1986 Legislative Session: 4th Session, 33rd Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

FRIDAY, MARCH 21, 1986

Morning Sitting

[ Page

7451 ]

CONTENTS

Tabling Documents –– 7451

Oral Questions

Coal cutbacks. Mr. Williams –– 7451

Housing studies. Mr. Blencoe –– 7451

Vancouver Island highway. Ms. Sanford –– 7452

GAIN program. Mr. Barnes –– 7452

Budget lockup. Mr. Rose –– 7452

Municipal transit. Mr. Williams –– 7453

Private Members' Statements

Youth unemployment. Mrs. Dailly –– 7454

Hon. Mr. Segarty

Reverse mortgages. Mr. Davis –– 7456

Mr. Cocke

Armed services pensions. Mr. Mitchell –– 7457

Ms. Sanford

High-tech industry in B.C. Mr. Reynolds –– 7458

Hon. Mr. McGeer

Budget Debate

Mr. Stupich –– 7460

FRIDAY, MARCH 21, 1986

The House met at 10:05 a.m.

Prayers.

Hon. A. Fraser tabled the annual report of the Ministry of Transportation and Highways for the fiscal year 1984-85.

MR. D'ARCY:

Mr. Speaker, in the gallery today we have two individuals from

Fruitvale, B.C.: my hard-working executive assistant in the riding,

Sean Philp; and a volunteer assistant, Bob Warning. They do their best

to serve the public in Rossland-Trail in a fair and even-handed way. I

would ask the House to bid them welcome.

MR. PASSARELL: Visiting sunny Victoria today is a long-time resident of Atlin, Mr. Joe Florence. I wish the House to pay him adieu for today.

MR. CHABOT:

On a point of order, Mr. Speaker, standing order 8 says: "Every member

is bound to attend the services of the House, unless a leave of absence

has been given by the House." I understand the member for

Burnaby-Edmonds (Ms. Brown) is in the precinct but refuses to come into

the House. I'm wondering, Mr. Speaker, whether she has permission from

you to be absent from this chamber.

MR. SPEAKER: On

the point that was made by the member for Columbia River, which the

Chair has ruled on numerous occasions, the first member for Victoria

seeks to respond.

MR. HANSON: Mr. Speaker, the

member for Burnaby-Edmonds is ill, and it is my understanding that she

has advised the Speaker. That member has no right to cast any

aspersions on a hard-working member of this House.

MR. CHABOT: What are you, the minister of defence for that member or something?

MR. SPEAKER:

Order, please. The standing orders and the rules that guide us in this

chamber are well known. However, I would advise that the Chair has no

such information and has not been made aware specifically of....

Nonetheless, that is not a duty of a member. In any case the Chair does

not have to be....

Interjections.

MR. WILLIAMS: Could you advise me, Mr. Speaker? Is the question period commencing now, or...?

MR. SPEAKER: Hon. members, the point made by the member is a valid one. The question period will commence as of right now.

Oral Questions

COAL CUTBACKS

MR. WILLIAMS: Mr. Speaker, we learned last night that there have been

major cutbacks in southeast coal at the Greenhills mine of BCRIC — Westar — a

43 percent cutback on last year's volumes and a 15 percent cutback in price.

Clearly the Japanese are whipsawing British Columbia with these two coal areas

in the northeast and the southeast. My question is to the Minister of Labour:

is he prepared to intervene to deal with the unemployment problem in the East

Kootenays, which at 21.4 percent now exceeds Newfoundland, and see that government

is at the bargaining table, so that there is not this whipsawing by the Japanese

on price and volume in terms of coal shipments from British Columbia?

HON. MR. SEGARTY:

I wonder, Mr. Speaker, if the member for Vancouver East would like to

table the number of contracts that the Greenhills mine has with

Japanese coal companies.

MR. WILLIAMS: Mr. Speaker,

the response is that the minister is not prepared to intervene to deal

with the gross unemployment problem in his riding and deal with the

problem that we have, developed by northeast coal.

HON. MR. SEGARTY:

Mr. Speaker, I'd still like the member for Vancouver East to table in

this House the amount of contract tonnage that the Greenhills mine has

with the Japanese steel industry.

HOUSING STUDIES

MR. BLENCOE:

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

Housing. In January 1986 the provincial government tabled and brought

down a report on social housing in the province of British Columbia.

Now the minister has announced another study, a matter of only a few

months later, the trash and thrash study — a phony study that's going

to be done in the province of British Columbia....

MR. SPEAKER: Order, please.

MR. BLENCOE:

I'd like to ask the minister how much this January 1986 study cost the

taxpayers of the province of British Columbia, and how much your new

study — the phony study — is going to cost the people of British

Columbia?

MR. SPEAKER: Order, please. The question

is out of order, hon. member. If the hon. member is going to bring

argument and debate constantly into questions, the Chair will rule him

out of order. The first rule that guides us in questions, hon. member,

is that the question must be a question, not an expression of an

opinion, representation, argumentation or debate. The member can phrase

his question in a proper form, and the Chair will give him the right to

respond.

MR. BLENCOE: How much did the January 1986 study cost the taxpayers of British Columbia, Mr. Minister?

HON. MR. KEMPF: Mr. Speaker, in order that I bring that exact figure back to the member, I will take that question on notice.

AN HON. MEMBER: Who paid for the hot-tub?

HON. MR. KEMPF: I paid for the hot-tub, my friend.

[ Page 7452 ]

VANCOUVER ISLAND HIGHWAY

MS. SANFORD:

I have a question to the Minister of Highways and Transportation. The

Vancouver Island municipalities, the association of the chambers of

commerce on Vancouver Island, the Vancouver Island MLAs and the

candidates for the New Democratic Party on Vancouver Island have

requested that the government proceed this year to complete four-laning

of the Vancouver Island Highway. What decision has the government made

regarding this request?

[10:15]

HON. A. FRASER: First of all to the member, the

ministry's proper title is the Ministry of Transportation and Highways,

not the reverse. I like to go by the legalistic things that we have.

reference to the requests from Vancouver Island, we've got a warehouse

full of them, and they conflict with each other. I think you're

interested in Courtenay–Campbell River or wherever that area is — in

that area. What I'm getting at is that we have conflicting views. Yes,

we have people who want us to do something about the road — a new

freeway or bypass, if you want to call it that — but we also have a

resolution from the city of Courtenay, the member's home town, saying

they're opposed to it.

So we're analyzing all that material, and we aren't in any position to make any announcement at this time.

MS. SANFORD:

Mr. Speaker, I think the minister wants the word transportation before

highways because he is so embarrassed about the fact that he has done

nothing for highways on Vancouver Island. We have learned that $14 per

capita has been spent on Vancouver Island in 1984 for highway

construction, while $203 per capita has been spent in the rest of the

province. That's a totally unacceptable disparity but I shall ask my

question.

Will the government begin to equalize the

spending of highways funds by starting the much-needed inland bypass

route on Vancouver Island this year?

HON. A. FRASER:

Mr. Speaker, first of all, on the cost per capita, that sounds like

socialist arithmetic to me. I don't accept that at all, and I have a

question. Did the member for Comox include the ferry subsidy? B.C.

Ferries is all under transportation. I assume you got that in there in

your....

MS. SANFORD: We're talking about highways.

HON. A. FRASER:

Well, we're talking about transportation, and maybe we should look at

that as well. But again, to reply to you, we have not got right-of-way

for the area you're talking about. We have to acquire right-of-way, and

then we have to call tenders to get the work done, and that would be

physically impossible in the year 1986-87. If we started tomorrow to

acquire right-of-way, it would take over a year.

GAIN PROGRAM

MR. BARNES:

I was very disappointed with the budget speech yesterday to find that

the government failed to provide any new income for people on GAIN. My

question to the Minister of Human Resources is: would the minister

confirm that the $14 million special warrant in February of this year

was to cover an overrun in the income assistance budget?

HON. MR. NIELSEN:

I will respond generally; I do have the details on that special

warrant. The largest overrun was in Pharmacare. Some other programs

also had expenditures in excess of what was estimated, but the largest

single overrun, I believe, was in the Pharmacare program. I'll be

pleased to bring back the detail on that. But it was not only in one

specific area; it was a combined number of overruns totalling that $14

million. I have the details on my desk, but I'll have to get them for

you.

MR. BARNES: I appreciate the difficulty the

minister may have in the fact that he's taking over a new portfolio,

but whatever portion of the $14 million was specifically for providing

the extra needs in the income assistance portion.... As the minister

knows, those people on income assistance have not decreased in numbers;

they have remained constant. Could the minister indicate why the budget

does not at least reflect a consistent appropriation for that category,

as opposed to reducing that amount?

HON. MR. NIELSEN:

I'd be very pleased to provide some detail on that $14 million special

warrant — a very quick calculation. Pharmacare accounted for $6.9

million. Services for families and children were $3 million. The GAIN

program, health care and dental services, was $1.6 million. The

excessive amount required for income assistance was $1.6 million.

Direct community services — this is salaries — were $1 million. Those

are the component parts of that special warrant.

BUDGET LOCKUP

MR. ROSE:

I'd like to address my question to that great Canadian novelist, the

Minister of Finance. Some of us are very concerned about what happened

yesterday, when special interest groups and lobbyists of various kinds

were invited into a lockup and yet members of the opposition were

denied. Is the minister aware that the federal government and all other

provinces, according to our recent survey, do not have regular

procedures for locking up members of lobby groups with the press so

that they can see the budget before members of the opposition can?

HON. MR. CURTIS: While I have....

MR. HANSON: Propaganda stunt.

HON. MR. CURTIS: Oh, why don't you just go and do something else, eh?

Mr.

Speaker, I have respect for the member, but I don't have confidence in

that party's research. I wonder if he would attempt to determine that

that which he says is correct in all other provinces. With respect to

lockups, the press lockup is managed by the press gallery. With respect

to the....

Interjection.

HON. MR. CURTIS: The interjection is incorrect, as usual.

With

respect to the second lockup, I indicated publicly that we have tried

to make the budget information available to those who advise

individuals and organizations. We've turned to accountants — using the

generic term — and it's still in its experimental stage. I appreciate

that there will be

[ Page

7453 ]

varying views regarding lockups, Mr. Speaker, and if the member wishes to discuss

this with me privately at some time, or if the opposition House Leader wishes

to do so....

Interjections.

HON. MR. CURTIS:

Or we can discuss it in my estimates, Mr. Speaker. I'm not attempting

in any way to push the topic away, but there are varying views with

respect to lockups. So long as I hold this portfolio I would welcome

suggestions as to how they can be improved. I think there is a

tradition of lockup in this province, and I would not personally like

to see that discontinued insofar as the press is concerned —

representatives of the news media.

MR. ROSE: I

wonder, Mr. Speaker, if I could have a supplementary. Is the minister

aware that in addition to accountants there was a representative of the

mining association in that lockup yesterday? There was a special

representative of John Turner, the Liberal opposition leader — his

acolyte; and perhaps there were others representing Mr. Mulroney and

all sorts of different special-interest groups and lobbyists

sympathetic to this government. When is the minister going to allow

members of the opposition to have a jump on the budget at the same time?

HON. MR. CURTIS: Mr. Speaker, if there was a representative of John Turner, he could hardly be characterized as friendly to this government.

MUNICIPAL TRANSIT

MR. WILLIAMS:

A question to the minister responsible for transit, Mr. Speaker. The

SkyTrain and the tremendous debt tied to SkyTrain is now having an

impact on the citizens in greater Vancouver. There will be a 360

percent increase in the Hydro surcharge, as well as a significant

increase in the fares. Can the minister advise whether she's considered

an alternative system that would be less burdensome on the low-income

people who are bearing the cost in this system?

