1982 Legislative Session: 4th Session, 32nd 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 )

MONDAY, APRIL 5, 1982

Afternoon Sitting

[ Page

6859 ]

CONTENTS

Routine Proceedings

Oral Questions

Tax increases. Mr. Stupich –– 6862

Cominco closure in Trail. Mr. D'Arcy –– 6862

Mr. Lank

Government fee increases. Ms. Sanford –– 6862

Cabinet tour to Kootenays. Mrs. Dailly –– 6862

Prospectors' assistance. Mr. Nicolson –– 6862

Tour of northeast coal project. Mr. Leggatt –– 6863

Northeast coal cost-benefit analysis. Mr. Leggatt ____ 6863

Nursing home fee increases. Mr. Cocke –– 6863

"B.C. Spirit" logo. Mr. Lockstead –– 6863

Social Credit Party advertising. Mr. Lockstead –– 6863

B.C. Hydro rates. Mr. D'Arcy –– 6864

Tabling Documents

British Columbia public accounts, March 31, 1981.

Hon. Mr. Curtis –– 6864

Comptroller-general's report

Hon. Mr. Curtis –– 6864

Estimates of Sums Required for the Service of the Province. Hon. Mr. Curtis.

Introduction –– 6864

Budget Address

Hon. Mr. Curtis –– 6864

Employment Development Act (Bill 26). Hon. Mr. Curtis.

Introduction and first reading –– 6874

Special Appropriations Act (Bill 11). Hon. Mr. Curtis.

Introduction and first reading –– 6874

Motive Fuel Use Tax Amendment Act, 1982 (Bill 23). Hon. Mr. Curtis.

Introduction and first reading –– 6874

Housing and Employment Development Financing Act (Bill 39). Hon. Mr. Curtis.

Introduction and first reading –– 6874

Corporation Capital Tax (Bank Rate Increase) Amendment Act, 1982 (Bill 38).

Hon. Mr. Curtis.

Introduction and first reading –– 6874

Tobacco Tax Amendment Act, 1982 (Bill 29). Hon. Mr. Curtis.

Introduction and first reading –– 6874

Gasoline Tax Amendment Act, 1982 (Bill 22). Hon. Mr. Curtis.

Introduction and first reading –– 6874

Social Service Tax Amendment Act, 1982 (Bill 30). Hon. Mr. Curtis.

Introduction and first reading –– 6874

Taxation (Rural Area) Amendment Act, 1982 (Bill 21). Hon. Mr. Curtis.

Introduction and first reading –– 6875

Finance Statutes Amendment Act, 1982 (Bill 36). Hon. Mr. Curtis.

Introduction and first reading –– 6875

Health Cost Stabilization Act (Bill 12). Hon. Mr. Neilsen.

Introduction and first reading –– 6875

Municipal Expenditure Restraint Act (Bill 32). Hon. Mr. Vander Zalm.

Introduction and first reading –– 6875

Home-Owner Grant Amendment Act, 1982 (Bill 17). Hon. Mr. Vander Zalm.

Introduction and first reading –– 6875

Tabling Documents

Remissions and refunds made under the authority of Taxation (Rural Area) Act.

Hon. Mr. Curtis –– 6878

B.C. Lotteries branch annual report, March 31, 1981.

Hon. Mr. Wolfe __ 6878

Pension (Municipal) Act annual report, December 31, 1980.

Hon. Mr. Wolfe –– 6878

Pension (College) Act annual report, August 31, 1981.

Hon. Mr. Wolfe –– 6878

Public Service Labour Relations Act applications, 1981.

Hon. Mr. Wolfe –– 6878

Purchasing Commission annual report, December 31, 1981.

Hon. Mr. Curtis –– 6878

Statement of unclaimed money deposits, 1981.

Hon. Mr. Curtis –– 6878

Estate Administration Act annual returns.

Hon. Mr. Curtis –– 6878

Assessment Appeal Board annual report, 1981.

Hon. Mr. Curtis –– 6878

British Columbia Railway annual report, 1981.

Hon. Mr. Phillips –– 6878

The House met at 2 p.m.

Prayers.

MR. HOWARD: I'd like to rise on a question of privilege, Mr. Speaker.

MR. SPEAKER: Order, please, hon. member. Perhaps we could do the introduction of guests and....

MR. HOWARD: So long as it doesn't interfere with the first opportunity, Mr. Speaker.

MR. SPEAKER: So ordered.

HON. MR. CURTIS:

A number of ladies and gentlemen have travelled a considerable distance

for the presentation of the budget address today. I will not ask the

House's indulgence while I go through a long list, other than to say

that may they all be welcome, particularly those who have come from

eastern Canada, the eastern United States and Europe.

I would particularly like to ask the House to welcome Sheila Curtis, who is in the House this afternoon, and our daughter Sue.

MR. KEMPF:

With us on the floor of the House this afternoon is Mr. Colin Seeley.

It is my great pleasure to announce his presence. Mr. Seeley is

president of the Omineca Social Credit Association. I would ask the

House to make him very welcome.

HON. MR. BENNETT: I

have not seen them both in the gallery, but I understand that the

leader of the Conservative party, Mr. Brian Westwood, is here, and the

leader of the Liberal party, Shirley McLoughlin. I ask the House to

welcome them.

MR. KING: Since everyone on that side

seems to have overlooked the fact, I would like to introduce Mr. Bernie

Smith, provincial president of the Social Credit Party. He is not a

financier or a banker, but he is a good old cop off the beat, and I

think he should be acknowledged.

MR. SEGARTY: I would

like to take this opportunity this afternoon to welcome to Victoria His

Worship Mayor Tyrone Colgur for the city of Cranbrook. Mr. Colgur was

kind enough to bring my daughter Helen and my oldest son Justin down to

visit me for the week, and for that I thank him. I'd like the House to

welcome him this afternoon.

MR. BARNES: If the

Premier wishes I will defer, but in case he doesn't I will introduce

one of our mutual friends: the mayor of the city of Vancouver.

MR. RITCHIE: Mr. Speaker, would the members please welcome an old friend of mine, Mr. Aart Spyker, from Central Fraser Valley.

MR. SKELLY: Mr. Speaker, there are a number of people on the front lawn

of the parliament buildings who are here to attend a soup kitchen. Unfortunately

they couldn't make it into the precincts, but I would ask the members to

make them welcome and also to take into consideration their plight during deliberations

in this session.

MR. STRACHAN:

Mr. Speaker, from Prince George South I would like to welcome Mr. Larry

Hart, Mr. George Dimor, Mr. Lorne Jackson and Mr. Doug Randall.

HON. MR. VANDER ZALM: Mr. Speaker, I would ask the House to welcome the president of the Surrey constituency, Mr. David Penn.

HON. MR. PHILLIPS:

Mr. Speaker. I'd like to ask the House to welcome my wife Joan, who is

here to listen to her first budget speech, and from the great

constituency of South Peace River, the president of the Dawson Creek

Chamber of Commerce, Phil Sykes.

HON. MR. HEWITT: Mr.

Speaker, the Minister of Finance (Hon. Mr. Curtis) talked about people

coming from far and wide, and I'd like to have the House mention Kathy

Schweizer from Orlando, Florida, who's in the House today.

HON. MR. SMITH:

Mr. Speaker. I see at least four mayors here from the capital region

whom I would like to specifically welcome: Mayor Peter Pollen of

Victoria, Mayor Couvelier of Saanich, Mayor Sealey of Sidney, and Mayor

J. Rangel of North Saanich.

HON. MR. GARDOM: In the

unlikely event — remote though it may be — that there's anyone in the

gallery who has not yet been welcomed, I would bid them a special

welcome.

MR. BARNES: Mr. Speaker. I want to apologize

to the mayor. I'm so familiar with him that I forgot to mention that

it's Mayor Mike Harcourt. I didn't put his name on it.

MR. SPEAKER:

Hon. members, before we proceed to the member who is seeking the floor

on, I think, a matter of privilege, I would like you to understand that

we have guests on the floor of the House today because it is a

ceremonial day. We have television cameras on the floor of the House

because it is a ceremonial day. We will be turning up the lights, which

are rather severe, and I trust it will meet with the members' approval.

We will also have a short recess while the television crew come to take

their stations, if that is the wish of the House. Is it agreed that we

proceed on that basis?

SOME HON. MEMBERS: No.

MR. SPEAKER: Order, please. I hear some noes.

MR. BARRETT:

Mr. Speaker. there's a presumption that the House has agreed to these

proceedings before hearing a matter of procedure to be raised by my

colleague the member for Skeena (Mr. Howard). That is why I've said no.

I think this matter should be discussed, and we should hear the member

for Skeena.

MR. SPEAKER: The objection is not on a question of leave; it is on the question of an opinion. Therefore I recognize the member for Skeena.

MR. HOWARD:

Mr. Speaker, obviously that is exactly the question of privilege that I

wanted to raise with you and with the House. This is the first

opportunity I’ve had.

[ Page 6860 ]

The

question of privilege is a very fundamental one. It relates to that

fundamental matter of free and unfettered access by the public to the

full proceedings and debates of this Legislative Assembly. The Mother

of Parliaments at Westminster established the principle decades ago

that the full proceedings and debates be made available to the public,

issued by an official reporting staff under the authority of Mr.

Speaker. I emphasize those two phrases: "full proceedings" and

"official reporting staff."

You drew attention to the

cameras, which I contemplated noting as a prelude to the question of

privilege. Those cameras are here to record some of the proceedings of

the Legislature; in other words, to record on a selective basis this

afternoon. That's information that I obtained for myself. It was later

officially confirmed that that was their purpose — and I'll deal with

that in a moment or two. Let me say first that the cameras that are

here and the other connecting electronic media equipment are the

property of the Government Production Centre. Some of the personnel

operating the equipment are employees of the Government Production

Centre. The Government Production Centre is under the authority and

control of the Provincial Secretary (Hon. Mr. Wolfe) and the deputy

minister of that department, Douglas Heal, and this is the first time

that the Government Production Centre has been in the Legislature for

any purpose whatsoever.

They are not, Mr. Speaker, an official reporting staff as, say, the Hansard

staff is an official reporting staff. I submit to you that the

government, through the Provincial Secretary and Douglas Heal, is in a

position to provide edited and juggled versions of what is proposed to

be filmed this afternoon. To place this Legislature under such control,

to place this Legislature basically in the pocket of government, is

unconscionable and must not be permitted.

Under today's date

and a time of 11:25 a.m., I received from Mr. Speaker's office a

bulletin confirming that the cameras and other electronic recording

equipment would be used selectively to record proceedings this

afternoon. My question of privilege is that the age-old right of this

Legislature to provide the public with free and unfettered access to

the full — and I emphasize full — proceedings and debates of this

Legislature is being interfered with by permitting the

government-controlled Government Production Centre to film the

proceedings this afternoon on a selective basis.

Before I

identify the motion which I propose to found upon this question of

privilege, I would urge Your Honour to not delay in making your

decision, because a delay will play into the government's hands and

permit the government controlled Government Production Centre to

proceed to film selectively and thus do what I maintain my question of

privilege does not permit them to do. If Your Honour needs time to

examine this matter, I suggest that a short recess would perhaps be the

course to follow, and that nothing further be permitted to happen this

afternoon until Your Honour has had a chance to examine this question

of privilege. If Your Honour finds that there is a case based upon that

question of privilege, I intend to move that this House declares it to

be in the public interest to have the full proceedings and debates of

this House recorded for transmission by television by an official

reporting staff under the authority of Mr. Speaker.

MR. SPEAKER:

Order, please. On the same matter of privilege, if we are to enter

debate we must first of all find the motion in order. Would the House

permit the Speaker to review the facts of how the arrangements were

made?

In reviewing the motion, and in trying to determine

whether or not it is in order, I would like to remind the House of the

procedure by which we have arrived at this point. Then perhaps the

motion itself may be withdrawn.

MR. HOWARD: Mr. Speaker, I think reviewing how we got to this point is really going to be seriously embarrassing to Your Honour.

