1972 Legislative Session: 3rd Session, 29th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

MONDAY, MARCH 13, 1972

Afternoon Sitting

[ Page 743 ]

MONDAY, MARCH 13, 1972

The House met at 2:00 p.m.

Prayers.

MR. SPEAKER: The Honourable the Premier.

HON. W.A.C. BENNETT (Premier): Mr. Speaker, there's many good

communities in the province represented by the Members on all sides of

the House, but no community so beautiful and so dynamic as Kelowna.

Today we're highly honoured to have on the floor of the House two of

the pioneer citizens that have done so much for Kelowna.

Mr. Capozzi senior, whose son sits on the floor of this House and

has two other sons that are very fine citizens in our province, his

life just shows what can be done by an immigrant coming to British

Columbia and not just coming to dynamic British Columbia but making

British Columbia dynamic by his efforts. It just shows that native

ability that a person is born with perhaps is the greatest quality that

any person has in life. With him today is Mr. Chanconi, another pioneer

who came from Italy as well. He's been a great citizen in Kelowna.

They've been my friends for many years and I'd ask all Members of the

House to give them an extremely warm welcome.

MR. SPEAKER: The Honourable the Minister without Portfolio.

HON. P.J. JORDAN (Minister without Portfolio): Well, Mr.

Speaker, I would hate to suggest that I'm having a dispute with the

Honourable the Premier but in your gallery this afternoon we have some

other members of the jewel of the province — eight students from that

wonderful recreational village of Lumby with their teachers, Mr. Mark

Philips and Mr. Max Cosson.

These are young students and I know that all Members of the House

will be on their best behaviour and in their finest debating form. I

would ask you to give them a very warm welcome.

Introduction of bills.

FIRST READINGS

The following bills were introduced, read a first time, and ordered

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

sitting of the House after today.

Bill No. 84 intituled

An Act to Establish the Office of Commissioner for Grievances .

Bill No. 85 intituled

An Act Respecting Proceedings Against the Crown .

Bill No. 86 intituled Prevention of Restraint of Professional Practices Act .

Bill No. 87 intituled

An Act to Amend the Trust Companies Act .

Orders of the day.

THIRD READINGS

HON. MR. BENNETT: Report on Bill No. 28,

An Act to Amend the Administration Act , Mr. Speaker.

Bill No. 28 read a third time and passed.

HON. MR. BENNETT: Report on Bill No. 33,

An Act to Amend the

Summary Convictions Act .

Bill No. 33 read a third time and passed.

HON. MR. BENNETT: Report on Bill No. 35,

An Act to Amend the Mortgage Brokers Act .

Bill No. 35 read a third time and passed.

HON. MR. BENNETT: Committee on Bill No. 19, Mr. Speaker.

MR. SPEAKER: Bill No. 19, Accelerated Park Development Fund Act .

Bill No. 19 committed, reported complete without amendment, read a third time and passed.

HON. MR. BENNETT: Committee on Bill No. 20, Mr. Speaker.

MR. SPEAKER: Bill No. 20, Accelerated Reforestation Fund Act .

Bill No. 20 committed, reported complete without amendment, read a third time and passed.

HON. MR. BENNETT: Committee on Bill No. 21, Mr. Speaker.

MR. SPEAKER: Bill No. 21, Power and Telephone Line Beautification Fund Act .

Bill No. 21 committed, reported complete without amendment, read a third time and passed.

HON. MR. BENNETT: Committee on Bill No. 22, Mr. Speaker.

MR. SPEAKER: Bill No. 22, Provincial Rapid Transit Subsidy Act .

Bill No. 22 committed, reported complete without amendment, read a third time and passed on the following division:

YEAS-38

Ney

LeCours

Campbell, B.

Marshall

Little

Wolfe

Brousson

Jefcoat

Smith

Gardom

Bruch

McDiarmid

Wenman

McCarthy, Mrs.

Chabot

Kripps, Mrs.

Jordan, Mrs.

Skillings

Mussallem

Dawson, Mrs.

Loffmark

Price

Kiernan

Gaglardi

Clark

Williston

Campbell, D.R.J.

McGeer

Bennett

Brothers

Williams, L.A.

Peterson

Shelford

Capozzi

Black

Richter

Vogel

Fraser

[ Page 744 ]

NAYS-12

Wallace

Hall

Strachan

Cocke

Williams, R.A.

Dowding

Hartley

Calder

Nimsick

Lorimer

Macdonald

Dailly, Mrs.

AN ACT TO AMEND THE SUCCESSION DUTY ACT

MR. SPEAKER: The second reading of Bill No. 23. The Hon. the Minister of Finance.

HON. MR. BENNETT: Bill No. 23, Succession Duty Act .

This government believes a broad base for taxation is the most

suitable method to raise the fund necessary to carry out essential

services provided by government.

It considers that succession duties must form a part of this base in

respect of our more wealthy citizens, but that exemptions be provided

of sufficient worth to eliminate the vast majority of our citizens from

having to pay any succession duties whatsoever.

Accordingly, this bill raises the basic succession duty exemption

for special beneficiaries — husband, wife, father, mother, grandfather,

grandmother, child, grandchild, son-in-law, daughter-in-law — from

$60,000 to a minimum of $150,000.

Including the measures contained in this bill, the following are the

main exemptions now provided, for example, for a spouse — an outright

exemption of $125,000. Two, an additional exemption of the value of the

family home. Three, an additional exemption of up to $25,000 of life

insurance.

Four, an additional exemption of up to $250 a month pension. Five,

exemption in any event of at least $150,000. This means for instance a

husband could leave a $40,000 home, $25,000 in insurance, other

properties of the value of $125,000 and $250 a month pension to his

spouse, which if she were age 60 would be valued at $33,832.50. Or a

total of $223,832.50 and no British Columbia succession duty would be

payable.

A minimum of $150,000 exemption is proposed to apply for bequest to

special beneficiaries. Any Portion up to $25,000 to a minimum of

$150,000 exemption not used by the above preferred beneficiaries is to

be allowed for exemptions of a bequest to a brother or sister of the

deceased. It is therefore apparent that most beneficiaries of the

estates in British Columbia will be completely exempt from succession

duty.

The government further wishes to assist the families that carry on

the operation of a family farm, or a business, and is therefore

introducing a provision to give a family a 10-year interest-free period

to pay any succession duty which may be due on the passing of the farm

or business to them.

Other amendments to the Act are proposed to bring it generally into

conformity with the provisions of the common succession duty Acts being

introduced in most of the other provinces.

These amendments provide: One, property outside the province left to

a beneficiary in the province is to be subject to duty, less any duty

paid to the cooperating province. Two, in the case of a company

controlled by the deceased, verification of the valuation to be applied

to shares and to the debts and dispositions when passing to one person

connected to the deceased by a blood relationship, marriage or

adoption. Three, in cases of quick succession, it provides for

reduction and valuation of 10 to 15 per cent of property in which the

duty has been paid under this Act if it passes again within five years.

Four, proposes a reduction and duty payable when a bequest is a gift in

which the gift tax had been paid.

The Honourable Members will recall that on top of the generous

exemption provided the British Columbia succession duty rates are low.

For example, for a close relative after all these exemptions and the

first payable $50,000 of dutiable value, the rates range from 3 to 8

per cent. There is no revision of these low rates proposed to take up

the 25 per cent of the state tax field dropped by the federal

government.

The government is aware that thrifty, industrious and prudent

citizens in our society need encouragement and are entitled to

encouragement to continue their contributions to the economy of the

province. The British Columbia succession duties will therefore only

apply to very large estates as basic exemptions outlined above

eliminate most beneficiaries.

I move second reading, Mr. Speaker.

MR. SPEAKER: The Honourable the second Member for Vancouver–Point Grey.

MR. G.B. GARDOM (Vancouver–Point Grey): Mr. Speaker, we're

happy about hearing that there is going to be some increased exemption

under the Act. But I think the government is treading on very dangerous

and complicated and unnecessary ground here. Because we have in Canada,

Mr. Speaker, whether we like it or not, or even understand it or not,

over the past six years or so gone very, very carefully into the estate

tax, and the gift tax situation.

We had the commission that very, very carefully studied the

incidence of income tax, the gift tax, and the estate tax and that was

the Carter Commission.

Next, Mr. Speaker, it was followed by the federal government white

paper which went once again through the whole tortuous process. That

was followed by a review of the thing by the taxation committee of the

House of Commons, and finally the matter was debated almost ad nauseam

in the federal parliament and eventually the new Act was passed.

So Canada has come in with a new tax philosophy, Mr. Speaker, and

that includes the abolition of the gift tax, and the abolition of the

estate or death taxes with the whole bag now under one tax system, as

before it used to be perhaps under the three.

I think I can say perhaps good riddance to this federal gift tax,

and to the federal death tax. But, in one sense, Mr. Speaker, and this

is the point that is giving me a great deal of concern here, I don't

think this government has considered it properly. These taxes that I'm

talking about have not totally disappeared because by virtue of the

provisions of the new Income Tax Act ,

they are in essence included. They're perhaps less distinguishable

today than they were before, and they're certainly in a more equitable

form. I think we will eventually find through the proof of the pudding

that they will be considered to be, and in fact be, in a more equitable

form.

So from that viewpoint I think that the federal provision was

certainly a good step forward. But I say to the government here today,

for goodness sakes go ahead and give this new tax philosophy in Canada,

the federal system, give it a try and wait a while. Just see how it

will work and don't be precipitous and jump right back on to the tax

bandwagon. We don't really and truly know whether or not what has been

[ Page 745 ]

suggested here by the government is just an additional tax trip. It could well be just that, and in my view unnecessary.

I think perhaps the government is going by this statute to most of

all "muddy the water," by the perpetuation of succession duties in the

province. Mr. Speaker, the government here is not only ignoring the

philosophy of this single, and hopefully more simple, procedure but

it's not even prepared to give it a try,

By this bill, there's no question of a doubt it's going to grossly

complicate the process. It will be offering certain members of the

public another plateful of very conflicting jiggery pokery, and a

perpetuation of tax that is now considered to be an outmoded method of

taxation.

Even worse than that by duplicating and compounding a prevailing tax

system, from which B.C. will receive its share, in essence this is

again another tax whack upon the people of the province. I don't think

the bill is needed Mr. Speaker, concerning the money that it will

produce by itself outside of the general provisions of the federal Income Tax Act I very much doubt would be any net.

This government has enormous tax surpluses. There's no question of a

doubt it is the history of this government that they've continuously

and deliberately underestimated revenue. Some people can say this is an

accident. Well if it's an accident it certainly is an ever-repeated

accident. And B.C. people are over-taxed every year, every month, and

every week, and every day, in pretty well every way.

By this bill, the Minister of Finance — and I would hazard a guess

that it's his bill — he's just adding to the confusion, he's adding to

the red tape, is adding to the opportunity for bureaucratic bungles,

and this particular department by virtue I'm sure of understaffing has

had a great deal of difficulty in keeping up-to-date with the work that

it's had even up to this point.

It's creating just an additional tax jungle and I say perhaps a

great deal of more hardship to certain sections of B, C. society.

Now, in my view there's another aspect here. This bill could well

create a climate that would very much favour the exodus of capital from

the province. Capital is what we need in B.C. Now for example, Alberta.

It doesn't have any gift tax, it doesn't have any death tax, but it is

subject to the federal Income Tax Act

and that province will receive its share of it and by virtue of the

amendments to that Act and under the new philosophy it will receive its

particular share of those old kind of duties. I can't see how we can

possibly favour anything that's unnecessary or is unfavourable as this.

Shortly, by way of summing up, Mr. Speaker, this is one more tax

maze. I think it would be very difficult and very expensive to

interpret and to administer. Any of the Members who have read the Act

can certainly see that it's a confusing son of a gun, if nothing else.

