1985 Legislative Session: 3rd Session, 33rd Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

THURSDAY, MAY 16, 1985

Afternoon Sitting

[ Page

6167 ]

CONTENTS

Oral Questions

Hospital bed closures. Mrs. Dailly –– 6167

Mr. MacWilliam

Vancouver School District. Mr. Barnes –– 6167

Bingo Operations. Mr. MacWilliam –– 6168

Commissioner of critical industries. Mr. Stupich –– 6168

Vancouver Transition House. Mr. Reynolds –– 6169

Social Service Tax Amendment Act, 1985 (Bill 11). Committee stage –– 6169

Mr. Stupich

Mr. Skelly

Mr. Passarell

Hon. Mr. Gardom

Mrs. Wallace

Mr. Mitchell

Third reading

Gasoline (Coloured) Tax Amendment Act, 1985 (Bill 9). Report

Third reading –– 6173

Insurance Premium Tax Amendment Act, 1985 (Bill 14). Second reading

Hon. Mr. Curtis –– 6173

Mr. Cocke –– 6173

Mr. Stupich –– 6173

Hon. Mr. Curtis –– 6174

Insurance Premium Tax Amendment Act, 1985 (Bill 14). Committee stage 6174

Third reading

Resolution 56. (Hon. Mr. Gardom) –– 6174

Hon. Mr. Gardom

Mr. Howard

Hon. Mr. Gardom

Committee of Supply: Ministry of Industry and Small Business Development estimates.

(Hon. Mr. McClelland)

On vote 44: minister's office –– 6176

Mr. Mitchell

Mr. Passarell

Mr. Barnes

Mr. Michael

Royal Assent to bills –– 6183

Committee of Supply: Ministry of Industry and Small Business Development estimates.

(Hon. Mr. McClelland)

On vote 44: minister's office –– 6183

Mr. Skelly

Mr. Williams

Mr. Davis

Mr. D'Arcy

Mr. Gabelmann

Mr. Howard

THURSDAY, MAY 16, 1985

The House met at 2:04 p.m.

HON. MR. CHABOT: I'm very pleased this afternoon to introduce

in the galleries His Excellency Kokougan Apaloo, ambassador of the

Republic of Togo, and Mrs. Apaloo, and Mr. Gary Tarrant from Calgary.

MR. R. FRASER: In British Columbia we're all very proud of

the volunteers who serve our community and our athletes and our senior

citizens. Last night it was my pleasure to attend the 1985 Gymnastics

and Trampoline Sports Championships being held at the University of

Victoria by an organization that has some 500 volunteers and some 44

corporate sponsors. Representing that group today in our galleries is

Mr. Don Peachey, the organizing chairman. Would the House please make

him welcome.

MR. REID: Mr. Speaker, it's with pleasure that I introduce a

couple of very special friends of mine in your gallery today: Karey and

Nancy Graye from Saanich.

Oral Questions

HOSPITAL BED CLOSURES

MRS. DAILLY: Mr. Speaker, in the absence of the Minister of

Health, I'll relate the question to his parliamentary secretary, but I

don't think I see him here; is he away also? Is there somebody who's

the assistant or replacement to the parliamentary secretary of the

minister? Who would I direct this to — could you help me, Mr. Speaker?

All right, I shall direct it to the Provincial Secretary.

This question has to do with the St. Paul's Hospital, which has been

forced by government cutbacks to consider closing 278 hospital beds for

ten days in August. Has the minister, or whoever I'm relating this to,

decided to approve this action, pursuant to

section 41 of the Hospital

Act? I will perhaps explain to the person who answers: the minister is

the one who has to give approval for any closure of hospital beds. So

I'll read that one again. Has the minister decided to approve this

action, pursuant to

section 41 of the Hospital Act, or has he decided

to restore the $600,000 budget shortfall?

HON. MR. CHABOT: On behalf of the Minister of Health (Hon.

Mr. Nielsen) I will take the question as notice. I'm sure the Minister

of Health will be prepared to give you a reply to these issues that

you've raised, and give you all the details. I'll make sure that he

gets the question at the very earliest opportunity.

MRS. DAILLY: I thank the minister for being the messenger.

When you take the message, would you please relay to the minister — and

I'm being very serious here — that this is urgent? I hope you relay the

urgency of my question and we hope an answer will come back very

quickly, if not to me and the members of the Legislature, at least to

the public.

HON. MR. CHABOT: Absolutely.

MR. MacWILLIAM: I too have a question to the Minister of Health in absentia.

The Vernon Jubilee Hospital, as a result of government funding cuts, has also

been forced to initiate closures, in this case the closure of one-half of the

surgical beds and the loss of three of the five operating rooms during the months

of July and August. This will result in the cancellation of elective surgery

and a significant increase in the waiting-list. Has the minister decided to

approve this action, or has he decided to restore the $900,000 shortfall to

the hospital?

HON. MR. McGEER: Mr. Speaker, on behalf of the Minister of

Health I would be pleased to take the question as notice. I'm sure that

in answering the question the minister will be addressing the normal

workload of hospitals in the summer months as opposed to the winter

months.

VANCOUVER SCHOOL DISTRICT

MR. BARNES: Mr. Speaker, I have a question for the Minister

of Education. Now that the minister has imposed his own operating

budget on Vancouver School District, will he advise when local

democracy will be restored in the district of Vancouver?

HON. MR. HEINRICH: Mr. Speaker, I have not really addressed

that issue, with respect to when there will be an election of trustees

in the school district of Vancouver. There are other problems which are

much more pressing at this time in the management and administration of

the district. It seems to me, in view of what has occurred, that it

would be in the interests of all of us to allow the official trustee to

carry out his duties; in the interests of the children and parents of

Vancouver, so they don't have to be continually subjected to the

anxiety of those who perpetuated and continually created that anxiety,

which was totally unnecessary — putting out to the public that we have

to lay off 480 teachers and support staff, none of which is necessary,

other than through attrition and a decline in enrolment.

MR. BARNES: Inasmuch as the minister gave me an unrehearsed

response, perhaps I could ask him an unwritten question. I'll make it

very simple. He is concerned about the anxiety that was produced as a

result of the exchanges that happened between him and the school

trustees. What will the minister do to remove the anxiety that the

voters in the city of Vancouver and other districts will have with

respect to their elected officials having the ability to carry out the

mandate they were given, as in the case of the school district of

Vancouver this year? In other words, will you be firing those school

trustees in the future or will you guarantee that no trustees will be

fired in the future, to alleviate any possibility of anxiety on the

part of the voters?

MR. SPEAKER: That indicates future action, hon. member.

HON. MR. HEINRICH: Mr. Speaker, all 73 school districts have submitted

compliance budgets; two decided to defy the law. The position which we have

taken is that the rule of law is paramount. We have no intention of subscribing

to the view of the members opposite; that is throwing gas on the embers of anarchy,

which seems to be exactly what was going on in the Vancouver School Board —

on the steps of the Vancouver board. It's not necessary.

[ Page 6168 ]

MR. BARNES: My question, Mr. Speaker, again to the the

minister, is very specific. What guarantees do the voters have that you

will not in future interfere with their rights to have their elected

officials carry out the mandate they were elected to carry out? In

other words, will you be firing school trustees in the future? Is that

the way it will be in the province of British Columbia in the future?

He is not addressing that question, Mr. Speaker.

MR. SPEAKER: Order, please, hon. member. The question itself is out of order, in that it implies future action on the part of the minister.

BINGO OPERATIONS

MR. MacWILLIAM: Has the Provincial Secretary received the

report he requested on the emergence of large-scale organized

commercial bingos and gaming-houses which have opened in B.C.?

Secondly, has he decided to table that report in the House?

HON. MR. CHABOT: In answer to the first question, no. The answer to question number two is no.

MR. MacWILLIAM: In view of the fact that the minister has

fired four of the six bingo inspectors and withdrawn supervision and

inspection of the commercial operations, what action has the minister

taken to restore some semblance of control over the commercial

gaming-houses?

[2:15]

HON. MR. CHABOT: I don't want the member to leave the

impression that there is no control. I don't know if there are any

violations either, because the member made some allegations here in the

House a couple of weeks ago and was going to present me with some

evidence of irregularities in the operation of bingos in this province,

but he's failed to do so.

It's very nice to make cheap statements under the immunity of this

House, but then when you're called upon to deliver, you fail to do so.

I think it's most irresponsible on the part of a member of this House

to make those kinds of allegations in this House and then not be able

to produce. You failed to produce.

I want to say that the question of additional inspectors for

lotteries or bingos in British Columbia is under active consideration,

but there will be no action until such time as I receive the report

from the officials in my ministry. It will more than likely be a verbal

report to me. At the moment, it's anticipated to be in my office this

afternoon. Then we can move.

I answered your colleague who is taking over from you when you're

away, from Victoria, about the issue of an inquiry. In case that's your

next question, the answer is that there is no need for an inquiry in

British Columbia.

MR. MacWILLIAM: I have here three signed statements

respecting the operation of organized commercial gambling houses in

British Columbia. These statements deal with possible infractions with

regard to the regulations presently in effect. I have instructions to

the minister to make these statements available to an impartial inquiry

only. With this in mind, will the minister now reconsider his position?

The statements are available.

HON. MR. CHABOT: The answer is no in that respect. I want to

say that I had an inspector in the Okanagan; I'm not going to identify

the community. I will be receiving a report, as I said this afternoon,

about the inspections of some of those operations in the Okanagan. If I

find from that report that there are any infractions, I'll take the

necessary action.

COMMISSIONER OF CRITICAL INDUSTRIES

MR. STUPICH: If I may change the subject, a question to the

Minister of Finance. The minister knows that a number of firms in B.C.

are facing financial hardship — in part, I submit, as a consequence of

excessive tax increases coupled with cutbacks and layoffs by the

provincial government. Why has the government decided to restrict the

activities of the critical industries commissioner to the forest and

mining industries?

HON. MR. CURTIS: I think that subject was pretty carefully

dealt with at the time of the establishment of the office of

commissioner of critical industries. It was seen by the government,

through that process and through the consideration which led to the

establishment of the office, that those two industries — because of

their great dependence on international world markets and the severity

of the decline in those markets for the two activities, mining and

forestry — were in need of the kind of assistance which would be

offered by the office of the commissioner and his very small staff.

I cannot suggest today one way or the other with respect to the

addition of other industries to the commissioner's duties, but I think

it's fair to say that the government, through this process, is

examining the efficiency of the process and the way in which the

commissioner's office is assisting industry. It's very early, it's a

very young office, and I will want to have more experience with it, as

I know that my colleagues in the executive council will want to have

more experience with it, before making any decision with respect to

leaving it precisely as it is now structured or adding to its duties

over time.

MR. STUPICH: Mr. Speaker, tourism is our second or third most

important industry. The B.C. Hotels Association has asked that their

industry — the hotel industry — be added to the critical list because

of the large number of liquor licences handed out by the government,

apparently for political reasons. What consideration has the minister

given to the request of the B.C. Hotels Association?

HON. MR. HEWITT: Say that outside and name names.

HON. MR. CURTIS: I don't carry the responsibility for liquor

administration in this province, but I know my colleague is somewhat

exercised, and I share his concern. That "question" contained a fairly

serious challenge, and I wonder if the member would care to discuss

that at some length beyond the confines of this chamber.

MR. STUPICH: The minister missed the question, and I'll

repeat it. What consideration has he given to the request of the B.C.

Hotels Association to be added to the critical industries list?

[ Page 6169 ]

HON. MR. CURTIS: There is no doubt that in much of western

Canada the hotel-motel industry has been experiencing difficulties. It

is not unique to British Columbia. I have not carried that request to

the executive council at this point in time. Whether I do or not in the

future, sir, is a question of future policy. I am aware of their

concern, and I point out that the problem is felt not only in British

Columbia but also in Alberta, Saskatchewan and even, surprisingly, in

Manitoba.