MR. SPEAKER: Order, please.

MR. HOWARD: I suggest that it's not appropriate in any event.

MR. SPEAKER:

In a time of recess the Speaker must prepare himself, the House, its

furnishings and proceedings in such a way that when the members come

back together, and before the House can really express itself and its

desires, certain provisions will be made. In making those provisions,

if any new matters or procedures are deemed to be advisable, then in my

humble opinion it is the Speaker's responsibility to review those

matters with the members when we come together and see whether or not

it is the House's wish that we proceed on those assumptions. On the

matter of televising budget day, the House has for the past number of

years, to my remembrance, continuously given assent only to the

televising of the budget debate. That was the basis on which the

Speaker had to proceed. Let me say that television coverage of the

budget speech is a practice established by the House.

The

number of agencies — may I please just acquaint you with the dilemma —

requiring access to this coverage is constantly increasing. The ideal

coverage requires at least three camera positions. This year five

stations or networks expressed an interest in coverage here. The

resulting scenario, as you can all understand, could be about 15

cameras on the floor of the House. So it was obvious to the Speaker at

least that some kind of cooperation was necessary. Therefore some kind

of common feed was necessary, but a common feed supplied by one network

was not acceptable to some of the other networks.

Therefore a suggestion by Mr. Speaker to provide a Hansard -type

coverage appeared to have some merit, and consultation with

representatives from both caucuses showed the approach to be

acceptable. The networks agreed, the unions agreed, and equipment and

staff was seconded to Mr. Speaker for the day and is under Mr.

Speaker's direction. The guidelines for today's television — if it is

agreed to by the House — are simple. They are the same as the

guidelines for Hansard . Those members recognized by the Chair will be on camera. Coordination is provided by the former chief of Hansard ,

who is eminently qualified. A common feed is available to all agencies

requesting it, and the other arrangements regarding the scope of

broadcasting are unchanged.

Now perhaps the House could give

the Chair some direction as to how it wishes to go before I even look

at the motion itself — some assistance.

MR. HOWARD: Assistance in what?

MR. SPEAKER: Order, please. I'll accept an opinion.

[ Page 6861 ]

HON. MR. GARDOM:

Mr. Speaker, it has been the custom and the convention and the practice

of this House under a number of administrations, including the former

administration, that the budget speech would be televised. Mr. Speaker

has informed the House of the arrangements that have been made, the

proposed modus operandi, and the government finds those totally

satisfactory. I would certainly make the point with all respect to the

hon. member who raised this issue that his premise was farfetched and

incorrect to say the very least. It is very clear from the remarks of

Mr. Speaker that what we have here is a conduit process only. We

wouldn't have anything else but that.

MR. HOWARD:

Partly as to what the government House Leader said and partly as to

what you had indicated as well, sir, the fundamental point is that this

is the first time that the Government Production Centre has been in the

chamber. The second thing is that that was not the subject matter of a

discussion for approval. The third thing is that I discussed this

question with you, Mr. Speaker, you will recall, in your home in

Chilliwack from my home in Terrace on the telephone a couple of weeks

ago, and I raised with you on the telephone the very danger that I

raise today in my question of privilege — namely, that there is the

opportunity for editing and juggling and manipulating what flows out of

here. And you will recall, Mr. Speaker, that you indicated to me at

that time that you had no idea what would happen to that television

feed after it got out of this chamber.

Interjections.

MR. SPEAKER:

Order. please. Hon. members, I will accept one further opinion; but the

purpose, of course, is not to have the debate which could ensue if the

motion is in order. I think it is not in order to have it in advance,

but I'll accept the opinion of the member for New Westminster.

MR. COCKE:

Mr. Speaker, you will recall that I met with you as chairman of our

caucus, and at that point we discussed the whole question of

Speaker-controlled television cameras in the House. I felt at that time

and I feel now that had that been what we were facing at the present

time.... I realize there is seconding, but the seconding is coming from

the media centre, which is a totally government-control led

organization. I did not get that impression when we had our discussion.

So, Mr. Speaker, I believe that any comment that I might have made at

that time would be irrelevant in the context of the situation I now

find myself in.

MR. SPEAKER: Hon. members, the

question before us is clearly this: the House has not heretofore spoken

clearly on the matter of televising any of the proceedings of the

House, Therefore any televising of any proceedings of this House by

whatever agency is a matter of consent of the House itself. Without

that consent, a matter of privilege does not even exist — because a

matter of privilege assumes that some privilege of a member assumed and

predicted by the standing orders is being contravened — and as a result

the matter of privilege then becomes academic. Therefore, in the

opinion of the Chair, what is required is an expression of the House

itself as to whether or not in this instance television shall proceed

or not proceed. It therefore becomes my responsibility to ask whether

the House will express itself on that question.

MR. HOWARD: I need to challenge your ruling that there's no question

of privilege...

MR. SPEAKER: Order. please.

MR. HOWARD: ...because. I submit, there is. I think Your Honour is

wrong, and I challenge your ruling.

MR. SPEAKER: Order. please. There is a challenge to the ruling that

a matter of privilege does not exist.

MR. LEGGATT: On that point....

MR. SPEAKER: There can be no debate on the challenge, hon. member, and I must accept the challenge to that ruling.

I ask the House: shall the ruling of the Chair be sustained?

Hon.

members, as you know, the rules of the House require that during the

taking of a division all strangers be required to leave the floor of

the chamber. Is that our intention or shall leave be granted that they

remain?

Leave granted.

Mr. Speaker's ruling sustained on the following division:

YEAS — 29

McClelland

Hyndman

Waterland

Smith

Rogers

Chabot

Jordan

Hewitt

Heinrich

Richmond

Ritchie

Vander Zalm

Wolfe

Davidson

Ree

McCarthy

Williams

Gardom

Bennett

Curtis

Phillips

McGeer

Fraser

Nielsen

Kempf

Strachan

Segarty

Mussallem

Brummet

NAYS — 26

Macdonald

Barrett

Howard

King

Lea

Lank

Stupich

Dailly

Cocke

Nicolson

Hall

Lorimer

Leggatt

Levi

Sanford

Gabelmann

Skelly

D'Arcy

Lockstead

Barnes

Brown

Barber

Wallace

Hanson

Mitchell

Passarell

Division ordered to be recorded in the Journals of the House.

MR. SPEAKER: Shall leave be granted for the televising?

MR. HOWARD: For the full televising, starting right now, Mr. Speaker, yes.

MR. BARRETT:

You've given us some background, Mr. Speaker, and now you're asking for

leave. It's not clear to me that the Speaker has absolute and complete

control; it's not clear to me that every aspect of the sitting will be

covered. As

[ Page 6862 ]

consequence, Mr. Speaker, you're placing us in a position to vote for

an agency other than the absolute control of the Speaker in every

aspect of this House. Mr. Speaker, that impinges on our privileges. It

makes it impossible to delegate any authority outside of the Speaker,

and the Speaker gets such authority from a duly selected standing

committee of this House. So asking for leave is abrogating the rights

of this House and delegating authority to an agency that is not under

absolute control of the Speaker, and that would be a precedent. Mr.

Speaker, take some time to consider, but don't ask us to participate in

giving leave of any of the absolute powers of this House through the

Speaker and the standing committees.

Leave not granted.

Oral Questions

TAX INCREASES

MR. STUPICH:

I have a question for the Minister of Finance. Can the minister confirm

that the government has already imposed tax increases for 1982-83 of

some $300 million to $500 million in the form of increases for

government fees and user rates?

HON. MR. CURTIS: Hon.

member, through you, Mr. Speaker, in view of the fact that I hope to be

able to give the budget speech today and then subsequently participate

in a variety of debate, I would take the question as notice.

COMINCO CLOSURE IN TRAIL

MR. D'ARCY:

My question is to the Minister of Energy, Mines and Petroleum

Resources. Mr. Speaker, for the first time in three-quarters of a

century Cominco Ltd. is going to be closing its operations this summer

in Trail and Kimberley, idling some 6,300 people. In the last two years

the government has imposed water licence increases of 1,200 percent on

this company which lost $20 million in its operations last year. I

would like to ask the minister if the government did an economic impact

assessment before the water licence increase was imposed on this

hydroelectric energy intensive operation.

HON. MR. McCLELLAND: Mr. Speaker, there were a number of studies done both by my ministry and the Ministry of Finance.

MR. NICOLSON: Has the minister decided to table those studies?

HON. MR. McCLELLAND: No, Mr. Speaker.

GOVERNMENT FEE INCREASES

MS. SANFORD:

Can the Minister of Finance explain why he has failed to impose any

limit on government fee increases, such as the 25 percent to 50 percent

hike in bus fares, the 30 percent hike in ICBC rates and the 30 percent

hike in medicare premiums, in view of the 10 percent wage controls

announced on February 18?

MR. SPEAKER: This question

could undoubtedly take up the entire question period. Is it the intent

of the House to entertain this kind of a question?

HON. MR. CURTIS:

It is an all-encompassing question. We are now commencing the budget

process. I suggest to the hon. member that there will be ample

opportunity not only for me to answer questions from members opposite

but for other members who have responsibility with respect to the

corporations which have been mentioned in her question.

MS. SANFORD: Is he taking it as notice?

HON. MR. CURTIS: Yes.

CABINET TOUR TO KOOTENAYS

MRS. DAILLY:

Could the Minister of Finance confirm that the cost to the taxpayer for

the cabinet tour to the Kootenays last fall was in excess of $100,000?

HON. MR. CURTIS: Mr. Speaker, I would have to take that question as notice, because I do not have....

MS. BROWN: Don't you know anything, Hugh?

HON. MR. CURTIS:

Mr. Speaker, as an hon. member in this House, I take the question as

notice. The actual cost will be returned to the member who asked the

question in due course.

MR. SPEAKER: Is there a supplementary question?

MRS. DAILLY:

I wonder if I could redirect that question to the minister who was

probably in charge. I had hoped that perhaps the Minister of Finance

would have it at his fingertips, but he doesn't.

MR. SPEAKER: Hon. member, under the rules I don't know how we redirect a question taken as notice.

MRS. DAILLY:

No, but I have a new question to the Provincial Secretary (Hon. Mr.

Wolfe), who I believe was on the cabinet tour of the Kootenays and was

generally in charge of protocol and so on for these tours. Could he

give me an idea if the cost of that tour was in excess of $100,000?

MR. SPEAKER: I think that is a question of somewhat the same form as the one just taken as notice. Perhaps there's a new question.

PROSPECTORS' ASSISTANCE

MR. NICOLSON:

Mr. Speaker, can the Minister of Energy, Mines and Petroleum Resources

explain what consultation took place with B.C.'s recession-battered

mining industry and the various chambers of mines throughout the

province before the virtual elimination of the grub-stake allowance

officially known as the prospectors' assistance grant?

HON. MR. McCLELLAND:

Mr. Speaker, I'm not sure what the member means by virtual elimination.

We have consultation with the mining associations around British

[ Page 6863 ]

Columbia and individual mines practically daily, and that will continue.

MR. NICOLSON:

Is the minister aware that information has gone out through his

department informing prospectors that the prospectors' assistance grant

will not be available or that if it is available it will be

substantially reduced this year? I believe the total level last year

was maybe around $300,000.

MR. SPEAKER: Hon. members, the purpose of question period is to ask questions, not to bring information to the House.

TOUR OF NORTHEAST COAL PROJECT

MR. LEGGATT:

My question is directed to the Minister of Industry and Small Business

Development. Can the minister now advise the House the cost of his

recent media tour of the northeast coal project? Specifically we'd like

to know the cost of the helicopters, and also if you've got a figure

for the total cost of that promotion.

HON. MR. PHILLIPS:

Mr. Speaker, I'm glad the member asked that question and I'll be quite

happy to get him the answer. We gave the media of this province the

opportunity to see that great coal project. We're proud of that coal

project, and we intend to show it to other members of the media.

want to ask the member a question, Mr. Speaker. Is he against

helicopters? They were against planes once. They said, "don't pave the

highways," because they were against automobiles.

