1976 Legislative Session: 1st Session, 31st 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, MARCH 30, 1976

Night Sitting

[ Page

357 ]

CONTENTS

Routine proceedings

Budget debate (continued)

Mr. Bawlf — 357

Point of order

Time allotted for budget debate. Mr. King — 361

Hon. Mr. Bennett — 361

Mr. Lauk — 361

Hon. Mr. Bennett — 362

Mr. Speaker — 362

Mr. Lauk — 362

Routine proceedings

British Columbia Deficit Repayment Act, 1975-1976 (Bill 3).

Second reading.

Mr. Stupich — 362

Mr. Cocke — 381

Point of order

Procedure at time of adjournment. Mr. King — 385

Mr. Speaker — 386

Mr. Lauk — 386

Mr. Speaker — 386

Mr. Lauk — 386

Mr., Gibson 386

Mr. Lauk — 387

Hon. Mrs. McCarthy — 387

Mr. Speaker — 387

Mr. Lauk — 387

Mr. Gibson — 387

Mr. Speaker — 388

Mr. Gibson — 388

Mr. Speaker — 389

Mr. Chabot — 389

Mr. King — 389

Mr. Speaker — 389

Hon. Mrs. McCarthy — 390

Mr. King — 390

Mr. Gibson — 390

Mr. Schroeder — 391

Mr. Speaker — 392

Mr. Gibson — 392

Mr. King — 393

Hon. Mr. Vander Zalm — 394

Mr. Speaker — 395

Mr. King — 395

Hon. Mr. Vander Zalm — 395

Mr. Speaker — 395

Mr. King — 395

Hon. Mr. Bennett — 396

Mr. King — 397

Mr. Wallace — 397

Hon. Mrs. McCarthy — 398

Mr. King — 398

Hon. Mr. Bennett — 398

Mr. Cocke — 398

Mr. Mussallem — 399

Mr. Speaker — 399

Hon. Mrs. McCarthy — 399

Mr. King — 399

Hon. Mrs. McCarthy — 399

Mr. Wallace — 399

Mr. Speaker — 400

TUESDAY, MARCH 30, 1976

The House met at 8 p.m.

HON. P.L. McGEER (Minister of Education): Mr. Speaker, this

afternoon the member for Nelson-Creston (Mr. Nicolson) asked a question

with regard to correspondence between Dr. Armstrong and the board of

governors of Notre Dame University and I said that I would take the

question as notice and would be happy to file the letter in question. I

have the letter here as well as a report of the universities council of

British Columbia on Notre Dame University upon which certain of the

statements in the letter were based.

HON. H.A. CURTIS (Minister of Municipal Affairs): Mr.

Speaker, a few days ago in debate I referred to correspondence in 1973

between the then Minister of Municipal Affairs (Mr. Lorimer) and the

then chairman of British Columbia Hydro (Mr. Cass-Beggs) An hon. member

suggested that this material should be tabled and I file it herewith.

HON. G.M. McCARTHY (Provincial Secretary): Mr. Speaker, I am

pleased to file the 57th Annual Report of the Public Service

Commission, January 1 to December 31,1975, submitted in accordance with

section 7 of the Public Service Act.

MR. G.F. GIBSON (North Vancouver-Capilano): Mr. Speaker, just

an inquiry to the hon. Minister of Municipal Affairs (Hon. Mr. Curtis)

On that occasion the minister also referred to a memorandum which I

think was from the chairman of B.C. Hydro to one of his assistants.

MR. SPEAKER: Order!

MR. GIBSON: I was just going to ask if the minister was going to file that all's well.

MR. SPEAKER: It's not at this stage of the debate that we ask

questions. If the minister files documents, there will be an

opportunity to ask questions of the minister in question period on

another day.

Orders of the day.

ON THE BUDGET

(continued debate)

MR. S. BAWLF (Victoria): Mr. Speaker, I am pleased to have this opportunity

to present my maiden address before this House and, as you will recall, I have

already on an earlier occasion had the pleasure of extending my regards to yourself

and to the other members of the House. So I will pick up where I left off.

Victoria is by some standards an old city. Born out of the gold rush

of 1858, it was a thriving town of several thousand in the 1860s.

Considering its venerable age, it is not surprising that Victoria's

population is at last approaching 250,000 people. Indeed, one might

suppose from these facts that the city's rate of growth and change have

been so gradual as to be almost imperceptible. Victoria's growth has,

in fact, been very irregular. In one boom period spanning from

completion of these parliament buildings in 1897 through to 1914 more

buildings were built in Victoria than in the entire 50 years which

followed. This was Victoria's grandest era as an outpost of the empire,

its virtues extolled by Rudyard Kipling, its pride bolstered by its

stature as a home for the Royal Navy in the Pacific. Then came the

First World War and the expected commercial benefits from such as the

newly opened Panama Canal evaporated.

Suddenly the immense over-supply of everything we now call

infrastructure was painfully apparent. The city became a monument to

the fallibility of human speculations, and until the 1960s hundreds of

vintage commercial buildings stood almost vacant, and rambling

Edwardian homes were a glut on the market. This long period of

fossilization has had a profound effect on the city's image in an

otherwise changing world. Its reputation as a place of genteel

old-world charm has been steeped in the unchanging character of the

city.

This reputation is unrivalled on the western half of this continent

and it is the fundamental reason for Victoria's two most evident

functions other than that of the capital city — those of a tourist

centre and a retirement centre.

As a result, some have, unkindly I think, referred to Victoria as

the city of the newly wed and the nearly dead. Indeed, Victoria has now

entered an era of new growth. Some projections anticipate double the

population in this area within 20 years. This outlook may well prove

conservative, however, for during the same period the total population

of urbanized areas centred with….

Mr. Speaker, there seems to be an awful lot of talk on the opposition benches considering the…

AN HON. MEMBER: Those are the people over there.

MR. BAWLF: …courtesy that is normally accorded to a maiden speech.

MR. SPEAKER: I am sure the members will accord you the same privileges accorded other members when they make their maiden speech.

MR. BAWLF: This outlook may well prove

[ Page 358 ]

conservative, however, Mr. Speaker, for during the

same period the total population of urbanized areas centred within 75

miles of Victoria, including Seattle and Vancouver, is expected to

approach six million people, the population of Los Angeles today. It is

possible that Victoria, with it's superior climate, half the annual

rainfall of neighboring areas, and equidistant from the increasingly

mobile populations of Vancouver and Seattle, may soon face a

phantasmagoria of exploitation as the Orange County of the northwest.

At the centre of this capital region is my constituency, consisting

in the main of the city of Victoria. The central issue concerning most

of my 65,000 constituents, in the face of these growth pressures, is

the survival of the quality of life that they enjoy and the special

environment on which it is largely based. Translated into a political

mandate, this concern has resulted in a number of city programmes aimed

at minimizing the adverse effects of growth upon the community.

The City of Victoria has enacted one of the most progressive sign

bylaws in North America, prohibiting all third-party advertising by

sign and, in particular, eliminating billboards for hire. To complement

this measure against visual pollution, a strong anti-noise bylaw has

been recently passed. Most high-rise zoning outside of downtown has

been eliminated, leaving a six-storey limit in these areas. Where

several charming older neighbourhoods were threatened with decay and

eventual destruction, rehabilitation has been undertaken by the city

through federal neighbourhood improvement programmes.

Allowable building densities downtown have been halved with a view

to spreading the benefits of growth throughout the core area, avoiding

overly massive. buildings and encouraging retention of heritage

buildings. Furthering this last objective, a 50-foot height limit has

been placed on the entire old-town area compared with a 14-storey limit

elsewhere in downtown.

Victoria's old town is the finest collection of vintage commercial

buildings in western Canada or, indeed, on the west coast of the

continent. The city's heritage committee has identified some 125 of

these buildings in downtown Victoria worthy of preservation. Many of

these have been officially designated for preservation purposes.

Approximately 50 heritage buildings have already been renovated and

restored including many by private initiative. This reflects a growing

awareness by my constituents that Victoria's old-world character is a

vital economic stimulus not only to the city but to the entire

Vancouver Island. Last year, the capital region was visited by more

than two million tourists, who spent an estimated $120 million here.

The most recent Canadian travel survey reports that 29 per cent of

tourist spending in Canada is attributable to tourists whose main

activity is visiting historical and cultural sites. This outranks

fishing and boating dollars put together, and if we combine the

all-Canadian leisure pastimes of boating, hunting, snow skiing and

sports watching, we find that even they, combined, count for less

spending than do historical and cultural visits. Now if this is true as

a national average, it is doubly true of Victoria.

With this in mind, and mindful also of the need to make this city

worthy of its place as capital of British Columbia and a place that all

the people of this great province can be proud of, the city fathers

have pressed on to further secure and enhance the city's special

character. The city has directed expenditure of some $15 million in the

construction of two civic squares and a growing network of connecting

malls, in the undergrounding of all overhead wires in the core, in

planning for redevelopment of the Inner Harbour for public use and to

enhance these precincts, and in completion of the first stage of a

planned continuous waterfront promenade.

All this, Mr. Speaker, has been undertaken at the city's initiative

and pursued to the limit of her financial resources, reflecting the

capacity of some 28,000 municipal taxpayers and what meagre financial

assistance has been available from the senior levels of government.

These efforts by this community have won national acclaim, but, Mr.

Speaker, the three years of NDP government just passed have seen a

record of incredibly boorish treatment of the city of Victoria by the

provincial government, treatment which has incredibly frustrated the

city's sincere efforts and brought them to the point of collapse.

AN HON. MEMBER: Oh, oh!

MR. BAWLF: It is a sad and shameful record, Mr. Speaker,

which must bear comment for the benefit of the hon. members here

present if they are to understand the needs of my constituency at the

hand of this new government.

First, there is the matter of revenue-sharing with municipalities.

In the time that the NDP government more than doubled their spending,

the municipalities received only token increases in financial aid.

AN HON. MEMBER: Oh, oh!

HON. MR. BENNETT: Token.

MR. BAWLF: Increases in aid to municipalities have failed to

keep pace with inflation. Moreover in Victoria, at least, the increases

in aid under the NDP were absorbed entirely by increased charges to the

city for their share of provincial expenditures for welfare and

assessment services. This situation has resulted in intolerable

increases in the burden of

[ Page 359 ]

municipal taxes on municipal property taxpayers.

Compounding this is the situation of school taxes. Remember the famous

promise from the former Premier — that school taxes would be removed

from property assessments? Of course, we now know that school taxes

have gone up, not down — this, in spite of the fact that in most areas

school enrolment has fallen.

Then there is the matter of municipal property taxes on properties

owned by the Crown. The means of compensation, of long standing in this

province, has been a system of grants in lieu of payment of property

taxes by the provincial government. The rate in which these grants are

paid is equal to 15 mills. Though once adequate, this allocation has

long since been working a hardship on many municipalities, as other

hon. members will attest.

During the 1972 provincial election all parties addressed their

platforms to improved arrangements in this area. Indeed the former

Premier promised that the Crown would pay full municipal property

taxes. What happened instead, Mr. Speaker? No change in compensation.

Instead, the NDP government took blatant advantage of the status quo to

expand their municipal land holdings, thereby enlarging the proportion

of the total municipal tax base encumbered by this inequitable

arrangement, and further compounding the injury to steadily weakening

municipal finances in this province.

This was nothing more than usury, Mr. Speaker, and there is no

better example than my own constituency. In the city of Victoria the

NDP expanded the province's property holdings by nearly double by value

of land and assessments. As a consequence the city now owns 115 acres

in the city of Victoria, most of it in the core area, for a total of

about 10 per cent of the total assessment base of the city.

This voracious appetite was at the instigation of the former Lands

minister — that sensitive individual, Mr. Williams. You will recall,

Mr. Speaker, he is the former hon. member who, upon being duly

re-elected to this Legislature, and discovering that he was facing in

this House a government other than his own, decided that discretion was

the better part of valour and callously abandoned his constituents to

an unnecessary by-election.

