1984 Legislative Session: 1st Session, 33rd Parliament

Hansard

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

( Hansard )

TUESDAY, JANUARY 31, 1984

Morning Sitting

[ Page

2969 ]

CONTENTS

Routine Proceedings

Committee of Supply: Ministry of Finance estimates. (Hon. Mr. Curtis)

On vote 34: minister's office –– 2969

Mr. Howard

Mrs. Wallace

Mr. Blencoe

Mr. Davis

Mr. Cocke

Mr. Lauk

Mr. Skelly

Tabling Documents –– 2980

TUESDAY, JANUARY 31, 1984

The House met at 10:03 a.m.

Prayers.

HON. MR. HEWITT: Mr. Speaker, I'd like to take this

opportunity to introduce to members of the House my new executive

assistant, Mr. Mickey Perret, who is in the gallery along with my

secretary, Mrs. Joan Burleau. I'd like the House to welcome Mr. Perret

to his new job.

HON. MR. GARDOM: Mr. Speaker, I would say that over the years

a number of members have made some quite cogent observations about the

lack of light in this assembly, perhaps for reasons other than

electric, but this morning we seem to have it a little bit differently

with the electricity of the lights. Perhaps you could find somebody to

put an appropriate finger on a button to increase it slightly.

Orders of the Day

The House in Committee of Supply; Mr. Strachan in the chair.

ESTIMATES: MINISTRY OF FINANCE

(continued)

On vote 34: minister's office, $172,432.

MR. HOWARD: Mr. Chairman, last evening I was engaged in talking about the Public Accounts Committee

and the examination of government expenditures. It seems to me we are

always too far behind times in that examination. Attendant upon

introduction of the budget, the Minister of Finance brings in a motion

that refers the preceding fiscal year's public accounts to thePublic Accounts

Committee. At the very best, that means we are examining the

expenditures of more than a year ago. We are always sort of behind the

times on that.

In this modern day and age, with electronic gadgetry ahold of all

the things we do, the Ministry of Finance is able to produce, within

five or six weeks following the end of a particular quarter, a

quarterly report about incomes and expenditures of government over that

preceding quarter. Obviously somebody has tabulated the expenditures,

looked at the vouchers and said: "What is the total of all cheques that

have been written, and what have they been written for?" They have also

tabulated the levels of income over that particular period of a

quarter. Instead of, or in addition to, going back more than a year on

examination of public accounts, I am going to suggest that the Public Accounts

Committee be authorized to examine the quarterly reports, and the

vouchers attendant upon those reports, as soon as the report is made

public. In other words, the Legislature would then, through thePublic Accounts

Committee, whether or not the House was sitting.... It would need to

have authority to sit while the House is not sitting. That's not under

the jurisdiction of the minister, Mr. Chairman, but I throw it in as a

necessary explanation of what would have to occur.

The Public Accounts Committee would then be dealing with matters on a current

basis and not on an historic basis of expenditure activities of the preceding

fiscal year, at the very best. Sometimes, depending on when the budget is presented,

it may be a year and a half or up to two years after the actual expenditures

have taken place, and really is not germane to current things. I'm sure

it is not beyond the capabilities of the Ministry of Finance to be able to provide

the Public Accounts Committee.... And this is apart from what I was talking

about yesterday: the restrictions that exist. That's another matter that

can be dealt with in another context. But it should be within the capacity of

the Ministry of Finance to be able to say as soon as the quarterly reports for

the current fiscal year are available and made public....

The minister said that's usually within five to six weeks after the

end of the quarter. It should then be possible for representatives of

the general public — that is, MLAs who are on thePublic Accounts Committee — to have access to the documentation about those expenditures.

We would then be moving into the current age and taking full

advantage, on behalf of the general public, of the electronic wizardry

and gadgetry that exist with computers and the like — providing to the

general public, as quickly as we possibly can, and as soon after the

event as is possible, an explanation of the expenditures. I urge the

minister to look at that. I'm sure it can be done without a great deal

of difficulty. Bring that to the attention of the government as an

alternative to the present antiquated and obsolete method, which really

doesn't satisfy too many people when we are dealing with current

matters. To go back two years and say "What did we do two years ago?"

seems sort of out of whack with the demands of today.

[10:15]

HON. MR. CURTIS: Mr. Chairman, I am subject to correction, but I think that is a topic which could be discussed by the Public Accounts Committee,

possibly with the auditor-general. I recognize that what I am about to

say would prompt the member to say: "That was all right years ago." But

a fairly lengthy process is involved, and I'm informed that it is about

January, around the start of the calendar year, that the audited public

accounts for the year, which are then presented to thePublic Accounts

Committee through this House, are made available by the

auditor-general. Whether the auditor-general can accelerate that

process....

I appreciate and acknowledge that it is not solely attributable to

the auditor-general. The delay is not exclusively to be found in that

office and I wouldn't want the committee to misunderstand me. The

quarterly report is not audited by the auditor-general. It is a

document produced by the Ministry of Finance and the respective Crown

corporations to provide as much up-to-date information as we can, not

only to members of this House but to the people of the province. If

there is some opportunity for accelerating that process, then I think

the Public Accounts Committee could discuss that. I believe it would be

within their mandate to review that and to bring recommendations back

to the House. I have no fundamental objection. But I do caution the

committee that the public accounts as presented are finally and fully

audited by the auditor-general. I wonder if the Public Accounts Committee

would not find it somewhat difficult to be dealing with unaudited

accounts. But I have no philosophical or hard-nosed resistance to that

which the member has spoken of.

MR. HOWARD: I may not appreciate fully the complexity of

accounting and bookkeeping and what's necessary, but it seems to me

that an audit as done by an auditor, or by the

[ Page 2970 ]

auditor-general in this case, looks at the totality

of things and says: "Are the accounts kept accurately? Is this

happening properly? Does it all add up?" When the audited public

accounts for the fiscal year are referred to thePublic Accounts

Committee, the committee generally does two things: it has as a witness

the auditor-general to talk, usually, about the general picture; it

also takes the course of examining specific vouchers for which

expenditures are authorized.

I wasn't talking about the audited position of the public accounts,

but the opportunity on a current basis for the committee to have access

to the documentation authorizing the expenditure. They are two separate

things. When the formal, lengthy process of auditing is completed.... A

previousPublic Accounts Committee did examine this in a superficial

way, I think, but it did examine the possibility of dealing with

current fiscal year matters as distinct from or in addition to those

which had been referred by the House for the preceding fiscal year.

That information was provided, I believe, by the comptroller-general's

office. I'm not sure whether it was that or the auditor-general. But

that time-frame was provided to the committee, that it took that length

of time to get matters all sorted out, to get the final thing audited

and sanctioned as approved as an audited account by the auditor-general.

But I'm putting that to one side and saying that access to the

foundation for expenditures — the vouchers, the authentication for that

expenditure — should be made on an immediate or forthwith basis, which

doesn't deny the committee the opportunity to look at and examine the

auditor-general about the total picture when that is available. I'm

saying separate the two. If the quarterly reports are the subject

matter of referral to the committee and they are not audited, obviously

the committee could not call the auditor-general as a witness about

that particular quarterly report, and if they did, the auditor-general

would obviously say: "This is unaudited; I can make no comment about

it." That would be quite the proper thing for the auditor-general to

say and to do, and the committee would have to accept that. I would

think that the committee would have enough sense not to demand or

insist upon the auditor-general's commenting upon a document which is

not audited, but they would have access to the vouchers of expenditure.

That's my interest in this regard.