MR. SPEAKER:

Order, please. The scope of the answer should not be beyond the scope

of the question. The member for Port Coquitlam–Moody has a new

question, I'm sure.

NORTHEAST COAL COST-BENEFIT ANALYSIS

MR. LEGGATT: The minister will have the opportunity of asking me questions after the next election.

May of last year I asked the minister to table the cost benefit

analysis on the northeast coal project and he advised that it hadn't

been completed yet. Nearly a year has gone by and I wonder if the

minister can bring the House into his confidence, Mr. Speaker, and tell

us whether the cost-benefit analysis on the project is complete. If it

is, would he tell us when we're going to see it?

HON. MR. PHILLIPS:

Mr. Speaker, I want to tell you that the cost-benefit analysis is in

its final draft, and in due course the member will have the opportunity

to read the very positive report that shows the benefits of northeast

coal for one and all in this province to see.

MR. LEGGATT:

I have a further question, Mr. Speaker. In March 25, an

order-in-council was passed authorizing the additional expenditure of

$45 million for the purpose of northeast coal. Would the minister

advise the House why he needed the $45 million without the authority of

the Legislature and also whether he used part of the money to pay for

the helicopters that went all over that thing.

HON. MR. PHILLIPS:

Mr. Speaker, the member is full of bright questions today, but I would

suggest that we're about to hear the budget speech from the Minister of

Finance and when the crepe-hangers over there quit asking stupid

questions.... Your question will be answered in due course.

NURSING HOME FEE INCREASES

MR. COCKE: Thank you, Mr. Speaker. Doesn't he add credibility to this chamber?

Mr.

Speaker, I'd like to ask a question of the Minister of Health. Can the

Minister of Health advise why his ministry has seen fit under present

circumstances to punish senior citizens and the disabled by increasing

nursing home fees 61.5 percent over the past two years? They were $195;

now $315.

HON. MR. NIELSEN: Mr. Speaker, the member

for New Westminster is completely incorrect when he suggests that the

senior citizens of British Columbia are being punished. The services

which are provided to the senior citizens by way of the Ministry of

Health certainly would not be recognized by any intelligent human being

as punishment. The fees which are required to be paid are not out of

line and have been developed with every consideration possible. I think

I am not required to answer the balance of the question.

MR. COCKE:

Mr. Speaker, I would supplement my question by asking whether the

minister cannot see the irony in the government's restraint program, in

light of their 61.5 percent increase to these defenceless people?

MR. SPEAKER: Does the minister wish to answer? I did not hear a question there.

HON. MR. NIELSEN: I'll accept your

interpretation.

[Laughter. ]

"B.C. SPIRIT" LOGO

MR. LOCKSTEAD:

A question to the Minister of Transportation and Highways. Can the

Minister of Transportation and Highways explain the priority of

spending at least $150,000 to paint the "B.C. Spirit" logo on the side

of the vessels operated by the B.C. Ferry Corporation? While the

minister is on his feet, can he confirm that Baker Lovick, a

Toronto-based firm, was paid more than $25,000 for consultancy fees and

design work on the "B.C. Spirit" logo?

HON. MR. FRASER:

In reply to the member for Mackenzie, as usual you've got your facts

all mixed up. It didn't cost $150,000 to paint the "B.C. Spirit" logo

on the fine B.C. ferries we have. I'll get you the figure, but it's

somewhere in the range of $60,000.

Regarding the advertising agency, you should direct your question to another minister; that isn't part of my responsibility.

MR. SPEAKER:

Order, please. Hon. members, in question period, as in debate, we

direct our questions and our answers through the Chair, please.

SOCIAL CREDIT PARTY ADVERTISING

MR. LOCKSTEAD:

Once again, could the Minister of Health confirm that once again

advertising for the Social Credit Party is being paid for by the

taxpayers of this province?

[ Page 6864 ]

HON. MR. FRASER: Would I confirm? No, I will not.

B.C. HYDRO RATES

MR. D'ARCY:

Once again to the Minister of Energy. In the month of March B.C. Hydro

went to the Utilities Commission to ask for a 31.5 percent hike in

their rates that, by their own submission, was not based on increased

operating cost but in fact on a policy directive from the government

through to its wholly owned and controlled energy subsidiary. Has the

government decided to recognize the economic facts of life and ask for

reconsideration of this 31.5 percent increase in power rates imposed on

industrial Hydro customers, considering the lack of jobs and employment

in British Columbia today?

HON. MR. McCLELLAND: For

the first time in the history of this province British Columbia Hydro

is a regulated utility. It now has a board of directors representing

every part of this province. As a result, Mr. Speaker, it now is, as

many people in British Columbia have been asking for many years, much

more responsive to the needs of the community. Far be it from me to

move in an area where a free hand has been given to the British

Columbia Utilities Commission in regulating our largest and most

important utility.

Orders of the Day

Hon. Mr. Curtis tabled the public accounts of British Columbia for the fiscal year ended March 31, 1981.

HON. MR. CURTIS: Mr. Speaker, I move that the public accounts for the fiscal year 1980-81 be referred to the Select Standing Committee on Public Accounts and Economic Affairs.

Motion approved.

Hon.

Mr. Curtis tabled the report of the comptroller-general in accordance

with

section 8 (4) of the Financial Administration Act, the interim

financial statements.

ESTIMATES OF SUMS REQUIRED

FOR THE SERVICE OF THE PROVINCE

Hon. Mr. Curtis presented a message from His Honour the Lieutenant-Governor:

a bill intituled Estimates of Sums Required for the Service of the Province

for the fiscal year ending March 31, 1983, including

Schedule E sums required

by Her Majesty to make good certain sums expended for the period ended March

31, 1981, and to indemnify the several officers and persons for making such

expenditure, recommending the same to the Legislative Assembly.

Hon. Mr. Curtis moved that the said message and the estimates accompanying the same be referred to Committee of Supply.

Motion approved.

HON. MR. CURTIS: Mr. Speaker, I move that Mr. Speaker do now leave the chair for the House to go into Committee of Supply.

BUDGET ADDRESS

HON. MR. CURTIS:

Mr. Speaker, in speaking to the motion now before the House, may I say

that it is an honour to present to this House the British Columbia

budget for the fiscal year ending March 31, 1983.

In spite

of the inherent wealth and diversity of the British Columbia economy

the repercussions of inflation, high interest rates and international

recession are being felt throughout the province.

Members

will know that ours is an open economy. Our linkages are outward, with

a national and international economy. These links are the basis of our

past and future prosperity, but they also represent a fundamental and

intractable reason for the economic turbulence we face today. Our

industries have grown, developed and competed in markets beyond this

province and beyond this country. By forging these strong links we have

contributed to and shared in the growth and prosperity in such parts of

the world as the United States, Japan and Europe. We have become an

integral and dynamic part of the international economic community.

While we share in international growth and prosperity, we also share in

the effects of market weakness and instability when they occur.

could not avoid the current international recession. As with all

regions and communities in North America, we are feeling the impact of

high-interest-rate policies established in Ottawa and in Washington. We

are feeling the effects daily and directly, through the crushing burden

of interest rates on mortgages and personal and business loans; and

indirectly, through the loss of sales opportunities and markets for our

business. So it is that a province of boundless economic potential is

in the midst of a period of layoffs, unemployment and uncertainty.

assessing what can be done, we must have the wisdom to recognize those

forces beyond our control, but similarly we must resist the temptation

to say that nothing can be done. To be sure, we are only one of ten

provinces in Canada, and Canada is only one of many industrial nations.

It is also true that primary responsibility for domestic interest-rate

policies and management of the national economy rests with the

economic leadership and perseverance by a provincial government can

make a difference.

Mr. Speaker, this government will not

abandon the battle against unemployment against inflation and against

high interest rates. We will intensify the fight. Our overriding goals

will continue to reflect a commitment to provide rewarding employment

for British Columbians, to maintain a dynamic and a prosperous economy

led by a thriving private sector, and to provide public services of the

highest quality.

These are basic and essential goals — goals

never to lose sight of. But we have an open, outward-looking economy

and our tools are limited. In last year's budget we had some choices.

At that time the economy was strong and was expected to remain

relatively strong. We could continue to provide a diverse array of

high-quality public services, although it required restraint measures,

and, just over a year ago, it required tax increases.

Today

we have fewer choices. The cost of providing public services continues

to escalate, revenue growth is down substantially, the economy is

faltering and people are hurting. What was affordable last year is not

affordable this year. Major tax increases are not an option, for they

would impose a burden on our citizens and bring harm to the economy. I

do not propose to increase a wide range of personal, consumer and

business taxes for the new year.

The objectives I have set

for the 1982-83 budget are the following: to provide economic

stimulation and create employment, particularly in those sectors and

communities

[ Page 6865 ]

hardest

hit by world recession; to ensure that the burden of restraint and

adjustment to current economic circumstances is shared fairly among all

British Columbians; to maintain the high quality of public services

provided by the government of British Columbia.

[Mr. Davidson in the chair.]

Mr.

Speaker, the actions of one provincial government can make a

difference. This budget reflects my commitment and the commitment of

the government of British Columbia to provide economic leadership. This

budget will make a difference.

We can, and we shall, provide

economic stimulation to soften the blows struck by world recession and

draconian interest-rate policies. We can, and we shall, ensure that the

burden of restraint is shared fairly among all segments of the

population, and not shouldered only by those without sufficient power

to protect their incomes when conditions are adverse. Mr. Speaker, we

can, and we shall, protect and preserve the high quality of vital

public services available to all British Columbians.

As I

indicated a few moments ago, we are prepared to say today that

increased taxation is unacceptable, that major tax increases would

impose a burden on the private sector, on those with fixed incomes, on

the poor and on the unemployed. We are reaching the point beyond which

heavier taxation would undermine our economic future by discouraging

investment initiative, by removing incentives to work, and by

penalizing those who take risks in pursuit of economic betterment.

are prepared to say that government is large enough, that the public

sector is consuming a sufficiently large share of our limited economic

resources. We are prepared to say that increased public services can be

provided only if government becomes more efficient or if savings are

made elsewhere.

Finally, Mr. Speaker, we shall continue to

resist the borrowing trap into which many other governments have

fallen, seldom to emerge. Prudent families would never borrow to buy

groceries, although many borrow for a new car, and most will borrow for

a new home. This government adheres to similar rules of careful

financial management. We shall not borrow to finance the ongoing

operation of programs, although it is both appropriate and necessary to

borrow for major capital purchases such as schools, hospitals and

railway facilities.

The government of British Columbia has

earned the highest credit rating — the AAA rating — in international

financial markets. That rating represents a direct endorsement of

responsible fiscal management by this government. It is a direct

endorsement of the fact that only once since 1952 has a British

Columbia government borrowed directly to pay for the operation of

government programs. It is a rating that saves our people millions of

dollars annually in reduced interest costs, and it is a rating we shall

not risk for reasons of short-term expediency.

Achievement

of our goals would be difficult even under more favourable fiscal

circumstances. The challenge is doubly difficult in light of the

currently weak revenue situation. Extraordinary measures have been and

will continue to be necessary. But leadership is what government is all

about. I am confident that with public support from all segments of

British Columbia society we shall succeed. We shall do so fairly,

firmly and with collective will and determination.

I can

report, Mr. Speaker, that this budget is very much a collective effort

and a collective statement from all members of this government. My

colleagues have been fully supportive and deeply involved in many

aspects of the budget process. Their cooperation was freely given and

that has been an essential element. I pay tribute to them today.

Current

economic circumstances need little elaboration. Far too many British

Columbians are seeing firsthand the effects of high interest rates and

weak markets for our products. Nevertheless it is helpful to look at

the national and international economy, to which our provinces economic

fortunes are closely linked.

Internationally, the war

against inflation is being fought vigorously, particularly in the

United States and the United Kingdom. In both countries the selected

anti-inflation weapon has been a restrictive monetary policy — high

interest rates. In both countries it is felt that the appropriate

method to hold down prices is to reduce the ability of people and

corporations to make major purchases. This has been accomplished by

interest rate policies designed to make the cost of borrowing money

virtually prohibitive.

