1975 Legislative Session: 5th Session, 30th 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)

FRIDAY, FEBRUARY 28, 1975

Afternoon Sitting

[ Page

259 ]

CONTENTS

Afternoon sitting Routine proceedings Budget address. Hon. Mr. Barrett —

Special Funds Appropriation Act, 1975 (Bill 23). Hon. Mr.

Barrett.

Introduction and first reading — 279

Succession Duty Amendment Act, 1975 (Bill 24). Hon. Mr.

Barrett.

Introduction and first reading — 279

British Columbia Hydro and Power Authority

(1964) Amendment Act, 1975 (Bill

25). Introduction and first reading — 279

School Tax Removal Act (Bill 26). Hon. Mr. Barrett.

Introduction and first reading — 279

British Columbia Railway Company Construction Loan

Amendment Act, 1975 (Bill 27). Hon. Mr. Barrett.

Introduction and first reading — 279

Assessment Authority of British Columbia Amendment Act, 1975 (Bill 28). Hon.

Mr. Barrett. Introduction and first reading — 279

Corporation Capital Tax Amendment Act, 1975 (Bill 29).

Hon. Mr. Barrett. Introduction and first reading — 279

Gasoline Tax

(1958) Amendment Act, 1975 (Bill 30). Hon. Mr.

Barrett.

Introduction and First reading — 279

Gasoline Tax

(1948) Amendment Act, 1975 (Bill 3 1). Hon. Mr. Barrett Introduction

and first reading — 280

Motive-Fuel Use Tax Amendment Act, 1975 (Bill 32). Hon. Mr. Barrett. Introduction

and first reading — 280

Coloured Gasoline Tax Amendment Act, 1975 (Bill 33). Hon. Mr. Barrett. Introduction

and first reading — 280

The House met at 1 p.m.

Orders of the day.

HON. D. BARRETT (Premier): Mr. Speaker, I move that the

public accounts for the fiscal year 1973-74 be referred to the

Select Standing Committee on Public Accounts and Economic

Affairs.

Motion approved.

HON. MR. BARRETT: Mr. Speaker, I move that the report of the

comptroller-general, pursuant to provisions of the Audit Act,

chapter 22, RSBC (1960), be filed.

Motion approved.

ESTIMATES OF SUMS REQUIRED

FOR THE SERVICE OF THE PROVINCE

Hon. Mr. Barrett presents a message from His Honour the

Lieutenant-Governor: Estimates of Sums Required for the Service

of the Province for the fiscal year ending March 31, 1976,

including

Schedule A.

Hon. Mr. Barrett moves that the said message and the

estimates accompanying the same be referred to Committee of

Supply.

Motion approved.

HON. MR. BARRETT: Mr. Speaker, I move that the Speaker do

now leave the chair for the House to go into Committee of

Supply.

BUDGET ADDRESS

HON. D. BARRETT (Minister of Finance): Mr. Speaker,

this is the third year now that I have had the privilege and

pleasure of presenting our government's budget to this

Legislature.

In August of 1972 the citizens of this province entrusted

the New Democratic Party with the responsibility of bringing a

new government to British Columbia — a government committed to

work for a real political, social and economic equality for the

average wage-earner, the old-age pensioner, the widow with

small children, local small businessmen, the farmer and

residents in the regions neglected in the past.

The people of British Columbia wanted a government which would not be afraid

to challenge the status quo and to implement basic reforms, even though such

reforms would be unpopular with and opposed by those with a vested interest

in preventing change.

I am proud to say there has been widespread support for

these new and responsible policies of economic and social

reform. Our budget for the 1975-76 fiscal year has been

designed to achieve greater economic equality and social justice

in British Columbia.

Before discussing the general state of our economy and the

budgetary intentions for 1975-76, I want to review briefly some

general philosophical considerations which underlie the

development of programmes and policies by this social

democratic government.

It is the goal of this government to direct British

Columbia's economy toward the needs of all the people, rather

than those who possess power because of their wealth or

influence. Our government is committed to win the long-term

fight to rout out inequality and to achieve a humane society

which responds, through the democratic process, to the actual

needs of all our citizens.

The essence of this social democratic government is to

promote the equality of the human condition. This objective to

seek greater equality for all British Columbians is the common

theme in all of this government's policies. It is evident in

our health and social development programmes, in our

development goals for the provincial economy, in our new

agricultural income assurance programmes, in our emphasis on

providing housing accommodation, and in basing our taxation

policy, to the extent possible, on the "ability to pay"

principle in order to protect those with lower incomes and

those on fixed incomes.

I want to talk about the British Columbia economy, Mr.

Speaker, just for a few moments. The British Columbia economy

made a number of important advances in 1974. The gross

provincial product is expected to reach $16.2 billion at

current prices. This is 17.1 per cent higher than the 1973

level. Although the real growth and real output was somewhat

lower than in 1973, preliminary estimates indicate the real

growth will be around 3 per cent in 1974. Certainly, this

performance compares favourably with rates of growth being

experienced elsewhere in Canada and substantially exceeds the

growth in many other industrialized countries.

Although most sectors of the economy performed well in 1974,

there was a marked slow-down in the lumber component of the

forest industry. Mining production is not as buoyant as last

year, primarily because of slackening demand in Japan and the

United States.

The total personal income in 1974 is expected to amount to

$12 billion. This is 16.7 per cent above the 1973 level. The

average weekly earnings as measured by the Industrial Composite

wage index is estimated

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at $195 in 1974, compared with $178 in 1973. I would point

out to Members that the most recently available data indicates

that, for the first time, family income in British Columbia has

replaced Ontario as the highest in Canada.

The rate at which prices are rising continues to be a matter

of great concern to the government. I don't have to tell the

Hon. Members that rapidly rising prices are an international

phenomenon at the present time. Indeed, the present

year-over-year rate of close to 12 per cent in Canada is

somewhat lower than is being experienced in many other

countries. This does not mean that we can be complacent about

the problem.

In 1974 the underlying strength in the provincial economy is

reflected in data which have now become available. The value of

retail trade in British Columbia grew 17 per cent in 1974 to a

record level of $5.5 billion.

The value of factory shipments in all British Columbia

plants rose, in 1974, to over $7 billion, an increase of 16 per

cent over 1973, attesting to the strength and resilience of our

provincial economy.

The forest industry has maintained a favourable overall

position due to the strength of the pulp and paper sector. Of

particular interest is a year-to-year increase of over 32 per

cent in the investment expenditures of the forest industry — 32

per cent in one year.

Mr. Speaker, there will be a supplement to the budget to

share with some of the Members, a supplementary page, which

will indicate the capital and the repair expenditures in the

Province of British Columbia.

Some Members of this assembly seem to be under the

impression, I think unintentionally, that things have not been

going well in British Columbia in terms of private and public

investment. So for their information primarily, as well as for

the people of British Columbia, I'd like to share with you the

information that the overall increase in investment is over 16

per cent in one year, but in the area of manufacturing, where

both private and public sectors are involved, private and

public investment in British Columbia in manufacturing has gone

up in one year, under this democratic socialist government, by

29 per cent. Mr. Speaker, that's bad news for the

doom-and-gloom boys.

SOME HON. MEMBERS: Hear, hear!

HON. MR. BARRETT: Despite the fall in world copper

prices during 1974, the value of British Columbia mineral

production rose 12 per cent.

Farm cash receipts in 1974 increased an estimated 25 per

cent, Mr. Speaker. After our land bill, farmers increased their

incomes by 25 per cent in one year.

In a year when the tourist industry in North America experienced substantial

difficulties, our province's popularity as a tourist destination remained high,

with the result that British Columbia's tourist industry is estimated to have

experienced a growth in receipts of 15 per cent, bringing these receipts to

a new high of some $760 million

AN HON. MEMBER: Hear, hear!

HON. MR. BARRETT: Mr. Speaker, as I've mentioned, the

capital investment is up by 18 per cent, which is equal to

$2,161 on a per capita basis, which exceeds the federal norm —

the national norm — of $1,765. We are over $300 above the

national per capita investment level in industry and

development in this province.

These investments had an important effect on creating jobs

for our province's labour force — a labour force which,

incidentally, is a faster growing labour force than that of any

other region in Canada.

To an important degree, the economic performance in British

Columbia in 1975 depends upon the economic prospects of our

trading partners. It is expected that the pulp and paper sector

of the provincial economy will continue to expand. Indications

are that the private and public investment in the province will

continue at an encouraging level. Indeed, the budget I am

submitting to this House today ensures that the British

Columbia government will play an appropriate role in this

regard.

I anticipate 1975 will see continued growth in the British

Columbia economy. Most importantly, we can expect inflation to

moderate from the present level, while real growth will at

least match the level of around 3 per cent forecast for Canada

as a whole.

Before reviewing our revenue and expenditure position, both

with respect to the present fiscal year and the 1975-76 fiscal

year, I would like to deal with a number of important

federal-provincial subjects.

Since our government came to office in 1972, steps have been

taken to break down the many barriers erected by the former

administration to reflect fully the fact that British Columbia

is a part of Canada.

Two meetings with federal Members of Parliament from British

Columbia were held in the last year, which allowed an

opportunity for our government for express its point of view on

a number of important matters affecting British Columbia and

which would allow the federal Members of Parliament to raise

certain matters relating to their constituents in a federal

context. I am appending to this budget four position papers

that I presented at such a meeting on September 24 on the

subjects of the federal budget, resource taxation, health

policy, federal ferry policy and west coast tankers.

Two of these subject matters are deserving of more detail.

The threat of oil pollution resulting from

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increased tanker traffic off British Columbia's west coast

has been of great concern to our government, We have made

strong representations and have requested the federal

government to seek alternatives with the United States

government to the proposed Alaska oil tanker route which is

scheduled to go through the straits of Georgia and Juan de

Fuca.

The British Columbia government proposed the transporting of

oil by rail as a real alternative to ocean tankers.

Notwithstanding the fact the federal government, after

considerable delay, agreed through its own preliminary studies

that the proposal put forward was feasible, it has still

refused to study it in a serious way with the aim of presenting

an alternative to the United States government. We will

continue to make strong representations to the federal

government, arguing that other alternatives to the increased

use of tankers along our shores must be found. In addition, we

will stress a comprehensive accident-prevention and oil

clean-up strategy as an essential ingredient to protect British

Columbia's coastal waters.

The second matter arises as a result of the federal budget

brought down in November of last year by the federal Finance

Minister (Hon. Mr. Turner). You will recall that natural gas

producers in British Columbia curtailed their operations in

northern British Columbia, which subsequently created an

increased shortfall in natural gas delivered in the United

States. The effects of the federal government's action caused

dislocations in the northern part of our province.

The federal government insisted that, in order for the

multinational oil companies to start up their operations again,

the British Columbia Petroleum Corp. should substantially

increase the price paid to the companies. This we refused to do

since prices had already been negotiated in good faith at arm's

length and without any coercion between the British Columbia

Petroleum Corp. and the natural gas producers. Furthermore, Mr.

Speaker, British Columbia had been following the policy already

established by the federal Minister of Energy, Mines and

Resources (Hon. Mr. Macdonald). Notwithstanding the fact that

the federal budget contradicted the federal Minister's policy

as announced by the federal Energy Minister, another Macdonald,

we attempted to seek a compromise.