HON. MR. CURTIS: Mr. Chairman, I appreciate the member's clarifying the point he made earlier. I misunderstood him in that one context.

The books for any given year are closed in approximately May

following the fiscal year. The interim statements, which are unaudited,

appear in the late summer or fall in the Financial and Economic Review ,

the document to which I referred yesterday, and with which all members

are familiar. Then the process of auditing by the auditor-general will

have commenced and again continues until December or January.

I would look to others to comment, but it seems to me that a change

in the process of viewing vouchers for a given year could well be

addressed by thePublic Accounts Committee with a recommendation which

would come to this House. I would be reluctant to usurp the legislative

authority assigned to the auditor-general with respect to vouchers,

prior to the....

Interjection.

HON. MR. CURTIS: Nor could I, I believe the House Leader interjected.

We have appointed an auditor-general to review, to the extent that

she considers necessary and appropriate in the fulfilment of her

mandate given by this Legislature, and as we discuss it I would think

that it would be very awkward for the auditor-general to be answering

questions which would inevitably be posed by the Public Accounts Committee on specific expenditures which she or her staff have not yet finally reviewed. But insofar as the Public Accounts and

Economic Affairs Committee wants to examine ways in which the process

can be accelerated and improved, then I would think that is in the

committee's power.

MR. HOWARD: Mr. Chairman, the comments of the minister simply

reflect an attitude that if you don't want to do something, you can

find all sorts of reasons not to do it. All I'm asking is that they

examine the possibilities of doing it, and I ask why can it not be done

instead of saying: "Here are all the difficulties we have to deal

with." That's all I'm asking for. There is nothing to stop the Public Accounts Committee

from looking at the possibility. I was hoping we would get from the

minister a general agreement of thought without approving the thought

or the idea. It does seem rather awkward when you put forward an idea

that immediately makes everybody on the other side grope for reasons

why it can't be done, instead of examining the possibilities of doing

it.

HON. MR. CURTIS: I will undertake to discuss this point with the auditor-general. She can then communicate with me and with the chairman of the Public Accounts Committee,

a member representing the official opposition. I think the bottom line

is that we are obliged to ensure that the auditor-general is

comfortable with any change in procedure. I shall raise it in writing

with her and ask for a response.

MR. CHAIRMAN: Shall vote 34 pass? On vote 34, the Member for Cowichan-Malahat.

MRS. WALLACE: I don't wish to deal with any real specifics

under this particular estimate, but I do want to take this opportunity

to deal generally with the financial direction of the government and to

do it under this minister's estimates, because after all he is the

chief financial officer of the government and the man charged with

doling out the taxpayers' dollars to the various ministries which form

the government. In that context I want to make a few general

observations and perhaps issue a word of warning to the minister.

During the years when the present Premier was Leader of the

Opposition, he coined the phrase, "Not a dime without debate." We still

hear it, but it has become utterly meaningless in today's context. Here

we are on the last day of January — the day, incidentally, when the

government runs out of interim supply....

HON. MR. GARDOM: How do you know?

MRS. WALLACE: We passed a bill, Mr. House Leader, that took you through until January 31.

The great percentage of the money that we're talking about today is already

expended. The tax measures that have raised the money which the government says

it needs have been in force for ten months in the main. Some of them didn't

go into force until July 7 because of the lateness of the budget,

[ Page

2971 ]

but some of those were retroactive. So it is certainly in a strange atmosphere

that doesn't compare one iota to the "not a dime without debate"

concept that was proclaimed so loudly and for so long when that government was

in opposition.

MR. SKELLY: It's no longer operative.

MRS. WALLACE: Yes, you're right.

I think I would like to draw to the minister's attention the results

of his financial policies. Although that minister may not want to take

responsibility for, say, the problems that are being faced in the

ministries of Education, Health, the Attorney-General and others, the

very fact that he is the holder of the purse-strings and restricts the

money that goes to those areas makes him just as responsible or more

responsible than the minister who may make the actual decision as to

what particular spending pattern his ministry is going to follow,

because if you don't have the money you can't spend it. It's the

Minister of Finance who is responsible for doling out that money, so I

think that minister has to take that responsibility.

We've heard a lot about the need to restrain our spending, to hold

ourselves back, to be very careful with our funds and to try and keep

taxes down — all those kinds of things. Do you know, Mr. Chairman, what

is happening out there? The people whose children are being deprived of

the right to an adequate education are beginning to squirm a little

bit. They're beginning to realize that it's as a result of this

government's fiscal policies that their children are not able to get

the proper training, or the proper help if they need special education

because of being disadvantaged.

[10:30]

I think we have the highest unemployment among young people ever in

British Columbia; yet there is a curtailment of opportunity for those

young people to advance their education when they can't get work. We

find tuition fees going up. We find the number of admissions being

reduced. Those things are all a direct result of the policies of the

Minister of Finance. People are becoming very concerned about this, Mr.

Chairman. They find that they are on long waiting lists for health

care, and other facilities have been cut or reduced, and they are

beginning to realize that it's not the local hospital board, that it's

not really the Minister of Health (Hon. Mr. Nielsen), but it's this

government.

[Interruption. ]

The sun has risen; the lights are on. That's great! Maybe now, with

all that brilliance, some of these arguments will be seen over there.

Yes, maybe even that government and that minister will begin to be able

to see what I'm talking about.

We've seen some very short-sighted fiscal policies. The bottom line

is the thing that people are concerned with. Certainly the lack of

opportunities in education and lack of admissions in health care are

going to be more costly in the long haul. We're building up an unseen

and unaccounted deficit today that we will have to face tomorrow, and

that's in addition to the most extensive borrowing that this province

has ever undertaken. Every week I get the minister's little notes

telling me that he has borrowed another $60 million. We the taxpayers

are beginning to realize that the interest on that, as well as the

principal, is going to have to be paid back somewhere down the road.

Certainly with the lack of funding in the ministry of the

Attorney-General we could go through a multitude of things, but one of

the gravest errors of that minister's way — it has to be that minister,

because he's the one that has reduced the amount of money that the

Attorney-General has to provide the services.... Yesterday we heard

about the problems with legal aid and help for the Status of Women.

I'm concerned about what we are doing as far as young offenders are

concerned. The minister is going to review the Victoria young offenders

program in March. The money is going to come from the Minister of

Finance. Will that Minister of Finance be prepared to assure the

Attorney-General (Hon. Mr. Smith) that those young offenders will have

these kinds of services, or is he going to say no, with the result that

we then come to a spot where we are paying $40,000 a year to keep those

people in prison? Those are the kinds of....

MR. CHAIRMAN: Hon. member, I must now remind all members of

the committee that we have digressed to some degree and we have

accepted a lot of latitude. But we are discussing the estimates of the

Minister of Finance; we must discuss the administrative actions of that

ministry only. Other estimates are yet to come, and I'm sure all hon.

members of the committee are aware of that. Items that might be better

dealt with by another minister should be dealt with during those

estimates and not during the estimates of the Minister of Finance. If

we could relate our remarks and be relevant in Committee of Supply to

the administrative actions of the minister, then the committee will be

well served.

MRS. WALLACE: With due respect, Mr. Chairman, the

administrative actions of the Minister of Finance relate very closely

to what I'm talking about. They relate to tight-fisted financial

programs today with long-term costs that are inestimable for future

generations. I have simply drawn three or four very quick examples as

to how that is the case. The reason I have done it is that if there is

any purpose in debating estimates at this time of year, after they are

five-sixths spent, it surely has to be to try to encourage that

Minister of Finance in preparation of his budget next year to change

his direction, to see the error of his ways, to recognize that the

costs of this kind of policy on which the government has embarked are

far more extensive than would be some programs today to avoid those

costs in future. The old adage: an ounce of prevention is worth a pound

of cure.