HON. MRS. McCARTHY:

Mr. Speaker, I'm very pleased to respond to the question from the

second member for Vancouver East. First of all, the formula we have for

the public transit system in British Columbia and the provincial

government's sharing of the burden is the most generous in all of

Canada. The SkyTrain, the ALRT, to relieve the problems of congestion

and to help in the redevelopment of the lower mainland, was a project

agreed to by all the member communities in the lower mainland — the

GVRD group. The people who arranged the formula to underwrite and

amortize the cost of SkyTrain over a period of years were

representatives from all the lower mainland municipalities.

April of last year, in spite of the fact that we had negotiated a

formula with that group, we renegotiated the formula to a far more....

Interjection.

HON. MRS. McCARTHY: Does the member wish to listen to the answer, Mr. Speaker?

We renegotiated the formula and we underwrote $275 million of capital in the

SkyTrain guideway in order to lessen the burden on the riders. In the last week

and a half or two weeks....

The

Vancouver Regional Transit Commission, who set the rates for the fares,

had two ways in which they could make a decision as to how to finance

the new system — which they unanimously agreed to do. They could take

the increased budget for SkyTrain — and as we all know, it is an

increased budget because any time you increase service you increase

budget — and amortize it. They could assist....

Interjection.

HON. MRS. McCARTHY: I can see the member doesn't want to have the answer.

They

could take the budget and they could increase the fares, or they could

decrease the service in various areas throughout the lower mainland.

the member may not know, B.C. Transit covers more miles in the lower

mainland than any other service in Canada. In providing that service,

Mr. Speaker, there may be routes which the transit commission can

reduce; but at this point they felt there were none. Therefore they

increased the fares. I know the member will understand that in the 15

stations on the line between Vancouver and New Westminster, the

resulting economic impetus provided by SkyTrain is dramatic and adding

to the assistance for the lower mainland.

His reference to

people who cannot afford.... It should be noted that the seniors in

this province — some 28,000 — pay $28 a year to ride the SkyTrain and

every other kind of transportation in the lower mainland. Students and

seniors who do not qualify for the seniors pass have rates as low as 60

cents and 50 cents, which I suggest is lower than any in Canada.

Interjections.

HON. MRS. McCARTHY: If you don't want the answer, don't ask the question.

[Mr. Speaker rose.]

MR. SPEAKER:

Order, please. Hon. members, open-ended questions tend to elicit

open-ended responses, but in the case of the minister the time for

question period had elapsed during the response, and that was the

reason that was permitted. However, hon. members, I wish to raise

another matter of importance.

Yesterday, prior to the

commencement of the budget speech by the Minister of Finance, the

member for Skeena rose on a point of order proposing, as he did in

1983, that the speech of the financial critic of the official

opposition should be televised. In support of his position, the member

stated that the Chair had put a motion to the House seeking unanimous

consent in 1983 and stated further the Chair would be inconsistent not

to do so during yesterday's sitting.

The proceedings of

July 8, 1983 disclosed that when the matter was raised, the Speaker

clearly stated that under the special circumstances of the day,

including those of time constraints, he would put the question of leave

to the House, and he did so. What the member failed to bring to the

Chair's attention was that the Speaker clearly stated at that time he

was prepared to put the question to the House, but this was not to

establish a precedent.

[10:30]

[ Page 7454 ]

The

difficulty that arises here is that when an hon. member of this House

extracts only such portions of a previous decision as will support his

argument, without quoting the full decision, it has the obvious

tendency of misleading the House and the Chair. The Journals

state clearly that the action taken in 1983 was not to be considered a

precedent, yet the member for Skeena urged the circumstances on the

Chair as a precedent. The Chair suggests this shows something less than

total candour with this House and the Chair.

All hon.

members know that if they wish to effect change in relation to the

televising of proceedings or any other usage of this House, proper

procedures are available. Those procedures do not include selective

quotes from previous decisions, which unless quoted in their entirety

can be, and often are, totally misleading.

[Mr. Speaker resumed his seat.]

Orders of the Day

Private Members' Statements

YOUTH UNEMPLOYMENT

MRS. DAILLY:

I'm taking the opportunity today, having had my name drawn for a

statement this Friday morning, to speak on a subject which I'm most

concerned about and spoke about just last week during the throne speech

debate. I believe that this subject is of such importance that it needs

and bears repeating and repeating. It is the whole subject of

unemployment of our youth today.

[Mr. Strachan in the chair.]

I consider that when you

have over 20 percent of the young people in the province of British

Columbia between the ages of 18 and 25 without work — in some areas

even higher — it is a crisis. It's a moral crisis, also, for the

government which does not come to grips with dealing with it.

have had the opportunity to go through the budget, although not in too

much detail yet. In the budget — which of course will be elaborated

upon in great detail later on this morning — in reference to the amount

of money for students, I see that the government has at least

recognized the fact that it's a basic problem by earmarking some extra

funds. So we'll give them credit for that recognition, but we cannot

give them credit for the amount of money which is placed into it. It is

not going to come to grips with the serious crisis of the youth of

today in this province. Mr. Speaker, to put in the amount that has been

put in, an extra $10 million in one area, in the area of Challenge '86,

plus some other student work-creation jobs and an increase for student

loans, is only a small step towards what we have to do in this province

to work on solving youth unemployment.

Of course, the major

problem we're dealing with is a government whose economic policies are

such that they have created this environment for the youth of the

province. But we have to deal at the moment with the government that is

in office, with the government that in the last ten years has allowed

this situation to take place. Mr. Speaker, if you look at the amount of

money allocated for youth unemployment and then compare it to the

amount of money put aside by the NDP government in 1975, you would find

that to match in today's dollars the contribution of the NDP government

toward youth and youth programs, you would have to have approximately

$100 million from this government today. And yet look at what is in the

budget.

Mr. Speaker, this government talks a good line

about their concern for youth unemployment, but they simply have not

come to grips with it. Let me give you an example of what is happening

in other parts of the country. You know this government always says

it's a worldwide problem. Well, they will accept the fact that the

other countries in this world have the same problem with their youth.

As you well know with your background, Mr. Speaker, the European

countries — and particularly may I use Germany, Sweden and Austria —

have an extensive apprenticeship system combining on-the-job and

classroom training for an average of three years. West Germany

particularly leans heavily on the enterprise-based system.

find Sweden far more interesting, Mr. Speaker. Just to look at the

figures in Sweden, do you know what the unemployment rate is in Sweden?

In 1984, youth and adult combined, it is 3.5 percent. We know what it

is in Canada today. I don't know what the latest national combined

figures were, but I think they were well over 12 percent. Mr. Speaker,

we have to then say: "Well, what is it that another country can do that

British Columbia and Canada do not seem to be able to do?" Well, there

is no time in this brief statement to go into the details, but I would

like to get it on record that Sweden has had remarkable success.

put this to the minister in charge of youth programs, who I know will

respond. Look into what is happening in Sweden today, particularly the

youth teams which have been established for all 18- and 19-year-olds,

and all physically disabled youth up to age 25, for between four and

eight hours a day. You know, Mr. Speaker, after the establishment of

those youth teams in 1983 in Sweden, unemployment for young people

dropped from 8 percent to 5.5 percent in 1984. Therefore, if we are

serious in this province about doing something about this tragic

situation, then I say to the minister, through you, Mr. Speaker, that

you simply must look at what is going on in countries that have

achieved success.

Mr. Speaker, it is most unfortunate that

when talking on a subject as important as this, one which needs more

detail, that my time is up. I hope to have a further occasion to speak

on this very serious matter. I look forward to hearing from the

minister.

Interjection.

MRS. DAILLY: Oh, I thought you meant I was finished. I couldn't see from here. Thank you, Mr. Speaker.

would like to say to the minister that we need — and I do hope that he

will respond on this — only to look at successful programs in other

countries but to build up a great coordination between the Education

ministry and the Labour ministry. To speak only about what's happening

in education in relationship to preparing youth for the scene when they

leave looking for work would be the subject of a complete speech. But I

want to get this said at this moment. I realize this is not the

responsibility of the Minister of Labour, but I hope he'll discuss it

with the Minister of Education (Hon. Mr. Hewitt). The Ministry of

Education's tendency to start standardization and centralization of the

whole school system is not going to have anything but a negative effect.

[ Page 7455 ]

Mr. Speaker, I'll have to leave Education for another day. Thank you very much, and I look forward to hearing from the minister.

DEPUTY SPEAKER:

Again, for the benefit of hon. members, during this process of our

Friday agenda, the green light always comes on at the two-minute time

period.

HON. MR. SEGARTY: Mr. Speaker, it's a

pleasure to respond to the member for Burnaby on this very important

subject this morning. I thank the member for her comments, and I know

that she made them in all sincerity and in true regard for the problems

that young people face today, not just from British Columbia but across

the country and indeed throughout the entire world.

It was

with this in mind that the government of British Columbia established

last year a Youth Advisory Council. It provided me as Minister of

Labour and the young people of British Columbia direct access to

government. Rather than the government coming out and telling them what

they feel is good for the young people of British Columbia, I took the

approach that we would go directly to young British Columbians. We

would be able to select young British Columbians from the various

regions of the province, from the various professional backgrounds,

from the various cultural organizations and groups throughout the

province, and also ask that the student union council select a

representative of their organization who would be able to participate

in the British Columbia Youth Advisory Council.

I've got to

say that that council has worked very hard over the course of the past

few months providing me with input and ideas on how the government of

British Columbia can best respond to their needs, particularly in the

area of unemployment, areas relating to transit matters in Vancouver

and other areas affecting youth.

I'm pleased with the

budget announced yesterday by the Minister of Finance. It recognizes

the advice that young British Columbians, particularly the Youth

Advisory Council, have given me over the course of the past few months

on matters dealing with youth unemployment in British Columbia. They

gave me good advice on changes that we could make to the Challenge '86

program. That, of course, is a follow-up to the Challenge '95 program,

which was very successful — a joint program in cooperation with the

non-profit agencies. I'm pleased that that program is part of the

budget process this year.

As well, there is in the budget a

program of $10 million that we hope will create approximately 5,000

jobs. I hope that during estimates we will be able to provide the

member for Burnaby and other members of the House full details of those

programs, as the Youth Advisory Council continues to mature and develop

those programs in cooperation with the Ministry of Labour, industry and

small business, which play an important

part in that.

Also,

the program that was announced yesterday by the Minister of Finance

identifies $5 million that we hope we will be able to cost-share with

needless to say.

In recognition, too, of the difficulties

that many young professionals have on graduating from universities with

particular degrees in certain areas that may be in short demand in the

marketplace today, we hope to be able to develop some sort of

internship program in cooperation with the business community in

British Columbia to accommodate some of those young people who graduate

from school and have difficulty finding a job or placement. More

details on that program will be announced during the next few weeks and

during my estimates.

As well, we have other programs in the

Ministry of Labour that have been recognized and advised on by the

Youth Advisory Council. These are in the area of trades and things like

that, where we hope that we will be able to provide some sort of

on-the-job subsidy for employers to hire young people and get them into

training programs and things like that.

All in all, the

Ministry of Labour and particularly young people in British Columbia

have done pretty well in the budget. I hope to have more dialogue and

consultation with young people in British Columbia as they continue to

advise us on the role that government can play in assisting young

British Columbians help them help themselves. Without question, we have

a gifted group of young British Columbians. Every place I go across the

province I see young, enthusiastic British Columbians. Quite frankly,

they're getting tired of being called the lost generation or the

useless group. There are lots of positive things that those young

people have done and will continue to do as they play a major role in

the further development of British Columbia's economy.

