March 21, 1977 ALBERTA HANSARD 377 LEGISLATIVE ASSEMBLY OF ALBERTA Title: Monday, March 21, 1977 2:30 p.m. [The House met at 2:30 p.m.] PRAYERS [Mr. Speaker in the Chair] head: INTRODUCTION OF BILLS Bill 15 The Planning Act, 1977 MR. JOHNSTON: Mr. Speaker, I request leave to introduce Bill No. 15, The Planning Act, 1977. DR. BUCK: You're kidding, Dick. MR. JOHNSTON: This being a money bill, his Honour the Honourable Lieutenant-Governor, having been in­ formed of the contents of this bill, recommends the same to the Assembly. Mr.

Speaker, the purpose of this act is to provide the guidelines and related principles which are intended to achieve the orderly and economical de­ velopment of land in the province of Alberta. This act recognizes the need to maintain the quality of physi­ cal environment for human settlements, while weigh­ ing the rights of individuals and the greater public interest of all Albertans. While many changes in planning approach and procedure have been reflected in this act, there is a recognition of local autonomy over development and further opportunity for munici­ pal responsibility for subdivisions.

A somewhat dif­ ferent terminology and process are suggested for the various statutory plans provided in the act. Develop­ ment control and the process of zoning are consid­ ered in a single land use by-law. There is also the requirement for all municipalities to establish public participation in statutory planning by-laws. While this act has had considerable opportunities for input from the participants, I look forward to the debate in this Assembly during the spring session. [Leave granted; Bill 15 read a first time] head: TABLING RETURNS AND REPORTS MR. HYNDMAN: Mr.

Speaker, I wish to file two copies of a document, being background information with respect to economic and inflation indicators. Copies will be available in members' mailboxes this afternoon. DR. HOHOL: Mr. Speaker, I should like to table the first annual report of the Alberta Students Finance Board. head: INTRODUCTION OF SPECIAL GUESTS DR. BUCK: Mr. Speaker, I wish to take this opportuni­ ty to introduce to you, and through you to the members of the Assembly, a large group of grade 9 students from Tofield in my constituency. They are accompanied by their teachers Mr. Blades and Mr. Hulkovich.

They are seated in both galleries. I would ask them to rise and receive the welcome of the Legislature. MR. GETTY: Mr. Speaker, I'd like to introduce a group of students from the Richard Secord school. The 25 students are accompanied by their teacher Louise Heggerud. They are in the public gallery, and I would ask them to stand and be recognized by the House. MR. TAYLOR: Mr. Speaker, I would like to introduce to you, and through you to the hon. members of the Legislature, some 35 students from one of the finest junior high schools in Alberta in the village of Carbon.

These students are accompanied by two teachers Mrs. P. Reddekopp and Mrs. P. Hanna, one parent Mrs. V. Goldhammer, and bus driver Mr. R. Harsch. I would ask the teachers, the parent, the bus driver, and the students to stand and be recognized by the Legislature. head: ORAL QUESTION PERIOD Rent Control MR. CLARK: Mr. Speaker, I'd like to direct the first question to the Minister of Consumer and Corporate Affairs. It flows from the question asked by my col­ league on Friday.

Is the minister planning to intro­ duce legislation which would require landlords to give two months notice prior to increase or change in rent? MR. HARLE: Mr. Speaker, the Institute of Law Research and Reform has given some recommenda­ tions to the government, but I don't recall that being one of them. MR. CLARK: A supplementary question to the minis­ ter. Is the government then giving consideration to introducing an extension to the rent control legisla­ tion that would contain a provision which would have retroactive features?

I raise the question because of the minister's comments that the government will not have made a decision on the continuation of rent controls before the end of this month, and remind the minister of the need for three months' advance notice to be fair to both renters and landlords. MR. HARLE: Well, Mr. Speaker, the government will be making a decision on whether to extend The Temporary Rent Regulation Measures Act in April, and the announcement will be made. If it is extended, of course a bill will be presented in the House. MR. CLARK: Mr.

Speaker, is the government giving active consideration at this time to the concept of cutting the three months notice to two months so in fact May and June would be the two months needed

378 ALBERTA HANSARD March 21, 1977 for notice before rents could be increased or changed? MR. HARLE: Well, Mr. Speaker, I think it would be highly unlikely. MR. CLARK: A further supplementary question to the minister, flowing from the minister's remarks outside the House. At what stage is the government's con­ sideration now to exempt areas outside Edmonton and Calgary from the provisions of the rent control legislation? MR. HARLE: Mr.

Speaker, I've said on a number of occasions on which the subject of controls and decontrols has been discussed that in fact some pro­ visions for exemptions are already built into the pre­ sent Temporary Rent Regulation Measures Act. DR. BUCK: A supplementary question to the minister. If the minister will recall, three weeks ago I asked about Athabasca Realty Company's notice of over 20 per cent rent increase. Mr. Speaker, in light of the fact that the 15-day intervention period has elapsed, can the minister indicate what, if any, percentage increase will be allowed to Athabasca Realty on June 1? MR. HARLE: Mr.

Speaker, I'd have to take that ques­ tion as notice. MR. CLARK: A further supplementary question to the minister. Is the government at this time giving active consideration to making an exemption for all areas outside Edmonton and Calgary as far as rent controls are concerned? MR. HARLE: Mr. Speaker, as I said in the House, the matter of whether the bill will be extended has not been decided upon. MR. CLARK: Mr: Speaker, perhaps I could have a try at the same question again.

Recognizing that the final decision hasn't been made, is the government giving consideration at this time to the concept of exempting all the province, excluding Edmonton and Calgary, from the rent control program? MR. HARLE: Well, Mr. Speaker, the government is obviously considering all types of possible solutions to the problem. MR. NOTLEY: Mr. Speaker, a supplementary question to the hon. Minister of Consumer and Corporate Af­ fairs.

Is the minister in a position to advise the Assembly whether the government is specifically considering an extension from July 1 to December 31 to coincide with Alberta's participation in the AIB? Is this specific option now before the government? MR. HARLE: Mr. Speaker, I suggest to the hon. member that all options are open, and when the decision has been made it will be announced in the House. MR. CLARK: A further supplementary to the minister. I would like the minister to explain why he refuses to indicate that the government is giving any considera­ tion to the . . . MR. SPEAKER: Order please.

It's well established in the long history of the Oral Question Period that the minister is not obliged to answer nor is he obliged to explain why he doesn't. MR. CLARK: Mr. Speaker, then we will rephrase the question. I would like to ask the minister to explain the government's policy, which is that the minister will speak outside the Legislature Chamber of exempting the areas outside Edmonton and Calgary as far as rent controls are concerned, but will not discuss it inside the Chamber. MR.

SPEAKER: The hon. member may have a grie­ vance there, but he doesn't have a point which could properly be raised in the Oral Question Period. MR. CLARK: He's almost ready to answer it. MR. NOTLEY: A supplementary question to the hon. minister. Can the minister advise the House at this time whether the government has in its possession accurate statistics on the vacancy rates in the centres outside the two major cities, including the smaller centres? MR. HARLE: Mr. Speaker, I refer that question to the Minister of Housing and Public Works. MR. YURKO: Mr.

Speaker, during the last several months the Department of Housing and Public Works has done an extensive analysis of the vacancy rates through centres in the province other than Edmonton and Calgary. Such a report has been compiled, and it shows that some of the smaller centres have fairly high vacancy rates but that some do have low vacan­ cy rates. MR. NOTLEY: A supplementary question to the hon. minister. Is it the government's intention to table that survey in the Legislature? MR. YURKO: I hadn't considered it, Mr. Speaker.

That's a matter for the Order Paper, and government will then give consideration to whether this study should be made public. Agricultural Development Corporation MR. CLARK: Mr. Speaker, I would like to direct my second question to the Minister of Agriculture. Could he indicate when we could expect the annual report of the Ag. Development Corporation for the year '76-77? MR. MOORE: Mr. Speaker, the annual report of the Agricultural Development Corporation is based on a fiscal year ending March 31. The annual report for the year ending March 31, 1976, was tabled in the Assembly last fall.

I would expect the annual report for the year which will end on March 31, 1977, could be available about October or November. MR. CLARK: A supplementary question to the minis­ ter. Is the minister in a position to indicate to the

March 21, 1977 ALBERTA HANSARD 379 Assembly whether the Agricultural Development Corporation will either be foreclosing or having to pick up any further guaranteed loans which flow from the various ventures the Alberta Export Agency got involved in? Is the minister aware of any additional loans that the Ag. Development Corporation will be picking up? MR. MOORE: First of all, Mr. Speaker, I don't really feel that is a proper kind of question for the Oral Question Period. I don't believe the Ag. Development Corporation per se has been involved in picking up loans from the Alberta Export Agency.

Indeed the guaranteed loan program of the Alberta Export Agen­ cy involved the Provincial Treasury, not the Agricul­ tural Development Corporation. MR. CLARK: A further supplementary question. Is the minister aware of a guaranteed loan that the Agricultural Development Corporation gave to St. Paul Auction Mart and, if he is, could he give us the status of that loan? MR. MOORE: Mr. Speaker, it's my understanding that on Wednesday morning the Public Accounts Commit­ tee will be reviewing the Agricultural Development Corporation.

I would be prepared at that time to provide some information with respect to what the hon. Leader of the Opposition is referring to, but I'm not at the present time. MR. CLARK: Mr. Speaker, a supplementary question to the minister. Is the minister aware of the treasury branch system foreclosing on a $200,000 loan to St. Paul Auction Mart, and has the Agricultural Devel­ opment Corporation had to pick up the $200,000? MR. MOORE: Mr. Speaker, I'm aware of loan guaran­ tees to St. Paul Auction Mart Limited, but I'm not aware of the allegations being presented by the Leader of the Opposition. MR. CLARK: Mr.

Speaker, a further supplementary question to the minister. Have there been discus­ sions between the minister and the chairman of the Ag. Development Corporation with regard to a state­ ment of claim being lodged against the St. Paul Auction Mart for this loan, which was made by the treasury branches and has been called in by the treasury branches? MR. MOORE: Mr. Speaker, I have weekly meetings with the chairman of the Ag. Development Corpora­ tion. I speak with him by telephone almost daily. I'm not prepared in the question period to indicate the nature of those conversations. MR. CLARK: Mr.

Speaker, then, very specifically to the minister. Has the minister at any time in the course of the last year given instructions to the chairman of the Agricultural Development Corpora­ tion that a statement of claim should not be lodged against the St. Paul Auction Mart? MR. MOORE: Mr. Speaker, I've just finished saying that I'm not prepared to divulge in the question period the nature of various conversations I have with the chairman of the Agricultural Development Corpora­ tion. I've said earlier in this Legislature we now have some 11,000 farm loans to individual farmers throughout this province in the ADC.

To expect that I would divulge in the question period the nature of conversations between the chairman of the board of ADC and me with regard to any or all of those loans is not, I think, realistic at all. Indeed ADC could not serve its function if we were to discuss individual farm loans in that manner. MR. CLARK: Mr. Speaker, let me put the question to the minister. Has the minister given directions to any official of the Agricultural Development Corporation that they should not proceed with a statement of claim against the St. Paul Auction Mart? MR. MOORE: Mr.

Speaker, for the third time, I'm not prepared to answer that kind of question in the ques­ tion period. Certainly not. Unemployment Insurance MR. NOTLEY: Mr. Speaker, I'd like to direct my ques­ tion to the hon. Minister of Labour and ask whether or not the government of Alberta proposes to make any representation to the government of Canada con­ cerning Bill C-27 — that's the proposed changes in the Unemployment Insurance Act — particularly as it relates to the new requirement that jobless people must work 12 weeks a year instead of eight to qualify for unemployment insurance benefits. MR. CRAWFORD: Mr.