Another adage is that if you're not part of the solution, you're

part of the problem. I think that that has also been very definitely

demonstrated. We've seen — back last summer when the House was still in

session, I'm sure some of these quotes were used — that restraint is

part of the problem, not the solution; that Statistics Canada has

reported that incomes are being squeezed and there are worrisome signs

that could choke off economic recovery. This is Phil Cross of

Statistics Canada, who is saying: "In 1982-83 labour income as a whole

grew only by 3 percent, while inflation was at 6.6 percent." When you

take that money out of the economy, Mr. Chairman and Mr. Minister of

Finance, you are becoming part of the problem because you are

restricting the ability to stimulate the economy when incomes fall

behind.

George Pedersson, a Vancouver economist — and this is an August

quote; he's a consultant for Pemberton, Houston and Willoughby — has

indicated that this budget that we're talking about now and this

Minister of Finance's estimates for 1982-83 have hampered the economy.

[ Page

2972 ]

The Minister of Labour (Hon. Mr. McClelland) is in the House. One of

his own officials in a report within his ministry has indicated the

same thing: that the government's programs have reduced the likelihood

of the economy turning around. Statistics have been quoted in this

House earlier in this debate which have indicated that the economy in

B.C. is lagging behind the rest of Canada. If you're not part of the

solution you're part of the problem, Mr. Minister.

I guess my advice to you is to change your direction, to bring in a

budget for 1984-85 that will reflect that kind of thinking and

recognize that we have to take some action now rather than delay and

retrench to the point that the economy spirals further and further

downward. The warning is that public opinion out there is beginning to

recognize this, and if there's enough pressure put on the Premier, you

may well find yourself out of a job, Mr. Minister. That's the habit

with this government: when they get into a problem, they simply try to

put the blame on someone. And who better than the Minister of Finance,

who is responsible for all these programs? He's not really one of

"them"; his background is a Conservative background. It would be very

easy to make him the fall guy. That may well happen, Mr. Minister, and

I would suggest that you change your direction, look to the thinking

out there and start B.C. on a road to recovery, rather than further

down the tube — which is exactly where we're going under the policies

you've been advocating.

HON. MR. CURTIS: Mr. Chairman, very briefly, I heard the

member for Cowichan-Malahat (Mrs. Wallace), particularly with respect

to her latter remarks on the fiscal policies of the government. I am

compelled to observe, as you did a few moments ago, that I believe it

is inappropriate to discuss expenditures or proposed expenditures by

other ministries under this vote or the votes of the Ministry of

Finance. The administrative responsibilities of the ministry are quite

clearly identified.

If the theory advanced by the member for Cowichan-Malahat at the

outset of her remarks were followed to its ultimate conclusion, then

you would have two or three votes. One would be legislation, one would

be the estimates of the Premier, and the other the estimates of the

Minister of Finance. I don't believe any member of this House would

like to move to that particular model. I certainly would not. Ministers

of any government at any given time are responsible to answer for the

expenditures within the ministry for which they are responsible, and to

respond to criticism in the traditional way. I don't intend to respond

to comments with respect to an expenditure in this ministry, that

ministry and another ministry, but I note what the member has said in

general terms.

MR. CHAIRMAN: The point is well taken. Hon. members, the Journals

will show that we have had adequate opportunity to discuss the budget

in the House. We are now in Committee of Supply, and dealing with the

estimates of the Minister of Finance; if we can be relevant to that

particular department, the committee will be well served.

MR. BLENCOE: Mr. Chairman, right from the start I would like

to direct a very pertinent question to the minister pertaining to the

overall provincial debt. Figures do get bandied about and no one is

quite sure exactly what the total provincial debt stands at. I have

done some calculations, Mr. Minister, that show the total provincial

debt, as of January 24, 1984, standing at $15.3 billion. Perhaps the

minister could comment upon this astronomical figure. Does he have any

figures which show a lesser amount, or even more? I think it would be

useful this morning for the minister to comment about the overall

provincial debt. It is one that concerns not only British Columbians,

but deeply concerns financiers across North America and, of course,

major investment opportunities for our province.

My first question is: could we have some discussion of the overall provincial debt by the Minister of Finance?

HON. MR. CURTIS: Mr. Chairman, I would refer the member to the last quarterly report issued following....

Interjection.

HON. MR. CURTIS: Unaudited; nonetheless, I think reasonably accurate. The last quarterly report for the six months ending September 30.

I disagree with the member, and I'm sure he will have views in

response. I meet regularly with investment bankers in Canada and the

United States, and from Europe, and I do not detect the concern which

the member alluded to just a few moments ago. Quite the contrary. I

think the majority recognize the undertakings made by this government

in managing its direct debt and debt of Crown corporations. I'm very

satisfied, and can so assure the committee, that the view of those who

examine sovereign credits around the world is one of confidence in

British Columbia, and one of confidence in our policies through this

very difficult period of an extremely bad recession.

I think the numbers that the member seeks are shown in part on page

10, as well as on other pages, of the quarterly report. I will, when

this House considers it appropriate, be able to report more

specifically and on a more up-to-date basis with respect to the debt of

the province, projected revenues and expenditure of the province in

something called a budget. I trust that will be happening this spring.

[10:45]

MR. BLENCOE: So I can assume, or presume, by the minister's

answer that he really is not arguing with my particular figures this

morning: that close to $15 billion is the current provincial debt. It's

a figure, I think, that is not generally known in the province of

British Columbia, given that there always appears to be the public

perception that the Social Credit Party is a good manager of taxpayers'

money. It would appear that we are in somewhat serious problems with

the finances of this province. I would also add, again, that the

provincial debt has quadrupled in nearly eight years — somewhat of a

mammoth task, I would say, by any government, but it has been achieved.

So I would again ask the minister if perhaps he will reflect on what

some credited and respected economists are saying about British

Columbia in terms of its ability to see a recovery take place. The

minister says that in his estimation there is trust and faith in the

financial institutions in North America and that British Columbia is on

the way. Yet — and maybe the minister can comment upon this — there

have been a number of very learned ladies and gentlemen who have

commented in the last few months on B.C.'s recovery.

Let me very briefly say this, Mr. Chairman, preceding my question to

the minister. In January of this year the Bank of Montreal financial

experts predicted that recovery in B.C.

[ Page 2973 ]

will continue to lag behind the rest of Canada

throughout 1984. Indeed, according to Mr. George Neal, a well-known

economist and certainly not a progressive economist in terms of some of

the economic structures we would say would bring the economy back, but

a gentleman who perhaps would be more akin to this current government's

philosophy, is basically saying that the recovery that was predicted by

the minister in his budget is not taking place. Indeed, the opposite is

happening. I'd like the minister to comment about that kind of

discussion brought forth by the Bank of Montreal.

I now refer to the Employers' Council of British Columbia. "British

Columbia," it says, "is facing another year of slow growth." In a study

that was released the council predicts that the B.C. economy will only

grow by 2.8 percent, well below the national average of 3.3 percent

which was forecast by the Conference Board of Canada. The council sees

the jobs in B.C. rising only 1.7 percent, while unemployment is only

marginally down from close to 14 percent. The council is pessimistic

about the outlook. Even Mr. Matkin says that the predictions for the

B.C. economy, despite what the minister and this government say about

their policies, predicted by the minister are nowhere in sight. As a

matter of fact, the opposite appears to have happened in terms of the

statistics that are being put forward by those who keep such statistics.

