1981 Legislative Session: 3rd Session, 32nd Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

TUESDAY, JUNE 9, 1981

Afternoon Sitting

[ Page

6071 ]

CONTENTS

Routine Proceedings

Oral Questions

Alleged cutbacks in homemaker service. Mr. Cocke –– 6071

Mr. Nicolson

Mr. Passarell

Mr. Howard

Racial discrimination. Mr. Barnes –– 6072

Tabling Documents

IBT list of pesticides used in British Columbia.

Hon. Mr. Rogers –– 6073

Building Safety Standards Act (Bill 20). Second reading.

Hon. Mr. Vander Zalm –– 6073

Mr. Barber –– 6074

Provincial Court Amendment Act, 1981 (Bill 8). Second reading.

Hon. Mr. Williams –– 6074

Mr. Macdonald –– 6074

Hon. Mr. Williams –– 6074

Environment Management Act (Bill 22). Second reading.

Hon. Mr. Rogers –– 6075

Mr. Skelly –– 6075

Hon. Mr. Rogers –– 6076

Petroleum and Natural Gas Amendment Act, 1981 (Bill 21). Second reading.

Hon. Mr. McClelland –– 6076

Mr. D'Arcy –– 6076

Hon. Mr. McClelland –– 6076

Mineral Land Tax Amendment Act, 1981 (Bill 5). Second reading'

Hon. Mr. McClelland –– 6076

Assessment Amendment Act, 1981 (Bill 11). Second reading.

Hon. Mr. Curtis –– 6076

Mr. Lauk –– 6077

Mr. Davis –– 6078

Hon. Mr. Curtis –– 6078

Committee of Supply: Ministry of Finance estimates. (Hon. Mr. Curtis)

On vote 86: minister's office –– 6079

Hon. Mr. Curtis

Mr. Stupich

Mr. Hall

Mr. Cocke

Ms. Brown

Mr. Passarell

Mr. Levi

Mr. Leggatt

Hon. Mr. Bennett

TUESDAY, JUNE 9, 1981

The House met at 2 p.m.

Prayers.

HON. MR. VANDER ZALM: Mr. Speaker,

attending, in the gallery today is a large gathering of Croatian people

from all over British Columbia, particularly the lower mainland, and

from out of province. With us today we have an outstanding Croatian,

Mr. Steve Stankovic of Hamilton, Ontario, who is president of the

society in Ontario, and is also the secretary for all Croatian people

in Canada.

MR. KING: Visiting in the gallery today we

have a school class from the North Okanagan Academy at Armstrong, along

with their teacher Mr. Bergey. I would ask the House to extend a warm

welcome to this class. Also, I have a constituent in the gallery today

who is from Ashton Creek, British Columbia. I know he's a staunch

supporter of this member. I would like the House to welcome Mr. Len

Bawtree.

HON. MR. WATERLAND: In the precincts today

is a group of students from Boston Bar Elementary and Secondary School

in my constituency, accompanied by their teacher Don Walmsley. I would

ask the House to make them welcome.

HON. MRS. JORDAN:

Mr. Speaker, this afternoon I'm delighted to have the pleasure of

introducing 20 convention hostesses from Seattle King County. They

represent the convention and visitors' bureau of that county. They

arrived here this afternoon on the Princess Marguerite and will be visiting our ministry in the precincts. I ask you all to give them a very warm welcome.

HON. MR. SMITH:

Mr. Speaker, visiting your gallery today is my wife Barbara. She is

accompanied by Mr. Bob Moffatt of Vancouver, who is a well-known

Canadian tennis coach of Canadian junior teams abroad. He is here to

give particular assistance to the second member for Vancouver East (Mr.

Barnes), the member for Okanagan South (Hon. Mr. Bennett) and the

member for Oak Bay-Gordon Head (Hon. Mr. Smith) in their tennis game.

Oral Questions

ALLEGED CUTBACKS IN HOMEMAKER SERVICE

MR. COCKE: I have a question for the Minister of Health — part of the ongoing saga of when a cut is not a cut.

It's

been confirmed that the Vancouver homemakers have been asked by

long-term-care to trim the fat and reduce their service to

long-term-care clients by 100,000 hours. It's very clear that cutbacks

of this size in homemaker service will put a great strain on old people

and will result in the deterioration of their health.

MR. KEMPF: What's your question?

MR. COCKE: When I get around to it, you'll hear the question. Mr. Speaker, the member has difficulty taking this question seriously.

What contingencies has the minister made to meet the anticipated extra demand on hospital facilities?

HON. MR. NIELSEN:

The member for New Westminster has reached certain conclusions which, I

gather, he can do by certain skills. I'm not sure. He has anticipated

deterioration of health and so on of some people. He mentions that the

Vancouver homemakers have been told to trim the fat, Mr. Speaker, if

that is correct. I would certainly support that if, indeed, we are

trimming, fat.

The homemaker program, as I mentioned

yesterday, is being funded with approximately $52 million. There will

be modifications on a case basis. Those people who are responsible for

coordinating the program will take into consideration that which is

deemed to be required by those individual clients. It is certainly not

the intent of the program to anticipate the deterioration of anyone's

health because of modifications in their schedule. This is an ongoing

program, and we cannot anticipate the individual needs of more than

21,000 people at this time. Moneys are being provided for the program.

Some of the programs will be modified — some individual clients will he

receiving fewer hours of service and some will be receiving more — but

the hours of service being provided will be approximately the same as

last year. The demand may be greater, and the costs certainly will be

greater.

MR. COCKE: Mr. Speaker, it's the same all

over the province. Yesterday I brought to the attention of the House a

number of areas: today I'm bringing another one — a large one in

Vancouver, Powell River has been cut from....

HON. MR. PHILLIPS: Question! Question!

MR. SPEAKER: Order, please.

MR. COCKE: Mr. Speaker, the reason they're so jumpy is because it's such a very significant thing.

MR. SPEAKER:

Hon. members, in question period the purpose is to ask questions, and

if the member perceives some differences in the House, it could be

connected with the length of the

preamble. Please proceed.

MR. COCKE:

Mr. Speaker, I listened to the minister yesterday. He took all of

question period. I'm asking the minister now what can be done about an

arbitrary cutback across the board. He's talking about individuals. Has

the minister decided to rescind that arbitrary cutback across the board

and start looking at individuals and their health needs?

HON. MR. NIELSEN:

Mr. Speaker, the budget which has been anticipated this year for the

homemaker service is approximately $52 million. That money will be

distributed throughout the province to the various health districts.

Interjections.

MR. SPEAKER: Order, please. Hon. members, let's hear the answer.

HON. MR. NIELSEN:

Mr. Speaker, the moneys provided in the budget will be distributed

throughout the province by the various health districts and the

administrators

[ Page 6072 ]

responsible

for it contracted through the various agencies that provide the

service. The agencies have been advised that they will be allocated so

many hours this year. Those hours will be dependent upon the number of

clients and that which is assessed to be required by each client. We do

not know with precision how many people will be seeking that service

this year — approximately 21,500; there could be more, there could be

less.

In some instances the program offered to the

individual will be reviewed. If the individual needs additional time,

that will be considered. If the individual needs less time, that will

be considered. The individuals who are assessed to require some type of

homemaker assistance need not forever be under that program. Some of

them require temporary assistance. Some of them require almost

permanent assistance. Some will go to an intermediate-care facility.

Some will go to an acute-care facility, depending upon their health and

its deterioration under some circumstances.

In addition, the

people who are involved in the homemaker policy will also be attempting

to see if other individuals can assist some of these people who require

assistance about their homes for different chores and other assistance.

Some other people will be asked to take

part in assisting those less

fortunate, including relatives and volunteer organizations.

Interjection.

HON. MR. NIELSEN: Apparently someone is offended by the thought of relatives or volunteers assisting people in need.

provided information to the House yesterday. We have an expanded

budget. It may not meet the anticipated or demanded need within the

province, but it will go a long way to resolving many problems of many

thousands of people.

MR. NICOLSON: I have a question

for the Minister of Health. The Cranbrook Homemakers Service has

advised that they've been ordered to cut 800 hours per month from their

operation. They have no choice but to reject qualified patients. Has

the minister decided to accept the advice of the Cranbrook society that

the Ministry of Health cut the extra layer of bureaucracy which now

provides field supervision and extra paperwork for homemakers, instead

of cutting services to the patients?

HON. MR. NIELSEN:

I haven't heard directly from the Cranbrook homemakers' society. It's

quite possible that staff have been advised by them. Unfortunately, in

delivering any service relative to people's needs, there is a need for

a layer of bureaucracy. Initially someone must assess the needs of that

individual person, and there must be follow-up attention.

AN HON. MEMBER: Bureaucracy.

HON. MR. NIELSEN:

Call it bureaucracy if you want. It's also responsibility, and it also

identifies that moneys being spent are going to where they're required.

It's

very difficult for some people in the field to make a very quick

decision on which person should receive what care, and it's necessary

that they follow through, not only to see that the care is what is

required but also to see that they're getting it. I don't object to

having people working the field first to assess and secondly to ensure

that care is being delivered. The Cranbrook organization may have been

advised to cut their workload by 800 hours; that would represent 800

hours of an anticipated 3.5 million hours of service expected this year.

MR. PASSARELL:

I have a question for the Minister of Health. The Ministry of Health

has ordered that 1,000 hours per month be cut from the Dawson Creek

homemaker service. The result is a freeze on new clients and a cutback

in the number of hours allocated to existing patients. Did the minister

receive a petition regarding this matter from 35 very upset patients,

and is he prepared to consider their plight?

HON. MR. NIELSEN:

I have not seen the petition from 35 very upset patients, I think the

member said. We would consider their situation, although it may not be

their plight.

MR. HOWARD: I wonder if I too could

direct a question to the Minister of Health. Given that the Smithers

Homemakers Service report that they have been ordered to cut

drastically the number of hours they can expend on visiting

long-term-care patients, and that sufficient money is not available to

the Smithers Homemakers Service to provide the care that those

long-term-care patients need, I wonder if the minister can advise

whether he has decided to find the extra money to make a request to the

Minister of Finance (Hon. Mr. Curtis) to see if he can get his hands on

some of the expected $97 million that the minister expects to earn on

interest on cash surpluses this year.

HON. MR. NIELSEN:

Mr. Speaker, I would be pleased to respond to questions relative to the

needs of a specific homemaker service in that member's constituency. As

to the other matters, he's anticipating a great deal.

MR. HOWARD:

I have another question to the Minister of Health. Inasmuch as in

answer to the first question posed to him today the minister indicated

that he thought it would be a good idea to trim the fat out of some

places, I wonder if the minister would mind explaining to this House

how he can justify this curtailment of homemaker services to

long-term-care patients while his own personal travel expenses in the

budget have increased by 55 percent over the last year.

HON. MR. NIELSEN:

I don't know whether we're debating estimates at the moment, but I

suppose if it's in order for the question, it would be in order for an

answer.

The ministry estimates, including the minister's

office, have generally seen an increase. The travel aspect throughout

the ministry is up considerably over last year. If all members of the

House and organizations make requests for ministers or members of the

minister's staff to meet with them in different locations of the

province, we either accede to those requests or we don't. If we agree,

then it costs money to travel. It's as simple as that.

MR. BARRETT: Every night home on a government plane.

MR. SPEAKER: Order, please, hon. members. We are in question period.

