September 15, 1986 ALBERTA HANSARD 1655 LEGISLATIVE ASSEMBLY OF ALBERTA Title: Monday, September 15, 1986 2:30 p.m. [The House met at 2:30 p.m.] PRAYERS [Mr. Speaker in the Chair] MR. SPEAKER: Let us pray. We give thanks to God for the rich heritage of this province as found in our people. We pray that native-born Albertans and those who have come from other places may continue to work together to preserve and enlarge the precious heritage called Alberta. Amen. head: INTRODUCTION OF VISITORS MR. GOGO: Mr.

Speaker, it's with great pleasure that I introduce to you, sir, and to members of this Assembly a Member of the Legislative Assembly of the province of Alberta, Mr. Ed Connery, the PC MLA for the riding of Portage la Prairie — for Manitoba. I'm sorry, Mr. Speaker; I know there are expansion plans under way, but . . . He is accompanied today by his wife, Beverly. I would ask that the Assembly welcome this colleague from a sister province. head: TABLING RETURNS AND REPORTS MR. TAYLOR: Mr.

Speaker, in response to an exchange between the Minister of the Environment and myself Tuesday, July 22, when he asked me to prove my statement that he and not TransAlta Utilities was in charge of the Bighorn dam, I table the original 1960 document between the fore­ runner of TransAlta, Calgary Power, and the minister of the day, which says on page 18: . . . however, that, to meet any emergency, the Minister may require the Company to release or retain water at the Brazeau storage and power development at such times and in such quantities as may be required in the opinion of the Minister to alleviate the emergency.

MR. SPEAKER: Hon. member, the customary procedure is just the tabling, which you now have accomplished. MR. TAYLOR: I understood I had one sentence. I'll admit it was as long as Diefenbaker's, but it was a sentence. Also with the first document is a six-page appendix, Mr. Speaker, which reiterates the fact that the minister is in charge. I submit these as the proof that the Minister of the Environment and not Calgary Power is in charge of that dam. I have four copies. MR. KOWALSKI: I tabled that two months ago. MR. SPEAKER: Hon. minister, a tabling? No arguments in the House. Thank you, gentlemen.

Further tablings? MR. KOWALSKI: Mr. Speaker, I'd like to table today the government of Alberta's official reply to the government of Canada's Final Report: Inquiry on Federal Water Policy. While I'm on my feet, perhaps I could just make mention to the Member for Westlock-Sturgeon that I think I tabled that report two months ago. MR. SPEAKER: Hon. member, that's highly irregular. head: INTRODUCTION OF SPECIAL GUESTS MR. YOUNIE: Mr.

Speaker, I would like to introduce to you, and through you to the Assembly, a visiting freelance writer, Peter von Stackelberg, who also shares my interest in environmental issues and I've heard doesn't even mind Denmark this time of year. I would ask that he rise in the gallery and that the House accord him the usual warm welcome. MR. HERON: Mr. Speaker, I would like to introduce to you, and through you to the members of this Assembly, two school trustees from the county of Parkland, Mrs. Margaret Miller and Mrs. Margaret McNary, who are situated in the members' gallery.

I would ask that they rise and receive the traditional warm welcome of this Assembly. DR. ELLIOTT: Mr. Speaker, it's my privilege today to introduce a visitor from Grande Prairie, one of the movers and doers, makers and shakers, Mr. John Simpson. MR. ANDERSON: Mr. Speaker, I'm pleased today to introduce through you to members of the Assembly members of the Alberta Women's Institute. They're in the members' gallery. I'd ask them to rise and receive the warm welcome of the Assembly. MR. ORMAN: Mr.

Speaker, I'd like to introduce to you, and through you to the members of the Assembly, an individual from the city of Calgary who has a long record of community involvement and besides that is a very respected lawyer in Calgary. His name is John McCarthy and he's seated in the members' gallery. I'd ask Mr. McCarthy to rise and receive the recognition of the Assembly. head: ORAL QUESTION PERIOD Crown Corporations MR. MARTIN: Mr. Speaker, I'd like to direct the first question to the Premier.

The Premier seems to have done a lot of speculating outside the Assembly lately, so we're going to see if we can get some answers in the House about what's going on. Could the Premier tell the Assembly what Crown corporations the government is considering selling? MR. GETTY: Mr. Speaker, there would be a review of all the Crown corporations before any decisions were made as to which ones might be sold. MR. MARTIN: A supplementary question, Mr. Speaker, to follow up so we don't misquote the Premier here. Is there any Crown corporation that the government is not prepared to sell?

1656 ALBERTA HANSARD September 15, 1986 MR. GETTY: Mr. Speaker, at this stage I would much prefer to stay with my original answer, which is that we'll review them all and then make a decision. MR. MARTIN: A supplementary question to try to determine the policy that the government might look at. In terms of general policy on the sale of Crown corporations, is the government's goal to try and unload money losers like AMHC even if it means the assets are undervalued, or is it to try and scoop up some of the easy cash from money makers like AGT? What is the policy? MR. GETTY: Mr.

Speaker, again I would much prefer that the hon. member was satisfied with my first answer. MR. MARTIN: I always appreciate the Premier's answers. They're always so straightforward and we learn so much. Mr. Speaker, to look at one specifically. It reminds me of the alcoholic who considers selling his house in order to pay for a case of gin. My question is specifically with AGT. Because of the nonanswer I take it that the government is considering selling AGT.

If not, I'll ask the Premier this so we'll get it clarified: what assurances can the Premier give Albertans that Alberta Government Telephones, which provides excellent service and is generally quite profitable, is not on the selling block and no consideration is being given to selling all or part of it? MR. GETTY: Mr. Speaker, again I would say that we will review all of the Crown corporations before making a decision on which ones might be sold. MR. TAYLOR: Mr. Speaker, it's a little disturbing to hear that AGT may be on the auction block.

Could the Premier at least give the House the assurance that if any of the Crown corporations are sold, it will be done by open, competitive bidding? MR. GETTY: Mr. Speaker, having been in business, the hon. Member for Westlock-Sturgeon knows that sometimes you can dispose of things in that way and other times they must be negotiated in different ways. Therefore, some Crown corporations might not be able to be sold on an open, competitive bid, although in every case, naturally, you would want to obtain the best possible price for any asset you're prepared to sell. DR. BUCK: Mr. Speaker, to the hon. Premier.

In the assessment of looking at the sale of some or all of these Crown corporations, is the Premier and the cabinet giving consideration to making sure that if we go that route, Albertans will have first choice and be the only possible buyers of Crown corporations belonging to Albertans? MR. GETTY: Mr. Speaker, you can't make that kind of commitment in advance. It is a good condition to look at in every case, but you can't make it in advance on such a wide variety of Crown corporations. I was thinking myself of trying for a liquor store. MR. MARTIN: Probably a good investment with a Con­ servative government, Mr.

Speaker. Syncrude Expansion MR. MARTIN; My question has to do with some more musings from Don. We could go on with this every day. It has to do with possible provincial support for the Syncrude expansion. It seems that spokespeople for Syncrude itself didn't seem to know over the weekend what the government was talking about with this trial balloon. My question is to the Premier: beyond a discussion of what to do with the $85 million in engineering funding that the government found during the election, are there in fact talks currently occurring with Syncrude about the expansion project? MR. GETTY: Mr.

Speaker, the hon. Leader of the Opposition must refresh his memory on the fact that there are two expansions that Syncrude has been discussing. One is the large expansion of some $4.5 billion. That expansion is the one to which the government has contributed on a loan basis $85 million to allow the engineering leading up to a construction decision to go ahead, because we believe it's so important to Canada and Alberta for future supplies. The second expansion is a less aggressive one, but nevertheless a significant expansion, referred to as the capital projects expansion.

That expansion has been delayed and to some extent put off or stretched out because of the current prices of energy. So on both of those we have had discussions with representatives of either Syncrude or the companies who own shares in Syncrude. MR. MARTIN: A supplementary question, Mr. Speaker. Other than just giving away huge sums of money at a time when we have a huge deficit in this province, how is it possible to make the expansion viable in the current pricing environment without some guarantee of a minimum price for the product? MR. GETTY: Nobody's talking about giving anything away, Mr. Speaker. The hon.

Leader of the Opposition perhaps doesn't understand all the gives and takes of risk and reward, but there are ways to figure these things out. MR. MARTIN: Mr. Speaker, we certainly do understand Tory rewards. It's giving away the public purse to every multinational that comes around. Mr.

Speaker, my question to try to get some answers from the Premier, to try to find out a little more about it from the minister and the Premier, is simply this: is there any interest — because we're told they're also discussing it with the federal government — from the federal government on this possible Syncrude expansion, or is it the case that we're going to have to go it alone even with our huge deficit? MR. GETTY: Mr.

Speaker, first of all, I wouldn't get into details of discussions with the federal government in this regard, but I make it very clear to all the people of Alberta that this government is committed to the development of their oil sands. If people are unable to see the wisdom and intelligence of that, then we may have to do it alone. MR. MARTIN: The cupboard is bare, but we still talk big, don't we, Mr. Speaker? There has to be a limited amount of money. We are told by the Treasurer that we're in serious times. We're going to debate $5.5 billion that we're going to have to borrow.

My question to the Premier, because of his answer, is: what ceiling has the government established for the amount of money it is willing to expend on this expansion project? MR. GETTY: Mr. Speaker, the hon. Leader of the Opposition has proven once again that he does not understand the matter of risk/reward investment. The difference between

September 15, 1986 ALBERTA HANSARD 1657 investing in the future of this province and spending, as he refers to it — when you invest, you end up getting a return. You aren't spending something; you're investing in the future of this province. It pays back in huge dividends to the people of this province. MR. TAYLOR: Mr. Speaker, I think that may make many taxpayers a little worried about the Premier's megaproject fantasies. I know he likes risk and reward, but taxpayers' risk and Esso's reward is really not what we're after.

Has he done any cost/benefit analysis on the oil industry to see where the most jobs are created and the best long- term returns to the people of Alberta come from when distinguishing between tar sands or heavy oil or the con­ ventional oil industry? Three very important sectors, but competitive. Would he spread the money around a little bit? Has he done a cost/benefit analysis on which is the best area? MR. GETTY: Mr. Speaker, from time to time there are efforts made to determine which has the greatest job-creation effort per barrel.

The hon. member should be clear as well that whether they be heavy oil, synthetic crude oil from the oil sands, or conventional oil, this government is committed to the development of all of those resources of this province because they are so important to the people of this province and the people of Canada. DR. BUCK: Mr. Speaker, I concur with the Premier's statement that the government supports the development of the heavy oil sands. My question is to the Minister of the Environment. Several years ago I asked the former minister, the hon.

Jack Cookson, what studies the Department of the Environment had done in the Fort McMurray area and downwind to find out what the limit is to the number of tar sands plants we can develop in the Fort McMurray area before we endanger our neighbours downwind with acid rain. MR. KOWALSKI: I'm sorry, Mr. Speaker; I didn't quite get the gist of the question. DR. BUCK: Mr. Speaker, to the hon. minister. Has the department done an assessment as to how many plants we can develop in the Fort McMurray area with the present technology, as to the amount of sulphur dioxide that goes into the air?

How many plants are we limited to developing so we don't cause an acid rain problem to our neighbours downwind? MR. TAYLOR: If you put it up high enough, it lands in Saskatchewan. MR. SPEAKER: Is the Member for Westlock-Sturgeon answering? Please. MR. KOWALSKI: Mr. Speaker, in terms of the major acid deposition report that was tabled in the House earlier this session, there seemed to be no major concern from Alberta Environment with respect to the possibility of enhanced acid rain or acid deposition in the northeastern part of the province of Alberta or the northwestern part of the province of British Columbia.