It's a dreadful thing to interpret. I think it will be a great boon to

the estate planners and to the financial advisers and to chartered

accountants and so forth — people in those fields. It will no doubt

swell their interests and certainly swell the offices of another level

of the civil service and I think we're going to have Parkinson's law

just running wild with this kind of a thing.

I say, Mr. Speaker, that one death tax and one gift tax under the

federal system is plenty, we don't need this in B.C. and I would much

prefer if this province adopted the attitude that the Province of

Alberta has done and that they're covered under the federal statute.

We don't need the two tax collectors, we don't wish the duplicating tax system, and we don't wish this kind of legislation.

It will cause confusion, Mr. Speaker. As I've said, it will enrich

the coffers of the estate planners and all of their satellite services

and all of those kind of satellite services. On the whole I very much

doubt if it will produce much net revenue, when you take into account

the cost of collection. It will definitely create another bureaucratic

establishment, and the public could once more be subject to very harsh

and arbitrary rulings.

Finally, Mr. Speaker, I think this could indeed create a means of

encouraging the exodus of capital from B.C. and that is the thing that

we should be discouraging rather than encouraging in this province.

MR. SPEAKER: The Honourable Member for Burnaby Willingdon.

MR. J.G. LORIMER (Burnaby-Willingdon): I think there are two basic principles involved here. One is referred to in the bill, and the other is not mentioned.

Now, the first principle is the question of the exemptions and so on

which I think is alright to have a year trial — to review it again in a

year's time, to see how it is working out.

But the second principle which is not in the bill which I want to

discuss is the one about the common-law spouse. We have had a number of

bills this year in which we've accepted a fact that there is such a

person and that we've given them certain rights and so on. But yet on

the

section dealing with the special beneficiaries there's no mention

of the commonlaw spouse.

Here is a case where I think it is very important that they be

recognised, due to the fact that there is a question of money — and

money that they should receive the benefit of in the Act. It should be

set out, I suggest, in the Act to give them those benefits.

There are certain ethnic groups in the province that are married by

their normal custom, that are not married by the laws of the province.

Now these people are not included, these widows are not included in

this Act. An example of this of course are the Doukhobor people that

are married by their own customs.

Now I know that around '54 and '55 there was a change where they

could do this and register their marriages. But a great number of those

people have never done this, and some of them have been married of

course since they came to this country. As a result they are still

common-law spouses, and when the breadwinner passes away under this

provision the spouse will be forced to pay the tax as a stranger.

Now, I think we've gone around the corner. We've decided that the

common-law widow or the spouse should be recognised in today's society,

and I suggest that this is certainly one place where it should be done.

I realise, as I mentioned, in the Doukhobor marriages probably

concessions have been made, and I know they have, to give them

benefits. But they shouldn't have to rely on this. They should be

protected by statute. And I would ask the Honourable Minister to take a

look at this definition of a special beneficiary and include the

common-law spouse.

MR. SPEAKER: The Honourable the first Member for Vancouver Centre.

MR. H.P. CAPOZZI (Vancouver Centre): Mr. Speaker, I would like to speak to this bill because I'm not prepared to support this bill.

[ Page 746 ]

In the past I have supported all the bills on succession duties and

have felt that there was a need to support them because there were many

loopholes in the previous tax Acts through which people could

accumulate large estates and not pay any tax on that accumulation.

Under the recent provisions of the Tax Act

and particularly under the bringing in of the capital gains tax the

main portion, or the main vehicle by which people could do this no

longer exists. I feel that people when accumulating and developing

estates will have paid their share under the new taxes. They will have

paid tax on their income, they will have paid taxes on their gains,

through capital gains and will have paid all the required taxes.

We really are saying that we are going to place them in nothing more

than really a double jeopardy. We're talking about encouraging thrift,

we're talking about encouraging the development of peoples' investment

incomes, to invest in Canada. And what we are saying now is that if

they do that and do accumulate in this manner we are really going to be

taxing them once again in a secondary fashion.

I believe that this tax at this time now becomes an unfair measure

of taxation. I do believe at the same time that the state is stepping

in and making arbitrary decisions as to which person is more entitled

to an estate and therefore should be tax exempt.

There are many cases where the estate might by some reason go to the

wife, though that may not be the final arrangement that the individual

may have wanted and would be tax exempt, and where he may have

preferred it to go in another direction. Probably if it's going to be

tax exempt because what has been done by another person for that

individual it might be a much more realistic exemption in the final

analysis.

I think that we are selecting arbitrarily the value of estates.

We're saying in this particular Act now that if the property that the

man owns, regardless of really how large the property is, that his

house sits on shall be non-taxable.

Whereas if he puts his investment

in another form of income, if he puts his savings in another form, it

is taxable.

We're saying at the same time that life insurance has suddenly taken

on again a very special premium over stocks, bonds or any other

investment form in the Province of British Columbia, and I suggest that

these are not valid explanations at this time.

I realise that by speaking against it that I probably place myself

in a rather difficult position of antagonizing tax departments

anticipating estates, but I would point out that for many people there

are still loopholes through which people can find their way by

transferring it down long before death to dependents and stabilising

the estate.

The very wealthy will escape the largest part of a lot of this, and

we're going to hit the middle income to the lower range of the income — those people who are making great contributions to the development of

the Province of British Columbia.

I say that this capital gains tax has eliminated the need for succession duty and therefore I am not prepared to support this Succession Duty Act .

MR. SPEAKER: The Honourable the first Member for Vancouver–Point Grey.

MR. P.L. McGEER (Vancouver–Point Grey): Mr. Speaker, our party has always opposed the Succession Duty Act .

It was our belief that we should avoid the tax jungles of Canada. In

those days when there was an estate tax, we should have participated in

the same way that other provinces participated in a share of the estate

tax, so that there was only one kind of administration on the estate

for purposes of levying a tax, and that it was comparable from one area

of Canada to another.

Instead what this province decided to do was to enter the succession

duty field, and to develop an administrative jungle; which provided one

set of assessors at the provincial level, and another set of assessors

at the federal level; which harrassed people of low and moderate

income; which provided for the Province of British Columbia only a very

modest amount of revenue and no more revenue than they would have

obtained had the Province of British Columbia stayed with the general

estate tax. This is on a net basis.

We have reason to believe, Mr. Speaker, that had we never entered

the succession duty field we would have been able to attract to British

Columbia substantial amounts of capital that would have provided jobs

and opportunities for British Columbians of all income levels, but

particularly those who have to work for a living. Therefore the Succession Duty Act

to date has done a great deal of harm in British Columbia and has done

no good in the way of providing needed revenues for the province.

Today, by retaining the Succession Duty Act

and bringing in further amendments, we are retaining a tax which is no

longer necessary because the capital gains tax does that social

leveling that was anticipated first by the Estate Tax and then by our

own Succession Duty Act .

So what we've done now in British Columbia, Mr. Speaker, is to add

double taxation. We have already done harm. What the retention of the

Act is going to do is to multiply that harm. What was a modest

disadvantage in previous years is going to be a major disadvantage

commencing today.

I'm going to give one example. There could be many that we might

quote. If we're to have a successful agricultural industry in this

province, we're going to have to retain under single management large

farms which can operate as successful business enterprises. Mr.

Speaker, the Minister of Agriculture is nodding assent. But this will

no longer be possible, Mr. Speaker, with this Act.

I don't care that a ranch has 10 years to pay off the succession

duties. All of these businesses are land rich and cash poor. The fact

that the Minister of Finance levies additional taxes on that farm isn't

going to mean anything to the hay that's grown or the cattle that are

raised. They can't do an extra job just to satisfy the Minister of

Finance. The consequence, Mr. Speaker, will be either to break these

farms up or to let them go to foreign ownership, because it just isn't

going to be possible facing these taxes for the agricultural people in

this province to retain economic-sized farms. For them it's a disaster.

Mr. Speaker, it's a disaster as well for any number of small,

successful and growing enterprises in this province. Again the

imposition of this tax levied on top of a capital gains tax will break

these businesses up at the time the person who started the business,

the father, passes on. It will produce moments of crisis in successful

British Columbia enterprises.

We stand here day after day in this House talking about the need for

Canada to develop itself, to have growing businesses, to have a

successful agricultural industry, and yet we come along with these

punitive and unnecessary taxes and bang these things on the head.

[ Page 747 ]

Sure the province is going to get a little bit of money out of it.

But it's going to more than pay the amount it receives out on

administration, on unemployment insurance, and on welfare. This is the

kind of taxation that costs jobs. This is the kind of taxation that

destroys enterprise. This is the kind of taxation which is totally

incorrect for a growing and developing country like Canada and for a

growing and developing province like British Columbia.

Mr. Speaker, we oppose it. It's stupid nonsense.

MR. SPEAKER: The Honourable Member for North Peace River.

MR. D.E. SMITH (North Peace River): Thank you, Mr. Speaker.

You know it's interesting to listen to the debate on this. I think

maybe one of the points that should be made is the fact that the

federal government has seen fit to revise the Income Tax Act

and get into the capital gains field. As a result of that and perhaps

as an appeasement to all the people in Canada, they have abdicated the

estate tax field, basically, I suppose, for two reasons.

One would be that they didn't feel that there was a great amount of

revenue to be generated from the application of estate taxes and gift

taxes. Therefore they would allow the provinces to have a few of those

concessions but at the same time retain in their own right that area of

taxation against each and every one of us that is the most lucrative,

namely the income tax field and the capital gains tax field.

So while they have said that they are prepared to get out of this

field, they certainly entered into another field which in the long run

will be far more lucrative from the standpoint of revenue generated to

the Crown than anything that will be gained from an estate or a gift

tax situation.

I'd like to commend the Minister for increasing the basic exemption

that will be allowed estates in certain special categories from $60,000

to $150,000. I'd like to suggest though to the Minister of Finance just

one suggestion. It is my belief that the exemption for an estate should

belong to the estate and not to the class of beneficiary who inherits.

I would hope that in the future we would see fit to remove the

classification altogether, and that the estate as such would be

entitled to an exemption of $150,000 plus the other exemptions that it

could reasonably qualify for under the Act without giving certain

discretionary powers and reduction in exemption to those estates that

were left to people outside of what might be considered a preferred

beneficiary classification.

I feel that the exemption is to the estate, not to the people that

inherit. The person who is the original owner of that estate should

have free access to leaving the estate to whoever they may desire

including a charity if that were their wish, or to anybody else,

without reference to the class of beneficiary who is to inherit. That

would, at least, be equal and fair to every estate in the province.

I do feel, Mr. Speaker, that with the added exemption and the fact

that the home can be exempt now plus other exemptions, the majority of

average-size estates in the Province of British Columbia will now pass

through without attracting estate tax within the province. This is a

good thing.

I feel also that the provision for extending the time that the

owners of family farms or family businesses will have without penalty

to 10 years for paying any taxes accrued is a fair one. Certainly most

of the assets of the smaller family business and of farms will be fixed

assets. They will be assets of land, of property, of equipment, and not

necessarily too much in the way of cash.

If I had one criticism of the Estate Tax Act

in the past, it would be that it did prove to be very detrimental to

estates that might be heavy in assets, some of them very difficult to

dispose of and very short in terms of cash liquidity available at the

time of the person's death. This has caused, I believe, undue hardships

in many cases where they have had to sacrifice valuable assets of the

estate to pay the estate taxes levied. With the idea of giving them 10

years to pay — and after all if it's a family farm and it's to be

inherited by younger members of the family — they're going to probably

receive the benefit of that farm without a great burden being put on

their shoulders to provide cash for payment of the farm right away.

Surely to goodness in that situation they'll be able over a period

of 10 years to arrange to pay off any estate tax that may be applicable?

It does seem that this field is not the most lucrative tax field in

the world that we could be involved in. I would like to see the Act

that we have now in effect simplified. I think it is an extremely

complicated Act as is the Gift Tax Act .

Certainly I would hope the Department of Finance will look at it in the

future with regard to simplifying the whole idea of gift taxes and

estate taxes, or succession duties as we call them in this province.

