1992 Legislative Session: 1st Session, 35th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

WEDNESDAY, APRIL 1, 1992

Afternoon Sitting

Volume 1, Number 17

[ Page 437 ]

The House met at 2:04 p.m.

Prayers.

N. Lortie: Hon. Speaker, you may wonder why we have this cast of thousands here. Well, many of the people in our gallery are from my constituency of North Delta. These are 56 grade 11 students from North Delta Secondary School, and they're led by their teacher Mrs. O'Shaughnessy. Please help me make them welcome.

G. Wilson: I would like to introduce Paul and Alison McKivett, who are in the Speaker's gallery today. Paul McKivett did yeoman service acting as my chief of staff as we got the Liberal opposition established in Victoria. He has also been a candidate for us in Oak Bay-Gordon Head, and we look forward to him joining the members in this caucus as we move across to sit on the other side after the next election.

P. Ramsey: We have in the gallery today one of the most successful regional publishers and local historians in British Columbia, Howard White, and his son Silas, from Powell River on the Sunshine Coast. Would you please join me in welcoming them.

S. Hammell: I rise to introduce my brother Barry Hammell, who is with us here today. He is not only a fine brother, but a friend as well. Will the House please welcome him.

Oral Questions

CORPORATE CAPITAL TAX

AND ICBC RATES

L. Hanson: I have a question for the Minister of Labour and Consumer Services. It was announced in the budget that there would be a corporate capital tax applied to some Crown corporations. I believe it mentioned Hydro, B.C. Rail and a couple of others. I assume that also applies to ICBC. The second announcement was that there would be provincial sales tax levied against legal fees, which I assume also applies to those Crown corporations. Could the minister confirm that?

Hon. M. Sihota: The answer to the first question is yes.

With respect to the second question, there is a levy on legal fees for legal services rendered.

L. Hanson: Supplementary and for clarification: is the minister suggesting that the 6 percent provincial sales tax does not apply to legal fees when Crown corporations purchase...? It does not.

Well, Madam Speaker, a supplementary to the same minister. It's obvious that with the $9.2 billion in assets of Hydro and some $2.8 billion in assets at ICBC, the public of British Columbia certainly remember a 19 percent fee increase. Can the minister tell us whether that 19 percent fee increase included the increase that they are going to enjoy as a result of this capital tax?

Hon. M. Sihota: Clearly the financial projections that both ICBC and B.C. Hydro undertook in their budgets for next year would not have been aware of any budget implications that are part and parcel of the budget of March 26.

Secondly, let me say this to the member: the hon. member should not presuppose that that will have an impact in terms of the ICBC fees for next year. The hon. member knows, as the former minister responsible for ICBC, that there are a number of variables that affect ICBC's bottom line. This administration is committed to cleaning up the mess around ICBC that it inherited from the previous administration.

We're hoping to turn around that corporation, so it can be profitable for next year, and so the citizens of British Columbia will not have to see the kinds of increases that were forced upon them as a consequence of the mismanagement attributed, in part, to the neglect of the previous administration around ICBC.

DEBATE ON INTERIM SUPPLY

D. Mitchell: I have a question for the Premier. Mr. Premier, we in the opposition enjoyed the last two nights' marathon sessions in this House as little as members on the government side did, and yet the debates on the government interim supply bill and special warrants were an essential exercise. Because of this government's incompetence and poor planning of House business, less than two days were left to hold this government accountable for billions of dollars of spending. My question is: will the Premier, as leader of the government, commit to this House today that in the future sufficient time will be provided to fully debate all spending of taxpayers' dollars?

Hon. M. Harcourt: The answer is yes.

I think that all of us found unfortunate the combination of 18 of the 21 estimates not being put before the Legislature last July when they could have been and should have been, plus the financial mess and surprise that we inherited and had to clean up, plus the independent financial review which had to be carried out -- and to see if the federal budget was going to provide any more surprises to the taxpayers of British Columbia with the capping of the Canada Assistance Plan; and the other unfair measures that were imposed on the taxpayers of this province; and setting up an orderly transition and bringing in this government.

