2003 Legislative Session: 4th Session, 37th 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)

WEDNESDAY, MARCH 5, 2003

Afternoon Sitting

Volume 12, Number 7

CONTENTS

Routine

Proceedings

Page

Introductions by Members

Introduction and First Reading of Bills

Unclaimed Property Amendment Act, 2003 (Bill 15)

Hon. G. Collins

Statements (Standing Order 25 b )

Transportation infrastructure

J. Wilson

Small business in Victoria

S. Orr

Economy in Tri-Cities area

K. Manhas

Oral Questions

Poll of B.C. Liberal caucus

J. MacPhail

Hon. G. Campbell

Economic growth in B.C.

J. Kwan

Hon. G. Collins

Economic partnerships between Indian bands and private sector

D. MacKay

Hon. G. Plant

Highway 11 improvements

R. Hawes

Hon. J. Reid

Health care services for northern B.C. residents

P. Bell

Hon. C. Hansen

Impact of gasoline tax increase on public transit

J. MacPhail

Hon. J. Reid

Petitions

T. Christensen

Second Reading of Bills

Budget Measures Implementation Act, 2003 (Bill 6)

Hon. G. Collins

J. Kwan

J. MacPhail

I. Chong

Income Tax Amendment Act, 2003 (Bill 7)

Hon. G. Collins

J. MacPhail

I. Chong

Hon. S. Hagen

Auditor General Act (Bill 9)

Hon. G. Collins

I. Chong

Committee of Supply

Estimates: Ministry of Education

Hon. C. Clark

L. Mayencourt

J. Kwan

S. Orr

E. Brenzinger

R. Masi

Proceedings in the Douglas Fir Room

Committee of Supply

Estimates: Ministry of Provincial Revenue

Hon. B. Barisoff

P. Bell

W. Cobb

Estimates: Ministry of Skills Development and Labour

Hon. G. Bruce

Estimates: Ministry of Public Safety and Solicitor General (continued)

M. Hunter

Hon. R. Coleman

R. Nijjar

Estimates: Ministry of Finance

Hon. G. Collins

J. MacPhail

[ Page 5235 ]

WEDNESDAY,

MARCH 5, 2003

The House

met at 2:03 p.m.

Prayers.

Introductions by Members

Weisbeck: In the gallery visiting from Kelowna to attend meetings in

Victoria is Dr. Peter Ricketts. Dr. Ricketts is the v-p of academics for

Okanagan University College — heavy on the "university," Mr.

Speaker. Would the House please make him welcome.

[1405]

Introduction and

First Reading of Bills

UNCLAIMED PROPERTY

AMENDMENT ACT, 2003

Hon. G.

Collins presented a message from Her Honour the Lieutenant-Governor: a bill

intituled Unclaimed Property Amendment Act, 2003.

Hon. G.

Collins: I move that Bill 15 be introduced and read a first time now.

Motion

approved.

Hon. G.

Collins: It's my pleasure to introduce Bill 15, the Unclaimed Property

Amendment Act, 2003. This act fulfils a commitment made under the Ministry of

Finance in its 2002-03 service plan — namely, to divest itself of its

unclaimed properties responsibilities. This legislation provides for program

delivery by a non-profit organization according to principles already

established in the existing Unclaimed Property Act.

The new

administrator will provide the same service to the public that the government

provides now. It will make location efforts, maintain a public database of

unclaimed funds, and assess and pay out claims. While the goal of the program

remains the same — to unite owners with their property — the act also allows

the administrator to donate excess funds to charities around British Columbia.

In this way the new program delivery model will benefit British Columbians from

all regions of the province.

I move that

the bill be placed on orders of the day for second reading at the next sitting

of the House after today.

Bill 15

introduced, read a first time and ordered to be placed on orders of the day for

second reading at the next sitting of the House after today.

Statements

(Standing Order 25

b) TRANSPORTATION INFRASTRUCTURE

Wilson: Since the days of the pioneers, efficient transportation routes have

been the lifeblood to the heartlands, delivering people to the Cariboo and

ensuring that the resources get to market. The roads may be a little fancier and

the vehicles a little faster, but the basic need for quality roads is unchanged,

which is why investing in transportation infrastructure is so vital.

Our

government has made a major commitment to fixing roads in the heartlands as we

understand the economic opportunities that flow from safer roads. In the past

there has been plenty of talk but precious little action taken to improve the

roads. The work is long overdue, and we are committed to improving the roads in

the Cariboo.

The

province, in conjunction with the federal government, is spending $9 million to

upgrade the Cottonwood Bridge just north of Quesnel. Originally constructed in

1957, the Cottonwood Bridge plays an important role in the regional

transportation network as well as providing a vital road link between the

northern and southern parts of the province. Unfortunately, the steep grade of

the road, coupled with a hairpin turn, has made this

section of road a notorious

crash site — none more spectacular than how badly the previous government has

handled this issue. The residents of my riding have been shouting for years for

this upgrade. Unfortunately, until recently those shouts fell on a government

more focused on regulating a problem road than fixing it. This upgrade will

ensure long-term and stable access to Quesnel and provide a safer transportation

corridor for both residents and visitors.

We want to

open up B.C. to the world, and we need to ensure that they travel and enjoy the

whole province. This is just the start, though. The Premier has announced $609

million over the next three years dedicated to the upgrade and development of

infrastructure projects throughout the province. This money is key to part of

our heartlands economic strategy.

[1410]

SMALL BUSINESS IN VICTORIA

S. Orr:

Polls are interesting beasts. Some look at them with keen interest, some analyze

them, and in most cases we pretend not to be interested in them. Well,

truthfully, I am. So when the Ipsos-Reid poll came out recently, I found it very

interesting. It felt really good seeing external figures confirming what we all

knew. Eight out of ten — that's 78 percent — of all small business owners

say that we are moving in the right direction, 44 percent say that the business

climate is already in better shape since we took over as government, and 66

percent say that it will be in better shape two years from now. It's a good

feeling to be in a government that's been endorsed by a huge group of people who

are the engine behind the future of economic growth.

Victoria-Hillside

is home to over 50 percent of this region's small businesses. Over the past

couple of days, I did some checking around to get my own snapshot. It is good.

One of my local furniture stores, Dodd's Furni-

[ Page 5236 ]

ture, said that they have had their best year in a decade. Furniture sales

are always a good indicator. Auto sales are another good indicator. One of my

local car dealers told me yesterday that in 2002 they had their best year since

1991, and this year they are already ahead of 2002 by 15 percent. Herman

Rednaris, a builder friend of mine, sent me a news clipping yesterday with

figures showing that residential construction is the key driver for the building

industry, and they have had their best year since 1989. Even my local Starbucks

says business is up.

On the

weekend, when I was running my own little survey and walking through one of my

malls, I noticed several stores had "Help wanted" notices in the

windows, and it's not even Christmas. Boy oh boy, things are starting to feel

good again. Thank goodness.

ECONOMY IN TRI-CITIES AREA

Manhas: Our government has worked hard to develop a competitive economic

foundation for the entire province. We declared that B.C. is open for business,

and we delivered a competitive tax structure and measures that will have

tremendous long-term benefits to businesses and communities across the province.

We laid that foundation, and now communities and businesses need to build on

that foundation to achieve economic success.

I know that

my community has great economic potential to build jobs. Our region encompasses

the municipalities of Port Moody, Coquitlam, Port Coquitlam, Anmore and Belcarra

and is commonly dubbed the Tri-Cities among area residents. In our region we

have multi-jurisdictional boundaries, but we also have many synergies and

interdependencies. We need to work together to achieve our potential in the

heart of the lower mainland. The municipalities need to work together to attract

business and investment and agree on transportation connections. We need a

coordinated plan, a marketing strategy and a strong brand that will sell our

strengths.

That

economic revitalization has already started to happen, and jobs are coming to my

region. The tourism task force has reinforced the need of a brand in their

recommendations. That is a key to our success. We know we have the raw

materials. We have to sell the package. That means looking at what we share as a

region, giving it a tangible name and marketing that to people outside the

region and inside the lower mainland.

The

Okanagan, the Kootenays, the Sunshine Coast and the North Shore — all these

regions have done an exemplary job of packaging themselves. The Tri-Cities

region must do the same. Perhaps it means a new name, one that speaks to our

common strengths and our common geography, but no matter the name, the

communities need to market their combined strengths. The identity will help draw

people, tourism, jobs and investment, and within that identifiable brand name,

each municipality can accentuate the individual characteristics that make them

unique.

When our

communities work together, we all stand to gain. In the long run, I believe it

will mean more jobs in our communities.

Oral Questions

POLL OF B.C. LIBERAL CAUCUS

MacPhail: Why did the Premier hire B.C. Stats to conduct an opinion poll of

his own caucus? Was he worried they would be too afraid to tell him personally

what they really thought?

Hon. G.

Campbell: The Premier's office is very concerned about measuring performance

— measuring performance of cabinet ministers as well as of deputy ministers.

We did what's known as a 360-degree performance analysis of all members of

cabinet and all deputy ministers.

Mr.

Speaker: The Leader of the Opposition has a supplementary question.

[1415]

MacPhail: My question is: why did the Premier hire B.C. Stats to survey his

own caucus? The opposition has obtained an internal B.C. Stats report that says

that the Premier's office hired them to conduct a poll of all 75 members of the

Liberal caucus. The Premier has an army of staff who are on public payroll to

communicate with Liberal caucus.

Interjections.

Mr.

Speaker: Order, please.

MacPhail: Was Steve Vanagas too busy? Martyn Brown couldn't pick up the

phone and ask them himself if the Liberal members were happy with the Premier?

What about the caucus chair? Isn't it his job to manage caucus? Again to the

Premier: are the inner workings of his caucus so dysfunctional that he has to…

Interjections.

Mr.

Speaker: Order, please. Order. Order, hon. members. Let us hear the

question.

MacPhail: …contract with B.C. Stats — a government agency — to find

out what his own MLAs are thinking?

Hon. G.

Campbell: So the member opposite knows this, I have no concerns about my

caucus whatsoever. I think that the critical things our caucus believes in are

public accountability and assuring that evaluation processes are independent,

clear and concise. We use B.C. Stats because they do this with deputy ministers.

They're doing it with cabinet ministers. For the first

[ Page 5237 ]

time, we're actually having measurement to see how people are performing.

Mr.

Speaker: The Leader of the Opposition has a further supplementary question.

MacPhail: Well, the fact is that the Premier is right that this is the first

time ever he's used public money to conduct a poll of his own caucus. If the

Premier is correct that he wants to be open and accountable and that he did

something that should have been done by the staff, the public has a right to

know what they got for their money. Will the Premier today, in the open and

accountable way he just admitted to, table the questions that were asked by B.C.

Stats of his own caucus, the responses that were given and the amount of money

this ridiculous exercise cost?

Hon. G.

Campbell: It is a fundamental tenet of trying to come up with performance

evaluations. This is known as a 360-degree performance evaluation. I am sure

that the member opposite has no idea what performance evaluations are. If the

member opposite had, I don't think the people of British Columbia would have

sent a 77-to-2 performance evaluation in the last election.

The

critical component of performance evaluations is their confidentiality. Our

performance evaluations will remain confidential, but I will tell the member

opposite this: we have a great cabinet and a great government.

ECONOMIC GROWTH IN B.C.

J. Kwan:

Instead of hiring B.C. Stats to conduct a poll of his caucus, maybe the Premier

should hire them to tell him what's happening to our economy. Yesterday the

Conference Board released a report forecast for B.C. for 2003, and guess what.

Who would have thought — dead last in economic growth in Canada. Two years of

the new era, and we're number ten — ten out of ten. Can he explain why he's

spending money to get B.C. Stats to conduct polls of his own caucus on how

satisfied the caucus is with the Premier, when he should be reading their

reports on B.C.'s abysmal economic performance?

