1973 Legislative Session: 2nd Session, 30th Parliament

HANSARD

The following electronic version is for informational purposes

only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

FRIDAY, APRIL 6, 1973

Afternoon Sitting

[ Page

2325 ]

CONTENTS

Petition Canadian Workers Union, etc. Mr. McGeer —

Routine proceedings

Automobile Insurance Act (Bill No. 35) amendments.

Hon. Mr. Strachan — 2325

Corporation Capital Tax Act (Bill No. 63). Second

reading.

Hon. Mr. Strachan — 2325

Mr. McClelland — 2325

Mr. Chabot — 2326

Mr. Richter — 2328

Hon. Mr. Barrett — 2328

Division on second reading — 2332

An Act to Amend the Coloured Gasoline Tax Act (Bill No. 65).

Second reading.

Hon. Mr. Barrett — 2332

Mr. Wallace — 2333

Hon. Mr. Barrett — 2333

An Act to Amend the Gasoline Tax Act, 1948 (Bill No. 66).

Second reading.

Hon. Mr. Barrett — 2333

M. Morrison — 2333

Hon. Mr. Barrett — 2333

An Act to Amend the Gasoline Tax Act, 1958 (Bill No. 67).

Second reading.

Hon. Mr. Barrett — 2334

Mr. Morrison — 2334

An Act to Amend the Motive-Fuel Use Tax Act (Bill No. 68).

Second reading.

Hon. Mr. Barrett — 2334

An Act to Amend the Social Services Tax Act (Bill No. 69).

Second reading.

Hon. Mr. Barrett — 2334

An Act to Amend the Gift Tax Act (Bill No. 70). Second

reading.

Hon. Mr. Barrett — 2335

Mr. Morrison — 2336

Ms. Young — 2336

Hon. Mr. Barrett — 2336

An Act to Amend the Assessment Equalization Act (Bill No.

71).

Second reading.

Hon. Mr. Barrett — 2336

Mr. Phillips — 2337

Mr. Morrison — 2337

Mr. Williams — 2337

Mr. Wallace — 2337

Hon. Mr. Barrett — 2338

An Act to Amend the Provincial Home-Owner Grant Act (Bill

No. 72).

Second reading.

Hon. Mr. Barrett — 2338

An Act to Amend the Municipalities Aid Act (Bill No. 73).

Second reading.

Hon. Mr. Barrett — 2338

Mr. Morrison — 2339

Mr. Williams — 2339

Mr. Wallace — 2339

Mr. Lauk — 2340

Hon. Mr. Barrett — 2340

An Act to Amend the Revenue Act (Bill No. 74). Second

reading.

Hon. Mr. Barrett — 2341

Mr. Chabot — 2342

Division on adjournment of debate — 2343

Mr. McGeer — 2346

Mr. Wallace — 2346

Mr. Morrison — 2349

Mr. Williams — 2351

Mr. Richter — 2352

Mr. McClelland — 2352

Hon. Mr. Barrett — 2353

Division on second reading — 2356

Introduction Bernard Weatherill, M.P. Mr. Speaker — 2356

Hon. Mr. Barrett — 2356

Mr. Williams — 2356

Mr. Wallace — 2357

Mr. Richter — 2357

Mr. Barnes — 2357

FRIDAY, APRIL 6, 1973

The House met at 2 p.m.

Presenting petitions.

MR. SPEAKER: The Hon. First Member for Vancouver-Point

Grey.

MR. P.L. McGEER (Vancouver Point-Grey): Mr. Speaker, I beg

leave to present a petition.

Leave granted.

MR. McGEER: It's a petition of Douglas Swanson, Frederick

Mullin and Jess Succamore of the Canadian Workers Union, the

Pulp and Paper Workers Union of Canada and the Canadian

Association of Industrial, Mechanical and Allied Workers, who

say:

"There is dissatisfaction with recent actions of the Labour

Relations Board.

"Wherefore your petitioners humbly pray that your Honourable

House may be pleased to pass a resolution urging that the

Labour Relations Board reconsider its decision regarding the

application of the Canadian Workers Union to represent the

employees of Cominco at Trail, Kimberley and Salmo, and to urge

the board to resolve the issue by a government representation

vote.

"In duty bound, your petitioners will ever pray."

Dated April 6, 1973. Signed by Douglas Swanson, Frederick

Mullin and Jess Succamore.

MR. SPEAKER: The usual procedure with respect to a petition

is that it is examined by the Clerks of the House and the

following day it is reported upon to the House. In the

meantime, it's merely presented to the table with the statement

made by the Hon. Member. The matter can be raised again the

next business day of the House. There's no debate on the issue,

Hon. Member.

The Hon. Member for Kamloops.

MR. G.H. ANDERSON (Kamloops): Mr. Speaker, I'd like the

House to join me in welcoming a group of students from an

open-area school in Kamloops who are visiting the Legislature

this afternoon as part of their study of the political process.

I hope we can assist them.

Introduction of bills.

MR. SPEAKER: The Hon. Minister of Highways.

HON. R.M. STRACHAN (Minister of Highways): Mr. Speaker, I

have the honour to present a message from His Honour the

Lieutenant-Governor.

AUTOMOBILE INSURANCE ACT

MR. SPEAKER: His Honour the Lieutenant-Governor transmits

herewith amendments to Bill No. 35 intituled Automobile

Insurance Act enclosed herewith and recommends the same to

the Legislative Assembly, Government House, April 4, 1973.

HON. MR. STRACHAN: Mr. Speaker, I ask leave to move that the

said message and the amendments accompanying the same be

referred to the committee of the whole House having in charge

the said bill.

Leave granted.

HON. MR. STRACHAN: Mr. Speaker, I move that the said message

and the amendments accompanying the same be referred to the

committee of the whole House having in charge the said

bill.

Motion approved.

Orders of the day.

HON. D. BARRETT (Premier): I move we proceed to public bills

and orders.

Motion approved.

HON. MR. BARRETT: Adjourned debate on Bill No. 63, Mr.

Speaker.

CORPORATION CAPITAL TAX ACT

(continued)

MR. SPEAKER: The Hon. Minister of Highways adjourned the

debate.

HON. R.M. STRACHAN (Minister of Highways): Thank you very

much, Mr. Speaker. This is a pretty important piece of

legislation. I think it's self explanatory. I think it's worthy

of the support of every Member of this House. I want to tell

you, Mr. Speaker, and the other Members of the House that I

support Bill No. 63.

MR. SPEAKER: The Hon. Member for Langley.

MR. R.H. McCLELLAND (Langley): I'll be very brief, Mr.

Speaker. In comment on the Hon. Highways Minister's statement,

I can't support this bill.

I'd just like to relate to the Minister of Finance's (Hon.

Mr. Barrett'

s) statements over and over and over again in this

House about the state of the economy of British Columbia. He's

told us time and again in very glowing terms about the state of

our

[ Page 2326 ]

economy and how it was left by the previous government. Yet

he's telling us that he needs a tax that, in his own

estimation, will raise not more than $7 million in one year.

Mr. Speaker, he also relates this tax to Ontario and Quebec,

which means absolutely nothing. It has nothing to do with the

British Columbia situation.

I suppose that the question to be asked, Mr. Speaker, is:

why is the Minister of Finance so eager to introduce this kind

of tax if it will only raise $7 million a year? Many people in

the business community think that this tax is nothing less than

the thin edge of the wedge. I think it was the Member for

Vancouver Centre who said it's a "gentle tax." Well, perhaps it

is a gentle tax at this time, being one-tenth of 1 per

cent.

Mr. Speaker, the Minister of Finance has related to the

Quebec situation. He's indicated that to some degree this is a

copy of the Quebec legislation. Perhaps next year he's going to

copy the Quebec legislation a little further and raise the

amount of that tax to one-fifth of 1 per cent. Maybe the next

year we'll see it raised to 1 per cent, which then will then

bring in $70 million annually instead of $7 million.

Many of the people in the business community, Mr. Speaker,

think that that's exactly the intention of this Government.

This one-tenth of 1 per cent is just the beginning. It's

another way of keeping on the rise the ever-increasing

taxation needed for the ineptness of the socialist government,

such as it has in Saskatchewan and Manitoba.

I was surprised, Mr. Speaker, when I learned that this tax applies not only

to the actual capital that a company builds up but also to the loans that a

company has. If that's the case — and I'm sure that it is because the Minister

of Finance has assured us that that's true — then I would say that the exemption

of $25,000 means absolutely nothing. There are very few businesses in today's

society, Mr. Speaker — especially any business that needs any equipment, given

the cost of equipment in today's market — that will be exempt under this $25,000

limit. In effect what we're doing is hitting every business in British Columbia,

and the small business is getting it in the neck again.

I read in the paper,

Mr. Speaker, news from Ottawa that the federal government has increased the

taxes to small business by another 7 per cent. While they cut the corporation

taxes by 7 per cent, they re-introduced on December 31 legislation which taxes

small businesses more again by another 7 per cent. So here we're just adding

another tax and following the habit of socking it to the small business. We

complain over and over again about the "corporate burns" but the policies of

this Government, Mr. Speaker, are lashing out hardest at the small businessmen

— not the corporate giants that are complained about so much, but the small

businessman who is the real stronghold in our society.

Mr. Speaker, we know as well that some of your backbenchers

have gone out and risked their security and capital to start

small businesses of their own. The people in the cabinet don't

have that same experience, most of them at least. For the most

part, they can't relate to that kind of experience, where a

person goes out and risks everything he has in order to start a

business and provide for his family. He doesn't have any kind

of security. He doesn't have any pension plan. He doesn't have

the kind of security of working under the umbrella of a

government corporation. The only security he has is the sweat

of his own brow, his own initiative and his own guts.

For that reason, because most of the Members of this cabinet

who are charged with bringing in this kind of legislation can't

relate to that experience, another tax on the small businessman

doesn't amount to a hill of beans as far as they're concerned.

Mr. Speaker, surely those Members of the backbench — although

most of them have gone home for the weekend — who do know the

hardship of trying to establish and maintain that kind of small

business I've talked about; surely those people who haven't any

guaranteed security and who know that they have to work 18 to

20 hours a day and that their families have to work along with

them if they're going to make it at all; surely those people

could drill some kind of sense into the cabinet so that the

cabinet would take a new look at what it's doing and rethink

its whole legislative process with regard to taxation. Surely,

Mr. Speaker, those Members of the backbench could convince this

cabinet to throw out that kind of oppressive legislation.

MR. SPEAKER: The Hon. Member for Columbia River.

MR. J.R. CHABOT (Columbia River): Thank you, Mr. Speaker. I

have a little hand calculator on which I do a little figuring

with from time to time. When I looked at this Corporation

Capital Tax Act , I took my little calculator out. I wanted to

get some answers. All my calculator would tell me was, "See the

regulations because they can change a little bit."

Also, when I look at this Bill No. 63, I have to take into

consideration the type of jobs it will create. I find that this

legislation is a deterrent to job creation in British Columbia.

This is a time when we need investment capital. Time and time

again I've said in this House that investment capital flowing

to British Columbia does create jobs. I don't know how many

times I must say that.

What you're doing by this legislation is chasing away

investment capital from British Columbia at a time when

unemployment is extremely high in this province. You can say

all you want about the job

[ Page 2327 ]

creation and so forth. It doesn't take away the fact of the

number of people in British Columbia who are looking for work,

the number of people who are unemployed. The Premier can make

his statistics and comparisons with February of last year. But

in February last we had in British Columbia 70,000 people

unemployed, which is 7.6 per cent of the labour force.

When you compare that with February of this year, which are

the latest statistics available, we find there are 81,000

people unemployed in British Columbia; 11,000 more, 8.3 per

cent, actually unemployed in British Columbia; 11,000 more

people seeking work while the Government brings in legislation

like this which will chase away investment capital from British

Columbia.

You can sit there and say that I am twisting figures all you

want, Mr. Premier, but these are the actual figures by the

Department of Labour of British Columbia — the British Columbia

labour force employment and regional unemployment rates.

HON. MR. BARRETT: One is seasonally adjusted and one

isn't.

MR. CHABOT: I told you that I am talking about the actual

numbers — I mentioned that very clearly. When you talk about

numbers you certainly can't change numbers into percentages.

There were 70,000 out of the labour force in February of 1972

who were unemployed in British Columbia, and when you look at

the labour force in February of this year we find there are

81,000 unemployed. That can't be twisted from actual bodies,

actual people looking for work in British Columbia and unable

to find jobs.