VANCOUVER TRANSITION HOUSE

MR. REYNOLDS: Mr. Speaker, as parliamentary secretary to the

Minister of Human Resources (Hon. Mrs. McCarthy), I would like to

respond to a question I took as notice yesterday from the member for

Burnaby-Edmonds (Ms. Brown). The question regarded Vancouver Transition

House, and the minister's answer is as follows:

"It was with regret that I heard of the board's

decision to cease operating this resource. However, the ministry

respects the board's right to decide which services it will offer, and

I have every confidence in the board's decision. This decision by the

YWCA does not change my ministry's commitment to provide help to women

and children in need.

"Assistance with emergency shelter and counselling is

available from all ministry offices. There are currently 32 emergency

shelters or transition houses operating in the province. In the lower

mainland alone there are nine resources. Counselling and support

services continue to be available through social workers in ministry

offices and through community resources.

"Presently there are 96 emergency beds in the

Vancouver lower mainland region, and there are only 10 beds being

closed at Vancouver Transition House. On average there are 15 vacancies

at all times in the lower mainland region."

Mrs. Johnston, Parliamentary Secretary to the Minister of Energy, Mines and Petroleum Resources, tabled an answer to a question.

HON. MR. SMITH: Mr. Speaker, the member for North Okanagan

(Mr. MacWilliam) was raising certain allegations a few minutes ago

which I listened to. I would urge the member to bring forward any

evidence he would have of those allegations so that they can be dealt

with by my staff, instead of making such allegations in this chamber

only.

MR. SPEAKER: Hon. members, with the greatest respect, that is

an obligation that the member himself must undertake and cannot be

instructed so to do by the House.

Orders of the Day

HON. MR. GARDOM: Mr. Speaker, I call committee on Bill 11.

SOCIAL SERVICE TAX AMENDMENT ACT, 1985

The House in Committee on Bill 11; Mr. Strachan in the chair.

Section 1 approved.

section 2.

MR. STUPICH: Mr. Chairman, I asked the minister briefly about

this yesterday in second reading. Is it really increasing the tax? Is

it simply clarifying something that was vague before — that is, the

delivery charge with ready-mix concrete? It would seem to me there

would be no need to do it unless it was levying an additional impost on

the construction industry, which right now doesn't really need any of

that kind of help.

HON. MR. CURTIS: This really is a clarifying amendment. This

practice has been in place. In the majority, firms were paying; in the

minority, some were not. Therefore we have taken the.... So it's not

new, but it is clarification. Those who were not paying will

undoubtedly not be pleased, and those who were paying will see that

justice is being done.

Section 2 approved.

section 3.

MR. SKELLY: I'm a bit concerned. There are a number of

subsections in this section, and one of these provides for the taxation

of pay television services — applying the sales tax to pay television

services. There is some concern....

MR. CHAIRMAN: Hon. members, please, from both sides of the

House, there appears to be an awful lot of noise here. It is really

detracting from the debate as it's proceeding. Could we please have

some order.

MR. SKELLY: There is some concern on the part of pay

television operators that adding a tax to the services they provide is

going to make things very difficult for a new and expanding industry in

Canada and in British Columbia. This makes it difficult to attract new

subscribers, because it adds substantially to the cost. I understand

that this is going to add $1.5 million to government revenues from what

is essentially a growing industry in western Canada.

We would suggest to the Minister of Finance that this is not a

desirable tax. In fact, it makes it much more difficult for this

industry to survive, an industry that has committed itself to providing

some stimulus to culture and the arts in Canada. Taxing it makes it far

more difficult for that industry to thrive, and difficult for them to

subsidize some of the cultural developments that are taking place. We

see that in British Columbia there's a growing movie industry and that

we're attracting investment by movie producers from all over the world,

and particularly from the United States because of the advantage

provided by the value of our dollar. This is one of the industries that

is promoting the Canadian movie industry, and we feel that it's

counterproductive to employment to tax this industry at a time when

it's just growing in this province. We would question the Minister of

Finance as to what his reasons were for levying this tax on a growing

industry and what alternatives there were to this kind of tax.

[2:30]

HON. MR. CURTIS: Mr. Chairman, this is

section 3(e)(z.92),

which deals with cable-television services. The Leader of the

Opposition will recall that we looked at a host of suggestions to lower

taxes and to raise taxes as a result of the tax study, which occupied

the best part of two months,

[ Page 6170 ]

around the province last year. One decision that I

made immediately was that I would not in any way tax basic cablevision

service. The member has not suggested that, but I just want to put in

perspective, as I did yesterday with the member for Nelson-Creston (Mr.

Nicolson), that I certainly could not in any way consider the taxation

of that basic service.

Mr. Chairman, the Leader of the Opposition might like to know that

or might indeed know that pay-television is taxed in the province of

Manitoba. That may not change his mind. It certainly is taxed in most

provinces, with B.C. now added. It is taxed in all provinces with the

exception, I'm informed, of Alberta and Nova Scotia.

It was seen as a discretionary service. The member for

Nelson-Creston made the point yesterday, as did the Leader of the

Opposition today, that it has an educational aspect, but it also has an

entertainment aspect. Certainly it speaks to, if I may say so, my

general philosophy with respect to taxing those items which are

discretionary, not basic. I understand that the pay-television industry

— speaking to this

section — is not happy about it. I didn't think they

would be; indeed, I would have been astonished if they had said that it

was a good thing, long overdue. But the hardware that is used in some

pay-television — that is, the remote-control unit — is already taxed.

The member would understand that. But, Mr. Chairman, it is not an

unusual tax now across Canada.

MR. SKELLY: I suppose maybe that's our concern, Mr. Chairman.

If the minister was doing with the revenue that he generates the same

kinds of things Manitoba is doing with the revenue they generate, there

would be thousands more people working in the province of British

Columbia right now. That's the difference between what's happening in

this province and Manitoba. So the comparisons aren't equal. In

Manitoba taxes are generated and then used to create employment. As a

result, things are much better in Manitoba right now than they are in

British Columbia.

Our concern is that if you constantly levy taxes on virtually

everything that's happening in the province, especially on a growing

industry like this, when other aspects of your policy are designed to

thwart economic development, this creates even more of a problem.

That's our concern with this additional tax on pay-television services.

The pay-television companies in the province of British Columbia and in

western Canada have agreed, as part of their conditions for getting

their licence, that they will encourage the development of film and

television industry in western Canada. That's something we should be

encouraging. If any fiscal stimulus should be applied, Mr. Chairman,

it's in this area.

We realize that the difference in Manitoba is that they apply a

fiscal stimulus in a different way, and they are encouraging the

creation of new employment. I wish we had the unemployment rate that

Manitoba has; we'd all be a lot better off, and we wouldn't have to

raise taxes like this today.

MR. PASSARELL: Mr. Chairman, I'd like to discuss with the

minister subsections 3(

b) and 3(c), where it makes a statement in the

explanatory note: "Portable buildings will no longer be taxable." I'd

like to pose a question to the minister. Many of us who live in

northern communities have our homes on skids. For instance, at the

house in Atlin I have a chicken coop, a greenhouse and a house, all on

skids. Now it says here in the subsection: "Portable buildings will no

longer be taxable." Does that mean that on your assessment no longer

will you have to pay taxes if a house is on a skid? Because I know your

tax assessment does list, let's say, outbuildings as part of the

property taxes.

The second thing is trappers' cabins. Often trappers' cabins are put

on skids too. They're portable; they move around. Is the minister now

making it so that all trappers' cabins that are movable in the bush

will no longer be taxable? Those are two questions I direct to the

minister.

HON. MR. CURTIS: To the member for Atlin, this deals with

sales tax. It has nothing whatsoever to do with property tax. The

member is on the wrong tack in this regard. I could expand on it later,

but this has nothing to do with property tax.

MR. PASSARELL: That's fine, but if I'm going to build a new

house in Atlin, and I put it on a skid, I don't have to pay sales tax

on any material that I'm using for a portable building?

HON. MR. CURTIS: Mr. Chairman, we canvassed this yesterday in

second reading. We had an appeal to the court with respect to the

portable building question. The decision was handed down in May — in

fact, just one year ago — that portable buildings were tangible

personal property and were subject to tax on the sale or lease price.

What we're doing here, Mr. Chairman, through this amendment, is

reverting to that which has been in place for a good long time in B.C.

— that is, the practice of taxing the materials that go into a portable

building only — whether on skids or whatever — not on the finished

portable. The court case forced us to bring this amendment; that is why

it's here. We did not want to further tax portable buildings. The court

case overthrew the earlier law in this regard.

MR. PASSARELL: I just need one more clarification on that.

You say " non-taxable"; no sales tax for portable buildings. If I'm

going to build a new house in Atlin, and I want to go in and buy stuff

for the new house, and I'm going to tell the contractor, or the supply

house, that I'm buying all this material for a portable house.... I'm

going to be building a new house up in Atlin, and I'd like a little

letter from the minister. If this is true, I'll build a portable house

and won't have to pay any sales tax on any of the material. I'm sure

there are a lot of people.... There has to be some clarification on

what a portable house is. If you don't want to, that's fine; we'll just

take a bunch of letters, and nobody will pay sales tax in Atlin, which

we shouldn't have to pay anyway.

HON. MR. CURTIS: Mr. Chairman, the member has missed the

point; I don't say that unkindly. We'll be happy to explain it this

afternoon, if you wish to deal with officials or with me. We do not

want the tax to be applied on the completed building; that's what the

court case said had to be done. You pay the tax, depending upon what

material it is, Mr. Member. You pay the tax, whether it's for a

portable building or a three-bedroom full-basement house, Some

materials are tax exempt and others are not, but that's got nothing to

do with this.

This amendment corrects the situation in which we were placed, when

the court case said: all the materials are put together in a portable

building, and the building itself is sales taxable; we don't want that.

That's what this amendment

[ Page 6171 ]

achieves. So we're returning to that which has existed for a good number of years.

HON. MR. GARDOM: I'd just like to make one observation

concerning item (e), Mr. Chairman, dealing with bottles that are used

to hold milk products. I only wish that Mr. Ev Crowley had lived to see

this amendment. I certainly know that his son and Mrs. Jean Crowley

will be delighted to see this. It's been advocated for some time, and

I'm glad that the Minister of Finance has now succeeded in making it a

reality.

MRS. WALLACE: I am sure there are a lot of returnable milk

bottles in use these days, so it's really a big item for the minister

to make that concession.

I would like to ask the minister why he has seen fit to include

returnable milk bottles and basic cablevision equipment in exempt, and

has not seen fit to include the equipment that is used by volunteer

fire departments.

HON. MR. CURTIS: Well, Mr. Chairman, that isn't in this

section. I used to sit on that side of the House, and the Chairman and

the Speaker of that day wouldn't let me talk about what wasn't in a

section. Mr. Chairman, I have difficulty answering a question from the

member for Cowichan-Malahat (Mrs. Wallace) about matters which are not

in this

section in committee. Now if the member....

Interjection.

HON. MR. CURTIS: That's a non-question. Mr. Chairman, if the

member wants to launch an attack in the debate on my estimates, which

will occur in August or September, or whenever, later this year, then

I'll be happy to discuss with her and other members why some items are

taxable and some are not. But I feel constrained, dealing with

section

3, in terms of why something else is taxable.

Madam Member, you said — and I appreciate you said it in good

humour.... If you think returnable milk bottles is not a big item, boy,

I'd like you to see the mail I had last year. It was a very....

MRS. WALLACE: Dollar value.

HON. MR. CURTIS: Oh, dollarwise, no, it's not a large amount

of money. But I think we spent a fair amount of the public's money

answering the letters which inundated my office. I dreamed occasionally

of returnable milk bottles. They were walking past....

