1983 Legislative Session: 1st Session, 33rd 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, AUGUST 8, 1983

Afternoon Sitting

[ Page

665 ]

CONTENTS

Routine Proceedings

Oral Questions

Highgrading by Macmillan Bloedel. Mr. Lea –– 665

McKim advertising. Mr. Cocke –– 666

Property Tax Reform Act (No 1), 1983 (Bill 7). Second reading

Mr. Blencoe –– 667

MONDAY, AUGUST 8, 1983

The House met at 2:06 p.m.

Prayers.

Oral Questions

HIGHGRADING BY MACMILLAN BLOEDEL

MR. LEA: I have a question for the Minister of Forests.

Recently the Forest Service on the Queen Charlotte Islands caught

MacMillan Bloedel highgrading on Louise Island. In other words, against

the directives of the Forest Service, MacMillan Bloedel was leaving

timber that's valuable on the forest floor. It's my understanding that

MacMillan Bloedel has been told by the Forest Service that from now on

they must live up to the terms of the directive in the contract. I'd

like to ask the minister whether he has decided to order MacMillan

Bloedel to go back into the area that they've already logged in

contravention of the directive from the Forest Service and clean it up.

HON. MR. WATERLAND: Mr. Speaker, no, the minister has not

decided to do that. MacMillan Bloedel is treated exactly the same as

anyone else is on the Queen Charlotte Islands, or anywhere else in the

province. I think it's common knowledge that during this recession —

which we hopefully are beginning to recover from now — utilization

standards in the forests have been relaxed somewhat for most licensees,

when it is appropriate to do so, in order to help them weather the

economic downturn.

Recently one cutting permit of MacMillan Bloedel's was suspended on

the Queen Charlotte Islands because our waste assessment indicated that

they had not even attained the more relaxed utilization standards.

Discussions with MacMillan Bloedel regarding that suspension and the

standards to which they have operated other cutting permits are ongoing.

One of two things can happen, Mr. Member. Either they can be

waste-billed for material left behind which under relaxed utilization

standards they should have recovered, or they can be told to go back

into the forest and remove that material. I have not yet determined

which will be the case.

MR. LEA: I'm glad to hear that one or the other will happen,

although obviously it would be preferable to go back and save the

timber than just get the money through stumpage.

The part that really concerns me is that when this was brought to the attention

of MacMillan Bloedel, their spokesman on the Queen Charlotte Islands, Jim Connor,

said: "So what." He was quoted as saying that it's going on along

the entire coast, that all logging companies are doing the same thing, and that

their operations are even more relaxed than the new relaxed rule. In other words,

they're underutilizing even more than the relaxed rules allow. MacMillan

Bloedel's spokesman has said that it is happening along the entire coast.

I would like to ask the minister whether the government has decided to take

a look at the whole coastal operation to see whether or not MacMillan Bloedel's

is an isolated case, whether or not MacMillan Bloedel is correct that everybody's

doing it.

HON. MR. WATERLAND: I'm very pleased to hear that the member

for Prince Rupert now puts such great credence in everything that

everybody employed by M & B says. Normally when M & B says

something, the members opposite consider it to be false.

However, my advice to the member is that we carry out constant waste

assessment throughout all cutting permits. Standard practice within the

ministry is to have a minimum of 12 test spots to assess waste per

logging opening. We have found no attempts to date — that I'm aware of,

at least — to exceed those relaxed standards. If I come across

information — which I will, if it is happening — I'll be very happy to

advise the member. But those types of waste assessments are an ongoing

thing throughout all harvested areas in the province.

[2:15]

MR. LEA: First, there were not 12 plots done on Louise Island; there were only five, and they were caught within the five test plots.

It isn't a case of whether I believe MacMillan Bloedel or whether I

don't believe MacMillan Bloedel. MacMillan Bloedel, through one of

their supervisory staff — in other words, the person in charge of their

operation on the Queen Charlotte Islands; whether or not I believe him

isn't important — stated as a matter of fact that MacMillan Bloedel is

not the only one exceeding the requirements of the Forest Service.

MacMillan Bloedel says that the entire coast is being done that way.

Does that not raise in the minister's mind enough concern that he will

take extra precautions to make sure that it's not being done along the

entire coast, or is he going to relax it so much that we're going to

leave all of those jobs plus added wealth lying on the forest floor?

Does that not concern the minister enough that he go out and do

something a little extraordinary to make sure that we're not blowing

this very valuable resource of the province of British Columbia, or is

he satisfied to let it go on?

MR. SPEAKER: Order, please. Hon. member, with the greatest

respect, I must at this time instruct the member that the last remarks

hardly constituted order for question period. At another place they

would have been great for debate, but we have rules for question period

and I think the member realizes that he went beyond them.

HON. MR. WATERLAND: First of all, it is not a fact that all

licensees on the coast are exceeding the standards. That's a statement

made by one employed by MacMillan Bloedel, according to the member from

Prince Rupert. I will say again — the member seems to be somewhat hard

of hearing — that it's standard practice to have a minimum of 12 waste

assessment plots in each cutting open. In the one particular one where

M & B were suspended on the cutting permit, an additional five

assessment plots were involved. Then the licence was suspended. It is a

matter of common practice that each opening in each and every cutting

permit has waste assessments done when logging is completed.

MR. LEA: To the same minister: I didn't say that it was a

fact that it is going on; I said it's a fact that the MacMillan Bloedel

spokesman said it's going on. That causes great concern for this side

of the House.

Another question to the minister: would he say that the forest company would

rather have an order to go in and clean

[ Page 666 ]

it up, or would they rather have an order to pay

the stumpage without having to go and clean it up? Which would be the

most beneficial for MacMillan Bloedel or another forest company to do?

HON. MR. WATERLAND: The member's asking me to give an opinion of what somebody else might think, and I'm afraid that I'm not going to do that.

MR. LEA: First of all, I wasn't asking for MacMillan

Bloedel's opinion; I was asking for the minister's opinion of which

would be the most economic for MacMillan Bloedel but not necessarily

the best resource management practice, because we'd leave the wood to

rot or be burned the one way.

My final question to the minister. Timber is being left in the bush

because we don't have the proper processing plants on the coast. The

technology is not there to utilize some of this wood in a softening

pulp market and a hardening lumber market. Could the minister tell us

what he has done recently to ensure that the forest industry spends the

proper amount of capital to make sure the correct processing procedures

are in place so that there is no further need, economically or

otherwise, for the forest companies to leave the smaller timber in the

bush? What has the government done recently to make sure that capital

investment is taking place?

HON. MR. WATERLAND: Perhaps when the member reads his Blues

he'll understand just what questions he's asking. He seems to get

somewhat carried away in his

preambles and he himself forgets what

question he's asking. In his previous final question, the member said:

"In the minister's opinion, would MacMillan Bloedel rather have this or

that happen?" How am I to know what they would rather have happen, and

what difference would my opinion make? Whatever is proper will be done.

Over the past eight years the forest industry throughout British

Columbia, once we were relieved from that disastrous government that

was in British Columbia during the early 1970s, has had massive capital

commitments to modernize, particularly on the coast. Literally billions

of dollars have been spent. A lot of those capital programs were

suspended during the very serious recession, which we are hopefully

emerging from at this time. Once the industry can recover from some of

the capital losses that it suffered over the last few years — which, as

a matter of fact, would have been much greater had this ministry and

this government not done things which helped them through the recession

— plans are still underway for massive organizations. In fact, a number

are going on right now. I don't think the government has to do anything

more than encourage the private sector and make them realize there is

going to be a government in British Columbia for many years that will

support free enterprise.

MR. LEA: Out of the minister's answer, is the minister

telling us that he's perfectly satisfied to see MacMillan Bloedel's

profits expand at the expense of leaving that forest product on the

floor? That's basically what he's saying, and he's using economic times

for bad resource management. That's the minister's stand on this, as

far as I can see.

HON. MR. WATERLAND: I didn't detect a question on that last

mini-speech of the member. However, I would hope that the member is

sufficiently wise to understand that what is economic wood in the

forests of British Columbia changes as economics throughout the world

and our marketplaces change. What can be economically extracted today

is far different than what could be economically extracted two years

ago, or perhaps two years from now, because the end value price is what

drives the utilization in the province. Yes, our utilization is much,

much better now than it has been in the past. Over the average period

of time, considering the economic cycles we go through, it will

continue to improve in years to come, as long as we have a government

that encourages investment in this province.

McKIM ADVERTISING

MR. COCKE: Mr. Speaker, I would like to address a question to

the Attorney-General. McKim Advertising received $5 million in

unauthorized payments during 1981-82. The auditor-general has found

that some of those payments resulted from third-party accounts

laundered through McKim. Has the Attorney-General discovered how much

of those funds found their way into supporting the Social Credit

election campaign?

HON. MR. SMITH: Mr. Speaker, when a matter of this importance

is being investigated by the auditor-general, who has not made a final

report to this House, and when the matter is also being reviewed by the

criminal justice branch of this ministry, to take political shots like

that when the course of justice is yet to unfold is inappropriate.

MR. COCKE: Mr. Speaker, we are outraged over here. This is

day 20 of this proposition. The Attorney-General has done absolutely

nothing to see that the police are brought in.

Let me ask the Attorney-General the following question: is he aware

that the auditor-general's investigation does not extend beyond March

31, 1982? Incidentally, that final report from the auditor-general is

in. What investigation has taken place in respect of 1982-83, the

period leading up to the provincial election?

HON. MR. SMITH: I take the question as notice.

MR. COCKE: Mr. Speaker, that's exactly what we've been saying; that's why the police should have been brought in.

Another question. In view of the fact that McKim Advertising became

the agent of record for the entire government in May 1982, has the

Attorney-General determined that even more public funds flowed through

McKim's accounts during the 12-month period up to the election?

HON. MR. SMITH: The answer to all those questions and

preambles is no, Mr. Speaker. But the answer to all the gentleman's

questions is that when the final report is in and I have a report from

my officials, if further action is warranted from either of those

reports, it will go forward quickly without favour or fear of any

person.

MR. COCKE: Mr. Speaker, 20 days ago we were told that McKim

Advertising would not be suspended during the investigation. Twenty

days later, they are still agent of record of the government. Has the

Attorney-General failed, or neglected, to satisfactorily investigate

this matter because of McKim's role in the Social Credit election

campaign?

[ Page

667 ]

HON. MR. SMITH: It's tempting, Mr. Speaker, just to respond with

"yes" and "no" to questions which aren't questions but

are political statements. The gentlemen opposite who ask questions on this subject

do so under the guise of seeing justice be done, but the very nature of the

questions they ask precludes people from having justice done and precludes key

people in organizations in this province from being properly and fairly investigated

and those reports being made public and then being subjected to the criminal

justice system where they would get a fair hearing. They do not want that to

happen, Mr. Speaker. They want political solutions in this chamber.

Interjections.

MR. SPEAKER: Order, please! The bell terminates question period.

[Interruption. ]

MR. SPEAKER: Order, please, Staff will remove the offending person from the gallery.

The member for Nelson-Creston rises on a point of order.

MR. NICOLSON: Mr. Speaker, I didn't wish to interrupt during

question period, but during question period the Minister of Forests

(Hon. Mr. Waterland), in response to the member for Prince Rupert (Mr.