As a former board member who represented, I guess, the government of Alberta at that plant for several years, I simply would like to say that this whole business was a major priority concern of the Syncrude board of directors. Heritage Savings Trust Fund MR. TAYLOR: Mr. Speaker, this is to the hon. Treasurer. Sorry, Mr. Speaker; I'm fumbling my papers here. The Treasurer said through the Premier last Friday that his government will not be encroaching upon the principal of the heritage trust fund. This is a critical statement given the state of the fund and the pressure that a desperate government could put on it.

How can we not be eroding the principal this year when $405 million is going into it and $644 million is coming out, being spent according to the Treasurer's June 16 budget? How are we not eroding the principal? MR. JOHNSTON: Mr. Speaker, I think the concept of using the Heritage Savings Trust Fund to support the general revenue is one which could deserve some explanation. Within the Heritage Savings Trust Fund there are a variety of income flows or income streams which can be used. When we talk about the capital, we're talking about reducing the value of the fund below the year-over-year balance.

It's not our intention, first of all. to encroach upon that in capital. Yet it is reasonable, I think, given the shortfall of revenue in the General Revenue Fund and the need to have some eye on the size of the deficit, that we do use the stream of income from the heritage fund into the General Revenue Fund. That stream is generally made up of the income from income-producing assets within the heritage fund. That has been the way in which we've transferred money from the heritage fund into the General Revenue Fund.

Pan of that income stream does include the earnings on the income- producing assets and the cash flow or the royalties which are received from the General Revenue Fund back into the revenue fund again. Mr. Speaker, we're not reducing the size of the fund year over year. We're maintaining the capital portion of the fund, and we will use the income flows, as I have indicated before, to support the General Revenue Fund. MR. TAYLOR: Mr. Speaker, you are transferring all the interest to the operating revenue. This is out of the principal we're talking about. We're talking about $240 million that has disappeared.

All right, then. Is the $405 million of resource revenues destined for the heritage trust fund this year a realistic projection since it is based upon 15 percent of the total resource revenues to the province, a number which the budget clearly overestimates? What's your latest prediction? Do you still think $405 million? MR. JOHNSTON: It is a reasonable estimate. Mr. Speaker. MR. TAYLOR: I like the Treasurer's panache, or gall, some people would call it. Mr.

Speaker, the Treasurer is considering transferring no resource revenue into the fund next year, and the fund is not allowed to retain its present investment income. Does this mean that spending out of the heritage trust fund account next year must come from the capital of the fund itself? MR. JOHNSTON: No, Mr. Speaker. MR. TAYLOR: He is difficult to pin down, Mr. Speaker.

1658 ALBERTA HANSARD September 15, 1986 Can the Treasurer tell the Assembly whether he plans to cut spending for the '87-88 year from the heritage trust fund altogether? Was the Premier, for instance, confused when he said in the House last Friday that there were no plans to take money out of the fund itself? MR. JOHNSTON: Mr. Speaker, it's a crystal clear policy. There is no doubt in most Albertans' minds what is meant. If you've had a chance to read the fund, you'll see exactly how it's set up. I must say that I apologize for not having an annual statement ready at this point.

We are in the process of printing the updated annual statement. That will be available, and there is a nice graphic form which the hon. Member for Westlock-Sturgeon can look at and see how the flow of funds takes place. MR. MARTIN: Mr. Speaker, when the trust fund was set up, there were sort of two main goals, as I understand it: one was the sock mentality, saving for a rainy day; the other was diversification. With the deficits we're facing, could the Treasurer tell us what the philosophy of the government is in regard to the trust fund now? MR. JOHNSTON: Mr.

Speaker, the philosophy of the trust fund essentially is fitted within the broad policy that we have articulated over the past 10 years with respect to its future.

Some of the items which should be considered to be priorities in that discussion and that policy formation would be those that are spelled out in the legislation; that is, first of all, to generate a savings fund to set that money aside from the general revenue flow so that the burden of future deficits is not transferred inordinately to the people of Alberta, and secondly, to ensure that there's an income flow from the resources to the Heritage Savings Trust Fund. That income flow can be used for a variety of purposes.

Those purposes must include, first of all, the diversification of the economy of the province of Alberta, unusual projects which have long-lasting benefits to the future of Alberta, including such things as research, scholarships, irrigation, and medical research in particular. Those are some of the items which would be in that diversification element.

Finally, to ensure that we do have an ample opportunity to use the nonrenewable resources, which are depleting in this province, over a longer period of time — not necessarily to match the use of the funds with the drawdown of the pool of resources themselves but to have a smoothing process over a longer period of time. It is that good management plan which we are identifying, which we have gone to the people on on a variety times, and which is a keystone of the provincial government's policy with respect to its fiscal management side. 1988 Winter Olympics MR. HAWKESWORTH: Mr.

Speaker, my question is to the Minister of Recreation and Parks. On August 1 my New Democratic colleague for Edmonton Highlands raised a concern in the Assembly about the possibility of the official film record for the '88 Olympics going to an American TV network and not an Alberta firm. Now just this weekend we've learned that OCO, the Olympic committee, is about to finalize an award of the largest and most expensive sculpture of the games to two French artists.

Can the minister explain what steps he has taken to make sure this decision is reconsidered so that the commission goes to some of our excellent Alberta or Canadian artists instead of sculptors from another country? MR. WEISS: Mr. Speaker, the Member for Calgary Mountain View has asked specifically what steps the minister will take. The minister will not be involving himself personally, because I believe in the autonomous support of the committee that made those decisions. I'm sure they reviewed all potential candidates before making that decision.

I certainly will apprise myself of it and see if they have done that. I would undertake to that degree, but as far as reversing the decision, I would not be prepared to do so. MR. HAWKESWORTH: A supplementary, Mr. Speaker. The minister stated in a letter to my colleague for Highlands as a result of her raising that past issue in this Assembly that the Alberta government has developed an understanding with OCO '88 that all projects within reason would be offered publicly and that OCO '88 would give first priority to Alberta and Canadian firms, all things being equal.

Could the minister tell the Assembly if he or any of his staff or the provincial government representatives on OCO spoke to the OCO committee to ensure that Alberta content was being upheld in regard to artistic works? MR. WEISS: Mr. Speaker, I'm not aware personally that any of our staff were involved in that. As it would really fall under the Minister of Culture, I'll refer the question directly to him. MR. ANDERSON: Mr. Speaker, earlier this afternoon I had a chance to talk to Mr. Pratt of the Olympic committee and other officials with respect to the sculpture in particular.

As the minister of recreation has indicated, we don't have a direct role to play, but I did express to him my feeling that it was most unfortunate that they had not found an Alberta or Canadian artist to do the sculpture. I asked him to consider in every way possible that position and the need for Canadian and in particular Alberta artists to be recognized in that particular instance and in all other future ones. MR. HAWKESWORTH: Mr. Speaker, the provincial government is represented on the OCO executive committee by a number of individuals.

Are those individuals under instructions by the provincial government to give first priority to Alberta and Canadian firms, all things being equal, when they vote on matters of this nature? MR. WEISS: I'd be pleased to take that under advisement and report back to the member specifically. MR. HAWKESWORTH: Mr. Speaker, my final supple­ mentary. I understand the official name for this yet unbuilt sculpture is going to be A Pig in a Poke.

In terms of awarding this particular project to Canadians, can the minister assure the House that Canada does have artists of an international or world-class calibre that are perfectly capable of carrying out this particular work of art? MR. WEISS: Mr. Speaker, once again the question should be related to my colleague the hon. Member of Culture. Yes, I am sure there are lots of qualified artists, but that decision was made and the Olympics, remember, is a worldwide situation. I'm sure that was considered. Perhaps the member would like to supplement.

September 15, 1986 ALBERTA HANSARD 1659 MR. ANDERSON: Mr. Speaker, with respect to art, of course, the judgments are always subjective, but it's my personal opinion that we have artists of great renown in the country and in the province who would have been satisfactory to me personally in any such function. As the Minister of Recreation and Parks has indicated, we don't have a direct involvement, but I did express to the officials this morning my belief that Alberta and Canadian artists should be considered first and foremost in their selections.

I should mention that the officials mentioned to me that their volunteer committee, headed by Jane Edwards, reviewed the situation, went through about 120 different artists, and concluded that the best were the Paris artists. I would probably come to a far different conclusion, but that is the circumstance as it currently exists. MR. NELSON: Mr. Speaker, I'd like to direct a supple­ mentary to the Minister of Recreation and Parks and/or the Minister of Culture.

As the city of Calgary is the host city for the games and a contractual obligation is there between the city and the international Olympic people, is this devel­ opment not a decision for OCO and the city of Calgary? It is being considered by the city of Calgary today in council and should not be a part of the consideration of the government of Alberta. MR. ANDERSON: Mr. Speaker, with respect to that, the officials did in fact indicate to me that they were going directly from my conversation with them to council chambers, where they would offer the sculpture they had to the city of Calgary.

I haven't been apprised of that vote, if it has been taken by now in the city of Calgary, but it will be up to them whether they reject or accept this particular offer. The guess as to the outcome of that vote would probably be better made by the Member for Calgary Mountain View, who has more intimate knowledge of that council. MR. SPEAKER: Member for Clover Bar, a supplementary or a main question? Main question? Sorry, hon. member, there's a supplementary from the ranks of the Liberal Party. MR. CHUMIR: A supplementary to the Minister of Culture, Mr. Speaker.

Has the government itself commissioned or is it considering commissioning any works of art by Alberta artists to commemorate the occasion of the Olympics? MR. ANDERSON: Mr. Speaker, no, the Alberta government hasn't, and, to the best of my knowledge, hasn't at this point any plans. Its involvement is through the Olympic committee in terms of funding and involvement, not directly through the Department of Culture. We do encourage, however, and have encouraged the committee to involve Alberta artists and, in the case of the multicultural organ­ izations, such organizations in all aspects of their plans. DR.

BUCK: Mr. Speaker, my question is to the hon. Minister of the Environment, but I'd like to say before that, Mr. Speaker, to the Minister of Culture that the last time we got Olympics and French engineers mixed up. it cost the taxpayers $1 billion. MR. SPEAKER: Hon. member, the Chair did offer on the previous question if you wanted to ask a supplementary, so let us please go to the main question. DR. BUCK: I'm trying to save a billion dollars. Wood Preservative Plant DR. BUCK: Mr. Speaker, to the Minister of the Environment.

Can the Minister of the Environment inform the Assembly as to the status of the Bradbury Chemicals application and the development of the site east of Fort Saskatchewan for the new chemical plant? Have there been any changes in the last week as to the siting of that proposed plant? MR. KOWALSKI: Not that I'm aware of, Mr. Speaker. We have the application that basically came forward to us under the Clean Water Act.

The last time a question was asked on this matter, I indicated that I would be corresponding with the federal Minister of Agriculture in an attempt to get a status on the chemicals in question, and such letter has been sent. There's nothing further to add other than that I understand the official position of the NDP has changed on this matter and they're now supportive of the application from Bradbury Chemicals. MR. SPEAKER: The question will have to be raised by them. DR. BUCK: Mr. Speaker, I'm not interested in what the NDP's position is.

I'm asking the minister: is the minister still considering having a study as to the environmental impact of this plant on the community? MR. KOWALSKI: Absolutely, Mr. Speaker. That has already been announced. The decision by myself to call for an environmental impact assessment was announced the morning after the application was received from Bradbury Chemicals. DR. BUCK: Mr. Speaker, can the minister indicate any dates if public forums are going to be held in the area? MR.