Few will argue with the importance of

arresting inflation, and few will debate that high interest rates have

reduced demand in the economy, but there are many who question the

insensitive way in which these policies have been applied. High

interest rates hurt most those people and industrial sectors that rely

heavily upon borrowed money and those with the least access to pools of

money of their own — homeowners, would-be homeowners, farmers,

fishermen, those working in the construction industry and small

business people for whom the cost of borrowing to run their business

has become unbearable.

The consequences of these policies

are well known by the governments that practise them. They have

recognized the cost and have made a conscious decision to accept that

cost of driving down inflation. So vigorously, however, have these

blunt and inequitable measures been applied that a major recession has

been inflicted on both the United States and the United Kingdom.

Canada's own economic policies bring no comfort, for we are following

the same path. The federal government has pursued high interest rates

in lock-step with those in the United States. We are told that high

interest rates in Canada represent a deliberate policy to deal with

inflation in this country. We are told that we really do have a

made-in-Canada economic policy. If this is the kind of policy we make

in Canada, then perhaps we should look elsewhere.

As an

example. the Japanese government has succeeded in adopting interest

rate policies distinct from those in the United States. The prime

lending rate in Japan in February was less than 7 percent, compared to

more than 16 percent in Canada and the United States. This has been

achieved by saving more and consuming less that other countries.

Japanese savings in 1980 represented some 31 percent of gross national

product, compared to 22 percent in Canada. Higher domestic savings

allow that country's capital needs to be met without the necessity of

high interest rates to encourage and attract foreign capital. They have

been able to finance their own economic growth, rather than relying on

others.

Although Canadian savings are relatively high among

western industrial nations, our young resource-economy requires massive

amounts of capital to finance its development. When these capital needs

are not met from our own savings, we have to look to others to fill the

gap. Attracting international investment dollars, particularly in the

hostile

[ Page 6866 ]

climate

for investment created by federal government policies, has locked us

into the use of high interest rates to compete for capital with the

United States.

Mr. Speaker, I shall not debate Canadian

monetary policies in this forum, except to say that there are

alternatives to high interest rates. The Premier of the province

presented a series of policy proposals to the economic summit of first

ministers in early February. British Columbia's proposals called for

government to show leadership by exercising fiscal restraint, by

expediting major developmental and energy projects, by pursuing

measures to enhance our transportation system, by promoting exports,

and by providing low-interest development money through encouraging

Canadians to save by way of federal-provincial tax-free bonds. We

offered proposals that ultimately would have allowed some reduction in

Canadian interest rates, while creating employment opportunities and

continuing the battle against inflation in a less destructive manner.

There

was little willingness on the part of other governments in this

country, particularly the federal government, to pursue or examine

these initiatives. Nevertheless, the government of British Columbia has

proceeded with important measures, and this budget will outline yet

more steps to be taken.

The consequences for British

Columbia of high interest rates have been devastating. Business

bankruptcies are increasing and the values of some investments,

representing lifetime savings and hard work, are literally being wiped

out. Added to these difficulties are the effects of the North American

recession on our major industrial activities — forest-based industries,

mining and manufacturing. Approximately 60 percent of British Columbia

lumber, for example, is sold in United States markets to supply a

housing-construction industry which is experiencing its worst slump

since the Second World War.

We have kept a close watch on

the economic situation during the past year. In 1981 the provincial

economy performed surprisingly well, in spite of serious work stoppages

and market deterioration in the second half of the year. Real economic

growth is estimated to have been 2 percent, with business investment

continuing to be a major source of strength, increasing an estimated

16.6 percent over 1980. Similarly, housing starts reached a record

level of close to 42,000 units last year.

Unemployment rates

continued to be relatively low, averaging 6.2 percent until August,

when the effects of international recession began to have a serious

impact. By February of this year the unemployment rate had reached 8.7

percent.

The effects of market weakness hit the lumber

industry first and hardest, as lumber production in 1981 declined by 13

percent from 1980 levels. Lumber prices remain low and unemployment in

the forest sector has become a serious problem in many communities.

Continued high interest rates and the prolonged United States recession

have created unemployment and economic hardship throughout the province.

The

situation has been aggravated by the recent pattern of inflation and

wage settlements. British Columbia's 14.3 percent inflation rate was a

primary factor behind a substantial increase in settlements in 1981.

Settlements in the private sector averaged 14.2 percent, while those in

the public sector escalated by 14.4 percent.

With the serious and extensive weakening in economic conditions, many employees

in the private sector have accepted wage and salary rollbacks or shorter work

weeks as a way of avoiding layoffs for an unfortunate few. This recognition

that low prices and production levels cannot support high levels of employment

unless there are limitations on wage increases is both responsible and commendable.

It underscores a general attitude of fairness which I believe appeals to most

British Columbians — a willingness for many to make minor concessions so that

a few will not carry an inordinate burden.

Although

the short-term economic situation is troublesome, we must not lose

sight of the great opportunities in British Columbia's future. Our

strong and varied resource base will continue to provide rewarding

employment for British Columbians: through our forest resources; our

mineral wealth our diverse and abundant supplies of energy; and the

natural magnificence and magnetic attraction of our province to

visitors from around the world. The problem we are facing is serious,

but it is short-term. National and international recovery will come,

inflation is beginning to moderate, and interest rates are expected to

move downward.

Although real economic growth for British

Columbia is forecast to reach only 1.4 percent in 1982, it is projected

to rebound to an average 3.5 percent over the period 1983 to 1986

inclusive. This compares with the Canadian economy as a whole which is

expected to experience a decline of 0.5 percent in 1982 and to average

3.4 percent growth over the 1983 to 1986 period.

Inflation

this year should decline to the 10 to 11 percent range in British

Columbia, compared to last year's 14.3 percent. With inflation in the

United States now moderating, and with the recent weakening of

international oil prices, the prospects are good for a continued

improvement in the rate of inflation during the next few years.

Responsible economic management by all governments in Canada is

essential, however, if these anticipated gains are to be realized.

Speaking

of the province, Mr. Speaker, to a considerable degree the province's

finances are dependent upon major developments in the economy, most of

which in turn reflect our close relationship with the national and

international economy. Revenue from income taxation falls if

unemployment rises and economic activity declines. Growth in sales tax

revenue weakens if individuals and businesses are cautious and restrain

their purchases of taxable items. Revenue from fuel taxes falls or

rises depending upon conservation efforts and the level of activity in

industries which consume large quantities of fuel.

The

factors affecting revenue from resources are similar, because this

revenue represents a return to the owners of those natural resources —

all British Columbians — over and above the costs of extraction and

processing. When markets are weak and prices for resource products are

low, revenue from this source will be correspondingly low. Because

markets for resource products are extremely volatile and because

government sometimes forgoes revenue to maintain employment in resource

sectors, such revenue is subject to exceptionally wide variations.

Looking

at the expenditure side of the ledger, a somewhat different picture

emerges. Although program costs inevitably expand to meet the needs of

a growing population, short-term economic weakness does not lead to

reduced demands for government services. Health programs, for example,

must respond to citizen needs for health care services — needs which

bear little relationship to existing economic conditions. Similarly,

the demands on the educational system

[ Page 6867 ]

remain the same, or may even increase, during periods when job opportunities are more limited.

There

are, in fact, many government programs which require increased

expenditure during difficult economic times. Social assistance programs

such as GAIN must fill a greater need when the economy falters. In

addition, the government has a key role to play in providing jobs and

economic stimulation to counter short-term unemployment problems. As I

mentioned earlier, the provincial government alone cannot influence

international markets, but it can provide some stimulus where it is

most needed.

Looking at the fiscal year which ended March

31, 1982, I am pleased to be able to report to the House that in spite

of revenue weakness and expenditure pressures greater than anticipated,

we've been able to meet our fiscal objectives for the year. This has

been possible only because a number of steps were taken to increase

revenue and a rigorous expenditure restraint program was put in place.

Together these actions produced savings of approximately S150 million.

reviewing the 1981-82 fiscal year one observes that forest revenue was

particularly weak, reflecting the major strike and severe market

deterioration which occurred during the year. Forest revenue was 64

percent lower than the level of the previous year and only one-fifth of

the 1979-80 level. In fact, as I have indicated repeatedly in our

quarterly financial reports, revenue from natural resources has been

the main factor in the erosion of our revenue position during the last

two fiscal years.

We have seen total revenue from natural

resources fall from $1.3 billion in 1979-80 to $613 million in 1981-82

— a decline of 53 percent. This alone demonstrates the volatile nature

of natural resource markets, but it also reflects the actions of the

federal government, which has taken a larger share of energy revenues

as part of the national energy program. Since that program was

introduced in 1980, the retail price of natural gas in Vancouver has

risen from $2.48 to $4.35 per thousand cubic feet. Of this increase,

more than 60 percent has been taken by the federal government, while

the government of British Columbia has received less than 5 percent.

Taxation

revenue was particularly strong early in 1981-82, although a number of

serious weaknesses developed later in the year as a result of poor

economic conditions. The most pronounced effects were observed in sales

tax collections. After adjusting for inflation and the higher tax rate,

sales tax revenue during the second half of the year actually fell

below the level of the previous year.

One positive revenue

development was a significant upward revision to the province's

personal income tax entitlement under the federal-provincial tax

collection agreement. Hon. members will know that personal and

corporation income taxes are collected for the province by the federal

government, with interim payments made until final tax collections are

assessed and appropriate adjustments occur. A major upward adjustment

of $281 million was received in 1981-82 in respect of tax collections

for earlier years. Late payments such as this have resulted in

interest-free loans to the federal government, and last year alone

represented a loss to the province of $69 million. The fact that such a

major adjustment payment was necessary reinforces British Columbia's

view that the tax collection arrangements with the federal government

are inadequate and should be restructured.

Overall operating

revenue on a cash basis is estimated to have reached S6.66 billion for

the 1981-82 fiscal year. This represents an increase of 15.1 percent

from the previous year and is approximately one-half of 1 percent more

than the forecast contained in last year's budget plan. I must stress

that it was only through careful monitoring and additional revenue

measures that it has been possible to stay within the 1981-82 budget

plan.

Once such revenue initiative was the review and

adjustment of literally hundreds of fees charged by the government for

a variety of licences and services. In many cases the government of the

day has been providing services such as safety inspections and

motor-vehicle title searches for fees well below the cost of providing

the service. The common element in all cases has been a service

provided to individuals or organizations at a cost that has been

largely or partially borne by the general taxpayer. The central

objective of the fees and licences review has been to shift a greater

proportion of the cost of such services to the recipient of the service

and away from the taxpayer.

I must stress that the cost of

the program has not changed as a result of this policy. The only change

has been a reduction in the amount of costs recovered from taxpayers

and an increase in the proportion of costs recovered from users. In

this way we have been able to supply additional taxpayer dollars to the

funding of universally available public services such as health and

education.

A further significant revenue initiative was the

increased rental charged to utilities for the use of provincial rivers

and river valleys for electricity generation purposes. The increase in

water rentals was intended to bring the price of electricity more in

line with oil and natural gas prices and to reflect to a greater degree

in electricity prices the cost of hydroelectric power projects. British

Columbians place a high value on the magnificent heritage of rivers and

river valleys for recreation, farming and wildlife purposes. It is

quite appropriate that these values be reflected in the price of

electricity and passed on to those who benefit from its use.

Some

critics have suggested that government fees should not have been

increased. that poor economic conditions made it a bad time for such

increases. Let us be clear that these critics are also saying, in

effect, that it was a good time to place a greater burden on the

general taxpayer. That, I submit, is very questionable logic. In total,

adjustments to fees, licences and water rentals brought in revenue of

more than S50 million in 1981-82. In the absence of these measures.

total operating revenue would have been an estimated S6.6 billion.

slightly below the projected figure contained in last year's budget.