Mr. Williams was not satisfied with merely meeting the direct needs

of his government for land; he had to embark on a binge of grabbing any

land which would allow him to supercede the role of the city in

governing its own affairs, and grab the headlines as a fictitious hero

of his fiefdom.

To secure the Inner Harbour waterfront for public use and enjoyment,

and to enhance these precincts, the city worked for 10 years. The city

approached the former Minister of Public Works to ask for assistance

with half the costs of an important land acquisition in this

connection, known as the Reid site. No reply, Mr. Speaker. No reply was

received.

Another letter goes out; still no reply. As the deadline for action approaches the letters from the city grow more frantic.

MR. G.V. LAUK (Vancouver East): Did you own land there?

MR. BAWLF: No. All this is ably documented, Mr. Speaker.

In an

article in The Vancouver Sun , dated May 29, 1974, by one Marjorie Nichols, a very capable reporter, in spite of what the former Premier thought of her….

AN HON. MEMBER: We agree — read tonight's paper.

MR. BAWLF:

"The deadline comes and goes. The city council, still

lacking the courtesy of even a reply" — still lacking that courtesy —

"subside into despondency and give up the ghost on that government.

Suddenly, out of the blue comes an order-in-council from the NDP

government, placing a complete freeze on the status of all the

waterfront property in the Inner Harbour.

"The order-in-council is accompanied with a statement from

the Minister of Lands: 'The council, I think, has stumbled along through

the history of the whole Inner Harbour development, and we see it as important

in relation to the parliamentary precinct, and important to the province at

large. That is why we stepped in. It's why we intervened; it's why we

bought the land. In effect, we have had to do the job the city has shown it

is unable to do.'"

An incredibly arrogant statement, Mr. Speaker. An incredibly

arrogant manner in which to treat the city council of Victoria and the

people they were duly elected to represent — so arrogant, Mr. Speaker,

that the press throughout this province, in defence of the city of

Victoria, rose up in unison and slammed that minister for his actions.

I quote from just one of a dozen examples of commentary in the press

on his actions. Characterizing it as "the now typical NDP bulldozer

tactic," this is an editorial in the Victoria Times dated Friday, May 31, 1974:

"Although there have been discussions between the city

and the provincial government several months before with consideration

of a 50-50 arrangement to acquire the Reid property, these had lapsed.

Letter after letter, over a period of more than a year, had been sent

from city hall to various cabinet ministers

[ Page 360 ]

urgently requesting action which only the provincial government

could provide to help solve Victoria's Inner Harbour problem.

"The letters were not even acknowledged. Then subtly,

without any contact with the city, Resources Minister Williams, in a

most contemptuous and ham-handed manner, announced the government's

purchase of the Reid property.

"There is no excuse for such God-has-spoken treatment

of the capital city or any other municipality in the province. Such a

boorish performance destroys the confidence and cooperation of the

municipal governments, alarms the public by trading a claustrophobic

fear of what may be coming next from an administration in which

ruthless arrogance is poorly suppressed and harms the government itself

by creating. a repulsive image. Even worthwhile actions, if performed

in an unworthy way, will not build the public acceptance that good

government requires, and bad manners don't hide bad administration."

Mr. Speaker, I could produce many more of those kinds of comments on

that particular action. The reason I bring this example to your

attention, Mr. Speaker, is not because it was the exception but because

it was the rule under the former government. Time after time, similar

behaviour was repeated.

The same minister, Mr. Speaker, commissioned a study. He wasn't

satisfied to ask for the cooperation of the city of Victoria in

planning her own destiny. He commissioned a study from a city planner

from eastern Canada, a Mr. Clack, who was to report on how the city was

to be planned according to Mr. Williams' whim. That report included

such recommendations that the city was subsequently advised were going

to be fact as reorganizing the entire traffic system of the downtown

area of Victoria.

It was a completely cavalier treatment of the city. The city of

Victoria for years had been endeavouring to bring about the public use

of the waterfront, and part of that was the acquisition of the former

CP Marathon site, Mr. Speaker. It is interesting to note that the city

concluded an arrangement which would have seen that site bought for a

price of $1.2 million. But the ministers of the former government, in

their enthusiasm for controlling the situation, said they would take

over the negotiations because they wanted to acquire the site. And what

was the eventual cost of that site, the city having concluded a price

of $1.2 million? The province later bought the site for $2.4 million.

Causeway Garage, a rather sad old relic on the Inner Harbour here, the city

acquired with their own funds. The provincial government said: "Now let

us take this over. We want to beautify the Inner Harbour. This is an important

exercise in cooperation."

City council, having been burned a couple of times, asked: "Well,

now are you sure that you intend to carry out this beautification?" The

response was: "Oh, yes. Of course." So the property was turned over for

the same cost to the city.

The Minister of Public Works proceeded, without any permission or

discussion with the city, to construct a beanery on the site. An

interesting point, Mr. Speaker, is that the city had understood that

that was being turned over to the duly constituted body, the Capital

Improvement District Commission, a body which is, by legislation,

responsible for cooperation between the province and the local

municipalities in beautifying capital areas.

Now how it passed from that commission's hands without the benefit

of a meeting…the commission had no idea, Mr. Speaker, that that

property was being turned over to the Minister of Public Works and a

beanery being constructed there, without any formal meeting of that

commission to decide such an action.

AN HON. MEMBER: Local planning.

MR. LAUK: Snob!

MR. BAWLF: We have the example; I could go on. There are a number of examples in just this one subject of the Inner Harbour.

To give you one further example, the province has owned for a number of years the site where the Black Ball ferry docks.

Repeated attempts were made, Mr. Speaker, to arrange a meeting with

the Minister of Transport to discuss an eventual evolution of that site

into part of this waterfront promenade. Never, Mr. Speaker, was the

courtesy of a fair reply given to the city on that, in spite of years

of effort.

Mr. Speaker, the ignorance and abusiveness of the NDP government

towards the city's elected representatives became so bad that finally,

out of total frustration, those city councillors personally paid for a

full-page ad in the local dailies in an attempt to fight off Daddy

Warbucks and his grabby hand of state socialism — a message to the

citizens of Victoria concerning the Inner Harbour.

It was a case of the former provincial government having obviously

the greater opportunity to do the shouting with their extensive

resources and access to the media. So we have here, Mr. Speaker, an ad

which was placed in the Saturday Times ,

Victoria, June 1, 1974, which outlines 21 steps which the city of

Victoria had taken over that 10-year period to advance the cause of an

improved waterfront area and specifically public use.

But the grab went on, Mr. Speaker, in spite of it,

[ Page 361 ]

and on and on and wilted the hopes of a diligent

little city council of governing their own affairs as they were duly

elected to do, because on top of this state of affairs the city were

advised by the NDP government of their plans to use their newly

acquired lands to construct 2.4 million square feet of new office space

in this city, in the core area, to accommodate its plans for expanding

the bureaucracy.

This would double the office content of the city, placing large new

demands for expansion on the city's services, including sewers, water,

roads, parking, police and fire protection, only one-third of the cost

of which would be recovered through the existing provincial grants.

At present, nearly one million square feet of office space —

provincial office space — is under construction in downtown. Only one

of the several buildings involved has, for example, provision for

employee parking, and in that single instance, the city has had to

defray most of the cost of the parking structure itself. So today, as

Victoria with its grant in lieu of taxes equal to only one-third of our

general purposes mill rate, the shortfall in the taxes paid to the city

by the province amounts to nearly $1 million a year.

This is nearly triple the annual shortfall that existed only three

years ago. As such, it is an entirely unreasonable burden on the city's

28,000 taxpayers to have to subsidize more than two million British

Columbians to this extent. Even with no further office building starts,

the shortfall of tax revenue to the city, thanks to the NDP

administration, will be approaching $2 million per year within three

years.

Whatever the other citizens of this province would have thought of

these grandiose NDP plans to expand the bureaucracy and influence

people, the citizens of Victoria have been seriously concerned. When

the council protested, however, the former Premier arrogantly

threatened to withhold the per-capita grant from the ungrateful city, a

grant which is made to all municipalities without reference to Crown

lands.

The argument put forward by that man, having reneged on his promise

to pay full taxes, was that the provincial government should get

special treatment because it provides jobs in the local economy. In

other words, he would have the people of my constituency accord the

province status as a corporate welfare burn. How hypocritical, Mr.

Speaker.

In fact, Mr. Speaker, most of the provincial employees in this city

reside in neighbouring municipalities and pay no property taxes in

Victoria. The largest identifiable group of taxpayers in Victoria are

senior citizens, for the most part on fixed incomes.

Now, Mr. Speaker, I spoke at some length the other day on the

unfortunate lot of a large number of senior citizens in my

constituency, who during the NDP term in government suffered so badly.

I don't intend to repeat those remarks today, Mr. Speaker. Suffice it

to say simply that here is yet another example of that sad performance

by the NDP.

Well, Mr. Speaker, fortunately for these people and all my

constituents, and for all the people of this province, what's-his-name

and his inept NDP colleagues are no longer in government, and never

again should those people have the opportunity of inflicting such

grievous wrongs on the citizens of this province. Never again, Mr.

Speaker.

Mr. Speaker, I'd like to take this opportunity to interrupt my

remarks and to move the adjournment of this debate until the next

sitting of the House.

MR. W.S. KING (Leader of the Opposition): On a point of

order, Mr. Speaker. I wonder if the Chair could give a rule with

respect to the amount of time allotted for the debate of the budget,

which in my understanding must be 14 sittings, not less than 14

sittings in 10 days. I wonder if the Chair would rule whether or not

the one-shot excursions that we are making into the budget debate in

night sittings, in the view of the Chair, constitute one sitting

devoted to budget, because if that is the case it seems to me that the

government is doing through the back door what they protest they do not

intend to do, and that is to limit the time afforded for debate of the

budget.

HON. W.R. BENNETT (Premier): Mr. Speaker, I would suggest

that we would be prepared, with leave, to extend the number of days for

budget debate, because of the urgency of debate, now to accommodate

those members who wish to speak in budget debate and not to have these

sittings constitute any time taken away from any of the members who

wish to speak.

MR. KING: I appreciate the Premier's comments, Mr. Speaker, but I do think it would be appropriate for the Chair to rule on this matter.

MR. LAUK: Mr. Speaker, in support of the Leader of the

Opposition's point, we also, of course, must thank the Premier for

indicating his desire to have a full debate on the budget, but the

House is in control of its own procedure and its own points.

I think it's important, not only for this budget debate, but for

other budget debates, that the Speaker do consider this matter and

consider the length of the sitting. As I recall, the committee which

proposed the present rules carried on for many, many hours, with the

member for Columbia River (Mr. Chabot) and others, about this very

point: what constitutes a sitting, what is the length of a sitting,

what is the length of debate on the question of the

[ Page 362 ]

budget debate and throne debate, and so on. It was

felt that unless there was a substantial portion of the time of that

sitting devoted to the debate, it could not be counted as a sitting on

its own.

HON. MR. BENNETT: Well, Mr. Speaker, so that you can take due

time and deliberate, and perhaps even extend your deliberation…just to

assure the members of this House that you need not hasten your

decision, I have given my assurance that with leave of the House no

opportunity to debate in budget will be lost.

I just want to assure you, Mr. Speaker, of our intentions to provide

and support any opportunity of leave so members can speak, and you may

take due time in coming to a decision.

MR. SPEAKER: Thank you, hon. Premier, and the Leader of the Opposition. It is a matter that I'll take under consideration.

I would say at this point that, perhaps in clarification, I see

nothing in the rules that precludes the House Leader from moving from

one position on the order paper to another after we have accommodated

some debate on the budget. I can also see the fact that if, in a

sifting, we only had the opportunity to hear one or two speakers, then

that would preclude a number of people from being heard in the time

limits that we have presently before us as to the number of sittings

and the number of days.