I think that this administration has done quite well in bringing some order and stability to the finances of the province.

We agree that it was unprecedented, and we don't intend, quite frankly, to have to take these unprecedented measures. We regret that they had to occur, but we are going to make sure that there is full and open debate on estimates. We have worked with our House Leaders to make sure that that takes place in this session.

[ Page 438 ]

D. Mitchell: I'll take the Premier and government leader at his word that this unfortunate experience over the last few days will not happen again. The NDP promised the people of British Columbia a government that would be open, honest and accountable. But what we've seen over the past few days illustrates, in our view, that the government uses underhanded tactics, Mr. Premier, and confirms our worst fear that there is no commitment on the part of this government to legislative accountability.

So, just for clarification, I ask the Premier as a supplementary question: will he commit very clearly to this House today that never again will this government abuse special warrants and deny full accountability to the taxpayers through this Legislature?

Hon. M. Harcourt: I can assure you that this government will always be fully accountable to the people of British Columbia.

[2:15]

GYPSY MOTH SPRAY PROGRAM

J. Tyabji: My question is for the Minister of Environment. Mr. Minister, are you aware that the pesticide formula your ministry has approved for aerial spraying for gypsy moths over densely populated areas is not licensed for orchard and garden use?

Hon. J. Cashore: I'm aware of a number of factors with regard to this extremely serious issue: the concern, on the one hand, about the possibility of defoliation of crops and forests; the concern, on the other hand, about the way this is a deep concern to many members of the public; and issues that have to do with pesticides and agricultural use. My colleague who sits beside me here in the House is certainly involved in those issues, as am I. As we address this issue, I'm sure that all members of the House would want to join me in recognizing that we consider environmental, health and also economic aspects in making the difficult decisions that have to be made.

J. Tyabji: The application is a 20-micron droplet released at 600 feet. It takes almost one hour to reach the ground. My question to the minister is this: do you understand that any wind at all will drift the spray well off the intended target and onto home gardens, parks, schools and residences?

Hon. J. Cashore: Hon. Speaker, these are the very kinds of issues that Mr. Ron Kobylnyk, who is the official in the Ministry of Environment responsible for the administration of the Pesticide Control Act, is taking into consideration, and has taken into consideration, in his decision, which is his statutory authority, to issue a permit -- which he has done. Processes are now underway with regard to that, given that the federal Agriculture department has also issued a permit giving it authority to spray private lands.

The Ministry of Environment permit gives permission to spray public lands, and there are due process considerations now, I believe, for an injunction that some citizens have brought forward with regard to that federal application. All those issues are being considered by the appropriate officials in a very concerned and urgent manner.

J. Tyabji: Final supplementary to the minister. Insofar as it is his ministry that has issued the permit, will this minister accept full responsibility for any liabilities to either property or personal health incurred by this application?

Hon. J. Cashore: Hon. Speaker, as an elected MLA who has been given the privilege of serving, I will accept my responsibilities to their fullest, along with all members who are equally elected to carry out their responsibilities.

PROPOSED INCREASE IN

PROPERTY TAX FOR TRANSIT

A. Cowie: My question is to the Premier. News reports in the media today quote the Minister of Finance as saying that property taxes could be hiked in Victoria and Vancouver to raise revenues for B.C. Transit, as only the lower mainland and Victoria do not have property tax applied to transit. Could the Premier confirm this information? A simple yes or no will do.

Hon. M. Harcourt: It would be more appropriate to have the minister answer that question when he returns. The minister in charge of transit will be back in the House soon. He is away on business. I'll take the question on notice.

PHARMACARE DEDUCTIBLE

P. Dueck: My question was to be to the Minister of Health, but since the minister is not present, I will direct my question to the Premier. Diabetics are faced with an ever-increasing cost for insulin, needles, glucose-monitoring equipment, etc. This is not taken for the purpose of making them feel better; this is actually taken because it's required to maintain life. They are faced with a $400 deductible under the Pharmacare program. Also, children who have a growth problem are in a similar situation -- the families are faced with $400 a year. It costs thousands of dollars to keep these diabetics alive, and the children need the growth hormone to become a normal height.