Lea), said that members opposite usually assume that anything MacMillan

Bloedel people say is false. Mr. Speaker, I believe the minister has

imputed improper motive to myself, as one of those members opposite, as

well as to others on this side of the House. I could go on and say who

I feel do say things that are false, but I'm not going to do that

because this is a point of order. I'm very serious about it, Mr.

Speaker, and I'd like the minister to withdraw the offending statement.

MR. SPEAKER: An hon. member has requested of another hon. member that

if there were any imputations, they be withdrawn. I must ask the minister if

there was any imputation; if so it must be withdrawn.

HON. MR. WATERLAND: There certainly were no imputations.

However, if the member wishes, I'll withdraw. Perhaps they believe

everything that MacMillan Bloedel says, which they're accusing me of

doing.

MR. SPEAKER: Thank you, hon. member, the matter is cleared.

Orders of the Day

HON. MR. GARDOM: Leave to proceed to public bills and orders.

Leave granted.

HON. MR. GARDOM: I call adjourned debate on second reading of Bill 7.

PROPERTY TAX REFORM ACT (NO.1), 1983

MR. BLENCOE: At the last opportunity I had to debate this

bill last week, I was trying to point out to the government, and

particularly to the minister responsible, that there are some major

flaws and problems with the municipal real estate tax system, Those

problems and flaws have been well documented over the years. Studies

have been brought forth and many commissions have tabled their reports.

Basically, all of them say that the system in place for generating

revenues for municipal purposes is antiquated, unfair and not based

upon the ability to pay. One of the major problems in today's society,

we all know, is the problem of taxation and the problems that

governments face in trying to acquire enough revenue to maintain their

operations. There's no question that municipal operations and civic

government today probably face the worst scenarios they have faced in

many a year. They have seen their revenues dwindle to the point where

they don't know where they're going to find the resources to maintain

essential services, and at the same time — as I indicated last week —

this government, in its wisdom, has decided to remove itself from one

of its major responsibilities of senior government; that is, to

maintain and ensure that municipal government is healthy and reasonably

wealthy in terms of revenue- sharing, ensuring that underground service

grants are maintained properly, and that the health and safety of

British Columbian citizens are protected and supported at the municipal

level,

[2:30]

[Mr. Strachan in the chair.]

I tried to indicate to this government that if they are trying to

give the impression that the variable mill rate and the ability of

municipal governments to shift the tax load on to various categories of

property categories.... If it is their intention that that will be the

panacea for municipalities in terms of coming to terms with their

revenue and resource problems, they are wrong. It is not a panacea. The

impression given by the minister is that it's going to create

marvellous opportunities for municipalities to resolve their financial

problems. That's not true at all. All this government is doing is

tinkering with a system that should be totally revamped and subjected

to a major overhaul. The priority in any overhaul should be trying to

ensure that revenues generated for municipal purposes are based on the

general premise — I think we've all accepted it today — that taxation

should be based on one's ability to pay.

I gave examples last week of a person on fixed income being

subjected to the same real estate tax system that those who are

currently employed and earning money are faced with. That is patently

ludicrous –– I, for one, along with many of my colleagues at the

municipal level last year, saw senior citizens in a home paying taxes

based on what was happening in the speculation in the real estate

market. What was happening, particularly to senior citizens, was that

they were facing tax increases based on what some real estate person

might be able to acquire for that property in a highly inflated real

estate market. Many of those senior citizens saw their taxes escalate,

many beyond their ability to pay, and many had to sell their homes;

they had to move out.

HON. MR. BRUMMET: That's not true, and you know it.

[ Page 668 ]

MR. BLENCOE: Oh, that's right! Many senior citizens are in a

position — or were in a position — of not being able to maintain their

homes. The ultimate goal of this government should be to deal with a

tax system that no longer ensures that British Columbians, if they wish

to hang onto their homes and pay the services that maintain those

homes.... There should be a system of taxation at the municipal level

that allows them to maintain their homes and pay according to their

ability to pay, not one based on a real estate system that many

commissions and studies have said is archaic, ridiculous and needs to

be overhauled.

I would re-emphasize that this government, if it really wants to

come to terms with the real estate system and the tax system of the

municipal government, and if it wants to deal with the inadequacies in

municipal revenue-generating procedures, should take a long, hard look

at the overall tax system. It's been waiting for a long time — over 100

years to have a proper look taken at it.

In my discussions last week I referred to a commission report, one

of the best that's been done in this country over the last few years.

That commission was done by the Ontario government, the Ontario

Committee on Taxation. I use this one because it's recognized as one of

the best documents on tax systems in this country. Although it was done

in 1967, it's still used as a major source of information and is a

credible report on what should happen with taxation at the municipal

level. I would like this afternoon to go into some depth on what this

report had to say at that time, because I think it has implications for

today. In its wisdom, this government will perhaps take another look at

what it's doing in terms of tinkering with the tax system, and

introduce meaningful long-term changes.

The report gives a good introduction on constitutional democracy and

taxation. I would like to read some of the passages from that

commission's report. I'll quote from the introduction on constitutional

democracy, and give my thoughts on it:

" The reconciliation of governmental power with individual

rights is a problem as old as human society itself. Centuries of evolution,

and sometimes revolution, have yielded in much of the western world a mode of

governmental organization that is indelibly stamped by the quest for such a

reconciliation. This mode of government is commonly called constitutional democracy.

Constitutional democracy can assume different forms in different countries,

but its most classic types are the parliamentary forms as practised in the United

Kingdom and Canada, and the presidential-congressional, of which the United

States is the major progenitor and leading example."

Mr. Speaker, this may seem boring, and many of my colleagues across the way

may think, why is he going into this? I want to set the tone for the background

for progressive taxation systems: that indeed taxation systems are part of constitutional

democracies, and we have a responsibility to ensure that they do fit into that

democratic process.

"Whatever particular forms developed to suit their

peculiar circumstances, all constitutional democracies share two basic

elements. The first, the 'democratic' element, attempts to ensure

government that is at once responsive and responsible."

"Responsive and responsible:" two key words in dealing with this

kind of legislation. In my estimation, and the estimation of our party,

this bill does not go far enough in terms of being responsive to the

problems of taxation at the local level; you have only scratched the

surface. And if you are indeed serious about trying to improve the

inadequacies and injustices of the taxation system in place for

municipalities, you will go much further and be far more responsive in

your analysis and your legislation.

"Constitutional democracies respond by providing for

periodic competitive elections on the basis of something approaching

universal adult suffrage and for constant ready access to governing

representatives on the part of the governed, whether as individuals or

as groups.

"The second, the 'constitutional' element, consists of built-in practices designed to restrain abuses of government power."

This is an important clause, Mr. Speaker. It's what is happening in

this province and in this Legislature in terms of what we feel has been

an abuse of the democratic system.

"The rule of law, the independence of the judiciary

and legislative oversight of the executive are the best-known of these

restraining devices. At this point we think it appropriate to develop

two philosophical positions to which we wholeheartedly subscribe. The

first concerns democracy, the second constitutionalism."

Mr. Speaker, I'm quite serious in reading and talking about

democracy and constitutionalism in terms of the bill we're debating

today. It may seem far-fetched that we would talk about democratic

principles and constitutionalism when talking about things as mundane

as a variable mill rate and new tax systems for municipal government,

but they are important.

Let's remember that one of the very reasons that democratic

principles and governments were established was the fact that people

often felt they were being taxed unfairly and that they were being

asked to donate their hard-earned dollars to institutions and

governments that did not appear to be responsive to their needs. We

only have to take a look at the history of the United Kingdom. Indeed,

the great civil war in the United Kingdom and the challenge to the

authoritarian and the divine right of kings was over the very thing of

who should make decisions about who should collect the money and what

that money should be used for. Taxation systems and financial

arrangements are definitely interwoven in the very democratic process

and the constitutional kind of democracy that we have in Canada.

"It's a long-held axiom that government exists for the promotion of

something that is variously called the 'common good'...." That well-used

phrase is often over-used and is perhaps a trite and hackneyed phrase; however,

I think it is appropriate. Governments do indeed still have responsibilities

to talk about common good. In any financial arrangements or taxation system

we must talk about the common good. It's a long-held axiom that governments

do talk about the common good, the public interest and the general welfare.

These are three important axioms in anything that government purports to do

on behalf of the people they represent. Those axioms should be used when you

are talking about taxation systems for municipal governments.

Mr. Speaker, in my estimation this bill does not go far enough in

terms of talking about the common good, the public interest or the

general welfare. If they did the Minister of Municipal Affairs (Hon.

Mr. Ritchie) or the Premier himself would announce to the people of

British Columbia that

[ Page 669 ]

they are going to totally revamp the municipal tax

system and introduce a system that's based upon the ability to pay, not

on what some person in the real estate industry might get for their

home. "Democratic governments seek out the 'common good' through a

variety of processes, the best-known of which are majority vote, the

reconciliation of competing group claims and the quest for consensus

through deliberation." I would like to expand on the last one: the

quest for consensus through deliberation.

There is a very well-known organization existing in the province of

British Columbia that tries to deal with municipal problems in an

intelligent and rational way. They're always open to discussion, new

ideas and meeting with the government. I refer to the Union of British

Columbia Municipalities. It's my belief, and our party's belief, that

the quest for consensus through deliberation should have come over this

bill. Not only should it have come over the intent in the wording we

have before us today, but it also should have come over the regulations

that will be introduced to accompany this bill. It's my understanding

that the UBCM indeed would like the opportunity — before this bill goes

through its final readings and becomes law — to discuss those

regulations and the various limits that are going to be put on property

categories. They have had very little input on this particular

legislation. It was discussed some months before the election: it would

come into force; it would be retroactive. All municipal governments had

to scramble to introduce the right tax notices and the right systems to

try to accommodate the government in its retroactivity. The UBCM and

those hundreds of municipalities that they represent have not had the

opportunity to look at the regulations or discuss those regulations

with the new minister. They would really like the opportunity to do

that.

[2:45]

As Municipal Affairs critic — and as I get more and more into this

role and into what happens in this chamber — I am finding that this

government, for whatever reason, seems to be out of tune with that kind

of consensus-through-deliberation process that is so important in

democratic societies and in constitutional democracies, and seems to be

turning away from that kind of process.

They are introducing legislation.... Bill 9 is very similar to it,

but I won't get into that, Mr. Speaker, because I know you'll say

that's not what we're debating today. It reflects the current process

and the current attitude. You dump the legislation on the table,

without discussion or input from those affected, and you proceed as

quickly as possible to introduce that legislation. When you think about

what municipal governments have to do these days and how difficult it

is to maintain their operation in these difficult financial times, that

kind of process — I direct my comments especially to the new Minister

of Municipal Affairs — cannot help municipalities to participate with

this government in terms of trying to resolve the recession in this

province. It can't do it.

The UBCM has been in existence for many years. The process of

discussion and conciliation and consensus through deliberation has been

a worthwhile process. It has worked extremely well. There are members

across the way who have been responsible for Municipal Affairs. I think

the minister should perhaps discuss with those members how that

consensus-through-deliberation process can work very effectively. This

variable mill rate legislation, like Bill 9, has come forward in a

vacuum. What happens is that municipalities and the UBCM have to react

— overreact at times, I'm afraid — in trying to get that point across.