We look at the legislation and it is quite obvious that the

legislation was modelled on similar legislation in eastern

Canada, but it has a little different approach. It takes a

little bigger bite, it takes in a little bit more of the

smaller companies in British Columbia.

There was a very interesting

article in a journal of

commerce called Barron's the other day dealing with the

attitude of the Government, the attitude of this legislation.

The article, of course, was "Chile of the North." I'm sure you

have read it, Mr. Minister of Finance. In that

article it said,

"Barrett's bite is worse than his bark." And Bill No. 63 is

evidence of the bite he is putting on the manufacturers and the

people that generate jobs in British Columbia. This is the type

of bite. Little bites here and little bites there, bigger bites

here and bigger bites there, Mr. Speaker. That is the direction

of that Government.

We hear this morning from a very well-respected columnist — one who sat in

this gallery — who assessed the direction in which that Government is

going. I'm not going to read the entire

article because time will not

permit, even though the Premier wants to push us, compress us. But I do want

to say that there was one very interesting paragraph in that

article relative

to the Corporation Capital Tax Act and other Acts you are passing. He used to sit

in this gallery. I have always had the greatest respect for that gentleman who

wrote this

article and I am sure you have too, Mr. Premier. An outstanding journalist

who works for an outstanding newspaper.

HON. MR. BARRETT: I consider him to be a friend of mine but

that doesn't mean he can't be wrong.

MR. CHABOT: That paragraph goes:

"His government is turning out to be naive, arrogant, inept,

prone to gallop headlong into danger."

That's what this legislation is doing, Mr. Speaker. It is

going up a very dangerous path.

I'm not a lawyer, but there is no clear definition and, of

course, it is all in the regulations. There is no clear

definition as to its application, whether it will apply to

capital employed for capital purposes, or whether it will apply

for operating capital, or whether it will apply to both. When

the Premier closes the debate I hope he will tell us what the

application will be, what the regulations will spell out, that

it is not his intention to scare away capital-intensive

industry from British Columbia.

I want to assure you that I have the feeling

capital-intensive industry will not come to British Columbia

because of this and other pieces of legislation which you are

introducing in this particular session of the Legislature.

Again, of course, everything is determined by the

regulations and until you see the regulations you don't really

know what the Act is going to do. It is all spelled out in the

regulations.

There is the friend of the Press; we just heard from the

friend of the Press. The Minister tries to butter up the Press

all the time to see his point of view and the Government's

point of view. They won't be bought off, Mr. Provincial

Secretary (Hon. Mr. Hall), they won't be bought off.

I guess just by a stroke of the pen you will decide the

retroactive portion.

HON. E. HALL (Provincial Secretary): What business are you

in?

MR. CHABOT: My business is representing people and fighting

on behalf of people to ensure that jobs come to British

Columbia.

HON. MR. BARRETT: I'll make that retroactive.

[ Page 2328 ]

MR. CHABOT: This legislation is going to chase away

investment capital. I'm not going to say retroactive

legislation under certain circumstances is not necessary. I

think it is from time to time, but I don't think it is

necessary as far as this legislation is concerned. You could

have set the legislation up to apply to the fiscal year of a

company operation in British Columbia. I imagine if a company's

fiscal year ends March 31, you will just take an average and

say, "Well, we'll take one-quarter of it for that particular

part of the year." If it ends at the end of January, you'll

just say, "You'll pay one-twelfth or something like that on

this tax."

No, there is very little consideration for the impact this

legislation will have on the attraction of investment capital

into our province as well as job creation. I know the Premier

has made certain statements relative to the amount of capital

that this will generate. It can't generate more or less capital

than you have indicated just by slight variations of the

regulations.

I would hope that when you adjourn the debate and put the

question, move the second reading of the bill, you will tell us

what you intend putting in the regulations. There are people

who are interested in investing in British Columbia who want to

know, and people who are interested in acquiring work who want

to know too.

I don't think that this is an incentive to job creation.

Certainly it is going to create jobs. As the Member for South

Peace River (Mr. Phillips) so ably said this morning, it is

going to create jobs for another little bureaucracy of

government going around inspecting the books of every little

company as well as every big company in British Columbia.

No, Mr. Speaker, this legislation does nothing to enhance

and to attract investment capital which creates jobs in British

Columbia. I think it is poor legislation, it is unnecessary

legislation and I hope the Premier, when he stands in his

place, will tell us that the legislation will be withdrawn

because it will not meet the aims and objectives of the people

of British Columbia.

MR. SPEAKER: The Hon. Member for Boundary-Similkameen.

MR. F.X. RICHTER (Boundary-Similkameen): Mr. Speaker, I am

very distressed at this piece of legislation particularly as it

applies to farm corporations. We find a great number of farming

operations today are involved by way of incorporation.

Along with that, the $25,000 figure is not a very large figure when you start

to talk in terms of capital as far as these enterprises are concerned. Certainly

we can find in this particular case an industry which is suffering and suffering

badly from the over-taxation due to the lack of a viable return from their

production. What if this happens to be in the northern part of the province,

in the Peace River country, in the Okanagan or in the lower mainland of the

Fraser Valley? This is going to hit more people than I think was realized by

the Minister of Finance (Hon. Mr. Barrett) when this legislation was promulgated.

I feel confident this is the instrument or the vehicle which

could load the extra straw that will break the camel's back. We

could drive out a great deal of secondary industry, service

industries and so on which service our general basic industries

due to the fact that today's dollar doesn't carry the same

value as it did heretofore. Today, $25,000 is not a very large

investment in any type of corporate organization., I feel very disturbed about this tax and this legislation in

light of the fact that the Province of British Columbia is not

in a position where it must have additional revenues. If the

Minister is really sincere about his concern in this relation,

there are other ways of enhancing the revenue of the province

by stimulating more secondary industry, more primary industry.

Our basic resources are here in which we could stimulate a

greater degree of trade, a greater degree of commerce, which

all shed off by way of our present tax formulas and tax

legislation. We can certainly do without this type of

legislation, and I must say that I will be opposing this

bill.

MR. SPEAKER: The Hon. Minister of Finance closes the

debate.

HON. MR. BARRETT: Mr. Speaker, thank you very much. I

appreciate the wide-ranging debate we've had on this bill. I've

seen that some Members found it necessary to touch on

philosophy in discussing this bill. I will try to confine

myself as much as possible to the principle, but I do think I

must respond to some of the criticisms that were attached to

the bill but related generally to philosophy.

First of all I'd like to point out to everybody just exactly

what we are talking about. We're talking about a tax of

one-tenth of 1 per cent of capital to be employed in projects

here in British Columbia.

That is, if an investor wishes to put $100,000 in an

investment in the Province of British Columbia, we're going to

tax him $100. One hundred dollars on a $100,000 investment, I

maintain, wouldn't even cover the cost of the coffee charged by

the lawyers drawing up the legal accoutrements necessary to

establish that bill.

Interjection by an Hon. Member.

HON. MR. BARRETT: I want to deal with the $1 million…I

want to deal with the next figure up — how tough this is on the

millionaires. And I'm sorry

[ Page 2329 ]

that all those working people out in front of this

Legislature weren't in the House to hear how these great

defenders of the working man and the union are in here spending

a whole day defending the large corporations out of a little

tax money, Mr. Speaker.

A million dollar investment under this bill means $1,000 in

tax.

HON. MR. HALL: Wall Street Freedom Fighters.

HON. MR. BARRETT: Yes, "the Wall Street Freedom Fighters," as my friend, the Provincial Secretary, calls them.

You know, in 1965, the working people of this province paid

$45 million in income tax and the corporations paid $40

million. In 1972, the working people paid $266 million and the

corporations paid $80 million. The working people's

contribution went up six times; the corporations' contribution

went up twice, 6 to 2, the score against the little people of

British Columbia, and we are trying to equal the score.

One thousand dollars on a million dollar investment. I've

seen more high-priced lawyers, would-be lawyers, and

Philadelphia lawyers get up today and try to attack the

Government for doing something Ontario did 43 years ago, and

attack this Government for being socialist by catching up with

Tory Ontario. Who are they trying to kid? Who are they trying

to kid?

Interjection by an Hon. Member.

HON. MR. BARRETT: He says we don't need the money. Let me

tell you that this is a good economic year, and I hope that the

future brings good economic years. But there are also great

demands on this government — demands of services that went

neglected year after year after year by that Opposition over

there. Demands that require such things as chronic care, as

fought for by the Member for Oak Bay (Mr. Wallace). Better

education, better facilities for the aged, better services for

children — and why shouldn't the great wealth of this province

pay a little bit towards services for people?

I hear the homilies that are so often thrown across by the

wisdom alleged of the backbenchers in terms of "no business

experience." Well, if you want to go into that homily area, my

father was a pioneer businessman in this province. My brother

and I spent 16 and 18 hours a day working with my father and

you know…

MR. G.B. GARDOM (Vancouver–Point Grey): How did you go

wrong?

HON. MR. BARRETT: "How did I go wrong?" says the Member. It was in that

experience with my father who started out as a simple

food peddler to begin with, and he built his business up into an extremely successful

company before he retired in the late 50's.

The experience I had with my father was most interesting.

Since this is a homily debate, let me share some of my homilies — the myth of pulling yourself up by your bootstraps. My father

was in the fruit and vegetable business and he liked the idea

at first that he was in free enterprise. Then he found that it

wasn't very free and it wasn't very enterprising. And what an

education it was for my brother and me.

He wanted, at one time, to bring in bananas from the Fiji

Islands. Because he was a small businessman and he wanted to

risk his money and he wanted to follow the North American

Dream, he was going to bring in bananas from the Fiji Islands.

When he brought in his first shipload of bananas from the Fiji

Islands — bananas at that time were selling for 21 cents a

pound — and we marketed them wholesale at 9 cents a pound and

retailed them at 13 cents a pound out of our store and out of

our wholesale operation.

Lo and behold — because you are interested in homilies —

along came a representative of the United Fruit Company. Now

you know the United Fruit Company — that's that little,

struggling, free enterprising corporation that has a monopoly

on all the bananas in North America. That's that corporation

that upset a democratically elected government in Guatemala.

They sent along a representative to my sweet lil' old daddy,

and you know what they said: "Hey, daddy Sam, you don't bring

bananas in any more from Fiji." And my dad said, "Would you put

that in writing, fellows?" And they said, "Oh, no, we don't put

it in writing, but you just won't get any other fruit and

vegetables in your store if we find Fiji Island bananas in the

store." They made him an offer he couldn't refuse — that's what

they did. And poor old dad, he stayed in business all right as

a free enterpriser, but he got the message in a hurry — don't

mess with a multi-national corporation.

Fiji Island bananas could have been here years ago; the same

time they dumped bananas in the harbour in Vancouver during the

war years — if you remember those bananas floating around. Food

went to waste under your system that you support — and you're

crying here today with the homilies about us not being in

business.

I had a little bit of experience in business. I saw how that

competitive world works out there, So don't give me the homily

stuff about the little businessman struggling his way through;

that major multi-national corporations dominate the market of

North America, dominate the money market, dominate the

industrial market and dominate every scene of the economic

activity of this whole province and this whole country.

[ Page 2330 ]

The other homilies you give about the struggling little

enterpriser out there — sometimes you referred to the insurance

agents, and these poor fellows are going to have to pay

one-tenth of 1 per cent for their corporations. Where are the

insurance companies when it comes to defending the agents now

that we are going into government-owned automobile insurance?

Are they giving the agents any compensation for the fact that

they have given good service for 20 or 30 years? Why aren't you

fighting for that?

You know this kind of twisted homily business we've had is a

little bit of nonsense. It's the chronic kind of thing that

somehow "business knows best" and, if you've had a little bit

of business experience, you wouldn't support a bill like

this.

I've been talking to my dad lately, and he says, "Right on,

Dave, maybe it should be a little bit more." (Laughter).

You know, my dad was a successful businessman too. Every

year he was in business he lost money. That's what he always

told my brother and I. And by golly, for a guy who was losing

money we were doing O.K. My brother and I decided the time that

we'd better worry about my dad and his business was when he

said he'd made a few bucks this year.

It's just like every other businessman — they're crying all

the way to the bank, Mr. Speaker. All the way to the bank. And

all we're asking through this legislation is a simple little

one-tenth of 1 per cent that Tory Ontario has had.

I'm trying to go through all the questions asked. Now the

Member for Boundary-Similkameen (Mr. Richter) in his few

moments, raised what I consider to be a valid point. Mr.