I think you've heard a commitment from the Premier in this respect.

I'll take a look at it, however, to see how that fits in with the rules

of the House, and take it under advisement.

Interjection.

MR. SPEAKER: The matter is under advisement. Have you something further to offer, Mr. Member?

MR. LAUK: While Your Honour's in deliberation on this point,

it might be helpful to refer to the committee reports that did

recommend these rules. I'm sure there's some discussion in that regard.

If there is not, I'd be only too glad to come to your office and

provide you with my personal notes on the matter.

MR. SPEAKER: Thank you, hon. member, for your observations and advice.

HON. MRS. McCARTHY: Mr. Speaker, I move the House proceed to public bills and orders.

Motion approved.

HON. MRS. McCARTHY: Adjourned debate on Bill 3.

BRITISH COLUMBIA DEFICIT

REPAYMENT ACT, 1975-1976

(continued)

MR. D.D. STUPICH (Nanaimo): If I could pick up my remarks

where I left off two and a half hours ago, I was actually comparing the

partisan political approach taken in Bill 3 to the extremely partisan

political approach in the uncalled-for and unusual partisan political

approach taken in the British Columbia budget, March, 1976. I was

discussing, I think, the fact that it is in the budget and in the bill

by implication, a serious of threats against people, a series of

insults. I think I got as far as mentioning that it was threatening,

indeed, the voters of Vancouver East. The implication is there in the

bill, as it is in the budget.

In the budget speech the voters of Vancouver East were being told

that they are going to be used in an attempt for someone to slide in —

some 28,000 or 29,000 registered voters. They were being insulted….

Interjection.

MR. STUPICH: Well, Mr. Speaker, I suggested in an earlier

debate, on two occasions that I can recall today, that the Premier, by

his interjections, encourages me to extend my remarks further than I

might otherwise do.

Mr. Speaker, through you, I would remind the Premier that that is

exactly how he arrived in this chamber — by someone resigning and

making room for him to run in a by-election. And, Mr. Speaker, it was

never suggested by anyone on this side of the House that he was sliding

in. We never insulted the voters of South Okanagan by saying they were

being used in an attempt for someone to slide into office. We accepted

the resignation; the by-election was called, the Premier ran for that

position and was duly elected by the voters of South Okanagan to

represent his constituents in this most exclusive of all clubs.

Interjections.

MR. SPEAKER: Order, please. Could we get back to the principle of Bill 3 now, please?

MR. STUPICH: Well, as I say, Mr. Speaker, if you were just a

little more successful at controlling the Premier, or if the Premier

were a little more successful at controlling himself, then it would be

easier for me to keep my remarks in line with the discussion of Bill 3.

However, let me get back to the discussion of Bill….

MR. SPEAKER: Hon. member, I realize that

[ Page 363 ]

interjections come from all sides of the House at

different times. I try to be fair and protect you from the abusive

remarks, or from any remarks that will distract you from debating the

principle of Bill 3.

MR. STUPICH: Mr. Speaker, I certainly didn't intend to imply

in any way at all that you were being unfair. I was just agreeing with

you that it is an extremely difficult job to control the Premier when

he is determined to interrupt. He seems to be determined to continually

interrupt.

Interjections.

MR. SPEAKER: Order, please. Would you allow the hon. member who has the floor to continue the debate?

MR. STUPICH: Mr. Speaker, as I have said — and I note you are

giving me your attention — Bill 3 is another document very similar to

the document that was produced by the hon. Minister of Finance (Hon.

Mr. Wolfe) a little earlier in this debate.

The wonder, I suppose, is that since it is so much in line with the

budget speech itself, that in this Bill 3 the House, or the minister

presenting this bill, didn't take advantage of the same opportunities

afforded him — the opportunity he took advantage of to threaten people

around the world. Maybe I'm accusing the Minister of Finance

improperly; perhaps I should have said it was Mr. Brown who wrote these

remarks to which we are taking offence, or perhaps a Mr. Dan Campbell.

Whoever wrote it, it doesn't really matter.

They took advantage in the budget speech, and since Bill 3 is

following the same partisan political approach, they might really well

have taken advantage of Bill 3 to have done the same thing. Since in

the budget speech they were so keen to give advice to people around the

world as to what they should do and what they should not do, perhaps in

Bill 3 they might very well have given the same kind of advice.

They might have advised people in the United States, for example,

that if you want to continue dealing with the citizens of British

Columbia, you should be careful in your presidential election not to

elect anyone other than George Wallace or possibly Reagan as president.

Mr. Speaker, the New Democratic Party government of British Columbia

was accused at times by some people of being perhaps a little left of

centre — let's say some 10 degrees left of centre. If that accusation

can be made, then I think the government opposite in presenting this

kind of legislation, and the budget speech that is so closely

associated to it, might very well have been accused of being, not 10

degrees away from centre, but 90 degrees to the right, since they seem

to have assumed the responsibility for advising voters around the world

as to how they should look at British Columbia and how they should look

at the politics within their own jurisdictions.

I have an interesting quotation from the Los Angeles Times , perhaps, about the present government:

"The Bennetts belong to the Social Credit Party —

Socreds in the local press — a party at the opposite political spectrum

from the New Democrats, conservative in its politics and a history of

being cosy with big business. There also is some feeling that young

Bennett may be particularly friendly towards some of the American-based

firms operating in British Columbia."

Particularly friendly towards some of them.

I would hope that is not true, Mr. Speaker. Nevertheless, that is

the opinion that is going abroad, and it is the opinion that is going

to go abroad even more when they read this bill and the budget speech

that is so closely associated with it.

Mr. Speaker, we cannot be a part of these threats to B.C. voters. We

have indicated earlier that we cannot support the budget and we cannot

support this bill.

We just don't accept this kind of attitude. This partisan political

approach within our own community is okay, but when we extend it beyond

our jurisdictions, beyond the boundaries of our own province, then, Mr.

Speaker, we just can't be a party to legislation that goes in that

direction or of a budget speech that is so blatantly political partisan

politics.

We could, perhaps, support legislation like this if it were

legislation that were going to provide that succeeding governments —

and, Mr. Speaker, I think we will all have to admit that there may be

some change in administration at some time — if we were going to deal

with legislation in this House that would open the possibility of

legislation such as this being necessary….

AN HON. MEMBER: Where do you get your suits?

MR. STUPICH: A firm by the name of Harvey Murphy in Nanaimo. I buy them off the rack, Mr. Premier.

If this kind of legislation were available in such a form that it

would be available to any or all succeeding governments in the event

that legislation such as this were necessary to deal with some emergent

situation, some unusual situation, to deal with the kind of

unemployment that we have today — and admittedly it's worse than it was

three months ago, and would seem to be getting worse than it was last

year and worse than it was in the three years under the NDP

administration; it's getting worse —

[ Page 364 ]

and if the legislation were legislation that were

needed to deal with that situation and with the possibility that that

situation might arise again at some time or might continue during the

lifetime of the present administration, if it were general legislation

that were providing the government with an opportunity to adopt a

fiscal policy that would deal with unemployment when it became

necessary to deal with it, that would deal with recession when it

became necessary to deal with it, then we would have to admit the

possibility, Mr. Speaker, that from time to time legislation like this

might be necessary because certainly we are so dependent upon the world

economy. We are not an island unto ourselves. We are not a province

unto ourselves. These opportunities do arise, or occasions do arise,

when it might be necessary to have legislation that would provide for

this kind of accommodation to deal with a problem of the day,

But this bill before us, Mr. Speaker, doesn't do that. It limits

this particular legislation to the needs of the government of today. It

specifically says that it will not be available to governments of

tomorrow or of the day after tomorrow. We just can't support that kind

of legislation and we are disappointed that the government brings in

and asks the House to support that kind of legislation. Mr. Speaker,

the legislation suggests that if the B.C. voters are unreliable enough

that they might be irresponsible enough to some day turn out that

administration, then by this legislation we are guarding those voters

against making that kind of a mistake and getting into trouble because

they have been unwise enough to have thrown out this particular

administration. Mr. Speaker, we can't be expected to support that kind

of legislation.

The first member for Victoria (Mr. Bawlf) said during the campaign

that the issue is not — the issue in the election, that is — social

benefits; the issue is who is fit to govern. Now that member has

influence in this government, Mr. Speaker. Apparently that member had

access to the Clarkson, Gordon report even before the Premier did.

Interjection.

MR. STUPICH: He was quoting the Clarkson, Gordon report

before the Premier wag ready to do it. The first member for Victoria

was referring to figures and, of course, at that time….

Interjection.

MR. STUPICH: Well, I have newspaper clippings where he is quoting figures about the Clarkson, Gordon report….

HON. MR. BENNETT: He's as wrong as you are.

MR. STUPICH: He's as wrong as I am?

HON. MR. BENNETT: Almost.

MR. STUPICH: Well, Mr. Speaker, I suggest that if the first

member for Victoria is wrong, then that is something that the Premier

should take up with the first member for Victoria rather than with me,

because I am simply referring to reports of what the first member had

to say. I understand at the time there were also reports where the

Premier did take occasion to discuss with the first member for Victoria

some of the remarks that he did make. There were newspaper reports

saying that you thought at the time he was wrong and that perhaps he

should change his mind. Nevertheless, Mr. Speaker….

Interjection.

MR. STUPICH: As I say, the Premier keeps urging me to extend

my remarks. Now I am not sure if that's the goal that he has in mind.

If that is….

HON. J.A. NIELSEN (Minister of Environment): Yes.

MR. STUPICH: I hear a "yes". If that is the goal that he has

in mind I would appreciate knowing what is the time limit, because I

always like to know just what is my goal and how long I should carry

on. In this particular case, if it's the Premier who is setting some

goal in his mind, then perhaps sometime during the course of the

evening he will pass on to me his advice as to just how much longer he

would like me to carry on. And certainly it does help; his

interjections do help. But I have numerous clippings since the first

member for Victoria's comments have been called into question as to

what he said about the budget and his estimates as to what the deficit

was.

Mr. Speaker, these estimates were not made in advance of the

Clarkson, Gordon report — not much. Just hours before the Premier chose

to give his release of the Clarkson, Gordon report the first member for

Victoria was speaking at a meeting in Victoria and telling us all what

was going to be revealed in the Clarkson, Gordon report.

Mr. Speaker, I think it is quite obvious that he did have access to

that report, and while he may not have had access to it in advance of

the Premier himself, certainly he was able to talk about it publicly

before the Premier felt that he was able to talk about it.

HON. MR. BENNETT: Will you resign if you are wrong?

MR. STUPICH: Would I…?

Mr. Speaker, was either of you wrong? You were both wrong. It's not coming out quite the way I heard

[ Page 365 ]

it the first time, but what I did think I heard him

say was: "was either of them wrong?" Mr. Speaker, I appreciate that,

knowing that the question's coming out different now, but I prefer to

answer the question "was either of you wrong", and I would say you were

both wrong.

Interjection.

MR. STUPICH: Would you do it through the Speaker?

MR. SPEAKER: Order, please.

MR. STUPICH: Mr. Speaker, this government needs….

AN HON. MEMBER: You're wrong.

MR. STUPICH: Am I wrong? Am I wrong about what now? About the Clarkson, Gordon report being right? The Clarkson, Gordon report was right.

Interjection.

MR. STUPICH: I take no issue at all with anything that was in

the Clarkson, Gordon report, and if you stick around long enough I'll

talk to you more about the Clarkson, Gordon report this evening.

MR. G.H. KERSTER (Coquitlam): Is it right?

MR. STUPICH: Yes, it was. The Clarkson, Gordon report is

right in line, and, Mr. Speaker, through you, I have never quarreled

with the Clarkson, Gordon report, but I have quarreled, not with the

use of it, but with the abuse of it. I intend to get into the details

of that.