Mr. Speaker, I think we all know that the best way to solve problems

is to discuss them quietly, not in an atmosphere of confrontation;

certainly not in an atmosphere where I and the minister have to go back

and forth in this chamber over

an act that really affects far more

people than we think it does, in terms of those municipalities and the

people they represent. That bill, like Bill 9 and Bill 7 and Bill 12,

which I presume we will get onto later, really should have come forward

after thoughtful and intelligent discussions that try to achieve

consensus through deliberation. The UBCM exists for that.

Since we're not going to finish debating this bill today, I would

hope the minister will indeed take the opportunity, as I understand he

has done with Bill 9, to meet with the representatives of the UBCM and

other municipalities that feel affected by this legislation and try to

discuss what the regulations will be and how they will affect all

municipalities before they pass this legislation and before that

opportunity for deliberation has gone.

I would like to go on and quote from this learned journal. The

authors state: "We believe that the 'common good' evokes something more

than majority rule." That's an interesting quote. The common good is

beyond what's perceived to have happened on May 5. The current

government did, indeed, get re-elected and it forms the government. But

although they have the majority and although they can subject British

Columbians to majority rule, there is something slightly higher than

such heavy-handed rule. Again I refer to the common good. Perhaps the

minister will take that into consideration. "We believe that the

'common good' evokes something more than majority rule, the outcome of

group conflict or the politics of consensus."

If there was ever a time in the history of British Columbia, or in

the history of our country, that we needed to try to reintroduce the

politics of consensus, it is certainly now. In the last few weeks we

have seen thousands and thousands of our citizens in British Columbia

indicate their deep concern over the direction of this government. When

I'm talking about Bill 7 I'm obviously, therefore, lumping all 26 or 27

pieces of legislation in a particular package, because they do indicate

the current direction of this government.

I appeal to those members across there. I think there are many of

them who are prepared to listen to the majority of British Columbians.

There is a message coming through from the people of British Columbia —

a message from people of all political stripes — that this government

may indeed have gone too far with its current package, and I include

Bill 7 in that package. I know all governments, when there is an

outcry, tend to say: "Well, it's only representative of a handful of

people — all these vested interest groups." Or: "It's the union

movement." Or: "It's the church groups." And certain members of this

government have been attacking those church groups rather ruthlessly

and unfairly. There is indeed a coalition out there in British

Columbia, but I don't think it's just special interests. It is a

meaningful groundswell of discontent, of apprehension and, I think, of

some fear. I would really urge this government — and I'm still talking

to Bill 7, because I'm talking about the politics of consensus and

because I think the politics of consensus should be in effect on Bill

7....

You know, we're right in the middle of summer and it's getting somewhat hot. We've been here quite a while and, I

[ Page 670 ]

presume, we'll be here a little longer. There is

the opportunity for this government, if it's serious about wishing to

listen to all British Columbians, to take some time over its various

pieces of legislation, particularly — for today — Bill 7, and to try to

reintroduce that great principle of constitutional democracy: consensus

through deliberation. I'm quite serious about that. I know the

government is worried, Mr. Speaker. I know it's wondering where the

next salvo will come from, in terms of what it's doing. But I urge the

government to not just close their eyes, back off and hide, and say:

"Well, we'll get over it. It'll go away. Six months from now the heat

will go down." I would urge the government to really rethink its

priorities, its policies and its direction.

There's nothing wrong in admitting every now and again, when you're

in political life and you're making legislation, or making rules and

laws for people, that sometimes you can make mistakes. As a matter of

fact, there seems to be among modern politicians — and I certainly

think this government represents that current trend — an attitude that

you must never ever admit you've made a mistake. You'll do anything to

backtrack, rewrite or amend, but never admit that perhaps, in your

general wisdom, you misread what British Columbians or Canadians wanted

from their government. I think that has implications not only for the

government but also for all of us involved in public life. It's a

difficult chore to ask anybody, particularly during these difficult

times, and given the legislation that this government has introduced,

to listen to a member of the opposition and say: "Listen, guys. Perhaps

you blew it a little bit. Maybe you went a little too far. Maybe

there's room for reconsideration."

To get back to the thread of my introductory remarks today, the

great principle of consensus through deliberation, it seems to me, in

my short time in public life, that we need to take a look at that

fundamental principle a little more. The Minister of Municipal Affairs

knows that he has a good vehicle in the UBCM to use that principle, or

call together any mayors or aldermen from any municipality he wishes to

to talk about the regulations that he will introduce behind this

particular act.

[Mr. Pelton in the chair.]

Why is the politics of consensus so useful? It's because one set of

policies is not just as good as any other, even though it may be the

temporary outcome of the democratic process. Rationality in the raising

and spending of public funds, as in other areas, requires the making of

difficult choices in the light of the expected consequences of

alternative courses of action. I'm quite prepared to admit, as a member

of the opposition, that it's difficult for any person in government

today, no matter what political stripe. There are some problems facing

us to which not one party or group of politicians or statesmen have all

the answers. We admit that. It's during such times that we need to talk

among ourselves a little more to try to achieve the answers or our

perceived solutions to problems through a process of deliberation. I

know that process can be very troublesome. It can be long. It can

certainly lead to heated debates and people often taking offence to

each other in those kinds of meetings.

[3:00]

If we are to resolve our long-term problems, there must be common

goals and directions, and, I suppose, a bit of a common philosophy that

all British Columbians feel they can identify with. We know the

government is trying to identify this thing called restraint as the

common objective. I don't think anyone has any particular difficulty

with the theory that we've all got to try ourselves to resolve some of

the problems of this province or country. But I think it's the

consensus out there now that this government has gone beyond that

restraint thing. It has become extremely political to take on certain

aspects of government that some might say are not politically in tune

with the current Social Credit government.

MR. BARNES: It's a smokescreen.

MR. BLENCOE: My colleague said "smokescreen, " and I think that's an appropriate word.

I would urge this government, if it wishes to be perceived as

serious about that concept of restraint, to try to achieve a feeling

for the people of British Columbia about what their consensus is on

some of the things they are doing. I don't think there's any question

that this package, including Bill 7, which has been introduced has not

been established through any process of consensus through deliberation.

It certainly wasn't talked about during the election, and the people of

British Columbia had no idea that this was going to come, no idea at

all. Although this government has been elected for four years, I

already said ten minutes ago that there is something above majority

rule, and that's common good, public interest and general welfare.

Those are three important principles that are above the majority rule

syndrome that currently, I think, pervades the modus operandi of this

government.

If they searched their consciences and talked to many of their

constituents, I think they would find that there are thousands and

thousands of British Columbians who feel that those three

principles.... There appear to be no terms of reference for them in the

current modus operandi of this government. To go back to Bill 7, I

would urge this government to utilize those fundamental principles in

constitutional democracy and in the taxation systems we establish for

municipal-level or civic government.

"It's always" — I go back to the report — "distinctly

possible that a given choice made by consensus or majority rule will be based

on misapprehension or unawareness of the underlying facts, and hence will be

irrational." That's an important statement. I believe that this government has introduced

26 pieces of legislation, including Bill 7, under a cloud of misapprehension;

a cloud of unawareness about what British Columbians really want in terms of

the long-term goals and objectives of this province. And, I believe, it is totally

irrational. If anyone takes the time to study the various pieces of legislation

in depth, they will find that there are incredible conflicts in them and in

the budget that was tabled. I don't want to go into any of those in detail,

Mr. Speaker, but one of the basic principles of this government appears to be

— and they're saying this to all British Columbians — that it will be the

private sector that will be the...

AN HON. MEMBER: ...engine of growth!

MR. BLENCOE: Thank you!

The budget and the legislation are irrational in terms of that

statement, because that very engine of growth has been hit hard by this

government. In Bill 7 that engine of growth.... There is an incredible

potential for the business and industrial sector to be hit extremely

hard, and I'll get back to that theme in a minute.

[ Page 671 ]

1 think it's extremely important that this government take a look at

such things as misapprehension and irrationality in their current

deliberations, because I think they will have to admit that their whole

modus operandi and current direction is irrational, and that they are

being seriously misled by whoever is giving them advice.

Before we started the debate today, I had the opportunity again to

talk to Victorians on an open-line program. Interestingly enough, once

again, many of the people calling in were people who had voted for this

government. I admit that supposedly it could have been set up, or that

they could be isolated calls, but I've listened to many of these kinds

of programs, and have been on many of them myself, and have been

reading letters to the editor, and there are indeed many long-time

Social Credit supporters who are deeply concerned about the legislation

they have introduced. If there's anything that might move this

government to go back to consensus through deliberation, I would have

to think it would be their very own supporters.

Indeed the host of this open-line program in Victoria, Mr. Joe

Easingwood, was a candidate for your party and for this government. He

carried the flag as best he could. During the election, when he was

asked if he supported Socred principles and ideologies, he said:

"Absolutely. Wholeheartedly." That's why he was running for the party.

Today, Mr. Speaker, he said categorically that if he was on that

government's side today he would have to cross the floor. If there is

one person in this area who was a Socred during the campaign — I

suppose in many respects still is — and who said he supported Social

Credit principles, constitution and direction, it was Mr. Joe

Easingwood. Well, he admitted today that if he was in government and

sitting over there with you, he would have to cross the floor. I

believe that has to be a serious indictment of this government and its

policies and 26 or 27 bills, and Bill 7 which we're debating today.

It's a reflection, Mr. Speaker.

HON. MR. PHILLIPS: He's worse than Charlie.

MR. LEA: You're a little better than Waldo Skillings, but not much.

MR. BLENCOE: Actually, the Minister for Industry and Small

Business Development (Hon. Mr. Phillips) has been in the House for

quite some time and.... Oh, he's leaving. He's gone again. Well, I was

expecting it, Mr. Speaker, because I know that when I go on he tends to

get a little impatient and makes a few remarks and suggestions. But I'm

not going to have that benefit today. That's too bad, because I always

look to forward to that minister's remarks. However, he's decided to

leave.

Mr. Speaker, I was reporting on some of the calls I had today. I'll tell you some more about those calls.

HON. MR. RITCHIE: May I leave too?

MR. BLENCOE: Feel free. You're a free agent, I believe, although perhaps you may want to stay and listen to some of these....

HON. MR. RITCHIE: Have you got anything important to say?

MR. BLENCOE: Oh, this is all very important, Mr. Minister.

The principles and elements of constitutional democracy and common good

are all things we should be interested in all the time.

Mr. Speaker, I was trying to indicate to the members of the

government across the way who have had.... Thank you for staying to

listen to this today. I was trying to indicate to them that maybe there

was misapprehension in their priorities for what government should be

doing in this province, or they were unaware of the reactions of that

silent majority they like to refer to. Maybe they would reconsider some

of their irrational actions, of which there are many. The opposition

has given you examples, and many people out in the community have given

you lots of examples.

Alternatively, Mr. Speaker, it may be that through inertia a

particular minority is allowed to dictate a policy or another minority

is placed at such a disadvantage that the basic rights of its members

have been prejudiced. I would say that indeed this government's

policies, particularly in certain areas, are in favour of certain

minorities.

MR. LEA: Them.

[3:15]

MR. BLENCOE: Well, them is the.... Certain members, yes.

Much of the legislation we have before us does help or reflect

certain minorities. I refer to Bill 5, the rentalsman legislation,

although we're supposed to be on Bill 7. There's no question that that

reflects a very small minority and is a way of granting some special

privilege to development corporations and landlords in this province.