MR. SPEAKER: The Honourable Member for New Westminster.

MR. D.G. COCKE (New Westminster): Mr. Speaker, certainly I can't oppose a bill with the principle that is involved with respect to the Succession Duty Act .

The Honourable Members from the Liberal Party indicate or somehow

leave the impression that what the federal government has done has been

to move into adopting the Carter Commission report. Well, they never

went anywhere near part-way. So, to suggest that they've really moved

into the whole matter of capital gains and the whole matter of taxing,

"a buck is a buck" et cetera, they just haven't moved in that direction.

Mr. Speaker, however, I feel that the succession duty is an

anachronistic type of law. I think what we should have done was adopt

an estate tax type of bill rather than succession duties, and exempt

the spouse.

I can see no reason in the world why any government would look upon

a spouse as a person who should pay tax on her husband's estate — none

whatsoever. She spent her whole life helping him accumulate that

estate. However, once the spouse dies then I believe that we don't want

a situation where wealth can be accumulated and passed on from

generation to generation. Even if it doesn't generate a great deal of

income for the government — and it does generate some — even if it

doesn't generate that much, some of the Members indicate that it

doesn't generate that much — my suggestion is that it does a good job

in redistributing income. That's one of our great problems.

However we're still faced with that problem in spite of this Act and

practically any other Act because if a man is wealthy enough he can see

to it that he's in a position where somehow or another he can

circumvent past tax. That's what I'm going to suggest is happening with

the Income Tax Act . We see

the high-power corporate lawyers and the high-power chartered

accountant seeing to it that the very wealthy are protected. Those in

the middle range are the ones that get it in the neck.

[ Page 748 ]

That's unfortunately what it is going to be with respect to a Succession Duty Act as well, in my view.

The Member from Vancouver Centre (Mr. Capozzi) says that people have paid their shares under the Income Tax Act .

I dispute that. I dispute the fact that they've paid their share. The

Member from Vancouver Centre knows full well, and I'm adopting someone

else's phrase, that when the corporate lawyers and corporate C.A.s go

to work, the very powerful, the very wealthy, are able to get around

taxes very aptly.

MR. SPEAKER: The Honourable Member for Oak Bay,

MR. G.S. WALLACE (Oak Bay): Mr. Speaker, I feel that I should make some comment on this. In my budget speech, this was touched upon.

The fact is that succession duties do not raise a large amount of

revenue and the law is obviously very complicated and involves a great

deal of administration.

But perhaps most important of all, it seems to be agreed that this

is intended to deal with the very rich or richer members of society.

It's that same segment of society that indeed we require for the

investment of capital. I don't know how often in this House we hear

about the need for capital and how concerned we are about American

capital taking over our industries and businesses. For that main reason

I think that succession duties are not necessary any longer. In

addition I would agree with what's already been said — that with a

capital gains tax, while the person is accumulating assets, he is

indeed being taxed at many levels, mainly at income tax level and

capital gains tax level.

I think it's also clear that the capital gains tax is rebated by 30

per cent to the province so that this province is gaining money or

revenue through the new capital gains tax.

I feel that if we really claim that this is a country or a province

that encourages individual enterprise and people to build up their

family businesses and farms, it's mighty difficult to do that nowadays

with the various taxes, including this latest one, the capital gains

tax.

Therefore you would achieve two things. I think there would be

greater tax justice if succession duties were abolished. Secondly I

think that the very rich members of society and the people who have

developed wealthy businesses would have more capital to create more

industry and create more jobs. Therefore I cannot support this bill. I

believe that succession duties should be abolished.

MR. SPEAKER: The Honourable the second Member for Vancouver Centre.

MR. E.M. WOLFE (Vancouver Centre): Mr. Speaker, in other

years when we have looked at amendments to this bill, I've had some

concern as to whether to support succession duties.

In this instance I propose to support the bill because I believe

we're into a whole new ball game in terms of taxation in Canada. We

shouldn't, at this stage, look at this legislation and say succession

duties are out. We should at least allow them to stand on trial in this

province. I think they create substantial revenue. If you don't think

$21 million is substantial, my friend, well you're looking at a

different code of ethics than I am.

I used to hold the view, when I first entered this House, that the

revenue received from succession duties was not commensurate with the

costs of collecting them. I've checked on this point with those who are

involved. It is my view that we pay very little proportion of what we

collect in succession duties. Therefore they represent a substantial

revenue.

Now what are some of the arguments we've heard just in the last few

minutes here? That it is injurious to growing British Columbia

businesses. It seems to me that the substantial exemptions provided

take care of this feature.

Secondly, it is going to drive people out of British Columbia. I'd

like the Members to name one person who succession duties have driven

out of British Columbia. I know there are other provinces which see fit

to remove themselves from this field and which now are, with a view to

the fact that there is a new capital gains tax in the federal area.

My one primary concern is that we may be creating aspects of double

taxation and of course a sort of a taxation jungle, where succession

duties are concerned. It has always been very complicated legislation.

I would like to point out one feature of this legislation which has

been brought to my attention, perhaps the Minister of Finance may

comment on this, and that is with regard to taxation on a resident of

British Columbia who inherits property that is situated outside of

British Columbia.

He may do this notwithstanding the fact that the deceased was

domiciled and resident outside of the province. This philosophy of

taxing all assets inherited by B.C. resident regardless of the site of

the asset or the domicile of the deceased is I think a new approach to

the taxation of estates. I understand it is also to be followed by some

of the other provinces who are entering the succession duty field at

this time.

Section 15 of the amending Act enacts

section 10 which provides for

a tax credit in connection with death taxes paid to another province on

property that is situated in a cooperating province. But there is no

provision to grant a tax credit where the asset and the deceased are

situated outside of Canada as I see it.

It would seem that the legislation should provide some form of

foreign state and foreign federal tax credit if serious double taxation

is to be avoided when a B.C. resident is the beneficiary of a foreign

estate.

Also I have some concern with the first Member for Vancouver

Centre's (Mr. Capozzi) statement where he showed concern over the

double taxation aspect and I believe that legal opinion does appear to

be to the effect that it is uncertain where the income tax on 50 per

cent of capital gains that are deemed to be realised due to death are

to be deductible as a debt of the estate.

I think it should be made clear as to whether or not double taxation is to be imposed in this area.

However, as I say this is a new ball game where taxation is

concerned and the question we have to ask is whether or not at this

stage, succession duties are obsolete. I say they are not and therefore

I stand to support the bill.

MR. SPEAKER: The Honourable the first Member for Vancouver East.

MR. A.B. MACDONALD (Vancouver East): Mr. Speaker, I have to disagree with our colleague from Oak Bay. I think succession duties…

AN HON. MEMBER: Your colleague?

MR. MACDONALD: He's a colleague in this Legislature. A Member of the Legislature. We're all colleagues in that sense.

[ Page 749 ]

But I have to disagree with him even though we had his support on a

bill a few minutes ago because I know that other jurisdictions, like

Alberta, have gone out of the succession duty field and I say they have

become chicken on this matter because we're dealing with the future

generations of young people who should grow up in a world of some kind

of equality of opportunity.

We cannot accept the principle that there should be in society, an

aristocracy of wealth with the private fortunes accumulating to the

extent generation after generation that the recipients cannot even

spend the interest on their interest. I deplore the fact that even B.C.

citizens and certainly some of our Canadian citizens have fled with

their assets to tax havens in the Bahamas.

I say in that way they say: "We're holding you up to blackmail, you

in the Province of British Columbia. You make nice laws for the rich or

we'll take our wealth and we will leave this province." Well, if that's

got to be their attitude — good riddance.

MR. SPEAKER: The Honourable Member for Alberni.

MR. H.R. McDIARMID (Alberni): Mr. Speaker, there are some

things about this that I'm not particularly enamoured of and one of the

things is the question of the insurance provision. Many people now

hesitate to buy anything other than term insurance. There's a trend in

the industry towards increasing amounts of term insurance to age 60 or

65, so that when a person reaches this age often they are unable at

that point in time to purchase insurance and they may have been

investing their money in other forms of assets.

In particular, one of the things that I can't find in here is

whether the amount of money that's put into a registered retirement

savings plan should be survivored. Say there was $ 30,000 or $40,000 in

a registered retirement savings plan — specifically a registered

retirement savings plan — this money, should the person reach the age

of 65 (1 believe it is) then they must purchase an annuity with this

amount of money.

So, what I'm asking is, would this amount be exempted if the widow

took this cash to purchase an annuity for herself? Or is it going to be

deducted from the $150,000 deduction?

In a general way I think that there is a feeling among some of the

real workers and real producers within British Columbia, the people who

are actively trying to build up small and medium size companies within

the Province of British Columbia. Even a small logger today has got

$500,000 worth of equipment in assets and I think that there is a great

discouraging influence with the myriad of taxation laws that we have

federally and provincially.

The accountants that I talk to say it may take six or seven years to

sort these things out. I can't help but feel that while I agree in the

principle that the wealthy shouldn't necessarily be able to pass on a

largesse, I do believe that in terms of moderate and medium size

businesses the amount of provision and the way that they're couched

does not make it fair to everyone.

MR. SPEAKER: The Honourable Member for Kootenay.

MR. L.T. NIMSICK (Kootenay): Mr. Speaker, there's one point

in this succession duty that bothers me. I have had several widows come

to me where in drawing up the estate for succession duties, they are

allowed two per cent, I believe at the start. In a smaller estate, this

pension that's used as part of the estate as long as the widow is alive

she doesn't receive the pension at the time that she is being taxed.

They use this pension in the total estate and then tax the widow for

the cost of the probate, I suppose it's called, and to arrive at

whether they've got to pay succession duties or not.

Now I feel that the people that I'm worried about most are those

people that don't have to pay succession duties, the only thing that

they've got as far as an estate goes, maybe, is a little insurance and

this pension that they've got totalled for their whole lifetime — and

they never get this money.

This is all they've got at the time and yet they're taxed on this

total amount as part of their estate. I don't think this is fair. I

don't know whether you could do it in this bill or some other bill but

I think that there should be some place that this pension should not be

included as part of the estate.

It may be fine and dandy where you are collecting succession duties,

but where this is all a person's got along with a little insurance and

maybe a house or something, where they don't have to pay succession

duty taxes and it increases the cost to a widow. I'm not saying that

all lawyers charge them this amount on everything, but I know several

cases that I had brought to my attention that it was charged on and I

think it is discriminatory in that respect.

MR. SPEAKER: The Honourable Member has exhausted his right to speak. The Honourable the Premier will close the debate.

lnterjections by Hon. Members.

HON. MR. BENNETT: You mean they forgot to say something before?

lnterjections by Hon. Members.

HON. MR. BENNETT: My friend, I don't wonder at all that some

of these representatives of the fat cats are preaching their doctrine.

I'm going to tell you this, they talk about double taxation, the

federal income tax — that we wanted larger exemptions. As long as I'm

Minister of Finance I will never agree to tax the people with low

income and let the people with wealthy estates off scot-free my friend.

That might be the new policy of the Tory party in this province but I

want to say that's the reason I left the Tory party and that's the

reason the ordinary people will not vote for Tories in the next

election. That's the reason really — now.

We found out today the reason why the Member for Oak Bay (Mr.

Wallace) left our grass roots movement — because he doesn't believe in

the principles of Social Credit which is for the ordinary people, my

friend. That's the difference. That's the difference.

Interjections by Hon. Members.

HON. MR. BENNETT: Oh, I'm going to tell you, we're going to

see how you vote this day. I will tell the people of this province how

you vote this day. Before this day is out you will be tied to the mast,

my friend,

MR. SPEAKER: Order, please! Can we get back to the principle of this bill?

Interjections by Hon. Members.

[ Page 750 ]

MR. SPEAKER: Order, please!