Speaker, my colleague the Min­ ister of Advanced Education and Manpower may wish to make some remark as our liaison with the federal government in regard to unemployment insurance is normally in that way. I have no intention of making representations at this time. MR. NOTLEY: Mr. Speaker, a supplementary ques­ tion. Perhaps I could put that to the hon.

Minister of Advanced Education and Manpower, and at the same time add as a supplementary: has the government of Alberta developed any position with respect to the proposed changes in unemployment insurance opera­ tion in the country, in view of the present controversy? DR. HOHOL: Mr. Speaker, at a meeting of all minis­ ters responsible for manpower with the hon. Minister of Manpower and Immigration Mr. Cullen, the matter of UIC as it was at that time — and this goes back about three months — was explained to us by him.

Extensive discussions were held on two things: the length of time for qualification, the money that would be left over — if one can put it that way — and Mr. Cullen's proposition that this residue of money would go into what he called direct job employment, to take up the slack where there would be unemployment as a result of the shorter period for qualification. We examined his proposition very closely with respect to the circumstances in Alberta, and found that the effect of the change on Alberta would be minimal. MR. NOTLEY: Mr. Speaker, a supplementary question to the hon.

Minister of Advanced Education and Manpower. In light of his comments that the effect on Alberta would be minimal, has the minister

380 ALBERTA HANSARD March 21, 1977 assessed statements or reports attributed to Mr. Cul­ len that the changes would cost claimants in the province of Alberta between $7 and $8 million a year? DR. HOHOL: I don't recall that specific one, Mr. Speaker, and would have to take it as something to examine. We've watched very carefully UIC changes and the effect of the legislation, the regulations, and the shift of money. We'll take a look at that one and report back. MR. NOTLEY: Mr. Speaker, a supplementary question either to the hon. Minister of Advanced Education and Manpower or to the hon.

Minister of Community Health and Social Services. Has the government compiled any statistics to evaluate the impact of the changes on UIC benefits in transferring responsibility from federal UIC to provincial welfare payments through health and community services? DR. HOHOL: Mr. Speaker, if I can respond to that. The intentions of the UIC, and I'm not making a case for Mr.

Cullen because we have some disagreement on some of these issues, was not that the difference in the savings — and there would be some cost directly to what had been beneficiaries of UIC in Alberta, that money would go directly to employment programs funded by the federal government and administered by the provincial government. The dif­ ference of the purported figure of $7 million would have to be set against the amount of money the federal government would assign for employment programs specifically in Alberta. I will make that examination and report back. MR. NOTLEY: Mr.

Speaker, a supplementary question to the hon. minister. The question really relates to the issue of whether the government has compiled any accurate statistics at this point in time on wheth­ er the change in fact is going to shift the cost of helping people who are out of work from federal UIC to provincial welfare. Perhaps I could put that to the hon. minister of Social Services and Community Health. MISS HUNLEY: It certainly has come up but only as rather a side issue in discussions we've had federally and provincially on the social services act and the phasing out of the Canada assistance plan.

What the hon. member says is quite accurate. It was a matter of grave concern and was expressed, but not in the exact context to which he's referring today. It was one of the positions of the maritime provinces where unemployment is extremely high. The total cost would not be federal through the Unemployment In­ surance Commission but rather would have to be subsidized by the local provincial governments under social assistance. That point was made, but it was made to one of the other federal ministers. MR. NOTLEY: Mr. Speaker, a supplementary question to the hon. minister.

Has there been any assessment as to what that cost might be in the province of Alberta? In view of the fact that the Atlantic prov­ inces have raised this matter quite emphatically with the federal government, I assume there would be at least some statistical analysis of what that would mean to the province of Alberta. MISS HUNLEY: I would have to check with the research and analysis

section of my department, Mr. Speaker. I trust the hon. member appreciates that it's a much more severe problem where there are such high rates of unemployment. But certainly it would be one of the aspects we would look at. I doubt we would have the kind of information that would give us any hard data, but I would be pleased to inquire and report to the hon. member. MR. SPEAKER: Might this be the final supplementary. MR. NOTLEY: Mr. Speaker, one final supplementary to the hon.

Minister of Advanced Education and Manpower concerning the savings UIC will presuma­ bly gain from this program and putting it back into make-work programs of one kind or another. Is the minister in a position to report to the House on what that sort of shift would mean in the pockets of unemployment or underemployment in the province of Alberta, such as the town of Slave Lake for example or the general area of Lesser Slave Lake where we have rather serious unemployment. Even though that may not be an overall problem in the province, it's a very serious problem in those pockets of unemployment or underemployment.

DR. HOHOL: Mr. Speaker, I'm pleased to have the opportunity to speak again. In my prior answers I was straining to say that in Alberta we really wouldn't know the answers to those questions until the end of the working period, say some time in the fall, before the winter works programs begin. The UIC funds, which are supposed to be a surplus because of the two-week qualification shortage, are now being assigned to constituencies, federal con­ stituencies, and municipalities. Until this period is over, we won't know what number of people who had been in the work force will be in the social assistance force. Mr.

Cullen felt that was not going to happen. The provinces felt it would in fact happen in every province in varying degrees. In a province like New­ foundland, Mr. Speaker, the unemployment situation and the social assistance situation are predictable because they're the same every year. In Alberta, that's not the case. Now, specifically on the matter of the pockets and the fairly large geographic areas, we will look at this at the end of the year and try to discern — and we can do this pretty accurately — the difference that the shift of UIC did or didn't make. We predicted to Mr.

Cullen that it would not have a discernible effect. He felt it would. But I submit, sir, that we will only be able to make that judgment at the end of the work period. School Grants MR. TAYLOR: Mr. Speaker, my question is to the hon. Minister of Education. Are the grants, now the increased grants, for small high schools earmarked for small high schools when they're sent to the various divisions and counties?

March 21, 1977 ALBERTA HANSARD 381 MR. KOZIAK: Mr. Speaker, it's a method of distribu­ tion of funds, recognizing that certain jurisdictions have certain circumstances which require additional funding. But in fact there is no compulsion on the jurisdiction that receives the funds to spend those funds on that particular school. Those funds are received by that jurisdiction in their normal inflow of funds and grants from the department, then distri­ buted according to the budget developed by the school board. MR. TAYLOR: A supplementary to the hon. minister.

Are the hon. minister and the department aware that some local authorities are simply putting the small high school grant in with the rest of their appropria­ tion? Consequently the smaller high schools are not receiving the same impact that I believe the govern­ ment intended that grant to give. MR. KOZIAK: Well, Mr. Speaker, two considerations which run opposite to each other must be kept in mind here. One is the achievement of a particular result, and the other is to recognize the autonomy of the local school boards throughout the province.

Of course a grant can be developed which requires that the funds received be spent in a specific area. We have some of those in the Department of Education. Amongst them are the educational opportunities fund, both the compensatory and the elementary por­ tions, and the special education teaching positions.

But the majority of funds that go out to school boards, even those funds that are paid out on a differential basis — and when I mention differential basis, recognizing peculiar circumstances that require funds in one particular jurisdiction that may not be required in another — by and large those funds are provided to school boards, recognizing that we have responsible people occupying the positions of trus­ tees throughout the province, that they are close to the people who elected them, and that in making the decisions they will in fact reflect the views of the people who elect them.

Of course, sometimes a conflict develops. But I've been very satisfied over the last two years with the type of presentation and representation that the peo­ ple involved can make to their local school boards and the way they can influence those decisions. So by and large I think school boards throughout the prov­ ince are acting very responsibly in the discharge of their duties. MR. TAYLOR: Just one further supplementary. If that is the case, why don't we simply add the grant to the small high schools to the total appropriation and give it to the school board in that way? MR. KOZIAK: Well, Mr.

Speaker, I mentioned this was a differential grant. In other words, not every jurisdic­ tion receives this grant. There are certain limitations. In the first place, only those jurisdictions that have a student population of less than 6,000 would be eligi­ ble. Secondly, it's probably incorrect to refer to it as a small high school grant because it's in fact a small school grant. I have not to date provided the exact details of the distribution of those funds, but expect to make a ministerial statement within days which will provide the details of the distribution.

Not every jurisdiction receives these funds, only those that fall within the formula. That formula rec­ ognizes there are certain additional expenditures by jurisdictions in maintaining these small schools. Michener Centre MR. WOLSTENHOLME: Mr. Speaker, my question is to the Minister of Social Services and Community Health. With regard to gloomy forecasts about poor service, I was wondering if the minister could tell us what the food was like at Red Deer over the weekend. MISS HUNLEY: I believe all those present found it a very pleasant and delicious luncheon, Mr. Speaker. Land Banking MR. DIACHUK: Mr.

Speaker, I would like to ask a question of the hon. Minister of Housing and Public Works. Has the hon. minister received any request recently from the city of Edmonton or Edmonton city council with regard to additional land banking for housing? MR. YURKO: Mr. Speaker, on March 11 the general manager of the real estate and housing department of the city of Edmonton wrote to the president of the Alberta Housing Corporation requesting the possibili­ ty of land banking 400 acres within the city of Edmonton at over $22,000 per acre.

The Alberta Housing Corporation examined the implications of this type of transaction and whether they had money in the budget to involve themselves in this transac­ tion, and concluded that the transaction itself was a bad deal, because the land wasn't scheduled for de­ velopment until after 1985. In the normal course of interest addition to such a land banking program, the land itself would be in excess of $40,000 per acre when it came on stream. So the president of the corporation informed the general manager of the Edmonton real estate and housing department that it wasn't prepared to land bank on this basis.

I want to suggest to the House, Mr. Speaker, that the city of Edmonton has plenty of opportunities to land bank in several ways if it wishes. Of course it can borrow money from the municipal . . . MR. SPEAKER: It would appear the hon. minister is going considerably beyond the scope of the question. Real Estate Salesmen MR. MANDEVILLE: Mr. Speaker, I'd like to direct my question to the hon. Minister of Consumer and Cor­ porate Affairs.

With regard to the new exam which must be passed in order for one to obtain a real estate salesman's licence, has the minister done a prelimi­ nary assessment on the effect the new exam requirements have had on the number of people being granted licences? MR. HARLE: Well certainly, Mr. Speaker, I understand the number passing is down on a percentage basis from earlier years. Beyond that, no, I haven't had an opportunity to make an assessment.

382 ALBERTA HANSARD March 21, 1977 MR. MANDEVILLE: Supplementary question then, Mr. Speaker. Does the minister anticipate any further measures to upgrade the quality of real estate sales­ men in the province? MR. HARLE: Yes, Mr. Speaker, there will be a con­ tinuous effort by the government and the department to upgrade standings in the profession. MR. MANDEVILLE: A supplementary question, Mr. Speaker. Has the minister received any information which would indicate there is a problem with applica­ tion forms for real estate licences not being properly completed? MR. HARLE: Not that I'm aware of, Mr. Speaker. MR.

MANDEVILLE: One further supplementary question then, Mr. Speaker. Could the minister indi­ cate what steps are being taken where the

section deals with disclosure of criminal convictions? I'm thinking of criminal convictions when these forms aren't filled out, as far as salesmen are concerned. MR. HARLE: Mr. Speaker, on that particular aspect the superintendent is making checks. Of course when it comes to light, we are raising it with the applicants. Canadian Airborne Regiment MR. JAMISON: Mr. Speaker, I'd like to direct a question to the Minister of Federal and Intergovern­ mental Affairs. It has to do with the Canadian Air­ borne Regiment in Lancaster Park and Griesbach.