Reflecting

for a moment. Mr. Speaker. I recall that at this time last year,

approximately. members of the opposition and some individuals in the

news media were repeatedly accusing me of deliberately underestimating

government revenue. Today I am reporting that those careless and

erroneous charges have been refuted by the facts. Objective observers —

and there are many — would be interested to read in Hansard the many comments made by the members opposite on this topic during the spring of 1981.

Looking

at he expenditure side for 1981-82 reinforces the earlier comment that

while a slumping economy can sharply reduce revenue. expenditure

pressures continue and may even increase. Last year's budget plan

forecast total operating expenditure of S6.61 billion. I now estimate

that actual spending reached S6.75 billion. Unanticipated expen-

[ Page 6868 ]

diture pressure was particularly acute in the Ministries of Health and Forests.

Now,

Mr. Speaker, 1982-83. The lean financial picture that I have described

for 1981-82 is expected to carry on well into the current fiscal year.

In fact, 1982-83 revenue growth will be down significantly from last

year — in large part because of the economic situation, but also

because of reduced federal contributions for health and post-secondary

education.

This year alone British Columbia faces a $122

million reduction in federal contributions for health and

post-secondary education programs. During the next five years the

reduction will reach almost $700 million.

Hon. members will

recall that in the November 1981 federal budget the Minister of Finance

for Canada presented a proposal to reduce transfers to the provinces.

The 1982-83 reduction for British Columbia was estimated at that time

to be $108 million, although the federal minister stated quite clearly

that negotiations would follow.

Mr. Speaker, since the

beginning of 19811 or my officials attended 25 meetings on federal —

provincial fiscal arrangements, 12 of them since the federal budget was

tabled. In spite of genuine attempts by provincial governments to find

a compromise, the federal government failed to show any flexibility.

There was no negotiation in any sense of the word. In fact, the

anticipated revenue loss to British Columbia is now greater than the

original estimate contained in the federal budget.

Reduced

contributions from the federal government, coupled with the downturn in

the economy, have limited considerably my budget choices this year. In

the absence of other initiatives, a continuation of prevailing revenue

and expenditure trends would have led to a substantial fiscal gap in

the 1982-83 fiscal year. Our projections show, for example, that if no

corrective steps were taken, the gap between revenue and expenditure in

this new year would have exceeded $1 billion.

Closing such a

gap with revenue measures would have required, for example, an increase

in the social service tax rate from 6 percent to 11 percent. In terms

of expenditure, this is equivalent to the entire cost of operating the

Ministry of Education in the year just ended. These are dramatic and

unlikely examples, but they show the magnitude of the problem and the

limited options available.

The budget framework for 1982 is,

therefore, one of restraint. But it is restraint with a difference. It

is restraint which serves the goals of fairness and equity among

British Columbians. It is restraint which serves the goals of continued

financial responsibility in government. It is restraint which creates

rather than suppresses opportunity by allowing us to do more with less.

The

centrepiece in the budget framework is the two-year economic

stabilization program announced by the Premier of British Columbia in

February. The program contains a number of elements which together

represent a responsible approach to restraint. It is a program of

economy for government which is far more sensitive than the severe and

heartless program of restraint so bluntly imposed on the private sector

by high interest rates and sagging markets. Let me review briefly the

major elements of the program.

First, the program puts in place an overall 12 percent limit on spending increases

by the provincial government, municipal governments, school districts, hospital

districts and a host of other provincially funded agencies. While some program-by-program

flexibility is both necessary and desirable, we shall adhere to the overall

guidelines.

Second,

the program includes the compensation stabilization program, which

applies compensation guidelines to all provincial public-sector

employees. The program will be administered by an experienced and

impartial commissioner, Mr. Edward Peck, and includes a basic

inflation-protection factor of 10 percent for the first year. Provision

has also been made in the first year for an additional 2 percent for

special circumstances, such as improved productivity performance or

skill shortages, and for a possible further 2 percent adjustment to be

added or subtracted to correct serious distortions resulting from past

compensation experience. Salaries of the most highly paid public-sector

executives are frozen pending a review of compensation relationships

among public- and private-sector executives.

Mr. Speaker and

hon. members, we too have a direct responsibility for showing

leadership. Members of this Legislative Assembly received, by formula,

an 11.9 per cent pay increase on January 1 of this year. During this

session members will be asked to approve a legislative amendment which

will roll back that increase to 8 percent in 1982. I am hopeful that

this proposal will receive the unanimous support of this House.

The

compensation stabilization program is designed to meet several

objectives, the most important of which is the need for an equitable

sharing of the burden of restraint imposed upon British Columbians by

the world economic situation. Employees in the private sector are all

too aware of the sometimes insensitive and unyielding way in which the

marketplace restrains — through layoffs, unemployment and business

bankruptcy. Responding to these realities, many employees have accepted

wage and salary rollbacks or shortened work weeks as a way of assisting

employers to hold on to markets and avoid widespread job loss. Such

pressures are not present in the public sector, particularly if

governments are willing simply to borrow and tax to pay an

ever-increasing wage bill.

Shifting to the taxpayer the cost

of large wage settlements is unacceptable to this government. So we

have chosen instead to put in place a program that will ensure equity

between employees in government and employees in the private sector.

restraining growth in public-sector salaries the need to lay off public

employees to meet overall expenditure objectives will be minimized.

Wages and salaries directly or indirectly account for more than 60 per

cent of government expenditure. Achievement of expenditure restraint in

the absence of limitations on compensation increases would have

required major social-program reductions and the loss of jobs for many

of our employees — an unattractive prospect for the government, its

employees and the taxpayer.

In order to obtain authority for

the compensation stabilization program, I shall introduce legislation

which defines the scope of the program, sets the framework for the

guidelines and provides for the establishment of the office of the

commissioner. Upon legislative approval, detailed regulations relating

to the administration of the guidelines will be issued. Public opinion

has been sought and will be reflected in the legislation, the

guidelines and the regulations.

A third major element of the

economic stabilization program will include measures to stimulate the

economy and create much-needed jobs. Economic stimulation requires that

the government put more money into the economy than it

[ Page 6869 ]

takes

out in the near term. We must take a leadership role in maintaining the

level of demand in the economy, but it must be done in a financially

responsible manner.

To repeat, we shall not resort to

borrowing for operating purposes in order to accomplish this. Rather, I

shall present a program involving more rapid expenditure of moneys now

held in special purpose funds, combined with a program of capital

spending, for which financing over a longer period is both necessary

and appropriate.

Hon. members will note that the estimates

of revenue and expenditure for the current year are presented on the

new basis of accounting, which I announced in last year's budget and

applied in subsequent quarterly financial reports. The new policy

adopts generally accepted accounting principles and is part of our

overall program to reform and update government financial practices.

Detailed discussion of he changes will be found in a background paper

to this budget.

The budget plan I am proposing today projects general fund expenditure of $7.23 billion, balanced by revenue of the same amount.

broader, more comprehensive perspective is obtained from consolidated

revenue and expenditure figures, bringing general fund revenue and

expenditures together with that of special purpose funds and accounts.

On this basis, revenue for the year is projected to be $7.33 billion,

an increase of 7.2 percent from last year.

This is

substantially less than the 10 to 11 percent rate of inflation

projected for this year, and it is a significant real reduction in

revenue from last year.

The estimate of consolidated

expenditure for 1982-83 is $7.69 billion, an increase of 8.1 percent

from actual expenditure in 1981-82. This is well within the 12 percent

expenditure growth limit established by the economic stabilization

program.

Mr. Speaker, the difference between consolidated

expenditure and revenue for the current year is $358 million. The

budget I am tabling here today injects $358 million more into the

economy than we are withdrawing in revenue.

Directly and

indirectly this stimulus alone will create some 9,000 jobs in British

Columbia. It is an economic stimulus to assist British Columbians

during this period of short-term weakness.

Further

stimulation will be provided by the massive program of capital spending

the government has underway. Two months ago, I announced a review of

capital spending by the government. The purpose of that review was to

assess approximately 600 capital projects, or requests for approval of

capital spending. We now have completed that review, having paid

special attention to the needs of certain communities for projects that

will create employment and bolster a sagging construction industry.

Projects

now underway, or beginning this year, represent a total capital

spending program of S3.6 billion. Of this total, $1.2 billion will

actually be spent during the 1982-83 fiscal year, providing close to

40.000 jobs. Included in this amount are northeast coal development,

British Columbia Place, a light rapid transit system for the greater

Vancouver region. schools, hospitals, courthouses and other capital

projects — projects that will provide jobs for today while building our

economic and social capital facilities for tomorrow.

The

northeast coal project merits special mention. It deserves comment

because of its many critics in the opposition and because this project

is such a driving force in our economy. I want to spend a few moments

with it. Northeast coal alone will account for nearly one full percent

of British Columbia's real economic growth and will create 5,800 jobs

in the current year. That is an essential contribution to our economy

today, and it will be an engine of northern growth and development for

years to come.

Mr. Speaker, I challenge the critics of this

vital project to come forward and tell us they would cancel the

northeast coal development. I challenge the critics to show a better

way to stimulate the economy today, while securing our economic future.

cannot overemphasize that we are able to provide this major stimulus

without borrowing to fund ongoing programs. It is an accomplishment

made possible because this government has, in the past, funded programs

responsibly. We have not allowed the provincial finances run down to

the point where there would be no funds available to deal with the

difficult situation such as we face today. Rainy-day money has been set

aside in special purpose funds and in the revenue surplus account. This

careful financial management combined with the economic stabilization

program allows us to maintain essential social and economic programs as

well as to provide for the economic stimulation now called for.

[Mr. Speaker in the chair.]

I announced in last year's budget, in future we shall stabilize revenue

and expenditure by means of the resource revenue stabilization fund. I

shall therefore table legislation which formally creates this special

government fund. At the same time most other special funds will become

accounts of the general fund, their purposes to remain unchanged. The

resource revenue stabilization fund will build up a contingency balance

in periods of strong economic growth to be used to counter future

economic and financial weakness. This special fund will become a

central element of responsible financial management in British Columbia

in the years ahead.

The budget framework I have outlined

will enable us to reach our goals of providing economic stimulation, of

spreading the burden of restraint fairly among all British Columbians,

and of maintaining the high quality of public services in our province.

The fiscal course I am charting today is narrow: there will be little

room to manoeuvre if revenue or expenditure deviate negatively from the

fiscal plan. At the end of this fiscal year our cash balance is

expected to be only slightly more than the revenue collected by the

province in one week. If the economy fails to respond as we are

anticipating. more difficult decisions will be required, but I am

confident that the toughest decisions have been made and that the worst

is over.

Mr. Speaker. the task of compiling the 1982

expenditure budget has been complex and has involved man\, difficult

decisions. Without the cooperation and support of my cabinet

colleagues. It would have been impossible.

In all

expenditure areas, three basic questions were asked. Firstly. how can

we deliver a better service at lower cost? Secondly. do programs

provide a service fairly, efficiently, and to those with the greatest

need for the service'? And thirdly, does the program represent an

appropriate use of limited resources during a difficult year in the

economy?

The measures taken have been balanced and

realistic. Programs that support citizens most in need have been fully

funded, while programs not meeting the test of necessity during a tough

year have been trimmed back. In order to achieve their objectives in

the current year, ministries will

[ Page 6870 ]

have

to operate at maximum efficiency. Program managers and others in

British Columbia's dedicated and capable public service will be

challenged to the limit. I am confident that the challenge will be met

positively and with enthusiasm.

The expenditure guideline

contained in the economic stabilization program called for a limit of

12 percent on expenditure increases in 1982-83 over last year. Most

programs will meet the guideline, and those that exceed it will be

balanced by programs where expenditure will increase less than 12

percent. Overall government expenditure growth will be within the

prescribed limit.

I shall review briefly some of the major

programs that are to meet the 12 percent guideline. First, grants to

school districts will be limited to a 12 percent increase. School

enrolment in British Columbia has been declining in recent years, while

the number of teachers has continued to rise. The average number of

pupils per teacher has declined from 22 in 1971 to 17 in 1981, a 23

percent reduction. Our teachers are better paid than those of any other

province and our provincial educational system now stands as one of the

best in Canada.