[1420]

Hon. G.

Collins: I would encourage the member opposite to read the research that

B.C. Stats has done over the last number of years. They showed a progressive

decline in British Columbia's performance year after year after year under the

previous government.

Interjections.

Mr.

Speaker: Order. Order, please.

Hon. G.

Collins: I know that was the rallying cry of the previous administration for

ten years. Let's look at the facts: 78,000 new jobs created in British Columbia

last year; near record growth in the housing market; buoyant housing sales

across the province, retail sales and automobile sales. British Columbia has

done astoundingly well in the last year, and we're going to go in one direction,

and that's up.

I'll also

be glad to send the member opposite the report by the Toronto-Dominion Bank, a

little over a month ago, which said that in 2004 British Columbia is going to be

number one in Canada.

Mr.

Speaker: The member for Vancouver–Mount Pleasant.

Interjections.

Mr.

Speaker: Hold it a minute, please — a moment until we have some order. The

member for Vancouver–Mount Pleasant has a supplementary question.

J. Kwan:

Not only were we dead last in economic growth, our youth unemployment is rising

as well. Last month it was up 16.1 percent — well above the Canadian average.

For five straight months we have lost jobs in B.C. — lost jobs. When the

Premier took office the unemployment rate stood at 7 percent. It is now over 8

percent. How many other polls of his own caucus has he authorized…? To the

Premier: how many polls of his own caucus has he authorized to find out if

they're unhappy with his own performance?

Interjections.

Mr.

Speaker: Order, please.

Hon. G.

Collins: One of the very encouraging things underlying the job performance

numbers and statistics numbers is that young people are coming back to British

Columbia. Contrary to the distorted statistics of the members opposite, last

year, for the first time in the history of British Columbia ever, over two

million people had jobs and were working in this province.

Mr.

Speaker: The member for Bulkley Valley–Stikine.

Interjections.

Mr.

Speaker: Order, please. Order.

Interjections.

Mr.

Speaker: Will the Leader of the Opposition please come to order. The member

for Bulkley Valley–Stikine has the floor.

ECONOMIC PARTNERSHIPS BETWEEN

INDIAN BANDS AND PRIVATE SECTOR

MacKay: My question is to the Minister Responsible for Treaty Negotiations.

It has come to my atten-

[ Page 5238 ]

tion that several native bands throughout the province have entered into

negotiations with developers who are looking at investing in British Columbia.

These ongoing negotiations between the native bands and developers are targeted

at the developers who are being asked to enter into revenue-sharing agreements

with the natives. There is no risk to the native bands. They just want a share

of the revenues.

However, I

am concerned that all we have done to date to attract new investors will be

compromised by the actions of a few native bands. Could the Minister Responsible

for Treaty Negotiations advise my constituents of the government's position on

this issue?

Hon. G.

Plant: Part of our task in building a climate of hope and economic

prosperity in British Columbia is to find a way to ensure that economic

development is there for the benefit of first nations and non-aboriginal people

across the province. We're also doing that within a framework where we as

government have to meet the obligations that have been established in judicial

decisions around consultation and accommodation. In fact, those judicial

decisions suggest that in some cases there are obligations on third parties.

[1425]

My message

to the investment community and to the developers of British Columbia is to open

up the dialogue for partnerships with first nations where it makes good business

sense, because in the long run, good business sense means good business sense

for aboriginal and non-aboriginal British Columbians and greater opportunity for

everyone around this province.

HIGHWAY 11 IMPROVEMENTS

Hawes: Highway 11 between Mission and Abbotsford has been identified as one

of the most dangerous pieces of highway in British Columbia. The engineering for

the widening of this highway has been completed for several years, and the

councils in both Mission and Abbotsford are asking when the widening might

proceed. To the Minister of Transportation: can she tell my constituents when

they might see actual work begin on widening of this highway?

Hon. J.

Reid: Highway 11 is a priority for this government. There are many aspects

of the highway, not just the specific one the member mentioned. In fact, in

today's announcement — with the federal government and the partnership —

that was made of $336 million going into transportation infrastructure, there

are two projects on Highway 11 in Abbotsford that are included for a total of

$6.5 million. Along with that, the stretch the member mentioned, where widening

is necessary and the engineering work has been completed, is a high priority now

that we have the dedicated transportation funding. We are drawing together the

plan for that. It is a very likely candidate to be included, and that would be

four lanes from Harris to Clayburn with an intersection upgrade.

HEALTH CARE SERVICES FOR

NORTHERN B.C. RESIDENTS

P. Bell:

After a detailed analysis from the member for Prince George–Mount Robson and

myself, it has become apparent that the northern regions are relying heavily on

the coastal health authority for services to northern residents. As a result,

many of my constituents and the constituents of the member for Prince

George–Mount Robson have to travel a long distance to get those services. Can

the Minister of Health Services tell us what steps this government is taking to

allow northern residents to receive the services where they need them, when they

need them?

Hon. C.

Hansen: I certainly appreciate the work the two members have put into the

analysis of patient flow in the province. As a result of the redesign that we

announced almost a year ago, there has been a real strengthening of health care

delivery in the north and greater capacity, more nurses being trained and more

doctors being attracted to those regions. In addition to that, we've got a $50

million capital expansion underway at Prince George Regional Hospital. What that

means is that in the future, more of those procedures that now get delivered in

other parts of the province will be able to be delivered in the north. We are

looking at strategies to ensure that we can build capacity in the north and at

the same time make sure those dollars are reallocated so those services can be

delivered for northerners where they live, when they need it.

IMPACT OF GASOLINE TAX INCREASE

ON PUBLIC TRANSIT

MacPhail: I wonder if part of the survey that B.C. Stats did for the caucus

dealt with the 3½-cent-per-litre gas tax increase. We know today that bus

service is at risk in Kelowna, in Victoria and in the lower mainland because of

the increased fuel taxes for public transit. We also know that this government

has not dedicated one cent of that gas tax to increased public transit. To the

Minister of Transportation: can she identify what economic impact study she did

on public transit that would determine the effect of the increased fuel tax on

cuts in public transit service? Who is affected? Who will be harmed? How are you

going to make up the difference?

Hon. J.

Reid: Public transit is very important to this government. We have

maintained the funding for public transit. When we've looked at what was

happening within transit, we realized that there were efficiencies to be

obtained within the transit system. That was confirmed over the system. As we've

looked at getting those efficiencies into the system, we've been consulting with

municipalities about that. Prices of fuel have always been volatile. That's part

of the budgeting mechanism within…

Interjections.

[ Page 5239 ]

[1430]

Mr.

Speaker: Order, please. Let us hear the answer.

Hon. J.

Reid: …the transit system. While we still are looking at efficiencies that

are in the works, we are going to pursue that, and we're going to achieve those

to the benefit of all users of the transit system.

[End

of question period.]

Interjections.

Mr.

Speaker: Order, please. Order, please.

Petitions

Christensen: I have a petition from 313 of my constituents encouraging

government to work with the North Okanagan regional district to maintain and

enhance the community economic, environmental and social values of the

small-scale salvage program in the Vernon forest district.

Orders of the Day

Hon. G.

Collins: I call second reading of Bill 6.

Mr.

Speaker: Second reading of Bill 6 will continue in just a moment.

Members

will please make their way about their business as quickly as possible. We're on

second reading of Bill 6.

Minister of

Finance.

Hon. G.

Collins: Sorry, I forgot to call Committee of Supply in Committee A, and for

the information of members, we'll be beginning the estimates of the Ministry of

Provincial Revenue followed by Skills Development and Labour and, depending on

progress, followed by Finance.

Second Reading of Bills

BUDGET MEASURES

IMPLEMENTATION ACT, 2003

Hon. G.

Collins: I move that Bill 6 be read a second t ime.

Bill 6

amends a number of provincial statutes to implement many of the 2003 provincial

budget measures announced in our second budget on February 18, 2003. The

measures included in this bill will help to achieve our vision of a prosperous

and just province for all British Columbians through a continued focus on

restoring sound fiscal management and revitalizing the economy.

The

government has already taken important steps to restore sound fiscal management,

and it's working. Spending is under control, and as the economy strengthens,

we'll be in a better position to invest even more in high-quality services that

British Columbians require.

Bill 6

amends three provincial statutes and includes one transitional provision in

order to implement the non-tax measures announced in the 2003 provincial budget.

The Balanced Budget and Ministerial Accountability Act is amended to clarify the

reporting obligations of ministers of state in terms of what they must make

public — the actual results achieved respecting their accountability under the

act to become entitled to their salary holdback amount. This amendment will

provide more flexibility with respect to the timing of the reporting of the

actual results.

[1435]

addition, this act includes a transitional provision that allows the Minister of

Health Services and the Minister of Health Planning to table interim service

plans until final service plans reflecting the new federal funding for health

care are completed. These final plans will include final ministerial

accountability statements for both ministers, as well as for the Minister of

State for Mental Health and the Minister of State for Intermediate, Long Term

and Home Care. Those plans will be made public at the same time as supplementary

estimates for the new federal health care funding are tabled in the House.

For the

purposes of the Balanced Budget and Ministerial Accountability Act, the

estimated amount of operating expenses for each Health minister will include the

appropriate amount in the main estimates for which they are responsible, as well

as the approved amounts included in the subsequent supplementary estimates

reflecting the new federal health care funding. The expected results, as defined

in the act for the two ministers of state, will be outlined in a Treasury Board

regulation that will be issued once the final service plans are made public.

The

Financial Administration Act is amended to provide for payments from the

consolidated revenue fund for fees, commissions or expenses relating to

public-private partnership projects. This amendment will provide Treasury Board

with the authority to approve funding for public-private partnership projects

that may arise during the fiscal year. Any funding approvals would have to be

accommodated within a minister's operating expense target as defined in the

Balanced Budget and Ministerial Accountability Act.

The working

capital account referred to in the Purchasing Commission Act is repealed

effective March 31, 2003. The purpose of the special account was to provide the

working capital funding for the acquisition of capital assets for use by special

offices and ministries. The account has been inactive for several years because

special offices and ministries now receive funding directly for capital asset

acquisitions.

Bill 6 also

includes measures to further enhance the competitiveness of the provincial tax

system, improve fairness, provide a revenue source for opening up our

transportation infrastructure and clarify existing legislative policies. I am

pleased to describe and explain the rationale for these amendments as well.

[ Page 5240 ]

The Social

Service Tax Act is amended to further improve the competitiveness of the tax

system, enhance consistency and add clarity. Amendments are introduced to allow

for the expansion of the exemption for machinery and equipment. The exemption is

amended by extending it to contractors who supply and install such equipment on

behalf of eligible manufacturers and other eligible persons under lump sum

contracts. This will ensure that those who are intended to benefit from the

exemption do so, regardless of how the contract to supply and install the

machinery and equipment is structured.

The act is

also amended to improve consistency by treating aggregate producers like mineral

producers for the purposes of the act. The result is that aggregate producers

will now qualify for the exemption for explosive supplies that has long been

provided to mineral producers.

The act is

amended to clarify and confirm the longstanding application of the tax to

birdseed and other agricultural feeds used to feed wild birds, pet birds and

other domestic pets. This clarification does not affect the exempt status of

agricultural seeds and feeds for poultry and other animals that provide food for

human consumption.

The

Corporation Capital Tax Act is amended to raise the exemption threshold for

small financial institutions from $5 million to $10 million. This will allow

those small, local trust companies and credit unions to expand to a more

sustainable size before being required to pay the corporate capital tax.