Section 3 approved.

section 4.

MR. STUPICH: Mr. Chairman, I spent some time yesterday

discussing six years as opposed to four. The minister has since issued

an invitation for me to meet with him and discuss it. I accept with

pleasure, and I believe our respective secretaries are working out the

details. I didn't really expect that this change would be made this

year. I think it's something that we should look at; perhaps it's not

wise that we go from ten years down to four all in one jump. It is a

subject that I will want to bring up again, and I look forward to

discussing it with the minister.

[Mr. Ree in the chair.]

Sections 4 to 7 inclusive approved.

section 8.

MR. STUPICH: Again, I raised this very briefly in second

reading. I'm wondering whether the minister has reason to believe that

the instances of wilful failure to remit tax have increased, that there

is a substantial volume. Is that why this and other related sections

are included in the legislation?

HON. MR. CURTIS: It has been on the increase. I think that

the information I received in the course of reviewing all that we'd

heard in the tax study and from the series of officials' meetings that

occurred later.... We've seen this trending over a number of years. It

has reached a point where I think the tougher penalties are appropriate.

It has to be seen in lock-step with the amnesty program, which is

not in this section. It is alluded to in the explanatory note. Amnesty

has been undertaken elsewhere in North America with some interesting

results. It's a little early for me to comment on that. But there has

been a slow and steady increase in wilful evasion of declaring tax

payable or, more particularly, in the case of the social services tax,

collection of the tax from the consumer and then deciding not to

forward it to the Crown.

MR. STUPICH: When we discussed this yesterday, I raised the

question of the number of auditors. I believe the minister said that he

was giving active consideration to the possibility of having more sales

tax auditors out in the field.

HON. MR. CURTIS: Mr. Chairman, I will commit to have the

information the member wants when my estimates are called. I understand

his interest in that, and I'll have it.

Section 8 approved.

section 9.

MR. MITCHELL: Mr. Chairman, I'm not sure if it's

section 9 or

section 11 where they bring in the penalties. It's not so much what the

particular piece of legislation says or the publicity that is being

given to it, but from what I feel it may say — and I would like some

confirmation from the minister of my reaction to it — it's kind of

tightening up a lot of the regulations. I know from experience and a

lot of correspondence that took place between my office and the

minister's office and various groups....

They started to enforce the collection of the 7 percent sales tax

from the Boy Scouts' sale of Christmas trees. In a broad discussion on

the collection of sales tax with members of the minister's staff, it

was mentioned quite strongly that we have a whole grey economy out

there, in which people are dealing in garage sales, church bazaars,

church rummage sales and community group rummage sales, and no one is

collecting sales tax. There are a lot of complaints from second-hand

stores and groups within the retail trade who feel that the ministry

should be tightening up and going after this revenue.

[2:45]

[ Page 6172 ]

I feel that some of the wording in there may be a hidden bomb that

is not being brought out to the public. Is it the minister's intention

to go after some of the money that is being lost in this grey economy?

I believe we were all given an amnesty; I'm not sure if it's run out.

Last year I bought an outboard motor from my neighbour, and I paid

$200. Now should he have collected sales tax on that sale and am I in

jeopardy, when I walk out of the House, of having this evidence used

against me in a collection? If the minister's intention is to go after

all the private sales that are made between neighbours, that are made

by church groups, community groups and garage sales, get up and say

that this is what they want to do: that they want to tax that economy

to get the revenue. I quite believe that if you take that attitude and

that threat....

I remember being active one time in a community organization where

we used to put on boxing shows. Ministry officials came down every

little boxing show we had to collect the amusement tax. We had to keep

the first ticket we sold and the last ticket we sold, and we had to pay

whatever the amusement tax was on that community show. If this is what

we're going to go back to.... It's too bad Hansard

was not in operation in 1952, because I opposed it then. Somewhere down

the line the Ministry of Finance of those days got rid of the amusement

tax for community groups. Are we going back to another type of tax on

little community groups, on church groups or on garage sales in the

neighbourhood? Is this the thin edge of the wedge, the tightening up of

the regulations? That's a thought with some of the officials that I've

talked to; is that thought going up from the officials or coming down

from the government? I've heard from one of his colleagues that they

too have received complaints from the people in the retail industry;

those who run legitimate second-hand stores are saying that their sales

are down because people are buying their second-hand goods at garage

sales.

Is this what the government really wants to do? Are they going to

set up this whole bureaucracy to go out and pick on little family

groups that are making money? I'd like something on record to know

where we're going to go, and if that fear is out there.

HON. MR. CURTIS: First, with respect to the sale and purchase

of an outboard motor, I am not here to offer the member the kind of

advice which he could get from any official in the Ministry of Finance

consumer taxation division, or indeed from his own caucus research. Or

if the member for Skeena wishes, he can come to my constituency office

and we'll be happy to assist him in that regard. That's for the member

to determine, not for me to advise.

Interjection.

HON. MR. CURTIS: Mr. Chairman, I hear an interjection from a

member who is not in her seat: "What does the law say?" I think we're

all required to know what the law says.

No, I assure the member seriously and very directly that we have no

intention of using this or any other

section to move into that

incredible area of garage sales and sales of goods by societies and

organizations, other than those which are in place now. The Christmas

tree one is very frustrating, I think, to a number of us on both sides

of this House, and I'll be looking at that again, Mr. Member. So let's

not get into that debate today, if you don't mind.

Quite apart from how it would be received, quite apart from the

foolishness of attempting to do it, the cost of going around to every

garage sale in the province of British Columbia, whether small or

large, with an official from the Ministry of Finance, or a government

agent, to collect 7 percent sales tax on those items which are taxable

in another area — that is, if they are sold by a commercial enterprise

— would represent sheer lunacy in terms of proper utilization of

government employees. I have no intention of sneaking behind this to do

that. If anyone has suggested that within the consumer taxation

division of the ministry, I'll make it very clear. I'll send them a

copy of Hansard from this

afternoon. It is not in the cards. It's not something the government

seeks; it's not something the government is studying; it is not

something I would personally countenance.

What may have happened, because in the course of the tax tour we did

receive some submissions from individuals who said that these garage

sales are really getting very large and very regular.... These were

people speaking to us. This was not a question of our offering a view

to the individuals who came along to those tax meetings all across the

province. They spoke about them; fair enough. It was an open season on

any tax topic. I know also that the member is correct when he says some

second-hand stores are concerned with respect to the proliferation and

regularity of garage sales. They seem to occur quite often in certain

areas. But I am not interested under any circumstances in moving to

that area of taxation. That's the bottom line; no equivocation;

absolutely, flatly, positively no.

MR. MITCHELL: I'm quite happy that I have that assurance from

the minister that it is not going to be the thin edge of the wedge. But

I still can't understand why we even got that thin edge of the wedge

when they started picking on Christmas trees. You may say that that has

nothing to do with it. But it still was a method that community groups,

Boy Scouts groups and all types of groups used to raise money. Much to

their surprise, they were nailed with an inspector, the regulations

were read out and all kinds of

interpretations were given.

I'm not going to go on to Christmas trees. I'm glad that he's going

to review it. I know that you're not going to have collectors going to

every garage sale, but once you start hitting one, two or three, the

rest of the public are going to get into line and submit. I know, as

one who years ago got into line and submitted.... But so long as I can

have that assurance from the minister, it's on record that if things

change, then we know that we can quote the minister's statements that

Christmas trees were the end of the line and there's nothing else.

HON. MR. CURTIS: Mr. Chairman, with respect to garage sales,

again, no. Whether it could be done by long distance, by telephone or

by whatever means, it's not in the cards. I can't make a more

straightforward statement to the member on that point.

The Christmas tree situation I will review. It's a very

contradictory situation. I'll be happy to discuss it with that member

or any other member of the committee at any time. But I expressed my

frustration with it, particularly at Christmas 1984, although I think

it also surfaced at Christmas 1983. I can't promise a solution; I can't

promise an easy

[ Page 6173 ]

solution. There isn't such a thing as an easy

solution here. You see, the point that is made by some is that some of

the non-profit sales of Christmas trees are very big business. I want

to address it. I won't be addressing it in the next few weeks, but I

hope to address it before Christmas 1985.

Sections 9 to 16 inclusive approved.

Title approved.

HON. MR. CURTIS: Mr. Chairman, I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Strachan in the chair.

Bill 11, Social Service Tax Amendment Act, 1985, reported complete without amendment, read a third time and passed.

HON. MR. GARDOM: Mr. Speaker, with leave, I call report on Bill 9.

Leave granted.

GASOLINE (COLOURED)

TAX AMENDMENT ACT, 1985

Bill 9, Gasoline (Coloured) Tax Amendment Act, 1985, reported complete without amendment, read a third time and passed.

HON. MR. GARDOM: Second reading of Bill 14.

INSURANCE PREMIUM TAX AMENDMENT ACT,

HON. MR. CURTIS: Mr. Speaker, amendments to the Insurance Premium Tax Act are introduced in Bill 14. I move second reading of that bill.

The amendments are for the purpose of increasing the rate of tax for

general insurance premiums and also to extend the tax to include marine

insurance for pleasure craft. The rate of insurance premium tax on

general insurance premiums — property, liability and other non-personal

items — is being increased from 2 to 3 percent. The rate of tax on life

and personal health insurance premiums — sickness, personal accident

and wage indemnity policies — remains at 2 percent; there is no change.

This tax rate structure is similar to insurance premium tax rates now

in place in Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick and

Nova Scotia.

The increase in the general insurance premium tax rate is scheduled

to take effect on January 1, 1986, in order to allow insurance

companies to plan for the rate increase when establishing annual

insurance premiums. As such, no increased revenue will be collected

during the 1985-86 fiscal year. The increase in general insurance tax

is expected to generate $5.8 million in additional revenue for the

following fiscal year, 1986-87.

Insurance premiums for pleasure craft which are insured by marine

insurance policies and are not included in personal property policies

will become subject to tax. In order to allow insurance companies to

plan for this change, the application of tax to marine insurance for

pleasure craft takes effect on January 1, 1986. The tax is going to be

phased in in this instance, at the rate of 1 percent for 1986, 2

percent for 1987, and the general property insurance tax rate of 3

percent for 1988.

This measure will have a rather minimal revenue effect, but it will

ensure uniform taxation of insurance premiums for pleasure craft. Mr.

Speaker, taxation of marine insurance will not be extended to premiums

for commercial vessels, and I think that point should be emphasized.

In

summary, these amendments are necessary to provide consistency

with the taxation of general insurance premiums in a number of other

provinces in Canada, and for the taxation of pleasure craft. I move

second reading.

[3:00]

MR. COCKE: Mr. Speaker, one of the things that I should bring

to the House's attention is the fact that the tax increases every year

in any event. My experience over the many years that I have been

purchasing general insurance has been that the rate increase has gone

sky-high, so we are getting that increase in any event.

I'm not opposed to the increase to 3 percent, because it does put us

in line, but I'm really surprised that the life lobby is as strong as

it is. I had expected that the life insurance premiums would have been

treated in exactly the same way. I've had some experience with them,

and I know they're a pretty strong bunch, something like the doctors.

But strong to the extent of excluding life insurance from this

increase! I realize that elsewhere in this country they've managed to

be excluded from the increase mainly because of the fact that they have

a very strong lobby. They make great sounds and put forward arguments

that for all intents and purposes are great arguments. But, Mr.

Speaker, I was somewhat surprised that it didn't happen that the life

insurance premiums were treated in the same way as general insurance.

Normally at least sickness and accident always used to be considered

under the casualty line. Life insurance, of course, has a "savings

element," and probably that is one of the reasons it was excluded, but

there's no such element as far as sickness and accident are concerned.

We're supporting the bill, but as I say, I'm somewhat surprised, and

I'll look forward with pleasure to what the minister has to say in his

closing remarks on second reading.

