1982 Legislative Session: 4th Session, 32nd 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)

WEDNESDAY, MAY 26, 1982

Afternoon Sitting

[ Page

7783 ]

CONTENTS

Routine Proceedings

Limitation Amendment Act, 1982 (Bill 48). Hon. Mr. Gardom

Introduction and first reading –– 7783

Oral Questions

Use of government aircraft. Mr. Passarell –– 7783

Expenses of Minister of Consumer and Corporate Affairs. Mr. Macdonald –– 7784

Funding for rape relief centres. Ms. Brown –– 7784

Clifford Olson trust fund. Mr. Leggatt –– 7784

Dismissal of Crown counsel. Mr. Macdonald –– 7785

B.C. Packers Ltd. Mr. Lea –– 7785

Seizure of goods at Prince Rupert. Mr. Howard –– 7785

Court of Appeal Act (Bill 2). Report. (Hon. Mr. Williams)

Third reading –– 7785

Geothermal Resources Act (Bill 5). Report. (Hon. Mr. McClelland)

Third reading –– 7785

Gasoline Tax Amendment Act, 1982 (Bill 22). Committee stage. (Hon. Mt. Curtis)

section 3 –– 7785

Mrs. Wallace

Mr. King

section 7 –– 7787

Mr. Howard

Mr. Mitchell

Mr. Mussallem

Mr. Leggatt

Division

Third reading –– 7790

Motive Fuel Use Tax Amendment Act, 1982 (Bill 23). Committee stage,

(Hon. Mr. Curtis)

section 2 –– 7790

Mrs. Wallace

Division

Third reading –– 7791

Financial Administration Amendment Act, 1982 (Bill 24). Committee stage.

(Hon. Mr. Curtis)

section 3 –– 7791

Mrs. Wallace

Mr. Stupich

Mr. Hall

Division

Third reading –– 7793

Agriculture and Food Statutes Amendment Act, 1982 (Bill 31). Committee stage.

(Hon. Mr. Hewitt)

section 2 –– 7793

Mrs. Wallace

section 3 –– 7794

Mrs. Wallace

section 4 –– 7795

Mrs. Wallace

Division

section 9 –– 7796

Mrs. Wallace

Third reading –– 7796

Health Cost Stabilization Act (Bill 12). Committee stage. (Hon. Mr. Nielsen)

section 1 –– 7796

Mr. Cocke

Third reading –– 7797

Hydro and Power Authority Amendment Act, 1982 (Bill 40). Committee stage.

(Hon. Mr. McClelland)

section 2 (continued) –– 7797

Mr. Cocke

Mr. Hall

Mr. Barrett

Mr. Howard

Mr. Leggatt

Taxation (Rural Area) Amendment Act (No. 2), 1982 (Bill 34). Hon. Mr. Curtis

Introduction and first reading –– 7806

Division

WEDNESDAY, MAY 26, 1982

The House met at 2 p.m.

Prayers.

HON. MR. BENNETT: In the gallery

this afternoon is Bill Wright from Richmond who is, among other things,

vice-president of the British Columbia Social Credit Party. Sitting

with him is Dick Gibbons from West Vancouver. I'd ask the House to bid

them welcome.

MR. KING: Mr. Speaker, in your gallery

today we have a group of 18 senior citizens from the city of Revelstoke

who are visiting Victoria along with their tour guide Miss Cheryl

Richardson. I would request the House to extend a very warm welcome to

them all.

MR. STRACHAN: One of the outstanding

independent schools in the central interior is Prince George College,

which was begun by Bishop Fergus O'Grady in the mid-1950s. Would the

House please welcome teacher Allan Boras and 50 students from Prince

George College, who are in the precincts today.

MR. LAUK:

The second member for Vancouver Centre (Mr. Barnes) and I would ask the

House to welcome a group of students from the greatest high school in

the world, Britannia, who are visiting the precincts with their teacher

and guide Mr. Guy.

HON. MR. McCLELLAND: In the

precincts of the building today are some young students from Langley

Elementary School. They are not able to be in the gallery, but I'd like

the members to make them welcome as they tour the buildings. They are

about 35 grade seven students, along with four persons from the school

helping them out. I'd also like to welcome the Mountain Secondary

School band, which I believe should be somewhere in the gallery today.

Some of the members may have had the opportunity to hear them play on

the steps of the Legislature today. They are quite a band. They took

first place in the Kiwanis music festival in Vancouver this year, first

place in the Coquitlam music festival, first place in the Abbotsford

music festival and second place in the New Westminster music festival.

I'm told that's a record number of awards for any band in any single

school year in British Columbia, and I'd like the House to make them

welcome.

HON. MR. VANDER ZALM ; In the precincts today, and hopefully visiting

the House just a little later, is a group from Johnston Heights Junior Secondary

School, and 50 exchange students from Prince Edward Island. On behalf of myself

and the second member for Surrey, I would ask the House to bid them welcome.

HON. MR. BENNETT:

I have a second introduction. Visiting the Legislative Buildings today

are 70 grade seven students with three of their teachers, plus parents,

from my home community of Westbank, across the lake from the beautiful

city of Kelowna. Would you please bid them all welcome.

Introduction of Bills

LIMITATION AMENDMENT ACT, 1982

Hon. Mr. Gardom presented a message from His Honour the Lieutenant-Governor: a bill intituled Limitation Amendment Act, 1982.

Bill

48 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.

Oral Questions

USE OF GOVERNMENT AIRCRAFT

MR. PASSARELL:

Mr. Speaker, I have a question for the Minister of Transportation and

Highways. The surveys and mapping branch of the Ministry of

Environment, which is responsible for all aerial photographs and maps

required by the government, was told yesterday that the two Beechcraft

King Air 200 aircraft normally used for this work will not be available

this summer. Can the minister confirm that these aircraft, controlled

by the air division of his department, will not be available because

they've been diverted to transporting Social Credit politicians around

this province?

HON. MR. FRASER: Mr. Speaker, the two

King Air aircraft referred to by the member for Atlin are on a

scheduled service between Vancouver and Victoria, and they won't be on

aerial photography. They're carrying government personnel steadily on a

scheduled service between Vancouver and Victoria.

MR. PASSARELL:

The minister is surely aware that these particular aircraft we're

discussing are specifically designed for photography and, indeed, were

originally purchased for this work. The surveys and mapping branch,

whose work normally would be well underway because of the seasonal

aspects of this work, have been completely frustrated in making

alternative arrangements. Can the minister confirm that he has

specifically rejected a proposal from the Ministry of Environment,

whereby Environment would lease two additional aircraft and then loan

them to Highways so the King Air 200s could be properly employed for

their rightful purpose instead of shuffling cabinet ministers and

government executives around on political business?

HON. MR. FRASER:

Mr. Speaker, it is correct that they are equipped for that, but they

are also equipped to haul passengers, and that's what they're doing.

There are hundreds of public servants travelling between Vancouver and

Victoria. That's the run they are on and they are far more economical

than what we had on the run, which were the jets.

MR. PASSARELL: I thought there were commercial aircraft between Vancouver and Victoria.

Mr.

Speaker, the logs for government aircraft are normally tabled with the

budget. Can the minister explain why he has not yet tabled the

government aircraft logs?

HON. MR. FRASER: The first part of your accusation is not correct. They are not normally tabled with the budget. I

[ Page 7784 ]

haven't got the logs. As soon as I get them, they will be tabled.

EXPENSES OF MINISTER OF

CONSUMER AND CORPORATE AFFAIRS

MR. MACDONALD: I have

a question for the Minister of Consumer and Corporate Affairs. Did the

minister receive approximately $1,509 of public money as payment

towards a trip he took to Arizona at the end of February, 1981?

HON. MR. HYNDMAN:

With respect to that and what may be related matters, I think I've made

it extremely clear that until the report of the auditor-general is

released I should have no comment on details. Following that I would be

happy to comment fully.

MR. SPEAKER: The minister takes the question as notice.

MR. MACDONALD:

In view of the fact that the auditor-general cannot deal with the

question of extravagance — or even vouchers, if they are properly

audited — in view of the fact that the auditor-general has made it

perfectly plain that her work is one thing, legislative work is another

thing and they can both go on together, and in view of the fact that

these particular vouchers are not before the public accounts committee

because they were paid after March 31, 1981, I ask the minister: when

was this trip planned, when were the reservations for the trip made and

what was the purpose of the trip?

AN HON. MEMBER: It was taken as notice.

MR. MACDONALD: No accountability?

MR. SPEAKER: Order, please.

HON. MR. HYNDMAN:

Unlike the member asking the question, I do not presume to prejudge

what will be in the report of the auditor-general. I shall take the

question as notice and, as I said, be extremely happy to provide

details and comment following the release of that report.

FUNDING FOR RAPE RELIEF CENTRES

MS. BROWN:

My question is to the Attorney-General. Some time ago the minister took

as notice a question which I asked him concerning the funding of rape

crisis centres. The question pointed out, using the statistics of the

Attorney-General's department, that in the 88 days since funding was

terminated approximately 5,237 women could have been raped in British

Columbia and the $151,000 earmarked for funding would have earned $5,

876.69 in interest. My question to the minister is: is he now ready to

tell the House how many centres have received funding since February

26? Secondly, will the nearly $6,000 of interest earned be added to the

$151,000 for distribution to the rape crisis centres?

MR. SPEAKER: Parts of the question are in order.

HON. MR. WILLIAMS:

Mr. Speaker, the number of rape centres funded since the date mentioned

by the member is one. We are currently completing the examination of

six applications from organizations which are prepared to operate

centres throughout this province. I wish to advise you, Mr. Speaker,

and the member that much more than the amount of money that she

mentions will be expended for this purpose.

MS. BROWN:

I just want to confirm, Mr. Speaker, that the interest earned on that

$151,000 is going to be included. That's all I'm trying to find out.

MR. SPEAKER: It involves a future decision.

CLIFFORD OLSON TRUST FUND

MR. LEGGATT:

Mr. Speaker, my question is also directed to the Attorney-General. On

February 25 and on April 14 of this year, the solicitors for the

parents of the victims of Clifford Robert Olson wrote to the

Attorney-General asking for information concerning the trust fund of

some $100,000 which was set up, and they also asked for financial

assistance to commence legal action. Could the Attorney-General advise

why he has not yet responded to those letters which he has received?

HON. MR. WILLIAMS:

Mr. Speaker, the matters to which the member refers and other aspects

of problems associated with the parents of the victims of Olson are

still receiving consideration. I hope to be able to give a much fuller

response to the lawyers representing that group than would be possible

if I responded to those questions.

MR. LEGGATT: Mr.

Speaker, the solicitors for the parents also requested a copy of a

legal opinion which the Attorney-General had prepared concerning the

status of this so-called trust fund. I also understand he gave a

commitment to them that he would provide a copy of that opinion so they

would be assisted. Could the Attorney-General advise the House why he

has not yet provided a copy of that special legal opinion he requested

on the trust fund?

HON. MR. WILLIAMS: Mr. Speaker, I think that the premise on which the member's question is based is in error.

MR. LEGGATT: Would the Attorney-General advise why he has, on three separate occasions, cancelled proposed meetings with the parents?

HON. MR. WILLIAMS:

That's not accurate. A meeting arranged with the parents was cancelled

because of newspaper publicity, which the parents did not wish. I

subsequently arranged for another date. The date was not convenient to

the parents because of the shortness of notice. No further meeting has

been arranged because of the sittings of this Legislature.

MR. LEGGATT:

To the Attorney-General again, the Olson case is one that is almost

without precedent in Canadian jurisprudence. The Attorney-General has

treated it as such by authorizing payment of $100,000 to the murderer.

Could the Attorney-General advise the House if he has now decided to

recommend special legislation to compensate the parents of these

victims for their catastrophic loss?

[ Page 7785 ]

DISMISSAL OF CROWN COUNSEL

MR. MACDONALD:

I have a question for the Attorney-General. My question relates to the

firing of A.K. Hoem, regional Crown counsel. In view of the fact that

this Crown counsel, who was a bird dog of a prosecutor, was the one who

recommended charges against the member for Central Fraser Valley (Mr.