A technical

amendment is also made to clarify that the adjustment to an authorized foreign

bank's paid-up capital to allocate the capital to other jurisdictions is

restricted to capital employed in Canada. Because the act only applies to a

foreign bank's Canadian operations, any allocation of its capital outside the

country would inappropriately reduce its tax payable and be inconsistent with

the overall scheme of the act. This amendment is retroactive to June 6, 2000,

the date the act first applied to authorized foreign banks.

The Motor

Fuel Tax Act is amended to help fund the transportation plan announced by the

Premier on February 12, 2003. The 3½-cent-per-litre dedicated tax increase

effective March 1, 2003, may help the province leverage more than $1.7 billion

in additional transportation investments. Projects under the transportation plan

will benefit all regions and communities and will help to open up the province

to more investment, job creation and economic growth.

I am very

pleased with the joint announcement today with the Prime Minister and the

Premier with regard to two of those projects that are on the target list: the

Trans-Canada Highway at Kicking Horse Canyon as well as some of the

border-crossing initiatives and planning for some transit infrastructure. We're

already seeing the biggest partner come to the table on the transportation

infrastructure plan, and I think everybody's very pleased with that.

[1440]

The Motor

Fuel Tax Act is also amended to provide authority to exempt from tax marine gas

oil used in turbine-powered commercial vessels. The exemption for marine gas oil

parallels the exemption that was provided for bunker fuel in 2001 and will level

the playing field for cruise ships that use this cleaner fuel.

The bill

also amends the B.C. Transportation Financing Authority motor fuel tax

regulation under the Build B.C. Act. This amendment implements the clear fuel

tax rates that have been collected on behalf of the B.C. Transportation

Financing Authority since June 1, 1999.

As part of

the restructuring of B.C. Ferries, the Motor Fuel Tax Act is amended effective

April 1, 2003, to return to the consolidated revenue fund the 1¼-cent-per-litre

clear fuel tax that's paid to the B.C. Ferry Corporation. The corporation, which

currently operates as a Crown corporation, will be restructured into an

independent company renamed B.C. Ferry Services. The government will support

coastal ferry services through an annual grant negotiated with the new company

rather than through the fuel tax means.

As well,

the Property Transfer Tax Act is amended to improve the fairness and

effectiveness of the first-time home buyers exemption. The major changes are as

follows. We add a new proportional exemption for first-time buyers who purchase

homes valued at up to $25,000 above the current maximum property value

thresholds and a new prorated exemption for first-time buyers who do not fully

meet the requirement to live in the home or maintain the required level of

mortgage financing for one full year following date of registration. Both of

these changes improve the fairness by replacing the previous start dividing

lines between eligibility for the exemption and full taxation with the new

system of partial exemptions.

Other

changes include extending the prepurchase residency requirement to former

residents of British Columbia who have filed B.C. income tax returns in any two

of the previous six years, restricting eligible mortgage financing to

arm's-length lenders to better target the exemption to those in need of support,

clarifying the definition of "permanent resident" to add clarity and

certainty, and ensuring that the penalty provisions for those who apply for the

exemption more than once are effective and can be enforced.

The

Insurance Premium Tax Act is amended to increase the tax rate on property and

automobile insurance premiums paid by insurance companies to 4.4 percent from 4

percent. The $14 million in annual revenue will be used to help offset

provincial costs incurred in fighting forest fires. Forest fires can and do

threaten communities in different areas of the province, and the province's fire

suppression program is essential to minimizing property damage and loss.

addition, the act is amended to require payment of the tax by all businesses

that are required to have an authorization under the Financial Institutions Act

to carry on insurance business in the province. This levels the playing field

for all businesses that carry on such business in this province.

The Tobacco

Tax Act is amended to increase the cigarette tax rate by $2 per carton to $32

per carton of

[ Page 5241 ]

200 cigarettes and the tax rate on fine-cut tobacco by a proportionate

amount. This increase will bring British Columbia's tax rate into line with the

other three western provinces. It will raise about $25 million annually to help

fund provincial priorities and will help to reduce future health care costs by

encouraging current smokers to quit and discouraging young British Columbians

from starting smoking in the first place.

Bill 6

contains several changes to the property tax statutes as well. Three acts —

the Local Government Act, the Vancouver Charter and the Taxation (Rural Area)

Act — are amended to exclude buildings and structures from the property tax

exemption for dust and particulate-matter eliminators. These amendments respond

to a court decision which expanded the exemption far, far beyond its original

intent.

The

provincial surveyor of taxes is responsible for levying, collecting and

recovering property taxes on behalf of all taxing authorities in rural areas of

the province. Bill 6 amends the Taxation (Rural Area) Act, effective for the

2004 taxation year, to expand the cost-recovery fee charged by the surveyor of

taxes for this collection service to three additional taxing authorities.

However, broadening the cost-recovery base will be done on a revenue-neutral

basis so the extension of the fee to include B.C. Transit, the Municipal Finance

Authority and hospital districts will allow for a reduction in the fee for those

currently paying.

The

University Act is amended to confirm longstanding assessment and taxation policy

of university land. Commercial occupiers of university land and university land

used for commercial purposes have long been assessed and taxed. This ensures

that users of such land compete on a level playing field with other taxpayers

and help to pay their share for the services they receive. Substantive changes

to longstanding policy are not anticipated but, if required, would only be made

after consultation with those universities involved.

[1445]

Finally, a

number of statutes are amended to validate interest charged prior to February

19, 2003. In

summary, the amendments in Bill 6 continue to open up and

revitalize the economy through further improvements and refinements to the

provincial tax system, provide funding for essential transportation and

infrastructure projects without increasing provincial debt and, ultimately, will

help balance the budget in 2004-05.

It's not

only with sound fiscal management and a balanced budget that we'll be better

able to ensure that British Columbians will continue to have access to the

services they need when they need them. This bill takes us closer to achieving

that objective. I move second reading of Bill 6.

J. Kwan:

Let's take a look at some of the numbers that we are faced with in the B.C.

economy. Almost two years later, after the government has been elected, the

results of the tax cuts are in. Personal income tax revenue has gone down by

over $1.2 billion. Corporate tax revenues have gone down by $299 million.

Revenue from the corporation capital tax has gone down by $358 million.

While

revenues from personal and corporate taxes have plummeted, revenues from

regressive taxes and fees have gone through the roof. Revenues from the sales

tax, which the Liberals hiked last year, went up $370 million; from the fuel

tax, $151 million last year, and here — this year and under this bill —

another $211 million. From MSP premiums, revenues have gone up $516 million.

This is the first billion of the Liberal tax cut clawback.

Of course,

there have been a huge number of other fee and licence increases — from filing

court documents to taking families camping, your Hydro bill, ICBC rates and even

renewing your driver's licence. Those fees are going up, and they are too

numerous to count. This year the cost of house insurance will be increased by $4

million in this bill — from this budget — and will be increased another $14

million next year. That's something the government doesn't talk about. The MLAs

don't get up and start to chant and raise this issue for the information of the

public. It's buried deep in the budget information.

School

taxes will be increased by $34 million this year. Of course, none of that money

is going into education this year. Next year, $62 million more — and that is

on the school taxes. A million dollars more this year from rural property tax

owners and $2 million more next year….

There we

have it. We are well on our way to clawing back. In fact, I would argue that we

have already clawed back — from the middle-income families, the low-income

families, the single moms, the seniors, the students — the second billion that

this government handed to the wealthiest in our province. It is interesting. If

you look at the tax shift, is it really a tax cut that the Liberals had given to

the middle-income or to the lower-income people? Or is it a shift in the tax

burden? In fact, there was an analysis done. If you actually look at some of the

tax categories, you will see that, indeed, it is a shift of the tax burden from

the wealthiest and from the big corporations to the middle income and low

income.

[1450]

Revenue

sources. I just want to highlight for this House progressive taxes and the shift

of that tax burden to regressive taxes. In the year 2000-01, the amount of

personal income tax under this list of progressive taxes was at $5.963 million.

For '03-'04 it dropped to $4.7 million. Corporation income tax was over $1

million; for '03-04, $755,000. Corporation capital tax in the year 2000-01 was

at $459,000. For '03-04 it dropped down to $101,000.

Regressive

taxes. The social services taxes. The sales tax, a shift in burden — in

2000-01, it was $3.6 billion. In '03-04, it went up to $3.9 billion. Fuel —

$715 million. It went up to $866 million. Tobacco — in 2000-01, $460 million.

It went up to $635 million. MSP premiums — $894 million in 2000-01. In '03-04,

$1.4 billion. The lists go on.

[ Page 5242 ]

You can see

the flavour of it in terms of the shift in tax burden. This is all happening, of

course, at the same time when equalization funds — federal support — are

actually increasing for this government. Even then we still see the highest

deficit ever in the history of B.C. The total revenue in the shift of the tax

burden on a percentage basis from progressive taxes to regressive taxes…. Progressive

taxes went down from 26.8 percent to 21.5 percent, and regressive taxes went up

from 22.5 percent to 29.4 percent.

When we're

talking about tax cuts, it is actually not a tax cut which particularly the

middle- and lower-income people got. They simply got a shift in tax burden. The

government cast the increase in taxes in a number of different lights. Some of

them are indeed outright tax increases like the PST, like the fuel tax increase.

Others were hidden by way of forms of a licence, of a fee or of increases in

numerous ways.

[J.

Weisbeck in the chair.]

We already

know that most recently Pharmacare costs are also going to go up, as another

area. For students who are faced with tuition, their costs are going up. They

went up last year 30 percent and this year another 30 percent. Just imagine for

one moment, if you were someone who is struggling and who is trying to make ends

meet, what those impacts would be.

The

government and the Minister of Finance are very proud of their record. What

record do we have to look at? After two years in government, the Conference

Board just released a report yesterday to say that we're number ten — ten out

of ten — in terms of economic growth. That's something this government and all

the government bench MLAs are really proud of. In the survey that was ordered by

the Premier's office for B.C. Stats to survey the caucus to see how happy they

are, I wonder if that question was asked. Are you happy with the fact that under

the new-era agenda, we are now number ten in economic growth?

[1455]

What about

this information? The unemployment rate has gone up under this government from 7

percent to 8 percent. Youth unemployment has gone up to 16 percent. Guess what.

Private sector investment is expected to go down 3 percent this year. This is

the record of the new-era agenda; make no mistake about it. This is the record

of this Minister of Finance, this Premier, this Liberal government.

The $1

billion that was invested in business taxes has not gone into reinvestment in

British Columbia. It's gone somewhere else. I don't know where. It has not gone

into reinvestment in British Columbia. Our economy is very fragile. We're faced

with many difficulties, yet somehow this government is oblivious to that. They

don't see that. They don't sense that.

Somehow you

don't hear the MLAs getting up in this House raising concerns from their own

constituents, like maybe the MLA from Prince Rupert. You might think that the

MLA from Prince Rupert might want to come into this House to say, "You know

what?" in one of those soft-lob questions to the ministers: "I'm very

concerned for my community, because we have a 60 percent unemployment rate.

Minister of Finance, Minister of Competition, Science and Enterprise, what are

we going to do about that? How can we move those numbers down, not up?" You

never hear those kinds of questions in this House from the government bench. All

they do is come in and say how great they are and how wonderful everything is.

Yet when you talk to the real people in the real world, they have something else

to tell you. The reality is completely different from what goes on in this

chamber and what is in the minds of the MLAs.

The survey

was conducted, ordered by the office of the Premier and paid for by the

taxpayers to find out the satisfaction with caucus procedures. Maybe that money

should be invested into surveying the issues around economic growth for British

Columbia. Maybe that should be directed to see if we can find solutions that

would help our community deal with these challenges instead of saying: "Are

you happy with the Premier's performance? Are you happy with the way things

are?"

