1998 Legislative Session: 3rd Session, 36th 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)

THURSDAY, APRIL 2, 1998

Afternoon

Volume 8, Number 8

[ Page 6713 ]

The House met at 2:04 p.m.

Hon. I. Waddell: I'd like to introduce and have the House welcome a New Democratic MLA from Manitoba. He's Steve Ashton. He represents the Thompson riding. He's here with his daughter Niki. He was first elected at 25 years old -- elected five times. He's currently the Opposition House Leader and soon, given provincial trends, will be in the government. Would the House please make both Steve Ashton and his daughter Niki welcome.

F. Gingell: It's my pleasure today to introduce to the House Mr. Peter Wilkins, who's a principal project director in the public sector performance office of the office of the auditor general of Western Australia. Mr. Wilkins is the principal project director with lead responsibility for the development of performance audits, specifically in the human service agencies, and directs complex and sensitive audits, as well as developmental projects within his office. I encourage him, hon. Speaker, to stay here as long as he possibly can and pass on much of his wise advice to us in British Columbia.

Hon. A. Petter: I'm pleased to announce the presence in the gallery today of a very special visitor. We have Ms. Marisol Prado, the national president of the Confederation of Chilean Students. She and her organization have played a major

part in moving Chile on the road to citizens' democracy and ending military dictatorship in Chile. Ms. Prado, I'm told, is the first woman ever to lead a national student organization in Chile, and she does this while studying medicine. She's currently on a tour of Canada sponsored by the Canadian Federation of Students and is joined in the gallery by Rob Fleming, chair of the UVic Students Society, and Maura Parte, B.C. chair of the Canadian Federation of Students. I would ask the House to make them all very welcome.

Hon. M. Farnworth: Today in the members' gallery we have some special visitors from Chile. His Excellency José Tomas Letelier is the newly appointed Ambassador of Chile to Canada. The ambassador is accompanied by his wife Anamaria Letelier and Dennis Biggs, consul general of Chile at Vancouver. This is the ambassador's first official visit to British Columbia and to our capital, so I'd ask the House to please make him, his wife and the new consul general extremely welcome.

W. Hartley: It's my pleasure to welcome some neighbours from the south of us, from Cashmere, Washington: teacher Mr. Gjullin and the Cashmere Middle School students, grades 7 and 8, as well as several adults. They're here for comparative government and local history learning. Welcome.

G. Wilson: Hon. Speaker, in the gallery we have today two students of political science. One is my son Mathew Wilson, along with his companion Giovanni Turla, who is here from Ontario to witness firsthand what the reality of politics is, rather than the academics they may learn at school. Would the House please make them both welcome.

T. Stevenson: I see up in the gallery Bill Hartley, who was the member for Yale-Lillooet for many years during the Barrett administration. I've gotten to know Bill over the past few years, having married his daughter -- that is, doing the ceremony. I hope the House will make them welcome.

Hon. H. Lali: I would like to join my colleague, who just introduced former MLA Bill Hartley. As well, sitting next to Bill Hartley is Tosh Mukaida, who is a former constituent of mine. Would the House please make them both welcome.

Hon. J. Kwan: Also in the gallery visiting us today is Nikki Hill. She comes from the Premier's Youth Office, but prior to that life she worked very hard in the youth community, particularly among the student body. Would the House please make Nikki Hill very welcome.

Oral Questions

TAX BREAK FOR FINANCIAL INSTITUTIONS

M. de Jong: Yesterday the Minister of Finance couldn't or wouldn't explain to the House where in her budget the $8 million tax break to at least one financial institution was reflected. She's had 24 hours to think about that question and get a new set of briefing notes. Can she today indicate to the House -- point out -- where precisely in her budget documents she has chronicled that $8 million tax break to at least one financial institution?

Hon. J. MacPhail: I appreciate the opportunity to do so. Clearly the change is shown there. It's listed in the change in policy. There was no attempt to hide this whatsoever. In fact, our policy of encouraging support for locally homegrown financial institutions is one that we're very proud of -- one that we've consistently done since 1994 -- and it's good news for homegrown financial institutions such as the Hongkong Bank of Canada and credit unions. It's very, very good news.

There's no revenue posted and no revenue lost, because there is no certainty that there will be a revenue loss. There is no certainty when and if any financial institution will actually cross the threshold. In fact, there were consultations done with the broad financial sector, but there was no indication of if and when any financial institution would actually cross the threshold.

M. de Jong: We know from the minister's own officials that one institution has crossed the threshold -- and did so last February, in fact. All we have to rely on -- unfortunately, given their record in the past -- are the minister's own documents. If you go to page 52 of the budget reports, it indicates that this tax break for financial institutions will have no -- or minimal -- revenue effects. Well, I don't know if the minister considers $8 million to be minimal or insignificant, but maybe I'm being unfair to her.

Maybe she can indicate to the House today whether in introducing this amendment to the corporate capital tax she just had no idea that it was going to result in an $8 million tax break to the Hongkong Bank.

Hon. J. MacPhail: The information to which the hon. member refers . . . . I'd be pleased to have him table it if it's in the context of a news report. Perhaps he would also be interested in knowing that some of this information is confidential. But I'd be happy to reply to the actual information he has.

G. Farrell-Collins: The question is a simple one, and it's not getting a simple or clear answer. On page 52 of the budget reports, it says with regard to this lifting of the threshold from $750 million to $1 billion that there will be no -- or minimal -- revenue impacts. It doesn't say that we don't know what the revenue impacts may be; it says that there are no revenue

[ Page 6714 ]

impacts, or that they will be minimal. There are a whole list of other tax breaks here, many of them smaller than the $8 million figure, and they are recorded. In fact, they are not just recorded in the documents; they were certainly recorded in the speech the minister gave in the House. So the question is: why was the minister so enthusiastic about all the other tax breaks, and why are her documents so -- if I may be delicate -- unclear about the $8 million break that her government gave to a bank?

Hon. J. MacPhail: There was just so much good news in this budget, I couldn't get it all into one speech and still hold the short attention span of the opposition. This policy is very clear; it clearly shows the change in policy. I repeat, and I would be happy to repeat again and again for you, that there is no prediction of revenue loss yet, or if indeed ever -- or when there is, we will be showing it, because we cannot predict when the bank will actually, in a way that doesn't reveal confidential information . . . when the threshold will actually be met.

It is a policy of which our government is extremely proud: protecting locally homegrown financial institutions that face a great deal of competition from the bigger sector.

[2:15]

The Speaker: Opposition House Leader on a supplemental.

G. Farrell-Collins: The minister says that there was so much good news in the budget, it couldn't fit into her speech. Perhaps that's an explanation, given the way she views her budget, but I'm shocked that it didn't appear in the documents. If it's such good news, why didn't it appear in the documents?

Can the minister tell us . . . ? Her financial officials are quoted as saying that there are other financial institutions that were involved in this deal. There was a change in the corporate capital tax threshold that will very likely benefit other financial institutions. Can the minister tell us how many financial institutions the government spoke to with regard to this -- not who they were, but how many other financial institutions made representations to the government about this lifting of the threshold from $750 million to $1 billion?

Hon. J. MacPhail: I have already answered. I'll answer the second question, but on the first question, I would be pleased if the hon. member could actually refer to the official's quote in terms of the threshold. Given the limited number of taxpayers involved, it may not have been at all possible to report the revenue amount, even if we had been sure, because of its confidential nature and the limited financial institutions -- the confidential information that would be revealed by that.

There was consultation across the financial sector. We actually consulted very widely, extremely widely, with all business sectors: with the tourism sector, the small business sector, big business, the traditional industries and the new economy. It was through wide consultation that we have come up with a three-year plan -- a guaranteed three-year plan -- that cuts taxes and cuts red tape. The result will be stimulating the economy. You wait for it.

The Speaker: Final supplementary.

G. Farrell-Collins: The problem is that British Columbians have been waiting for a long time for any sort of economic plan from this government. That's the whole problem.

I quote: "However, the source said there may be one other B.C. financial institution which could be affected by the change but would not be more specific about which financial institution that might be." Can the minister tell us how many financial institutions stand to benefit? How many banks stand to benefit from this government's corporate capital tax break for the banks?

Hon. J. MacPhail: I already answered that in terms of the confidential information. It's interesting that the hon. members on the opposite side don't care about confidential information. My answer stands in that area.

1998-99 BUDGET AND BOND RATES

Hon. J. MacPhail: Let me read from a current analysis done by an institution called CIBC Wood Gundy, which was put out on the day of our budget:

"Since the Asian crisis deepened last fall, bond market investors have recognized that the economic slowdown hitting B.C. would pose a challenge to plans for aggressive deficit-cutting. Even so, British Columbia will retain its status as one of the least-indebted provinces, despite some slippage from earlier deficit reduction targets."

That's CIBC Wood Gundy saying that it's still okay to invest in British Columbia. In fact, we stand out as one of the highest-rated provinces.

Hon. Speaker, you know what? What I would like to say is: instead of the negative naysaying and the doom and gloom and hopes for a disaster from the opposition, why don't they get on board with the new way of doing business and encourage investment in British Columbia? Instead, they're doing everything possible to make it worse.

The Speaker: Supplemental, hon. member.

F. Gingell: The real test is how the outside community views the record and the discipline that this government brings to its financial management.

At this time last year the province of British Columbia could borrow more cheaply than the province of Saskatchewan. That is not true today. Today the province of Saskatchewan borrows at rates that are lower than British Columbia's. The financial markets have given such an absolute and total thumbs-down on the financial performance of this government that it now costs less to borrow for Alberta, Saskatchewan, Manitoba, Ontario and New Brunswick. Alberta's bonds spread is less than one-third of ours.

Can the Minister of Finance please inform this House and the citizens of British Columbia how much in additional costs this increase in bond spreads will cost the people of British Columbia for this coming year?

[ Page 6715 ]

Hon. J. MacPhail: I'll be happy to take the question on notice.

OFFSHORE OIL AND GAS DRILLING

G. Wilson: My question is to the Minister of Fisheries. Will the minister tell us whether or not he supports the current discussions that are underway that will see the resumption of offshore oil and gas drilling in the Hecate Strait and Queen Charlotte Sound?

Hon. D. Streifel: You know, this happens every year, hon. Speaker. The first question that comes my way is not under my ministry. It's not my responsibility, unfortunately. This is an issue that is far-reaching. It's an interesting question, and I'll get back to the member on it.

The Speaker: The member has a supplemental? There is no supplemental to the previous question. It was taken on notice.

G. Wilson: I have a second question that the minister might find is indeed well within his jurisdiction. I would suggest that he might want to go back and read the history of offshore oil and gas drilling from 1972 on and find out that not only have federal Fisheries ministries . . .

The Speaker: Hon. member.

G. Wilson: . . . been directly involved, but it is directly in his portfolio.

The Speaker: Hon. member, that question has been taken on notice. Your supplementary question.