Member, I want to assure you, because of your speech, that this

bill will exempt the family farm. You've made a valid point,

and we will see that this takes place.

Also, condominiums, as raised by the Member over there,

co-ops and credit unions — they will all be exempt.

I cannot ever recall a time when the previous administration

brought in regulations or discussed them before the principle

of the bill was even in committee stage, but I'm telling you,

quite frankly, that I've listened to the whole debate and those

things that made valid impressions will be carried out in the

regulations themselves.

Interjection by an Hon. Member.

HON. MR. BARRETT: "What about the several questions?" he

said. I'm going to talk for at least 10 minutes anyway, after

having that whole barrage of mostly nonsense, except for a

number of pearls out of all those oysters over there. You have

to shuck an awful lot of oysters to get a few pearls, Mr.

Speaker, and I'm entitled to about 10 minutes of going through

what's left.

You know, the other attack was made that we are going to

have the snoopers going around. Well, I find that it's another

consistent remark attached to the Social Credit Party.

If you look to

section 28 of the Social Services Tax

Act , brought in by Social Credit, they've been sending snoopers

out for years, and I've never heard him once get up in the

House and say, "You shouldn't have that power." He runs down

the hallway yelling "Communism!" That guy, Mr. Speaker, has

been endorsing legislation far tougher than anything we propose

in this particular bill. You know, it's such a degree of

irresponsibility…

Interjection by an Hon. Member.

HON. MR. BARRETT: What you lack in common sense, Mr. Member,

you make up in volume. (Laughter). You know, Mr. Speaker, we

had an attack on…

Interjection by an Hon. Member.

HON. MR. BARRETT: Yes, they can hear you all the way up in

North Peace River right now. Just a little bit louder, Mr.

Speaker, and we can get that Member a job replacing modern

technologies of microphones.

Now the other thing was the Waffle thing — that this is a

Waffle-inspired idea. I want to ask the Liberal Party: does Mr.

Bourassa have a Waffle wing, or is it the Crepe Suzette group

in his party that pushed him into this particular role?

(Laughter). Does Davis, in Ontario, have a Waffle wing? Or is

it just a straight Flapjack in Ontario? Now there we are. So

we've got a new breakfast menu in British Columbia that's a

continuation of the one we explored in the last provincial

election. We got the Waffles, the Crepe Suzettes, the Flapjacks

and the stale old Pancakes. (Laughter). I'd rather have a

Waffle any day.

MR. CHABOT: I never eat 'em.

HON. MR. BARRETT: You never eat 'em? You sure didn't eat

them last August, I'll tell you. (Laughter). But anyway, Mr.

Speaker, on to some of the other statements.

The Member for West Vancouver–Howe Sound (Mr. Williams) said

that it may be a more appropriate tax in Ontario or Quebec. But

why isn't it an appropriate tax here? You claim it's

regressive. I claim you're wrong. Regressive taxations are

those that hurt a great number of people.

One of the most regressive taxes we've got is the 5 per cent

sales tax. That's a fact. Some day, somehow — I don't know

when, I don't know how — we're going to have to, whether it's

us or another administration, look at that 5 per cent sales

tax. It has to be

[ Page 2331 ]

adjusted some way so that the rich pay a fair share. The 5

per cent sales tax means that somebody who is on welfare pays 5

per cent on a suit and a millionaire pays 5 per cent on a suit.

If you want to make a pitch on regressive taxes, I'd like to

hear some constructive ideas of how we find other forms of

revenue to meet service needs and education needs other than

the 5 per cent tax.

The Member for Columbia River (Mr. Chabot) said with regard

to jobs that this would be counterproductive. I don't agree

with him. I believe that infant industries have more difficulty

with the IDB (Industrial Development Bank) and with DREE

(Department of Regional and Economic Expansion) than they have

with this bill.

Any tax they pay under this will be deductible from federal

tax.

You talk about planning — there's a five-year write-off

period on this. If they haven't made money, they write it off

for the first five years. If a company hasn't made money in

five years, it surely to goodness isn't because of the

one-tenth of 1 per cent tax. So the idea of planning and

AN HON. MEMBER: What about Colcel?

HON. MR. BARRETT: Colcel! Colcel was a straight disaster —

straight financial disaster. That's free enterprise, we're told — they can walk into it. But the consequence of the end of that

disaster, Mr. Member, is that free enterprise says, "O.K., you

lost money. Goodbye gang," and walk out. And what do we

leave? We leave wrack and ruin through one-third of this

province.

Even the Vancouver Province — and I'll refer to Mr.

Sherman's

article in a minute — admitted in an editorial two

days ago that sometimes government has to be bigger than

business when there are social consequences involved, and the

future of an idea involved.

Now, I'm back to the principle of one-tenth of 1 per cent

and that Member referred to the

article by my good friend Paddy

Sherman. Paddy Sherman has been known to be wrong before. So

have I. So have I. We've both had the opportunity…

MR. CHABOT: What year were you wrong?

HON. MR. BARRETT: What year was I wrong? I though you were

going to be beaten in 1969. I was wrong.

Interjection by an Hon. Member.

HON. MR. BARRETT: No, I didn't figure you'd be beaten in

1966, but after I saw what got elected in 1966, I figured you

were through in 1969. (Laughter).

But anyway, Mr. Speaker, to avoid this kind of delightful

exchange that we've having on a highly intellectual level —

back to the principle of the bill. I said it would be fully

deductible for over a five-year period. I listed the things

that we are trying to do.

We recognize that we are going into a surplus this year. I

want to point out again, to dispel some myths, that it wouldn't

matter if the NDP, the Liberals, the Conservatives or the

Socreds were around this year. The Member for West Vancouver is

absolutely right — the projections that are showing up this year

are on planning decisions that were made two., three, four and

five years ago. And the kind of course that we're following in

bringing in this legislation now is to let people know what

kind of decisions to make for the next three, four, five and

six years. That's why there are major taxation bills on the

order paper that should be put through this particular session,

because if we don't put them through, business won't have that

definite guideline that everybody in the House wants them to

have to make their decisions.

So I want to make it very clear that the Member for Columbia

River (Mr. Chabot) can't have it both ways. We are setting out

the guidelines and he claims there's insecurity. The insecurity

can only come from attempts to filibuster legislation and not

through any attempt by this Government not to withhold it. It's

quite right, and in terms of the

article by Paddy Sherman this

morning, I want to remind my friend Paddy — does he want it

like the old days when the Opposition was cut off? Certainly

we're taking longer this year, but we've made sure that every

legitimate freedom that should exist in a British parliamentary

style House does exist. If the Opposition wishes to abuse it,

that's on their head, not on ours.

We want the corporations of this province to see through

this legislation and accompanying legislation exactly what they

can plan on for the next few years that we are here and charged

with the responsibility of governing this province. It would be

wrong, in my opinion, not to bring this legislation in now.

They have been asking for the blueprint, and certainly they are

entitled to receive the answer as it exists on the order

paper.

I want to remind the Member for West Vancouver–Howe Sound

(Mr. Williams) that while I accept completely his argument

about decisions being made two or three years ago for the

investment projections to be made now and in the future, it

cannot be the material of debate of two months ago. We cannot

justify the material of debate of two months ago by saying that

this Government is responsible for high unemployment. I know

that you didn't say that, but that was the allegation of the

official Opposition.

We'll take our responsibility in terms of our policies — at

the earliest, next spring. The consequences of our policies

will begin to show up next spring. In a large part, certainly

we will bask in the

[ Page 2332 ]

luxury of the obvious growth of the economy in North

America, but in all true sense, we will not be able to be

measured in terms of our impact until next spring, for better

or for worse.

Of course, that impact was in the context of the North American economic structure. Because the United

States economy, like it or not, largely dominates this economy

here in British Columbia and Canada. There are offsetting

things that a provincial government can do and offsetting

things that a federal government can do, but our greatest area

of success can really be measured in terms of services to

people within our jurisdiction. Regardless of what label the

party in power has, there's a certain amount of finger

crossing, hoping for the best in North America. That's a valid

statement.

As to that

article in Barron's referred to in this

debate, I can only dismiss it with the further reference I made

about it being a recovery of the "Joe McCarthy cutout kit," because it was a stupid article, and I will say

publicly, so the message does get back to Wall Street, that

they've impaired their credit rating here in British Columbia.

When they come up here and ask us to loan them money out of our

surplus funds, we're going to think twice about it. We're going

to think about it. Now if they assure us they have nothing to

do with Barron's , we'll talk to them. I would think that

Dow Jones would be pretty upset that their publication,

Barron's , borrowed some of Merrill Lynch's bulls to help

prepare that article. But anyway, that's the case.

No legitimate investor in the Province of British Columbia

is going to look upon this tax as a detriment to his coming to

this province and making money. This is one-tenth of 1 per

cent, it is valid, it is justified.

As to the real argument that was put up as to the timing,

that is a valid criticism by the Opposition but it means a

difference of opinion. You don't feel this is the time to do

it. We do. We feel this is the time to do it because I happen

to be a subscriber to one of the cautious tenets of both my

father and the former Premier. They both came through the

Depression and both operated businesses with similar syndromes.

"Always put a little bit of cash aside while you have the

chance."

That is really what this bill represents — a little bit of

"tuck" money. When the time comes and the economic situation is

such that we are not in a position to control it, we have a

little bit of money to fall back on so that those people who

are relying on us for Mincome, those people who are relying on

us for good education services, social services…

Interjection by an Hon. Member.

HON. MR. BARRETT: We'll label it. I've said all along that surpluses

will be shown. But I will never designate funds: that's

a mistake. I don't want to go through that American experience.

But I will say that caution is a good thing; a little bit of

money on the side is not bad. We have a $98 million cash

surplus in the bank right now. This is a little bit more, but

you never know what comes up. I have learned well from my

father who suffered the Depression along with my predecessor.

Both of them have certain limits out of that Depression

experience which I don't have and we'll see the consequences of

that over a period of time. Therefore, Mr. Speaker, I move

second reading of this bill.

Motion approved on the following division:

YEAS — 29

Hall

Barrett

Dailly

Strachan

Nimsick

Stupich

Nicolson

Sanford

Cummings

Dent

Lorimer

Williams, R.A.

Cocke

Calder

Hartley

Skelly

Lauk

Lea

Young

Lockstead

Gorst

Rolston

Anderson, G.H.

Barnes

Steves

Kelly

Webster

Lewis

Liden

NAYS — 10

Richter

Chabot

Fraser

Phillips

McClelland

Morrison

McGeer

Williams, L.A.

Gardom

Wallace

PAIRS

Anderson, D.A.

Macdonald

King

Curtis

D'Arcy

Brousson

Gabelmann

Schroeder

Radford

Smith

Brown

Bennett

Nunweiler

Jordan

Bill No. 63 read a second time and referred to a committee

of the whole House at the next sitting after today.

HON. MR. BARRETT: Second reading of Bill No. 65, Mr.

Speaker.

AN ACT TO AMEND

THE COLOURED GASOLINE TAX ACT

HON. MR. BARRETT: Mr. Speaker, it gives me a great deal of

pleasure to introduce this bill intituled

An Act to Amend

the Coloured Gasoline Tax Act . The amendment to this Act is

proposed mainly to give

[ Page 2333 ]

exemption from tax to family farmers and commercial

fishermen, when coloured gasoline is purchased in operation of

their family farm, farm truck or fishing vessel.

The effective rate of 1 cent a gallon will still apply to

corporations engaged in farming or commercial fishing. The 15

cents a gallon will apply to corporation trucks.

The amendment to broaden the definition of gasoline from a

"liquid" to a "product derived from petroleum" will mean that

natural gas used in internal combustion engines in the pumping

stations of pipelines will be subject to the 3 cent a gallon

coloured gasoline tax. At the same time, it becomes

automatically exempt under the social service tax where it was

subject to tax before. The net increase in tax is estimated to

be $6 million.

MR. SPEAKER: The Hon. First Member for Victoria.

MR. N.R. MORRISON (Victoria): …I would like to know how

you know, as a vendor, who is and who is not a bona fide

individual. Therefore, if you don't know, how do you prosecute

a vendor for selling to someone who is not a bona fide user of

a product?

MR. SPEAKER: One minute. Is there any further debate on this

bill? The Hon. Member for Oak Bay.

MR. G.S. WALLACE (Oak Bay): Mr. Speaker, very briefly, we

also support the bill. It is one of the positive measures that

the Government has brought forward to help the farmer. The

bitter debate which was waged in this House was related in some

part to the fact that this side of the House was concerned

about the economic well-being of the farmer. We're eager to

support this bill because it is a step in the direction of

making farming easier and more economically suitable and viable

for the farmer.