Ritchie) and was the Crown counsel involved in the preparation of

evidence in the case of Ed Murphy, Douglas Holme and the surveillance

that was part of that investigation, how can the Attorney-General

justify his

summary discharge because in the case of Duckworth and

Cristensen the judge made very usual remarks about there not being

enough evidence for any jury to convict? What was the real reason for

the discharge?

HON. MR. WILLIAMS: Mr. Hoem has

consulted counsel with respect to this matter. I'm not sure at the

moment, whether a writ has been issued. I'll take the question as

notice.

MR. MACDONALD: No writ has been laid before

this Legislature. As far as I know, no writ has been issued at this

point. The Attorney-General should answer to this Legislature for this

kind of

summary action, and not hide.

I'll ask the

Attorney-General another question. In view of the fact that the

Attorney- General, having punished Hoem for a judgment call, thereupon

made the remark that he "can't say whether other persons are being

disciplined, but that's a possibility," isn't that rank intimidation of

prosecutors who are diligently applying the law without fear or favour?

HON. MR. WILLIAMS: The answer is no.

B.C. PACKERS LTD.

MR. LEA:

Could the Minister of Environment inform me whether the government has

met — through either him and other ministers or him alone — with

representatives of B.C. Packers to discuss the closure of their

groundfish plant in Prince Rupert? What was the outcome of that meeting?

HON. MR. ROGERS:

Yes, we have met. There are several considerations that will be

considered by the economic development committee of cabinet at our next

meeting, which is next Tuesday. At that time we will make an

announcement.

MR. LEA: Can the minister tell me

whether he has informed the union involved of the decisions and

recommendations that have been made so far? It was the union and a

citizens' group that brought it to government's attention. Has the

union been informed by the minister of what he just told me?

HON. MR. ROGERS:

The union approached the economic development committee of cabinet. At

the request of the union and at the recommendation of the committee, we

had the meeting with the company. I have not had a discussion with the

union or with the citizens' group since that time, because it is my

intention to first report to the committee and then have the committee

report to the people who brought us the request in the first place.

SEIZURE OF GOODS AT PRINCE RUPERT

MR. HOWARD:

I would also like to direct a question to the Attorney- General.

Inasmuch as residents of northern coastal communities must regularly

travel — by North Coast Air Services and by other forms of

transportation — to Prince Rupert to purchase household items and

commodities like food, clothing and, indeed, alcohol, can the minister

tell me why, on three separate instances on May 12, RCMP officers

visited the North Coast Air Services Ltd. terminal at Prince Rupert and

confiscated alcohol, some of it from sealed cartons, which had been

left at the terminal for safekeeping? Can the minister tell the House

if those recent seizures constitute the practice of the RCMP harassing

residents in these outlying northern communities?

HON. MR. WILLIAMS:

I am not aware of the circumstances that the member relates in his

question. If he would provide me with the particulars, in addition to

those he has given in his question, I would be happy to have the matter

examined immediately.

Orders of the Day

HON. MR. GARDOM: I ask leave to proceed to public bills and orders.

Leave granted.

HON. MR. GARDOM: Report on Bill 2, Mr. Speaker.

COURT OF APPEAL ACT

Bill 2 read a third time and passed.

HON. MR. GARDOM: Report on Bill 5, Mr. Speaker.

GEOTHERMAL RESOURCES ACT

Bill 5 read a third time and passed.

HON. MR. GARDOM: Committee on Bill 22, Mr. Speaker.

GASOLINE TAX AMENDMENT ACT, 1982

The House in committee on Bill 22; Mr. Davidson in the chair.

Sections 1 and 2 approved.

section 3.

MRS. WALLACE:

I note that in the explanation for this

section it says: "compressed

natural gas and liquefied petroleum gas are deemed to be liable to tax

under this Act for the purposes of the Gasoline (Coloured) Tax Act and

the Social Service Tax Act." I raised this point earlier with the

minister, and he indicated to me that he would have an amendment before

this House to ensure that the farm community would not have to fib

about the use of natural gas in order to be tax-free.

The way this bill reads it means that if you buy natural gas to propel your vehicle you are tax-free, but if you buy it to use

[ Page 7786 ]

the production of food on the farm, you will have to pay an escalating

tax which is tied to inflation. The farm community has estimated that

it's going to cost them something like $26 million this year on

gasoline alone and that it will escalate to perhaps $75 million by

1990. Surely we can't let this

section go without some explanation or

assurance from the minister that natural gas is going to be completely

exempt for farm production and not subject to this escalating gasoline

tax which farmers are now faced with under the Gasoline (Coloured) Tax

Act.

HON. MR. CURTIS: I don't recall that I said

there would be an amendment as such, but I think I did answer the

member's concern on this specific point when second reading debate

closed.

The committee will know that a number of regulations

and

interpretations have to flow from this act and from any amendments

to it.

MRS. WALLACE:

Section 3 says:

"Section 4 is further amended by adding the following:

"

(7) Notwithstanding this

section and

section 8, no person

is required to pay or collect tax on compressed natural gas or liquefied petroleum

gas that is purchased to propel a a motor vehicle.

"

(8) For the purposes of the Gasoline (Coloured) Tax Act

and the Social Service Tax Act, compressed natural gas and liquefied petroleum

gas are deemed to be liable to be taxed under this act."

I think that's clear enough. If we pass this section, it says that they are deemed liable to tax.

understanding of a regulation is that it cannot exceed the scope of the

act. How can the minister assure this House that he's going to bring in

a regulation which supersedes the intent of the act? It seems to me

completely beyond the scope of this act. Just the assurance that this

is going to happen under a regulation doesn't seem to be in line with

legislative procedure or even in line with legislative possibility. If

you have a piece of legislation that says something is to be taxed,

there is really no way you can bring in a regulation under that act to

say that it won't be taxed. Let me tell you, there are a great many

farmers who are very concerned about this. Just the simple assurance

from this minister that he's going to bring in a regulation when this

act definitely says it's going to taxed is contrary to all rules and

regulations of this Legislature.

HON. MR. CURTIS: Mr.

Chairman, the member has expressed concern for the agriculture

community. The concern is unfounded, because in the context of

section

3, it is taxed and exempted under the Gasoline (Coloured) Tax Act. I've

discussed this with the Minister of Agriculture and Food (Hon. Mr.

Hewitt) and I must say that I think he's satisfied. I did allude to

this in the closing of debate. Upon passage of this we will certainly

see it as our responsibility to communicate this to the farming

community in the province of British Columbia. I would share that with

the critic, the member for Cowichan-Malahat (Mrs. Wallace).

MR. KING:

I want to take up briefly with the minister some of the concerns

expressed by my colleague for Cowichan-Malahat and to question the

minister with respect to the application of this particular tax to

greenhouse operators. There is one such greenhouse operating in

Revelstoke. The minister can appreciate that that's a fairly cold

climate with a very heavy snowfall. In order to provide a uniform heat

for that kind of operation, there's a very heavy expenditure required

in either natural gas or some form of petroleum fuel for heating over a

long winter in our community. It used to be a fact that greenhouses

were included as an agricultural operation, recognizing that they

produce not only flowers for that type of commercial use but also

vegetable crops and plants for distribution in the area. My concern is

whether or not greenhouses may once again be exempted from that very

onerous fuel tax as a valid agricultural operation, which I believe

generally to be the case. I would like the minister's response.

HON. MR. CURTIS:

The point raised by the member for Shuswap-Revelstoke is not related to

a mode of fuel use in this section. I don't know how far I could go in

dealing with this particular section, but the commercial use of any

fuel is seen to apply under other statutes as taxable and that would

apply in this case in this section. Farm use is deemed to be

commercial,

whereas the member for Cowichan-Malahat (Mrs. Wallace) was

speaking of the movement of a farm vehicle — tractor or whatever — on a

farm property. We could debate at some length the desirability of

exempting from tax fuel used for heating in agriculture, but I think

that moves beyond the ambit of this section.

MR. KING:

I appreciate the minister's response. It just seems to me that under

this provision there's a pretty wide latitude left beyond the use for

motor vehicles, and the minister had indicated to my colleague that

regulations would issue upon proclamation of these amendments. I see no

reason why a simple regulation could not take account of the very

difficult economic times that farm enterprises are having and go beyond

simple exemption for motive fuel purposes. I don't think we're asking

for a precedent here and, with due respect, I don't think we're talking

about an unrelated thing. In the course of the past year I have had

correspondence with the minister over this that he may recall. It seems

to me that certainly there's latitude here to restore the status to

what it used to be. It's my understanding from the greenhouse operators

that the application of this taxation is a relatively new one — in the

last couple of years. Prior to that they used to be adjudged as an

agricultural enterprise and enjoyed the same exemption that we are now

asking for. If there is a more appropriate place for the discussion,

I'm certainly in the minister's hands on that. I would be glad to raise

it again during his estimates if he thinks that's more appropriate.

HON. MR. CURTIS:

I think it would be more appropriate under my estimates, and I look

forward to that discussion. I cannot respond too readily, inasmuch as

the fuels about which the member speaks would be taxed under the Social

Service Tax Act and not the Gasoline Tax Act, which is being amended by

this bill.

MRS. WALLACE: I hate to belabour the

point, but we've had some experience in

definitions by that ministry as

to what constitutes a farm tractor, and I think here we have the same

thing with a motor vehicle. What constitutes a motor vehicle on the

farm? I'm a bit hesitant to leave it in the hands of the minister in

view of the kind of experiences we've had previously relative to sales

tax. He talks about regulations; my

[ Page

7787 ]

understanding

is that he did indicate during second reading — I'll have to check the

Blues on that — that an amendment would be forthcoming which would make

this very clear. Once again, to leave this to regulations that are made

by some person at some time down the road defining what constitutes a

motor vehicle seems to me to leave it in limbo.

HON. MR. CURTIS:

I cannot agree. A motor vehicle is quite clearly defined, and has been

so defined over a good number of years in the province of British

Columbia. When I spoke on budget day, I indicated that we were further

broadening the exemption with respect to fuel for farm vehicles. I'm

not aware of any confusion that has arisen, particularly since budget

day. I want to see the broadest possible

interpretation of the

definition of a farm vehicle within the law. There is not only a

dictionary description of a tractor, there is also one in terms of our

interpretation. I offer the member the assurances of the ministry that

we seek more exemptions, rather than fewer. I will be happy to share

that with her at the appropriate time, when the instructions are issued

by the consumer taxation branch.

Sections 3 to 6 inclusive approved.

section 7.

MR. HOWARD:

I have a brief question for the minister. This is the

section that

contains a minimum fine. In other words, when a person commits an

offence and is found guilty, there's no discretion in the hands of the

court to do anything else except to impose a fine: $200 for a first

conviction, and for subsequent convictions not less than $500. What is

the rationale for that?

HON. MR. CURTIS: There has

been debate, and I'm sure there will be debate in other statutes this

session, with regard to the minimum fine. This

section does indicate

that there is a minimum fine of $200 to $500 on a first conviction, and

of $500 to $2,000 on a subsequent conviction. Some members of this

committee disagree as to the appropriateness of a minimum fine. It

should be pointed out that we are concerned about infractions that are

much more than just simple mistakes but are, rather, deliberate

attempts to evade a taxation statute. It's one of the unpopular aspects

of being Minister of Finance.

MR. HOWARD: I think

that's the argument the minister should be putting forward if no

minimum were proposed: namely, that the determination as to whether

it's a mistake, accident, deliberate attempt on the part of the

individual to contravene the law or whatever is a decision the judge

should make, not a decision the minister should make. I asked the

minister first what the rationale was for a minimum fine. I don't think

he dealt with that.

HON. MR. CURTIS: I'm sorry if I did not correctly and completely

hear the member in his first remarks. We are attempting to bring a rationale

to a variety of fines set out in taxation statutes. They have been discussed

in committee and in the context of other bills. It is certainly not the intention

of the consumer taxation branch to pursue someone who has made a simple mistake

but, rather, the very deliberate and quite widespread infractions which occur.

I feel this is appropriate. We discussed this at some length in my ministry

through the course of the fall and winter. Again, we are concerned where someone,

not by oversight but deliberately, sets out to evade the payment of tax which

others, those of us who follow the rules, are paying.

I trust that answers the member. I'm not sure it will satisfy him, but that is the rationale.

MR. HOWARD:

The rationale appears to be a desire to make the policeman the judge,

or to make some unknown person in the public service, someone who

examines the records, the judge and determinator as to whether it's an

accident or whatever. It's usurping the function of the court.