I was wondering if the minister could inform the House what correspondence or dialogue he's had with the federal government regarding the Airborne Regiment and in particular with former minister James Richar­ dson and present minister Barney Danson. MR. HYNDMAN: Mr. Speaker, we've made represen­ tations of various kinds at least over the course of the last year to both ministers not only in respect to the change which was made there, but also indicating we wish to have consultation and ample advance notice of any movements out of the province of Alberta of military bases of any kind.

With regard to the Air­ borne Regiment in Edmonton apparently our sugges­ tions went unheeded. With the recent evidence from committee hearings in Ottawa, the situation with respect to the move of the Airborne to eastern Canada seems to be even more bizarre and unrealis­ tic in the view of this government, as I mentioned when the decision was first made. MR. JAMISON: Mr. Speaker, a supplementary to the Premier.

I wonder if the Premier, as first minister of the province of Alberta, would consider contacting the Prime Minister to request a possible one-year delay, so that this whole aspect of the Airborne Regiment's move could be really studied from the military and social aspects. MR. LOUGHEED: Mr. Speaker, we'd be prepared to take that under consideration having regard to the advice I may receive from the Minister of Federal and Intergovernmental Affairs as to the effectiveness of such a communication. Medical Tests MR. KUSHNER: Mr. Speaker, I wish to direct my question to the Minister of Hospitals and Medical Care.

I have received several inquiries on testing ordered by doctors and hospital staff that is probably abused and [is] paid by medicare. Has the minister a committee or department that monitors if this sort of situation in fact exists? MR. MINIELY: Mr. Speaker, I wonder if the hon. member could clarify. I'm not sure what testing he's referring to. MR. KUSHNER: Well, for instance, unnecessary X rays or whatever. MR. MINIELY: Mr. Speaker, I think that's a fairly broad question of policy which is difficult to answer in the question period.

Suffice it to say that in meetings with the College of Physicians and Surgeons in the period of assessing policy and broad policy develop­ ment in the hospital and medical care field, concern has been expressed relative to the control of diagno­ sis, in particular the control of X ray and laboratory costs. Solutions to this are a little more difficult to arrive at, at this stage, than having perhaps delineated a general problem. MR. KUSHNER: Just briefly, to follow up again to the minister if I may. Could he inform this House if in fact it's being abused and if that type of abuse is monitored? MR. MINIELY: Mr.

Speaker, what I've tried to say in answering the hon. member is that there is no defi­ nite evidence at this stage that it has been abused. As a matter of fact the lab and X-ray utilization factor in our province is superior to many other provinces. So there is no definite answer to the hon. member's question except to say that it is sufficient [that a] question has been expressed through my travels throughout the province, that it's a matter I hope to investigate more definitively and in due course be in a position to advise this House and Albertans of my conclusions. Planning Act MR. CLARK: Mr.

Speaker, I'd like to direct a question to the Minister of Municipal Affairs and ask if he'd outline to the House the anticipated speed with which the planning act will move through the House. AN HON. MEMBER: Accelerated five years. MR. CLARK: To rephrase the question: is it the gov­ ernment's intention to move through perhaps second reading and hold the planning act in committee until the fall? MR. JOHNSTON: Mr. Speaker, we haven't had an opportunity to determine our position on that. How­ ever, I would imagine that would be the final outcome of the presentation of this bill. Those people who are

March 21, 1977 ALBERTA HANSARD 383 interested in it now have taken the effort to write to me and suggest that we should hold it over to the fall, and we will await the decision of government. I'm sure we'll have ample opportunity for input from various people, and we'll decide very soon. Anti-inflation Program MR. NOTLEY: Mr. Speaker, I'd like to direct this question to the hon. Minister of Federal and Intergov­ ernmental Affairs, and it flows from the ministerial announcement on Friday, March 18, concerning Alberta's participation in the anti-inflation program.

Has the government evaluated the impact on collec­ tive bargaining of moving into year three of the AIB program as of October 14, 1977, where the basic increase is no longer 6 per cent but in fact 4 per cent? MR. HYNDMAN: Well, Mr. Speaker, I think that is more properly a matter for debate when the resolu­ tion is moved on Wednesday and discussion or response either by me or the Minister of Labour. We will take note of that and have an appropriate response on Wednesday during debate. MR. NOTLEY: Mr. Speaker, a supplementary question to the hon. minister.

Has the government of Alberta made any recommendations to the government of Canada with respect to postcontrol mechanisms? MR. HYNDMAN: There again, Mr. Speaker, rather than deal with this issue in bits and pieces, I think that properly is a matter for debate during the resolu­ tion discussion on Wednesday. Red Deer River Dam MR. TAYLOR: Mr. Speaker, my question to the hon. Minister of the Environment concerns the possible dam on the Red Deer with its alternatives of storage and diking, et cetera.

Has the government set any criteria which will be used in making a decision on this matter in view of the fact that such a mass of representations are being made at this time on the various aspects of this item? MR. RUSSELL: No, Mr. Speaker, we haven't. I really think the government has taken all reasonable moves it could with respect to investigating technological, scientific, engineering, and sociological factors. It is now doing its best through the ECA hearings to col­ lect public response to the various alternatives.

Based on the ECA recommendation and other factors involved, we would hope to arrive at an early decision. IPACE Meeting DR. BUCK: Thank you, Mr. Speaker, for getting me back on the list. Those 90 potential constituents had to be looked after. Mr. Speaker, I'd like to ask a question of the hon. Minister of Energy and Natural Resources to do with the meeting held recently with IPACE, the Interpro- vincial Advisory Council on Energy. I'd to know if the provincial government had representation and how involved it was at that meeting? MR. GETTY: Mr. Speaker, that's a meeting of various provincial government officials.

The government of Alberta had a representative there. DR. BUCK: Mr. Speaker, in light of the outcome of the election in Quebec, can the minister indicate if the meeting made any progress in setting up the pro­ posed national energy grid? MR. GETTY: Mr. Speaker, I know the matter of the energy grid was discussed, and there was some variety of opinion as to going ahead with studies into it. However, no resolution was arrived at with regard to completing a study into the advantages or disad­ vantages of the national electrical grid. DR. BUCK: Mr.

Speaker, can the minister indicate if there will be further meetings of IPACE? MR. GETTY: I think there would be, Mr. Speaker, not necessarily on that subject although presumably it might well come back on the agenda. However, it is a committee that meets at the call of the chair. A revolving chairmanship principle is established. They meet at least once a year to have an interprovincial discussion on a variety of energy matters. Michener Centre (continued) MR. CLARK: Mr.

Speaker, I would like to follow up a question I posed to the Minister of Social Services and Community Health last week with regard to Michener Centre in Red Deer. It flows from the Parents for Progress report on their visit to Michener Centre on December 7, 1976. The first question is: when the minister was in Red Deer for the official opening of Michener Centre, did she have an oppor­ tunity to look at Cherry Villa, which Parents for Pro­ gress pointed out as one area where they had been particularly discouraged because the conditions there were worse than they had been on their earlier visit?

MISS HUNLEY: On Friday I was occupied in other areas. But I'm happy to advise the hon. Leader of the Opposition that Cherry Villa is no longer in use. That point was made to Parents for Progress when they visited there in December. Within the week there were no longer any residents in it. So I can advise the hon. Leader of the Opposition there is no longer any concern in his mind or the Parents for Progress. MR. CLARK: Secondly, Mr. Speaker, I hope the minis­ ter can be as positive as far as Juniper Ward is concerned and the concerns expressed there by Parents for Progress.

Again on their visit in Decem­ ber, they said they were disappointed to see the conditions in that area also. They felt they had deteriorated from their last visit. Is the minister able to give us such a good word as far as Juniper Ward is concerned? MISS HUNLEY: Yes, Mr. Speaker. I have nothing but positive statements to make, although we realize we wish to do more there. I visited Juniper in late January; I dined there. There has been considerable improvement in nearly all the villas. Cherry Villa was closed approximately one week ago, as I alluded to

384 ALBERTA HANSARD March 21, 1977 earlier. Two other villas are also empty now. We've done extensive renovations to them. One of the other questions the hon. Leader of the Opposition asked me was whether we would be increasing the staff. The answer is yes. My esti­ mates show that we are now recruiting for additional employees. MR. CLARK: Mr. Speaker, a further supplementary question to the minister. Will the additional staff be primarily in the area of day care? I raise that again because of the Parents for Progress report. That seemed to be one of the major concerns they raised.

MISS HUNLEY: I don't have the specific breakdown of where all the staff will be deployed. But I know that is one of our areas of concern. I expect some of them are there. I have not asked for the exact deployment and the positions we will be recruiting for, but I would anticipate those are some of them. Perhaps I could add something further about Juniper. As I recall the report, Mr. Speaker, they were alluding to the fact that no playthings were out for the residents to entertain themselves with.

I've been advised that the residents had only returned, either from a meal or from recreation — I'd have to check that to be sure. Usually the playthings are not out at that particular time, but they are available. MR. LOUGHEED: Mr. Speaker, I would just like to supplement the hon. minister's answer on a couple of points, having been at Michener Centre on Friday. I note the hon. Leader of the Opposition was not in the Legislature on Friday when I referred all members to the report of the Hospital Visitors Committee with regard to this area, the one in 1971 and then the one in 1975.

It's interesting that the hon. leader refers to a report by a Calgary group entitled Parents for Pro­ gress, which the hon. minister has effectively responded to. I just want to tell the House I had the experience of talking to a number of parents, and what I got from those parents was very deep appre­ ciation for considerable progress. Age of Minors MR. TAYLOR: Mr. Speaker, my question is to the hon. Attorney General. Has the government reached a decision yet on the juvenile age for boys and girls in the province? MR. FOSTER: Mr.

Speaker, I expect my colleagues and I will be considering this in government caucus in the near future. As a matter of fact, the Deputy Attorney General and some of my staff will be joining a meeting in Regina, I think in the next week, to discuss what's described by the federal government as the young offenders act. I'm sure representatives from other departments will probably be going as well. One of the questions to be discussed will be the matter of age. I anticipate that if the federal government is bring­ ing forward this new proposed legislation, it may indeed be some time in the mill, as it were.

It may be that the government of Alberta will have to establish its own young offenders policy, and perhaps some legislation in that area, before then. As I said in the House before, I anticipate the government will settle on a uniform age for both boys and girls. I expect it will be under the age of 18. If I had to guess, and it's purely a guess, I would say probably 16. Medical Tests (continued) MR. MINIELY: Mr. Speaker, I wonder if I could supplement my earlier answer to the hon. Member for Calgary Mountain View, to be more specific on lab and X-ray services in the province of Alberta.

The College of Physicians and Surgeons assumes a major responsibility in Alberta for the control of laboratory and X-ray services. Generally there are three areas. One is that the College of Physicians and Surgeons licenses laboratory and X-ray services throughout the province, particularly private lab and X ray. The import of the question, as I understood it from the hon. Member for Calgary Mountain View, would cover two basic areas. One is the question of im­ proper billing.

If there is any evidence of improper billing at all by a member of the Legislature or by any citizen, a report to my office or the Alberta Health Care Insurance Commission would immediately result in an investigation, and we would also advise the College of Physicians and Surgeons. They would investigate and, if found to be abused, the individual member would be disciplined by the College of Physi­ cians and Surgeons. Also, we have had excellent co-operation from the College of Physicians and Surgeons on the question of utilization.

If they find that an individual member of the medical profession tends to be requiring too many laboratory and X-ray tests on a referral basis — it's something the College is working closely with us in monitoring — the College will have discussions with the member of the medical profession. Mr. Speaker, I just wanted to clarify that more specifically and to indicate that the College of Physi­ cians and Surgeons has given us excellent co­ operation in Alberta in this area. MR. TAYLOR: Supplementary to the hon. minister.