[10:45]

MRS. DAILLY:

I appreciate the minister's response. I think he too is sincerely

concerned. Where we differ is that I think he's still only skimming the

surface of this major problem. I am particularly concerned.... I give

him credit for establishing the youth council; I think that that's at

least giving him some eyes and ears from the youth themselves. But

there is a whole group of youth.... The ones who suffer the greatest

unemployment are the dropouts — the students who are voiceless, the

ones who have come from homes where unfortunately, because of poverty

and low income, they have not had the opportunity that some others have

had. I'm afraid they are not the ones who end up on youth councils. So

my concern is that the minister remember that one must keep in touch

with that large group of young people, many of whom are, unfortunately,

illiterate. As someone who was once in charge of the school system, I

take my share of the blame for the fact that we still have children

graduating or dropping out of school who are illiterate. We have not

come to grips with some of the programs needed to keep those young

people in school.

The minister knows that he's also going

to have to work very carefully with Health on this whole increase in

the use of liquor and drugs. British Columbia has one of the highest

rates. It probably goes together with the fact that we have one of the

highest rates of unemployment. The minister has a massive job to do,

and I sympathize with the scope of the job he has. All I would like to

say in conclusion is that that job you have been given is at the moment

one of the most important things any minister in your cabinet has to

deal with. I say to you that I wish you good luck in dealing with it,

but I also ask you to widen your scope, to look at other countries, to

took at new programs, and to pay particular attention to what goes on

in the Education ministry and the Health ministry and work together

with them.

[ Page 7456 ]

REVERSE MORTGAGES

MR. DAVIS:

Many senior citizens are property-rich and income-poor. Their life

savings are locked up in their homes; their pensions are small. The

result is near poverty in a land of apparent plenty. I'm saying in this

statement: give them a choice. Let them live off their real estate and

enjoy their savings during their remaining years.

In the

United Kingdom older people can take out what are referred to as

"reverse mortgages." They can take these mortgages out on their homes.

This gives them a cheque monthly for the rest of their lives. They have

less property to leave to their children, but a better income to

cushion their remaining years. Here, as in the United States, it is

difficult to put reverse mortgages together. Real estate and insurance

companies are separate entities. Government must therefore bridge the

gap. Surely Ottawa, or CMHC, for example, working with our provincial

Ministry of Lands, Parks and Housing, can make the necessary

arrangements to facilitate the development of an industry which can

offer reverse mortgages to our older people. Then home annuities for

the elderly will be commonplace here as well as in Europe.

the United Kingdom, for example, Home Reversion Ltd., a private

company, will purchase an individual's home outright, giving him in

return a guaranteed annuity for life and lifetime occupancy. The

current market value of the house is discounted by the individual's or

couple's life-expectancy, and the annuity payments continue until the

death of the surviving member of the family. The annuity, less a fixed

but nominal monthly rent, is paid in advance. The annuitant must insure

the property and maintain it in good condition. A minimum age of 69

years is recommended for entry into the plan, as the monthly payments

drop sharply for entitlements at lower ages. Variations allow the

senior annuitants to retain some equity in the home. There's a

corresponding reduction in monthly payments, of course, but this way

the homeowner secures part of the inflation-induced depreciation of

home market value.

In France, a personalized variation of

the split-equity plan has been in effect for decades. This "vente en

viager," as it's called there, is a transaction between two parties

arranged through a notaire — I assume that's like a notary public in

British Columbia — specializing in property matters. The senior citizen

or couple sells their property to a buyer, and the price, less a down

payment, is divided by the seller's life-expectancy. The buyer then

pays the seller a monthly annuity which continues until death,

whereupon the payments cease and the property belongs to the buyer.

Canada and the United States, meanwhile, there have been studies upon

studies. We've been slow to develop equity conversion loans for

seniors. The main reason given by our Central Mortgage and Housing

Corporation officials is that life insurance companies here are not

involved in the residential mortgage market. In this country a reverse

mortgage transaction would have to be carried out in two steps instead

of one as it is in the United Kingdom, France, Italy and so on. This

gap, or deficiency, or lack in our financial institutions, could be

overcome by some government agency, federal or provincial — CMHC

perhaps, at the national level, or an agency set up by Lands, Parks and

Housing here in B.C. — to make payments against properties held in

trust and in the interest of the elderly.

There are several

concerns. We would have to be sure that the annuities paid under plans

of this kind would not be subject to income tax, as they would be

proceeds from savings, savings accumulating after tax. There should be

no income tax liability in this case, but legislation may be required

to insulate the recipient of the annuity from that liability. Also, I

think, in the initial stages anyway, it may be necessary to have a

government agency involved because the differences in interest rates in

and out of the plan should only cover the cost of the plan's

administration. It should not be in excess of that; there should not be

any undue profit taken in instances of this kind.

Mr.

Speaker, there are numerous variations on the U.K. and French plans

possible. Central Mortgage and Housing has done various studies. I

would like to think that our own people here would look at this

opportunity, as I see it, for the elderly, and hopefully come up with a

plan which could be used here in British Columbia.

MR. COCKE:

Mr. Speaker, I want to commend the member for North Vancouver–Seymour

respecting the idea that he's presented today. We have two problems in

this country. We have had a better economic background than Europe has

had over the years in terms of people's ability to build an estate,

property and so on. We have two groups here. We have one group that is

property poor, as the member points out. Generally speaking, that's

their only asset.

We have another group who have, by virtue

of having been brought up in the Depression, saved and saved, and they

not only have property, they also have liquid assets. But generally

speaking, those liquid assets are in bonds and that kind of very safe

investment where that money isn't circulating. So I think we have to

encourage them to use their assets, travel around the province and

spend some money so that we can help our economy. Then we have the

other group, who are, as the member points out, property poor. I have

no objection, and I'm sure that we have no objection on this side.

could also be used, in my opinion, as agreements between heirs and

their parents, the parent being late into their sixties and the

children will look forward to inheriting something that they haven't

worked for. It might be an idea to encourage those children to pay in

advance for what they're hoping to receive and that way assist the

parents in surviving the rest of their lives.

The only

concern that I would have around this is that it would have to be,

regardless of how you go into it, tightly legislated. The most

vulnerable people, probably, in our society are senior citizens.

Virtually every week you pick up a paper and find out that senior

citizens have been ripped off by some construction outfit that has come

around and said: "We'll put vinyl on the outside of your house." By the

time they're through, they find they've got a big mortgage that they

can't handle, and they've been very badly deceived. I would worry that

con-men, con-people, would get into the business of annuitizing homes

in this way and having agreements that would not be fair.

Therefore

I feel that the member's suggestion, while it's great.... I think it

would have to be most tightly legislated. The government has to be

involved in this, as much as some of us feel that government should

stay clear of this, that and the other thing. This is one area where I

believe the people would have to be really protected. Were they not

protected, the opportunity to deceive here would be too great a

temptation for some people in our society, unfortunately. Some of that

property that the seniors own is very valuable property.

[ Page 7457 ]

Therefore it has to be protected; they have to be protected against people who might abuse the system.

question, as far as I'm concerned, that where it's applicable, this

would be an excellent idea to help people, and it would help us all. It

would help society spread the income around so that people can live

gracefully in their twilight years, as opposed to having to pay taxes

and so on and so forth, holding on for dear life so that their kids,

who are generally.... We're talking about an age where their kids have

come through a pretty good time too. We're talking about the fifties

and sixties and so on, and they really don't need all they're going to

inherit.

I suggest that it's a splendid idea, providing it's very tightly controlled.

MR. DAVIS:

Mr. Speaker, the hon. member for New Westminster says that government

should be involved. I agree with him. In the United Kingdom, they have

building societies. Their charters are tightly legislated. We would, at

least, have to have legislation governing the private sector which

involved itself in this kind of activity.

I think

initially, though, Central Mortgage and Housing nationally, or a small

agency provincially, should administer a plan of this kind, get it off

the ground. Having established the guidelines, perhaps the province,

the nation, could legislate in this area and ensure that there were no

ripoffs.

[Mr. Ree in the chair.]

It could cover

a substantial part of the population. Statistics Canada tells us that

four out of five senior citizens own their own homes in Canada; the

British Columbia figure is slightly higher than the national average.

The great majority of those homes, when owners reach age 65 or later,

are mortgage free.

So there is a substantial inventory of

assets out there; they're not at all liquid. It is very difficult for

our senior citizens to draw on those lifetime savings. Therefore, like

the hon. member for New Westminster (Mr. Cocke), I would urge that the

provincial Minister of Lands, Parks and Housing have someone look hard

at this opportunity.

[11:00]

ARMED SERVICES PENSIONS

MR. MITCHELL:

Today I'd like to talk about a special group within my constituency

who, because of a change in the federal unemployment insurance

regulations, are finding themselves in a very extreme position; that

is, retired members of the armed forces and the RCMP.

think it is important that we look at what type of personnel we do need

in the armed forces. Basically, we need a young, bright and active

group. To maintain that standard you have to have an early retirement,

and many people are retiring from 42 to 50 years of age. Part of the

recruitment package in Canada to attract personnel into the armed

forces is that you have an early retirement pension and then you can go

on to a second career. All through their years of active service — 20,

25, 30 years — they have been led to believe that at the end of that

career they would have a resettlement package; that they could move to

whatever part of Canada they felt was the best place to retire to, and

buy a home. Many of them, because of the job, travel throughout Canada,

or into Europe or to Cyprus, and are living in what is commonly called

PMQs, or military housing. So they do not have that opportunity to buy

a home and settle down.

So when they get to that age of

retirement, what has happened? The federal government has changed the

regulations so that the pension they've built up over the many years of

service is classed equally with unemployment insurance. Before, they

could collect the unemployment insurance that they had been promised

for the last 20-odd years; that has been denied them. Although they

have paid into UIC.... They have resettled. Many of them have planned

to build, to buy a home. They have been banking on the pension to make

the mortgage payments, and on their second career to support their

families.

We in Canada have never really accepted the

of dole system. We have always encouraged people to invest, to build up

a second.... I guess we could say a second safety net so that we can

live in dignity. The armed forces have been actively counselled to do

that. Because of the change that came into effect this year, the

federal government cut off their rights to collect UIC, but it is still

demanded that they pay. When they're in the armed forces, or if they

take a second job and are working in a second career, they still must

pay their UIC.

If they had taken their pension and invested

it in rental properties — or anything — they could collect the rents

and the income from those investments. But because it is classed as a

public pension, they cannot collect that pension and also collect the

UIC payments that they have paid for, or the UIC payments that they are

forced to pay in the future. It's like paying fire insurance on your

house, and then when the house burns down they say: "Well, too bad. We

can't pay it." In fact, the situation is worse than that. We had people

who were collecting it, and then all of a sudden, on January 5 — I

believe the date was — it was cut off. That's like if your house burned

down, you had a contractor in and he got it half constructed, and then

they say: "We're not going to pay any more. We're not going to honour

our insurance. We're not going to honour our commitment."

There

are some real horror stories, particularly in my area, because my area

is the centre of the armed forces on the Pacific coast. We have people

who have retired, who have these mortgages to pay. The large proportion

are younger people; they have younger families. They're in their second

career, they're out of work, and all of a sudden they're cut off their

UIC, and their pension is already committed to their mortgage.

There

are other horror stories of families who have broken up, and part of

the marital settlement was that the wife took the pension, and the

husband has gone into a second career and all of a sudden he's out of

work. He would normally be able to collect UIC from his second career,

but though he's been paying it all these 30 years, he is denied the UIC

benefits. When they are in that position, all the Unemployment

Insurance Commission says is: "Go to your wife and see if she will help

you." This isn't right. People who have joined the armed forces, they

have served Canada, all parts of the world.... There has to be a

different phase-in policy if you're going to change the regulations. I

won't get into an argument on the legal position, if it's right or

wrong, but it's morally wrong, and I feel it's important for that

group. A lot of that group sit around here as attendants. They have

served their country, and today, though they have their second

[ Page 7458 ]

jobs and are paying their payments, they are not allowed to benefit.

call on the government to bring pressure on the federal government to

rethink the position they have put a large group of people in British

Columbia in. They have changed the goalpost in the middle of the game.