We agreed that the federal government should receive a

share of the revenues derived from the sale of our natural gas,

but we did not want the federal government's share to be hidden

in the pockets of the multinational oil companies.

Mr. Speaker, I have said on a number of occasions, and I

repeat again: we believe the benefits of the God-given

resources in this country should be shared with all

Canadians.

SOME HON. MEMBERS: Hear, hear!

HON. MR. BARRETT: We believe that the non-renewable energy

sources of oil and gas in this country should be totally under

public control and public ownership so that all Canadians can

benefit as we develop a national energy strategy.

Mr. Speaker, I repeat: I will support any federal government

energy policy that says first, above everything else, that the

control and ownership of gas and oil should be in the hands of

the Canadian people. If that is accomplished by the federal

government, we in British Columbia will cooperate fully with

that programme.

But we have not had that leadership from Ottawa. Thus we

said, through our petroleum corporation, that we must maintain

control of the destiny of the use of our own resources.

We put forward a compromise which would have had the effect

of raising the selling price of British Columbia's natural gas

to our American customers to its BTU equivalent, prices

presently being paid on unregulated natural gas in Louisiana,

Texas and other places in the United States. We are being

forced by our federal government to sell our natural gas

cheaper to the United States than what Americans pay for their

own American gas, Mr. Speaker.

Instead of squabbling over the sharing of revenues derived

from the export sale of our natural gas, we suggested the

federal government, through its National Energy Board, raise

the price of export gas to the real market value, which would

have allowed the British Columbia Petroleum Corp. to divide

those new revenues equally among the federal government, the

provincial government and, for the first time, the

municipalities of British Columbia.

As I explained at that time, this procedure would have

produced three or four times the amount of new revenues for the

federal government, compared with what they would have received

had the British Columbia government followed the federal desire

to raise the wellhead price of gas to the oil companies. The

oil companies don't need our help; the people of Canada do.

The proposal I put forward would have also provided the

citizens of British Columbia, through their petroleum

corporation, a fair share of the new revenues, but, more

significantly, it would have provided an historic

revenue-sharing plan in which the municipalities would have

been provided with additional revenues to provide local services

to the people. My proposal thus would have benefited three

levels of government, and would not have added to the already

overflowing coffers of the oil companies.

Subsequently, an agreement was reached between our

government and the federal government, which I believe

represented a major victory for British Columbia. The results

of this agreement, as I have already announced before are:

1. A tax rebate system which would be

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established allowing payments to be made directly to the

federal government by the provincial government. In other

words, no additional moneys would go to the oil companies to be

buried in their books and left untaxed forever.

progressively the price of natural gas exported to the United States, with the

final decision on export price to take place at the First Ministers' Conference

on energy in April, 1975.

apply an export tax on natural gas as they have done on oil exported from Canada.

As a result of this agreement, the producers commenced

exploration, drilling and development in accordance with their

previously announced expansion plans.

Although the federal government rejected our proposal that

the municipalities should share in the revenues received from a

higher export price of natural gas, I will have more to say

about this matter later in this same speech.

There is one other subject that I would like to discuss in

the context of federal/provincial relations. You will recall in

last year's budget, Mr. Speaker, I expressed deep concern

regarding the introduction by the federal Minister of Finance

(Hon. Mr. Turner), without any consultation with the provinces,

of a concept of annual indexation of the personal income tax.

As a result of the federal government's action, it is estimated

that British Columbia will have to forgo about $65 million in

income tax revenues in 1975, $100 million in 1976 and $185

million in 1977 at the current rates. The cumulative reduction

in revenue in the five years 1974 to 1978, inclusive, is

expected to be in the neighbourhood of $700 million.

It was anticipated by all provinces that this income tax

change, which reduces provincial revenue substantially, would

be subject to an income tax revenue guarantee by the federal

government similar to the "guarantees" provided for other

income tax changes. However, this has now been rejected by the

new government in Ottawa.

While British Columbia agrees with the principle underlying

indexation, we disagree with the manner in which the federal

policy works. As nearly every province has expressed, including

the provinces of Ontario and Quebec, the indexation scheme by

the federal government produces grossly unfair results since it

favours the rich and almost completely disregards the effects

of inflation on those with low or fixed incomes.

Thus the federal policy has undesirable distributional results. In addition,

part of the cost of the federal policy has been borne by the provincial government,

as our revenues are lower in the income tax field than they would have been

— revenues that could have been put to work reducing the taxes of those with

low and moderate incomes.

Mr. Speaker, the estimates of revenue and expenditure for

the fiscal year 1974-75 presented to this House one year ago

forecast revenues at $2,178 million and total government

expenditures of $2,173 million.

Hon. Members will note from the report of the

comptroller-general tabled in the House today that to December

31, 1974, a number of revenue sources have exceeded earlier

expectations. Most notable is a substantially higher level of

personal and corporate income tax revenues. This reflects the

significant growth in the number of persons employed at greatly

improved wages as well as generally strong profit gains for

businesses in this province. Revenues from corporate income

taxes, including logging and mining taxes, were particularly

buoyant. In the nine months to December 31, 1974, total revenue

from corporate income taxes was $210 million, a little over $94

million more than the same period in 1973. It's only right, Mr.

Speaker, those corporations pay their fair share on the very

substantial profits they are making in this province. Personal

income tax, which is the largest single source of revenue, was

$57 million higher, and amounts to $338.3 million.

An increase of nearly $83 million in recoveries from the

federal government under cost-shared agreements reflects the

expansion of services to our people. Buoyant demand associated

with a sharp increase in total personal incomes and the

relatively high levels of capital construction activity in the

province have been important factors explaining retail sales

tax collections up $45 million above the same period last year.

In addition, it is recognized that basic transfer payments such

as Mincome provide a significant economic stimulant to the

local economy, Mr. Speaker. Every dollar we spend in Mincome

programmes in this province adds to our own general well-being

through increased purchases, more spending and more jobs — a

social programme proving our theory that if you provide the

poor and provide those who are least protected by the economy

with a guaranteed minimum income, you provide the total

community economic security, Mr. Speaker.

Mineral royalties amounting to $13 million, higher petroleum

royalties of $28 million, together with an additional $6

million from petroleum and natural gas drilling rights, Mr.

Minister of Mines (Hon. Mr. Nimsick), have contributed

significantly to the $51 million increase in mineral revenues,

exclusive of the mining income tax. All the doom-and-gloom

people said there'd be no money, Mr. Minister, but very quietly

you've done very well in bringing the money in.

The $26 million increase in interest earnings on provincial

government investments reflects the higher

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interest yields prevailing throughout most of the current

fiscal year. These and other revenue gains have offset the

decline in forest-related revenues such as timber stumpage

fees, resulting from the current decline in lumber markets.

Total revenue for the nine months to December 31, 1974, was

$1,867 million.

Members of the House will recall that in my budget address a

year ago I indicated that the policy of the government would be

to use increased revenues for government programmes for people,

rather than accumulate larger and larger surpluses. The revised

expenditure plans for the current 1974-75 fiscal year reflect

this objective. The major thrust of the increase in

expenditures to December 31, 1974, is in the areas of

education, health, social services, public works and

transportation.

Total expenditures to December 31, 1974, amounted to $1,850

million.

Turning for a moment to our financial position as it stood

last March, I am pleased to report that the government

completed the fiscal year ended March 31, 1974, with a modest

surplus of $12.9 million to augment the cash surplus to a total

of $157 million. This cash surplus is still intact today, Mr.

Speaker.

During the last 12 months we have further reduced the amount

of parity demand debt — cash money that was printed by parity

bonds — by an additional $38 million from a total of $179

million to a total of $141 million, Mr. Speaker. When we came

to office, there were $98 million in the bank and $255 million

out in instant cash, instant debt, known as parity bonds. We

ran a risk situation: if there had been a rush on those bonds

so that we would have had to come up with the cash, we had $98

million in the bank, $255 million outstanding. In 2 1/2 years we

have reduced that instant debt to $141 million and we have $157

million in the bank to cover it, and more, Mr. Speaker — and

more.

Sometimes you hear Members of this assembly speak about the

fiscal position of this government without adequate

information. I know that. Today, after they've had this budget,

no longer will any Member of this House go out and say that

this province is not in good financial shape. We're better than

we were 2 1/2 years ago, Mr. Speaker.

In respect to our public bond issues, we enjoy an excellent

rating by two United States bond-rating agencies. These

achievements all point to the fiscal responsibility of the

government.

For the fiscal year ending March 31, 1975, it is now

estimated that the revenue will amount to $2,585 million, and

expenditures will be $2,515 million, leaving a surplus this

year, above all the increased programmes in human services and

education, of $70 million. Mr. Speaker, I will have more to say

on the disposition of this surplus in a moment.

On a more detailed basis, some of the additional

expenditures to the people are in the following programmes: $23

million more to Mincome, which is....

AN HON. MEMBER: Over-taxing.

HON. MR. BARRETT: No, Mr. Member, it's not over-taxing. For

the first time, fair taxing on industry in this province — fair

taxing on industry. Without that revenue, our people would not

enjoy Pharmacare, Mincome, day-care services and all the other

measures brought in by this government, Mr. Speaker. There's

$23 million more for Mincome....

Interjection.

HON. MR. BARRETT: Mr. Speaker, you know the reason why

there's more revenue from personal income tax is because we've

had more people working than ever in this province. That's

basic economics, Mr. Speaker, but the doom-and-gloom boys

haven't heard the best news yet (laughter): $40 million more

for social allowances to meet unanticipated revenues and cost

in shelter; $12 million in additional payments for hospitals

and $8 million for medical care expenditures; $57 million to

education, of which $24 million is increased grants to schools

and homeowners; $9 million more for university operating

grants; $7 million for student scholarships and bursaries; $6

million for college and technical-vocational school

construction; $24 million to transportation, principally for

upgrading the British Columbia Ferries system; $19 million in

public works; almost $4 million to assist native Indians to

establish themselves in cooperative business endeavours. I

know, Mr. Speaker, that not one of these items would be one

that any Member of the opposition would vote against — that's

why I won't dwell on them. (Laughter.)

Mr. Speaker, our government's budgetary proposals for

1975-76 address themselves to our primary concern — the

necessity to ensure that job opportunities exist for the

citizens of British Columbia. Despite the international and

national economic situation, employment opportunities must be

maintained in our province. This job-security budget is

designed to increase employment opportunities. The budget also

addresses itself to two other major concerns: the effects of

the continuing high rate of inflation and the legacy of neglect

left us by our predecessors. The problems of unemployment and

inflation are not unique to British Columbia or Canada. They

are international problems affecting rich and poor nations

alike, including the countries which are our major trading

partners.

Mr. Speaker, I should point out that the means for dealing

most effectively with unemployment and

[ Page 264 ]

inflation in Canada are in the hands of the federal

government. It alone has the necessary fiscal and monetary

leverage to have a significant impact on the economy. It should

be a matter of disappointment and concern to all of us that the

federal government has not exercised the leadership and

decisiveness in this regard that we would have expected from

our national government. And, Mr. Speaker, my own concern has

increased in recent weeks as I noted that a trend toward

moderating price increases has been accompanied by an increase

in the ranks of the unemployed. Trading jobs for inflation

cures is not a solution to our problem, and it is a

manifestation of the lack of policy at the national level.