G. Wilson: My next question. The Supreme Court of Canada has ruled that notwithstanding B.C.'s fisheries interests, they have exclusive jurisdiction with respect to the permitting of offshore oil and gas drilling in the Hecate Strait and Queen Charlotte Sound.

The Speaker: Hon. member, that's the same question you asked before.

G. Wilson: Hon. Speaker . . . .

The Speaker: Thank you. Please take your seat.

1998-99 BUDGET AND CHARITABLE GAMING

G. Plant: The budget statements indicate that this government expects to collect $95 million in additional revenue from the B.C. Lottery Corporation this year. The mess that this government has made of gambling and gambling expansion in this province is well documented: court cases, charity ripoffs, threats and bullying tactics. They have led the same Nanaimo charities that were ripped off by the NDP to go back to court and recover funds . . .

The Speaker: Hon. member, please get to your question. This

preamble is a little political.

G. Plant: . . . illegally taken by the government.

My question is for the Minister of Finance. Can she tell the House how much more damage the charities of British Columbia are going to have to suffer in order to satisfy the NDP's desire for another 95 million bucks?

Hon. M. Farnworth: I have the pleasure of responding to the member's question. I notice that in the case of the Alberta budget, where there's $400 million coming from VLTs to the Alberta treasury, they seem to find that perfectly acceptable. I notice that when they trumpeted the Saskatchewan budget the other day, they seemed to find that $124 million from VLTs was perfectly acceptable.

Over the next little while we will be making some policy changes with regards to gaming within the province. We've been working with the charitable gaming sector to ensure that charitable gaming continues to have a viable economic future in this province, that funds going to charitable gaming will continue to go to charitable gaming and that charities will be happy.

The Speaker: The member for Richmond-Steveston on a supplemental.

G. Plant: When it comes to siphoning money from charities, nobody does it better than the NDP. The NDP said they could impose casinos on Vancouver; they were wrong. The NDP told us they could impose new gaming rules on charities; they were wrong.

Will the minister assure this House that B.C. taxpayers will not be dragged through the courts one more time to defend one more unlawful B.C. government gambling scheme?

Hon. M. Farnworth: When it comes to siphoning a million dollars of taxpayers' money for phoney mailouts, nobody does it better than the Liberals.

We are working with the charities to ensure that charitable gaming has a long future in this province, and we are going to do that working with them.

The Speaker: The bell terminates question period.

I recognize the member for Delta South -- rising on what matter?

F. Gingell: I seek leave to table documents.

Leave granted.

Tabling Documents

F. Gingell: I table documents showing provincial and federal bond spreads for March 31, 1997, and April 2, 1998, which the minister may find helpful in responding to my earlier questions.

Petitions

G. Plant: I have the honour to present a petition from 36 condominium owners in the Okanagan Valley who wish to make their views known with respect to proposed changes to the Human Rights Code.

[ Page 6716 ]

Point of Privilege

The Speaker: Hon. members, at this time I would like to present my response to the point of privilege which was raised last week.

On March 26, 1998, the hon. member for Matsqui rose, reserving his right to raise a matter of privilege, and on March 27 stated his matter of privilege and filed certain exhibits. Let me say here that the hon. member provided the Chair with the text of his proposed remarks and, in response to a request from the Chair, summarized his presentation in accordance with the established practice in this House. Following the member's presentation, the Government House Leader stated her view of the matter of privilege, followed by remarks from the House Leader of the official opposition.

I might add at this point that the hon. Opposition House Leader in his remarks, in referring to the alleged conversation, stated as follows: "Well, hon. Speaker, it'll be up to you to decide whether or not that kind of thing is a threat." The Speaker has to determine, firstly, whether or not the conversation amounted to a threat and, secondly, whether or not the threat, if established, gives rise to a prima facie case of breach of privilege.

On Monday, March 30, 1998, the hon. member for Surrey-Whalley advised the House that she wished to reserve her right to make a personal statement, and made a statement to the House the following afternoon, Tuesday, March 31.

I wish to state that in the Chair's opinion, the member for Surrey-Whalley was entitled to make a personal statement, as she was directly and substantially implicated in the statement made by the member for Matsqui on the previous Friday. It is established practice in this House and other Commonwealth parliaments that members, within strict guidelines, are permitted to make statements to the House on matters in which they are personally implicated.

I am further persuaded that the member for Surrey-Whalley was entitled to have time to examine the material filed by the member for Matsqui, with a view to giving her version of the facts alleged.

[2:30]

I emphasize at this point that the latitude provided in a personal statement does not permit a member to re-argue the technical merits of the matter of privilege. It must confine itself to his or her version of the facts, and also permit that member, where appropriate, to offer an apology. The definitive guideline on personal statements is contained in the twenty-second edition of Erskine May, on page 312, and I quote, in part, as follows:

"Personal statements. In regard to the explanation of personal statements, the House is usually indulgent, and will permit a statement of that character -- also referred to as personal explanations -- to be made without any question being before the House provided that the Speaker has been informed of what the member proposes to say, and has given leave. Because the practice of the House is not to permit such statements to be subject to intervention or debate, the precise contents of the proposed statement are submitted in advance to the Speaker to ensure that they are appropriate. The member granted the privilege of making such a statement may not therefore depart from the agreed text."

In this case, however, the member for Surrey-Whalley departed from the text accepted by the Speaker. I have, however, taken into account her version of the conversation, as well as the version of the member for Matsqui, in coming to my conclusions on this matter. Looking at both versions of the conversations, I have difficulty accepting the argument advanced by the member for Matsqui that he felt genuinely threatened by either version of the conversation. I feel confident that the member was aware that the jurisdiction to amend funding formulas remains at all times with the Legislative Assembly Management Committee and not with the member for Surrey-Whalley.

The member for Matsqui acknowledged in his remarks to the House on March 31 that the member for Surrey-Whalley had tried to apologize to him. It is also the Chair's view that the

interpretation of such conversations is highly subjective. Based on the evidence before me and the numerous decisions of this House on matters of privilege, it is the Chair's view that the member has not established a prima facie case of privilege, which would entitle him to move the tendered motion.

With the indulgence of the House, I wish to make a further observation. The subject matter of the conversation in this matter centred around caucus funding. It is evident to the Chair that the authority to determine this and related matters rests squarely with the Legislative Assembly Management Committee under and by virtue of

section 3 of the enabling statute. Accordingly, the alleged discussions brought to this House should properly be aired in that committee. I draw an analogy between the longstanding rule that matters arising in a select standing committee should be settled in the committee, and matters within the purview of a statutory committee should likewise be settled in that committee.

Representation, arguments and disagreements occurring in committees or disagreements between members of a committee occurring elsewhere are not a proper subject matter to be brought to the floor of this House, either by way of points of order or matters of privilege.

Orders of the Day

Hon. J. MacPhail: Hon. Speaker, I call budget debate.

Budget Debate

(continued)

G. Wilson: Hon. Speaker, in rising to speak to this budget, I think it is important for those British Columbians who are observing and listening to the debates in this Legislative Assembly to understand that in looking at the figures, there are three critical numbers that we need to deal with. The first critical number that we need to deal with is the overall amount of money that the government intends to spend on our behalf this year. We're looking at some $20.4 billion that the government has decided that it plans to commit on our behalf. Then we'll perhaps look at what it is they intend to spend the money on.

The second important figure is the amount of money that will be committed to in expenditures this year, which exceed -- are greater than -- the amount of money that they will be taking in. The government would have us believe that that number is $95 million. But in fact, the true number, the real number, the number that British Columbians have to be aware of in the deficit is $949 million.

No matter how you try to present this -- no matter how you try to paint it, no matter how you try to spin it about other provinces and the way that other provinces report or don't report -- the fact of the matter is that British Columbians will see a deficit of $949 million above what we are taking in, in revenue. The third figure that's an important figure to recognize is: what is the overall

[ Page 6717 ]

debt that British Columbians are now facing as a result of the public expenditures that the government is committing us to? That figure is $31.2 billion.

Those are the three numbers that really have any meaning at all in this discussion. As we start to look at the pros and cons about how we commit budgets and spend budgets and don't spend budgets, I think it's really important that British Columbians understand that there really is no right or wrong. There's no good or bad necessarily, because it all depends largely on what your priorities are and how you intend to commit the public's money.

Where differences of opinion will occur, as we start to look at those figures, is in whether or not we have actually committed our priorities in an appropriate and practical way and whether or not British Columbians can continue to pay the debt-servicing cost on an ever-rising provincial debt.

When we start to look at what the actual debt figures are, we have to recognize -- notwithstanding the fact that this government is relatively new, 1996 being the tenure of this particular administrative regime -- that politically the NDP has been in power since 1991. When we look at what the debt figure was in 1991 -- some $18 billion -- we now see that the $18 billion has risen to $31.2 billion. We have to ask ourselves: is that an appropriate level of debt increase?

Now, like anybody who is doing business or anybody who is trying to purchase a home, few of us are able to bring in enough cash on an annual basis to pay for all of what we need in that year. Therefore a certain percentage of debt carried by government is acceptable.

The question is: what percentage of debt to GDP is an acceptable level? Has the government actually embarked upon a debt management plan that provides an acceptable percentage of debt to GDP, or has it exceeded it? That's a really important public policy discussion that has to take place.

It is quite unlikely in these modern times that you're going to find any government that is able to set aside enough dollars to put into hospitals, roads, schools, bridges -- all the kinds of infrastructure that we need in our society -- and that will also be able to cover it, on an annual basis, by the revenue they can generate through tax collection. So we have to really ask ourselves what the percentage of debt to GDP is going to be.

I personally believe -- and my party, the Progressive Democratic Alliance believes -- that there needs to be a limit, a cap. We should cap the government's legal authority to borrow money and therefore to "indebt" British Columbians on a prescribed ratio of debt to GDP. We also believe that in any given year we should cap the ability of the government to borrow based upon what the GDP expectations are going to be and upon revenue expectations.

That's not unlike, in lay terms, a credit-lending agency -- whether it's a bank, a credit card company, whomever it may be -- saying: "We have looked at what your potential earnings are. We have looked at what we believe is your potential capacity to pay -- given that you have fixed expenditures, fixed costs, every month, whether it's your housing, transportation, food costs and so on -- and we believe that this much is what we will give you as disposable income. Therefore we believe that your capacity to pay back debt should be limited to this margin."

That's a responsible way for us to start to look at that management of our economy, because what it says is that we are not going to borrow beyond our capacity to pay. What it means is that we're going to have to make some tough decisions, some hard decisions, as to how we are going to commit the public's resources within a finite -- and it will become finite -- amount of money. Regrettably, we haven't done that, although we are taking steps in that direction. We have not got there by a margin.

As a result, I think what we need to do in this budget debate is fix our attention with respect to two areas, expenditures and revenue, and recognize that British Columbians generate revenue not only to keep the provincial government funded but also to generate revenue with respect to our commitments to the federal government.