Another three B.C. economists made a very important statement in the Vancouver Sun

on January 10, 1984. Mr. George Pedersson and Richard McAlary said that

B.C. lags behind the rest of North America on the road to recovery.

These economists are highly regarded and highly respected, not only in

British Columbia but I think in Canada as a whole. Mr. McAlary said he

could not consider the B.C. economy back on its feet as long as the

unemployment rate remains in the 14 percent range.

Other concerns, of course, have to be the uncertainty that pervades

the B.C. economy, and, therefore, the uncertainty that pervades the

financial world in North America, about the reaction and the attitude

of the last budget and the minister's policies. Back in November it was

stated that less than six months ago Canada's major banks were

predicting a rosy future for British Columbia. However, they have now

changed that opinion and believe that because of the incredible rise in

bankruptcies and the continuing rise in unemployment, particularly in

the young age level, the predictions by the minister that the economic

recovery was on the way in this province have not transpired and the

province is in deeper water.

In light of what he said back in the middle of last year, can the

minister comment on his budget and his policies being a panacea for

this province? Can he comment about the comments made by such learned

professional economists? I think it would be useful. Perhaps the

minister would say that maybe there were some mistakes made. Maybe

there has to be a different tack taken this year if indeed all British

Columbians are to participate in what appears to be an economic

recovery that is virtually illusion, Mr. Chairman. Perhaps the minister

could comment about that.

HON. MR. CURTIS: Mr. Chairman, yesterday we discussed at some

length — I don't know if the member was in his seat; I'm sure he was in

the building — the variety of forecasts for economic growth in Canada

and in British Columbia. I think we spent a fair amount of time on

that. I recognize that economists are going to have varying points of

view; that is of particular assistance to a government and to those who

are interested in the health of a province or a region or a nation.

When I spoke with Mr. McAlary most recently — and I have conversations

with him from time to time — I think his latest number for economic

growth in British Columbia in 1984 was in the vicinity of 3.5 percent.

Yes, there are those who will forecast lower numbers and higher

numbers. I hope I will have the opportunity in two or three or four

weeks of laying out in greater detail for members of this House

precisely how we view the short- and medium-term future of the province

of British Columbia and the financial health of its people.

MR. BLENCOE: I know it's very difficult for the Finance

minister and for anybody in government to admit that perhaps the course

they took was a little too dramatic and a little sheer. It impacted on

the economy to the point where very little has happened in terms of

economic development in this province. However, it might be useful if

the minister could perhaps be candid enough with this House and the

people of British Columbia that the statistics before us — and I will

give some of them again in a minute, in terms of unemployment and

bankruptcies — do show that in British Columbia we are ahead in these

areas. We are the leading province in the country in unemployment and

bankruptcies. That has to have some impact and must make the minister

and his cabinet colleagues reflect on their policies.

For instance, unemployment. Let's go back, to October 1983 — that

was a number of months after the budget came down — when the

unemployment figure in Canada was 11.1 percent; in British Columbia it

was 13.5 percent. The number of bankruptcies, I think, is a telling

figure in terms of what's happening to business, particularly small

business in our province. From October 1982 to October 1983

bankruptcies in Canada fell by 21.6 percent; in B.C. they grew by 8.4

percent. From January 1983 to October 1983 bankruptcies in Canada fell

by 11.3 percent; in British Columbia they were up by an astronomical 37

percent. That's got to send a message to the minister and to the

government that perhaps they really should review their policies.

[Mr. Pelton in the chair.]

Again, I know it's difficult for any government to admit that

perhaps there were some wrong decisions made or that they went a little

too far. But given the statistics, particularly in the bankruptcy area,

with B.C. up 37 percent between January 1983 and October 1983, does

that not give you some concern about your policies? I know you may not

wish to comment, but can you give us any indication that you will be

bringing in some policy that may start to reverse that very unfortunate

trend in the province of British Columbia?

HON. MR. CURTIS: Mr. Chairman, I do not intend today, or for

so long as my estimates are before the committee, to indicate what I

propose to be advanced in the budget for the 1984-85 fiscal year.

The member has spoken of two or three indicators which are of

concern to any thinking British Columbian. But also I think the member

will understand and admit that in terms of employment we reached the

depth of this particular measurement in mid-1982. We see that

employment in British Columbia in 1983 was just fractionally below that

of 1982. We

[ Page 2974 ]

have an employment forecast for 1984 which is

stated in the positive, and which may well be exceeded once the impact

of the forthcoming budget is digested and analyzed by the people of the

province. The other side of the employment question, unemployment, has

been debated at length in this House. If I heard him indicate that ours

is the worst in the country, I would suggest that that is not the case.

It is not an unemployment percentage in which I can take particular

satisfaction, but I am encouraged by the likelihood that we shall see

improvement through 1984 — probably not dramatic improvement, but on

the right side of the ledger and with indication that it will continue

into 1985. The recovery is occurring. As I indicated before, it is

perhaps not occurring as rapidly at this moment as it was in the first

half of calendar 1983, but I believe it is more a pause than a

structural change in the economy of the province. I will be providing

the House with a variety of data at a more appropriate time.

[11:00]

MR. DAVIS: The hon. member opposite is being very selective

in his use of statistics. I note that he is quoting private sector

sources which he says are currently pessimistic. He wasn't reporting

them last year when, as he said, they were more optimistic.

I also want to comment on his reference to the debt of the province.

If it is in fact in the order of $15 billion, some $12 billion is due

to the operations of Crown corporations. The remainder of $3 billion is

due to several recent budget deficits — in other words, on operating

account. I would assume that as good socialists, they would have us

operating more Crown corporations like B.C. Hydro, B.C. Ferries, B.C.

Systems Corporation, etc. If they had been in power, the capital debt

of the province would have been many times the current capital debt. It

would be substantially higher. I think that it's at the very least

facetious to comment on the capital debt as being inordinate, unusual

or exceptional. In socialist countries it is many times the debt of

this province because more private sectors in this province would be in

the public domain. So the $12 billion figure, which can perhaps be

criticized on the grounds that Ontario Hydro has expanded facilities

too rapidly, cannot be criticized on the basis that socialistic

activities of that nature are peculiar or unique to British Columbia.

MR. LAUK: What country?

MR. DAVIS: Take Sweden, for example. Take any country in which industry is more highly socialized or owned by the government.

Had the socialists — and they admit the socialist approach,

obviously — done it, the $12 billion debt would have been much higher.

Let's take the current operating deficit of the order of $3 billion.

The members opposite time after time have advocated more spending in

the people program areas. They're always asking for greater

expenditures and are occasionally critical of more taxation. They would

have run greater deficits in recent years. The current $3 billion

current operating deficit figure would have been much higher. I think

it's two-faced. It's inappropriate for members opposite to be critical

of the debt of this province.

MR. COCKE: I thought that I might put off my discussion with

the Minister of Finance until the next budget, but he is clutching at

straws, and then that resolute member for North Vancouver–Seymour (Mr.

Davis) got up and gave us some marvellous statistics for an engineer.

He talked about Sweden. Sweden has less nationalization than most

countries in the world. That member knows it if he knows anything about

Sweden. Sweden has a planned economy, but their economy and their

businesses are owned by the private sector.

It is interesting that the member supports this government of

nationalization. It nationalized the only two corporations in this

province that have ever been nationalized: the B.C. Electric, which

became B.C. Hydro, and the Black Ball Ferries, which became B.C.

Ferries. Nobody is going to argue about those particular

nationalizations. They were not fairly done, but you couldn't expect

that. The fact of the matter is that since this little group has become

the government, it has set up the B.C. Systems Corporation and the B.C.