HON. MR. BENNETT: I always pay taxes my friend. Oh, it's noticed in the paper that some people don't.

AN HON. MEMBER: Earl Grant!

HON. MR. BENNETT: He's no relation of mine.

AN HON. MEMBER: We're happy at that.

HON. MR. BENNETT: So am I. (Laughter).

AN HON. MEMBER: I'll bet you are.

HON. MR. BENNETT: Some of the Honourable Members are mixed up

on the income tax and how it affects — on the new system on capital

gains. They say the provincial government is going to get all this

extra money. That is not true, Mr. Speaker.

Under the original arrangement, ever since we've been in the income

tax basis we've always had a percentage of the total tax, the tax

abatement and it grew up to be 28 per cent.

Under this new income tax, to make sure that British Columbia and

others do not share in the capital gains tax, the federal government

changed the formula. I pointed that out at the federal-provincial

conference. I pointed it out in my budget speech and I point it out

again today.

Before, we had 28 per cent of the total. Now we're going to get 30.5

per cent of the federal share. When you take off our share, the

abatement of 28 per cent before gives us 72 per cent. So 30.5 per cent

of 72 per cent only gives the province 22 per cent.

Where does the other 30 per cent really go? To the federal

government. I can't understand how the leader of the Conservative Party

and the leader of the Liberal Party can't understand ordinary

arithmetic. I can't understand it at all.

AN HON. MEMBER: You're getting just as much money.

HON. MR. BENNETT: Just as much money as the old basis. But no

share of the capital gain and you want us to give away succession

duties and we get no share at all. If that is Liberal policy in this

province no wonder you and the Tories are going down the drain.

My friend can snicker as much as he likes — he's never going to be

elected again. He got elected under false pretences the last time.

MR. SPEAKER: Order, please!

SOME HON. MEMBERS: No, no! Point of order!

HON. MR. BENNETT: I noticed that he didn't report back to his riding or get any confirmation from the last meeting …

MR. SPEAKER: Order, please! Can we get back to the principle of this bill?

HON. MR. BENNETT: The principle of this bill, my friend, is to reduce taxation.

MR. GARDOM: Withdraw that.

HON. MR. BENNETT: I don't want to withdraw reducing taxation.

I certainly will not. I want to say this bill, if it isn't passed

today, means that taxes will be higher than they would be if this bill

passes.

This bill reduces taxes on succession duties. It reduces succession

duties. If this bill doesn't pass today then the people will pay more

taxes. This bill is tax reduction, my friend. Tax reduction on

succession duties.

Now I want to say this. As far as these people who, when they share

money in this country, who make this money in this province, and if

they want to go to the Barbados or Nassau or somewhere else, for a tax

haven, let them go and I agree for the first time this session with the

first Member for Vancouver East (Mr. Macdonald) — good riddance, my

friend.

Because we want only people in this province that are willing to

take their fair share of responsibilities to pay their share of taxes

and build this country.

I move second reading.

MR. SPEAKER: The question is that Bill No. 23 be read a second time.

Motion approved on the following division:

YEAS-44

Ney

Nimsick

Black

Marshall

Barrett

Fraser

Cocke

Dailly, Mrs.

Campbell, B.

Hartley

Vogel

Wolfe

Lorimer

LeCours

Smith

Hall

Little

McDiarmid

Williams, R.A.

Jefcoat

Chabot

Calder

Bruch

Skillings

Wenman

McCarthy, Mrs.

Loffmark

Kripps, Mrs.

Jordan, Mrs.

Gaglardi

Mussallem

Dawson, Mrs.

Campbell, D.R.J.

Price

Kiernan

Brothers

Macdonald

Williston

Shelford

Strachan

Bennett

Richter

Dowding

Peterson

NAYS-6

Brousson

Wallace

Williams, L.A.

Gardom

McGeer

Capozzi

PAIR

Merilees

Clark

Bill No. 23 read a second time and ordered to be placed on orders of the day for committal at the next sitting after today.

HON. MR. BENNETT: Second reading of Bill No. 24, Mr. Speaker.

AN ACT TO AMEND

THE INCOME TAX ACT, 1962

MR. SPEAKER: The second reading of Bill No. 24. The Hon. the Minister of Finance.

[ Page 751 ]

HON. MR. BENNETT: Mr. Speaker, Bill No. 24, Income Tax Act .

For the period since January 1, 1962 this province along with most

other provinces has entered into agreement with the federal government

for the collection of provincial, personal and corporation income tax.

The collection agreement requires the provisions of the British Columbia Income Tax Act

to be compatible with those of the federal Act. The filing of one

income tax return is convenient for taxpayers, and it's beneficial for

efficient administration.

The province desires at the present time to remain within the

collection agreement and have one collecting agency. Accordingly, as

required under the terms of the agreement with the federal government

amendments are proposed in this bill to bring the provincial income tax

legislation in line with the federal income tax legislation which has

recently been changed.

This bill brings the provincial rates in line with those contained

in the federal legislation. The balance of proposed amendments cover

administrative and enforcement procedures identical to those contained

in the federal Income Tax Act ,

and are required to allow British Columbia to continue under the

federal taxation collection agreement. I move second reading, Mr.

Speaker.

MR. SPEAKER: The Hon. Member for Cowichan Malahat.

MR. R.M. STRACHAN (Cowichan-Malahat): Thank you, Mr. Speaker.

It's good politics for a provincial government if at all possible to

have the federal government do the collecting of taxes because then it

all goes to Ottawa. Not all people realise even though there's a

section in the income tax form which says "provincial share" and you go

down the line and there it is.

You know, the Act we're referring to is this document here. About

600 pages and I don't pretend to understand every paragraph or every

phrase and I would question the modesty of any person who did. As well

as being tempted to question his truthfulness.

Then you go into the amendments that were added to it and try to

apply the amendments. I'll just read you one amendment, Mr. Speaker, to

give you an example of how difficult it is to try and take a provincial

bill through these amendments and then go back to this bill to see what

it means. One of the amendments that was introduced in October says:

As a reference to

section 120 of the amended Act does not include a reference to paragraph 33 1A of the former Act.

(

B) For the purposes of paragraph 33 1A of the former

Act and subsection 121 of the amended Act all of the income of the

individual for that or any previous taxation year shall be deemed to

have been income earned in the year in a province.

AN HON. MEMBER: Would you please explain that?

MR. STRACHAN: Now, I wouldn't begin because it would take me about an hour to look up all the references related thereto.

You know, when this bill was brought into the House of Commons there

was an ordinary little salary earning taxpayer was told about this bill

and his M.P. showed it to him and he said "All of that for my few

little deductions?" Well, of course, that's not the way it works

because all that isn't for his little few deductions. Most of it

applies to other aspects of the income tax system.

This was trumpeted as tax reform. It's nothing of the kind. It's not tax reform.

Interjection by an Hon. Member.

MR. STRACHAN: I'll get around to proving it in a minute

because it still leaves the balance of payments on the same shoulders

that they always have been. It does not create an equitable society

because people who work with their hands or their brains are still

being discriminated against.

Again, I'm not blaming the provincial Minister of Finance for this.

It's very difficult to decide to go it alone and send out your own

income tax form in a federal situation like we have today. But there's

no doubt about it. It's not tax reform because it still continues to be

unfair between the little people — the wage earners the small

businessmen and the conglomerate — the large corporations and the

multi-national corporations.

We got this after the Carter Commission, the Benson white paper, the Benson tax changes and the Benson mini-budget.

Under the Carter Commission all income would have been taxed on

ability to pay. I would have bought that on the principle of a buck is

a buck. Under the Carter Commission three million Canadians in the

$10,000 per year and less bracket would have a reduction of over 15 per

cent. Almost another three million would have seen reductions from 1 to

15 per cent. 600,000 would have been eliminated entirely from the

income tax role.

It was for that reason that I would buy the Carter Commission even

though I didn't like every aspect of it. Because roughly 10 million

Canadian taxpayers would have had their income tax reduced or

eliminated altogether, 600,000 Canadians would have paid more under the

Carter Commission recommendations. The federal government would have

had more revenue.

The Benson white paper put some water in the soup and the later amendment didn't really improve too much.

AN HON. MEMBER: You mean the alphabetic soup?

MR. STRACHAN: Yes, the alphabetic soup. The present tax

perpetuates all the unfairness and inequities and it's even added a few

more. It's true that under these tax amendments that we're considering

today about three million Canadians would disappear from the tax roll,

But salary and wage earners would be taxed on almost all of their

income. In view of the fact that salaries and wage earners are taxed on

almost all of their income why do we only tax 50 per cent of capital

gains? Income from dividends are getting exemptions up from 20 to 33

1/3 per cent exemptions.

What happens under this tax formula? The single man with no

dependents earning $10,000 per year in salary or wages will pay $2,285.

A single man getting $10,000 per year in corporation dividends will pay

$193. Is that equity? Is that equal taxation?

AN HON. MEMBER: You're not right.

MR. STRACHAN: I am right, I am right.

On income of $8,000 the salary earner will pay $1,654. If his income is on capital gains he will pay $579. If it's in

[ Page 752 ]

corporation dividends he'll pay zero.

What has been the tendency with regard to federal taxation in the

last 10 years? In 1961, 35 per cent of the federal tax revenues came

from people. Individual income tax. In 1971, that was up to 42 per cent

of federal tax revenues that came from persons.

How has the corporation income tax gone? In 1961, 23 per cent of

federal tax revenues came from corporations. By 1971 it was down to

19.5 per cent of federal tax revenues coming from corporations.

In the new legislation that 19.5 per cent will be even less. The

theory is that this will help create employment by encouraging industry

to invest and all the rest of it. But if we're encouraging the wrong

kind of investment through our income tax and corporation tax policies

then it's possible to increase the Gross National Product without

increasing employment. That's one of the major problems facing us today.

You know, the professor of finance at the University of Toronto not too long ago made a statement. He said:

"On its own, Canadian industry can't provide an

adequate response to the challenge of foreign competition. Strong and

efficient competition is required in the area of taxation and beyond it

as well. The alternative is a drift down the road to a Venezualian-type

economy. A large modern resource extraction industry that provides very

little employment, a large unproductive government bureaucracy, an

inefficient, weak manufacturing sector, increased imports of

manufactured products and rising government expenditures on

unemployment."

I think that describes the economy of Canada because of the tendency

towards the resource benefit taxation system. You know, again under

this new tax set-up a single taxpayer earning $5,000 will pay $14 less.

A single taxpayer earning $11,000 will pay $74 more. A single person

earning $100,000 will pay $1,000 less. That's redistribution of wealth

isn't it? That's real redistribution of wealth.

The man who earns $100,000 will actually pay $1,000 less. But you

know, that's the breaks. But it gets worse and worse you know, when you

think of the special privileges that is allowed to the major

corporations.

Can you imagine the man who is earning $11,000 and is going to pay

$74 more, finding himself in a financial position where because of that

he was having trouble finding the money?

If he wrote a letter to the Minister of Finance and asked for

surcease from that particular obligation what would happen? He wouldn't

get it. But we find just recently an organisation called the Great

Canadian Oil Sands Limited asked the federal government to release them

from their obligation of paying $6 million in sales tax. They pleaded

financial hardship. Financial hardship! The Great Canadian Oil Sands

Limited — $6 million worth of federal sales tax! Financial hardship!

What did the federal government do? They excused them from paying

their $6 million. But the poor little man who earns $11,000 a year

under this new tax bill, if he pleaded financial hardship to the

federal government what would happen? Would they give him an exemption?

If he refused to pay he'd probably go to jail.

The basic exemption under this new tax Act is being raised for a

single person to $1,500 for a married couple to $2,850. We have always

felt — and the Premier said so today, and I agree with him — that this

basic exemption should be at least $2,000 for a single person, $4,000

for a married couple because that's just about the poverty line in

today's society.

AN HON. MEMBER: He can do it.