It seems to

me that all the MLAs are capable of doing is simply thumping their desks and

saying, "Hooray, everything is fine. Everything is rosy under the new-era

agenda," when reality tells you something completely different.

MacPhail: I rise to address this piece of legislation, and I must say that

the remarks of my colleague the member for Vancouver–Mount Pleasant were

thoughtful and very much to the point. I want to add a few things to the many

issues that my colleague has already covered in this bill.

One of the

areas that I want to talk about, though, is this government's direction from its

effect on the macroeconomy. We are an open economy in British Columbia, and that

means that we are an export-driven economy. We're a small, open economy, just a

little under four million people now in a country of over 30 million, and in the

North American continent which, including Mexico and Latin America, is well over

400 million people.

There are

two ways that our economy can grow or two ways that the GDP increases. One is to

actually increase exports, to increase the business that British Columbians do

with the rest of Canada and North America, and with offshore exports as well.

What's taken away from that are the imports that British Columbians have to

bring here, which we can't produce ourselves — all very basic, and I know

everyone understands that.

[1500]

That's one

way you can grow an economy. The other way that an economy flourishes, albeit

for a short period of time, is a consumer-driven economy. A consumer-driven

economy can exist in an open economy even when exports are in decline. In fact,

a consumer-driven economy is driven by monetary policy. When money is made cheap

to borrow, then people are able to spend more money, and in fact, people feel

more comfortable investing in debt, shall we say.

[ Page 5243 ]

That's

what's happening across North America right now. The economy is not growing

because of economic growth through exports. Certainly in British Columbia this

is suspect, but the economy keeps going because it's consumer-driven. When this

government in British Columbia stands up and says that house and furniture sales

are great and therefore aren't we wonderful…. Well, no. That people are

spending money on houses and furniture actually has absolutely nothing to do

with this B.C. Liberal government. I'm happy that people are spending money on

houses and furniture, because if we didn't have the consumer, our economy would

actually be in decline.

Exports are

down. Non-residential building permits are down. Manufacturing output is down.

Jobs over the last five months are down. Income tax revenue is down. Corporate

tax revenue is down. Sales tax revenue in the last few months is flat. So, thank

God for the consumer.

Why is the

consumer purchasing? They're purchasing because the Bank of Canada, for a

substantial period of time, kept interest rates at the lowest rate in 40 years.

That was good. It was excellent that Mr. Dodge, the governor of the Bank of

Canada, did that. There's been a slight shift in that as of yesterday. The

governor of the Bank of Canada increased interest rates, and we'll have to see

what effect it has on a consumer-driven economy.

The U.S.

economy is softening substantially. Of course, the U.S. is our largest trading

partner, and the share of exports to the U.S. grows. Certainly, it has grown in

the late nineties and the early two-thousands.

It's very

important that we have consumers who have money to spend. It's the only thing

that's working in the British Columbia economy. It's working far less well in

British Columbia than anywhere else in Canada. We are number ten. Our forecast

economic growth in the year 2003 — the third year of this B.C. Liberal

government — is dead last. This is the third budget that this government has

brought down. We're dead last in economic growth, and our debt-to-GDP is on the

rise.

What are we

doing to help the consumer? Well, this legislation is taking money out of

consumers' pockets. It's raising taxes. That's what it's doing. It's all very

well and good to give corporations tax breaks, but the minister himself, in the

most recent issue of B.C. Business , is quite scathing about the business

community's contribution here in British Columbia. This is out of the March 2003

B.C. Business Magazine . The

article is called "Diminished

Returns." I'll just read the opening of it: "The economic revival

we've been anticipating is falling behind schedule. Celebrations are on hold,

and voters are getting grumpy. Should the Premier and his government accept all

the blame for this sluggish pace of change?"

[1505]

read this with interest. It is a business magazine. I wanted to see what,

indeed, the government's contribution was to this. In this

article — which we

will go into in more detail in estimates with the Minister of Finance, and I'll

quote from it when we're in estimates — the Minister of Finance is basically

saying that the business community hasn't done what it's supposed to do. He, of

course, tries to blame it on the last decade. I wonder how long that's going to

last. But here we are, the third budget of this government, and investment is on

the decline, and the B.C. Finance minister accepts no responsibility for it.

Regardless, if he doesn't accept responsibility for it, the fact is still there

that the business community is not using its tax breaks to invest in British

Columbia, so all we have to rely on is the consumer.

This

legislation takes money out of consumers' pockets. Middle-income families have

lost their tax break. Low-income families lost their tax break a long time ago.

This legislation increases the taxes that low- and middle-income families have

to pay so that they actually have less money to spend in their communities.

That's going to have an impact on a consumer-driven economy right now.

Of course,

the taxation increase in this legislation will be exacerbated negatively by the

increase in interest rates brought yesterday by the governor of the Bank of

Canada. Consumers are getting hit twice: higher taxes by the B.C. government and

higher interest rates by the governor of the Bank of Canada. Our economy,

already dead last, is in even worse trouble today than it was four weeks ago,

before this budget was brought down and before interest rates were increased.

Now, these

tax increases hit everybody. Gas tax — today the gas tax increase…. I asked

the Minister of Transportation what she's doing to help public transit, and she

has no answers. The people who take public transit, who don't drive cars, are

going to be hit by this as well. In Kelowna they're talking about having to

increase bus fares. In the lower mainland they're being hit with a $1.3 million

gas tax increase because of this government — the transit authority. In

Victoria here, they're having to talk about cutting 10,000 hours of public

transit service because of the gas tax increase. So even public transit users

are being hit as a result of this gas tax increase.

The

Pharmacare increases are regressive. Jon Kesselman, UBC economics professor….

I know the Minister of Finance likes to pick and choose what economics

professors he listens to, but Jon Kesselman had an excellent piece in the Vancouver

Sun about how even the income-testing that this government has brought in

for Pharmacare assists the high-income taxpayers in this province at the expense

of the middle-income taxpayer.

There is a

tax shift going on here like we've never seen before, as my colleague from

Vancouver–Mount Pleasant pointed out. Take from the low- and middle-income,

and give to the wealthy. Everything this government does is on that bent. It's

never been seen before, and this bill epitomizes that.

[1510]

We have a

bill that directly attacks consumers and therefore will undermine the only good

thing about the

[ Page 5244 ]

economy in British Columbia today — and even that's waning — that is, a

consumer-driven economy. As importantly, this bill attacks people on fixed

income. I've been talking to seniors around the province over the last few days,

who are very concerned that even their fixed income is declining. The stock

market crash is now affecting their fixed income in many ways. RRIFs, retirement

income funds, are paying out less today than they did last year. The return that

retired people are getting on their investments is on the decline. We can't even

say that people on fixed incomes have a steady stream — that regularized

non-employment-related earnings of retired people are on the decline…. As

their disposable income shrinks, this government is hitting them with the same

taxes that they're hitting the people who live in West Vancouver, the high

earners who live in West Vancouver.

We have a

situation where the rural property taxes, the school property taxes, the gas tax

increases and, of course, the Medical Services Plan increases and the Pharmacare

increases are all hitting seniors. It's a double whammy for them. They do not

have the opportunity to go out and get two of those part-time jobs that were

created last year and make up a full income. They just can't do that.

This

legislation is the wrong direction to go during a fragile economy. It's exactly

the wrong direction to go when the only solid aspect of the British Columbia

economy is the consumer. Even that is under threat now with higher interest

rates. The proof of the pudding that this government has nothing to do with

increased consumer spending is because disposable income under this government

for low- and middle-income people has gone down, and the interest rates that

drove consumer spending are controlled in Ottawa. Just the same way that this

government can't have an effect on those interest rates, they cannot claim any

success for any of their failed economic policies.

I would be

happy — I just said this out in the hallway — to sit down and have a

discussion about the direction of the B.C. economy. I objected, throughout the

1990s, when this Liberal government in opposition got up every day and spread

doom and gloom. Every day, no matter what happened, this Liberal opposition

spread doom and gloom despite the reality of the economic situation. I said I am

not going to do that. I want the economy of British Columbia to be strong and

growing and inflation-proof and interest-proof. I want us to have a vibrant,

open economy, but it isn't happening. Instead of passing legislation like this

bill, it's time for us to sit down and rethink the direction of the economy. It

can be done in a way where there are not slings and arrows thrown, like this

government did throughout the 1990s.

The silly

mantra of this government that somehow suggests that everything was a failure by

previous governments is just wrong for a commodity-driven, commodity-reliant,

open economy. It's just wrong, because they're going to be hoisted with their

own petard. They already are. Their third budget — and they're number ten.

Their third budget — and they have the largest deficit in Canada. Their third

budget — and their rate of debt growth is the biggest in Canada.

[1515]

It's time.

Maybe the provincial congress that the Premier is calling on Monday is exactly

the time to discuss the proper direction of the economy. I'm sorry, I didn't

even mean to use that word — discuss alternatives to economic policy that

could be considered now. A strong British Columbia is what we all want,

including the opposition. A strong economy is what British Columbia deserves,

and this legislation does exactly the opposite.

Chong: I, too, would like to rise and respond to second reading of the

Budget Measures Implementation Act, 2003. Contrary to the opposition members, I

wholeheartedly support this bill, because it does put in place the measures,

incentives and initiatives that were introduced in Budget 2003 — which, of

course, I support as well.

I want to

pay particular attention to a couple of sections of this bill, because I think

they're important.

Section 5 of this bill deals with the Corporation Capital Tax

Act. I think it's relevant and important in this day and age, when our small

financial institutions are starting to grow and needing some relief, to know

that they're not going to be taxed on more, additional investment. Our small

communities rely on these small financial institutions, so increasing the

threshold amount from the $5 million to $10 million is a good start. I think we

will find that those small communities, those in the heartlands in particular,

will be very grateful for this particular move.

Also, I

want to make note of some changes to the Social Service Tax Act, where there are

some amendments to the definition and where there is clarification made to some

tax exemptions pertaining to things such as agricultural feeds and seeds. I

think these changes are important in a budget measures act, to have some

housekeeping items to provide clarity and, in particular, those that were not

well defined in the past and need to be addressed.

I do want

to speak to the Motor Fuel Tax Act and the changes that have been made to

provide for the application of the 3½-cent-per-litre fuel tax that is going to

be used and dedicated to road improvements and to our transportation strategy

that was introduced by the Minister of Transportation. Never before has a

government been as bold as to ensure that these future and forward-thinking

ideas are considered, but not on the backs of future generations, and that it is

a pay-as-you-go system.

We are

going to see very shortly that these are going to pay off in spades. As these

roads and bridges are improved in our heartlands and in other parts of our

province, we're going to see economic development occur, and people are already

talking about it. Small communities are excited about it, and all that

excitement will only lead to more investment and more job creation for our young

people. So I think that is a good

[ Page 5245 ]

thing. It's already starting to pay off in dividends as well, in that the

Prime Minister of Canada has made announcements about wanting to participate and

share with our renewed sense of investment in our transportation system.

Section 48

of Bill 6 also makes reference to the University Act. I want to speak very

briefly on this, because I represent a university in my riding — the

University of Victoria. What this

section does is confirm that the exemption

from taxation for property that is vested in a university will continue to apply

to only those properties that will be held and used for university purposes.

That's important, because in Victoria, due to a very substantial bequest that

was left to the university, some properties had been left — in particular,

some commercial properties. In fairness, it would have been exempt from property

taxes, and that would have been an unfair playing field for the businesses that

competed with that.

[1520]

While the

university was very grateful for this bequest left to them, they also realized

that taxation would have had to apply to that. But ensuring that those

properties, if they were to be used for university purposes, would qualify for

the exemption…. That clarity needed to be made, because I think there were

some concerns about that. Again, that deals with fairness, and that deals with

equity.