Now I want to talk a little bit for a moment about how we, in terms of revenue collection, should -- and, I would hope in a future government, will -- move towards an amendment to or a change in revenue collection. It isn't done the same way right across Canada, as most Canadians probably know and certainly as British Columbians are likely to be aware. There are different arrangements that are made and negotiated between the provinces and the federal government with respect to tax collection.

The reason there are different arrangements is because constitutionally, we, this legislative authority has the right of tax collection. Over a successive number of years we have negotiated away our jurisdiction with respect to revenue collection. Initially, on income tax in particular, we negotiated that away in order for us to retire what was a debt incurred by two world wars.

It seems to me that if we start to look at the numbers of dollars that we generate with respect to our provision to Ottawa, what we notice is that the roughly three million British Columbians -- give or take, plus or minus; not all of whom are income earners, I would point out, and therefore not all of whom are taxpayers -- will generate $20.4 billion for the provincial treasury this year, and we will generate, if we can use last year as an example -- and I doubt there will be much difference -- some $19.5 billion for the federal treasury.

Let's round it off and say that roughly three million British Columbians -- not all of whom are taxpayers, not all of whom are income earners -- will generate over $40 billion in this fiscal year to keep two levels of government providing the services for us that we deem necessary.

The difficulty with the portion that goes to the feds is that once it goes there, it is managed by a legislative body, the Commons, which has, as its majority, elected members from two primary provinces, Quebec and Ontario, and who set a fiscal policy that is far more directed toward central Canada and the needs of central Canada. After all, that's where most of the people in the Commons have their primary interest, not the areas outside of Ottawa; namely, British Columbia -- the west, in more particular terms -- and certainly the Maritimes.

So when we look at what we get back in terms of cash returns through transfers, we see that for our $19.4 billion -- or $19.5 billion or $19.6 billion, depending on which year we're looking at -- we're going to be getting back somewhere in the neighbourhood of $3 billion to $3.5 billion.

We have, by statutory obligation, a requirement to spend in health care; we have a requirement to spend in social services, to look after those who, for reasons beyond their control, cannot look after themselves; and a requirement with respect to the education of our children. Yet we find that the greatest proportion of dollars that are transferred to those areas where the federal government has a jurisdictional right with respect to determining what it is we must do by statute, particularly health care . . . .

They do not transfer back adequate resources for this province, to be properly applied to what we need delivered here in this province. As a result of that, we have to then find ourselves scrounging around to try and find additional dollars from an already overburdened taxpayer to try and put money back into the provincial treasury in order to be able to commit those moneys.

[ Page 6718 ]

Hon.

Speaker, it seems to me that what we need to do is take one page -- and only one page, because I'm not a great fan, necessarily, of all things done in Quebec -- from the province of Quebec and say that we are going to renegotiate our position with the federal government on tax collection and move toward the collection of tax revenue provincially, apply it to those programs that will affect us provincially, and then -- because we're not miserly people; we're not saying that we don't want to contribute to Confederation; we recognize that there is a great deal of hardship in the Maritime provinces, in particular, which do not have the level of wealth that we enjoy in British Columbia -- that we will transfer to Ottawa our fair share.

But we want control of the resources, the moneys, the finances, here at home, right here in British Columbia.

[2:45]

There is a move to do that. I think that when we look at revenue collection across the country today, we have to understand that people are recognizing that the complexities of revenue collection have become so enormous that average Canadians can no longer determine whether or not they have been taxed fairly or unfairly, whether they have paid enough, whether they have paid too much or whether they should be getting back more than they are. Few British Columbians today understand the complexities of the provincial and federal tax systems. They don't understand what it is they're being taxed for.

All they know is that the two certain things in life are death and taxes. The greater the degree of taxes, the higher the level of stress and the faster we get to the death part.

It seems to me that what we have to do is recognize that there is a need for a far simpler way of collecting taxes, so the average British Columbian fully understands exactly what their financial tax commitment is provincially. We will collect it provincially, through a single taxing agency. We will do so with a tax policy established at the provincial level, and we will then remit our fair share federally, so there is a clear understanding of what the tax obligation is of each individual being taxed. When we understand that, we can move on to a second point.

This government has made a great deal of how much it is going to return in terms of its tax concession to business. How do we put this in terms that the average British Columbian can understand? Let me put it to you this way, hon. Speaker. Hopefully, this will help those British Columbians who are interested in understanding just how much help this government has actually given this year and next year to all of the businesses in British Columbia.

This government has committed more in loan guarantees and direct capital expenditures to one business, Skeena Cellulose, than to all of the businesses in British Columbia in this budget. That's how you put it in perspective.

One transaction -- one deal in one pulp mill in one part of British Columbia -- got more than the benefit you're going to see for all the businesses in British Columbia in terms of the guarantees that were provided and the actual dollar expenditures that have already been provided and that will be required as that company tries to meet its environmental obligations in order to stay in business next year.

When you put it in perspective that way, you understand that the amount of revenue that has been provided -- the relief, the assistance that's been provided -- to local businesses across B.C. is not that significant. Certainly the move toward amendments to the corporate capital tax are welcomed by some but will have relatively little impact in its initial stages. The proposed amendments -- the changes to income tax -- affect only the provincial share, first of all. Secondly, they don't even happen for a couple of years, in terms of their entirety, and therefore are going to provide minuscule relief -- in fact, so minuscule that most people won't even notice that the relief is there.

It seems to me that when we look at the kind of tax relief that is proposed, what we understand in dealing with that is that the government missed the boat. It did not implement what was necessary, and that was tax reform. It did not reform the tax system to be able to provide for British Columbians a simpler, fairer, more equitable way in which revenue could be taken into the province and could be applied to those programs that we need and that we demand.

Let's take a look for a second at the expenditure side. What is it that the government is committing its dollars to, and how should it commit its dollars in this particular budget? Well, it seems to me that there has to be an understanding that if we are going to have a budget that truly reflects the desires and needs of British Columbians, we have to reprioritize -- put a new priority on what it is the government intends to commit its dollars toward.

First of all, this government indicates that its number one priority is the protection of health care. Yet in truth, we don't see that happening. When we do an analysis -- it can be as dispassionate and as impartial an analysis as one can find -- we find that health care in British Columbia is slowly falling into a crisis situation. The very priority that this government puts on our health care belies the fact that health care is falling into a crisis situation. It is most unfortunate that it has now become, it would seem, a partisan issue.

It seems that the delivery of health care and the provision of services to British Columbians have now fallen into a political debate, a political discussion, rather than sitting down and sorting out what I think are some very obvious practical needs. Let's look at a couple of them. First of all, there's the question of the northern doctors. The northern doctors have, in my judgment, two legitimate concerns. One, it's hard to attract people there. Secondly, the workload, as a result of the kind of demands that are placed on northern doctors, is in excess of what most of us believe to be practical and realistic.

I think we have to understand, as we look at this sacred cow of health care, that in fact we have to have a flexible provision that allows us to have a variable rate of compensation depending upon region. We have to understand that the regional needs are going to be somewhat different. As we look at those regional needs, we're going to have to make provision for those needs to be adequately and properly funded.

The second thing we have to understand is this notion that we have this one-tiered health system. You know, really, practically, honestly, it's not true; it really isn't true. We would like to think it's true, but it's a myth. We already have in the province of British Columbia not a two-tiered health system but a multi-tiered health system. Ask anybody who tries to see whether or not they have equal access to or provision of health care services, and you'll find that those decisions are already made on a whole host of criteria which determine that services to one will not necessarily fall to another.

The universality concept -- which is, I think, an outstanding concept in principle, one that Canadians are very proud about and Americans are very jealous of . . . . Universality is there in concept, but in practice it does not apply at all times. We have to understand that. Nor can it possibly apply at all times. This may sound like I'm about to slay the sacred cow of

[ Page 6719 ]

health care; that's not my intention. I'm trying to put some practical, realistic information in front of the people of British Columbia.

The third myth is that health care is free -- that we have a free health care system in Canada. That's not true; we pay for it -- pay handsomely for it. We are going to continue to pay for it as our technologies increase, our health abilities and capacities increase and as we have new discoveries in how we understand how the health of our people is to be dealt with.

We have to understand that it is time that we abandoned some of the old myths in health care and put in place a new funding program that understands the reality of the delivery of the system, that there will be regional variations required and that the flexibility of the health care dollar must be at its maximum if we're to make sure that each of our communities receives the maximum service that it requires.

Second is the matter of social services. You know, I found, in debating and discussing the issues around the special warrants that this government brought in just a day or so ago, that they were saying that they needed, because they'd overspent by $65 million or $67 million . . . . They'd spent all kinds of dollars in that special warrant. I had a chance to question the new Minister for Children and Families. I found it incredible -- quite incredible -- that at the moment there are somewhere in the neighbourhood of 9,500 children in care in British Columbia. Of that number, 31 percent are aboriginal children.

That is a disgraceful statistic for two reasons. It tells me that there is something systemically wrong in our society that needs to be addressed at that level. It isn't going to happen, quite frankly, by simply putting more money into an existing system that clearly is overburdened, is unable deal with this and unable to cope with the situation. It is systemic to the extent that this government . . . . It's ironic that it is this government, because you would think that this government, beyond any other, would understand that the cause is poverty. It is poverty.

There are more and more British Columbians who are falling into the ranks of the poor. It's incredible. When you start to look at these people and you go out and meet with them, you understand that these people are hurting and that they are suffering. The one thing that is interesting is that they have no lobby group; they have no well-funded union. They have no business administration. They're not the BCMA. They're not some group that can wine and dine MLAs -- bring them out here, get their MLA and take them out to dinner. Nobody speaks for those people.

What's even more upsetting to me is that it's becoming more and more obvious that they will never, ever have the opportunity to stand in this place, in this Legislative Assembly, and argue their case, because it's becoming more and more difficult for them even to be involved in the system of politics.

There are higher numbers of people in poverty in British Columbia every year, and many aren't even counted anymore. I heard the minister say that the number of welfare recipients has taken a substantial reduction. You know, it makes my blood boil -- and I see the Minister of Education applauding that. They're not getting welfare, but it doesn't mean that they're not in need of it. There are more and more on the streets, more and more of our young people running away. More and more of our people out there are desperate.

As I stand and make this speech today, there are two gentlemen on a hunger strike, right outside our doors, who suffer at the hands of Workers Compensation -- one of the most obsolete, one of the most uncaring, one of the most insensitive institutions in this province -- because they can't even make ends meet. He gets $800 a month, $500 of which goes to his rent. Then he has to try and feed himself. Do you know that by the time he's paid his expenses, he's got $80 a month to live on? -- $80 a month in a province that raises $40 billion in revenue every year.

That gentleman on a hunger strike out there, who's suffering and in pain, gets 80 bucks a month to live on. There's something pretty badly wrong in this province of British Columbia -- really wrong.