MR. SPEAKER: Before the Minister closes the debate, I have

to tell the House that he does close the debate. Is

there any further debate? The Hon Minister closes the

debate.

HON. MR. BARRETT: Mr. Speaker, because of the question

raised by the Member, I wish to assure the House to eliminate

the confusion of bona fides as a farmer, we will eliminate the

section that still requires the 1 cent a gallon on the farm

corporation There will be no problem and we'll change that in

the regulations.

Mr. Speaker, this Act is covering a request made for many,

many years by fishermen and farmers. It's a valid request and I

move second reading.

Motion approved; second reading of the bill.

Bill No. 65 referred to a committee of the whole House at

the next sitting after today.

HON. MR. BARRETT: Second reading of Bill No. 66.

AN ACT TO AMEND THE

GASOLINE TAX ACT, 1948

HON. MR. BARRETT: Mr. Speaker, this Government is greatly

concerned about pollution in all its aspects. It therefore

wishes to encourage the use of propane, butane and natural gas

to propel motor vehicles, as these products have proven to be

cleaner in the release of waste atmosphere pollutants than

regular gasoline.

The proposed amendments bring liquefied petroleum products,

namely propane, butane and natural gas, under the Gasoline

Tax Act . The proposed tax is to be 10 cents a gallon,

rather than the 17 cents now applicable to them under the

Motor Fuel Use Tax Act .

Mr. Speaker, I'd also like to add that we encourage all

companies and all individuals to seriously consider the

feasibility of converting their company trucks or individual

vehicles to the use of these non-polluting fuels. A number of

firms in Vancouver have been doing this. This bill will be of

direct benefit to those and an encouragement to others to

follow their direction. I move second reading.

MR. SPEAKER: The Hon. First Member for Victoria.

MR. MORRISON: Mr. Speaker, we're in favour of this also;

there's one question I'd like to ask. That is, how is it

possible to tell whether liquefied petroleum gas or natural gas

is purchased to propel a motor vehicle or whether it is

purchased for some other use?

MR. SPEAKER: Is there any further debate on Bill 66? The

Hon. Minister closes the debate.

HON. MR. BARRETT: We'll be able to tell if they put it in

the tank of a vehicle.

AN HON. MEMBER: They might want to take it away with

them.

HON. MR. BARRETT: Well, if they take it away with them and

then drain it out and use it for something else, so be it. We

as a Government don't believe that anybody is going to drive

up, fill up the tank and go home and use it for something else

just to beat the tax.

So, Mr. Member, with full trust in the people of British

Columbia, I now call the question.

[ Page 2334 ]

Motion approved; second reading of the bill.

Bill No. 66 referred to a committee of the whole House at

the next sitting after today.

HON. MR. BARRETT: Second reading of Bill No. 67, Mr.

Speaker.

AN ACT TO AMEND THE

GASOLINE TAX ACT, 1958

HON. MR. BARRETT: Mr. Speaker, this is an amendment to the

Gasoline Tax Act, 1958 . Since 1928, the province has had two

gasoline taxation statutes, only one of which is operative, the

Gasoline Tax Act, 1948 . The 1958 Act has been kept in reserve

because of possible legal complications with the operative

Act.

While the 1958 Act will not be proclaimed unless adverse

circumstances require, it is deemed advisable to keep the

statute up to date. Accordingly, the amendments are hereby

submitted, which correspond exactly to the amendments presented

in this session to the operative Gasoline Tax Act . I move

second reading.

MR. SPEAKER: The Hon. First Member for Victoria.

MR. MORRISON: Mr. Speaker, my question is exactly the same

as the last one. I think there is a problem in deciding how

this is to be used. I believe that a taxation law that can't be

administered is sure to bring the whole tax system into

dispute.

MR. SPEAKER: Is there any further debate on Bill No. 67? The

Hon. Minister closes the debate.

HON. MR. BARRETT: Mr. Speaker, I appreciate the question

raised by the Member. I now ask that the question be put.

Motion approved; second reading of the bill.

Bill No. 67 referred to a committee of the whole House at

the next sitting after today.

HON. MR. BARRETT: Second reading of Bill No. 68, Mr.

Speaker.

AN ACT TO AMEND THE

MOTIVE-FUEL USE TAX ACT

HON. MR. BARRETT: Mr. Speaker, this is the Motive-fuel Use Tax Act .

To encourage the use of less pollutant fuels, propane and butane are removed

from the 17 cents a gallon rate of tax imposed under the

Motive-fuel Use Tax Act . As previously reported, they will be taxed at the 10

cent a gallon rate under the Gasoline Tax Act . It's a companion bill.

MR. SPEAKER: Any further debate? The Hon. Minister closes

the debate.

HON. MR. BARRETT: I call the question.

Motion approved; second reading of the bill.

Bill No. 68 referred to a committee of the whole House at

the next sitting after today.

HON. MR. BARRETT: Second reading of Bill No. 69, Mr.

Speaker.

AN ACT TO AMEND THE SOCIAL

SERVICES TAX ACT

MR. SPEAKER: The Hon. Minister.

HON. MR. BARRETT: This is

an Act to Amend the Social

Services Tax Act . In a review of the taxation statutes, the

Social Services Tax Act was noted to be inconsistent in its

treatment of interprovincial carriers. Both road and air

carriers are subject to tax on their equipment used in the

province,

whereas a complete exemption was allowed for railway

rolling stock.

It is therefore proposed in this bill that the exemption for

railway stock be deleted. The Social Services Tax Act presently

contains an exemption for vessels over 500 tons because of

their inter-continental connections. In our view, it was not

intended to include the large barges which are now being built

since the introduction of the social services tax. This

section

is being changed by this bill so that only self-propelled

vessels will be entitled to exemption from the tax. I move

second reading.

MR. SPEAKER: The Hon. Member for South Peace River.

MR. D.M. PHILLIPS (South Peace River): Mr. Speaker, I would

like to move adjournment of this debate until the next sitting

of the House.

Motion negatived.

MR. SPEAKER: Any further debate on Bill No. 69?

MR. PHILLIPS: Well, Mr. Speaker…

MR. SPEAKER: Order, please. The Hon. Member, not having won

his adjournment, is thereby disquali-

[ Page 2335 ]

fied from speaking.

MR. PHILLIPS: Well, the whole House is disqualified as far

as I'm concerned…

MR. SPEAKER: Order. I follow, in this matter, the rules of

our House. They clearly state…

MR. PHILLIPS: Well, the rules of the House clearly state

that we're supposed to adjourn on Friday afternoon at 1

o'clock.

MR. SPEAKER: Unless otherwise ordered.

MR. PHILLIPS: We didn't do it.

MR. SPEAKER: Unless otherwise ordered.

MR. PHILLIPS: The rules were changed so that the Members

could go home on Friday afternoon. We haven't done that.

MR. SPEAKER: There's a point of order been raised. It is not

part of the debate to discuss the adjournment of the House

under Bill 69. The Hon. Member has moved the adjournment of

debate. Having lost that motion, he is required by our rules to

be seated. I would ask the Hon. Member to be seated.

MR. PHILLIPS: And you can use your button which was

installed because…

MR. SPEAKER: Order, please. Would the Hon. Member be

seated?

Interjection by an Hon. Member.

MR. SPEAKER: Order, please. Would the Hon. Member be seated?

I don't know of any parliament in the Commonwealth where a

Member stands while the Speaker is standing. I think that in

the circumstances the Hon. Member feels upset, but the House

has made the ruling that we proceed this afternoon. It was

voted upon and I am bound by the wishes of the House.

Is there any further debate on Bill No. 69? The Hon. First

Member for Victoria.

MR. MORRISON: Mr. Speaker, I wonder if before closing the

debate the Premier would answer a couple of questions

concerning Bill 69 for me. I'd like to know what the true

intent of the Act is, and does he really intend to try and

collect 5 per cent sales tax on every piece of rolling stock as

it enters the province for the first time, which would appear

to be the ability of this Act to do. If so, how does he propose

to do it?

MR. SPEAKER: The Minister closes the debate.

HON. MR. BARRETT: Mr. Speaker, the tax will be calculated on

the same basis that air carriers and road carriers are now

calculated — miles in and miles out. It will be difficult on

the railroad cars as we know. But we expect that the system,

once worked out, will operate effectively as it does now on

road and air carriers. This is only to allow the road carriers

and the air carriers to be in a more competitive position.

I now move the question be put.

Motion approved; second reading of the bill.

Bill No. 69 referred to a committee of the whole House at

the next sitting after today.

HON. MR. BARRETT: Second reading of Bill No. 70, Mr.

Speaker.

AN ACT TO AMEND

THE GIFT TAX ACT

HON. MR. BARRETT: Mr. Speaker, this is an amendment to the Gift Tax

Act . Although the exemptions allowed at present under the Gift Tax Act are considerable,

I wish first of all to review them here for the information of the Hon. Members:

1. Up to $ 10,000 a year is exempt to the spouse of the

donor. Exemptions continue up to $10,000 a year to other

persons with a maximum of $2,000 per person free of tax; up to

$10,000 interest in farm property once in a lifetime to a child

of the donor to be used in farming operations carried on by the

child.

(

d) Gifts to Canada, the Province of British Columbia or a

municipality in British Columbia.

(

e) Gifts to a charitable organization

(

f) Gifts to an educational institution or a hospital.

(

g) Gifts to non-profit organizations where the gift is used

for benefit of the community as a whole.

(

h) Gifts made at the time of death.

It is proposed in this bill to also exempt the transfer

between spouses of one-half interest in the family home. This

is a matter raised, I might say, Mr. Speaker, by many Members

of the House, both Opposition and Government Members.

In addition, it is proposed to correct the

section requiring

a tax return to be filed so that it is the same as the other

provincial statutes administered by the federal government.

This means that a return will be filed if a person gives more

than $2,000 in gifts in a year to persons other than a spouse.

In the latter case, he or she is allowed to give up to $10,000

without reporting the gifts.

The Act contains a

section which gives the government an

automatic lien on any real property owned by a person if any

amount of tax is owing. As

[ Page 2336 ]

this means the lien is not readily discernible in the land

registry records and could mean extra costs to check out for

any person purchasing a home, the

section 1s amended to provide

a lien only if it is registered against the property by the

government, The amendments are made retroactive to January 1,

1972 in order to give benefit of the changes of the full period

that the Act has been in force.

I might say, Mr. Speaker, in moving second reading, that I

want to thank all the Members — legal Members and rural farm

Members who have advised us on these amendments — and for those

who think in a community that we've taken a long time in

legislation this year, this and many other Acts are well worth

the time.

I move second reading.

MR. SPEAKER: The Hon. First Member for Victoria.

MR. MORRISON: Mr. Speaker, I might say that we support this.

Rather than take the time of the House, I wonder if I could ask

the Premier if he has received from the Canadian Bar

Association a letter with some suggestions concerning the

wording in this Act and some suggested changes. If not, I would

be happy to read the letter. They have some rather constructive

suggestions in their letter which I think should be taken into

consideration. Have you got the letter? I'll be happy to read

it if you haven't.

HON. MR. BARRETT: Yes, I've got it.

MR. MORRISON: Thank you.

MR. SPEAKER: The Hon. First Member for Vancouver-Little

Mountain.

MS. P.F. YOUNG (Vancouver–Little Mountain): Thank you, Mr.

Speaker. I appreciate the principle of the bill. I think it is

an excellent amendment.

However, I do take umbrage at the fact that a joint tenancy,

where a spouse puts a domicile into joint tenancy with the

other spouse, is considered a gift. This usually means that the

husband, when he declares joint tenancy with his wife, is in

effect "giving" her half of the home. I maintain, Mr. Speaker,

that she has earned that half of the home.

She is the manager. She is managing a small enterprise. She

is the budget manager. She does all of the work in that home,

and by right of her labour alone is entitled to half of that

home and not as a gift. Thank you.

MR. SPEAKER: The Minister closes the debate.

HON. MR. BARRETT: Mr. Speaker, in answer to the questions: yes, we did

receive the letter referred to by the Member. The suggestions were considered

but it was the advice of the department that we should stick with the uniform

Act that exists and that was the decision we made. Otherwise there would be

too many complications — although they were good suggestions. It would be too

difficult.

In reply to the Member for Vancouver–Little Mountain (Ms.