They have left people who have been counselled and planned and promised

by Canadians to depend on it, to plan for a future, and they are cut

loose.

MS. SANFORD: I had assumed that some member

of government might give some response to this, because this is a very

important issue that is affecting some 20,000 people in our province. I

know that legislatures in other parts of the country have made an issue

of this, and yet we have no response from the government at all to the

statement made today by my colleague the member for Esquimalt–Port

Renfrew.

There are 20,000 people in this province, and

another 150,000 people across Canada, that are being affected by these

changes introduced by Flora MacDonald. Within my constituency it is a

very important issue, because as you may know, Mr. Speaker, Comox is

one of the largest air bases in Canada and hosts a very large

contingent of armed services personnel. In addition to that, we have a

large number of RCMP people who are going to be affected by this

legislation as well.

The argument, I think, that this

government should be making to the government in Ottawa is that because

people are in the armed services and are forced to retire at an early

age, their pensions are often inadequate. Mr. Speaker, I think that in

your constituency as well as in every constituency in this province,

people recognize how difficult it is to find a second job when you have

already reached the retirement age, even if it is an early age of

retirement, 40 or shortly after. We know that there are no jobs for

those people, and if they do come up with a job it is usually a very

low-paying job, which means that the Ul that they will collect will

also be low. Yet these are the people who have very high expenses at

that time in life, because it is very often the time when their young

people are teenagers, their children are at the teen-age level, or they

are entering university. Now as a result of those additional expenses,

they are asked to deduct from the small UIC payments they are likely to

get — if they've been lucky enough to find a job — the pension that

they have paid into and the pension that they deserve. It's an unfair

situation, Mr. Speaker.

The other problem, of course, is

that many of these people are faced with relocation costs at precisely

the same time. As my colleague pointed out, they are shipped all over

Canada, sometimes into Europe. Many of them are living on air bases

right now in PMQs which they have to vacate once they are out of the

armed services. These people should be entitled to full Ul benefits if

they are fortunate enough to get work.

I certainly hope

that the government will take some action on this and make the views of

those 20,000 people who are now banding together, raising money to take

this case to court — that the government of British Columbia will

support them in their efforts, as other legislatures have done.

MR. MITCHELL:

Mr. Speaker, I must go on the record that I was shocked that the

Minister of Human Resources (Hon. Mr. Nielsen) sat in this House and

did not stand up and give any support to people whom he is watching the

federal government legislate into poverty This is what we are setting

up in Canada, a legislated level of poverty at the UIC level. Granted,

it's larger than the welfare level in some cases, but in many other

cases it is not. I feel that this government is completely unbelievable

about what is needed to get this economy going.

We have in

my riding a young lawyer who is an alderman in Esquimalt, Moe Sihota,

who is taking class action with the veterans, the members of the armed

forces, to fight this issue through the board of referees, through the

federal court umpire, and it may eventually be appealed before the

federal court of appeal. I feel that if one alderman, working out of my

constituency office and Jim Manly's constituency office, can give that

type of leadership.... The government is so insensitive to 20,000 of

the citizens of this province, and they sit there and do absolutely

nothing. The ex-Provincial Secretary will go out on a pension of

$39,000 or so a year, and he won't have to worry about a second job

because he is at the age where money is not important. But when you

have people 42, 45 or 50 years of age who are denied all the benefits

that the other residents of Canada have, and who have given their best

working years, and the government does nothing....

I know

there are at least 20,000 people out there who will listen to the

silence that this government gave in support of their cause. And

they'll know that this government is solely ready and prepared to go

along with the Conservative government to legislate poverty at the

lowest minimum wage possible. This is the sort of stuff where if we

don't have cooperation and we don't have these issues that arise at

times pointed out to the federal government and a stand taken on, then

we will never have the continuity of full employment that we need. We

must build in something better than the safety net of poverty. We must

give people that opportunity to build that second career, to build for

investments, to be able to live in dignity. I thank you, Mr. Speaker. I

will take the message of the silence of the government to the

constituents.

HIGH-TECH INDUSTRY IN B.C.

MR. REYNOLDS:

It's a pleasure to get up this morning and talk about the high-tech

industries in British Columbia. High technology in B.C. Is an exciting

story of dynamic economic growth and dramatic scientific breakthroughs.

An industry barely known some 15 years ago is today providing new jobs

and new opportunities. It truly represents the progressing front in our

province's fight for economic renewal.

[11:15]

High

technology is one of the fastest-growing industries in British

Columbia. The software sector of the industry alone averages a growth

rate of 25 percent per year, and in 1985 saw sales of $200 million.

Between 1982 and 1985 the hardware sector's total sales increased from

$250 million to more than $640 million. Some high-tech companies double

or even triple their sales annually. The success of high technology in

British Columbia contributes to more than just economic growth.

Economic

renewal also means economic diversification. B.C. must diversify its

economic base to meet more successfully the challenges of the coming

decades. High technology is crucial to this process of economic

diversification, as the industry creates many interesting and diverse

companies.

[ Page 7459 ]

existing companies become more firmly established, they in turn create

demands for other products within the industry which can be made

locally. The jobs created by high technology are many and varied.

Although 60 percent of all high-tech companies number fewer than ten

employees, it is these very companies which grow the fastest. A good

example is Softwords of Victoria. A finalist in the 1985 Canada Awards

for Excellence, Softwords has increased its employees from five to more

than 25 over the span of three years. That is an astonishing fivefold

growth of jobs. Examples of such dynamic growth are many.

The

fastest-growing high technology companies are those that create unique

and original products. Often these products are developed to enhance

the operation of a resource industry within the province. British

Columbia has a particular advantage in developing these kinds of

products due to the strength of our resource-based industries. Geomin

Computer Services of West Vancouver exemplifies the type of company

that is achieving great success in this area. Geomin has developed

excellent software for use in the mining and engineering industries.

Software was developed in response to a provincial mining project, but

its application is not limited to just British Columbia. An

international market for the product exists. In fact, Geomin has signed

a sizeable contract with China to export the software. Such a contract

enhances British Columbia's value as a Pacific Rim trading partner.

Burnaby, Newtec Industries Inc. In 1984 had five employees and sales of

$225,000 a year. It is in the business of making fume detectors on

recreational vehicles, boats, etc. Over the last two years the number

of employees is up to 24 from five and is doing sales of $1.1 million

and expanding every month. They are also becoming the standard

equipment in many international companies that make recreational

vehicles and boats.

Another company that has recently won a

major contract with a foreign country is Photofax of Kelowna. Photofax

will be selling $(US)4.5 million to Bulgaria. The Bulgarians are also

building a $(US)2 million facility in which to house this equipment.

Photofax beat out such competition as ITT of West Germany and Xerox of

Great Britain to secure the contract. Company president Mr. Bob

Asseltine says that he believes this is in part due to the good

reputation Canada has as a trading partner, and it enjoys it in many

other areas. British Columbia can pride itself on the

part it plays in

maintaining and furthering this good reputation.

Entrepreneurs

like Mr. Asseltine are the driving force behind the success of high

technology in British Columbia. Our Social Credit government applauds

their ingenuity, hard work and enterprise. To further encourage these

entrepreneurs and others like them, the government has established such

bodies as the Science Council of British Columbia, the Discovery

Foundation and the discovery enterprise program. These programs provide

a vital helping hand especially to young people and young companies

seeking to establish themselves in the market. The rate of economic

growth in high technology, Mr. Speaker, has given new meaning to the

initials of R and D. As well as standing for research and development,

they now also signify renewal and diversification. High technology is

contributing to a bright economic future in British Columbia, and that

is good news for everyone.

HON. MR. McGEER: Mr.

Speaker, I waited vainly to hear from the opposition agreeing with the

member for West Vancouver–Howe Sound about the dynamism of high

technology in British Columbia and the contribution that it is already

making to the future economic growth of our province. I associate

myself with everything that the member for West Vancouver–Howe Sound

has said, and I can only say that if anything he was too modest about

the accomplishments and about the future.

We will, Mr.

Speaker, soon be releasing a report giving a quantitative assessment of

just what the Science Council grants have done in terms of economic

return to the province of British Columbia. I think it's the first time

any government has attempted to make this kind of economic quantitation

as a result of the science investment. I have seen the figures from

that report, and I can only say that it will astonish the members of

the House, and it will astonish many members in the government. It does

say, however, in our own experience in British Columbia, why it is that

jurisdictions that have invested in science and companies that have

invested in science have obtained for themselves returns far beyond

their wildest expectations.

In addition to this direct

investment of science grants, we have been supporting an innovations

office through the Science Council and the Discovery Foundation joint

sponsorship. This isn't related as much to high advancing science as it

is to the small ordinary inventor who has a new product that he wants

to develop.

The result of that, quite apart from science

investment — just counselling and giving a little bit of assistance —

has produced the equivalent since its inception of a megaproject in

British Columbia, comparable almost in its total effect to that

produced by northeast coal, itself a stunning success. But this is

diffused in small companies — several hundred of them — which in total

have had this economic impact in British Columbia. That's a second and

rather small part of our science policy here in British Columbia.

Then

in addition to these two we have the discovery enterprise program,

which is providing the bridge funding for those enterprises that are

now ready to step into the larger market of world competition. All of

this adds up to the most rapidly growing sector of industry in British

Columbia, and one which I have predicted in the past and predict now

with even more confidence will become by the turn of the century the

province's largest employment sector.

MR. REYNOLDS:

Mr. Speaker, the minister said I was a little modest in my initial

comments. I wanted to make sure that he would have a chance to get up

and talk eloquently about his department as he has done such a great

job, but it was interesting that we didn't hear from the doom-and-gloom

boys across the....

Interjection.

MR. REYNOLDS:

Oh, you get up and talk about the positive things, about what this

government is doing in this province, especially in the high-tech

areas. The Minister of Finance (Hon. Mr. Curtis) is sitting here to

listen to the Finance critic for the opposition, which event will be

happening immediately after I sit down. I'm sure we'll hear the doom

and gloom. We won't hear about some of these good high-tech things that

we're doing in this province, the jobs that we're creating in this

province, the employment that

[ Page 7460 ]

we're

creating, the new British Columbia that we're building. We'll hear the

doom and gloom. It's unfortunate when they have this opportunity.

Where

were they? Tongue-tied? They couldn't get up and.... I would have

expected them to at least find one or two that maybe went broke. In any

good economy any free enterpriser has the right to start a business and

go broke, and I'm sure there's a couple that did. But, my God, they

didn't even get up and talk about that.

Once again, I want

to say congratulations to the minister and to our government, who have

done so much hard work in these high-tech industries. They are

blossoming around the province. There are some exciting stories around

the province. To the Minister of Finance, with his great budget

yesterday — it will encourage even more high-tech development in this

province — congratulation goes also.

I just know that we

will continue over the next years and past the next election to keep on

building this province the way the people of British Columbia want it

built, with new high-tech industries, and to keep this province going

and flourishing. I'm looking forward to the next election, when we can

talk to the people of British Columbia about these high-tech

industries, because people are working out there in the Chemainuses and

Squamishes — in the north, the east, the south — in all these new

industries. They know what this government is doing; they know we're

doing our best. When you look at the rest of Canada, we're just doing a

great job in this province in building with these industries. It's

exciting to look at these, especially exciting when you have to sit,

probably for the next two hours, and listen to the Finance critic for

the NDP with the doom and gloom. They won't tell us what they would do

for this province; they'll just get up with the doom and gloom about

what they think we've been doing.