The Speaker: Please state your question, hon. member.

P. Dueck: My question is: is there anything in this year's budget that will in some way relieve the pressure on these families that can barely keep above water paying this $400 a year?

Hon. M. Harcourt: I seem to recall the member being asked this question when he was the Minister of Health.

Hon. C. Gabelmann: I wrote to you.

[ Page 439 ]

Hon. M. Harcourt: As a matter of fact, the Attorney General says that he wrote to the minister about those very issues. I am sure that the Minister of Health is reviewing the whole question of some of those inequities in Pharmacare for diabetics and that those are some of the reforms put forward by the Royal Commission on Health Care and Costs that are being reviewed by the minister at this very time.

P. Dueck: I would like to inform the House that at that time the deductible was about $200, and there's a big difference between $200 and $400.

FAIR WAGE POLICY

P. Dueck: I'd like to ask another question, and this is to the Minister of Labour. I mentioned to him that I had a phone call yesterday from a contractor who had just finished or was in the process of completing a $20 million job on some government buildings. He did some calculations and found by extrapolating some of the figures pertaining to labour that the cost would be $2 million less.

The Speaker: Please state your question, hon. member.

P. Dueck: My question is: is it not reasonable to think that the money saved from construction jobs -- about a billion dollars that will be left out this year -- could be spent wisely for these children who need it to sustain life, rather than giving it to people who already earn $20 to $21 an hour?

Hon. M. Sihota: I thank the hon. member for that question. Let me say two things in response. First, the hon. member should be assured that the fair wage policy that this government introduced a couple of days ago in this House is crafted so as not to cost the taxpayers any additional money.

Second, let me also say to the hon. member that the budget tabled in this House on March 26, 1992, is crafted and designed so as to attend to the health care needs of British Columbians. We as a government are pleased that the expenditures in health care have been increased by some 7.4 percent, to accommodate the increased health service needs of British Columbians.

Orders of the Day

Budget Debate

(continued)

S. Hammell: I am privileged to speak today for the first time on behalf of the people of Surrey-Green Timbers. There are five of us whose constituencies bear the name of Surrey. Together we represent about 250,000 people. Except for the Minister of Social Services, we are all new to this assembly and to provincial politics. I am delighted to be starting down this new path and to have the opportunity to work at the task of government and represent the people of my constituency in these challenging times.

As I stand to speak in support of this budget, I know that it has been well received among the hard-working and fair-minded people of Surrey-Green Timbers.

Before I elaborate on that theme, I want to acknowledge the contribution the voters of Surrey have made to progressive change in this, the Legislature of British Columbia. From my municipality of Surrey, in fact from what is now one-half of my constituency of Surrey-Green Timbers, came the first female Premier from anywhere in Canada. Like the people of Surrey, she worked hard, and she served her constituency well.

Out of the five legislators sent to this thirty-fifth parliament, three are women; two of them are in the cabinet, and one is the minister of the first stand-alone Ministry for Women's Equality anywhere in Canada -- a significant contribution to equality in British Columbia by the people of Surrey. As you can see, we are justly proud of the people who have elected us.

In the early days Surrey was home to loggers and harvested more than four billion board feet of lumber in the half century before 1930, when the last stand of virgin Douglas fir was felled at Green Timbers. Here is evidence that our current preoccupation with sustainable development is just the latest version of an age-old dilemma. The forest was cleared to create farmland and to provide lumber for the construction industry, but once the timber was gone, those early residents of Surrey tried to restore the forest by setting up the Green Timbers Plantation Reserve.

That plantation, which is not quite as big as Stanley Park, is now preserved as an urban forest park. Locals call it the lungs of Surrey.

The loggers and farmers who were Surrey's first residents set the pattern. These pioneers were hard-working and independent, and the people of Surrey continue today to work hard and to demand in return a fair share for their efforts. Like most ordinary people in British Columbia, we in Surrey-Green Timbers do not want special privileges, but we do want fair treatment.