We, as social democrats, do not believe in hide-bound

economic theories that say cut the taxes for the rich to

protect the poor from the ravages of inflation — just exactly

the opposite, Mr. Speaker, is the need for the people of this

country.

In large measure, our capacity to deal with our present

social and economic problems has been constrained by the legacy

of neglect and inadequate planning which we inherited from the

previous administration. In the 2 1/2 years in which the present

New Democratic Party government has been in office we have

worked to correct the following deficiencies which, as a matter

of record, we inherited.

Steps have been taken to broaden the activities of our

research sector. We are aggressively seeking to ensure that

most of our resources are processed in British Columbia to

provide jobs and the complementary growth and diversification

that will make us economically more self-sufficient. At the

present time feasibility studies are being conducted with

respect to a steel mill and a copper smelter. Other potential

developments are initial stages of development.

Steps have been taken to ensure that any developments which

are approved will be compatible with protecting our environment

and, as far as possible, be in harmony with the existing

communities in which these developments will be located.

Steps have been taken to reduce the impact of rising costs

and unemployment through programmes of direct assistance to

people and improvement of job security through government

action where we perceive corporate responsibility to be

failing.

Steps have been taken to provide a variety of important

services to citizens in an integrated fashion through community

resource units and through legislation and assistance which

will inform and protect them better in their dealings in the

marketplace.

Steps have been taken to improve the quality of life of British Columbians

through expanding educational opportunities, better health facilities, accelerated

park development, and through funding of cultural and recreational facilities.

Steps have been taken to reinforce our determination to have

a more balanced economy by increasing our assistance to the

agriculture sector by protecting farmland, assuring an income

to farmers, which will keep them productive and protect them

against bad weather, and assisting them with promotion and

marketing of our agricultural products.

Steps have been taken to increase the supply of housing and

lots at affordable prices, and funds have been provided to

assist those requiring mortgages. Even Mr. Danson approves of

our latest steps. (Laughter.)

I want to say, Mr. Speaker, when I saw Mr. Danson on

television last night, I said, "Yes, there's Mr. Danson, and I

know where there'll be some fancy dancing next week."

(Laughter.)

Steps have been taken to expand the training of young people

for careers in industry so that we will have a productive

labour force to take advantage of the employment opportunities

as the economic base of the province is broadened.

Steps have been taken to modernize and streamline all

aspects of the justice system and bring it under the direction

of the province so that equal access and more even justice can

be dispensed right across the province.

These, Mr. Speaker, are the directions in which our

government is leading British Columbia, and the proposals

contained in the budget today are designed to maintain this

momentum and to provide some new directions within a budgetary

framework that is prudent and realistic.

This budget is a job-security budget. It contains new

programmes and initiatives, and new and improved services for

our citizens. This job-security budget provides many

expenditure programmes to maintain and increase employment

throughout the economy of British Columbia: there are further

increases in our construction programme of new schools,

hospitals, houses, highways, homes for our senior citizens, and

other general government construction which will increase job

opportunities for the citizens of this province.

There are special employment programmes for the forestry

sector and a continuation of the summer employment programme

which was successfully initiated last year.

Interjection.

HON. MR. BARRETT: Mr. Member, because you are conditioned by old-style

politics and old-party politics you think that good news is only announced before

an election. Well, you are wrong. With this government we announce good news

every year, Mr. Speaker. We are not here to play political games in

[ Page

265 ]

the old style; we are here to serve the people, and we are

doing that very well.

Furthermore, this budget will provide more services to the

people of British Columbia, and will increase transfer payments

made to those on low and fixed incomes, providing new

purchasing power to stimulate various sectors of the provincial

economy.

In addition, Mr. Speaker, this job-security budget provides

for further relief from school taxes for residential and

family-farm property owners, a continuation of our government's

programme started last year. It provides for additional

assistance to the municipalities and to those renters in the

province who are in low- and middle-income brackets.

This job-security budget is possible, Mr. Speaker, because

of the generally healthy state and wealth of the British

Columbia economy. We expect this fiscal year to end in a

surplus budgetary position.

Notwithstanding the current down turns and recessions being

experienced by most western economies, the Province of British

Columbia continues to make real economic gains. Our wealth is

found in the skills of our people and in the resources they own

and control, control for the first time, with the resources

paying a fair share for the first time. It is this underlying

strength and wealth that lies behind the ability of our

government to continue its programme of economic and social

reform while continuing to balance the provincial budget.

I am certain the people of British Columbia are proud of the

substantial progress achieved in the last two and a half years,

but they recognize that greater efforts are necessary in the

future to rectify many of the inequities which still

characterize our society. The new policy directions which our

government has already introduced will ensure a firm foundation

upon which to base these efforts. The budgetary proposals I

will place before the House will build on this foundation and

strengthen it. I believe these proposals represent important

advances in our government's efforts for a more equitable

distribution of the benefits of British Columbia's economic

development.

In today's budget I am proposing expenditures in 1975-76 of

$3,222 million. We will have jobs in this province, Mr.

Speaker, under our own thrust. This is $708 million higher than

the revised estimates for the 1974-75 fiscal year. This level

of increase is consistent with our commitment to stimulate

employment in the province and to protect those least able to

defend themselves against the effects of inflation.

Mr. Speaker, expenditures of the Department of Education are estimated at $754

million in 1975-76. This is $144 million more in one year — an increase of 23

per cent in the education budget. This is a measure, Mr. Speaker, of the importance

our government places upon the equipping of our young people and adults to be

better able to achieve personal fulfilment in their work and leisure time in

an increasingly complex and challenging age.

The largest outlay goes to the public school system, which

receives $461 million. This is $96 million more than in the

current year. Homeowner grants in respect of school taxes,

which will amount to $96.5 million in 1975-76, are $8.6 million

higher.

Members are also aware that our government has provided

money to reduce the size of classes in schools. The sums we

have provided have enabled school boards throughout the

province to reduce the pupil ratio down to 19.8, on average —

down from 1972 when we inherited the responsibility when the

rate was 22.7. Mr. Speaker, this is down three in two and a

half years — one of the best records anywhere in Canada. This

has been achieved during a period when British Columbia has the

fastest growing population in Canada. Although we are not able

to proceed at the same pace as before, our government is still

committed to a long-term goal of further reducing the

pupil-teacher ratio throughout the province.

The province's share of contributions to teachers' pensions

will be $7 million higher. This is now one of the best in

Canada with an increase in provincial contributions of 150 per

cent since 1972.

Assistance to post-secondary education, operating and

capital expenditures, will amount to $272 million. This is $56

million, or 25.9 per cent, more than the revised level of

spending in 1974-75 — 25 per cent increase in one year. Only a

special few have had access to operating grants to universities

according to one Member of this House. We hope that more people

will have access to universities along with those who have

benefited, and the operating grants to universities for this

year will go up to $150 million, up $31 million in one year.

Since 1972-73, operating grants to universities have gone from

$93 million to $150 million, an increase of 60 per cent in two

and a half years through the energy and devotion and the

commitment of the best Minister of Education this province has

ever had. This more than out matches the growth and enrolments

and the inroads of inflation during the period.

Payments for technical and vocational colleges and other

post-secondary institutions for operating and capital will

amount to $95 million. Operating grants will be $86 million,

including $4 million to be recovered for apprenticeship and

industrial training. In addition, night school grants, which

were increased from $325,000 to $1.3 million in the current

year, are now increased further to $2 million in 1975-76.

I would like to draw the Hon. Members' attention to the

significant increase in assistance being provided by our

government for student-aid and teacher-training

scholarships and bursaries. In 1972-73 the level of this

assistance was $2.5 million; in 1975-76 it will amount to $12

million. It is the best

[ Page 266 ]

in Canada, Mr. Speaker, in terms of student-aid and

teacher-training scholarships and bursaries.

Mr. Speaker, this assistance being provided for the

education of our young people by way of new colleges and other

training facilities, and by way of student financial

assistance, is a measure of our government's determination to

broaden educational opportunities to ensure that no person

shall be deprived of attendance at a post-secondary institution

due to financial hardship.

Another important change in our education system is a

dramatic increase in the number of part-time students — more

jobs, more money, more opportunity to take part-time education.

The trend has been encouraged by government funding. It is my

view that our education system should continue to develop in a

direction where students of all ages and backgrounds can move

in and out of our educational institutions in response to their

needs and to society's needs.

The following figures show the rapid year-over-year increase

in the number of part-time students in our universities. The

University of British Columbia in 1973-74 had 1,218; in 74-75 —

1,882, a 54 per cent increase. Simon Fraser had a 38 per cent

increase from 1,500 to 2,100. The University of Victoria had an

increase from 1,297 to 1,511 — 16.5 per cent.

Mr. Speaker, I've had a lot of warming experiences since

becoming the leader of this government, but one of the most

exciting and touching moments in relationship to education was

the letters I received last fall from the senior citizens of

this province who had the opportunity for the first time of

attending classes at the University of British Columbia. People

in their senior years wanted the opportunity to attend

university, and we funded these special programmes — one of

them being a programme for these senior citizens — and

literally dozens of older people took advantage of this first

opportunity ever of going to university. I say that many of

them are better students than some of the younger people. Those

letters of heartfelt gratitude were from the senior citizens of

this province who, by the provision of Mincome and by the

provision of the opportunity of special grants from the

Department of Education, had their first taste of university

education. I do hope that some of them with that will move on

into politics. We could all use their help.

It is our belief that it is the government's responsibility

to provide basic services to all children, regardless of where

these children are being educated. Therefore I have asked the

Minister of Education (Hon. Mrs. Dailly), Human Resources

(Hon. Mr. Levi), Health (Hon. Mr. Cocke), Recreation and

Conservation (Hon. Mr. Radford), Municipal Affairs (Hon. Mr.

Lorimer), the Attorney-General (Hon. Mr. Macdonald) and the

Provincial Secretary (Hon. Mr. Hall) to establish a committee to decide what these

basic services should be and how they could be provided.

This committee will include representatives from these

groups which are directly affected by or involved in the

provision of such services. The committee will be instructed to

report to the government by August 1, 1975. One of the

committee's responsibilities will be to consider the expansion,

where possible, of bus service to all school children,

including those outside the public school system.

The Department of Health expenditure proposals are set at

$712 million — $139 million above the revised estimates of

expenditures in the current year. That is an increase of 24 per

cent. General hospital and medical care for provincial

residents are the major elements of cost in this department.

Hospital insurance services are provided with $92 million more,

for a total of $464 million. Included in this amount are funds

for the improvement of cancer services, including programmes

for the earlier detection, improvement and treatment

capabilities of the British Columbia Cancer Institute,

increased consulting services to areas outside the metropolitan

areas and improved followup procedures.

Provincial government medical care costs under the medical

service plan are estimated to increase $113 million in the

current year.

A long overdue and vital public service introduced by our

government this past year was the emergency health services

programme, which provides emergency ground ambulance

transportation for residents throughout the province for a

nominal charge. Initiated at the cost of $6 million in the

current year, the $11 million provided next year should show

expansion of the service to include emergency air

transportation capability.