Young), her analysis is correct. While I have complete sympathy

for her, it appears that the problem was caused in some

instances by the Veterans Land Act , in that the veteran

himself was given the title to the home. To allow the VLA

people to apply and others, the wording of the Act has to be on

the basis of spouse.

I agree with the Member. If anybody has earned ownership in

the home, in my opinion, it is more the wife than the husband.

I have complete sympathy for you, and I say that knowing that

my wife is not in the gallery. I move second reading.

Motion approved; second reading of the bill.

Bill No. 70 referred to a committee of the whole House at

the next sitting after today.

HON. MR. BARRETT: Second reading of Bill 71, Mr.

Speaker.

AN ACT TO AMEND THE

ASSESSMENT EQUALIZATION ACT

HON. MR. BARRETT: This is

An Act to Amend the Assessment

Equalization Act . The Assessment Equalization Act is

in force to equalize real property assessment values for school

taxation purposes throughout the province. This is mainly

because of assessment limitations that were applied by the

previous administration in an apparent attempt to keep

assessment on homes in line through a highly inflationary

period.

This Government will be giving the Act further study. In the

meantime, one glaring inconsistency in our opinion needs

correcting. Due to daily up-to-date sales figures from homes

being readily available, the assessed values of land and

improvements skyrocketed each year as a result of inflationary

forces.

On the other hand, assessed values for industrial-commercial

properties progressed in a more orderly manner because of the

lack of up-to-date or numerous sales figures and because of

depreciation and other accounting procedures applied by

industry. However, the assessment limitations of not more than

10 per cent for individual properties per year and not more

than 5 per cent for individual school districts per year

presently contained in the Act applied equally to industry as

well as homes.

In our view, the industrial and commercial properties do not

require the assessment increase

section

[ Page

2337 ]

that homes do because, as I have mentioned, homes are

assessed on an up-to-the-minute sales information and industry

is not. It is therefore proposed in this bill to removed the

benefits of the restrictions on the limits of assessments

accreted from industrial and commercial properties.

In future, the restrictions will only apply to improvements

used for residential purposes or classified as farmland, and

this would include apartments of both condominium or rental

type.

I move second reading of this bill.

MR. SPEAKER: The Hon. Member for South Peace River.

MR. PHILLIPS: Mr. Speaker, I would like to move adjournment

of this debate until the next sitting of the House.

Motion negatived.

MR. SPEAKER: The Hon. First Member for Victoria.

MR. MORRISON: Mr. Speaker, in our opinion this should not be

made retroactive. We'd also like clarification as to whether

this does include apartment blocks and rental accommodation in

that manner which in turn will also probably raise the

rents.

MR. SPEAKER: The Hon. Member for West Vancouver-Howe

Sound.

MR. L.A. WILLIAMS (West Vancouver–Howe Sound): Mr. Speaker,

I take it from what the Hon. Premier says that this is an

interim step and we hope to have some further and perhaps

complete revision of the Assessment Equalization Act .

With that assurance we will reluctantly support this

amendment.

I am concerned, Mr. Speaker, that this is just another

interference with the true function of equalization. While it

may create some apparent advantages for homeowners and for

farmers, it interferes in another way with equalization and

therefore with the true functioning of the tax system which is

based upon a value assessment.

It is, I am sure, not going to change the assessment

procedures of those municipalities which maintain a double

roll; those municipalities at least are making an attempt to

keep themselves in line with the proper relationship of

assessments to what is a proper approach to value.

This is going to further create inequities with regard to the tax burdens for

school and hospital purposes. I truly hope it will be an advantage to the homeowner,

but the best thing we could do for the homeowner would, of course, be to take

the taxes off their homes altogether. Until that happens

we should go back to equalization in the true sense and require assessors to

make special efforts to keep the industrial and commercial properties in line

with values as they increase or decrease in each community.

What the Premier says about the availability of information

is true. The number of changes there are in residential

ownership give the assessors an easy way in which to determine

the value base, but just because it is difficult or more

difficult to do it for industrial or commercial properties does

not mean that it cannot be done.

I would think that the assessment commissioner should be

concerning himself and all the municipal assessors throughout

the province with the devising of techniques whereby industrial

and commercial assessments can be more orderly.

MR. SPEAKER: The Hon. Member for Oak Bay.

MR. WALLACE: Mr. Speaker, I also feel that the important

qualification in supporting this bill is that the Premier has

stated that a review of the Assessment Equalization Act

shows many inefficiencies and inadequacies and that this is the

one particular area that stands out like a sore thumb, I'd say,

and that this is the one aspect which he feels entitled to try

to correct at this time.

As anyone who has served at the municipal level knows, there

is perhaps no Act, or no aspect of municipal government which

is more contentious or more distressing to the individual than

the assessment of property. I am sure that the Hon. Minister of

Finance knows this very well.

I'm picking a fight with no one when I say that certainly

the municipality that I served in at one time did not seem to

me to be able to keep abreast of equalization of assessment

even at the residential level. In times of rapid inflation, to

which the Minister has referred, it is very difficult to keep

residential accommodation equally assessed in different areas

of the municipality when you are perhaps assessing only part of

the municipality each year, and perhaps only completing a total

assessment over a period of five years. But that's a little off

the point.

I do feel that there is a tremendous concern in the City of

Victoria by businesses and industry. I think the mayor of

Victoria is on record as saying that this will result in a

dramatic increase in the assessment of business and industrial

concerns in this City of Victoria. Here again we come back to

the inevitable effect, which will be increased costs to the

consumer, because whatever these industries or businesses are

producing for the consumer, whether it's consumer goods or

services, we can assume that the end result will be increased

costs and a further addition to the inflationary spiral that we

are all trying to contend with.

[ Page 2338 ]

On the other hand, I certainly agree with the Minister that

if the facts show, and I think to a degree they do show, that

we are not able to evaluate assessment on properties that don't

change hands very often, namely the industrial businesses

concerned,

whereas we can come closer to knowing what the

situation is with regard to homes…On that sort of qualified

basis, this party will support the bill.

MR. SPEAKER: The Hon. Minister closes the debate.

HON. MR. BARRETT: Mr. Speaker, in closing the debate, the

Act will be retroactive to December 31, 1972, so that we can

start from that date — due to a court case, as I understand

it.

The question asked by the Member for West Vancouver-Howe

Sound (Mr. Williams) I plead ignorance in interpreting. My

advice is that there are indeed great discrepancies in taxation

between school districts. In conjunction with the questions

raised by the Member for Oak Bay (Mr. Wallace), I've been

advised that the Minister of Municipal Affairs has already

started a review.

The target date for amended legislation is next spring. But

I've been given a caution on that target date by the Minister.

The two departments, Finance and Municipal Affairs, are now

co-operating and hopefully it will be next spring, along with

our own party policy — you know that I've already stated

publicly that there is a difference of opinion in our own group

as to the method of removing school tax from land. We've agreed

as a group that we're going to remove it, but we haven't agreed

as to the method. So hopefully by next spring when we get the

report and our cabinet comes to some agreement with our caucus,

we'll have a package to present to the House.

In the meantime, this is, as the Member for West Vancouver

has said, purely a method of patching up the catch-up for the

time being.

I move second reading.

MR. McCLELLAND: What about apartments?

HON. MR. BARRETT: Mr. Member, this will include apartments

or condominiums of rental types. The restriction is only

applied to improvements used for residential purposes, and that

would include apartments or condominiums of rental type.

MR. SPEAKER: The question is that Bill No. 71 be read a

second time now.

Motion approved; second reading of the bill.

Bill No. 71 referred to a committee of the whole House at

the next sitting of the House after today.

HON. MR. BARRETT: Mr. Speaker, second reading of Bill No.

AN ACT TO AMEND

THE PROVINCIAL HOME-OWNER GRANT ACT

HON. MR. BARRETT: The provincial homeowner grant is firmly

entrenched as a part of the provincial government's financial

aid to home-owners to help them pay a part of the provincial

government's financial aid to homeowners to help them pay their

local property taxes. Throughout many an election campaign the

New Democratic Party was accused of being a group who, if they

got into power, would take away the home-owner grant. I'm happy

to say I've lived to see the day where we're proving that we

are not only going to take away the home-owner grant…

AN HON. MEMBER: You wouldn't dare.

HON. MR. BARRETT: Well, I've no comment on that other than

to say that I'm happy to report, as reported in my budget

speech, that the Government is committed to study of the ways

and means of eliminating the school tax from property. This

requires major considerations and possible realignment of

provincial revenue structure and will take time to

complete.

In the meantime, it is not the Government's desire to

penalize home property owners. It is therefore. proposed to

increase the home-owner grant to a maximum of $200 from $185

and to a maximum of $250 from $235 for those home-owners 65

years of age or over.

I move second reading.

MR. SPEAKER: The Hon. Minister closes the debate.

HON. MR. BARRETT: Mr. Speaker, I request the question be

put.

Motion approved; second reading of the bill.

Bill No. 72 referred to a committee of the whole House at

the next sitting after today.

HON. MR. BARRETT: Second reading of Bill No. 73, Mr.

Speaker.

AN ACT TO AMEND

THE MUNICIPALITIES AID ACT

HON. MR. BARRETT: This Government is conscious of the

position of the municipal governments who, like everyone else,

are faced with increased

[ Page 2339 ]

costs. Therefore, to assist these governments and to ease

local taxes on municipal property owners, it is recommended in

this bill that the municipal per capita grant be increased an

additional $2 per person.

This means a total grant of $32 for each man, woman and

child in each municipality. (Pause. Arm waving.) 1952, 1953…Oh, sorry. Wrong script, Mr. Speaker. Right place, right script

but wrong guy! (Laughter). It is estimated this will cost the

province an additional $4 million, a total of $58,500,000 per

capital in the next fiscal year.

To further assist municipalities in running their own

affairs this bill will also remove the requirement of how the

grant is to be used by the municipalities. In other words, the

$32 per capita grant will now be given unconditionally by the

province, my friend! (Laughter). Same script, same script

writer but far better words and I move second reading, Mr.

Speaker.

MR. SPEAKER: The Hon. First Member for Victoria.

MR. MORRISON: This is one of the times when I wish I had

been here for years. (Laughter). I feel a little bit left out

when I've missed all this humour.

HON. MR. BARRETT: It was serious before! (Laughter).

Interjections by some Hon. Members.

MR. MORRISON: I might say at this point that we're obviously

in favour of it, but we wish it were a great deal higher. We

realize that the municipalities are probably going to get

considerably more tax revenue in the amendment on the

equalization Act. But we also think that this should have been

raised to at least $36, if only to have taken care of

inflation.

MR. SPEAKER: The Hon. Member for West Vancouver-Howe

Sound.

MR. WILLIAMS: Well, it is the same script, Mr. Speaker. I

would really have thought that the new Minister of Finance

might have seen fit to bring in some real variations insofar as

aid to municipal revenues is concerned.

Again, I hope that when he's closing the debate, he will say

that this too is under review and that the Minister of

Municipal Affairs (Hon. Mr. Lorimer) will be able to convince

the Minister of Finance that we must have a completely new deal

for the municipalities and their revenue sources.

Yes, the Minister said that this is going to increase by about $4 million the

cost to the province in their aid to municipalities. Well, the Hon. Minister

of Rehabilitation and Social Improvement (Hon. Mr. Levi) just announced another

new scheme the other night that's going to cost the

municipalities $4 million. So already we're back to where we were a year ago.

That's why this same old script is not good enough.

Mr. Speaker, there's another reason why I think the

Government should and must make a complete revision in its

assistance to municipalities. That is that the per capita basis

for determining need and the province's answer to that need is

no longer satisfactory. It's an easy one to use. But, as the

Premier well knows, in urban areas increasing populations

create more and more problems. The problems are created at a

rate greater than the population increase.

In a small community there are many problems and many

expenses which the municipality faces in providing the services

for its citizens. But when increasing numbers of people are

brought in closer and closer relationship one with the other,

additional problems are created which are not found in many of

the small communities. The City of Vancouver is certainly an

example. In fact, so is the area in which the Hon. Premier has

had so much experience in private life, as has the Minister of

Rehabilitation and Social Improvement. They know the

consequences of large numbers of people living in extremely

close proximity.

They increase the costs to the local community. I would

certainly hope that one day we would get away from the easy per

capita basis of making funds available. This would be a step

forward in itself. But I also hope that we will see the day

when municipalities can have some other tax revenue base than

just the ownership of land.

MR. SPEAKER: The Hon. Member for Oak Bay.

