1993 Legislative Session: 2nd Session, 35th Parliament HANSARD

The following electronic version is for informational purposes only. The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

WEDNESDAY, JUNE 2, 1993

Afternoon Sitting

Volume 10, Number 17

[ Page 6781 ]

The House met at 2:04 p.m.

Prayers.

G. Brewin: I would like the House to join me in welcoming a group of approximately 15 adult students from the Executive Secretarial College in Victoria-Beacon Hill. They are here to have a tour of the Legislature as part of their course work at that college. Would the House please join me in making them welcome.

K. Jones: Visiting with us today is Mr. Jack Cook, an active community worker in Surrey. He is accompanied by his two sons, Christopher and Matthew, and his mother, Mrs. Diana Cook from Anaheim, California. Would the House please join me in making them all welcome to Victoria.

F. Gingell: Joining us in the precincts today are some more visitors from California: Carl and Linda Walters from Newport Beach. I ask the House to join me in making them welcome.

Ministerial Statement

VIOLENCE IN THE WORKPLACE

Hon. M. Sihota: A report was released yesterday by Simon Fraser University concluded that health care workers in British Columbia face as much violence as police officers working in the province. In some ways I think this study may have caused quite a bit of interest and surprise.

In fact, workers in British Columbia are exposed to the potential for violence every day. A clerk working at 7-Eleven late at night is vulnerable to acts of violence. A taxi driver, as we have witnessed in the past, is vulnerable to acts of violence. We have seen taxi drivers lose their lives because of their exposure to violence in the workplace. A night watchperson left unattended for hours is exposed to the potential for workplace violence. A clerk working in a liquor store alone in the evenings is exposed to violence in the workplace, as is a hospitality employee serving beverages in a bar, a guard secluded in a jail cell and a hospital worker working on a floor.

Over the past ten years, violence in the workplace has increased at an alarming rate. In 1982 the Workers' Compensation Board recorded 539-wage loss claims due to acts of violence in the workplace. In 1991 -- some ten years later, and the most recent statistics that we have -- that figure had doubled to 1,158. Statistics show that women in particular are exposed to violence in the workplace.

Recognizing these trends, and the vulnerability that working men and women feel in the workplace, the Workers' Compensation Board, in July 1992, started to examine the issue. I am pleased to advise the House today that the Workers' Compensation Board has now developed draft regulations to protect workers from violence in the workplace. The draft regulations require that each workplace first perform a risk assessment of each worksite based on past experience and other variables. Secondly, tailor-made regulations must be developed for each work environment to minimize and eliminate the risk of harm to workers.

Thirdly, the draft regulations require the training of workers to deal with violent situations and to reduce their vulnerability.

The draft regulations are now available to the public, and the Workers' Compensation Board is in the process of holding public hearings throughout B.C. seeking input from employers, trade unions and other British Columbians. The public input stage with regard to these regulations to eliminate violence in the workplace will be completed this month. It is expected that regulations will be in place this summer to reduce the exposure that workers feel to violence in the workplace.

Last month I stood in my place in this House and announced that regulations for farmworkers have been developed and have indeed been implemented. This month I'm pleased to advise the House that we will soon have regulations in place to deal with violence in the workplace. Both of these developments have placed British Columbia at the forefront in protecting the occupational health and safety rights and standards of workers in B.C. In the months ahead there will be further announcements with regard to new regulations dealing with occupational health and safety as a demonstration of this government's commitment to enhance the rights of working men and women in British Columbia.

A. Warnke: I welcome this opportunity to respond to the minister's statement. Only last weekend I too expressed concern publicly through a press release that rising violence and crime are becoming real problems in B.C. This isn't a problem confined to the lower mainland; almost everyone has been affected by crime and violence at the community level. I emphasize that very strongly, because it's not only outside of the workplace but also in all of our lives; we've become increasingly vulnerable to forms of violence and crime in every minute of our lives. This increased rate of such crimes and violence has been acknowledged, I'm pleased to see, by the Minister of Labour.

I also want to echo the concern expressed by the Minister of Labour. Violence in the workplace isn't something that has just happened in the past, and we recognize that. I too believe that it has been on a sharp increase in the workplace. Every effort must be taken to combat, control and, hopefully somewhere along the line, eliminate increased violence and violence from the workplace altogether.

Such initiatives as announced by the minister certainly are welcome, I suspect, by all members of this House and society. This is exactly the kind of thing that the public has been expressing time and again. We need to address violence in our communities not only just outside of the workplace but also in the workplace, our homes, and in every aspect. This is a very serious problem that needs to be addressed. Any kind of initiatives certainly are supported.

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L. Hanson: Certainly our party will be supportive of this initiative. It has been recognized for some time that certain segments of our society who are not responsible and have some criminal intent seek out people who are in vulnerable positions; violence is the result. Anything that can happen to prevent that or provide some safety or security is certainly laudable and would be supported by our party.

[2:15]

I know that the minister is doing this because of the involvement of the WCB. I would suggest that a number of people are vulnerable to this sort of violence who are not necessarily in the workplace. It would be my hope that the Attorney General and the enforcement part of our province also do a study to help those people who are vulnerable not because they're in the workplace but simply because they are alone. We would certainly support that initiative; I think it's an excellent one.

Oral Questions

ACQUITTAL IN VANCOUVER BREAK-IN CASE

A. Warnke: My question is to the Attorney General. Recently three youths charged with breaking into the home of William Twaite were acquitted by the judge on so-called constitutional grounds that could be considered a gross distortion of the intent of the Charter of Rights and Freedoms. What action is the Attorney General taking for the Crown to appeal this decision by the court?

Hon. C. Gabelmann: The appeal period has not ended. I have no comment to make.

The Speaker: Keeping in mind the minister's reply -- supplemental, hon. member?

A. Warnke: In this particular case, Mr. Henry....

Some Hon. Members: Out of order.

A. Warnke: It's not out of order. Listen to the supplemental, hon. member.

One particular individual acted not only as a responsible citizen but as a commendable citizen by providing the police with information that combatted crime. Surely the justice system in this country wants to encourage that. I'm taking into consideration what the Attorney General has said. Nonetheless, what does the Attorney General want to say to those citizens who want to protect themselves and their fellow citizens by providing police with hot tips?

Hon. C. Gabelmann: The matter is before the courts. It's inappropriate for any public discussion in this forum on this subject.

The Speaker: In consideration of the response of the Attorney General, I will recognize the hon. member for a second supplemental but ask him to avoid any reference to a specific case that may be before the courts at this time.

A. Warnke: Thank you, hon. Speaker. I'll avoid making any reference whatsoever to the case.

A simple question to the Attorney General: when will the Attorney General take concrete action to enhance victims' rights and recognition of their just place in a court of law?

INVESTIGATION OF WELFARE FRAUD

V. Anderson: My question is to the Premier. Yesterday I received in that famous brown envelope a memo that indicated the Social Services ministry would be hiring an additional 264 persons for the ministry, plus the five fraud investigators and a senior Crown attorney would be appointed. At best, only half of these people will be frontline workers. Will the Premier indicate to us how and why they are undertaking this expense of probably $8 million to $10 million without increasing the effective service to those in need?

Hon. M. Harcourt: The Liberal opposition indeed has changed its approach. In May they were saying: "We want to see you crack down on fraud." Now in June they're questioning that. The member is well aware of the special prosecutor -- which I've talked about here in the open Legislature; you don't need a brown envelope to get that information -- the five special investigators on organized fraud, the 16 auditors who will be able to deal with administrative error and the other people who have been approved by Treasury Board. They are all there to deal with the increased caseload, which Alberta has also received.

The hon. member will be able to deal with those details when the minister's estimates come up.

The Speaker: Supplemental, hon. member.

V. Anderson: My question was not about fraud particularly; my question was about efficient service to those clients who are in need of it. Clearly the management of this ministry is confusing the public once again, and this mismanagement should not continue. I ask the Premier again: will he not undertake, in the light of another set of confusing responses, to set up a royal commission on social services, so that we might have a clear picture for the future?

Hon. M. Harcourt: The member will have a chance to ask those kinds of detailed questions when the minister's estimates come forward. Quite frankly, hon. Speaker, this government doesn't want to waste money on a royal commission. We want to put that money into B.C. 21 and into getting British Columbians back to work.

The Speaker: A final supplemental, hon. member.

V. Anderson: You talk about wasting money on a royal commission. The royal commission would not cost as much as the 270 new workers you're putting into

[ Page 6783 ]

the Social Services bureaucracy. Let's have a royal commission once and for all. If the Premier will not undertake to have a royal commission, will he put a new minister in charge so that we might get the action we need?

Hon. M. Harcourt: Again, this government would prefer to put the funds into training single parents to enable them to get back into the workforce and into getting unemployed forest workers involved in reforestation and silviculture programs and reclaiming salmon streams -- getting those workers back to work.

I'm sure the member is aware that last year British Columbia created 28,000 new jobs, when the country lost 120,000 jobs. This year British Columbia will create 35,000 new jobs. We're trying to keep up with other Canadians moving to this gorgeous province of ours. For every three Canadians who move here, two find jobs. We're trying to find work so that other person, who is on the welfare roll, can get into the workforce.

ACCESS TO FTE UTILIZATION NUMBERS

J. Weisgerber: My question is to the Minister of Finance. The Treasury Board secretariat has denied us access to the FTE utilization numbers, the number of employees actually working in each ministry. The Treasury Board secretariat claims these numbers are for internal use and are confidential. Can the minister tell us if was it on Mr. Gunton's direction or the minister's direction that these numbers are deemed confidential?

Hon. G. Clark: I think that's kind of ironic coming from a member who was part of a government that hid thousands of public employees from the government payroll -- shielded from scrutiny. Peat Marwick, the largest accounting firm in the country, documented that they hid thousands of public employees from the payroll. Revenue Canada is auditing the government of British Columbia for breaking the law because of that government's flagrant disregard....

Interjections.

The Speaker: Order, please. The minister will conclude his reply to the question, please.

Hon. G. Clark: The Korbin commission was established precisely to deal with cleaning up the mess left behind by that administration. That report is due shortly, and we hope to have legislation flowing from it.

The Speaker: Supplemental, hon. Leader of the Third Party.

J. Weisgerber: Well, one always knows when they're getting close to the point, because the minister goes in to his bafflegab mode. I believe the problem is that there are many ministries in this government that have already exceeded their allocated number of FTEs for this year. The Ministry of Social Services is already 24 FTEs over their allocation, and they advise us that they are going to hire more than 200 additional employees. Will the Minister confirm that the Ministry of Social Services is already over its FTE allocation, even before it hires new employees?

Hon. G. Clark: I want to remind the member that Peat Marwick said that the allocated FTEs bear no resemblance to the number of employees in government. Year in and year out, there are thousands of contract workers. What we have been doing is a process of rationalization. As we uphold the law by rolling contract workers into full-time employees, they become FTEs. Generally speaking, that accounts for 100 percent of the increased number of FTEs in the government.