In any event, I assume it's government policy to establish minimum fines for infractions. Am I correct in that?

HON. MR. CURTIS:

Yes, that is correct with respect to taxation statutes. I can't speak

for other ministries and I can't speak beyond this section, but that is

correct. Fines have been left untouched for a good number of years.

his

preamble to the question, the member for Skeena indicated that this

is to make the policeman the judge. I disagree; I don't see that

occurring at all. After all, the consumer taxation branch of the

province of British Columbia's Ministry of Finance determines if a

charge in fact should be laid; and then the court process takes place.

In the event of a minor infraction, of course we're not going to

pursue, but the authority should be there for those instances where a

deliberate infraction, the avoidance of payment of tax, in this or any

other statute, is determined. The consumer taxation branch then would

see that a charge is laid.

MR. HOWARD: Exactly the

same sort of reasoning would prevail if there were no minimum. The

consumer taxation branch or the minister, whoever makes that decision,

is going to make it on the basis of whether or not they perceive a

certain action to be accidental, or with intent to deceive or work

fraudulently under the act. That exists now. We're talking about the

fact that you are removing the discretion of the judge. You're

intruding upon the discretionary power of the court to do that.

The

minister says it's government policy with respect to taxation statutes.

It's government policy with respect to the individual owner-operator of

a retail gasoline service station. It's government policy with respect

to the poor individual trying to eke out a living, who, if he happens

to make more than one or two mistakes — if they are mistakes — may find

himself in court automatically facing a $200 fine, or a $500 fine on a

subsequent occasion; I'm talking about just the first offence. This

doesn't jibe with the government's position on securities legislation.

People in the securities business — stockbrokers, promoters or others —

can engage in bilking the public out of thousands and thousands of

dollars; and the minister's own government is proposing to this House

that in those instances there be no minimum fine. The government's

approach to the securities business, stockbrokers and stock promoters

is that crooked dealings may take place with no minimum fine if they

contravene securities legislation as proposed to this House, but

they're going to nail the poor retailer, the individual owner-operator

of a service station, with a minimum fine and give the court no

discretionary powers whatever. Why is that? The two just don't mix,

unless of course you're playing more favourites with the big-money

people than with the operator of a corner service station.

[ Page 7788 ]

MR. CHAIRMAN:

Before recognizing the minister, I will advise the member for Skeena

that while the first part of his questions was very much in order under

this bill, any reference to

an act which obviously does not fall within

the purview of the minister currently before us is out of order.

HON. MR. CURTIS:

Mr. Chairman, I concur with your observation in terms of the comparison

the member for Skeena has drawn. I am distressed that he would infer

that. There are 178 people in 14 offices of the consumer taxation

branch of the Ministry of Finance. History will prove the accuracy of

the statement that they are not interested in the small infraction.

They do not have the resources nor the time to make a nuisance of

themselves and harass individuals who, for one reason or another, have

made an error with respect to this particular taxation act. Quite the

contrary, I Think the member knows that the resources of the ministry's

taxation branch would be directed to those contravening the statute on

a very large scale. Obviously that is the point. We do not have a

history, through several governments, of going out and bothering

individuals because there might have been a minor infraction. A certain

amount of common sense is required and is used in a statute of this

kind.

MR. HOWARD: I am not going to argue that point

with the minister, except to point out to him that the act applies

across the board. There are no exemptions in it about size of operation.

Secondly,

the rationale the minister has just advanced to the committee is

exactly the same type of reasoning and explanation that the Liberal

government in Ottawa, under Pierre Elliott Trudeau, used to advance for

its desire to get extraordinary powers from parliament and say: "But

we're not going to use them." Then we find out some months or years

later that they do use them. It is the same type of argument and the

same sort of approach that the minister is using today — the

doctrinaire approach and attitude of the Liberal Party in Ottawa. Have

those guys in Ottawa infected this government all across the board?

Have they turned them all into Liberals?

MR. CHAIRMAN: Order, please, hon. member. Again, we are on

section 7, and the member was doing so well.

MR. HOWARD:

We were doing so well until the minister admitted that he is basically

a Liberal and that that is the kind of thing he wants in the act. He

laughs about it, but that is precisely where we are.

MR. MITCHELL:

Like many members on this side of the House, I would like to register

our opposition to the minimum fine. I say this from a little bit of

experience in the enforcement of many of these regulations that are on

the statute books. It turns the courts of this province back many

years, so that they do not have the discretion to consider the

individual, the situation and some of the background that went into the

particular offence. I feel that the minister is attempting to use all

these regulations as revenue-producers. As you go back in the history

of municipalities — especially in smaller communities — and read some

of the history of our southern neighbour, you see that enforcement of

petty little bylaws and regulations was one of their revenue-producers.

In fact, the police were literally instructed in some cases.... I can

remember many cases in my own experience where a policeman was hired,

issued a uniform, a gun, a ticket book and a quota. Municipalities

actually had a

section in their budgets that depended on X thousands of

dollars being raised by the fines that the police went out to collect.

That was used to keep down the mill rate. I feel that all these minimum

fines are designed for one thing: to raise money. In this court system

fines cannot be used in this manner. I remember one time coming in from

Port Renfrew — and I am glad I have the protection of the House — and I

ran out of gas, so I siphoned the gas from my outboard motor into my

car. If I'd been caught, I would have been faced with a minimum fine of

$200, my name would have gone on the CPIC and my record would be on all

the police records of Canada.

Another experience I had — and this is my personal experience — was

travelling from Prince Rupert to Terrace, and at 1 a.m. running out of

gas. I eventually found a house with some lights on, I went in, and the

gentleman there had a number of chainsaws. He drained those chainsaws,

we put the gas into the car, and he said to me: "You know, you're not

paying any road tax on this. Don't get caught." All right, it was a

matter of survival — either stand outside in the middle of the night

between Terrace and Prince Rupert.... If I had been picked up, they

would have checked and I would have appeared in court. They would have

checked the CPIC machine and it would have recorded that I had a

conviction. I would have been sentenced to a minimum fine for my second

offence. For getting my family out of the wilderness into Terrace, I

would have had a minimum fine of $500. Under the circumstances, Mr.

Speaker, if I had presented that evidence to the court they would have

accepted it. But because the judges and the courts would be tied to

this minimum fine, the hands of the court would have been tied. I know

the Minister of Finance would have chuckled with glee. He would have

got another $700 from an NDPer, and this would have been a great

feather in his cap.

The thing is,

there are a lot of other people out on that street; there are a lot of

farmers, there are a lot of sportsmen, there are a lot of loggers in

the same position. A minimum fine that is that restrictive and punitive

is going to destroy the intent of the court system and the intent of

justice. It's going to bring in more revenue to the province. The

public is going to have the same opinion they have in some of these

smaller municipalities that use the fine system to raise revenue. Some

of the terror stories that tourists who have travelled through some of

the southern towns in the U.S. will tell you.... All they are doing

there, between speed traps and petty little regulations — they're put

into jail and they're fined — is raising money. I don't think that the

court system or any of our regulations or any of our legislation should

be used solely as punitive methods of raising funds. If we must raise

money, let's raise it in the manner of taxation or royalties — along

that line — but let's not use the regulation with a minimum fine. I say

the minimum fine should be taken out, and the court system only should

decide what the offence should be.

HON. MR. CURTIS:

Mr. Chairman, I was attempting to conjure up the image of the member

for Esquimalt–Port Renfrew draining chainsaws and then chewing his way

home, but it isn't quite complete in my mind.

Mr. Chairman,

I want to assure the member that this is not going to be a

revenue-producer for the treasury of British Columbia. If we were to

consider the costs involved in stopping that member of an evening while

driving from point

[ Page

7789 ]

A to point B in order to find that he had taken

coloured gasoline from a lawnmower, an outboard motor or whatever, I

think that we would very quickly, before we even started any I

paperwork, exhaust any amount of money which would be derived from the

penalty

section of this bill. Furthermore, nowhere does it say that

because one is charged, one is considered guilty. This is designed — as

I've said repeatedly, and as it applies to other statutes — with a view

to the large user who would evade the gasoline tax statutes of the

province of British Columbia on a deliberate and persistent basis, and

therefore would erode the revenue base of the province of British

Columbia.

To assist another member, I have indicated that

there are 178 men and women employed in the entire consumer taxation

division of the Ministry of Finance. While I do not condone, and I'm

sure the member does not condone. the illegal use of coloured gasoline,

surely he would have to agree — and past history will confirm this,

rather than just my assurance this afternoon — that it is not our

intention to harass the individual, nor is it our intention to stop

literally hundreds of cars on a holiday weekend on the Hope-Princeton

highway to determine if one or two have put some coloured gasoline into

their automobile.

Let's keep our perspective on this thing.

Our perspective should be that this is for someone who is very large

and who is consciously, for purposes of evading tax, utilizing coloured

gasoline. I know we can have the debate, but the member must understand

what I've been saying. He must know that common sense has prevailed in

the consumer taxation branch of the ministry. Even when that side

formed government, common sense prevailed, and it will continue to

prevail.

[Mr. Strachan in the chair.]

MR. MITCHELL:

The one thing the minister seems to forget is that although he talks

about the people in his own department, this becomes a regulation that

is enforced by every policeman in this province. It becomes an offence

that policemen, on their routine checks in certain areas, check for on

a regular basis because of abuses. If there was a

section in that act

that gave assurance that people who were caught in an emergency would

not be charged.... But when someone is out on the road enforcing these

regulations.... The minister keeps talking about these large abusers of

the gasoline tax. Because of this minimum fine, people are caught up in

that net. There is nothing in the act that gives any chance for a

person to give a reasonable explanation or that provides for an

emergency situation. If he is picked up a long way from home where he's

not known, he can be charged, because that is a part of

an act, a

provincial statute which is enforced.

This is my big fear.

I'm not afraid for those who are going out purposely and abusing it. I

can understand the need for the minister to have some teeth in it. The

minimum fine goes back to bad legislation, and there is nothing in it.

If the minister would say that he would bring in an amendment so that

those who are caught in an emergency situation would be exempt, or

something like that.... How many times do you have emergency

exemptions? I know I've abused it twice that I'll admit to.

AN HON. MEMBER: How many times that you won't admit?

MR. MITCHELL: You prove it.

This

is the situation that worries me. There is nothing in he regulations,

and the minister, with his flowery talk, says t's only for the large

abusers. But it's the little guy that gets picked up in the road cheek.

that gets caught and has this minimum of $200, or $500 for a second

offence. I think it's wrong.

MR. MUSSALLEM: It has

often been said that confession is good for the soul, and I'm delighted

to hear the hon. member for Esquimalt–Port Renfrew (Mr. Mitchell) make

this confession. I only hope that if there is anything else that he has

on his mind at this time.... This is the time to do it. I would say go

forth and do it no more.

My view of this act — and I'm

supporting this

section — and as the minister has mentioned a couple of

times, is that the opposition seems to have failed to see.... This is

not a small amount of money. I remember in 1971 when I think a study

was made on how much the government was losing from this coloured

gasoline tax act. There were amendments made then to try and stop the

losses. The losses were estimated to be $1.25 million, and that was

considered a very low estimate. I imagine at the present time it could

be millions. It's a larger figure than we think, and I applaud the

minister's position. He's putting those who are making a business out

of this on notice that they will be caught and they will pay the fine.

It's not the man who takes a little gas out of his lawnmower to get

home — I don't think the ministries interested in that, and neither are

the judges. But the government is interested when we find that taxes

are being evaded — the neighbour's paying the bill. I think evasion of

tax has to have a high penalty, and this traffic is very, very high.

understand that at one time gasoline was bought as clear gas, and the

supplier supplied the individual with an envelope of colour to put in

his tank. They never put the colour in. Now it's all coloured gasoline.

But it didn't stop the traffic. The traffic is still on, as many of us

know.

I applaud what the minister is doing. In this

Legislature only a little while ago — not this session but last session

— on the Pollution Control Act they were saying that having a small

fine for polluters is a licence to pollute. The fine is too low and we

should make the minimum fine higher. You can't have it both ways. This

heavy traffic calls for a high fine to give notice that they will be

charged and if found guilty will be fined heavily. The second offence

is worth $500. That's a good way to do it, because that's bad traffic

and should be stopped. I applaud the minister's section, and I will

vote for it.