I see the young people out there, despondent, on the streets, who don't know whether they're coming or going. I find out that there's a young girl who can't get insulin. She's run away; she can't get money to pay for insulin. She's a diabetic. But this government's prepared to give her money to go out and buy cigarettes. What is going on in British Columbia? Something is drastically wrong when it comes to social service delivery.

You know, the fault is not that of the civil service. It's not the BCGEU worker; it's not the case workers. I hear people say: "It's because you've got a dispassionate civil service out there that is bullying people on all those sorts of things." Spend a day in their shoes, as I've done. Sit in their office and listen to these complaints. Do you know what? They're more frustrated than I am. At least, as an MLA, I deal with a whole bunch of other issues, some of which are actually good issues. It means you can actually bring good news from time to time. Most of them can never deliver good news to these clients.

They are frustrated, they are angry, they are despondent, and they are quitting because of the red tape, which is so thick and deep in this government and that is provided for in a budget that puts more and more money into establishing more and more red tape. They can't cut through it to get money to the people who need it.

Hon. Speaker, if I get upset and passionate about it, it's because you have to go out and deal with these people, look at what they're living through, and then wonder why, in a province that was the number one province in Canada, we're now number ten. The province that boasted that it had one of the best systems of delivery for those in need now has one of the worst. It's all happened when a New Democratic government has been in power -- the very government the poorest of the poor believed, above everything else, would look after their concerns and issues and which has not done so.

This Premier has chosen to meet with the top CEOs of the top corporations to take some direction as to how we're going to end up with a new budget that is going to give greater opportunities to these large corporations, and he didn't even deliver at that level.

But let there be one thing clear. Those large corporations, the top ten money-earning corporations in Canada, the ones that made the most money last year, did so by laying off the most workers. They are not committed to employment; they are committed to shareholder profits. That's their job; that's what they're there to do, and they do a good job of it, if they can. They will take whatever avenues they need to take to make sure their shareholders get their profits increased, because that's their job.

But what is the job of the members of this House? What is the job of the members of that government? It's to look after the people. It is the business of business to make profit, but it is the business of government to protect the people. Those people are sadly not being protected today.

Hon. Speaker, 31 percent of children apprehended and in custody are aboriginal children. We've got to do something

[ Page 6720 ]

about that. If this government had moved forward to collect the tax revenues that we send to Ottawa, we wouldn't have $9.5 billion spent annually on first nations interests and see only 15 cents of each dollar actually come back to those living on reserve. Figure it out. There are roughly 750,000 status aboriginal people. Most of the landed non-treaty status aboriginal people live in British Columbia -- $9.5 billion, and we spend only $10.2 billion on national defence. That kind of puts it into perspective.

You go out and look at what the first nations people are dealing with on a day-to-day basis, you look at the abject poverty on those reserves, and you really have to wonder how it is that the law firms that are negotiating on their behalf are making millions of dollars of profit. How is it that the accountants that are negotiating are making millions of dollars of profit? We're in a negotiation business that has no intention of settling a land claim, because it's far, far too lucrative not to. You can just keep it going.

[3:00]

What people don't understand is that the first nations don't have the resources that they are being trapped into . . . . Long extended negotiations are going to take resources off the top of whatever cash settlement they get at the end. So where are the net winners? Net losers once again. There is no reason on Earth for the people of this province not to have negotiated settlement of the outstanding land claims in British Columbia -- no reason at all.

The Sechelts. We were within a matter of weeks, and it fell apart, partly because the government decided that between the time of the AIP -- the agreement-in-principle -- and the time we were to sign the agreement, revenue from the gravel that was being extracted from the land that was to become theirs would continue to go to the province.

It's like me saying: "Okay, we've got an agreement for sale of this house, but between the time that we've agreed you're going to buy it and the time you take possession, I'm going to take every single thing I can get out of it and you're going to end up with an empty house." Who among us would sign that deal? Nobody would. So why was it offered? It was offered because there was never any intention to settle that deal. There was no mandate to close it. The feds didn't want to close it; the province didn't want to close it. If they did, they'd actually have to come up with some bucks.

I'll tell you, hon. Speaker, that the one thing I find absolutely incredible is those people who say that we can't afford to settle these deals. We can't afford not to, because the revenue that comes back to first nations people goes back to the communities. That money will be spent within the communities of the province of British Columbia; it is our wealth to share. It's important to note that in all of the budget lines in here, there's nothing that shows any financial commitment whatever to the resolution of one single agreement -- not even for the Nisga'a.

When the minister was being interviewed on CBC Radio two days ago, the minister turned around and said: "It's in there, but you've got to realize that these are ongoing processes" -- and so on and so forth. Well, nobody believes it anymore. We want it resolved, and we want it resolved speedily. We have a commitment from the Premier to do it. Yet where in the budget do we see any of that being in place?

There are solutions, and the solution with respect to the poor and the needy is what's called a guaranteed annual income. We need to look at it. It will dramatically cut the costs of social services delivery and will allow British Columbians to live with a certain level of dignity. It's a good idea, and it needs to be implemented. We need proper tax reform. I hope, as my time expires, that this government -- hopefully -- will take heed of these words and over the course of the next number of months will bring in some of the changes recommended.

R. Kasper: Hon. Speaker, it is indeed a pleasure to take my place today to speak about the budget and other matters. I'd first like to congratulate you on your election as Speaker. You and I go back many years in civic politics. As I have said publicly, you're probably much more diplomatic in that position in this House than I. Actually, I congratulate you on that, and I'm sure you're going to do an excellent job for us.

This budget deals with a plan that will cut taxes to help stimulate our economy, a plan that cuts red tape, a plan that gives small businesses a break, a plan that will help revitalize B.C.'s traditional industries and a plan that supports the new economy.

As far as tax cuts, I think it's been said over the past few days that when the plan is implemented over the next three years, the some $415 million annually will prove to be a benefit to our business communities, small, medium and large.

The plan also deals with issues that I've raised in this House in previous years on the question of cutting red tape for businesses in this province. As has been noted earlier, a task force will be implemented to prepare a report on ways to cut red tape. I'm sure that many of us have talked about this at length -- I know I have -- in dealing with a lot of the bureaucratic bumblings that have been going on in this province for decades. The problems that small business faces are just phenomenal. The paper push makes your head spin.

As far as I'm concerned, it's long overdue that we see a report from a task force that will deal with ways to streamline the approvals process without reducing standards and without taking away from important issues such as the protection of the environment. It will make sure there are mechanisms in place that will assure the business community that the rules are here and that they have a full understanding of the rules. Now it's their opportunity to get on with the job of creating jobs in this province.

I am confident that we will see an elimination of the duplication of paper filing. We should go into more streamlined electronic filing systems. I know that some branches of the provincial government have actually started that process when dealing with contractors. I am confident that we will see those changes applied to our forestry industry, to our mining industry and to our oil and gas sectors. I am also confident that small business -- because I have a small business background -- will benefit from cutting red tape.

I feel that this sector, as we all know, creates more jobs than any other sector in the community. Small business is the backbone of this province and the backbone of the country in job creation.

Small business will benefit from this budget in that the corporate capital tax will be eliminated for 10,000 small businesses over the next three years. By the year 2001, 90 percent of the small businesses in this province will not have to pay the corporate capital tax -- something that I feel will be beneficial to my constituents in Malahat-Juan de Fuca, because many of them are employed by small businesses.

The small business tax rate will be cut by 11 percent over the next two years. What that translates into is the lowest rate since 1986, covering some 40,000 businesses in this province. That's good news. That's good news for small business. It's

[ Page 6721 ]

good news for those who are employed in small business, because they will reap the benefits of that. That is the direction and purpose of this budget. It's a plan, over the next three years, to help stimulate and improve our economy.

I think it's also important that the plan that is laid out in the budget will deal with the revitalization of traditional industries. The plan will help our traditional industries to stay competitive and to continue their key role in B.C.'s economy. Initiatives are being developed to cut costs and to spur new investment.

Forestry. By July 1, stumpage reductions and regulatory changes will cut costs substantially and generate investment without eroding environmental standards. That's something I look forward to, because there are a lot of people in my constituency employed in the forest industry. It has traditionally been the backbone of a large portion of the riding I represent.

Oil and gas. New incentives and regulatory changes will follow the Premier's oil and gas initiative to stimulate investment in exploration and development. I know that in my previous role as Parliamentary Secretary to the Minister of Transportation and Highways, I had an opportunity to visit the constituents of the members for Peace River North and Peace River South. I travelled through that area, went over the roads and met with constituents of those MLAs. What I heard from the oil and gas industry is that there has to be a new way of doing business for those businesses in British Columbia.

I'm confident that this will be achieved. There has been a commitment made, and it's been identified in this budget.

In regard to mining, the government is working with industry to improve security of access, to develop a new exploration code and to again cut red tape, as I mentioned earlier.

I think it's important that we have to support B.C.'s new economy: the knowledge-based industries and film and TV production. The plan includes expanded training and education through extension of the tuition fee freeze and 2,900 new post-secondary spaces, incentives for film productions in British Columbia and, to help retain highly skilled people, a top marginal income tax rate cut from 54.2 percent to 49.9 percent over the next three years. That will put us in British Columbia in the middle, and that will enhance our opportunities.

We also have to see increased tourism marketing by the British Columbia tourism entity. I know that they're doing a diligent job in their efforts to promote tourism -- again, another major employer in our province. There's also going to be a 50 percent cut in our international fuel tax over the next two years, which will improve B.C.'s position as a gateway to the Pacific Rim.

I'm proud that the government's 1997-98 fiscal and debt management targets were met and exceeded. The three-year financial plan will see continued fiscal discipline in government. The deficit for '98-99 will be halved to $95 million. I know that the opposition has been critical of that, but it's a step in the right direction. If you look at the historical trends as to the deficit, it's been halved, halved, halved. A balanced budget is projected for 1999-2000 and a surplus in the year 2000-2001.

Health and education are protected, while other governments have not shown the same diligence. Funding opportunities for health and education are what we've done in British Columbia over the last seven years.

I think it's important that we recognize that the debt-to-GDP ratio will be managed within a target range of 19 to 22 percent and will continue to be among the lowest in Canada. I know the opposition is very critical of our debt ratio and the debt that is being added continually, but I think we have to put that in context. The $1.25 billion for new schools, hospitals, roads and transportation projects is something that I pride myself on as advocating on behalf of my constituents.

You know, I've been doing a little bit of research here. It's absolutely astounding, the kinds of comments that the opposition members have actually brought forward, through the media and also in this House, on what they've continually advocated for their constituents. They have advocated, and lobbied MLAs and cabinet ministers, to increase funding for schools in school districts in their constituencies. They've been out there advocating road improvements and transportation improvements for the constituents in their ridings. Those things cost money, and you can't have it both ways.