I want members to know that the entire FTE allocation system is under review. It will be changed. Peat Marwick said that the appropriate mechanism for controlling costs in government is their budgets. Very clearly, that's what we're controlling much more effectively than that administration. FTEs bear no resemblance to the number of people who work in government.

The Speaker: Final supplemental, hon. member.

J. Weisgerber: You can provide the information in here, or you can provide it outside in the hallway. Somebody is going to ask you the question.

Will the minister commit today to table in the House an allocation of FTE numbers for each and every one of the ministries in government, or does he stand behind Tom Gunton in his statement that this information is confidential and private?

Hon. G. Clark: I would have thought, hon. Speaker, that a member who had been in the House this long would know that in the budget document there is a page that shows the FTEs of every ministry; it's public information. We are reviewing that entire process, because it does not capture the entire number of people who work in government. It also does not capture the 1,800 fewer people working in the hospital sector, which are not included on the books of the government. We are reviewing that, and it will be changed.

Peat Marwick and Korbin both recommended that it be fundamentally changed and eliminated, and they are reviewing it again. It will be changed, so I give all members the comfort of that.

Until it's changed, the Financial Administration Act is very clear. We are working on the FTE numbers that are in the budget. Until it is changed, if any more FTEs are required by the end of the year, the Financial Administration Act requires an order-in-council -- which is public information. That was done last year, and I might remind members that last year there were more FTEs than were published and an order-in-council was required to comply with the legislation. The legislation is flawed, and we are in the process...

Interjections.

The Speaker: Order, please. I'm sure the minister will conclude his statement quicker when we have

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order in the House. Could the minister wait until we have order in the House? I'm sure the minister is just concluding his statement now.

Hon. G. Clark: I want to be clear. The Financial Administration Act requires FTE controls. We know they are inadequate, but until they are changed, they are required to follow them. At the end of last year, when there were more FTEs, an order-in-council was required.

WELFARE FRAUD

A. Cowie: My question is to the Premier. Since the Minister of Social Services has taken over the provincial welfare system the costs have spiralled and fraud is running rampant. I think we all understand that. Will the Premier now admit that the minister's policy of requiring only one non-photo identification is costing this province millions in fraud?

I would have thought the Premier would have known that digital photo identification has been recommended by the police. It is not demeaning to the welfare recipients at all. The minister is allowing fraud to cost a horrendous amount of money in this province. She is just simply out of control. Will the Premier ask the minister to install video camera systems in the social welfare offices in this province in order to help her overcome the fraudulent situation.

Orders of the Day

Hon. M. Sihota: I wish to advise hon. members that Committee of Supply A will convene in the Douglas Fir Room to deal with the estimates of the Ministry of Transportation and Highways.

[2:30]

I call second reading of Bill 5, the Income Tax Amendment Act, 1993. Oh, my apologies, hon. Speaker. We will be dealing with Bill 5 later on, but we'll work that out with the House Leaders opposite. At this point I call second reading of Bill 28.

ENERGY, MINES AND PETROLEUM RESOURCES STATUTES AMENDMENT ACT, 1993

Hon. A. Edwards: Four statutes are being amended under Bill 28: Energy Efficiency Act, Hydro and Power Authority Privatization Act, Petroleum and Natural Gas Act and Utilities Commission Act. I'll touch briefly on the changes to each of these acts before the other members are invited to respond in second reading.

The amendment to the Energy Efficiency Act will allow the province to introduce minimum energy efficiency standards for a wider range of products, including thermostats, low-flow shower heads and manufactured windows and door systems. The bill also provides for stronger energy efficiency reporting requirements for manufacturers who want to sell their products in B.C. This will, of course, assist the government in compiling information for setting new standards.

Currently, only appliances and other energy-using products can be regulated under the act. However, windows, doors, thermostats and showerheads have a significant impact on energy consumption, even though they do not directly use energy. I make that distinction: we have previously regulated appliances that actually consume energy; now we have ones that make a difference in their use, but don't actually consume it themselves. So you don't need a motor for your showerhead, but if you have it regulated, you actually have rules for how efficient it must be.

The proposed legislation is enabling legislation only. Before any new standards on energy efficiency are set, there will be wide consultation with all affected parties. I might say that it will be even wider than the consultation which has already occurred with the manufacturers who are willing to work with us to assure that we have better standards.

The second act is the Hydro and Power Authority Privatization Act. The amendment we propose will allow B.C. Gas Inc. to form a holding company, which will allow the isolation of its non-regulated companies from its B.C. Utilities Commission-regulated companies. The separation will allow regulatory clarification for B.C. Gas Inc. and the Utilities Commission by simplifying calculations on utility components of their utilities business. In addition, it will provide greater flexibility for the management and financing of the corporation's other companies. The reorganization will enable B.C.

Gas Inc. to invest in projects outside its core distribution utility business and to pursue economic development opportunities within the province by enabling its shareholders to participate in activities that have higher risks and rewards and which are not appropriate to its regulated activities as a utility.

The Hydro and Power Authority Privatization Act contains provisions to ensure that B.C. Gas Inc. shares are widely held, and this amendment ensures that the shares of the holding company will remain widely held. The same shareholder constraints that applied to B.C. Gas Inc. will apply to the holding company.

The amendment to the Petroleum and Natural Gas Act includes minor revenue items, administrative changes, an allowance for suspension of tenures and the adoption of an updated survey standard. The revenue items affect only the upstream oil and gas industry and are expected to generate about $40,000 in the first year from a new fee for service. They are expected to save the province $120,000 on an annual basis through the cancellation of an ineffective program. The administrative changes will improve efficiency for both government and industry without loss of regulatory control.

One of the changes will aid land use planning by allowing suspension of tenures, which would be necessary to protect the natural values where a land use study of tenured areas is underway. Adoption of the new survey standard will reduce the potential for mapping errors by conforming to a standard that is used nationwide.

The Utilities Commission Act amendment will amend

section 133, which will permit the Utilities Commission to award costs in regulatory hearings to

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various interest parties who may not otherwise be able to participate. Broad public participation leads to better decisions and ultimately will benefit everyone. No one should be excluded from proceedings and reviews simply due to lack of resources. Public interest groups and first nations are among groups who have asked for assistance so that they can participate in these public processes.

Applicants for assistance will be required to meet specific eligibility criteria and will be able to claim specific expenses such as travel, meals and accommodation at current BCGEU rates. They will be able to claim dependent care and per diems when they can demonstrate financial hardship, by foregoing income, in order to participate. Participants will also be able to hire experts to address specific issues.

I bring that forward with the note that the commission will certainly be encouraged to hire, and participants encouraged to use, neutral experts, so that we can avoid the unnecessary adversarial confrontations in hearings and allow the best use of the resources. The amendment also provides for prescribed limits on the commission's ability to award funds, to avoid excess costs.

With that, I conclude my remarks on second reading.

D. Jarvis: Bill 28 is not a single piece of legislation, nor does it have one particular effect; rather, it's an omnibus bill which makes amendments to six separate acts. There are some positive things in the bill. Several of the changes in the bill are supported by the Liberal caucus. Measures that clarify mineral and petroleum tenures are welcomed. Increasing the accuracy of surveying is a good thing. Changes that serve to reduce the bureaucracy and allow the minister to delegate responsibility to regional employees, who are more in touch with local issues, are a positive step.

Anything that serves to expedite the exploration process and cut through the bureaucratic red tape is endorsed by the Liberal caucus and is really a progressive measure.

However, there are several sections which raise serious concerns with us, and there are a handful that we are firmly opposed to. I would like a moment to canvass those, while leaving the detailed interrogation until Committee of the Whole.

On the Energy Efficiency Act, the government proposes to expand their ability to set regulations regarding energy-using and -effecting devices. The intent behind this change is good, however there are concerns that the changes to the Energy Efficiency Act may lead to a violation of current and future trade agreements. The current FTA and the proposed NAFTA have to be taken into consideration. Many forms of non-tariff barriers.... There is a potential for this bill to be perceived as such a violation, and we will canvass that aspect of it.

The B.C. Hydro and Power Authority

section is an attempt to create a clear distinction between the utility and non-utility functions of B.C. Gas. As such, this is seen to be a positive step, and it is long overdue. We will be canvassing this issue in some depth. However, the proposed changes are complex and may have some unforeseen implications. We will be seeking assurance from the minister, of course, that the changes regarding the special company designation and shareholding restrictions will only have the intended effect and are limited to that purpose alone. We had a briefing by the minister's deputy on that aspect, and he was very helpful.

In the petroleum and natural gas

section of the bill, we see the true nature of this NDP government once again. We find two attempts to increase revenues from a sector which can ill afford it. The government has proposed a new fee for geophysical exploration. Previously there was no charge for that. As you are aware, we have consistently objected to the crippling taxes and fees imposed by this government on the mining and energy sectors. We feel it is really unnecessary in an area that is in trouble. Our resource industries are already on their knees, and the economy of the province cannot be too far behind.

This is an attempt to bring fee increases in through the back door. It's one more burden that the industry does not need and cannot bear. We are doubly concerned that the fee is not spelled out in the bill but will be at the discretion of this government. From what we know of their spending habits, and thus their insatiable need for new revenues, this isn't a very comforting situation. In addition, the government proposes eliminating an incentive that currently exists to encourage drilling activity on leased lands.

Anything which discourages development and activity, especially in the resource sector, is indefensible and sends yet another signal that the industry is not welcome in this province. These are revenue measures pure and simple. We believe they are ill-conceived and are being imposed on those least able to bear them. For these reasons, we are strongly opposing this aspect of the bill.

On accountability, there is also some over-tendency in this bill to remove specific

definitions and requirements from legislation, either to reintroduce them as a regulation or to leave them undefined at the discretion, again, of the government. This trend is of concern to our caucus, as it reduces the accountability and the scrutiny of this government. We will certainly be seeking explanations as to why this is necessary.

We have grave concerns over the proposed changes to the Utilities Commission Act. This government proposes to grant the BCUC the power to award expenses, to fund intervener groups and even to order one group to fund another. There are several problems with this section. There is no indication of how much this may cost the province, and the potential for a massive expenditure is frightening. The BCUC will now possess quasi-judicial authority, with the ability to punish all the participants by forcing them to cover the expenses of others. The potential for abuse will be outstanding.

This is especially true as there are no guidelines outlining when and in what fashion this power may be invoked. Thus utilities could end up repeatedly having to finance the challenges of their detractors. This situation may prove to be both unbearably expensive and impossible to justify to their shareholders. In addition, the potential cost to the taxpayer is tremendous, and a further discretion with tax dollars cannot and should not be tolerated.

[2:45]

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In conclusion, while parts of this bill are timely and will be welcomed by the Liberal caucus, there are several major initiatives in this bill that seek to further bleed the resource industries through additional fees and penalties. There are yet other sections that may place an unbearable burden both on industry and on the taxpayer. These sections are not acceptable to this caucus and will be vigourously opposed. There's hope that the government will reconsider the wisdom and fairness of these measures. In the course of debate and through constructive criticism, we can improve on this bill to the benefit of all British Columbians.