Buildings Corporation. It's had a marvellous time. All it does is duck

behind their corporations. That is where the debt is. This piddling bit

of debt that we've got right now in terms of operating is nothing to

what we would have if we had kept the public service in charge of the

public buildings, for instance. But no. We have moved it into a Crown

corporation. It is the same with the ferries. Their operating costs

used to be paid on a regular basis; now, of course, they're out there

as a Crown corporation. I don't know why that member jumped up and made

the points that he did, but they were pretty hollow, to say the least.

I suggest this, since I'm on my feet. I keep hearing the minister

saying: "When we get to the next budget, then we're going to discuss

how things are going to improve in this province." We saw what your

last budget did to this province, and God forbid the next one is going

to have those same characteristics.

We see, for instance, in a national magazine, this week's Maclean's ....

Where do they go to find the breadline? They come all the way to

British Columbia for their picture. They didn't find it in Toronto, in

Nova Scotia, in Newfoundland. They found it here in this province, and

much more the shame to this government, who have taken advice from that

game-playing bunch, Poleconomy babies, down at the Fraser Institute,

who are an absolute sham in connection with proper economic theory and

certainly proper economic policy. That's the government that clutched

the Fraser Institute to their breasts, that took us down the road to

"recovery." This is the kind of recovery that we've got out of them;

this is what the Fraser Institute and this government stand for. A

government that's taken us down the tube. Not the laughing-stock of

Canada — who would ever laugh at so horrendous a situation? — but the

shame of this country nonetheless. And they get up and make fatuous

comments like the member for North Vancouver–Seymour about those

terrible socialists and what shape this province would be in if we had

been government. I'll tell you something: we wouldn't have all this

unemployment. We would have a vibrant economy compared to what you've

got, compared to this bunch of people who know nothing at all about

planning or progress. Long-term planning for the Bennett government,

for the Socreds, is two and a half weeks: if we can just get by the

next two and a half weeks, we've got it made.

I heard a remark yesterday that pretty well characterizes that

group. The member for Nelson-Creston (Mr. Nicolson) was talking about a

need for a debate on that town that has been absolutely devastated by

government policy. And what did the Minister of Forests (Hon. Mr.

Waterland) say? He said what they have up there is a political crisis —

sitting in his

[ Page 2975 ]

chair. If he admits that it's a political decision

because they have elected a member from the New Democratic Party, then

shame on them for eternity. If they've ruined one of B.C.'s oldest and

finest towns for political reasons — and he said it's a political

crisis, I didn't — then shame on that bunch.

I'm looking forward to the next budget just to see if there's

anything that might stimulate the economy, but I don't want the

Minister of Finance jumping up and down here saying that we shouldn't

be saying a word about this budget and what it has done to the economy.

The fact of the matter is, it could have been all over a long time ago

had we had any kind of satisfaction, without a long recess and all the

rest of it. Now we're back, and certainly the proof of this pudding is

in the eating: it's a pretty lean, meagre pudding.

So, Mr. Chairman, having said that, I suggest that we don't get any

more of this talk about how marvellously we're going to do because of

the advice we've had from the Fraser Institute. It carried us right

down the tube. Clutching those people to your bosoms is like clutching

an adder. You know, they bite. The trouble is, they don't bite them.

Oh, the Premier sits there and laughs and smiles, but the Premier

doesn't laugh and smile if he has any kind of conscience about what's

going on in this province. This province is in tough shape because of

your misguided policy. It's always been and always will be misguided,

because you seek your advice from the wrong people. Too bad for us, not

for you.

MR. LAUK: I notice the member for Vancouver-Seymour (Mr.

Davis) has vacated the House. Whenever the member stands in his place

the truth shudders for fear of what is going to happen to it. Indeed,

the member invariably uses statistics in the most elastic and

uncomfortable way — uncomfortable, that is to say, from the point of

view of accuracy. He said that debt in democratic socialist countries

far exceeds debt here, which is a totally false and inaccurate

statement.

Interjection.

MR. LAUK: The Premier says: "What's the debt in the Soviet

Union?" I would think that he would have more access to his

totalitarian brothers than we would, and he should know those figures

very well.

It would seem, Mr. Chairman, that the member for North

Vancouver–Seymour does not do his research; he's a gentleman who hides

behind this facade of research and elaboration in his speeches. Yet

obviously throughout the course of events in the last several years in

this chamber we have heard time and time again, and we have seen

demonstrated, how a man can be educated far beyond his capacity to

understand. The misstatement made to couch his rhetoric against the

social democratic philosophy of this party gives a clear demonstration

of the tactics that the Social Credit Party use in attacking another

party's point of view. The tactics are misstatements and rhetoric

rather than using facts. Whenever that is done, members in this House

should rise, and will rise, to correct these people and eventually try

and set the record straight so that these propagandists hiding behind

the "brazen institute," and other propaganda-like outfits have to be

called to question for their misstatements of information in and

outside of this chamber.

[11:15]

MR. BLENCOE: Mr. Chairman, I didn't expect such a reaction

from the member, who has now left the chamber, on the government side.

When I was asking questions about the debt, I was just trying to

ascertain if the Minister of Finance had some accurate figures to give

this House. Obviously when one states certain information that is

apparently quite correct, it gets a reaction from the government side,

and the truth does indeed hurt: we have over a $15 billion provincial

debt in British Columbia. He says that if we were in government it

would be far worse.

I would again remind that side of the House that when we were in

government we left the provincial debt at $4.4 billion. That was a

total debt of 104 years of all provincial governments, including your

father, Mr. Premier. Since 1975 you have wound up, through your

mismanagement and not seeing the recession coming and heeding the words

of learned economists that you should start to take some serious

measures to control your spending.... We now end up, Mr. Minister and

Mr. Premier, with a total provincial debt of over $15 billion —

quadrupled in eight years. There aren't many governments that have done

that, and basically it's because you did not heed the warnings. You

continued to spend on pet projects that have got this province into

serious problems, and we see no indication by the Finance minister what

his strategy is to remove that debt off the backs of British Columbians

in the next few years. There is no strategy in this province on

economic planning. Certainly there's no strategy in terms of removing

that debt and eradicating it as quickly as possible.

I might also add, Mr. Minister, that when we were in government we had the best record in many a year of debt servicing.

AN HON. MEMBER: Baloney!

MR. BLENCOE: The facts are there; the figures are there, and if they want me to I will indeed table those figures.

MR. CHAIRMAN: Hon. member, I would remind you that there is a Chairman in the House.

MR. BLENCOE: The truth, my hon. friends across the chamber —

and you know the truth, and the minister knows the truth — is that you

have done an incredible job, beyond the expectations of any economist

who tries to give you advice. You have quadrupled this debt in the

province of British Columbia in eight years. That's a serious

reflection on Social Credit policies and your apparent ability, as you

say, and you tell everybody that you know how to manage dollars.... In

104 years of all governments in British Columbia the debt was only $4

billion in 1975. That's a fact. That's reality. That's the truth. What

you have done, under this minister, is build the debt to over S15

billion. When everybody else was taking heed of what was happening in

North America and in the western world in terms of the economy, you did

not cut back; you continued to spend, to deficit finance and build it

up, and you have gone far beyond expectations in terms of a government

trying to keep an economy rolling.

So that's the issue and that's why the government and that minister

reacted: because he knows, and the Minister of Finance knows, that

that's a reality he has to deal with.

[ Page 2976 ]

Hopefully, Mr. Chairman, the minister will deal with that in this

next budget. He will bring forth a package of recovery and economic

planning — maybe a three-year or four-year proposal that will show how

he is going to eradicate this debt.