MR. STUPICH: Mr. Speaker, I want to talk a little more

generally about it. It is significant, in that of all the tax increases

imposed by the minister in this budget.... There haven't been very

many; I grant him that. I suppose there must have been the temptation

to try to get more revenue. After all, this is the third time in a row

that he has introduced deficit budgets. The one he introduced in 1983

was the first one in some 45 years in the province of British Columbia.

So I could see where he would be trying to find ways of cutting down

that deficit. Although the amount to be raised is the

second-largest.... Leaving aside the B.C. Rail, which I believe is a

special situation, it's still the second-largest increase, and I'm

wondering why at this time.

The minister does say that it's bringing it into line with other

provinces, but I wish we could bring other things into line with other

provinces. I wish we could bring our unemployment rate in line with the

other provinces. I wonder too whether those provinces increased their

rate at the time of

[ Page 6174 ]

greatest economic depression. It seems to me that

the timing could have been better. It could have been better to have

done this when things were going well in the province, rather than to

load it on the backs of many people who are going to have to pay higher

insurance premiums on very low insurances maybe — property that's low

in value — so it's not going to hit them very much individually. But

it's just one more way, it would seem, of extracting money.

The minister said that he had these representations during the

hearings all around the province. Did anyone suggest to him that one

way of making up some of the losses he was experiencing in the other

areas was to increase by 100 percent the rate of tax...? I'm sorry,

that was 100 percent for marine. In this instance it's a 50 percent

increase in the rate of tax. Did anyone suggest that to him? Did that

come out of the hearings? I can well imagine that someone might have

suggested increasing the tobacco tax. It could be argued that people

who are smoking are not paying nearly enough tax to make up for the

added cost on the rest of us for the health facilities that must be

maintained because of all these smokers. So that might well have been

done. But did anybody suggest to him that one way of making up the

shortfall was to increase the tax on insurance premiums?

DEPUTY SPEAKER: Pursuant to standing orders, the House is advised that the minister closes debate.

HON. MR. CURTIS: Mr. Speaker, to the member for New

Westminster (Mr. Cocke), the most important change here, I think, is

not the increase in general property — and I will speak about that in a

moment — but rather the introduction of a nominal, modest insurance

premium tax for pleasure craft. I think that, again, is in line with

ability to pay. Certainly it seems to me to be fair.

I can tell both members that I had no lobby one way or the other.

The "life insurance lobby," to use your phrase, Mr. Member, didn't come

before the tax hearings. I'm almost certain of that. I don't recall any

— not even an individual who came from the life insurance industry.

Similarly to the member for Nanaimo (Mr. Stupich), no, we didn't

have anyone who suggested this as a revenue source. This came about as

a result of the final, if I may use the phrase, debriefing through

which the five of us went after concluding the tour. We had made a

number of recommendations with respect to those taxes which should be

reduced and which have been dealt with in other bills, and then I had

to start considering how to increase revenues in some other ways. This

was seen as one which was relatively painless. So we're moving into a

new field, marine insurance premiums. I made the conscious decision not

to get into life in general. That was a decision made within my office

in terms of not wanting to intrude on that.

Mr. Speaker, I move second reading of the bill.

Motion approved.

HON. MR. CURTIS: Mr. Speaker, with leave I move that the bill be referred to a Committee of the Whole House forthwith.

Leave granted.

Bill 14, Insurance Premium Tax Amendment Act, 1985, read a second

time and referred to a Committee of the Whole House for consideration

forthwith.

INSURANCE PREMIUM TAX AMENDMENT ACT,

The House in committee on Bill 14; Mr. Ree in the chair.

Sections 1 to 3 inclusive approved.

Title approved.

HON. MR. CURTIS: Mr. Chairman, I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Strachan in the chair.

Bill 14, Insurance Premium Tax Amendment Act, 1985, reported complete without amendment, read a third time and passed.

HON. MR. GARDOM: Mr. Speaker, I call Resolution 56 standing in my name on the order paper, which I will read into the record:

"That the Special Committee of Selection appointed on

March 4, 1985, be empowered to appoint a special committee to select

and unanimously recommend the appointment of an ombudsman, pursuant to

section 2(2) of the Ombudsman Act, and that the special committee so

appointed shall have the following powers: (

a) to appoint of their

number one or more subcommittees and to refer to such subcommittees any

of the matters referred to the committee; (

b) to sit (

i) during any

period in which the House is adjourned and during any sitting of the

House, and (ii) to adjourn from place to place as may be convenient;

and shall report to the House on the matter referred to it during this

session, or following any adjournment of the House, or at the next

following session, as the case may be."

I so move, Mr. Speaker.

On the motion.

MR. HOWARD: Mr. Speaker, I'd like to make a few comments with

respect to the motion and, of course, by doing that indicate our

endorsement of it. In fact, we would have endorsed it a month ago or a

month and a half ago or at some earlier time. We would have preferred

the motion to have been dealt with earlier than this moment, because we

feel that the special committee, which will be assigned the task of

making a unanimous recommendation with respect to the ombudsman, should

not feel pressured by time; should not feel under any compulsion to do

something in a hasty way. We have a concern that the office of the

ombudsman may become vacant by default, which would be a regretful

thing to have happen. I need, therefore, to refer to the Ombudsman Act

in that regard to indicate to you how I think this vacancy could come

about by default.

Section 3 points out that "the ombudsman shall be appointed for a term of six years...." Our research branch of

[ Page

6175 ]

the New Democratic Party caucus tells me that that

six-year period will expire at midnight, June 30, which is not too many

weeks from now. When we reach

section 7 of the bill, I think a very

ready construction can be placed upon it: that the office of the

ombudsman might become vacant if a decision is not made by the 30th and

if other factors are operative at that time, namely.... Let me read

from it. Subsection 7(

l) says: "Where...(

b) the office of ombudsman

becomes vacant for a reason other than by operation of subsection

(2)(c)...." Subsection (1)(

c) is the potential suspension of the

ombudsman, or the office of the ombudsman becomes vacant when the House

is not sitting, and the like.

I submit that when we put those two together there is a possibility,

if on June 30 the special committee has not made its determination, and

has not made a report to the House about this matter, and the House is

not sitting — we don't know that — that by default a vacancy will be

created. The term of office will have expired. I think the office of

ombudsman is far too important to be left in any doubt or in any

question, or for there to be any uncertainty about the necessity of

having the office filled on a continuous basis.

As I read the act, there are certain things that only the ombudsman

himself, or herself, can do. If that office becomes vacant by default,

some aspects of the activity of the office of the ombudsman come to a

dead stop until a replacement takes place. I think it's far too

important to have that element of uncertainty existing there. The

office, of course, is also far too important to have people, members

particularly, railing against the office and raising questions about

its authenticity or its function, either directly or indirectly.

I've heard the argument, and others have, that MLAs used to do the

work of the ombudsman before the office of ombudsman existed, and that

MLAs now do some of that type of work. That's quite true. Problems,

situations and cases come to the attention of members, and every member

tries assiduously to see that justice is done with respect to whatever

those complaints are.

But there are certain disadvantages facing an MLA. Ordinarily an MLA

has no power to investigate the complaint, except by way of being a

supplicant and phoning a department and asking for information; by

contrast, the act setting up the ombudsman gives that specific

authority and power. An MLA has no power of access to documentation; an

MLA can't go and look at records and files or anything of that sort; an

MLA has no power to take evidence or to discuss the matter with

witnesses or whatever the case may be; there is no possibility of

making a formal report to the House or to Mr. Speaker about instances.

There are a number of authorities and powers that the ombudsman has, by

virtue of the very fine statute that was passed by this House a number

of years ago, that permit the ombudsman to function in a much better

way than can a mere MLA, who doesn't have those authorities, those

powers of access to information and the ability to look at records and

to be able to make some formal reports if the question may arise.

[3:15]

1 think, Mr. Speaker, if I could, in dealing with the value of the

office, quote a few sentences to indicate how important this office is.

This is a quotation:

His basic function — with respect to the ombudsman — will be to investigate

complaints from individuals who feel aggrieved by the administrative processes

of government. Where there's been an inequitable decision to an oppressive

practice, it will be the job of the ombudsman to make inquiries, to gather all

necessary information. Then if the decision or the practice has not been corrected,

he will be enabled to make appropriate recommendations to the authority concerned,

to the cabinet or to this assembly itself.

He's required to maintain confidentiality of

information that is received by him in the performance of his duty, but

he's empowered to publicize his findings, which will ensure on both

counts the best of service before the general public.

...to any people who may see the advent of the

legislation as a disadvantage to government or to the public service, I

would indeed respond very much to the contrary, because it will be

welcomed as a means whereby members of the public can be satisfied as a

result of an investigation of a third impartial adjudicator that their

affairs are being handled equitably and their affairs are being handled

fairly.

There are a number of other quotations in a similar vein, all

delightfully and properly phrased, indicative of the heartfelt feeling

that the originator or speaker of those words had and still has about

the office of ombudsman. The quotation is that of my colleague

immediately across from me, the Minister of Intergovernmental Relations

(Hon. Mr. Gardom), spoken in this chamber on the occasion of the

introduction of the bill, when he held the office of Attorney-General.

Those words will stand for all time, in my mind, as being declaratory

of the purpose and function and value of the ombudsman.

I think the committee probably needs to look at what should be the

qualities of an ombudsman, apart from the obligations by law. Those

qualities, I think, need to be that the person must be intellectually

very capable and very competent. Even though the ombudsman himself does

not need to examine each and every case that is brought to the office

of ombudsman, he should have that intellectual capacity to be able, if

necessary and if required, quickly to read files to assess the evidence

and the information and come to a conclusion readily about what that

problem might be. He needs to be intellectually strong and

intellectually very able and very competent.

And the ombudsman has been the experience in other jurisdictions....

I recall, when I read the speech made in 1977 of the Attorney-General

of the day, that he had occasion then to introduce the person who was

then the ombudsman in Ontario, Arthur Maloney, QC, now gone — a

delightful person, a person of intellectual ability, a person who was

determined, strong, fair, gutsy and prosecuted the office of ombudsman

in Ontario to the full without fear or favour. That's what we need to

have in the quality of ombudsman, wherever that office might exist:

someone who is determined, committed, able to stand up to government if

that necessity arises, able to ferret out the truth if it is denied to

him, and without fear or favour able to deal with the problem brought

to the ombudsman's attention in a fair and a just way. Those are

absolute qualities, and there should be no dilution in our minds as to

those being the qualities we seek in the person for that office,

remembering that the ombudsman represents the citizens of this province

— not the government of this province, not the legislature of this

province, not the power structure of this province, but the citizens

thereof. When the special committee is appointed, which I hope is soon,

I hope it will come to a conclusion fairly quickly, because I would not

want to see by default the office of ombudsman become vacant by the

process that I mentioned before.

There is, and it seems to me.... I hope it isn't an expectation, but

there appears to be in the motion the thought that perhaps the special

committee, which is sought to be coming into being shortly, may not be

able to conclude its

[ Page 6176 ]

deliberations by the end of June, because

incorporated within the motion is that the special committee can report

either during this session or following any adjournment of the House or

at the next following session, which might be next year. As I say, I

hope that that is not put in there as a sort of guidepost for the

activities of the special committee.

But if the occasion does arise whereby, because of the circumstances

of time or the functioning of the special committee, or because of its

deliberations, or because of the desire of the government to adjourn

the House for any reason over an extended period of time — and that's

the prerogative of government.... If, because of any of those factors,

we find the force of the Ombudsman Act comes into play and that office

is vacant by default, then the Lieutenant-Governor-in-Council has the

authority to appoint an acting ombudsman in that circumstance. I would

submit that if that arises, the Lieutenant-Governor-in-Council has no

alternative, without equivocation and without question — not placing

any doubt whatever in the minds of anybody — and has no other

obligation, I submit, but to appoint the present ombudsman in an acting

capacity. There's no other choice available. To do otherwise would

indicate that politics prevails with respect to the ombudsman. That

should never be permitted to be the case.