R. Neufeld: I rise to reply to Bill 28 introduced by the minister. I will be brief, because when we get into committee stage we'll want to go into a number of the areas in more depth.

Just to briefly go through it from the start, we commend the government for some of the actions and changes. We don't have any problem with the cleanup of the language and with putting Power Smart and energy conservation into the bill. I think all of us are concerned about that in British Columbia and, in fact, in Canada and the world as a whole. So we don't take much exception to the items that do those types of things.

It was interesting to hear the minister speak about shares in special companies and the amending of Hydro and Power Authority privatization. Those issues will come out a little further during committee stage. It will be interesting to see what happens on the issue of repealing the

definitions of block and grid areas in the survey areas in the province and how they describe them now.

As always, in every bill that the NDP government brings forward there's a little charge to somebody. This government has never failed. The Finance minister is sitting here listening. He talks about small bills that really don't mean that much, but you never know; there could be a sleeper. Obviously, there's a sleeper in almost every bill that this government brings forward. This is an industry that's having some difficulty surviving, I might add.

Although some gas sales of land leases are up in the last few months -- that's obviously what has driven this minister to start charging more for a few things -- it does not mean that the industry is in good shape. One thing that the industry has done, which government so often fails to do, is reduce the number of employees. Unfortunately, that's what happens when government increases fees to these corporations. They have no recourse. They can't charge it back to the public at large, so the only way they can alleviate the increase in charges is by laying off people.

I think I spoke to the Minister of Economic Development yesterday in these same terms. We think we're going to get more money if we increase the rates that we charge, but it doesn't always work that way. It works in reverse. Something happens on the other side of the book, and it's usually the number of jobs. Maybe the government has a magic way of picking up all those jobs and keeping them in the economy, but I don't believe so. It's hard to say, though.

The application fees for geophysical exploration are again something that probably doesn't affect any area of the province other than Peace River North and Peace River South. I represent one of those constituencies, and I know that the geophysical part of the oil and gas industry is not faring well. There have been numerous bankruptcies. They are not well off. They charge it back, like I say, to the oil companies, and then they just lay people off. That certainly doesn't help anyone.

I think it's commendable to remove the existing exemption for penalty lease payments of companies that drill on land for more than ten years, with the intention to tax them if they're still drilling ten years later. If they're drilling for ten years it means we've hit a field that's going to produce. It's an incentive to keep companies drilling, producing and giving revenues to the province. But what does the government do? They're going to penalize them after ten years when they've been fortunate enough to hit a field. Going out and finding natural gas and oil reserves is not that easy.

They spend tremendous amounts of money on exploration and on dry holes where they don't get anything. But if they hit a field or are lucky enough to get something that provides to the economy and the betterment of the province and all the things that we enjoy, this government intends to penalize them. We're going to hit them with another tax, because, by golly, they shouldn't be that lucky. Maybe it goes back to some of the new people in the A-G's ministry: either you win it or somebody gives it to you; you don't work for it.

They've removed the 90-day time limit from some tenures for production of petroleum and natural gas, and we're going to question that and find out just what's taking place there and why we have to do that. But the interesting one is

section 22, which allows the cabinet to nullify well-drilling licence permits and leases without compensation if it decides that a study area should not have any development.

The whole natural gas and oil industry has been telling me that they are very nervous about the protected-areas strategy. I can understand why because I've spent the majority of my working life in the oil and gas industry in the north. For instance -- and I know that it may not make sense to a lot of the members here, but there will be people that it will make sense to -- there's a field in northeastern British Columbia called the Helmet field. It's a natural gas field.

We've had tremendous difficulty trying to convince the government to maintain the road into that area because it delivers an awful lot of natural gas into the pipelines for export and money is derived from that. But this field is some 100 miles north and east of Fort Nelson. I've been in that field for many years. As a youngster I was up there working in the oil and gas industry.

And all of a sudden, just a year ago, the government decided that that was going to be a protected-areas strategy because of some biodiversity or something -- nobody seems to understand what it means, but it's a nice, cute word -- and they're going to put that under study. It happens to be that there's an ecosystem there -- that particular area, that field -- that they say is found nowhere else in the world. Hon. Speaker, it's muskeg. There's one river

[ Page 6787 ]

that goes through there, the Petitot. I can't understand why that particular area, right where the drilling activity has been taking place for a number of years, is all of a sudden under a protected-areas strategy.

But it's obvious, by this bill, that this government intends to remove the drilling rights of those companies, and that's what they have feared. They have come to Fort St. John; I met with CAPP just recently in Fort St. John, and they told me that they are really nervous about what the government is doing with their protected-areas strategy. And all of a sudden it comes out: that's exactly what's going to happen. I guess Bill 32 last year fell flat on its face. The Schwindt commission has reported, and this government intends to carry on in other ways.

The last part that disturbs me is the

section added to the act that will force participants who are coming to make their cases to the government about issues in the resources field to pay the fees and wages -- and they could even have to pay room and board for others to come and bring information against what they want to do. That's like telling someone who's going to court to sue someone else that they have to pay that person's costs up front before they can even get them into court. That's just not right. And we know exactly who that's put on. The oil and gas industry will be picking up the bill for all kinds of people, anyone at large.

I don't have too much problem with the public having their say. We have to have that, but sometimes that can get a little bit carried away.

The minister talks about native bands. I don't like her singling out native bands because they want to come and make presentations. I think the Minister of Aboriginal Affairs probably has some money in his budget, or the federal government might have some money in its budget, to help those bands. Any one that I'm aware of that has happened in northeast British Columbia, that's the way it's happened. But all of a sudden now we're going to place that further burden on this industry.

This industry is having a difficult time. I said that before and I'll say it again. As a government, if we continue to try to wiggle in here and there a little bit on this part and a little bit on that part, increase taxation here and increase taxation there, we are going to see the industry fade into the sunset, much like the mining industry. The mining industry is moving away from British Columbia simply because of over-regulations, fees that are ridiculous and hydro rates that have gone sky-high. This government has brought in all kinds of taxes, fees and regulations to no end.

I thought that this Minister of Energy, Mines and Petroleum Resources understood the business a little bit, because we haven't seen very much legislation from her. But all of a sudden it is starting to come through. We're going to see an assault on that part of her industry that so many of us in the south here cannot relate to. They don't understand it down here as much as I do, living in the north and working in it most of my life.

With that I will take my place and will wait for committee stage to go a little deeper into each section.

L. Fox: I am pleased to speak on the principles and philosophies of Bill 28. I am rather amazed that it must be a prerequisite of this government -- in order for a bill to be placed on the order paper -- that there must be at least one new taxing authority placed within the bill. While there are some particular bookkeeping amendments which allow the process to be updated, we see three major areas of cost to industry contained within this bill. That's a concern to me. Over the course of the last 19 months this government has literally driven mining exploration out of British Columbia.

[3:00]

R. Neufeld: In fact, the Premier says: "Go away!"

L. Fox: As the ships were leaving for Chile and other foreign countries with the manpower and the investment, the Premier stood on the docks in Vancouver waving goodbye and wishing them well. What do we see here? We see another area of our industrial community being attacked by this particular legislation. It's shameful that this minister cannot understand her ministry and cannot understand the negativity that this government is placing on that kind of investment, and once again brings legislation into this House that is driving another wedge between the investment dollar and the resource industry of this province.

As I said before, the Finance minister has to have made it a prerequisite that in order to get a bill on the table of this Legislature, there has to be some form of new tax.

An Hon. Member: Bob Williams did it.

L. Fox: We do not need more taxation in the oil and gas industry before they have the ability to realize a profit. This government has to understand that there is a phenomenal amount of red tape and there are development costs that these corporations have to put in before they ever get one nickel back. It's not made over a short term; it's made over the long term. We have to recognize that any more bureaucratic paperwork or costs prior to the ability to raise any dollars is going to be another detriment to the development of British Columbia.

Clause 22 reminds me of the arguments of Bill 32 last year. Cabinet is going to have the unilateral power to take away any resource if it's put into a study area. Any permit may be put on hold, without compensation, until that study is concluded.

It reminds me of the interview that the Minister of Energy gave in, I believe, early spring or late last fall. When asked by a member of the press, she announced that if the mining industry lost a particular claim because of a new park allocation, she would offer them new land and a new opportunity elsewhere. That shows the understanding of the minister. She doesn't seem to understand that it takes seven to ten years to develop a claim and bring it to the point of recognizing that there is something worthwhile in a mine.

You cannot take a body of ore and move it from this area over to that area and say: "There boys. Go at it. We've given you an equal claim of land here to offset your losses there." That is

[ Page 6788 ]

exactly the kind of statement made in

section 22. I shouldn't be surprised, but I'm deeply disappointed.

Now we look at sections 24 and 25, which are of even more concern to me. When we look at the red tape and the length of time it takes to put forward any kind of major project in this province, we're looking at a commitment of huge amounts of dollars in environmental and social impact studies. All these things are demanded of the proponent, and rightfully so. We now have an environmental project review process which is indeed in the best interests of all of the province, including the industry. But now we're going one step further.

We're giving the Utilities Commission the authority to arbitrarily tell the proponent that they must meet the costs of the interveners. Not only that, but there is no definition of what an intervener is.

I've been around this block a few times and know that a handful of people can all of a sudden become an authority in a particular area and can automatically qualify as an intervener and demand a huge amount of resources in order to prepare themselves. We find now that the proponent has no voice in that. In fact, the commission can tell the proponent that it will be a direct cost to them, thereby putting another obstacle and another cost in front of development in the province.

The intervening cost issue is an important issue, and it should be addressed by this Legislature. But I don't believe that we should have this kind of initiative within legislation before there are some principles as to what constitutes a legal intervening body and whether it is the responsibility of this Legislature to provide the funding for those intervening bodies.

I don't believe this government should automatically assume that the proponent should have to pay the costs of that particular process, without having any ability whatsoever to either edit the number of interveners or to limit the amount of funding they will be given. I will be voting against this bill primarily because, once again, it's nothing more than a new taxing authority and a new shift of costs from government onto industry.

P. Ramsey: I hadn't intended to speak on second reading of this act, but after sitting here and listening to the arguments of the opposition, and knowing how they want to encourage government backbenchers to speak up, I thought I'd seize this opportunity and say a few things about this series of initiatives that the Minister of Energy, Mines and Petroleum Resources has brought forward to take some legislation and add provisions to make sure that it addresses the true situations of 1993 and beyond. I couldn't help but notice the objections the opposition were raising to some of these initiatives.

We have a very progressive change, for instance, to the Energy Efficiency Act, which points out, quite properly, that when we're looking to control energy use, we have to look at not only devices that consume energy but also at those that save energy.

It's a wonderful initiative, and I can't believe what I'm hearing from the Liberal opposition when they dither and squirm and say: "But oh, this might somehow be against the tenets of FTA or the NAFTA." I guess we know where your priorities are here. First, I think you're dead wrong. I don't think there's anything in NAFTA or the FTA that is going to prevent this government from doing what it should to enhance energy efficiency in public and private use in this province. Good Lord!