Expenditures of the Department of Human Resources have been

budgeted at $516 million for next year — $132 million or 34 per

cent above this year's revised estimates.

The government's Mincome programme, with a total expenditure

of $122 million in 1975-76, today guarantees the handicapped

and persons 60 years of age and over a monthly income of $234.

There are 128,000 people now receiving income support payments.

We are the only province in Canada which guarantees a basic

income programme for those 60 years of age and over. With our

policy of passing on cost-of-living adjustments, we will still

have the highest income guarantee programme among all the

provinces in Canada at the end of this year.

The adult care and homemaker service programmes will

increase $23 million to a total of $43 million. Homemaker

services are assisting those people afflicted with illnesses

that are better treated at home — or, at least, allowing people

to stay in their

[ Page 267 ]

homes.

The department's health-care services, which administers the

health-care programme for persons on assistance and the

Pharmacare programme, receives $6 million, or a total of $28

million. Total expenditures on Pharmacare will be $20 million,

up $3 million over the revised estimates for the current

year.

Mr. Speaker, Pharmacare is one of the kinds of programmes

that under past administrations would have never been initiated

unless it was an election year. We're into our second year of

Pharmacare and all I ask, humbly, is that every other province

of this country follow the programme. It could have been done

years ago in British Columbia, Mr. Speaker, and so could

Mincome have been done years ago.

Deathbed repentance by politicians on what they should have

done is no succour to the people who are now benefiting from

those programmes, and should have been benefiting years

ago.

Our government is encouraging the establishment of community

resource boards as a means for individual participation in the

betterment of their neighbourhoods. These boards offer a

measure of local responsibility in determining the particular

area's needs. To further the development of this community

participation programme, the level of expenditure is increased

almost $10 million to a total of $28 million. The department's

income-assistance programme will cost $167 million in total.

The cost of next year's child maintenance care and provision of

special services takes a large portion of the budget, and a

further $13 million is appropriated for these services.

Housing continues to be a high priority of our government.

During the past year assistance was given in the creation of

over 2,000 rental and cooperative housing units, with a

further 15,000 units in the construction or planning stage. The

Department of Housing was also active in the acquisition and

development of home-building sites.

To assist the department in their several programmes, a

total of $90 million is to be allocated to housing next year.

Legislation will be introduced to revise the application of the

renters' resource grant.

House building will be stepped up throughout British

Columbia in the coming year. The resurgence of the

home-building industry will be spearheaded by the departments'

expanding land development and construction programmes.

The department will continue to increase rapidly the supply

of good and reasonably priced housing for senior citizens by

building its own projects as well as supporting the activities

of non-profit societies. Altogether, 3,000 housing units should

be completed in the coming year.

MR. D.M. PHILLIPS (North Peace River): Casa Loma.

HON. MR. BARRETT: Casa Loma? Casa Loma, Mr. Member, has been

given the endorsation of the federal Minister of Housing, Mr.

Danson. Far be it from me to criticize a federal cabinet

Minister — they're having enough trouble of their own.

(Laughter.) But when the federal Minister of Housing gets on

television and says that it's a good deal and they wish they

could have got it at that price, I feel embarrassed for the

local Liberal Party. But I won't say anything about it

publicly; I'll just keep it here in the chamber, Mr. Speaker.

(Laughter.)

An ample supply of residential lots is one of the most

crucial keys to stemming the soaring costs of housing. In this

area the department will be mounting aggressive land-servicing

schemes throughout British Columbia, as well as starting

development on a number of substantial projects for entire new

communities in the Victoria and Vancouver areas. This is in

addition to the servicing of Crown lands undertaken by the

British Columbia Lands Service.

Agriculture: that was to be brought to ruin if we had

listened to those wild, bordering-on-hysterical attacks against

the Land Commission. Expenditures of the Department of

Agriculture are increased $34 million, to a total of $60

million — over 50 per cent in one year.

Provision for the Farm Income Assurance Programme in the

Department's operational budget accounts for $27 million for

the increase.

Throughout that whole Land Commission debate we heard some

of the Members in this House on hotline shows, and wild

statements outside this House, a demonstration in front of

these buildings, saying that the farmers would be ruined and

that this government would never provide income assurance, Mr.

Speaker. I'm proud to say that the Minister of Agriculture has

been asked to be a speaker right across this continent, to

explain to other jurisdictions how the first and only income

assurance programme works in British Columbia, and is not

available anywhere else.

I have a forgiving nature. But I will not forget the

personal abuse that Minister took in this House on the Land

Commission Act and his efforts and desires to save the farmland

of this province. Over 80 per cent of the people of this

province support the land preservation policies of this

government. That Minister took it all, and he's still here, and

he's delivered to the farmers. I say this to you, Mr. Speaker:

not one Member of the opposition today would dare repeat some

of the statements they made during those debates.

Mr. Speaker, while remaining humble (laughter), I want to

say that the Minister has kept his word to the farmers of this

province. He has fought tooth and nail

[ Page 268 ]

in Treasury Board meetings and in cabinet to get this money

for the farmers of this province and he has delivered. To their

dying days, the farmers of this province will say never, never,

never have they had a better Minister of Agriculture than the

present Minister of Agriculture.

Mr. Speaker, one of the critical problems confronting many

of the less-developed countries of the world is a shortage of

food to provide their people with an adequate level of

nourishment. To foster a spirit of understanding and

willingness to aid those who are less fortunate, and to share

our bounteous production, our government is dedicating

$5 million towards world food relief which augments

the $5 million capital and unexpended interest

earnings of the Agricultural Aid to Developing Countries and

Major Disaster Areas Fund. This province will match all private

sector contributions to world food relief, and it is our hope

and expectation that citizens, business and religious

organizations of this province will respond warmly to this

international need.

Mr. Speaker, we have a moral obligation to assist other

human beings, regardless of race, creed or colour, who are not

as fortunate as those of us who live in this wonderful province

and this wonderful country. I ask the Minister of Agriculture

to announce the programme details as soon as possible, and I

ask the people of this province to open up their hearts to

other people in the world so that we may say that we have at

least attempted to help our fellow human beings.

The budget of the Department of Highways, whose Minister

(Hon. Mr. Lea) never gets a bad time at estimates, will be

increased by $80 million in one year to a total of

$275 million. This 41 per cent increase in

expenditures reflects this government's resolve to stimulate

employment this year in a way which will also service our aims

to improve the infrastructure and need to broaden economic

development opportunities. The main components of the budget

are: $105 million for highway maintenance operation

and repairs; $140 million for highway capital

construction; $11 million for the purchase of new

equipment.

Mr. Minister of Highways, highways go where they are needed,

not on the basis of political boundaries under this government.

Whatever you do, Mr. Minister, don't play politics with

highways — there's a bad precedent in this province for it.

(Laughter.) I don't want you to develop any bad habits.

Interjection.

HON. MR. BARRETT: I won't pick on you too much

more.

There are existing plans to extend the Island Highway north to Port Hardy and

upgrade Highway 16 between Rupert and Terrace, and the construction of the highway

link between Kitwanga and Meziadin Lake will go forward. In addition, numerous

improvements will be undertaken in all parts of the province.

Never again do we want a Minister of Highways to come into a

riding like the old constituency of Dewdney had at one time. I

don't know who the Member was who represented that area, but

the former Minister of Highways came in and told the local

chamber of commerce: "As long as you have that MLA, you're not

going to get any money for highways." Look what happened to

that Minister of Highways, and look what happened to the new

MLA. (Laughter.) Faith, Mr. Speaker.

Transportation and Communications: the increase in

expenditure of the Department of Transportation and

Communications for the coming year is $47 million. Of

this amount, $20 million is set aside for the three new ferries

now under construction in the British Columbia shipyards and

$10 million for the increased operating costs of the British

Columbia ferries next year. The shipyards were moribund before

we were elected to office. They're building three ferries now,

Mr. Minister (Hon. Mr. Strachan), and they'll be building more.

We'll keep our workers building our own ships for our own

needs.

Mr. Speaker, we're not like the CPR — we build our ships at

home. Except for one we had to buy immediately to make up for

the backlog left by the former administration, we buy our ships

and build them right here at home. I challenge the federal

government and the CPR to adopt our programme: build Canadian

ships here in Canada.

Municipal Affairs: an amount of $100 million has been

budgeted for the Department of Municipal Affairs in

1975-76. This is $15 million more than the

revised estimate for the current year. The provincial municipal

matters have been allocated a high priority by our government.

This has been amply demonstrated in the past two years.

A review of the steps that have been taken to assist

municipalities would take up a great deal of time, but I'll

mention a few. The province has increased its share of

municipal welfare costs to 90 per cent from 85 per cent. The

province has assumed full cost of administration of courts and

the correction service. Over $21 million has been paid from the

community recreational facilities fund. The Sewerage Facilities

Assistance Act is helping to increase the supply of serviced

building sites in local communities. Amalgamations have been

encouraged to improve the economy of providing local services,

and the province is making grants to offset the costs of this

restructuring.

There is a lot more to say. (Laughter.) I don't mind the

Members chuckling at this point because I am reminded of the

old adage: "He who laughs last,

[ Page 269 ]

laughs loudest" — and there is a long way to go yet.

In the coming fiscal year per capita grants to municipalities will

amount to $70 million, an increase of $8.4 million over the current. In

addition, special restructuring grants totalling $3.6 million will be

provided to assist these municipalities with the costs of amalgamation.

I will come back to this money in a few moments.

Lands, Forests and Water Resources: the budget of the

Department of Lands, Forests and Water Resources is estimated

at $140 million in 1975-76. This is a $40 million allowance

higher than the revised expenditure for 1974-75.

The budget of the Lands Service has been increased $15

million. The government's attention to guiding the use of the

province's lands on a course which protects the public interest

is reflected in a $3 million allocation to the Environment and

Land Use Committee secretariat, and $2 million to be spent on

the servicing of Crown land for sale or lease.

In the Forest Service budget of $94 million, nearly $20

million more will be devoted to reforestation and forest

nurseries. Engineering services and forest development roads

will cost $6.2 million, an increase of $2 million over this

year's allocation.

The budget of the Water Resources Service is $29 million

from the revised expenditure of last year.

Recreation and Conservation: to those who were Members of

this House many years ago when we fought tooth and nail to have

parks budgets expanded, and we went through the pathetic

performance during those estimates, this Minister has got to be

classified as the most determined to hold this portfolio.

The allocation in over one year of $21 million more to the

Department of Recreation and Conservation, to a total of $47

million, is an increase in that department's expenditures in

one year of 82 per cent, Please don't bother me any more.

(Laughter.) Eighty-two per cent reflects this government's

commitment to the protection and enhancement of our fish and

wildlife services and the provision of year-round recreational

opportunities.

The fish and wildlife budget has been increased almost

fourfold since this government came to office, and $3 million

of additional funds, for a total of $ 10 million next year,

allows further development of environmental protection and fish

and wildlife management programmes.

The construction and operation of the ever expanding park system, which includes

several year-round recreational services, requires an increasing amount of the

department's budget. The addition of $15 million to this activity next year

represents an increase of 150 per cent in one year, to a total of $25 million.

Expenditures for park development projects are increased $6 million for a total

of $11 million.

Spend it well, Mr. Minister, because parks and recreation

were for too long neglected in this province. It is about time

that this kind of expenditure was made available.