Is there a cross-check in the matter of payments be­ tween the Workers' Compensation Board and medicare? MR. MINIELY: Mr. Speaker, yes there is. In discus­ sion with the chairman of the Alberta Health Care Insurance Commission, Dr. MacLeod, we have at times come across duplicate billing. Again, where that's been detected through a matching, we have advised the College of Physicians and Surgeons.

Be­ tween the legislation authority which exists in The Alberta Health Care Insurance Commission Act, and of course the role of the College of Physicians and Surgeons in disciplining their members, we've been able to take appropriate action. MR. KUSHNER: A supplementary question to the minister. MR. SPEAKER: Might this be the last supplementary. We've run beyond the time allotted for the question period.

March 21, 1977 ALBERTA HANSARD 385 MR. KUSHNER: If citizens feel this type of abuse is done or prescribed by doctors or hospital staff, and I have several complaints that it is, would the minister be in a position to inform this House to whom we refer these types of complaints so they can be mon­ itored or investigated? MR. MINIELY: Mr.

Speaker, I would certainly encourage citizens who have any knowledge of im­ proper billing of laboratory and X-ray services, or for that matter any other improper billings to Alberta's health care insurance plan, to write to the plan as well as to the College of Physicians and Surgeons. Of course, Mr. Speaker, my office is always available to receive complaints of that nature as well. MR. KUSHNER: A last supplementary question, Mr. Minister. The concern of some citizens is that doctors are actually . . . MR. SPEAKER: Order please. The hon. member seems to be making a representation.

If there are further questions on this topic, perhaps they might be brought up in a future question period. ORDERS OF THE DAY head: GOVERNMENT MOTIONS 2. Moved by Mr. Hyndman:

Be it resolved that this Assembly do resolve itself into committee to consider the supply to be granted to Her Majesty. [Motion carried] head: Committee of Supply [Dr. McCrimmon in the Chair] MR. CHAIRMAN: The Committee of Supply will now come to order for consideration of the 1977-78 estimates. MR. HYNDMAN: Mr. Chairman, before moving into the estimates I'd like to take this opportunity to move the motion which establishes the subcommittees of this committee. About 2 o'clock today, members of the opposition received copies of the motion. I gather they have no objections to it.

First, I'd like to ask leave of the committee to move that motion, notwithstanding the lack of normal notice. HON. MEMBERS: Agreed. Moved by Mr. Hyndman:

Be it resolved that: (1) (

a) Two subcommittees of the Committee of Supply be established with the following names: Subcommittee A Subcommittee B (

b) The membership of the respective committees be as follows: Subcommittee A — Chairman, Mr. Shaben Appleby Kushner Ashton Little Backus Lysons Bradley Mandeville Buck Notley Chichak Paproski Clark R. Speaker Diachuk Stromberg Doan Taylor King Thompson Kroeger Young Subcommittee B — Chairman, Mr. Gogo Buck Notley Clark Planche Cookson Purdy Donnelly R. Speaker Ghitter Stewart Hansen Taylor Horsman Tesolin Hyland Topolnisky Kidd Walker Mandeville Webber McCrimmon Wolstenholme Miller Zander Musgreave

(2) The following portions of the estimates of expenditure for the fiscal year ending March 31, 1978, be referred to the subcommittee hereinafter set forth for their reports thereon to the Committee of Supply: Subcommittee A Energy and Natural Resources Social Services and Community Health Hospitals and Medical Care Subcommittee B Recreation, Parks and Wildlife Housing and Public Works Municipal Affairs Transportation. MR. HYNDMAN: In speaking to the motion, Mr. Chairman, I'd like to outline the tentative dates on which these subcommittees will sit and the rooms in which they will sit.

Members may wish to make some notes. Subcommittee A will meet Thursday, March 24, at 8 p.m. in room 312 to begin consideration of the estimates of the Department of Social Services and Community Health. The next department for consid­ eration will be Energy and Natural Resources, proba­ bly on Monday evening, March 28. Subcommittee B will meet this Thursday night in room 119 to initiate study of the Department of Recreation, Parks and Wildlife. If it is completed by the following Monday, they will begin with the Hous­ ing aspect of the Department of Housing and Public Works.

Both committees will meet at 8 p.m. [Motion carried] Treasury MR. CHAIRMAN: Mr. Minister, do you have any opening remarks? MR. LEITCH: Thank you, Mr. Chairman. Yes, I have some opening remarks. I would like to review some of the major activities of the department during the

386 ALBERTA HANSARD March 21, 1977 past year and outline some new activities we antici­ pate being involved in during the coming year. Mr. Chairman, perhaps the most important — and if not the most important, certainly the most demanding — activity in which the department was involved last year was the negotiations leading to the new federal/ provincial financial arrangements. I would like to take a moment, Mr. Chairman, to call to the commit­ tee's attention the unique character of those negotiations.

Over the past years there have been a number of negotiations on financial arrangements between the federal government and the provinces. Always in the past there would be meetings between the respective finance ministers and provincial treasurers, and there would be discussions about what the new financial arrangements ought to be. Inevitably, Mr.

Chairman — and it flows out of the different economic circum­ stances of the provinces, the different financial cir­ cumstances and, in some cases, the different political philosophies — a wide divergence of views would be expressed by the provinces as to what form these financial arrangements ought to take. That of course made it very easy for the federal government, because it could simply point to the wide divergence of views expressed by the provinces and say, it's obvious we can't meet all of them, it's obvious there's very little agreement among the provinces.

The fed­ eral government would then simply pick the ar­ rangement that suited its purpose and, with some justification, say that was the best that could be done under the circumstances. On this occasion, following the meeting of premiers in Edmonton, there was a direction that the finance ministers meet. In accordance with that direction, we did.

Out of that meeting developed the belief and commitment that provincial interests would be better served in these upcoming negotiations if we develop­ ed a common position; that is, if the provinces were able to come together and present to the federal government one position for future financial ar­ rangements. We as provinces were able to accom­ plish that over the months following the premiers' meeting in Edmonton, and I think it was an impres­ sive accomplishment. Mr. Chairman, the fact that we were chairing these meetings imposed a very heavy burden on the de­ partment.

As a result of direction coming from a premiers' meeting in Alberta which we chaired, it fell on me to be the chairman of ministerial meetings leading to this common position, and of course on senior officials of the department the responsibility of chairing meetings of officials. As a result of our responsibilities as chairman, we were also obliged to prepare the position paper which we presented to the federal Minister of Finance at a meeting on December 6 and 7 last year in Ottawa. As I indicated, Mr.

Chairman, this was a considera­ ble burden on senior members of the department because it involved a large number of trips to Ottawa, both for officials' meetings and ministers' meetings. I was certainly very pleased with the dedication and hard work senior members of the department put into that task. I'm satisfied too, Mr. Chairman, that it was a very worth-while and useful exercise, because I'm totally convinced that had we not developed a com­ mon position and maintained it throughout all these meetings, leading to the completed agreement, we would not have done as well as we did. Mr.

Chairman, I don't propose in these opening remarks to review all the new arrangements that flowed from those meetings. They have already been dealt with at some length in the news media. They are contained within a bill now before the federal House. However, if any members would like some more information or greater detail on those arrange­ ments, I would be pleased to provide it later on during a review of the estimates. For the moment I propose to restrict my comments to saying that the new arrangements are a very important move in the direction in which Alberta wanted to go.

That arises from the fact that the federal cost-sharing payments have, roughly to the extent of 50 per cent, been replaced by transfer of tax room. That gives us greater flexibility in two areas. It means we have greater flexibility over our programs. That is, we don't need to keep in mind that certain programs are cost-shared 50 per cent and therefore structure our programs to get maximum funds in that way. We're perfectly free to structure the programs in the way we think is best for the people of Alberta.

It also gives us greater flexibility in that a larger percentage of our budget comes from our own tax revenues than was the case under the old arrangements. In conclusion on this point, Mr. Chairman, I'd recall to the committee's attention that the new arrange­ ments will mean Alberta will receive in the coming year approximately $54 million more than it would have received under the old arrangements. Now, in saying that I want to point out that the revenue guarantee payments of course terminated, as was provided for in the revenue guarantee agreement, on December 31 of last year.

The arrangement is also to our advantage because we are satisfied that the revenue growth from the transfer of tax room will be greater than the revenue growth would have been under the former cost-sharing arrangements. All in all, while one would have liked to have done better and gotten more from the federal government, I feel that the current arrangements are a reasonable compromise. In short, I think the current arrange­ ments are the Canadian confederation working in much the same way it has worked for a long time.

One other area I would like to touch on briefly is the trip senior members of the department and I made to New York recently. We essentially had two purposes in making that trip. One was to have some preliminary discussions with the rating houses, that is, the houses that rate credit of various governments and so on that wish to borrow money. That credit rating of course influences the interest rate the bor­ rower pays.

In addition to that, we wanted to tell the Alberta story — that is, we wanted to talk about our economic situation, the financial position of the prov­ ince, the investment opportunities, and things of that nature — to the financial community in New York. Mr. Chairman, I don't know that before making that trip I had really fully appreciated how helpful it is to those Albertans who are borrowing in the New York money market to have senior officials and ministers from the government go to New York, meet the finan­ cial community, and talk to them about the province. That does help them in their borrowing.

Of course that is of direct benefit to Albertans, particularly in the case of utility borrowing, because anything that

March 21, 1977 ALBERTA HANSARD 387 can be done to make the borrowing easier, to reduce the interest rate, is a direct reduction in cost to the user of that utility. Then of course it's an indirect benefit to Albertans if it assists people who are endeavoring to borrow money there for purposes of investment in Alberta, because that simply increases the economic activity here. Mr. Chairman, we had a luncheon, then later in the day we had a reception. Alberta was the host in both instances, and we invited about 50 or 60 people to each of the two functions, making a total of 100 or 120.

They were either the same people who had been present at Mr. Levesque's speech in New York, which was a week or so before I went there, or they were from firms that had representatives there. I think we made mention of this earlier, but I repeat it now for the benefit of the committee: there was no question whatsoever but what the election in Quebec and Mr. Levesque's comments on that election to the New York financial community, the group he was speaking to, had significant detrimental impact on the capacity of Canadian governments to borrow in New York.

The consensus there was that the cost of borrowing had risen appreciably from those events. I would say the impact would be greatest on the Atlant­ ic provinces and minimal on the western provinces. But even our advice was that there was some minim­ al impact on western provinces. Now whether that continues, I think remains a matter on which I wouldn't wish to speculate at this time. I filed the booklet that we distributed there, The Alberta Story, along with notes for the speech I made in New York. I commend The Alberta Story to members of the committee.

I think it is perhaps one of the best things we have done in government in laying out the opportunities and describing the cir­ cumstances in Alberta. I want to commend the peo­ ple in the department who prepared that. Members will also note that it was because of the timing and of the feeling that existed in New York while I was there that I made some comments on the question of the Quebec election and Canadian unity. The notes of those comments are in the speech I earlier filed in the House. Mr. Chairman, I think those were two of the main highlights of the Treasury department last year.

I should simply call the committee's attention to one of the activities we're going to be concentrating on very substantially in the coming year: the establishment of the controller function, and the new legislation with respect to financial administration and the Audi­ tor's office. We have been working during the past year on the financial administration legislation. Quite frankly, it has proven to be a much more formidable task than any of us had anticipated when we embarked upon it.