RACIAL DISCRIMINATION

MR. BARNES:

Mr. Speaker, this is a question to the Minister of Labour. The minister

indicated last week in the House that he is reluctant to release the

McAlpine report because of a "contentious issue contained therein." The

McAlpine report, of course, has become contentious in itself. However,

has the minister decided to bring the House into his confidence at this

time, and inform us what that contentious issue is which keeps the

report hidden from the public?

[ Page 6073 ]

HON. MR. HEINRICH: Mr. Speaker, I have advised the House on more than one occasion that the report will be released in due course.

HON. MR. ROGERS: Mr. Speaker, I ask leave to table a document.

MR. SPEAKER: Is this the document referred to earlier?

HON. MR. ROGERS:

No, Mr. Speaker, it is not a document referred to in estimates, nor is

it a statutory document. Therefore I ask leave to file it.

MR. SPEAKER: In order for the House to intelligently decide, perhaps the member could....

HON. MR. ROGERS: This document is a list of IBT pesticides used in British Columbia.

MR. SPEAKER: Shall leave be granted?

Leave granted.

HON. MR. ROGERS: I thought that would get it.

Interjections.

MR. SPEAKER:

Hon. members, there seems to be an increasing practice of members,

while in their chairs, interrupting the proceedings of the House by

speaking out. I would decry the practice, and suggest that perhaps

every member observe what is the normal practice of an orderly House.

Orders of the Day

HON. MR. WILLIAMS: Mr. Speaker, I ask leave that the House proceed to public bills and orders.

Leave granted.

HON. MR. WILLIAMS: Second reading of Bill 20, Mr. Speaker.

BUILDING SAFETY STANDARDS ACT

HON. MR. VANDER ZALM:

Mr. Speaker, it gives me pleasure to move second reading of Bill 20,

Building Safety Standards Act. Historically, the construction industry

has been faced with regulations that have been initiated from a

multitude of provincial and local government jurisdictions. The result

has been the enactment and enforcement of conflicting regulations,

delay at the time of construction, and increased costs to the consumer.

Part of the difficulties that were being caused by the varied

regulations were overcome when the Municipal Act was amended to direct

that the British Columbia Building Code would apply throughout the

province, with the exception that regional districts could, by by-law,

determine areas not within municipalities that would be subject to the

enforcement of the building code. This action eliminated the authority

of municipalities to directly amend the construction regulations, but

did not eliminate the authority of other provincial jurisdictions

initially to act on their own to regulate particular phases of

construction, and the resulting higher costs persisted, with the

consumer having to pick up the tab,

Overtures were made to

the government by people in the construction industry and by people who

had suffered financially when they had to meet the cost of rectifying

construction renovations which were demanded by the variables in

regulations. The Premier recognized a need for a review of the

regulatory authority as it affected construction, and in a number of

statements had indicated the matter would be studied with the object of

making recommendations that would overcome the overlapping of

regulatory authority and the inconsistent regulations that resulted.

the Ministry of Labour was heavily involved in all phases of the

construction industry, the Hon. Minister of Labour struck a

consultative committee with membership from both the public and the

private sectors. Membership included representatives of provincial

government ministries, local government agencies, the UBCM, the

construction industry including the building trade unions and design

profession industry, and the enforcement officers. The committee was

commissioned to make recommendations that would overcome the conflicts

and inconsistencies that have arisen through the enactment and

enforcement of regulations emanating from a proliferation of

jurisdictions.

After examining alternatives the committee

made a number of recommendations to cabinet which were contained in a

report dated February 21, 1980. The first recommendation was that the

British Columbia building code and the British Columbia fire code be

adopted under the provisions of the Municipal Act and the Fire Services

Act respectively and that the code be applied throughout British

Columbia, including the city of Vancouver. As the codes were based on

the national codes that were drafted to avoid overlapping of regulation

content, the acceptance and adoption of this recommendation eliminate

the inconsistencies that have occurred in the past between the two

jurisdictions and provide a uniform level of building safety throughout

the province. The final construction costs will also be reduced with

the implementation of the recommendations. Legislation was recommended

to establish an advisory council that would have the primary function

of examining and, when appropriate, recommending for adoption all

proposed changes to codes and related legislation and regulations that

affect the structural design, construction. alteration and occupancy of

buildings.

The acts directly affected by this recommending

body would be the Municipal Act, the Fire Services Act, the Electrical

Safety Act, the Power Engineers and Boiler and Pressure Vessel Safety

Act, the Gas Safety Act, the Factory Act and the Mines Act.

Representatives on the advisory council would come from the

jurisdictions administering the acts referred to together with

representatives from the construction industry and other interested

parties, at least one half of the members not to be persons who are

public employees.

The Building Safety Standards Act has

included legislation to enact these recommendations. In addition, the

establishment of an appeal board to hear matters advanced pursuant to

specific sections in the acts referred to was also recommended. The

Building Safety Standards Act authorizes the establishment of the

appeal board.

Finally, to assure primacy in the application

of regulations, and to resolve any conflicts now existing, or ones that

may have been overlooked, the act has provisions which firstly give the

Fire Services Act and building code under the Municipal Act primacy

over all the other acts. Secondly, it gives the building code primacy

over the fire code.

[ Page 6074 ]

Consequential

amendments to all acts affected are also attached to the Building

Safety Standards Act. The legislation of the Building Safety Standards

Act will lead to the simplification of administrative procedures

involved in obtaining all permits related to the construction and

alteration of buildings. The regulation and enforcement of regulations

will be more consistent, which in the end will lead to less

inconvenience, less delay and the lessening of final construction costs.

Mr. Speaker, I move second reading.

MR. BARBER:

I rise as the designated speaker for the official opposition. At the

beginning of my lengthy remarks, I would like to advise the House that

the official opposition will support this bill.

Bill 20,

Building Safety Standards 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. MR. WILLIAMS: Second reading of Bill 8, Mr. Speaker.

PROVINCIAL COURT AMENDMENT ACT, 1981

HON. MR. WILLIAMS:

This act, while apparently simple in content, is nonetheless an

appropriate development in the functioning of the provincial court. The

court is in its eighth year of functioning in this province since major

revisions were last made. It has achieved a level of distinction which

brings it into a class at least equal to that of the superior courts of

the province. However, over the period of its existence, and during its

course of development, it has been perceived that there are some

appropriate modifications which should be made.

The bill

before us makes more clear the specific powers and responsibilities of

the chief judge of that court in matters associated with judicial

administration. In addition, the legislation before us modifies the

membership and composition of the Judicial Council, and it redefines

its role in such a way as to make it clearer that it too discharges its

principal responsibility not only in the selection of persons to take

their place on the bench of the provincial court but also in matters

related to its continuing administration. Heretofore the Judicial

Council exercised its sole responsibility when dealing with matters

involving the discipline of judges, court referees and justices of the

peace. While this role continues, provision has been made to ensure

that the person being disciplined will have the opportunity to

determine whether the Judicial Council or a judge of the supreme court

of this province will have the responsibility of dealing with alleged

infractions of the duties, responsibilities and expected conduct of

members of that bench.

In modifying the composition of the

Judicial Council, we have expanded the opportunity for appointment of

lay persons to the Judicial Council in order to ensure that the council

does not seem to be one which is controlled by the court or, indeed, by

members of the bar. It is also in the way of the continuing

independence of this court that it is made clear that the

responsibilities of the executive council are virtually removed with

respect to the operation of the court. While the executive council

still has responsibilities with respect to the formality of appointment

of members of the bench, many of the other provisions in the existing

statute which might lead to the conclusion that the executive council

could exercise an influence over the bench have been removed. In so

saying, I move second reading.

MR. MACDONALD:

Undoubtedly the bill is an improvement. The opposition will support the

measure introduced by the Attorney-General. There will be questions

perhaps at the committee stage.

I notice that one of the

provisions of the bill clarifies that a judge of the higher courts may

sit as a provincial court judge. I hope and I expect that the

Attorney-General — but I might be a little bit out of order in saying

it — is pursuing the reverse of that particular coin — namely, the

importance of vesting provincial court judges with family court powers,

including divorce, by appointment from the federal government, so that

that particular constitutional hangup, which has caused so much grief

and has interfered with the administration of justice, can be resolved

through negotiations with the Minister of Justice in Ottawa.

The

Judicial Council is gradually increasing the prestige which it enjoys.

That's very important. They can't give orders to judges as to court

management and the scheduling of cases. Nevertheless, in respect to

those matters their guidance is also important. It's not just a

disciplinary body. It should be able to give the kind of guidance that

will make the justice system work more expeditiously in the interest of

all concerned. It can only do that as its prestige continues to rise.

have always been of the opinion that in the disciplinary aspects there

has to be a very good reason why a hearing should not be open, even if

it involves alleged infractions on the part of a judge. I think that

the rumour mills are worse in the long run than an open hearing. If the

ordinary citizen has an open hearing, there has to be a very good

reason shown as to why a hearing before the Judicial Council should not

be open. Nobody would bother attending most of the cases; no press

would be there; it would not be a matter of public interest. But when

it is closed, as too many hearings are, then I think that you have not

accomplished anything worthwhile, and I don't think it's good for the

prestige of the Judicial Council.

HON. MR. WILLIAMS:

Mr. Speaker, I thank the hon. second member for Vancouver East for his

comments. With respect to the provision which is made in this statute

enabling judges of the county and supreme court and indeed the judges

of the court of appeal to discharge the jurisdiction of the judge in

court, that step was taken because we find that from time to time the

opportunity does present itself where some of the judges in other

courts may be able to lend very valuable assistance in the work of the

provincial court. It is for the purpose of ensuring that that authority

be clearly set out that that change has been made.

On the

question of the use of provincial court judges in matters of family

law, I assure the member and the House that this is a matter with which

I am in agreement. Indeed, it was the position of the government of

British Columbia during the constitutional discussions of last year to

bring to the province the responsibility with regard to a range of

family law matters for the purpose of, assuring that this court in fact

could more effectively discharge that responsibility. It is one matter

of regret arising out of those discussions that such an accord was not

reached. In the continuing discussions with the national government on

the matter of the constitutional revision and shifts in jurisdiction, I

hope that this will be quickly resolved.

[ Page 6075 ]

It was clear, I believe, that except for two provinces there was full support for such a move.

The

question of open hearings is one which has been a matter of concern. I

agree with the second member for Vancouver East when he says that to

hold private hearings into matters affecting the conduct of the

judiciary is to raise serious questions as to whether or not what is

done behind those closed doors is really in the public interest. It is

for that reason that we have in the amendment before you made it clear

that all such hearings will be public. Therefore it's a significant

shift from what has been the existing legislation.

All of

these hearings on discipline matters will be public unless there are

circumstances with respect to the evidence to be given which the public

interest itself indicates should be dealt with in camera, in the same

way as takes place in our courts today when persons who give sensitive

testimony and who may themselves be affected by the testimony — not the

proceedings — can be properly protected. Only in those circumstances

when the tribunal dealing with the particular disciplinary matter is

satisfied that it is in the public interest that all or part of the

hearing should be in camera will the statutory provision for open

hearings be departed from.

I move second reading.

Motion approved.

Bill

8, Provincial Court Amendment Act, 1981, 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. MR. WILLIAMS: Second reading of Bill 22, Mr. Speaker.