HON. MR. NIELSEN: Adjourned debate on the budget, Mr. Speaker.

ON THE BUDGET

(continued debate)

DEPUTY SPEAKER: The Chair recognizes the member for Nanaimo.

Interjection.

MR. STUPICH:

The Minister of Finance notes underwhelming applause. For a moment I

thought he and I and you were going to be the only ones here this

morning, but we've done a little better than that. He had a much wider

audience yesterday. I envy him that.

Well, here's a quotation:

" ...and we believe" — we being Decima Research,

the Progressive Conservative Party, the Social Credit Party, etc. — "that

we can take what the pollster is telling us and change your mind. We can move

you to do something that you may not have agreed on as a logical thing to do.

I know that sounds provocative and unrealistic, but I can prove it to you, because

we've done it. I've done it in campaigns where, on an issue basis, I've

been able to persuade you, notwithstanding what you told me a minute ago. We

can move you from one side of the ledger to the other."

That was Patrick Kinsella addressing SFU marketing students in November 1984.

was with that theme in mind that the fiction writers who prepared this

budget drafted it as it was presented to us yesterday. It is a

provocative and totally unrealistic budget — unrealistic in its

portrayal of the state of the province and provocative in the extent to

policy, about the state of the economy and, ultimately, about their own

powers of observation. The mission of this budget is misinformation and

deceit. It attempts to fool people into believing that the government

has a magic formula to turn the economy around without an economic

policy. In the end this budget will fail in its mission. It will fail

because it is patently unbelievable. It represents an impossible

combination of policy choices all at once. Everyone knows you can't

increase spending, cut taxes and balance the budget simultaneously.

Everyone

knows that only a desperate government would attempt to pawn that one

off as government policy in British Columbia in 1986. Moreover,

everyone knows that the Socred government is interested only in

bluffing its way through until the next election. There is no effective

economic plan coming from this government. How could there be? There

isn't even a commitment to being truthful to people. If you don't

believe me, listen to what is written by one of our airport-bookshop

economists, Milton Friedman:

recent election in a Canadian province illustrates our generalization

in a rather different way, one that clearly brings out a major reason

why the generalization is valid and also bears particularly on the

prospects after re-election. William R. Bennett was recently re-elected

for his third term as Premier of British Columbia. Immediately after

his re-election he announced a sweeping program to reduce the role of

the provincial government. He proposed to cut the number of government

employees by 25 percent — that's all of the employees in the public

sector, some 75,000 people — and to reduce spending on a wide range of

programs. In addition, he abolished outright a number of politically

sensitive commissions. There has, understandably, been an outcry of

rage and frustration from threatened civil servants and other groups

directly affected by his actions.

[11:30]

"Now

Mr. Bennett could have introduced these measures before the election

instead of immediately thereafter. Why didn't he? The answer is so

obvious that it is embarrassing to spell it out. Had Premier Bennett

spelled out his intention to cut personnel and funds before the

election, he would have aroused immediate and vocal opposition from the

special interest groups affected and only lukewarm and far less vocal

enthusiasm from the taxpayers affected in general. By waiting until

after the election to spell out his program, Premier Bennett could hope

that the bad effects on the concentrated groups would dissipate before

the next election, while the good effects on a broad constitutuency

would have time both to take effect and to be recognized as the result

of the measures he took."

That's from Milton and Rose Friedman's Tyranny of the Status Quo , Harcourt Brace Jovanovich, 1984, pages 6 to 7.

[ Page 7461 ]

What

can you expect of a government which was brought to power on a

deliberately hidden agenda? Forthright honesty? I think not, Mr.

Speaker. In the budget speech yesterday and in the throne speech and in

the Premier's televised speech before, the message has been the same.

Unfortunately, the government does not see the importance of the values

of truth, honesty and a well-informed public.

The

relationship of elector and elected is a powerful thing in a democracy.

There comes a time in the life of every democracy when the government

finds it must call upon that bond and seek extraordinary performance on

behalf of the public good. This government has shattered that bond. It

has no reservoir to draw on. It has lost a significant part of the

moral basis for governing. In a sad way it has destroyed a part of the

social fabric of our province. But sadder still is the realization that

this budget is designed to put over another one, to help the government

bluff its way through one more time.

This budget cannot be

relied upon as an accurate estimate of anticipated revenues and

expenditures. You can't trust it any more than you could trust the last

budget before the 1983 election. Remember: actual revenues $703 million

less than estimates; actual expenditures $281 million over estimates; a

total deficit of $984 million in the face of a predicted break-even

position — almost $1 billion. What's more, it was the first deficit for

B.C. In over 30 years. What's more again, if I may abandon my notes for

a moment, Mr. Speaker, the deficit in that period ended March 31, 1983,

together with the borrowing of the Crown corporations in that period,

was greater than in any other single year in the history of our

province and was 20 percent greater than the total borrowing of all of

the Crown corporations during the four-year period which included the

three-year reign of the NDP. In that whole four-year period, the Crown

corporations increased their debts by $1.8 billion. In this one year,

the year in which the government predicted a break-even position, they

borrowed an additional $2.2 billion, 20 percent more than was borrowed

during the whole four-year period during which the NDP were in office.

That budget was not to be trusted any more than the government which

presented it. It was part of the Kinsella-Premier-Minister of Finance

connection designed to fool the voters rather than to inform them.

these remarks, I will examine the budget record of this Minister of

Finance. I will comment on the economic fortunes of the province and

examine the budget proposals. I will discuss the economic mistakes of

the government and present some concrete solutions on behalf of the New

Democratic Party. It is a history of budget deficits. We should not be

surprised that this budget attempts to pull the wool over the eyes of

the public. Some of us should, I suppose, be less surprised than we

are, given the politicization of the Ministry of Finance under this

government.

I recently reviewed the budgets of the past

five years. There is a pattern: a history of deceit. In 1981 the

government was — and this is a quote — "not prepared to consider

borrowing to pay operating expenditures." The record of deficit

budgets, of course, has continued despite the bold statements made by

the Minister of Finance. Indeed, they started then. Since he made that

statement, almost $5 billion has been borrowed to pay for operating

expenses alone.

The Premier recounted an important

initiative taken to remove transit services from B.C. Hydro and "put it

where it belongs, in the hands of local governments but with the

support of generous and dependable provincial funding." It is ironic

that in the lead-up to this budget, the provincially dominated transit

authority for greater Vancouver raised fares and doubled the surcharges

on Hydro bills to pay for a transit budget that has increased by 125

percent. The citizens of greater Vancouver are paying 61 percent of the

cost of transit, compared with the province's contribution of 39

percent. Yet in contrast to the promises of 1981, they have absolutely

no control over the miserly and unpredictable financial directives

received and handed down from the minister responsible.

The

1981 budget made some truly extraordinary promises regarding the

northeast coal railway line, which the minister of international travel

called a tremendous success. Mr. Speaker, we can't afford any more

successes like northeast coal. At that time, the Bennett government

predicted that "financing for this line will take the form of

provincially guaranteed debt, issued on behalf of the BCR. A surcharge

on all rail shipments of coal will be used to repay the debt." Recent

calculations show that even if coal contracts are fully honoured, the

surcharge would cover only one-half the cost of the rail line. My

colleague from Vancouver East has consistently shown, and now the

member for North VancouverSeymour (Mr. Davis) has written, that the

surcharge will not be fully operative until 1989, by which time there

may be no more coal left.

The 1982 budget — the government

was resisting "the borrowing trap" and preserving the AAA credit

rating. Well, the trap baited its lure, and the AAA rating is long

since history. In fact, no government in B.C. has ever squandered the

credit of the next generation the way this one has. They have

quadrupled the debt in four years. No one can possibly sustain that

pace of borrowing, and with nothing to show for it. That's the tragedy

of it. It's not just that they've borrowed; they've borrowed us into

tremendous debts, and there are absolutely no positive accomplishments

to show for it.

AN HON. MEMBER: The Coquihalla Highway.

MR. STUPICH:

The Coquihalla Highway has been mentioned as their one positive

accomplishment. May I remind you, Mr. Speaker, it's the only toll

highway in the whole of Canada.

This budget was to carry us

through "without harsh and inequitable sacrifice" — that's the way it

read — "and would pave the way to recovery." The facts show that there

are now 70,000 to 80,000 fewer people working in B.C. than there were

five years ago. Is this "without harsh and inequitable sacrifice?" Is

this "the way to recovery?" Mr. Speaker, you can't trust their budgets.

This

budget grossly overestimated revenue. It overestimated economic

activity in the province by a factor of some $4 billion, despite a

multitude of respectable economic forecasts both inside and outside the

government. The 1982 budget was presented to us as balanced between

revenue and expenditures. Within a few hours I predicted the deficit

would be at least $500 million. It finally ended up at $958 million — a

politically inspired budget, not an accurate estimate.

Nineteen

eighty-three — this was the big lies budget. The first big lie was that

restraint leads to economic recovery. Where's the evidence of that?

What recovery? I was interested to read a story of a meeting where

David Tafler, the publisher of the Financial Times , was talking about Canada

[ Page 7462 ]

as a whole, the prospects for Canada and the need for something to happen.

"The program must emphasize British Columbia, and B.C.'s

forest industry. How can Canada press ahead as a whole when British Columbia

is on such a losing streak?"

This is dated February 20, 1986 — just four weeks ago. He told those at the

chamber luncheon:

"We see hard numbers which point to a region of the country

which has been almost crushed from the economic standpoint. The numbers are

stark. B.C. unemployment, now 14 percent, was under 7 percent in 1980. The province

once had the highest wages in Canada, but now it has pay raises among the lowest.

In 1985, for the fourth year in a row, B.C.'s economic growth ran last,

or near last, among all ten provinces. And the real volume of production last

year was the same as it was for nearly five years earlier."

Mr. Speaker, that is the product of restraint, restraint that was supposed

to lead us to recovery. And that's recovery, as Mr. David Tafler of the

Financial Times describes it. We predicted that the result would be a downward

pressure on economic recovery and direct job loss to the economy. Unfortunately,

our predictions were only too accurate.

The

second big lie in the budget was to say that the government had no

choice. "Restraint" was the term used to get rid of programs that had

been a thorn in the side of the Bennett government for a long time:

programs like the Human Rights Commission and the human rights branch.

The Bennett government abruptly and secretly ceased all direct lending

programs for small business under the restraint program. In fact, only

one-quarter of the funds promised under these programs was ever

delivered. It was "restraint for recovery." Following publication of an

error-ridden pamphlet, this slogan was dropped. Most of the province,

most of the country and much of the western world is fully aware that

the restraint package set our economy back on its heels and killed a

fragile recovery in 1983.

Now for 1984. This is the year

the Bennett government trumpeted "the first-ever reduction in

government spending." You can't even believe that. The fact of the

matter is that spending increased in 1984-85 by $382 million. Some

reduction. That was the year that the budget deficit jumped more than

$300 million over the budget figure. They've been worse, but that's

pretty bad. A temporary measure called the health care maintenance tax,

in the form of an 8 percent tax on personal income, was brought into

being in 1984. British Columbians are still paying for this "temporary"

tax.

Nineteen eighty-five saw the emergency of substantial

tax breaks for business, but nothing for their customers. This budget

committed the taxpayers to fund a $1 billion tax expenditure plan over

three years with absolutely no indication of where the money would come

from.

New programs for small business, introduced in 1985,

only provided partial loans for manufacturing operations, and there was

nothing for the bulk of small businesses, which are in the service

sector. Who knows to what extent, if any, they will ever deliver on

these promises? The myth of Social Credit as a government for small

business exploded when business bankruptcies in B.C. rose by 166

percent in the last five years, compared to Canada as a whole, where

they have dropped by 9 percent. There is a history of misleading

statements in budgets from this government.