It's technically very difficult, and I think the senior people from the Legislative Counsel's office have held something like 20 full-day meetings on that legisla­ tion within the past few months. We're making pro­ gress, but not nearly at the rate we anticipated when we were first considering it. I do want to call to the committee's attention that all the new positions in Treasury — and there are 23 of them — are in the controller's office. These people will be working to begin putting in place the preaudit function, which will be transferred to Treasury from where it now is in the Auditor General's office.

They are doing such things as developing financial man­ agement and control manuals, special payment sys­ tems, and so on. So we are moving ahead with the actual work and the putting of people in place in the anticipation of being able to introduce legislation in the future. Mr. Chairman, I'd like to close my remarks with some comments about the personnel administration office. First, I'm pleased to report that this year we appointed Mr. Jim Dixon as the Public Service Com­ missioner.

Members will recall that last year I commented on the very untimely death of our former Public Service Commissioner Keith Robertson and advised the committee that Mr. Dixon was then act­ ing in an acting capacity. After that, Mr. Chairman, we advertised the position across Canada in the usual competitive way and received a substantial number of applications — I've forgotten the actual figure; I think it may have been 40 or so — many from outside Alberta. I think the largest number were from outside Alberta, and many from very highly qualified people.

I appointed a committee of senior members of the Alberta civil service to review all the applications and hold interviews with the applicants where it felt that was appropriate, and asked that it make a recom­ mendation to me after it had done that. The commit­ tee did so and, with very little difficulty, was able to recommend to me that Mr. Dixon, who was then the Acting Public Service Commissioner, was the person who ought to be appointed Public Service Commis­ sioner. Its recommendation merely confirmed the views I had formed about Mr.

Dixon's capacities, and I think it's a cause for some satisfaction and pride for all of us that a person who was with our civil service for a number of years would be rated so highly in an application for the senior position in comparison with very well-qualified applicants from across the rest of Canada. Mr. Chairman, I would like to draw members' atten­ tion to a new program in the personnel administra­ tion office.

It's entitled personal planning and career development, and nearly all of the increase in per­ sonnel in the personnel administration office is to staff this new program, which requires four positions. The object of the program is to enable the personnel administration office to respond to the demands and needs in special areas of recruitment, retention, and advancement.

It's the personnel in this program who will be doing one of the functions I referred to in question period earlier this session; that is, they will be endeavoring to find out why more qualified women are not applying for the senior well-paying jobs in the civil service, and endeavoring to find ways and means of increasing the number of applications from women for that kind of employment. Lastly, Mr.

Chairman, I'd simply like to publicly express my appreciation and gratitude to the staffs of pension administration, the personnel administration office, and the Treasury department for their support and, I think, the really outstanding work they have done on behalf of the people of Alberta during the past year. MR. CLARK: Mr. Speaker, in responding to some of the comments made by the Provincial Treasurer and then perhaps moving into one or two other areas, I'd say at the outset that we on this side of the House concur whole-heartedly with the comments made by

388 ALBERTA HANSARD March 21, 1977 the Provincial Treasurer with regard to Mr. Jim Dixon. My colleague the Member for Little Bow, when he was the minister responsible for the public service, certainly developed a deep appreciation for Mr. Dixon's abilities, and indeed I think the government made a wise choice in that particular area. Perhaps as part of my remarks, I should also say that following the tabling of the budget in the House, we asked the Provincial Treasurer to make available to us the detailed object of expenditures. I'd say, Mr.

Chairman, the Provincial Treasurer has done that for the Treasury department, and it's my understanding the information will become available for the other departments. Certainly that makes it a great deal easier for us to look at some of the details of the budget, and I suspect will enable us to move ahead a bit more quickly here in the committee. Thirdly, I would express my appreciation for doing the Treasury estimates first. I think it will provide us with an opportunity to perhaps better understand some of the overall components of the budget itself.

Now dealing with the question of the federal/ provincial fiscal arrangement, first of all might I say we would look forward to the Provincial Treasurer perhaps indicating to us in the course of our discus­ sions here this afternoon, this evening, or on some later date during this spring session the kinds of trade-offs we really had to talk in terms of. We appreciate very much the problem with the federal government in the past, because the prov­ inces were in a position where agreement wasn't possible between the 10 provinces.

I think the move that has been made will give the province considera­ bly more flexibility. It would also be interesting to hear from the Provincial Treasurer what areas the government is now looking at as far as using that increased flexibility. Are there some aspects of the fields of advanced education, health care, and the social service pro­ grams in which the government plans to change the emphasis? Because I am sure all members of the House recognize the problem of the 50 cent-dollar thing in the past, and if we spent money there you could reclaim approximately half of it from the federal government.

I'm sure the government has now had some time to look at what some of the changes will be. What are some of the areas the government is looking at? I think that would be very helpful to us along with some of the background information. As far as the trip to New York that the Provincial Treasurer spoke of, I commend the Provincial Treas­ urer for his endeavors in that particular area. Now I move into the question of the reorganization of the department, especially in the area of The Financial Administration Act.

I think when the Pro­ vincial Treasurer talks about The Financial Adminis­ tration Act, he's really saying to us in a very nice way that it'll be some time yet before we see a provincial auditor. Very frankly, that disappoints me. Some months ago, in fact over a year ago now, the Provincial Treasurer announced in Calgary that we were moving towards a provincial auditor. Last year when we pursued this matter in the House, there was an indication we might not see the legislation in the spring, but we certainly would in the fall.

Now I don't accept the point put forward by the Provincial Treas­ urer that there have been 20 full-day meetings be­ tween the Legislative Counsel and senior officials of the department and that would be sufficient for not moving ahead with provincial auditor legislation. I remind the Provincial Treasurer that before he was in the House, his colleague the Government House Leader presented legislation to the House.

I recog­ nize that that legislation can't be taken in its entirety and just plunked before us, but certainly when it's been six years in the development stage, we're not now saying we're going to have wait another year. That's pretty slow, in fact very, very slow. I'd also be interested in the Provincial Treasurer enlarging on the preaudit growth in the department. I suspect that would be under program 4, Mr. Provin­ cial Treasurer, the office of the controller. I would appreciate very much if the Treasurer would go into some detail here.

When we see the office of the controller, there's something like a several hundred per cent increase in that vote, a 523 per cent increase. It's also interesting that when one goes back to page 2 in the estimates and looks under the legisla­ tion, one finds that the appropriation for the Provin­ cial Auditor in the area of preaudit responsibilities is also beefed up. Well, the Treasurer shakes his head. Then I'll be looking forward to his explanation with more than the usual amount of interest. Unless the figures are wrong or our calculations are wrong, that's certainly what it appears to be on the surface.

So we'll look forward to the Treasurer's comments there. I'd like to make two other initial comments, responding to the study of the estimates. During the course of the estimates, it's our intention in the offi­ cial opposition to move a number of amendments to the budget proposals set forward. These will not take place in every department — in some departments more than others. But it is our intention to move a number of amendments to the budget. We hope the amendments will be seriously considered by the government.

The amendments will really be based on the three criteria we started this session with: first, the idea of open government; secondly, the concept of new value for the taxpayer's dollar; and thirdly, increased emphasis on less power being placed in the hands of the provincial government and strengthening of local governments across the province. So the amend­ ments we will be making to the budget will be from those three basic points of view. Perhaps I might stop my comments now, Mr.

Chairman, and ask the Treasurer to respond in two or three of those areas; especially with regard to the Provincial Auditor, especially with regard to growth of the controller and the preaudit function in the Provin­ cial Auditor's office, thirdly with regard to the fiscal arrangements between Alberta and Ottawa and the trade-offs that were involved, and what changes we can expect in the structure of programs. MR. LEITCH: Mr.

Chairman, perhaps I should begin by responding to the first question the Leader of the Opposition asked: what kinds of trade-offs were involved in negotiating the new federal/provincial arrangements? I'm not sure I would characterize any­ thing that happened during those negotiations as "trade-offs". A position was put forward by the prov­ inces which would involve more money coming to the provinces than is the case in the final arrangements.

March 21, 1977 ALBERTA HANSARD 389 As I remember it, the proposal the provinces put forward, for example, called for a transfer of four personal income tax points to make up for the fact that the revenue guarantee agreement was terminat­ ing on December 31, 1976.

The argument that there ought to be a continuation of that was based on a statement made by John Turner when he was federal Minister of Finance, that when that came to an end there would need to be some further consideration, or words of that nature which might have implied that the federal government was going to do something but certainly weren't strong enough to indicate they were committed to doing anything.

In any event, the provinces calculated the payments they were likely to receive under the revenue guarantee agreement if it had continued, and came to the conclusion that four points of personal income tax ought to be transferred to make up for the loss of revenue resulting from the termination of the agreement. Now the final arrangements: one additional income tax point was transferred in respect of that. Then an increase in the cash payments being made by the federal government came to roughly another tax point. So there was sort of a division, almost an equal division, of the amount in dispute there.

But I wouldn't have characterized that as a trade­ off. The province was simply saying, look, this agreement should be continued, if it were continued we'd get four points. The federal government was saying, it was never the intention of that agreement to be for more than a short period of time, because the purpose of the agreement was to enable the provinces to adjust their tax systems to meet any reduction in their taxes that might flow from the fact that the federal government had introduced a new tax system in 1972.

They said, that was just to protect you during the five-year period from any loss of those revenues, and during the five-year period you should have been able to make the appropriate changes in your own taxation system. Again, I thought that was a reasonable compromise of an issue [on which] there was obviously much to be said on both sides. So I wouldn't regard it as a trade-off. There are other areas in the proposal which the agreement falls short of. One of them is an equaliza­ tion of tax points.

The provinces proposed that the tax points that are being transferred be equalized to the highest province, and have the final arrange­ ments equalized to the national average. But again I wouldn't call that a trade-off, unless the hon. Leader of the Opposition is referring to trade-offs as the final agreement being something less than what you had asked for in your opening negotiation. I think there were other changes too in the levelling down and levelling up of payments to the provinces.

That comes about because under the shared cost programs, some of the provinces are higher than the national average in their costs of those programs and others are below. The changed system is designed to level up in a short period of time those provinces which are below the national average, and level down over a longer period of time those provinces which are above the national average. Again, those are differences between the provincial proposal and the final agreement. I wouldn't have called them trade-offs. I think that normally means you give up something you have in order to get something else.

Looking at the whole arrangements between the provinces and the federal government, I don't think that occurred at all. With respect to what areas we're now considering because of this increased flexibility flowing from the new federal/provincial fiscal arrangements, I think that's not a question I'd give any definitive answer to. We're pleased that we have this additional flexibility. We've just gotten it. At this time I think I wouldn't want to speculate on how it may be used in the future.

With respect to the comments made by the Leader of the Opposition as to when we might see new legislation with respect to the office of the Auditor, and the reference to the personnel increase in the Auditor's estimates which we will be dealing with at a later time, I didn't make reference to the legislation with respect to the Auditor's office because I assume that would be more appropriate when we deal with the Auditor's estimates. But I see the two things going hand in hand; that is, the new financial admin­ istration legislation and new legislation with respect to the Auditor's office.

I would not now want to give a commitment as to when we can bring it to the House. The Leader of the Opposition says it has been in the mill for six years. That isn't the fact. It may have been talked about that long ago. It was about the time I made the an­ nouncement to which he refers that we began to put things in place to get this work done. It's simply turned out to be a far more complex undertaking than we had anticipated, therefore it is taking longer. There is some increase in personnel in the Audi­ tor's office. I haven't briefed myself on the details today, because they will be coming up later.

But I recall them from briefings some time ago when we were putting the estimates together. My memory is that there was an increase simply because of a very substantially increased workload. You can go through the number of cheques and things like that now being dealt with, compared to a little while ago, and there had to be additional personnel to cope with that. In addition there was added personnel for the Auditor to do more post-audit work than he has in the past. We are actually moving administratively in areas where we can move prior to the coming in of the legislation I've been talking about.