MR. SPEAKER: Hon. member, may I interrupt you for just one

second? You made a reference to time limit in this debate. I assume you

are the designated speaker and I've extended that without really asking

you that question, and there's no time limit, as you know, on your

remarks in second reading as designated speaker.

AN HON. MEMBER: We have two designated ones, the first and the last.

MR. SPEAKER: Thank you. Please proceed.

MR. STUPICH: We appreciate your advice, Mr. Speaker. It's

just, as I suggested in my remarks, that the Premier seemed to be

encouraging me to extend my remarks. I wondered if he had some time in

mind, not the time limit imposed by our rules, but rather a time limit

that he had in mind for this debate.

MRS. P.J. JORDAN (North Okanagan): Don't you have a mind of your own?

MR. STUPICH: Sometimes it gets hard, Mr. Speaker, but I'm going to resist that particular temptation.

AN HON. MEMBER: Good for you.

MR. STUPICH: Mr. Speaker, this legislation could be used as

an attempt to combat unemployment, and certainly there is a need to

combat unemployment. Yesterday, during the course of my remarks during

the budget debate, I did quote some figures on unemployment. I quoted

figures to indicate that unemployment has been increasing in the few

months during which this government has been in office, that

unemployment is higher than it was during the same months last year

when the New Democratic Party formed the government, that unemployment

was decreasing faster than it was in Canada as a whole during the last

few months of the NDP administration, and that it has been increasing

faster than in Canada as a whole since the present government took

office.

I think there is a real need for some kind of legislation to be

brought in by this government that would give it the fiscal opportunity

to do what it feels would be necessary to combat unemployment. But

again, Mr. Speaker, in this particular legislation they're not doing

that. They're zeroing in on one particular situation, relating it to

what they consider to be past crimes of a previous government, rather

than using this particular kind of legislation to open the door for new

policies that might correct some of the ills in our community, some of

the economic problems that our community faces.

The bill ought to have a full employment

preamble, Mr. Speaker. If

we're going to deal with this kind of legislation, then we should

include that kind of thing in it. This bill doesn't include that.

Similar legislation in other jurisdictions to allow for borrowing

has included some

preamble to provide for employment, and I have a

reference now that I'd like to quote from, the Full Employment Act from

the United States. It's an old one. This is nothing new I'm talking

about. This is one that's 30 years old, Full Employment Act, 1946, in

the U.S.

Declaration of policy is the

preamble to the legislation in that

case, rather than a straight political partisan attack on a previous

administration. This is dealing positively with the problem. The

Congress declares that it is a continuing policy and responsibility,

and, Mr. Speaker, yesterday during the course of my remarks I talked

then about policy and responsibility, about the responsibility that a

government has to govern on behalf of the citizens, about the

opportunity that a government has, and I

[ Page 366 ]

quoted from the budget speech where there is a

reference to people in government and where it said: "Government, like

people". I argue that government is not like people; government has a

responsibility.

[ Deputy Speaker in the chair.]

If I may go back, then, reading this declaration of policy:

"The Congress declares that it is the continuing

policy and responsibility of government to use all practical means

consistent with its needs and obligations, and other essential

considerations of policy, with the assistance and cooperation…"

And there's mention of this in the budget — cooperation with

industry — and we grant that there has to be that kind of cooperation

with our whole community, cooperation with industry, with agriculture,

with labour. I think there's been, perhaps, precious little cooperation

between this government and agriculture, but we're hoping for an

improvement. There has been precious little cooperation with labour — a

lot of confrontations, perhaps, but not much cooperation yet.

"…and state and local governments to co-ordinate and

utilize all its plans, functions and resources for the purpose of

creating and maintaining, in a manner calculated to foster and promote

enterprise and general welfare conditions under which there will be

afforded useful employment opportunities including self-employment for

those able, willing and seeking to work, and to promote maximum

employment, production and purchasing power."

Mr. Speaker, this is a

preamble that was used in legislation 30

years ago in the U.S. Congress. Yet we have this legislation before us

30 years later, and all it can deal with are the pressing political

needs of the day. And these political needs, Mr. Speaker, are not

pressing. I keep saying over and over again, and many of us will be

saying over and over again, during this debate and other debates: the

election is over; the pressing political needs are to get on with the

business of governing the province, not to continue fighting the New

Democratic Party.

We have problems in this province. I suppose the biggest problem of

all is that we have a Social Credit government. But we have other

problems, and they are problems that the Social Credit government could

deal with if it would forget that the election was fought, is over and

would get on with governing the province.

Mr. Speaker, if we could contrast this with the attitude in this

bill, and the narrow approach that it takes to this question of

borrowing…. I have already referred to the legislation in the United

States. I would now like to refer to something closer to home, and that

is another of our provinces — the province of Ontario, and their

attitude towards borrowing. And that's what this bill is about, but

borrowing for a very particular partisan political purpose;

whereas the

legislation in Ontario was dealing positively with this question of

borrowing when the need arose.

"The underlying strength of incomes, consumer spending and

investment is reinforced by the measures in this budget." Mr. Speaker,

this was dealing, also, in a time when there was need for economic

recovery, which is mentioned in the budget speech, and which this bill

is indirectly related to.

Whereas we are proposing to increase the

sales tax — and I can't talk about that because there is a bill before

us — nevertheless, this

preamble goes on to say that a temporary retail

sales tax cut will generate additional consumer spending, particularly

on durable commodities.

"The $1,500 grant for first-time home buyers, the

temporary removal of sales tax on production machinery, this measure

will promote expansion of Ontario's manufacturing capacity and improve

the competitive position of industries depending on export."

Mr. Speaker, they were prepared to deal positively with this

question, rather than to simply deal with it from a partisan political

point of view.

If we are going to talk about borrowing, Mr. Speaker…and we are in

this legislation; we are talking about borrowing. If we are going to be

talking about borrowing, rather than directing it to a political

campaign, a political fight, there ought to be some sensible limit

instead of some purely arbitrary, vengeful and purely partisan

political limit. Perhaps we could think about a limit related to

something else. One of the criteria that might be used would be a limit

related to the gross provincial product, as an example.

If I may quote from another document, Mr. Speaker, the History of the Committee of Finance: United States Senate ,

in talking about this problem: it does talk about the need to borrow,

and talks about borrowing related to the economic conditions in a

country. In this case, of course, we are talking about the United

States, and it is talking about debt.

Yesterday I pointed out, Mr. Speaker, that while we say we have no

gross debt and no net debt in the province, we do have a very real

community debt in the sense that the so-called contingent liabilities

are part of our total government operations. The contingent liabilities

are all liabilities guaranteed by the Province of British Columbia;

they are liabilities of agents of the Crown, and in a sense they are

part of our total liabilities, and nothing to be alarmed at. The fact

that our contingent liability today must be standing at about $2,500

per capita is not something

[ Page 367 ]

to be alarmed about, as long as we have the

productive kind of machinery that can service that kind of a debt. I am

talking now in total, not talking within the narrow limits of so-called

direct government accounts.

So reading, then, from this book about the conditions in the United States:

"Although the national debt seems, in absolute terms,

immense, and has been growing steadily since World War II, when looked

at in terms of the national income and wealth, as measured by the gross

national product, the relative size of the debt has decreased

substantially."

Well, Mr. Speaker, I'm not sure that we can say that about our

contingent liability. I think the relative contingent liability has

increased substantially in the last 20 years. But that is not something

to be alarmed about as long as it is kept within workable, reasonable

limits.

Mr. Speaker, rather than dealing with a bill right now that is

suggesting an amount related to a political campaign, we should perhaps

be dealing with general legislation that will be dealing with a problem

that is with us today, might be tomorrow or the day after tomorrow, and

one where borrowing, rather than being limited to the needs of partisan

politicians of today, would be not so much limited as calculated with

reference to some other criterion in the province.

Even the U.S. Congress now does have a public debt limit, an exact

amount of money. Mr. Speaker, no doubt you have seen in the papers from

time to time just what the debt limit is for the United States, set by

the U.S. Congress.

Now the problem they have found in setting a dollar limit on the

debt is much like the contingent liabilities we have on behalf of B.C.

Hydro, on behalf of B.C. Railway.

We find that almost every session we have legislation coming in to

raise the borrowing limit of B.C. Hydro and the B.C. Rail. Although

we're dealing today with a partisan political approach to borrowing in

this province, a very finite amount in relating it to a campaign, we're

wondering whether a year from now, or two years from now, this

administration might be obliged to bring in a general bill that would

deal with the situation generally.

Nevertheless, the U.S. Congress has found that in having a specified

amount, as we do with B.C. Hydro, as we do with B.C. Rail, that

annually they are obliged to change that amount. The record is here

showing that year by year they have another bill in to change that

amount, and, of course, Mr. Speaker, as you can guess without me

telling you, it's always a change upwards, and likely that will be the

situation here. Certainly, it is the situation here when we deal with

B.C. Hydro, and when we deal with B.C. Rail.

Each year, or almost every year, in both cases we bring in

legislation that changes the borrowing limit of that particular Crown

corporation and, predictably enough, the change is always an increase.

Mr. Speaker, the problem with this bill is that there is no

statement of principle as such — and I'm speaking now about principle

rather than principal. If it is declared that the government could

quite properly borrow money to maintain and expand services such as

hospitals, schools — we have that without this legislation…. But if

legislation were before us that we're to give the government the

opportunity in time of need to borrow to construct government-owned

capital projects, that kind of legislation we could accept. We could

certainly consider it at least in a much better light than we're able

to consider the kind of legislation before us now.

Mr. Speaker, the budget reveals that this particular legislation

will carry a price tag. It's going to cost the consolidated revenue;

it's going to cost the taxpayers of this province the sum of $40

million a year. Perhaps in winding up debate on this, the Minister of

Finance might reassure us otherwise. But it would appear as though this

price tag of revenge, this revenge against the voters for having dared

to do what they did in 1972, this price tag of $40 million a year that

is part, though not written in the bill — but according to the budget,

that's going to be the annual cost with no provision, apparently, for

repayment of that — an indefinite charge of $40 million a year is to

serve as a constant reminder to the people of the province that once

they voted NDP in numbers sufficient to change the government.

Perhaps, Mr. Speaker, that is the intention of the government in

proposing this bill in the way they have, and in introducing the

companion budget in the way that they have. No provision for capital

repayment. A debt of $400 million that will stay there for all time.

Each year members of the Legislature will be reminded, and through

them, the public generally will be reminded that they are paying $40

million out of their tax revenue so they can continue to service this

debt. Absolutely no provision to repay the capital portion of this

debt, this political debt, that has been arranged.

Mr. Speaker, this is a bill that says to the people of B.C.: "Give us

$40 million a year so that we can indulge ourselves in an orgy of revenge against

the enemies out. there." The member for Burnaby-Willingdon (Mr. Veitch)

talked about this; he talked about the enemies out there in one of his speeches.

It was during the course of his contribution during the throne speech debate.

He talked about the enemies out there. Of course, now we're getting even

with the enemies out there, those that are enemy enough that they voted in the

New Democratic Party in 1972. The wonder of it is that many of them did vote

in 1975 for the return of that government. Not

[ Page 368 ]

quite enough, Mr. Speaker, I'm sure you'll agree with me, but many of them did.

Indefinitely; I can't stress that too much because there seems to be

no provision at all for any capital repayment. Indefinitely, $40

million a year as a constant reminder. Nothing in return for that; $40

million going out simply as a reminder, simply as revenge. Nothing in

that $40 million to provide any protection against unemployment,

because there is nothing in this bill that is directed in that

direction. It's a simple statement to pay for an alleged deficit, and

the calculation of that deficit is something that I will get onto later

on in my remarks.