Although further improvements are possible,

it will not be a simple matter of spending more money. Rather, we must

harness more effectively and innovatively the talents of our

professional educators. I am confident that they, as well as other

professionals in the public sector, will meet the challenge of

restraint with continued dedication and commitment to excellence in our

schools.

While expenditure restraint in the education area

is clearly essential, this budget also makes provision for a program of

assistance that will reduce the burden of education costs on local

property tax payers. This program, announced last month by my colleague

the Minister of Education (Hon. Mr. Smith), will bring about a

fundamental restructuring of the education financing system in the

province and provide a substantial reduction in residential property

taxes for school purposes.

Mr. Speaker, in 50 of the

province's 75 school districts, school taxes in 1982 will be less than

they would have been under the former system. For example, a typical

taxpayer in Vancouver will pay $121 less, in Vernon $108 less and in

Terrace $144 less. Under the old system, residential property taxes

provided 12 percent of the total cost of education. Under the new

system the residential taxpayer will shoulder an even more modest share

of these costs — less than 10 percent.

The provincial

government will assume responsibility for the financing of some 90

percent of school operating costs. In addition to paying directly for

75 percent of these costs, the province will continue to contribute to

education financing by way of the homeowner grant, payments to school

districts for debt servicing, and contributions to the teachers'

pension plan. The total contribution of the government of British

Columbia to public school education in the 1982-83 fiscal year will

amount to approximately $1.65 billion, or $3,400 per student enrolled.

Under this financing arrangement the provincial government will assume

responsibility for nonresidential school taxes. A uniform

non-residential mill rate will be set by the province, although no

increases will be made in 1982 for those school districts where the

1981 mill rate was below the uniform rate of 55 mills announced for

1982. As a result, non-residential mill rates will decline in areas

where previously they were comparatively high and will remain at last

year's level in areas where they have been relatively low.

addition to property-tax relief for those carrying the greatest burden,

it is appropriate for the achievement of equity that those paying

minimal property taxes make an increased contribution. I am therefore

announcing two other changes to provincial property taxes.

First,

there will be an increase from $75 to $125 in the minimum property tax

payable in British Columbia. The new minimum, which is approximately

$10 a month, in our view represents an extremely small minimum

contribution on the part of most property owners in this province. The

minimum for seniors and others eligible for the supplementary homeowner

grant will remain at $1.

Secondly, the rural property mill

rate, which has been set at 10 mills since 1917, will be raised to 12

mills for the 1982 taxation year. For the average rural taxpayer this

will mean an average monthly tax increase of $1.60.

Finally,

Mr. Speaker, I am establishing today an education cost stabilization

account, from which a total of $75 million will be expended for

purposes of restraining increases in school property taxes.

Still

within the area of education, operating grants to colleges and

universities also will be restrained. Here again British Columbia has

funded and developed a college and university network which ranks with

the best in the country. Our advanced educational system offers diverse

opportunities, provided through internationally reputable universities

and research facilities, community-based colleges and institutes. The

average operating cost per full-time equivalent student in British

Columbia's colleges and universities has risen from $2,560 in 1971 to

$7,227 in 1981 — an expenditure increase well ahead of the rate of

inflation over the same period and well ahead of most other provinces

in Canada.

At the same time, Mr. Speaker, tuition fees at

British Columbia colleges and universities are among the lowest in

Canada and actually have declined by 34.9 percent after accounting for

inflation over the past decade. Similarly, the share of operating costs

covered by student tuition fees has declined substantially in recent

years. During the early 1960s student fees provided more than one of

every five dollars required to operate our colleges and universities.

Today, less than one of every ten dollars comes from student fees.

During

a difficult year it is necessary and appropriate to limit operating

grants to colleges and universities. I must emphasize, however, that

the government pays the full cost of servicing the debt associated with

the capital facilities of colleges and universities. These commitments

must be met and will be met.

A number of important restraint

initiatives also will apply to provincial programs of assistance to

local government. In the past there have been several different

programs involving expenditure to or revenue from local government.

This has resulted in an excessively complicated administrative

structure which will be simplified and improved this year.

particular, the Revenue Sharing Fund, which was introduced in 1977 by

this government to provide an assured and predictable method of sharing

provincial revenue with local government, will be broadened to include

several additional programs. The sewerage assistance program, the

utility underground program and the restructure assistance program will

be financed now from the Revenue Sharing Fund.

Most

significantly, the requirement that local government pay a share of

social welfare costs will be phased out over two years. This will

result in an important cost saving to local governments. For example,

the saving to municipalities will

[ Page 6871 ]

$26.6 million in 1982-83 alone. In the future these costs will continue

to be carried by the senior levels of government. With this program

consolidation it now will be possible to reduce the diverse and costly

financial interaction between the province and local government.

Program efficiency and service to the taxpayer will be improved.

Mr.

Speaker, payments to local government under the Revenue Sharing Fund

have increased by an average annual rate of 23 percent since 1979-80.

That's a generous increase by any standard — far in excess of the 9

percent growth in provincial revenue during the same period.

should be emphasized that the revenue-sharing formula does not require

local government to share in provincial revenue losses resulting from

cutbacks in federal transfer payments. Therefore, 1982-83 payments into

the Revenue Sharing Fund will again grow faster than provincial

revenue, although the changes in funding arrangements I have outlined

will reduce unconditional transfers to municipalities. Local property

tax payers will be protected from substantial tax increases by the

application of the 12 percent guideline to the budgets of local

government, including school districts.

Mr. Speaker, this

government's commitment to a high quality of life in our urban areas is

by no means restricted to programs to assist local government. The

province has taken a direct leadership role in a number of key urban

development areas. The Premier last week confirmed that Expo '86 will

go ahead. It will include the Canada Pavilion on Pier B-C, later to

become a trade and convention centre that will bring significant

lasting benefits to British Columbia.

The light rapid

transit system for the greater Vancouver region represents a historic

undertaking dedicated to improving the movement of people within this

large and growing urban area. British Columbia Place will make a major

contribution to life in the city of Vancouver by providing housing

accommodation for a broad range of income groups and by giving British

Columbians a stadium that will serve athletes and spectators alike for

many years to come. Similarly, Mr. Speaker, the new Annacis Island

crossing over the Fraser River will substantially ease traffic

congestion in the southern part of the Vancouver urban region. While

grants for transit will be held to less than 12 percent, I've been

assured that the high quality transit services in numerous centres

around the province will not be jeopardized by this restraint measure.

some program areas the government commitment to vital services can only

be met by expenditure growth in excess of 12 percent. The provision of

policing services to smaller communities, for example, has been

threatened by reductions in federal expenditure commitments for RCMP

contracts. This government is not prepared to sacrifice community

safety and protection, leaving us little choice but to provide funds

that will replace those withdrawn by Ottawa.

Similarly we

will not compromise the high standard of services to the needy and the

elderly in British Columbia. In fact, the troubled economy will place

additional expenditure demands on such programs of assistance as GAIN,

Pharmacare and services for families and children. This expenditure is

essential; therefore the increase will exceed 12 percent.

Mr. Speaker, governments often are criticized for failing to maintain high

standards of health care. In this regard may I say that the entire health-care

delivery system of British Columbia occupied a great deal of time and received

careful consideration during the past year. The Minister of Health (Hon. Mr.

Nielsen) has consulted extensively with Treasury Board and with me as Minister

of Finance. I want to commend and express appreciation to the Minister of Health

for the manner in which he has contributed to British Columbia's first-class

health care system.

Frankly, sir, it is mv view that, as a government, we have not fully emphasized

the extent of the health services which are offered to the people of this province.

One need not took far beyond our provincial boundaries to appreciate the fundamental

principle to which we adhere. That principle is this: that no individual and

no family in British Columbia will face devastating costs as a result of illness

or injury. Health care in this province. In every respect, is among the best

to be found anywhere in the world. This government undertakes to maintain the

integrity of that service. Expenditure on health care will exceed the 12 percent

guideline. In particular, the government will continue to commit substantial

resources to priority health-care areas. For example, the budget proposes a

24.6 percent increase in spending on the long-term care program. With approval

of this funding it will be possible to provide 675 new long-term beds. Despite

our revenue constraints, necessary improvements in the health delivery system

must proceed. Offsetting economies must be made elsewhere in the budget

so that vital health services to British Columbians can be maintained.

In order to meet this undertaking I propose a special appropriation

from which to maintain the quality and integrity of the health-care

system in this period of sluggish revenue growth. As provincial revenue

recovers, it is my intention that support for the health-care system

will again be met from the normal operating revenue of the government.

But for the current year I am creating the health cost stabilization

account for the purpose of protecting the standard of health care in

this province. This fund will provide $77.8 million to help cover the

cost of medical and hospital service for all British Columbians. In

some activities, Mr. Speaker, significant additional expenditure is

required when it is not appropriate for the cost to be home by the

taxpayer. In the area of fish and wildlife resource management,

expenditure increases will be offset by enhanced revenue from the sale

of fishing and hunting licences. Again, this reflects a desire on the

part of this government to have a greater proportion of the costs for

services such as these shifted from all taxpayers to those who

primarily benefit from services provided.

Turning again to

economic development, the focus will be on provision of short-term

stimulation of employment, consistent with building the long-term

economic base of our province. I discussed at some length the way in

which this budget provides for an overall expenditure injection into

the economy — through consolidated expenditure exceeding consolidated

revenue through the current year, and through a program of capital

construction that will create employment and assist the slumping

construction sector.

In particular, provision is being made

for a number of direct employment initiatives. Today I am proposing to

establish a special account, the employment development account with an

initial allocation of $132.9 million. The account will be managed and

coordinated by a special cabinet committee on employment development

which will start immediately to set priorities and to expedite the

necessary program initiatives. This account will bring together into a

single policy framework a number of programs from different ministries,

in addition to receiving $25 million in new funding.

[ Page 6872 ]

The

new cabinet committee will give priority to training programs, the

objective being to prepare people now for the employment opportunities

that will emerge as the economy recovers and a series of major projects

go forward. Effective manpower planning and training programs will be a

critical element in avoiding skill shortages and giving maximum

employment opportunities to British Columbians in the years ahead.

Short-term employment opportunities will also be created by the

Ministry of Forests programs to protect and enhance the forest resource

base. Silviculture and forest protection will both receive a

substantial expenditure boost.

It must be stressed that this

is only a first step toward a major employment development program

which will include initiatives in job creation, housing, forest

resource development and human resource development. For every program

where expenditure exceeds the 12 percent guideline, there must be other

programs where expenditure falls short of the guideline. Ministries

where expenditures will be restrained to increases below 12 percent

this year include Transportation and Highways; Energy, Mines and

Petroleum Resources; and Agriculture and Food. In addition, Mr.

Speaker, I am proposing that the $26.1 million annual installment

payment required to retire the debt incurred by the previous government

in 1975-76 be refinanced. This is a year of restraint, during which it

is more appropriate that such expenditure be directed to employment

creation and social programs. I shall therefore table legislation

authorizing the government to refinance the 1982 debt retirement

payment.

Restraint involves more than reductions in

particular programs; it also involves improved overall government

efficiency. Across government, steps are being taken to improve the

efficiency and effectiveness of programs. The provisions of the

Financial Administration Act implemented this year will provide new and

improved approaches to financial management and control. The estimates

of revenue and expenditure that I've tabled today have also been

restructured to provide an improved vote structure, to be more

informative, and to provide superior accountability for expenditure of

public funds.

We shall also continue to implement cash

management and investment policies that will ultimately offer

considerable savings to taxpayers. Interest earned by careful cash

management and investment of public funds totalled more than $100

million and saved taxpayers millions of dollars in 1981-82.

outlined earlier the high priority given to containing the growth of

government and limiting the tax burden on British Columbians. The

economic stabilization program will hold in check the cost of

government cost savings that will be passed on to citizens through

restraint on tax and government fee increases.