MR. LEGGATT: I really have trouble

following the logic of the minister and my colleague for Dewdney. The

minister says that it's designed for the large user. The member for

Dewdney suggests that the fine should be large. I agree. But the

section says: "Not more than $500." The maximum under this

section is

$500. If you've got somebody big out there defrauding the government of

millions, which my friend suggests is probably taking place, why are we

only fining him $500 maximum? Surely we should have a higher maximum

and no minimum. That's what makes sense, because what we want to have

is the flexibility so the court can make some decisions around the real

justice of the case. What you're doing is giving the court a discretion

of $300. That's the only discretion they have under the section. They

either fine somebody $200, $300, $400 or $500, and that's all the

[ Page 7790 ]

discretion

they have on a first offence. If you've got somebody big who you really

want to tackle, a $500 fine is a slap on the wrist if the guy is making

millions, as my friend here suggests could be happening.

The

point is still one that I don't think the minister has accepted. I

still believe he is listening to the advice of those who wish to have

their departments more effective. I can understand that kind of advice

being given, but it's a very big price to pay for that kind of

efficiency. A $200 minimum fine is not a deterrent to this offence, but

it means a big, heavy injustice for someone who, for example, might

violate

section 23. It's not

section 23; I think it's

section 5. It's

the one that deals with failing to comply with the return. That can be

inadvertence, but there is a mandatory provision in here that you must

make a return with regard to your sales, etc. That

section doesn't say

only if it's advertent or deliberate. It can be inadvertent. The person

doing it through inadvertence can be caught up in the law and face a

$200 minimum fine with the best will of the people enforcing it. You're

handing a lot of clout to that guy who walks into the service station

and says: "I can nail you for a $200 minimum fine." If he doesn't like

the way he combs his hair, he can proceed. Mat we want is the

discretion on the part of the judge so he can say: "Wait a minute. This

really wasn't anything serious; it wasn't anything deliberate." Then he

can treat it with a sense of justice and fairness.

That is

why the minimum fine question is the only one we're dealing with. I

could buy the idea of increasing the maximum if you've got someone who

is playing fast, loose, high, wide and handsome. Again, that's when you

want to give the judge some discretion so he can nail the guy for a

venal offence, one that has defrauded the government of a great deal.

But this

section doesn't say that. All he's got is a $500 fine. There's

a big difference between a conspiracy to deliberately deny the

government their fair taxes and somebody who inadvertently fails to

make a return or perhaps slips up once, as my colleague may have done

at some time in deliberately putting chainsaw gas into his car.

It's

all very well to say that they probably don't want to fine or charge

people like that. I'd rather have a discussion so that if they do, the

court can say: "You haven't done anything wrong, brother. Goodbye."

That isn't what we have here; what we have is justice by bureaucracy.

That's why we oppose it. It is wrong. I am very interested to hear the

minister say that it is a policy of his department that on taxation

statutes there should be minimum fines. That is also a policy of the

income tax department. It is a policy throughout most tax statutes.

That doesn't make it any more right. It is a very wrong policy. It is a

policy that denies justice to people. For that reason we oppose this

section. We think there should be no minimum, but on a first-offence

maximum I would say the minister would find a willing ear on the

opposition side if he felt $500 wasn't a sufficient sanction for a

serious offence.

HON. MR. CURTIS: I think the member who has just taken his seat is perhaps

misinformed on one point. That is that the service-station operator is not required

to file a return in this regard. That is more than just a detail. That immediately

offers a safe haven for the individual service-station owner or lessee who might

inadvertently permit some coloured gasoline to be used improperly. He is not

involved at all. This occurs at the bulk-plant or the oil-company level. That

is where the return occurs. The member and I disagree. He has said, "Why

not make the maximum much higher?" but, as I observed to him in an interjection

on another bill recently, it is not just the fine but the tax which has been

evaded. It could be a fair amount in the event that someone is charged and found

guilty under this section.

Section 7 approved on the following division:

YEAS — 27

Wolfe

McCarthy

Williams

Gardom

Bennett

Curtis

Phillips

McGeer

Fraser

Nielsen

Kempf

Davis

Strachan

Segarty

Waterland

Hyndman

Chabot

McClelland

Rogers

Smith

Heinrich

Hewitt

Jordan

Vander Zalm

Ritchie

Richmond

Mussallem

NAYS — 25

Barrett

Howard

King

Lea

Lauk

Stupich

Dailly

Cocke

Nicolson

Hall

Lorimer

Leggatt

Levi

Sanford

Gabelmann

Skelly

D'Arcy

Lockstead

Barnes

Brown

Barber

Wallace

Hanson

Mitchell

Passarell

An hon. member requested that leave be asked to record the division in the Journals of the House.

Sections 8 to 10 inclusive approved.

Title approved.

HON. MR. CURTIS: Mr. Chairman, I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Division in committee ordered to be recorded in the Journals of the House.

Bill 22, Gasoline Tax Amendment Act, 1982, reported complete without amendment, read a third time and passed.

HON. MR. GARDOM: Committee on Bill 23, Mr. Speaker.

MOTIVE FUEL USE TAX AMENDMENT ACT, 1982

The House in committee on Bill 23; Mr. Davidson in the chair.

Section 1 approved.

section 2.

[ Page 7791 ]

MRS. WALLACE:

I don't want to belabour the argument, but

section 2 is the same as the

section we just dealt with in the previous bill. This

section imposes

minimum fines. We have taken a very definite stand and have presented

some very definite arguments expressing our opposition to this concept.

The minister tries to tell us that they've only got 178 employees, or

118 — whatever it is — and that somehow they're the ones who don't have

time to go around picking up these people. I would suggest this is

something that is outside the venue of the Minister of Finance when the

charge is actually laid. It has nothing to do with the Minister of

Finance. It is a police officer who does this, and the case then comes

into court. A minimum fine is a concept we cannot accept. We want to go

on record at every opportunity to oppose this particular section, and

we so do, Mr. Chairman.

Section 2 approved on the following division:

YEAS — 27

Wolfe

McCarthy

Williams

Gardom

Bennett

Curtis

Phillips

McGeer

Fraser

Nielsen

Kempf

Davis

Strachan

Segarty

Waterland

Hyndman

Chabot

McClelland

Rogers

Smith

Heinrich

Hewitt

Jordan

Vander Zalm

Ritchie

Richmond

Mussallem

NAYS — 25

Barrett

Howard

King

Lea

Lauk

Stupich

Dailly

Cocke

Nicolson

Hall

Lorimer

Leggatt

Levi

Sanford

Gabelmann

Skelly

D'Arcy

Lockstead

Barnes

Brown

Barber

Wallace

Hanson

Mitchell

Passarell

An hon. member requested that leave be asked to record the division in the Journals of the House.

Sections 3 to 5 inclusive passed.

Title approved.

HON. MR. CURTIS: Mr. Chairman, I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Division in committee ordered to be recorded in the Journals of the House.

Bill 23, Motive Fuel Use Tax Amendment Act, 1982, reported complete without amendment, read a third time and passed.

HON. MR. GARDOM: Committee on Bill 24.

FINANCIAL ADMINISTRATION

AMENDMENT ACT, 1982

The House in committee on Bill 24; Mr. Davidson in the chair.

Sections 1 and 2 approved.

section 3.

MRS. WALLACE:

Mr. Chairman, I have some real concerns about this particular

section

because of the government's move here to deduct management fees from

special trust funds and any funds with respect to which management

services are provided by the ministry. Certainly the special funds

which have been set up by previous administrations, many of them by the

one of W.A.C. Bennett — or at least the few that are left, I should

say, perhaps — really should remain inviolate.

[Mr. Strachan in the chair.]

But

I am even more concerned about the trust funds, because since the

recapture of the trust funds, those funds now sit in general revenue.

with moneys — not all government money, as in the case of the Farm

Income Assurance Fund; that's the one I'm thinking about — from

producers bearing interest which will, in all probability, go into

general revenue. Now this particular

section of this bill makes it

possible for the Minister of Finance, at his discretion, to charge

management fees with no limits. You know, the harder up this government

becomes, the more grasping it becomes. Here is a real move to go into

collecting money, transferring dollars into government coffers out of

the pockets of people — particularly in the instance of the Farm Income

Assurance Fund where we have no assurance that that interest is going

to be calculated to help defray the costs of farm income assurance.

There's no assurance of that at all. We may find that those programs

are limited or restricted because of that. Now we have a case where the

minister, at his discretion, not only doesn't have to pay the interest

on that but can turn around and charge a management fee for

administering that fund. It just gets to be a little heavy-handed, Mr.

Chairman, and certainly it's not the kind of legislation that I think

we should be discussing at this particular time when all those funds

have been recouped and put into general revenue.

Now, after

wiping them out and putting them into a trust fund, we're going to be

faced with a management fee to operate them. To me, that seems just out

of the realm of reality entirely. I'm really concerned about this.

There are no limits. It's a discretionary thing, so it can be put on at

the whim of the minister in any amount that he happens to see fit. I

have some great misgivings about this, Mr. Chairman.

MR. STUPICH:

Mr. Chairman, I might not have said anything, depending upon what the

minister answered, so I just don't know. I'll add to the question by

asking whether or not this legislation would give the minister the

authority to levy an assessment for administration purposes against all

of the Crown corporations, for example. The minister is the fiscal

agent for a number of them. Does that mean they will be charged a fee

for service, whether or not they want that service? Does it mean that

the pension funds, for example,

[ Page 7792 ]

would be charged a fee for service? Does it open up the door for charging all of those funds a fee for service?

HON. MR. CURTIS:

Mr. Chairman, yes, the answer is essentially as the member for Nanaimo

has put it. In the Ministry of Finance we administer about $8 billion

in special funds and trusteed funds, as the members opposite would

know. It is the intention that we will charge a fee for service to more

properly reflect, I think, the cost of servicing that particular fund.

There are some exceptions, and I dealt with these in the closing of

second reading debate. In the First Citizens Fund, as an example, there

would be no management fee, because that does not form part of

consolidated revenue, so that one is exempt. I have no problem with the

principle of charging a fee, having served for a short time on a

regional district, where indeed the regional district would be

requested to undertake a specific service for a specific portion of the

region, not applying to all. Therefore a fee would be levied. That

might be an administration fee with respect to a swimming pool or a

special service in an electoral area. It had no direct relationship to

all the other parts of the region. I think the principle of a

management fee is not unknown and is probably more appropriate than

that which has been the case in the past. Certainly there is no

intention of being unreasonable here. It's going to be set at a level

to recover the cost, so clearly someone responsible for a fund upon

which a fee is levied would quite properly go to the media very quickly

and say it is an absurd charge. It is to recover the costs. I think

that we're going to find the two sides of the House in disagreement on

this point.

MR. STUPICH: Mr. Chairman, I wish I could

feel confident that the minister will always be reasonable. I'm

thinking, for example, of the pension funds, which the government is

really ripping off by borrowing money from the funds and paying 9. I

percent, at the same time as it had in excess of a billion dollars — it

doesn't today — in various term deposits on which it was probably

earning something in nature of 16 percent. Without having the authority

to levy any fee they were making 7 percent interest on something in

excess of $220 million. I don't feel confident that the minister will

always be reasonable.

I don't think we can feel confident

about the minister being reasonable in dealing with B.C. Hydro. We know

that water licence fees have been increased so that the users of

electricity will pay an extra $150 million into government coffers in

1982. I wonder how much more this is going to mean the users of

electricity will have to pay for electricity so that B.C. Hydro in turn

will be able to pay the government the management fee. In short, Mr.

Chairman, I would ask the minister how much money he expects to raise

from this source in the fiscal year ended March 31, 1983?

HON. MR. CURTIS:

Mr. Chairman, about $3.6 million in all, and that can be measured

against the amount which I indicated earlier — in excess of $8 billion.

Further, I guess it would be more appropriate in my estimates, but the

returns on pension funds are higher than the member has indicated.

Certainly we've been moving toward market, but I feel that doesn't

belong on this section. I would agree with the member in terms of what

happened in the past. That doesn't happen now.