I want to

touch very briefly, as well, on some comments made by the members of the

opposition. It's always very disturbing to hear them speak of the members on

this side of the House when we were in opposition, suggesting that we always

spoke of doom and gloom. To be fair, that is exactly what they're doing on a

daily basis. They may not think so, but that's what I hear from them. They're

naysaying. They're fearmongering at each and every opportunity they have.

The

concerns that we raised when we were in opposition were valid, because they took

us from a have status to a have-not status, so we were right to raise the alarm

bell. We were right to tell them that they were bringing our economy to a

downward and a backwards approach and that we needed to revitalize our economy.

When they spoke today of being the number ten economy, I have to remind them

that they're the ones that put us there. When they started off in 1991, we were

the number one economy, but they put us in number ten.

We've been

here but a short 21 months, and it's pretty hard to reverse all the damage that

they've done in ten years. It took them ten years to do this, so I think they

should give us some time to reverse the trend that they've put us in. It's

starting to work. It's starting to pay off, because we do see private sector

investment returning to this province.

I mentioned

it in my response to the budget speech about a week and a half ago when I spoke

of investment from the United States that affected their ridings — in

particular, in Vancouver. I spoke about the former Ford Centre for the

Performing Arts being purchased by investors from the United States. They said

to me specifically, because I asked them: "Why did you do this? Why did you

put your dollars in British Columbia?" They said: "We have confidence

in your province. We have confidence in your fiscal plan. We have confidence

that our investment is going to be safe in British Columbia. We're prepared to

bring our dollars up here. We're prepared to invest them in British Columbia,

and we're prepared to continue to invest in British Columbia." That's not

doom and gloom. That's a very positive indicator.

Another

issue I would like to mention, which again supports what we're trying to do with

Budget 2003 and Bill 6, is private sector investment. When I was in opposition,

I had met with the Investment Dealers Association. They're a group that look at

investment opportunities across Canada. They rate each province. They do a

profile of each province. I recall meeting with them, and they said to me at one

time: "You know, we put all our provincial reports out. We throw them out

on a table when these foreign investors come, and they say, 'Where do we want to

put our dollars?' The books that were always pushed aside were always the

British Columbia reports. They didn't want to look at British Columbia. They

didn't want to invest their dollars here when the NDP were the administration in

charge."

Now, after

21 short months, the investment dealers have said that the trend has started to

reverse. The investors now consider British Columbia a good place. Our ranking

is now not number ten, or last place in that respect; it is now number ten. We

are trailing behind Alberta, and we are trailing behind Ontario. But I know it's

only a matter of time, when we bring our balanced budget in next year and when

we show strong fiscal plans and economic growth, before the investment dealers

are going to propel us forward another step. I can't wait for that day to

happen. I hope those two opposition members will be here to watch and to thank

us for that, because they certainly didn't help us when they were in government.

[1525]

You know, I

find it really hard to take their comments this afternoon very seriously. I was

quite distressed when they said that they wanted to sit down and talk about some

solutions and things of that nature. Well, I really wish I could take their

advice, but their advice is what has caused the problem that we're in and the

structural deficit that we had to inherit. As I said in my response to the

budget: thanks, but no thanks. They can keep their advice. I think what they

need to do is to come on board, to work with us, to see how these things are

changing and to see the fact that there are more opportunities, more job growth,

more investment, and to help us revitalize our economy.

When they

talk about the unemployment rate…. Again, these are numbers. They're numbers

that can be adjusted, and it all depends on the number of people who have put

their names forward as looking for jobs. I don't doubt that perhaps the

unemployment rate has risen, because more people are putting their names down

for jobs. More people are interested in jobs, and the problem is that we can't

place them as quickly as

[ Page 5246 ]

we can. We've heard the Minister of Human Resources indicate the extra moneys

that he's allocated toward employment programs. People are coming off of

temporary income assistance and finding work. All of this is beginning to pay

off, and people are beginning to see that this is happening. I think that when

they speak about the unemployment rate, they should put it in perspective.

Private investment is up. Jobs are up. In two short years we've already seen

some of the dividends paying off. I think it's very important to acknowledge

those accomplishments.

The

bond-rating agencies have given our government a thumbs-up as well. Our

financial instruments have been purchased. They're scooped up as quickly as they

can. We haven't experienced a credit downgrade, despite the deficit budgets

we've had to bring in. But that NDP opposition, when they were in government,

went through two credit downgrades. If they want to talk about the confidence

that people have in our province, I think they better start looking at their

record before they start judging us and ours, because we're doing exactly the

kinds of things we need to do to turn our economy around.

Bill 6 is

absolutely an important piece of legislation. It brings into force items that

were introduced in our Budget 2003. I say: let's get on with it. I say: let's

support our tax measures that are going to see more opportunities. With that, I

thank you for the opportunity to respond.

Deputy

Speaker: Closing second reading debate, the Minister of Finance.

Hon. G.

Collins: I want to thank the members for their contributions to the debate

today, especially the member for Oak Bay–Gordon Head, who has been paying

attention to the economic file at least since she was elected in 1996 and, I

expect, as a CGA long before that. I do put a great deal of value in her

comments and her input. She never hesitates to offer it, and I never hesitate to

accept it.

I want to

address some of the comments made by the member for Vancouver-Hastings, if I can

for a moment, because she made a comment that she has made in the past, over the

last couple of years. As well, people like Jim Sinclair of the B.C. Federation

of Labour and other traditional supporters of the NDP government have made it

over the last couple of years. It is that we sit down and have a rethink about

the government's economic strategy and our tack, because they think there's a

different way of doing it. Those offers have always been put out there, with the

caveat that we roll back the tax reductions that are in place, that we increase

spending, that we stop the deregulation process and we stop trying to get better

value for the dollars that we do spend as government. In essence, they want

things to go back to exactly the way they were on May 17, 2001. They want the

same economic policy and strategies in place that got us to where we ended up on

May 17, 2001. By "us," I mean the province of British Columbia.

We as a

province used to lead the country, and certainly in the late eighties and early

nineties we regularly were number one or very near the top of the charts as far

as economic growth goes in Canada. We had done very well. I think 1998 is a very

important date, because in that year British Columbia — this is while North

America was booming, I might add — and Chiapas, Mexico, were the only two

regions in North America that were in recession, and Chiapas, Mexico, had a

civil war ongoing. I think that gives you an indication of how the province had

declined over that period of time.

[1530]

I remember

comments prior to the election, in the years leading up to the election and,

briefly, post-election when as Finance critic…. Members of our caucus in

opposition said it as well — that British Columbia was running the risk of

becoming a have-not province. I remember the member for Vancouver-Hastings going

out and saying, "Oh, the member must have pixie dust. He's trying to

sprinkle pixie dust in people's eyes. There's no way. That's pure fiction. He

doesn't know what he's talking about," and she says that every day.

The reality

is that Statistics Canada and the federal government have informed us that in

1999-2000, British Columbia became a have-not province.

Interjection.

Hon. G.

Collins: The member opposite seems so proud of her accomplishment. The

reality is if you go back and look, year over year over year, you can see

British Columbia's position declining relative to the rest of the provinces in

Canada. You can see it year by year by year. The trajectory on the graphs is

very clear that we were headed for have-not status. We became a have-not

province in 1999-2000.

In 2000….

MacPhail: What happened in 2000?

Hon. G.

Collins: I'm glad she asked that; I was about to say it. In 2000-01 B.C.

Hydro, as a result of the electricity meltdown in California and some other

jurisdictions, had profits and cash flows to government of over a billion

dollars. As was commented at the time, those were really one-time revenues. They

weren't revenues that were going to continue to be there year after year.

Interjections.

Deputy

Speaker: Members, order.

Hon. G.

Collins: It wasn't economic growth. It wasn't that we had created a new

economic base for the province. It wasn't that there were going to be new jobs

or new businesses that were going to be there year after year. They were

one-time funds. You can actually see on the equalization formula, if you look at

it, that

[ Page 5247 ]

British Columbia was on this steady decline. It was on a steady decline, and

in the year where B.C. Hydro records the energy revenues, we bump up just

barely. Once those energy revenues disappeared again, the trajectory continued.

It's

important to see how we got where we are and how we got where we were on May 17

and where those economic policies got us. I talked about "us" in the

broad sense of British Columbia, but the member opposite should reflect on where

that economic policy got her and where that economic policy got the New Democrat

Party in the province of British Columbia. They got a resounding whopping by the

people of British Columbia in the polls, because the people knew that British

Columbia was on the wrong track. They chose a different track with a resounding

endorsement for change — a 58 percent endorsement, 77 of 79 seats, a record in

the province of British Columbia. This government, day in and day out, has been

delivering on that agenda, and we're starting to see the results.

Perhaps I

can warn the member opposite that if she's got earplugs, she should put them in

now, because I'm about to give her some more good news, and I know she doesn't

like to hear it. Let me put forward to the House some of the positive economic

indicators we're seeing in British Columbia. The economic growth is the same as

political growth. It's not so much where you are as the momentum and the

direction that you're heading.

MacPhail: Being dead last isn't relevant — yeah. Dead last is not

important.

Hon. G.

Collins: If the member was concerned about being dead last, why didn't she

do something when she was in government for ten years to stop us from being dead

last?

Interjections.

Deputy

Speaker: Order, please. Order.

Hon. G.

Collins: I've warned her to put in her earplugs, so let me start with some

of the good news. Small businesses. An Ipsos-Reid poll was just put out, and 78

percent surveyed said the provincial government is moving in the right direction

with changes to help small businesses. Two-thirds say the business climate will

continue to improve over the next two years.

Investment

intentions in British Columbia — private sector investment intentions — are

the second-highest in Canada. Data from Stats Canada shows that capital

investment in British Columbia is expected to increase by 5.1 percent in 2003,

the second-highest of all provinces and more than double the expected 2.1

percent national increase. Those are dramatic numbers for private sector

investment.

Interjections.

Deputy

Speaker: Order, members. Order.

[1535]

Hon. G.

Collins: Private sector investment is what will drive the economy and what

creates new jobs. New vehicles sales growth in British Columbia was the second

highest in Canada. New motor vehicle sales in B.C. in 2002 showed the

second-highest increase in Canada, with a gain of 13.1 percent from 2001 —

more than 50 percent stronger than the national increase of 8.5 percent.

MacPhail: Thank God for the Bank of Canada.

Hon. G.

Collins: The value of residential building permits in B.C. in 2002 was up

37.4 percent from 2001.

What the

member fails to mention, when she talks about thanks to the Bank of Canada, is

that the same interest rates are in every jurisdiction in the country. So if

we're outperforming the country in all of these statistics, we can thank the

Bank of Canada. But I think we should also be thanking the new vision and the

new economic policy of the province of British Columbia.

Interjection.

Hon. G.

Collins: I've just given the member three examples of where B.C. is number

two, Mr. Speaker.

As far as

job creation, in 2002….

Interjection.

Hon. G.

Collins: The member should be careful. She runs the risk of becoming a

caricature of herself as she does this.

Last year,

in 2002, British Columbia gained 78,000 new private sector jobs.

MacPhail: Thirty-one thousand jobs by your own stats.

Hon. G.

Collins: Seventy-eight thousand new jobs in 2002. Well, that's according to

StatsCan. If she's got a better source, she should let us know, Mr. Speaker.

According to Stats Canada, there were 78,000 new jobs in British Columbia from

December 31, 2001, to December 31, 2002. It's an increase of 41 percent.

Housing

starts in British Columbia in 2002 were up 25 percent from 2001, surpassing

forecasts by the provincial government, CMHC and the Economic Forecast Council

— again, good numbers.