There will be

no increase in personal or corporation income taxes this year. We will

continue this year to apply the small business tax rate at 8 percent,

which is one-half of the general corporation tax rate. There will be no

increase in the social service tax rate this year.

In last

year's budget I announced a provincial personal income tax credit. The

benefits of this tax credit are now available to 40 percent of British

Columbia families and about 75 percent of elderly tax filers in this

province. Depending upon income and deductions, a family of two adults

and two children could receive a credit of up to $214.

shall also table legislation to authorize British Columbia housing and

employment development bonds, as a new mechanism to put the savings of

British Columbians to work. Provision will be included for the issuance

of bonds on which the interest is exempt from provincial income tax

income tax. The funds raised by these bonds will be made available

through the Cabinet Committee on Employment Development for

low-interest housing programs and employment initiatives in the

province. The legislation will initially authorize up to $250 million

in bonds to be issued.

I have stressed repeatedly that a

primary government objective is to ensure that the burden of restraint

is spread fairly among all British Columbians. I have also stressed,

sir, that our current economic difficulties owe their origins primarily

to high interest rates. These rates have placed an enormous cost burden

on many segments of our population.

Unfortunately, high

interest rates have also provided inadvertent benefits to some that

most people would agree are not appropriate. One such group is Canada's

chartered banks. Since 1977, for example, chartered banks have realized

an average after-tax return on shareholders' equity of more than 21 per

cent, significantly and consistently higher than other financial

institutions and industrial sectors. Not all of these excessive profits

have resulted from high interest rates. The banks have, since 1977,

benefited considerably from federal government tax provisions, enabling

them to reduce their income tax liabilities by enormous amounts. As a

result, some of Canada's banks have recorded very large net incomes and

yet have paid very little federal or provincial income tax. For

example, in 1976 income taxes paid to British Columbia by the chartered

banks totalled $15.5 million. In 1980, in spite of large profits, those

banks paid only $5.8 million in British Columbia income taxes. At a

time when many families, individuals and businesses are struggling to

cope with high interest rates, are paying their fair share of taxes,

and are faced with widespread economic uncertainties, this privileged

position for banks is both unfair and inappropriate. It is a problem

that governments have avoided for too long. I shall therefore table

legislation providing for a tax increase which will apply only to

chartered banks, effective May 1, 1982. The increase in revenue from

this measure, estimated at $15 million for the 1982-83 fiscal year,

will be used to partially fund the new British Columbia employment

development program outlined earlier in this budget address.

Mr.

Speaker, I am committed to a restraint program that is fair to all

British Columbians. I believe, and I am confident that those in the

financial community will agree, that this is a reasonable and fair

contribution to those British Columbians being hurt seriously by high

interest rates and unemployment.

Today I am announcing another significant tax change in connection with provincial

energy policy. Considerable interest has been expressed recently in having motor

vehicles converted to use compressed natural gas or propane. These are clean,

efficient gasoline substitutes which are in plentiful supply in British Columbia.

To encourage substitution of these fuels for gasoline, effective midnight tonight,

there will be no provincial fuel tax applied to propane or compressed natural

gas. This represents an estimated reduction in the average fuel cost per kilometre

for vehicles using propane or compressed natural gas of approximately 20 per

cent. As a further measure, this government will provide to individuals

[ Page

6873 ]

grants of $200 each to assist with the conversion of automobiles to compressed

natural gas. These initiatives will complement the federal grants available

for this same purpose.

I am also announcing today, Mr. Speaker, a number of

minor taxation-related amendments. They include additions to the list of items

which farmers may purchase exempt from social service tax; and an increase in

fines and penalties under a number of taxation statutes, to ensure prompt payment

and full compliance.

Finally, I am announcing the government's intention

Under this new agreement the federal government will agree to pay grants in

lieu of provincial social service tax, fuel taxes and a number of other provincial

taxes not previously paid by the federal government. In return, the government

of British Columbia and its agencies will pay all constitutionally valid federal

excise taxes. Under this agreement it is estimated that the government of British

Columbia will realize a net financial gain of approximately $8 million in the

first year.

In addition, Mr. Speaker, I shall continue discussions with the

federal government on other areas where reform can and should be pursued. I

am particularly concerned about the current federal-provincial arrangement

governing the collection of personal and corporation income taxes. As I mentioned

earlier, under this arrangement the federal government administers the collection

of income tax for the province, remitting the revenues collected over a period

of years as final information becomes available.

Our taxpayers are losing millions of dollars due to slow

payments under this must unsatisfactory arrangement. Moreover, the

federal government has used its dominant role in the tax collection

agreement to unilaterally force upon provinces a substantial amount of

the cost of federal tax initiatives. Such actions have been taken

without full consultation and with no recognition given to the

provincial contribution. The lack of a suitable amending formula with

respect to both the tax collection agreement and the established

programs financing arrangement is clearly inappropriate. It is a

persistent federal-provincial problem and one for which I shall

continue to seek a cooperative resolution.

If fundamental

problems with these taxation arrangements cannot be resolved, the

government of British Columbia is prepared to develop its own personal

and corporation income tax system to serve better the needs of British

Columbians. Some provinces have done this successfully and several

others are currently giving consideration to self-administration of

income taxes. Our ultimate decision, however, will be determined by how

we can most effectively meet the social and economic aspirations of

British Columbia citizens. I have advised the federal government of our

intention to withdraw from the tax collection agreement if satisfactory

progress is not made toward removing the deficiencies in the current

system.

Mr. Speaker, not long ago a newspaper in greater Victoria ran a very humorous

cartoon portraying the Ministry of Finance as a group of marauding pirates out

to fleece a bewildered pair of British Columbia citizens in a small rowboat.

The message was clear enough that the Ministry of Finance is single-mindedly

using tax and fee increases to ravage an unsuspecting public. But as I thought

about that cartoon it occurred to me that it illustrated a deeper contradiction

that has emerged in British Columbia — in fact in much of the western world

— in recent years. Many of us have lived through a period of plenty — a period

of growth, prosperity and rising expectations. As citizens, we have also come

to expect high quality. We've come to demand much of government — high-quality

health care, first-rate education system; we expect protection in our communities

from crime and fire, a clean environment and rewarding employment opportunities.

Yet there is a contradiction: we are all citizens with great expectations of

government but at the same time we are all. In one way or another, taxpayers,

and as such we understandably do not wish to pay higher taxes; most would prefer

lower taxes or no taxes at all. The contradiction is this: we cannot go on placing

greater and more costly demands upon government for new and better public services

and for solutions to new and more complex problems unless we are prepared to

pay. Government has no money of its own — only the taxpayers' money. The

citizen demanding services and the taxpayer footing the bill are one. Such contradictions

are not isolated. We are also consumers at the same time as we are either employers

or employees. As consumers, we abhor inflation: yet, how many will refuse a

wage or salary increase when productivity has not improved? How many producers

will reject a price increase when their product has not improved?

Mr.

Speaker, if you will forgive me, I am reminded of that most memorable

quote by Walt Kelly: "We have met the enemy, and he is us.'' All of us

— taxpayers, citizens, employers and employees. even those of us on

both sides of this House — at times have lived such contradictions. We

have become victims of our own prosperity. We have allowed ourselves

the luxury of drift.

A missing ingredient has been leadership — economic leadership. In a

rising sea of conflicting currents we need a steady hand at the tiller

— not at the till, aimlessly taking more and giving less.

This is a leadership budget to lead us through the storm. This

budget will attain the objectives I have set out to meet. First, it

will provide economic stimulation in the short term, while building the

economy for the long term. Second, it will help to ensure that

restraint is shared equitably among all British Columbians. Finally, it

will protect and enhance the quality of public services in our province.

This

is not a budget of illusions. It will not turn the international

economy around. But it will carry us through without harsh and

inequitable sacrifice, and it will pave the road to recovery.

believe the greatest accomplishment of this budget has been the meeting

of our objectives without major tax increases, without substantial cuts

in public services. and without mortgaging our future and our

children's and our grandchildren's future by borrowing for operating

purposes. I believe that the budget framework I have outlined today

will hold government expenditure in British Columbia to a level which

our economy can support in the longer term. This budget will preserve

our province's status of having one of the leanest, most effective

government sectors in Canada. This is a status in which we can take

pride. It is a status which, by avoiding government strangulation of

the private sector, will assure the continuing health of our economy.

It is also a status not enjoyed by many governments in Canada.

The

federal government currently spends one of every five dollars received

in revenue just to meet debt-servicing obligations. If we in British

Columbia had followed the federal example, we would have a financial

disaster on our

[ Page 6874 ]

hands

today. The sales tax today would be 11 percent, not 6 percent. Our

personal income tax rate would be 54 percent, not 44 percent. Mr.

Speaker, our province has vast economic potential. Lasting prosperity

can be ours, but this is a turbulent and competitive world. There are

no quick fixes; there are no free rides. All British Columbians must

pull together and we must dedicate ourselves to the effort and

ingenuity required to turn our potential prosperity into real

prosperity. We hope that the worst of the world recession is now over

and that the international economy will recover. Mr. Speaker, we shall

be ready. Our industries will be strong and our workforce willing and

able. The sacrifices we make today will ensure strength, stability and

prosperity tomorrow and from tomorrow's prosperity we shall again build

up our finances. We shall use the resource revenue stabilization fund

to provide the financial security that will see us through the

difficulties of future years.

Last year in concluding the

budget speech, Mr. Speaker, I referred to our good fortune. I referred

to our resource heritage and wealth, our unsurpassed recreational

opportunities and our public services which are among the finest in the

world. Looking back over this past year and looking toward the future I

am thankful that we have been able to provide economic stimulation at

this difficult time, that we have imposed financial discipline on

ourselves to make this possible and that as a government we have

applied restraint in a fair and a forward-looking manner. Finally, I am

thankful for the good fortune, Mr. Speaker, to be part of a government

that is offering leadership to British Columbians through these

challenging times.

MR. NICOLSON: On a point of order,

I believe it is customary for the minister to make a motion at the

beginning of the speech and also at the conclusion.

MR. SPEAKER:

As long as the motion is made — and I recall it being made at the

beginning — it is before the House and will be called again before the

question is put.

MR. STUPICH: Mr. Speaker, I've had the opportunity to hear the minister and I'd like an opportunity to review some of the Hansard reporting of it. I move adjournment of this debate until the next sitting.

Motion approved.

MR. SPEAKER: I declare a short recess for distribution of the proposed estimates. I will recall you with the ringing of the division bells.

The House took recess at 4:31 p.m.

The House resumed at 4:41 p.m.

Introduction of Bills

EMPLOYMENT DEVELOPMENT ACT

Hon. Mr. Curtis presented a message from His Honour the Lieutenant-Governor:

a bill intituled Employment Development Act.

Bill

26 introduced, read a first time and ordered to be placed on orders of

the day for second reading at the next sitting of the House after today.

SPECIAL APPROPRIATIONS ACT

Hon. Mr. Curtis presented a message from His Honour the Lieutenant-Governor:

a bill intituled Special Appropriations Act.

Bill

11 introduced, read a first time and ordered to be placed on orders of

the day for second reading at the next sitting of the House after today.

MOTIVE FUEL USE TAX AMENDMENT ACT, 1982

Hon. Mr. Curtis presented a message from His Honour the Lieutenant-Governor:

a bill intituled Motive Fuel Use Tax Amendment Act, 1982.

Bill

23 introduced, read a first time and ordered to be placed on orders of

the day for second reading at the next sitting of the House after today.

HOUSING AND EMPLOYMENT

DEVELOPMENT FINANCING ACT

Hon. Mr. Curtis presented a message from His Honour the Lieutenant-Governor:

a bill intituled Housing and Employment Development Financing Act.

Bill

39 introduced, read a first time and ordered to be placed on orders of

the day for second reading at the next sitting of the House after today.

CORPORATION CAPITAL TAX

(BANK RATE INCREASE)

AMENDMENT ACT, 1982

Hon. Mr. Curtis presented a message from His Honour the Lieutenant-Governor:

a bill intituled Corporation Capital Tax (Bank Rate Increase) Amendment Act,

Bill

38 introduced, read a first time and ordered to be placed on orders of

the day for second reading at the next sitting of the House after today.