ENVIRONMENT MANAGEMENT ACT

HON. MR. ROGERS:

Mr. Speaker, it's my pleasure to stand and move second reading of the

Environment Management Act, Bill 22. As the world's pressures grow and

increasing numbers of people discover British Columbia, our resources

and our relatively unspoiled heritage, the pressure that continues to

grow in this province requires that we have legislation not only to

protect our environment but to manage it — well planned, thoughtful and

sensitive legislation. This benchmark piece of legislation is the

foundation of this government's program of new environmental

legislation. It allows the ministry to assist in the development and

management of environmental plans and guidelines for all those people

who are involved in the use of the environment. It allows for

investigation of current environmental issues and it allows the

minister to take strong action to prevent environmental damage or other

emergencies that are occurring, or even to take action when a potential

emergency appears. It also allows for a

section of enforcement —

including regulations — and, of course, a

section for appeals.

Mr.

Speaker, this act was introduced some time ago. In that ensuing time I

have had several hundred letters and communications complimenting the

government on this particular piece of legislation and only one letter

opposing it, and in that particular letter it was more a question of

not understanding the legislation put forward rather than being opposed

to it. I found no one who was opposed to it in principle; some people

do have some quarrel with some of the sections of the act.

This

legislation represents a great deal of work by the staff of the

ministry, and it also represents an enormous amount of effort and input

by the general public and outside groups who have lobbied this minister

for such a piece of legislation. I think this piece of legislation will

be well received province-wide, and it is my pleasure to move second

reading.

MR. SKELLY: Mr. Speaker, the opposition will

be supporting this act in principle in second reading. There are a

number of things that we welcome in the legislation: first of all the

environmental emergency provisions in the new act. We understand that

there are some difficulties when a pollution or an environment

emergency takes place which requires the immediate decision and action

of the minister or the ministry, and we see the need for that

section

of the legislation. We also have seen over the last short time the need

for the improved powers of investigation and enforcement which the bill

grants to the ministry. We agree with it, and will be supporting those.

We agree also with the minister, both in his statements during

estimates and in the bill, that the fines for environmental violations

should be severe. As I've mentioned before, we're dealing with a

question of life-sustaining resources here. People who take any actions

in the province which degrade those resources should be punished

severely. We will be supporting the minister and will be supporting

that

section of the bill.

We do have some serious problems

with the legislation: first of all the problems that we see in

section

4 with the discretionary powers which are granted to the minister under

that section. It's very difficult to speak on the principle of a bill

which wanders into a number of areas, but we are very concerned about

the discretionary powers which are granted to the minister under that

section. A few years ago an opposition would have called those

"sweeping powers," Mr. Speaker, as you well recall. We'd like to deal a

little more responsibly with legislation now than was done at that

time, but we are concerned about those discretionary powers. During

debate on this

section in committee we may have some suggestions to

make to the minister as to how this part of the legislation might be

improved.

One of the things that we're concerned about is

that discretionary powers granted to the ministry in the absence of any

legally stated environmental assessment and review procedure creates

uncertainty among industry and developers. We're concerned that the

legislation should not do that, but in fact this legislation will. The

industry can go ahead and develop in certain ways and then suddenly the

minister, as a result of some pressure placed upon him, will issue

orders against that development. The member for North Vancouver–Seymour

(Mr. Davis), during debate on Environment estimates, mentioned two such

possibilities: the 20th Century Energy development on Gambier Island

and the Weldwood-Luscar development on Vancouver Island. What we would

like to see is legislation that spells out more clearly what the

requirements of a developer are in terms of environmental impact

statements, public review procedures, public hearing procedures, etc.

before a development goes ahead, so that uncertainty is eliminated and

ministerial discretion is used as little as possible.

The

minister in his introduction called this "benchmark legislation," Mr.

Speaker, and I think that was a bit of an overstatement. There are

models for environmental-impact legislation throughout Canada and the

United States which

[ Page 6076 ]

could have used and which would have given B.C. a much more reasonable

rule of law with respect to environmental matters than this legislation

does. We are particularly concerned about the appeal procedure which is

spelled out in this act, and it appears to us that the minister is

attempting to dodge court order in the Esquimalt Lagoon case. We're

wondering just how effective this appeal procedure can be. It allows an

appeal to a body set up by the Lieutenant-Governor-in-Council, but that

appeal body doesn't make the final decision. It simply recommends an

action or a decision to the Lieutenant-Governor-in-Council, and cabinet

actually makes the final decision. So really here we have, in fact,

cabinet sitting in appeal on the decisions of its own tribunals again,

which the Esquimalt Lagoon decision attempted to avoid. We are

concerned about this appeal section, and we'll be proposing amendments

during committee stage on this section.

As to the principle

of the bill in general, we support increased fines for environmental

offences. We support better investigation and enforcement procedures

for the ministry, and more effective emergency provisions in the

legislation. There are some amendments which we will propose during

committee stage.

HON. MR. ROGERS: I thank the member

for his comments. Some of the matters he has brought up involve other

legislation that's required, not this particular legislation. I

appreciate the member's support of our legislation and look forward to

the debate in committee on this bill. I move second reading.

Motion approved.

Bill

22, Environment Management 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. MR. WILLIAMS: Second reading of Bill 21, Mr. Speaker.

PETROLEUM AND NATURAL GAS

AMENDMENT ACT, 1981

HON. MR. McCLELLAND: This is

basically a housekeeping bill with some minimal amendments to the act,

which was introduced in 1973, basically to take care of some problems

expressed by both the people in government and the public which

followed a public and comprehensive review of the application of this

act. We've made some amendments embracing the definition of mineral

lands, the incidence of taxation, the delivery of tax notices, mineral

lands subject to forfeiture, erroneous forfeitures and the disposition

of surrendered or forfeited mineral rights. I don't think it should be

necessary to speak much further on the principle of the bill, since

it's difficult to find a single principle, but, rather, it cleans up a

number of areas which we felt were deficient. I move second reading.

MR. D'ARCY: In my view this bill is long overdue. I welcome it.

In my particular riding there are a number of property holdings which are not

agricultural, and therefore people could not apply for and get an exemption

under the existing legislation, and were forced to pay, admittedly, very small

amounts, but very annoying amounts. They were additional amounts that did not

apply to most of their neighbours.

would like to hope that where there are other inconsistencies in

legislation, other government ministers will move to literally clean up

those acts.

HON. MR. McCLELLAND: I welcome the comments from the opposition energy critic and move second reading.

Motion approved.

Bill

21, Petroleum and Natural Gas Amendment Act, 1981, 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. MR. WILLIAMS: Second reading of Bill 5, Mr. Speaker.

MINERAL LAND TAX AMENDMENT ACT, 1981

HON. MR. McCLELLAND:

We may have called Bill 21 but we debated Bill 5. It is fast second

reading. I've explained the Mineral Land Tax Amendment Act and move

second reading.

Motion approved.

Bill 5, Mineral

Land Tax Amendment Act, 1981, 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. MR. WILLIAMS: I call second reading of Bill 11, Mr. Speaker

ASSESSMENT AMENDMENT ACT, 1981

HON. MR. CURTIS:

I draw Mr. Speaker's attention to the significant amendments which will

be referred to committee for debate at that stage, and which now show

on Orders of the Day . All,

taken together, are required to restore the assessability of a number

of items of machinery and equipment recently held by the Assessment

Appeal Board not to meet the requirements of the word "placed" in the

definition of improvements used for school taxation purposes. The

purpose is also to advance by six months the valuation date needed in

determining assessed values to improve the quality of actual value

forecasts used in setting the following year's assessment policies; to

ensure that no ambiguity exists as to the method to be used by the

assessment commissioner in determining the assessment levels under the

municipal option; to validate the percentage of actual value used in

the 1981 assessments of residential and seasonal resort properties; and

to remove a number of administrative problems and difficulties.

think it would be helpful to the House to observe that this bill was

introduced on March 9, 1981 — budget day — and was then dealt with by

the amendments which I refer to — the amendments now on the order paper

— which were a response to considerable opinion expressed by a number

of British Columbians. We have attempted, to the best of our ability,

with the second set of amendments which will go to committee, to

accommodate a number of the points which were made.

The step taken to restore the assessability of those machinery and equipment items which historically have been

[ Page 6077 ]

construed

to be within the definition of improvements used for school taxation

purposes, but which were held to be non-assessable by the Assessment

Appeal Board, as they did not meet the test of being affixed or placed,

was to redefine and broaden the definition. While the definition of

improvements is, of necessity, broader, the power to exempt items

assessable only for school purposes is continued.

I should

tell you that while for 1981 purposes these exemptions will be dealt

with by regulation, discussion with officials in my ministry and

general review suggest that these exceptions should be placed in

legislation. Therefore in the 1982 session we intend to lift the list

which will be dealt with by regulation, but in addition to consider

whether one, two or three other items should be added on the basis of

the experience which flows from the regulations which will be

introduced. I give the undertaking to the House that while of necessity

the practice is continued this year — that is exemptions of certain

items by regulation — I do commit that there will be an amendment bill

in early 1982 dealing with, I would think, nothing else but the list of

those exemptions. I think it properly belongs in legislation.

The

revised definition of improvements is retroactive in application to

December 31, 1980. That is to ensure that the items of machinery and

equipment affected by the board's 1980 decision will continue to be

assessed and taxed for 1981.

[Mr. Davidson in the chair.]

Earlier

I spoke about the second significant change in the act; that's the

amendment advancing by six months the valuation date used for

assessment purposes. The House will know that present legislation

requires assessors to complete annually their assessment rolls by

valuing all properties in the province in terms of their market values

and physical condition on December 31 of the year preceding the year

for which the roll is being prepared. Not only is this assessment date

for assessors impractical to achieve; it can be subject to wide

variations in results caused by rapid changes in market conditions

which may occur during the latter months of the year. Clearly such was

the case last year when values predicted by the British Columbia

Assessment Authority for use in the 1981 levels were subsequently badly

distorted by rapid, inconsistent and almost unpredictable escalation of

property values during the last half of the year. The distortion caused

a significant underestimation of the actual values expected to appear

in the 1981 assessment role, and in turn resulted in percentages of

actual value in excess of those desired for residential-type properties

being fixed by cabinet.

Last year, based on the most

reliable information then available, 13 percent of actual value was

fixed on October 11, as the 1981 assessment level for class 1

residential and class 8 seasonal, resort, recreational and fraternal

organization properties. This is, incidentally, a representative

reduction from the 14.5 percent which was fixed for the previous year,

1980. Then it was subsequently determined by the Assessment Authority

that market values of residential properties in many areas had risen

dramatically in the third quarter of the year, as indicated. The

application of the 13 percent level would produce substantial increases

in assessments for most owners of the class 1 residential and class 8

seasonal, resort, recreational and other properties if a further

reduction of the percentage fixed earlier was not implemented. So this

amendment will improve the accuracy of value forecasts used by the

executive council in fixing the percentages of actual value and, most

importantly, will provide assessors with a practical valuation date.

The

third problem encountered in the preparation of the 1981 assessment

roll was an ambiguity found to exist as to the precise method the

assessment commissioner was required to use in determining the

percentages of actual values required in fixing assessment levels for

general municipal taxation purposes. Some municipalities, considering

the use of option (c), expressed concern over the possible challenge to

the validity of their rolls if the

interpretation used by the

commissioner was subsequently felt to be incorrect. The amendment

removes that ambiguity and changes the date on which the percentage

levels are required to be determined, to coincide with the revised

valuation date, which will be used in the preparation of the 1982

assessment rolls.