Unemployment that the government of Ontario has tried to deal with

in its legislation, unemployment that the U.S. Congress has tried to

deal with in its legislation, and the need for other government

services — for which all of these jurisdictions had provision that they

may finance them by borrowing if need be, so they can continue to

provide the capital goods and, indeed, the services in time of need.

The threat in the budget speech, of course, Mr. Speaker, and the

implicit threat in the bill, is that if you don't pay this $40 million

a year, this continuing charge, this charge that will go on

indefinitely, then other services may have to be cut. Of course, the

speech itself carries with it over and over again the message: never,

never again should you take a chance on doing something like this, or

you might be hit with a larger, a continuing charge against the revenue

of the province.

Mr. Speaker, as I said earlier in my remarks, that kind of a bill

just can't be supported. It's not a bill that is induced to in any way

at all provide for good government. It is simply a bill that provides

for political revenge.

The Premier now used to say when he was in opposition: "Not one dime

without debate." In this bill before us we're being asked to provide

400 million dimes of revenge against the people of British Columbia.

Certainly, as I said, this is a bill that we just cannot support; it's

a bill that we do intend to debate over and over again.

It's a fine — a fine against the people of British Columbia for

having voted the way they did, a 400 million dime fine per year.

This province — not the government but this province — in view of

the record it has built up over the years will have no trouble in

borrowing this money. That's not our concern. The $400 million can be

borrowed. We have no doubt about that.

I did quote earlier from a newspaper report that indicates B.C.'s

credit rating is still very strong. Even after the happening on

December 11, apparently our credit rating is still strong. We have a

double-A credit rating. The banker….

MR. L.B. KAHL (Esquimalt): It's stronger.

MR. STUPICH: Not stronger, Mr. Speaker — no. If there were any evidence that it were stronger then I'd like to see that evidence.

Mr. Speaker, we have had a double-A credit rating for some time. The

U.S. banker talking to the municipal financing authority — the member

who is raising questions about this may not have heard me yesterday —

is telling the citizens of British Columbia that we still have — not

now have, but still have — a strong credit rating, as does B.C. Hydro,

a strong credit acceptance that we have in New York. But he's warning

us, Mr. Speaker, and I think it is significant that he takes this

occasion — no, not talking about something three or four or five months

ago, but talking about something a couple of weeks ago — to remind us

that we have to be careful, that that credit rating and the trust that

goes along with it or that upon which the credit rating is based is

something that we have secured but it is very fragile and must be

jealously guarded. Otherwise we may lose it.

I think there is some significance in that, Mr. Speaker. That kind

of warning, to the best of my knowledge, was never issued during the

three and a third years during which the New Democratic Party was in

office in this province. I don't recall it ever being issued prior to

that. I think there is some significance, Mr. Speaker, that after the

present government has been in office for some three months and one

week, up to this time, the U.S. banker feels that it's necessary to

warn the Government of British Columbia that there is some concern,

that they have to be very careful to guard that acceptance that they

have in the financial markets in New York. We all know we need that

kind of acceptance. We all know that we are going to need to go there

and borrow money for the tremendous capital projects that are coming up

in this province. I repeat, Mr. Speaker, that to the best of my

knowledge no U.S. banker has ever felt it necessary to come to British

Columbia and warn us that we had to jealously guard the good reputation

that we have in New York. Nobody has had to warn us about that until

some three and a third months after the present administration was

elected to office.

I suggest that the government take that warning very seriously,

consider it and remember they've only seen the need to warn British

Columbia after the Social Credit were elected to office. It must be the

actions of this government: what this government has been saying around

the world, what it's saying now in this budget speech before us, what

it's saying in this very partisan political legislation that we are

debating this evening. It must be because of things like that that have

been going on in the last three months or little more than three months

that the U.S. banker has suddenly felt the need to warn us to guard the

very good reputation that we have previously held, the very high repute

in which we have been held up

[ Page 369 ]

until this point in time.

I would like to add to that my own warning, Mr. Speaker, that they

do jealously guard B.C.'s reputation, that they not risk our reputation

for the sake of cheap partisan, temporary political advantage as they

seem to be so wont to do in documents like the campaign leaflet for the

Vancouver East by-election, euphemistically called the British Columbia

budget speech, or in documents like Bill 3 that is before us now.

B.C.'s credit rating is still high. Moody's ,

1975, says that we have a double-A rating. That's not news; we've had

that double-A rating some time. But perhaps the members opposite might

be interested in just what is meant by…. What is a double-A rating?

I'd like to quote, Mr. Speaker. I think this is informative for

those of us who haven't had an opportunity, perhaps, to read this.

"Bonds which are rated double-A are judged to be of high quality by all

standards. Together with the triple-A group…."

Mr. Speaker, I think perhaps at this point I might interrupt to say

that we were working, we were hoping to get a triple-A rating in the

last few months of our administration…

SOME HON. MEMBERS: Oh, oh!

MR. STUPICH: …and, Mr. Speaker, we're getting close to that.

I'm hoping that the present administration will continue in what we

believed would be a successful application to get a triple-A rating for

the province of British Columbia. We were getting close to that, and I

hope the minister will pursue that campaign to try and get that kind of

a rating. In any case, bonds which are rated double-A are judged to be

of high quality by all standards.

Interjections.

MR. STUPICH: Mr. Speaker, these interjections again tempt me to say perhaps more than I intended to say.

Had it not been for the questions raised by the present Premier with

the Securities Exchange Commission in the United States after the

auditor's report on the BCR was questioned to the extent that the

auditor was suspended by the Institute of Chartered Accountants, had it

not been for the present Premier pursuing that question with the

Securities Exchange Commission, we were quite confident that we would

have had that triple-A rating by the fall of last year. However, I

think there is still a good chance that that can be obtained, and I

would urge the government to continue its attempts to get that kind of

a rating.

In any case, Mr. Speaker, we did retain the double-A in spite of

that very irresponsible campaign led by the present Premier. If I can

get back to the definition, bonds which are rated double-A are judged

to be of high quality by all standards; together with the triple-A

group they comprise what are generally known as high-grade bonds. Mr.

Speaker, we've retained that rating. We were hoping to improve upon

that rating, but it is important that at the very least we do retain

that rating.

But, Mr. Speaker, that's not all that Moody's

says. On page 3907 it goes on to explain why we have a good rating in

the province of British Columbia. I have a photocopy of a page from

that, and in this photocopy from Moody's ….

AN HON. MEMBER: A photocopy?

MR. STUPICH: A photocopy of a page from Moody's .

It goes back to the year 1957, brings it right up to 1974, and shows

the gross debt of the province. For the new members who may not realize

it, we still do have a gross debt which is balanced by the sinking

funds there, so there is a net debt of nil at the current time. But

there is also the contingent liability of which I spoke — a net

guaranteed debt is what Moody's

calls it. They don't call it "contingent liabilities" — it takes too

many letters, I guess — but also they recognize that it is a guaranteed

debt as far as the province is concerned.

It also lists the revenue, the expenditures for the province. It

points out with respect to revenue that revenue is not just current

taxation revenue that is coming in in the year. I am referring now to

some of the proposals we had for balancing or near balancing the budget

in what has been a very difficult year for the whole western world,

including British Columbia, but it states here that revenue includes

refunds of capital expenditures — and we intend to bring in some of

those refunds, and the present Minister of Finance (Hon. Mr. Wolfe)

intends to bring in some refunds in the next fiscal period.

As far as expenditures are concerned, they include current

expenditures and all capital expenditures to the extent that they are

included in the general government accounts. It talks about the public

debt, the funded debt, the gross debt, the sinking fund, the net debt,

and totals the contingent liabilities to show exactly what is the

position with respect to the province of British Columbia. Because our

position is so good, and has remained good during the reign of the New

Democratic Party in this province, we maintained our good credit rating

and, as I suggested to you earlier, we're attempting and we're quite

optimistic about the possibility of getting an even better credit

rating.

Mr. Speaker, Moody's is

something that is relied upon by investors all over the world. To get a

good credit rating you have to have a good report from Moody's . Moody's , Mr. Speaker, doesn't join with this present administration in its tirade about British

[ Page 370 ]

Columbia being on the verge of bankruptcy, and this

legislation suggesting that it is the first time in so many years and

that it is necessary now because of what has happened in the last three

years, suggesting that things are all that bad in British Columbia.

Mr. Speaker, Moody's

doesn't go along with that tirade at all. The Minister of Health (Hon.

Mr. McClelland) suggested that British Columbia was on the verge of

bankruptcy. Now if his words were being listened to by Moody's, then

there would be cause for great concern. I certainly hope they aren't

being listened to. But I think it would be good advice for the members

opposite to consider that they not try to spread that message too far

abroad, that they not push that message too hard, just in case some

uninformed person or some person not so well informed as Moody's might start listening.

If people do start listening to this sort of doom and gloom that is

being preached by some of the members opposite, that is not going to do

anything but harm for the people of British Columbia, because if these

people are able to raise questions about our credit rating in the

financial capitals of the world, even the members opposite, I think,

can understand the kind of harm that would do to us.

While it might be B.C. Hydro that is borrowing the money in New

York, Mr. Speaker, we're paying for that. It's the citizens of British

Columbia that are paying the finance cost of that money, whether we are

borrowing it in New York or whether we're borrowing it from the Arabs.

It is important that we maintain a good credit rating wherever we're

borrowing and, Mr. Speaker, through you to these noisy people down the

back bench, the more they talk about how bad things are in B.C., the

more likely we are to have to pay more for the financial accommodation

that we need so much…

AN HON. MEMBER: Hear, hear!

MR. STUPICH: .. . the financial accommodation that we need to

continue to develop this province in the way that it must be developed,

in the way that it should be developed and, Mr. Speaker, in spite of

the doom and gloom people down in the back benches, the way in which

this province will be developed. Because it will be developed, Mr.

Speaker, in spite of them. But I say it will be an easier job if they

don't spread this kind of story in places where it might be listened to.

Mr. Speaker, I talked earlier about the exclusive nature of this

club, about the opportunities we 54 members, soon 55 members, have. But

we also, Mr. Speaker, have some responsibilities. We have some

responsibilities to speak carefully, to speak the truth. That's

something they should remember, too. But we should not go around the

province and the country and internationally telling stories about

British Columbia that are calculated to hurt British Columbia, because

you don't hurt British Columbia without hurting the people of British

Columbia. This legislation before us, it seems to me, is calculated to

do more harm than good because the purpose of this legislation before

us is obviously to carry on a political campaign rather than to deal

with a financial problem that we have today.

Mr. Speaker, if a minister of the Crown of the province can take it

upon himself to wreck the good repute of this province, then certainly Moody's will go along with it. I suppose we'll have to wait until the next edition of Moody's

to see whether or not the kind of concerns, the kind of questions, the

kind of accusations that are being raised by the people opposite are

really being listened to. I'm fairly confident that they aren't being

listened to, and I hope very dearly that they are not being listened to.

All the financial information that we have been able to get hold of,

the financial facts in the Vancouver East by-election leaflet, the

financial facts in the publication The British Columbia Economic Activity Report

that I quoted from yesterday, all of the facts indicate that the

province of British Columbia is in good shape. But it's the way in

which those facts are related to the misinformation that is being

peddled around about them that concerns me when I raise questions about

what effect some of these remarks may have on our credit rating in the

world.

I'm not really worried about the facts. The facts speak for

themselves. But facts can be misinterpreted, if people are determined

to misinterpret them. I think one of the ministers — I am not sure

which one now — did say in one of his speeches that the province is on

the verge of bankruptcy. I think it's very ill-advised to say that. We

know it isn't true, Mr. Speaker. You and I know it isn't true, but

certainly no one, and in particular, no minister of the Crown should

lend himself to that kind of remark.