If we look at a statistical profile of the people of Green Timbers today comparing ourselves with the provincial average, we are right there in the middle on almost every measure. It is true that our families are a little bigger, and we are more likely to have manufacturing or construction jobs if we are male, and retail and clerical jobs if we are female. Both individual and family income is slightly lower in Surrey-Green Timbers than the provincial average, but there isn't much variation within the community -- no extremes of wealth or poverty. We are typical British Columbians.

[2:30]

[ Page 440 ]

Substantial support has been given to community agencies for providing immigrant services with a priority for families and women. Of course, this will have an effect on schools as well as on homes. We will be building more schools in Surrey, replacing portables with real, honest-to-goodness school buildings, and seismic upgrading will protect children in existing schools. There is also new funding for women's centres and for the school meals program.

It will take time to turn things around, certainly, but this budget sends a clear message that our priority is with people. Priority has been given to education, health and social services, as promised. The people of Surrey-Green Timbers expect no less.

Surrey is a vast municipality. If you were to set your car's tachometer and then drive along every mile of road in Surrey, you would think you had crossed two provinces, covering the distance from Vancouver to the Alberta-Saskatchewan border: 1,400 kilometres of roads take us across 80,000 acres of land in Surrey. That land was once forest, and then farms and villages. Now the uplands are covered with suburban communities, some old but most new.

The Nicomekl and the Serpentine Rivers create a wide, fertile valley that runs through the centre of Surrey. It is protected by the agricultural land reserve. In recent years the integrity of this farmland was threatened, but on assuming office this government moved quickly to ensure that any decisions on exemptions for golf courses were made by the independent Land Commission without interference from cabinet.

Elsewhere in the lower mainland the mountain views are majestic. The beaches are endless and the fjord-like topography provides a setting for dramatic architecture. By contrast, in Surrey the scale is much more subdued, more human. Children from Surrey schools hatch fingerlings and then release them at the Tynehead fish hatchery, and salmon spawn in many of the creeks that remain in Surrey. You will see harbour seals fishing in the Serpentine, and at the mouth of the two rivers in Mud Bay birds from all over the world rest and feed as they make their way along the Pacific flyway.

In the Serpentine Fen, Ducks Unlimited works hand-in-hand with the Ministry of Environment to provide a sanctuary for migrating birds, where people walk from early morning until after sunset.

Two freeways serving trade and industry pass through the middle of Surrey. Like the tide in our rivers, they carry the flow of workers out into the lower mainland and up the valley, then back home again to the neighbourhoods of Surrey. The CN, Burlington Northern, B.C. Rail and the old B.C. Hydro rail lines cross Surrey. So do the big hydro lines taking electrical power to the city. At the northwest tip of Surrey, the deep-sea port of south Westminster serves heavy industry. In the south, our saltwater beaches are clean and hospitable to herons and eagles. For a time at Blackie Spit there was even a lone pink flamingo which had escaped from the Stanley Park zoo.

Twenty years from now Surrey's population will exceed the city of Vancouver's. Some people see this as a problem; I see it as a challenge. In my constituency there are two major shopping centres, two SkyTrain stations and a wide variety of light industrial firms. The character of the community is entirely urban. Here we have the modest homes of working people who shop locally and send their children to the local public school. Most households extend beyond the classic Canadian nuclear family of two parents and 2.5 children to include grandparents and others. They work hard for their money and budget carefully for their future needs.

What they want from government is nothing more than their fair share. They used the democratic process to express that demand last October, and this budget is a strong indication that the government is responding to that need. It is an honour to speak to this motion in support of a government that has opened the door to new ideas, finding new ways to involve the people of this province in the decisions that affect their lives.

I know how eager people are to speak out on the issues of the day, because I have had the privilege to travel back and forth across this province listening to ideas and options on our present constitutional crisis. Our committee on the constitution has been busy since just after Christmas studying the options that are available to Canada and especially to British Columbia in the current stage of constitutional negotiations.

One thing has emerged very clearly from our public hearings on the constitution. People are not willing to confine their remarks to issues like amending formulas, elected Senate, distinct societies and inherent aboriginal rights. Discussions on these matters inevitably turn to questions of social and economic policy. People are telling us that the decisions we make on the constitution must serve our social and economic goals. What I am hearing in Prince George, Vernon, Port Alberni and Langley are voices raised to demand strong economic leadership from government.