Also significant is the amendment required

to validate the reduction in percentage of actual value from 13 percent

to 11 percent, as I indicated earlier with respect to the two classes

of properties. The bill also contains a number of amendments designed

to either clarify the intent of existing provisions of the act or to

make its administration more effective. I would deal more fully with

these other modifications in committee stage, I think.

believe that all members of the House are aware of the complexities of

the province's property tax system and the important role which

equalized assessed values play in the effective operation of that tax

system. The House will recall that assessment policies were the subject

of considerable debate in recent years, as a number of urgent reforms

were being considered. The implementation of those reforms has brought

about a dramatic improvement in the quality of assessments used for

general, municipal and school taxation purposes, as well as having

provided an effective administrative vehicle for use in modifying the

impact of assessed values of rapid changes in market values.

The

reforms which have been implemented in these recent years have improved

the province's property tax system to where it is one of the best in

North America. The amendments contained in this bill are designed to

further improve the system, and I would hope there is support for the

changes which are placed before the House.

There are a number of methods which appear on the order paper for discussion in committee. I move second reading of Bill 11.

MR. LAUK:

Mr. Speaker, I think the hon. minister has been in this House long

enough not to go into a long and tedious explanation over such a

complex tax bill, but taking the minister up sharply for that....

Casually chatting about assessment and about the Assessment Act in this

province, in the weeks in which homeowners are receiving tax bills that

are doubled, tripled and quadrupled, must appear to the average

citizen, if they could be here listening to this speech today, as a

classic example of the cynicism of this government. The minister says

that the assessments are based on property values as they unpredictably

— using his word — rose in value in the last quarter of 1980. That is

simply a mistaken view of what actually happened. The Conference Board

in Canada, the local real estate boards and economic journals across

the country were predicting that this kind of rapid increase in home

value would be taking place in major urban centres — predictably

Vancouver.

[ Page 6078 ]

The

minister, quite pathetically, has confessed his government's ineptitude

in meeting that challenge in that predictability. It is not enough to

argue. It is not enough for the minister to say today that they didn't

know when those values would increase and how rapidly they would

increase. That's nonsense. The government must have known. Everybody

else seemed to know that it would occur sooner or later. It occurred

because of the bankruptcy of this government in terms of housing

policy, particularly for urban centres. There is no housing

corporation. There are no incentives to build rental housing. There is

no use of Crown land to build rental housing. Between 1975 and 1979 the

housing market was starved by this government, and he's saying that

he's surprised at the rapid increase in value of homes in the lower

mainland and indeed the whole province.

It's cynicism at its

worst, Mr. Speaker. Tax notices are going out this week, next week and

the following week. The people of this province are seeing their hopes

and dreams of home ownership shattered by this government. It is an

attack by this government on home ownership itself. Only the very rich

and elite can afford homes. There is no relief. The least they could do

is to take the onerous burden of homeowner taxation off the backs of

homeowners and place it where it properly belongs: in an incomes policy

in this province; taxing incomes, taking that burden and having the

government share the burden of school costs, rather than the homeowner.

Tax

notices have been going out in the city of Vancouver, New Westminster,

Richmond, Coquitlam, North Vancouver, Delta and all over the lower

mainland, doubling, tripling and quadrupling. I have even received

letters from Mr. Speaker's constituency complaining about the increase

in taxation. There's some confusion with some of the members in Mr.

Speaker's constituency. One letter indicated to me that it was the

fault of the school board in Delta. You can rest assured, Mr. Speaker,

that on your behalf I sent a letter to that person, immediately

indicating whose fault it was.

The fault lies squarely with

the Minister of Finance and the Minister of Education (Hon. Mr. Smith),

who have failed to meet the real needs of the taxpayers of this

province. Instead, the minister comes in and gives us a 15-minute

mumbo-jumbo reading report on a complex statute, when in essence what

people are looking for is tax relief. They don't want to hear about

tinkering with the Assessment Act. They want to hear about real, bold

programs of tax relief from this government.

The minister says in the Globe and Mail

that he's a hands-on minister. I didn't know what that meant until I

saw the budget. I know what "hands-on" means: he's got his hands on the

money of the people of this province. That's where he wants his hands;

he wants his hands on their wallets. He wants to destroy home ownership

in this province. He comes in here mumbling jargon prepared for him by

his bureaucrats, instead of coming to grips with the real political

issue in this province. The difference between that side and this side

is that we don't burden ordinary people with taxation that will destroy

home ownership and opportunity.

Having said that, we agree

with the amendments outlined in the Assessment Amendment Act. Although

they are baby steps, they are at least a token gesture on the part of

the government towards reviewing the assessment procedures under that

act.

MR. DAVIS: This legislation concerns me, partly

because it extends the tax base and partly because it's retroactive. I

must say that if the official opposition sees little wrong with it,

that's no assurance to me. I'm concerned about the fact that most of

the items the business will need to carry out its business will be

included in the tax base from now on. At one point the word "chattels"

was used in the proposed legislation. That was removed by the minister.

Nevertheless, nearly everything that a business will utilize, down to

pocket calculators — even equipment which may, in common parlance, be

regarded as mobile — is now included in the tax base, or will be

included as a result of this legislation.

It's a tax base

for school purposes. One question I'd like to ask the minister is: why

is it necessary to have a different tax base for school purposes than

for general municipal purposes? Municipalities do not tax many of these

items of machinery and equipment that are called improvements. As I

understand it, improvements have been included for some time as being

taxable for school purposes but not for general municipal purposes.

second question is: to what extent do other provinces tax machinery and

equipment or, indeed, the miscellany of equipment needed to do

business? Which do not? My impression is that British Columbia is one

of the few provinces that already extends this assessment thing to

include virtually all items of machinery and equipment;

whereas in

other provinces and, I think, generally in the United States and in

many other parts of the world, property is deemed to be land and

buildings and structures and pieces of equipment if they're permanently

affixed to the structure, but certainly not items which are small and

mobile. Now we've extended the base.

I realize that this

problem arose out of the fact that several large corporations had been

installing expensive computer equipment. They claimed that these were

not improvements in the plant structure, fixtures and parts of the

structures, that they were immovable equipment in those businesses.

They were successful, in the first instance, in having them excluded

from assessment. Now we're ensuring in law that they will be included.

Not only will those very large and expensive items such as computer

equipment be included, but many smaller items such as cash registers,

for example, now in the computerized variety — many items of equipment

in businesses of all sizes from the largest to the very smallest will

be included.

While I understand that the minister proposes

to eventually have passed and publish a list of orders-in-counciI that

leave out a variety of small business pieces, nevertheless the

Assessment Authority will now have the task of assessing absolutely

everything on the premises. Reference is made to simplifying

administrative procedures, overcoming administrative problems and so

on; but I suggest that we are in the process — perhaps we have been for

some years — of immensely complicating the whole assessment process by

now including everything by order-in-council. Next year, if the

minister's intentions are carried out, we'll be excluding some of these

items. But I do have this concern that we are — at least on the face of

it — extending our tax base considerably and adding to administrative

difficulties in this area.

HON. MR. CURTIS: I thank

the two members for their comments. I'm sorry that the member for

Vancouver Centre who spoke quite critically of this amending bill is

not in the House to hear any response which I could have given to his

concerns.

[ Page 6079 ]

This

is not a new assessment act. This is the kind of amending act which of

necessity comes before the Legislature from time to time. The

government is concerned about the dramatic increase in assessments. I

have instructed ministry staff to examine not what is done in other

nearby jurisdictions, but to examine on a worldwide basis whether there

is any system better than the system now used in British Columbia, in

terms of assessment of property for taxation purposes. We don't believe

there is, but if there is we shall examine it, and that would be the

subject of a major change in the whole assessment procedure in this

province in time to come. I was criticized by the member, who is not

here, with respect to the government — to paraphrase — not recognizing

the significant escalation in values which would occur. Well, we did. I

mentioned that in the previous year, for residential purposes, the

taxable assessment value was 14.5 percent. It was lowered by the date

on which it had to be done for 1981 assessment purposes. However, as

most of us who follow these things will recall, the escalation

accelerated and did so in the last few months of 1980. That is the

reason for the further reduction in the percentage of actual value for

assessment purposes, dropping from 14.5 percent to 13 percent, and then

to 11 percent.

I know of no government or group of

individuals, notwithstanding the forecasts which were offered, which

could have anticipated with complete accuracy the dramatic increase and

the increase on an increase which occurred through the last part of the

calendar year 1980. One need only cast one's mind back to those months

to realize the validity of my rebuttal in that regard.

The

member for North Vancouver–Seymour (Mr. Davis) asked about the

assessment for school purposes, and I believe that it occurs in other

jurisdictions. I do not believe we are that unique. He asks a very good

question — why? I think it can only be identified as an historic

practice. His concern is such that we would want to examine that

particular aspect and we shall do so. Again, I assure the hon. member

that with respect to the items under machinery and equipment, which are

to be exempted this year by regulation, it is more than a hope — it is

a commitment to this House, as long as I am Minister of Finance — to

transfer those exemptions in 1982 from regulation to legislation. As I

said earlier, that's where I think they properly belong.

There

is another point that I think all members will find encouraging and

appropriate. That is that we are increasing the assessed value of

machinery and equipment with respect to exemptions from taxation by

regulation this year, and legislation next. This will impact in a

favourable manner on some 8,500 of the 19,500 businesses Currently

taxed for machinery and equipment. The last change in the exemption

levels was 1954, and clearly it is time for a very significant change

in those exemption levels. So not quite half of the businesses in

British Columbia currently taxed for machinery and equipment will

become exempt through this change alone.

I approach

assessment matters very carefully. I read extensively from notes. It is

a complex subject. I do not pretend to be an expert on assessment,

although in local government, in regional district government and in

this House I have had had to address myself to assessment. I think we

can be satisfied that assessments in British Columbia, as a mechanism

of equity from class of property to class of property and from region

to region, are among the best in the continent. I move second reading

of Bill 11.

Motion approved.

Bill 11, Assessment

Amendment Act, 1981, 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. MR. WILLIAMS: Committee of Supply, Mr. Speaker.

The House in Committee of Supply: Mr. Strachan in the chair.

ESTIMATES: MINISTRY OF FINANCE

On vote 86: minister's office, $176,348.

HON. MR. CURTIS:

Mr. Chairman, I wondered from time to time if my estimates would be

presented to the House this year, or if, in fact we could do 1981 and

1982 at the same time. I invite all comments that members of the

committee wish to offer with respect to the ministry. I am tempted to

review in detail the accomplishments of the ministry, the problems we

face and the problems which we are overcoming; but I rather suspect

that these can be more effectively dealt with in the usual exchange

between members of the committee. I say that and deliberately hold the

remarks short, bearing in mind that there are those in this House who

still reflect upon the length of the budget address for 1981-82 and

have issued pleas that I not enter into that long and rather complex

comment. Therefore, Mr. Chairman, I present myself for questions from

the committee and look forward to assisting members as and when I can.

MR. STUPICH:

Mr. Chairman, I prefer to do this one point at the time. I'm rather

inclined to think that is the way estimates should be handled, but I'm

not saying that judgmentally at all.

The minister said in

his budget speech that he had already notified the federal government

of B.C.'s intention to withdraw from Ottawa collecting our taxes, and

then there was a response from the federal Finance minister that he had

not seen the request yet. There is some discussion of revenue — I

suppose I should call it expenditures — that takes up about 37 percent

of the total material in the background papers, talking about

expenditures in the sense of revenue that is lost because of various

tax treatments.