Why should we possibly get concerned about energy efficiency and making sure that we have windows, showerheads and other passive devices that will help us control energy use? We'd better look south of the border and make sure that the U.S. will let us do that here in British Columbia? To hear that as an objection is just ludicrous. I ask the hon. member to give his head a shake. This is good legislation that recognizes the variety of devices that we need to have in place to control energy use in this province.

The second thing I want to comment on is the concern about some fee measures that are being brought into place -- and properly, I think -- in the area of gas and petroleum exploration. Like the members from Peace River and my area of the province whom I heard speak, I recognize that there are limits to what industry can be prepared to bear in terms of exploration fees. I'm sure that when we get into committee stage the minister will be addressing some of the concerns that the member raised. But to take these minor changes and blow it up to the extent that I heard opposite is just amazing.

I'm not so much concerned about the members from the third party, but I heard a comment from a member of the Liberal Party which was just fascinating. He characterized these fees as an imposition on those least able to bear increased fees. I guess this reveals the true priorities of our Liberal opposition here. Day after day in this House we hear the Liberal opposition stand up and ask what we are doing about welfare fraud. My word! Lord forbid that we should possibly give the poor in our society a decent chance and some assistance with their basic needs of food and shelter.

Interjections.

The Speaker: Order, please. I regret that I am interrupting the member, but we need to have order in the House. The member who has the floor at this time is the hon. member for Prince George North. I'm sure others will have the opportunity to participate in the debate. Please continue, hon. member.

P. Ramsey: I recognize that we have to take account of the ability of the corporations to bear the fees that are part of doing business in this province, but to characterize them as those least able to bear the cost of this is just absurd, quite frankly.

The last thing I want to comment on is the comments about the changes to the Utilities Commission Act to enable and enhance participation in hearings before the B.C. Utilities Commission. I heard a variety of comments about this. The member for Peace River North said he supported public intervention, but thought we might be getting carried away with this thing about the public having their say. Maybe this government is carried away compared to the standards set by the former administration. But I assume that this is the right direction for this province. The people of

[ Page 6789 ]

this province increasingly want to have a say before those who regulate their activity, before those who set the cost of their gas and oil and before those who control how corporations can behave.

Members seem to object to the fact that we would differentiate between one participant before the commission and another; they want to treat everybody the same. They object to the principle that the commission could require one participant to perhaps pay for another participant's expenses or that the commission itself could assume the cost of interveners. It's just amazing. This is egalitarianism carried to its extreme. It assumes that all are equal in their ability to carry their case before a commission.

It reminds me of an old sign -- I don't know if it's apocryphal or not -- that is supposedly posted in some park in England. It says: "Both lords and paupers are forbidden to sleep in the park." According to these members, both lords and paupers are equally able to come before a commission and make their case. I suggest that that totally ignores the facts.

One of those members referred to a handful of people who might come forward. Well, that's exactly the problem: there are handfuls of people. Sometimes they are from native groups, sometimes they represent aboriginal interests and sometimes they may represent a small group of concerned citizens. To assume that those groups have the same financial resources and expertise as corporations, municipalities and well-funded interest groups to come before a commission ignores the reality of the way this world works.

We have a progressive piece of legislation here that says we must try to level the playing field to make sure that all citizens of British Columbia have their say. What did they say to this? They said: "No, we like the old way, where those who had the wealth, the power and the resources had their say and their way." That's not good enough anymore.

The Speaker: On a point of order, the hon. member for Okanagan East.

J. Tyabji: As amusing as this discussion is, I don't think that socialism is what we are debating here; we are debating Bill 28. Maybe because this member wasn't planning to speak, he didn't prepare any notes for it. But if he could stick to the subject....

The Speaker: I thank the hon. member for the point of order. I would encourage the hon. member to continue to address second reading of Bill 28.

[3:15]

P. Ramsey: The reason I originally decided to speak on this was that the changes to the Utilities Commission Act are vital to a Utilities Commission hearing that is going to be starting in my community and other communities in the north this summer and fall into the Kemano completion project. I would suggest that these sorts of provisions, which try to level the playing field for those who wish to have their say before that commission and have their voice heard on the Kemano completion project, are essential. That's why I will be fully supportive of this act when we come to vote on second reading.

Hon. M. Sihota: It's a pleasure to take my place in debate with regard to this bill. I just want to make a few comments. It's not too often that I actually have some time in the House. But the last time I looked, there was no strike going on, so I thought I'd pop in here.

Interjections.

Hon. M. Sihota: Hon. Speaker, I think even Surrey is resolved, if hon. members are interested.

I just want to take a few minutes, as the minister responsible for B.C. Hydro, to say a few words about this legislation. I want to commend the Minister of Energy for taking the leadership and introducing this legislation to the House.

Interjection.

Hon. M. Sihota: I'm sorry, I'm getting too many disruptions.

Short term? No, B.C. Hydro is the most enjoyable part of my portfolio. If I may say....

Interjections.

The Speaker: Order, please. I must call the House to order. As members know, we cannot have conversations going across the floor. When a member is recognized, he or she does have the floor to speak. We have to extend a courtesy to the member who has the floor. At this time, it happens to be the Minister of Labour.

Hon. M. Sihota: Thank you, hon. Speaker. I appreciate it when you come to my defence. I trust the members will listen now.

I'm pleased to report that just this week the Minister of Energy and I launched the Power Smart challenge here in the beautiful city of Victoria. We challenged the citizens of Victoria to help this city be number one in terms of energy conservation and environmental responsibility. We're saying to people who live in Victoria that we can make better use of our energy. Through the Power Smart program, B.C. Hydro has spent a lot of time trying to curb the demand for energy.

What we're trying to do now is take the Power Smart concept to a new height: to invite British Columbians, particularly the people in the greater Victoria area, to look at all the steps they can take to become more energy-efficient.

I know that my colleague the Minister of Finance is sitting here next to me. We are encouraging people to take B.C. Transit to work everyday as a way of being a bit more conscious about our energy. Cycling to work everyday is another example of being a bit more efficient in the way we utilize our energy in the greater Victoria area. We're encouraging people in greater Victoria to be more responsible with respect to recycling. We're inviting the input of groups like the

[ Page 6790 ]

Sierra Club to educate people with regard to environmental needs.

As a component of the plan that we're bringing forward, we're also taking steps to encourage business to promote energy-efficient products. When we go shopping in stores, all too often businesses promote a particular kind of product and draw your attention to another type of product. In fact, the Buy B.C. program initiated by the Ministry of Agriculture has been a very successful program. It has encouraged people from British Columbia....

Interjection.

Hon. M. Sihota: I know the member for Chilliwack endorses the program to buy B.C.-grown products. What we're trying to do is encourage businesses in the greater Victoria area to promote energy-efficient products, so that when you walk in through the door of a particular enterprise or business, people will see right in front them a product which promotes energy efficiency.

This bill, as you are aware, deals with amendments that encourage the sale of products designed to improve energy efficiency in British Columbia -- products like thermostats, low-flow showerheads and manufactured window and door systems. Those are all being encouraged in this enabling legislation, which enables us to develop standards so that a business can place a little sticker on a thermostat or on a window and door system, just like they do on an appliance, that tells the consumer it is an energy-efficient product, so that that business promotes energy efficiency right in the store.

Interjection.

Hon. M. Sihota: Preferably orange and black, or whatever the more contemporary colour is.

As the minister responsible for Hydro, I want to endorse what the Minister of Energy is doing and the leadership she is taking in bringing forward enabling legislation to establish standards for thermostats, low-flow showerheads and manufactured window and door systems. In fact, if you think about it, the amount of water that gets wasted every year in British Columbia is incredible, particularly in a community like Victoria, because low-flow showerheads aren't a requirement under the Building Code as a standard feature of buildings. It's one of the things that I think we should do.

In the context of the legislation being proposed here and the Power Smart challenge, I really want to take this opportunity to congratulate a lot of the businesses in Victoria, particularly Capital Iron. It has taken leadership in making sure these products are front and centre when you walk into the store.

An Hon. Member: Buying a showerhead.

Hon. M. Sihota: Right. Just as you're walking in to buy your new shower stall, there you have a low-flow showerhead, and as you're looking for the new thermostat for that shower you want to put in downstairs in the basement, you've got the energy-efficient thermostat. Just as you're walking out the door there's the window and door systems that allow you entry into those legal suites that you're building in your community.

First of all, I want to encourage British Columbians, particularly the people of greater Victoria, to participate in the energy efficiency program and challenge in B.C. Secondly, and equally as important, I want to congratulate the business community, which has taken some leadership here in Victoria, particularly under the auspices of Capital Iron, to develop a consumer awareness program to make people more aware of energy-efficient products.

The repertoire of products that can be covered is going to be increased because of the legislation that the Minister of Energy has brought forward, and I congratulate her for that, as much as I congratulate those who are involved in the Power Smart business awareness program established for consumers in Victoria.

A. Cowie: This is a very wide-ranging bill. I think it can be supported, with a number of concerns. I'll carry on with the discussion of the last speaker regarding B.C. Hydro.

B.C. Hydro participated in a program called Quality Plus. By backing out of that excellent program, which operated for the last two years, B.C. Hydro has destroyed it. I was very disappointed to see that happen. I'm looking forward to seeing B.C. Hydro reinstate that initiative on the energy conservation side. They've stuck with their Power Smart energy program. Mr. Shell Busey, an excellent person, at least from the public relations point of view -- he's certainly very knowledgeable -- is running that program.

The Quality Plus program set a number of standards for walling. For instance, they used different methods of Nascor walling. I probably should use the generic name: foam walls were used in housing. They also had ratings for windows. We have to watch that here in B.C., because if you want the highest standard for energy conservation, you'll go with vinyl windows. Vinyl windows, as you know, will disrupt the wood industry to some extent, so we have to think whether we want to promote wood or not. Depending on how they set the standards, vinyl and wood will eliminate some windows -- like metal windows, in most instances anyway.

One of the advantages of specifying materials is that.... This bill will, I hope, encourage the use of materials that last a long time. Our housing industry builds to a very low standard at the present time. In fact, the standards currently used by the builders are at the bottom. It's like zoning: everybody always goes to the lowest common standard. By setting standards that are not so market-driven, the industry will build to the lowest standard. Although the Quality Plus program that B.C.

Hydro participated in encourages the use of six-inch rather than four-inch wall construction, if you go throughout the lower mainland today, you'll find that in Richmond they're using four-inch construction. They do in Delta too. We should be ensuring that we're using proper six-inch wall construction.

[ Page 6791 ]

Interjection.

A. Cowie: South Delta as well is using four-inch construction.

Interjection.

A. Cowie: No it isn't NDP. Our leader comes from South Delta and it's solidly Liberal. Although it's a very quality area, you will find four-inch construction in Delta, which I think we should be discouraging.

I'll be looking to some of the provisions in this act at third reading that I can speak to very specifically. Some of the members speaking before me talked about nozzles, and got down to detail like that. I know that the biggest energy-saving device in a home is your shower head. While I respect that, I don't think government should be specifying shower heads. What they should be doing is setting an overall standard for water consumption. Certainly I will look at that in detail when we get to that stage.