So an increase in the post-audit work of the Auditor accounts for some of the increase in personnel in the Auditor's estimates. I don't have with me at this moment the actual detail of what those 23 people we talked of here are going to do, but I'm sure I can get it. They will all be involved in a transfer of some of the preaudit function from the Auditor's office to the controller's office, so they will actually be doing some of the preaudit work. In addition they will be doing all the work necessary to get a total preaudit function in place within Treasury. Mr.

Chairman, I believe I've covered all the points on which the Leader of the Opposition asked for some response in his opening comments. MR. CLARK: Mr. Chairman, perhaps I might just make two comments, then go on to some very specific questions. First, when I make the comment about the question of an auditor general being in the gestation period for some six years, I would suggest the Provin­

390 ALBERTA HANSARD March 21, 1977 cial Treasurer go back and check the bills introduced by his colleague the present Minister of Federal and Intergovernmental Affairs when the government sat on this side of the House. Secondly, I would like an explanation from the Pro­ vincial Treasurer. . . MR. R. SPEAKER: It was actually poor legislation, though. MR. CLARK: We didn't think it was so poor that it would take six years to correct.

Secondly, if we are not going to be changing The Financial Administra­ tion Act for a year, and if under the present legisla­ tion the Provincial Auditor has audit and preaudit responsibilities, under what statute are we changing that, prior to the change in The Financial Administra­ tion Act? MR. LEITCH: Mr. Chairman, I would like to check this, but I think I'm accurate in saying the Auditor remains responsible, because that is required under the legis­ lation. Someone else not necessarily in the Auditor's office can actually do the work — and that's what we are doing — but the Auditor remains responsible.

There is no change in the responsibility, but there is a change in who's actually and physically doing the work. AN HON. MEMBER: But no change in responsibility? MR. LEITCH: Just a change in the people who are doing the work. MR. CLARK: Under the arrangement that has been worked out between Treasury and the Provincial Auditor, is the preaudit function in some cases going to be handled by Provincial Treasury personnel and not by audit personnel? MR. LEITCH: That's right, but that doesn't alter the Auditor's responsibility for all that work. MR. CLARK: Mr.

Chairman, I would like to reserve my comments until I've checked The Financial Adminis­ tration Act too. But it seems a rather strange situa­ tion that prior to the Provincial Treasurer bringing this to the House, they would work out an arrangement where some of the Auditor's function would be taken over not by people who are employees of the Provin­ cial Auditor's office but in fact by people who are in the Provincial Treasurer's office.

I raise that because in 1972, if my memory is accurate, or it could have been '73, a private member's resolution dealing with this question of the maintenance of the preaudit sys­ tem was before the House. I recognize the arrangement the Treasurer has explained to us here doesn't deal with changing to post-audit and preaudit; that isn't being changed. But what does concern me is that we are now going to have people who are employees of Treasury doing the preaudit function rather than people who in fact are employees of the Provincial Auditor.

From the Treas­ urer's explanation I can see that the Provincial Audi­ tor will still have the overall responsibility. But frank­ ly it doesn't seem to be a very desirable arrangement, and I would like the Treasury to elaborate on it somewhat. MR. LEITCH: Mr. Chairman, I don't see the slightest problem with that kind of arrangement. The Auditor knows what's being done, approves of the way it's being done, and remains responsible for the work to the House and the government, in the way current legislation makes him responsible.

But whether the actual work is being done, under his approval, by someone in Treasury or someone in one of the de­ partments or someone in the Auditor's office, I don't think is that significant. What the committee needs to appreciate too is that you can't suddenly switch this kind of system on like a light. A lot of preparatory work needs to go on ahead of time. You don't suddenly move this from one place to another in one day.

The kind of work we are now doing, in close liaison with the Auditor's office, is putting the people and systems in place in Treasury so when we have the legislation and it clicks into place, everything will be able to pick up from there and function. As I say, there is no alteration at all in responsibili­ ties assigned to Treasury and the Auditor by the legis­ lation. It's simply a question of who's doing some of the preliminary work. MR. CLARK: Mr. Chairman, perhaps we could come back to that matter just a bit later on.

I would like to ask the Provincial Treasurer what directions were sent to the various departments with regard to the preparation of the budget this year. We look through the budget and find some departments under the supposed 10 per cent guideline across the board. Several departments — I guess the best example is the Provincial Treasurer's own department — are well above the expenditure guideline, which seems to be the practice of do as I say, not as I do.

I should say to the Provincial Treasurer, so our arithmetic will agree, that we are working on the basis of estimates to estimates — the estimates the Legislature approved last year with the estimates the Legislature is being asked to approve this year. My question to the Treasurer is: what kind of direc­ tion went to the various government departments, also to boards and commissions, as far as budget preparation for this year is concerned? MR. LEITCH: I'm going to respond to the, I thought, rather unfair accusations the Leader of the Opposi­ tion made about the increase in Treasury's budget.

It's true it has increased about 18 per cent over estimates. And I say that because the Leader of the Opposition was comparing estimates to estimates. But if you look at Vote 3, you will find that's where the bulk of the increase occurs and that all of it is non-discretionary.

As we go through the estimates — and I'm delighted to get the opportunity to do this, because I think I'm going to be able to demonstrate even to the satisfaction of the Leader of the Opposition that Treasury, like the government generally, has prac­ tised restraint most severely in its own discretionary operations, with the exception of course of the new program, the increase in the number of people in the controller function. In all other areas you will find that Treasury has stayed with the same number of people.

The workload has grown; you can't have a province that is growing and expanding the way Al­ berta is without the workload growing. But we've

March 21, 1977 ALBERTA HANSARD 391 stayed with the same number of people. That's also true, Mr. Chairman, with respect to the pension administration where the increase is nomin­ al. Again, there's been an immense increase in work­ load there, part of it flowing from added people coming in under local authorities pension administra­ tion. As new groups come in, it adds to our workload. There's also a minimal increase in the personnel administration office, except for the four people in the new program I just mentioned.

So I'd conclude with those general comments on the Treasury's estimates by simply saying that more than all of the increase above the guideline we talked about is accounted for simply by non-discretionary expenditures. One of the major increases is the utili­ ty rebate which is in Vote 3, and members of the committee will remember that that is a program whereby the federal government rebates, I think, 95 per cent of the income tax paid by utility companies to the province. We in turn rebate it to utility companies who in turn rebate it to the utility users. I'd have to check the actual figure, Mr.

Chairman, but a very large percentage of the increase in that vote flows from an increase in that payment. With respect to criteria — I haven't got it with me at the moment. It was sent out to the departments many months ago, with respect to their preliminary requests for budget preparation. Since I've been the Provincial Treasurer we have always sent out very restrictive instructions. We want department per­ sonnel to take a very close look at their operation, and we want them to do it at that time. We want them to review it with their minister.

That's the time we think the opportunity should occur for the senior depart­ ment people and the minister to be carefully examin­ ing all aspects of their department expenditure pro­ grams to see if they can't find efficiencies here or cost savings there, to re-examine programs. There may be some that have outgrown their value to the people of Alberta and ought to be considered in that light. Those are the only instructions we send out, Mr. Chairman. The departments prepare preliminary budgets on that basis.

Now, as to why some depart­ ments are above the 10 per cent guideline and others are below, you'll find much of the answer to that in non-discretionary expenditures. For example, I think one might look at Social Serv­ ices and Community Health and find areas where there's significant increase above the guideline. But there you're really dealing with numbers. You have a program or a policy in place that provides for certain levels of social assistance. How much the govern­ ment is going to have to pay depends on the number of people who fall within that category.

That's not really a controllable item unless there's a change in the policy. So much of the difference both above and below the 10 per cent guideline will come from just those circumstances. Either it's a non-discretionary area and we were called on to make certain payments by statute or you're simply dealing with numbers. Another area in which there's been a significant increase in Treasury is in farm fuel, transportation — that's grown substantially. Our estimates are that there's going to be more [inaudible] than quantity this year than has been the case in the past.

So there's an increase there because of that. Those are items I'd call non-discretionary, Mr. Chairman, because it means those funds have to be made available unless you make a change in the program. MR. CLARK: Mr. Chairman, perhaps I could just ask one more question and then become a bit more open on it. I'd like to ask the Provincial Treasurer [about] a meeting that was held between the Premier and the deputy ministers. I've heard of this meeting so often — not from the deputy ministers, I would hasten to add — and I think it's fair to raise it here.

The meeting I allude to was when the Premier called in the deputy ministers sometime last year and talked pretty frankly about the rate of growth of the provin­ cial budget, and the impact it was going to have on the province if things continued to grow at the rate they had over the past number of years. If my recol­ lection is accurate, it was following this that the very specific guidelines the Provincial Treasurer referred to went out to the various departments.

I raise this because I think it would be helpful for the committee to get some view from the Provincial Treasurer as to what kind of rate of increase we can look at. I recognize it varies somewhat from year to year. Is the Treasurer basically satisfied with the 12 per cent rate of growth — using his figures, or 1 5 per cent using mine — that we have this year in compari­ son to last year? We look at the budgets for two and three years prior to that and there's a great increase.

On a five year average what rate of growth can this province stand, given the fact that we are now committed to 30 per cent going into the heritage savings trust fund, our crude oil production has been tapering off for a couple or three years, and by 1981 we expect to reach the peak as far as natural gas production is concerned. What kind of ballpark rate of increase should we be looking at here? MR. LEITCH: Mr. Chairman, that asks me to look into the crystal ball, and I've never prided myself on having a very large crystal ball.

As I said earlier, I think the growth in government expenditure, which in the four years from the 1972 budget through to the 1975 budget averaged some­ thing in the order of 23 per cent, was justified, indeed was necessary, because I thought Alberta had increased natural resource revenues coming from increased prices and production at that time, from crude oil and natural gas, [and] that there ought to be some immediate benefits to people now living in Alberta.

We were of the view then that Alberta lagged behind many areas in Canada in certain very basic services to people: mental health, retarded chil­ dren, the handicapped, and things of that nature. It was my view, and obviously the government's view, that we ought to increase the level of services to Albertans to the point where they were either the highest or very nearly the highest in Canada. That was accomplished over those four years.

Having done that, and having said that was the government's philosophy, to go now and do what the Leader of the Opposition asks, to indicate a kind of average we might have during the current term, if you like, is not something that I would want to or could usefully speculate on. I think taxation levels, government service levels are just constantly under review. I don't suppose a day goes by when that question isn't considered by the government. The

392 ALBERTA HANSARD March 21, 1977 amount of increase is going to be determined by economic conditions, revenue conditions, service levels and so on existing at that time. I know it would be useful to members of the opposi­ tion if the government were to speculate on what a figure should be for the next five years. But I think it's unrealistic. I don't think these things can be done by looking into your crystal ball. They are constantly under review, and that's a judgment decision that has to be made each year, each time we come to put the budget before the Assembly. MR.

CLARK: Talking about crystal ball gazing, it amazes me how the Treasurer and the Premier can gaze into the crystal ball and say that if our expendi­ tures continue at this rate, within the next number of years we're going to break the economic fibre of the province, and tell the deputy ministers this. But then they haven't got the same crystal ball, or any kind of crystal ball at all, when it comes to levelling with the Legislature as to what kinds of expenditures we can expect for the next four or five years.

We recognize that next year is going to be election year, and I can appreciate why the Provincial Treas­ urer is pussyfooting around, and so on. But it seems to me that if the same government can go to the senior officials and say, look, this is the kind of thing we're looking at: if our education costs and health costs continue to increase at the rate they have over the past number of years we're going to . . . You know, the province can't afford it.