The Premier of the province is lending himself to some of it to some

extent when he says we've got to have $400 million at 6 p.m., March 29,

1976. The Premier of the province is reported in a newspaper story as

having said that we have to have it. Premier Bennett said outside the

House: "The bill must be passed." The bill is, Mr. Speaker, as you

know, to provide $400 million. He said the bill must be passed before

Wednesday midnight, the end of the current fiscal period. I don't agree

that it has to be passed. I don't agree that it has to be passed at

all. I don't agree that it has to be passed by midnight on the current

fiscal year. There is no reason that that kind of legislation would

have to be dealt with in that kind of a time-frame unless there were

some partisan political reasons for dealing with it that way. We are

talking now about a time that is only 26½ hours

[ Page 371 ]

away, When I prepared my notes on this particular

subject, the figure here is 54 hours, but time has gone by since the

time that I thought I would be delivering these remarks.

But, Mr. Speaker, Moody's

goes on. On or about 9 p.m., March 29, the Finance minister said: "We

don't really need it by then." I don't know who it is we are to

believe, but the Minister of Finance is said to have said in the

corridors, in spite of what the Premier had said: "We don't really need

the money by that time."

It is also reported that at that time the Premier, earlier on in an

exchange, denied this. But it is reported in one of the papers, at

least one of them, that he is said to have taken the Minister of

Finance by the arm, to have said: "Peace! Love!" and then dragged the

Minister of Finance from the hall. We don't know the story behind that,

Mr. Speaker. All we know is that it was reported in the press.

HON. R.H. McCLELLAND (Minister of Health): Are you against peace and love?

MR. STUPICH: No doubt, Mr. Speaker, Moody's

will go on to observe that the present government urges a form of

fiscal orthodoxy that would have been outdated…I quoted from a book

yesterday to show that it was outdated long before 50 years ago, to

indicate that the financial attitude of this government is unorthodox

But surely, Mr. Speaker, if there were anything wrong with the province — anything wrong with the finances of the province — Whitaker's would

report it. It was prepared in the fall and lists the Hon. David Barrett

as Minister of Finance at that time. It forgoes the opportunity that

certainly was there, because they had available the same information

that the present Premier was using as he was going around the province

talking about doom and gloom — the same as the members on the

government side of the House, those who were in the House at that time,

who were travelling around the province and speaking in this House

about doom and gloom.

Whitaker's had the same

opportunity and access to the same information, but, Mr. Speaker, they

were a bit more responsible; they were dealing with facts. They weren't

dealing with the sort of political accusations that the members

opposite were so anxious to deal with and so anxious to talk about on

the hustings. And they do go to quite an extent in talking about, the

Province of British Columbia, giving factual information about British

Columbia — about all the provinces.

Mr. Speaker, if one takes the time to read Whitaker's ,

one would find that B.C. has done quite well, related to other

provinces. There are no problems at all as far as B.C. Is concerned, in

spite of all the concerns voiced by the members opposite, and the

concerns that maybe B.C. Isn't a very nice place to live. Now this

concern is not supported by Whitaker in this book. If any of the

members would like to read what they have to say about B.C., I would

recommend that they take a look at Whitaker's Almanac .

Mr.

Speaker, another book that I would recommend to some of the members, if

they want to read factual information about B.C. and to see the high

repute in which the finances have been held by others, is the Statesman's year

book, 1975-1976. It had the same opportunity to talk doom and gloom,

if, in fact, there was any reason to talk doom and gloom about the

state of affairs in the province of British Columbia. But they saw no

reason to reveal any of this information, to discuss any of this

information. The Statesman's

year book apparently felt, along with the government of the day, that

the finances of B.C. were in quite good hands and things were going

well in the province of British Columbia, until the present

doom-and-gloom wrecking crew arrived on the scene on December 12,1975,

or a few days thereafter.

The Statesman's year book,

1975-76, came out and they had the opportunity. Unlike the current

ministers of the Crown, they bear no particular responsibility for

maintaining the good repute of the province. And that's a point I have

tried to make, Mr. Speaker: the ministers of the Crown do have that

responsibility. And they might be excused if they didn't say some of

the things they know that they felt might do some harm. They might be

excused. But, Mr. Speaker, the Statesman's year book has no such

responsibility. Its only responsibility is to tell it as it sees it. As

far as the Statesman's year

book is concerned, when it told it as it saw it, B.C. during the three

and a third years of the previous administration was running well and

was obviously in good hands, in spite of everything that has been said

by these people opposite, and in spite of the indications of the

legislation we are discussing this evening.

I think this government, if it really feels that everybody else is

wrong and that they are right, has an opportunity to tell the world

that Moody's is wrong; that Whitaker's is wrong; that the Statesman's year book is wrong — if they really believe that.

Mr. Speaker, I don't believe it; I hope they don't believe it. I

wish they wouldn't keep talking about how bad things are in the

province of British Columbia, and start talking, instead, about how

good things are. I would excuse them if they want to go on and say

things are good now, but they are going to be better. But they are not

saying that; they're talking about the disaster that befell the

province of British Columbia, and that they hope things will not be so

[ Page 372 ]

bad in the future. Not that they'll be good but simply that maybe they won't be quite so bad as in the past.

This government does not pale at telling voters throughout the world

how to behave. They have done that in this by-election leaflet: they

criticized voters all over the world; they criticized their

governments; they criticized opposition parties. They don't back away

at all from giving that kind of advice.

Surely, since they are in possession of arcane fiscal methods by

which they can reveal that a jurisdiction in good financial standing

throughout the world — and I have quoted all kinds of references to

indicate that as far as the world is concerned, our financial position

is good and our finances are in good hands — but if they really are in

possession of some kind of knowledge, not known to anyone else, that

would indicate the situation as otherwise, they have some

responsibility to tell the world just exactly how bad things are.

Mr. Speaker, that would be doing a disservice to the province

because it just isn't true. This legislation before us this evening is

doing a disservice to the province by spreading around the world the

idea that B.C. is in bad shape. B.C. is in good shape, Mr. Speaker.

B.C. was in good shape and in spite of what has happened — in spite of

the wrecking crew opposite now being in office — B.C. will continue to

be in good shape; B.C. will continue to prosper.

One might wonder if fiscal information, financial information, has

been withheld, as some of them would seem to suggest — they suggested

we were keeping this information away from people, that we weren't

letting the information be known, in spite of the fact that we were

filing information on a regular basis — in spite of that, one might

wonder what other secrets they are hoping to find that have been

withheld. I wonder what they are looking for that really isn't there at

all. But are they looking for it? Are they going to report to people

around the world that they should be looking deeper into some of the

things that have been happening in the province of British Columbia?

Moody's reports that many

jurisdictions are not in nearly as good a shape, as British Columbia.

Just imagine, Mr. Speaker, if the crew opposite were to take a look at

the finances, let us say, of one of our sister provinces — the province

of Ontario. What would they say about the finances of that particular

province, if they were to have a look at those finances and compare

them to the very outmoded ideas they have about finance? At this moment

nobody is concerned about what is happening in the province of Ontario,

but if they were to follow the guidelines espoused by the Minister of

Finance (Hon. Mr. Wolfe) in this document, then, by comparison, the

province of Ontario would, indeed, look very dark. But, Mr. Speaker,

nobody does; not even the people opposite would suggest that.

They are directing their political campaign only against the

previous administration of the province of British Columbia. The bill

before us this evening is an attempt to direct people's attention, for

purely partisan political purposes, against what has been happening in

the province; trying to destroy the excellent reputation that the

province has had, again for purely partisan political advantage, even

though the need for that is certainly gone, at least for the time being.

If one were to look at some other jurisdictions in the light of the

legislation before us, and talking about debt, about the danger of debt

— of course, this document also talks about the danger of debt — try

looking at some of the other jurisdictions and see how they view it.

For example, one country that is presumed to be in very good

financial shape, one of the financial countries of the world, is

Switzerland. Actually — and if you'll excuse me for using the word —

Switzerland has a debt. Really, Mr. Speaker, Switzerland has a debt.

Now nobody has ever noticed them having any trouble. I'm sure they used

that money for good purposes for the people of their country. But

there's no denying the fact that they have a debt, and they seem to

have survived at least as well with it as we have without having any

direct debt. Although, as I say, the difference is that we have what we

call contingent liabilities.

If the present Minister of Finance, the present administration

opposite, feel that they are going to be so good at running the affairs

of this province that they will be able to do it and be out of step

with every other jurisdiction in the world, or almost every other

jurisdiction, perhaps they will go on and give advice to the rest of

the world and tell them, too, how they may govern their affairs to they

will be able to provide the citizens with everything they should have

today — all of their capital projects, all of their capital needs — and

do this and finance it all out of current revenue.

It's quite a challenge for them, because, as I say, in doing that

they would be reversing the trend of the whole world. Because in

pretending that we are out of debt in this province, we are pretending

to be out of step with the whole world.

The bill asks for $400 million. You don't need $400 million. I think

that's generally agreed; we don't need it from the financial point of

view. We could raise that amount of money, I suppose, if we're going to

say to the rest of the world that we're so much better here that we can

manage our affairs in a better way than anyone else in the whole world.

We'd have people coming, flocking to us. Our finances would be so

strong that all the money in the world would be deposited in the

province of British Columbia. If we were able to convince the world

that we were that good, then money would be flowing into B.C. banks

[ Page 373 ]

and there'd be enough money coming in that we could finance our debt out of a small service charge on all the money pouring in.

But, Mr. Speaker, we

aren't going to do that. We're simply pretending that we're different,

because, really, when it comes to financing — although we don't use the

word "deficit" and we don't use the word "debt" — we do continue to

finance a large proportion of our capital expenditure by borrowing. We

will continue to do so, Mr. Speaker, and other legislation before us

indicates that we are going to do that to a greater extent. There is

absolutely no harm in doing that; we will be simply following the trend

that has been established, well established, in the rest of the world.

The United States and all of its states have debts. All the provinces in Canada have debts of one kind or another.

A lot of people out there may be wondering why the need for this

$400 million. Although it was talked about, apparently it didn't become

absolutely known to the government until the bill was introduced just a

few hours ago, almost. A few days ago. If the need was that urgent, if

it was known that long ahead, I wonder why the bill wasn't introduced

sooner, Mr. Speaker?

If there was that kind of a time limit on debate on this bill, it

could have been dealt with sooner by the House. There could even have

been a special session to deal with this question of emergency

legislation that was going to be needed. But it was known — and the

Premier knew; the Minister of Finance knew — that it was a political

ploy, that it was a continuation of the partisan political campaign.

There was no real need to bring in this bill. There was a political

battle to be fought, but there was no real need to bring it in then, or

at any other time. So there's no need to bring it in any sooner than

they did.

Mr. Speaker, if I could just make a reference for a moment to a

former Social Credit province, and that is the province of Alberta.

There too, Mr. Speaker, they're in step with the rest of the world.

There too they operate by having deficits. Now they do have capital

expenditure, they do have capital funds, but they also, Mr. Speaker, if

I may use that nasty word, they also often have deficits in their

operating accounts. But Mr. Speaker, they don't try to hide this. They

reveal it publicly. They don't try to pretend they don't exist. They

recognize that they are there.

Mr. Speaker, yesterday I did quote from one publication to talk

about the reasonableness of this kind of approach, about the

out-of-date policies that are apparently supported by the present

administration. One of the members opposite was asking for the title

and the author of this book. I quoted from Prosperity Without

Inflation , by Arthur F. Burns, to show that it is not unorthodox to

borrow for capital expenditure, or indeed to borrow for any other

expenditure.

Quoting at length — I didn't quote at length, Mr. Speaker — and I

won't bore you this evening with quoting at length, but the comments

are in here and showing that any such idea as is being espoused in the

British Columbia budget went out of date at least 50 years ago.