The budget of the Department of Consumer Services is $2.6

million, an increase of 28 per cent over the 1974-5 estimate.

Overcommited consumer debtors will receive help and advice

from the debtors' assistance division. This Minister is proving

to be most aggressive in developing this new service in the

province, Northern affairs: we are saddened by the loss of the

Minister of northern affairs' (Hon. Mr. Nunweiler'

s) father.

The Minister Without Portfolio has particular responsibility

for the province's northern affairs. Our government is

developing policies for the northern regions of the province

through consultation with the regions affected.

Economic Development: expenditures of the Department of

Economic Development have expanded in the current year from the

original budget appropriation of $4 million to $10 million. Of

the $6 million increase, $3 million was to meet the

government's commitment to the Pacific North Coast Co-operative

Cannery and fishing development in Port Simpson. A feasibility

study for an integrated steel mill in the province was

initiated this year.

Provision has also been made in the forthcoming year for the

expansion of trade missions, technical and small business

assistance and economic studies programmes.

The Attorney-General: expenditures next year in the

Attorney-General's department are budgeted at $115 million,

compared to revised spending of $78 million a year ago. This

significant one-year increase in the department's expenditures

should be assessed in the context of the consolidation of the

justice system at the provincial level. All aspects of the

system are under review, including crime prevention,

enforcement, prosecution, legal aid, operations of the courts

and the Correction Service.

The progress which is being made in rationalizing and

streamlining the justice system is reflected in many of the

components of the department's requirements in 1975-76.

Our government's innovative programme for the establishment

of regional justice councils will encourage community

involvement in the planning and operation of justice department

services throughout the province.

Provincial Secretary: the 1975-76 estimates of expenditure

for the Provincial Secretary's department have been increased

from a revised $56 million in 1974-75 to $77 million.

I can report to the House that the British Columbia Cultural

Fund of $20 million, which is an endowment fund, is generating

about $1.5 million annually for cultural activities. In

addition, revenue

[ Page 270 ]

derived from the Western Canada Lottery will be used for

cultural, recreation and sport activities.

Travel Industry will also have a dramatically increased

budget.

Labour: the budget of the Department of Labour is $18

million for the coming year. This increase reflects the aim of

the department to provide better arbitration, mediation,

information and research services to groups in the labour

market. In particular, I would like to draw attention to the

efforts the department is making to expand its manpower

development activities.

Mr. Speaker, when I was first called upon to name a cabinet

it gave a great opportunity for the citizens of this province

to speculate on who would be in it, and what their role would

be. The most difficult portfolio in any government in the

Province of British Columbia, since its inception as a

province, has been the Ministry of Labour. No one carries a

more emotionally charged portfolio than the Minister of

Labour.

I said, Mr. Speaker, at the time I named that Hon. Minister

(Hon. Mr. King) to the post that he would become the best

Minister of Labour in the history of this province. No one knew

of him. He was relatively new, having only served one year in

this House prior to his being named to the cabinet. I'm not

proven right more than 50 per cent of the time, but in this

instance I've been 100 per cent correct. This Minister is the

best Minister of Labour in the history of the province.

I want to publicly thank his wife and his family, because no

other Minister carries home a greater emotional burden from the

pushes and pulls and the pressures that exist in

labour-management relations in this province.

MR. G.S. WALLACE (Oak Bay): What about the other 50 per

cent?

HON. BARRETT: The other 50 per cent? That's what I thought

the opposition would do; I thought you would do better. I was

wrong.

Interjection.

HON. MR. BARRETT: You lost 50 per cent, too. (Laughter.)

Interjection.

HON. MR. BARRETT: Oh, you lost 50 per cent of the worst

part. (Laughter.)

Well, Mr. Speaker, in all seriousness, I don't envy him in

his job. He's done it well. He's kept his cool, and he has

provided very, very good leadership in this regard.

Mines and Petroleum Resources, Public Works, they will both be expanding this

year.

The Crown corporations of the province — the British

Columbia Hydro and Power Authority, British Columbia Railway

Company, the British Columbia School Districts Capital

Financing Authority, British Columbia Harbours Board, British

Columbia Cellulose Company.... The cellulose company that

last year made $50 million — Mr. Speaker, I apologize for this

mistake. We were told that government-owned enterprises are to

lose money, but unfortunately we didn't live up to the

expectations of the opposition, and that Minister brought in a

$50 million profit. It's absolutely shocking to the myth that

only private enterprise knows how to run a business. I say the

workers of this province and the government of this province

have just as much on the ball as any outfit in New York or

Toronto or Montreal, and the $50 million goes to prove it.

To those who like to have an historical perspective on these

matters, please read Hansard and see what the

doom-and-gloom boys were saying at that time. Mr. Speaker, I

don't want to belabour the success of that Crown corporation,

because I would like to talk about the next one, the British

Columbia Petroleum Corp.

Last year, Mr. Speaker, it brought in tens of millions of

new dollars to the people of this province. Next year it will

bring in more. Remember what the doom-and-gloom boys said about

that? This is not a doom-and-gloom day.

In keeping with the government's policy of disclosure, the

audited financial statements of the several provincial Crown

corporations will be tabled in this House as they become

available.

Expanded construction programmes of the British Columbia

Hydro and Power Authority, the British Columbia Railway and

schools and hospitals greatly increase the demand for

investment. The province has made a total of $532 million

available to the Crown corporations, of which $182 million was

from the Canada Pension Fund, $150 million from the provincial

trustee funds, and $200 million from market borrowings.

In addition, the province has made a $5.4 million repayable

advance at prime bank rates to the British Columbia Cellulose

Co. in the current fiscal year. Total advances to the company

outstanding in 1974 were $14 million. Another 50 shares of

Plateau Mills were acquired last year, giving the province 97.5

per cent ownership.

The British Columbia Hydro and Power Authority:

Information on British Columbia's Hydro and Power

Authority's major electrical construction projects is given in

the nine months' report to be tabled. Almost $100 million more

is being spent on capital projects in the current fiscal

1974-75 year — $430 million compared to $332 million. This is

$200

[ Page 271 ]

million more than the capital expenditure in the 1972-73

fiscal year.

In the calendar year of '74, the authority received $82

million in Canada Pension proceeds, $107 million of provincial

trustee funds and $200 million from market borrowing. A United

States issue of $100 million, 25-year sinking fund bonds at

10.25 per cent was marketed in October, 1974. There was also a

private placement of $100 million of Canadian fund bonds at

9.75 annually on an eight-year maturity.

The increased demand for investment funds by the authority

resulted primarily from the excessive costs of the work

required as part of the undertaking of the obligation of the

Social Credit government in 1964 as part of the agreement of

the Columbia River treaty for the development of generating

capability at Mica Dam. I wish to bring you up to date in a

public statement as to the exact costs we are faced with as a

result of the Columbia River treaty.

At the time the treaty was signed, the government of the day

proudly boasted of its most beneficial agreement. The prepaid

proceeds from the sale of downstream benefits for a period of

30 years were claimed to be sufficient not only to pay for the

construction of the required treaty storage projects, but also

one-half of the cost of generating capability of Mica Dam.

Because the Social Credit government failed to allow adequately

for the increased material and labour costs over the projected

construction period and sold the substantial 30-year downstream

benefits for a cash lump sum rather than charging market vale —

a foolish business practice, fiscally irresponsible and said so

at the time by General McNaughton, the official opposition, the

Liberal Party in this House and others — this and future

generations of British Columbians will be burdened with

additional heavy costs.

Rather than providing British Columbia citizens with cheap

power, it is the Americans who are receiving this beneficial

gain. To December 31, 1974, Mr. Speaker, the authority has

spent $577 million on the construction of storage projects

required under the treaty — as of that date, $98 million more

than we had realized from the United States advance

payment.

In addition, to December 31, 1974, $255 million has been

expended on generation, transmission and transformation

facilities in connection with the Mica project, with at least

$450 million more required to complete the project. This means,

Mr. Speaker, the deficiency that has to be financed by the

people of British Columbia — the deficiency that the people of

this province must pick up — is now in excess of $800 million,

or over 60 per cent of the overall treaty costs, which is

hardly a matter of "cheap power."

MR. P.L. McGEER (Vancouver–Point Grey): Are you going to

have an inquiry?

HON. MR. BARRETT: Mr. Member, we have a long way to go in

the session yet, and a little bit more in this speech.

Because of the commitment associated with the Columbia River

project, Mr. Speaker, the authority will have to seek increased

borrowing power for the British Columbia Hydro and Power

Authority, from $2,250 million to $3 billion.

The British Columbia Railway Co.:

The British Columbia Railway Co. received $55 million in

capital investment funds during 1974. Track had been laid on

over one-half of the rail line under construction between Fort

St. James and Dease Lake. The fabrication of freight cars will

start early next month at the new facility in Squamish.

Legislation will be presented to the House to increase the

railway's borrowing authority from $400 million to $650

million.

British Columbia Schools and Regional Hospital Districts'

Financial Authorities:

In 1974 the British Columbia school districts' capital

financing authority made available a total of $61 million to

the school districts throughout this province. The British

Columbia regional hospital districts' financing authority

provided regional hospital districts with $25 million for

hospital construction.

The British Columbia Cellulose Co.:

The British Columbia Cellulose Co. was the vehicle through

which the Province of British Columbia acquired a 79 per cent

equity interest in Canadian Cellulose Co. Ltd. by assuming the

guarantee of $68 million of outstanding long-term debt. Since

acquiring our interest on June 29, 1973, Canadian Cellulose has

repaid $12 million of the long-term debt, leaving a balance of

$56 million under our guarantee at this date. Canadian

Cellulose, in a recent interim report to shareholders, reported

an operating profit for 1974. After giving effect to an

extraordinary credit of losses in prior years, the company's

net earnings were $50.9 million in one year — not exactly a box

factory in Saskatchewan. Let's not hear any more of that old

story.

This performance in 1974 is a startling reversal for this

company and is a high level of profit among the major British

Columbia forest producers. We're No. 2, and we're going to try

harder. Through this government's actions, job security for

many workers was guaranteed, domestic ownership of an important

resource company was achieved and more effective control was

obtained for developing an industrial complex in keeping with

the balance between the social and economic goals we consider

appropriate for this province.

Ocean Falls Corp.:

Ocean Falls Corp. owns and operates a pulp-and-paper mill at

Ocean Falls. The province acquired the mill and townsite from

the Crown

[ Page 272 ]

Zellerbach for $790,000 on March 31, 1973. Provincial

government loans at bank prime rate to the corporation totalled

$4 million as of December 31, 1974.

The problems of preserving this mill and townsite as a

viable industrial community are unique, particularly because of

its isolated coastal location. Operations last year were

particularly affected by a water-supply problem which

interrupted full utilization of the plant's capacity. We are

hopeful, however, for its future success.

I am informed that we will be able to announce for the Ocean

Falls Co. a profit for this year. It's not going to be very

much, but it's better than a loss. We said that we would buy

Ocean Falls and operate it at a loss. We said that for social

conditions alone it would be far cheaper to keep this community

alive than face huge welfare costs. When Crown Zellerbach

pulled out, that was a decision they made based on hard

economics. We made a decision on hard economics and a matter of

social consequence.