MR. STUPICH:

Mr. Chairman, it may be more appropriate in estimates, but in this case

I was dealing with the money the government has borrowed from the

pension funds to finance the deficit that they incurred on March 31,

1976. At last reading that was 9.1 percent. The minister agrees, Mr.

Chairman, for the sake of Hansard .

HON. MR. CURTIS:

I now hear precisely what the member was speaking of. He was speaking

of one specific matter, and I concur that he is correct. I was speaking

in mote general terms with respect to the amount which is realized on

pension funds generally, particularly in the last period of high

interest rates.

MR. CHAIRMAN: The Chair also recognizes, hon. members of the committee, that this

section does discuss a management fee.

MR. STUPICH:

The discussion right now is hinging on whether or not the minister can

be relied upon to be reasonable. As I pointed out with respect to

stealing money from the pension funds, seven points on $200 million

means $14 million a year from that one bit of larceny. I was going to

say petty larceny, but it's anything but petty.

SOME HON. MEMBERS: Order!

MR. CHAIRMAN: The hon. member is not imputing any dishonour to another hon. member?

MR. STUPICH: Of course not, Mr. Chairman. You know I wouldn't do that. It's the government that's being larcenous, not the minister.

The

minister gave us the figure of $3.5 million, and I appreciate it. My

next question is: how much of this is coming from the pension funds and

how much from B.C. Hydro? I know other members are interested in other

areas, but I'm concerned about those two.

HON. MR. CURTIS:

I don't have a precise breakdown, but I think one could work out the

factor in terms of the amount of money which would be rolled over or

which would be accessed from time to time. As the member knows, some of

our money is out for a very short period of time, and in other

instances it's out for much longer. I'm sorry, I don't have that detail.

MR. STUPICH:

When we do get to the minister's estimates, I would like to ask him how

much of this is expected to be raised from B.C. Hydro and how much from

pension funds.

MR. HALL: This question of a

management fee, Mr. Chairman, raises a philosophical question in terms

of a service other than those services currently being provided by

Crown corporations that have been set up by this government to do work

which was previously done by line departments of government — namely,

Public Works or Finance. I refer, of course, to B.C. Systems and B.C.

Buildings. There was a time when the work done by those people was work

which was normally discussed in here under estimates. That work was

taken out of our direct purview by establishing Crown corporations. Now

we've got a different kind of thing. We have here a ministerial

function, a non-hardware ministry,

[ Page 7793 ]

and

philosophically I haven't quite made up my mind about that yet. I hope

it will always be an ever-changing sort of approach. So we have a new

philosophy or, at least, if not a new philosophy, a new attempt or

approach, and that is the management fee. I want to ask the minister if

he envisions a point in time when the Ministry of Finance will be

charging out its services as the Queen's Printer does, as B.C. Systems

and B.C. Buildings do. In short, how will he recover the cost of the

Treasury Board? The Treasury Board, with its ever growing staff,

doesn't do all its work for this minister. It does its work for the

whole of the administration. In fact, Treasury Board can be found

everywhere. At one time it was the Public Service Commission, but now

it's Treasury Board. Somebody's won a fight over there, I would

imagine, and this gentleman looks like the winner.

To get

back to the

section and discuss management fees, I think it's important

to know where we're going, and this minister is indelibly imprinting

his particular style of administration on the government. I want to

know whether that indelible footprint or palmprint is the one we really

want to see. In order to be able to vote intelligently for this, I

would like to know where we're going with this idea,

HON. MR. CURTIS:

The member has raised an interesting point. Obviously — and I don't say

that in a derogatory sense; I say it perhaps to myself — the Ministry

of Finance cannot levy a fee against other ministries or sections of

government for every single activity which we undertake. The second

member for Surrey has raised the question of the Treasury Board. Would

the Treasury Board at some point say: "In order to process your

request, ministry X, that will be 2 percent of the cost of your

request"? No. we're not contemplating that at all. I would certainly

resist that if it were suggested within government. But here we're

speaking of, as I've indicated and as the member well knows as a former

minister, the amount of time and skill required to administer several

billions of dollars. I indicated this in response to an earlier

question.

From the discussions we've had within the ministry

which have led to this point in the House, we feel as we bring a number

of people into the treasury

section — not Treasury Board — that it is

appropriate to charge, rather than the general taxpayer, the fund or

activity which is forcing us to do this work. It is appropriate to

charge a fee for that. I used the comparison earlier on of another

level of government, which may or may not assist members in

appreciating the reason for this. I don't expect them to accept it

blindly, but I certainly have no intention of seeing the ministry, so

long as I am responsible for this portfolio, levying fees within

government.all over the place. In this case it's quite, a significant

task, and we can, directly trace the travel and activities, here or out

of province, which are required. I think it's only appropriate, in the

interests of the general taxpayer, that we attempt to recover some of

that cost.

[Mr. Davidson in the chair.]

Section 3 approved on the following division:

YEAS — 27

Wolfe

McCarthy

Williams

Gardom

Bennett

Curtis

Phillips

McGeer

Fraser

Nielse

Kempf

Davis

Strachan

Segarty

Waterland

Hyndman

Chabot

McClelland

Rogers

Smith

Heinrich

Hewitt

Jordan

Vander Zalm

Ritchie

Richmond

Mussallem

NAYS — 24

Barrett

Howard

Lea

Lauk

Stupich

Dailly

Cocke

Nicolson

Hall

Lorimer

Levi

Sanford

Gabelmann

Skelly

D'Arcy

Lockstead

Barnes

Brown

Barber

Wallace

Hanson

Mitchell

Passarell

King

Hon. Mr. Williams requested that leave be asked to record the division in the Journals of the House.

Sections 4 to 6 inclusive approved.

Title approved.

HON. MR. CURTIS: Mr. Chairman, I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed, Mr. Speaker in the chair.

Division in committee ordered to be recorded in the Journals of the House.

Bill 24, Financial Administration Amendment Act, 1982, reported complete without amendment, read a third time and passed.

HON. MR. GARDOM: Committee on Bill 31, Mr. Speaker.

AGRICULTURE AND FOOD STATUTES

AMENDMENT ACT, 1982

The House in committee on Bill 31; Mr. Davidson in the chair.

Section 1 approved.

section 2.

MRS. WALLACE:

I would like to ask the minister for an explanation of this particular

section, which appears to remove the limit on this bill. As I

understand it, the previous bill allowed only 25 percent of the

payments to come from the provincial treasury, and this bill apparently

removes that 25 percent limit. As this piece of legislation implies

federal involvement, is the minister anticipating a further extension

[ Page 7794 ]

the ARDA agreement? Or is he expecting that it won't happen, and that

is why he is removing this limit? If so, why is no funding provided for

in this bill? Where is the funding coming from? Is this just a nothing

piece of legislation?

I would like the minister to explain what he's trying to do here.

[Mr. Strachan in the chair.]

HON. MR. HEWITT:

I'm looking at

section 2 of Bill 31, which is the Agricultural Credit

Act amendments. The member seems to be talking about

section 1, which

deals with the removal of the 25 percent limit. I'd just like some

clarification.

MRS. WALLACE: I'm sorry. Yes, it's

section 1.

MR. CHAIRMAN:

Section 1 has been passed. Shall

section 2 pass?

HON. MR. HEWITT:

Mr. Chairman, I believe the member was speaking on

section 1. I'm quite

prepared to respond to the question raised. She may wish to ask leave.

MR. CHAIRMAN: Leave can't be granted. The

section has been passed, and the committee has no authority to do that.

MRS. WALLACE:

On a point of order, Mr. Chairman, you were not in the Chair at the

time that we started discussion on this bill, but there was a great

deal of noise in the House at the time. In fact the Chairman called for

order at that point to get some attention. We've obviously slipped over

section 1 inadvertently. If there is some way that we could revert to

it, I think it would be in the best interest of both sides of the

House. I ask for leave.

MR. CHAIRMAN: Please proceed on

section 2.

MRS. WALLACE: If the minister would answer the question then.

HON. MR. HEWITT:

With regard to the Agricultural and Rural Development (BC) Act

amendment, by deleting

section 3 (2) of that act, it allows some

flexibility for the provincial Minister of Agriculture and Food to

expend more than 25 percent of the amount expropriated in the fiscal

year. If the member was looking at the original legislation, she'll

note that where no agreement has been reached or there is no

anticipation of an agreement being reached, we would not have the

flexibility if we don't enter into an agreement with the federal

government. We would be limited to that 25 percent restriction. We may

wish to proceed to spend those moneys within my budget on a provincial

type of program. As you are aware — and you raised it in my estimates

yesterday — at the present time we are in discussions to extend the

current agreement, which falls due in July of this year, for another

year. Failing that, we would not have the ability to spend more than 25

percent.

MRS. WALLACE: In effect, it would appear

that you are not anticipating successful negotiations with the federal

government on this. As a result of that, we're having several million

50-cent dollars down the tube because we will lose that portion of the

commitment that hasn't been expended by the feds. There is no way that

this is going to provide the use of that extra federal money; this is

just going to provide the provincial share of about $5 million. We will

lose that other $5 million unless you're successful in negotiating an

extension of the ARDA agreement. Is that correct?

HON. MR. HEWITT:

Repealing this particular

section gives us the flexibility to ensure

that we do have a type of program available to the farm community. I am

not anticipating that we will not get an extension of that agreement.

I'm hopeful that we will. I've had some discussion with the honourable

Herb Gray. We are working now to put together an agreement which will

allow us to have that extension. If it is granted, there is no problem;

if it wasn't granted, for whatever reason, it would still enable us to

have the flexibility to proceed with a program of our own.

MRS. WALLACE:

Section 2 of Bill 31 amends

section 2(2) of the Agricultural Credit

Act. It appears that this extends the definition to include more items.

Is that the purpose of this amendment to section (2) under 2(h),

where it adds: "purchase of plant materials and supplies, the purchase

of production quotas and the acquisition of working capital"? Is this

an addition to the scope of this act?

HON. MR. HEWITT:

That particular amendment is basically to clarify

section 2 of the

Agricultural Credit Act. The wording that was in that particular

subparagraph (

h) tended to leave some confusion in the minds of those

people who are well versed in legalese. This clarifies it and indicates

that it allows for a new subsection, you might say, and then provides

for other purposes relating the development of the operation of farms

as are authorized by regulations. It expands that and gives us the

ability to cover all the items, plus others.

MRS. WALLACE: I thank the minister for his explanation. It's both for legal reasons and to expand it.

Section 2 approved.

section 3.

MRS. WALLACE:

This of course still deals with the Agricultural Credit Act. As I

recall, this

section 4(2) that's being repealed is the one that allows

the minister to discount a loan. Why is he repealing this section?

HON. MR. HEWITT:

We have repealed

section 4(2) of the Agricultural Credit Act, but if

the member would look at the amendment bill, she'll note that we have

added

section 4.1(1), which deals with discount or reimbursement of

loan principal or interest.

Section 4(1) in the original act deals with

the lending of money. We also add

section 4.2, which deals with the

recovery of moneys that may have been paid out improperly. We've

expanded that section. Also, Madam Member, as mentioned in second

reading, we have included in

section 4 those references that were in

the Agricultural Land Development Act. This is the consolidation I

talked about in second reading, which would allow the Agricultural Land

Development Act to fall under the Agricultural Credit

[ Page 7795 ]

Act. Then we will have all our financial credit programs under one piece of legislation.

Section 3 approved.

section 4.

MRS. WALLACE:

In his response to my question about

section 3, the minister in fact

gave me some information about

section 4. I therefore waited until we

moved on to that. Certainly this is a very debatable section. The

provisos that were established under the Agricultural Land Development

Act, whereby you took a claim against land and applied it to land, had

some reasonable basis. To take any agricultural credit.... If a farmer

defaults through high interest costs, let's say, or for whatever

reason, that credit may be on any number of things, as we have just

talked about in a previous section. That credit could be on the farm

equipment, the quota, the machinery, I would expect on the stock, the

animals, the birds, whatever. If he defaults on the loan, this

section

gives the minister the right to put a lien against his property, to

file with the Land Registry in two different ways. I'm trying to find

the exact words here:

"The minister may

forward to the Surveyor of Taxes for a rural area, or to the collector

of a municipality for land in the municipality, a certificate

containing a description of the land, the name of the farm operator or

of the owner or occupier, and the total amount outstanding, whether

then payable or not.