I would like to leave that particular issue and ask some questions

about a local Crown corporation that I think is very important to this

area: British Columbia Systems Corporation. I believe the minister is

responsible for this particular Crown corporation. Because there is

some haze and doubt about the status of this Crown corporation, I

wonder if the minister would relate to this House what exactly the

government is selling. Is it the buildings alone? Is it the buildings

and the equipment? And what plans has he or the government for the

employees in that particular Crown corporation? Perhaps the minister

can give us the background as to the state of the B.C. Systems

Corporation.

HON. MR. CURTIS: With respect to the British Columbia Systems

Corporation, all business activities of that corporation are available

for proposals from organizations and interested groups. Incidentally,

today is the closing day for receipt of proposals, but I would tell the

committee that one should not expect, within a matter of one or two

weeks, any specific announcement with regard to the ultimate

disposition of that corporation. It will take many weeks to review the

complex proposals which I believe are forthcoming. Then we will be in a

position to make a report.

With respect to the employees, there is the law and there is the

contractual arrangement with the employees, both of which obviously are

to be taken into account.

The member spoke on two occasions this morning regarding the direct

and guaranteed debt of the province, and I would refer him to Table H-2

of the 1983 budget document. I think it is time we put to rest some of

the allegations which have been made regarding debt in the province of

British Columbia. If one looks at Table H-2 one will see that from 1971

to 1983 the debt, as a percentage of gross provincial product, is

virtually identical; that is, the net direct and guaranteed debt. In

1971 it was 27.4 percent, as a percentage of GPP, and in 1983 in the

budget, with admittedly some minor variation by the time the year is

closed off, it is 27.3 percent. I will be speaking about that in

greater detail later. Interest expenditure for 1983-84, the fiscal year

coming to a close, represents 1.8 percent of total provincial spending,

compared to 0.3 percent in 1982-83.

By comparison, Mr. Chairman, it might be of interest to the

committee to note that the federal government allocated 21 percent of

its expenditure to debt service charges in 1982-83, and 19.8 percent in

1983-84. If we are to debate the seriousness of debt as it affects

British Columbians as residents of Canada, then I think we could have a

far more productive debate with respect to the magnitude of the federal

debt, which has grown so dramatically in the last little while. So I

speak of net direct debt: 1971, 27.4 percent, 1983 estimated, 27.3

percent. That takes into account the severity of the recession from

which we are now emerging.

MR. BLENCOE: It still does not escape the fact, Mr. Minister,

that we have a very serious provincial debt in this province, and it is

not being dealt with. You can give all the figures and say the federal

government is far worse, but you should take care of your own back yard

and not turn to somebody else to say they are worse or whatever. Take

care of your own backyard, because what you have done in eight years

really is quite scandalous in terms of financial management in any

private or public sector, and that's a fact, Mr. Minister.

Interjections.

MR. BLENCOE: I was trying to ask a few questions about the B.C. Systems....

Interjections.

MR. CHAIRMAN: Order, please, hon. members.

MR. BLENCOE: Mr. Chairman, I was trying to ask some questions

about the B.C. Systems Corporation, and I take it from the minister's

lack of response that both building and equipment are for sale.

Correct? Okay.

Mr. Minister, one of the concerns, of course, is the current debt of

the B.C. Systems Corporation. I believe it is around $60 million, and

maybe you can give me an accurate figure or correct me on that. I think

the taxpayer would like to know whether that debt will remain with the

taxpayer of British Columbia when you sell this particular corporation,

or will the buyer be taking on all or some of that particular debt? In

other words...

Interjection.

MR. BLENCOE: ...what is your intention, Mr. Minister, in

terms of the incurred debt of the B.C. Systems Corporation of close to

$60 million? Will it remain, and what is your intention to remove that?

HON. MR. CURTIS: I couldn't hear the member's last comments because of an interjection elsewhere on the other side.

MR. BLENCOE: From the Premier, actually.

HON. MR. CURTIS: No, elsewhere on the other side.

I didn't hear your concluding question.

MR. BLENCOE: Basically, I'd like to know what your intention

is in terms of the $60 million debt of the corporation. Is there any

opportunity for the purchaser to take some responsibility for that

debt, or will that debt remain within the public sector? And how do you

intend to deal with that $60 million?

HON. MR. CURTIS: Mr. Chairman, the sales advisory committee,

which I appointed and which was announced some time ago, will analyze

the several proposals with respect to that debt. It is comprised

essentially of the mortgage on the building and leases on the

equipment. Quite clearly the sales advisory committee will want to

satisfy itself that any proposal or proposals will be taken into

account in order that the interests of the taxpayers of British

Columbia are protected to the greatest possible extent. I cannot

forecast what proposals will be advanced by the proponents, inasmuch as

I indicate today is the closing day, and it will be some time before I

have an opportunity to see those and to receive the report of the sales

advisory committee.

[ Page 2977 ]

MR. BLENCOE: I am wondering, Mr. Minister, whether you have a

policy, or have considered this: will you be trying your best to see

that this corporation, or the particular building, equipment and

expertise that is developed behind this building, remains in Canadian

hands first?

HON. MR. CURTIS: The answer is yes.

MR. BLENCOE: How do you intend to achieve that? Is that in

the proposal call or is that just an unwritten policy that you're

trying to bring about?

[11:30]

HON. MR. CURTIS: It is a subject which I discussed with the

sales advisory committee which is or will be advising me on this at the

outset to the greatest extent possible. I would hope that it will be a

British Columbia or a western Canadian proponent which is successful.

There is a preference stated in the documents which have been

distributed to interested parties, and I think that I also said last

year that, as one would expect, the decision to return the Systems

Corporation to the private sector in no way suggests that we are

compelled or feel compelled to accept any proposal. I trust that we

will receive a proposal which is acceptable to the government and is

responsible to the taxpayers of the province, but should that not be

the case we would examine our circumstances at that point. It is

premature for me to say much more inasmuch as right now we are just

about to....

Late this afternoon, I suppose, the advisory committee will have the

packet of proposals, and then they will start their exhaustive review.

But clearly there is a preference stated in the documentation which was

distributed some time ago; the preference makes reference to employment

in British Columbia.

MR. BLENCOE: My last question will be on the B.C. Systems

Corporation. There has been some concern expressed, Mr. Minister — and

I'm sure you have read about it and probably heard about it.... Much of

the information kept by the B.C. Systems Corporation is of a

confidential nature — health records and such things. Of course, there

has been some concern that if this particular corporation is sold off

to the private sector, as is your intention, many of those records will

fall into the private sector; they will not be protected as they are

under the public domain. Mr. Minister, perhaps you could answer that

particular concern. Will the records currently maintained by the

Systems Corporation be going along with the sale? Can you, perhaps

today, give assurances to the people of British Columbia that much of

the confidential material kept there will indeed remain confidential?

HON. MR. CURTIS: I think it would be correct to say that the

security of data in the entire industry is of concern, whether private

or public. I was not the minister responsible at the time, but I recall

the same fears being expressed in the mid-1970s when it was proposed to

establish the British Columbia Systems Corporation: that a wealth of

information with respect to British Columbians would be vested in the

hands of a particular group, albeit officials and employees of a Crown

corporation. So the argument was used then and is being used again.

Quite clearly, on a contractual basis we will want to be fully

satisfied with regard to the security of the information which is

stored in the Systems Corporation. I will be exhaustive in my pursuit

of that security.

[Mr. Strachan in the chair.]