So let's keep that in mind when we're talking about this budget and about the problems relating to debt. Hon. Speaker, when there is a new facility being opened, be it a new cancer clinic or a new hospital, I can assure you that opposition members will be there in some way, shape or form advocating that they had a strong role in getting that facility built on behalf of their constituents. So they can't have it both ways.

[3:15]

Yes, debt is a problem, but under this plan there will be a reduction of the debt and, more importantly, what all of us have advocated, the elimination of the deficit. So I fully support the capital investments that have been outlined, because that is going to enhance the economic competitiveness of this province and different communities within the province.

We have to make sure that we have good, sound infrastructure so that the communities in the north, by way of the northern roads initiative -- which I know the Minister of Transportation and Highways will be discussing in future days and future weeks, and which will be of benefit to the constituents in the north, to the oil and gas industry, to the transportation industry, etc . . . .

Going back to the cutting of red tape, I had an opportunity last year to deal with issues relating to the trucking industry. I feel very good about the work that I did with colleagues in the Legislature. Two colleagues in particular worked closely with me. We made a series of recommendations to the Minister of Transportation and Highways that dealt with the Motor Carrier Commission. I think all of us, on all sides of the House, agreed that there was a lot of red tape and bureaucracy within the Motor Carrier Commission. There were some preliminary changes made last year.

I'm confident we will see more changes that will assist the trucking industry in allowing them to get on with their job without sacrificing the safety issues that I know a lot of us are concerned about.

The budget also targets some $228 million more for improved health care, and I think the funding for health care is an important issue. We are still a growing province, and we have to make sure that those dollars are spent where they are needed. Some $66 million more will be targeted for Pharmacare, $63 million to hospital budgets and $10 million for a new mental health care plan in British Columbia.

We've also targeted in this budget over $100 million for our K-to-12 education. I had a discussion with the Minister of Education and the chair of the Sooke school district, Denise Riley. We had a very good meeting. We talked about some of the problems that that district is facing in dealing with their particular deficit problem. I'm confident that by working

[ Page 6722 ]

together with the Ministry of Education, with the parents and with the district officials, we can get the district back on track in a sound fiscal way.

The budget also identifies that some 400 new teachers can be hired, and some 300 additional librarians, counsellors and classroom aides, something that I know I've heard from the parents in my constituency, who were very concerned about counselling and librarian positions being targeted for cuts in the coming year.

There is also a second commitment that new schools will be built from the $1.25 billion investment plan. I am hopeful that in the next weeks we will hear from the Minister of Finance as to where each of the districts stands in regard to capital investment improvements to existing facilities and also in regard to improvements throughout the ridings.

The budget also deals with the question that I know the previous member spoke on, and that is those who are in need -- families in need, children in need. This budget makes provision for additional staff and additional services for children. I know that members opposite have advocated that the Ministry for Children and Families had to make some changes in regard to additional staffing to help reduce the caseload. That has been identified in this budget.

Something that I think all of us pride ourselves on is working together. I know, as a member of the Gove implementation committee, monitoring the progress of that, that all members of the House have set aside politics and have given a commitment to ensure that dollars are spent where they are needed, and that is on dealing with children and families in need.

Getting back to the issue of red tape, I know that last year I spoke on the question of workers compensation recipients and people who have suffered injuries. I think that what we have to strive for is reducing the red tape that injured workers encounter. Injured workers have had the hardest blow given to them -- first, by way of injuries. Some of them are of a disabling effect where workers are no longer able to continue the work and employment opportunities they had prior to their injury.

After injury, they have found themselves in a position where they have no choice but to go on social assistance because they've encountered huge time delays and bureaucratic delays in getting their claims and their rights as an injured worker settled.

I've spoken to the new Minister of Labour, and I know he is concerned about making sure that injured workers take their rightful place in society, become important individuals in the sense that their pride in themselves and in their families is restored so that they can have an opportunity to seek some form of gainful employment that should be equal to what their status was prior to their injuries.

I know that on the opposite side of the House we have been accused -- the government has been accused -- of a tax grab. I'll just give you an example of a tax grab about which I didn't hear any comments from the Liberal side. It deals with their cousins in Ottawa and specifically relates to the widows of workers compensation accident victims and the fact that large pensions . . . . These were pensions that were payable as far back as 1986.

They were retroactive payments, and Revenue Canada has now seen fit to deem that the interest portion of these pensions -- for an injustice that the widows really had no say in -- will now be taxable by Revenue Canada. I think that's shameful. We have to make sure that we don't lose sight of the fact that for injured workers, and those who receive back payments, the interest portion has never been deemed taxable by the Workers Compensation Board, by the provincial government and, traditionally, by Revenue Canada.

But in this particular case, where we see settlements as high as $300,000 in back pension benefits, widows and widowers are now being taxed on the interest portion. That's wrong. I've raised the issue with the Minister of Labour, and I'm confident that we can at least present our position to Revenue Canada. It's my hope that the members opposite will join with us in making sure that these individuals are not suffering a tax grab by Ottawa.

There are times in this House where we have a tendency to lose it, and I hope that in the coming weeks and months we can strive to work together on a number of common issues. That's usually been my approach in this House: to find a way where we can strive together to ensure that the constituents we represent get the best service that they're due, and that they also get the best legislation to protect their interests and their families and their future.

Hon. Speaker, I conclude my remarks by saying that I support the budget. I know that there are critics out there, and that's understandable. I guess that in this world things aren't right if you don't have critics, and you shouldn't be fearful of criticism. People are apt to make mistakes, but there's a plan here. We have to strive together to enhance investment in this province, to encourage the investment community to participate in the new economy and to work together. It's all of our jobs to make sure that working people have opportunities now and in the future.

Hon. J. Kwan: I too would like to congratulate you, hon. Speaker, on your new position. I know that you will serve us well and, in the most difficult times, ensure that on both sides of the House we follow its rules, and, most important of all, uphold the dignity of this House.

I am very delighted to rise and speak on the issue of the budget. First of all, I'd like to acknowledge the people of Vancouver-Mount Pleasant once again for their ongoing support. Vancouver-Mount Pleasant is indeed a community that is very diverse. It is a community that is very reflective, in some ways, of the diversity in British Columbia. It is made up of people from all walks of life. It is made up of small business and big business, as well as just your average worker. We have professionals in our community; we have students in our community.

We have families in our community; we have single parents in our community. It is a community that I believe reflects, by and large, the diversity of British Columbia.

The budget, like many budgets previously before us, tries to address the changing needs of our different communities throughout the province. It tries to address the different priorities that have been identified. I think the role of government is to listen, to create the opportunities, to consult and dialogue with the people of British Columbia, and to come forward with strategies, with positionings that best reflect the changing needs of our province. In this budget we have identified a number of different areas.

I think the business community is definitely one area that our government has taken the time to listen to, to consult with and to encourage -- and to create an environment that will benefit all British Columbians and will ensure that economically we have the opportunities needed to flourish.

Another area that we touched on, of course, is health care and education. Throughout this government and the previous government -- for all seven years -- health care and education have been the consistent theme, and we have acknowledged working toward ensuring that they are protected in British Columbia. Of course, having been, within this

govern-

[ Page 6723 ]

ment, one of the younger members of the Legislature . . . . Oftentimes politicians talk about how we need to focus on the youth of tomorrow, our younger generation. Previously we had many students visiting us in the gallery. Indeed, the youth focus is a critical component that government must pay attention to; our government is in fact doing that.

I want to touch on these themes more specifically now. On the theme of business, particularly the needs of the economic environment in British Columbia, this budget introduced a number of measures to address that. Some of them have been addressed by my colleagues, and I would like to actually reiterate a few of these items.

In terms of tax breaks for the small business community as well as the larger business community, that has been in service for a number of years now. I recall that during the election campaign, that was a matter that came forward and was debated with some heat, actually, amongst different members. With the changing economics of British Columbia due to the Asian situation, the government sat down and talked to business people.

They said to us: "You must create a better impression of what British Columbia wants in terms of economic growth and the environment in which businesses can operate." In that vein, our government introduced small business tax cuts for the second year in a row to reduce those pressures on the small business community, to engage them and to allow them to flourish in our province.

[3:30]

The larger business community, in terms of the corporate capital tax is also something that our government has focused on, and it has made some reductions in that regard. But those weren't the only areas in which this government has engaged. We also recognized that what is important is to ensure that individuals in the community, who are actually spending the dollars in the community to create the economic vitality that is necessary, also get tax relief. That's the package which the government has put forward, having listened and consulted with individuals in our community.

What does that mean for the people in Vancouver-Mount Pleasant? Vancouver-Mount Pleasant, as I mentioned earlier, is a community that is made up of very diverse neighbourhoods. We have a number of different districts where small businesses are really the backbone, if you will, of the economic vitality of those different sectors within Vancouver-Mount Pleasant. We have Chinatown in Vancouver-Mount Pleasant; we have the Broadway corridor in Vancouver-Mount Pleasant. The Main Street corridor, which is ever-changing and attracting new businesses, is in my riding.

Commercial Drive, that ever-vibrant area of Vancouver, has a lot of businesses, many of which are family-owned small business operations. We have the upper Mount Pleasant and lower Mount Pleasant areas, along with Hastings Street. All of these tax measures and these initiatives that government has introduced in this budget will benefit the development, the continued revitalization and the flourishing of these different corridors.

But that doesn't mean that we don't have different challenges which we must deal with. I know that within these districts we have a lot of issues around crime and safety; we have issues around drugs and prostitution and so on. Those are the issues that we need to work with our communities on -- to try to address and to ensure that there is safety not just for the business environment but for the people who live in those neighbourhoods.

Hon. Speaker, just to put into perspective the number of measures that government has introduced in addressing the business environment in British Columbia, the tax package yields a total amount of $450 million. Those dollars are significant indeed in ensuring as best we can, given that we have a lot of pressures put on us, that other programs and other needs are met.

When I talked about young people in relation to the small business community particularly . . . . There are actually a lot of young entrepreneurs who are out there in British Columbia. Not very long ago, I was actually at several graduations from programs which this government has funded, one of which is the You-BET program. It funded young entrepreneurs who want to venture out into the business world, to create their own businesses, to bring in their innovative ideas.

The program that government brought forward was to assist the young people in developing their business plans and to actually implement their dreams of entering the business world. These are the kinds of programs that are much needed, and I'm very delighted that our government initiated these programs. I was even more delighted to attend the graduation of some of these young entrepreneurs. I know that many of them have gone out there to create their own little businesses.

These tax measures that our government introduced will further assist young people, women and all entrepreneurs across British Columbia in creating and realizing their dreams as they venture into the business world.

Taxation relief is not the only thing that can help the business community in terms of its ability to flourish. Of course, there are many other things that the government can do. Another item that has been identified, indeed, is the issue of bureaucracy -- what is commonly called red tape. That is something that exists at all levels of government.