KOWALSKI: Under the arrangement and under the guidelines and the policy setting forth environmental impact assessment, it's up to the proponent to basically get back with a document, to advertise locally that such a document is present, and to advertise as well when such public information hearings and meetings would be scheduled and available. When the environmental impact assessment that the proponent will write and pay for is ready, they will also have to provide it to Alberta Environment for scrutiny and phrase-by-phrase analysis. MR. TAYLOR: To the Minister of the Environment.

Has he gone so far as to approve the disposal of hazardous waste on-site, or will it be going to the Swan Hills plant? Have we gone that far yet on the proposal? MR. KOWALSKI: Mr. Speaker, until we give an approval for Bradbury Chemicals to get a licence to operate, that would appear to be rather hypothetical. I don't know at the moment whether or not Alberta Environment and the government of Alberta will be in a position, until we get all the information that's required with respect to this application, to determine whether the firm will be allowed to operate in Alberta. MR.

YOUNIE: First, I'd like to state that my position hasn't changed, and I'm surprised that the minister . . . MR. SPEAKER: Hon. member, that's entirely out of order. Order please, hon. member. This is a supplementary question. Please proceed with the question.

1660 ALBERTA HANSARD September 15, 1986 MR. YOUNIE: Thank you. Considering that Mr. Hean has already announced that he plans major expansions once this very modest proposal goes ahead, will the minister guarantee that environmental impact assessments will also be required on any significant changes within the plant and any significant expansions of the plant? MR. KOWALSKI: I think, Mr. Speaker, that once again we had better wait to see whether or not the current application is going to be one that will be accepted for licensing and operating in the province of Alberta. Economic Outlook MR. MITCHELL: Mr.

Speaker, Albertans are facing a deficit of $3.5 billion dollars, unprecedented unemployment, and the lowest growth rate in Canada next year. SOME HON. MEMBERS: Question. MR. MITCHELL: I get two sentences. The government responds with an eclectic range of ideas from the Heritage Savings Trust Fund revenue to megaproject expenditure to Crown corporations, ideas which have to be thought out properly.

To the Premier: is the government not saying in effect that the economic assumptions upon which the Treasurer's last two budgets were based have changed so dramatically that a new provincial budget is required immediately — not now, but right now? MR. GETTY: No, Mr. Speaker, the government isn't saying that. MR. MITCHELL: I wonder if they know what they are saying. Can the Treasurer tell this Assembly what his estimate of the deficit is today, since the underlying assumptions have to have changed, particularly with respect to resource revenues? MR. JOHNSTON: Mr.

Speaker, we stand by the estimates which were tabled June 16. MR. MITCHELL: To the Premier, whose Treasurer loses all kinds of credibility when he answers like that. The assumptions have to have changed dramatically. Why then do we have to wait until 1987 for a more realistic budget based on more realistic assumptions? Is not an interim budget called for right now? MR. GETTY: No, Mr. Speaker, it's not. MR. MITCHELL: Will the Premier recall the Legislature before Christmas, if not for the presentation of a budget, at least for a special debate of the province's current budgetary situation?

We have to be discussing that right now. MR. GETTY: If I understand the hon. member's proposal, it is to shut down the House and come back again before Christmas in order to discuss another budget. That's not our intention, Mr. Speaker. MR. MARTIN: Mr. Speaker, it seems to us that the worst case scenario that the Treasurer has talked about is true. For the budget to work out, we would need $24 per barrel. How can the Treasurer tell us that his estimates from the previous budget are in that range at this time? Everybody in Alberta knows that's false. How can he justify it? MR. JOHNSTON: Mr. Speaker, again the hon.

Member for Edmonton Norwood has focussed on one amount. We have from time to time indicated that we are using a one- third reduction in all revenues to the province that come from natural resources, including land sales, gas sales, and a variety of other items, and I think fairly at this point, Mr. Speaker, that assessment is as good as any. Certainly, we do not hang our hat on a number as the Member for Edmonton Norwood has just done. Water Resources MR. YOUNIE: Mr.

Speaker, after a meeting with the council and mayor of Oyen I've come to the conclusion that they have very legitimate concerns about their water supply and that that problem has been an ongoing source of serious concern and frustration for years. So I'd like to ask the Minister of Community and Occupational Health: has the minister personally studied the danger to community health that is embodied in this water problem, and is he therefore urging the appropriate minister to find a solution to this problem? MR. DINNING: Mr.

Speaker, I appreciate the question by the hon. member, but I can quite frankly say that I have not received that information, and if he cares to make it available to me, I would go to work on it. MR. YOUNIE: Thank you. That would be my pleasure later today. To the minister in charge of Public Safety Services. In view of how big a small fire can become when there's no water to put it out, has the minister taken this factor into consideration in choosing which of the 14 alternatives from the Oyen-Youngstown Corridor Water Supply study he will eventually go ahead with? MR.

KOWALSKI: A wide variety of inputs is being received with respect to this, including a meeting that I'll be having in the Oyen area hopefully in the next several weeks, Mr. Speaker. MR. YOUNIE: To the Treasurer. We've heard much talk about cost cutting. Has the Treasurer done or has he had the Minister of Environment do a comparative study of the cost to the province in finding a permanent solution to this problem as compared to the ongoing band-aid solution of trucking water and digging hundreds more wells? MR. JOHNSTON: Mr.

Speaker, that's not within my range of responsibilities, and other ministers who have spoken already have indicated that they're on top of the issue. MR. YOUNIE: The people of Oyen are incredulous to hear that. To the Premier. Can the Premier assure that a solution will be found and that construction will begin no later than next spring so that the residents and town councils of Oyen and nearby communities can be assured of a dependable water supply? MR. GETTY: Mr. Speaker, I'm sure and I would confirm that we will work with the people of Oyen and the surrounding

September 15, 1986 ALBERTA HANSARD 1661 area — it's not just a matter for the town of Oyen — to work out the best possible solution for them working together. Church of Scientology MS LAING: Mr. Speaker, to the Premier. On August 26 the Premier as head of this government promised me that he would investigate and report back to me and this Assembly as to why this government is giving money through the Manpower, Community and Occupational Health, and Edu­ cation departments to the educational offshoot of the Church of Scientology. What is the Premier's report on this matter? MR. GETTY: Mr.

Speaker, I thought that that had already been dealt with by another minister in the House. MS LAING: Not to my satisfaction. To the Minister of Social Services. It now appears that the Social Services department may also be providing funding to the Church of Scientology, in particular to their offshoot Education Alive through a day care operated by JVK Enterprises. Why is Social Services also making grants to the Scientologists? MRS. OSTERMAN: Mr. Speaker, we have no evidence that the Church of Scientology is operating a day care or a family day home.

The programming that is in place is acceptable right across the province. It has been thoroughly monitored. If the hon. member has specific information that someone is being trained in a different way to present a different philosophy that the hon. member believes that we as a government should strike out in all of Alberta, I'd be very interested in hearing that. MS LAING: Mr. Speaker, in August the minister's department closed the family day home servicing

section of JVK Enter­ prises due to the potential of fraud by the centre in regards to funds received for services provided. Will the minister be introducing any new monitoring requirements to ensure a similar type of abuse does not occur in the future? MRS. OSTERMAN: Mr. Speaker, I find that supplementary question to be a rather odd one in light of the question that was originally asked. We're now getting into the administration and moneys flowing from government and not the educational program at all. Mr.

Speaker, the hon. member certainly has been in the House when on a number of occasions I have said that I am addressing in an admin­ istrative sense the whole area of how funds go and how we can assure that they are being properly spent. MS LAING: Mr. Speaker, I'm unconvinced that the mon­ itoring is of sufficient quality. I'm wondering how the minister is monitoring the services and the programs within day cares to ensure that the kind of abuses that we hear about are not in fact occurring? MRS. OSTERMAN: Mr.

Speaker, I'm not sure what kind of abuses the hon. member is speaking to, but I think that she has already raised a question about a particular organization that in fact is under review at this moment. We have taken over to make sure that the services are still available to the public. Bank robbery is also against the law. I guess it's unfortunate to say that we get into situations where people, human beings, commit some kind of misdemeanour that may in fact be against a provincial law. They are then investigated. The hon. member has already raised that. Mental Health Act MRS. HEWES: Mr.

Speaker, my question is to the Premier. In June of 1985 the Court of Queen's Bench heard a notice of motion on behalf of the Canadian Mental Health Association declaring that sections of the current Mental Health Act are inconsistent with the Charter of Rights. That motion was later delayed on the strength of commitments from the Attorney General's department and the then minister of health and, I believe, an understanding from the Premier himself prior to the election that new legislation would be tabled in the spring of 1986. This legislation has not yet been introduced.

What's the reason for the delay in introducing this new legislation, and when on earth can we expect to see the new Mental Health Act? MR. GETTY: Mr. Speaker, it is a very important piece of legislation, one that has received a great deal of attention and work throughout the province, as the hon. member would know, I believe. As soon as we have it in a form that can be presented to the House, it will be. MRS. HEWES: Mr. Speaker, thank you; I'm glad to hear it. To the Premier. Will the new Act make provision for the individual to be fully informed of the reasons for his detention and his right to legal counsel?

MR. GETTY: Mr. Speaker, like any piece of legislation you shouldn't anticipate the details of it. or else we'd be debating it before the Bill is before the House. I'd only say that we would make sure the Bill is as full and complete as possible and would listen with interest if there are any deficiencies in it that are raised by members of the Legislature that could be changed. MRS. HEWES: Mr. Speaker, will the Act ensure that treatment requires the consent of the individual? MR. GETTY: Mr. Speaker, the same answer. You're referring to Beauchesne: I'm not sure if you wish me to answer this or not again. MRS.

HEWES: Mr. Speaker, to the Premier. We're waiting for the Act, and people are very anxious and want to know what on earth we can expect to get in this Act. We need to know, for instance, if the Act will provide — and I've asked this one before — for local treatment of involuntary patients in properly designated general hospitals. MR. GETTY: Mr. Speaker, unfortunately, it's the same matter she's raising: one particular clause from a very complex, important piece of legislation. We should surely wait until the Bill has been introduced. The hon.

Minister of Hospitals and Medical Care may well wish to supplement my answer. MR. M. MOORE: Mr. Speaker, if I might add to the Premier's comments on the last question. The matter of treatment of involuntary patients in active treatment hospitals in this province has been dealt with at some length in the Legislature during the course of the last few weeks, and it has little or nothing to do with whether or not a new Mental

1662 ALBERTA HANSARD September 15, 1986 Health Act is introduced into the Legislature. The existing Mental Health Act has all the requirements that are necessary to move toward the treatment or the admission of involuntary patients in existing active treatment hospitals. I outlined to the Legislature some weeks ago a proposed

schedule of moving certain hospitals in Edmonton and Calgary and other regional centres to a stage of being able to receive involuntary patients over the course of the next three fiscal years. The Department of Hospitals and Medical Care is working now with those hospitals in an effort to try to ensure that they can come on stream as quickly as possible in that category. But I'd repeat again, Mr. Speaker, that it has nothing whatever to do with the requirement for a new Mental Health Act. DR. BUCK: Mr. Speaker, to the minister of health.

Is any consideration being given to bringing the Bill in for first reading before the session rises, holding it over so we could have more public input and give it some consideration, and then bringing it back for discussion in the spring session? MR. M. MOORE: Mr. Speaker, as the Premier and the line of questioning have indicated, there are several very important principles with respect to a new Mental Health Act that involve constitutional matters as well as rights of the patient, and there are differing points of view as to how those important matters can be resolved.

I'm in the process of trying to come to some conclusions that will allow us to put together legislation that could then be put into the House, but at present there is no legislation drafted. We're not able to introduce a Bill until we've had some further opportunity for discussion on at least three aspects of the Act that there are no easy answers for. MR. HAWKESWORTH: Mr. Speaker, to the Minister of Hospitals and Medical Care.