It's not the government that made a profit or loss; it's not

the Crown Zellerbach that made a profit or loss; it's the

working men and women of that community who have made that mill

come alive because they had a chance to remain alive as a

community. I'm proud of those people.

Insurance Corp. of British Columbia:

One year ago tomorrow, the people of British Columbia became

the owners almost overnight of the largest general insurance

company in Canada, the Insurance Corp. of British Columbia. The

corporation's aims and actions are devoted completely to the

interest and advancement of the economic and social well-being

of British Columbia.

Today the Insurance Corp, of British Columbia completes its

first full year of operation of the universal Autoplan with a

record of commendable achievement. Close to 1.5 million

motorists of British Columbia have enjoyed the benefits of

complete auto insurance coverage at rates among the lowest in

North America, efficient and prompt adjustment of 450,000

claims through 42 facilities throughout this province, and

courteous and careful attention to their insurance needs.

A year ago, I can remember the speeches in this House saying

that Autoplan would be a disaster, that there would be lineups

for renewal. It would never work; only the private companies

knew how to do such things. I won't pass any positive or

negative judgment on Autoplan. I would just say that all those,

when an election comes, who wish Autoplan to be destroyed,

please let the people know during the campaign.

Mr. Speaker, Autoplan is a success and it's here to stay. Yes, Mr. Member,

how you had to stand in this House and answer all those interesting questions.

Yes, Mr. Member, how all the D & G boys were saying at that time that it's

no good; it won't work; we've got to keep the private companies. Let's hear

from the D & G boys now.

The British Columbia Petroleum Corp.:

The British Columbia Petroleum Corp., like the Insurance

Corp., achieved success almost overnight. Founded in the fall

of 1973, the corporation undertook to obtain a more appropriate

return on the province's natural gas resource for the, producer,

the transporter and, most importantly, for the resource owners,

the people of British Columbia.

Through an agreement with Westcoast Transmission Co. Ltd.,

the corporation assumed contracts for the supply of natural gas

from producers, and became the principal gas marketing agency

in British Columbia. Westcoast is now the transportation agent

for British Columbia natural gas.

Through acquisition of the producer contracts, the

corporation was able to renegotiate the artificially low

wellhead prices for those private producers. We're paying a

higher price to those private producers than they have ever

received before, Mr. Speaker. We want to see those little

private oil companies have a fair break under this government.

Higher prices than they ever had before, and we even hear

Members of this House asking for more price. We can't do that.

They're doing very well.

By effecting a more realistic market price for natural gas,

the people of British Columbia are now receiving increased

benefits from this non-renewable resource.

In the short time the corporation has been in operation it

has been tremendously successful in effecting a higher rate of

return. At the same time it has formed an excellent working

relationship with the industry. Mr. Speaker, I recollect some

18 months ago that the Hon. Members on the other side of the

House were berating our government on its resolve to establish

the British Columbia Petroleum Corp. I trust the Hon. Members

in the opposition have changed their views in the light of the

demonstrated ability of the corporation to serve the people of

this province.

I should also like to draw the attention of the Hon. Members

to the recent statements by the former governor of Oregon — who

is not an NDP member. (Laughter.) The former governor of

Oregon, Mr. Speaker, congratulated and backed the British

Columbia government for its policies on natural gas, and I note

that the State of Oregon will be setting up a state marketing

agency for natural gas, copying British Columbia.

We will help our American friends as much as we can, and I

hope they don't receive mindless opposition in the State of

Oregon, the way we received it in this House. Our American

friends should benefit from our experience, and we won't stop

that experience from going across the border and helping

them.

The British Columbia Development Corp. has an

[ Page 273 ]

enviable record.

A provincial financial institution:

I should like to add at this time some comments on our

proposal for a new financial institution in British Columbia,

designed to serve the needs of the people, rather than the

large multinational companies. As I have indicated on many

occasions, our government is completely dissatisfied with the

banking structure in our country — a structure in which five

large banks control banking in all of Canada. These institutions operate in substantial harmony among

themselves. Competition is largely absent, with the result that

interest rates ordinary people pay are higher than they need

be. Bank profits last year are up 23 per cent in one year. I

think there's even an admonition against that from the Bible:

it's known as usury. Twenty-three per cent in one year!

It is our intention to establish a new financial institution

which will attempt to achieve the following objectives:

To increase the degree of competition in financial markets, and thereby

narrow the spread between borrowing and lending rates.

To allow British Columbians to use their deposit funds to support the further

economic and social development of this province.

To ensure the maximum possible retention of funds within the province.

To attain a better balance between loans and deposits among all regions

of the province.

To increase the amount of credit extended to low- and middle-income earners,

to farmers, small businessmen, widows, single women, and others who have been

neglected by the traditional banking system.

To provide full credit facilities services such as mortgages, processing

of government bills and accounts, and to provide a personal service in terms

of small loans counselling, and advising young, newly married couples how

to avoid debt that becomes crippling and unnecessary and hampers the development

of a good positive relationship as a family.

Mr. Speaker, earlier in my address I indicated there would

be an estimated surplus of $70 million in this fiscal year. We

propose to allocate these excess funds to set up some

employment-producing programmes as follows: $15 million for a

special employment programme for the lumber sector of the

forest industry right now; $20 million for a renewal of last

year's employment programme for students; $15 million for the

Community Recreational Facilities Fund; $20 million for the

Ferry Capital Expenditures Fund.

A total of an additional $70 million for employment programmes is a significant

outlay in any year. It is designated to supplement the already active government

construction programme in the general budget. Together they will have a substantial

effect in stimulating employment throughout the province. These expenditures

will substantially increase the effect of public sector activities, and will

also move us towards our goal of job security in British Columbia.

Details concerning the forest industry and student

employment programmes will be given by the Ministers concerned.

With regard to the Community Recreational Facilities Fund, I

would like to say how pleased we are with the response to this

programme.

Hon. Members will recall that approval was given last

session for the appropriation of $35 million from the cash

surplus for the construction of three major ferries and the

necessary terminal facilities to accommodate these additions to

the fleet. Work is proceeding on these ferries and dock and

terminal facilities.

Revenue estimates for 1975-76:

Mr. Speaker, I have outlined a government expenditure

programme totalling $3,222 million for the fiscal year 1975-76.

1 will now describe how these expenditures will be

financed.

Revenue for the fiscal year 1975-76 is forecast at $3,222

million, an increase of $637 million over the revised estimate

for the current fiscal year. This estimate includes $150

million from the British Columbia Petroleum Corp. — $150

million that, had we not set up the Petroleum Corp. of British

Columbia, we would have not had. It is appropriate to use this

income, which is largely the result of the natural gas

commodity price increase, to ease the burden of cost-of-living

increases for the unprotected and to create jobs. To improve

the equity of the tax system and to balance our job security

expenditure programme, we propose certain tax adjustments to

increase revenue by approximately $60 million. That's all —

minor tax adjustments to increase by $60 million.

Mr. Speaker, I would like to turn to the detailed

examination of proposed fiscal measures for the coming

year.

Tax measures for corporations:

There are two general taxation taxes that all corporations

in British Columbia pay: the first is the corporation income

tax and the second is the corporation capital tax. We have been

examining the question of the provincial tax treatment of

corporations and we have now decided to institute a change in

our present policy. We propose to change the structure of

provincial taxes on corporations so that tax rates on large

businesses will increase marginally — very marginally — and the

tax rate on small businesses will decrease in British

Columbia. This is to allow British Columbia's small business

sectors a better opportunity to grow and compete.

The provincial corporation income tax rate is

[ Page 274 ]

presently 12 per cent of the taxable income of corporations.

Effective January 1, 1975, this rate will be increased to 13

per cent. The administration of the provincial corporation

income tax will be changed so that small businessmen will have

their rate reduced so as to make their effective rate 10 per

cent. That's good for small business in this province. We are

the first province, as I understand it, to make this move, and

we are going out of our way to ensure that small businessmen do

flourish, and survive, in competition with the jungle of the

large multinationals.

Under the Corporation Capital Tax Act, the province now

levies a tax of one-tenth of 1 per cent on utilized capital of

corporations. This rate will be increased to one-fifth of 1 per

cent to bring the British Columbia rate into harmony with the

rate both in Ontario and Quebec. Our policy of providing tax

decreases to small businessman will take effect under this Act

through our proposal to exempt from capital tax all

corporations with less than $100,000 of taxable, paid-up

capital, compared to the current exemption of $25,000. This

measure, Mr. Speaker, is also effective January 1, 1975. It is

designed to help the small motel owner, the small grocery

store, the small entrepreneur who is struggling to make it

through — this tax concession will ease the burden for him.

Mr. Speaker, as I mentioned, we are the first province to

have negotiated successfully a change in out tax-collection

agreement with the federal government, which allows us a lower

effective provincial tax rate for small businesses.

Mining rebate:

When legislation on Bill 31 was introduced last year,

spokesmen for the industry claimed mining royalties would total

over $150 million, compared to the department's estimate of $30

million for the fiscal year. However, Mr. Speaker, latest

indications are that we can only expect to receive about $15

million — will the mining companies please forward a cheque for

the other $135 million? The estimate for the next fiscal year

is only $9 million. How anyone in the industry can claim that

these figures represent a punitive level of royalties is beyond

my understanding.

Members will be aware that the federal budgetary measures of

May 6 and November 18 of last year regarding the

non-deductibility of provincial mining royalties had two

principal effects on British Columbia. First, the effect of

federal policy on natural gas exploration and production in the

province was extremely serious. Our negotiations on this matter

with the federal government are now completed. The issue was

settled, and exploration and production are now going ahead.

Second, the federal actions also affected the mining industry,

since that industry pays royalties to the provincial

government.

Mr. Speaker, we strongly disagree with these federal measures, and I might

add our views on this matter are shared by every other Canadian province. We

will, along with other provinces, continue to press our position on the federal

government.

While discussions are continuing, there is one important

matter that requires provincial action. British Columbia

imposes its corporation income tax in conjunction with the

federal taxes. As long as the provincial and f federal tax

systems remain comparable, the federal government has agreed to

administer and collect the provincial corporation income

tax.

Provincial royalties are now deductible within this system as a result of the

federal policy. Consequently, corporations who pay provincial royalties pay

more corporation income tax than they would have in the case of the deducibility

remaining unchanged. The federal government had not really thought this out.

Since our corporation income tax system is administered by

the federal government through agreement, the province receives

higher corporate tax receipts as a result of the federal

non-deductibility policy. It is our firm view that the federal

policy which gave rise to these receipts is ill-founded.

Therefore, Mr. Speaker, we wish to announce today that it is

our intention to rebate to the corporations concerned the

additional British Columbia corporation tax revenues that the

province will receive as a result of the federal policy with

which we disagree. I am sure that it is welcome news for the

mining companies in this province.

The Minister of Mines and Petroleum Resources (Hon. Mr.

Nimsick) will be making a statement in the near future,

detailing the mechanism we have chosen to achieve this end.

Motor fuel tax:

Events of the last two years relating to the price of

energy, particularly oil, has served to emphasize to people

around the world the extent of our energy dependence. The

dramatic increase in the price of oil has had important

effects. The major oil-producing countries are now extremely

wealthy, while increases in the price of this one commodity

have severely affected the economies of some countries,

particularly those in the Third World. In Canada, we have been

largely shielded from the oil price increases as we ourselves

produce substantial amounts of oil.