Within this government we have identified the critical need to cut red tape, to cut bureaucracy and to facilitate, while at the same time protecting and maintaining the measures that need to be maintained for the protection of consumers and our environment and other areas. So as we work toward streamlining efficiencies, if you will, within government to facilitate economic activities across British Columbia, that is one area that I know, as we work hard towards reducing red tape, will benefit the business community.

Some young people in British Columbia have moved on to small business entrepreneurship, but others are looking for post-secondary education. I actually come from a very low income family, and I know that my sisters before me did not even contemplate the notion of post-secondary education. That is because it was something that, in our family at the time, we could not foresee engaging in. It was simply not affordable. It was not an option, nor was it a choice that could be contemplated by my sisters.

From that point of view, I very much believe that all of us, no matter who we are and where we come from, ought to have the opportunity to maximize our potential, to have choices before us. Within Vancouver-Mount Pleasant, many students come from very low income families, and they don't have the opportunities to engage in those choices.

Government, in trying to assist as best we can and to facilitate the notion of choice and the ability of young people to maximize their potential, has put a freeze on tuition fees. This is the third year in a row in which our government has initiated a tuition fee freeze. I know this will, to some degree, help young people and their families to venture into and engage in post-secondary education,

whereas they wouldn't otherwise have the opportunity to do that.

I know that sometimes it sounds not even convincing for some people to say that a tuition fee freeze would actually

[ Page 6724 ]

facilitate young people having the opportunity of engaging in post-secondary education. But the fact is that when you're faced with a mounting debt possibility because you want to engage in post-secondary education, it is very frightening and threatening for a lot of young people. Before they even venture into that option, they actually want to walk away from it, and sometimes those are lost opportunities in terms of development potential for young people. So I am very, very proud of our government for putting forward the tuition fee freeze once again, which will benefit some 15,000 students across British Columbia.

Having said that, though, is that enough in terms of generating opportunities for young people? Our government feels that we could do more, and we are doing more. We are creating new spaces across British Columbia for young people to access. Within the budget we have identified funding for 2,900 new spaces across British Columbia in terms of access to post-secondary education.

[W. Hartley in the chair.]

I know that within our communities we talk a lot about unemployment, and particularly unemployment for young people. Once again the question becomes: what is government doing around that? Of course, we are also looking at how we can enhance opportunities for young people to be gainfully employed, to have the opportunity to gain the experience and also the financial means. To that end, within this budget we have identified $36 million to provide employment opportunities for some 17,000 young people in British Columbia.

I know that last year, even with increases in the Education budget, what we heard from our communities was that it simply wasn't enough. People wanted more dollars out of general revenue towards education. When we consulted with people in our communities, we reflected in this budget what we heard and increased the Education budget. This year will see a lift of $105 million in core funding for the K-to-12 area.

Addressing the K-to-12 area, one of the things that I've heard from the principals and students in schools in my own riding who have written letters to me is that they need programming, librarians and teacher aides. They said that their teachers were overworked and that they needed more teachers on the grounds to assist them in their educational development. Our government has responded to that. With this budget we have introduced 700 new teachers, librarians, counsellors, teacher aides, and so on, to assist in the classroom.

Another component relating to education, of course, is capital construction. There are many regions throughout British Columbia that, because of the growth in those areas, are lacking school space. The portables that have been developed are a target. In terms of people wanting to move away from the use of portables, our government has committed to capital construction to the tune of $1.5 billion over the next five years to address some of those issues.

Is that enough? I know the critics across the floor will say that that is not enough and that they want more. Of course, we would be delighted if we could do more. But again, that's having to balance all the different competing demands that governments are faced with to ensure that we come up with a balanced approach. Quite honestly, as my colleague has said before me, you simply cannot have everything your way.

There are compromises that we do have to make, and we believe that in this budget we have struck a balance that can best meet some of the pressing demands in our communities but at the same time protect the basic community services like health care and education -- which is really a trademark of who we are as Canadians.

I would be remiss if I didn't mention as well, in terms of operating budget, the dollars that our government identified to be allocated to the post-secondary sector. There is a $40 million increase to that end. When I talked to the community colleges in my area, they said to me that they need more support from government in terms of operating dollars. In order to meet all the different demands that they're faced with and to ensure that they can best deliver the services to the students within their institutions, they need more support from government. We have identified $40 million within this budget to provide that relief.

[3:45]

That is health care and education that our government has identified, the dollars that we have identified and the dollars that we have allocated to support our perspective on health care and education. I'm very proud to say that our province is the only province that has consistently increased funding in education for the last seven years.

Unlike other jurisdictions, where a different approach has been taken, we have resisted the temptation, or even the pressure from some areas or some communities, to not provide the funding in these areas to ensure that health care and education -- the cornerstone of what makes us Canadian, I believe -- have been protected in the last number of years within our government.

When we talk about tax breaks . . . . I talked a little bit earlier about tax breaks for the small business community and even in some instances for the bigger corporations, as an incentive to create a better economic environment in British Columbia. We have also engaged in tax relief for individuals and their families. The B.C. Hydro rebate is something that will hit every family across British Columbia.

Some people will say: "Oh, that amount is very small; it is unimportant." But I know that for some families in Vancouver-Mount Pleasant, as an example, any relief is a substantial relief, whether it is $1, $5, $10 or $15. For some families with fixed incomes or low incomes, that kind of relief is really important to our communities, on the whole. So I wouldn't undermine the B.C. Hydro rebate; that applies to everybody in British Columbia. We have also frozen ICBC rates; that's another area that provides relief for families across British Columbia.

One initiative that our government introduced is the B.C. family bonus, which benefits over 230,000 families across B.C. It is a very progressive family bonus that provides, again, relief for lower-income families. That's the kind of thing that our government will continue to work on to enhance the opportunities and the services that we provide for families across British Columbia.

Another area that our government introduced in this budget is savings in the Medical Services Plan. Over 80,000 British Columbians will actually benefit by up to $170 from

[ Page 6725 ]

this. Again, this is the kind of measure that will provide relief for a lot of families. Some people may say this is not a lot of money for relief that would apply to them. But for families whose income is fixed -- where their income is not as big as some others -- any relief, I believe, will benefit them in the long term.

When I think about other issues, I think about the land claims issue. One member talked a little bit about the land claims issue and about the importance of actually concluding the treaty process and bringing certainty and stability to our province. I couldn't agree more. The fact of the matter is that we have a lot of uncertainty if we don't bring the treaty negotiations to conclusion.

The historical injustice that had been applied to the aboriginal community is something that we must face up to; we must own up to that and bring conclusion to these very important matters. When people talk about the aboriginal community, I look at the Vancouver-Mount Pleasant area. There are a lot of people who are living in despair and pain -- a lot of them who are still struggling with the historical injustices that they have been faced with. We must turn over a new leaf, so that we can address these issues and create stability and certainty in our communities and, of course, create harmony in our communities.

Our government is very supportive of moving forward in that direction and coming to final resolution with regard to the treaty process.

I mentioned the health care issues a little bit earlier. I always sit back and think about the different demands that are out there across the province in terms of health care. In my research, I've actually found that since 1991, British Columbia has increased health care spending by over $2 billion. No other province has done this. We have allocated more dollars to health care than any other province in the last number of years. This year we increased health care spending by $228 million in a range of different services.

I know there are some difficulties up north right now in working out some very difficult issues with the doctors. Just to put things in perspective, when I researched this material I found that out of the ten provinces across Canada, the province that allocates more dollars on a per capita basis to the health care system is indeed British Columbia. We rank next to Ontario, which is after us in terms of the dollars it puts toward health care. In fact, we are putting close to 10 percent more into health care than Ontario does.

A lot of people talk about Alberta and about how great Alberta is. I have a sister who lives in Alberta with her family, and she phones me from time to time and tells me how their education system is and how their health care system is. Yes, they may have some lower taxes, but she says to me: "You know, the services that you obtain in British Columbia are second to none in comparison to Alberta." She realizes that and reflects that. She tells me of the pressures she's faced with every day with her two boys, who access and need the educational system, as well as with her family, who need the health care system.

Alberta, in comparison to the rest of the provinces, actually ranks ninth in terms of health care funding. It is the second-last province in terms of the number of dollars in health care funding. British Columbia maintains its first-place status in allocating dollars to the health care system.

When we think about all of these things and put them into the package and balance all the different demands that governments are faced with, the priorities that we have heard and that have been identified in our consultations with our communities . . . . We have made some changes in comparison to last year's budget to reflect the fact that we have listened and we have heard the different messages. We have put together a package that we hope will encourage all British Columbians to change the perception that British Columbia is not open for business. We want business in British Columbia.

I would urge all members to work with government to enhance the outlook of British Columbia. I don't think it does anybody any good to create a gloom-and-doom perception in British Columbia; it doesn't do one shred of good for anybody in British Columbia. We must work together to overcome the crisis that Asia is faced with, which is therefore impacting us economically. We must work together to overcome the perception that British Columbia is a province that does not want business, because that is simply not true.

Not only in the new and modern areas of tourism, film and high tech but also in our resource-based industries of oil and gas, mining, forestry and so on, we must -- and I think we owe it to all the people who have elected us to our respective positions -- work together in solidarity on behalf of all British Columbians to create a brighter future for all British Columbians.

On that note, hon. Speaker, I want to thank you very much for this opportunity to speak on the budget. I look forward to working with members across the floor and with my colleagues on these very important issues.

K. Whittred: For some weeks now we have heard the NDP promise dramatic action to revive the confidence of business and consumers. In recent days we've heard speaker after speaker from the government benches, and indeed the minister herself, talk about a new way to do business. What is new about an acknowledged $95 million deficit? What is new about a debt of $31.2 billion, except that it represents an increase of $1.25 billion over last year? What is new about $2.4 billion in interest payments? That's $2.4 billion that serves to stifle investor confidence, block job creation and rob health and education of much-needed resources.

But I'm a generous person, and I do believe in giving credit where credit is due. The minuscule tax cuts to individuals and small businesses and the changes to the corporate tax structure represent an admission by this government that seven years of NDP economic policy was not working -- seven years of a policy that has driven away investment, creating job losses and feelings of helplessness for the people of British Columbia. The minister, in her budget address, spoke of revitalizing traditional industries and strengthening our new economy. New economy -- is that another admission that the NDP policies weren't working?

Then there is talk of cutting red tape and creating a positive business climate. Who has driven our traditional industries, especially the forest industry, into the ground? Who has imposed the oppressive corporate capital tax? Who indeed created this red tape? The government would like us to believe it was the tooth fairy. Can a leopard change its spots? Can this government legitimately speak of a new economy? I think not.

B. Barisoff: Hon. Speaker, I ask leave to make an introduction.

Leave granted.