DEPUTY SPEAKER: Pursuant to standing orders the House is advised that the minister closes debate on the motion.

HON. MR. GARDOM: I'd like to thank the hon. member for Skeena

for his kindly observation. The talk that he was referring to was one

that I gave on August 15, 1977. I've had occasion now to reread it. You

know, you're absolutely correct: it was a very good talk indeed. I

think we'll have to take it as read for the purposes of Hansard

and historians, or anyone else who may be interested in the topic. But

I did make a couple of points that I think bear repeating.

To any people who may see the advent of the legislation as a

disadvantage to government or the public service I would respond very

much to the contrary. I said it would be welcomed as a means whereby

members of the public could be satisfied, as the result of an

investigation by an impartial adjudicator, that their affairs were

being handled equitably and fairly — which is a point that was

emphasized by the hon. member for Skeena. That, of course, is one of

the principal concepts and one of the obvious qualifications for an

ombudsman as a person who can represent the conscience of the state,

provide additional service for our citizens, move aside the

bureaucratic roadblocks, wade through the red tape, approach the

unapproachable and recommend improvements to administrative practices

and procedures, because the realm of the ombudsman is certainly within

that administrative jurisdiction and that administrative arena.

The person in question — again quoting from that talk of this

nameless individual of August 15, 1977.... It was an evening sitting, I

well remember that. I also well remember my good friend Arthur Maloney

sitting in the gallery. He was very impressed with this legislation. I

may say — and I think he would like to have it noted publicly — he

considered the act that was brought forth in British Columbia to be the

best act of its kind in Canada.

I made this point concerning the qualifications of the individual to

the office. It's obviously a position that is open to a well-trained

individual, a person with the highest standards and of the greatest

integrity and — I said in response to the hon. lady member from

Burrard, as it then was — of either sex. Indeed, the function is one

that is open not just to a man but to a woman as well.

I think the concerns of the hon. member for Skeena as to whether the

function would be continuous or not are ones that he really should not

be too troubled about. I think it's clearly contemplated within the

spirit of the act, and indeed the spirit of the office, that we would

not have a vacancy in the position. If the committee was unable to

conclude during the time-frame in question, there would be the

appointment of an acting ombudsman, because there is a responsibility

that the office continue — from its statutory conception if nothing

else. Furthermore, Mr. Speaker, I feel that the committee will be able

to proceed with all dispatch.

Perhaps I could make a public suggestion now that when the committee

of selection meets, the hon. opposition House Leader and I both be

members of that committee. The committee of selection was, of course, a

committee formed on opening day. Perhaps Her Majesty's Loyal Opposition

could bring their three names to the committee, and I will certainly

endeavour to see that the government will bring their names to the

committee. It's no secret now for me to mention that I have brought the

question as to whether or not the hon. member for Prince Rupert (Mr.

Lea) would like to be a member of the committee, and he expressed in

the affirmative. So I did make the motion in opening. If you need me to

reiterate I shall do so, and I move the resolution.

Motion approved.

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

[3:30]

ESTIMATES: MINISTRY OF INDUSTRY

AND SMALL BUSINESS DEVELOPMENT

(continued)

On vote 44: minister's office, $196, 94.

MR. MITCHELL: Mr. Chairman, there are two particular

industries in my riding that I sincerely hope the minister and his

ministry will take a very close look at. One is Sooke Forest Products,

which I have spoken on in this House on many occasions. In spite of

what the minister may believe — what he said earlier this morning in

debate with one of my colleagues — this is a forestry matter. The

industry of this province is not the sole jurisdiction of one minister.

We as the elected Legislature and the minister as a member of the

cabinet must realize that we cannot have a solid industrial workforce

if there is not 100 percent cooperation with both...with all

ministries. We could go through the Finance minister, through Energy,

through Forestry, but what we have to look at in that particular

industry is the financing cost. We all know — and this is shared by

those in the forest industry — that Sooke Forest Products is one of the

most efficient mills in operation. It is a high-state-of-the-art

industry in what they get out of a log, how they run the operation. It

has all the new innovative machines that are needed to compete in a

very tough industry.

[Mrs. Johnston in the chair.]

[ Page

6177 ]

But somehow that particular operation was allowed to drift. I

brought it to the Minister of Forestry's attention that you cannot run

an operation like that without an assured, affordable log supply. It

was allowed to drift because there was not the cooperation needed by

the government to make sure logs were made available. Logs were not

allowed to be bought up and exported to the other markets. There has to

be that cooperation, making sure that the resources of this province

are made available to create the workforce that is needed in any

community; in my particular case, the community of Sooke. That mill has

been allowed to grind to a halt. I'm not saying that their methods of

financing were wrong, or that one particular bank was a little more

vindictive than was needed, but what has happened is that the whole

community of Sooke has slowed down. Businesses are going bankrupt

because the workforce of 150 to 200 people are not spending money in

the community.

The minister has a heavy obligation to keep on top of communities,

keep on top of industries, to make sure we don't have that drift; that

we don't have communities going broke; that we don't have people losing

homes. It's nice to set up a critical industries commission, but it's

far better to act before it happens. It's far better that the minister

speak up in his own cabinet to make sure he has the clout to

coordinate, talk and meet with the established industries that are

there to review them, to give suggestions when needed. If he doesn't

take that responsibility, we're going to have other companies in other

communities suffer the same fate as Sooke.

I'm hoping and praying for each one of those employees who are out

of work today, for that whole community that needs that revitalization.

They need that positive economic stimulant to the community before more

people go under. When my colleague for Vancouver East talked about our

present Ministry of International Trade and Investment, he said that

the ministry in Japan had the same initials: MITI. They coordinate

every company, their resources and investment. You know, you are the

junior representative of the same type of philosophy: we must have

cooperation, we must have coordination and we must keep jobs in

operation.

The other company the minister referred to was the Victoria Plywood

co-op that has started. As one who has gone through the various trials

and tribulations with that particular group of people — and many of my

friends have invested in that — I think there are still problems facing

that particular co-op. I think one of the major problems that they are

going to face in the plywood industry is the great market of beautiful

fir knot-free plywood that a lot of us used to buy and build cupboards

with and then paint it so no one really knew what was underneath it.

The main market today is not for the clear plywood, but it is for

the finished panels. It doesn't matter really what type of a panel it

is, but it has to be finished when it is put on the wall. This is the

new technology that this particular mill, like all the plywood mills,

is going to have to recognize and start phasing in now to get that

market and provide the product that will allow them not only to

continue in operation but also to enlarge.

The minister, through his staff, should start the consultation and

the cooperation that is needed now, while all the enthusiasm is there

and the operation is going. They should start looking at changing over

now, not waiting until it goes down and becomes another statistic of an

industry that tried to take shortcuts but didn't succeed.

We just can't allow one more company, especially in my riding, to go

that route. I think it's important that that consultation, that input

from the minister and the studies and the research that is available to

the government is made. The groups that are involved should be

consulted with, and they would move onward and upward. Through you,

Madam Chairman, to the minister, we should start that consultation,

start that research and try to get the Sooke Forest Products going.

They have a great group of people there. They have had some excellent

cooperation from the company that owns the mill, the CPR. They have

been given all the breaks and the cooperation, but let's not just leave

it there. Let's not have media hype while it's starting, and let's make

sure it keeps going.

What type of input is his ministry prepared to give to companies like that, to employees and to communities.

HON. MR. McCLELLAND: Madam Chairman, we'll continue to

support the opportunities for companies like Victoria Plywood. I hope

the member will also continue to work with us in a cooperative way to

ensure that industries within the communities, which all of us as MLAs

represent, will continue to be supported as much as possible.

The Sooke Forest Products matter — of course the critical industries

commissioner is looking at Sooke Forest Products. We'll do whatever we

can to help him in his recommendations when they come forward and to

develop the programs that we hope will be able to be tailored directly

to those companies. Again, I must emphasize that we're not interested

in propping up non-viable industries. We are, instead, hopeful that all

of the people within the communities, whether they be labour,

management, government, suppliers, purchasers or whoever, can work

together to make sure that viable industries can continue to be viable

in our community.

AN HON. MEMBER: A helping hand.

HON. MR. McCLELLAND: That's right, it's a helping hand. It's

not government imposing restrictions or making impositions on

companies, rather we would like to be the person who gets everybody

together. Cooperation is going to be the key to the future in our

province, and I hope that that will happen in the two instances that

the member has talked about.

I just wanted to say that there seems to be some kind of focus

developing here with the forest industry over there and everything else

over here in the development of the economy. That's not true. The

forest industry is a vital part. As your colleague from Vancouver East

suggested, it is our basic industry, and it will continue, in my

opinion, to be our basic industry for as long as we can ever think

about.

It's not a sunset industry. It's a vibrant industry which has every

opportunity to grow, and we as government, you as opposition, and

everybody in our province need to support that. It's not something else

that's over there somewhere; it is a part of our industrial fabric in

British Columbia. It is the reason, as a matter of fact, that the

programs that we've put forward in our budget and in some of the bills

that are going to be debated at a later time.... I won't comment on

them, because that offends the rules of the House, Madam Chairman.

Those programs are geared to the industrial benefits in the province.

[ Page 6178 ]

I'm told, having had a quick financial analysis done by some of my

staff people, that 50 percent of all of the benefits which are

contained in the budget and the other programs will go to

forest-related industrial opportunities — 50 percent of everything that

we're doing. Research and development, processing, manufacturing —

those forest industries will benefit from those programs which we're

putting forward now in this package.

One hundred million dollars per year, from 1987 onwards, will go

into forest-related developments, whether it's through the corporation

capital tax removal, which will mean ultimately, starting this year,

something in the neighbourhood of half a million dollars, working up to

$8 million per year.... The gasoline tax is starting with $5 million

and working up to $6 million in the third year. The property tax

revisions that this government has made will relieve the forest

industry of something in the neighbourhood of $33 million this year,

working up to $86 million in the third year, for a total, as I've said,

of $100 million in relief of taxes.

Then add on to that, Madam Chairman, some of the programs which will

allow for loans, other programs under the ERDA agreement and everything

else, and you see a very significant, important and real commitment to

the forest industry by this government — not as something other than

everything else we're doing but as a vital, important part of the

fabric of this province and, in fact, of this nation, because all of

Canada depends on the development of our forest industry in British

Columbia.

We have a real commitment to that, and it's not only a commitment

philosophically but it's a commitment in dollars as well. In terms of

the two things you mentioned, we'll be extremely interested in working,

first of all, with Sooke in trying to solve that problem, and secondly

with Victoria Plywood, making sure that that is not a flash in the pan

or a short-term solution, but one which will be a long-term solution

for employment in this region.

[3:45]

MR. MITCHELL: I wanted to endorse what the minister said, and

I'm glad that he did listen to my colleague from Vancouver East,

because it was my impression that he thought that the member for

Vancouver East was talking in the forest estimates. As the member

said....

Interjection.

MR. MITCHELL: He wasn't. He was talking about industry;

industry, development and jobs in this province. You can't separate

them, and I'm glad that the minister has come over to our view over the

lunch hour. He does realize what the member for Vancouver East was

saying: that we must cooperate.

Interjection.

MR. MITCHELL: He has converted you? Then I'm really impressed with the member for Vancouver East.

AN HON. MEMBER: You did the converting.

MR. MITCHELL: No, he was giving me the same lecture that the

member for Vancouver East was giving to him, and then he gave it to me

— that there is a need for cooperation.

Interjection.

MR. MITCHELL: Madam Chairman, will you have that cabinet minister make his own speech and not interrupt mine?