One of the important ways in which the province can act to

encourage energy conservation is through the operation of

efficient, pleasant and low-cost public transit systems.

Over the years the British Columbia Hydro and Power

Authority, with substantial aid from the general government

revenue, has implemented such public transit systems in our

major urban centres. This government intends to continue the

orderly development of such systems, both because of their

favourable effect on the development of our cities

[ Page

275 ]

and for reasons of fuel conservation.

To this end, I am announcing today an increase in motor fuel

taxes of only two cents per gallon.

SOME HON. MEMBERS: Oh, oh!

HON. MR. BARRETT: Some of the proceeds of this will

go to assist in public transit fares at levels to encourage

British Columbians in urban centres to make even greater use of

their existing public transit systems.

This new level of motor fuel taxes in British Columbia will

be substantially below the average motor fuel tax levels in

other provinces.

For those in the opposition who are upset by this extra two

cents, you can save it simply by doing one thing — sell your

Cadillacs and buy a smaller car, or use the transit system that

will be assisted by the two pennies. It won't hurt you MLAs to

get on a bus once in a while. Just think, if you get on a bus,

it could be your revenge on the Minister of Finance because we

are subsidizing it.

In fact, only two provinces, Saskatchewan and Alberta impose

a motor fuel tax below the new British Columbia level.

MR. WALLACE: Subsidizing ICBC.

HON. MR. BARRETT: Subsidizing? That is the people's own

money; it's the people's own money.

The Succession Duty Act will be amended to exempt from duty

bequests by individual residents to the provincial Crown and to

local governments within the province. It's a good move. It's a

good move that was asked for by Members on all sides of the

House.

Logging tax:

An amendment to the Income Tax Act changing the tax credit

rate against the provincial corporation income tax for taxes

paid on logging under the Logging Tax Act will be introduced to

give effect to a change in the provincial income tax rate.

Tax measures for homeowners, farmers and renters:

For many years now, British Columbia homeowners and family

farmers have been in a very favourable property tax position as

a result of the homeowner grant and the measures which were

introduced last year — that is to say, the resource grant and

the school tax removal programme.

I am pleased to announce today the introduction of

additional measures that will, for most homeowners, farmers and

others, produce substantial additional amounts of property tax

relief.

Members are aware that the whole area of property taxation is under intensive

review by this government. The property tax is an important tax for both the

province's municipalities, its schools, and for the province itself. It is important

that the tax be levied equitably throughout the province. It is also important

that the burden of the tax be shared equitably on ability to pay. These are

the principles which will guide the government in its review of the entire property

tax structure.

In order to ensure that changes occur in an orderly and fair

manner, we have chosen to freeze the 1975 residential

assessments to provide for time for adequate preparation for

the changes which are to come in this important area of

taxation.

Our programme of property tax relief will go ahead in any

event. The homeowner grant, the principal vehicle of school tax

relief for residential property, stood at $200 in 1974, with an

additional grant of $50 for those aged 65 and over. This grant

will remain the same in 1975. The resource grant and the school

tax removal programme will produce additional tax relief to the

homeowners and family farmers of between $30 and $40 in

These programmes were designed to reduce school taxes that

were in excess of the homeowner grant by one-fifth to a maximum

of $40.

In 1975, this school tax removal programme will be doubled

so that two-fifths of the school taxes in excess of the

homeowner grant will now be offset by provincial grants. The

maximum school tax removal grant in 1975 will be $80 — double

the 1974 maximum.

In an inflationary period such as we are now experiencing, a

commitment of this kind is a costly one. We believe it is

necessary, however. Property taxes can weigh heavily on those

with low and moderate incomes. Our policy will shelter those

groups.

I would like to spend a moment detailing the manner in which

the policy will work in 1975.

For a homeowner or farmer with gross school taxes of $200 in

1975, the whole amount will be offset by the $200 homeowner

grant. If gross school taxes are at the $300 level, the

provincial offset will by $200, plus 40 per cent of the amount

by which school taxes exceed $200, in this case $40, for a

total offset of $240, leaving the net annual school taxes of

$60. For those residential and farm properties paying $400 in

gross school taxes, the provincial offset will be $280. For

those age 65 and over, the provincial offset in this case will

be $330.

The resource grant introduced last year will be

discontinued. The operation of that grant included a feature

which caused the grant to decrease as school taxes increased.

With generally higher school taxes in 1975, the cost of the

resource grant to the province would have fallen. Consequently,

our decision is to remove the resource grant and to concentrate

on the funds saved in the school tax removal programme which I

have just outlined.

This announcement today constitutes the second step in the

government's programme to eliminate

[ Page 276 ]

school taxes from homeowners and from family farms. The cost

to the provincial government in 1975-76 of its school tax

removal commitments is estimated at $25 million. This, I

emphasize, is over and above the cost of the homeowner grant

programme which is anticipated to cost $107 million.

In addition to these substantial sums devoted to property

tax relief, our restructured renter grant programme, on which I

will comment shortly, will carry a cost for 1975-76 of around

$20 million. These three programmes will provide over $152

million of tax relief to homeowners, renters and family

farmers.

It is crucial, in our view, to ensure that the government's

programme of property tax relief has its effects concentrated

where the benefits are most needed. As we are reviewing the

provincial assessment picture over the next year, we will also

be reviewing the provincial programmes to produce property tax

relief. Our aim is a fair assessment system coupled with a

system of property tax relief for homeowners, renters and

family farmers that seeks to protect the income position of

those who need it most.

I would now like to turn to our policies affecting renters

in the province in 1975-6. Our housing policies have already

included a number of important initiatives for the benefit of

renters. In addition, our government has two other principal

policy tools designed to protect the position of those British

Columbians who live in rental accommodation. The first is our

policy of rent control, which at one time was supported by and

opposed by, and supported by and opposed by, the opposition. We

are not sure what this week's position is, but I want to assure

people that the government's policy is continuing rent

control.

The second relates to benefits under the renter grant

programme. Members will be aware of the recent establishment of

the Rent Review Commission, which has the responsibility for

carrying out an ongoing review of the administration of our

rent control legislation.

Our second policy tool has been our renter resource grant;

it is in this area that we contemplate changes for 1975-6. Two

changes are planned. First, renters' benefits will be scaled to

income to give greater benefits to those on low and moderate

incomes, and, second, there will be changes in the

administration of the programme.

In order to bring about the change in the distribution of

benefits to low- and moderate-income earners, a formula will be

adopted to pay benefits on the following basis: for 1975, a

renter tax credit will be calculated on the basis of $100 minus 1 per cent of taxable income, with no credit exceeding 10 per

cent of the 1975 rent paid. We will give a detailed scale

within the printed budget itself on how this programme works.

Some quick examples are as follows.

In 1975, a renter tax credit benefit for a family of

four would provide the following benefits. For a family of four

with a gross income of less than $4,000, they will receive $100

as a rental grant; $5,000 — $96; it scales right up to $12,000 —

they will receive $27. The benefits extend up to the

$14,000-per-year income. So a family with four children, for

example, with a gross income of $8,000 will receive a $67

rental grant. The scale will continue on that basis. The

programme will be announced in more detail.

Since the credit is related to income, those with gross

incomes of around $15,000 and above will receive no credit. For

those age 65 and over....

MR. WALLACE: Is that a means test?

HON. MR. BARRETT: No, income test — the same way that

the federal Tories ran the federal income tax, the federal

Liberals ran the income tax; and the provincial NDP is giving

some of the money back.

MR. WALLACE: It sounds like a means test.

HON. MR. BARRETT: Well, it's not a means test at all. It is

the fairest way that I know, and I've not yet heard that the

Conservative Party wishes to abolish the income tax procedure.

It's dollars for people — that's what it is. It's dollars for

people who really need them.

For those aged 65 and over, the minimum renter tax credit

will be $80, with benefits rising to a maximum level of $100,

depending on income. In those cases where each spouse earns

income, the credit will be claimed by the spouse with the

higher taxable income.

There is one important additional feature to our 1975 policy

for renters. Many of the province's senior citizens expect to

receive their normal $80 payment within the next few months.

Since it is among this group, many of whom are on low or fixed

incomes, that inflation often has its severest effects, our

decision is to continue the renter resource grant programme in

1975 for those British Columbia renters aged 65 and over. These

citizens, then, will receive two payments of $80 or more in

respect of 1975 — one under the existing programme and one

under the renter tax credit programme. Our view is that this

additional tax measure will ease the transition to a new

income-related programme, while at the same time providing what

might be called "double benefits" in 1975 for those 65 and

over.

Assistance to local governments, Mr. Speaker:

I would like to spend a few moments to discuss the important

issue of financing of the province's municipalities. I

previously noted that our property tax relief measure would

proceed in 1975 even though the assessment question is still

under review.

[ Page 277 ]

In addition to the residents who pay property taxes, the

municipalities also have an obvious interest in the

government's policy relating to assessment. As on the

taxpayers' side, we intend, on the municipal side, to proceed

with a number of important announcements now. The policies

announced today will be integrated with the new 'assessment

system when it is implemented.

The first announcement relating to municipalities concerns

itself with a municipal per capita grant. Mr. Speaker, in 1973

the per capita grant payments made by the province amounted to

almost $59 million, which was equivalent to one-quarter of all

the taxes imposed by the British Columbia municipalities. While

the per capita grant programme has been accepted generally by

municipalities, there is one procedure associated with the

grant that has attracted criticism. Grants are paid to the

municipalities on the basis of the federal census count taken

every five years. In the intercensal period, the grants

continue to be based on the previous census period. For

example, grants paid in 1974 were based on the 1971 census

figures. For most municipalities, and particularly for those

which are growing rapidly, grants paid in this manner pose

something of a hardship.

It is our intention, therefore, to restructure the per

capita grant programme so that growing municipalities are not

penalized by the use of outdated population data. To achieve

this result, the government intends to make additional per

capita grant payments to the municipalities next year — this

year and the next — so that by 1976 the loss that the

municipalities incurred over the period 1966 to 1971 by virtue

of being paid on the 1966 population count will be totally

offset. Not only are we going to make the system more adequate

and more honest, but we're going to try to correct the mistakes

of the previous administration.

In 1975, four-fifths of that loss will be disbursed to the

municipalities, with the remaining one-fifth of the shortfall

to be made up in 1976. In 1977, the new population figures will

be available from the 1976 census. Municipalities will receive

per capita grants on the basis of the 1976 population count

and, in addition, one-fifth of the amount of per capita grant

"lost" in the 1972-76 period.

MR. G.B. GARDOM (Vancouver–Point Grey): It's a little

catch-up.

HON. MR. BARRETT: It's a catch-up, and it's a good thing. It's a catch-up,

and no other government would have done it — they would have just started from

where they are now and gone on, but we believe in a little catch-up on the past

mistakes of the former government. One by one we're wiping out the inequities

that we inherited. We haven't been able to do it overnight but one by one we're

getting there.

This new policy ensures that the per capita grant programme

will be kept up to date. The extra payments to municipalities

as a result of this measure will total $6.8 million in 1975;

this is in addition to the ordinary per capita grants, which in

1975 will amount to $64 million.

