13.

TOURIST ACCOMMODATION

(ASSESSMENT RELIEF) ACT

HON. MR. COUVELIER :

The purpose of this bill is to provide assessment relief to owners of

tourist accommodation properties, thereby encouraging the further

development of the accommodation and tourism sector. I move second

reading.

MR. STUPICH : We will support this bill.

There are a couple of concerns we have, but we will probably have more

opportunity to discuss them with the minister in committee stage. One

of them is that seasonal tourist operators who do not provide

accommodation are still left in the situation of facing the 50 percent

property tax increase in September, so they are not being helped by

this particular amendment.

Some communities — for example,

Hope — with an extremely large number of tourist accommodation

businesses are going to find that they'll have a problem in their

municipal budget if a large number of these businesses receive relief

under this legislation. However, we're prepared to perhaps discuss it a

little more fully in committee stage.

Motion approved.

Bill

13, Tourist Accommodation (Assessment Relief) Act, 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. REID : Second reading of Bill 15, Mr. Speaker.

EDUCATION EXCELLENCE

APPROPRIATION REPEAL ACT

HON. MR. COUVELIER :

This act was proclaimed in 1986 and created a special account known as

the fund for excellence in education. For 1988-89 the voted

appropriations of the Ministries of Advanced Education and Job Training

and Education include funding for expenditures previously funded by the

fund for excellence in education.

Therefore there is no requirement to maintain the legislation in force. I move second reading.

MR. STUPICH :

We will support this legislation because it is getting rid of garbage,

really. The legislation meant very little when it was first introduced.

It was legislation to provide for a fund, and again there was no money

set aside in that fund except the money that was going to be

appropriated that particular year.

I said at the time that

it was a fund designed to suit the political purposes of the

government, because it gave them an opportunity to spend all of that

money within a certain confined period if they chose to and if they

thought it was necessary to enhance the prospects of their getting

re-elected in the general election. That's all it was: another election

ploy. It's been used; it was abused. We're now going to get rid of it

and clean the books of it. We'll support this move.

MR. LOVICK :

I also want to say something about the fund for excellence legacy, if

we can use that term. I'm not going to be quite as polite as I was last

time, given that the Minister of Finance's remarks in response were

rather testy, it seemed to me — without much justification, by the way,

because I was being quite pleasant and merely asking for some

assurances. Instead, I got this rather bellicose response from the

minister opposite, suggesting that I was using euphemisms to describe

things that didn't exist: namely, something like workers. I merely want

to go on record as telling the minister that if he is ignorant of

sociology, I am not. There is indeed a legitimate terminology called

working class and workers. And there is indeed a stereotype associated

with it that suggests that working people — again to use the

terminology — do drink beer more than they drink other alcoholic

beverages, despite the fact that the minister and I both, I am sure,

enjoy beer and the blushful Hippocrene and scotch as well as any other

items. We are eclectic in our tastes. Please don't suggest, because

you, Mr. Minister, have a foot in both camps, that there is no such

thing as workers and working people out there.

Having now vented that....

MR. SPEAKER :

I might remind the member that his comments are very interesting, but

I'm finding it hard to see how they relate to education excellence.

MR. LOVICK :

I confess I was somewhat carried away. I saw the rapt attention on the

part of the minister and therefore carried on, recognizing that I was

indeed veering from the subject under discussion.

To the

business of funds for excellence in education, I'm pleased to see that

the Minister of Education has entered the chamber. The only concern I

want to register — and it shall be a brief one, but an important one

nonetheless — is that in the shift of funds for excellence in education

to different programs, I think particular programs and initiatives

perhaps fell through the cracks. My concern is that too often, it seems

to me, governments will introduce programs that rather adroitly and

without warning suddenly cease to be. Sadly, what happens is that the

impact and the implications of what was initially done is ignored in

the process. That's the concern.

I spoke earlier with the

Minister of Education about a particular program in Nanaimo: namely, an

effort to introduce computers throughout the system in Nanaimo, using

the funds for excellence mechanism. To the minister's credit, he

[ Page

4195 ]

said that certainly they were attempting to accommodate that. Indeed, I think

they have taken some steps. The point, though, is that that whole elaborate

program, which my colleague the first member for Nanaimo (Mr. Stupich) has referred

to as garbage — I think that perspective, by the way, is widely held — suddenly,

peremptorily ended, without much at all, it seems, in the way of consultation

or discussion, and therefore caused a crisis in terms of local school boards

trying to fulfill their mandates to their own constituents.

Again,

as kindly and graciously as I can to the Minister of Finance, all 1 am

asking is to take that under advisement and perhaps demonstrate to me,

if not now at least in committee stage, the error — if indeed there is

one — of the argument I present.

[4:45]

HON. MR. BRUMMET :

I can't really let this debate go by without some comments about some

of the myths created by the opposition that it was a political fund. I

don't think it was any such thing. The initial intent was to provide

additional sums during a period when school boards and others had made

the point that there wasn't enough money in the education system. I

think the fund for excellence was clearly identified as dealing with

those extras that people said were being left out because of the

emphasis on some restraint in spending.

The idea of

earmarking those funds for special programs was clearly coincidental

with the CSP program and other programs which were based to some extent

on ability of school districts to pay. To have put that money into the

general account we would not have had computers in this school; we

would simply have had better argument that salary increases were the

most important, because ability to pay would not have been as good an

argument. So there were a lot of computers in our public education

system. Over $42 million in two years went into computer programs,

computer training, teacher in-service and some other programs, but

special programs earmarked over and above the operational budget.

Admittedly, a fair amount of that money then was used for teacher

salary increases where boards carefully made the argument that because

they had negotiated agreements, because they had been approved by the

CSP commissioner, they were in effect obligated to pay those amounts

and there was not a source of money in their operational budget. So

they said: "Can't we do this, please?" The government acknowledged that

need, built it into the first year, and then, of course, it rolled

forward into the second year.

Textbooks. The arguments have

been made that there was not enough money allotted for textbooks, that

much more was needed. Several million dollars — $6 million, I believe,

in the one year, and quite a few million the second year — were given.

If the argument is made that better textbooks were required to improve

the education system, then surely that qualifies as excellence of

education.

These funds have done a lot of good. They may not have done all the things

originally envisioned, but I would like to let members know that as I've

gone into the schools — take the debate from this House out of the picture —

school after school has been proud to show me the computer labs and the special

computer usages developed in their schools as a result of the funds for excellence.

They possibly say: "We'd like more and we want built into it additional

funding for