MR. BLENCOE: I really do have to emphasize this, because

obviously, if this corporation does go into the private sector and

these records go along with it, you know and I know there is incredible

competition by private entrepreneurs, companies and institutions to get

hold of certain information, for whatever reasons, to be used as

background material. Much of this information is very delicate to

people. It's known now that there are private institutions collecting

information and selling it off, for whatever reasons — for background

information or delicate material on people. Many people in our country

are concerned about what is being kept on computers and what both

government and the private sector have access to. With the private

sector there may be incredible pressure there because of the

opportunity, I suppose, to gain financially from selling of

information. That is done now in the private sector. Mr. Minister, how

do you intend to guarantee that that doesn't happen if you do sell this

Crown corporation? It's very hard once it's out of your hands.

HON. MR. CURTIS: As I indicated a moment ago, that is a very

major concern, and one to which I have addressed myself in the months

since the decision was made. I will be reporting on that in greater

detail in the event that we have a proposal for the acquisition of the

Systems Corporation which in all other respects is acceptable. I will

be speaking of that at that time.

MR. SKELLY: In the minister's response to one of the

questions he mentioned that the B.C. Systems Corporation was being

returned to the private sector, and that was probably a slip of the

tongue. People should know that the B.C. Systems Corporation was

developed by the government of British Columbia with government funds.

All of the development costs that went into that organization were

development costs paid by the taxpayers. I don't imagine that when the

corporation is dismantled and sold, or sold as a piece, that those

development costs will ever be recovered by the citizens of British

Columbia. So what we're doing is taking a corporation that originated

and was developed and perfected in the public sector and now turning it

over to people who had no responsibility whatsoever for the development

and perfection of that corporation and the services it provides to

government. I doubt that we'll ever recover the costs that the

taxpayers put up to create that corporation in the first place. So

we're not talking about a return to the private sector of something

developed in the private sector. Clearly this is something that the

taxpayers paid for and are now going to continue to pay for in order to

generate private profit.

My question relates to the government payroll. Each year in the

minister's annual report he publishes a graph which shows the

government payroll as a percentage of total expenditure of government.

On page 29 of the report for 1981 he shows a graph which indicates that

for January 1981 to December 1981 the total government payroll is $914

million as a part of total government expenditures, which were $6.632

billion. I worked out the percentage, and the government payroll in

1981 was about 13.7 percent of the total government expenditure.

[ Page 2978 ]

In the 1982 ministry annual report he shows total government

expenditure increasing by 18 percent, well over the increase in the

consumer price index or in all of the indicators that the government

claims to relate the budget to. Government expenditures increased to

$7.851 billion, an 18 percent increase over calendar 1981. Total

government payroll increased by only 9 percent, and represents 12.71

percent of the provincial budget. So as a percentage of total

government expenditures the government payroll, in recent years at

least, has been declining. Yet the government seems to have targeted

those who work for the government as the cause of all our economic

problems, the cause of runaway government expenditures. When the facts

come out in the minister's own annual reports, this is clearly not the

case.

I'm wondering what the situation is for calendar year 1983. In his

budget last year the minister stated that he intended to cut back on

the size of the government service by about 25 percent. Or was it 33

percent? It's hard to tell now. He was going to do that in order to

reduce these runaway government expenditures on public employees'

wages. I'm wondering how much the government payroll has decreased this

year. In 1981 the minister indicated that we were paying out an average

of about $80 million a month in government payrolls. What are we paying

out per month in government payrolls now? And if the government payroll

has decreased, then has the total government expenditure decreased as

well, and have those savings in government expenditure been passed back

to the taxpayer, who seems to be paying an increasingly heavier burden

of taxes in this province, even though the government claims to be

cutting back on the runaway expenditures of government? The fact is

that government expenditures are increasing, taxes are increasing, and

I'm just wondering what the minister has achieved in the way of payroll

reduction and how that is translated into any benefit to the taxpayer

at all.

HON. MR. CURTIS: Mr. Chairman, the member has raised a couple

of questions which I will commit myself to provide answers for to him

in the course of the next few days. But I think the fundamental factor

at play, with respect to government payrolls, of course, is the

compensation stabilization program which covers some 220,000 to 225,000

employees. That has certainly been fundamental to our activities over

the past two years. It was two years ago that CSP was introduced. The

specific questions that he asked I do not have readily available, but I

can provide them before the end of the week.

MR. SKELLY: Mr. Chairman, my main concern is that the

government seemed to indicate in its last budget speech that one of the

most serious problems with runaway government expenditures which

imposed a burden on the taxpayer was the payroll paid to provincial

government employees. Clearly the facts of the matter are that

provincial government employees get a very small, and a decreasing,

percentage of total provincial expenditures, so I do hope that the

minister can come back and demonstrate what the changes have been in

the total government payroll, and also if any reduction in payroll has

been translated into any benefit to the taxpayers, because it seems

that total government expenditures are increasing regardless of any

cutbacks in the civil service. There are more people on welfare and

more social service costs as a result of the damage that the government

is doing to the economy as a result of the unemployment that you're

creating.

So I'd like to know if there's been any benefits turned back to the taxpayer from the cutbacks in government employees.

It seems that the attack on the public sector employees has no

economic rationale; it is ideologically based more than anything else.

I don't see any change or reduction in the tax burden on our citizens.

All I see is a decrease in the services available to the citizens and

in the revenue returning to the government because of inadequate

supervision of companies operating in the resource sector.

It was mentioned that debt has increased in this province from

approximately $4 billion in 1974 — in that case, I guess, it was

guaranteed debt — to a direct and guaranteed debt in 1980 of

approximately $15.3 billion. The minister then sought to relate the

debt figure to gross provincial product. What is the sense of comparing

debt to gross provincial product? It doesn't seem to make any sense at

all. We know that gross provincial product is a composite of many

transactions that take place in the economy. Even when you have a car

accident and take your car to the claim centre, it contributes to the

gross provincial product. Is the minister saying that if the gross

provincial product increases as a result of a lot of car accidents, we

are entitled to increase our debt so that we can maintain that 27

percent ratio? It is a statistic that makes no sense at all. It is

simply a way of abusing statistics to try to create some semblance of

equity between what was happening in 1971 and what is happening in

1984. It is a kind of newspeak using statistics. The simple fact is

that regardless of how you strike the comparison, the comparison makes

no sense at all. The simple fact is that we have gone from a $4 billion

debt in 1974 to $15.3 billion in 1984. Every month this province is

being forced to pay something like $75 million to service that debt, if

the debt is at an average of 6 percent. It costs the taxpayers of this

province much more in 1984 to service that debt, whether it's serviced

through B.C. Hydro bills or directly through taxes. The comparison

between debt and gross provincial product is a specious comparison. It

is simply statistical newspeak and doesn't make any sense to anybody.

[11:45]

I'm also concerned about the leaseback arrangements that the

province is involved in and that the minister provides guarantees for.

Over the past few years we have sold most of the ferry fleet to eastern

trust companies, and we lease those ferries back. We sold even those

ferries that were built for cash under previous Social Credit and NDP

governments. We are now forced to lease those ferries back. The ferries

are now operating at a curtailed level. There is only one ferry every

hour. I can remember when I was running against the Socred candidate in

my constituency in 1975; he was promising that they would run the

ferries around the clock. Now the ferries are tied up around the clock.

Yet we still have to pay those lease fees. I want the minister to tell

me how much it is costing us to keep those ferries tied up. How much

are we paying to those eastern trust companies while those ferries are

tied up?

HON. A. FRASER: Is this your leadership speech?