Before dealing with the budget statement from yesterday, I want to comment briefly on the economic situation in our province.

The

outlook for economic activity in British Columbia is very mixed. On the

one hand, some sectors show the first modest signs of a fragile

economic recovery. The recovery is slow, considering that the B.C.

economy is in such a depressed state. Forecasting opinion holds that

economic growth will be somewhere between 3 and 4 percent. Employment

opportunities are predicted to improve during 1986, but they seem to be

tied to the short-term service sector jobs at Expo 86. Unfortunately,

the consensus also holds that there will be a steep downturn and a

decline in employment in 1987.

[11:45]

For

the first time since 1981, there was actual growth in retail sales in

1985. Tourism growth has been favourable and is likely to be very

strong in 1986 with the influx of tourists for the world's fair, and a

projected growth of 3 to 4 percent in real disposable income. For the

second time in this decade, B.C. Is poised on the verge of economic

recovery. On the other hand, there are a number of specific programs

which have arisen and which, I regret, the government has not dealt

with in this budget.

On March 4, more than two weeks ago,

Statistics Canada reported it had completed its survey of investment

intentions among investors. The results are a disaster for British

Columbia generally and for the budget in particular. What has happened

is that public and private capital spending declined almost 40 percent

in real terms between 1981 and 1985. A recovery was hoped for in 1986,

but StatsCan reports that investment in B.C. will again decline in 1986

by 6.7 percent in nominal terms.

The Minister of Finance

feels confident in ignoring this information. He has forecast an 8

percent increase. StatsCan says it's going to decrease by almost 7

percent; the Minister of Finance bases his rosy projections on his

estimate that investment will increase by 8 percent. That's a

difference of almost 15 percent. The authoritative data from StatsCan

shows that by the end of this year, investment will have dropped more

than 44 percent below 1981 in real terms. This news comes as a shock to

many forecasting agencies, which probably believed more than they

should have from this government's propaganda.

colleagues and I in the New Democratic Party see clearly that there is

a need to do something in this province which will return some degree

of confidence to private investors. The disastrous investment climate

is reflected in the resource sector. Continuing low commodity prices

and high costs relative to competitors have made it difficult for

resource industries to absorb new provincial taxes. Temporary relief

has been obtained for some of the closed mining operations through the

critical industries program. The participants know that this program is

a temporary one, and know that the Bennett government would follow a

familiar pattern if it became re-elected. The low value of the Canadian

dollar relative to the American dollar makes many products competitive.

Under these circumstances, protectionist measures continue to be a

constant concern if B.C. wishes to maintain its share of the U.S.

market.

Everyone who thinks about it realizes that we need

a long-range industrial strategy to meet the competition. This

government cannot expect to be bailed out forever by currency

depreciation. The world glut of coal will dampen any

[ Page 7463 ]

hope

of that sector recovering. Just yesterday, more price and volume cuts

for southeast coal were announced. The mistake in developing northeast

coal was in its timing. A perfectly useful and necessary economic

development can be a disaster if it is timed for political expediency

rather than timed to meet sound economic objectives. That's the crime

in this government's economic policy.

So the economic picture is very mixed for 1986. The longer term is a different story, and I'll deal with that later on.

Budget

outlook. Equally important is the state of the provincial government

budget. Last year, without ever revealing where the money would come

from, the Minister of Finance saddled this year's budget with a $340

million revenue hole in terms of new tax concessions to industry. There

was a heading: "Revenue: the more you give away, the more you get." The

revenue concessions: corporation capital tax, gasoline tax, small

business employment tax credit, non-residential school machinery and

equipment, non-residential tax ratio reduced, freeze on water rental

rates and others. Total tax concessions to business and industry: $382

million. Increased revenue from B.C. Rail tax: $12.5 million. Insurance

premiums and tobacco tax total increases, leaving a net tax expenditure

of just about $340 million.

Mr. Speaker, I think it's worth

noting that among these tax expenditures, some $18.2 million is being

raised — additional taxes from individuals — while business and

industry are getting welfare to the extent of almost $358 million.

Where are the jobs that were supposed to come from this tremendous

giveaway to business and industry? There are more people unemployed

today than when this program was introduced in the Legislature a year

ago.

The 1985-86 budget produced a deficit of $890 million.

Yesterday the Minister of Finance confessed that the actual figure will

be closer to $948 million. But what about 1986-87? The budget forecasts

a deficit of $875 million, just $15 million lower than the deficit that

was forecast a year ago. So when the minister talks about the reduction

in the deficit.... Let's compare the budget figures. The budget deficit

estimated last year was $890 million. This year it's $875 million — a

decrease of $15 million. Mr. Speaker, I intend to show you that that

figure will not be realizable.

Let us look first at the

revenue side of this picture. Personal income tax revenue has been

growing at an annual rate of 2.1 percent over the last five years, but

grew more rapidly, at an estimated rate of 8 percent, in 1985-86.

Clearly, part of this increase was due to the two surtaxes imposed. The

imposition of a surcharge will boost the rate of increase in income

taxes when it's introduced, but this growth rate levels off immediately

thereafter. Even if it did not, and income tax grew at the same rate as

in 1985-86, personal income tax revenues might go as high as $2.165

billion. But the minister has pegged them at $2.35 billion. In other

words, the revenue forecast exceeds an optimistic mark by almost $200

million. The budget is padded. This figure cannot be trusted.

Corporate

tax revenues were overestimated in the 1985 budget by $100 million, or

25 percent. The minister has failed to explain this discrepancy. The

third-quarter financial statement noted that the federal government had

decreased payments during the first two months of 1984-85, but that no

such problem was expected this year. So why was the government wrong by

$100 million in this one item? And why hasn't that $100 million

reappeared in this year's budget? Could it be that this figure is also

padded, Mr. Speaker? When you have a budget which offers nothing but

tax breaks for investors — tax breaks? giveaways! — it's hard to see

the forecast 28.5 percent increase in corporate tax revenues being

realized, especially if you look at the forest industry and realize

that it will be five to seven years before they will be paying any

corporate income tax. This figure cannot be trusted.

Social

service tax revenue has been growing at a rate of 6 percent over the

last five years. The budget projects the growth rate will escalate to

10.6 percent. At the outside, this may be feasible because of the Expo

world's fair. But on January 23, 1985, the government said that $126

million of Expo-generated sales tax revenue would be used to offset the

then projected $311 million deficit of the fair. This statement, issued

under the name of Expo chairman Jim Pattison, represents the only

budget information yet given by the government. Why is there no

provision in the budget for funding the Expo deficit? This is the year

in which it would happen. This figure cannot be trusted.

Natural

resource revenues will again be a fairly unstable area of government

revenue during 1986-87. In the mining and petroleum industries revenues

will be below those of the previous year, due to the instability of

world oil markets and flat commodity markets. Coal and natural gas

prices will remain low. In 1985 the forest industry saw profits for the

first time since the major turndown in 1981-82. The industry should do

moderately well in 1986-87, provided high interest rates, a stronger

Canadian dollar and protectionism in the U.S. do not choke off this

sector's recovery. Revenues are not expected to increase, and I agree

with the government's assessment in this respect.

In terms

of other revenues, the government has forecast a huge increase in

lottery proceeds. We're going to gamble our way to prosperity. Booze

and gambling are the two growth industries under Premier Bennett. This

government has taken all the cash in tax increases; it has eliminated

job opportunities. Now many people have nothing more to look forward to

than cashing a social assistance cheque of some kind and gambling with

the proceeds. Lottery revenues were budgeted one year ago at $78

million; this year they are budgeted at $110 million. In addition,

perhaps a like amount will be turned over to Expo.

With

these assumptions, one would expect the budget to look vaguely like

this, Mr. Speaker. Looking at personal tax revenue, the budget figure

is $2.35 billion; I predict $2.165 billion. Corporate tax revenue:

budget, $0.406 billion; I say $0.350 billion. Social service tax

revenue: budget, $1.623 billion; I say $1.580 billion. Other taxes:

budget, $0.808 billion; $0.798 billion in my figures. Natural resource

revenue: $0.681 billion in the budget; $0.665 billion in my figures.

Federal transfers: $1.892 billion in the budget; $1.85 billion in mine.

Government enterprises: $0.43 billion in the budget; $0.42 billion in

mine. Other: $0.577 billion in the budget; $0.57 billion in mine.

The

total in the budget is $8.768 billion; the total in what I call

realistic figures is $8.398 billion. Then subtract the tax expenditures

inherited from last year's budget, in the amount of $340 million, and

we're left with actual revenue, which should have been presented to us

yesterday — realistic figures — of $8.058 billion.

preparation for this debate the NDP caucus research staff examined

various economic indicators and prepared forecasts of government

revenue under existing tax legislation. The estimate thus produced was

just under $8.4 billion. When the effect of tax reductions for

investors in the '85

[ Page 7464 ]

budget

was considered, the revenue estimate dipped to just over $8 billion.

Even this estimate might be considered optimistic, because it did not

take into account the decline forecast by Statistics Canada in capital

investment that I referred to earlier. Somehow the Minister of Finance

has managed to coax his fiction writers to produce a much larger

revenue figure of $8.768 billion. How he did this we'll never know.

This

year's budget revenues were reduced in the 1985 budget programs by over

half a billion dollars, according to the minister yesterday. The funny

thing is that the revenue effects of the '85 budget were supposed to be

$340 million in the '86 year. I'm not sure which figure is correct, Mr.

Speaker. That bears more analysis.

In this year's budget

the Minister of Finance has further reduced revenues by almost $45

million, yet he shows a revenue increase to the province of $593

million. Mr. Speaker, these figures don't add up. They cannot be

trusted.

Expenditures. The expenditures announced in the

'85-86 budget totalled $9.056 billion. The revised total, according to

the government, is $9.123 billion. The average increase in expenditures

has been 4 percent over the past two years. This year's budget calls

for an increase of $587 million, or just under 6.5 percent on an

estimate-to-estimate basis. The increase runs ahead of expected

inflation. There are, however, a number of strange items in the

spending estimates which need an explanation. Here, too, the rubber

numbers in the budget lack credibility. This is most obvious in the

three areas highlighted by the minister yesterday: health, education,

and forestry. All British Columbians know what they have been denied up

till now. They know that the taxpayer-financed polls show the

government is weak in these areas. So as in 1982 — history

repeats itself — we have special funds and new initiatives and all

kinds of smoke and mirrors to show some signs of activity. The working

people of this province who pay the bills for all this carry-on are not

going to buy it once again.

[12:00]

[Mr. Ree in the chair.]

Education.

The only case where the commitment to increased funding for education

is clear is in the minister's office, which has shot up 17.7 percent —

the largest increase in the ministry. Grants and contributions for

education as a whole, excluding the excellence fund, are down 1.01

percent to $16.6 million. The base funding for public schools is down

$24.5 million, comparing contributions to school districts, school debt

service, homeowner grant and non-residential property tax. Some of this

base funding shortfall will be made up by the $15 million allocation

from the excellence fund — the slush fund that's available to cabinet

to do with as they will, where they will, when they will. So the

shortfall is still about $9 million. A shortfall of $9 million is

hardly a major new commitment to education, as it was described by the

minister.

What funding does exist for the school system

carries a lot of baggage with it. The whole concept of putting the

Bennett cabinet in direct control of education funding decisions

through this fund is highly questionable, to say the least. Educational

autonomy at all levels is always a concern. That concern is a growing

one in our province, and rightly so.

Most other commitment

consists of promises for the future. Ordinary people have learned the

hard way that there is no guarantee this cabinet will provide anything

from the excellence fund for the next year. The power-grab is further

heightened by the erosion of base funds of school districts and by

making them compete for funds — $75 million left to allocate — against

other districts, colleges and universities; funds which may never be

allocated. Meanwhile universities, colleges and institutes are frozen

at exactly last year's level of operating.