I really wanted to stress that there is that need for that

cooperation, but there also must be some planning ahead. He seemed to

miss what I said. For the last number of years we have allowed these

companies to drift, and if the minister is going to pave some new roads

and take a new tack in that particular ministry, it's so important that

he work with all of the companies. There are two categories: (1) a

company that has the top of the technical arts for production of

lumber, Sooke Forest Products; and (2) another one that is becoming

antiquated. We must upgrade the one, and that planning must take place

right now.

I know a lot of people run off and hide when you start to talk about

planning. But that economic planning, that job preservation, that

change must take place in the product. It has to take effect now, and

it has to be led by somebody. The minister has that particular

responsibility, and I hope he accepts it.

MR. PASSARELL: Thank you, Madam Chairperson. It's good to see

you in the chair, and I know that you're in good hands with the Clerk

from Kicking Horse Pass.

I have three specific questions to address to the....

Interjection.

MR. PASSARELL: Order? Yes, we'd like some order here with

regard to regional development in the northwest, and I have three

specific questions to address to the minister.

The first one is the Stewart port expansion. Yesterday the federal

government started to put signs around Stewart, stating that Stewart

was no longer a port of entry with regard to shipping, customs and that

kind of thing.

The Hon. James Fulton was able to discuss this matter in the federal

House. The signs were held incognito for the time being, and it would

be worthwhile for the government to pursue this matter and not allow

the federal government to come into Stewart and close Stewart as a port

of entry. Stewart is the most northerly ice-free port. The minister has

been up there and he understands what I am talking about.

This was a decree that was made yesterday by the federal government,

and the Hon. James Fulton was able to hold that back for the time

being. I would hope that the minister would be able to pursue that on

his level, because Stewart is an expansion port for the mineral

developments in the far north, and the entire transportation link. It's

of major importance, I think, for this government and all citizens of

British Columbia that Stewart is used as an expansion of the ports.

The second issue I'd like to direct to the minister regards regional

development and the application by the Nishga nation to use tree-farm

licence No. 1, which is currently being held by B.C. Timber-Westar and

has not been in production, per se, for the last two years. It would

allow the native people to put people back to work. As the minister is

aware, those reserves — Greenville, Kincolith, Canyon City and New

Aiyansh — have 95 percent unemployment. Westar is not using its

tree-farm licence properly, and as the Forests minister did say at one

time: "Use it or lose it." The Nishga people would like the tree-farm

licence turned over to the

[ Page 6179 ]

Nishga people; it's their land, they understand the

consequences of forestry in this province, and it would be a boost to

the regional development.

The last specific question to the hon. minister is transportation

links in the far north. There are a number of possible major mineral

developments in the far north, but they will not proceed unless there

is some kind of transportation link in the far north. For instance,

Stikine Copper is 40 miles from the closest road and then has to truck

over to Dease Lake and then 250 miles down to the port of Stewart.

So there has to be some kind of regional development with regard to

transportation, and I know the minister is aware of this and is

probably as concerned as I am about the need for improvement of

transportation in the far north.

Those are three specific questions: firstly, the need to expand the

Stewart port and to stop the federal government from closing the port

of entry of Stewart; secondly, the Nishga tree-farm licence; and,

thirdly, the improved transportation link in the far north.

I think my honourable friend knows that I went four minutes and 35 seconds.

HON. MR. McCLELLAND: I've not heard about the matter of the

Stewart port and the federal government. This is the first I've heard

of it. I've asked my deputy to make sure that we find out what's going

on. Our interest, of course, is to make sure that Stewart does become

an opportunity for shipping, whatever developments we might be able to

bring forward in that northwest sector of British Columbia.

I didn't quite understand what the member meant about keeping those signs incognito. Was that in Chinese? I don't know.

Interjection.

HON. MR. McCLELLAND: Okay, so they're hidden somewhere. Well,

we'll try to make sure that wherever they're hidden we cover them with

dirt or something like that.

Tree-farm licence No. 1. I'll contact the Minister of Forests (Hon.

Mr. Waterland) and find out where we're at with that, and if there's an

opportunity for that transfer. I'm also not that familiar with

tree-farm licence No. 1. But I have had good meetings with the mayor of

Stewart, Gary Hubbard, in the last ten days, and we talked about the

way in which we think that.... We'll continue to try to develop those

opportunities. There are a number of transportation issues particularly

related to mining development in which we might be able to take some

initial steps now: airstrips and some other things in some of the

mining areas that would lead for us later to have more full-scale

developments, which would lead to further opportunities for that whole

northwest sector, including Stewart.

I'm fully sympathetic with the concerns of the member. We'll do

everything we can to try to make sure that those opportunities are not

lost by any actions of any other level of government, for sure. Again,

I'm not aware of what has actually happened, but I will find out, and

we'll try to turn that around a bit.

MR. BARNES: I would like to present to the committee a bit of

information that is available in a study that was presented to the

thirty-seventh annual general meeting of the Community Arts Council of

Vancouver last September. It's entitled "British Columbia and the Arts"

— the investment, the dollars, the jobs, etc. Under this particular

ministry, Madam Chairman, I just wanted to raise this matter, hoping

that the minister would indicate to the committee the strategy that his

ministry may be considering with respect to the arts as one of the

major industries in British Columbia, and certainly in Canada.

If we are to believe trends in the world, one of the graphs that I

was looking at with respect to the arts.... This is a Stats Canada

graph that was produced last April: growth in the arts labour force in

Canada compared to growth in overall labour. The province of British

Columbia has seen an 87 percent increase in the arts labour force,

compared to 53 percent generally with respect to the overall labour

force. This compares with a 53 to 50 percent increase in Newfoundland,

a 112 to 32 percent in Prince Edward Island, a 69 to 32 percent

increase in Nova Scotia, and a 62 to 33 percent increase in New

Brunswick. Quebec has a 76 percent increase in the arts, over 38

percent generally in the labour force; Ontario, 65 percent to 33;

Manitoba, 49 percent to 22; Saskatchewan, 61 percent to 23. Our

neighbour, Alberta, has had an increase of 124 percent in its arts

labour force, compared to a 75 percent increase generally in the labour

force.

HON. MR. McCLELLAND: On a point of order, I really like

listening to that member; he's one of the delightful members of the

House. But this has nothing whatsoever to do with my ministry. I don't

understand why we're doing it here. The Provincial Secretary (Hon. Mr.

Chabot) is responsible for discussions and financing under arts and

culture. I don't mind, but I'm sure that it offends almost every rule

of the House.

MADAM CHAIRMAN: Hon. member, would you confine your remarks to the ministry.

MR. BARNES: I'm really very disappointed at the minister for

coming down so hard on the arts industry like that. I appreciate that

it is not normally considered to be part of his ministry because the

arts are suffering so much. That isn't to say that the minister

shouldn't consider the possibility that the arts are one of those

industries that he as the Minister of Small Business Development, in

his role in trade and in industrial development, and his general

background and interest in the best economic direction for the province

of British Columbia, certainly will appreciate the significance of

these points that I wish to make. I am addressing myself specifically

to those aspects of the arts as they relate to the economy, as they

relate to business, as they relate to a healthy economic environment,

tourism, the multiplier effect with respect to employment and all of

these things. So I would hope that if the minister is serious when he

says that I am out of order by raising this matter, he will reflect

upon the need for change, the need for a more innovative view of

things, and with that in mind would permit me to expand perhaps briefly

— just as a compromise — on just a few of the submissions that were

made. I will restrict my comments in light of the possibility of

disagreement on what is clearly defined as being relevant under this

ministry and just comment on the jobs aspect, because that is certainly

something that that minister and his government have concern for.

If that is okay with Madam Chairperson, I will just proceed to make

some of these points. I notice that the Chairman has not interrupted

me, so I presume that it's okay.

[4:00]

[ Page 6180 ]

Madam Chairman, there are two distinct arts-related employment

populations. Together they included about 414,000 workers or 4 percent

of the Canadian labour force in 1981. In fact, arts-related employment

is nearly as large as the agricultural labour force and total federal

government employment, including Crown corporations, together. The

first group is the arts labour force made up of workers who use

arts-related skills in their day-to-day jobs, such as artists and arts

technicians, including curators, librarians and camera-persons. Between

the years 1971 and 1981 the arts labour force increased 74 percent from

156,455 to 272,640 — or 2 percent of the Canadian labour force, which

as a whole increased 39 percent between 1971 and 1981. In British

Columbia the arts labour force increased 87 percent compared with an

increase of only 53 percent for the entire labour force, as I

pointed out to you in the diagram earlier.

Madam Chairman, the second group is the arts industry labour force

made up of workers employed in arts industries such as advertising,

publishing, motion pictures, live stage events, fine arts schools, etc.

In this category only 35 percent of the arts labour force are employed

in the arts industry. Between 1971 and 1981 the arts industry labour

force increased 58 percent from 150,080 to 236,110, or 2 percent of the

total labour force. Of this total, 52 percent were men and 48 percent

were women, compared with 60 percent men and 40 percent women in the

total labour force. Artists made up 24 percent of the arts industry

labour force, arts technicians 18 percent, arts administrators 8

percent, and other support personnel about 50 percent.

The employment efficiency question is equally of significance to

this ministry. The 1981 census of manufacturers comparison between the

20 largest Canadian manufacturing industries and the performing arts

reveals that of every revenue dollar earned by manufacturing companies,

only 20 cents was spent on salaries and wages, compared with the

performing arts, where 66 cents of every revenue dollar was spent on

salaries and wages. Given that average wages in the arts are less than

half those in manufacturing, then dollar for dollar the performing arts

enjoy an employment advantage of six to one. Furthermore, the fine arts

provide meaningful employment with a high level of job satisfaction,

long-time career commitment and appreciation of human capital rather

than depreciation of capital-intensive plants and equipment. I would

suggest as well that in the area of industrial location, the investment

of industries that may be seeking the most desirable regions and

locales within a province.... They quite often prefer those areas that

have the basic amenities. On this the report had this to say with

respect to the industrial location:

"The arts also have a role to play in attracting new

industries to a province or community. Traditional industrial location

theory suggests that companies locate plants in a particular community

for access to markets, raw materials and energy supplies. During the

1960s, however, many companies, particularly but not exclusively in the

service industries, began to locate headquarters according to the

amenities available in a given community — for example: good weather,

easy access to cultural, educational and recreational facilities, etc.

The tendency to make industrial location decisions based on a

community's amenities has been amplified by the shift from traditional

smokestack manufacturing to high-tech industries. A number of observers

suggest that jobs now follow people in high-tech industries, rather

than people following jobs. To attract and retain scarce,

highly-trained workers, companies and communities must offer an

increasingly attractive quality of life which includes the fine arts."

"An increasing number of businesses find that the

cultural ambience of a community influences whether executives and

workers — including marketers, of course — want to work and live there.

In recruiting, companies frequently emphasize two matters very much

related to the arts: the cultural facilities of a community in which

the companies are located, and the corporation's involvement in the

arts."

Then it goes on to talk about productivity, again recognizing the

importance of a good state of mind with respect to employees and the

role of the company with respect to recognizing the multiplier effect

by employing people who are highly skilled in various forms of the arts.

Madam Chairman, I basically wanted to introduce the idea. Perhaps I

could ask a specific question to the minister with respect to the

availability of capital funding — seed money, so to speak — for people

who are in small businesses and the arts. I'm sure the minister

recognizes that small business in the province of British Columbia may

be anything from one person to a group of individuals, say six or

eight, who have maybe $250,000 capitalization. But many people are

operating on very marginal budgets who are contributing a great deal of

their effort, their time and study.

What I would like to know is what access artists have generally to

loans and grants and to ways of being encouraged to make contributions.

We know about the Industrial Development Bank on the larger scale, but

what other facilities are available within your ministry to assist the

small entrepreneur and investor in the arts, the smaller individuals?