If we expect the public service to take that kind of advice seriously, it's amazing to me that the Provincial Treasurer isn't prepared to try to look in the same crystal ball and give us some indication as to what he sees in the area of social service programs. Can we continue hospital increases at the rates of the past four or five years? What about education? Let's confine it to those two areas, Mr. Treasurer. MR. LEITCH: Mr. Chairman, in my view the Leader of the Opposition confuses the capacity to look in the crystal ball and the capacity to draw conclusions from facts that have occurred.

It's really this simple. The rate of increase over the four-year period we've been talking about was 23 per cent. It's one thing to say, look, that's too high, it should not continue at that level, and it should not continue at that level because of difficulties of financing. That's one obvious reason it shouldn't continue at that level. But there's a second reason, which I've already referred to; that is, how far out of step should Alberta be with respect to the rest of Canada in comparing levels of government service? Now to say that is too much is one thing.

To jump from there — which the Leader of the Opposition does — to saying, having now been able to say that's too much, you should be able to pick a figure that is right, is a kind of exercise that to me doesn't follow at all. It's one thing to say that figure is too high; it's quite a different thing to say another figure is the right one. As I've indicated, we've said that figure was too high and shouldn't continue, and that's what I said in the budget speech a year ago. But to say you can equally easily find a figure that should be the right one for the next years is just wrong. MR. NOTLEY: Mr.

Chairman, I'd like to make a number of general comments. Flowing from them will be questions, and I would appreciate answers from the Provincial Treasurer. First of all, dealing with the new fiscal arrangements between the feder­ al government and the provinces, I'd just like to offer a few observations about the change.

I certainly agree with the criticism levelled in this House before about the inflexibility of some of the cost-shared programs, even though I would argue that in the last 10 years since the Pearson govern­ ment embarked upon them — and for that matter, the first major one was originated by the St. Laurent government — I think in principle they have contrib­ uted to an improved quality of life for the people of Canada. But I think it is a fair comment that in the administration of cost-shared programs there has been an inflexibility.

That inflexibility has quite prop­ erly contributed to an almost general feeling among all provinces — whether it's in the Atlantic region, which is a have-not area or Ontario or Alberta, which are have areas of the country — that perhaps some alternative should be found. Whether or not we should have looked at a more flexible method of administering the cost-shared programs as opposed to the tax point transfer is, I suppose, a debatable question.

But there is no doubt, for example, in the area of hospital expenditures, that we were caught where we had to invest year in and year out in active treatment hospitals because the inflexibility of the program has caused problems not only here but in other provinces as well. My concern with the new arrangement, Mr. Treas­ urer, doesn't really originate from being a member of this Legislature. I think Alberta is a have province; it's going to do quite all right out of the transfer of tax points.

There's no doubt in my mind that Ontario, a have province, is also going to do quite well out of the transfer of tax points. But to begin my comments, I pick up just one statement you made in response to the Leader of the Opposition which I think is extreme­ ly important, and that is the concern of the have-not provinces about equalized tax points, equalized up to the top yield of the richer provinces and not some sort of national average. I think this is a very relevant point.

One can say there was no trade off as far as the province of Alberta is concerned and be quite accurate, because Alberta is a have province. So we're going to do all right out of a trade off of tax points. But what about Prince Edward Island, what about New Brunswick, what about Newfoundland where we've recently invested $50 million, if one can call it that? What about the yield to those provinces? I understand that the difference in per capita yield on the tax point is really quite dramatic, even with this averaging up to the national average.

The difference between Prince Edward Island and Ontario is that a tax point in Ontario will bring in $10 per capita; in P.E.I., $4 per capita. Now when the Treasurer introduced the estimates you talked about going to New York, and in the course of your remarks, made observations about national unity. Well fair enough, and I'm sure most of us would agree with those remarks. But — and I say this "but" quite seriously — I suggest that national unity will be fostered more directly over the next few years in this country by fiscal arrangements rather than attempting to find constitutional formulas.

March 21, 1977 ALBERTA HANSARD 393 When one looks at the Atlantic region today where there's a good deal of disaffection, unless we can deal with the regional disparities that Trudeau talked about so eloquently in 1968, this country's going to be in trouble. It's not only going to be in trouble with the Levesque government in Quebec; it's going to be in trouble in the have-not regions of the country.

So my basic concern with the proposal that we have in effect now is that it seems to me it is still going to lead to some very serious inequities, perhaps in the first year, as a result of the three ingredients set out on page 45 of the budget speech. The poorer, or have-not provinces may come out even Steven. Alberta apparently comes out $54 million ahead. But what do the projections say? And as a result of this move are we going to find that the quality of some of these basic programs in the poorer parts of the coun­ try will lag significantly behind the wealthier prov­ inces in Canada?

I say that because it seems to me that is really a passing issue in this House, but it is going to be one of the more crucial questions in determining whether we keep this country together. I really believe that we've got to tackle regional dispari­ ties and that a wealthy province like Alberta has to take a very strong stand in terms of, we're going to go this route of tax points. It seems to me our position should be that the tax point yield should be equalled up to the top province in Canada and not the national average. Mr.

Chairman, I want to move from that point to deal with several other questions that occur to me. I note that on page 47, I believe, of the report we will receive approximately $160 million more in income tax revenue. My calculations were something over $200 million, but I assume that's making allowance for an increase that would flow in because of higher personal income tax payments in any event. So we're looking at $160 million. My calculations would show somewhere around $32 million over the estimates of last year in corporation tax income and what we expect to get this year. The first observation I'd make, Mr.

Chairman, is it seems to me there is a rather strange disparity here between the yield, because we're going to get back one income tax point. So it would seem to me there should be a larger increase than $32 million. How­ ever, I don't want to get into a debate over that. MR. LEITCH: You already have. MR. NOTLEY: Okay. That $32 million then is the increase in the yield one expects this year. Okay. So we're looking at $160 million, Mr. Chairman, and approximately $30 million or $32 million more, which is about $192 million.

My question — a very direct question — to the Provincial Treasurer is whether or not . . . and one can look through the estimates. I've done so in a cursory way, but I haven't been able to see whether or not we're going to put all that addi­ tional money into the programs that were in fact cost shared before.

If we do have any statistics on that — the Leader of the Opposition asked a very important question about what new thrusts we are considering with the flexibility, but I would add to that: is it the government's intention generally — within reason; no one is saying every last cent has to be transferred into these programs — to use that elbow room to improve services which were previously cost shared, or is it the government's view that this will give greater flexibility for other types of expenditure or investment? I'd like to raise three other points, Mr. Chairman. Two deal with unemployment.

Unemployment is not a major problem in Alberta. The fact of the matter is that as a result of the boom we have a very high rate of employment. But — and this relates to the ques­ tion I posed to the Minister of Advanced Education and Manpower this afternoon in the question period — we do have pockets of unemployment that are really quite distressing, because they remain pockets of unemployment. The first time I went to the Peace River country in 1961 and travelled along Lesser Slave Lake, Lesser Slave Lake was a have-not area. There weren't enough jobs.

The same was true in 1965, and even more true in 1969 and '70 when we got into the DREE program. Lamentably, Mr. Chair­ man, the same is true today. It's still an area where you have rather serious pockets of either unemploy­ ment or underemployment. Rather than looking at a grand design to deal with what is not a problem across the province as a whole, I would be interested in what kind of sophistication we have to zero in on those parts of the province where there is serious unemployment, particularly chronic unemployment.

One of the suggestions made in the federal House recently by Lincoln Alexander, the Conservative man­ power critic, was that we should be providing public works or public expenditures in some of these areas of chronic unemployment. I would ask the minister whether or not the government is now considering any sort of program — I'm not suggesting a crash program — that he sees being undertaken this year, directed to those areas where we have unemployment. Along with that, Mr. Chairman, I would just make this pitch I've made in the Legislature before when dealing with Department of Treasury estimates.

We can talk about different kinds of tax relief. In 1975 the government reduced personal income tax by 10 per cent. I said then, and I say now, that it would be better to have a tax credit system instead, even if we were looking at approximately the same amount of loss to the Treasury, because a tax credit system would get the money into the hands of the lower income people who need it most. When one looks at an across-the-board reduction in personal income taxes, high-income individuals gain the largest tax saving. A tax credit system would get money into the hands of people who consume.

It seems to me we want to get money back to those people who have the highest propensity to consume at this point in time, so that we can get the wheels of industry rolling again right across the country. The other and final point I would raise — and I would ask the minister to respond directly, Mr. Chairman — is with respect to ALPEP. The minister and I have had some memos going back and forth as to the approximate loss, but I think we got fairly close to a figure of around $400 million revenue this year as a result of the incentive program. Not too long ago Oilweek carried an assessment of one part of ALPEP.

While there's no doubt that drilling has increased, the rather disturbing feature of this report was that new wildcat wells — which, as I understood it, was really the principal reason for the program — had not increased. In-field drilling is going to occur anyway,

394 ALBERTA HANSARD March 21, 1977 particularly with the higher prices of natural gas and oil. Therefore it seems to me, Mr. Chairman, if we're not getting new wells drilled and new wildcat wells coming in, one can really question whether it's a very sensible program. I understand it is being reviewed. I'd like the minister to respond as to where that review is presently, in terms of the government's position, whether or not it sees an extension of the program, a phasing out, or some partial continuation. MR. LEITCH: Mr.

Chairman, I find it a little difficult to respond to the comments of the Member for Spirit River-Fairview because it seems to me most of his comments dealt with areas in which I don't have prime responsibility. That would be true particularly with respect to his comments about the new fiscal arrangements as they affect other provinces in Cana­ da. I attended a number of meetings with finance ministers and provincial treasurers, as the case may be, of those provinces. I must say I came away with the decided impression that they were all very cap­ able of looking after themselves without any help from me.

But, for the hon. member's benefit I would call to his attention, with respect to his comments about the need not to let the economic opportunities get too far out of line across this nation, that the equalization program — which was, I believe, improved as a result of new fiscal arrangements — is designed to do that. In addition, while I don't carry the figures in my head, it's my impression that in some respects some of these provinces will do better under this arrangement than they would under cost sharing because, remem­ ber, their cash payment is up to the national average of expenditure.

In some of these areas some of the provinces were well below the national average, on a cost sharing basis. On the question of what is being done about unemployment or what the plans are, it seems to me, Mr. Chairman, that the hon. Member for Spirit River- Fairview could get more information if he asked those questions of the minister directly responsible for such programs as our PEP and STEP when that depart­ ment's estimates are before the committee. I'd really say the same with respect to his request about ALPEP. That is of course in the field of crude oil and natural gas.

Specific items such as the exploration incentive credit will be dealt with in the budget for the Department of Energy and Natural Resources. I'd suggest, Mr. Chairman, that again he would get much more helpful responses from the minister when that department is under review by the committee.

The last comments with respect to a tax credit as opposed to an income tax reduction: again I'd call to the committee's attention the changes we've made in the income tax system for Albertans who have low taxable incomes, to ensure they wouldn't be paying provincial tax if they weren't paying federal tax, nor should we either lose sight in that connection of the very, very major increase in the natural gas price protection plan where the total amount of about $105 million is — I'm not sure of these figures, Mr. Chairman — but it is worth five or six income tax points.

That of course helps those people who are on low incomes very significantly. MR. NOTLEY: Mr. Chairman, just to follow that up. It may well be that I'll get more helpful answers if I do ask the other ministers. But that isn't going to dis­ suade me from asking the hon. Provincial Treasurer, for the simple reason that the Provincial Treasurer has to be the one person primarily responsible not only for the accounting but for the fiscal policy of the government of Alberta. Just as the Provincial Treasurer's friends in Ottawa are quite properly peppering Mr.