There's one other aspect that I'll want to address when we get to third reading, and that is private energy systems. For a long time in this province, people who had private energy systems couldn't get into the electricity grid. B.C. Hydro would not allow private systems to buy into the grid. So I would hope that this bill -- my understanding is that it's a very wide-ranging bill -- will enable private energy systems to plug into the grid and get paid for their electricity; and when they need electricity for particular developments, they will be able to get out of the grid.

I assure the government that I -- and, I think, our party -- will be supporting this in principle. But we will want more information on particular details when we get to third reading. I won't take any more time in the House on this.

J. Tyabji: I want to spend a few minutes on this bill as it affects the environment, and as it affects some of the interior communities.

First of all, I want to commend the minister for the amendment to the Energy Efficiency Act. However, I'm wondering -- and I'm sure we'll get to this in committee stage -- to what extent these amendments are going to be followed up with legislation or regulations that will direct either development of homes or development of industrial complexes, and generally how much we will see a redirection of the standards by which we construct homes and buildings in the province, with regard to energy efficiency, alternative methods of conserving energy and alternative methods of producing energy.

I hope we will see some progressive ideas coming forward, whether it be through the minister or through the Energy Council, and some further amendments to the act.

[3:30]

I'll be interested to see if the information that is provided with regard to greater energy efficiency -- for example, of windows or solar panels or any of the things that would fall under this

section of the act -- will be available to consumers. For example, will there be a labelling process in place whereby a private contractor going out to gather energy-efficient materials can easily -- by looking at the labelling on the products -- understand which are the most advantageous from the perspective of lowering the consumption of energy. I am disappointed that in the amendments to the Geothermal Resources Act we don't see a little bit more progressive legislation coming forward in that area.

I want to move to the part of the bill which we see under the Petroleum and Natural Gas Act. I'm concerned with regard to the protected-areas strategy, and the impact that the amendments to the Petroleum and Natural Gas Act will have on people who have followed due procedures of the government in pursuing a permit, a drilling licence or lease, etc.

When they're prevented from doing their work because of the protected-areas strategy, or because of the evaluation or planning process of one of the committees of government, there is no provision for some kind of compensation, or some kind of time frame within which that cancellation or postponement of the permit will occur.

Those of us who are very concerned that the protected-areas strategy proceed, and who want to see a responsible protection of representative ecosystems around the province, don't want to engage in some kind of corporate backlash on that process by having an unfair, or severely disadvantaged cancellation or the permits or leases, as we see through, I believe, (

o) in

section 22 under the Petroleum and Natural Gas Act. We will have to canvass that at some length in committee stage. If it does turn out that in order to advance the government's agenda on the protected-areas strategy and the land use commissions in the parts of the province that have been frozen that people in the business sector are being unduly disadvantaged by that, then surely we're going to provoke a backlash, and I don't think that we want to do that. We would like to see at least some recognition in that area that there should be an adequate time frame provided to the people who will be affected by that

section of the bill. In addition to an adequate time frame, they should have some confidence that the capital investment they have put in will either be recouped at the end of the time frame or will be compensated for in some way, so that they have some comfort before they make that capital investment so that we don't have a further grinding to a halt of the economy.

I feel quite disappointed in the part of this bill dealing with the Utilities Commission Act. I am very encouraged by the energy-efficiency portion; I think that's the right direction to go. I think we should move more in the direction of the Geothermal Resources Act and start to release some of the grip that B.C. Hydro has in terms of exclusivity of our power production.

In the Utilities Commission Act, the government had an opportunity to address some of the promises it made in the last general election -- particularly in the Kootenays -- such as the commitments made to groups like the Electric Consumers' Association and the people who were interested in the West Kootenay Power interim rate increases. With a few amendments in this

section of the bill we could have had some redress to the injustice that is being experienced right now.

[ Page 6792 ]

For over a year people in the interior who are subscribers to West Kootenay Power have been paying interim rate increases subject to them going to a public hearing process. The public hearing process has been unduly delayed because of ongoing labour disputes, so the consumers are paying higher rates with the expectation that there would be a public hearing. Through those public hearings, there may very well end up being a recommendation that the rate increases not be approved, in which case West Kootenay Power has had access to that extra money for a great length of time.

All the subscribers and consumers who are locked into that are engaged in a very unfair process. There could be some redress to that through this portion of the bill.

It's ironic that one of the members from Prince George say that the amendments to the Utilities Commission Act will allow the public to have their say. Well, the public want to have their say in the interim rate increases, and they're not able to do that. Costs of a proceeding are being paid for. I think that's interesting, because in the interior, when many of us spoke out against the gas turbine proposal that UtiliCorp was trying to bring in through West Kootenay Power from Venezuela, people travelled from around the province to participate in that.

So I can see that participant cost is an important point to make. The public does have to have legitimate access to public proceedings. That's very important, and at that time the leader of the Liberal Party spoke out very strongly in favour of more public input.

At the same time that we have this

section trying to increase public access -- when we had the public repeatedly speak out for a number of years through the Electric Consumers' Association, at their own cost....

When we had this government commit again and again through every community in the Kootenays that there would be proper redress to the issue of West Kootenay Power and UtiliCorp, that there would be proper redress to interim rate increases, that there would be adequate redress to the issue of ownership of our own utilities, that there would be an adequate process beyond the Utilities Commission, that the government was going to take action to reform and to change the legislation that addresses the Utilities Commission, especially in the Kootenays, and here we don't see any of that coming up.

That is unfortunate, because this is supposed to be aimed at advancing the cause and the interests of the public. When the public have repeatedly said very specifically that here are some important issues -- and when this government was in opposition they committed unequivocally that they would see those issues advanced -- now when we have an opportunity to do that, it hasn't been done.

In terms of some of the principles behind this bill, yes, I do agree that the Energy Efficiency Amendment Act is an excellent first step; I would like to see what the rest of it is. I think we should be very cautious, when approaching progressive initiatives like this, that we take into account the status quo and that we make sure that the status quo is adequately provided for in a transitional period and that if we are going to have alternative products available, the market is informed before the legislation comes forward so they feel part and parcel of the process.

With regard to the Petroleum and Natural Gas Act, I look forward to committee stage to see how the minister is going to address the anxieties that will be engendered in the private sector by people who may have capital investment there and who may, as individuals, representatives and people within British Columbia, very much support the idea of the preservation of representative ecosystems, but not to the extent that there is so much anxiety in the private sector that nobody has any security for their capital investment.

These are the things that we have to flag, hon. Speaker. Although there's an important principle being addressed in the Utilities Commission Act, it certainly doesn't go far enough. It doesn't do what the government committed to do in the last general election, and that's truly unfortunate. With that, I yield the floor.

W. Hurd: It wasn't my intention, originally, to speak to this bill, but I was so moved by the dissertation from the Minister of Labour about the challenge for natural gas consumers in Victoria that I felt it was important to point out a few things about the switch to natural gas, particularly as it relates to Vancouver Island. I am delighted to see that the Minister of Finance is here, because in the vaunted Peat Marwick Thorne report, there's a substantial

section about lurking expenditures, particularly on Vancouver Island. There's one

section about the natural gas pipeline to Vancouver Island and the extent to which that pipeline is being subsidized by the taxpayers. The minister will well know that the rate of natural gas to Vancouver Island has been fixed at a rate of 15 percent below any other fuel source, which will cost the taxpayers hundreds of millions of dollars over the coming years. The company which is converting to natural gas in Victoria is also benefiting from generous subsidies by the provincial government, particularly as it relates to conversions of up to $1,000 for people converting to other energy sources.

The exposure of the provincial government is absolutely mammoth in connection with this project, and it should be pointed out to the Minister of Labour that the good consumers of Victoria are going to have to install a great many efficient showerheads indeed to make up for the kind of subsidies that are going into this particular conversion to other energy sources. In fact, I can see many generations of energy-efficient windows and showerheads and improved insulation before the taxpayers ever recoup the kind of investment they have in this particular project.

I am delighted the Minister of Finance is here. I urge him to reread the Peat Marwick Thorne report, particularly the

section about lurking expenditures and the one that talks about the taxpayers' exposure for conversion to what is an energy-efficient source, but which the generations of British Columbians will pay, particularly on Vancouver Island.

I couldn't help but throw that in, because the energy-efficient challenge that the Minister of Labour is talking about may be efficient for consumers, but it is quite a different story for taxpayers.

[ Page 6793 ]

Hon. A. Edwards: Hon. Speaker, I'm a woman of few words, and usually, in the interest of efficiency in this House, I try to keep my speeches to a minimum and to a minimum length. I know that in general that is appreciated by those who listen and hear what is said. What has happened here today is that we have discovered a swamp of misinterpretation, misunderstanding, misconception, misstatement and even irrelevancy in the other benches about this bill, which is a relatively minor bill and deals with relatively few things.

I would like to deal with a few of them. Most of them, of course, we will discuss in committee stage. This bill deals with four acts, so it's very difficult to consider them together, but I would like to deal with a few things before I put this second reading to bed.

There is a strange misinterpretation about the Energy Efficiency Act. This is an enabling act which allows you to do things. Certainly, for the member for North Vancouver-Seymour, we would never do a thing that would oppose the requirements of the FTA. Nor would we like to challenge the NAFTA on this issue, would we? He brings out a truly amazing attitude on this. What we have is very good legislation which will allow us to work further with manufacturers in order to bring in standards for energy-efficient appliances and devices and to develop stickers and things like that to assure buyers.

There was a strange attitude that there are some back-door fees here. These fees are right up front. We want to make sure that the whole House knows what we're planning to do. There is some kind of an

interpretation that we're bleeding the resource industry, and that's absolutely amazing.

I would like to go back to the idea that the Energy Efficiency Act was a first step. I repeat that this is about step three with this act. I have to congratulate the previous government for first bringing it in. We improved it once, and we've improved it again. I think it was a good first step. We even supported it at the time. I would certainly say that this is a good act, and I'm sure that later, when the members understand what it's about, they will support it all the way.

[3:45]

There is a strange attitude about participant funding. Strangely, they seem to think that there are no limits on how the participant funding can go. It says right there that the Utilities Commission can put limits on it. There are limits and there will be limits in the regulations. A number of members agree that it is a very good idea to let people have a say in a public process. Well, it certainly is. Here there is a public process, but, because of legislation on the books right now, there is no way to support people who cannot afford to attend public hearings and say what they have to say.

If they have a legitimate interest and are willing to work with the Utilities Commission, this particular amendment will allow that to happen.

I will limit my remarks to just one more issue before I sit down, a misunderstanding about (

o) in

section 22. There have been a number of statements that we are nullifying leases, permits or licenses. In fact, what we're doing is allowing an extension of governmental requirements, which is a move in favour of industry.

I encourage the critics and others who want to speak during committee stage to look carefully at the legislation and, if they choose, to consult with the ministry beforehand so that they will have a good sense of what we're talking about. I look forward to committee debate later. With that, I move second reading.