MR. STRACHAN: Well…it can only be done by going outside the federal tax system and imposing and sending out your own tax forms.

Interjections by Hon. Members.

MR. STRACHAN: But what else is happening under this

legislation? By taxing unemployment insurance payments and allowing

premiums as a deduction the government will actually take in $30

million more. By treating as income medical premiums paid by the

employer on behalf of an employee they'll take in $80 million more.

Again the little man's being hurt. These two sums more than compensate

for loss of revenue by increasing B.C. exemptions. These two increases

will take from the little man more than they get by the increase in the

B.C. exemptions.

We in this party have always advocated a tax system that possessed

made a value judgment and basically the worker's wages are not

important. They will pay taxes on the full shot. But if you have

capital you can invest that and it will only be subject to partial tax.

Only the entrepreneur gets the icing on the cake.

You know, I've listened to the arguments from across the way several

times during this session about the need to let the entrepreneurs and

the corporations get this special privilege in the tax field — the

Member for Vancouver Centre (Mr. Capozzi) who voted against succession

duties…I'm having a little trouble with the noise in the House.

Interjection by an Hon. Member.

MR. SPEAKER: Yes, I would agree with the Hon. Member. Could we have some order please?

MR. STRACHAN: As I listened to the Hon. Members across the

way talk about the need to allow the privileged to get away with their

privilege as being important to the provision of employment in this

country I realised just how far out of date their thinking is. Because

more than about 250 years ago a man by the name of Richard Mandival

wrote a series of essays in which he put forward some peculiar theories.

One of his theories was that workers shouldn't be paid too much, because if workers were paid too much they wouldn't work.

AN HON. MEMBER: How long ago was that?

MR. STRACHAN: 250 years ago. Then he went on to say that the

workers of that day were enjoying comforts that were once the special

privilege of princes.

Then in another essay he went on to talk about the spending of the

luxurious rich providing employment. Basically that whole essay was

based on the premise that we should encourage the luxurious consumption

of the well-to-do. We should help them to become more wealthy because

then they will be able to hire chimney sweeps, gardeners to look after

their gardens, seamstresses to make their clothes, sew buttons on their

clothes and all kinds of services.

Basically he said that we should see that the rich have lots

[ Page 753 ]

of money. We should see that no one takes it away

from them because after all they provide employment. Oh my goodness,

what trials and tribulations, where would society be if the rich did

not have the money to provide employment?

Now, that was 250 years ago and that's exactly the arguments I've

been hearing from the Member for Vancouver Centre (Mr. Capozzi), the

Member for Alberni (Mr. McDiarmid) and other Members across the way all

during this session. That's how far back their thinking is.

You go read "The Fables of the Bee" and you'll find that you agree

100 per cent with that particular philosophy that was written so well

so long ago. But the lobbyists and the pressure groups that operate in

this province and this country have been able to persuade the federal

government (1) not to implement the Carter Royal Commission, (2) not to

implement the Benson white paper, and what we get is this sickly

continuation of the same old discriminatory tax legislation.

When that Carter Royal Commission came out the beefs started to pour

in, there were stacks about that high from all the special privilege

groups and industries and corporations in this country. And they got

their way. The Carter Royal Commission went down the drain.

Then came the Benson white paper, again they descended. They even

set up a special organisation to lobby against the very limited

benefits that the Benson white paper was going to bring. And finally

when this tax bill was brought in they howled in glee and this is their

paper, the Guardian they called it. When these amendments were brought

in it, the date was June 18, I think, on that tax bill. "White Paper

Philosophy Defeated. A victory or something else — time alone will tell.

"If we view Mr. Benson's tax legislation only in the context of his

original white paper proposals the council's victory was stunning and

clear cut, " said John F. Bullock, president of this Council of

Canadian Taxpayers which is a straight entrepreneurial front to tear

down public support and public belief in the need for real tax reform

in Canada.

Another quote: "So many concessions were made in the new tax reform

legislation that the council will be able to curtail some of its 1971

programme and thus save money." A clear cut, and stunning victory they

called it.

But who won? They won, the representatives of the special interest.

Who lost? The average taxpayer and worker and salary earner in Canada.

They say so right in their own publication and it is colossal gall to

brag about it. And that's why the situation exists that the

individual's going to finish up paying more taxes while the man who

earns $100,000 a year is actually going to pay $1,000 less.

I would like to ask the Minister of Finance why he didn't pursue the

same course as the Province of Ontario. Because they were able to got

other exemptions written into the tax system there.

I go to the Financial Post of last November and we are told

that Ontario wants to introduce its own system of property and

provincial sales tax credit — property and provincial sales tax credit

for Ontario residences effective next year.

Now, that was last November, and the same story says Ontario's

proposed new system of sales and property tax tennants will be a boon

to lower-income individuals and families. Now we weren't able to get

the increase in the deductions the Premier spoke of.

Why didn't he bring in this situation? I don't know whether he's

listening or not. Now Mr Minister I'm wondering why you didn't do as

Ontario did, which they claim would be a boon to lower-income

individuals? They would get relief from provincial sales tax for the

first time, you would get more relief for property taxes, and rents,

that is now the case in the province's basic shelter exemptions grant.

Then later there was a story that came out in the Financial Post indicating that Ottawa has agreed to allow Ontario to incorporate that into their tax structure.

Now, Mr. Minister I have objected all through this session to the

unfair taxation which operates in this country, to the fact that the

individual has to pay taxes on almost all of his earnings, that the

small businessman pays taxes on about 90 per cent of his earnings, but

in the resource base industry, mining only pays taxes on 13 per cent of

their income and the oil and gas industry only pay taxes on 6 per cent

of their income.

As long as that situation prevails we cannot say that we have an

adequate, fair, or a reasonable income tax system. Because you look at

the iron ore of Canada. We are not providing the job-intensive

industries under our present tax system and as I said earlier, it's

possible to increase the Gross National Product without providing a

single job, and the long list that I read off the report of the

Minister of Industrial Development the other day where new expansions

were taking place and plants in this province without producing a

single job indicates that very clearly, that we could increase the

Gross National Product of goods and wealth without providing a single

job.

The Iron Ore Company of Canada, which is one of those companies that

gets in under the 13 per cent payment on their income tax, they are

spending $900,000 to provide one job, and this income tax situation

encourages that kind of capital-intensive rather than labour-intensive

industries, and we certainly can't continue up that road or we are in

trouble.

So I have these questions for the Minister. Did the Minister of

Finance press the federal government for changes in this weighting of

the tax system, so that the resource-base industries don't get away

with only paying income tax on such a small percentage of their

proposals? And two, why didn't he suggest the Ontario system of

allowing tax credits for rent, property taxes, and sales tax? I know he

won't answer because he wasn't even listening.

DEPUTY SPEAKER: The Honourable Minister of Municipal Affairs.

HON. D.R.J. CAMPBELL (Minister of Municipal Affairs): Mr.

Speaker, I think one of the unfortunate parts of having to accept this

statute is that throughout the negotiations that went on with the Income Tax Act

there was very little said about suffering in silence the amount of

revenue which the federal government is going to take from the capital

gains tax on property.

I don't understand most of this silence because if there's anything

that is very peculiarly the province of municipalities and provincial

governments it has to be the property tax. And when you consider that

looking at the values which have been added to property it's almost

impossible to look at any community and not come to the conclusion that

the property values that were created were essentially created by

provincial investments, or by municipal investments, or by the direct

investment of local taxpayers in their own right through such things as

local improvement taxation and so on.

When you consider that over the course of time buildings

[ Page 754 ]

like the Medical-Dental Building in Vancouver

showed increases in value of from $3 million to $5 million and assume

that that is a new tax plum for federal taxing authority then this has

got to be just about the most serious encroachment on local property

rights that we've had since confederation.

Right through the piece on this I indicated at a federal-provincial

conference with the ministers of municipal affairs that I consider this

an intolerable type of an encroachment where government, which produced

little or none of the investment which created these property values,

presumes to tax those property values with no indication whatsoever

that there's going to be any return to the province, nor to the

municipality.

Certainly I know that the Minister of Finance for this province, while having to accept the Income Tax Act as presently being established, that British Columbia has indicated in a number of ways that we're not happy.

We're not happy in the way the federal government has handled their

tax formulas, we're not happy about the way in which they've handled

equalisation payments.

We're talking about equalisation payments now, moving from $1.1

million to $1.5 million, over the course of the next year and probably

upwards of that — one billion, one billion. Of course, one of the

sources for some of this new revenue, it's quite conceivable that the

property tax take in the Province of British Columbia alone, on the

values added, could be of the order of $75 million a year without one

iota of any indication from the federal authority that any of that

money will come back to the provincial authority which helped to create

the values nor to the municipal authority which help to create it as

well.

Certainly I want to make it pretty clear that in supporting this

bill I'm not supporting the position of the federal government with

respect to their tax reform and I'm certainly not supporting the

federal government's position with respect to the capital gains tax,

and the lack of return to the provincial government and the

municipalities.

DEPUTY SPEAKER: The Honourable second Member for Vancouver East.

MR. R.A. WILLIAMS (Vancouver East): I do think, Mr. Speaker,

that the Honourable Member for Cowichan-Malahat deserves some better

answers from the Premier than he's received so far. The Premier …

Interjection by an Hon. Member.

MR. R.A. WILLIAMS: Oh well, he missed half of the discussion,

but the point was made that the Province of Ontario brought about

different conditions with respect to that region. And it's very clear

that the Province of Quebec is continually getting different conditions

with respect to federal tax legislation.

There's no reason in the world why we can't take a regional approach

in Canada. There are differences in each of the regions, and I think

the nation's laws should reflect that. But, if the Premier was on his

toes and cared about the unjustices that the Member from Cowichan was

talking about enough, I'm sure he could get changes in the legislation

so that there would be a regional approach to British Columbia.

Our point of view — and there is some consensus across the floor of

this House, with the possible exception of the Liberals and the Member

from Centre (Mr. Capozzi) — is that these exemptions and the treatment

between capital and wages is unfair, that we're developing a

resource-based economy that is too capital-intensive. We lost probably

the most able economic mind in the federal government over this very

issue — Mr. Kierans. I think Mr. Kierans was right, the nation has been

moving in the wrong direction with respect to capital-intensive

resource industries and hasn't been creating the jobs that are needed.

That's one of the reasons we've got the level of unemployment that we

now have.

But for the Minister of Municipal Affairs (Hon. Mr. Campbell) to

come out bravely as he's done, saying how unfair it is that they're

taking the capital gains in property away to Ottawa — he didn't mind

when every speculator in the province was packing them all home, or

across the line to the States. When the province could have been

reaping the revenues from that area the Minister of Municipal Affairs

was strangely silent. It was: "Fine, fine! Go to it boys, feed in the

growth communities of British Columbia, make a fast buck" — on housing,

on industry, all the development that is needed in this province.

He says $75 million may be going to Ottawa. What might we have done

last year with that $75 million, or the year before, or the year

before? Now, this is an area where the province could have jumped in

and been getting the revenue beforehand.

There's just no excuse in the world for the Minister to come out

now, and say: "Isn't it a shame that this is going into the public

purse in Ottawa, and helping people in the Maritimes." It could have

been going to the public purse right here in Victoria and helping out

our people all the time, over the last two decades when this province

has been undergoing tremendous growth.

If there is one area that is justified to tax — you know if you have

to choose a tax that bears less heavily on the unfortunate, that is not

a drag on the economy — that's the place to get it, right there where

the gravy train is, in the increased value in property.

The Minister says: "The increased value is mainly a result of the

work of the community, the work of the province, the work of borrowing

and spending, and improvement"…

Interjection by an Hon. Member.

MR. R.A. WILLIAMS: Oh no, I said it when I came into this

Legislature in 1966, and the Minister was just sitting around just

doing his usual thing and blaming Ottawa for this and that. He's had

the opportunity and it's been pointed out again and again by the

Opposition that this was a rightful source of revenue for the people of

British Columbia.