The vote that

provides for special initiatives in the colleges and institutes and

other educational agencies has actually been cut by $1.8 million.

Lip-service to education. Again, portions of the budget that would have

been spent anyway are being transferred to the excellence fund so that

the Socred cabinet can have a photo opportunity.

For

example, the ministry published 16 press releases last week, all of

which claimed to release $4.8 million from the excellence fund for

student aid. "Student Aid Funds Doubled," screamed the headlines,

which was not quite the case. All that had been doubled was the

opportunity for more students to rack up a debt to get an education,

when this government should have been providing grants. Within this

government all the people get are new ways to get into debt.

Forests.

The Ministry of Finance has announced an increase in funding for

forestry, including a silvicultural initiative. We're pleased to see

that this government is finally beginning to learn — and I say that

with tongue in cheek — that forestry is not a sunset industry. We are

pleased to discover that this government has perhaps even been

listening to concerns and suggestions that our party has been making

strongly in this Legislature on behalf of British Columbians concerned

about the forest sector. So much time has been lost, and I'm afraid

we're looking at too little too late.

For example, help to

update our number one industry was turned down by the Socreds in the

form of federal money for a pulp and paper modernization program. As a

result, independent reports warned that our industry is stuck with

producing low-value products with outdated technology. Furthermore, we

have seen this government neglect to replant and tend our forest well.

NSR, non-satisfactorily restocked, land has increased by 50 percent in

the past five years alone.

Only last month the Premier

stated in a television address that forestry will no longer be able to

provide additional jobs for B.C., yet now the Minister of Finance tells

us that he wants to "emphasize that our basic resource industries will

be the backbone of the provincial economy for years to come."

The

question is: can we trust this government? Are they really turning over

a new leaf and committing themselves to properly managing the renewing

of one of the world's richest forest resources? Or is this just a

pre-election spending boost or a promise of a spending boost to give an

impression of some new commitment to forestry? Their record speaks for

itself. They cannot be trusted.

If we look more closely at

the $58 million increase in the Ministry of Forests budget it is worth

noting that some of this money was slated to rise in any case. For

example, about $18 million of this increase was planned for 1986 under

ERDA signed last year. Further, $9 million of that is actually federal

money, not a new provincial commitment. A further $8 million of this

budget increase is committed to silviculture.

In Mr.

Curtis' budget of last year, he cut $4 million from this crucial area

of forestry. Yet this year the minister is apparently trying to tell us

that he wants to make up for past mistakes. Their record speaks, Mr.

Speaker. They cannot be trusted. We have a serious concern with this

approach. A

[ Page 7465 ]

good

administrator does not just throw money at a problem when it becomes

apparent that he or she has made a mistake. There must be a system in

place to deal with this increased silvicultural funding to ensure that

taxpayers' money is used wisely.

Unfortunately, under the

restraint budget of 1983, the staff of the Ministry of Forests was

slashed by 35 percent. Is the ministry properly prepared to deal with

the new $61 million silvicultural project? Their record speaks. They

cannot be trusted.

Finally, the largest portion of this

increase in the Ministry of Forests' budget will be to establish what

the government calls "a forest stand management fund." Once again we

are tempted to think that this government may have actually been

listening to NDP policy suggestions. This idea is similar to the

forestry for the future fund which our debate leader in forestry has

introduced as a private member's bill before this House. But their

record speaks. They cannot be trusted.

We have to be

encouraged by this lip service, but we do have concerns, Firstly, the

moneys allocated to this fund are insufficient. Experts have estimated

that at least $300 million needs to be spent annually on reforestation

and silviculture if we are to fully recover from Socred neglect.

Secondly, we repeat the question: can this government be trusted to

carry through on its promises? Once again their record speaks. They

cannot be trusted.

In the forest and range resource fund

for 1985, the government had to admit it had reduced silvicultural

activities to meet planting targets. It was on page 21. A promise not

kept is a promise broken. They cannot be trusted to keep even their own

estimated programs going.

British Columbians concerned

about our forest sector remember only too well events in 1982 when the

Socreds wiped out the forest and range resource fund and used its

remaining $83 million contents to offset the provincial deficit. Our

forests cannot afford such neglect again.

Finally these

attempts by the government to gain some credibility on forest issues

fail in their neglect of the industrial side of the picture. About

14,000 IWA workers have lost their jobs in the past five years and the

volume of raw logs exported has tripled. Reports like that of

Woodbridge Reed and Associates point out that our forest industry must

move into higher process goods, seek out new markets and develop a much

stronger research and technology base.

However, the

Ministry of Forests and the Ministry of Industry have taken no

initiatives in this direction. Their inaction means lost opportunities

for British Columbians who could be working producing specialty wood

products, printing paper, specialty pulps and remanufactured lumber.

Health.

I would like to review some of the methods by which Social Credit

finances our health care system. Again, we get a blast from the past.

In the 1982 budget, the Minister of Finance announced the creation of a

health care stabilization account for the purposes of protecting the

standard of health care in the province — $77.8 million which the

Minister of Health announced during committee stage of the Health Cost

Stabilization Act. "The moneys which are being appropriated in this

bill will be used for various aspects of health care in the province,

not only for hospitals, although hospitals will receive a portion of

the money." That was 1982, Mr. Speaker. Is it starting to sound

familiar?

In the 1984 budget the Minister of Health announces the Income Tax (Health

Care Maintenance) Amendment Act which, by imposing an 8 percent surtax on working

British Columbians, raised $166 million in fiscal 1985-86. Now in the 1986 budget

the Minister of Finance announces the Health Improvement Appropriation Act,

which will provide $120 million for 1986-87, and at least $720 million over

three years. Taxpayers will continue to pay the surtax. British Columbians will

continue to pay medical premiums that will increase regularly, to the tune of

$367,475,285 this year, and we will continue to lose $2.7 million each month

in federal money as we continue to charge acute-care hospital user fees.

The

health improvement fund worries me. I'm afraid that the decisions of

where the money will be sent will be partisan in the worst sense, just

as the decisions have been made as to where and when health care

capital projects will be approved.

It is obvious that we

will spend a great deal of time reviewing the impact on our health care

system of the Ministry of Health budget: the $30 million cut in the

Medical Services Commission budget; the continued lack of commitment to

community and preventive health care; budget cuts in long-term care

facilities, in home nursing care, in community physiotherapy, homemaker

services, adult day care, emergency health services; the studied and

very deliberate policy of denying the chiropractic association the

courtesy of even a hearing; budget cuts in those vital cost-effective

preventive programs and the money set up in a fund that will be

controlled and doled out by cabinet members if, as, where and when

there are political advantages in so doing.

Social

assistance. This budget has betrayed the 226,000 men, women and

children who are forced, through bad economic policies, into dependency

on income assistance for their food and shelter. There is no

recognition that the payments are worth only 75 cents on the dollar

from when rates were last increased in 1981. Instead we get a

deliberate underestimation of the numbers who will be forced onto

social assistance this year. Nothing new here. In the 1985-86 fiscal

year an extra $14 million was required because of budget overrun in

that area.

It's all so familiar, so reminiscent of another

phony budget. Again, back to 1982. The then Minister of Human Resources

admitted that the department had failed to predict the huge increase in

welfare recipients that resulted in a $117.3 million welfare budget

overrun. Deputy Minister Noble said in an interview in December 1982:

"Our budget of $493 million (1982-83) was based on the understanding it

would be insufficient and a contingency would be required." Mr. Noble

also said in September 1982 that the Ministry of Human Resources works

on a contingency basis, and that during an economic downturn general

revenue must be tapped to make up the budgetary overrun. What he didn't

say was that the 1982 budget was the last one until after the following

election. The government in the 1982 budget were not prepared to tell

the people of British Columbia the extent to which the numbers of

people on welfare were going to increase. They weren't prepared to tell

them, so they provided for the increases by having a contingency in

mind but not in the budget.

The government announces that

it is providing a new allocation of $10 million to fund new programs

developed for the specific purposes of assisting unemployed British

Columbians to enter the labour market and meet the changing needs of

employers. Why is the emphasis not on retraining and education needs of

those outside the boundaries of Social Credit land, the unemployed? The

$10 million is not new money; it is taken from the support and shelter

allocation of the GAIN program.

[ Page 7466 ]

The

budget had little to say about women. I note that although the budget

for the Ministry of Labour women's programs has been increased by

$100,000, the amount of money allocated to grants to further the role

of women in society remains exactly the same as last year at $47,000.

The

pattern is clear. The fine print does not deliver what the press

releases promise. In as few words as possible, that's what's wrong with

this government: they cannot be trusted.

The Bennett

economic policy. There are elements of this budget presentation which

are very close to the essence of this government's approach to public

life. In short, they put propaganda ahead of the needs of ordinary

people. Ordinary working people have suffered. They have paid the price

in these four consecutive restraint budgets, and now the government

believes it can fool people into thinking otherwise. As the leader of

the New Democratic Party observed in the debate last week: "But what

really bothers me about this speech is its attempt to describe a

British Columbia that isn't the real British Columbia." He didn't give

us the real British Columbia; they didn't even give us the real budget.

I honestly think the government prefers to dream up results it wishes

it had obtained from economic programs and to trumpet these as if they

had actually taken place.

There is so much in the

government statements which cannot stand up to scrutiny. The government

knows that the only way it can routinely recycle and rehash statements

about the economy — which cannot be believed — is through saturation

advertising. Not only is the government squandering $20 million of

precious tax dollars through its own advertising program; a like or

larger amount is being spent through Crown corporations and the

Lotteries Fund.

By now, Mr. Speaker, I'm sure that you,

along with the rest of us, have heard from media outlets in our own

constituencies about the packages of press releases, several inches

high, that are to go on the radio and to be in the newspapers starting

immediately, telling everybody what a great budget it is. That has not

happened previously, Mr. Speaker. That's a departure, and it's going to

come out of this extra $20 million that's been provided to try to

persuade people that this government has indeed been doing something

for them, rather than to them.

[12:15]

further attempt has been made to bury the government's advertising

program in this year's budget. I'm not talking just about burying the

accounts in Crown corporations and the Lotteries Fund, although I

could, but there's another part of it. The 1985-86 Government

Information Services budget presents another example of the propaganda

dollar shuffle. Instead of presenting the accurate figure of $20

million as published in last year's estimates, this year's estimates

have reduced the 1985-86 expenditure to $12 million. With magical

transparency the government tries to pretend that Government

Information Services actually spends only $12 million, or 40 percent

less than they originally stated they would last year. To reduce the

political heat on the minister, $8 million for advertising and

marketing costs has been transferred to other ministries — the majority

to the Ministry of Tourism. The Bennett government, in an attempt to

deceive, has tried to bury this $8 million.

The advertising

is of the sort referred to as "opinion advertising." Its purpose is to

actually change people's views of themselves, their society and their

political choices. Remember that it was Patrick Kinsella who said in

his public address at Simon Fraser University: "We can move you from

one side of the ledger to the another." They really believe that, Mr.

Speaker. This budget is one more move in that campaign. They really

think they can change people's heads with propaganda over there. What

malarkey! If they weren't wasting so much taxpayers' money it could be

comical. Ontario admen and political hucksters come to B.C. They take

the taxpayers' money and give themselves jobs and titles, set up

consulting firms, and pay themselves salaries and a percentage on the

gross. But that's where this government is today. It is spending untold

millions in a vain attempt to mislead and misinform people about

government policy, about the state of the economy and ultimately about

their own powers of observation. They are still trying to move people

from one side of the ledger to the other, without bothering to resolve

economic problems in between.