I gathered from something the minister said

in his remarks that he is concerned about the fact that he doesn't have

as much freedom as he would like to have, and that is why he wants to

do his own tax-collecting. The material on pages 29 to 51 of the

background papers frightens me a bit, if the minister is intending to

move into such areas. One of the largest items of so-called

"expenditure" is non-taxation of imputed rents on owner-occupied homes.

Now I can't imagine the minister wants to get into that, but I wonder

what all this material is doing before us. Unless it was put together

for some useful purpose and unless the minister is looking at these

so-called "expenditures" as one way of raising a lot more money in the

event he does his own tax-collecting.

I'd like to put it to

the minister: has he officially notified Ottawa that he wants to get

out of that agreement? Does he have some plans in mind to follow some

of the material in the background papers with a view to raising more

money for the provincial government?

[ Page 6080 ]

HON. MR. CURTIS:

Mr. Chairman, the whole question of tax expenditure, it seemed to me

last year — my first year as Minister of Finance — was a subject which

should be identified in any statement of the financial affairs of the

province of British Columbia. Clearly a number of the tax expenditures

— the hon. member for Nanaimo (Mr. Stupich) referred to one — are there

only for identification purposes. There is no way that a government

would move into certain fields, but rather I think there is every

reason for a government to identify what money is forgone, what money

is not collected as a result of tax credits or taxes not collected or

tax expenditure — whichever term the committee would prefer. That was

the purpose: to identify every possible tax expenditure, because I

think that is extremely important.

With respect to the

possibility of British Columbia withdrawing from certain tax

agreements, following budget day this year that notification was

transmitted almost immediately to the federal government through the

Minister of Finance for Canada, Mr. MacEachen. In due course it was

acknowledged. More recently we've indicated that, if there is to be a

withdrawal, it would occur one year later. In other words, the deadline

mechanism is in place. We approached the deadline for one year, and we

have indicated that any consideration would be delayed by a full year.

In fact we wish to stay in the agreements. I think that is the

preferable route to follow. If necessary we will follow the course of

other provinces — most recently Alberta, which has just embarked on its

own tax collection with respect to corporate income tax. I hope that we

can. There is a three-year notice required. The first deadline has

arrived, Mr. Member. We're not serving firm, final notice, and the

three-year meter starts running now. We extend that for another year.

In the course of this next year, the established program's funding

discussions will come about. There will be much contact between the

provinces and the federal government. Undoubtedly tax collection

agreements will be on the agenda of a number of those meetings. I trust

that assists the member in his first question.

MR. STUPICH:

I suppose it gives me the answer at least. I was going to ask whether

that meant four years in total. I did understand there was a three-year

notice, and now it's one year on top. So it's actually four years from

the time.... That's the way it would work. I think it would be an

extremely expensive step for us to go into our own tax collection,

whether it be corporate or personal. It's my understanding that only

one province has ever taken that step — Alberta. It's with respect to

corporate tax only. I believe that's the only instance where a province

has moved away from having Ottawa collect taxes. Some of them never had

it in the beginning. Quebec has always done its own. Ontario has always

had its own corporate tax. I believe Alberta is the only province that

has ever done anything like this. It's with respect to corporate only.

follow-up question is whether in giving notice the minister included

personal tax as well as corporate tax. In your letter to the federal

government were you including personal tax as well as corporate tax, in

saying that you wanted to give notice, in effect?

HON. MR. CURTIS:

We referred to corporate. That was the subject of the notification and

remains the subject of the notification. However, we said that we would

review and consider the personal side. I think that at this point in

time Alberta is doing the personal side — considering. Pursuing is a

stronger term in that context than considering. I don't think they've

reached any conclusion. I reiterate for the committee that we earnestly

hope — that is a hope, not a threat — that it is not necessary for us

to collect our own taxes on the corporate side. However, if that option

had to be exercised, then it would be. But I think because of the

countless discussions which are going to come about — as I said a few

moments ago — between Ottawa and the provinces, we will have ample

opportunity to discuss this with the federal authorities and the

federal ministers concerned. I can't indicate today what the odds are.

It will happen in the next three to four years. I hope that it is not

necessary. We have examined the Alberta situation, and they shared

information with a number of provinces on the administrative staff

required for separate tax collection, the additional costs and the

advantages which led them to take this step. So we have that

information and that experience next door to watch as well.

MR. STUPICH:

I hope we never fall out of favour or get into such trouble with Ottawa

that we do embark upon our own tax-collecting system and set up dual

income tax corporate or personal. I just hope that never happens.

I'd

like to get into another area — Hydro. On many occasions the minister

has expressed his pride in the fact that B.C. Hydro now has a triple-A

rating. I'm sure we're all happy about that. I'd like to refer briefly

to a newspaper story in the Sun on March 21, where there's talk

of a new rate increase and the cabinet giving Hydro the authority to

impose a new rate increase. It does quote the Minister of Energy, Mines

and Petroleum Resources (Hon. Mr. McClelland) as saying that the

purpose of the directive to the Energy Commission is to require Hydro

to achieve a financial position that allows it to borrow funds on the

most economic terms available. We already have a triple-A rating. I

wonder at the wording of that. I wonder why B.C. Hydro is being given

permission to improve its debt-equity ratio from 91:9 to 80:20. If the

reason is, as the Minister of Energy, Mines and Petroleum Resources

said, to enable us to borrow at better terms, what better terms can we

get than triple-A? Is there some other reason? Are we anticipating

borrowing in some other markets? I'd like some explanation from the

Minister of Finance as to why it's necessary from that point of view,

since we already have what I believe is the best rating possible.

HON. MR. CURTIS:

We've had an opportunity in recent months particularly to analyze the

borrowing requirements of Hydro Authorities and power-oriented

corporations in Canada and the United States. The corporate calendar of

projected borrowing for utilities of that kind, whether privately or

publicly owned, is very large. Yes, British Columbia has received a

triple-A rating, and I'm sorry the member for Coquitlam-Moody (Mr.

Leggatt) is not in his chair because I would then speak at great length

with respect to the triple-A rating which was granted last year.

However, if we go to the market on behalf of Hydro we are competing

with other triple-A credits: Canadian, Ontario and Quebec, and also a

number in the United States. The competition is very tough, and no

triple-A is exactly identical to another triple-A credit. That's why

British Columbia Hydro is moving in that respect.

If I've

not answered the member's question satisfactorily then I will attempt

to take it a little further. There is competition within the top class

of triple-A credits.

[ Page 6081 ]

MR. STUPICH:

I heard, and I understand the answer. I just find it difficult to

believe, after what we were told at the time the triple-A rating was

announced, that changing our debt-equity ratio from 91:9 to 80:20 is

going to give us a better rate when we go to borrow. At the time it was

my understanding we had won the best position possible and the best

rate possible. I suspect that loading additional costs onto Hydro in

the form of doubling from $15 million to $30 million the tax on water

that Hydro is required to pay is simply another way of extracting $15

million from taxpayers, and now changing the debt-equity ratio is

simply one more way of getting more money out of taxpayers and putting

it into the Crown corporation. I suspect that this particular Crown

corporation is going to do more borrowing in the open market and less

from pension funds. I think it's simply part of the pattern where the

minister is getting more and more money from taxpayers and is going to

be using it for a particular purpose that I may say more about later,

but only part of the pattern. There's the story that university tuition

fees are going to be indexed, and the concern of students for that.

That's part of the pattern. There are many examples I can use, but I'm

going to try to use ones that haven't been used by everybody else.

Part

of what I want to draw attention to is a news release from the Minister

of Education (Hon. Mr. Smith) saying that debt requirement costs for

school districts have risen by an additional $2.5 million, and I'm

wondering to what extent that might be due to anticipation that the

school districts' financing authority may be borrowing in markets other

than the pension funds. The minister did say in the budget speech that

he intended to direct the Crown corporations to borrow on the open

market and perhaps save the pension funds for something else. I'll come

back to that as well. That's part of the school picture.

The

other part of the school picture, of course, is the proportion of the

costs of education that are being borne by local taxpayers, as compared

to the proportion being borne by government. The proportion borne by

the provincial government has been dropping regularly since Social

Credit was re-elected in 1975. In 1975, the proportion established by

the NDP administration and paid by the provincial government was 48

percent. In 1976 it dropped to 47 percent, in 1977 it dropped to 45

percent, in 1978 it dropped to 42 percent, in 1979 it dropped to 38

percent, in 1980 it dropped to 37 percent, and in 1981 it dropped to 33

percent. That's part of the whole pattern of shifting costs away from

the provincial government at the same time that the provincial

government is increasing taxes.

The minister said that the

change in the rate of the sales tax commission would not bring in much

revenue. The hotel industry, on its own, is saying that it's going to

bring in an extra $3 million to the provincial government.

The

change in trade licence fees. I have a letter from a constituent in

Lantzville who wrote to the Minister of Finance. If the Minister of

Finance replied to this letter dated April 28, I have not yet seen a

copy of the reply. In his particular case, his annual trade licence was

$10. It's been increased to $75. That's only a $65 increase in the

course of a year, but it's a 650 percent increase. It's 750 percent of

what it was before. Now $65 doesn't sound like much, but 750 percent of

the previous figure sounds like quite a lot.

Even in things

like children's clothing there's a complaint from a constituent. It

used to be that children's clothing was exempt according to the size.

That presented some difficulties, so it was changed to 16 years of age

and under. It was then changed to 15 years of age and under. I don't

have the dates. The most recent change is to under 15 years of age. One

wonders when that particular trend is going to stop.

Fuel

taxation. I’ll just refer to the background papers again. As I said.

Mr. Chairman, all I'm doing is developing a pattern and showing that

the minister, in addition to the taxes he announced in the budget, has

done many other things to increase provincial government revenue. The

new fuel taxation system doesn't really identify just how much of the

increase in revenue from this source is due to the change in the system

and how much of it is simply due to inflation. I don't know.

don't really, have questions. but comments and concerns about the

minister's policy. I know he said that he would have taken an

opportunity to develop an opening statement, but chose not to. I guess

it's just as well that he didn't. He really did it in his budget

speech, which was very long,

There is something else I'd

kind of like to go into. In the background papers there is a

section on

natural gas and the cost of subsidizing it. I recall asking another

Minister of Finance, W.A.C. Bennett, how he could justify B.C. Hydro

making the profit that it did on natural gas. In those days it was very

profitable for B.C. Hydro to sell natural gas in Vancouver and

Victoria. His explanation at the time was that B.C. Hydro made money on

natural gas sales and lost it on transit. Since both were happening in

the same jurisdictions, one balanced the other and everything was okay.

But in this case it's costing taxpayers in areas that are not served

natural gas and are not getting any benefit at all a substantial amount

of money to subsidize those users of natural gas in the areas where

they are getting it. I'm not quarrelling with that. I'm just wondering

how the minister justifies taking money out of people on Vancouver

Island, for example, to help provide cheap gas to people in other areas.

MR. HALL:

The minister, when he opened his remarks, wondered out loud whether his

estimates would ever come on to be discussed. I'd like to tell the

Chairman what I told the minister in a private conversation a couple of

days ago. I said that, had the minister's estimates been brought on

immediately following the budget debate, we probably would have dealt

with them by now. It would probably be the same day of the we,ek today,

and we would already have the minister's estimates passed. I say that

because it seems to me that once you had the budget speech and you

dealt with Finance, and you got 10 or 15 finance bills on the order

paper, you would do the estimates of the Minister of Finance a lot

quicker than otherwise. I share that information with the House because

I know that nobody in the House will tell the House Leader, who is not

here. I don't think he knows how to do what he's supposed to do, in

terms of getting these estimates through. So. Mr. Chairman, we'll keep

that secret between you and me and the Minister of Finance.

can remember the days when we always did Finance first. That wasn't

simply because the Minister of Finance was also the Premier. It was

because of what I have just described to you — a sort of exhaustion of

the subject.