MR. WALLACE: Mr. Speaker, I'm sure my colleague from Saanich

could express this far better than I. As he quoted from the

Plunkett report the other day in the House, the whole scope by

which municipalities can raise money for an ever-increasing

demand on them, dealing again with the question of inflation in

relation to wages and materials, this amount of increase per

capita seems to us to be quite inadequate.

Again, in the same line of thinking as we discussed on an

earlier bill today, one has to see sums of money in context.

The Premier has stated how much this will cost the Government.

But set against some of the other consequences of taxation and,

as the former speaker just mentioned, while we very much

support the concept that people requiring social assistance

should be given a fair slice of the provincial pie,

nevertheless 15 per cent of that cost has to be borne by the

municipality and they don't have the room to manoeuvre in

raising their share of the cost to the degree that the

provincial government can choose various forms of taxation.

[ Page 2340 ]

In other words, this Government has brought in the tax we've

just passed, the utilized capital tax, but the municipalities

don't have any such way of raising the money, other than by

raising it against the homeowner. We feel that the time has

long since passed when some basic review should have come up

with a better formula.

It would seem to us that surely one kind of formula would be

to relate the money made available to the municipalities as

some kind of percentage of the tax revenues available to the

province. That may not be the solution but it's certainly

better than the per capita basis on which it has been

calculated.

The one factor in the bill which we do approve, Mr. Speaker,

is removing the conditional basis on which $3 per capita was to

be spent, when it was increased by $3 a year or two ago by the

former administration. That was, as I recall, for ambulance

service, development of trade and development of tourism. I

think those were the three areas where dollars were given

conditionally. I think the grant fell into disrespect because

I'm quite sure there were municipalities who just put the money

in their pots and I don't think there was any accounting as to

whether the money was spent for these conditional purposes or

not.

I think the first meeting that had been held ever — in

Toronto a few months ago between the three levels of government — municipal, provincial and federal — should surely be some kind

of starting point out of which this government can gain benefit

in having a better understanding of the municipal problem and

the raising of finances at the municipal level.

This seems to me a little similar to the Assessment

Equalization Act . We're accepting this as an interim

appraisal by this Minister of Finance (Hon. Mr. Barrett) in the

early months of his term of office and we look forward, no

later than a year from now, to a much more comprehensive and a

much more fair and just bill for the municipalities.

MR. SPEAKER: The Hon. Second Member for Vancouver

Centre.

MR. G.V. LAUK (Vancouver Centre): Thank you, Mr. Speaker.

Firstly, I want to thank the Government on behalf of Vancouver

Centre for the increase and also for the many other advantages

that the City of Vancouver is getting.

However, I am concerned about the rising costs of having

one's home in the City of Vancouver. The taxes are increasing.

The municipal government's expenditures are increasing. Perhaps

there's a little bit of fat in their budgets, Mr. Speaker, but

not that much.

I think that before long, the review of a revenue sharing

formula has to be made by this Government. I might echo what

has been said by the Members for Vancouver-Howe Sound (Mr. Williams) and Oak Bay (Mr.

Wallace). The people…

Interjection by an Hon. Member.

MR. LAUK: West Vancouver–Howe Sound. Believe me, Mr. Member,

I know the distinction between West Vancouver and Vancouver

Centre in all of its characteristics.

I believe that this revenue-sharing plan is in the mind of

the Minister of Finance. I rise only as a gentle reminder that

there are some of us Members from Vancouver who have

constituents who we must speak out for and who wish to maintain

their own homes in the area. Their property taxes are very

high. There's the likelihood that they still might be

increased. The sooner that we come to some arrangement — not

only with the City of Vancouver, Mr. Speaker, but with all the

municipalities in the province, with a new programme of revenue

sharing — it will be a brighter day for the municipalities and

especially for the City of Vancouver.

MR. SPEAKER: The Hon. Minister closes the debate.

HON. MR. BARRETT: Thank you, Mr. Speaker. We agree that the

grant has paternalistic attitudes related to it. However,

although we have been criticized for going too fast, we just

haven't had enough time to come to a conclusion about how to

vary this particular method of assisting the

municipalities.

We did have a meeting in my office shortly after the

election of the new mayor in Vancouver, Mayor Phillips. He

proposed a number of interesting methods. I told him at that

time that I could not give him a commitment in terms of one

office meeting. I asked him to put the proposals in writing and

get the endorsation of the UBCM so that when we began

discussing the proposals, he and the committee from the UBCM

would be speaking in one voice. The Minister of Municipal

Affairs (Hon. Mr. Lorimer) and myself could sit down with them

on that basis. That's the direction we're going in.

The grant system has a number of built-in advantages as well

as disadvantages. What do you replace it with if you take away

the grant system? It may be easy, Mr. Member, but also there

are politics involved. On a quiet afternoon with a drowsy Press,

it's easy to be very frank about some of the politics.

AN HON. MEMBER: I said nothing's easy.

HON. MR. BARRETT: Nothing's easy? O.K. Now I don't have to

go into a political discussion.

Nothing is easy. It means politicians in a room behind a

closed door — I know this sounds terrible to

[ Page 2341 ]

people. But they've got to sit down, close the door and have

a header.

MR. WILLIAMS: Smoke-filled rooms.

HON. MR. BARRETT: On occasion they're necessary.

MR. WALLACE: They don't need to be smoke filled, though.

HON. MR. BARRETT: "They don't need to be smoke-filled,

" says the doctor.

Now that's the kind of atmosphere in which the political

lines disappear and some hard-nose bargaining takes place.

That's what I'd like to see happen.

Mayor Phillips took the request back to the UBCM and that's

the direction we're going in.

The problems raised by the Member for West Vancouver-Howe

Sound (Mr. Williams) about the growing cities — I'm going to

resist the temptation to give a long speech. I will just tell

you that I do share with the Prime Minister of this country one

common fear about city life. I really worry about an American-style city life developing in our major cities. Touch wood! It

hasn't happened so far. People still are not frightened to walk

down our city streets.

It's a beautiful thing to be able to walk in Vancouver or

Victoria. I don't find Victoria nearly as exciting. They roll

up the sidewalks — I shouldn't say that. Victoria's a very

exciting city. But Vancouver is exciting too.

MR. WILLIAMS: Esquimalt?

HON. MR. BARRETT: Esquimalt is exciting, Saanich is

exciting. (Laughter).

Having said that, I just want to illustrate a little story

and then I'll sit down and shut up.

Four years ago as a social worker I had occasion to do some

traveller's aid. I had a couple up from New York who were

looking for a lost daughter. They expressed the fear for their

daughter — I think it was at the time of the tragic murder of

the nurse in the West End of Vancouver — and how upset the

newspapers were: the Vancouver Sun , the Vancouver

Province , full headline stories demanding action by the

then Attorney General, kicking the heck out of the city,

kicking the heck out of the province, the government.

These parents came in to me in fear about their daughter.

They showed me the headlines.

I said, "Look. It is a problem. But can you name an American

city of this size where an occurrence like this would be on the

front page? Can you name a state where the attorney general

would be in hot water?" It happens so infrequently in our great

City of Vancouver or Victoria that it's front page news.

Down in the United States, that's an everyday occurrence and

you get a small box saying "Three murders."

When we were in Washington we walked from Washington's

Chinatown — I confess of my habits — four of us, back to our

hotel. We enjoyed going through that part of the city and we

came back. The driver at the Canadian Embassy picked us up the

next morning and we told him we'd walked through there. And

without thinking at all he said, "You idiots. Four people were

shot in Washington last night alone."

Now you can have all the material progress in the world and

all the great wealth in the world. But if it leads to that kind

of city life, it isn't worth it. We're interested in helping

the cities somehow avoid that. The grant is obviously not the

best system. We'll try to find a better one.

I move second reading.

Motion approved; second reading of the bill.

Bill No. 73 referred to a committee of the whole House at

the next sitting after today.

HON. MR. BARRETT: Mr. Speaker, second reading of Bill No.

AN ACT TO AMEND

THE REVENUE ACT

HON. MR. BARRETT: This is a very short bill, Mr. Speaker.

The Hon. Members will note the Minister of Finance has taken

the power under this bill to invest surplus funds of the

province in the capital stock of corporations.

At the present time the Minister has the power only to

invest in capital stock of chartered banks.

I want to assure the Hon. Members that it is not the

intention of the Government by this amendment to start playing

the market with the people's money, but rather it is the

investment policy of this Government only to commit the

people's funds to the capital stock of those corporations where

it is considered the investment is a most prudent one or it is

considered highly in the public interest to do so.

The bill also includes two routine amendments. In the case

of revenue refunds, the limit is being raised from $200 to $500

before an order-in-council is required. I expect an amendment

to raise it to $1,000 before an order-in-council is required.

The $200 figure has remained unchanged in the Revenue

Act for many years and is now considered unrealistic. It

certainly is when you have to sign stacks of orders-in-council

dealing with refunds of $600 and $700. So I expect an amendment

up to $1,000.

Similarly too, the maximum interest payable of 5 per cent

allowed the province is unrealistic in terms

[ Page 2342 ]

of today's financial markets. This limit is therefore being

removed.

I move second reading.

MR. SPEAKER: The Hon. Member for Columbia River.

MR. CHABOT: Bill No. 74, Mr. Speaker,

An Act to Amend the

Revenue Act . It could quite conceivably be called the

"Waffle Act, 1973."

I find it an incredible piece of legislation which has been

introduced by the Premier. He says it's not to be used in

investment in the stock market or something of that nature. But

if he really wants it to be used for investment in some of the

companies that might create jobs and help develop and further

refine our natural resources, it should be spelt out in the

Act. He should leave no doubt in the minds of the people of

British Columbia as to the reason for this legislation.

You can spell it out if you want to participate in the

development of a smelter in British Columbia. There is no

reason why that objective could not be spelt out in the Act. I

think that it's wrong, really, for a government to turn over

the power of investment to one man — the Minister of

Finance.

Even in most large corporations, they wouldn't do this. But

here, where we're dealing with the taxpayers' dollars that come

from everyone — small taxpayers and large taxpayers — we give

the right to the Minister of Finance to invest in any endeavour

that he sees fit, in the capital stock of any corporation. I

think that's a lot of power to give to one man, a man who has

indicated to us very clearly this afternoon that he has some

business experience. It dates back some considerable time

ago.

He told us his business experience was restricted to the

selling of bananas from Fiji; that's the only business

experience which he possesses. Now he's asking us, by the

amendment to the Revenue Act , to give him the right to

invest in any corporation in British Columbia a man whose only

business experience is selling bananas. That's asking too much,

Mr. Minister of Finance.

[Mr. Dent in the chair]

HON. MR. BARRETT: Don't you think United Fruit is a good

investment?

MR. CHABOT: I don't know anything about United Fruit. But

really, I think you should clearly indicate to us for what

reason you need this absolute power which you are asking for

under this Act. It's "Big Club" legislation; that's what it is.

"Big Club" legislation by a left-wing Government.

What do you intend investing in? You've indicated but you can change your mind.

You can bring in regulations or something of that nature

to invest in the stock market if you want.

Do you intend in investing in corporations such as Kaiser

Resources, which is a coal-mining operation in the East

Kootenays that has come into British Columbia under the free

enterprise system to try to make a dollar or lose a dollar?

They lost a lot of money. Their capital investment was

something in the neighbourhood of $130 million. They've been

operating that mine for approximately three years and have lost

in operating losses something in the order of $35 million.

They've lost roughly $165 million…

HON. MR. BARRETT: We've lost a lot of coal.

MR. CHABOT: Yes, we've lost a lot of coal, Mr. Premier, and

it's your intention to export a lot more from the Sukunka

coalfields as well.

HON. MR. BARRETT: We won't give it away for 10 cents a

ton.

MR. CHABOT: You intend exporting the raw material, the

natural resource from this province. And there will be others

too.

Is it your intention to invest in Kaiser Resources? A

money-losing proposition — you've already bought into a couple

of money losing propositions. A couple of white elephants — one

at Ocean Falls, and Columbia Cellulose. Is it your intention to

pursue your present direction which is to uplift the money

losing operations in British Columbia?

I know that the Premier's predecessor, Mr. Speaker, in 1969

said that if they were elected to government they would stop

the Kaiser deal. He felt that it could best be developed as a

Crown corporation, that is the coalfields. And I am wondering

whether the Premier intends investing the taxpayers' dollars in

such types of operations as Kaiser resources, because I don't

think that government should take that kind of risk that they

have taken, and other coal miners have taken not only in

British Columbia, but in other parts of Canada as well.