Macdonald at the present time about what happens vis-a-vis unem­ ployment, what will be the future on inflation pro­ grams, quite appropriately, the person who must bear the major responsibility federally is the Minister of Finance and the person who must take the major responsibility for the fiscal management of Alberta, the programs, emphasis, and direction, is the Provin­ cial Treasurer. So while I can appreciate that it would be nice to sort of sidetrack the issue to the hon.

Minister of Labour or the Minister of Manpower — I intend to ask both these honorable gentlemen the same question — the Provincial Treasurer is the man behind the sign, such as the sign on Harry Truman's desk which said, "the buck stops here". When it comes to overall employment policy and overall fiscal management of the province, the buck stops at the Provincial Treas­ urer's desk.

Therefore I would again put to him the question of whether, as part of its fiscal priorities, the govern­ ment is considering a program designed not to deal with overall problems such as the STEP program, but with those special areas that have chronically high unemployment in Alberta. The other question I would put while I'm on my feet, Mr.

Chairman: the Provincial Treasurer didn't answer the specific question as to whether or not it is the intention of the government to use the flexibility from the new arrangements on income tax and corpo­ ration tax transfer to continue to funnel that money into those areas that were previously cost-shared. MR. LEITCH: Mr. Chairman, I simply can't agree with the hon. member comparing the Provincial Treasur­ er's position on Alberta unemployment with the fed­ eral Minister of Finance's position on unemployment. He has a much different problem than we have in Alberta.

It may well be that unemployment in Canada has reached the proportions — and I think it has — where there needs to be overall action in a budgetary sense taken by the federal government. That's quite properly the field of the federal Minister of Finance. But we're dealing with a much different situation in Alberta. The hon. member pointed that out clearly in his opening comments. He said there isn't an unem­ ployment problem generally in Alberta, there are poc­ kets of unemployment.

We have designed programs to deal with those pockets of unemployment, not necessarily in the specific areas to which the hon. member refers, but to treat the unemployment prob­ lem with the "rifle shot" approach as opposed to the broad "shotgun" approach that one would get in an overall budgetary sense. That's why I, in my judg­ ment quite properly, Mr. Chairman, referred him to the ministers who administer the programs we have with respect to unemployment. Turning to the direct question asked earlier as to whether the additional money we were receiving

March 21, 1977 ALBERTA HANSARD 395 under the present arrangements would all go into the programs being funded under the old arrangement, I don't know. I haven't worked through the numbers in the budget so couldn't tell the committee what the situation is this year. Frankly I've not been involved in any discussions about that. I'd simply offer my own personal view that if we were channelling the additional revenues into all of those programs, we're not doing much different from what we were doing in cost sharing except we have the flexibility to design the program.

But in some areas we may well want to spend money on a program that wouldn't have been cost shared under the old arrangement, because we feel it will be of beneficial effect to the program that is in fact cost shared and may well improve the service at the same cost or alternatively maintain the same level of serv­ ice at reduced cost. So I wouldn't think it likely that would be our philosophy. But in saying that, I want to say that it isn't a matter that has been considered or on which any firm position has been arrived at. MR. NOTLEY: Mr.

Chairman, I'd just like to say that while I don't think anyone in the Legislature would say the government has to be held accountable to the last dollar, that if they are $10 million short or $20 million over somehow that that's a negation of the program. But it seems to me that the basic argument for the substitution of tax points instead of the cost- shared programs was not that there would be greater flexibility to do X, Y, and Z instead of A, B, and C. The basic argument was really that it would provide a much better job, to do A, B, and C well.

So it would allow the provinces to design programs that would provide equal or better service at a more reasonable cost and that perhaps any savings in cost could be used to extend or to improve the quality of service. Certainly that was the tone that came out of the finance ministers' conference.

When the press con­ ferences were held the suggestion was always that it would create the flexibility to improve hospitalization, to improve postsecondary education opportunities and what have you and to design mechanisms for delivery of these services which would roll back and create greater opportunities, rather than simply to give the government elbow room to move into other areas instead. So I would just say to the Provincial Treasurer I hope at least the bulk of this money would be used in that general area of the former cost-shared programs. MR. TAYLOR: Mr.

Chairman, I just have one or two remarks to make at this time. The first one is on the matter of unity in regard to the tabled statement made by the hon. Provincial Treasurer while he was in New York. My only comment is that it was unfor­ tunate this was not covered by the press throughout Canada in order that people would have known the stable, sensible approach the people of Alberta are taking in regard to this matter of unity. The speech of the Premier of Quebec, which was very lopsided, was published throughout the country time and time again.

When a representative of Alber­ ta made a sound, sensible statement, my view is that it was very unfortunate it wasn't carried by the press across Canada and the United States. The other point I would like to make in connection with this part of the budget is the matter of an auditor general, a controller, or changes in the auditor's of­ fice. Rightly or wrongly, I understand from the hon. Provincial Treasurer that there is not going to be a separate man appointed as the auditor general. If that is so, I applaud that decision.

In my view, having an auditor general and an Auditor is simply putting another level of bureaucracy, another level of cost on the people. In my view, it wouldn't save the people 5 cents, but it would cost them extra money for an additional bureaucracy. If it's a matter of having a combined preaudit and post-audit under the present Provincial Auditor, I look upon that a little differently. For many years the Auditor of this province has acted in that capacity to some degree, perhaps without legislative authority.

Many times while in government I would check with the Provincial Auditor in regard to a certain expendi­ ture before it was made, to make sure it was going to receive the support afterward. The Auditor was always very obliging to check and advise whether he thought it was a proper expenditure under the laws of the province or otherwise. To expand that service and have the Provincial Auditor check on a preaudit as well as a post-audit may have some value to the people of the province. If that's the way it's being done, I could certainly support it.

But as I opposed the resolution previously, I certain­ ly think it's a waste of public money to have another man appointed as auditor general over and above the present audit. In my view the present audit of this province is excellent and thorough, and we don't need another layer of bureaucracy. I am looking forward to the legislation to see exact­ ly what form this is going to take. But I certainly hope it's not going to be the appointment of another audi­ tor over and above the present Auditor. MR. KING: Mr. Chairman, listening to the earlier remarks of the hon.

Member for Spirit River-Fairview, and having read this morning contrasting remarks made by his federal leader respecting the paramount importance of centralization and the fact that if there was any conflict between centralization and flexibili­ ty, why certainly centralization had to win . . . MR. NOTLEY: Do you always agree with Joe? DR. BUCK: Joe who? MR. KING: I'm inclined to agree with him in the great majority of cases, yes. I was reminded though, Mr.

Chairman, of some­ thing I couldn't resist passing on to the House, the story about Will Rogers visiting a university campus in the States during the first world war. Apparently in the course of his comments he alienated a couple of scientists, one of whom sought to put him in his place by asking if he knew very much about science. For example, did he know the difference between somebody who did theoretical research and some­ body who did applied research? Mr. Rogers replied very, very quickly, of course he knew the difference. Take the war we're engaged in right now.

You want to find out how to take U-boats out of the North Atlantic, you go to a theoretical scientist and pose the problem to him: how are we going to get the U-boats out of the North Atlantic? He'll think about it for a while and come up with the simple, straightforward

396 ALBERTA HANSARD March 21, 1977 solution: heat the North Atlantic to 212 degrees Fahrenheit, and they'll all pop to the surface broiled like lobsters. Now the politician who is faced with the problem will be a little bit concerned about this and will ask if that isn't an impossible situation. And the theoretical scientist will say, I don't know about that, that's the field of applied research. Mr.

Chairman, I thought the remarks from the hon. member opposite demonstrated with great clarity the fact that the NDP is constantly faced with the same problem of being very good on theoretical research and not very strong on translating it into the practical realities of political life. SOME HON. MEMBERS: Agreed. MR. CLARK: Mr. Chairman, I'd like to explore a number of other areas with the Provincial Treasurer. Mr.

Treasurer, perhaps we might start with the salary contingency fund of some $28.8 million last year, and then up to $36.8 million this year; its purpose, and what happened that the money wasn't used last year. Secondly, the Treasurer would be somewhat sur­ prised to receive a compliment from me, but he will recall that I commended him on the question of special warrants: $300 million down to, I think, $107 million this year. The third area I would like to touch on, though, is the question of the financial statement within the budget itself.

I would refer hon. members and the Provincial Treasurer to page 22 of the Budget Ad­ dress, where it talks in terms of a total general revenue fund cash surplus requirement, really a $40 million deficit. I allude to that $40 million, Mr. Treas­ urer, because if I turn back to page 37, in the table at the back of the Budget Speech, it talks of the Alberta Housing Corporation, the Alberta Home Mortgage Corporation. Then under the explanatory notes (

b) and (

d) it suggests very strongly that those expendi­ tures, either all or in part, will be transferred to the Alberta heritage savings trust fund in the course of this year. Now that would have a substantive dif­ ference on that $40 million, if the indication set out here is followed. The other area, Mr. Treasurer, deals with the upcoming oil negotiations. I recognize that in the last number of years there has been no effort to try to include the additional revenue in the budget. There's good reason for that.

But if we take the proposition that's been put forward by the federal Minister of Energy, Mines and Resources, where he's been talk­ ing in terms of a $1.25 a barrel increase, our calcula­ tions are if that happens we could be looking at something in the vicinity of $200 million additional revenue to the province. I'm asking the Treasurer to comment on that area of the oil increase, using what the federal minister has considered a basic minimum.

Secondly, the likelihood of the transfer of the herit­ age savings trust fund in the area of the Housing Corporation and the Home Mortgage Corporation, and the effect that will have on the budget statement I referred to on page 22. Thirdly, the question of the salary contingencies and what we might expect there this year. MR. LEITCH: Mr. Chairman, I didn't follow the remarks of the Leader of the Opposition when he said that the salary contingency fund provided for in last year's budget wasn't used.

The situation with the salary contingencies is that we had not included them in previous budgets because salary increases to the public service were simply a matter under negotia­ tion. And it is not wise to put in the figure before the event. But last year it was different. We knew very closely what that figure would be, since we were in the AIB program. That was put in last year, and we just put in the comparable figure this year.

So when we complete our negotiations with the public service, that fund will then be allocated to all departments in accordance with their salary requirements flowing from the new arrangement. Now with respect to what the Leader of the Opposi­ tion referred to as a deficit of $40 million; I may be wrong in this, but I don't think any finance minister or provincial treasurer would refer to that as a deficit. MR. CLARK: A shortage, then. MR. LEITCH: It's a cash requirement because of cash flow matters.

But he is correct in that if we were to fund some of the additional borrowing requirements of the Home Mortgage Corporation or the Alberta Housing Corporation by having them sell debentures to the Alberta heritage savings trust fund, that $40 million figure would change. But those are decisions that have not yet been made. I wouldn't anticipate them being made until the requirement for that fund­ ing came about. We would then make decisions as to whether they should be funded.

I guess at the moment we have three alternatives: by purchasing their debentures in the Alberta heritage savings trust fund; perhaps we could fund them out of general revenue, as we have done on occasion in the past; or we could take one of the provincial agencies to the market and have them borrow money in the manner they had in the past.

With respect to my commenting on whether there would be a $200 million revenue increase if the oil and natural gas price increased in accordance with news statements attributed to the federal Minister of Energy, the figure sounds reasonably close but I can't give an accurate estimate at the moment, Mr. Chair­ man. It's something I'd have to have worked out. Again I just caution members of the committee that that's very much in the field of speculation at the moment. For those reasons we have not included any estimated increases for crude oil and natural gas in the budgets in past years. MR. NOTLEY: Mr.

Chairman, I take it this would