HON. MR. McCLELLAND: Madam Chairman, just very briefly, the

member referred to the arts industry, and if the arts industry can

qualify under the terms of our targeting arrangements — if they're

manufacturing, if they're processing, if they're expanding into export

markets — the arts industry would be treated no differently than any

other industry in British Columbia, whether it be the forest industry,

the mining industry or anyone else. As long as they can meet the

targets and the criteria that we have under the various programs that

are available.... In fact I would encourage it — very much — if we

could have people who are developing small manufacturing operations to

support the movie industry, for instance, which is one of our growing

industries in British Columbia. Then I would encourage them to come to

us to take advantage of the programs we have. They will be treated

exactly the same as every other industry in British Columbia, and we

would be very happy to help them.

[Mr. Strachan in the chair.]

MR. BARNES: This question is one that I didn't have notes

prepared for, but when the minister was commenting on the right of all

the various people in the arts industry to apply for funds on the basis

that any other industry would, I wondered if the minister has given any

thought to the fact that it is of a different nature; the arts

community generally is not able to compete on the same basis as others,

because of the criteria. Quite often a financial institution sets some

pretty

[ Page 6181 ]

rigid standards with respect to qualifying for grants and for loans and these kinds of things.

It's been my experience that many artists are not experienced in

business in that sense, not understanding just how to qualify

themselves, but they nonetheless are investing a lot of time, effort

and energy and clearly are willing to work for wages generally far less

than the average wage. So there is a difference. These people are in a

different category. They're highly motivated, willing to make great

personal sacrifice, as is unfortunately the problem with many small

industries — family operations, the husband and wife and the children.

They work hard day and night. They get rid of the telephone and they

don't have a car. They pay people's wages, except themselves. They can

barely make the payments on their mortgages and so forth.

But it seems to me that when you analyze the contribution of these

people to the industry, they are probably the ones that we should be

willing to make special arrangements for. It seems to me that there is

a distinction between this kind of an entrepreneur and the person more

experienced in the business of finance. I'm wondering if the minister

can see any possibility of a special trust or one that recognizes the

advantages of keeping some of these small operations afloat. I'm not

suggesting that you are pouring good money after bad, but clearly these

people are contributors, and we know from experience that it's the

small operations that are the most labour-intensive and return the

greatest percentage of the dollar into the community simply because

they are constantly trying to keep afloat, and their dollars rarely are

fleeing the province, so to speak.

HON. MR. McCLELLAND: As the member likely knows, Mr.

Chairman, there are a number of grant programs available, not in my

ministry but in the Ministry of the Provincial Secretary, which are

available to help the very people he is talking about, usually

non-profit societies who will support various kinds of artistic

endeavours, whether it be a community music school or community

artists' school or something like that. Those programs are available,

but we have to remember first of all that anything that my ministry

offers to somebody else comes from you and me and everybody else who

pays taxes in the province. So we must have some criteria that protect

the taxpayer in terms of how we support other industries. That's why I

have some guidelines given to me by this Legislature that I can't go

beyond. I wouldn't really want to go beyond them.

However, one thing we do have, and it is very successful, is a

business counselling service out of our Robson Street office in

Vancouver. That is open to everybody; it doesn't matter what kind of

category they fit into or anything else. I would encourage the member

to counsel people who may be interested in developing some kind of a

business interest, whether it's in the arts or anywhere else, if they

don't have the financial capability.... I agree, a lot of people just

lose because they don't know where to go. But we have that opportunity

available. I don't know how many people come and see us every day, but

it's a very busy office. We've got business counsellors who can talk

about business plans, financial plans, marketing plans and the way in

which you yourself might advance the various financing that might be

available through the Federal Business Development Bank or the B.C.

Development Corporation or the normal banking system. That's probably

the first step that anybody in that position should take. Come and see

us, get one of our business advisers to talk about the way in which we

might or might not be able to help, whatever it turns out to be. But

we've got that business service available to people, and we encourage

them to use it. Perhaps the people that you're talking about could very

profitably use it.

[4:15]

If they're into the business of supplying the arts industry, one of

the things that you said in that report that you quoted, and they are

actually making things that supply the arts industry, they would

certainly qualify for some of the programs that we have already. But

the business counselling program is available to everybody, and I would

hope that the people that you're talking about would come and see us.

MR. MICHAEL: Mr. Chairman, I'm pleased to take my role in the

minister's estimates at the committee level. I must compliment him on

the final resolution of the ERDA agreement with the federal government.

I am particularly happy to see the $300 million figure in ERDA for

silviculture. It's interesting to note the emphasis that the two

governments put on forestry in the province of British Columbia, for in

looking at the figures, the $300 million forestry

section is in excess

of 50 percent of the total. I'm certainly pleased to see that. I'm also

pleased to see that tourism obtained $30 million in that program and

agriculture received $40 million, as both are very significant

industries in my constituency, and certainly growing industries. It's

interesting to look over the last two or three years, which indeed have

been hardship years: the fact that agriculture has held in there very

well, with the exception of a couple of segments. But by and large it's

held in there very well, and indeed has withstood the downturn of the

economy quite well.

I'm also very happy to see the number of announcements being made by

the private sector in job creation, in new plants and facilities that

have been announced in just these last few weeks or months. It's good

to see the announcement of Ocelot Industries, the ammonia plant in

Kitimat, a capital expenditure in the neighbourhood of $65 million. A

very positive announcement, and something that will certainly mean a

lot to the community of Kitimat.

[Mr. Ree in the chair.]

I was also very pleased to see the announcement of the fertilizer

super plant on Annacis Island, a capital cost of $600 million that will

result in thousands of jobs and steady employment for approximately 200

people. Along with that it's interesting to note that the fertilizer

plant on Annacis Island is going to be consuming in the neighbourhood

of 20 billion cubic feet of gas a year. That will mean a lot to the

north country, a lot for the natural gas industry, and will certainly

have long-lasting effects on that industry in British Columbia. I would

hope that the minister and the government will be successful in

completing the negotiations with the federal government for them to

fulfil their commitment to the Vancouver Island gas pipeline, as that

again is going to create 20,000 man-years of employment and several

hundreds of full-time long-lasting jobs for the province.

I would hope that we will very shortly see a successful conclusion

of the long-discussed liquefied natural gas plant for the Prince Rupert

area. It is a capital expenditure in excess of $2 billion — two

thousand million dollars, Mr. Chairman — and large consumptions of

natural gas, opening up the

[ Page 6182 ]

massive fields and massive reserves that we have in the north country.

It's been very interesting sitting here listening to the debate from

the members of the opposition for the last couple of hours. I think

it's been very positive. Some very constructive suggestions have been

put forward by the opposition. It's certainly rewarding to see that

type of positive, sincere suggestion put forward by the opposition in

an attempt to further lead this province into recovery and create those

much-needed jobs.

It's very interesting and somewhat in contrast to one member of the

opposition, the second member for Vancouver East (Mr. Williams), who

seems to think his sole role in this Legislature is to talk negative,

negative, negative. It's very interesting to look at the facts of coal

production, the facts surrounding Quintette and the northeast coal

venture. I intend to read just a few into the record today, and perhaps

the second member for Vancouver East would like to take note of some of

the facts and figures of the tremendous growth of the coal industry in

British Columbia.

In 1983 the quantity of coal produced in the province was

approximately 11.5 million tonnes. In 1984 that figure had grown to

19.26 million tonnes — pretty significant growth. Looking at the dollar

value, very interesting figures again: $556 million of coal produced in

British Columbia in 1983, and in 1984 that figure was well in excess of

$900 million. The quantity of coal produced is estimated to have

increased by 7,800,000 tonnes, 1984 over 1983, and the value has

increased by in excess of $365 million in 1984 over 1983. I'm amazed,

in looking at these figures and listening to the member opposite talk

about.... He tries to imply through his questions, Mr. Chairman, the

failure of northeast coal and coal production in British Columbia. The

value of total mineral production in the province during 1984 was a

record $3.3 billion, according to the Ministry of Energy, Mines and

Petroleum Resources. The total is up 15 percent, from less than $2.9

billion in 1983, and compares with just under $3.1 billion in the

previous record year of 1980. Why are those figures so high? They're

high because of this government's vision and determination to develop

the northeastern part of British Columbia.

It's also interesting to look at a recent

article from the Canadian Press, a story about Quintette Coal.

"Quintette Coal Ltd. in northeast British Columbia has

confirmed a Japanese industry newsletter report that it is ahead of

target in coal production this year."

These are not my words, Mr. Chairman; they're quoted from the Canadian Press. This was written in the last two or three days.

" If Quintette's April production is sustained for the

rest of the year, the mine would produce 5.1 million tonnes of coal,

ahead of the targeted 4.4 million tonnes set for all of 1985. Anijad

Ali, controller of the coal division, Denison Mines Ltd., said Monday

April's production amounted to 426,000 tonnes of saleable coal. Denison

Mines owns 50 percent of Quintette and is the operator of the mine.

Ali's confirmation of the mine exceeding its target production came as

the May 2 issue of the Tex Report, a Japanese industry newsletter,

reported the better-than-expected production figures."

Mr. Chairman, I don't read this as doom and gloom, like the second member for Vancouver East.

"Ali also said that a former B.C. chief geologist's

claim about lack of exploratory drilling at Quintette wasn't borne out by

independent geologists' reports."

It's interesting to look at some more articles on coal and at the

positive aspect of coal production in British Columbia. An

article from

the Westar mining newspaper: "The 400,000 tonnes for Westar represents

13.6 percent of Balmer's current annual production. Fording Coal has

affirmed that they will be supplying Japanese companies with 175,000

tonnes of a similar product." Positive articles, Mr. Chairman; and no

question about the future of coal in British Columbia, one that indeed

is going to be very positive and is truly a growth industry.

Looking at another article, the headline says: "American Utility Looks at B.C. Coal to Fill Fuel Needs." It reads:

"A U.S. east coast power utility, with an annual appetite

for 3.2 million tonnes of coal, is continuing to discuss a major purchase of

fuel from B.C. Glenn Schleede, president of New England Energy Inc., the transportation

subsidiary of New England Electric System, said talks are continuing with Fording

Coal Ltd. of Calgary. Fording delivered a 40,000-tonne shipment of fuel to

New England Electric in November 1984. The fuel moved by rail from Fording's

East Kootenay mine to Vancouver and then to a Japanese owned bulk carrier, the

Sanko Eternity ,

to Brayton Point, Massachusetts, a total trip distance of 14,129

kilometres. Schleede said the coal had a lower landed price than coal

moving from mines in Virginia, West Virgina and Pennsylvania."

Looking at the statistics, Mr. Chairman, it's very plain, for any

who wish to look, that the production and future of coal in the

province of British Columbia is indeed a very positive one.

Looking at job creation, Mr. Chairman, I know that the minister has

a very difficult task indeed in British Columbia. We know that we are

probably the province most susceptible to the devaluation of the

currencies in the European area, in Sweden, and in Chile and Brazil.

It's been very difficult to keep pace with the new people coming on the

employment market, people coming from out of province, in excess of

15,000 in a year over the last five years, people who are graduating

every year through our school system, spouses who are coming onto the

labour market, and immigrants coming from other countries.

It's interesting, Mr. Chairman, to have a look at job creation in

British Columbia since the end of April 1985 from the end of April

1984. It's very interesting to note that there have been 29,000

additional jobs created in this province during that 12-month period;

twice as many jobs as the three other western provinces combined.

During that same period the province of Manitoba that we hear so much

about has had a reduction — 1,000 fewer people were working on April

30, 1985, than on April 30, 1984. Mr. Chairman, I think it's

interesting to look at the type of....

MR. SKELLY: On a point of order, Mr. Chairman. Three days ago

Statistics Canada issued their April

summary. It showed that 4,000

fewer people were working in British Columbia than a year ago.