Even this watered-down soup that came from Mr. Benson is stronger

stuff than the Minister is able to produce, under his administration — so don't knock Ottawa all the way down the line because it's a job that

you should have been doing. You chose not to do.

Now we've got $75 million that at least is going to be used for

public benefit in this nation. And I'm proud of Ottawa for that at

least, that they are willing to move, in an area that you should have

moved in long ago.

DEPUTY SPEAKER: The question is that Bill No. 24 be now read a second time.

Motion approved: second reading of the bill.

Bill No. 24 ordered to be placed on orders of the day for

[ Page 755 ]

committal at the next sitting after today.

HON. MR. BENNETT: Second reading of Bill No. 31, Mr. Speaker.

AN ACT TO AMEND THE

HEARING-AID REGULATION ACT

DEPUTY SPEAKER: Bill No. 31,

An Act to Amend the Hearing-aid Regulation Act .

The Honourable Minister without Portfolio.

HON. I.P. DAWSON (Minister without Portfolio): Mr. Speaker,

during the past year experience has shown that the hearing aid dealers

and the public in general have welcomed legislation regulating the

hearing-aid field. Nevertheless it has come apparent that

section 4

needed amending, and that

section 12 should be repealed and re-enacted.

The intent of the original legislation was to benefit both the

general public and the hearing-aid dealers. It was the intent and it

has been carried out. But to make doubly sure that no misunderstanding

can take place we're presenting the amendments contained in Bill No.

31,

An Act to Amend the Hearing-aid Regulations Act .

Individual senior citizens and groups and associations who represent

their interests have all welcomed the safeguards contained in the

Hearing-aid Regulations Act , and its regulations as passed by this

House last year.

The board has wide powers to regulate the activities of hearing-aid

dealers and the general public will now be assured that each

hearing-aid dealer who continues to be licensed by the board will meet

a suitable standard of competence.

The dealer has to provide a bond to keep proper records and

correctly describe a hearing-aid as being new or used, maintain an

adequate range of hearing-aids with repair facilities necessary to get

a good service, keep equipment calibrated to acceptable standards.

Hearing-aid healers are not allowed under the Act to carry out tests

or sell a hearing-aid to a person under 16 years of age, unless the

young person has previously consulted an ear, nose and throat surgeon

or an audiologist. Mr. Speaker, I move that the bill be now read a

second time.

DEPUTY SPEAKER: The question is that Bill No. 31 be now read a second time.

The Honourable Member for Kootenay.

MR. NIMSICK: Mr. Speaker, in regards to this hearing-aid bill, has it got any set price for hearing-aids at the present time?

DEPUTY SPEAKER: Well, I think that would be a matter properly

asked under the committee on the bill. The question is that Bill No. 31

be now read a second time.

Motion approved: second reading of the bill.

Bill No. 31 ordered to be placed on orders of the day for committal at the next sitting after today.

HON. L.R. PETERSON (Attorney General): Second reading of Bill No. 32, Mr. Speaker.

AN ACT TO AMEND THE LITTER ACT

DEPUTY SPEAKER: Bill No. 32,

An Act to Amend the Litter Act . The Honourable the Minister of Recreation and Conservation.

HON. W.K. KIERNAN (Minister of Recreation and Conservation):

There are three or four key points in this bill, Mr. Speaker. We amend

the original bill to establish quite clearly that a lake or a water

course whether it is frozen or not is still protected under the Litter

Act .

There seemed to be some possibility of a legal quibble that a water

course or a water body that in its natural state — i.e. water — was in

fact protected under the Litter Act, but if it were frozen it might not

be protected. So we are amending the Act to include water courses and

bodies of water in their frozen state as well as in their liquid or

watery state.

There was an exclusion of certain requirements in the original bill

as it related to sanitary facilities on private land. As a result of a

year's experience we see no good reason for continuing to exclude

private land from the requirements of the Act as it relates to people

using those private lands for camping or campsite purposes. So the

amendment there makes the same sanitary facilities requirements apply

to private lands as it does apply under the bill to Crown lands.

The further major factor has to do with specific penalties in

relation to the sections of the original Act that deal with containers;

beer, ale, and soft drink containers. As you may recall there has been

some difference of opinion expressed in the trade as a result of a

court decision last summer.

The amendments before you make it very clear that the original

intent of the bill was to require that a merchant selling soft drinks

in the kind and classes of containers specified must if asked to do so

by a customer refund the empty containers. The merchant was given the

protection that he need not refund more than a dozen-and-a-half for any

one customer, in any one day, simply so we wouldn't have possibly

truckloads of empty soft drink cans or one-way bottles coming in from

Alberta or Washington to be sold to merchants in British Columbia for

the 2 cent refund, since there was no indication of refund legislation

applying in the bordering states and provinces at the time we brought

in this bill.

It should be pointed out also, however, that where a group such as

the Boy Scouts engage in a bottle drive or can drive, this is entirely

commendable. But really they shouldn't expect the merchant in the

corner store to take 1,000 empty bottles and cans back simply because

they have had a drive. I would suggest where they are holding bottle

drives they make arrangements with the local bottling plant to receive

those empties, rather than expecting a merchant or even a group of

merchants to receive them in that volume. .

But specifically what we seek to do here is make it quite clear that

by the process of merchandising you undertake the responsibility to

refund the kind and class of containers that you sell. While we may

recommend the changing of the regulation to make it two dozen instead

of 18, we feel there should be a safeguard always for the merchant in

the number that he is required to refund.

This doesn't mean that a merchant cannot refund 20 dozen if he

wishes to do so, but simply that he will not be in breach of the law if

he says he will only take a dozen-and-a half or two dozen from you

today. Until such a time as this situation is under full control, I

don't think we can take away that protection from a merchant. But at

some future date, I would think, when the other provinces and states

which are following along this same general line have their systems

fully

[ Page 756 ]

operative, perhaps in a year or two, it will be practical to wipe

out the number limit altogether, with the understanding that those

people who put on bottle drives will make arrangements with the local

bottler to receive them, rather than the local merchant.

There have been a number of reports and I would like to just draw

one to your attention because it is partly germane to the basis upon

which these amending sections are before you. You've probably seen from

time to time the arguments that soft drink and beer bottles and cans

are really not a very substantial portion of the litter along the

highways.

I think if you examine some of these statistical reports you'll find

that they are reported as so many pieces of litter. Now this means one

pop can is one piece of litter, one empty safety-match card is a piece

of litter, one chewing gum wrapper is one piece of litter and so on.

However, we have a report that we think is somewhat more factual

because it was conducted by the State of Oregon with their own highway

crews. They found that by volume, bottles and cans constituted from 60

per cent to 70 per cent of the litter along the highways. That is

litter by volume, rather than litter by pieces.

Some of you may have observed that while most of our highways are in

comparatively good shape, in some of the states to the south of us they

are really having a difficult time.

I think also we should note that there has been some confusion in

the trades. That confusion, I think, arose certainly not from anything

we put out from our office. We certainly tried to inform the trades

accurately on what we expected them to do, to the extent of

circularising by direct mail every person on record as selling soft

drinks — so any confusion that arose was, I think, engendered perhaps

for reasons other than good public information.

I believe however that amendments that are before you simply

reiterate somewhat more firmly the principle of the Act as it was

originally presented to you. I think we can all agree we've made

considerable progress. We've had our problems. We'll still have more

problems. But I don't hesitate to recommend these amendments to you,

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

DEPUTY SPEAKER: The Honourable Member for Kootenay.

MR. NIMSICK: Mr. Speaker, in regards to the Litter Act , when

it was first brought in, I don't question the purpose that the Minister

brought it in for — and that was to clean up some of the litter along

our highways and byways. But when it was put into practice it didn't

actually work. There were many, many drives throughout the country;

Scouts, school classes, and different ones. They gathered up bottles

and cans and everything. They got them all together and they couldn't

do anything with them. It was a hopeless case. It discouraged a lot of

our people in this regard.

I think that after that experience, this government should have been

prepared to launch on the real programme of cleaning up the tin

cans and bottles in the province. Some of our dealers went to the

extent of setting up central depots, which did work in many ways to the

benefit of the Litter Act .

People that bought cans of soft drinks and bottles, instead of

running back to every little corner store there with three bottles and

a half-a-dozen bottles and a dozen tin cans to another place, they

could go to the central depot and they could deposit the whole load

right there. In many cases that I know of up in Cranbrook, there wasn't

too many containers that they would refuse.

It worked quite successfully. Now I understand that they're going to

have to desist from operation. Some of the big stores wouldn't take

back their containers. They didn't have to because the Act actually

wasn't working.

When I say that, I think the government is evading their

responsibility in regards to this litter, it is high time that the

government set up the depots throughout the province. Every place that

we've got a liquor store we should have a depot, not to only take back

the soft drinks and the beer bottles or the cans but they should take

back the liquor bottles, all these containers.

They're just as much of a litter as anything else. Why shouldn't the

liquor store have to take back their liquor bottles? Those are the

things that get broken along the highways and smashed up and create

quite a litter problem. You break a liquor bottle or a wine bottle

along the highway and it makes 12 times as much litter as breaking a

pop bottle. This doesn't let the government have the responsibility.

I think we should standardise our containers, standardise a

container for soft drinks thoughout the province the same as we can

standardise the beer bottle. Then we would have an easier problem to

control the litter.

In order to give people incentive to use a standardised container,

we could have some sort of a tax on the non-standardised containers. So

the standardised container would be used thoughout the province.

If we did this we could have some sort of recycling dump throughout

the province for these containers and the glass and the different

things. I mean it's easy to pass a law and abuse the corner store. I

think it's abuse of the corner store if you're going to say to them

that you're going to charge every corner store that doesn't do this,

that doesn't do that. I think it is an abuse of the corner store. A lot

of these little corner stores haven't got the facilities to handle

taking back of these cans and bottles.

Somebody buys a half-dozen of pop in one store and they're 50 miles

away and they want to take it in. They don't take it back to the same

store, so the store can rightfully refuse accepting them. But if we had

depots wherever we had liquor stores, people could go to that one

central place to turn in this litter. Then we could solve the job.

We make $60 million or $80 million a year on liquor. Why couldn't

we, for the purpose of a clean province, set up depots throughout the

province and handle a job without expecting every little corner store

to litter up their place with tin cans and bottles in the corners? It

doesn't make sense to me.

I think that with the experience that this government has had in the

last year, we could have come forward with a better plan than you've

got in these amendments. These amendments change nothing. They only add

to the problems. What are you going to do with your corner store?

You're going to have all kinds of charges laid against them. Then

you've got to prove that the people bought the soft drinks there,

you've got to prove whether a can is rusty or whether it's bent, or

whether it's not acceptable. I think that it's just wishful thinking.

Mr. Speaker, through you, the Minister hasn't come forward with a

proper plan to have the depots recycle this stuff. We'd be in the

business and might have to use a little bit of the profits of the

liquor throughout the province but at least we would be on the road to

cleaning up the province

[ Page 757 ]

with a proper type of a policy rather than a mish-mash policy such as you have in this Act here.

DEPUTY SPEAKER: The Honourable second Member for Vancouver–Point Grey.

MR. GARDOM: Mr. Speaker, I wish to address myself to the

similar point that the last speaker did. I don't wish to take the time

of the House to be repetitious. I think there's a great deal of

validity to the suggestion that the liquor outlets in the province do

become depots for the return of bottles, most particularly, and I'd say

definitely, for the return of liquor bottles in the province.

The Member was quoting some figures of profit. My recollection of

the profit of the Liquor Control Board was $66 million net, which

didn't take into account, Mr. Speaker, the 5 per cent gross sales. So

it really has a profit of about a $77 million net.