When we are talking about investment dollars, we are not

talking about investing our own dollars, or dollars that we've

borrowed from a finance company or borrowed from a bank. We are

talking about dollars that we have extracted from the people of

British Columbia.

I don't think, really, that you would invest it as you have

indicated to us, in penny stocks — unlisted penny mining and

oil stocks — but you could, quite conceivably, invest in a lot

of money-losing propositions in British Columbia. And I think

the Act can be amended and the Act should be amended to clearly

define what the Government's objectives are, relative to

participation in corporations of this province.

You can clearly spell it out in the Act what your

[ Page 2343 ]

objectives are for financial participation. And unless you

do so, the people will only assume that you intend investing it

in a very willy-nilly way, by propping up many unprofitable

enterprises in the province.

No, I don't think we should give the power to the Minister

of Finance to invest as he thinks best. He could get up some

morning after a bad dream and come to the conclusion that he

should invest in this particular corporation — after having had

a bad dream, Mr. Premier.

HON. MR. BARRETT: I only had those when you were in

power.

MR. CHABOT: All of British Columbia is having them now. All

of British Columbia. No, there is too much power in the. hands

of one man who has only business experience to the extent of

selling bananas from Fiji. (Laughter).

Interjections by some Hon. Members.

MR. CHABOT: There will always be a dark cloud over this

business community in British Columbia with this type of

legislation, because there will always be that fear in view of

the many statements that you have made over the years and have

made since you have been Government, that you're going to take

this over, going to invest into this corporation or that

corporation. "We'll push West Coast Transmission out of

business, we'll take them over." — Inland Natural Gas, B.C.

Telephone — and now you bring in Bill No. 74 to invest in the

capital stock of any corporation in British Columbia.

Tell us, do you intend taking a minority share position in

B.C. Telephone, West Coast Transmission, Inland Natural Gas,

Columbia Cellulose? We know the story there — you don't intend

taking any minority position there. Do you intend taking a

majority position in any of these corporations in British

Columbia?

This is dangerous legislation — legislation that puts a

cloud over this community of British Columbia. Because you can

with this type of legislation, threaten any corporate body in

the province of British Columbia. You can threaten them through

the cancellation or alteration of any lease they might hold in

the province, or any licence they might hold in the province.

You can threaten them under several pieces of legislation that

exist such as the Pollution Control Act , or the

Health Act .

It's a most dangerous stranglehold, in my opinion, over the entire business

community of our province. No one will know when the big hand of big brother

is going to reach out, put the pressure on the business community and tell some

corporate enterprise in British Columbia that "you'd better shape up or we might

cancel your lease or cancel your licence. We want a piece of the action. We

want 20 per cent of your company. We want 30 per cent. We want 40 per cent.

We want 51 per cent too."

[Mr. Speaker in the chair]

MR. CHABOT: And there is that possibility of threat against

the business community of British Columbia through adjustments,

alterations, or the threat of cancellation. A very subtle word

here or there and you better believe that the government will

be in business in British Columbia, either in a minority way or

a majority way, because they have the power to make or break

any business enterprise in British Columbia by this

legislation.

It's legislation that has very wide ramifications. It's

legislation that should be fully debated in this House. It's

legislation such that every Member of this Assembly should be

here when it's being debated as well. I think that some of the

backbenchers who aren't here should have an opportunity to

listen to both sides of this piece of legislation that we're

debating right now, because it has such wide ramifications in

the affairs of the business community of this province. In

order that they will have an opportunity to participate and

assess and listen to the position being taken by every Member

of this Assembly, I think that it's only reasonable and fair,

Mr. Speaker, that I move adjournment of this debate until the

next sitting of the House.

Motion negatived on the following division:

YEAS — 8

Richter

Chabot

Fraser

McClelland

Morrison

McGeer

Williams, L.A.

Wallace

NAYS — 28

Hall

Barrett

Dailly

Strachan

Nimsick

Stupich

Nicolson

Sanford

Cummings

Dent

Lorimer

Williams, R.A.

Calder

Hartley

Skelly

Lauk

Lea

Young

Lockstead

Gorst

Anderson, G.H

Barnes

Steves

Kelly

Webster

Lewis

Liden

Cocke

PAIRS

Anderson, D.A.

Macdonald

King

Curtis

D'Arcy

Brousson

[ Page 2344 ]

Gabelmann

Schroeder

Radford

Smith

Brown

Bennett

Nunweiler

Jordan

Gardom

Levi

Rolston

Phillips

MR. SPEAKER: The Hon. Member for Vancouver-Point Grey.

MR. P.L. McGEER (Vancouver–Point Grey): Mr. Speaker, I am

sorry to have such negative emotions on my mind this afternoon

that I just about get up and vote no automatically. Mr.

Speaker, we have nine little words here which remove virtually

every safeguard that has been built up through a century of the

responsible political process in British Columbia. There are really eight words and something which says "(d)",

permitting the Minister of Finance to invest in the stock of

any corporation.

Mr. Speaker, I would just like to know a few things about

the Premier's plans. Will he have a stockticker installed in

his office? What kind of stocks does the Premier prefer? It's

not limited to any particular class, bank stocks or even stocks

from corporations in British Columbia. Does he prefer mining

stocks like Western Mines or Sunshine Lardeau? Will we be wanting these in our portfolio? Horseracing stocks; take a

flyer on Whitney Stables. How about Brameda? That is a mining

company. It did very well for a while; brought in Brenda Mines,

went from $9 down to about 16 cents, didn't it?

[Mr. Dent in the chair.]

MR. McGEER: Are we going to invest through the normal

investment houses in British Columbia? Will we buy these stocks

through Pemberton Securities or will we want to have our own

stockbroking house? Will we maybe be buying shares with the

ability to manage stocks themselves?

Are we going to buy trust companies like Commonwealth Trust?

Would we have invested in Columbia Cellulose a year or two ago

when that corporation was writing off $130 million in capital

investment?

Will we be investing extensively in corporations outside of

British Columbia? Would we be investing in the Benquet

Corporation for example? One that has done very well in the

Bahamas.

These things, of course, are all possibilities for the Minister of Finance

(Hon. Mr. Barrett). I'm not sure, Mr. Speaker, whether I would have picked,

given a free choice of investment managers, the present Minister of Finance

to invest my portfolio. I might have preferred the former Minister of Finance

(Hon. Mr. Bennett) if I had to pick a politician to manage my investment portfolio.

I think that the people who are experienced in the field would perhaps be the

kind of people that most Members of the House would want to see managing their

surplus funds — people who have had extensive experience in managing portfolios,

who will be guided dispassionately to invest in sound stocks, perhaps a little

bit in government bonds, some domestically and some on the foreign market.

This is the kind of thing that investment houses do

full-time. They give full attention to the management of the

portfolios of their clients. I don't know if the Minister of

Finance intends to devote that kind of undivided attention to

the investing of these surplus funds from consolidated general

revenue, but if this is to be an important new direction for

government, then I think we should have the Minister of Finance

giving that kind of attention to the people's portfolio.

It's really, Mr. Speaker, a blank cheque bill. I can recall,

many years ago, a blank cheque bill coming before the

legislative assembly and it being the subject of very lengthy

and bitter debate, but that bill provided only for the

investment by the Minister of Finance in the stock of a bank.

The reason why it became a subject for heated debate, and was

finally vetoed by the national parliament, was because we

didn't know how much stock the Minister of Finance wished to

buy in that particular bank.

Interjection by an Hon. Member.

MR. McGEER: No, Mr. Speaker, it wasn't the Senate. As a

matter of fact, as I recall, Mr. Speaker, the Senate tore the

former Minister of Finance (Hon. Mr. Bennett) apart when he

went down to appear before the Senate banking committee,

because a number of the Hon. Senators were very experienced in

such matters and pointed out to the former Minister of Finance

how shallow his own outlook was in suggesting that the bank

could be capitalized at $100 million. Indeed, there was a

public subscription with a target of $75 million, which wound

up with $10 million or $12 million.

Later, Mr. Speaker, we opposed in this House another bill,

which gave the Minister of Finance power to invest trust funds

in the stock of a bank. This was after the Bank of British

Columbia had become a fully operating chartered bank with stock

issued at $25 per share, and where it was slipping on the open

market to $18, $17, $16. The value of that stock was propped up

for a considerable period of time by purchases made by the

former Minister of Finance. In other words, the people's money

was being used to provide a floor support for the value of

stock in the Bank of British Columbia.

I only mention these examples, Mr. Speaker, not to rake over

the ashes of past legislative debates, but to illustrate the

restraint that was urged upon the former Minister of Finance in

this Legislative Assembly, in the Senate and in the House of

Commons with regard to investment in the capital

[ Page 2345 ]

stock of one corporation — a bank that was totally under the

control, as far as operation was concerned, of the statutes of

Canada and of British Columbia.

When in the past there has been restraint over an investment

in that limited field you can imagine, by comparison, the lack

of restraint which is suggested by these eight words and the

letter "c," which gives the Minister of Finance power to

take any amount of money, invest it in any corporation, however

sound or unsound. He can do so without reference to Treasury

board, to the cabinet, to the Legislative Assembly or to the

people.

Mr. Speaker, we probably won't know what stocks or bonds

have been invested in. I would presume that one of the

investments that the Minister of Finance will make, if this

bill passes, is in the B.C. Telephone Company. Of course, what

will be done is to make statements regarding the takeover of

the B.C. Telephone Company to depress the stock and then it

will be possible for the Minister of Finance to purchase the

stock. In other words, you play the market at one end against

the other.

But whether it's the telephone company, whether it's a

forest company, whether it's mining stock, whether it's a

gambling casino outside of British Columbia, this particular

legislation in its wording doesn't distinguish one from

another. It could be any of these things, or all of them. The

purchase of any amount of stock on the New York Stock Exchange,

the Vancouver Stock Exchange, Toronto or Montreal, over the

counter — none of this is limited in any way by the wording of

the legislation.

I would like to inquire, Mr. Speaker: what has happened to

us in British Columbia that a century of restraint in the

management of the people's funds should be dismissed in this

rather short bill with the amendment consisting of just a few

simple words? That restraint has certainly disappeared. Mr.

Speaker, it is not as though we were turning the consolidated

revenue surplus over to Howard Hughes as our investor, though I

wish we were, because there is a man who has done very well

with his investment portfolio. Mr. Speaker, we can't find

anywhere on the Treasury benches of the New Democratic Party

the kind of experience that Howard Hughes has had, the record

of success with investment moneys.

Instead, Mr. Speaker, we've found the government using the

people's money to invest in corporations that have demonstrated

an inability to carry on. The purpose of the investment has

been to save jobs, not to make sound investments that will

allow for growth and future opportunity. One presumes that this

is an indication of the trend.

The particular funds that are provided for under Bill 74 aren't limited to

the kinds of investments that are provided for in the bill of the Hon. Minister

of Industrial Development (Hon. Mr. Macdonald) because there are shares in a

development corporation that are invested only after

due consideration by a board.

It is not, Mr. Speaker, as though the provincial government

has a team of investment analysts, as the civil servants. They

don't have the kind of alert organization that usually stands

behind any fairly large investment portfolio. So one wonders

whether the intent is to have one of these mutual fund

investment programmes, or whether it's to use consolidated

general revenue for other purposes.

These purposes, Mr. Speaker, could be to invest in

money-losing corporations, with some stated social objective.

They could be used as sly means for engineering takeovers, for

example. As the Member for Columbia River (Mr. Chabot) has

pointed out, it could be the Waffle bill. I submit that the

B.C. Telephone Company, of course, will be the first target for

purchases of shares by the Minister of Finance (Hon. Mr.

Barrett) because he and the Minister of Industrial Development

(Hon. Mr. Macdonald), have this enthusiasm extending back over

many years, to have control of that telephone corporation.

AN HON. MEMBER: Wrong number.

MR. McGEER: This has been the stated policy, of course, of

the CCF and then the NDP and one can presume that the Minister

of Finance will receive all kinds of urgings and proposals from

other Members of the Waffle group and other Members of the NDP

as to things that he might buy here or there.

All these years he's been a social worker, helping out

people who have lost daughters when they arrived here from New

York. All these years, Mr. Speaker, he may have had these

secret ambitions to own a steel mill or perhaps a race track.

We don't know what the Minister of Finance's industrial

ambitions have been.

All that we know is that now he's got the people's money and

if this legislative authority is given to him, he will be able

to indulge all those fantasies, whatever they may have been in

the past.

HON. MR. BARRETT: I'm not Walter Mitty.