Mr. Speaker, I would urge this government to reconsider that particular

bill as well in light of the common good and the public interest and

the general welfare. That bill does not meet those particular

fundamental principles of constitutional democracy. Indeed, Mr.

Speaker, it violates those very principles, as do a number of other

bills before us.

"The achievement of the common good, then, depends on

more than the existence of democratic processes through which policies

are devised. It will require from each individual a genuine concern for

the needs of others and a consequent refusal to use others simply as a

means of promoting his private or public objectives, however laudable

these may be made to appear"

That's a very important description of the achievement of the common

good. We have before us umpteen pieces of legislation that initially

may have appeared laudable to this government, but I think they've gone

beyond that appearance. No longer should they be interested in

promoting their private or public objectives above the common good, the

public interest or the general welfare. I keep going back to those

three phrases, but they are very important. They are principles that

are very much in the forefront in this province these days because we

do have a package and a government direction that for the majority, I

would say, of British Columbians, violates those very principles. Bill

7 is part of that particular direction, and if they do nothing else, I

would urge, again, that the minister temporarily withdraw this bill and

enter into a process that will allow him to achieve consensus over the

regulations that will back up the variable mill rate.

"It will depend, too, on the continuous use of the

individual's powers in the maintenance and enlargement of freedom and

human relationships.

[ Page 672 ]

" Finally, the common good will always require the

orientation of public policy to the general well being of society

rather than to particular interests."

I will go back to this bill and reflect on that statement, because

section 10, if it goes through as stated in the act, will create

special privilege and special interests for two particular property

categories. I refer to exemptions for industrial or business property.

I talked about this when I was up last week, but I would like to

reflect on it again because it is an important aspect of this bill.

One of the important prerequisites of the attempt to establish

taxation systems is that in a constitutional democracy we still believe

that taxation systems should reflect equity and fairness, and that the

principles should apply as much as possible to all citizens and people

owning particular types of property. This

section creates some concern,

because they're saying that the industrial or business property holders

are going to have special privilege or status. The cabinet will be able

to prescribe exemptions from property tax levies for these categories.

That's difficult to support when this government says that Bill 7 is

the panacea for municipal tax systems. If this legislation were as good

as the government purports, they would not need

section 10. If they

were introducing a piece of legislation that was fair and equitable,

they wouldn't have to ensure that two property categories be exempt

from certain levels of property tax, at the whim of cabinet. They admit

that what they're doing is band-aid. It's just a tinkering and an

admission that the real estate system can indeed be extremely harsh

with those particular categories, so you make sure they are exempt, if

required.

I have no axe to grind with business or industrial property holders.

Last time I gave a description of what happened with industrial

property in the city of Victoria. They were and still are in trouble.

No particular property owner should have special privilege. If you're

going to have special privilege, then you had better have it for the

thousands and thousands of single-family property owners. Introduce

special exemptions for them if they start to pay a higher proportion of

property tax at the municipal level than can be supported or endorsed.

Don't just do it for a particular category, because that means you're

being selective in your legislation. You're not trying to introduce

legislation that is fair and equitable and follows the principle of the

common good, the public interest and the general welfare. You are

creating privilege in your legislation; there's no question that it

does that.

Perhaps the minister will clarify this: if there is one part of Bill

7 that is creating some concern in the municipal area, it is

section

10. I go back again to the Ontario commission: "Because the furthering

of the common good does represent the fundamental task of democratic

government, government's use of the tax system must always be judged in

relation to that end." That is to say that the common good does

represent the fundamental task of democratic government. Everything you

do, not only just in social service legislation but also in something

as mundane as the tax systems of municipal governments, should be

judged in terms of the fundamental task of achieving the common good

for all.

I want to move on and talk a little bit about constitutionalism and individual rights:

"If the basic purpose of democratic government is the

pursuit of the common good, constitutionalism exists to safeguard

individual rights in the face of any aberrations or deviations that

will necessarily arise from time to time as fallible governments press

on in their quest for the public welfare. While there is considerable

disagreement over the sources of individual rights — whether from

divine intent, human reason or sociological conditions — there exists

remarkable consensus as to their content.

"We wish to comment briefly on three widely recognized

individual rights, not because we necessarily prize them more highly

than others, but because they are particularly relevant to the field of

taxation. The first is the right to equal treatment before the law."

I refer to

section 10. That certainly is not part of this act.

Citizens have the right to equal treatment before the law. That is not

just applicable to Bill 7; there are a number of other pieces of

legislation that one could quote that statement for. The second is the

right of the individual to earn, own or dispose of private property.

The third is the right of the individual to a minimum level of economic

and social well-being. They are "all essential to achieve both free

exercise of constitutional rights and the equitable distribution of the

fruits of economic growth."

It's the first one that is of particular importance in this piece of

legislation: the right to equal treatment before the law. This act goes

nowhere near that fundamental right in a constitutional democracy. As a

matter of fact, it's an admission by this government that they are not

coming to terms with the inadequacies and inequalities in the real

estate tax system utililized by municipal governments. It is — and I've

used the word before — irrational, because it has to provide for

certain exemptions if that tax system gets out of hand, as it did a

couple of years ago, when we saw an incredible escalation in

assessments brought on by the unearned wealth syndrome that pervaded

this province. I'm sure we've all talked to people who within a matter

of weeks made $20,000 or $30,000 on a piece of property. Of course, in

terms of assessments and tax increases for the average British

Columbian who didn't want to sell his home, the whirlwind that brought

on was incredible.

We need a tax system for municipal purposes in British Columbia —

and I'm going to continue to say this, Mr. Speaker — that is based upon

the ability to pay. There are thousands and thousands of British

Columbians who should not be subjected to the whims of that great free

enterprise syndrome, the unearned wealth syndrome that the real estate

industry forces upon us at certain times.

I don't want to get into codes of ethics for the real estate

industry. That's for another debate. But something as fundamental as

shelter — one's home and that piece of land....

The preservation of the family environment in progressive society is

one of the most stabilizing influences in our communities. When you

have a taxation system that can overnight jeopardize that basic

stabilizing influence in our communities, it's time to admit that

band-aids are no longer the answer, that we can no longer just accept a

tinkering with the process, that we must have a system that is related

more to a person's ability to pay.

I have no problem with a two-tiered municipal tax structure. There's

no question that when municipal governments were established many years

ago, the services that were provided by municipalities were directly

related to property: fire, police, sewer, water — those sorts of

things. But over the years municipal governments and the services they

provide have radically altered. There has been, I suppose, a revolution

in municipal governments in terms of what they are involved in and the

services they provide. I think it's a

[ Page 673 ]

creative revolution. Let's say "evolution, "

because "revolution" has bad connotations. I've said this many times,

and during my term of office members are going to hear it over and over

again, but I think municipal government is the most efficient and most

democratic level of government. It's the most accountable and the most

accessible. And so the systems we introduce for it should enhance that

type of government. Unfortunately, the taxation system that's in place

doesn't do that.

[3:30]

I would like to suggest that if this government is so supportive of

the real estate tax system for all services municipalities are involved

in, why not then investigate a two-tiered system? I won't get into

actual details or specifics in terms of numbers, but it's quite

plausible that for certain functions at the municipal level the

property taxation system could be in place. But there could be a cap on

that. For instance, property taxes will be collected for services such

as sewers and underground services, and for fire protection — that

protects private property, but of course it protects individuals as

well. There are a number of others, Mr. Speaker, but there is a direct

correlation between the property tax and the services that are

supported by that property tax. There's your first tier of tax.

Through analysis one could take a look at the other services that

municipal governments are involved in, and it doesn't take long to

recognize that those services are not property-related. Unfortunately,

however, those services are being funded by property tax. I don't think

there's any reason why — and I don't want to get into details, because

it's a very tricky issue — there should not be a second level at the

municipal level that collects money from the homeowner on the basis of

income. Those funds go to non-property kinds of services. I recognize

that the Minister of Finance (Hon. Mr. Curtis) and the Minister of

Municipal Affairs (Hon. Mr. Ritchie) cannot work out a system like that

overnight, but there's no question that we have been....

Actually, I'm glad the Minister of Finance is here. Because he was

involved in civic politics for many years he knows the problems of the

revenue system that's in place for municipalities. I would address my

remarks particularly to that minister, because he's had that

experience. Maybe he will try to encourage his colleagues to take a

took at the revenue generating procedures for municipalities. I think

he would have to admit, as we all would, that the property-tax system

is antiquated. Why continue to support it? Why continue to add band-aid

after band-aid, when we all know that it's basically unfair, and for

the very reasons that I stated some time ago?

This government believes there's one area in which it has some

expertise, and that's the financial area. I'll debate that another day

if we ever get back to the budget debate. We're all waiting for that

budget debate, by the way, to those members of government over there.

We should be on that, but we won't get into that today.

MR. LAUK: December 21.

MR. BLENCOE: December 21 we'll get back to the budget debate? It could well be that we'll still be here on December 21. Correct.

I would hope that that Minister of Finance, who has had many years

at the municipal level and has gained a degree of expertise, I think,

would enter into some intelligent discussion with his government

colleagues and say: "Yes, we will, over the next two or three years,

work towards introducing a tax system that doesn't just tinker with the

real estate process for municipal government." That has to be the

long-term solution, which can be done through consensus, meaningful

deliberations with the UBCM and any municipalities the government

wishes to discuss it with. I've already said that in my opinion the

municipal government is accessible, efficient and prepared at any time

to debate or discuss their problems with senior government, and to try

to work out some consensus in achieving solutions.

"The right to equal treatment before the law is one of

the principal reasons for constitutionalism. Restraints against

arbitrary and capricious legislation" — and we have certainly had a lot

of that in the last month or so — "the independence of the judiciary

and legislative checks on executive power are all designed to secure

for the individual this basic right. Tax laws, no less than other kinds

of legislation, must be tailored in applying strict adherence to the

letter and spirit of this right."

It must be strange to hear discussions of constitutional democracy,

and principles such as common and general welfare, when we're talking

about such boring things as taxation systems, but if there's anything

that should be based on the common good and consensus through

deliberation, it has to be taxation systems. Unfortunately, it's that

dollar — the love of the dollar that leads to so many problems — and

the financial arrangements that we have in place, that burdens modern

society, although as a party we believe the cash register shouldn't

always be in place. Not all programs should be subjected to the ring of

the cash register. Certain things are above and beyond the bottom line.

The Minister of Finance smiles slightly, but I think he knows what I

mean — the cash register and that thing called majority rule, although,

as I said earlier, some things take precedence over majority rule.

Currently the majority rule in this province is subjecting some very

basic services and fundamental rights to the cash register. There are

some things that are beyond that. Of course, there's the common good,

the public interest and the general welfare. All of those things are

being questioned in this province by thousands and thousands of British

Columbians deeply worried that some of those norms we accept in a

democratic society — in a free society — are being eroded in the name

of....

MR. PARKS: Progress.

MR. BLENCOE: Well, I'm not going to get into a discussion

about progress. All we know is that there are thousands of British

Columbians who feel that we have stepped back many years in this

province in the last month or so.

MR. PARKS: Hundreds of thousands feel differently.

MR. BLENCOE: Hundreds of thousands? Well, Mr. Speaker, Goldfarb has just done a study for the Province ....

MR. PARKS: Do you believe Goldfarb?

MR. BLENCOE: Well, you believed him. You've used Goldfarb

many times. Goldfarb has just told this government that they're right

off the mark. If there's ever a time for a government who may have the

right to majority rule to look at

[ Page 674 ]

consensus through deliberation, now's the time.