People are concerned about the economy, about jobs. They want to know that government is prepared to work toward long-term goals that will secure the future well-being of their families. They expect us to manage our public affairs in their interests, and they expect us to be fair and open in the process.

As an example of the fairmindedness of the people of Surrey, I want to applaud my colleague the Liberal member for Surrey-Cloverdale, when he spoke out this weekend firmly in support of the government's fair wage policy. He is quoted in the newspaper as saying he saw this policy as an opportunity to put construction contracts on a standard basis, and my government concurs. He did not believe the move would cost the taxpayers much at all. We also concur with this.

The member for Surrey-Cloverdale also said: "Although non-union contractors pay their workers

one-

[ Page 441 ]

third less on average, they did not bid much lower than union companies and simply took more profit." It's about time workers got equal treatment, he said, adding that he agreed that, in general, women's wages should be increased, but that had nothing to do with paying all construction workers fairly. He said that it's not a trade-off. Again my government concurs.

Finally, the Liberal member for Surrey-Cloverdale also rejected the claim that the move to a fair wage policy is a pay-off for political support. My government again concurs, for like most of the people of Surrey-Green Timbers I meet, it is a question of priorities. They expect this government to put people first, and the budget before us today does just that. The priority given to education and health care, to social services, to the needs of women and to the environment reflect a commitment to the future.

Clearly it has not been easy to develop a strategy to deal with the financial quagmire left behind by the previous government. All the choices we must make are hard choices. With very limited resources and a tight-fisted federal government holding back transfer payments, the job of creating a budget for the coming year is onerous.

This budget does what is necessary to lay a foundation for the long term, for the financial stability of the province and the personal prosperity of individuals. It is the individual working people, like the working women and men of Surrey-Green Timbers, who have asked for a responsible and cautious approach to public finance, and the Minister of Finance has managed to combine both responsibility and caution with a sense of fairness that protects the basic services provided working people. Those working people are doing their share to drive the economy back to prosperity.

I want to take just a moment to comment on the question of worker productivity. We hear a lot about the need to improve our competitiveness in a global market. What we do not hear so much about is our status as one of the top five among industrial nations, according to the World Competitiveness Report of 1991. We have the second-highest output per worker in the world, surpassed only by the United States. That is not just an aberration, the result of some historical anomaly. In the past decade we have seen a remarkable 70 percent increase in productivity in this province.

Ordinary British Columbians are working harder and better than they ever have before, and we see the results in our standard of living where we also rank second in the world only to the United States. Those who disparage working people and always point to Japan as the model for prosperity that comes from hard work.... They say that we don't work hard enough. But the fact is that we produce a full 20 percent more per employee.

One of the factors in the basket of indicators that are used to measure competitiveness is public finance. Public finance is one of the keys to our status as the second-strongest economy in the world. Certainly an abundance of natural resources gives British Columbia an edge in world products, but the way we do our public business is crucial to our success in converting those resources into the second highest standard of living in the world.

The budget presented to this House by the Minister of Finance provides the kind of leadership that is essential to create a stable economic climate in which firms can invest in research and develop new technology, a climate that encourages new enterprise and the expansion of successful companies.

Hon. Speaker, with sound government policy and careful management of the taxpayers' money, we will be able to maintain our position as world leaders in the provision of services that attract and sustain strong economic activity. I mean an educational system that has the tools to do the job properly, health care facilities that are closer to home, universities and colleges that reach for excellence and attain it, and sensible environmental protection regulations that will guide us into the next century.

We have good roads and harbours, cheap electricity, extensive and efficient communication systems and a highly skilled workforce. We attract not only investment but people who come to this province determined to benefit from our high standard of living and to help us maintain our competitive edge. Many of those people will choose to live in Surrey-Green Timbers. I want to assure them that the government of British Columbia has a fair and balanced approach to government, that we put our dollars to work where they are needed most, according to a set of priorities that puts people first. Public interest is the single criterion by which this budget was measured.