Now we're going to deal with Finance at a time

when everybody is receiving tax notices. Not only will we talk about

increasing the sales tax by 50 percent; many of us might also discuss

the kind of tax notices that the first member for Vancouver Centre (Mr.

Lauk) referred to in question period today. I don't want to do that

today, however. I've got some

[ Page 6082 ]

other

subjects that I'd like to discuss with the minister in terms of his

administration of the department. I thought I'd mention that to you

because it seems to me that the Minister of Finance in his

administration of all financial matters and the production of the

budget papers.... His jam-packed budget speech gave us a great deal of

information, but it was so long ago that I can only remember because of

the chant in unison that appears here at 2:25 every day: "March, April,

May and June." However, one thing that does affect us all as

legislators is that when that budget speech comes down, we all receive

the estimate book. We all know by now that the estimate book doesn't

bear a great deal of relevance to what is going to happen during the

course of the year. At the same time that we get the estimate book we

get interim financial statements and supplementary financial reports

which show us how far out the estimate book was in the previous year.

That's not very important in itself, because obviously an estimate is

only an estimate.

I want to ask the minister if he as a new

minister is satisfied with the quality of information provided to the

members in the estimate book. I remember — and I think the minister

does also — when the estimate book contained, for instance, even the

technical descriptions of the jobs in the government; you could find

out the fact that, for instance, the Forestry department employed 24

foresters; the actual number of employees in Highways was listed, along

with a job description which matched that in the files of the Public

Service Commission. Now we don't see any of that information. Now that

the number of public servants is now between 40,000 and 50,000, I don't

expect to see all the job descriptions or anything like it. All we have

is a gross figure at the end.

One thing that we don't

have any longer is the breakdown in the leadership roles of the

ministries. When the minister first came to this House some years ago,

he was able to ask questions of, for instance, the minister he was

facing.... He didn't have to ask the minister. First of all, he got the

initial information from the estimates book as to the make-up of the

minister's office, and then he could ask supplementary questions. From

the estimates book he found out how many employees were in the

minister's office and in the deputy minister's office. He saw what

their rank and salaries were, and their travel expenses. That's not

available to legislators now. Yet we're spending more and more money

each day in top administration. We have passed bills. In my view, we've

even politicized the top two, three, four or five levels of public

service. I don't say the minister's done that. I'm saying we have done

it by passing legislation.

I only mention this in passing:

since March 18 I've had question 21 on the order paper. I could shout

every day, "March, April, May June," just as the minister does to us.

I've had question 21 on the order paper since March 18, asking him how

many people work in his colleagues' offices. I could have walked those

corridors myself by now with a blunt pencil and found out. With a sharp

pencil, I probably could have even found out how much they're getting.

Similarly, I've asked another colleague of the minister's, since a date

not too far away from that, how and where they've all been in the last

12 months. But that's not this minister's responsibility, so we'll

leave that alone.

So there we start off with the quality of the estimates. I want now to move

into a field where I have a specific interest. Legislators the length and breadth

of the province are talking about the quality of information they're getting

from governments. This isn't a party political issue. This goes to the question

of accountability and the question of value for money. This goes to the question

of whether or not, as legislators, we're going to be faced with mindless

proposition 13 revolutions, like California, which some people may think are

good things — I happen to think that they're terrible things — or whether

we're going to produce accountability, value for money and sensible discussion

about whether or not the taxes collected by government are correctly spent and

are seen to be correctly spent. We can only do that by excellent quality of

information.

do that, we've got to have the kind of information that the minister

sometimes stands up with and is justly proud about. I know he's going

to stand up and talk about his quarterly reports and so on. I say we've

got to do even better than that and not just regurgitate incorrect

stuff four times a year.

Interjection.

MR. HALL:

Let me put it to you this way. We've got to make sure that we're on the

right track. When I see the third report of the auditor-general — in

the "Status of Findings and Recommendations" on page 28 — and can show

you ten pages in which the words "no change; no improvement; no

significant change; my concern continues; no significant improvement"

occur one, two or three times on every page, I don't think it's

satisfactory.

I'm sure you will stand up and read those that

say — I'll read them for you — "improvements were noted;

recommendations have been followed; major systems changes are in

progress." It's a question of the eye of the beholder seeing what he

wants to point out as optimistic or pessimistic. My point is that I

don't think we're making sufficient progress in this vital area, when

we're growing in expenditures of revenues at the rate you announced in

March. For instance, I see in five categories the following changes.

Here I'm coming to the end of my statement to you.

This year

in advertising and publications you have produced a budget that sees a

31.3 percent increase in expenditure. In consultants' charges you have

produced a budget which sees a 13 percent increase in expenditure. In

travel — we've discussed this through the ministries — you've produced

budgets which show a 20 percent increase. There are two categories, l'm

suggesting to you in the fairest way I know how, Mr. Minister, over

which you have no control whatsoever, because both items are totally

and utterly out of control: building occupancy and computer charges, in

which we see increases of 39 percent and 30 percent in expenses this

year.

Those millions of dollars in increases this year are

in what will turn out to be, in the end, a $7 billion budget based on

methods and procedures which don't meet the standards of good financial

management. I think we're entitled to stand up and express concern.

That's what I'm doing today. I'm pointing out to you that it starts

with good information, management and dialogue. It starts with

providing people with the tools for the job, not only in the public

service but in the legislative body itself.

Lastly, may I

say that you can't give legislators too much information. Hard-working

legislators will use it all; idle legislators won't read it and will

put it into the waste-paper basket. But whatever you spend on good

information is money well spent — whatever we spend in trying to improve

[ Page 6083 ]

accountability,

in trying to get value for money and in improving this kind of

information that I've indicated to the minister, has got to be money

well spent. I would hope that he would do it and not, in effect, play a

traditional game that's been played in this House — and I don't blame

this minister for it any more than I blame anybody else — of making

people go through those silly businesses of asking questions in March

and getting the answers in September; of getting annual reports when

the minister is away and gone out the revolving door — his annual

report has been tabled after the event, and that kind of thing. I think

this minister, as he sits on Treasury Board and as the Minister of

Finance, has got a large part to play in that, and I hope he will pick

up that responsibility.

HON. MR. CURTIS: Mr.

Chairman, before too many items go unanswered, I think perhaps I would

like to respond from the notes which I have made. The member for

Nanaimo is not in his seat at the moment, but I'm sure he will be back.

With

respect to a letter which he spoke of, I have quite a good idea of the

size of Lantzville, but I do note that I wrote to a resident of

Lantzville on May 21 this year with respect to business licence fees.

It is not shown — this is a Xerox, but I'll happily share it with the

member.

Interjection.

HON. MR. CURTIS: Yes, that's the gentleman, and he was written to on May 21.

think in the course of the budget debate we canvassed pretty thoroughly

the situation which faced the government in terms of the pressures on

us in the expenditure-revenue equation. Yes, we have increased a

variety of fees for services — I continue to refer to the points made

by the member for Nanaimo. We've increased a number of charges for

services across government. Frankly, I know I'm not alone in government

in believing that there should be a strong factor of userpay in terms

of a particular service that is obtained by a citizen. Not to recognize

the user-pay principle is to ask all British Columbians to subsidize

all services of government. I don't think that's correct. In the case

of motor-vehicle licence fees and trade licence fees — incidentally we

debated that bill last year — those fees had not been altered for

decades. It's a question not of years but of decades. In all those

instances we are attempting to update. It's painful to do so, but we

are in a position where it has been necessary and where I quite

earnestly believe it is the fair thing to do, and that is the basis on

which we have proceeded.

The second member for Surrey (Mr.

Hall) has made a number of comments which I accept from him not only as

someone who has been in this House for quite some time, but as the

member of this House who is now chairman of the public accounts

committee. I attempt to pay attention to all members as they

participate in debates, but the Chair will forgive me if I say I pay

particular attention to what the Chairman of the public accounts

committee has to say. Yes, he has read out from the auditor-general's

report a number of comments which could be described as critical, or

which at least indicate there has been no change. Then he, fairly,

observed that there were other comments by the auditor-general in her

last report which indicate that improvement has occurred and been

noted, and where a recommendation has been followed.

can't anticipate legislation in the Committee of Supply. However, I am

hopeful that the Financial Administration Act will reach this House in

the very near future. That is a document which has occupied a

tremendous amount of time on the part of people in the Ministry of

Finance, throughout government and also on the part of the

auditor-general. The auditor-general, in the role of triggering a

number of the matters which we have incorporated into this legislation

which is on its way.... We have worked closely with the auditor-general

in the preparation of the legislation. The task force which dealt with

the White Paper or the draft act last year completed its report. That

was a major, overdue and, I believe, very useful undertaking on the

part of the Ministry of Finance. We shall see the results of many

months of effort involved in correcting those things which should have

been corrected earlier and attended to a good number of years ago. In

fact I will have an opportunity at that time to refer to a memorandum —

I believe dated in the late 1940s — indicating the need for reform of

various financial control mechanisms in the province of British

Columbia. That will be more appropriately referred to in detail at

another time.

The restructuring of the Ministry of Finance

has also been a very direct effort to improve the capacity of the

ministry in what is now the complex '80s as opposed to the relatively

easy and straightforward '50s and '60s. Certainly there was a need for

restructuring, assignments of new duties, a tightening up of the

Ministry of Finance and a very significant formalizing of Treasury

Board and Treasury Board processes. I think all of these speak to the

concerns which the member for Surrey has referred to today and on

previous occasions. He speaks about late annual reports. In all

candour, I have to agree with him. I don't think annual reports from

ministries should be late, and I think most of our annual reports are

now on time. There are some exceptions. There's no dispute on that

point, Mr. Member. It's a matter of good practice, whether the law says

they should be in or not, that annual reports and financial statements

come in at the earliest possible time.

MR. COCKE: Tell that to McClelland.

HON. MR. CURTIS: Mr. Chairman, I have responded frankly to a comment made by another member of this House.

terms of restructuring and strengthening the Ministry of Finance we've

gone through the whole question of signing authorities. We found that

in need of improvement. That is being worked on in government — not

only in the ministry; we have worked on that for a clear definition, a

much more accurate statement Of understanding, as to who is authorized

to undertake the particular move to issue a requisition to sign on

behalf of the government of British Columbia. That work is ongoing. It

is not yet complete, but certainly we've done very well thus far.

The

estimates restructure. The second member for Surrey opened his remarks

with respect to the fact that there was considerably more information

available in the estimate book several years ago. Then he made the

correct observation in terms of it's being a very complex estimate book

now if we listed all the details which were acceptable 15, 20 or 25

years ago. I have communicated with the member as chairman of the

public accounts committee, indicating the reform which we are

undertaking, the estimates restructure which is going to occur. It has

commenced, and we will see it to a further extent in 1982.

[ Page 6084 ]

However,

I think all members should know and will know that the kind of detail

which the member referred to in developing his point is available on

request through the Ministry of Finance. It is not available by means

of a formal request in this House. The information is available and it

is already prepared. It can be obtained by any member of this House on

a day's notice or so. That provides the sort of detail which I think

the member spoke of in his comments.