In view of the fact that the Drewry report was tabled three years ago and the changes to the Charter of Rights occurred three years ago, is the minister saying that the present Act is not going to be amended in any significant way, or is he saying that a new Act is in fact going to be introduced within the next six months or before the spring session is concluded? MR. M. MOORE: There is always the possibility, Mr. Speaker, that we could provide some sort of draft Act for review when the House isn't sitting if we're able to get it concluded and into that sort of shape. My preference would be to table

an Act in the Legislature for first reading. As I've said earlier, I don't believe that is possible to do over the next short while, but certainly we are working hard on it, and when we've concluded studying all the issues involved and are able to finalize the drafting of the Act, we'll make it public as quickly as we're able to, preferably through the Legislature. MR. SPEAKER: The time for question period has expired. Two ministers wish to supplement information given to the House previously. First, the Minister of Transportation and Utilities relative to last Friday. Natural Gas Billing Practices MR. ADAIR: Mr.

Speaker, on Friday last the hon. Member for Westlock-Sturgeon asked a series of questions related to the billing processes of ICG, and I have some answers that I hope will clarify the situation. ICG is in the process of changing from volume billing — cubic feet or cubic metres — to energy billing — British thermal units, BTUs, or gigajoules. Most of the Alberta gas utilities have already made the change. The reason for the change is that a given volume of gas contains a variable heat value, a BTU or gigajoule, depending on the well it comes from, and thus energy billing is a fairer way of billing the consumer.

The specific question was: can the minister guarantee that energy value readings based on samplings will be published on each customer bill? The response is that ICG proposes to take monthly readings of the gas energy content on a sampling basis and that the company intends to show on the bill the average megajoule content per cubic metre for the gas in the area in which the customer is located. The second question was: is ICG buying gas on an energy value basis since it sells that way? The response is that yes, ICG buys gas on an energy value basis.

The next question: is the PUB contemplating a provincewide standard of energy value calculations? The response is that all natural gas sold in Alberta, and in fact throughout Canada, is sold under standard conditions of atmospheric pressure and temperature established under the federal elec­ tricity and gas inspection regulations administered by the federal Department of Consumer and Corporate Affairs. The PUB does not set a standard for energy value calculations, but the PUB ensures that the gas utility conforms to those standards with respect to the price charged customers for natural gas.

The last question was from the Member for Athabasca- Lac La Biche: will the minister contact ICG regarding 40,000 consumers being billed an extra dollar? In checking with ICG, normally ICG has a fixed monthly billing charge of $7.50 for residential service. The billing cycle is normally on a 30-day basis, but the billing computer is programmed to charge an extra dollar if the billing cycle exceeds 33 days or deduct a dollar if it's less than 27 days.

In one instance during February-March 1985, the meter readings for a number of customers were delayed due to bad weather and the customers affected were billed the extra dollar. ICG has manually checked about 8,000 customers' bills to date and credits the dollar on the next customer bills. It's intended to complete this analysis for the other 32,000 customers as quickly as possible. MR. TAYLOR: Mr. Speaker, I appreciate the minister's answer, but it doesn't get to the point. The point is that the meter reads in cubic feet.

A gigajoule or a BTU is the number of heat units within a cubic foot of gas, and it can vary from month to month from whatever they're buying. All I'm asking is that utility companies should say on their billings that so many cubic feet — that person can then read it off his meter — times the energy value of what they got equals so many gigajoules. What they're giving you is the answer and the meter but not telling the multiplier factor. There's a multiplier factor in between. You can tell that gentleman that I was selling gas when he was still running around in rompers, and I know exactly what he's trying to do.

MR. SPEAKER: I'd like you to know that this is not a debate, hon. members and minister. The minister brings back the information, and the member who raised the issue gets one chance to ask for supplementary information. But indeed, you're right. As I recollect the process, it's up to the minister to continue with his statement in response to the question as raised. The Chair apologizes.

September 15, 1986 ALBERTA HANSARD 1663 MR. ADAIR: May I go a little bit further? The other point I was going to make was that the approximate energy value of 1,000 cubic feet of natural gas is 1.05 gigajoules, and this varies from source to source. Then my department said to me, "As you know, a gigajoule is 10 joules." That's 10 times 10 nine times. A megajoule is l0, joules; that's 10 times 10 six times. And a petajoule is 10 joules. MR. SPEAKER: Thank you for this precious gem of an answer. Point of order, Athabasca-Lac La Biche?

It's not appropriate for other members to be asking questions on this topic, just the member who raised the initial question. What is the point? MR. PIQUETTE: I just want to thank the minister for checking that ICG monthly billing system. MR. SPEAKER: Order, hon. member. The Chair appreciates your generosity, but you should send a personal note to the minister. Thank you. The Chair understands that there is a point of privilege. head: Question of Privilege MR. YOUNIE: Thank you, Mr. Speaker. Earlier in today's question period the hon.

Minister of Environment made a statement with respect to my opinions and feelings on a certain issue that is factually incorrect and could be detrimental to my ongoing opposition on the matter. I would respectfully request that the minister withdraw the statement that was based on thirdhand information. MR. KOWALSKI: Mr. Speaker, I think it would be appro­ priate at this point in time for all members to perhaps look at the Blues, because I do not recall mentioning the name "Member for Edmonton Glengarry" in any comments I made this afternoon. MR.

SPEAKER: For a point of clarification, the Chair's recollection was that it was a reference to the NDP, not to the Member for Edmonton Glengarry. Hon. member, one last time on this point of privilege. MR. YOUNIE: Mr. Speaker, as I recall, he referred to the New Democrat Environment critic, which is myself [interjections] MR.

SPEAKER: Hon. members, because we're getting this bit of dialogue back and forth, the Chair invites the Minister of the Environment and the Member for Edmonton Glengarry to indeed check the Blues, and if there is indeed any further basis for any discussion with respect to a point of privilege, the Chair will also invoke Standing Order 15(2), which means that two hours' notice before tomorrow's session will be given to the Speaker of the Assembly. ORDERS OF THE DAY [On motion, the Assembly resolved itself into Committee of the Whole] head: GOVERNMENT BILLS AND ORDERS (Committee of the Whole) [Mr.

Gogo in the Chair] MR. CHAIRMAN: Will the Committee of the Whole please come to order. Bill 11 Alberta Stock Savings Plan Act MR. CHAIRMAN: Are there any comments, questions, or amendments to this Bill? Are you ready for the question? MR. McEACHERN: Mr. Chairman, there are some good aspects to Bill 11, as we said in second reading. I want today to get into some of the details. The first one I want to raise is rather odd in a sense, because it's not there. That was the thing we mentioned last time, that it's hard to debate the principles when the principles aren't there.

I want to talk about the details of the principles, but there are no principles in the Bill, or at least written into it. But as I pointed out last time around, there were some rather nice principles outlined in a pamphlet which we think would do just fine. So. Mr. Chairman, I'd like to spend a minute or two on those principles. They are principles that all members of this House, I believe, could support. They are: To strengthen the private sector and create jobs by providing expansion capital lor new and growing Alberta companies. That's certainly a worthwhile aim and one that this party concurs with.

To attract more Albertans to capital markets, and encourage equity ownership of Alberta companies by Albertans. Again, we have spoken in this House before about the need, and some of our questions related to Consumer and Corporate Affairs indicate the need for developing this. We've asked the Premier to outline plans for developing capital markets in this province. The third one that should be in the Bill and is not: To encourage diversification of, and investment in. Alberta-based industries, a fundamental concept for this party and. I believe, to some extent for the government.

They've put it forward in this document as being one of the reasons for the Alberta stock savings plan in the first place. The fourth one: To strengthen the Alberta Stock Exchange and the Alberta financial environment. Mr. Chairman, we have talked often about a number of Bills — and this one is no exception — that do not bother to indicate any principle, objective, or purpose. We suggest that those kinds of details should be in the Bill. There is no reason the government shouldn't be able to outline those principles in the Bill if they can outline them in a pamphlet to be made public.

That would give us something with which to measure the effectiveness of the Bill in subsequent years when we look back and say: "What was the Alberta stock savings plan about? What did it do? Did it accomplish what it was supposed to do?" I suggest that that would make a reasonable set of details to put into the Bill in lieu of principles or objectives for this Bill. One of the other aspects of the Bill that bothers me considerably. Mr. Chairman, is the fact that the minister, in effect, had bowed to the federal government in terms of

1664 ALBERTA HANSARD September 15, 1986 the Alberta content. The acceptance in

section 4 on page 6 of 25 percent of wages being paid in Alberta as being enough is not acceptable to us. That's not high enough; at least 50 percent of the labour expense should take place in Alberta. Twenty-five percent is not a very large portion of the total, and if this Bill is to help develop the Alberta economy, then we can't afford to be helping the Ontario or the American economy more than we're helping the Alberta economy. So that is another area in which we're rather disappointed in the details in this Bill. There is a requirement in that

section for the company to be incorporated in Canada, but there is no provision in the Bill that says it would have any special treatment if it were an Alberta-based company. I think that could be done also. In fact, it seems to me that the whole

section on the credits and who gets them needs to be strengthened. The flat tariff approach that was suggested by the minister as being adequate or the best way to go doesn't seem to me to accomplish what this Bill has set out to do. If you give 30 percent, up to $3,000, credit to new corporations, 15 percent to the expanding ones, and 10 percent to the mature ones and then just say that that's it, then you leave the development of the economy totally in the hands of whoever tries to qualify and you don't give any sense of direction or purpose. Mr.

Chairman, it's not adequate to say that that's the way it should be. As the minister said himself, this government has interfered and encouraged certain kinds of activities in the past. In fact, anything the government does is really an interference in the economy. You cannot say that we will not interfere and that we will let other people make the decisions. There are too many interconnections, if you like, between the government and private enterprise already. We've gotten to a point where it doesn't matter what the government does; even if they stay still, there is still that interconnection.

If the government changes the tax law, that's an interference. If they change it up or down, it's still an interference. If they leave it where it is, in a sense that's still an interference. If they give money to small businesses, that's an interference. If they give money to farmers, that's an interference. The government took something like $15 billion out of circulation in this province over a number of years and then starts to say that they're not interfering in the economy. When you bring in the farm stabilization Bill, it's an interference.

When you subsidize fuel for farmers, that's an interference in the economy. So the question, Mr. Chairman, is not whether you will interfere in an economy. The fact is that we are already interfering in a myriad of detailed ways in the economy of this province. You can't say that we'll just leave it up to the private sector. When you give royalty cutbacks, as Bill 45 does, you are in fact interfering in the economy. So it's not a question of whether you'll interfere in the economy; you just do automatically.

The question is: on whose behalf do you interfere, how are you going to administer it to be most effective, and then how are you going to measure that interference to see if you accomplished what you wanted to accomplish? That does assume, then, that you have some idea of what you want to accomplish. Perhaps that is where this government falls down. In fact, the Premier seems to sort of lie back a bit and just let things happen.

Perhaps the minister is taking that attitude and putting it into his Treasury Department, his Bills, and his idea of the economy — to some extent, that is, but he's certainly not with Bill 45. With Bill 45, he's making very specific interference for a specific purpose. If he can do it in Bill 45, he could do it in Bill 11. Mr. Chairman, what I'm suggesting is that the Treasurer consider very seriously some of the suggestions we made.

If you look back at the principles I read, they could be boiled down in their essential part, as far as the people of Alberta are concerned, into a couple of words: jobs and diversification to help create those jobs. It would seem to me that the government would have a much better chance of doing that if they took an inventory of our economy: how it's working, what's working and not working.