TOBACCO TAX AMENDMENT ACT, 1982

Hon. Mr. Curtis presented a message from His Honour the Lieutenant- Governor:

a bill intituled Tobacco Tax Amendment Act, 1982.

Bill

29 introduced, read a first time and ordered to be placed on orders of

the day for second reading at the next sitting of the House after today.

GASOLINE TAX AMENDMENT ACT, 1982

Hon. Mr. Curtis presented a message from His Honour the Lieutenant-Governor:

a bill intituled Gasoline Tax Amendment Act, 1982.

Bill

22 introduced, read a first time and ordered to be placed on orders of

the day for second reading at the next sitting of the House after today.

SOCIAL SERVICE TAX AMENDMENT ACT, 1982

Hon. Mr. Curtis presented a message from His Honour the Lieutenant-Governor:

a bill intituled Social Service Tax Amendment Act, 1982.

[ Page 6875 ]

Bill

30 introduced, read a first time and ordered to be placed on orders of

the day for second reading at the next sitting of the House after today.

TAXATION (RURAL AREA) AMENDMENT ACT, 1982

Hon. Mr. Curtis presented a message from His Honour the Lieutenant-Governor:

a bill intituled Taxation (Rural Area) Amendment Act, 1982.

Bill

21 introduced, read a first time and ordered to be placed on orders of

the day for second reading at the next sitting of the House after today.

FINANCE STATUTES AMENDMENT ACT. 1982

Hon. Mr. Curtis presented a message from His Honour the Lieutenant-Governor:

a bill intituled Finance Statutes Amendment Act, 1982.

Bill

36 introduced, read a first time and ordered to be placed on orders of

the day for second reading at the next sitting of the House after today.

HEALTH COST STABILIZATION ACT

Hon. Mr. Nielsen presented a message from His Honour the Lieutenant-Governor:

a bill intituled Health Cost Stabilization Act.

Bill

12 introduced, read a first time and ordered to be placed on orders of

the day for second reading at the next sitting of the House after today.

MUNICIPAL EXPENDITURE RESTRAINT ACT

Hon. Mr. Vander Zalm presented a message from His Honour the Lieutenant- Governor:

a bill intituled Municipal Expenditure Restraint Act.

Bill

32 introduced. read a first time and ordered to be placed on orders of

the day for second reading at the next sitting of the House after today.

HOME OWNER GRANT AMENDMENT ACT, 1982

Hon. Mr. Vander Zalm presented a message from His Honour the Lieutenant-Governor:

a bill intituled Home Owner Grant Amendment Act. 1982.

Bill

17 introduced, read a first time and ordered to be placed on orders of

the day for second reading at the next sitting of the House after today.

MR. BARRETT:

Mr. Speaker, on a point of order. I wish to ask your advice. I have in

front of me estimates for the fiscal year ending March 31, 1983. I'm

desirous of knowing if that's it in terms of the estimates. Have I only

received half a document?

According to the practice of this

House, there are detailed breakdowns in the estimates comparing

proposed expenditures with the expenditures of the year before. For

example, if you turn to any of the ministry offices, there are global

figures in an unprecedented manner, unless this is just a précis and

the details are forthcoming.

I would ask for your ruling,

Mr. Speaker, if my suspicions, founded on this government's past

behaviour, are valid, which they should not be. If another document is

not forthcoming, do I lose my earliest possible time to bring to your

attention a matter of privilege: that the accounts are being fudged a

bit, that the accounts are not being presented in the normal manner, as

they have been in the past? Before I make the accusation on a point of

privilege, I would like to know whether or not this is it, or if we

have not been given complete documents.

AN HON. MEMBER: Good for you.

MR. BARRETT: Good for me. What about the taxpayers who are having the facts hidden from them?

that's it, I want to know whether or not I've lost the time for

privilege. Can I know whether or not they intend to give us more

information, or is that it?

AN HON. MEMBER: You're on your feet.

MR. BARRETT:

Well, Mr. Speaker, I'm on my feet, and the indication is that I have to

raise on a matter of privilege here right now without prior notice. I

raise a matter of privilege, and I'll need some order paper to write

out a motion that we have full accounts.

Mr. Speaker, just to point it out to you, there are no motion papers available to the members in the House.

MR. HOWARD: Use the back of an envelope.

MR. BARRETT:

Would this be permissible, Mr. Speaker? Would you accept the motion on

the back of an envelope? Could I have a recess until proper documents

are made available to all MLAs to conduct the business of the House?

How embarrassing!

On a matter of privilege, Mr. Speaker. I move that all documents that are not....

MR. SPEAKER:

Order, please. Hon. member, in a matter of privilege the matter is

stated and the motion is held on hand until the matter for privilege

can be considered.

MR. BARRETT: I thought I'd made my

case, Mr. Speaker. The motion I intend to move is that all documents

that are normally part of the estimates be made available to this House

forthwith. The reason that I intend to move this motion is that it

appears by the government's silence that this House is being given an

estimates book that is radically different from any other that's been

presented in the history of this House and it has been given at the end

of the budget speech, where the question of privilege would forever be

gone unless it were raised right now. If this is the only document we

are to see, it is my opinion that the government has deliberately set

out to withhold information that is normally part of the House's

business and that has been presented in the past.

If the members are to do their job on a motion of privilege....

[ Page 6876 ]

MR. SPEAKER:

Thank you, hon. member. In a matter of privilege, the matter is stated

briefly. The motion, if found in order, is then debated, but we do not

embark upon debate under the motion until the motion is first of all

determined to be in order.

MR. BARRETT: I am giving you reasons, Mr. Speaker. My privileges have been abridged.

Does

the government give an undertaking that every single detail that was

available to this House in every past session will be available now?

The government is silent, Mr. Speaker.

MR. SPEAKER: Order, please.

MR. BARRETT:

I have no other alternative than to raise this question as a matter of

privilege. The documents are being withheld from the House and the

figures are being fudged in the present presentation.

MR. SPEAKER: I think we have the matter stated, hon. member.

MR. BARRETT: Yes, I certainly have stated the matter, and I've got a case for the matter. Now I'd like to move.

MR. SPEAKER:

Order, please. We must first of all find out if there is a matter of

privilege, and then the motion will be read. We have the statement

concerning the matter of privilege. If the member would now submit the

motion, we'll find out whether or not we have a matter of privilege.

MR. BARRETT:

The motion reads as follows: that all documents that are normally part

of the estimates be made available to this House forthwith.

MR. SPEAKER:

I must observe, without purporting to give a legal opinion, that in the

Financial Administration Act,

section 20(l), it says: "The estimates of

revenue and expenditure for each fiscal year shall be prepared in a

form directed by the Treasury Board for presentation to the Legislative

Assembly by the Minister of Finance."

MR. HOWARD: Oh, you did cook the books!

HON. MR. CURTIS: Withdraw!

MR. SPEAKER: Order, please.

In view of this provision, I cannot find a matter of privilege.

MR. BARRETT:

You are compelling me to respond by challenging your ruling when you

haven't given a ruling — which I would have expected — but an

interpretation for the government. I am surprised that the Chair has

given a reason for the government's action, without the government

saying why it has taken this action.

MR. SPEAKER: Order, please.

MR. BARRETT: I'm shocked, Mr. Speaker, that the government has remained silent.

MR. SPEAKER: Order.

MR. BARRETT: You are giving an

interpretation, not a ruling.

MR. SPEAKER: Order, please.

MR. BARRETT: You are giving an

interpretation for the government, not a ruling.

MR. SPEAKER: Order.

MR. BARRETT: Are you ruling that I don't have a point of privilege?

MR. SPEAKER: Order, please.

MR. BARRETT: Are you ruling that?

MR. SPEAKER:

Let me rehearse for the hon. member the matters concerning privilege.

If any member believes that he has a matter of privilege, he stands on

his feet, in his place, states the matter briefly, and has in hand —

without referring to it — a motion which, if it is found that he does

have a matter of privilege, is then called upon and is then moved. That

is the procedure in this House. Sometimes — as a matter of fact, most

of the time — the Speaker takes a matter of privilege under advisement

and deliberates over it for as many hours as is required to come up

with a well-considered opinion. Sometimes, when a matter of privilege

does not exist and is obviously not present, the Speaker may, if he

wishes, rule immediately.

In today's procession the member

stated his case. He read the motion, which was not necessary. The

Speaker has found that a case of privilege does not exist, and

therefore the motion itself is out of order.

On a point of order, the member for Skeena.

MR. HOWARD:

The point of order I want to raise with you, Mr. Speaker, involves that

very booklet identified as the estimates for the fiscal year. Hidden

within there, unable to be discovered, are tens of millions of dollars

of padded expenses which were able to be identified in preceding

sessions as travel expenses, office expenses, advertising, propaganda

and furniture. They're now hidden and are not available.

Obviously,

as a result of our ability in the last session to identify them as

padded expenses, the government sought to cover them up. The

government, by virtue of the very statute that you quoted, Mr. Speaker,

has rewritten this document to hide from public view their excessive

expenditures in those areas that I enumerated.

Secondly, Mr.

Speaker, speaking about rehearsal, the speed with which one of the

Clerks at the table was able to find that statute and draw it to Your

Honour's attention suggests to me that the rehearsal took place

beforehand.

MR. SPEAKER: Would the member please state his point of order.

MR. HOWARD:

The point of order is that here is a crowd of people who, by their

history, are able to cook the books. They are able to show that certain

things have happened which have not. They have manipulated financially

for years in this province, and now they're doing it again.

[ Page 6877 ]

MR. SPEAKER: Would the member please state his point of order.

MR. HOWARD:

The point of order, regretfully, Mr. Speaker, is that in the process of

doing that they've dragged Your Honour's office into it as well, and

the Clerk's.

HON. MR. CURTIS: On a point of order,

Mr. Speaker, I would draw to Your Honour's attention that

unfortunately, the first day after we returned, the member for

Nelson-Creston (Mr. Nicolson) referred to me as dishonest and a coward.

I would ask the member to withdraw.

MR. SPEAKER: The

statement alleged is a statement which escaped the Chair completely.

Therefore I would have to ask the hon. member, if he made such a

statement, to please withdraw it.

MR. NICOLSON: Mr.

Speaker, matters should be drawn to the attention of the Chair at the

first opportunity, but I will withdraw the remarks which I made.

MR. BARRETT: Are you making a ruling, Mr. Speaker, that there is no question of privilege in the matter raised by me?

MR. SPEAKER: That was the ruling.

MR. BARRETT: The reason again for the ruling, Mr. Speaker?

MR. SPEAKER: Reasons were given.

MR. BARRETT: May I have them again, please, Mr. Speaker?

MR. SPEAKER:

It is the Financial Administration Act,

section 20(l): "The estimates

of revenue and expenditure for each fiscal year shall be prepared in a

form directed by the Treasury Board for presentation to the Legislative

Assembly by the Minister of Finance." Does the member wish to challenge

the ruling?

MR. BARRETT: Mr. Speaker, I appreciate

the quote from the statute and your saying to me that the government

has the legal right to do anything it wants with the books of this

House. That is what you are saying.

MR. SPEAKER: Order, please.

MR. BARRETT: That's correct. Look at what happened to the $45 million order-in-council. It’s not here.

MR. SPEAKER:

Order, please. Hon. member, the provisions of the standing orders are

that if the member wishes to challenge the ruling, it's open to him. No

further debate is possible.

MR. BARRETT: Mr. Speaker,

I think you're making a hasty ruling. I don't think that the whole act

has been searched. Normally you take time, peruse it and come back in

with a ruling. I ask you to do the same thing now. I got up immediately

so that I wouldn't lose time in terms of the earliest possible moment.

If you don't do this, it leaves a cloud of suspicion about rehearsal,

as raised by my colleague the member for Skeena (Mr. Howard).

MR. SPEAKER:

Order.