B. Barisoff: I'd like to introduce a grade 9 class from Osoyoos Secondary School: Patrick, Shurn, Lana, Sharon, Amy, Alisha, Pawandeep, Mandeep, Genevieve, Michael -- he's in grade 2 -- and Elizabeth; their teacher Mr. Sanderson and his wife, Mrs. Sanderson. Would the House please make them welcome.

[ Page 6726 ]

Deputy Speaker: The Chair also likes to welcome the guests. I remind members that when introductions are to be made, if the member who is speaking acknowledges that, it's much easier for the Chair to ask the other member to stand. Thank you.

K. Whittred: Let's look at this government's plans to cut red tape by appointing an advocate -- soon, if history repeats itself, to become another bureaucracy. The advocate will need an assistant, the assistant will need an assistant, they will all need secretaries, and so it goes. And what of the time frame for this New Age NDP economic plan? The miserly tax breaks offered to families and small businesses don't kick in until next year. Some stimulus!

[4:00]

Sadly, I can only conclude that the rhetoric about a new economy is more of the same old policies that have managed to take this beautiful province of ours, with its bounty of resources and its skilled and innovative people, and turn it into a province that is dead last in economic growth among Canadian provinces. Who among us is not humiliated that the media are now calling British Columbia a have-not province? Sadly, this budget illustrates that indeed the NDP government can't change its spots.

I would like to illustrate this by speaking for a moment on the way in which this budget impacts on the health care system. The speaker before me spoke about health care, but I'm afraid that what I've seen is quite different from what she spoke of. What I have seen in health care is a province where health care is clearly in crisis. In the past few weeks I have travelled to many areas of the province, touring facilities and talking to many health care professionals. Everywhere I go, I see the same thing. I see emergency rooms full to overflowing.

I see acute-care wards utilized to care for elderly patients awaiting long-term beds. I see gurneys in the halls and patients housed in storage areas. I see the material that would normally be in those storage areas piled in the hallways. At every stop I listen to health care professionals express their frustration that the resources they need to treat their patients are not readily available. There are long waits for tests -- even longer waits for beds or operating room time.

I'm told that countless hours of valuable time are spent on the telephone, begging for a test, looking for a bed or trying to negotiate time in the OR. Home care is difficult to access, and 18 months is a typical time frame for entering a long term care facility. But this government boasts that it has increased spending on health care; it boasts that it spends the most on health care of any province in Canada. What is wrong with this picture? This government has lurched from crisis to crisis for the last several years.

Many capital projects were promised for health care facilities in last year's budget, and many were promised in the budget the year before that. Then most of these projects were frozen. They were promised, but they were in fact never built. Where are the multilevel facilities that have been promised?

On the North Shore, we actually have fewer long-term beds today than we had a few years ago, in spite of the fact that a new facility that had been under construction for a number of years recently opened. Is this what the government calls more good news? How much of the current crunch in health care is directly related to years of neglect and lack of strategic planning to accommodate our aging population?

There appears to be no end in sight to the chaos surrounding regionalization. This government has promised a new way to do business, but there is nothing to give me confidence that a year from now our province will have the promised chronic-care beds or adult day care centres. There is nothing to convince me that one year from now we will have any more stability in the health care system than we do right now. Members opposite have suggested that the opposition wants more spending; it's quite the contrary.

We simply want, when the government promises capital spending on health care projects, that these projects actually get built, that somebody actually puts a shovel in the ground and breaks the turf. That's all we're asking.

I feel that many of these promises about capital spending . . . . I feel as though I've heard this tune before. Last week I toured several communities in the north of our beautiful province, and I might add that those were two very gorgeous days. During that time I heard many stories of how the economic folly of this government over the last seven years has impacted their families. I talked to a truck logger who had had a thriving business. I believe he said he had seven trucks. He now has one truck and barely manages to meet his financial obligations.

I heard from other loggers about how they and their wives were now scurrying for any little part-time job that they could possibly get, just to keep their families intact. I heard from people in the recreational fishing industry, and they told me how seriously the increase in angling fees last year had affected their business.

The tragedy of this budget is that the timid attempt by this government to change the way it does business really represents no change at all. This government is talking about a new way to do business. But that's what it is: it is talk. This budget shows us that they took one tentative baby step toward acknowledging their folly of the last seven years. But this government lacked the courage to take that giant, bold step that was necessary to create a prosperous economic climate that would stimulate investment and create jobs.

D. Jarvis: Mr. Speaker, I'd like to congratulate you and Madam Speaker on your election to your jobs as Speaker and Deputy Speaker. I hope your honeymoon lasts a long time.

The 1998 budget. Again we see a bad, bad budget by this government. After seven years . . . . I've been standing up, along with all my associates, trying to tell this government that what they're doing is wrong, and no one listens -- not this government.

Not too long ago the Premier of this province, who was then Finance minister, said that any fool can balance a budget. However, I'd like to enter information to show that this Premier and his two or three Finance ministers since then really aren't fools, because they haven't been able to balance the budget.

We are looking at a large deficit of over $31 billion. The B.C. economy is in trouble. It's not just today; it didn't happen today. It has been since the last two governments, the Socreds and then this gang, came in. They've either tried to buy an election or tried out social experiments which have failed us. Up to this date, the top rate of tax in this province has been 54.5 percent -- the highest in Canada and in all of North America. It will remain that way until at least the year 2001, regardless of what they have said about reducing taxes.

It will still be the highest in Canada until the year 2001, unless New Brunswick and Newfoundland suddenly decide that they are going to drop theirs down another point. So there will be no great rush to Vancouver or British Columbia.

Our unemployment rate as of January '98 rose to almost 10 percent, and we in B.C. are the only province in Canada

[ Page 6727 ]

that lost jobs last year. We lost jobs in B.C. when no one else did. The same rules apply to all the provinces in Canada. An example would be the falling dollar and the Asian crisis, which apply to every other jurisdiction in Canada as well. But we are the ones that had to raise our taxes and have no jobs to give to our citizens. We have the weakest economic growth in all of Canada, and it is getting worse. We are going into a deep recession.

The chief economist for the Business Council of British Columbia says: "This just didn't happen overnight." We have had very weak economic growth in this province for the last three to four years. Also, I might add, during a high business cycle, we had weak growth. This is because of the socialist programs that this government was putting in. A slow buildup of the lack of leadership in this province and the economic strategy that they put forward, along with the present Asian crisis, has really impacted on our economy. However, this socialist government won't admit that we have an internal problem; they just blame everyone else. Here's a government that philosophically cannot create wealth.

No one on that side of the House has ever had to meet a payroll. They don't know what it is to run a business. They have never run businesses, and now they're trying to run this government. We have found out over the last seven years that we now owe almost $32 billion. Here's a government that can't create; it only consumes. British Columbians have to suffer for their failed socialist experiments. We are going from bad to worse as more people move away from British Columbia to the other jurisdictions across Canada and into the United States.

Every other western province is projecting balanced budgets, and they are currently putting debt reduction into their budgets. Every person living in B.C. -- all four million of us -- has an individual provincial debt burden of approximately $8,000. The average family of three is now looking at in excess of $24,000. That's an appalling indictment of this NDP socialist government and their fiscal mismanagement. As I said, the budget is getting worse.

The government wants you to believe -- wants everyone to believe -- that B.C.'s economic woes are only cyclical and that the good times will return if we just wait it out. That may be comforting for some, but it betrays a fundamental understanding of what is really going on in this province with this government.

The Asian crisis and world prices have had a negative effect on forestry, mining, tourism and real estate. Accordingly, a portion of our economic problems can be considered cyclical -- that's a given. But our problems run much deeper and started not last July but three to four years ago. This government does not realize that we are losing companies, jobs and people to other jurisdictions in North America as a result of their philosophy and policies. That's why we're losing jobs, not because of a cyclical problem.

Finning Tractor doesn't just suddenly pick up and leave this province because they see that there's a sudden cyclical problem in the economy. It was because there was a more attractive place to go to do business, and that was in Alberta. A cursory examination of our two provinces shows that we are both dependent on resource extraction. Our forestry and mining are going down, and their oil and gas went down about 30 percent. Yet Alberta's economy continues to grow and prosper, and we wonder why.

Well, Alberta's economy is basically designed to encourage business; British Columbia's economy is designed to repel business. Before 1995 we had performed below the national average for economic growth, and today we are at the bottom of this country's list -- No. 1. That is, as I say, an awful example of how a socialist government supposedly runs a booming province that has an economic resource that should be number one in this country.

[4:15]

That's not because of a cyclical problem; it's because we have a poor business climate. This has created an adverse downturn. Unless our business climate is turned around, our economy will continue to slow down, and jobs and businesses will go to where there is growth and where the cost of doing business is viable. The auditor general, in his last report, said that the government's debt reduction plan is flawed, as well as being extremely vague. He goes on to say that the public could better judge whether this debt plan is reasonable if the government offered details to back up its main assumptions.

Well, the main assumption is clear: we have gone into last place in economic growth. Our debt is increasing; our unemployment is realistically at 12 percent. That's including those that can no longer get credit with UI. Youth employment is reported at about 17 percent, and it's probably higher. So much for this government's debt reduction plan and balanced budget. All we can see is no economic growth, a runaway debt that's alarming, skyrocketing taxes and overall NDP socialist mismanagement of our economy.

The implications are that this NDP government has driven resource extraction to the point that the treasury will fall short in its predictions this year -- as it has in other years, I might add. There are no alternatives and no backups. The evidence is that there are benefits from making tax cuts to boost job creation, but they should be doing it now, not in 1999 and 2000 and 2001. It'll be too late then; everyone will be gone.

We in B.C. have been blessed with an inexplicable wealth of resources, yet this NDP government's ideology will focus on B.C. becoming a province that can prosper and exist solely as an information society in what they call the global economy. This could very well be true, but I would say it's impossible. We know that the real truth is that to do so -- to change over like that -- would place this province at a very bad economic disadvantage with the rest of the world, probably more so than now.

Our economy today is in a state of correction. We see this as our forest industry shuts down. Our mining industry appears to be driven to the sunset stage, our fishing is collapsing, and our agriculture is not even producing anymore. The throne speech, at best, did not show any economic plan or a target that would produce wealth, as a stimulus to our economic problems. This budget shows us that we are in debt -- reported, as I said, at about $31.3 billion and climbing. We have no debt management plan in this year's budget, and we pay $6.7 million per day on interest payments alone. Just think what that $6.74 million would do to our education and health systems, if we had that to spend.

In my riding, school yards and schools are in deplorable condition. Children don't have books and services that they should have. Our health system is not the greatest health system, as they lead us to believe. It's in a sad state. I have a constituent that was diagnosed last August, eight months ago, with an embolism in her brain. She has yet to be operated on; she's waiting to be operated on. I was in the hospital about six months ago, and I know what kind of condition the hospitals are in. They're deplorable. Our health system sucks -- no question.