While I'm at it, perhaps I could suggest that the Treasurer should certainly do that in terms of giving us some reasons why he thinks he needs to borrow $5.5 billion in another Bill that will probably be before this House today. In any case, if you accept the notion that we are in fact interfering, whether we really want to or not, then we should be interfering in a positive way.

Rather than giving those flat rates of 30, 15, and 10 that I mentioned a minute ago, we should be building in credits for corporations that get involved in industries that actually lead the economy in the direction of diversification and job creation and achieve the objectives laid out in those principles. Mr. Chairman, the three basic concepts I am putting forward now are summarized in an amendment I have for Bill 11. I would like to send a copy of that to the Clerk and the Speaker, with copies for all members of the House. MR. CHAIRMAN: Would you get a copy to the sponsor of the Bill as quickly as possible. MR.

McEACHERN: Since I made a lot of the points in my

preamble, I will read through the amendment and reiterate one or two points. I will not have to debate them at great length because I think I've already made the case for most of the amendments suggested here. The Bill is hereby amended as follows: A. The following is added after

section 1: 1.1 The purposes of this Act are (1) to strengthen the private sector and create jobs by providing expansion capital for new and growing Alberta companies, (2) to attract more Albertans to capital markets, and encourage equity ownership of Alberta companies by Albertans, (3) to encourage diversification of and invest­ ment in Alberta-based industries, and (4) to strengthen the Alberta Stock Exchange and the Alberta financial environment. Before I go on to number 2, I'll make my final comment on that section.

These four points are from the pamphlet put out by the Alberta government on the Alberta stock savings plan for the industry and for people who might be interested in getting involved with a stock savings certificate, so the points have to be acceptable to the government in the sense of the direction they take. The reason for asking that they be put in the Bill is a little different.

If you put them into the Bill, that's going one step toward making the Bill more relevant and giving purpose to the Bill and one step toward making it easier in subsequent years to determine whether or not the government has lived up to those principles and expectations and objectives: has the Alberta stock savings plan actually helped to achieve those ends? That is why we would like them incorporated in Bill 11, Mr. Chairman, and that is why we urge all members of this Assembly to accept that amendment. The second amendment is shorter but also very important:

September 15, 1986 ALBERTA HANSARD 1665 B.

Section 4(l)(e)(

i) and (ii) are amended by striking out the words "25%" and substituting therefor the words "50%." Mr. Chairman, the effect of that would be to increase the share of wages and salaries paid each year in Alberta by any company asking for an Alberta stock savings certificate. The reasons for that are fairly self-evident. I think I mentioned earlier that if it's only 25 percent, it means we could be doing more to create jobs somewhere else than in Alberta. If we are going to spend Alberta tax dollars, we think the minimum should be at least 50 percent Alberta wage content.

That is the second amendment, and I urge all members of this Assembly to support that amendment. Sections C and D sort of go together, so I will read them. They address the question of helping encourage the kinds of activities that would diversify the economy: C. The following is added after

section 4: 4.1(1) On all certificates issued by the Provincial Treasurer in accordance with

section 4, he shall indicate which of the following criteria, in his opinion, are met by the corporation to which the certificate is issued: that the corporation is (

a) at the date of the corporation's application for a certificate, owned at least to the extent of 51% of its outstanding voting shares by persons whose principal residence is in Alberta; (

b) principally engaged in business of a sort which will tend to diversify the economy of Alberta, or will be principally engaged in such business within one year of the granting of the certificate; (

c) principally engaged in business activities at places outside the commercial environs of the cities of Edmonton and Calgary, or will be so primarily engaged within one year of the granting of the certificate; (

d) engaged in the business of manufacturing commodities derived from one or more primary natural resources or commodities procured within Alberta.

(2) Any corporation applying for a certificate pursuant to

section 4 may indicate, in the prescribed form, which of the criteria set out in subsection (1) it meets and shall include with its application any documentation supporting its indications.

Section D gives the purpose for outlining these points: D.

Section 28 is amended in the proposed

section 13.l(l)(

e) by adding "5% for each of the criteria listed in

section 4.1, that are, in the opinion of the Provincial Treasurer, met by the corporation, plus" after "applicable to an eligible share." While that might sound a little awkward read this way as an amendment, I will explain the way it would work. If a new company starting out qualified for a 30 percent tax credit and it also fit some or all of these criteria — let's suppose for a moment it fit (a), (b), (c), and (

d) from

section C — then each of those would be worth 5 percent credit, totalling 20 percent credit, plus the original 30 percent. So a company could get up to a 50 percent credit. If the company were an expanding company and maybe only qualified in, say,

section A, it would start with a 15 base and would get a 20 percent tax credit. The arithmetic is quite easy from there on, once you understand the principle. Mr. Chairman, I think these amendments make it a better Bill. We've tried to bring in some amendments that should be acceptable to the government. We have not tried to say that the Treasurer should make all the decisions for the companies that operate in Alberta.

All we're suggesting is that the Treasurer be prepared to give some encouragement to development of industries that would be useful to Alberta at this time, that would help diversify the economy, help create jobs, and strengthen the economy in areas that need strengthening. I agree with the Treasurer saying, as he did in the debate on principle at second reading, that he doesn't have wisdom or all the answers on how and what should be. No one person does, but he has a whole group of people in his department backing him up. They should know and understand the economy of this province.

If they don't, then they better do some homework and start learning and understanding about the basic economy of this province. You have to be almost blind not to see that we're in a great deal of economic difficulty, and it is not good enough for the government to just sit back and say, "It's okay for the companies to do what they want; we'll give them this money anyhow, no matter which area they go into." and then react ad hoc to the difficulties we get into. Mr. Chairman, the government does interfere in the economy in massive, massive ways, in all kinds of directions, and for all kinds of reasons.

What we have to get away from is reacting ad hoc to what's happening; we have to start doing some thinking ahead and try to get some purpose or direction for the economy of this province.

If this government isn't prepared to take the lead in doing that, if they aren't prepared to incorporate into their Bills some accountability — the idea that the principle should be in there and that we can afterwards check and see whether or not the objectives have been met — if they aren't prepared to strengthen the Alberta content, and if they aren't prepared to think in terms of giving some direction to this economy, then I suggest that this government is not doing its job. that they are sitting back and letting things drift, and that they've lost control.

I think these amendments are reasonable, and I would suggest that every member in this — and by the way. Mr. Chairman, we could take these amendments one at a time if members find one, two. or all of them acceptable. I would see them as three: A stands by itself, B stands by itself, and C and D would have to go together to have any meaning. MR. JOHNSTON: I think we'll save you that pain. MR. McEACHERN: You think you'll save that, do you? Mr. Chairman, I put these ideas forward seriously and in a serious manner. I'm not being frivolous, and so I hope the hon.

Treasurer will take a serious look at them and accept at least part of them or at least give good reasons why he thinks he can't accept them. Thank you, Mr. Chairman. MR. CHAIRMAN: Members of the committee, before we proceed, the Member for Edmonton Kingsway has moved an amendment. Essentially there are three amendments: please identify them on your sheet. They are known as A. first amendment; B, second amendment; and C and D, third amendment. Inasmuch as the sponsor spoke to the three, we'll deal with the three as a package.

1666 ALBERTA HANSARD September 15, 1986 The Member for Calgary Mountain View, to the amend­ ment. MR. HAWKESWORTH: To the amendment indeed, Mr. Chairman. I think the analogy I would like to use in my comments this afternoon is to think of this particular Bill and the amendments that are being placed before the Assembly along the lines of taking a trip. That is, you want to go some place; what is the best way of getting there? Quite frankly, Mr. Chairman, I know that I don't like where we are today.

I don't like to see 12 percent unem­ ployment, the highest rates of business failure in the country in Alberta, the out-migration of people because of the lack of opportunity in this province, falling incomes, the insecurity it creates amongst our residents, and the dislocation that occurs in families who suffer under the economic changes which this province has gone through. I'm sure the Provincial Treasurer doesn't like it either, nor does any other member of this Assembly. What they have brought in is an Alberta Stock Savings Plan Act which purports to take us in a new direction.

Well, we want to make sure that we end up in some place other than where we are today and to ensure that we're putting forward some amendments to this legislation which in our opinion will strengthen the legislation so that it does the job it's intended to do. We've heard much in the last 10 to 15 years about diversification in Alberta. In fact, the brochure which has been published and distributed in advance of this legislation being passed mentions diversification.

It talks about job creation, and indeed the Provincial Treasurer no doubt hopes that the stock savings plan is going to help achieve div­ ersification and job creation in this province. We've taken him at his word, Mr. Chairman, and we agree that those are things that are important if we're ever going to go someplace other than where we are today with the economy in this province. People need work; people need jobs. There's nothing more important in this province today, it seems to me, than creating jobs and giving people meaningful work.

We feel that it's important to identify that this Act is intended to achieve diversification in Alberta and create jobs. But is this legislation going to do it, Mr. Chairman? Is it going to achieve the things that the Provincial Treasurer says it's going to? After 15 years of talking about diversification in Alberta, we still don't have it. In order to make sure that we do have it, so that 15 years from now we're not in the same place we're in now, we have to move from where we are to some new place where there is a diversified economy, and that means taking some leadership.

Quite frankly, it comes down to the fact that we can no longer continue to allow things to drift along as they have in the past. We've drifted into the place we now are, and if we want to get out of the place we are now, we can't continue to drift as we have in the past. As the Provincial Treasurer is painfully aware these days, we live in a world of limited resources, and he hasn't the financial resources he wishes he had. We ought to be using the financial resources that we have in the most effective, positive, and efficient way.

To do that, to get the maximum return, the maximum benefit, and the maximum effect from their spending or their investment, we're going to have to target how they're used. It seems to me, Mr. Chairman, that we have certain opportunities which don't always stay open to us, and I suspect that if we don't start using the resources at our disposal to create jobs and diversify this economy, we may not have that opportunity in the next few years to come.

I heard the Provincial Treasurer, in introducing this leg­ islation, speak about the fact that programs introduced by the government are market neutral, so they don't take the kind of steps necessary to ensure that that spending and those programs achieve the ends, objectives, and purposes for which they were set up. It seems to me, Mr. Chairman, that if we continue along that line, we're going to continue to drift, we're going to continue in the same place where we find ourselves today, and there will not be a change from what our residents of this province are facing today.

Are we going to lose the opportunity to build our manu­ facturing base? Are we going to lose the opportunity to establish the value-added businesses so that the resources of this province get developed in the province and the value added to those resources is done in this province by Albertans?

We've looked at the legislation, and we've said, "In order to get to some place other than where we are now, to get to low unemployment rates, and to get people back to work, we're going to have to make a concerted effort to ensure that the funds directed into this program result in jobs being created in Alberta for Albertans." For example, in amendment B, relating to the matter of labour expense, we find that 50 percent of labour expense ought to be spent in Alberta in order to achieve a benefit under this particular program. We also have to be concerned about our small-town and rural economies.

It seems that much of the economic activity, certainly in diversification and the value-added sectors of our economy, has occurred in the major urban communities in Alberta. I believe that it is right and proper and just to direct these funds to help ensure that jobs are saved and created in the smaller communities of our province.

On the second page of the amendment, in C(c), we're suggesting that these funds be directed and incentives be provided to businesses in our smaller communities also, that they locate, expand, and create jobs there so that people do not have to take up their roots and move to the big cities where the jobs are. Let's make sure that we provide jobs for our rural and smaller community economies. In essence, Mr. Chairman, what you see here is a map which we believe is going to take us from this place we have arrived at, where our economy is suffering and where things are not going well for the people in our province.

To get out from that eddy and move into the mainstream, we've got to take action. We can't continue to drift. What we've laid in front of the Assembly is a series of amendments that do two things: they set out the purposes for this particular legislation; they put some real emphasis on div­ ersification so that 15 years from now we're not struggling with the same problems that we are today and we recognize the vital importance of creating jobs for Albertans. We believe we need to maximize the use of Alberta resources to provide work for Albertans in Alberta.