Pointing out also, Mr. Speaker, and I think I should remind you of

this, pointing out also in the words of the foreward to this book, by

Ralph C. Epstein…and reminding you, Mr. Speaker, as I did the House

yesterday, that when I attended the first meeting of the Ministers of

Finance that I did attend, the Minister of Finance — and I think it was

his first meeting of Ministers of Finance as well, he was new in his

position too — made a point of saying that fighting inflation and

fighting recession are like fighting two sides of the same coin. The

kind of thing, Mr. Speaker, when we talk about borrowing, if we are

talking about borrowing in that context, Mr. Speaker, of it being a

two-pronged attack on two problems that are really part of the same

problem, then that kind of borrowing legislation we could accept, Mr.

Speaker. But the kind of legislation, as I have to keep repeating, the

kind of legislation that is simply partisan political legislation, is

legislation that we feel we just can't accept.

Mr. Speaker, the budget for the state of California, Ronald Reagan —

how can you find anyone any more conservative than that — borrowing

right across the United States, right across Canada, with the one

exception, the province of Quebec, where they do it differently, but

the same pattern, Mr. Speaker. There is nothing wrong with the

borrowing. It's not the borrowing in this legislation that is before us

now that we object to. It's the partisan political approach in this

bill that's before us and the fact that it is said to be there simply

to pay off deficits that were accumulated by a previous government when

we know that those deficits were something that were arranged by the

present administration, rather than something that was a result of a

previous government.

Of course the rate at the top of the good risk borrowers, and I

mentioned that earlier I think as far as B.C. Hydro…fortunately for us

it is one of the agencies that does have this double-A credit rating.

It is important that we hold that. I recalled to the House yesterday

that when the second issue of petro-dollars became available, Mr.

Speaker, B.C. was the first province, because of the high credit

rating, the good esteem in which we were held under the previous

administration — and I warn them again not to do anything to damage

that — that we were the first province to get in on that second issue

of petro-dollars. Mr. Speaker, it is important that we retain that good

reputation in the financial capitals of the world.

Mr. Speaker, perhaps the government should be

[ Page 374 ]

reminded that at every university in British Columbia, there are

people teaching that it is normal for governments to borrow,

particularly for capital expenditures, by implication that there are

circumstances in which they have a responsibility to borrow. A

government that can tell other sovereign states what kind of

governments they should have, or how they should act, should not

trouble about the independence of the university perhaps.

But beyond that, Mr. Speaker, there are the members of the U.S.

senate committee on finance, that have associated themselves with

government borrowing, and more particularly with a law that permanently

permits succeeding governments to borrow. I said that earlier during

the course of my remarks, and I want to repeat again, that it's the one

prime nature of this legislation — that's one of the things that

disturbs us most about it — the fact that it's related to one

particular incident, rather than giving the government the authority to

use this opportunity, when whatever government of the day feels it is

necessary to have the use of this authority in the interests of the

community that the government should be serving.

AN HON. MEMBER: He's lost his place.

MR. STUPICH: Lost my place? No, Mr. Speaker, I haven't lost

my place. It's just that I'm avoiding repeating some of the information

that I feel perhaps may be failing on some deaf ears down on that side

of the House, and perhaps moving on….

HON. MR. BENNETT: Why don't you talk about your Bricklin?

MR. STUPICH: My Bricklin?

Interjections.

MR. STUPICH: Well, you've got me wondering. I'm not just sure what my Bricklin is.

Interjections.

MR. STUPICH: Mr. Speaker, I've said all along the different

reasons why we should oppose this particular bill — why we just feel

that we can't support it, the kind of bill that is before us. I have

suggested the sort of legislation that we could support: general

legislation that was not related to or not referring to partisan

politics, legislation that would province an opportunity for future

governments to borrow when circumstances of the day required it,

whether it be a future Social Credit government — although one would

hope not, certainly — but a future Social Credit government, or one

like the Social Credit government they had in the province of Alberta which found it in the interests of that province to borrow

in the 20 years from 1952 to 1972, a government such as they have in

the province of Ontario — certainly not a New Democratic Party

government and not one that can be considered wasteful because it is a

socialist government, but rather a Conservative government, Mr. Speaker

— one that chose to borrow when it felt it in the interests of its

people to borrow to maintain programmes or to proceed with capital

expenditures without any real political tirade and without any real

political squabbles in the House. It was legislation that was supported

because it was not directed against any political party. It was

legislation that was intended to deal with a particular problem of the

day. That's the kind of legislation that we would like to see before us

now rather than the sort of legislation with which we are dealing.

Mr. Speaker, there is a recent news release put out by the Ministry

of Treasury, Economics and Intergovernmental Affairs in the Province of

Ontario that, I think, relates something I have referred to earlier

when I talked about the close association between government and its

agencies. It's from the Ministry of Treasury, Economics and

Intergovernmental Affairs, March 25, 1976, Toronto. It's an announcement

by the Ontario Treasurer: "Darcy McKeough today announced a major

financing by Ontario Hydro in the United States private placement

market, the issue of U.S. 650 million 20-year 9.5 per cent notes

guaranteed by the Province of Ontario." That's the same sort of

approach that we take, Mr. Speaker, when we are borrowing for Hydro.

But again, it's being arranged by the government, it's being

announced by the government, it's guaranteed by the government. There

are more dollars involved than we would normally do in one borrowing,

but nevertheless guaranteed by the Province of Ontario, sold to a group

of U.S. financial institutions, arranged by Salomon Brothers and Wood,

Gundy Inc. of New York, the same people with whom we deal from time to

time. "Payment and delivery of the majority of the placement was

completed on March 24, with the balance to be completed in two smaller

installments in June and September."

That's the kind of thing that goes on, Mr. Speaker. There were no

quarrels about that in the Ontario Legislature, I'm sure — certainly no

objections from the New Democratic Party. There was nothing political

in this; it was borrowing that was done for the citizens of the

province of Ontario. That kind of borrowing is something with which we

would not quarrel. But that is not the kind of borrowing bill that is

before us this evening.

You don't find in the Conservative government of Ontario any statute which guards against the

[ Page 375 ]

possibility that the people of Ontario might someday elect a

different kind of government. And that's a very real possibility, Mr.

Speaker. You will recall they had an election last year and they now

have a minority government. There is a very real possibility that there

might be a change of administration after the next election. But

there's no legislation on their books guarding against that

possibility, warning the people what might happen if they dare to throw

out an administration that has been in so long, no lashing out against

political Joes, not preachment to the social democracies of the world

that they had better watch their step, they had better smarten up, if

they want Ontario to continue talking to them. Or a Liberal government,

Mr. Speaker — again, not NDP, not socialist, but a Liberal government;

if the people choose a Liberal government they won't slide in any more

than the hon. Premier slid in when an opportunity was opened for him to

enter the Legislature, in the words that our budget speech talks about

the parliamentary system.

We're all here as part of the parliamentary system. I think we

should honour that system rather than talk about it in the disparaging

terms that are used in the budget — to think that one would "slide" in.

Mr. Speaker, I am sure you and I respect the parliamentary system under

which we both serve. Neither one of us would want to be associated with

the kind of words that are used in the British Columbia budget, March,

These people are properly elected, Mr. Speaker, as were you and I properly elected.

The administration may change in Ontario and if it does it will be

properly elected. Some day the administration will change in the

province of British Columbia, and when that day comes, I hope, Mr.

Speaker, it will be by election, because I think you and I would not

want it to happen by any other means.

But that is not sliding in, that is by election, and that is the

system that you and I support. Or an NDP government such as they have

now in two provinces in Canada, twice as many as the number of

provinces in which there is a Social Credit government…any government,

whatever the party, whatever the politics, we're certainly much closer

in our thinking than we are to governments of many other nations. Any

government such as we have in mind might feel it wise to borrow, might

feel it expedient, might feel it necessary to borrow to establish

capital assets, just as they do in the Conservative province of Alberta.

The federal government has borrowed every year for many years. They

ran deficits in 1969-70,1971-72,1973-74, and there's no doubt that

they're going to run a substantial deficit this year, but nobody is

preaching ruin. Canada is doing very well among the nations of the

world and Canada will do well among the nations of the world and nobody

is going around preaching the sort of doom and gloom that they are

here. Of all people, the government is the one that is doing the

preaching of doom and gloom about the province of British Columbia.

AN HON. MEMBER: Shame on them!

MR. STUPICH: British Columbia, even under this Social Credit

administration, Mr. Speaker, is still a province in Canada and let us

remember that. Let us remember that we are part of Canada. As a part of

Canada we live under laws that allow governments to borrow at need, or

when it's sensible to do so. The legislation before us is not drafted

in that vein. Again, Mr. Speaker, it's legislation like the budget

speech, legislation of political revenge. Shocking, yes, I hear someone

saying that it's shocking that legislation of this kind should be

placed before us. Indeed, Mr. Speaker, it is shocking that this kind of

legislation should be before us this evening.

Interjection.

MR. STUPICH: Mr. Speaker, reference has been made in the B.C.

budget speech to the Clarkson, Gordon report, about the need to borrow

$400 million. There's reference to a deficit of $541 million. There

just as easily could have been reference to a deficit of $40 million,

as was the figure forecast by the then Premier of the province, David

Barrett, and myself in December of 1975. The figure could have been $40

million, it could have been $541 million, or it could be more, or it

could be less. Mr. Speaker, it is a politically contrived figure and I

intend to…. And this came up earlier in the debate, Mr. Speaker, when I

was being challenged from across the way about the Clarkson, Gordon

report, and I said that no one on this side of the House has questioned

the Clarkson, Gordon report in any way at all. We do not question the

use of the Clarkson, Gordon report, but we cannot help but question the

abuse of the Clarkson, Gordon report and the liberty that has been

taken with this report in the budget speech itself and by implication

in the bill before us now, the bill that pretends that, because of the

information revealed in the Clarkson, Gordon report, it is necessary

for this province to borrow $400 million.

Mr. Speaker, I find no quarrel at all with the Clarkson, Gordon

report. I think the only people who can quarrel with the Clarkson,

Gordon report are the people who haven't read it. Mr. Speaker, for

their benefit I want to quote a few lines from the Clarkson Gordon

report. Mr. Speaker, in the budget speech reference was made to the

fact that information was revealed in the Clarkson, Gordon report and

of course that information forms the basis of the legislation before us

this evening. The Clarkson, Gordon report, dated February 18, 1976,

addressed to the Hon. Evan

[ Page 376 ]

M. Wolfe, Minister of Finance. It starts by reminding the Minister

of Finance: "On December 22, 1975, you requested us" and I'd like you to

note these words, Mr. Speaker, "to co-ordinate the production of

certain unaudited financial information for the year ending March

31, 1976."

Mr. Speaker, when the hon. member for Vancouver East was referring to this

in the same vein, and when the Premier was in his seat at the time, he said:

"Are you questioning the Clarkson, Gordon report?" Mr. Speaker, we're

not questioning the Clarkson, Gordon report. We're questioning only the

abuse, the liberties that have been taken with this report. "You requested

us to co-ordinate the production of certain unaudited financial information

for the year ending March 31, 1976 which you" and the you, Mr. Speaker,

is not you, but it's the hon. Minister of Finance, "information which

you had requested from the Deputy Minister of Finance," and that's

quite proper, "the comptroller-general," and that too is quite proper,

"and the management of all Crown corporations, boards and agencies"

and, Mr. Speaker, this I want you to note too, "and to produce a

summary

report on the overall financial position of the province."

Mr. Speaker, it is quite plain in there that the advice in the

Clarkson, Gordon report is simply a compilation of information that was

provided by the hon. Minister of Finance. They had not arrived at this

independently, in spite of what the Premier said in the opening of his

address where he promised research, promised an independent review by a

firm of chartered accountants. Now that's not what Clarkson, Gordon

tell us they did. Clarkson, Gordon tell the Minister of Finance, remind

him, that all he asked them to do was to add up certain figures that he

was giving to them. That's all; there was nothing more than that.