"

(2) The Surveyor of

Taxes or the collector shall add the amount to the assessment roll and

it shall then be deemed to be taxes for all purposes of the Taxation

(Rural Area) Act or the Municipal Act, including collection and

recovery."

It's taking that loan, which for some reason....

Certainly there could be a good many reasons in this time of high

interest and low return, as well as the cost-price squeeze that farmers

are facing. This farmer could find himself with his whole property gone

because he simply cannot meet that tax bill. This seems very

heavy-handed treatment for the farm community at a time when we're very

critical of banks for foreclosing too quickly; at a time when we are

talking a lot about extended credit, when members of the business

community are approaching the banks and asking them to hold off on

foreclosures. Here we have a piece of legislation that is going to put

the farmer in a very vulnerable position, where any debt that he may

incur on any kind of property or equipment can immediately be applied

to his tax bill. And if he can't pay his taxes, of course we know what

happens — he loses his property. This particular

section seems very

heavy-handed and unfair treatment.

HON. MR. HEWITT: Mr. Chairman, I hope I can clarify this for the member.

She is dealing with two separate issues.

Section 4(2) primarily deals with

interest reimbursement, where we have paid an amount of money to a farm operator,

calculated under the interest reimbursement program, and have found at a later

date that he is not eligible for that. Therefore we have the ability to deduct

the amount that he has been paid in error from any future money. When you move

section 4(2)(1), under the heading of "Debt treated as taxes,"

and then over the page to sub-subsections (2) and (3), what you're seeing

there, Madam Member, is a transfer across, almost word for word, of sections

out of the Agricultural Land Development Act. It's just providing, in the

Agricultural Credit Act, the same sections that were in the Agricultural Land

Development Act.

There's

a difference between those two sections. One is a recovery of moneys

paid improperly to an ineligible person. The other is a debt that was

not repaid, and therefore the ability to place a charge on the tax

notice or assessment roll and to register a charge in the land titles

office. There are two separate issues being dealt with there.

MRS. WALLACE:

It's that second issue that I'm taking exception to. You may recall

that I indicated that that may have been reasonable for a debt which

occurred strictly related to the land; but when you take any debt that

a farmer may be responsible for and has government backing for under

the Agricultural Credit Act — that can be for any number of things,

including what we've just passed on quotas, machinery and all kinds of

different things — and you take that and put into place those dollars

owing, which may be quite a sizeable amount, to such an extent that the

farmer has to fold up his tent because he's not going be able to meet

that.... It's going to be considered part of his taxes. He's not going

to be able to pay them. He's going to be in default of his taxes and

he's going to lose his operation.

It seems to me that this

piece of legislation is simply driving farmers into bankruptcy. It

seems a very poor time to bring this kind of step into place. It’s very

heavy-handed at a time when interest rates are so high, and the

minister's own interest reimbursement program is so limited that it's

hardly doing anything to help the farm community. Those kinds of costs

are going to accrue, those kinds of situations are going to happen, and

we're going to find farmers forced out of possession of their land as a

result of this piece of legislation. It's an unfair way to treat the

farm community at a time when financial costs and interest rates are so

high. Farmers are facing a tremendous amount of debt, much of which is

out under the Agricultural Credit Act. I just cannot accept that, Mr.

Chairman.

Section 4 approved on the following division:

YEAS — 27

Wolfe

McCarthy

Williams

Gardom

Bennett

Curtis

Phillips

McGeer

Fraser

Nielsen

Kempf

Davis

Strachan

Segarty

Waterland

Hyndman

Chabot

McClelland

Rogers

Smith

Heinrich

Hewitt

Jordan

Vander Zalm

Ritchie

Richmond

Mussallem

NAYS — 25

Barrett

Howard

King

Lea

Lauk

Stupich

Dailly

Cocke

Nicolson

Hall

Lorimer

Leggatt

Levi

Sanford

Gabelmann

Skelly

D'Arcy

Lockstead

Barnes

Brown

Barber

Wallace

Hanson

Mitchell

Passarell

An hon. member requested that leave be asked to record the division in the Journals of the House.

[ Page 7796 ]

Sections 5 to 8 inclusive approved.

section 9.

MRS. WALLACE:

I want to congratulate the minister on this section. I'm very glad that

the Minister of Finance (Hon. Mr. Curtis) is in the House, and for his

information I would like to read the section.

Section 10 is amended and

renumbered, and "the maximum penalty that may be prescribed or imposed

for contravention of a regulation is a fine of $2,000." No minimum, Mr.

Chairman.

Sections 9 to 13 inclusive approved.

Title approved.

HON. MR. HEWITT: Mr. Chairman, I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Division in committee ordered to be recorded in the Journals of the House.

Bill 31, Agriculture and Food Statutes Amendment Act 1982, reported complete without amendment, read a their time and passed.

HON. MR. GARDOM: Committee on Bill 12.

HEALTH COST STABILIZATION ACT

The House in committee on Bill 12; Mr. Davidson in the chair.

section 1.

MR. COCKE:

Mr. Chairman, we will squelch the rumour that the House is running

about as well as the rest of the government. What we're dealing with

here is an appropriation — how we call it stabilization I'll never know

— of $77.8 million for hospitals. You'd never know that the hospitals

or the health-care system can look forward to this appropriation,

because they feel they've been robbed. We know that there is a

shortfall of at least $84 million in our hospital budgets this year.

Mr. Chairman, a year ago we warned that the cutbacks in the less expensive

areas and most productive areas of health care would severely damage the system.

We're finding that that's occurring, which is not to suggest that this

is the only problem we face. I am suggesting that if we saw real stabilization

in this section, if we saw an effort to put some money into reorganizing at

the community level, instead of spending all of our time totally preoccupied

with reorganizing the ministry itself.... When we discussed this bill in

principle yesterday, I suggested that the minister's further expenditure

on his report to, among others, the Socred caucus.... It's a report

that must have cost a fair amount of money and one that in this day and age,

unless it's a piece of political propaganda, shouldn't even be considered

by anyone knowledgeable in the field of health care. One of the things that

report said was that we in B.C. have a very high utilization of hospital beds.

I said yesterday and I say again today that that was just a terribly unfair

comparison. Yes, the report indicated that our hospital days are something in

the order of 8.5 compared to anywhere from 4 to 6 in the United States. Comparing

what to what?

can remember going to Prince Edward Island years ago, and at that time

they took care of chronically ill people in chronic hospitals or at

home. For some unknown reason, our hospitals have been overloaded — and

I'm talking about our acute hospitals now — with chronically ill

people. It's a system that is unable to respond to the needs of the

people of B.C.

I suspect that most of the $77.8 million that

we're voting for here has been spent. I also suspect that it is a means

of broadcasting that the government is doing something. Moreover, it's

a means of putting another item in the budget. Why wasn't it there in

the first place?

This is not the place for a prolonged

debate on health care. If we ever get to the minister's estimates,

that's where I feel that debate should occur. But I believe that in

this province today we're being badly served with a totally

disorganized health-care situation and that the expenditures should be

on coordination. I don't suggest for one second that we don't have a

large budget; we do. We know we get major sums from the federal

government and we know that we get major sums from user fees, but I'm

talking in excess of half of the $2.2 billion in the budget. In excess

of half of that comes from elsewhere.

We will all be much

more satisfied when we see a streamlining that will make our health

system something to be proud of in today's terms, so that we will not

be facing a waiting list for elective surgery of some 12,000 people and

will have a health system that will provide us an opportunity to save

lives, not divert ambulances. I suggest that then the people would be

most grateful.

We're not voting against this. It's an

addition, probably an afterthought forced upon the ministry after

having spent the money. I'll support the section.

HON. MR. NIELSEN:

I have just a few comments. I agree with the member for New Westminster

that the appropriate place to discuss the overview of health care in

the province is during the estimates, which will be along at the

appropriate time.

The member commented on an overview,

nonetheless, with respect to health. I would agree with him that the

people of any province — our province of B.C., certainly — would feel

more comfortable if they felt that the delivery of health care across

our country was not in any danger at all. That is one of the concerns

that many ministers of health in Canada are investigating now because

of their concerns along with the concerns of others.

The

moneys which are being appropriated in this bill will be used for

various aspects of health care in the province, not only for hospitals,

although hospitals will receive a portion of that money.

am just commenting, not arguing, about figures. One of the problems

which we find in the Ministry of Health, and in the health field in

British Columbia, I think, has been a desire — not necessarily for

negative reasons — or method which has developed over the years where

it is very difficult to accurately evaluate costs in the health field

in a precise form. There is no question that over the years, for

reasons not

[ Page 7797 ]

immediately

known — maybe reasons which have been forgotten — health costs were

deemed to be in a category quite inappropriate for that expenditure.

That is beginning to change and an attempt is being made to

specifically identify costs and to develop programs which more

realistically approach the funding method.

The final comment

I have is that I share the concern of people in the health field,

particularly in the hospitals, where they argue that to some degree

they are trapped by a system which is in need of considerable overhaul.

That is being considered and done. For purposes of this very brief

bill, the $77.8 million will assist the ministry, obviously, in paying

out moneys necessary for health-care costs in the province.

Section 1 approved.

Title approved.

HON. MR. NIELSEN: Mr. Chairman, I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 12, Health Cost Stabilization Act, reported complete without amendment, read a third time and passed.

HON. MR. WILLIAMS: Committee on Bill 40, Mr. Speaker.

HYDRO AND POWER AUTHORITY

AMENDMENT ACT, 1982

(continued)

The House in committee on Bill 40; Mr. Davidson in the chair.

section 2.

MR. COCKE:

Again in this

section we are giving Hydro a blank cheque. There has

been a tremendous amount of criticism of Hydro and their ability, as a

Crown corporation, to place this province deeply in debt. This

government, which tries desperately to make sure that they don't have

an operating deficit from the governmental activities, certainly gives

a creature of this government an opportunity to carry us deeply in the

hole. We are moving Hydro's borrowing from $7.2 billion to $8.3

billion. That is $1.1 billion of increased borrowing in a time of

restraint. I find the only aspect of this

section and bill that leads

me to be rather less accusatory than I was the last time it came before

me is that it isn't an ignominious bill this time. I do believe, having

listened over the years to criticism of the fact that Hydro has not

provided sufficient research into alternatives, that they've been as

slow as can be in the development of geothermal power. I know we're

getting somewhat nearer to the first geothermal power station in the

interior or up around Pemberton. Those are the kinds of things we

should have been watching for and enthusiastically applauding. Instead,

we say: "Spend her. Take your $1.1 billion and run. If you want any

more, come back next year to the Legislature and we'll give it to you

again."

I wonder what the discussions are between the

cabinet and Hydro when they come in asking for this kind of borrowing

power. I think the government listens to the minister who is on the

board. He becomes totally convinced that the only way to go is to

continue to throw us more deeply into debt, and the cabinet says:"Okay,

let's prepare a bill, bring it before the House." They, prepare a

section such as this, put it before the committee, and the committee

votes to give them additional borrowing power of $1.1 billion. I

wouldn't mind so much if I didn't continually hear this government talk

about our not being in debt. Since this group has been in power, we

have had more Crown corporations than Carter has pills. There's anew

Crown corporation developing every day.

I'm getting right

back to the section, Mr. Chairman. The

section reminds me of all the

borrowing that's going on. What could be a greater reminder than $1.1

billion?

Mr. Chairman. I find it very difficult to support

this section. I find it particularly difficult with all those Liberals

over there. Those Liberals in that cabinet use to sit on this side of

the House and vote against this

section every time it came before the

committee. I sat and witnessed it year after year. The Attorney-General

(Hon. Mr. Williams), the Minister of Intergovernmental Relations (Hon.

Mr. Gardom) and all the rest of them voted against that $1.1 billion —

or whatever the sum was at that time. They won't vote against it today,

nor will anyone on the government side. The reason they won't vote

against this $1.1 billion increase in borrowing power is because that

government is a creature of Hydro, not the reverse. It's a gargantuan

monster gone wild. It's got us so deeply in debt — and continues to get

us deeper in debt — that we are now standing here in the quiet of the

afternoon and giving them another $1.1 billion.

The Health

minister (Hon. Mr. Nielsen) isn't giving the hospitals what they need.