We've had thousands and thousands of British Columbians on the lawns

here. They'll continue. They were not just organized labour, which this

government says is behind everything, but a coalition of deep-thinking

British Columbians from all sectors of this province who are saying —

as the Province has found out in Goldfarb's study — that this government is way off the mark with its 27 pieces of legislation.

You don't have to listen to the opposition in our debates. You don't

have to admit that we were instrumental in seeing you turn around in

the next few months when you start to retract some of your legislation.

Just admit that the people of British Columbia did speak up and you

listened. I certainly hope you have that ability.

Interjections.

MR. BLENCOE: Mr. Speaker, I hear the words: "May 5."

Democracy is not just alive at the ballot box. Democracy must continue

between elections. There is such a thing as participatory democracy.

There's such a thing as trying to achieve the common good and the

general welfare. And those things are achieved through allowing

citizens to participate in the democratic process. Please do not think

that May 5 was the end of democracy in British Columbia until the next

election. I hope not. I hope that this government will reconsider its

legislation, and certainly reconsider Bill 7, because it has some

serious implications for all of us.

"The right to equal treatment before the law is one of the principal reasons

for constitutionalism." British Columbia should be proud of its history

in constitutional democracy. There are many who have gone before us, who have

stood in this chamber and defended such rights and privileges. They've discussed

taxation systems before. I don't know whether they've discussed them

within the realm of constitutional democracy and such themes as common good

and common welfare. I suspect they have. But every citizen has the right to

equal treatment before the law. That's one of the principal reasons for

constitutionalism, and taxation has to fit within that.

"Restraints against arbitrary and capricious legislation..."

[3:45]

AN HON. MEMBER: Capricious?

MR. BLENCOE: It's a nice word. It's appropriate.

"...the independence of the judiciary, legislative

checks on executive power, all are designed to secure for the

individual this basic right. Tax laws, no less than other kinds of

legislation, must be tailored and applied with strict adherence to the

letter and spirit of this right."

This tax law is not done within the confines of that basic principle of constitutional democracy, It's not.

Interjection.

[Mr. Strachan in the chair.]

MR. BLENCOE: I'll save that for another debate. We'll get

lots of opportunity in the next few years to talk about banks. However,

the banks have just announced their profits. Boy, they're still making

history, in terms of the profits they're making in this country.

They're also making history in terms of the homes they're taking away

from people. There has to some concern about the common good and the

common welfare and the general welfare in terms of the rights and

privileges of the banks and what they can do to British Columbians and

Canadians. That certainly is a very big moral question in British

Columbian and Canadian society. However, I don't want to get into that.

The member here sort of brought it up a little bit.

Interjection.

MR. BLENCOE: Thank you for those interesting statistics.

"Both because taxation so intimately affects every individual and because

it is heavily dependent upon administrative processes, the achievement of strict

equity in this field poses an unusually severe challenge." We recognize

that challenge. We know the government does face a difficult time in trying

to deal with taxation systems. Those of us who have been involved in the municipal

level of government know it all too well. There are certain members in the House

this afternoon on the government side who have been involved in that municipal

system. They know it's very difficult to introduce tax systems that are

fair, It's a severe challenge, but I think we're up to it. We must be

up to it. The taxation process and how much money we take from British Columbians

and how fairly we do it is a major source of discontent, of pain and suffering

for British Columbians, in terms of the real estate tax system. When they get

a tax notice based on what the computer said somebody's house down the road

sold for, at about 40 or 50 percent higher than it should have, and that person

on a fixed income had to pay the same kind of taxes, that's not fair and

it's not right — I'm going to say that over and over again in this debate

— particularly in this riding, which is the major home in Canada for those who

are retired. Those retired, elderly people did not work in Canada or in British

Columbia all their lives, so that they could have a single-family home all their

days, only to see a municipal tax structure which when it goes wrong creates

all sorts of pain and suffering for those on fixed incomes.

I know that those who are involved in the municipal system heard

those concerns nearly two years ago. I hope they will get up and talk

about it. I hope the first member for Surrey will indeed give us her

words of wisdom on this particular bill.

MRS. JOHNSTON: You mean you're not speaking forever?

MR. BLENCOE: No, no, I wouldn't want to do that to you.

Interjections.

MR. BLENCOE: I'm quite relaxed, Mr. Speaker.

I will go on to give the government the sensible words of wisdom

from the well-known commission on taxation done in 1967. The authors of

this report said: "We consider equity in tax law and tax administration

a prime test both of a sound revenue system and, more important, of a

truly functional constitutionalism." This act does not meet that sound

revenue system for municipal governments. It comes nowhere near that.

All it does is to allow municipal governments to shift around the load

to other property categories whenever they

[ Page 675 ]

like. It removes from the provincial government

responsibility for trying to share the problems and the load that

municipal governments face in terms of maintaining their operations to

acceptable safety standards.

This government is more and more — I mentioned it last time, and

I'll mention it again today — removing itself from financial support of

municipal operations. There has been a long-standing tradition in this

province that senior governments, particularly provincial, be

financially responsible to municipalities. We have seen them remove

themselves more and more from that. Later on in the debate I will get

into the McMath report, which talks about how we should be moving more

towards senior government taking over the responsibilities of education

costs and, of course, municipal costs. After all, they have far more

revenue sources than municipal governments, who have limited resources.

Unlike senior governments, they are not permitted to run a deficit.

Consequently, they have to balance their books, which I think is

laudable and something that the provincial government may wish to try

to do in the next four or five years. The difficulty they are creating

for this level of government, as they remove themselves from financial

support, has serious implications for all British Columbians. This bill

is just part of that withdrawal.

I want to go on to talk about constitutional democracy, economic

policy and taxation. Terrific stuff, Mr. Speaker, and all things that

this government believes it knows about, purports to support, and about

which it purports to be the only party in this House that knows

anything.

When the New Democratic Party was in government, it left this province in sound financial shape.

Interjections.

MR. BLENCOE: Oh, yes, we did. After 104 years of government

in the province of British Columbia there was a total deficit of $4

billion contributed by all parties. In seven short years this

government has raised that deficit to $12 billion. Mr. Speaker, they

need to listen to things like economic policy and taxation principles

because what they've done to the economy of British Columbia and the

previous financial base of this province is unconscionable. They have

got this province into one heck of a mess and they don't know how

they're going to get out of it. That's why they won't talk about the

budget. They're going to talk about anything they can but the budget,

because they know that when we get to it and do our analysis, it's got

all sorts of flaws in it.

AN HON. MEMBER: Your analysis has?

MR. BLENCOE: No, your budget, Mr. Minister.

I would like to remind this government, as I start on this topic of

constitutional democracy, economy policy and taxation, that they have

run the debt of this province up to $12 billion, nearly $5,000 debt for

every British Columbian. If this government purports to be the experts

in financial matters, Mr. Speaker, they have blown that reputation.

It's gone. So I think they should listen to things like economic

policy, taxation and constitutional democracy, because it might help

them in their deliberations. I'm going to quote from

section 16 of the

best-known report on taxation, which was done in Ontario:

"To say that there are limits to the appropriate scope

of government is not to deny that government must play a critically

important role in society, more particularly in economic life. Such a

denial would surely fly in the face of reality."

Indeed, there are at least five major economic objectives that are

so generally recognized as falling within the purview of government

that an enumeration is almost superfluous. These objectives can be

summarized as follows.

The Minister of Education (Hon. Mr. Heinrich) is looking rather

tired, but I hope he will listen to these general objectives, because

hopefully we all support them. These are the general objectives of —

how do I put this...?

MR. VEITCH: Sit down and think about it.

MR. BLENCOE: The Whip wants me to sit down and think about it. No, I don't want to do that just yet.

These are the objectives of usually civilized and progressive

governments in western democracy. I would hope that this government

still believes that it's part of western democracy and part of the

progressive, civilized western concept of constitutional democracy. I

hope they still believe in that. Here are the objectives: first, "a

high and stable level of employment." Well, I'm not so sure that that

objective is being met by this government. This particular bill, in

terms of its impact on the industrial property holders, will certainly

not help to achieve that high and stable level of employment. If this

government is serious about helping the industrial property holder,

they will introduce a brand new industrial policy and taxation system

that is not based upon what happens in the upland property. Some

developer may wish to sell that land for condominiums, and consequently

that industrialist has to pay taxes based upon what might happen in the

real estate market. That industrialist who wants to provide jobs.... In

this community at last count we had 93 industrial property holders,

most of them sound, family businesses. Because of the crazy real estate

tax system, all are facing huge assessments and huge increases in

taxes. This bill does not address that problem and it certainly does

not try to maintain that objective of maintaining a high and stable

level of employment.

[4:00]

That first objective "is not only essential to the most efficient

use of available productive resources but is a basic foundation of

human welfare and dignity." Taxation systems, even in such technical

financial documents that often seem to be far removed from things such

as common good, human welfare and dignity, should reflect such

principles. I'm hoping this government will think about that a little

more.

What's the next objective? "Reasonable stability of the general

price level, a fundamental condition for economic efficiency and highly

important to the achievement of equity and the protection of savings."

This is a very important principle. I would have to say that I have

evidence.... I'm sure many on the other side who have been involved in

municipal government know that in the last few years those savings,

particularly of people on fixed income and in the retired community,

have been heavily drawn upon to keep up with the escalation of property

tax. This bill does not endorse that particular principle. It does

nothing to achieve equity and the protection of savings, particularly

for those on fixed incomes like our senior citizens, handicapped,

veterans and people like that.

[Mr. Veitch in the chair.]

[ Page 676 ]

What's the third objective in economic policy and taxation? It's

economic growth, something we haven't seen in this province for a

while. It's defined as "a rising per-capita annual production of goods

and services, a process vital to continuing improvement in the standard

of living — improvement that makes possible wider choices over the

entire range of public and private goods and services." This is

something that we haven't seen much of in this province in the last few

years, despite what the government would like British Columbians to

believe.

What's the fourth principle? An equitable distribution of income,

something the current government doesn't like to talk about, because if

it did believe in an equitable distribution of income, it certainly

would not continue to prop up a municipal tax system that has nothing

to do with equity and fairness, Mr. Speaker.

Interjection.

MR. BLENCOE: Well, the member here says that no tax system

has. In some respects he's quite correct, but he and I know that the

real estate tax system is the worst of the lot. We do have taxation

systems that are far superior that could be introduced for municipal

purposes. This government really should seriously consider that.

I'm talking about the fourth principle, Mr. Speaker: "an equitable

distribution of income, necessary not only to provide incentives and to

ensure the basic right of all individuals to a minimum level of

economic and social well-being, but also to prevent undue

concentrations of private economic power and to lessen the severity of

cyclical swings in the level of economic activity." These are all

important principles, Mr. Speaker. They are all something that this

government should dust off and reconsider particularly in its taxation

policies, because it's not only Bill 7 that's created all sorts of

concerns for ensuring economic activity is stepped up, but, as you

know, Mr. Speaker, in that budget the government delivered you gave an

incredible kick in the teeth to the private sector — the private sector

that's supposed to bail this government out of its problems. They hit

them with horrendous tax increases and at the same time made dramatic

inroads into the public service, creating further unemployment,

particularly in this and the greater Vancouver regions.