Motion approved on division.

Bill 28, Energy, Mines and Petroleum Resources Statutes Amendment Act, 1993, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. G. Clark: I call second reading of Bill 5. I believe the member for Delta South had just completed his remarks.

INCOME TAX AMENDMENT ACT, 1993

(continued)

J. Weisgerber: I rise to speak to the Income Tax Amendment Act, Bill 5. I appreciate the courtesy shown to me by the government and the official opposition when they spoke earlier on this bill.

I think it's important for us to look at this tax legislation, which clearly flows from the budget and is an instrument of the budget. British Columbians have already had opportunities, and they have taken those opportunities, to tell the government what they think about the budget. Indeed, we've seen rallies around this province focus primarily on disapproval by a wide range of British Columbians to the tax measures introduced by this government. Many of the people who demonstrated in protest of the tax measures in the budget were people who perhaps had never before found themselves part of a protest rally.

When I spoke to the group out on the lawns here, many of the people had never -- at least since the 1972-75 period -- felt motivated to come out and protest at the Legislature. They felt abused by this budget. They saw in this budget a pattern that had started in the first budget introduced by the NDP government. There was indeed a trend established in last year's budget that follows through into this year's budget, a trend that sees the government look to taxes and debt as the way to finance spending. There doesn't appear to be any appetite on the government side to control spending.

Indeed, after the demands are made, the question is only: will we finance our spending with more taxes or by creating debt for future generations?

This legislation clearly deals with those areas where the government has decided to look to income taxes and to eliminating the renter's tax credit for revenue. Those are the three things. The minister said in his opening remarks there were four areas that were dealt with. Three of them are tax measures, if you like, and there is a small sales tax rebate measure designed to soften the

[ Page 6794 ]

blow for people whose incomes are in the $17,000 range or below.

Essentially what we have here is a bill designed to take more income taxes from those who are described in the bill as higher-income earners. We know now that the government considers anyone earning a taxable income of $60,000 or more to be in the higher-income range. We have to think about a Minister of Finance who earns about $100,000 a year in his portfolio. We understand, because of his reluctance to participate in the debate over teachers in the province, that his wife is employed as a teacher. One could project that she would probably earn another $60,000 a year.

So here is a minister who looks at people earning $60,000 a year and decides that these are the higher-income groups that should be attacked. Those people are expected to pay -- and will have to pay, because this bill will undoubtedly pass -- a 20 percent surcharge. If they are fortunate enough to earn $86,000 a year, the income surtax is 30 percent.

[M. Lord in the chair.]

Now we know that governments have to tax as a way of raising revenue, and let me say, hon. Speaker, that I don't particularly argue with income taxes as a way of generating revenue. I believe that if government has to generate more revenue, income is a reasonable place to look. But I believe -- and I think most British Columbians believe -- that government has an obligation to first of all ensure that the money they already receive is being wisely spent, that it is using its resources wisely and that it is allocating tax dollars in the most appropriate way.

Not many people in this province believe this government is doing a good job in that area. Most people look at a whole range of initiatives undertaken by this government: new layers of bureaucracy, increases in the size of government, new bureaucracies, increases to public sector workers and a fair wage policy that costs taxpayers hundreds of millions of dollars a year.

Taxpayers look at all of these actions of government and say that surely if government has money for public sector wage settlements at three times the inflation rate or three times the settlements in the private sector, and all of these things for those people who are traditionally supporters of the government, then it should be able to economize and find a way to manage the business of government without coming back to the taxpayer for more. My opposition to this increase in sales tax....

Interjection.

J. Weisgerber: Income tax, as the minister so appropriately corrects me; he got to sales tax a little later on. There's another bill to cover that.

Hon. Speaker, we see a government that has not taken the prudent steps to trim government spending or dealt with the issues that British Columbians expect their government to deal with. It has brought in new programs and has allowed welfare costs in this province to increase by $900 million a year. This same government seems to have no hesitation in coming back to British Columbians for a whole range of new taxes and increases to existing taxes. These income tax increases are not acceptable. They slow the economy down.

At the end of the day they start to damage the government's ability to generate revenue, because if you take money out of the economy and put it into government, it's economy that's not available for investment or purchases to stimulate the economy.

In tandem with this, the government has increased the corporate tax rate. It is a natural and common occurrence for government to try to balance the income tax rate with the corporate tax rate. But we now see corporate tax rates of 16.5 percent in British Columbia -- a full percentage point higher than Alberta and much higher than in other jurisdictions in which we compete. This again slows down the economy and reduces investor confidence, the attractiveness of British Columbia as a source of investment and, ultimately, the government's ability to generate wealth.

This government is going in the opposite direction of the last administration. The last administration maintained tax rates at the lowest level in the country and generated tax revenues as a result. It encouraged investment in British Columbia as a direct result of an attractive tax environment here. Investors in British Columbia were more willing to invest here and expand their businesses. People from across Canada and all over the world looked at British Columbia as an attractive place to invest.

It still is, but it is not quite as attractive as it was two years ago because this government is systematically increasing taxes in every possible area. There is no tax, fee or revenue source that this government and this Minister of Finance haven't attacked once or twice in the two budgets they have brought down. People looking at British Columbia understand that this isn't the end of the road for tax increases and that this is part of a clear pattern by the government to continue to increase taxes and take more money out of the economy and spend more in government.

When you combine that with the increasing debt in British Columbia, you understand why people are nervous about what's happening in B.C. and why folks have gathered earlier this year all around the province to protest the tax measures that the government has brought in.

This Income Tax Amendment Act also deals with the elimination of the renter's tax credit. This is an area where I quite honestly expected an NDP government to be more sympathetic. What we see here is an attack on the working poor; the people who generally rent properties, who can't afford to buy properties but who are not looking for public or social assistance; the people who are earning too much to qualify for the sales tax credit that this bill established.

This bill targets those working people in British Columbia and punishes them with one more tax, and it is very much to the detriment of young people in particular. In large measure young people are folks who rent accommodation, rent apartments, rent homes and hope to save enough money to buy a house or a condo or an apartment, but this tax simply cuts back on their net income -- or the amount of money that they can set

[ Page 6795 ]

aside to buy property -- and slows down growth in the economy.

[4:00]

Every aspect of this legislation hurts the economy of British Columbia, and if this government had its priorities right and had an agenda for economic development for wealth generation -- for economic stimulation in the province -- it would not introduce this kind of legislation. It would have the courage to set about increasing government revenues by encouraging and promoting a more robust economy. That's the answer in British Columbia. We have the health; we have the potential; we have the economic base here for a very strong economy. We've been leading Canada for most of this decade.

We've been doing it because there were the resources, the people, the skills and the economic climate. We see this being undermined by a government that doesn't understand what makes British Columbia tick, doesn't understand what causes people to invest their savings and create new jobs and create wealth in the province.

We are very much opposed to Bill 5 because it's a key

part in a budget that we are overall opposed to and disappointed in. With that, suspecting that there is very little chance of defeating this bill, I'll take my place and hear from other members of the House, if anyone is so moved to speak.

L. Fox: I'm pleased to stand and speak on the principles and philosophies of Bill 5. Obviously following our leader, who has expressed our concerns very well, there are only a few personal observations that I would like to give to this particular bill.

The minister in his opening statements talked about the fact that this was only going to affect 8 percent of the province, but that percentage is a bit misleading. When we take out of the population the 20 percent -- 10 which is on welfare, 10 which is on UI -- then, in fact, that percentage of those who contribute to the province changes substantially and becomes about 15 percent. That is a significant factor. When we look at the people who drive the economy of British Columbia, it is not the average wage earner or the low-income wage earner.

They all contribute; they contribute in a very sincere and obvious way. But the movers and shakers, the people who drive the investment in the province, are the high-income people.

Look at the recent incident in which a Burnaby company hired a new CEO from California at a wage I'm not sure of -- it was in excess of $100,000. This individual chose to manage that British Columbia firm yet to live in Bellingham, because the tax advantages of staying in Washington while managing a B.C. company were significant to him. I recognize that is only one incident, but it is a very serious symptom of the kinds of things we are going to see grow to some magnitude over the next few years if we don't recognize the need to cut the size of government and thereby cut the need to raise taxes.

The other aspect of this bill that I really have problems with is that the $60,000 and $86,000 ceilings are on individual taxpayers. That discourages an individual, whether the male or female of the family, from seeking higher employment in order to allow his or her spouse to stay home and raise the children.

You now have a situation where two wage earners who have jobs that are under those particular caps can contribute more in wealth to their family by both being in the workforce than one individual looking at improving his employment, because he's going to be penalized the minute he does through this extra taxation on the so-called high wage earner. That's a real concern to me, given the social problems we have today.

It's something that should be recognized about all the taxing policies of this government: what is that policy encouraging or discouraging by way of social and economic problems throughout the province?

Because I don't support the budget or the taxing policies of this government, I will not support this bill either. I'm not going to belabour the fact; as my leader has said, we obviously don't have much chance of defeating this bill. But I wanted to make those two observations.

Hon. G. Clark: I enjoy hearing some of the comments from the opposition. It's unfortunate that they're somewhat incorrect, or certainly I have profound disagreements with other aspects. The member said that what makes the system go round is the rich.

L. Fox: They drive it.

Hon. G. Clark: They drive it, he says. Therefore the logic is that we should cut taxes on the rich and that would help the economy. That's the philosophy that we saw Ronald Reagan pursue; George Bush called it "voodoo economics," although he continued it. That's the policy we have seen pursued by the current Mulroney administration and by the Vander Zalm government that the members opposite were part of. Of course, that's one of the fundamental reasons that we have this massive deficit and debt problem in this country -- and, I might say, in the United States as well.

This is what has happened under conservative administrations: big tax cuts for business and the rich, all the while pretending that it's going to create more income for government, and this simply hasn't been the case. It won't happen. It's called trickle-down economics. It has been totally discredited in this country and in the United States.

We have increased taxes on the richest 8 percent. This is not a subjective term about who is rich and who isn't; it's an objective fact. For the record, I want members to know that after this budget, we have the second lowest taxes in Canada. This budget gives us the lowest rate of spending growth since 1987, way back when Bill Vander Zalm first got elected. If you count population growth and inflation, the real per capita expenditure is minus 0.8 percent.

As a result of these tax increases on well-off individuals and a spending restraint, we have cut the deficit that we inherited from that discredited administration from $2.4 billion to $1.5 billion. We just heard from the remnants of the last administration, who want to continue the policy of tax

[ Page 6796 ]

cuts for the rich and larger deficits. They've been rejected by the people, thank goodness.

We have increased taxes modestly on the top 8 percent while maintaining the second lowest taxes in Canada. We've cut back on government spending, we made a dramatic cut in the deficit, and we still have the second lowest taxes in Canada. We have the lowest deficit as a percentage of the economy of any province in Canada, and our credit rating has been confirmed. I shouldn't criticize another province, but I note that the Conservative administration in Manitoba, which is following exactly the policies mentioned by the members opposite, just had their credit rating dropped today.