MR. McGEER: It could well be at the expense of Mr. and Mrs.

Taxpayer in British Columbia.

HON. MR. BARRETT: Read

section 57 of the Act. You're just

saying that because you're a Liberal.

MR. McGEER: When the Premier closes the debate, perhaps he

could detail for us what his investment preferences are. If he

were to say that he preferred mines or if he preferred

railroads or if he preferred automobile factories — you know, a

joint partnership with Toyota or something like that — then we

could get some indication of where the tax

[ Page 2346 ]

revenues of British Columbia were going.

But, Mr. Speaker, we just have to guess at this point. All

we know is that whether we want to be in the Minister of

Finance's mutual fund or not, we're there. We're making forced

contributions to this portfolio with our tax money.

Mr. Speaker, it doesn't look as though the initial

investments of the new Government have had that shrewdness

about them. Indeed, the Victoria Times was moved to

write an editorial on the subject. I thought it was a very good

one, Mr. Speaker. It says, "Is this a rummage sale?" They

thought that the industrialists of the NDP were merely picking

up businesses that otherwise were failing. I would hope that

that doesn't become a fixed tradition of the Government. It

would mean that the portfolio would fare rather badly.

Indeed, there are some ventures that initially have looked

very, very good to the investing public. As you will recall,

Brameda started out and went up to $ 10 or $11. Then it sunk

down to just a few cents. Mr. Speaker, as we know, the

Government's proposal to invest in the Sukunka coal operation

really involved financial rescuing of Brameda Resources.

We don't need to go into Colcel at length, or Crown

Zellerbach's miseries at Ocean Falls. But as a matter of

record, we're into all of those operations and each of them has

been involved in extensive capital losses by the principals.

Each of them has been a tempting investment vehicle for

hardheaded private investors with experience in investing. It

only shows how easy it is to go broke when you move into the

private sphere.

When he was in Opposition, the Minister of Highways (Hon.

Mr. Strachan) used to say that it was a God-given right to go

broke. Now we have a Government that has taken over from where

the Opposition was. Instead of permitting that God-given right

and leaving bad businesses alone, it has felt an obligation to

get in and play in those operations in order to protect the

jobs and make them survive.

If that's the sort of philosophy that's guiding the people

who make the decisions today, I don't feel very secure, Mr.

Speaker, in seeing investment moneys being made available in

unlimited amount to these people to mix it in with the

highrollers of Howe Street.

Mr. Speaker, this is without question the riskiest bill that

has ever been introduced in the Legislature. It does open the

door all the way for the Minister of Finance to take all our

surplus revenue and invest it in any venture, however

speculative, leaving the public with no recourse and no way to

get the money back. So how could any responsible Opposition,

Mr. Speaker, support this bill or give any encouragement in any

way to the Minister of Finance to use its provisions?

First of all, Mr. Speaker, we say to the Minister of Finance and to the Government: please reconsider this bill.

Amend it and bring it back, spelling out the investment

limitations that should be spelt out if it's absolutely

essential to move into the private sphere. Then, Mr. Speaker,

we would want the Minister to limit the amount of money that he

would use for this purpose so that we haven't wound up passing

a blank-cheque bill.

Make it whatever is appropriate — $5 million, $10 million.

Then we know the limits of the amount of money that we're going

to lose if things go badly. As it stands now, all of

consolidated revenue could be used for this purpose.

HON. MR. BARRETT: No. Wrong.

MR. McGEER: Well, all of surplus in consolidated revenue. I

correct myself, Mr. Speaker, and I apologize for that.

But the surpluses have been very substantial. This coming

year they'll be about $180 million. That's a fair amount to

gamble with on the market. Even Howard Hughes doesn't shake up

that kind of money every year to play the market.

So there should be some restraints. I must say that the

Industrial Development Corporation Act — I don't want to

get into a discussion of that Act — does spell out the

limitations that are to be placed on investments and sets an

upper amount, beyond which consolidated revenue cannot be

tapped.

But what's the point of putting all those safeguards in one

particular area to support private industry and then leaving it

wide open in the other? It's like putting $25 in the safe and

locking it tightly and only allowing small amounts of that to

be taken after appropriate notes have been signed, and then to

take all the rest of the money and just leave it on the dining

room table for the Minister to come in and help himself to.

It's a most inconsistent and unfortunate way to do business

and we oppose this bill.

DEPUTY SPEAKER: I recognize the Hon. Member for Oak Bay.

MR. WALLACE: Thank you, Mr. Speaker. When the Minister of

Finance introduced this bill, I was rather amused by him saying

this was just a little bill. It's certainly a small bill in

terms of the words that are used. But that probably only

emphasizes the fact that sometimes tremendous punch goes into a

very small packet.

Interjection by an Hon, Member.

MR. WALLACE: Oh, I'm not talking about myself.

Mr. Speaker, the Minister of Finance made a

[ Page 2347 ]

comment in public not long after the bill was introduced, I

remember, which I think let it be understood very clearly he

himself understands the tremendous ramifications of this bill.

I can't recall where — on radio or television — I heard him say

in an interview that he was most surprised that there hadn't

been tremendous public reaction to Bill No. 74.

AN HON. MEMBER: "Opposition."

MR. WALLACE: Sorry, "opposition." Or maybe "reaction." I

can't remember his exact word, Mr. Speaker. But he was

certainly meaning that while there was tremendous furore about

Bill 42, he had slipped Bill No. 74 in and was surprised that

there was not more opposition.

AN HON. MEMBER: He didn't slip it in.

MR. WALLACE: No, I'm sorry. That's an unfair word to use. He

introduced Bill No. 74 soon after and apparently it went

unnoticed or almost unnoticed. The Minister was surprised that

there had not been more comment. I don't even know if he used

the word "opposition." But it was quite clear, Mr. Speaker,

from the Minister's statement at that time that he realized

very well that this bill is like no other bill that I've ever

seen in this House in terms of the lack of, to use the second

Member for Point Grey's expression, checks and balances.

The reason that we oppose this bill is the tremendous

discretion without any restraint which the bill gives to the

Minister of Finance to invest surplus funds from consolidated

revenue, and I use the words "in the capital stock of any

corporation." The tremendous scope and tremendous leeway which

this gives to the Minister of Finance leaves us with a great

deal of concern.

As the Minister stated, it is a small bill, but the

potential that it affords the Minister of Finance to deal with

taxpayers' money without any restraint other than his own

discretion, we feel we cannot accept.

When one looks at other areas in the financial world where

individuals invest money or seek various services, there is

always some measure of restraint, whether it is insurance

companies of banks, or any similar type of financial

enterprise.

There are laws which at least suggest or state that a certain fraction of money

must be kept in reserve and a certain fraction must be made available on demand,

and so on. And if this kind of safeguard to the individual citizen in the handling

of his private finances is considered necessary in banks, trust companies and

insurance companies, I think it is only reasonable, Mr. Speaker, that some kind

of guarantee should be available when the Minister of Finance is dealing with

taxpayers' money and its investment, however it is invested.

The two words "any corporation" seems to us to be such a

completely limitless possibility, and I won't reiterate some of

the points made by the First Member for Vancouver–Point Grey,

(Mr. McGeer) but I wish to say that we have the same

reservations in this regard.

We also wonder, and would like the Minister, in winding up

the debate, to perhaps give more details as to the methods that

are to be adopted, the degree to which there would be separate

accounting of any moneys that were invested out of surplus

funds.

With respect, we have to say what we have said already, in

regard to proposed investment in Brameda Resources, in Colcel

and in Ocean Falls. While the technique, we are told, is a

little different — that you said that the Government would set

up a Crown corporation, I again don't see that there is any

difference. It's taxpayers' money. The actual mechanics and the

method to be used still means that it is taxpayers' money being

used to shore up, or to invest in industries which at this

point in time are certainly money losers.

I accept, Mr. Speaker, the fact that the Minister of Finance

has been very frank and honest with the people of British

Columbia in saying that he just doesn't value a company or a

business on the sole and simple basis as to whether it makes

money. There are social considerations regarding, in the case

of Colcel, a whole sector of the north-west part of this

province, and that it is part of the more general strategy to

use our forest resources in a wise manner, and also create

jobs. I accept that, in that particular instance, but

nevertheless, when this Government has only been in power six

months, and when it has decided to use taxpayers' money in

certain business sectors of the community, it happens to have

picked three losers right off the bat. In Opposition to

Government one has to listen to the voices of the people you

represent. Everywhere I go people ask me, "What is this

government doing that it is only showing a financial interest,

or financial support of businesses which seem not to be viable,

and which are all losing money."

Then when we come to this bill and find such a limitless

amount of power and discretion which it gives to the Minister

of Finance, we cannot fail to be influenced by the actions of

this government to date in the three examples I have

quoted.

Interjection by an Hon. Member.

MR. WALLACE: I am not necessarily saying that they should

take over any businesses. I am saying that our attitude and our

opinions are these, that the function of government…Mr.

Speaker, again I have said this many times in this House, that

we have

[ Page 2348 ]

different philosophies and that is why we are on different

sides of the House, and this is what democracy is all about. I

am putting forward our philosophy and I'm leaving the people of

this province to judge.

I respect very much the socialist Government for its point

of view. I disagree with it, but I respect the conviction and

the sincerity with which the Minister of Finance holds his

views. But I have to disagree, and the party I stand for

disagrees.

What I am saying in answer to the Member up the road here,

is that we don't think that the government should invest in

business at all. We feel that the function of government is to

create a healthy climate whereby industry and business shall

find it encouraging, profitable and socially beneficial to

carry out its own expansion, its own development, and its own

competition in the market place. One of the reasons that we

think this way — and as far as I am concerned, think this way

very much — is that examples in other parts of this country,

and other parts of the world, do not lead us to believe that

when government gets into the business field that it ever does

a very good job.

We look certainly, as I quoted in an earlier debate, to

Manitoba and Saskatchewan where the government, by one

mechanism, Crown corporation or otherwise, has gone into

business and gone into nothing but further financial deficit. I

have got a newspaper here, the Financial Post …that

the Manitoba government is going to lose $8.65 million in an

aircraft business. We quoted some examples in Saskatchewan, in

an earlier debate, about them in box factories and shoe

factories and so on.

I am talking about general principles, and I don't want to

pick out the worst specific examples just to make a case. I'm

saying that there are areas in this country, in other provinces

and in other parts of the world, where the history, or the

track record of various governments shows that they are not

very good when they get into private business. This is what we

feel.

I would also say that one of our reservations is the point

already raised. But I think it must be mentioned again. That

is, where do we go if the government — the Minister of Finance — with some of the very substantial surpluses that have existed

in past years, does acquire 51 per cent of a company? Is it

healthy for our communities to find that there could well be

purely political pressures within the business segment of our

society because the government holds 51 per cent of the

control of business? What about the management of these

businesses? Would the board of directors, the people in

important positions possibly be placed in these jobs because of

political benefit or service to the party and so on?

I'm not saying this will happen, but the Minister of Finance I think seems

a little puzzled as to why we are so hotly opposed

to this bill. I'm trying to point out that while many of these avenues of action

might not be taken, we foresee some of the very serious possibilities if they

were taken.

This again brings us back to philosophy. We feel that this

is another means of takeover, rather than perhaps coming right

out and making an open bid to take over a company — whether it

be telephone or West Coast Transmission or whatever one you

care to mention. Once again we are talking about "any

corporation."

I feel that it should be made very plain that our main

concern is that taxpayers don't feel — and this is our view at

least — that government should in any way gamble with the

taxpayers' dollars. If some of these companies, even at the

time of government investment, might be making a profit, there

are many ways, as was pointed out earlier, by a former speaker

in the debate, that the picture could change very suddenly.

The taxpayer in this province — certainly in view of the

recation I have had in my area — is frankly apprehensive when

the Minister may feel there is no reason to feel apprehensive.

We have big surpluses, we have a buoyant economy and so on, but

he admitted earlier this afternoon, Mr. Speaker, that very

often we are in a grip of world circumstances and the best or

the worst government in the business wouldn't change some of

the hard facts of economic life.

I agree with what the Minister of Finance (Hon. Mr. Barrett)

said — you have to put a little aside for a rainy day. But if

some of that money that you have put aside for a rainy day is

invested in a company that goes belly-up when times get tough,

I don't, frankly, think this is the kind of area in which the

taxpayers of this province think their money should go.

The whole question was raised earlier on about social goals

and it was suggested that financial losses are justified when

the social goal is more important. I accept that, particularly

in the instances we have touched upon, because of the fact that

they are fairly smal