Mr. Speaker, what's the fifth principle? It's a very important one:

"the promotion and regulation of competition." Now this government

would probably just emphasize the promotion of competition. It

certainly may not want to support the regulation of such competition,

because in these very right-wing times it's trendy to talk about

eradicating regulation under the guise of "freeing democracy" and

"freeing enterprise" and "freeing business" and "getting government off

the backs of people." That's what we hear all the time. Regulation is

necessary in a democratic society. Regulation is necessary in a society

that's made up of all economic and sociological tiers and backgrounds

of people.

AN HON. MEMBER: You'd take the rights away from people.

MR. BLENCOE: No, Mr. Speaker. We're not talking about taking

rights away. You're the government that's taking rights away. That's

quite clear. But, Mr. Speaker, regulations are there for a reason. They

are there to ensure that those who wish to participate in the

marketplace do so with some decorum, some concern for common good and

common welfare. That's why we have regulation. If you have a wide-open,

jungle kind of mentality, that is not part of a civilized society at

all.

This document was not written, I can assure you, by New Democrats.

It was written by the accepted economists of the time. The majority of

them would accept and promote the free-enterprise system. They are

saying that the promotion and regulation of competition is an important

principle in constitutional democracy. This government believes that

you remove all regulation and leave people to be subjected to the whims

and events of a laissez-faire, wide-open, competitive world. Well,

society has seen, over hundreds of years, the results of a wide-open,

unregulated, unfettered economic system and a private sector without

regulation. We know the abuses that take place. I can tell you now that

for instance, in the landlord-tenant area, taking off the rights and

privileges that tenants have under law and getting rid of the

regulations is not.... Oh, I know you're shaking your head, Mr.

Speaker. I'm a little off the topic, but it's part of the system I'm

talking about; that is, when you're talking about the taxation system,

you're talking about basic principles of constitutional democracy, and

regulation is one of them. I would urge this government to seriously

ponder that.

"These five objectives are the legitimate concern of government

because it has become clear that the market mechanism, unaided, cannot

be relied upon to achieve them in satisfactory measure. In particular,

the private market economy by itself is clearly incapable of assuring

stability in employment and price levels and of achieving an optimal

and balanced rate of growth." Important words for this government. "Nor

does the market economy of itself guarantee an equitable distribution

of goods and services. Some services, such as education, highways,

police and fire protection, confer such general social benefits that

they must be provided collectively." There seems to be a move by this

government.... That collective principle in constitutional democracy,

in terms of collecting taxes for the collective distribution of

services, seems to be alien to this government, but I would remind this

government that all constitutional democracies in the western world, in

the free world, endorse such principles.

"Others, such as welfare programs, are necessitated

both by humane considerations and by the need to maintain a high and

stable level of aggregate consumption. Finally, the susceptibility of

the private economy to monopolistic influences, whether in industry,

labour, agriculture or elsewhere, means that its effective functioning

must be the constant concern of government."

All these principles are basic to any government in the western

world, whether they be Social Credit, conservative or New Democrat.

We're all involved in the promotion and regulation of competition, in

the equitable distribution of income — or we should be, for the common

good. We all should be involved in ensuring there is fair and

reasonable economic growth, in encouraging reasonable stability of a

general price level. And I hope that in our taxation policies we all

try to encourage a high and stable level of employment.

"In the light of what are necessary objectives" —

those five I have outlined — "economic policy in all constitutional

democracies, the tax system takes on a particular degree of importance.

Taxation is of course

[ Page 677 ]

necessary as the means of financing all but

those very few government services" — the document uses the example of

electricity — "which can be priced like any private good and charged

directly to the user. But in addition, taxation, because it influences

the distribution of income, the level demand for goods and services and

the allocation of resources between public and private uses, can be an

invaluable component of policies designed to secure full employment,

price stability and balanced growth."

[4:15]

Here is the important statement that I would like to make sure

government members hear clearly: "The potential economic effects of the

tax system therefore make its functioning a matter of special concern."

I know there's been a fair amount of discussion about the variable mill

rate, and how it's not really an important bill, but it is, because

anything that's got to do with collecting. money from all citizens has

something to do with trying to ensure that it's done fairly, equitably

and evenly. The government of the day should, when it introduces a tax

bill, and within the terms of reference, show clearly that they are not

satisfied with the municipal tax system by creating exemptions in this

very bill. They should take on the responsibility of revamping the

whole process.

I'd like to go on to another important....

MRS. JOHNSTON: To the bill.

MR. BLENCOE: I'm speaking to the bill.

I'd like to get on to another topic. It's something I'm sure the

government will be interested in: equity in taxation; the principle of

equal treatment of equals. Supposedly that means that all citizens

under the law of British Columbia or Canada are equal. At times some

are more equal than others; we know that. The principle is that we

should have equal treatment of equals.

AN HON. MEMBER: We're not all equal, I'm telling you.

MR. BLENCOE: That's why we need government to ensure that

there is a balance between the unequals. I'm sure this government, when

it rethinks its priorities and policies, will reintroduce that kind of

balance.

"The basic rule of equity in taxation is the principle

of equal treatment of equals. The principle is basic because it's

derived from the equality of individuals before the law, which we have

already referred to as a fundamental right of man. Furthermore, it is

applicable to all types of taxation, since all taxes are ultimately

paid by the individual. To be sure, a substantial proportion of taxes

are paid in the first instance not by individuals but by incorporated

enterprises which have a large identity apart from their owners."

I'll quickly say again that this bill indeed separates that

corporate identity by

section 10, allowing the cabinet at will to make

special exemptions for those corporate identities. The principle in

taxation is that wherever possible you apply the principle in

constitutional democracy of equal treatment. This bill does not support

that basic principle of constitutional democracy.

"In the long run, however, corporations are simply

intermediaries for collecting revenues from individuals, whether as

consumers, owners or employees. In exceptional circumstances a tax may

be shifted in its entirety to the consumers of a firm's product or to

the owners of the enterprise or to the suppliers of labour and other

resources employed by the business. More commonly, the tax burden will

be shared among these interests, their proportion of sharing being

related to market conditions and to the period of time within which

shifting takes place. Whatever the case, the upshot is that since all

taxes are ultimately paid by individuals, the principle of equal

treatment of equals is always a relevant consideration, and its

application should look beyond the entity on which any tax is first

imposed to the individuals on which the burden of tax finally rests."

Equal treatment of equals is always a relevant consideration in your tax system, Mr. Speaker.

This bill has nothing to do.... I'm putting the government to sleep,

Mr. Speaker. I wish they'd wake up, because this is very important

stuff.

Interjection.

MR. BLENCOE: Good. I'm glad to hear it.

"In an imperfect world" — and we all know we live in one — "it

is quite obvious that the principle of equal treatment of equals can never be

realized fully." We admit that. It should be something you should aim for

as the ultimate, but you certainly aren't doing it in this bill.

" Even if one could assume general agreement as to what constituted the

total fulfilment of this principle, other objectives might conflict with equity,

objectives whose achievement was deemed by society to warrant marginal sacrifices

in equity." We don't have any marginal sacrifices in this current legislation

before us. There are few sacrifices on behalf of the people of British Columbia.

I would again refer my colleagues in government to consider the

principle of consensus through deliberation. They have a terrific

opportunity, through the UBCM and other collective methods that can be

used to bring municipalities together, They have a terrific opportunity

to withdraw this bill temporarily and show the UBCM what the

regulations will be, how they will be applied, and whether they will be

equal, fair or just, because there is some concern that your bill will

allow some municipal governments to transfer horrendous loads onto

particular categories. We want to ensure that that won't happen with

the regulations. We want to ensure that a municipal government that,

for instance, has a large part of its land and its land use, say,

occupied by an industrial base — therefore with an intense lobby that

could bring undue pressure to that municipal government to transfer the

whole tax load from the industrial property holder onto, say, the

homeowner....

AN HON. MEMBER: For shame!

MR. BLENCOE: "For shame!" that member says, but we have no

guarantee in this legislation that in the shifts that municipal

governments are going to be allowed to do, you won't have some

particular categories bearing the brunt of the municipal tax system.

Unless the minister can assure in the

[ Page 678 ]

regulations that that won't happen, I must continue to oppose this particular

section of the bill on that ground.

MRS. JOHNSTON: Did you defend that when you were an alderman?

MR. BLENCOE: Oh, yes.

DEPUTY SPEAKER: Hon. member, you'll have plenty of time

during different periods to discuss the bill section-by-section. The

Chair would appreciate you speaking on the principle of the bill.

MR. BLENCOE: Well, the principle of the bill is in the particular sections, but I will continue as best I can.

Interjections.

MR. BLENCOE: All I'm trying to do, as the minister has done

on Bill 9 — and he has taken, to give him credit, the constructive

criticism of the opposition and reconsidered that bill, and entered

into some consensus deliberation with municipal governments.... He has

temporarily taken that bill out of debate. I'm hoping that he will do

this with Bills 7 and 12. That's the intent. Also, obviously, through

the debate we give the opportunity for government to recognize that in

a constitutional democracy there has to be equity in taxation. This

particular bill has nothing to do with equity in taxation. So I'm just

trying to give this government some direction that maybe they can go in.

MR. LAUK: Show them the door.

MR. BLENCOE: Thank you, Mr. Member for Vancouver Centre.

Interjection.

MR. BLENCOE: Let's not get personal. Let's stick to the bill, the debate. Let's stick to the intent.

"To recognize these impediments" — that is, the shifts

in taxation — "is in no way to deprecate equity, but simply to face up

to the practical difficulties that beset its achievement. Such recognition also

points to at least one significant conclusion: namely, that over-reliance on

taxes whose ultimate burden is difficult to trace is highly questionable from

the standpoint of equity." There is indeed, by the fact that this government has introduced Bill 7, continuing

to be an over reliance on a tax system that really needs to be revamped and

rewritten. This is not satisfactory if you want to achieve equity in taxation

at the municipal level. That is a basic principle of constitutional democracy.

I know it sounds farfetched when we are talking about a variable mill rate to

talk about equity and fairness and constitutional democracy and the principle

of equal treatment of equals, but indeed they are important principles that

we should consider.

"In taxation, the principle of equal treatment of equals

has two broad dimensions. First, it is a bulwark of protection against arbitrary

and capricious treatment by tax authorities."I think there were some citizens of British Columbia who wondered about the

capricious treatment they received from the Assessment Authority a few years

ago, in terms of how they were going to pay their taxes for that particular

year.

"Second, it provides the principal cornerstone on the basis

of which taxes can be justified." Taxes, Mr. Speaker, have to be justified, and bills have to be justified in

terms of equity and equal treatment under law. It's true. It is absolutely

true. It's a basic truth.

"The first dimension of equal treatments of equals

requires very little elaboration. In legislation, the principle demands

that the overall classification of taxpayers into categories be

reasonable and just and that all taxpayers within a given category be

treated equally. Thus, if it is decided that a tax is to be based on

retail sales, the array of items subject to tax must be clearly defined

and the rate or rates must be assessed uniformly."

[4:30]

There is going to be no uniformity in the province of British

Columbia in terms of all municipalities. Before, even though it was a

poor system, at least everybody knew what the formula was, what level

they would be taxed at and what would happen for each particular

category. Under this bill, every year it's going to be a guessing game.

What will council do with my taxes this year, because I don't have a

formula that I can count on? The formula will be subject to the whim of

the current council. So if a pro-development council gets elected, you

know what's going to happen. There's going to be a transfer of taxes to

other categories that the pro-development lobby would support. It's

going to happen.