If our interest payments were a ministry, it would have the third-highest expenditure, behind that of Education and Health. It's a sad statement that we waste all that money

[ Page 6728 ]

because of your government's philosophies. This government fails in its ideology, as industry and business symbolically move with their feet to Alberta, Washington State and other jurisdictions. If this attitude continues, we are going to be in real trouble. Revenues will continue to go down; taxes will continue to go up. The dichotomy between the rural towns and us will grow even wider. Economists have been warning us for years that excessive debt leads to high levels of taxation, and this in itself will lead to lower economic activity in business. Therefore higher unemployment will occur.

The evidence is mounting that this analysis is proving to be accurate. We see it happening all around us. Alberta, Saskatchewan and Manitoba have all had surpluses in their budgets in the last few years, which has led to debt repayment and lower taxes for their citizens, while we here in B.C. have the highest debt and the highest tax rate, and our unemployment is twice as high as the provinces to the east of us.

The success of this province as a whole is really dependent upon the success of our resource communities. Our standard of living is owed to our resource communities. Even though the Minister of Forests, the member for Cariboo South, says that the days of our forest companies making big profits are over -- the salad days are over . . . . We will only survive by extracting our resources. That's our ace in the hole. Two out of five jobs come out of the forests; one in four jobs comes out of mining. We are a resource-based economy that is being constrained by government policies.

The socialist experiment just won't work. The effect of NDP policies is spilling over into the overall economic performance of this province.

I'll sum up by saying that the government members, in their defence of this budget, keep trying to dodge the bullet and the issues by saying either that the economy is too comprehensive to address all at once or that if they cut spending, health and education would suffer. If this is what the opposition wants, they say, why don't we just say that we don't want to see any more schools or hospitals built? Of course, this is just a deflection of the real issue; this is just NDP rhetoric. What we are trying to say is that there are priorities. There is already money in these ministries for adjustments.

More than that, the NDP, the socialist government, must change its philosophy and create an environment to encourage the economy to grow, show investors that there will be security if other companies want to come to B.C. and create jobs. In turn, that will create wealth, which in turn creates taxation and revenue for this province. This is what we are trying to get through to this government.

During the early nineties, when we were in a high business cycle, this government was so caught up with the process of restricting resource extraction that it really missed the boat. Instead of being pro-resources -- pro-mining, pro-forestry, pro-agriculture and pro-fishing -- they did every conceivable thing to destroy or lose the confidence of these industries. These are the industries that built up this province and provided jobs, revenue, taxes and development. What has this socialist government done to this province? It's close to being destroyed completely.

This is a government that has no understanding of the economic problems of our resource communities. They have trashed lives, and they have trashed families. Community after community is in peril right now. With no understanding, it appears evident that this government doesn't know what's happening. It's not that they're illiterate; they're just innumerate. They just can't add up things, as evidenced by this budget.

Their job program is really just a snow job, as far as we're concerned. This government is trying to reassess the means by redefining the end, without understanding the problem. They have demonstrated that they have the ability to destroy an economy and that they don't deserve another chance. Accordingly, I would not support this budget.

B. McKinnon: I am pleased to rise and speak to the budget. I will not be supporting this budget. I am incredulous at the NDP spin doctors, who think they can once again pull the wool over the eyes of British Columbians. This is the seventh deficit budget that this government has put forward to the people of this province, the seventh deficit budget that this government expects hard-working people of this province to live with. These people were anxiously waiting for a budget that would stop the downward spiral that was bringing British Columbia to its knees and putting us into a recession.

This was supposed to be a budget that would revitalize our economy, encourage investment in our province and bring jobs to our unemployed. This was supposed to be a budget that would help the people and communities in this province who are suffering from the past incompetence of this government.

The government knew when it was putting together this year's budget that British Columbia was faced with an economy on the skids and that investors were bypassing us for places such as Alberta, Washington and Oregon. If our government would take a look at our neighbours, they would see why they are flourishing and we are sinking. They would see that British Columbia is a resource-based economy, with its industries characterized by large unions that form much of the NDP's financial support. They would see that they have to look beyond their labour-dominated government and that the Premier has to set clear goals and a clear strategy to diversify our economy.

The people of this province expected that last week's budget would bring about the transformation of a resource-based economy into a new economy that would carry us into the next millennium. British Columbia must recognize that its reliance must shift from its resource industry to human capital. If this government isn't prepared to show some leadership, even their union friends won't be having any jobs. This province will not attract anyone to put their money down and open up shop here in British Columbia. The economy, because of our deficit and our debt, has continued in a downward spiral since this government came into power in 1991.

In addition to the substantial provincial deficit, this government estimates that it will increase the provincial debt by $1.25 billion over the upcoming year. By the end of the 1998 fiscal year, the total provincial debt will stand at $31.24 billion. This is an increase of $13 billion since the NDP became government. For the second year in a row, the government will receive $365 million from B.C. Hydro. They are being used as a revenue resource for this government instead of giving individuals and industrial consumers a break.

The government estimates that it will spend $2.46 billion of our taxpayers' hard-earned money just on interest payments. This is disgraceful. There are no plans to do anything about it either. Think of the schools we could build, the patients that could be cared for. What we have is a huge debt that will be left to our children and our grandchildren, and I find that deplorable.

[4:30]

This budget has allowed for an increase of 980 additional civil servants at the expense of any meaningful tax relief for individuals and businesses. We support tax cuts for

individ-

[ Page 6729 ]

uals and businesses, but a 1 percent tax cut for individuals that doesn't even begin until next year? This is not going to do anything to stimulate our economy or put much money in the pockets of our overtaxed taxpayer. This tax reduction for an individual earning $50,000 next year . . . . All he will get is $89 a year, or $8 every two weeks. What an incentive for a shopping spree that money will create! I bet they can hardly wait for next year's income tax refund -- a 0.5 percent small business tax reduction effective, again, next year.

Maybe this government made a mistake, and we're actually looking at next year's budget. It looks like anything in this budget that could give even the tiniest bit of relief to small business doesn't happen until next year or the year after that or the year after that. I only wish that this budget were a mistake, because there doesn't seem to be anyone on the other side of the House that even cares what happens to this beautiful province of ours -- a province that used to be number one in Canada and is now at the bottom of the list.

Fee increases. Are they not a form of tax? This budget predicts fee increases of $50 million over last year's revenues. The Ministry of Attorney General has introduced severe fee increases on persons who use the provincial court system. There is also a new fee structure for land title services -- more money taken from our already overtaxed taxpayer and more money for the business community to put out in order to do business in British Columbia.

In a budget move not made clear in any way in the budget documents is the deductible for prescription drugs for ordinary British Columbians. It was raised from $600 to $800 -- a 33.5 percent jump. This will affect approximately 85,000 families -- another cost added to our taxpayer.

Let's take a look at what the business community and the taxpayer are saying about this budget that was supposed to kick-start our economy. B.C.'s mining industry says that this budget offers little relief to mining and that their only hope for survival -- for their future -- is now tied to legislative changes. The president of B.C.'s Mining Association said that the budget did not go far enough to address the negative perception held by investors that British Columbia is a high-cost place to do business.

They were led to believe that the government was actually serious about keeping its promise to improve competitiveness and to provide incentives, as stated in the budget. The elimination of the corporate capital tax and the tax on new machinery and equipment, the removal of overregulation and bureaucratic stonewalling are the kinds of incentives that the mining industry needs to stimulate mineral exploration and the development of investment in this province.

Think of the jobs that would be created and the money that would come into the province to stimulate the economies of our northern communities if mining were encouraged to invest in British Columbia. Think of it, hon. Speaker -- jobs. We would create jobs -- something that this government keeps telling us they want to create. The government has stated that they want to facilitate the creation of new mining operations in B.C., yet they have reduced by $15 million the Ministry of Energy and Mines' allotment for their operations. Hon. Speaker, would you call that encouraging? Well, I don't think so.

This budget does not do anything to stimulate the supply of B.C.-educated recruits for the high-tech sector. Every student in the applied sciences costs Simon Fraser University $10,000 a year, of which only $7,000 is recouped from the government, leaving a shortfall of $3,000. It is simply good business for the university to encourage students to take an arts degree; that is cheaper. So much for the freeze on tuition fees. They're not helping universities educate our youth in the field of high-tech.

We hear this government blowing its own horn for funding increases in the Surrey school district operating budget. Hon. Speaker, the school trustees will tell you that the increase will merely allow the district to keep up with rising costs. They say that this is not a good-news budget; this is a status quo budget -- an increase that will only fund new students and pay for the teachers' salary increase, which was approved by this government just before the last election. Surrey is just managing to remain on the same level as last year.

This money will not help the school trustees to restore any of the cuts that were made last year. So much for this government putting students first in such a fast-growing municipality.

This government led the people of this province to believe it recognized that British Columbia was in trouble. They had big splashes throughout the media that they were listening to business and labour. We heard them spouting off on the radio, on TV and in newspapers that they understood that fast action was needed in order to kick-start the economy. How much of our tax dollars were spent by this government advertising themselves? They led us to believe that their meetings with business and labour were beneficial and that the budget would bring about a turn for the better in our economy. They didn't do that.

All hopes were dashed on Monday, March 30, when the Minister of Finance gave her budget speech and tried to convince us that British Columbia was open for business.

B.C. residents, whether young or old, rich or poor, unionized or non-unionized, male or female, employed or unemployed, as well as businesses small and large have all been led down the garden path. It is a monumental shame, hon. Speaker. As long as there is a tax on investment, British Columbia will continue to see investment dollars flow to other jurisdictions.

They keep saying that the B.C. Liberals want to spend, spend, spend and cut, cut, cut. They don't listen. They don't hear what the people of this province are saying, and they obviously don't hear anything that we are saying that would help lead them to the path of economic recovery.

The B.C. Liberals have a nine-point plan for the economic recovery of this province -- something this government would do well to listen to. We would find the money in the existing budget, and we would make our priorities very clear to all British Columbians.

We would cut personal taxes and business taxes. Heavy taxation discourages investment and hampers job creation. Experience has shown that the more disposable income people have, the more jobs are created. Remember: consumer spending creates jobs.

We would eliminate red tape and costly government regulations. We must make B.C. businesses competitive again. A results-driven Forest Practices Code and streamlined approval processes for small business and resource companies will return new investment to this province.

We would speak about truth in budgeting. We must have open and honest accounting practices. Government should keep its books the way it makes the taxpayers keep theirs. Government financial statements must be truthful and easily understood. Governments must not hide the real deficit or debt from the public. It's their money, and they should know exactly what the government is doing with it.

We would balance the budget and reduce the debt. We must cut spending and create more value for every tax dollar

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spent. Individuals, households and businesses balance their budgets; we should expect the provincial government to do the same. We must introduce balanced-budget legislation outlawing deficit spending to ensure that the government lives within its means.

We would enact fair and balanced labour laws. We must put workers' rights first, by restoring their right to have a secret vote for certification. There must be more f