[4:15]

In conclusion, no one is happy with tax increases. No one wants to increase taxes, but to dig ourselves out of the massive deficit inherited from the last administration, it's important to have taxes that are based on the ability to pay. The tax credit in this budget for low-income people will stimulate the economy, because low-income people will spend that money in small businesses, creating jobs here in B.C. So I commend all members who believe in prudent fiscal responsibility and prudent fiscal management and in a fair taxation policy, unlike the regressive policy followed by the previous administration, to vote in favour of this legislation.

Motion approved on the following division:

YEAS -- 40

Petter

Boone

Edwards

Cashore

Charbonneau

Jackson

Pement

Beattie

Schreck

Lortie

Hammell

Lali

Giesbrecht

Hagen

Harcourt

Gabelmann

Sihota

Clark

Cull

Zirnhelt

Blencoe

Barnes

MacPhail

B. Jones

Copping

Ramsey

Pullinger

Farnworth

Evans

O'Neill

Doyle

Hartley

Streifel

Krog

Randall

Garden

Kasper

Simpson

Brewin

Janssen

NAYS -- 18

Chisholm

Reid

Gingell

Dalton

Stephens

Hanson

Weisgerber

Serwa

Mitchell

Tyabji

K. Jones

Jarvis

Anderson

Warnke

Symons

Fox

Neufeld

d e Jong

Bill 5, Income Tax Amendment Act, 1993, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

R. Chisholm: I ask leave to make an introduction.

Leave granted.

R. Chisholm: I would like the House to welcome 47 grade 7 students from Tyson Elementary School in Chilliwack. They are here to study our parliamentary system and to see just exactly what we do to earn our dollars. Could we please make them most welcome.

D. Mitchell: I ask leave to make an introduction as well.

Leave granted.

D. Mitchell: We have in our public galleries today a very enthusiastic group of grade 7 students from Hillside Middle School in West Vancouver. They are here in Victoria for a few days. They are here in the Legislature today to understand how it works, and they have many questions about how the institution works. I hope that members will welcome them here today. They're going to be observing our proceedings for a short while.

Hon. G. Clark: Adjourned debate on second reading of Bill 13.

INCOME TAX AMENDMENT ACT (No. 2), 1993

(continued)

F. Gingell: I rise to speak to second reading of Bill 13. As the minister stated when second reading debate first commenced on May 27 -- just to remind members of the House -- Bill 13 deals only with amendments to the provincial Income Tax Act to bring it in line with the federal Income Tax Act. With respect to the assessment and collection of taxes, there is absolutely no purpose that ours should be different because of the arrangements that exist between the province and the federal government.

There are just two minor items that I wish to deal with. When we got our briefing papers my heart rose, because we were told that this act would bring in some new fairness provisions.

An Hon. Member: Poor language.

F. Gingell: Poor language, indeed. I was hoping that the minister was going to take this opportunity to bring some equity and fairness into many of the acts of this province that deal with various taxes. I'm going to use this time, if I may, as an opportunity to make a plea to the Minister of Finance that he consider making those changes that will be necessary in the Social Services Tax Act to allow the minister to use the discretion that he has a great deal more than he ever does.

A great deal of the time of an opposition Finance critic is spent communicating with the Minister of Finance about instances in the provincial sales tax act where there are anomalies of wording and where written and verbal rulings that have been given to taxpayers, on which they have relied for long periods of time, are suddenly reversed by a new auditor, ruling or practice that is

[ Page 6797 ]

taken up by the department of the Ministry of Finance that deals with the administration of that act.

One of the most important things in taxation is that everybody sees taxes to be fair. I must say that from the days when I first started in the profession of chartered accountancy, the compliance of taxpayers to the Income Tax Act really was voluntary. There was an attitude in this country that the taxes were reasonably fair. No one likes to pay them, of course, but people obeyed the law, filed the returns they were required to file and complied with the requirements of the legislation. That doesn't happen to the same degree now.

That is caused, to a great extent, by the tremendous increase in the level of taxation. Anyway, it turned out that these references to fairness in this have something to do with the Human Rights Act. I look forward to having some further understanding of it during committee debate.

The only

section in this bill that doesn't deal purely and simply with ensuring that the provincial act is harmonized with the federal act is the

section that provides a tax exemption for the Vancouver International Airport. I appreciate that in the past, of course, the operation of the airport, as a division of the federal Ministry of Transport, wasn't subject to taxes. I can appreciate that because it has gone to a non-profit organization and is being run by an authority on behalf of all taxpayers, it is, I guess, only reasonable that it stay non-taxable.

But, again, this is an opportunity to encourage this government, having given up the right to tax the profits of the airport, not to relax their intent to try to get a little greater say in the operation of the Vancouver International Airport. It is clearly a provincial facility. I think it is a great disappointment, as I know the government does, that the federal government in Ottawa would have seen fit to move the control and operation of that airport to a body that really reports to no one and has no responsibility to the provincial government for the manner in which it is developed and operates.

With those few words, hon. Speaker, I am happy to advise you that the Liberal opposition will support this bill. I thank you for the opportunity to speak to it today.

Deputy Speaker: The minister closes debate.

Hon. G. Clark: Just to close the debate, I'll start with the first comments from the member opposite, which dealt with sales tax anomalies. This bill, of course, is an income tax amendment act. I appreciate his remarks, although I disagree with them. Maybe we can have that discussion in the estimates.

[4:30]

My own view is that the sales tax administration, although it is very tough.... I think there are lots of appeals. The minister has to exercise his discretion. I tend to support staff almost routinely -- but not always. The reason for that is simple: we want a consistent application of the law. If the politician, as the court of last resort, is going to overturn staff and use his or her discretion, the only problem with that is ensuring that all taxpayers are treated fairly and consistently. That's the challenge we try to deal with.

If members have concerns about that, I'd be delighted to talk further, either in estimates or privately, with any member of the House. If people feel that the tax is not being applied consistently or that it is consistently harsh, I'm certainly prepared to look at that, although it has nothing to do with this bill.

With respect to the airport authority, I think the member opposite and I agree completely on this question. We are a bit concerned about the lack of any provincial input, particularly since we're in the middle of this bill, which gives tax-exempt status.

On the other, I must say in all candidness in the House that the airport authority has had a very good relationship with the provincial government. Mr. Emerson, who is now the head of the airport authority, has great experience working for the previous administration and briefly for our administration, and is very capable. He very clearly understands the role the airport plays in the province's economic development. He understands and I think fully supports working with the provincial government. We've had some very frank discussions in preparation for this legislation.

I feel very confident in saying that the province of British Columbia, regardless of political stripe, will have a major influence over activities at the airport. In fact, there is some undertaking to that effect in writing from the authority, which I'd be happy to share in the House, if members want that. It's not formal documentation -- but just to seek some reassurances of the House.

Finally, I might say in closing that I'm really sort of bullish on the airport. I think that this is an important economic development engine. Their plans are very exiting for the province, and they're in fact key to encouraging trade and growth. I fully support their rather ambitious undertaking of expansion at the airport, both of the terminal and the runway. So I personally feel very confident and positive about this expansion for the economic development of the province. I think all members do generally.

This bill really enables that to happen. I think it's good faith, in the sense that I think the previous administration made some commitments to this effect. We didn't have to do it as a new government, but I feel that this really paves the way for more local autonomy -- although without the strict accountability guidelines -- which is better than allowing Ottawa, that administration in the east, to have influence over our airport.

So even though it's not strictly accountable in a local sense, which I would prefer, any local control is more desirable -- maybe my bias is showing here -- than allowing the bureaucrats in Ottawa to have that kind of influence. Because of that local control and because of this bill, in part, we are seeing dramatically more development on that site than we would had it still been in the hands of the federal government.

I'm pleased that opposition members are supporting this. I think it's good news for the province. I appreciate some of the caveats that the member opposite raised, and I agree with them. But I think that any concerns have been met. I'd be happy to further share any discussion about that with members of the House. With that, I ask members to support Bill 13 and move second reading of the bill.

[ Page 6798 ]

Motion approved.

Bill 13, Income Tax Amendment Act (No. 2), 1993, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. G. Clark: I call second reading of Bill 17.

BONDING ACT

Hon. G. Clark: The Bonding Act has existed in various forms in this province.... You learn something new every day in this job, hon. Speaker; it has existed in British Columbia since 1897. Over the years various improvements have been made, such as the concept of consumer protection and the establishment of standards for bonding and financial guarantees. The present act came into force in the mid-seventies, during that period of time when lots of legislative modernization and exciting changes took place in B.C.

The Bonding Act is designed to safeguard the interests of the public and the government from the failure of a holder of a permit, licence or statutory privilege to perform on their obligations.

This bill simplifies administrative procedure and allows the legislation to keep pace with modern business practices. One of the key features of the bill is to introduce regulatory flexibility, particularly in the area of the types of acceptable performance security. This will allow the acceptance of new forms of performance security that are being developed by the financial industry and the retirement of security forms that are no longer in use. This will be a significant improvement over the present act, which has a very narrow description of security and fails to adapt to changing business practices.

Regulations under the new act will provide legal descriptions of such financial instruments as term deposits, letters of credit and other types of commonly used performance security instruments. The bill also recognizes -- and these are capitalized, although I'm not sure that it's significant -- the safekeeping agreement which has been developed by the Canadian Bankers' Association to significantly ease the administrative burden of posting performance security for the licensee and the government.

While the old act had its problems, one of its features, that of establishing a two-year claim period for the public, has been carried forward in this bill. This bill is also a reflection of the government's commitment, where possible, to the use of plain language in legislation. When compared with its predecessor, the legislation tries to avoid the excessive use of legal terms to achieve its goals. Hon. Speaker, I move the bill be now read a second time.

F. Gingell: Having read the bill and the bill kit, I'm really quite impressed that the minister managed to speak on the subject for a minute and 45 seconds. I don't think I'm going to be able to match that. The bill seems to us to be common sense and brings the act into the 1990s. We totally support this new act.

J. Weisgerber: As rare as it is for me to be able to stand up and endorse legislation brought in by this government, today seems to be the exception. The Social Credit caucus, too, joins in supporting Bill 17. I think these kinds of improvements, particularly in the area of simplified language, are important steps forward. Acts like this need to be updated from time to time, and we should join with the government in doing it and move on.

Deputy Speaker: Does the minister wish to close debate?

Hon. G. Clark: No, thank you.

Motion approved.

Hon. G. Clark: I thank the members of the House for a rare unanimity motion.

Bill 17, Bonding Act, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. G. Clark: Hon. Speaker, I call committee on Bill 8.

SOCIAL SERVICE TAX AMENDMENT ACT (No. 2), 1993

The House in committee on Bill 8; M. Lord in the chair.

Hon. G. Clark: I'll introduce my staff. Glen Armstrong is on my left and Ed Turner is on my right. Ed is executive director of the consumer and taxation branch and Glen is in the tax policy branch.

Section 1 approved.

section 2.

F. Gingell: Perhaps this is a more appropriate occasion for me to make a speech about fairness in the administration of the Social Services Tax Act, seeing that we have the administrator through whom many of the appeals go.