I say to you that this assembly will have done a good day's work in voting to support this motion.

[2:45]

G. Wilson: It's my understanding that the speaking order has been changed due to the fatigue of government members, so let me take up debate on this budget.

Hon. Speaker, in starting my comments, I would like to say that there is nothing inherently right or wrong with any budget; there are simply choices that have to be made. Those choices are going to have a profound effect upon the ability of the society affected by that budget to be able to increase its wealth, to maintain its wealth, and to be able to expand and build the communities and service the people who live in those communities.

The choices that this government had to make were choices that were going to affect British Columbians in every single community in this province. We've heard a great deal from this government that the choices they had to make were extremely difficult, because when they inherited government after October 17, they also inherited runaway spending, a massive deficit and a government in chaos. Therefore they had to spend the first five months of their government trying to sort out the mess and trying to deal with some of the problems.

As leader of the official opposition, I will acknowledge that there is no doubt that the accounting practices of the former government left some measures to be desired -- no question at all. We will also acknowledge that the last year, in particular, of the former government was full of strife, and was one that essentially left the people of British Columbia somewhat jaundiced by the whole political process. We had gone through two Finance ministers in a very short period of time,

[ Page 442 ]

allowed the fiscal year-end to lapse, waited several months for the implementation of a budget, gone through two Premiers and then found ourselves into special warrant spending by the former government. By the time October 17 came around, this new government had to try to put its head to the task of dealing fairly and properly with last year's budget and special warrants that had not been passed in this House, and also come up with a proper and sensible set of choices for British Columbia.

The Minister of Finance has made a great deal in this House about how he, as the Minister of Finance and principal financial officer of this province, had to take charge of the public trust and take charge in terms of the amount of spending that would continue under special warrant, leading up to this budget which we are debating here today.

It was on the basis of those difficult choices, on the basis of his commitment to continue well over $2 billion worth of special warrant spending and on the basis of what he claimed would be runaway expenditures from the former government, that we found we were unable to have tabled in this House this document to which we now address our attention. This document was tabled only five short days before the fiscal year-end, making necessary -- if the opposition party was to do its job -- scrutiny debate that took us into the session that we witnessed over the last two days, and in particular over the last 24 hours.

Let it be clear that we made it abundantly clear to this government in November that as the official opposition we were not going to allow special warrant spending to the tune of $2 billion to go by without full, open, public scrutiny.

The Minister of Finance had been made well aware also that the official opposition was prepared to scrutinize that spending, because we were not convinced by this $1 million so-called independent audit that the full accounting as it was presented was indeed a complete and accurate reflection of the spending of the past government, and we believed that there was a very large and significant component of special warrant spending by the present government.

Neither were we particularly convinced that this independent committee financial report provided a sound basis upon which the fundamental analysis of the B.C. economy could be made and that the room to move on taxation, as was included in that report, was, in fact, sensible.

We wanted to have a complete scrutiny of not only those documents in the public domain, but also the working papers that led to that final document. We know only too well how experts tend to generate conclusions from material that often is essentially erroneous.

If fundamental principles that are being examined and the fundamental assumptions of those principles are not correct, the conclusions you're likely to make from those faulty assumptions are likewise not going to be correct.

It reminds me very much of the scientist who came out and had two jars of flies. When he undid the lid of one jar of flies, shook them and clapped his hands, all of the flies responded to the clapped hands and flew up and settled. He took the second jar, clapped his hands and all those flies flew up and then settled again. This scientist made very careful note of this.

Then the scientist thought he would keep one jar as his control. Working on some basic and primary assumptions, he took a second jar, opened it up and -- if you'll excuse this, hon. Speaker, and I hope it doesn't bring back memories to any former members of this House -- took all the wings from the flies and then put them back into the jar.

Interjection.

G. Wilson: I hear the heckling from the hon. Minister of Advanced Education, who already sees the implications of this experiment that I'm talking about -- when we get into numbers.