Mr. Speaker, they go on to talk about surplus or deficit, and this,

of course, is where we get to the nub of the bill before us, because

this is dealing with an alleged deficit that was built up as a result

of the financial operations of the previous administration.

Let's see what they have to say about surplus or deficit. It's worth

reading, this Clarkson, Gordon report. I would commend it to the

members opposite, that they quit talking about it and start reading it.

Or, alternatively, that they listen to me read certain passages from it.

When we are talking about surplus or deficit, Mr. Speaker, any

discussion of a province's finances usually starts with a consideration

of the anticipated surplus or deficit. Fair enough. "For the year under

review," and, of course, under this bill we are dealing with the year

ended March 31, 1976, "and the primary purpose of your request" —

that's the Minister of Finance's request — "for financial information

was to determine what the result would be for the province's fiscal

year, ending March 31, 1976, based on actual results to the end of

1975,

and estimates made by the appropriate officials and managers for the

rest of the year."

Mr. Speaker, the actual results for the year ended December 31, 1975,

were supplied by the Deputy Minister of Finance and by the

Comptroller-General, as he does regularly, and those figures are

usually available by the 7th or 8th of the month following the end of

the month. So they were using information up to the end of December,

and their figures for revenue and their figures for expenditure, in

some instances, varied from the figures produced by Mr. Barrett and

myself. They were a month later, so it's reasonable that they would

vary — and I want to come back to that point as well, Mr. Speaker — so

there is some difference there.

But he is saying that the information was made available, the

information up to the end of December 31, 1975. They were to take that

information; they were to get forecasts — not to make forecasts,

because, certainly, they are not as well equipped to make forecasts as

are the people dealing with these figures — they were to take the

forecasts that were made available by the Comptroller-General, by the

Department of Finance and by the appropriate officials and managers,

forecasts to deal with the balance of the year. On the basis of that

information that was to be supplied to Clarkson, Gordon — and according

to this, not even directly, but through the hands of the Minister of

Finance…. And I am not suggesting there is anything improper there,

because that information should go to him; it shouldn't go to other

people.

Clarkson, Gordon do say at the top of page 2 of this report that the

deficit for the current year is now estimated at $541 million. Now if

you took that statement completely out of context then, of course, we

would have to say: "Well, that's game over. We had $147 million to

start with and Clarkson, Gordon says $541 deficit, so obviously we need

$400 million." But, Mr. Speaker, you could only arrive at that

conclusion if you do take it completely out of context, because you

have to go on and read the rest of it. What are the details, for

example — the details of this forecast?

Then let's see what they say in the next paragraph. I am just

concerned that many of the members may not have taken the trouble to

read this, because it is, after all, in the back of a document. The

front part of this document is the address by the Premier. I am just

concerned that some of the members opposite may have taken the time to

read the 5½ pages of the Premier's speech, but might not have

bothered to read the Clarkson, Gordon report itself.

So taking that statement by itself, that the deficit for the current

year is now estimated at $541 million, then we go to the next

paragraph: "Details of this

[ Page 377 ]

forecast are set out in appendix1." But this is the point: this

information is meaningful only if the reader understands the way

British Columbia accounts for its revenues and expenditures.

Before commenting on the results we would like to discuss in broad

terms what a surplus or deficit is, and what it is not. Such an

understanding is essential if readers are to be able to place in

context the matters discussed later in this report.

Mr. Speaker, you can't simply lift that one line out of the

Clarkson, Gordon report and say that you have summarized the report.

Clarkson, Gordon go to great pains to tell the readers that they

mustn't take that one line out of their report and simply assume from

that, draw all their conclusions from that. Apparently, Mr. Speaker,

the legislation before us was drafted purely on the basis of that one

line in the Clarkson, Gordon report, without having taken into account

the advice contained in the report and the rest of the information in

it.

Clarkson, Gordon point out that that's the way things are. They

don't say it's right or wrong; I don't say it's right or wrong. I

simply say, Mr. Speaker, that one of the reasons that this legislation

is before us tonight is not simply because of what the previous

administration did, but it's because the present administration is

trying to take maximum political advantage of the fact that they won an

election. They are trying to make things look as bad as they can for

the previous administration.

So when the Minister of Finance and chairman of Treasury — and that

is the same fellow — was unable to explain to us any of the details why

these special warrants that totalled, I believe, in excess of $100

million…why it was necessary to proceed with us at this time.

Certainly, he gave us every indication that he was not examining these

urgent and special needs for funds, but was simply approving everything

that everybody asked for in the hopes that they wouldn't be coming back

next month asking for anything.

Now that is the impression we got when he was unable to answer these

questions. Nevertheless, he has taken his notice, and presumably

sometime in the next fiscal period we will get some of the answers,

sometime after, the government hopes, this bill will have been passed.

MR. A.B. MACDONALD (Vancouver East): We should have them before this bill is passed.

MR. STUPICH: Mr. Speaker, we've dealt with two of the

important things that Clarkson, Gordon have to say with respect to

surplus and deficit. First, you'll recall: it's an annual concept.

Secondly: it depends upon the political choice, the government's

decision as to whether an expenditure will be made by midnight on March

31 or whether it will be made on April 1. If it is made by midnight on

March 31, then it is the fiscal period ending in that period. If it is

made on April 1, then it is part of the surplus or deficit of the next

fiscal period, and the government has the complete authority to do that

kind of thing and to do its accounting in a way so that it can make one

period look better or worse compared to the other periods, depending

upon the government's purposes in so doing.

Finally, Mr. Speaker….

Interjection.

MR. STUPICH: No, no, Mr. Speaker, only finally with respect to the three. (Laughter.)

Mr. Speaker, I do appreciate the tolerance of the members, and the

fact that they are listening so patiently — those who are here. I hope

that they are gaining something from this reading of the Clarkson,

Gordon report. I am fairly confident that very few of them, if any,

have actually read the report the way that I have.

Finally, it is important to note that revenues and expenditures

entering into the calculation of the annual surplus or deficit relate

only to the general accounts of the province, and do not fully

consolidate any special purpose funds or other government-controlled

operations such as agencies and Crown operations. So there is a good

deal left out, Mr. Speaker.

[Mr. Speaker in the chair.]

They don't take into account at all the operations of the special

funds that total, at the March 31, 1975, year-end date, in excess of

$500 million. There is no recognition of those funds at all. They don't

take into account the operation of all the Crown agencies that the

government has under its control — B.C. Hydro, for example; B.C.R.;

Canadian Cellulose which is controlled by B.C. Cellulose which, of

course, is owned by the government. None of that is taken into account

at all. When they talk about the deficits of the current year,

estimated at $541 million, we have to remember that that word could

mean a great deal of things, or could mean very little.

You have to bear in mind the three important things that Clarkson,

Gordon draws to our attention when you are talking about the word

"deficit."

Going on further with a discussion now of general accounts, and

Clarkson, Gordon, I want to repeat again that we have no quarrel at all

with the Clarkson, Gordon report. We are concerned only about the

people who are talking about it and who, apparently, haven't read it.

With respect to general accounts since surplus or deficit refers

only to the general accounts, the question may well be asked: how are

other

[ Page 378 ]

government-controlled funds, agencies or Crown corporations, dealt

with? Of course, the Clarkson, Gordon report goes on to discuss a

number of these.

With respect to special purpose funds the government may, and the

previous administration did on occasion, transfer funds, too. There are

certain special funds set up by legislation — this money comes from the

general accounts in the province. The effect of this is that the full

amount of any of this cash taken out of general accounts will affect

the province's surplus for that period.

You will recall, Mr. Speaker, that during the three years the

previous government was in office government revenue exceeded budgeted

expenditures by $560 million in three fiscal periods. Revenues exceeded

expenditures by over $500 million; more than the deficit they are

talking about in this period. That is not unusual. That was done by the

previous Social Credit administration, and likely the present Social

Credit administration hopes that it will be done by them — that things

will improve to the extent that they, too, will be able to transfer

funds to special accounts from time to time, or to make grants to Crown

corporations from time to time.

They are making grants now. They are proposing that grants be made

to several Crown corporations by March 31 in order to increase last

year's deficit. But there may be other good reasons. There will be

other reasons, and they will be good reasons; that isn't a good reason.

But there will be other reasons in the future.

In common usage the terms "surplus" or "deficit" are used to

describe the difference between cash received by the province in a

year in its general accounts, and cash paid out. If cash coming in

exceeds cash paid out, there's a surplus for the year. If cash paid out

exceeds cash coming in, then, of course, there's a deficit. But there

are three important things to bear in mind. Mr. Speaker, I think the

members really should pay attention to the information in this report.

First, used in this sense, surplus or deficit is an annual concept

and, Mr. Speaker, I think that in itself raises an interesting concept.

Should we really be talking about 12 months? Can we really look at a

12-month period in time and say that this is a reasonable length of

time during which we should be considering government accounting?

Certainly it's reasonable for some items in revenue, and some of

expenditure, but not reasonable, I suggest, Mr. Speaker, in the total

concept when we are thinking, for example, of assets that in some cases

have a useful life of 100 years.

So it's really an artificial period of time when we take a year.

What would be more proper…. Why would 12 months be more proper than,

say, 15 months? Oh, it's generally accepted, 12 months. You usually

look at 12 months. But should we perhaps in some instances be looking

at 60 months instead of 12 months? Should we be looking with respect to

some items of 12 months and some at 60? Or should we be looking with

respect to some items at even much more than that?

So the first thing to bear in mind then, as Clarkson, Gordon points

out, is that this question of a surplus or a deficit…and I remind you,

Mr. Speaker, that this bill is referring to a deficit. Should we be

looking at this concept of a deficit with respect to the relatively

short period — perhaps not all that short in your life or mine, but

certainly short in the life of government as such, short in the life of

a particular administration. but not short in the life of a government?

It's a very short concept to be used when we are talking about this

idea of surplus or deficit.

To go on then, Mr. Speaker…. Perhaps I'd better repeat that.

Firstly, used in this sense, surplus or deficit is an annual concept.

Cash reserves available at the beginning of the year resulting from

surpluses, less deficits of all previous years, do not enter into this

particular calculation; we're talking now about this one-year period.

So when we're talking about the deficits that must be accommodated for

according to this legislation that is before us, we're talking about

the deficit of one particular year. That's one point. It's an annual

concept.

Secondly, it's measured substantially on a cash basis. Revenue

includes all the cash which came in during the year — expenditures, all

the cash paid out. As I mentioned before, if a building is purchased

during the year or a highway is built, the entire cost — that is if it

is something done out of general account or a ferry (that's not in

here, but I'm just throwing that in) or a ferry is built or purchased —

if it's paid for in cash in that period, then it's included as an

expenditure in that period, even though the asset may serve the

citizens of the province for many years to come. It's still part of the

expenditures of that year, and will still contribute either to a lower

surplus or a larger deficit, depending upon the situation we are in.

Similarly, if an expenditure is made on March 31 of the fiscal

year…. And this is one of the concerns we have about some of the things

that the present administration has been doing, and some of the reasons

we raise questions about warrants. You may recall, Mr. Speaker, that

today during question period we asked several questions about warrants

that had been passed just before this House was called into session,

and you're aware, Mr. Speaker, that warrants are something that are

extraordinary. Funds have not been provided for these certain

expenditures.

We had some concern wondering why the government felt it was

necessary to pay these specially large amounts out at that point in

time. The question in our minds was whether or not they were

[ Page 379 ]

simply trying to inflate the expenditures of this period, as

Clarkson, Gordon pointed out, so as to maximize the deficit in this

period and so improve the financial position for the next fiscal

period. I will not say now whether it will be surplus or deficit, but

certainly if they can put into this particular period expenditures that

would not normally be paid in this period, then they are maximizing the

deficit and increasing the necessity — if indeed there is any necessity

— but certainly increasing the possibility of a need to borrow by March

31, 1976.

If those special warrants were for expenditures that need not be

made…. An