We need a system that won't change from year to year. I'm not

wanting to speak heavily in favour of the old system, but at least we

knew what levels we were going to get. We knew, for instance, that

residential properties would be taxed at 10 percent of their value.

Boy, I can remember all the levels. It was 10 percent for residential.

I believe it was something like 24 percent for businesses.

AN HON. MEMBER: It was 24.5.

MR. BLENCOE: Thank you, 24.5. Industrial property, which was a bit higher, was over 30 percent, I don't know exactly....

AN HON. MEMBER: It was 29.

MR. BLENCOE: No, it was a little higher than 29, I think. At least those levels were established.

MR. LAUK: On a point of order, the rules of this House have quorum requirements. I wonder if Mr. Speaker could ring the bell.

DEPUTY SPEAKER: The Speaker will do a count.

The Speaker recognizes a quorum, and the hon. member continues.

MR. BLENCOE: What is a quorum?

DEPUTY SPEAKER: Ten, including the Speaker.

MR. LAUK: Ten, including the Speaker? Is that the rule? And

including the Minister of Agriculture and Food (Hon. Mr. Schroeder) as

well? Don't we have any standards at all?

DEPUTY SPEAKER: And including the second member for Vancouver Centre (Mr. Lauk).

[ Page 679 ]

MR. LAUK: Now I know we've reached the depths of depravity.

DEPUTY SPEAKER: Has the hon. member concluded his debate?

MR. BLENCOE: Oh, no, Mr. Speaker. That's just my

preamble.

We may laugh and we may joke about Bill 7 and Bill 12 being perhaps

the most innocuous pieces of legislation; but to the contrary, any

legislation that purports to resolve taxation problems from

municipalities and yet really doesn't do it is serious business. That's

why we're taking a little bit of time with this legislation to ask the

government to seriously look at it and get into a process of reasonable

deliberation and consensus-seeking with the UBCM and others.

I was talking about the equity in taxation and why it's extremely

important. The first dimension of the principle of equal treatment of

equals requires a little elaboration. "Here it serves as the master

guideline of tax legislation and administration. In legislation, the

principle demands that the overall classification of taxpayers into

categories be reasonable and just and that all taxpayers within a given

category be treated equally." I already stated that, but I wanted to go

over that again. Thus, if it is decided that a tax is to be used based

on.... Oh, I've already given you that little bit of information too.

AN HON. MEMBER: Where are your colleagues? They've all deserted you.

MR. BLENCOE: Mr. Speaker, my colleagues know that they can leave this particular bill in my hands and we can debate it accordingly.

"The second dimension of the principle of equal

treatment of equals, which involves the justification of taxes" — boy,

that would be nice if the government had to justify taxes — "is like

the first in that it is difficult to achieve in practice, but

unfortunately unlike the first in that its elaboration in theory is

highly complex. We can at least, however, begin on a simple note. It is

this: from the premise that equals should be treated equally it is

generally conceded that unequals should be treated unequally. At this

point it will be observed that two time-honoured principles apply to

the unequal treatment of unequals: namely, the principle of benefits

received and the principle of ability to pay."

Mr. Speaker, there is nothing in this legislation that talks about

the ability of the taxpayer to pay municipal taxes. It's something this

government has to address.

[Mr. Strachan in the chair.]

The principle of the ability to pay: I would like to go into that in a little depth, because it's important.

MRS. JOHNSTON: The principle of the bill!

MR. BLENCOE: That's important in this bill, because it isn't

there. It's tinkering; it's band-aid; it's got nothing to do with the

principle of the ability of municipal taxpayers to pay. It's something

that I'm hoping this government will reconsider in the next year or so.

"Under the principle of the ability to pay, equity

requires the equal treatment of persons possessing the same capacity to

pay taxes. Ability to pay is appropriate for financing that great

portion of government expenditure where it is either impossible or

inappropriate to allocate cost among taxpayers in accordance with

benefits received."

That's an important principle, Mr. Speaker. "The application of the

ability principle, however, requires agreement on some generally

accepted criteria by which capacity to pay taxes may be measured."

Mr. Speaker, I have suggested to this government that there are some

criteria they can achieve through discussion with the UBCM. For certain

services that are provided to municipalities, they could pay for those

services by a taxation system that is based upon the ability to pay.

It's an important principle, and I continue to emphasize it.

"Under the early versions of the ability-to-pay principle in

sixteenth-century Europe, and later in North America, wealth or

property was considered the most appropriate index of tax-paying

capacity." It was, at one time, considered that. As I said earlier,

municipal governments have grown and evolved beyond what they

originally were established for. Consequently the ways that

municipalities paid for themselves should be also allowed to evolve,

and we should have a new system that allows them to pay for their

services. It is interesting that they go back to sixteenth-century

Europe in terms of where we achieve the property tax system currently

in place in municipal government. I know it's been changed, tinkered

with and amended over the years, but basically we have the same system

that was in place those many, many years ago. If we consider ourselves

to be a progressive and forward-thinking province, we would admit that

we've got to rethink and retool this particular municipal tax system,

and not leave in a system that was put in place many, many years ago

and no longer reflects the current needs.

Interjection.

MR. BLENCOE: Well, I'm giving them the benefit of the doubt. I'll do that today.

"A little later consumption or spending was singled out as most

suitable." Mr. Speaker, I'm afraid I'm going to get into some history

here in terms of where the property tax system came from. Mr. Thomas

equity required that "people be taxed on the basis of what they used up

of their country's product, not on the basis of what they contributed

to it." In our present generation, the well-known economist at the

University of Cambridge, Nicholas Kaldor, talks about the expenditure

tax, regarding consumption as an equitable criterion of ability to pay.

"As a matter of general practice, with the increase in

industrialization of the past century, income has become widely

regarded as the best index of tax-paying capacity."

This bill has nothing at all to do with income or the ability to pay

according to one's income; indeed, it's just another crescent wrench to

a system that's faltering and falling apart. Unless we take time with

the UBCM to seriously try to put in place a fair and equitable system

based upon the ability to pay, municipal governments — the basis of

constitutional democracy in Canada — w ill be in serious trouble. Their future will be jeopardized.

[ Page 680 ]

MR. CAMPBELL: Are you saying all property taxes should be based on the ability to pay?

MR. BLENCOE: No, no. If you were here earlier, you.... I was talking about a two-tiered system. You missed that part of my debate.

MR. CAMPBELL: Repeat it.

MR. BLENCOE: You really don't want me to repeat it, do you?

MR. CAMPBELL: Yes, we want to hear that again.

MR. BLENCOE: I'll tell you what, I'll try to get to that a little later on, okay? I'll try to refresh....

MR. R. FRASER: Tomorrow.

MR. BLENCOE: Okay, tomorrow.

"The case for income as a better index of ability to

pay than either consumption or wealth rests on the fact that income is

a more comprehensive index than the other two.

That's a well-known fact.

"Income, after all, comprises both consumption and

saving, or increases in wealth during a given time period. Against this

it can be argued that income is inferior to consumption precisely

because it is too comprehensive. Because an income tax applies to

saving, it reduces the capital which an individual can invest, and the

effect is compounded when, at a later period of time the same

individual will be taxed again on the interest from his reduced

investment."

But it's not as bad as the scenario we had and continue to have when

people have to pay municipal taxes based upon a speculation system in

which somebody happened to sell their house in their block for an

inflated price. They have to pay taxes according to that system. Those

who are retired have to eat into their savings.

MRS. JOHNSTON: Have you got War and Peace there?

MR. BLENCOE: No, we don't need to go into War and Peace. We

all know that on this side we're for peace and on the other side you

declared war on the people of British Columbia. We don't have to talk

about it; we know it.

Interjections.

[4:45]

MR. BLENCOE: Perhaps we can find room for them over there. We

certainly would like them to move, that's for sure. We don't want them

over here either.

"By contrast to wealth, the taxation of income

recommends itself again in that income is more universal than wealth

and a better index of an individual's standard of living."

MRS. JOHNSON: Who said that?

MR. BLENCOE: A very important commission on taxation done in 1967 and recognized as one of the most....

MR. PARKS: It's the worst piece of....

MR. BLENCOE: It's the first time he's ever heard of it, but now it's the worst piece.

MRS. JOHNSTON: You want us to go backwards, don't you?

MR. BLENCOE: No, I want you to look at something that was

done quite a few years ago that was recognized as a very important

document in terms of taxation.

AN HON. MEMBER: Who's the author? Is it Carter?

MR. BLENCOE: Carter? No, that report is down here.

Before I was interrupted I was trying to give evidence to this

government that it is far better to base your taxation system upon

income.

Interjection.

MR. BLENCOE: Well, those on fixed income have already worked

in this country and they expect to hold on to their homes. Under the

current financial arrangement for municipalities and the real estate

property tax system, that future is jeopardized in terms of holding on

to their homes. There's no question about that, and that's something

the government should seriously ponder over the next year or so.

Before I was interrupted by various members, I was trying to give

you some thoughts about the principle of the ability to pay and why the

municipal tax system or this new bill has nothing to do with the

ability to pay.

MR. CAMPBELL: Words of wisdom.

MR. BLENCOE: They are indeed — something this government

really should listen to. There are many words of wisdom being spoken.

Unfortunately you don't appear to be willing to listen, so we have to

take time and effort to ensure that if we give you enough of it,

perhaps....

Interjection.

MR. BLENCOE: If that back-bencher had any influence on

cabinet, we know that this bill would be withdrawn today. They would

reconsider it and at least discuss with the UBCM some of the serious

implications for municipalities. Unfortunately that's not going to

happen, I don't think.

I'll quote from the report again: "We concur in the widely accepted

practice that takes income as the prime index of taxpaying capacity." I

keep emphasizing that particular component, and I would hope that

perhaps it would start to sink in on the minister and other members of

this government that income should be the prime index of tax-paying

capacity. It certainly doesn't have anything to do with this particular

bill or the real estate tax system that I have had the unfortunate job

of trying to administer in the city of Victoria for a number of years.

Interjection.

MR. BLENCOE: Mr. Speaker, does the member have a problem?

[ Page 681 ]

AN HON. MEMBER: Only when you're speaking to the gallery.

MR. BLENCOE: Oh, I see. Okay.

Tax-paying capacity should be based upon one's ability to pay and one's income. I think we all accept that.

MRS. JOHNSTON: No way.

MR. BLENCOE: No? You don't accept that? Well, that's

unfortunate, because what it means is that you're going to continue to

support a tax system for municipal purposes whereby those who don't

want to sell their homes, particularly those on fixed income, will

continue to pay taxes based upon real estate prices. The majority of

those people don't want to sell their homes. That's the system you're

continuing to support. You have a responsibility, in the estimation of

our party, to totally revamp that system.

"It has been only in the twentieth century" which I

think this government believes it's in — "that broad support has

developed for the idea that to conform to ability to pay, a tax system

must be progressive. Individual taxes in fact differ greatly in the

degree to which they conform to this notion, but the idea in question

is most effectively embodied today in the personal income tax. The

personal income tax generally incorporates basic exemptions that

recognize minimum income standards below which no tax should be levied."

Maybe that's something we should take a look at for the municipal

level. I know you give an increased homeowner grant to those on fixed

incomes, but many of them are still affected by increasing tax levies.