When we're talking about litter I do appreciate the fact that there

is a higher volume of pop bottles and beer and ale and so on than there

is of liquor bottles and wine bottles, but the concept of the Act is to

protect against litter and to clean up the countryside. If we can go

ahead and do this I don't think we should just ignore the 10 per

cent. Often that 10 per cent is involved in pretty messy kind of

breakage as well, I suppose.

The second point I would like to indicate to the Minister is perhaps

that if there could be some government encouragement in this

suggestion, people might not be as disposed as they are today to throw

away wine bottles and liquor bottles.

I think that if the industry itself was able to show a little more

imagination and innovation and make more useful containers — things

that were more readily convertible into something that the general

public could use — you wouldn't find so many of these bottles either in

the trash cans or on the roadways. They could have a bottle that could

be convertible as a lamp or a drinking glass or a water pitcher or a

preserving jar, should I say, or even a container for juice.

But at the present time in this industry this particular product,

the container I should say, is dedicated to just obsolescence and

waste. That's a silly thing to me. There's no reason why, Mr. Speaker,

that the industry could not be perhaps encouraged by the government to

come up with a more innovative kind of packaging which in itself would

give the purchaser an opportunity for better variety and in itself

would tend to prevent the purchaser from creating litter and throwing

these things away.

I'm not going to suggest for one moment that there should be any

increase in price because that's not needed as the industry is making

fantastic profits and the government is making fantastic profits out of

the tax. There's no need to come up with the suggestion that what I'm

recommending here would result in an increased price to the purchaser.

DEPUTY SPEAKER: The Honourable Member for Revelstoke-Slocan.

MR. B. CAMPBELL (Revelstoke-Slocan): Mr. Speaker, I'm pleased

to see these amendments which make a very good piece of legislation

even better. I want to comment in particular upon the fact that the

setting of the refund is being removed out of the Act and referred to

the cabinet — the executive council. I think that this is good insofar

as it will allow them to react more quickly than perhaps the

Legislature can and I would hope they would see fit to increase this

refund price immediately — I would hope to 3 cents and eventually to 5

cents.

Also, with respect to the returns, the Minister's opening remarks

indicated that he was considering increasing the refunds on which a

store must make from 18 to two dozen. I would hope that he would make

it at least four dozen and if they don't set that as a rule I would

hope that the L.C.B. may accept that suggestion as far as the return on

beer bottles is concerned.

With respect to the refund being made on pop bottles and beer

bottles and so forth, I would hope that in addition to the suggestions

made from our friends opposite that wine and liquor bottles be

included. I would also hope that they might give consideration to quart

oil cans from vehicles because in my particular constituency — in

mountainous areas with some of the old hay burners that are on the road

— they require a lot of oil and there's a lot of oil cans along the

roads.

DEPUTY SPEAKER: The Honourable first Member for Vancouver–Point Grey.

MR. McGEER: Mr. Speaker, I want to compliment the Minister on

this Act and the success that he has brought about. The Member for

Cowichan-Malahat (Mr. Strachan) you know, he's always suspicious of the

Liberal party …

Interjections by Hon. Members.

MR. McGEER: We stand up here to compliment the Minister when

he deserves compliments and we criticise him when he deserves to be

criticised. He knows that we don't stand up either to commend or

criticise unless there is a very good reason and unless it's justified.

Last Christmas we were in the State of Hawaii, on the island of Maui

for a vacation. It's a magnificent island with miles and miles and

miles of beautiful beaches that are undeveloped. But you find in every

one of those beaches now, mounds, literally mounds of cans and pop

bottles. Beer cans, pop cans and beer bottles — I would say that a good

80 per cent of the litter that you find on those beautiful islands, and

really it's reaching now disgusting proportions, literally 80 per cent

of that will be drink containers of one kind or another.

When this Act was originally brought forward, we heard testimony

from people who would be most affected that this was really only a

trivial part of the litter that existed in British Columbia and that it

wouldn't have any beneficial effect at all.

If anybody doubts how much containers contribute to the total litter

that exists in the countryside, he only has to go the Hawaiian Islands.

I know the Member from Alberni (Mr. McDiarmid) has been there and was

on the island of Maui and may have noticed some of this, but it's

really a testimony to the necessity of this kind of

an Act. We see

enough evidence of this kind already in British Columbia and I think

that the Litter Act is helping to reduce that. As time goes on it

should really make a substantial dent in it.

There is one part of this Act that does disappoint me and this is in

a

section which said that the container can be refused for a refund if

it's returned in a flat or damaged or dirty condition. Mr. Speaker, I

don't think that's wise. Because, what it will do is discourage the

cleaning up of the countryside. If someone doesn't give "2 cents"

whether he litters the countryside someone else may.

[ Page 758 ]

I think a lot of the discouragement of the industry to this Act has

come from the fact that it has been such a success. People do turn the

containers in to a far greater degree than was anticipated. The problem

for the industry is that fact that the Act is working. Too successful.

But, Mr. Speaker, to the Minister, what this particular

section does is

reduce to some extent the effectiveness of the Act. It's going to make

it a little less successful. What will happen is that people just will

not return containers that they see littering the countryside. I think

that this part of the Act is a retrograde step.

There is still time and I hope the Minister will take a second look

at this particular part and bring in an amendment eliminating this

section, because if you see what's accumulating on the island of Maui,

you'll realise that the hope for that island is to introduce this kind

of

an Act that will encourage the youngsters to go out and gather these

things up and turn them in for a little cash profit. It's the cheapest

kind of garbage collection that you can have. I hope the Minister will

see that there is a value to it.

DEPUTY SPEAKER: The Honourable Leader of the Opposition.

MR. D. BARRETT (Leader of the Opposition): Mr. Speaker, this

bill should be known as

an Act to amend the Sidetrack Act. If any bill

was ever designed to sidetrack the people of British Columbia away from

the real problems of pollution, this is this Litter Act . One good thing

about the bill is that the pollution control board will be back down to

Victoria in time to hear the debate because they've ended their

hearings a day-and-a-half ahead of time up there in the Kootenays where

the real pollution problems are caused by the mining industry and the

forest industry in this province …

DEPUTY SPEAKER: Will you get back to the Litter Act ?

MR. BARRETT: They spill their poison into the air and in the

water of this province and we piddle around with a little tin-can Act

while the real polluters in this province are getting away with poison

in the air and in the lands.

DEPUTY SPEAKER: Will the Honourable Member come back to Bill No. 32?

MR. BARRETT: This sidetrack Act. How much pollution can you

pour in a tin-can out of a pulp mill? How much air pollution can you

get in an empty bottle spewing out of pulp mills in this province? How

many mining companies are pouring filth into the streams of this

province and we're not doing anything about it except playing around

with a tin-can Act?

DEPUTY SPEAKER: Will the Honourable Member please come back to Bill No. 32?

MR. BARRETT: A tin-can Act. That's what I'm talking about,

Mr. Speaker. A tin-can Act, an empty bottle Act that's sidetracking the

people of this province away from the real problem of filth being

poured into the land and the soil and the air of this province.

DEPUTY SPEAKER: Will the Honourable Member please come back to discussing Bill No. 32?

MR. BARRETT: The streams in this province are being ruined by

this government without doing anything about it, and they're playing

around. We'll go around with tin cans and clean the pollution out of

the Fraser with tin cans. Is that the idea? We'll fill up bottles with

the pollution out of the Fraser and all the filth that's going into

that river and this government's doing nothing.

DEPUTY SPEAKER: Will the Honourable Member please desist and come back to Bill No. 32?

MR. BARRETT: A tin-can sidetrack Act, Mr. Speaker, that's what I think of it. It means nothing.

DEPUTY SPEAKER: The Honourable Minister will close the debate.

HON. MR. KIERNAN: Mr. Speaker, I'm sorry that the Leader of

the Opposition is so short-sighted that he finds he has to publicly

decry this Act and what it is accomplishing because he thinks it is of

no importance.

I find I am not necessarily always in agreement with the Leader of

the Liberal party but I too have seen what he refers to on Maui and if

it might enlighten the Opposition maybe we ought to take up a

collection and send one or two of them over there to see what the tin

can and the bottle …

MR. BARRETT: It's made up of filth here.

HON. MR. KIERNAN: …what the empty tin can and the bottle

have done to the beautiful island of Maui in all the areas that are not

patrolled by the public parks organisation.

AN HON. MEMBER: How many pulp mills have they got on Maui?

HON. MR. KIERNAN: Mr. Speaker, if this Act is of so little

importance, why is it that 40 jurisdictions on the North American

continent as a result of our action have either taken similar action or

are in the process of taking similar action? Why is it that we've had

inquiries from Chicago and New York if we would send my executive

assistant down there to show them how to deal with this problem? Why is

it we have had requests which we have honoured on two occasions from

the United States …

Interjection by an Hon. Member.

HON. MR. KIERNAN: My friend from Cranbrook (Mr. Nimsick) was

very positive in this House a year ago that nobody would refund on a

tin can. Over 20 million tin cans were refunded for 2 cents a piece. So

he's just 20 million times wrong.

Interjections by Hon. Members.

HON. MR. KIERNAN: However, until 1957, Mr. Speaker, virtually

all the beer and soft drink trade on the North American continent was

in a returnable, re-usable glass container. The one-way packages only

emerged after 1957. The can came in as an invasion of the field held up

to that time by the returnable, re-usable bottle. A few years later the

one-way bottle developed as a competitive response to the can.

Had the bottlers been left to their own devices without

[ Page 759 ]

the invasion of the trade by the can, the bottlers would have stayed

with the returnable, re-usable bottles because it was entirely

satisfactory to the type of business they were doing in every way.

It was also the least expensive and my friends in the N.D.P.

Opposition think perhaps that 400 million empty containers added to the

hard garbage disposal problem annually in this province is of no

importance. It certainly is rubbish and if we don't want so much

garbage in this country to dispose of, I suggest we don't manufacture

so much of it in the first place.

Interjections by Hon. Members.

HON. MR. KIERNAN: Will you stay to the subject of this bill

if you must comment Mr. Leader? You're always trying to drag in red

herrings. You never want to face up to the facts of any given time or

place.

I like the suggestion of one of the Honourable Members of the

Liberal Party that some of these containers be made in a form that

would be more readily convertible to useful objects. I think that has

some merit and I think there's even one better form in which to make

the container. Make the container in a form that it can be sent back to

the plant, washed and filled again. That makes it a real good

container. I don't think we need to be too alarmed about

standardisation provided they have the proper system of gathering these

things up.

On the question of increasing the refund. The 2 cents remains in the

Act unless we decide it's necessary to order otherwise. It can be more

than 2 cents but it shall not be less.

On the question of damaged and dirty containers, it's simply this.

In some areas, the method of disposing of the can will be to crush them

and send them to land fills. Now, if they are to be brought back from

the land fill to the merchant to be refunded and he sends them out to

the land fill and they come back in to be refunded, that'll be a type

of recycling but not just what normally would be expected. So that is

why damaged, dirty and crushed cans are excluded.

Now, as far as bottles are concerned, as long as they're not damaged, all you have to do is put them under the tap.

Interjections by Hon. Members.

HON. MR. KIERNAN: No. The difficulty is you could exempt them

but that doesn't mean you could keep the kids out of there to gather

them up. So actually what we're trying to do is get these containers

returned in a reasonable condition.

I think another point in favour of the re-usable returnable

container is simply this. From one of the Victoria bottlers I have the

advantage of having his glass costs as between the re-usable container

and the one-way container. The re-usable container cost him 26 cents a

dozen in terms of glass costs. In other words he had to depreciate it

that much. The one-way container on the other hand cost him a $1.26 per

case of 24.

Now, admittedly you don't save the whole dollar because the empty

containers have to be picked up from the merchant, they have to be

brought back and they have to be run through the washing machine and

the steriliser before they go back on the filler line. But even if you

just broke even, even if it cost as much to merchandise in the

returnable bottle as it did in the one-way bottle, the saving to

society in not having all this hard garbage to dispose of would be a

big advantage.