I want to deal with the

record of this government, and I want to look at two areas

specifically: restraint and unemployment, and provincial government

investments.

Let's look for a moment at the number one

problem this government has. Let's look at continuing high unemployment

and what it has meant to B.C. Let's look at the real legacy of the

first government in this half century which deliberately used higher

unemployment as a tool of government policy. This government likes to

boast about the alleged benefit of the restraint package. To take only

one self-serving pat on the back, I quote the Minister of Finance

yesterday: "With the clear support of the people of British Columbia,

we carried this process of reducing the size and scope of government."

will not come as news to anyone outside of the Bennett government that

we have an unemployment crisis in B.C. Some measure of the unemployment

crisis is found in the startling new information from the Canada

employment and immigration centre. Their recent survey shows an

alarming growth in the number of British Columbians unemployed six

months and longer. In this long-term category there were 11,000 at the

beginning of this decade. From there it has escalated to the point

where more than 65,000 are in the position of not having worked for

more than half a year. This figure has nearly doubled under the

restraint package. The worst of it is that B.C. has the highest

proportion of long-term unemployed of any province in the whole of

Canada. That's restraint, Mr. Speaker.

Even more serious is

the regional nature of B.C. unemployment. Recently I examined some

figures which compare unemployment in the regions of B.C. with the

national average. What would it mean to regional economies if we were

able to bring their employment levels up to the national average? What

are the true costs of high unemployment? Which has been used; high

unemployment has been used by this government as a deliberate tool of

public policy. Remember, they promised to increase unemployment by

75,000 among public sector employees alone. Looking at the region of

East Kootenay, unemployment is in excess of the national average by

3,000; the loss of wages, say $72 million; UIC and welfare benefits

paid out, $27 million. The West Kootenays: again, compared to the

national average, an additional 4,374 unemployed, with lost wages of

$104,976,000; UIC and welfare paid out, $39,366,000. Okanagan and the

South Interior: 7,900 more unemployed than the national average would

indicate. Lost wages of $189,600,000; UIC and welfare paid out,

$79,100,000. Kamloops and the Central Interior: unemployment in excess

of the national average to the extent of 2,328. Lost wages of

$55,872,000; UIC and welfare

[ Page 7467 ]

paid

out, $20,952,000. The Lower Mainland: one of the bright spots, and yet

even there, the number of unemployed in excess of the national average

is 7,990, with a potential loss in wages of $191,760,000. UIC and

welfare are being paid out to the extent of $71,910,000.

Vancouver

Island: one of the bad spots. Unemployment in excess of the national

average, the highest of all of these regions, 12,580. Wages lost,

$301,920,000; UIC and welfare paid out, $113,220,000. If the unemployed

on Vancouver Island in excess of the national average were put back to

work, then the Minister of Finance's budget of yesterday might be

attainable — just that one region. But there is no evidence of that.

Prince George and the Northern Interior: unemployment in excess of the

national average, 5,504; lost wages, $132,096,000; UIC and welfare paid

out, $49,536,000. The Peace River: a relatively small population, but

even there, unemployment in excess of the national average of 1,968.

Lost wages, $47,232,000; UIC and welfare paid out, $17,712,000.

Totals:

45,644 more people unemployed in British Columbia than the national

average would indicate. Wages lost, $1,095,456,000; UIC and welfare

paid out, $410,796,000.

If B.C. had enjoyed the average

unemployment — and I say "enjoyed" by comparison — there would be at

least 45,000 more of our people working and collecting paycheques and

paying income tax and buying things in the various communities in which

they live. These paycheques would total more than one billion dollars a

year. Taxpayers would save $400 million to $500 million in UIC and

welfare costs. Rather than collecting, these people would be paying

taxes. This government makes sure that every working person pays his or

her share — and more — in taxes.

This is the real legacy of

this government, and it is a problem which must be dealt with by all

British Columbians. Most people have by now come to terms with the

difference between what was promised and what has been delivered by

this government. It is for all of us to develop our courage to move

beyond this government and to find a formula for successful integration

of our citizens into a new full-employment policy,

The

minister was correct in pointing out yesterday that restraint was not

the only thrust in the government's policy. He has also mentioned

capital spending. Let's take a look at the record there. Let's look at

provincial government investments.

One of the ways in which

you can judge a provincial government's conduct is by the way it

handles taxpayers' money. Such a comparison is particularly inviting to

members of the New Democratic Party. There is a growing concern in this

province that the numerous major projects undertaken by the government,

however well intentioned they may have been, have saddled the taxpayer

with a debt burden that will be tough to bear. Through mistakes in

timing and execution, many have created problems for our province which

were unnecessary, and in some cases tragic.

First, I invite

members to consider a few examples of investments by B.C. provincial

governments over the past 13 years or so, going back to 1972-75.

Canadian Cellulose: the cost of acquisition was $1, a dollar that was

never paid. It was a guarantee that the government would stand behind a

$68 million debt load. It never had to pay one cent of that guarantee.

So the total cost to the people of British Columbia for Canadian

Cellulose, with all of its operations in the Rossland-Trail area and in

Prince Rupert, $1. It generated net profits of $135.4 million from 1973

to March 1978, when it was turned over to BCRIC. BCRIC acquired 81

percent of the shares of Canadian Cellulose that were held by the

province. Canadian Cellulose had a book value of $96.2 million at the

time of sale. It paid dividends out of its profit to the Crown of some

$13 million during those four short years — $13 million in four years

on an investment of $1. Mr. Speaker, it maintained employment in plants

which were on the verge of being shut down. It maintained employment,

returned dividends of $13 million, cost only $1, and was sold to the

newly incorporated BCRIC for its book value of $96 million. That was a

pretty good investment, Mr. Speaker.

Kootenay Forest

Products. This company was acquired by the province in 1974 for the

cost of $9 million through the B.C. Cellulose Corporation. It generated

profits of $2.048 million from 1973 to March 1978, before being sold to

BCRIC. BCRIC acquired 100 percent of the outstanding shares of Kootenay

Forest Products that were held by the province. Kootenay Forest

Products had a book value of $11.371 million at the time of sale. There

too, Kootenay Forest Products was bought not because it was a good

investment but because we wanted to maintain employment. We took action

to maintain employment, and employment was maintained as long as the

NDP was in office.

Plateau Mills. The cost of acquisition

of this company by the province was $7.6 million. It generated profits

of $7.4 million from 1973 to March 1978, when it was sold to BCRIC.

Plateau Mills had a book value of net assets of $10.964 million at the

time of sale. Cost $7.6 million, generated profit of $7.4 million. The

profits in those four years repaid the Crown almost the total

investment, and it was worth $11 million at the time that it was sold

to BCRIC.

[Mr. Strachan in the chair.]

Interjection.

MR. STUPICH:

Mr. Speaker, I've risen to the bait previously, and I'll do it again.

That member is not telling the truth when he says we stole it.

AN HON. MEMBER: You did so.

DEPUTY SPEAKER:

Just a minute, we have a little problem here. Would the member please

withdraw the statement. We may have varying opinions, but I would, in

terms of a parliamentary procedure, ask.... Order, please. The Minister

of Lands, Parks and Housing (Hon. Mr. Kempf) will also come to order.

If I could, please, ask the hon. member for Nanaimo to withdraw the

last statement.

MR. STUPICH: I'll certainly withdraw it. I'd far rather say he was lying, but I can't say that.

DEPUTY SPEAKER: Order!

MR. STUPICH: I withdraw that as well.

Mr.

Speaker, we've gone through this before in the House and in public

accounts. In public accounts, when in its earlier years this particular

Social Credit administration used to let public accounts committee meet

from time to time, and used to let public accounts committee call

witnesses, the previous largest shareholder, Bill Martens, was invited

to public accounts committee to talk about Plateau Mills and to talk

also

[ Page 7468 ]

about

the sale of Plateau Mills. In that public accounts committee, where he

certainly owed us nothing — he may have owed the Social Credit; I don't

know — in spite of every invitation from various Social Credit members

at that public hearing to say that he got a bad deal from the NDP

administration, he insisted that he got the same price at which he was

prepared to sell it to some American investors, exactly the same terms,

exactly the same conditions, and he was treated fairly. I trust him, I

believe him, and when someone in this House, or anywhere else, says

something different, I can only question.... If they can't be accused

of telling something less than the truth, then they are certainly

straying from the whole truth. Now that's on their conscience.

[12:30]

Mr. Speaker, I've talked about three forestry companies that were

bought by the NDP administration at various prices — $1 in the case of

one, $9 million in the case of another, $7 million in the case of

another. All of them purchased, all of them which maintained employment

as long as the NDP were in office, one of them which contributed

substantially in dividends, and all of them which were sold to BCRIC at

substantially more than they cost. The total cost of these forestry

companies was $16.6 million. They returned dividends to the Crown of

$2.6 million, for a net cost of $14 million. They were sold at far less

than their market value to BCRIC for a total of $73.2 million. Now that

was a good investment, Mr. Speaker. In every sense of the word that was

a good investment.

Let's look at BCRIC. BCRIC acquired

these three forestry companies, total book value of $118.5 million, for

only $73.3 million. Now if there ever was a case of a silk purse being

turned into a sow's ear, then certainly our Premier must hold the

record. He took assets accumulated by an NDP administration, at a

cost....

HON. MR. RITCHIE: Swan Valley.

MR. STUPICH:

Mr. Speaker, they keep talking about Swan Valley. I'll put Swan Valley

up against northeast coal any day of the week and come out tenfold

ahead.

To get back to this brilliant administration that

turned a silk purse into a sow's ear, if I may, Mr. Speaker, assets

that were making money, that were returning dividends, that were

increasing in value regularly.... Our Premier took these and gave them

to BCRIC.

HON. MR. RITCHIE: Panco Poultry.

MR. STUPICH: I'll come to Panco.

They

cost a total of $42 million and returned to the people of B.C.

dividends of $60 million, if we include Westcoast Transmission, during

a short period that they were owned by the people of British Columbia,

and then they were turned over to BCRIC for a total of $110.6 million.

With the Premier's help and active campaign, citizens of B.C. were

persuaded to invest almost half a billion dollars cash in other shares

of BCRIC — in the new company. This company had proven income-producing

assets and a bankful of cash, but the directors, personally chosen and

appointed by the Premier of British Columbia — the still Premier of

British Columbia — have been able in the intervening eight years to

work the market price of those shares down to $1.53. They were issued

at $6; they went up as high as $9.50 or something; they had a book

value at one point of $11; they're now, the last time I looked, at

$1.53. Assets which maintained employment and produced dividends to be

shared by all of our citizens have been written down to the extent of

$350 million recently and show absolutely no prospect of paying

dividends to anybody during any of our lifetimes. That's the kind of

people we have directing the affairs of the province of British

Columbia. Is there any reason, Mr. Speaker, that people are saying more

and more often that it's time for a change?

Interjections.

MR. STUPICH:

Okay, Mr. Speaker, they keep throwing Panco Poultry at me. Let's talk

about Panco Poultry, shall we? Panco Poultry was acquired by the

province in 1975 for $4.8 million when it was going to be shut down if

we didn't buy it.

HON. MR. RITCHIE: ...took it away from the growers at a much higher price.

Interjections.

DEPUTY SPEAKER: Order, please.

Interjections.

DEPUTY SPEAKER: Order, please. Order!

MR. STUPICH: Mr. Speaker, if that minister....

DEPUTY SPEAKER:

The Minister of Municipal Affairs will have every opportunity during

the budget debate to make his comments. The member for Nanaimo

continues. Please proceed.

MR. STUPICH: Thank you,

Mr. Speaker, I'm just concerned about the time. Otherwise I'd love to

debate it with him. But will he just listen? No, I don't think