We debated this bill at great length last year, and we all recognize that the purpose of this new act is -- pure and simple -- to fix up a bad job that was done by the government. Since they are all amendments that were made last year, I wonder if the minister could just briefly cover the changes as we come to each section.

Hon. G. Clark: The whole of part one of the bill parallels exactly last year's bill, and that was canvassed at length in the House. I'm in the hands of the members of the House if they want to redo that, but frankly there's nothing new there. Part two on the other hand is new. I don't want to prejudge members of the opposition, but one option would be to proceed with the first half of the bill, or part one of the bill, and then have some detailed discussion on what has changed this

[ Page 6799 ]

year from last year in terms of the new parts. If members are at all interested in that suggestion, that means that the first 14 sections we could do on one shot and then move on.

J. Weisgerber: Indeed, what we're doing now is having another look at some legislation introduced a year ago that received a great deal of debate in this House, and I too am reluctant to go over that argument again. But what we're doing here does bear repeating. The government set out to impose a tax on legal services, arguing that it was somehow taxing the legal profession. Reflection on that and common sense would tell you it was a tax on the users of legal services, not a tax on the providers of legal services.

I think too that it was pretty clear last year -- and the reason we're back here this year is that it's patently unfair to take a specific area of service in isolation from another range of services. The government's solution is interesting: when it was found to be inappropriate to tax a narrow range of services, the government taxed a broad range of services. They now say that what they did was okay in the context of the new tax regime, which sets out to expand taxes to a broad range of services.

[4:45]

I recognize that we're in committee stage of the bill and essentially dealing clause by clause, but we're also taking the liberty of lumping together the first 14 clauses. I will try to be brief in that regard.

It's unfortunate that we're trying to solve this problem by going back retroactively. I recognize that this is not the first time in the history of this Legislature that retroactive taxes have been imposed or that taxes which were struck down have been brought back to the Legislature in a form that would allow them to stand for a legal challenge. I think it's also important to recognize that most of the arguments that succeeded were raised in this Legislature a year ago. One of the shortcomings of government is that when it has the bit in its teeth and has decided on a course of action, it is pretty much oblivious to the arguments that are made.

An Hon. Member: Is this from experience?

J. Weisgerber: One of the more silent members of the opposition asks if this is from experience. As a matter of fact, I do speak from experience. I have seen governments introduce legislation. I have seen oppositions provide appropriate critiques that the government chose to ignore, as in the case of Bill 2 last year. The arguments that were made in court were not new arguments. For the most part, they were repetitions of the arguments made in this Legislature, and they succeeded.

Hon. G. Clark: You should have charged them.

J. Weisgerber: But then someone would have had to collect the 7 percent sales tax for the advice, and that would have been awkward.

I'm prepared to move on, having made those few comments.

Sections 2 to 14 inclusive approved.

section 15.

F. Gingell: My understanding of the court decision that struck down this legislation is that in the end it was really struck down for lack of certainty. There was a whole series of other issues on discrimination that the courts didn't decide on, things that I mentioned during second reading. The change that is made to

section 1 of the act through this

section 15 adds the words "legally related" in front of "services prescribed as legal services." Perhaps the minister will give us some description of how that changes the original intent of the act.

Hon. G. Clark: It actually defines the services. This is an amendment to the definition of legal services, and they're defined as the services that come within the meaning of the practice of law under the Legal Profession Act and those described in the Notaries Act. The definition captures most services provided by lawyers and notaries except those provided by employees to their employers. Unlike the retroactive legislation, the definition of legal services in the prospective tax includes the authority to prescribe legally related services as legal services. It's required to deal with a possible omission.

The member is correct. Initially we attempted to keep.... If I could just back up, what this does is dramatically narrow the definition outside of the province and somewhat significantly broaden the definition within this province and allow the ability to prescribe legal services. That gives greater certainty, which is one of the fundamental problems with the "vagueness" of the tax initially.

Initially we designed the tax in such a way as to try to not disadvantage British Columbia lawyers from other lawyers in other jurisdictions doing work here, or vice versa. We wanted to try to not have them at a competitive disadvantage. But unfortunately, that's the part that was ruled largely to be a bit too vague for the courts, because it's a principle, I guess, of the Charter of Rights, quite correctly, that on things like tax policy -- fundamental policy -- the Legislature has to be absolutely clear. The problem that the courts had is that someone could break the law inadvertently.

If somebody is going to break the law, we want to make sure that the law is clear. This is a significantly tightened-up version dealing with that specific question.

F. Gingell: I'm afraid I cannot resist the temptation to speak again to the last line and a half of

section 15: "...but does not include services provided by a person to that person's employer in the course of employment." Hon. Chair, this is a very discriminatory tax. Not only is it discriminatory in the area of asking why tax legal services and not tax a whole series of other services, but that line and a half specifically causes small corporations seeking advice from lawyers to pay a tax, but excludes from taxation the value of services rendered in large corporations who have so

[ Page 6800 ]

much legal work that they have a need to employ their own house counsel.

I'm not suggesting that you should include the value of legal services rendered by house counsel to their own employers, but I want to point out the unfairness of this act, and I am interested in your comments on it. You shouldn't bring it in period, because it's unfair. This is one of the areas in which it is terribly unfair. You have not only the problems of a tax that is going to be deductible to business and never deductible to individuals but you're also creating a tax on services rendered to small business that will be perfectly legal and properly avoided by large corporations.

That is so unfair, and unfair taxes are the cause of underground economies and people avoiding and evading taxes. I really do think that you should reconsider this whole exercise. I wish you would. That particular line and a half causes unfairness that isn't acceptable.

Hon. G. Clark: I recognize that there are some concerns, and obviously we'll monitor this tax very carefully, as we do others, but I might say that the tax system is replete with tax preferences or taxing at different rates. We don't tax books right now; no one would like to see us tax books, but that's an advantage. That's a tax advantage conferred upon books.

Interjection.

Hon. G. Clark: Everybody who buys books is treated the same way. Similarly, we don't tax children's clothing but we tax adult clothing, so we're discriminating against adult clothing manufacturers versus children's clothing manufacturers. The system has inconsistencies, tax preferences by virtue of the tax policies pursued by various governments across the country. It is somewhat unfair in some respects. One legislation we are looking at is limiting the preference for certain renewable energy sources.

We didn't really want to do that, but there was this bias in the legislation that was growing and was getting very difficult to police and was causing some inconsistent application, so we have rectified that.

I appreciate that with members opposite there is some concern about this legislation in terms of its application. I am concerned as well, and we will monitor it very carefully. But on balance, we think this is progressive legislation. Firstly, we think that -- factually and individually -- the consumers of legal services have a somewhat higher income; secondly, we would hope that lawyers would become more competitive as we move forward and there won't be a passing on of this tax, particularly to the business community.

Section 15 approved.

section 16.

F. Gingell: If one just takes the number of words that are in the new

section compared to the number of words that were in the old section, there is a fairly substantial change in the definition of the legal services to which the tax will apply. I would presume, from reading the result of the court case in the Supreme Court of British Columbia, that the changes made in this

section must be very key to bringing it within what you believe is going to be provincial jurisdiction. I wonder if -- for myself and for the Leader of the Third Party -- you could just cover the changes that you believe have accomplished your nefarious program.

An Hon. Member: Nefarious?

F. Gingell: Nefarious, yes.

Hon. G. Clark: The member is essentially correct in saying this is a key section. "A connection to British Columbia" were the words used; it is now simply that any British Columbian purchasing legal services in British Columbia is taxed. This is what we talked about earlier as being much tighter. Before, the key question was "a connection to British Columbia." That's been eliminated and tightened up under this section.

F. Gingell: Does this mean that a resident of British Columbia now receiving legal advice from a lawyer not resident in British Columbia with respect to a matter that doesn't have residency here in British Columbia will not be taxed?

Hon. G. Clark: The answer is no.

J. Weisgerber: To follow that question, and assuming that the minister was correct in what he said, the flip side then is: is someone who receives legal services in British Columbia who is not residing in British Columbia exempt from the tax?

Hon. G. Clark: I want to clarify this. If you are a British Columbian resident and you buy legal services in Toronto for a function which is not in British Columbia, you don't pay the tax.

F. Gingell: Maybe the best way for us to understand this is just to move through all the alternatives. If a British Columbia resident with a non-British Columbia lawyer is dealing with an issue that is in British Columbia -- like the transfer of real estate -- will that be taxable?

Hon. G. Clark: Yes.

F. Gingell: I guess we will get into how you collect those taxes later. The next issue that I'd like to ask the minister about is whether it is taxable to have a non-resident of British Columbia dealing with a non-resident lawyer dealing with a matter that is resident within British Columbia.

Hon. G. Clark: No.

F. Gingell: Is the reason that that is not included in Bill 8 because you do not believe you have jurisdiction to charge that tax? It obviously wouldn't seem to be fair.

[ Page 6801 ]

Hon. G. Clark: I think that's correct. Constitutionally there's nothing to tax.

[5:00]

J. Weisgerber: This opens a whole range of possibilities. I would find that area contradictory, if I understand the minister's answers. If someone non-resident in British Columbia were to visit a B.C. lawyer and seek advice on an issue that was not particularly related to this province -- for example, an issue that might arise in Alberta or Washington or the like -- is the minister then suggesting that that advice, that legal service, wouldn't be taxable?

Hon. G. Clark: Yes, that's correct. Let me just draw the member's attention to

section 16 dealing with

section 2.012(3). It says that if neither the purchaser nor the recipient of legal services provided in British Columbia resides, ordinarily resides or carries on business in British Columbia, a tax shall be paid essentially for the following services: real property situated in British Columbia; tangible person property, delivered in British Columbia; and the ownership, possession or use in British Columbia of property other than that referred to, and so on. So, it's fairly tightly prescribed.

J. Weisgerber: I live in Dawson Creek, and quite regularly, hundreds of times a day, Albertans come into British Columbia to buy goods, and there's no shame. As a matter of fact, it's of considerable benefit to British Columbia and the region. It is a longstanding argument of Alberta residents coming into B.C. that they should be exempt from social services tax. When they come in and buy goods, the vendor is obligated to charge them a tax. I'm curious to know what the difference is between a legal service and some hard goods that are purchased.

Hon. G. Clark: The member is correct. I thought he was talking about British Columbians going to Alberta. Albertans coming and buying goods in British Columbia is good news. It's important that people realize that we're trying to treat legal services exactly the same as goods. As you know, if you're an Alberta resident and you're buying goods in British Columbia for export to Alberta, you don't pay the sales tax, if you have them shipped to your address.

Similarly, if you purchased legal services in British Columbia, you would not pay the legal services tax, unless it is something absolutely integral to British Columbia -- these five things. So if it's real, tangible personal property in British Columbia, then you pay the legal services tax, but if it's essentially exported -- legal services for a function outside of the province and the person is from outside of the province -- then constitutionally we cannot tax it, so we don't in this legislation.

J. Weisgerber: The purpose of my argument is not to include in the web t