The member

talked about wages in British Columbia going down. Actually, the average weekly

wage increase in British Columbia was the highest in Canada, number one of all

provinces in 2002.

A record

year for B.C. home sales as well. Home sales in British Columbia in 2002

totalled more than $19 billion, up 27 percent from 2001 — a remarkable number.

Interjection.

Hon. G.

Collins: The member opposite talks about nominal numbers. The fact of the

matter is that if you

[ Page 5248 ]

measure us relative to every other province in the country, we are not number

ten. We're number one for weekly wage increases. She can argue with StatsCan all

she wants. She should go do that. The fact of the matter is that she's wrong

now, she was wrong the last two years, and she's been wrong for ten years.

That's what got us in this position in the first place.

Interjection.

Deputy

Speaker: Order, member. Leader of the Opposition, please come to order.

Hon. G.

Collins: She should get herself one of those little red noses and the floppy

shoes. It would suit her performance some days.

The B.C.

mineral exploration in 2002 — let's talk about that. When that government —

the NDP — took office, mineral exploration in British Columbia was about $200

million but declined over their ten years to $20 million. It is starting to go

up — not down, but up. I think that's important.

The port of

Vancouver ships record cargo volumes in British Columbia as well. Container

traffic at the port of Vancouver increased 27 percent in 2002, rising from 1.15

million 20-foot equivalent units in 2001 to more than 1.46 million last year.

Cruise ship

traffic was up in 2002 as well. The city of Victoria saw a 43 percent increase

in cruise ship visits in 2002 over 2001. In 2002, 110 cruise ships stopped in

Victoria, compared to only 77 in 2001. There were 343 cruise sailings from

Vancouver, up 11 from the previous year. So there's improvement in the tourism

sector in the cruise ship industry as well.

[1540]

One of the

signals that you see happening in British Columbia, as the member for Oak

Bay–Gordon Head talked about, is the new attitude of private sector investors.

After ten years of watching the decline in this province, they've waited to see

the changes come into force. They're starting to come back to British Columbia.

Asian investors are coming back. PeopleSoft, the second-largest software company

in the world, has chosen to locate a branch office in Vancouver and has been

hiring 150 or more employees, and more people to come.

Mr.

Speaker, eBay has chosen Burnaby, and I know members from her constituency would

probably love to have some of those jobs. One of the largest web retailers in

the world, if not the largest, eBay chose Burnaby to create their customer

service centre, with 600 jobs coming to that community. I know the people of

that member's constituency will be lined up looking for those jobs as well, and

I think that's something she should be excited about instead of spreading doom

and gloom in people's minds.

As well,

the wireless tech companies in British Columbia are expected to double their

employment. The report released by PricewaterhouseCoopers says that employment

at the 67 wireless technology companies in British Columbia that they surveyed

is expected to double from more than 1,500 in 2001 to almost 3,300 by 2004.

I know that

the member opposite doesn't like to look at those numbers, doesn't like to hear

those numbers and doesn't like to realize the change that's happening and the

progress being made. I think what she needs to do is look at what government has

achieved and what government is hoping to achieve.

MacPhail: Your own book. You've got to be accurate when you're Minister of

Finance. You can't make it….

Deputy

Speaker: Order, member, order.

Hon. G.

Collins: I've got to put that one on the record just so that everybody hears

it. The member for Vancouver-Hastings says: "You've got to be accurate when

you're the Minister of Finance. You can't just make it up." I wish she knew

that when she was in the NDP caucus in 1996, when they lied to the people of

British Columbia about the state of the finances year after year after year.

The member

opposite…. I'll be glad to send her the statistics. She can look at the

sources, and if she wants to wrestle with StatsCan and B.C. Stats and all the

other independent bodies that provide those statistics, she can do that. I look

forward to that discussion when it happens.

I think the

member did say one thing accurately, and that is that British Columbia is a

small, open trading economy. That's what we are. There's no question that a big

portion of our industry and our GDP historically has been the resource sector.

There's no question about that. The mining sector was devastated over the last

ten years. There wasn't one new mine opened up in the latter part of the decade.

In fact, they drove the industry right out of the province with their corporate

capital tax, with their regulatory policies and with their ridiculous land use

and environmental regulatory policies that didn't make sense and weren't based

on science. All of those things went to destroy British Columbia's number two

industry.

We're

starting to see that come back. They're not going to flock in overnight, as the

member can imagine, but they're starting to come back, and we're starting to see

those investments. Noranda, for example, after leaving British Columbia, has now

said that it's coming back to British Columbia to invest, to explore, to build

new mines and to create great jobs for the province and the people of British

Columbia. I think that is a huge advantage for this province and the economy.

All one has

to do is look at the devastation that the NDP wrought on our number one

industry, the forest industry, in their time in office. I remember that member

standing up here and giving speeches when she was Minister of Finance about the

jobs for B.C., the jobs in the forests, the forests jobs accord, the 20,000 —

or was it 41,000? — new jobs. I can't remember. Mr. Speaker, 41,000 new jobs

— now, there's a backhoe full

[ Page 5249 ]

of pixie dust for you. Not one new job was created; in fact, we lost tens of

thousands of jobs in the forest sector.

At the same

time that workers were being laid off, they were driving past billboards paid

for with their tax dollars talking about how behind every tree there's a job.

They were going around and around those trees looking for a job for ten years

and never found them. We saw that. That member opposite stood up in this House

time and again and talked about the jobs they were creating. She smiled into the

camera and talked about the jobs they were creating in the forest sector. It was

not factual in the least, and they knew it wasn't factual, but they stood up

over and over and over again and told people that. The member opposite says

we're right about that.

[1545]

Interjections.

Deputy

Speaker: Order, please. Order.

Hon. G.

Collins: If she says now that we shouldn't have believed her then, why

should we believe her today? What's changed, Mr. Speaker? What's changed? If she

was lying to the people of British Columbia with her jobs and timber accord back

then, why should we believe what she says about the forest sector today? What

credibility does that member have to stand up in this House and say that we are

right, that she was misleading the people of British Columbia, misleading rural

British Columbia, misleading the forest workers in this province by telling them

there were there were thousands and thousands of jobs being created, when she

knew that jobs were going down? When that member says to me in this House,

"You have to state the facts when you're Minister of Finance. You can't

make them up…." Was she making those numbers up when she stood up in this

House as Minister of Finance and put that out? There we go.

Interjections.

Deputy

Speaker: Order, please. Order.

Hon. G.

Collins: I bet that member never talked about the three — count them:

three — aluminum smelters that they were going to bring to British Columbia

— never once. She says she never talked about that. She never talked about the

jobs that were supposed to be created — never once. Where was she then? She

never stood up in this House and said: "Oh, by the way, the jobs and timber

accord is smoke and mirrors; it's pixie dust." When she was in government,

when she sat around the cabinet table, she never once stood up in this House and

talked about the pixie dust and the lies she was perpetrating on the workers of

this province. Never once did she stand up and do that. She brought in three

budgets in this House. Right through….

MacPhail: No, I didn't. Two. Both were balanced.

Hon. G.

Collins: Two budgets. It just seemed like three. She brought in two budgets

in this House, and I don't remember in those budget speeches her standing up and

saying: "Oh, by the way, the jobs and timber accord is a bunch of

hooey." I don't remember her saying that even once. I don't remember her

once standing up and saying that the aluminum smelters were the dream of the

then-Premier of the province — not once. That was not leadership. That was

followership, and she did it again. When she finally decided she wanted to be

leader, she resigned, started a campaign and got zero support from her own

caucus.

Let's come

back to the reality. If that member misled the people of this province year

after year about the state of the economy when she was Minister of Finance, if

she admittedly — now, as we know in the House today, which I find remarkable

— knowingly misled the people of British Columbia….

J. Kwan:

Point of order, Mr. Speaker.

Point of Order

J. Kwan:

On two occasions now, the Minister of Finance has called my colleague a liar or

said she lied in this House. I would ask him to retract those words without

condition.

Hon. G.

Collins: What I said was that the member opposite had misled the people of

British Columbia, and I was merely quoting what she had said back to me.

J. Kwan:

On a point of order. No, I heard very clearly the Minister of Finance say on two

occasions, where he used unparliamentary language to call my colleague a liar

and implied and, in fact, said that she lied in this House. That is

unparliamentary. I demand that the Minister of Finance withdraw those words

without condition.

Hon. G.

Collins: I was referring to the comments made by the member for

Vancouver-Hastings. If I've offended her in any way, I certainly withdraw my

comments.

Deputy

Speaker: Member, I did not actually hear the word "liar," but I

heard the minister actually say that the member had lied. So, if the minister

could please withdraw those remarks.

Hon. G.

Collins: Thank you, Mr. Speaker. I just did.

J. Kwan:

I'm asking the Minister of Finance to withdraw those words without condition.

Deputy

Speaker: Member, I believe he did. Can you take your seat, please.

J. Kwan:

New rules in the new era….

[ Page 5250 ]

Deputy

Speaker: Member, you're completely out of order. You're out of order.

Hon. G.

Collins: As I've said, if I've in any way offended the member opposite, I

withdraw whichever comments they were that offended her. I don't know how much

more unconditional I can be.

Deputy

Speaker: Minister of Finance, proceed.

Hon. G.

Collins: So let's come back….

Interjections.

Deputy

Speaker: I ask the members of the opposition to please come to order.

Debate Continued

[1550]

Hon. G.

Collins: Let's come back to the issue of the member's comments with regard

to taxation policy. What the member failed to mention is that when we raised the

PST in British Columbia, we also increased the PST exemption for low-income

families by 50 percent. She failed to mention that. She also failed to mention

that when the MSP premiums came up to fulfil commitments and a process through

bargaining that was actually started under the previous government, we provided

increased premium assistance to 230,000 low-income British Columbians who

actually saw their MSP premiums go down. They actually saw their MSP premiums go

down and, in many cases, are no longer required to pay the premium.

The member

forgets to talk about the progressive portions of those changes to the tax

structure that we put in place for low-income families. The new Fair Pharmacare

put forward by the Minister of Health Services also is structured, so I think

280,000 will see their Pharmacare costs go down. That's my understanding. I'm

glad to be corrected if I'm inaccurate. Certainly, the goal of that plan is to

make sure that it's based on people's income. There are a whole bunch of

low-income families who were paying pretty exorbitant Pharmacare costs over the

last number of years. Under the new income-tested process we're putting in

place, those low-income families will benefit substantially from those changes.

The member fails to mention that. I think it's something that requires comment

and requires putting on the record. I'm glad to have the debate about the job

numbers if the member wants to. We'll do that in estimates, and I can explain to

her….

Interjection.

Hon. G.

Collins: No. What I'll do is explain to her how those numbers worked,

because she obviously didn't learn them when she was Minister of Finance. I'll

be glad to explain them to her. Those are three instances where the member

talked about the increase cost to the public but didn't talk about the

progressive additions to those changes we made so that low-income families in

British Columbia benefited from those changes as opposed to being hurt by those

changes. I think that's important as well.

Now, I was

speaking earlier about British Columbia being a small, open trading economy. The

forest sector has been hit very hard by the softwood lumber dispute; there is no

question of that. I think everybody understands that. We are all working very

hard to try and come to terms on that with governments of all political stripes

across the country. It's something we're trying to do not just on behalf of

British Columbians but on behalf of Canadians. We're going to continue to work

to make sure either that we get a fair agreement or that we win the case which

we think is strong at the WTO. So that, while it's a burden on the community and

it's a burden particularly on forest-dependent communities, is something we are

all working very hard to solve.

We are not

helped, however, by the billion dollars in costs that the previous government

ascribed or put on that industry and the workers in that industry through their

overly burdensome and restrictive Forest Practices Code. That's a stat that the

member can go back and check, because her Forests minister at the time actually

used that number. He said that over a billion dollars in additional costs have

been added to the forest sector of this province for no net environmental

benefit. Boy, could those businesses and those communities and those workers

ever use that billion dollars about now. Yes, there are difficulties….