MR. STUPICH: Mr.

Chairman, I can't help but express a bit of amazement at the kind of

information that's available on a day's notice. Yet, as the hon. second

member for Surrey pointed out, the question has been on the order paper

and could easily have been answered long before now. There are

questions I put on the order paper a year ago that were not answered

even by December. I put them on again this year, but I don't expect

them to be answered. It would seem the minister is not quite so open

with his information as he might be. I'd like to come back to one

question I asked that I don't think he responded to: in his user-pay

attitude, he didn't comment on the information in table 2 on the

background papers, page 49, which is headed "Estimates of the Implicit

Subsidy Received by B.C. Consumers of Natural Gas." I'm not urging that

he do anything; I'm simply asking whether or not he can rationalize

that and, if he can't, whether he has something in mind. I'm simply

looking for information.

MR. COCKE: Mr. Chairman,

I'll try to make my point in such a way that the minister might give

some credibility to the fact that I'm making a statement. I realize

that I'm not the chairman of Public Accounts, and so may not have the

credibility. I'd like to take you on a little trip across the province

— a trip that would lead you to meet disappointed person after person,

up to and including some of your constituents, wealthy as they are. I'm

talking in terms of those people now receiving their property taxes,

and particularly their school taxes. This government, not only under

this minister but ever since 1976 — since this government has been in

place — has had a policy of shifting the tax burden from Victoria to

the local taxpayer.

This minister is carrying on the

tradition. We stand up here and blame the Minister of Education. He

sets the mill rate; he does this; he does that. But the buck stops on

this minister. He told us earlier this year that we have to raise our

sales tax, we have to raise the motive fuel tax and so on and so forth

by virtue of the fact that we're in some trouble. Well, the only

trouble I see, Mr. Chairman, is the fact that he's hoarding it, saving

it until suddenly they decide now might be an appropriate time to go to

the folks, call an election, and there'll be some dollars to distribute

some goodies.

Right now there is school district after

school district where the entire shot, the entire load is picked up by

the local taxpayer. New Westminster has been in that position for the

last two years. Vancouver is now in that position, a position that had

been held for some years by those communities which had an immense

industrial base — for example, a relatively small community like

Kitimat with a huge industrial base. Now that's relatively fair. But it

is not only the formula, which has long been in place; it's also the

implementation, and the direction has to come from Finance — the

direction that the tax burden be shifted comes from Finance. Now it may

come from the Premier's office to the Minister of Finance, but the

direction has to come from Finance. In Victoria, this government has

off-loaded to the tune of $400 million a year on the folks at home. And

the best luck they had was the fact that the assessments went way up —

and even that gave them a greater bonanza. The setting of the mill

rate, starting with the former Minister of Education — but don't forget

that it comes from cabinet, and the direction has to come from

Finance....

I've had a little experience — three short

years. But in those three short years we had a decent government in

this province, which we don't have now.

MR. MUSSALLEM: The public didn't think so.

MR. RITCHIE: You were a disaster, and you know it.

MR. COCKE: As the member for Dewdney says, the public didn't think so.

Interjection.

MR. COCKE:

Mr. Chairman, I suggest that the member who is now speaking get up and

defend this government's position with respect to taxation, with

respect to school taxes and the setting of the mill rate. That mill

rate has gone up over 50 percent — over 50 percent has been moved over

from the provincial government's responsibility to the local taxpayers.

has got so bad.... I couldn't believe it when I went home this weekend.

I picked up my tax notice and my hair did rise a little bit. However, I

was anticipating what it would say. But in along with the tax notice

was a brochure from the school board telling us what's happening. Now

when municipalities, when school boards, when local elected officials

have to put a brochure in along with your taxes to explain that it's

not them.... Their budget only went up 12 or 13 percent, but the school

taxes doubled. I suggest that they didn't only get a tremendous

off-load from the incremental aspect of the assessments. Also, over the

last four, five or six years the off-loading has come from

systematically increasing the mill rate, and that's the responsibility

of that government.

Four hundred million bucks. Over and

above that, we see an increase of 50 percent in our sales tax and all

the other increases which, I charge, are the responsibility of this

minister. Maybe he's under orders from some of his colleagues, but

that's where the policy decisions are made with respect to finances in

this province.

You can go across B.C., and I defy you to

find one school board that's presently satisfied with the way things

are going in terms of financing. I defy you to find a city council

satisfied with the off-loading that's been going on and has been going

on incredibly systematically since this group took government. If you

can find one or if another MLA knows of one, maybe he should get up and

make a speech. The member for Dewdney (Mr. Mussallem) is indicating to

me right now that he'd like to make a speech on this subject matter.

I'll give him a promise. If he makes a speech on this subject matter, I

will promise to see to it that that speech is delivered through Hansard

to as many people in Dewdney as I possibly can, particularly your

school boards and your councils. I'm sure they would like to hear what

you have to say.

It's absolutely indefensible the way the

property owner has had the can tied to his or her tail in this respect.

I know it's not only in my area. I know it's in each and every area

throughout B.C. It's profoundly bad, particularly in the areas

[ Page 6085 ]

where

the assessments have shot up like lightning. Some of the areas are

beset mostly by virtue of the increased mill rate. But areas like where

I reside, Vancouver, the southern part of Vancouver Island or for that

matter almost all of Vancouver Island are hit with the double whammy —

that increased property tax or assessment which naturally reflects the

amount that goes into the formula. Also there have been all these

arbitrary shifts upwards in the amount that would be paid by the local

taxpayer as a proportion of the total amount. It's much larger each

year and a diminishing amount for the provincial government's

responsibility. It's not fair. I'd just like to know what the minister

has to say about that.

HON. MR. CURTIS: Any

discussion of property taxes will inevitably bring charges from members

of the opposition against the government of the day with respect to

where the responsibility rests. A number of us here have served either

on the school boards or municipal councils; I think one or two have

seen service on both.

I'll start with the least important point: what is placed in the tax

notice. We've all followed that route in municipal councils and school

boards. We've put in a little slip which indicates usually in a pie

form or a graph form where the money comes from and where it goes. We

did it in Saanich, We did it because we wanted more money from the

government of the day. That's fair game.

I've read the material. It was a little too much, I thought, in

my tax notice this year, There were too many notices from too many

organizations, to the point where I did not read all of them. I don't

make light of the subject. As we have the war between the sexes, that

is simply the war between the various levels of government. School

boards and municipalities are going to criticize the provincial

government. The provincial government of the day is going to point out

the shortcomings of the local council, the school board and the federal

government. The member, in developing his comments with respect to

property taxes, has touched on a matter which obviously is of concern

to me as Minister of Finance. It is of concern to members in this House

and to those who pay the property taxes.

However, the member

also knows very well — and he stops short of this — that a large part

of our problem relates to measures taken by the federal government in

recent months. We know that revenues to British Columbia from the sale

of natural gas — not due entirely to federal government actions, but in

large part — are now down by approximately $300 million. What is $300

million? It would assist by recalling that the sales tax most recently

raised by 1 percentage point produces about $195 million. That's the

magnitude of the loss in natural gas revenues alone.

Forestry

revenues. We did canvass this during the budget debate and during

debate of a number of bills which increased taxes. They are bills which

have now been given royal assent.

I categorically and

absolutely reject any inference that this government or this minister

is hoarding revenues for a good day. I have said repeatedly in this

House, in the variety of debate which has occurred, that the budget was

an extremely straightforward document. The quarterly report will show

that we budgeted on the basis of the rather gloomy situation that we

saw — not gloomy for the province as a whole, but for the government in

the expenditure-revenue squeeze. There's absolutely no question with

respect to the accuracy of that budget document which was presented to

this House and debated over some two weeks.

Mr. Member for

New Westminster, we are not hoarding or attempting to hoard revenues.

We simply are not. I cannot make it any more precise or clear. I'm

speaking in the committee. As an honourable member, I say to you that

that is not the case. You can accuse us of other things. You can say

that we've fallen down here or that we've made an error there, but, Mr.

Member, there's no hoarding process in that budget.

MR. COCKE:

I'm thankful that the minister has partially answered my question. I

guess there's no real answer to the question of the shifting of the tax

burden other than the way the minister answered. I think it's a shame.

I think our whole system should be run in a way that would help us to

take care of our own obligations. I believe that the local taxpayer is

really getting hit over the head with a sledgehammer these days. I

think it's an outright shame, particularly in view of the fact that I

think we should be doing our utmost to keep people in their own homes,

etc.

[Mr. Davidson in the chair.)

There's one

other question I'd like to ask the minister. Has it become policy with

the Ministry of Finance to have its officials as part of other

ministries? I'm told that there is a Finance person in the Ministry of

Health, overseeing that situation. If that's the case, it strikes me

that it would be very.... Sure, it's good to get some advice from

Finance and so on. It strikes me that one of the reasons that Health is

in such grave trouble is that there are very few people in that place

anymore who understand anything about the delivery of health care,

economically. There are far too many people who are administratively

inclined. So you throw another administratively inclined person from

Finance in there.

Interjection.

MR. COCKE:

Yeah, they're good cops. I suggest that the Ministry of Finance could

do some good for the Ministry of Health if they'd send somebody over

there who knows something about the delivery of health care.

MS. BROWN:

I want to very briefly support the last comments made by the member for

New Westminster and say that I think the criticism of the Minister of

Human Resources (Hon. Mrs. McCarthy) — that she was being run by her

deputy minister — was unfair. In fact, the Minister of Human Resources

is being run by Treasury Board. It's Treasury Board which decides what

kind of services are delivered, how much service, for how long and

under what circumstances. What we have in this province is a Minister

of Finance with incredible powers to make all kinds of decisions

affecting people's lives based on how much money they get in terms of

the budget they present to Treasury Board. I don't believe that the

minister should have that kind of power. I think it's grossly unfair

that he has been permitted to have that kind of power. All of the

cutbacks that we're seeing in Human Resources, and the staff

freezes.... Last year a memo was released showing that the Ministry of

Human Resources had negotiated with the Minister of Finance to save $3

million by not filling vacancies when staff people left — social

workers or financial-aid workers or child-care workers — for one reason

or another. I want to go on the record as saying that I recognize that

a lot of the problems that the Ministry of

[ Page 6086 ]

Human

Resources is having in terms of delivering services to the people in

the province who depend on them are the direct result of the fiscal

policies of that government as administered by the Minister of Finance.

The

second point I want to raise very briefly is the incredible burden that

that government's policy, as administered by that minister, is having

on the municipality of Burnaby. Burnaby is in the strange position

where it's actually saying thank goodness it had a strike. It's

absolutely ridiculous that if it were not for the fact that the

municipality had been locked in a labour dispute for some time, the

property taxes of people living in that area would have increased

something in the area of 13 percent to 14 percent, instead of the 8

percent to 10 percent which they are now finding on their tax notices.