With these amendments we believe those purposes will be accomplished far better than they would be if this Bill were passed unamended. Thank you, Mr. Chairman. MS BARRETT: Mr. Chairman, I'd like to add my voice of support for the amendments as presented by the Member for Edmonton Kingsway. In so doing, I need not be lengthy. However, I would like to anticipate some arguments that may be put forth by the Treasurer or other government members inasmuch as those arguments had been stated at second reading of this Bill.

September 15, 1986 ALBERTA HANSARD 1667 Particularly, Mr. Chairman, with respect to the issue of targeting, the Treasurer on previous occasions has said that when government is in the business of promoting business and economic development in the province, it would prefer to use the marketplace and the particular nature of its vehicle in promoting those business and diversification developments, that we as legislators are better off not to target and to let the market mechanisms determine the direction of these initiatives. In principle, that's actually not a bad thing to do, in my view.

I've been a co-owner of a small business, and I know that I personally didn't find banks, credit unions, or Treasury Branches to be of any use to me in helping launch my business. But at the same time, we did manage to launch it after all and did it without anybody else's help. If we had had government help at a certain point, it could be that we wouldn't have qualified because of targeting, so there is some merit in the Provincial Treasurer's position.

However, with a massive program like the Alberta stock savings plan and with the nature of its rewards for investment — that is, tax credits — it seems to me that what we can do is reward those who are serious about helping to diversify our economy, employing Albertans, and making our economy stable in the long term. On behalf of the Alberta New Democrats, I think it's safe to say that one of our prime concerns is that we manage to even out the wild fluctuations in what would otherwise be considered ordinary business cycles, whether they're national, international, or regional.

What I'm really referring to is what's commonly called a boom-and-bust economic cycle. We would like to even those out so that the troughs are not as deep and the peaks are more sustained but perhaps not as high. It seems to me that this is the way that you enable people to predict the future of an economy. Stability of an economy is itself of merit when investors are looking around for places to put their money. Stability in the case of Alberta is very important because we have an economy based on primary products, in particular oil and energy products and agriculture products.

With respect to the energy products, we have seen what happens because of the vagaries of the international market. Regardless of the number of phone calls that may emanate from this building to Sheik Yamani, I think we've been able to see, Mr. Chairman, that no matter who in Alberta you are, you in fact don't have much say when it comes to OPEC. They're just dealing with a lot more of a commodity than we are. In fact, we probably haven't been the prime targets of OPEC's decisions when it came to flooding the market and flexing a little muscle internationally. That said, Mr.

Chairman, it then seems to me that what we want to do when we're not in programs which target specifically by virtue of their nature and as stated in their

preamble, such as the many energy Bills that this Legislative Assembly deals with year after year, is talk about things in general that will provide incentives to help stabilize the Alberta economy. Those things in general — I think they're principles and items with which even government members would agree — are to strengthen our economy and create jobs. Putting that sort of thing in the

preamble only helps show the direction we want to take with this Bill and with the program that will follow the Bill. Remember that in the long run, it is ordinary Alberta taxpayers who are really footing the bill for this. There's no other way around it. For every credit that goes out to every company or every corporation — and I can remember years in which those corporate tax credits rang up as high as $150 million to the negative — someone else has to pay to make up that money.

It's inevitably the ordinary taxpayer who has over the years become the primary taxpayer, not only in this province but in this country. I think the way to justify that, the way to tell the public that we really are working in everybody's best interest by offering company and corporate tax credits, is to make sure we stipulate that the jobs be Alberta jobs — at least half of them — that the people who are making those investment decisions be Albertans, who have an investment in this province in the long run.

To use other examples, one of the criticisms that multinational corporations are frequently subject to is that they don't have personal stakes at hand in many of the countries in which they invest. One particular example that comes to mind in that regard is with respect to environmental issues.

Those who listened to Sunday Morning, the CBC program, just yesterday, September 14, will have heard a fairly interesting critique of environmental concerns in Ontario with respect to international investors and how local people have managed to provide programs that improve the stake of investors from outside that province with respect to environmental concerns. By supporting this series of amendments. I think we can do the same thing with respect to jobs created and with respect to the decision­ makers themselves.

We do some benefit to not only the Albertans who directly benefit from this program, which we support in principle, but the overall taxpayers. After all, they are indirectly sponsoring this program. There's nothing the matter with that. I think governments are in the business of the redistribution of incomes and wealth in a variety of manners, and we all recognize the responsibility that goes along with that. How­ ever, if we recognize that responsibility, why don't we just put in a few extra words that say how responsible we really feel on behalf of the taxpayers?

We really believe that we have to have 50 percent of those jobs created in Alberta. We really believe that the investors themselves, even with a slim majority, should be Albertans. They should reside here. They should have some kind of ownership in this program that means that they're basically stakeholders. We also believe — and I'm surprised that this wasn't in the Treasurer's own Bill — that we should provide incentives with respect to those criteria so that those people who are doing a good job, those people who are engaged in div­ ersification, are even further rewarded.

I think the the taxpayers would go along with that, because the taxpayers know that in the long run. the greater the jobless rate we have, the more it ultimately costs society by virtue of social allowance payments, unemployment insurance payments, increased medical care costs due to stress and related illnesses, higher prison costs because of higher crime rates, higher mental health costs, more suicides — which may not have a monetary cost but have a lot of other costs — and that sort of thing. Let's give Alberta taxpayers the best deal that we can with this program.

We like what the Provincial Treasurer has come up with in this program; we just think it needs to be tightened, refined a little, and made the best that it could be without, as the Provincial Treasurer said, tightening the targeting process so much that you eliminate people. You don't want to do that; you want to be embracive and inclusive in this sort of package. But you can balance that; it's like a concept of elasticity in economics. You can balance those things in such a way that you get more of what you're looking for at no additional cost. That, Mr.

Chairman, is what we're really calling for in this series of amendments. I support them wholeheartedly.

1668 ALBERTA HANSARD September 15, 1986 MR. CHAIRMAN: Before we proceed, would the committee agree to revert to Introduction of Special Guests? HON. MEMBERS: Agreed. head: INTRODUCTION OF SPECIAL GUESTS (reversion) MR. PENGELLY: Mr. Chairman, through you and to members of the committee I would like to introduce a former Minister of Agriculture, former MLA for Wetaskiwin- Leduc, and present member of the hail and crop review panel. Mr. Chairman, would you please join me in welcoming Dallas Schmidt. head: GOVERNMENT BILLS AND ORDERS (Committee of the Whole) Bill 11 Alberta Stock Savings Flan Act (continued) MR.

CHAIRMAN: Are you ready for the question on the amendment? MR. McEACHERN: Mr. Chairman, I rise a second time reluctantly, but it's just because nobody on the other side of the House has gotten up to say anything in any reaction to these points. I do not understand the members of this House. So it's late in the fall. It's been a long, hot summer. We didn't notice it was summer; it has come and gone. But the fact of the matter is that we've still got an important Bill before this House, and we've put forward some serious amendments.

How many times have you heard the Premier and the Treasurer stand on the other side and say, "You don't give us any ideas; all you do is gripe." Here are some very specific ideas that are worth considering. Some of them are your own ideas, and you don't even have the courtesy to respond to them. You just sit there and say, "Okay, we want to get out of here; we'll go home on Wednesday or Thursday" or something. In fact, you're not doing the job you were elected to do if you do that. [interjections] Stand up and give me good reasons why we shouldn't pass some of these things. AN HON.

MEMBER: We'd rather listen to you speak. MR. McEACHERN: I've had my say, and I put forward some serious and good ideas. I think this government is using its majority of 61 just to smother debate in the House and is saying, "We're not even going to participate in it; we're not going to put forward our ideas." What's the matter? Do your ideas not stand up to the ones we've put forward? MR. JOHNSTON: You can talk all day, Alex. Go ahead. MR. McEACHERN: No, I don't want to talk all day. But I want some dialogue, I want some debate, I want some reaction to these ideas put forward . . . MR. CHAIRMAN: Order please.

Would the hon. member speak to the amendments proposed. MR. McEACHERN: Yes, I will. I will say that I think these are good amendments, and it would serve this government right if we made a standing vote on each one of the three parts. But if we must, I will agree to one vote on all the amendments so that we can get on with this and get on to other things. SOME HON. MEMBERS: Question. MR. CHAIRMAN: Are you ready for the question on the amendment? [Mr. Chairman declared the amendment lost. Several members rose calling for a division.

The division bell was rung] [Eight minutes having elapsed, the House divided] For the motion: Barrett Laing Roberts Ewasiuk Martin Sigurdson Fox McEachern Wright Hawkesworth Mitchell Younie Hewes Mjolsness Against the motion: Adair Elliott Musgrove Ady Elzinga Nelson Alger Fischer Oldring Anderson Fjordbotten Orman Bogle Getty Osterman Bradley Heron Payne Brassard Hyland Pengelly Campbell Johnston Reid Cassin Jonson Rostad Cherry Koper Shaben Clegg Kowalski Shrake Crawford Kroeger Sparrow Cripps Mirosh Stevens Day Moore, M. Weiss Dinning Moore, R.

West Downey Musgreave Zarusky Drobot Totals: Ayes -- 14 Noes -- 49 MR. CHAIRMAN: Are you ready for the question on Bill 11? The hon. Member for Edmonton Meadowlark. MR. MITCHELL: Mr. Chairman, I would like to address one issue with respect to this Bill, and that is the question of ensuring that Alberta stock savings plan programs are implemented to the benefit of Albertans. There are two critical ways they will benefit Albertans: through the creation of employment here in Alberta and through the creation of economic development opportunities here in Alberta.

I have a feeling that it is the minister's intent to ensure that that will occur. By virtue of his altering the Bill originally proposed and bringing this Bill in with certain measures that appear to strengthen it, I think he has telegraphed his intent that he will ensure that this Bill results in investments that operate here in Alberta for the benefit of Albertans. We would simply like to support any initiatives he takes to ensure that that occurs. Right now his authority to ensure that that occurs is

section 4(3), which outlines the Provincial Treasurer's authority to refuse to issue a certificate "that is contrary to the spirit and intent of this Act." However, as has been pointed out earlier, nowhere in this Act is it specified what its "spirit and intent" are.

September 15, 1986 ALBERTA HANSARD 1669 For that reason, we have two amendments that will clarify the spirit and intent of the law and will in turn specify that the Provincial Treasurer's discretion, when exercised to ensure that the spirit and intent of the law are adhered to, will be clearly laid out. I therefore propose, Mr. Chairman, an amendment to

section 1: 1.1 The spirit and intent of this Act is to provide for a tax exemption in respect of a stock savings plan, based on shares in corporations whose activities will promote employment or economic development of sig­ nificant benefit to Albertans. To ensure consistency with that amendment throughout the Act, I propose an amendment to

section 4(3): striking out "that is contrary to the spirit and intent of this Act" and substituting "that will not, in his opinion, provide employment or economic development to the benefit of Albertans to a degree sufficient to fulfill the spirit and intent of this Act". We would suggest, Mr. Chairman, that it is very difficult for us to understand how the government could not support this particular amendment.

It is an amendment that addresses simply general principle, that raises as objectives of this Act two ideas which must be supported by virtue of their clear correctness; that is, that this Act "will promote employment or economic development of significant benefit to Albertans." I would defy the government to vote against these particular amendments. I know that the Treasurer will provide leadership in this respect and ensure that his caucus votes in favour of these amendments, to the benefit of all Albertans. The responsibility for not doing so surely rests with the Treasurer of this province. MR.