The other ministers aren't giving the creatures of government what they

need. But we'll give Hydro the opportunity to go into the market and

borrow $1.1 billion at fantastic interest rates. How could one support

that?

Will the minister get up and tell us what they are

going to do with the $1.1 billion they already have? It's such a nice

brush stroke: a little bit of this and a little bit of that. Mr.

Chairman, read Hansard and see how definitive that statement

was, It's the normal kind of definitive statement I would expect from

the Minister of Energy.

Mr. Chairman, I am not really very happy about this particular

section of this particular bill.

MR. HALL:

Sixteen years ago I contracted, on behalf of my wife and I in my new

house, a regular monthly payment to B.C. Hydro for the services that

B.C. Hydro was providing for me. It was a regular monthly amount. I had

occasion to cheek that just recently because I was curious to find out

where my money was going each month. I seem to have too much month left

at the end of my money, which is a frequent happening for a lot of

people these days. On checking, I found that my hydro bill — which is

how most people describe this activity, and that's what we're really

getting down to when we're discussing this

section — had gone up 400

percent in 16 years. My wages haven't gone up 400 percent in 16 years,

but then I'm in a funny trade. Other people's have; some people's

haven't. Hydro has gone up 400 percent in 16 years. I now read the

newspapers and find out that it's going to go up roughly 100 percent in

the next three years.

[ Page 7798 ]

question to the minister — and it's a genuine question; I'm here to get

information as well as anything else — is this: I'd like the minister

to tell us what effect this

section will have on our monthly hydro

bills in terms of debt servicing.

The last time I worked

this out, Bob Strachan was in the House. In those days it was about 26

cents on every dollar to service debt. It's got to be about 50 cents

now. I'd like the minister to tell us that. I don't see how we can

really swallow 50 cents on every dollar of hydro's bills servicing

debt. That's megadebt. When half your bill is to pay debt, that's

megadebt. That's crushing, unsupportable, Socred megadebt. That's the

best way I can put it. That's not restraint. I'd like to know what the

effect is of the kind of borrowing in

section 2 that lifts the

borrowing power of B.C. Hydro to $7 billion. What effect does that

have? Working its way through the system, soaking up some of the

available capital from coast to coast — and offshore as well — what

effect is it going to have? More importantly, in the short run, what

effect is it going to have on the public, who are paying their hydro

bills? What effect is it going to have at the bargaining table? How can

I go out and carry the Premier's message of restraint and at the same

time say: "Oh, by the way, you'll be paying more for your hydro."

How

can I go out and carry the Minister of Health's (Hon. Mr. Nielsen'

s) message about not getting sick? For God's sake, don't go to the

hospital — and you're going to pay more interest on your hydro bill.

You

can't have it both ways over there. You can't tighten the belt on one

side of the ledger unless you tighten it on the other. That's why we

find this kind of activity a little hard to take. That's why we can't

allow this unfettered borrowing to go on, this headlong plunge into

further debt, without a much more rational explanation than that which

we're getting.

Simply stated, it's a 400 percent increase,

with 100 percent already asked for — the headlines are already out in

the newspaper — because of government action. There's no water.... It's

you people who have put the increased costs on your own corporation.

You're increasing user charges for those corporations. Now you've got

this going on. What's the cost of it all in terms of the bill that I'm

asking my wife to pay out of our wages, our cheque? And that goes for

the 2.5 million people who live in British Columbia.

That's

just one aspect of it. There's the industrial side of it they have to

pass that charge on. When they pass that charge on, I know what

happens. I used to be an executive in a department store. As soon as we

got an increased hydro bill, up went the prices: on went the nickel on

top of the cigarettes, on went the nickel on the box of confectionary,

on went the nickel on the drugs, on went the nickel on all the things

that the Hudson's Bay, which I used to work for, used to sell. Pass it

on. As long as they get their 12.5 percent on invested capital

including accounts receivable.... Pass it on. So it's a vicious circle.

Because, you see, it's not only just the question of the increased

bill; it's the profit on the increased bill that has to be passed on.

You don't have to be much of an economist to know that goes on —

particularly in the service industries. It's on and on and on.

[Mr. Strachan in the chair.]

Mr. Minister, in a quiet little chat on a Wednesday afternoon, I'd like

you to tell us what Mr. and Mrs. Average Consumer, for a start, can expect to

be paying in the form of debt payments out of every dollar on their Hydro bills,

and a more rational explanation of what is going on in terms of Hydro's

program of trying to do with less.

HON. MR. McCLELLAND: I'll attempt to answer a couple of the questions asked this afternoon.

This

borrowing authority is not a blank cheque for B.C. Hydro. The borrowing

authority simply gives Hydro the authority to attempt to borrow that

money as needed. I remind the members again that the Minister of

Finance of the province of British Columbia is the fiscal agent for

B.C. Hydro. Hydro makes no borrowings without the approval of the

fiscal agent. Hydro's board of directors, which was appointed to serve

as one more watchdog over Hydro's activities, can pass resolutions

approving borrowing up to certain levels, but only as approved by the

Minister of Finance. So the Minister of Finance has the responsibility,

because the province guarantees the debt of B.C. Hydro, to actually

make those borrowings. In the past couple of years, a very good

relationship has been developed between B.C. Hydro's financial

management group and the Minister of Finance's financial management

group. There is more responsibility built into Hydro now than there

ever has been.

You will also recall that I've mentioned that

the British Columbia Utilities Commission has now, for the first time

in the history of B.C. Hydro, the responsibility for full regulation of

Hydro's rates and the way in which Hydro operates. That's a measure of

accountability which has not been there before.

The total

debt of B.C. Hydro represents about 5 percent of gross provincial

product. The ratio is lower than it was 20 years ago. I also would

confirm to the member that a very substantial part of all our B.C.

Hydro bills is for debt servicing. It's about 46.5 percent at the

present time. Last year it was 48.25 percent, so it's down somewhat

this year. I expect it will be reduced somewhat more as Hydro moves to

a more realistic and better operational ratio between its assets and

its debt.

I'm sure the member is right that his Hydro bill

has increased 400 percent in the past 16 years. I guess a lot of things

have, unfortunately, the way our inflationary society has been

operating. If the member was talking about his salary as a member of

this Legislative Assembly, I think that probably 16 years ago it was

around $5,000 or $8,000 at the most. I expect that it's increased over

1,000 percent since then. Everything is relative.

I think

that Hydro's debt is very large, and it's a matter that should concern

this House. Rightfully so, it becomes part of the debate. But I don't

accept that Hydro is out of control or unmanageable. I think some of

the measures we've put in in the past two years have shown that we can

manage Hydro's operation. We are certainly managing its debt, I

believe, in a more responsible manner than in the past; at least with

more responsibility, perhaps not better.

I gave this House

last week, and I don't remember it ever happening before, a very

detailed list of all the projects for which this borrowing is required.

It's in Hansard . I also explained that as a result of some of

the scrutiny, both internally at Hydro and externally by the ministry

and the B.C. Utilities Commission, those projects have already been

scaled down quite substantially from a total of around $1.8 billion in

actual projects down to just about $1.5 billion. That's a substantial

$300 million reduction as a result of having a second look at some of

the load forecast requirements of B.C. Hydro.

[ Page 7799 ]

With

that, I urge that in order that Hydro can continue to operate

responsibly and in a manner which will ensure that British Columbia's

energy needs are met over the next year, all members support this

section.

MR. HALL: I appreciate the answers. There's

46.5 percent currently. That's before we borrow the difference between

$7.2 billion and $8.3 billion. That's $1.1 billion. It's 46.5 percent

now. When we borrow that $1.1 billion, it's going to go up.

HON. MR. McCLELLAND: No.

MR. HALL:

Okay, we'll take the minister's word for it. It is 46.5 percent now.

That is 46.5 cents on every dollar going to service debt. I thank the

minister for that answer.

I said that a 400 percent increase

over 15 or 16 years may fit into a number of things. A lot of people

have wrong ideas about values of certain products now compared to the

thirties and forties and so on. It is amazing to look at how long it

used to take a worker in our basic industry to cam enough money to buy

basic products compared to now. Some very amazing facts come out. He

mentions, of course, our own individual cases. You can't really compare

what was happening 16 years ago in this House to what is happening now.

All of the MLAs, unless they were retired gentlemen — if I can use that

expression — that the Premier of the day used to often think we

were.... He used to think that the indemnity was only the re-election

money. He used to say that outside in the corridor, you may be

interested to know, Mr. Chairman. He thought that the $5,000 to $8,000

indemnity was just the money to get re-elected with. You can't compare

the tasks of the two jobs now.

I have one last question. Is any of this $1.1 billion of new borrowings scheduled for repayment of old debt?

HON. MR. McCLELLAND:

When I shook my head at that comment about whether or not that portion

of the total bill would be higher next year.... I expect it won't be,

because a couple of things have happened. One of them is that we have

established an interest ratio which should bring that down year by

year. It has come down in the past year and I would hope it will come

down next year as well. Also, the B.C. Utilities Commission has ordered

B.C. Hydro to establish a rate stabilization fund out of surplus

revenue, which Hydro has not done up to this point. A good portion of

revenue from surplus sales of electricity now must be put into a rate

stabilization fund at the order of the B.C. Utilities Commission, which

should help improve that situation even more.

As I mentioned

in opening second reading of this bill some time ago, about 2 percent

of the principal amount of the debt is deposited annually to sinking

funds from Hydro's general revenue to ensure some orderly retirement of

these debts.

MR. BARRETT: I have a couple of

questions for the minister. Can he tell the House if it is the

intention of the government within the foreseeable year — in terms of

the statements that have to be made to the Securities Exchange

Commission and the disclosures — to sell off any of B.C. Hydro's

assets, such as the gas distribution system?

HON. MR. McCLELLAND: The answer is no.

MR. BARRETT:

Mr. Minister, could you tell us if at any time in the last five years

since your administration the Minister of Finance has refused Hydro's

request for borrowing?

HON. MR. McCLELLAND: I haven't been involved in all that time. I think that question would he more likely asked of the Minister of Finance.

MR. BARRETT: Do you recall any time since you've been directly involved?

HON. MR. McCLELLAND:

I am not involved directly. The Minister of Finance is the fiscal

agent. There may have been times; I couldn't answer that question. I

would suspect that since there is a good working relationship between

B.C. Hydro and the government of British Columbia that that kind of

thing wouldn't likely, happen. Those things would be worked out between

the two parties. I would expect that that is the way we operate our

Crown corporations.

MR. BARRETT: In response to the

member for Surrey (Mr. Hall), the minister left the impression that the

Minister of Finance was monitoring these things. I do not recall any

single instance where the provincial government has said no to any

specific project of funding by B.C. Hydro. I don't believe it's

happened. Mr. Minister, I know you are busy, but I find it a little bit

surprising that you don't know. Having made the statement to the House

that the Minister of Finance can do this, you don't know whether or not

he has done it. It is not incompetence, but I find it puzzling. You of

all people. When you were in opposition there was never a quiet moment

from you on a bill like this. Screaming, wild accusations and unfounded

charges were part of your method of operation. Now you come in this

House and you can't even answer a question that you opened yourself.

You're the Minister of Energy, Mines and Petroleum Resources, and you

don't even know whether or not any, single Hydro request has been

stopped by the Minister of Finance. You're candid about it, but I'm

shocked that you, the know-it-all opposition member who made wild,

irresponsible charges, admit that you don't know what's going on. I'm

shocked. That doesn't square with your image of quiet responsibility

this afternoon. It doesn't square with the impression that everything

is under control. You don't know what the heck is going on. You come in

here to try to tell that member that everything is hunky dory. When we

left office.... I'll show you how much debt you're piling up on the

people of this province. Hydro is out of control, and you as the

government haven't got an idea from day to day what Hydro is doing. You

come in here and rubber-stamp borrowings, and you don't even know

whether or not the Minister of Finance has ever turned down a request.

Hydro is running circles around you,

When was the last time

you did an audit of how many engineers they've got on staff over there

and what kind of restraint is going on over there? When was the last

time you asked questions about the administration over there" When was

the last time that you gave a report to this House or an explanation of

why in the six years of your administration the debt charges that my

friend from Surrey has mentioned have gone up from $133 million a year

in our last full year in office to $400 million a year under the

bungling of Social Credit?