I certainly want to associate myself with all of the comments made by

the opposition that what this minister is doing is supervising the

squirreling away of funds, the biding of money, the overtaxing of the

people of British Columbia, so that in the spring, fall, winter, summer

or whenever, when an election is called, suddenly out of nowhere we

will find that he has been one of the elves working for Santa Claus and

that Santa Claus in the form of Premier Bennett can open the bag of

goodies and start distributing bridges, roads and tulips — all kinds of

things, from money which was saved at the expense of services to people

and raised as a result of overtaxing the municipal taxpayers.

addition, and finally, I want to comment on the impact of the taxation

policies of that government, as administered by this minister, which is

such a burden on the people on fixed incomes in this province. I never

will allow the subject of sales tax to pass without making some comment

about the impact of the sales tax on people on fixed incomes. It's the

most unfair form of taxation, the most inequitable form, and when the

tax was lowered earlier, the then Minister of Finance, who is now the

Provincial Secretary (Hon. Mr. Wolfe), assured all of the taxpayers of

British Columbia that it was a permanent decrease and would never again

be raised. Of course, in the budget brought down by this minister, that

inequitable sales tax, which is such a burden on the people who can

least afford it, was increased once again. I just want to go on the

record again speaking on behalf of those three segments of the

community: the Ministry of Human Resources, which is being totally run

and controlled from the Finance office; the people of Burnaby, who are

overtaxed as a result of the impost being visited on that municipality

by this particular minister; and, of course, all of the people on fixed

incomes, who are the victims of the increase in the sales tax.

MR. PASSARELL:

Mr. Chairman, I have a couple of questions for the minister. The first

one I'd like to discuss during this estimate on finance is the increase

of approximately 50 percent in the sales tax. When you compound this

upon the high cost that residents in the north must pay for many items

that are brought up there and the increase that's brought by freight

costs, I would offer the suggestion to the minister that he might look

upon a positive solution and give some type of northern rural tax

allowance. The minister is aware of the federal government's northern

tax allowance that was brought in last year. We raised this on a number

of occasions with the minister. There should be some type of an

allowance for northern residents, and rural residents too, where

there's some equality brought in on what they're paying increases that

they must face because they're living in rural northern areas of this

province. I suggest to the minister that he look upon some type of

allowance for northern workers and residents.

The second

question I would like to direct towards the minister, if I can get his

attention, is about the government agent. The government has built a

new government agency building in Cassiar. There's been a problem with

finding a government agent to staff the new building. I hope that the

minister can bring us up to date on where that government agent is. He

was supposed to be hired in April, Mr. Minister. I've noticed the

publications that have come out in the last two months that he or she

is coming. I would certainly hope that the minister could bring the

residents of the Atlin constituency up to date on when the government

agent in Cassiar will take on his new role.

Secondly,

another suggestion to the minister is the need of a government agent in

Dease Lake. There is a new government building supposedly in the

process of being built. Dease Lake definitely needs a government agent

to deal with the many problems that government agents deal with for the

public. There certainly should be a government agent in Dease Lake,

since it's increasing.

Thirdly, I'd like to mention

revenues. We've noticed that natural resource revenues from the budget

are down from $858 million, to $391 million. I would certainly hope

that the minister can give direction on why revenues are down so much.

I hope that the government isn't keeping the money in some type of

fund, but I think the minister could give us a suggestion as to why

there's been such a drastic cut. Also the natural gas petroleum

revenues were $62 million last year, and are now up to $65 million. I

hope that the minister can answer a few questions on why there's been

such a low increase in the amount of revenue to the government.

HON. MR. CURTIS:

I think three members of the committee have participated since I last

responded. Commencing with the member for New Westminster (Mr. Cocke),

who is not in the House at the present time, in his second remarks he

dealt with the question of the movement of people from Finance into

other ministries. To clarify precisely what has been occurring, in some

instances there are Treasury Board analysts who have been seconded to

other ministries. The one to which he clearly referred was the Ministry

of Health. But I have to take issue with the inference that they are

overseeing the Ministry of Health, because clearly that's not the case.

That is the responsibility of the minister, the deputy minister, the

several assistant deputy ministers and other officials in the Ministry

of Health. This move has been welcomed by ministries such as Health.

We're speaking of the desirability of Treasury Board in general for a

budget of something in excess of $6 billion. Then surely it would be

agreed that it is desirable to have a Treasury Board analyst working

directly with a large ministry such as Health, which is spending about

$2 billion.

The secondment has taken place. This particular

individual referred to or the individual who has gone to the Ministry

of Health is in fact a specialist in health administration. The last I

heard, which was very recently, suggests that the particular public

official has been very much welcomed in the Ministry of Health and is

not enforcing his will but rather is smoothing over some of the

difficulties with respect to a ministry of that size. I trust that

deals with the point raised by the member for New Westminster.

The member for Burnaby-Edmonds (Ms. Brown) unfortunately has referred to only one side of the story. In again

[ Page 6087 ]

raising

the sales tax increase she has made not one single reference today to

the low-income tax credit announced on budget day, which I believe was

appropriate and desirable. I refer the member to page 46, among others,

of the budget speech. An income tax credit is introduced for 1981 which

is going to benefit a significant number of people on fixed incomes and

low incomes, and a very large percentage of the elderly in British

Columbia. I think it's only fair, if the member feels that the sales

tax has imposed a burden, to at least acknowledge that that burden is

offset to a very major extent by the low-income tax credit. The member

can shake her head in disagreement, but she can't argue with the facts.

think I indicated earlier to the second member for Surrey (Mr. Hall)

that Treasury Board is gradually being refined and the process is

working better each year. That was formalized by my immediate

predecessor. We're building on that base. If it is felt that the

Treasury Board is intruding into government ministry activities, then I

can't believe that senior officials of various ministries, following

the estimates process in December 1980 and January 1981, would have

bothered to express appreciation, not to the chairman of Treasury

Board, not to an individual minister, but simply general appreciation

at the conclusion of the estimates process to the effect that they had

been given a very fair and complete hearing.

There was no

instance at all where a ministry — the minister and his officials —

were rushed in, dealt with in a 30-minute cavalier fashion and then

thanked and sent on their way. Some of the sessions with individual

ministries in preparation for the estimates this year took several

hours. Obviously the ministries with the larger portion of the budget

took a good number of hours. One can again dismiss the fact that a

minister would thank another minister and say, "That was a good

session, " but when you hear and understand very clearly that senior

officials felt that the whole process was very thoroughly canvassed and

very well explored, then I think that is a favourable comment on what

happens at Treasury Board.

To the member for Atlin (Mr.

Passarell), with respect to the government agent vacancy in Cassiar, I

will have to ask him to be patient. I will have that information in

just a matter of minutes. I have asked for it. I don't have it in the

material with me.

The member also indicated the desirability

of a government agency in Dease Lake. I agree. We are adding government

agencies. This province has a fine record of government agents and

government agency service. The member will know that last year and

again this year other agencies are being added, new agencies are coming

along. I can't commit, with respect to Dease Lake, except to say it is

precisely the kind of community where there should be a government

agent. It meets all the criteria for a government agent office, albeit

a relatively small one. It is seen that agencies are opening throughout

the province.

MS. BROWN: I just very quickly want to

respond to the minister's comments about the low-income tax credit, and

to bring to his attention that he wasn't listening very carefully,

because many in that particular group I mentioned would not benefit

from any income tax credit because they do not pay income tax. They

have no choice but to pay their sales tax, and the point I brought out

was that the sales tax was a regressive and unfair tax that created a

much harsher burden on people on low incomes and fixed incomes than it

did on anyone else. It certainly was not balanced off by the low-income

tax credit.

The other point the minister did not comment on

was the burden on the municipality of Burnaby created by the impost of

the government. The final figures I have on that are that it's even

worse than I mentioned earlier. Because the homeowner grant remained

unchanged most people are experiencing an increase somewhere in the

vicinity of 19.5 percent in their taxes. Although the composite is

really 12.9 percent, because the homeowner grant was not increased it

actually resulted in a 19.5 percent increase. The minister did not

comment on that or on the fact, as I mentioned earlier, that it's the

Ministry of Finance that's running the Ministry of Human Resources and

the decisions made by that ministry that have some kind of effect on

the services which are being cut back by that ministry.

HON. MR. CURTIS:

To answer the member for Burnaby-Edmonds, we will have to do a little

more work with respect to this, and obviously we will have the

opportunity next year. If the member, in fair comment, has

misunderstood then others will misunderstand. You don't have to be an

income tax payer to receive this credit: you simply have to be a tax

filer. The member will know there's a significant difference. We

developed that in the debate on the bill. So no tax need be paid, but

simply the form filed. A tax filer is the key phrase in this particular

measure. I think the member will agree that will assist a large number

of British Columbians. She may not feel as enthusiastic about it as I

do, but that's why we're on opposite sides of the House. I'm very

enthusiastic about that.

MS. BROWN: No, you're over there because you overtax people.

MR. CHAIRMAN: Order, please.

HON. MR. CURTIS:

With respect to Burnaby and other municipalities, we have discussed in

terms of legislation today, and earlier in these estimates, the

question of property tax, and I have made observations, particularly in

response to an earlier speaker on behalf of the official opposition. It

is not the full reason, but it must be acknowledged that a municipal

council is elected and enters a year with a series of choices and

options open to it. It can spend as little as possible or it can spend

more, it can enrich programs and it can undertake significant

activities within the municipality, if it chooses, or it cannot. We do

not set municipal budgets, and the member knows that, The member is

attempting to suggest that municipalities have no opportunity to

determine the level of services they are going to provide and the costs

they are going to undertake and face in the course of the year in

question.

In my home municipality of Saanich a decision has

been taken this year which in my view is wasteful and wrong, and as an

individual property taxpayer I'm very upset with it. I don't raise it

here and identify it; I raise it where it belongs, and that is in the

municipal council or in a discussion with a member of council. It's a

quarter of a million dollar expenditure which should not occur, in my

view. The member knows that municipalities make their own decisions,

and that they're not governed exclusively from Victoria.

MR. LEVI:

I've got some questions for the minister on the Systems Corporation,

and one question before that relates to his working papers. I wonder if

he's get them in front of him. Page 34, table 1, deals with estimated

costs of deferred

[ Page 6088 ]

British

Columbia income tax revenue. We're dealing there with registered

retirement plans, which are a form of deferred income, Canada Pension

contributions, capital cost allowance, etc. Now I want to ask the

minister this: during the recent Public Accounts meeting, I asked the

auditor-general if she could tell us what part British Columbia's share

was of what I understood to be $13 billion — but it turned out to be

$17 billion — of deferred corporate tax that is presently the situation

in Canada. They came back and told us that deferred taxation for

corporations in British Columbia is $2.4 billion, which on the basis of

a 41 percent tax-back presents about $990 million of taxes that are

presently not paid and do not flow to the provincial treasury. Those

figures were given to us by the comptroller-general's department —

there was a gentleman there who went out and got the figures. In Canada

generally we have a $17 billion deficit in terms of deferred taxes —

that's corporate tax. I appreciate that there are other forms of

deferred taxation; certainly RRSPs and HOSPs are a form of deferred

taxation, but they are not, of course, of the order that we're talking

about — nearly $1 billion of deferred corporate taxation.

One

of the questions we did ask both the comptroller-general and the

auditor-general. They weren't really able to answer because they are

not part of the ongoing discussions that take place with the federal

Department of Finance, but I would like the minister to tell us why

that figure that I've just mentioned, which can certainly be refined —

it's certainly $2.4 billion; that's the figure they gave us — doesn't

appear at least in your background papers; it certainly doesn't appear,

for instance, in the Public Accounts. It seems to me that if the

corporations are deferring taxes, surely there is a receivable there

eventually for the province in respect to its portion of the corporate

taxation. That never shows anywhere. In fact, it doesn't even show, to

my knowledge, on the Public Accounts of Canada, but i