CHAIRMAN: Are all members in possession of the amendments? Inasmuch as the hon. member . . . Order please. Inasmuch as the hon. Member for Edmonton Meadowlark has distributed and has spoken to two amendments, we'll deal with this as one amendment. Member for Olds-Didsbury, do you have a copy of the amendments? Are there any comments or questions on the amendment as proposed? MS BARRETT: Mr.

Chairman, on behalf of our caucus, I'd like to speak in favour of the amendments as proposed by the Member for Edmonton Meadowlark, inasmuch as they basically support the principles we were advancing just moments ago with respect to our amendments, although they're a little less clearly worded. In my view, they don't allow for the specifics of the recommendations that we were advancing. Upon

interpretation they could well do and, I think, nonetheless still constitute an improvement to the Bill which is in front of us. Therefore, we will support them. MR. HAWKESWORTH: In the absence of this amendment being brought forward, I'd be quite anxious to hear from the Provincial Treasurer as to how the spirit and intent of this Act is to be determined, inasmuch as there is a whole recourse of appeal through the Court of Queen's Bench and so on outlined here.

When you get into the courts and have something as poorly defined as the spirit and intent, it creates all kinds of difficulties in trying to imagine what was in the minds of the Legislature when it passed the legislation in the first place. I think the intent here is a good one: to try and put a little better focus on that particular

section of the Bill, to try and focus what is intended by the spirit and intent of Bill 11, the Alberta Stock Savings Plan. I think it picks up on an inadequacy in the drafting of this legislation. It assists in making this Bill a better one for those corporations that might have their certificates reviewed or denied. Thank you. MR. WRIGHT: Mr. Chairman, the proposed amendment is good Liberal wishy-washy stuff But you'll agree with this too, doubtless: it's not half as wishy-washy as what's in the Bill as it stands. This isn't a joke, Mr. Chairman.

The Bill says that it's contrary to the spirit and intent of this Act. We can guess what that is, but we don't know for sure. We will know somewhat better in certain specific — we will in fact know if the proposed amendment is adopted. I speak in favour of it, and it should be the wish of this House to do that. I ask members to consider this in a nonpartisan way. [Motion on amendment lost) MR. McEACHERN: Just a very few summing up points. In this instance most of the points have been made. This Bill is quite a good one.

The minister introduced it in a reasoned and quiet way and made some very good points in debate. We had a very excellent debate in second reading, but I want to express again my disappointment that in the Committee of the Whole we didn't get any participation from the other side of the House. We didn't get any reaction to what I thought were some very good amendments, so I will say that our caucus cannot support this Bill at the committee stage. MR. HAWKESWORTH: Mr. Chairman, this is the point at which we look at specific clauses within the legislation.

On page 6 of Bill 11: 4(1) The Provincial Treasurer may issue a certificate of eligibility to a corporation . . . (

d) if the corporation is not engaged in any prescribed activity on the date of the certificate. Would the Provincial Treasurer please go into a bit of detail to explain what "prescribed activity" is? That is, if you're "engaged in," I presume you're not eligible for a certificate of eligibility. In my perusal of this Bill I could not find any definition of what "prescribed activity" is, although it may be contained within the legislation. I would like the Provincial Treasurer to refer to that in his remarks.

As well, I understand from the brochure being circulated, which answers questions on the Alberta stock savings plan, that one of the provisions — contained, I believe, on page 7 of Bill 11, further on under

section 4 — can be waived if the corporation is a prescribed Alberta-based financial institution. So here again the word "prescribed" appears. I don't know whether these two are the same reference or refer to the same class of corporation or activity. If legislation says that you are not able to receive a certificate by being engaged in a certain kind of activity, I'd like some explanation of what that activity might be. MR. CHAIRMAN: Before we proceed, perhaps I should mention to people in the public gallery that the government has a Bill before the House called the Alberta Stock Savings Plan Act.

It has passed first and second reading. It's now in committee stage, which is the first time it can be amended.

1670 ALBERTA HANSARD September 15, 1986 You've seen two amendments; they have both been defeated. We are now carrying on with committee stage. MR. JOHNSTON: Mr. Chairman, I thought I would at least in some brief way summarize some of the comments which have been put before the Assembly.

Recognizing that there have been some significant attempts to contribute to the legislation and obviously some differences with the government in the amendments which were provided — the way in which government should respond and react to initiatives designed to generate job activity to encourage the private sector to invest in the province of Alberta, use the existing financial infrastructure of the province to strengthen the private sector, and use the tax system wherever possible in a neutral way to stimulate across-the-board opportunities for private-sector investors to capitalize on the opportunities which exist and which will exist in this province — I will attempt not to be as partisan with this legislation as some may expect me to be, because there were in fact some fairly reasonable explanations for the course of actions suggested by the opposition.

Frankly, there was some fairly significant thought given to the recommendations. That doesn't mean that there would not be disagreement, and I know that when the movers of the amendments put them forward, they did not expect them to go forward without (

a) debate or (

b) opposition from the government. Nor should I be the first to say that we consider this legislation to be perfect; far from it. Other hon. members have noted that we did make some changes, as between the date of original introduction of the legislation and this Bill. That period of time was given to some consideration of the elements of the legislation and in fact dealt with the Alberta presence, which was to some extent focussed on in the amendments and was a period of consultation and some thought about how the legislation should be drafted to embark on this course of action.

We did not ignore many of the recommendations which were given to us in these amendments — amendments which dealt with increasing the Alberta presence, amendments which may have considered targeting certain industries, and others which may have put into the legislation what might be described as "normative statements," which are in fact difficult to impose by regulation and

interpretation and in the court itself. We were not without thought and alternatives when it came to putting this legislation in place. We did have some model legislation to look at. That was the Quebec system, which I did not think was suitable for the province of Alberta, given the changed circumstances and the way in which the investments had been mustered in the case of Quebec as compared to what we wanted to achieve here in this province. There is no doubt that all members know what this Bill is designed to do, as I've outlined in terms of its objectives.

Other members have recognized that fully in their own discussions and have drawn upon other references which the government has put forward to reinforce that point. I don't think there is any doubt as to what the intention of the legislation is. Whether or not it should be put in the legislation is of course a debate for some lawyers, those who are experts in jurisprudence, to lean on.

My experience is that more normative words or statements of objectives that flow into the legislation — the "whereas" clauses, for example — do very little to add to the substance of the law itself and in fact in many cases tend to be restrictive as opposed to expansive and more limiting in the intention than the legislators probably wanted. In that context, Mr. Chairman, there are no whereases or broad statements of goals and objectives in the legislation. As to whether or not that is a fault in the legislation is a debate which we have had here already. Moreover, Mr.

Chairman, when you talk about balanced economic growth, that is not a new policy; that is not something which has suddenly been discovered. This government has had those statements of policy under its own broad policy precepts for some time. The principles have been applied across a range of programs which affect all Albertans. We've been very proud of the way in which we have succeeded in a balanced diversification in other regions of the province outside the heavy metropolitan areas, and those examples are obvious to all.

I have to admit that it's more difficult at some periods in economic cycles than others to achieve that sort of diversification into other parts of the province. Nonetheless, decentralization of government agencies and operations together with the balanced economic growth approach have been important imperatives which we have attempted to achieve. I doubt very much that we could achieve that balanced economic growth and decentralization or diversification in some of the smaller regions of the province through the use of tax incentives.

We must always factor into those investment decisions the fact that it is not just the tax decision that is used here. There have to be some fundamental marginal economics to support the original investment before any private-sector initiative can be focussed or brought forward. While I don't disagree with the notion of balanced economic growth or, for that matter, decentralization, I cannot be quite as firm in my conviction that this tax proposal — that is, using the tax system in this Bill — would in fact engender that kind of diversification and decentralization or balanced economic growth.

With respect to targeting, Mr. Chairman, I have already commented on those points. I still don't believe that using the tax system to incrementally increase the tax write-offs would be justified in this case. We not only have the problem I've described before, that you're trying to second- guess and pick winners and losers — the old zero-sum game that I referred to before — I simply don't believe that is the way to go in this particular piece of legislation, and it should be to the fundamentals of the decision itself that the investment takes place in the province.

Moreover, the targeting scheme, which in this case would allow more than 50 percent tax reductions, seems somewhat ironic given the other arguments that the NDs in particular have made with respect to the tax system and its impact on investors. Again, I would hesitate to be involved in targeting. As a footnote, I know that all our members know the General Agreement on Tariffs and Trade and the free trade arguments are before us now. Of course, at least one of the codes talks about the use of targeted tax systems to injuriously affect trade with other countries. I would not want that to happen.

I would not want Alberta to be the one seen to be using the tax system to generate any kind of implicit or explicit subsidies to a particular sector, particularly one which is important and would grow upon extended trade with the United States. With respect to the prescribed activities, it is true that one of the reasons we did not agree with the amendment brought forward by the Member for Edmonton Meadowlark is that we do have these so-called prescribed activities in the legislation, which I intend to use as a strengthening of the test of eligibility.

In those prescribed activities, we will be able to deal with some of the difficult areas, in particular

September 15, 1986 ALBERTA HANSARD 1671 some of the investment corporations, and we will not allow certificates of eligibility to proceed, for example, if it's a start-up investment corporation, which is clearly against the intention of the legislation. Therefore, the prescribed activities sections will be followed up with regulations, and those regulations will strengthen the Alberta test and will make sure the legislation is followed in terms of the intention of the investor before a certificate can be given. Mr.

Chairman, I think there was one other issue raised; that is, if a penalty were imposed upon a corporation after it had discovered that it was not eligible to be a Alberta stock savings plan corporation or that its eligibility levels had changed, then the penalty would be applied against the corporation. It's true that if the corporation is in fact bankrupt, no penalty can be levied. That's why we're very careful in the original go-round to be sure that the test of the corporation, whether or not it is classified in one of the three categories, is effected.

Thus it is true that a bankrupt corporation would not be able to pay the penalty, but we are hopeful that not too much of that will happen, particularly where we have to redefine what category a corporation is involved in. Mr. Chairman, I believe those are the broad elements of the legislation that have been raised in the Committee of the Whole, and I welcome the opportunity to have heard the comments. I hope that we can support this Bill in Committee of the Whole, because I don't think the Bill itself is much different from the suggested recommendations for changes given by the hon. members.

Therefore, it is on principle and in its fundamental strengths that we are going to see how the legislation is applied. I would be the first to say that if it is in fact necessary to strengthen the Alberta presence, I will bring those recommendations and amendments forward at some subsequent date. MR. McEACHERN: A couple of very brief comments, Mr. Chairman. I thank the minister for his response to our suggestions. That is certainly part of what we were looking for. Mr.

Chairman, a couple of the points that were raised are fundamental, and I guess we'll be arguing for a long time about whether the principles should be incorporated in the Bill. We were really only looking for guidelines instead of a blank cheque for the minister. We will always be looking at terms like "prescribed activities" giving the minister a blank cheque. We will be interested in slightly more direction being given in the Bill. Diversification is another thing that I guess we can talk about until the cows come home.

Because some of the suggested changes were not incorporated, we find that overall at this time we will vote against this Bill in Committee of the Whole and will probably support it in principle on third reading. MR. JOHNSTON: I want to add one other comment, an important point, which I neglected to add both here and at second reading. Even though a corporation comes forward and applies for a certificate of eligibility, there is no guarantee that the shares are going to be sold.

In fact, the whole marketplace is one of uncertainty at the present time because of softness in the stock market going back for the last two months. Therefore, the underwriting of these cer­ tificates is still open to some question. Moreover, Mr. Chairman, the tax advantages obviously do not flow to those shareholders who live outside the province, which I'm sure is obvious to all. Therefore, although it may have a prescribed share offering of X number of dollars, not all the tax benefits will flow to us.