Are you asking us to be accountable for this kind of massive borrowing by B.C. Hydro when you're the fellow

[ Page 7800 ]

who

ran around and attacked us for borrowing money at 9 3/4 percent?

Wouldn't you like to get 9 3/4 percent money in Canadian today? Why did

you attack it then? Because you were irresponsible in opposition and

you're irresponsible in government. There was no way that money could

be borrowed anywhere else in the world in terms of the needs of British

Columbia, and you nearly destroyed a market for us to borrow money on a

competitive basis. You drove away a chance for the people of this

province to have a wider range of borrowing potential because of

irresponsible statements when you were in opposition — wanton

irresponsibility. I was under the impression, when you made those

attacks and charges, that you would be a good supervisor, a good

watchdog, but you are the worst government, in terms of supervising

Hydro, that has existed in this province since that became a Crown

corporation.

Look at these shocking figures! We had a nice,

quiet little afternoon.... Who was it who put a $100 million charge on

the backs of businesses in this province with the sneaky way of picking

up new tax revenue? It was your government. What's a hundred million to

you? Not very much. You blew $11 million on a cockamamey heroin

treatment program that you never justified. You throw more money away

on little wild schemes, because you are Mister Know-it-all.

AN HON. MEMBER: Fourteen million.

MR. BARRETT:

Fourteen million, was it? Oh, well, what's the difference to him? He

comes in here this afternoon for a quiet little talk about how the

Minister of Finance will supervise it, but if he's asked a simple

question once under Social Credit that the Minister of Finance stop the

borrowing, he doesn't even know the answer. Incompetence, bungling....

AN HON. MEMBER: Slothfulness.

MR. BARRETT:

"Slothfulness" may indeed be a word to be used. I'm telling you that

you show no sense of the responsibility that you proclaimed so piously

when you ran around this province attacking borrowings. You have driven

the taxpayers of this province into debt; you have doubled the debt in

five years and you intend to double it again with the likes of this

bill.

Well, I find it very interesting. This so-called group

of businessmen who told the people of British Columbia that they were

going to show fiscal responsibility showed the people of British

Columbia that they are incompetent in dealing with massive amounts of

money; ruined the money market that could have saved the taxpayers

hundreds of millions of dollars, by irresponsible statements during the

time they were in opposition; attacked statements that were in the SEC

declaration of B.C. Hydro, acted wantonly and destructively as a group

while in opposition and, as a consequence, cut off access to European

borrowing at a time when we had the leverage and the debt load of B.C.

Hydro was not nearly as high as it is now.

That member in particular was one of the wild, irresponsible members of the

opposition, and now he comes in piously this afternoon asking for a billion

and says, "Oh, well, don't worry, the Minister of Finance will supervise

it," but when asked a question, he doesn't even know when, if ever,

the Minister of Finance said no. He casually announces that he is going to go

ahead, and that B.C. Hydro goes ahead.

Are

you aware that the corporation was talking about export after

completion of Mica? Are you aware of that? I'm referring to the

Revelstoke project above Mica. Are you aware of that? Did you approve

of that export? Is that a government policy?

AN HON. MEMBER: It's not export.

MR. BARRETT:

No, they're just going to sell it to the Americans. It's not export; it

becomes Canadianized in the transmission lines. You don't even know

what's going on. You are as much a failure in this responsibility as

you were when you were the Minister of Health, only this time there's

no Rafe Mair to clean up after you.

Interjection.

MR. BARRETT:

Oh, picking on you! I sat through all that garbage that he threw across

here. He destroyed a marketing possibility for us to borrow money in

Europe — petrodollars — and now we're faced with interest rates of 17,

18 and 19 percent because of Social Credit bungling. You've driven the

debt load up from where we paid $133 million six years ago to where

we're now paying $400 million in interest, and you try and tell that

member down there that it has piled up over 20 years. You go ahead and

talk and chat over there. You're driving this province's credit rating

to a very thin edge. You're irresponsible in terms of the kind of

borrowings you're piling up.

HON. MR. WATERLAND: It's a triple-A edge.

MR. BARRETT:

My good friend, do you realize what they're doing in terms of this

massive Hydro borrowing? They're jeopardizing funds in the private

sector as well in terms of driven-up costs for industry. Has there been

one word of explanation in here to the forest industry or to the mining

industry as to why it has to pick up the additional bill of the water

licence fees that you found as a nice, sneaky way of collecting more

money from the private sector? Cominco is closing down this summer.

They've got an additional $9 million bill to pay because of the

increase in water licences as a roundabout way of paying this massive

debt on B.C. Hydro. I haven't heard a single word out of the Ministry

of Mines in sympathy to Cominco and the workers up there. The charges

you brought on them! Send a card of sympathy. Some big deal! The

Minister of Forests (Hon. Mr. Waterland) hasn't said a word about any

kind of help to the forest companies in terms of the additional charges

that they'll get out of this irresponsible management of Hydro. You

have no supervision of Hydro. You put in your political man, Robert

Bonner, and it's been politics from day one, and there has been no

supervision of B.C. Hydro.

You come in here and say the

Minister of Finance will supervise.... Do you know what you would have

done if we had given you that kind of answer when we were in

government? You would have frothed at the mouth, which was a frequent

occurrence. You talked about kids in the Empress Hotel and made up

anything you wanted when you were opposition. Now you're responsible,

and what you reveal when you're responsible is that you don't know

what's going on. What a failure! But you think it's okay because you're

Social Credit and you're protecting free enterprise. You tell us and

you tell the taxpayers why the people of this

[ Page 7801 ]

province

— whether they were Social Credit, Liberal, Conservative, NDP or

anything else — had a debt load of $133 million a year in 1974, and

under Social Credit in 1980-81, it was $400 million a year.

Supervision?

Control? Restraint? You tell us the last time there was an outside

audit of staffing and supervision at B.C. Hydro. What do their expense

accounts look like? Are they still flying the Mitsubishi? Come on, Mr.

Minister. That B.C. Hydro has become a spoiled brat in British Columbia

because its parent has neglected the kind of supervision that it should

be giving.

Who is it out there that every one of us hears

about when we travel around this province? What are the complaints

about? They are about B.C. Hydro: "Insensitive, huge charges, massive

debt." We get a chance to ask a few questions in the House today and

the minister doesn't even know whether or not the Minister of Finance

(Hon. Mr. Curtis) once told Hydro they couldn't have what they wanted.

That spoiled brat!

You're not running Hydro, Hydro's running

you. Hydro has more power than this cabinet has. They tweak their thumb

on their nose at you, Mr. Minister, and laugh at you all the way to New

York when they put us deeper, deeper and deeper into debt on the

American market. It was your irresponsible statements in opposition

that cut out access to petrodollars. What administration borrowed $300

million in Canadian funds over a nine-year period at 9.75 percent and

had irresponsible opposition members running around all over this

province saying: "Oh, naughty, naughty. They're taking Arab money"?

They deliberately left the impression around this province that we had

sold B.C. Hydro to the Arabs. Me, of all people!

The fact

that they even loaned money was incredible in terms of the

international situation at that time, and I went out to get the best

deal for the British Columbia taxpayer that I could, and it's never

been equalled since by this government. I borrowed at 9.75 percent in

Canadian money. Oh, they laughed when they were in opposition when I

did it. They got on the hotlines and they said: "Oh, we're going to be

driven into debt."

This is nothing more than a fiscal

wrecking crew when it comes to B.C. Hydro. You stand up there and tell

the member for Surrey (Mr. Hall) that the Minister of Finance is

supervising, and you can't even tell us one instance. Do you blame it

on your staff that you weren't prepared to come in here? Who do you

blame when you don't even know the answers when you're talking about

driving the taxpayers of this province deeper and deeper into debt by

something which was once a proud, publicly owned Crown corporation and

that has now become nothing but a fiscal albatross around every

homeowner in this province? Lord knows what you would have done if

you'd gone nuclear. The only thing that stopped you going nuclear was a

political decision, thank goodness, by the Premier when he got scared.

Interjection.

MR. BARRETT:

Well, my dear friend, you take a look at Washington state, and the

billions of dollars of debt piled up down there because of

irresponsible governments like this one here. You have people cutting

off their hydro in their homes. In Washington state they are in debt

now to the tune of $12 billion to $14 billion for non-completed nuclear

plants. There's not been a kilowatt out of them, and they're not going

to complete them. Who is making up that power? We are. You don't tell

me that you're not exporting power. The only thing Hydro is bragging

about is peddling some interrupted power to Washington state. When does

the change take place between interrupted power and firm power under

political pressure?

I don't think this government has

learned a single thing about the Ontario experience in regard to that

kind of commitment. The gentle little walk in here today and the gentle

little talk about money.... You've piled debt on the backs of the

Canadian and British Columbia taxpayers in an unparalleled manner. God

rest the soul of W.A.C. Bennett. If he were here in this House today,

he wouldn't believe that that party that's bringing in this bill would

dare call itself Social Credit in terms of the debt that it's piling

up. Whatever happened to "pay as you go" under Social Credit? Whatever

happened to the philosophy of not putting this province in hock to the

moneylenders? You tell me, Mr. Chairman.

We've gone

from $133 million a year in interest charges and they used to scream

"irresponsibility" — to $400 million a year in interest charges. and

there's not a peep out of the minister to indicate that he knows a fig

of what's going on. He comes in here and tells us that the Minister of

Finance is supervising it, and then, when asked a simple question — "Do

you know of one time when he's stopped something?" —he said: "I don't know."

That

member was part of that same old screaming gang. It's partly that

member's responsibility that access to alternate competitive marketing

for financing, for cheaper money, was cut off because of irresponsible

political statements just to gain power. You attacked those markets.

You certainly did. When was the last time you went to Europe and got

some lower-cost money? Not in a pig's eye. You're paying $45 million up

front to lower the cost of borrowing for those crazy tunnels and

leaving debt all over this province — debt that the taxpayers will have

to pay. Cece Bennett never would have had them in the cabinet.

MR. CHAIRMAN: Order, please.

I will ask the Minister of Industry and Small Business Development

(Hon. Mr. Phillips) to cease what he is doing. The Chair finds it

offensive.

Please continue with

section 2 of Bill 40.

MR. BARRETT: Mr. Chairman, I want to thank you for telling the minister to stop being normal.

MR. LAUK: He's got some sort of twitch.

AN HON. MEMBER: You've driven him out.

MR. LAUK: Are you going out for your medication now?

MR. BARRETT: I hope you don't go out and borrow more money in the name of the taxpayer. We are in enough of a mess now, I’ll tell you that.

The

people of British Columbia have never heard the whole story of what's

gone on under B.C. Hydro, under the mismanagement of Social Credit —

incompetence and bungling mismanagement.

HON. MR. McCLELLAND: Tell us the whole story.

[ Page 7802 ]

MR. BARRETT:

The whole story is right here in the annual reports. Debt service has

gone up from $133 million six years ago to $400 million a year, and

every time you turn on a light switch you are paying for Social Credit

incompetence. You don't even know what your power needs are. You talk

about the public utilities commission, and B.C. Hydro appears in front

of it. You are asking us to give a blank cheque to this kind of

borrowing. You go up to the hearings at Site C, and the first position

of the government, through Hydro, is: "We need more power." Then you

walk away three weeks later and say: "We've reconsidered our position."

Have you not broken up Hydro's team on Site C? Answer that question.

Are the personnel that were with Hydro still on that Site C team? Do

you know that? Answer that. Write it down. I'd like to know whether or

not you know the answer to that.

You tell me what

supervision you are effecting. When was the last time you said no to

that spoiled brat — that wild cookie monster, B.C. Hydro — that gets

any single thing it wants and has driven debt sky-rocketing out of this

province? Have you done any projections or research on the point we may

be reaching with this massive debt, where people start cutting off

Hydro and going to alternate power? Have you done any checking on that?

What is your policy under this borrowing in terms of upping the

permissible amount that Hydro will buy back from private power

producers? Do you know the answer to that? I would like to know from

you today exactly what kind of fiscal responsibility you're going to

show to cut this debt down and cut that monster off.

You

talk about restraint here. You tell people to cut back their incomes,

and you cut back hospitals. Hydro is out of control and is showing

absolutely no restraint, and you've given no indication that you've

pared a single penny of expenses from Hydro — nothing. How do y