MR. SKELLY: You'll hear my leadership speech. I'm just asking

the minister how much we're paying to keep those ferries in port. How

much money is going out to those eastern trust companies that we sold

the ferries to and are leasing them back from? Even though those

ferries are not operating, not generating revenue, not carrying

passengers and not

[ Page 2979 ]

improving tourist travel between Vancouver Island

and the mainland, we're still paying those lease fees, and I'm

wondering just how much those fees are. How much money is being wasted

by paying those lease fees while the ferries are tied up?

I understand that we also sold buses of the Urban Transit Authority

to companies like Laurentide Finance, so every time you get on the bus

and pay your fare you are making a payment to Laurentide Finance. When

those buses are not operating, as the transit buses in Vancouver in

some cases now can't operate, we're paying lease fees on those buses —

even though they're not operating, not collecting fares and generating

revenues. It's a dead-weight charge against the operations of those

companies. So I'm asking the minister how much we are paying in lease

fees for those buses, whether or not they're operating.

The minister recently announced that the new electric locomotives we

bought for the electrified

section of the B.C. Rail system between

Anzac and the coalfields have been sold to Royal Trust Company, and

we're leasing them back. Now we have to pay lease fees on those

locomotives. So even if the Japanese cancelled their coal contracts,

even if we didn't run those locomotives across that electrified

section

of B.C. Rail's lines, we would still be paying the lease fees for those

non-operating locomotives. I'm wondering how much that is going to cost

us on a monthly basis, whether those engines are running or not.

It seems that this government has spent a good part of the last

eight years selling off the assets of the province and leasing them

back, so that the province is almost a hollow shell. Some corporations

do that; they lease everything. Nothing is held by the owners of the

corporation; it's all leased. Really, the province is nothing but a

hollow shell now and we're paying for everything to finance companies,

holding companies and trust companies.

There was a time, Mr. Minister of Finance, when the people of this

province were proud of their achievements. Maybe this is part of my

leadership speech. They were proud of that ferry fleet. They were proud

of B.C. Rail. They were proud of the accomplishments in opening up the

north. And they were proud of the development of hydroelectric power in

the north and in the Kootenays. I agree with it. Some of it was done

under Social Credit; some of it was done under the NDP. In spite of the

differences in political parties, people were proud of the achievements

that this province made over those years from the 1950s to the 1970s.

This government has sold it all off. They've created a hollow shell of

a government in this province. We're now a have-not province.

The minister talks about the federal debt. A lot of that federal

deficit goes in transfer payments to the government of British

Columbia. When the minister isn't complaining about the size of the

federal debt, he's going cap-in-hand to Ottawa asking for more money

for intensive forestry projects, for B.C. Place, for Expo 86.

HON. MR. PHILLIPS: Even your leadership speech can't help the

Liberals in Ottawa; you know that.

MR. SKELLY: Because the counterpart of the Liberals in Ottawa

are the Liberals across the floor here in British Columbia. You're a

combination of the Liberals and Conservatives. I don't want to help the

Liberals in Ottawa any more than anybody else does. To me, Liberal,

Social Credit, they're all the same.

What this minister has done is to turn this province into an

economic eunuch that's absolutely powerless. It's nothing but a paper

corporation. The citizens of this province used to be proud of the

achievements of governments under Social Credit and under the NDP. They

used to be proud of the assets of that government in terms of the ferry

fleet, the railways, the hydro corporations, the development prospects

of this province. Now people in British Columbia just don't see an

economic future for our citizens under this kind of government. In

fact, in many cases they feel ashamed that we're no longer a have

province, that we're a have-not province. I believe that the Socreds,

under this minister, have intentionally dismantled the economic power

of this province, so that if the NDP or any other government ever takes

power again, all those economic levers and buttons that we could use on

behalf of the citizens in British Columbia to make this province a much

better place to live, to provide better services to our people, to

increase the standard and quality of life of those who don't enjoy an

appropriate standard and quality of life.... You have dismantled that

power in order that nobody can exercise it again on behalf of the

citizens of British Columbia.

I'm ashamed of this government. Thousands of people in this province

are ashamed of this government. If the information came out about what

you have been doing to this province, as it will come out, then we're

going to see changes. You've totally dismantled it. You've totally tom

it apart. You've done it on purpose. You've done it to serve your

masters, the same people who finance the Fraser Institute.

Some people believe that the Fraser Institute is financed through

private subscriptions. When you look at those people who support the

Fraser Institute, they're the same people who donate money to this

government and to this political party — the chartered banks, the

distilleries, the resource companies, the major holding companies. Not

only that, they've created the Fraser Institute as a charitable

organization so that they can deduct the donations that they make to

the Fraser Institute from their taxes. I remember going out to lunch

one time with Michael Walker. He bought his lunch and I bought mine,

because he said that greed was the engine of the economy and he said

there is no such thing as a free lunch. Yet the Fraser Institute is

financed out of the taxes of citizens of this country.

MR. CHAIRMAN: Order, please. Perhaps we could return to the minister's estimates.

Interjections.

MR. SKELLY: Yes, that's really where it's at, because this

minister is in charge of dismantling the economic power of this

provincial government and this province so that the people of this

province can never stand up with pride in this country as a positive

contributor to the Canadian economy. We are now a have-not province

thanks to the Socreds and thanks to that particular minister.

HON. A. FRASER: I'm all for Passarell.

MR. SKELLY: I believe that.

MR. CHAIRMAN: Order, please. The Minister of Finance.

[ Page 2980 ]

MR. SKELLY: He's supporting somebody who isn't running for leader.

HON. MR. CURTIS: Mr. Chairman, I appreciate now that we have

in fact heard two or three leadership speeches in the course of

debating my estimates. I assure the member that I will make every

effort to circulate the remarks of the last few minutes in order that

the people of British Columbia can understand his views.

Let me speak about leasing in that a large part of the member's

remarks dealt with that. I support the leasing of a variety of

equipment in British Columbia which has a relatively long life in what

I believe to be the best interest of the people of the province. I

think we have several choices, don't we, with respect to a vessel which

is used in our ferry fleet, a locomotive, some relatively expensive

pieces of equipment — yes, and buses. We can (

a) not purchase them (

b) we can borrow to cover the cost of that acquisition at higher rates

than leasing, or (

c) we can increase taxes — or fees in the case of the

Ferry Corporation — to try to pay for the acquired item in a given year

or two. We've had this debate before in this House.

The other side, the socialists, are opposed to leasing. They think

somehow that it's an inappropriate approach. But every single

undertaking we have made with respect to leasing equipment for the

people of British Columbia has been done at less cost and more

effectively. I don't expect those on the other side to suddenly roll

over and understand the advantages of leasing, but so far as I am

concerned, when the opportunity presents itself we shall lease that

type of equipment. We shall lease ferry vessels, locomotives, rolling

stock and transit vehicles. That's my view. From time to time I may be

overruled by my colleagues in the executive council, but I believe very

firmly in the financial advantages of leasing that type of equipment.

In due course, Mr. Member, very early, I will be able to report on

those lease costs in the various sectors that have been debated.

I assume that others have points to make with respect to my salary

vote. Therefore I move that the committee rise, report progress and ask

leave to sit again.

The House resumed; Mr. Speaker in the chair.

The committee, having reported progress, was granted leave to sit again.

Hon. Mr. Brummet tabled five reports forming the basis of the wildlife management program, together with a brief

summary.

Hon. Mr. Nielsen moved adjournment of the House.

Motion approved.

The House adjourned at 11:58 a.m.

[ Return to Legislative Assembly Home Page ]

Copyright © 1984,2001: Hansard Services, Victoria, B.C., Canada