Frankly, if the opposition decides to vote against the legislation, I think that will be useful for me to have on the hustings. [Title and

preamble agreed to] MR. JOHNSTON: Mr. Chairman, I move that Bill 11, the Alberta Stock Savings Plan Act be reported. [Motion carried] Bill 30 Financial Administration Amendment Act, 1986 MR. MARTIN: Mr. Chairman, obviously the Provincial Treasurer knows from second reading that part of this Bill bothers us. I want to make a few comments about that and then come to an amendment, again in the spirit of co­ operation, always trying to help out our Provincial Treasurer. We will attempt to do that one more time. Mr. Chairman, I think it's a very serious Bill, and I've said this before.

We're debating because the Treasurer has basically said that it's a worst-case scenario. He has said that we really don't need it, that it's just in case we need it. That's a rather difficult solution for us to grapple with, because what he's asking is that we could with special warrants and without going to the Legislature . . . We could report before or after the fact, but that would be $2.2 billion. Now the Treasurer is saying that we will allow it to go up to $5.5 billion, just in case he needs it. Mr.

Chairman, there may be good reasons why the Treasurer thinks he needs this upper limit to $5.5 billion, but even as late as today in question period we were told that the scenario the Treasurer is reporting is dead on. that it's still their estimate that only a third of the revenues will be lost, that he still stands by the budget. Going on the Treasurer's word and suggesting that basically they're in the ballpark with their budget, why then do we have to increase the limits of borrowing?

It can't be both ways, and it seems to us that this is an important sort of admission that they want to move up to this type of borrowing. Before we do this, all legislators and all people that are concerned about the financial stability of this province — and I would suggest that would include all of us — have to know why they want to go up. Saying "the worst-case scenario" is not good enough. Surely we don't budget laws and give people that much leeway, billions of dollars, just on the thought that something might happen.

It's a rather unusual request, this specific part of Bill 30 that the Treasurer is asking for. Mr. Chairman, it seems to us that we can argue, as the Treasurer and I have, about the mismanagement of the province over the last 15 years. That's why they're coming home to roost. We are like a banana republic now. We have one or two resources. The price is down, and now the Treasurer has to go for extra borrowing power. That's why we're having this sort of request: there is no other reason for it. Otherwise, he wouldn't.

Wouldn't it be nice to have the $1.2 billion over-runs that we had from the trust fund at one particular time? The fact is that we are paying now for the mismanagement of the economy when times were good. Money was rolling and we in Alberta were the big shots. We could spend here, we could spend there, we could spend everywhere without any priority to that spending and, if I may say so, to using the trust fund

1672 ALBERTA HANSARD September 15, 1986 as a diversification tool. Even though we say it enough times, it doesn't make it true. So today in Committee of the Whole we have Bill 30, Mr. Chairman. We're basically asked again to trust the government and the Treasurer and allow the borrowing limits to go up to $5.5 billion, really without an explanation other than the worst-case scenario. I think it is a big mistake to give any group of politicians unlimited power — $3.2 billion.

The Treasurer will say that he has to report it in public accounts and all the rest of it, but there's not a lot you can do about it if we've gone ahead and borrowed it. That's after the fact. The reality is that we have tried to find out why. He turned down one reasoned amendment. We wanted to force, if you like, the government to tell us what is really going on. Is it that the estimates, especially the revenues, are vastly over-rated by the government and we need this as a contingency plan, or is the budget correct? It just can't be both ways.

I would expect that if the Treasurer were sitting opposite to this and we came in with a Bill and said, "Trust us; we're going to put the borrowing limits up another $3.2 billion," the Treasurer would be on his feet saying that this government can't be trusted. We're not prepared to do that, and I think the Treasurer knows what I'm talking about. Let us say that I understand that the majority is going to pass this Bill whether we like it or not; that's the reality in this House. There's one important aspect to this, though. It has to do with control of the purse strings and reporting back to the Legislature.

If the Treasurer is going to proceed and say that we need over $5 billion as the upper limits and use the majority here to push that through, I know the realities of the numbers. Surely then — and maybe the Treasurer will agree with this — there has to be special importance placed on reporting what is happening. Especially with the fall in international prices and where we stand, there has to be special status granted, and it should be to this Legislature, to keep an eye on that and know what is going on, because no government should be given a blank cheque in terms of borrowing. As I said, Mr.

Chairman, in the spirit of helping the Treasurer and in the spirit of good fiscal management, we thought we could bring in an amendment that would deal with the reporting aspect, which we think is very important. I'd like to hand this out, and I'll take just a few minutes to read it into the record. We move that the Bill be amended as follows:

Section 14 is amended by striking out clause (

c) and substituting the following: (c) subsection (2) is struck out and the following is substituted:

(2) The Provincial Treasurer shall, (

a) prepare a report within 30 days of the completion of each half of each fiscal year showing (

i) the money raised under subsection (1) during that half of the fiscal year, for which Government securities were issued, and (ii) the amount of unredeemed Government securities issued in respect of money raised for the purposes referred to in subsection (1) less the amount of the sinking funds established and existing for the retirement of Government securities and the interest accrued on those sinking funds at the completion of that half of the fiscal year; and (

b) table the report prepared pursuant to clause (

a) in the Legislative Assembly, within 5 days of the completion of the report if the Legislature is then sitting, or within 15 days of the commencement of the next sitting of the Legislature if it is not then sitting. Mr. Chairman, we think this is an unusual circumstance. I hope the Treasurer would agree that it is an unusual circumstance when we're lifting the borrowing power over $3 billion. Because it is, hopefully at least, an unusual circumstance, then we think there should be some reporting mechanisms to know what's going on through these difficult financial times.

It seems to me that this is a perfectly reasonable amendment: to report back to the Legislature so that we can take our responsibilities as the controllers, at least theoretically — in the past, under British parliamentary democracy, kings used to get beheaded when they didn't control the purse strings — to say that we have a special reporting mechanism to get through these difficult times. If at some point we no longer need the $5 billion and we're prepared to bring it down, I'd be prepared to say that we don't need the amendment.

We are making a very big mistake in accountability if we do not start a reporting mechanism like this. No matter what the good intentions of the Treasurer and the government are, if we lose control of borrowing and special warrants and can raise it and raise it and report after the fact, it's gone. I would hope that the Treasurer would look at this as a reasonable way of reporting back so that we as legislators, and through us, I suppose, the people of Alberta, can be updated on the financial stability of the province, because that's really what we're talking about at this particular time.

I think the Treasurer would agree with that. The Treasurer said, and I agree, that we have a triple A rating. But one of the things that bothers the money markets is feeling that governments have lost control of their spending and their revenues. I say to you, Mr. Chairman, that that triple A rating would be enhanced if there was that sort of reporting mechanism, if they knew they could take a look at it and that in fact good fiscal management was going on in the Alberta Legislature. In conclusion, Mr.

Chairman, I would say to the Treasurer in this committee that I hope that rather than just say no, the Treasurer would take a look at some reporting mechanism like this. It seems to me this is a reasonable way to go. If there's another way, great — but not the usual way we do it, after the fact in Public Accounts. We can talk about fiscal accountability and all the rest of it, but those of us who have been in the Legislature for a while know that that's not good enough, especially with these unusual cir­ cumstances that we're dealing with here. With that amendment, I'll wait for debate. MS BARRETT: Mr.

Chairman, I rise to speak in support of the amendment as advanced by the Leader of the Official Opposition, the leader of the Alberta New Democrats. I'd like to echo a sentiment that he expressed at one point, and that was embraced by a single word, "accountability." It seems to me that having failed in our attempts to get the government either to agree that we really will need this money, this whole $5.5 billion deficit financing, in which case it should be just asked for through supplementary estimates if necessary while we're in this legislative sitting,

September 15, 1986 ALBERTA HANSARD 1673 or to agree that we don't need it, in which case it would be nice if we could have figures and projections as compiled by his department tabled in the Assembly so that we can have an objective basis to determine what sort of revenues we are looking at, it brings me back to the words of former Premier Lougheed himself with respect to the importance of diversification in our economy. I believe it was in 1967 that Mr.

Lougheed, who then was not Premier of course, enunciated the famous words that we would be engaging in "folly" if we didn't take as our primary activity as a government or as legislators to ensure that we do not come to rely so heavily on one industry that we are at the whim of an international market over which we have little or no control. The reason I raise that, Mr. Chairman, is that now that we don't have the government coming clean as to whether we really need the money or we really don't need the money, I think the very least this government can do is agree to a process of accountability.

We haven't had a legislative sitting in some time. MR. CHAIRMAN: Order in the committee, please. MS BARRETT: We went for about a 10-month period without a legislative sitting. Some of the estimates that we were asked to pass this year in fact were retroactive. In other words, some of the money had already been spent. We made our objections known to that but at the same time, I think, took a responsible course with respect to analysing the priorities of those estimates and determining overall that the budget itself was of a reasonable size but that we didn't necessarily agree with the priorities.

With the kind of borrowing authority being asked for under this Bill we have no ability to do that, Mr. Chairman. Those decisions would be made behind closed doors. For the benefit of people who aren't in the Assembly as we speak, what we are talking about is massive. It's a 10-digit figure; $5.5 billion involves eight zeros. It takes a long time to count up and figure out just how much money we're talking about. We are in fact talking about more than 50 percent of the 1986-1987 province of Alberta budget.

That is such a huge sum that if the government is determined that it will not come clean and tell us which way it is, either that we're going to need to spend a lot more or that the revenues we had been hoping for from the energy sector will not be forthcoming in volumes anywhere near that which we have estimated in this Assembly — I use the "we" as a royal we; in other words, the government is "we" in this particular instance — the very least legislators here can do is agree that for the taxpayers of Alberta, for the people who may have to deal with this debt in the longer term, for the people who in fact rely on government help and who may have to face extraordinary tax increases to pay for this potential debt, for those who may have to pay higher medicare premiums, for those whose social allowance will never even meet 50 percent of the national poverty level: for all of those people, Mr.

Chairman, the very least we can do is be accountable to the electorate, be accountable to the public of Alberta that we are supposed to represent. I know that 16 of us are trying very hard in this regard. It's not that we're happy about supporting a Bill like this, Mr.

Chairman, but I think that if we had to support it, we could do it, knowing that the government itself would be accountable to the opposition benches, who are here in a watchdog capacity, so that we could keep an eye on how the government is spending the money and its ability to collect revenue to spend in the first place and what kinds of programs and what kinds of achievements we are getting in terms of that overall diversification and improvement in the stability and health of the economy. It's not a difficult, not even a compromising, amendment.

I believe that the government has within its power to accept this amendment and live with it without any difficulty. What we're asking for basically is that the facts and figures the Provincial Treasurer will be dealing with in the coming months simply become a matter of public record long before the printing of the Public Accounts — which are always delayed, of course; it makes sense that they're delayed — so that we can start looking at the priorities for the coming '87-88 budget and make sure that we're doing our job as watchdogs, as people who will make sure that the government is accountable.

For that reason, Mr. Chairman. I believe all members of this Assembly could readily support this amend­ ment. MR. HAWKESWORTH: Mr. Chairman, I think what's important to note about this particular request is that the borrowing ceiling being asked for is one-half of our yearly expenditures as a provincial government. This is basically being requested in one fiscal year. To go from $2.2 billion to $5.5 billion is a very, very significant increase. It translates, I gather, into some kind of per capita debt of around $23,000 for every Albertan.

That obviously has to be of concern to everybody in this Legislative Assembly. If this is the kind of change that's occurring in the fiscal situation of our provincial government in one year, how long can it be sustained before having to make some very significant changes? How do you make those changes such that they don't just add to and contribute to the