Now, Mr. Speaker, I wish to announce an important and

historic third direction in which this government intends to

channel future increased revenues arising from the natural

resource sector.

Over the past few weeks I have taken the opportunity

regularly to inform the citizens of the province of the

negotiations and ultimate resolution of the British Columbia

natural gas question. Members are aware that the provincial

government achieved a number of important advances in these

negotiations, advances which I outlined a while ago.

Members will recall that one of our proposals, one that was

not accepted by Ottawa, was that the increased revenue from

natural gas export prices exceeding $1 per 1,000 cubic feet be

split three ways — one-third to the federal government,

one-third to British Columbia and one-third to the

municipalities of this province.

Notwithstanding the fact that the federal government

rejected this proposal, our government has now decided to adopt

this principle with respect to the sharing of revenues with

British Columbia municipalities. Accordingly, one-third of the

net revenue produced from an export price of gas over $1, after

taking into account our federal tax-rebate system and other

expenses, will flow directly to the municipalities of this

province.

Mr. Speaker, a new export price will be determined following

a forthcoming First Ministers' Conference. If the export price

of gas is set at $1.50 per 1,000 feet, the amount which would

flow to the municipalities on an annual basis is estimated at

roughly $20 million. An export price of $1.75 would produce

approximately $30 million for the municipalities, and an export

price of $2, which is the competitive value of the fuel, would

yield approximately $40 million for the municipalities in a

full year, which at current population levels, is equivalent to

an additional $20 per capita payment.

Mr. Speaker, the opposition fought against a petroleum

corporation; now it's a success and they would never dare speak

against it. Now we are moving to increase the price of natural

gas, and we make this commitment: the municipalities will share

directly in that increased price. It is a new policy. It is the

first of its kind in Canada, and I'm a proud person to announce

it today, Mr. Speaker, $20 million in addition to municipalities if

the price goes up to $1.50; $30 million at $1.75; $40 million

at $2.

[ Page 278 ]

MR. D.A. ANDERSON (Victoria): Their expenses are fixed.

HON. MR. BARRETT: Their expenses are fixed, but they have

never looked at funds like this before, certainly not in one

year.

I say this: there is no other government in Canada, that has

the resources, that has embarked on a revenue-sharing resource

programme like this. All I ask is that Ottawa keep its

commitment to raise that gas price.

I want to publicly thank the municipal officials who have

supported me regardless of politics, regardless of political

parties, who have sent me wires supporting my programmes

including, ladies and gentlemen of this assembly, a telegram

from the Member for Vancouver–Point Grey.

Interjection.

HON. MR. BARRETT: No, the forward-thinking Member for

Vancouver–Point Grey (Mr. McGeer), the one in the front row. I

know that when the debate comes on this issue we will not have

to say a word to sell this programme; that fight will be led by

the Member for Vancouver–Point Grey.

I will distribute to every Member of this House, to ease

their pain in understanding his position, a copy of his

telegram. (Laughter.)

I urge all the municipalities of this province to write the

government's position — that the natural gas export price be

increased within a year to its BTU equivalent value of $2 per

1,000 cubic feet.

The Minister of Municipal Affairs (Hon. Mr. Lorimer) will

begin discussions concerning the most appropriate way in which

these gas revenues should flow to the municipalities.

Mr. Speaker, the budget I have presented today is a

job-security budget for the citizens of British Columbia.

The progressive fiscal policy measures we have brought

forward will provide jobs for British Columbians, together with

a movement toward a fairer tax structure. These policies are

introduced within a budgetary framework of a small revenue

surplus in the coming year.

Our budgetary plans include:

Job creation and expansion through special employment

programmes and through public works, ferry, hospital, housing,

schools, and community and recreation construction

programmes.

An historic revenue-sharing arrangement between the province

and its municipalities based on natural gas revenues which

should provide millions of dollars to assist the municipalities

in providing services to their residents.

A continuation of the government's programme of February 28, 1975 alleviating

the burden of rising school taxes.

A renter tax credit programme which provides relief for

those in the middle- and lower-income brackets, as well as

those on fixed incomes such as our senior citizens.

Continuation and extension of our programmes which are

oriented toward people — programmes such as Mincome,

Pharmacare, ambulance services, day care, nursing homes, and

community health centres.

A new programme of food aid to disaster-stricken countries,

with a matching-grant provision to help British Columbia

express their concern.

These measures will assist in creating new job opportunities

to help ensure a fairer distribution of our province's economic

benefits.

This budget, we believe, justifies the confidence the people

of our province have shown in our government. It has not been

an easy road. Faced with sometimes mindless and wild criticism,

we have still fought our way, tooth and nail, to these

progressive measures, and we have not lost heart nor hope for

better understanding. Certainly the acceptance of our

programmes has been great. And we will not falter in continuing

to fight for the ordinary people of this province in a

brand-new way.

The tax and expenditure policies that I presented today will

move British Columbia closer to the goals this government had

before it assumed office two and a half years ago, and since

the first democratic socialist was elected in this House in

1899, two years after this very assembly was opened. Parker

Williams was the first. From his time — Hawthornthwaites to

Reverend Cornell, a Methodist minister who led a small group of

social reconstructionists in this very House, based on

Christian socialist principles — from that time through the

Winches, through Webster, through Strachan, Berger and myself,

there has been a continuity over these 78 years of our movement

in this province — a people's movement committed to giving the

ordinary people a fair break out of their own resources. We got

our first chance two and a half years ago, and I think we've

done those pioneers proud.

Mr. Speaker, there is a motto that expresses these goals

well:

"The test of our progress as a society is not in

whether we add to the abundance of those who already have much, but in

whether we provide more for those who have little."

Mr. Speaker, that thought lies at the heart of our efforts

as a government, and it is that motto which is behind the

job-security budget I present to you for the coming year.

Mr. Speaker, I am very, very proud to move, with pleasure, to bring a motion

of our parliamentary system of government: That Mr. Speaker do now

[ Page

279 ]

leave the chair for the House to go into Committee of Supply.

Mr. Bennett moves adjournment of the debate.

Motion approved.

SPECIAL FUNDS APPROPRIATION

ACT, 1975

Hon. Mr. Barrett presents a message from His Honour the

Lieutenant-Governor: a bill intituled Special Funds

Appropriation Act, 1975.

Bill 23 introduced, read a first time and ordered to be

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

sitting of the House after today.

SUCCESSION DUTY

AMENDMENT ACT, 1975

Hon. Mr. Barrett presents a message from His Honour the

Lieutenant-Governor: a bill intituled Succession Duty Amendment

Act, 1975.

Bill 24 introduced, read a first time and ordered to be

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

sitting of the House after today.

BRITISH COLUMBIA HYDRO AND POWER

AUTHORITY

(1964) AMENDMENT ACT, 1975

Hon. Mr. Barrett presents a message from His Honour the

Lieutenant-Governor: a bill intituled British Columbia Hydro

and Power Authority

(1964) Amendment Act, 1975.

Bill 25 introduced, read a first time and ordered to be

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

sitting of the House after today.

SCHOOL TAX REMOVAL ACT

Hon. Mr. Barrett presents a message from His Honour the

Lieutenant-Governor: a bill intituled School Tax Removal

Act.

Bill 26 introduced, read a first time and ordered to be

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

sitting of the House after today.

BRITISH COLUMBIA RAILWAY COMPANY

CONSTRUCTION LOAN AMENDMENT ACT, 1975

Hon. Mr. Barrett presents a message from His Honour the

Lieutenant-Governor: a bill intituled British Columbia Railway

Company Construction Loan Amendment Act, 1975.

Bill 27 introduced, read a first time and ordered to be

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

sitting of the House after today.

MR. GARDOM: A point of order.

MR. SPEAKER: What is your point of order?

MR. GARDOM: My point of order, Mr. Speaker, is that the Hon.

Premier is introducing a number of bills today which would

suffice to stifle debate on the points that are raised in the

budget debate, and I wonder if we could have the undertaking of

the government that it's prepared to waive the anticipation

rule.

HON. MR. BARRETT: Mr. Speaker, it has been traditional in

this House that these bills related to the budget matters have

generally been waived during the budget debate. I do not

anticipate any change in that position. The budget itself has

been debated in the wide frame, and I do not recall, with your

advice, Mr. Speaker, at any time that the debate has been....

MR. SPEAKER: I don't recall it as having been a problem in

previous years.

MR. GARDOM: It could easily become a problem.

MR. SPEAKER: If any Member brings objection to any debate at

that time, of course, I would have to deal with it and not

hypothetically now.

HON. MR. BARRETT: Mr. Speaker, I would hope that every

Member would continue the undertaking that we have had by

tradition, at least in my understanding, and I hope that that

will be the case.

ASSESSMENT AUTHORITY OF BRITISH

COLUMBIA AMENDMENT ACT, 1975

Hon. Mr. Barrett presents a message from His Honour the

Lieutenant-Governor: a bill intituled Assessment Authority of

British Columbia Amendment Act, 1975.

Bill 28 introduced, read a first time and ordered to be

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

sitting of the House after today.

CORPORATION CAPITAL TAX

AMENDMENT ACT, 1975

Hon. Mr. Barrett presents a message from His Honour the

Lieutenant-Governor: a bill intituled Corporation Capital Tax

Amendment Act, 1975.

Bill 129 introduced, read a first time and ordered to be

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

sitting of the House after today.

GASOLINE TAX

(1958) AMENDMENT

ACT, 1975

[ Page

280 ]

Hon. Mr. Barrett presents a message from His Honour the

Lieutenant-Governor: a bill intituled Gasoline Tax

(1958) Amendment Act, 1975.

Bill 30 introduced, read a first time and ordered to be

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

sitting of the House after today.

GASOLINE TAX

(1948) AMENDMENT

ACT, 1975

Hon. Mr. Barrett presents a message from His Honour the

Lieutenant-Governor: a bill intituled Gasoline Tax

(1948) Amendment Act, 1975

Bill 31 introduced, read a first time and ordered to be

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

sitting of the House after today.

MOTIVE-FUEL USE TAX

AMENDMENT ACT, 1975

Hon. Mr. Barrett presents a message from His Honour the

Lieutenant-Governor: a bill intituled Motive-Fuel Use Tax

Amendment Act, 1975.

Bill 32 introduced, read a first time and ordered to be

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

sitting of the House after today.

COLOURED GASOLINE TAX

AMENDMENT ACT, 1975

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

a bill intituled Coloured Gasoline Tax Amendment Act, 1975

Bill 33 introduced, read a first time and ordered to be

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

sitting of the House after today.

Presenting reports.

Hon. Mr. Barrett presented the prospectus of the British

Columbia Hydro and Power Authority bonds at 10.25 per cent

series DN due in 1999, and the British Columbia Hydro and Power

Authority financial statement for nine months ending March 31,

HON. MR. BARRETT: Mr. Speaker, do you wish a five-minute

recess to distribute the copies of the budget?

MR. SPEAKER: Yes, I would like a short recess while the

books are distributed to the Members.

The House took recess at 3:28 p.m.

The House resumed at 3:36 p.m.

Hon. Mrs. Dailly moves adjournment of the House.

Motion approved.

The House adjourned at 3:37 p.m.

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