Interjection.

Hon. G.

Collins: There are difficulties in the forest sector, and the member laughs

about the tariff and the fact that working families and working communities are

being hit by that tariff and having to send those dollars to the United States.

I don't happen to think it's a laughing matter, nor do members of this House.

Interjections.

Deputy

Speaker: Order, please.

Hon. G.

Collins: I know the truth hurts. It hurt for ten years, and I guess it still

hurts because nothing's changed. I think what we've seen today are a number

of…. Oh, hot off the presses. Actually, I guess, it's not just hot off the

presses. It was December 2, 2002. Bell Mobility opens a western call centre,

network switching and operations facility. It was actually in the member

opposite's riding.

Interjections.

Deputy

Speaker: Order. Order, please. The minister has the floor.

[1555]

Hon. G.

Collins: That is just amazing information. That is so exciting — the fact

that that company, a na-

[ Page 5251 ]

tional company, is choosing.… Of all the communities in the country, of all

the ten provinces in Canada, they choose not only British Columbia, not only

Vancouver, but that member's riding. I'll take the "Thank you," and

I'll say: "You're welcome."

Maybe we

should have sent that over to her, because I didn't notice it in her budget

speech. Next time I'll make sure we do that.

There's no

question that there are challenges still to be faced in British Columbia.

There's no question that there are still challenges. We are not out of the woods

yet. We have a lot of work to do. We have to stay the course. The fact of the

matter is that we are seeing good trend lines. We are seeing good numbers come

in.

We are

starting to see the turnaround. I know that British Columbians feel good about

it, because the one thing that her colleague mentioned was growing

disappointment, I think, in British Columbia. In case that member hadn't

checked, I think the latest poll had us at 50 percent in the polls, which I

think is important. I think it is important to note that British Columbians

threw their support behind this government during the last election because they

wanted to see a change in direction. They're seeing that change in direction.

British Columbia is back.

Interjections.

Deputy

Speaker: Order, please.

Hon. G.

Collins: We're getting the job done. We're seeing the job growth. We're

seeing the economy turn around.

The one the

member forgets to mention is the Toronto-Dominion Bank report, which says that

next year British Columbia will lead the country in economic growth and be

number one again.

[1600]

Second

reading of Bill 6 approved on the following division:

YEAS — 62

Falcon

Coell

Hogg

L. Reid

Halsey-Brandt

Whittred

Hansen

J. Reid

Bruce

van Dongen

Barisoff

Roddick

Wilson

Masi

Lee

Thorpe

Hagen

Plant

Campbell

Collins

Clark

Bond

de Jong

Nebbeling

Stephens

Abbott

Neufeld

Coleman

Chong

Jarvis

Anderson

Orr

Harris

Nuraney

Brenzinger

Bell

Long

Chutter

Mayencourt

Johnston

Bennett

Christensen

Krueger

McMahon

Bray

Les

Locke

Nijjar

Wong

Suffredine

MacKay

Cobb

Visser

Lekstrom

Brice

Sultan

Hamilton

Sahota

Hawes

Kerr

Manhas

Hunter

NAYS — 2

MacPhail

Kwan

Hon. G.

Collins: I move the bill be referred to a Committee of the Whole House for

consideration at the next sitting of the House after today.

Bill

6, Budget Measures Implementation Act, 2003, read a second time and referred to

a Committee of the Whole House for consideration at the next sitting of the

House after today.

[1605]

Hon. G.

Collins: For the information of members, we'll be restarting the estimates

of the Solicitor General and Public Safety in Committee A, for members who have

questions. We'll be doing that briefly.

In this

House I call second reading of Bill 7.

INCOME TAX AMENDMENT ACT, 2003

Hon. G.

Collins: Bill 7 reflects the government's ongoing commitment to maintain a

competitive tax environment so that business and families can prosper and build

successful futures in British Columbia. Bill 7 implements sector-specific tax

cuts for the film, mining and book-publishing sectors. These measures are

designed to foster the growth and diversification needed to build a strong and

vibrant economy in British Columbia.

B.C. is

home to a billion-dollar film industry that employs approximately 50,000 people.

Clearly, it's important that we maintain British Columbia's competitiveness,

compared to other jurisdictions, to ensure that the film and television industry

can continue to thrive. Bill 7 extends the Film Incentive B.C. tax credits and

the production services tax credit for an additional five years. These credits

were scheduled to expire in 2003, but as announced by the Premier last year, the

credits are now extended to 2008. These credits will maintain British Columbia's

competitiveness and provide a solid foundation for future growth and job

creation in the film and television industry.

Bill 7 also

introduces enhanced regional income tax incentives for film production in B.C.

heartlands. The existing 12.5 percent regional credit, under Film Incentive

B.C., will be changed to make it easier for film and television productions to

qualify. A new 6 percent regional credit will be available for productions that

[ Page 5252 ]

qualify for the production services tax credit. The enhanced incentives will

be effective where principal photography of the production begins after March

2003. The existing regional credit will continue to apply to productions where

principal photography begins prior to April 1, 2003. These regional credits are

intended to make B.C.'s heartlands competitive with other jurisdictions for

attracting location-based productions.

The 2002

provincial budget signalled government's intention to develop incentives to

encourage digital animation. Budget 2003 follows through on that commitment.

Bill 7 implements a refundable corporate income tax credit of 15 percent of B.C.

labour expenditures incurred for digital animation or visual effects. Digital

animation and visual effects are created through digital technology and are

becoming increasingly important in film production. The new credit will

highlight British Columbia as a key location for film productions and help

foster animation and visual effects technology in the province. The new credit

will be available as a top-up to film productions that qualify for the existing

Film Incentive B.C., or production services tax credits where principal

photography begins after March 31, 2003.

Despite the

expansion of alternative forms of media and communications, book sales have

continued to grow in Canada and in other countries, and there are opportunities

for B.C.'s book publishing industry to contribute more to this growth, given the

right competitive environment. Bill 7 introduces a refundable corporate income

tax credit for B.C. book publishing firms that receive a contribution through

the federal book publishing development incentive program. The credit will be

calculated as 90 percent of the federal contribution received by the

corporation. The credit will help B.C. book publishers compete nationally and

internationally.

[1610]

The

government has already taken actions to restore a competitive tax environment

for the mining industry, and Bill 7 continues to improve British Columbia's

competitiveness. Bill 7 extends the B.C. mineral exploration tax credit for an

additional three years. In addition, effective April 1, 2003, the credit will be

extended to active members of partnerships that undertake mineral exploration in

the province. This credit will continue to encourage mineral exploration, which

has increased 25 percent since 2001, a period which saw exploration in many

other jurisdictions decline.

The

sector-specific income tax measures in Bill 7 will assist the film, book

publishing and mining industries. These targeted tax cuts continue the work of

ensuring that British Columbia has a competitive economy where business and

families can thrive and prosper.

I move

second reading of Bill 7.

MacPhail: I'll have questions on the effect and the studies that led to the

economic impact studies, which led to these choices of tax cuts. I want to make

a couple of points, though. While these tax cuts are targeted at specific

industries, again, the industries that are targeted here are part of an open

economy. The industries that are affected here compete with not only other North

American jurisdictions but in the commodities-based sectors, such as the mining

sector. They're competing with South America, Indonesia and South Asia as well.

While we

have a situation here where tax policy is being used to drive the economy, there

are many other factors that will influence the success or failure of those

particular sectors here in British Columbia. Just to take an example, one of the

factors that affected the film industry's growth throughout the 1990s — and in

fact it started in the early 1990s under the previous Social Credit government

— was an acknowledgment that the industry's comparative advantage would be

held in the training of people. Therefore, programs were instituted and expanded

greatly throughout the 1990s so that no matter what happened in terms of either

tax policy or a high dollar, there was a well-trained workforce that attracted

the industry.

In fact,

when we were actually doing our Finance Committee prebudget consultations,

people in that industry came forward and said that the things that will hurt the

industry as much as anything else would be the cuts to the training programs

that provide good, solid, well-trained crews. The other factor that the industry

commented upon was the fact that you need not only crews but infrastructure in

order to have the industry flourish.

I will put

this question to the minister so that he can be prepared for it in committee

stage: what is the relationship between this tax credit and the dollar? If the

dollar changes, what effect does the tax credit have, and at what point does the

tax credit maximize or at what point does the tax credit disappear, given the

change in the dollar?

Secondly,

in terms of the mining tax credit, it is true that mining exploration has

increased from $25 million a year — which was the last year under my

government — to $40 million this year, at the end of 2002. At the recent

mining conference in British Columbia it wasn't about regulation, and it wasn't

about policies. It was about land use — the issue around land use. It wasn't

about tax credits either. This government and I probably don't agree on the

issues of land use, but that doesn't take away from the fact that mining

exploration is not stalled because of tax credits — although the tax credit is

welcome; the extension of it is — but it's about land use. Those issues remain

unresolved in this province. Those are some of the issues that I'll be exploring

at committee stage.

[1615]

Chong: I rise to speak to Bill 7, the Income Tax Amendment Act, 2003, and

will just make my comments very brief. I again support this piece of

legislation, because in fact it does bring into existence the targeted

sector-specific tax measures that were introduced in Budget 2003. I'm very

pleased that some of

[ Page 5253 ]

these measures are targeted to things such as new media, book publishing,

television and film, and the cruise ship sector.

Here

in Victoria, as the Minister of Finance stated earlier, the cruise ship sector

is very important. I know that in the Prince Rupert area, where their economy

has had difficulty in diversification, they are looking very much for the cruise

ship sector there to grow as well. I am particularly pleased about these

sector-specific tax measures and will watch very closely to see how much they

are going to impact those areas, especially in our heartland.

I am

pleased, as well, because these are in fact sector-specific. They're not

business-specific, as what was done in the past. In the past we had things such

as Skeena Cellulose bailouts. Those were business-specific. We are getting out

of those kinds of initiatives. We want to ensure that industries are targeted

and that everyone in a particular industry has the opportunity to avail

themselves of particular tax measures.

I would

agree with the member opposite regarding the fact that tax measures, in and of

themselves, are not the only way to see an economy grow. She's absolutely

correct. On the Finance and Government Services Committee that I toured on with

her, we heard from people about things such as our skills shortage that we have

to address, and we are going to address it. I know the Minister of Advanced

Education is working on a comprehensive plan as well. So, absolutely, taxes in

and of themselves are not the sole solution. They must be complemented by a

number of other initiatives such as our labour shortage.

We also

need to deal with things such as red tape and regulation. Again, we have a

minister of state who is dedicated to reducing red tape and regulation. With all

those issues and with those initiatives and measures that we're going to

introduce, I am confident we are going to see some positive results in all parts

of our economy and in all parts of our province.

I'm very

pleased to support Bill 7.

Hon. S.

Hagen: I just wanted to add some thoughts I had with regard to this, and I

support what the Finance minister is doing wholeheartedly. I just want to make a

comment on the member for Vancouver-Hastings' comments about land use planning.

Land use

planning is moving along at a very good pace in this province, unlike in the

previous ten years. That's not to say there aren't some very, very serious

challenges to be met. One of those challenges is to get a discussion going

between mining interests and tourism interests. I'm pleased to say that the

mining industry in B.C., represented by the B.C. mining association and the B.C.

and Yukon Chamber of Mines, has agreed to enter a forum with the Council of

Tourism Associations together with first nations who will be invited to discuss

— at a very high level — the philosophy behind joint land use in the

province of British Columbia to arrive at some consensus on the use of land

involving both extraction resources and the tourism industry.