DEPUTY CHAIRMAN: Order, please. That is not a point of order.

[ Page 6183 ]

MR. MICHAEL: Mr. Chairman, I know some of these statistics

hurt when the facts are read, and I appreciate the rattledness of the

members opposite in not wanting to digest or comprehend the facts, but

perhaps they should have their research department check them out, and

I'm sure that they will find them very accurate indeed. If any members

opposite would like to check those facts with me after reading the

Blues tomorrow, I would be very pleased to meet them and show them the

statistics and prove them to be authentic.

Mr. Chairman, in conclusion, perhaps before we start comparing

ourselves and the competitive position with Sweden or comparing

ourselves and the competitive position with Chile — which is our

greatest copper competitor; and the country of Sweden is our greatest

competitor in the wood products field — they should look at the

devaluation of those currencies over the last two or three years. The

Swedish krona....

Interjections.

MR. MICHAEL: I'm sure they're not interested in this, Mr.

Chairman, but anybody with any knowledge of the international

marketplace will know that as a foreign country — a competitor —

reduces the value of their currency, it puts them in a much more

favourable position to compete with the Dominion of Canada and the

province of British Columbia. The Swedish krona, Mr. Chairman, has been

devalued by approximately 35 percent in the last 24 or 30 months and

the Chilean peso has been devalued by 100 percent in the last 24 months.

[4:30]

HON. MR. McCLELLAND: Mr. Chairman, I understand that the

Administrator is nearby, and I would like to move that the committee

rise, report progress and ask leave to sit again.

Motion approved.

The House resumed; Mr. Strachan in the chair.

The committee, having reported progress, was granted leave to sit again.

DEPUTY SPEAKER: Hon. members, the Legislative Assembly is

advised that His Honour the Administrator is in the precincts. I will

call a brief recess and ring the division bells, with the understanding

that His Honour will be approaching shortly.

The House took recess.

DEPUTY SPEAKER: Order, please, hon. members.

His Honour the Administrator entered the chamber and took his place in the chair.

CLERK-ASSISTANT:

Workplace Act

Assessment and Taxation (Miscellaneous Amendments) Act, 1985

Corporation Capital Tax Amendment Act, 1985

Gasoline Tax Amendment Act, 1985

Gasoline (Coloured) Tax Amendment Act, 1985

Motive Fuel Use Tax Amendment Act, 1985

Social Service Tax Amendment Act, 1985

Tobacco Tax Amendment Act, 1985

Hotel Room Tax Amendment Act, 1985

Insurance Premium Tax Amendment Act, 1985

Business Licence Repeal Act

British Columbia Transit Amendment Act, 1985

Ministry of International Trade and Investment Act

Legislative Assembly Allowances and Pension Amendment Act, 1985

British Columbia Railway Dispute Settlement Act

CLERK OF THE HOUSE: In Her Majesty's name, His Honour the Administrator doth assent to these bills.

His Honour the Administrator retired from the chamber.

HON. MR. GARDOM: Committee of Supply, Mr. Speaker.

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

ESTIMATES: MINISTRY OF INDUSTRY

AND SMALL BUSINESS DEVELOPMENT

(continued)

On vote 44: minister's office: $196,194.

MR. SKELLY: We were hoping that the member for

Shuswap-Revelstoke (Mr. Michael) would continue reading newspaper

articles. I don't know where he did his research, but Charles LaVertu

is doing a fine job.

Mr. Chairman, the member for Shuswap-Revelstoke was talking about

the minister's job creation successes and about 24,000 jobs that were

created in the last little while. This doesn't seem to fit very well

with the statistics that come out of StatsCan. Let me quote the

statistics for April 1985 relative to March 1985, talking about the

unemployed in British Columbia. On a seasonally adjusted basis, between

March 1985 and April 1985 the number of unemployed in the province

increased by 6,000 people. Between March 1985 and April 1985 the actual

unemployed increased by 1,000 from 15.3 percent to 15.4 percent. That,

we are told by StatsCan, is the fourth highest in Canada in terms of

unemployment. The number of employed in British Columbia — and the

member was talking about creating 24,000 jobs — went down between March

and April 1985 from 1,223,000 to 1,219,000. From March to April 1985

the actual number of employed in British Columbia went down by 1,000.

That's only between March and April, Mr. Chairman. But I think the

people of British Columbia would get a better idea what has been

happening in this province if we were to check a few other statistics.

Between 1975 and 1985 unemployment averaged.... In 1975 there were

92,000 unemployed in the province of British Columbia. That's when the

member for Shuswap-Revelstoke wasn't so happy about the employment

statistics or the unemployment statistics. In February 1985 the

statistics showed 226,000 people unemployed. Unemployment since Social

Credit came to office in this province has increased by 246 percent.

That's the statistic we should be looking at. There are 246 percent

more people unemployed in the province of British Columbia today than

there were when this government took office. That's after northeast

coal; that's

[ Page 6184 ]

after ALRT; that's after the BCRIC boondoggle;

that's after the construction phase of Expo — 246 percent more people

unemployed today than there were when this government took office in

1975. All of their megaprojects, all of their highway projects, all of

their politically motivated projects have not reduced unemployment at

all; in fact, unemployment has increased by 246 percent since they came

to office.

[4:45]

Interjection.

MR. SKELLY: Income assistance....

MR. CHAIRMAN: Order, please. The Leader of the Opposition has the floor. All other members will have an opportunity....

Interjections.

MR. CHAIRMAN: Order, please, Mr. Member for Omineca (Mr.

Kempf). All members will have an opportunity to participate in debate.

Would the Leader of the Opposition continue.

MR. SKELLY: Income assistance recipients in the province

since this government took office in 1975: an average of 127,551 people

were receiving income assistance in British Columbia in 1975; in

January 1985, 237,119 people were receiving income assistance in

British Columbia — a 186 percent increase in the number of people on

welfare in B.C. since this government took office.

This government? There are only two cabinet ministers in the House.

Not even the minister is sitting in his seat. Are they afraid to listen

to these statistics?

Since this government took office, there has been a 186 percent

increase in the number of people on welfare, in spite of all of their

politically motivated projects — northeast coal, ALRT, Expo, the BCRIC

boondoggle. In spite of all of those employment-generating projects,

there are now 186 percent more people on welfare in British Columbia

than there were when they took office in the first place.

UIC recipients, people on unemployment insurance in British

Columbia: in 1976 an average of 78,416 people in this province were on

unemployment insurance.

Interjections.

MR. SKELLY: Is there no order in this House, Mr. Chairman. No

minister, no government, no order. What kind of province are they

running? What kind of House are they running?

MR. CHAIRMAN: Order, please. Remarks or reference with respect to the Chair should be withdrawn.

MR. SKELLY: I am talking about the disorder that's taking place in the back benches of the Social Credit caucus.

MR. CHAIRMAN: Order, please. The debate is on vote 44, the minister's office, not with respect to others. Please carry on.

MR. SKELLY: Mr. Chairman, unemployment insurance recipients in the province

of British Columbia since this government took office: an average of 78,416

people were receiving unemployment insurance in 1976; in February 1985, an average

of 239,740 people were receiving unemployment insurance in this province —

an increase of 306 percent since this government took office. In spite of their

vaunted northeast coal project and in spite of all of the figures that the member

for Shuswap-Revelstoke (Mr. Michael) was giving about coal development and mining

production and economic development in British Columbia, there is a 306 percent

increase in the number of people receiving unemployment insurance since this

government took office.

Business bankruptcies: 151 in 1975. Remember how they cried about

that? The average for the year, based on February bankruptcies, is

1,500 bankruptcies — an increase of 993 percent. What a record this is.

And I hear that member for Shuswap-Revelstoke talking about how great

things are, how much coal is being exported from the province, how high

the value of minerals is from the reports of the Ministry of Energy,

Mines and Petroleum Resources.

These are the figures that this minister should be concerned about.

These are British Columbians we're talking about; these are people who

are unemployed, humiliated by this government; these are business

people who have lost their businesses, lost everything they ever worked

to accumulate during their working lives; these are the figures we

should be concerned about.

What is this minister doing to reduce the unemployment figures in

this province? What is this minister doing to reduce the numbers of

people on welfare and unemployment insurance that are a net drag on the

provincial economy? What is this minister doing? He's doing precisely

nothing, absolutely nothing. There is nothing in this minister's policy

statements that make any sense to these people who are suffering the

brunt of this government's economic policy. A 246 percent increase in

unemployment in the province since this government took office, a 186

percent increase in people on welfare since this government took

office, a 306 percent increase in people on unemployment insurance

since this government took office, a 993 percent increase in business

bankruptcies since this government took office. This government's

record is shameful. They don't represent the people of British Columbia

at all. If they did they'd be working at putting every effort into

getting these people back to work, but they're doing nothing. They're

doing absolutely nothing.

The budget speech talks about 14.8 percent unemployment in the

province of B.C. last year, Mr. Chairman. They're talking about the

results of their policies reducing that to 14 percent. It's going up;

it's 15.4 percent. This is the time of year when things are supposed to

be getting better in British Columbia; in fact, for most people they're

getting worse. The government's policies with respect to education are

going to result in the layoff of more people.

The member talks about the Westcoast Transmission fertilizer plant

on Annacis Island. Congratulations to Westcoast Transmission for

building that plant, with more than $600 million being invested. I

talked to the Westcoast Transmission people, and they were willing to

put that plant in in spite of the so-called municipal partnership

agreement, because things are looking good around the world in terms of

markets for nitrogen fertilizer derived from that natural gas.

Thanks. I think West Coast Transmission is doing an excellent job —

not this government. As soon as West Coast Transmission announces

they're going to put in this plant with their partners, the government

announces policies in education and in health care that will result in

thousands more

[ Page

6185 ]

people losing their jobs in this province.

Everything this government does is counterproductive to economic

recovery in the province of British Columbia. The way they generate

confrontation throughout the province, the way they attack certain

groups in society, investors are reluctant to come here. Thank goodness

Westcoast Transmission is willing to make the kind of investment

they're making, and then the government turns around and does something

absolutely counterproductive.

Mr. Chairman, this government has a record in terms of job creation

and the protection of jobs in this province that's absolutely shameful.

This minister has nothing to be proud of in terms of what he's done for

economic development in the province of B.C., and I'm surprised that

his back-bencher would stand up and express his happiness about the

ERDA agreement. This minister has done absolutely nothing.

HON. MR. McCLELLAND: I just wanted to make a comment about

something that was raised by one of the other members earlier in the

debate. He said that the biggest increase in my budget this year was in

advertising. I don't have any money in my budget for advertising — not

one nickel. The biggest increases in the budget are in small business

and regional industrial development — something in the nature of $3.5

million; economic renewal, over $8 million; and low interest loans

assistance for small businesses, $2.5 million — not in advertising.

The other thing that I might just quickly mention in passing at

least is that we are creating new jobs in this province faster than all

of the other western Canadian provinces combined. I just draw the

attention to another item from Statistics Canada. I don't think it does

much good in the House to fool around with statistics, because you can

do anything you want with them, as the member opposite, the Leader of

the Opposition, knows and is so good at. But one statistic that might

be of interest to the House is that....

MR. SKELLY: On a point of order, is the minister suggesting

that I'm misusing the statistics that come from Statistics Canada? Is

that what the minister is suggesting?

HON. MR. McCLELLAND: On the contrary, I said that that member was very good at using the statistics. He's a master at it, as a matter of fact.

Mr. Chairman, one item from those same statistics points out that in

the migration away from some provinces of Canada.... They point out one

from Alberta between June 1983 and May 1984, more people moved away

from Alberta than any other province. The statistics show that of the

106,000 people who left Alberta, 33 percent moved to Ontario and 31

percent moved to British Columbia, that awful province that the Leader

of the Opposition paints such a terrible picture of. That's over 33,