"These exemptions can be tailored to recognize the

need for minimum levels of income and the existence of different family

responsibilities for maintaining dependents. Above the basic exemption

level, rates of personal income tax can be made to vary in increasing

proportion as the level of income rises. Thus it is that the personal

income tax is widely acclaimed as the tax most in accord with the

principle of ability to pay."

There is no reason why this government, that has a mandate for a few

more years, could not take a serious look at introducing a taxation

system for municipal purposes based upon the ability to pay. There's no

reason why you couldn't do that, instead of trying to con British

Columbians that what you're doing through Bill 9 is going to save them

from the inequities of the municipal tax system. That's not what you're

going to do at all, but you've got time to do that. Perhaps you should

take the opportunity to do so.

MR. CAMPBELL: Thank you.

MR. BLENCOE: You're welcome.

MRS. JOHNSTON: Have you stopped?

MR. BLENCOE: No, I'm just trying to find some useful

ability-to-pay prescriptions here that might have some impact on these

government members, but I know it's difficult....

MR. COCKE: On a point of order, our member for Victoria would

have been through with his speech many hours ago had it not been for

these continuous interruptions coming from the other side of the House.

I wonder, Mr. Speaker, if you might admonish that group over there with

respect to the successor to Charles and maybe he could get on with it

and finish his speech. He's making a marvellous presentation and they

should listen, not be making all these....

DEPUTY SPEAKER: Points of order are also considered an interruption.

Interjections.

MR. BLENCOE: I find that difficult to do with this

government, because what you're doing has nothing to do with good

government. If you listen to some of the principles involved in what

I'm trying to state today, what you're doing has little to do with good

government or government in the interest of all British Columbians. The

first member for Surrey (Mrs. Johnston) should think seriously about

that.

The writers of this well-known document on taxation "strongly

support the principle of ability to pay as a cornerstone of sound

taxation, and believe that income provides the most reliable, but by no

means sole, index of tax-paying capacity." They readily admit that "the

principle and so-called 'law' from which it is often derived provide no

guide as to the most appropriate rate of progression. The ultimate

sanction for any given pattern of tax progression is the prevailing

consensus of ethical judgment as to what constitutes a socially

desirable distribution of the nation's income and wealth." Municipal

tax structures have nothing at all to do with any of those kinds of

principles.

To reiterate, I think this government should consider such

principles an ethical judgment that, for municipal purposes,

distributes the load in terms of taxes collected to pay for municipal

operations. Democratic principles in the financial arrangements of

municipalities demand that. Many times over the years we have heard

about the problems in the municipal tax system. We have heard of groups

having to get up and fight it, trying to change it and tinker with it.

We heard government after government say, "Yes, it's a problem but we

don't really want to try to come to grips with it in an overall sense;

we'll just play around with it." This government is carrying on that

long-standing tradition of just tinkering with the municipal system.

We as a party are quite prepared to work with this government.

Interjection.

MR. BLENCOE: The member doubts that. We're quite prepared to

work with this government on things like the common good and the common

welfare. We're quite prepared to work towards equity in taxation —

absolutely, unequivocally prepared to do that. If the government wishes

to strike a special select committee on the municipal tax system to

report in a certain period, the New Democratic Party would participate

in that particular committee. If the government is prepared to consider

seriously major changes to the municipal tax structure, to look at

equity and the ability to pay municipal taxes, we are prepared to

participate in that. That

[ Page 682 ]

offer is there for the taking. We are prepared to do that, if you are prepared to open that door.

Interjection.

MR. BLENCOE: Write you a letter?

Interjections.

MR. BLENCOE: Allowing the members to have their own discussion. I welcome it.

I said before, and I want to repeat it, that the ultimate sanction

for any given pattern of tax progression is the prevailing consensus of

ethical judgment as to what constitutes a socially desirable

distribution of the nation's income and wealth. Mr. Speaker, these are

important principles that we should try to aim for. I know it's a

challenge, but I think we're up to it. I hope we are. After all, in

this province there's nowhere else people can go to try and meet that

difficult challenge. Certainly, in our estimation, Bill 7 does not meet

the challenge of the antiquated and unfair taxation system that

municipal governments currently have to administer.

[5:00]

"Without undertaking to probe the depths of this

consensus, we think it appropriate at this juncture to suggest two

guidelines" — and this is the report again — "that we believe are

important considerations on making social judgments on progressivity.

The first is that the concept of ability to pay, rather than dictating

the progressivity of any given tax, embodies instead the more general

notion that the tax system should be moderately progressive as a whole."

This bill, in its attempts to be a panacea, has nothing to do with progression as a whole.

"The second is that government expenditures, which

themselves affect the relative position of individuals, should be

considered along with taxes in determining what constitutes overall

equity."

I know that appears to be funny for certain back-benchers, but it's

something that the government should take into consideration when

considering taxation law in terms of constitutional democracy, which I

believe we still have in British Columbia — I hope we still have it.

This report attempts to show that "different taxes place rather

different burdens on individuals and families with different levels of

income." There are property taxes, motor vehicle fuel taxes and retail

taxes, to name some. "Each absorbs rather different proportions of

family income depending on the size of that income." But the real

estate tax system does not absorb the proportion of family's income

based upon the ability to pay. It absorbs it, and again I repeat what's

happening in the real estate industry, the assessment authorities,

computer analysis of what XY Real Estate Co. is getting for the house

on your block.... The more I repeat how that particular system

works, the more it seems quite ludicrous that this government would

continue to support such a system.

"Such taxes, of course, cannot take into account varying personal and financial circumstances."

Certainly the municipal tax system has nothing to do with any

personal financial circumstances families might find themselves in.

"This suggests to us that the personal income tax,

which can be tailored to take relatively precise account of such

circumstances, has a particularly critical role in helping to achieve

equity, and that the burden of the other taxes on individuals and

families provides a rough but useful guide to the desirable degree of

progressivity in personal income tax rates."

Even though no one likes any taxation system, systems that are based

upon the ability to pay draw closer to equity in a constitutional

democracy. That's basically what the authors of this report are trying

to say.

Before I get onto some other learned documents and reports on

taxation systems, I'd just quickly like to go over some of the other

principles of taxation and highlight them. I won't go into them in

depth. As I said, equity under the law is the prime but by no means the

sole characteristic of a good tax system. It certainly, however, is the

prime characteristic. Bill 7 has nothing to do with equity at all. But

there are nine other principles that are important in introducing

equity into any taxation system. These other principles should form the

basis of a sound revenue structure. I hope that this government, in the

next few years, will indicate to the people of British Columbia that

they have a handle on a sound revenue structure so that they can give a

sense of hope to all British Columbians that they're not going to have

increased debt in this province. Some of these principles are derived

from equity; others have to do with efficiency in financial or taxation

systems.

Mr. Speaker, I would like to quickly indicate what those other nine principles are.

MR. COCKE: What's your hurry?

MR. BLENCOE: I'll do a little bit of background.

Mr. Speaker, there are nine, apart from the ones that I've already

given you today: (1) adequacy, (2) flexibility, (3) elasticity,

(4) balance, (5) neutrality, (6) certainty — there's nothing certain about

this bill, I can tell you that — (7) simplicity, (8) convenience,

(9) economy of collection and compliance. Those are all important

principles of taxation, other than the ones that I have tried to

outline for this government today. I won't go over those others I've

already outlined.

Now what do I mean by adequacy as a principle in taxation? Any

taxation system must be capable of providing a flow of funds that a

government deems appropriate in any given period. The principle of

democracy can become highly relevant when the relative merits of grants

and taxes are discussed in connection with provincial and municipal

revenue systems. Adequacy in terms of predicting, profitably and

accurately, the financial requirements to any level of government is a

basic principle of the taxation system. Mr. Speaker, if we ever get

back to the budget debate, I think that there'll be members on this

side who will show that there are some basic flaws in the figures in

the budget you have delivered in terms of your predictions and your

requests for tax increases.

The second principle, other than the ones I've already discussed

today, is flexibility. Flexibility means that a tax system should be so

constituted that government, by discretionary action, can readily

increase or decrease the flow of tax funds in response to changing

circumstances which can stem either from consideration of expenditure

requirements or economic policy. Obviously some taxes, such as those on

property and on personal income, are more flexible than

[ Page 683 ]

others in that the rates and alterations can be graded so as to

accommodate small as well as large changes in revenue requirements. The

principle of flexibility can thus be deemed to be satisfied if a

revenue system is comprised in part of flexible taxes.

Elasticity is the third one. The principle of elasticity is closely

related to those of adequacy and flexibility. This principle requires

that a revenue system be composed in part of taxes whose yields respond

closely to changing economic circumstances, without deliberate changes

in rates. It is important that the principle be fulfilled for two

reasons. First, elasticity enables government to meet rising service

demands occasioned by economic growth — if we ever get any in the

province of British Columbia — without the disturbance of frequent rate

changes. Secondly, elastic tax yields are an important adjunct of

fiscal policy in that they can serve as automatic stabilizers, leaving

a greater proportion of income in the private sector in times of

adversity and dampening inflationary pressures in times of prosperity.

MRS. JOHNSTON: Who said all that?

MR. BLENCOE: These learned ladies and gentlemen of the commission.

MR. NICOLSON: George Bernard Shaw said that. Don't you remember that?

MR. BLENCOE: George!

I will go back at another hour to talk about the remaining

principles of taxation for the government to consider, but I would like

at this time to give this government the opportunity to consider a

report by the B.C. School Trustees' Association called the "A Taxation

Report to Business."

AN HON. MEMBER: I've got that one.

MR. BLENCOE: Yes, you've got it. It's a good one, and I want

to put it on the record of this debate. It is an important document in

terms of local taxation systems.

[5:15]

[Mr. Pelton in the chair.]

Mr. Speaker, I will go through this report and try to indicate to

the members that there are many things in here that they should

consider in terms of Bill 7. I think the UBCM and many municipalities,

along with the B.C. School Trustees' Association, are telling this

government that they really want to know what the regulations will be

behind the various pieces of legislation you've introduced. They would

like some time to meet with this government before they pass the bills

to discuss the various regulations that will follow. They are very

tired of always having to react after the fact, and of course that is

not really good in terms of coming up with better ways to administer

our municipalities or schools.

I refer back to trying to achieve decisions by consensus. The

various pieces of legislation that I have had the privilege to debate

so far really shouldn't be in the House at this stage, because there

has been no consensus obtained by those to be affected by the various

pieces of legislation. The UBCM, the school trustees and the regional

districts — vis-à-vis Bill 9 — would certainly like the opportunity to

meet with this government to try to achieve some consensus and perhaps

come up with an intelligent answer to the problems of the taxation

system in place at the municipal level.

This report given by this trustees' association is an analysis of

property taxation policy in the province of British Columbia, and it's

a good report. The report does not defend education spending, nor is it

politically motivated. The trends of property taxation that are

identified are decades old and as such cannot be uniquely associated

with any political party. Indeed, much of the remarks I have made today

in terms of asking this government to look at the principles of

constitutional democracy and the principles involved in taxation do not

reflect any particular political viewpoint — New Democrat or Social

Credit. They are basically principles that have been established over

hundreds of years of constitutional democracy. Consequently I think we

can all support them and work towards achieving them once again in this

province.

In 1982 the provincial government assumed the right to tax business

and industrial property directly. They took that right. It wasn't done

particularly in