Hon. G.

Collins: I'd just like to close debate on Bill 7, if I may. I want to add a

very few brief comments. I think the Minister of Sustainable Resource Management

makes a very good point. I think the member opposite is correct in mentioning

land use and access to the land base as key concerns of the mining industry.

There's no question of that. That's why it's important that we resolve the

issues not just of environmental land use but also of access to the land base

and how our relationships with first nations are structured. The government has

made some fairly significant moves on both those fronts in the last two and a

half years.

I want to

thank the minister, as well, for some very successful contributions that he's

made in trying to make sure the dialogue between first nations, industry and

government continues to be open. We may not agree on everything, but I think

it's important to identify where we don't agree and try and work through those

disagreements. That effort alone, I think, is starting to be heard out there.

It's starting to build a sense of trust, and those are the first stages to

getting long-term solutions. I would encourage him and others to continue in

their work and do it in good faith so that we all understand that access to the

land base, the use of those resources, can provide good, family-supporting,

community-supporting, high-income jobs and futures for the province. It's a huge

asset that we have. It's something that should be available to everybody,

aboriginal and non-aboriginal alike.

[1620]

We've taken

some first steps to try and make sure that we continue to re-attract some of the

investment that was historically here in British Columbia. We're starting to see

some of the progress with those changes to the tax policy. That's one element.

It's not by any means all that's required to get our mining industry back up and

running, but it is one.

The

corporate capital tax elimination sent a very strong and powerful message to the

mining industry and investors in that sector, as well as the removal of the

provincial sales tax on production machinery and equipment. All of those things

are very positive messages to investors and to those communities and those

workers who make their livings from the mining sector. I think mining has a

great future in this province.

Certainly,

technology has improved in the last 20 years. Modern mining is much, much more

environmentally sound. It can be done in a way that can coexist with other uses

of the land base. I think that's something we should all be pleased with. I

certainly look forward to further progress in the future.

We'll

certainly have more opportunity to speak on the other items in the bill in

greater detail during the committee stage debate. We can talk about how some of

those tax incentives are designed to drive the competitiveness of those various

industries and to make sure that we can continue to compete and grow those

industries in the province.

So with

that, I thank the members for their comments, and I move second reading of Bill

[ Page 5254 ]

Motion

approved.

Hon. G.

Collins: I move that the bill be referred to a Committee of the Whole for

consideration at the next sitting of the House after today.

Bill 7,

Income Tax Amendment Act, 2003, read a second time and referred to a Committee

of the Whole House for consideration at the next sitting of the House after

today.

Hon. G.

Collins: I call second reading of Bill 9.

AUDITOR GENERAL ACT

Hon. G.

Collins: I move that the bill now be read a second time.

The new

Auditor General Act replaces legislation first passed in 1979. The present

Auditor General Act no longer reflects current auditing practices, nor does it

adequately support the evolving needs of the Legislative Assembly.

The auditor

general is an officer of the Legislature and is the Legislative Assembly's

auditor. It is the Legislative Assembly to whom he or she must turn for

direction and to whom he is accountable. This act will clarify and strengthen

that relationship. The accountability of the auditor general is demonstrated by

the mechanism, frequency and standards of reporting to the Legislature — a

requirement to present annually a three-year audit plan and a service plan to a

committee of the Legislative Assembly and a requirement for an independent audit

of the accounts of the auditor general's office itself by an auditor appointed

by that committee.

Independence

is key to the work of the auditor general. The new Auditor General Act supports

that independence by providing for the review and approval of the auditor

general's estimates by a committee of the Legislative Assembly, the ability to

collect and use fees with the approval of the committee, and the elimination of

any role government previously had in the appointment, reappointment and

suspension processes.

The new act

clearly identifies the scope of the audit coverage provided by the auditor

general. The act defines audit coverage in terms of the government reporting

entity. As the government reporting entity changes, so, too, will the coverage

by the auditor general. It confirms that he or she may request appointment as an

auditor of any government organization or trust within the

summary entity. It

allows the auditor general to request appointment as auditor of any new

government organization or trust fund for its first three fiscal years. It

ensures a balance between work done by the auditor general and external auditors

as well.

Finally,

the new legislation provides statutory authority to do value-for-money audits

and to comment on whether a government or government organization is operating

effectively. It confirms the role of the auditor general in the appointment of

external auditors and preserves the role of local boards in the appointment of

their auditors.

An update

to the Auditor General Act is very welcome and long overdue. We have before us a

piece of legislation which addresses the accountability and the independence of

the auditor general, the scope of audit coverage and services provided by the

auditor general, and which confirms practices that have evolved over the years.

This legislation also has the full and unqualified support of the auditor

general for British Columbia.

[1625]

I also want

to take a moment, if I can, to thank the current auditor general as well as his

predecessor, George Morfitt, for the work that they have done — over at least

the last decade that I'm aware of — to try and update and modernize our act. I

believe that if this legislation is passed by the House, it will place us at the

forefront in Canada for transparency and independence of the auditor general.

It's something that we can all be proud of. I also want to thank those

individuals in the Ministry of Finance who have worked hard on this: Arn van

Iersel, who is the comptroller; Murray Crowther, who took this on as a special

project that I know at times he didn't think was very special. But they managed

to work through it.

There is

always a healthy tension between government and the auditor general, and so it

should be. I'm very pleased to say that with the work those members as well as

others have done, this legislation has now come before the House. I think it's a

comment on the commitment and determination of the government to live up to its

commitments in its New Era document. It also opens up, I think, an era of

greater accountability and greater independence for that officer of the House.

Chong: I just want to add some brief comments to the Auditor General Act,

particularly since I have watched over the years — in my first term in

opposition and now in government — the requests made by the auditor general

— first with the previous auditor general, George Morfitt, and now with the

current auditor general, Wayne Strelioff.

want to pay particular respect, as well, to the late Fred Gingell, who was the

member for Delta South. I had the very distinct privilege of working with him

when he chaired Public Accounts. He helped me understand the importance of that

committee as well as the work of the auditor general's office — how his

independence was imperative and how the Legislative Assembly benefited from that

work, as well as what was brought forward.

As the

Minister of Finance has stated, the changes to this act are long overdue. The

first time I think it was passed, back in 1979…. I recall when I spoke to

George Morfitt, having been elected in 1996, and he said: "Well, I hope we

can finally all work together and have these changes made." I don't know

why it took so long.

I think

these changes reflect our moving into the twenty-first century. I know we are

leading edge, and I know other provinces will be watching us as well. It was

time that we moved forward. It was time that this act was updated and brought

forward.

[ Page 5255 ]

I just want

to confirm, though, for the members of this House, that this act in no way

affects the independence of the office of the auditor general, and that is very

important. While certainly there's healthy debate that sometimes occurs at

Public Accounts Committee, the independence of the auditor general has always

been maintained. I've always respected that and always held that in high regard

when I was in opposition and now in government.

I just

wanted to add those remarks to this bill, because I think it's important that we

do respect that. I think all members of this House have worked together over the

years to bring it to fruition, and I'm very pleased to see that it's finally

here.

Hon. G.

Collins: I thank the member for Oak Bay–Gordon Head for reminding me. I

was very remiss in not mentioning Fred Gingell and the great work he did over

the years in trying to improve this process as well. He's somebody we all honour

to a great extent, and his contribution to this shouldn't be missed as well.

I move

second reading of Bill 9.

Motion

approved.

Hon. G.

Collins: I move that the bill be referred to a Committee of the Whole for

consideration at the next sitting of the House after today.

Bill 9,

Auditor General Act, read a second time and referred to a Committee of the Whole

House for consideration at the next sitting of the House after today.

Hon. G.

Collins: I call Committee of Supply, and for the information of members

we'll be debating the estimates of the Ministry of Education.

[1630]

Committee of Supply

The House

in Committee of Supply B; J. Weisbeck in the chair.

The

committee met at 4:32 p.m.

ESTIMATES: MINISTRY OF EDUCATION

On vote 19:

ministry operations, $4,859,939,000.

Hon. C.

Clark: I'm pleased to present the 2003-04 budget estimates for the Ministry

of Education.

I would

like to introduce the ministry staff who will be joining me in a moment: Tom

Vincent, the assistant deputy minister of management services; Keith Miller,

director of school funding and allocation and capital planning; and Rick Davis,

superintendent field liaison. My deputy, Emery Dosdall, will be joining us later

in the estimates.

Our

government is committed to providing quality education for all students, an

education that ensures today's students become tomorrow's successful citizens.

Government is reforming the education system to ensure that all students have

the opportunity to become well-rounded citizens who contribute to the province's

prosperity and democracy.

In order to

ensure that B.C. students receive a quality education, we focused on five key

areas. We're committed to protecting and enhancing education funding. We're

focusing on increasing accountability across the system, providing more choice

for students, creating more opportunities for parents to become involved in

their children's education and, above all else, improving student achievement.

Education,

as I've said many times, is the best possible investment in the future of this

province. That's why we, our government and our Premier, are committed to

protecting and enhancing education funding. Funding for '03-04 is being

maintained at $4.86 billion despite a projected enrolment decline of about 4,700

students. This means that on average, we are providing $51 more per student in

B.C.

As laid out

in the recent budget, education will receive $83 million more in '04-05 and $60

million more in '05-06, for a total of $143 million in additional funding over

the next three years. Factoring in further projected declining enrolment, this

equates to $243 more per student by '05-06.

It's

important to recognize that because of our commitment to funding through '06,

school boards now have the multi-year funding envelopes that they asked for to

allow them to improve their long-term education planning and long-term

budgeting.

[1635]

Boards

also asked us for a simpler funding formula, and we delivered. Under the current

allocation system, funding is being delivered in just two ways: a student base

allocation and supplementary grants. The student base allocation provides a

standard amount for every student enrolled in school, and the student base

allocation accounts for more than 80 percent of every district's budget. The

balance is made up of supplementary grants.

The

multi-year funding envelopes and simpler funding allocation system are critical

to help boards plan for their future. This is even more important, because

boards have to contend with the school-age population that is continuing to

shrink. Almost every school district is seeing student enrolment fall from year

to year. A substantial decline in the number of students can create huge

financial challenges for districts, because it can mean a considerable loss of

funding over a relatively short period of time.

Our new

funding system protects districts caught in this situation. Each year we compare

current enrolment to enrolment for the previous year. If the decline is more

than 1 percent, districts receive half of the per-student funding amount for

every student exceeding that 1 percent threshold. This is an improvement on the

previous system. We understand that school districts face a dilemma,

particularly rural school districts, and they may find themselves in difficult

situations because of shifting demographics. We in this ministry are

[ Page 5256 ]

committed to doing all that we can to help those communities in the

heartland.

fulfilled our new-era commitments to funding, but we must not lose sight of our

goal of a quality education for every student. That's why we have made student

achievement our number one priority. We know B.C. has a good education system,

but we also know there is always room for improvement. We have great teachers,

administrators and school districts. We have lots of involved parents and

thousands and thousands of terrific students. Our job is to make sure that our

system is performing optimally for all of them.

As part of

the education reform, government has already taken a number of major steps to

give local school boards more autonomy, flexibility and control over delivery of

education services in their local communities. Each school district has drawn up

its own local accountability contract that states their public commitment to

improving student achievement.

Accountability

contracts are based on student performance. They're based on information at the

classroom, school and district levels and reflect the needs of different school

districts. It's an important part of our drive to make sure that we are making

evidence-based decisions and that our money is being spent as well as it

possibly can be to improve achievement for every student in B.C.

Ninety-three

percent of districts in their accountability contracts have set improved

literacy as their main goal. Other major goals include improvements in math,

human and social development, safety and graduation rates. Providing more

autonomy to school districts in req