What is really the most desirable situation is that in these

commodities with a high turnover and low value rate, that as near as

possible we should have it handled in a re-usable container because in

many cases these bottles are making up to 10 to 20 trips before they

become damaged or lost.

So I think you can see from that it is a fairly inexpensive way of

merchandising a low-cost high-turnover commodity and is really the most

desirable way to deal with it.

Now, our trade here is still in the majority, as to beer, about 98

per cent in the re-usable, returnable container and they are getting

about 94 per cent return on their bottles. In other words their shrink

is only about 6 per cent on beer bottles. In the soft drink trade the

shrink is higher. The shrink is apparently about 8 per cent to 10 per

cent on soft drink re-usable containers but the soft drink trade is

still getting on an average 8 to 10 to 12 trips, depending on the area

you're working in.

Now, on the question of liquor bottles there is, I think, an area

yet to be dealt with. There is a particular type of problem here and we

have asked the trade to see what they can do in terms of recovering

their own containers through the existing facilities that presently

pick up beer bottles.

First of all there's a very large sorting problem and in some cases

there's quite a shipping problem, but there is some indication the

trade is working in that direction. The numbers we're dealing in are:

beer, ale and soft drink containers, about 400 million a year; liquor

bottles about 32 million a year. That is why I indicated that we deal

with the major factors first and see what we can do about the minor

factors later on. I'm not suggesting to you that this has worked

perfectly but again for the benefit of my friend from Cranbrook, who

says it hasn't worked, there were millions of one-way bottles in the

trade a year ago. Those one-way bottles have virtually disappeared from

the trade and that I think is a definite advantage to British Columbia

because the thing that people were complaining about most was the

non-returnable bottles getting scattered all over the country and

broken all over the country, not in the hundreds but in the millions.

They have disappeared . Certainly you don't see the cans scattered

along the highways that you did two years ago. They're being picked up

by the kids. They're being picked up by the highway crews. I think we

have a reasonably tidy situation. No one has suggested that it will

work 100 per cent but I think it has worked better than what has been

tried anywhere else in the North American continent.

Now on the question of the depots. There is nothing in the earlier

legislation and nothing in this legislation that says a depot cannot

function in just the same manner that they have been functioning. The

only thing is this; that the Act required initially that if the

merchant sold he should refund. The trade traditionally was conducted

by the merchant, who when he sold full bottles of soft drinks he took

in the empties.

Mr. Speaker, those are the principles contained in the Act. Again I

have no hesitation in recommending that it be read a second time.

DEPUTY SPEAKER: The question is that Bill No. 32 be now read a second time.

Motion approved: second reading of the bill.

Bill No. 32 ordered to be placed on orders of the day for committal at the next sitting after today.

[ Page 760 ]

HON. MR. PETERSON: Second reading of Bill No. 42, Mr. Speaker.

HUMAN TISSUE GIFT ACT

DEPUTY SPEAKER: Bill No. 42, the Human Tissue Gift Act . The Honourable Minister of Health Services and Hospital Insurance.

HON. R.R. LOFFMARK (Minister of Health Services and Hospital Insurance):

Mr. Speaker, the purpose of this bill is to enact the Human Tissue Act .

The main feature of it, of course, relates to the inclusion in its

provisions of those sections which relate to inter vivos gifts.

The second

part is substantially the same as the previous Act. It deals with post mortem gifts.

The third part relates to provisions of general application. Also it

includes certain prohibitions relating to dealing in body parts, and

the preservation of confidential information and so on.

This bill, in general, is the same as the uniform Human Tissues Act

which was originally developed by the Conference of Commissioners on

Uniform Legislation and which was introduced by one province last year,

namely Ontario.

I might say, Mr. Speaker, that this Act differs from the uniform Act

and from the one introduced in the Province of Ontario in one material

respect. The age of consent in the uniform Act is set at 16 and in this

Act it's set at 19, which in the circumstances seems more appropriate

to us.

I might also say, Mr. Speaker, this Act before you represents the

necessity of keeping our legislation somewhat in step with the

development of new technology in the field of medicine. Until a few

years ago, the transplant of tissue could only be accomplished in very

rare occasions and with doubtful results.

However, with the development of new techniques in the last few

years, we're reading more and more about successes in respect of the

transplant of tissue. Insofar as it is possible for the Legislature to

do so, the activities of the medical profession and the health teams in

this respect are endorsed and are given the approval of the community.

I move second reading, Mr. Speaker.

Motion approved: second reading of the bill.

Bill No. 42 ordered to be placed on orders of the day for committal at the next sitting after today.

HON. MR. BENNETT: Second reading of Bill No. 39, Mr. Speaker.

ELDERLY CITIZEN RENTERS GRANT ACT

MR. SPEAKER: Second reading of Bill No. 39. The Honourable the Minister of Finance.

HON. MR. BENNETT: The Elderly Citizen Renters Grant Act . Mr.

Speaker, ever since introduction in 1957 of the annual provincial

home-owner grant to assist home-owners in paying their local property

taxes, this government had been continually carrying out studies on

home ownership and living habits of our citizens.

As a result to further assist individuals to own their own homes

effective on April 1, 1966, the provincial Home Aquisition Grant Act

provided a grant of up to $500 towards the purchase of a home. In 1968

the Act was amended to encourage the purchase or building of new homes,

and applicants could obtain a grant of up to $1,000 for that purpose.

In addition in 1969, to additionally assist in this field, a loan by

the way of low interest second mortgages up to $5,000 was introduced.

In 1970 the government extended assistance to persons who had rented a

home for at least two years in the province. A grant of $500 or a

second mortgage loan of $2500 towards the purchase of an existing home

was also made available to renters who had been renting for two years.

This opportunity which initially was only for a one year period was

extended last year for one more year. Now at this session of the

Legislature in this bill, because of the demonstrated use of the

incentive and to continue to encourage the person presently renting to

own their own home, the time for such applications is extended

indefinitely.

To round out the studies on this subject the Department of Finance

had estimated from the federal government census figures that

approximately 37,000 heads of families age 65 or over are renting

living accommodations. The government considers this a considerable

number of citizens who are not likely at that age to start buying a

home.

In addition the department has received letters and briefs from

individuals 65 or over pointing out that at this stage of life they

don't wish to purchase a home but they will be continuing as renters

and they would like some relief.

Therefore, it is considered sound policy to make available to this

group of citizens the same amount of $50 per year which has been made

available to those elderly citizens who presently own their own home.

That makes it $235, an additional $50. The extra amount of $50 is made

available to the present home-owners with a home-owners grant. This

bill provides a $50 yearly grant refund to those elderly citizens who

rent accommodations. We're treating it as a refund so as not to be

included in income. We certainly hope that no owner will increase the

rent by this amount. We hope not.

As Premier of the province, I ask them not to. Anybody that has his

rent increased by that amount, I would like to get by letter their name

and so forth.

I want to say that this $50 this year is just the beginning of this

policy. By saying that I still want to say that those especially under

65 we want to encourage them more and more to own their own homes.

This is the way we think we will get people to take more interest in

the community once they have a home and they start to fix it up and so

forth. They gain two ways. They gain in saving their money. They gain

three ways with the home-owner grant. Then they gain too because in an

inflationary world such as we live in the value of their home over a

period of years is higher and higher. Most of the average citizens have

their savings really in their home. It's very, very important.

But this renter's grant of $50 this year establishes a new policy of

the Social Credit government which will be extended and extended

greatly through the third great decade of the Social Credit government.

Mr. Speaker, I move second reading.

MR. SPEAKER: The Honourable Member for New Westminster.

MR. COCKE: Mr. Speaker, we agree that there is certainly a

step in the right direction here — one of the steps, of course, that

we've called for for some time. We were wondering when this might

happen because of the fact that

[ Page 761 ]

it's been announced by Social Credit candidates in the past that

something might be done in this area, but certainly not this kind of a

very small amount of $4 a month roughly.

While it's only $4 a month and while many people are reporting that

their rents are increasing to the tune of $5 and $10 a month, we still

feel that this would be a step in the right direction. We still feel

that it's going to be a help to some.

But, Mr. Speaker, the Premier — the Minister of Finance — said

"report it to us if anybody raises the rent." He has at his left hand

the man who is responsible for the Landlord-Tenant Act . The Attorney

General if he wished could see to it that the rents didn't go up

unjustifiably. That would be the way, rather than report it to the

Premier who writes letters once a year in answer to those people who

write to him.

So, Mr. Speaker, this is a very small reward for those people who've

spent their lives building the province. It's a small reward for those

people who have been forced out of their homes oftentimes by the

unfortunate taxation of our municipalities which has been brought about

by a government that has been ignoring the municipalities in British

Columbia, forced out not only in my constituency but in many

constituencies throughout the province.

We're in a situation in New Westminster now where more than half of

the people live in rented accommodation. I would say that 90 per cent

of those people live in apartments. There's nothing here for those

people who are under 65. There's only a pittance of $4 a month for

those people over 65.

I wouldn't suggest at this time that the government arrange a larger

amount until such time as they have courage enough to change the

Landlord-Tenant Act, so that landlords have to justify increases. They

don't now. We've left that discretion up to the municipalities. The

municipalities, of course, don't have the kind of muscle that's

required to do this kind of thing.

Who do we find on the boards of most municipalities, on the

councils? We find people who have a very definite interest in the whole

matter of rentals et cetera. So, therefore Mr. Speaker, while we

support the principle of this bill and we'll go on supporting help for

the aged in this province as we have indicated in the past, we

certainly would wish that there were more teeth put in other

legislation in order to see to it that the elderly citizens of British

Columbia keep this as an assist to their living and their needs.

MR. SPEAKER: The Honourable the first Member for Vancouver Centre.

MR. CAPOZZI: Mr. Speaker, speaking to the bill I find many

things in the principle of the bill, of course, which I over past years

have advocated. I certainly appreciate the government listening. I'm a

little surprised at the Member for New Westminster (Mr. Cocke) because

the other day in the House he said he was opposed to this form of

grant. I'm pleased that he has swung around now.

AN HON. MEMBER: When did I say that?

MR. CAPOZZI: You stated that. Your exact words were "I am

opposed to it because the apartment dwellers will take it away." Those

are your exact words, Mr. Member. I recall them said in this House.

But I'm pleased that you have taken another look as the Premier took

another look. Please, believe me, I'm glad that you support it. I'm

glad you've changed your mind and have swung over to the support of

this bill. I think it's very important.

Interjection by an Hon. Member.

MR. CAPOZZI: It shows — it's in the records. It's all in the records. It'll be there. It doesn't matter,

I would point out that there are some protections at the present

time that should prevent a part of this from happening. I'm not saying

that there aren't any because there are unscrupulous landlords that

will attempt this.

There are several factors that should prevent it from happening.

Firstly because in most apartment blocks there is a mix of tenants,

some who are senior citizens and some who are not, it becomes more

difficult for the landlord to put a blanket rate of rent that will

cover everyone on a justification that some may be receiving this

grant. I think that there has been some wisdom in providing it in this

manner for 65-year-olds.

The fact, and I'm encouraged by the fact, because by the Premier's

statement to the House today, is that this marks only a beginning of

the payments which will be made in this manner. I think that's

extremely significant.

I would point out that the original home-owner grant was less than

this. It was only $28 and this already is almost double that amount. I

think that is extremely significant. It does more, however, Mr.

Speaker. Through this bill, I think the very principle of recognising

that the tenant as part of the structure of our community has taken his

full place in society is as important as any other factor. I think that

the recognition of this basic principle which is found in this bill is

extremely important. I think that this bill for no other reason than

that deserves the full support of everyone in this House. I'm sure that

we will receive it.

I would also suggest that the time should come when there are some

other areas that it should be extended to as quickly as possible when

we're applying it on a certain principle. There are people, handicapped

cases, who probably should come under this consideration.

I would hope that the one thing we would see is that while it is

limited at the moment to age 65, that perhaps so