Having one control group of flies with their wings on and one control group of flies with their wings off, the scientist clapped his hands. All the flies with the wings flew up and then settled. Then he clapped his hands to the others. They didn't move. He thought this was interesting and worth noting, and he noted it. He went back and he did it again, and repeated this experiment three times to make sure he was testing the fundamental assumptions correctly. Finally, upon the third clapping of the hands, when the flies that had their wings removed did not move, the scientist concluded that when you remove the wings from flies, they go deaf.

That is precisely what we have seen in the Peat Marwick report, which made a conclusion on the assumption that if you make a comparative analysis between the taxing authorities of Alberta, Saskatchewan, Manitoba, Ontario, Quebec and points east in Canada, somehow you can come up with room to move on taxation that will allow us an opportunity to put a budget in place that would take taxation from industry, commerce, our communities and our working people, and allow us the opportunity to continue to compete on a proper and equal basis with our true trading partners -- those in Washington, Oregon, California and the Pacific Rim.

That is what this side of the House has been trying to communicate to the Minister of Finance for the last five and a half months: there is no room to move.

When we start to examine the fundamental assumptions of this budget in detail, we understand that the Minister of Finance is about as far off base as the poor misguided scientist who thought that when you pluck the wings from flies they somehow went deaf.

I suggest that when we tried to communicate that there was no room to move on taxation in the province, it was because we had some sound evidence to suggest it was the case -- evidence that is supported by the growing numbers of businesses that are relocating south of our border in Washington; the growing number of people who are travelling almost on a daily basis south of our border to consume their gasoline and their consumer products; the growing number of people who are involved in small business, especially those entrepreneurs in small-scale manufacturing and production in the province who are no longer able to compete and

[ Page 443 ]

develop a sound business that will allow them room to expand in the B.C. economy.

We also communicated to this Minister of Finance over and over again that if you start to put a punitive taxing authority in place through the budget, you will not only find more and more British Columbians put into more difficult situations on an ongoing basis with respect to the tax demand that will be made of them, but you will also find that those people looking to move into the province who will bring needed investment dollars will look to this area as a taxing area where they are simply not going to put in the kind of risk capital so desperately needed. If British Columbia is to succeed and excel in terms of our abilities to attract these new businesses and investments....

What we've started to recognize is that the Minister of Finance didn't understand the fundamental principles upon which the B.C. economy operates, and he relied upon documents largely generated from a perspective of central Canada, through the Peat Marwick study that had as fundamental principles those figures which are distorted and inaccurate.

It is not just the Liberal opposition which has taken issue with Peat Marwick, but many people in business have done so and have been reported widely in the newspapers. Many people who are involved in the academic area and my colleagues who have formerly lectured in economics and in resource management have taken issue with the Peat Marwick report.

Indeed, I'd like to read from a news release from an organization that I'm sure the hon. members opposite in government will have knowledge of -- the Hospital Employees' Union. The news release was on March 17, 1992, and I quote: "Peat Marwick's study distorts earnings of health care workers." It's right here for you to see. I'd like to just very briefly quote from this report. Carmela Allevato says:

"The figures contained in this report are a serious distortion of the truth about what health care workers are earning. The release of these misleading figures is particularly serious given that we are trying to negotiate a collective agreement that deals with wage discrimination and workload problems."

The same author in this same document from the Hospital Employees' Union, on the question of the accuracy of Peat Marwick, said: "I believe that the government should explain how these figures were arrived at." She added: "This report should have taken a harder look at the growing salaries within hospital administrators."

We concur; we agree. This government has a lot of explaining to do on why they have based on this document the budget that we are debating today, and why they have based so much faith and trust in what amounts to effectively a so-called independent analysis of the state of one of the most difficult fiscal years in the history of British Columbia.

It is not to say, however, that we would want to be branded as simply not recognizing that this government has had some good points in this budget. Let me say that there are some matters contained in this budget that we acknowledge are good and welcome. We want to let the government know that there are measures in here which we can essentially look to in the matter of support.

If we look, for example, at the question of this government's commitment to community-based health care, something that the Liberal Party in British Columbia has been talking about for well over a decade.... We are glad now that the members opposite in government have listened to what we have said and have agreed that they should move toward a community-based health care system.

We recognize the commitment of increase by $409 million with respect to the hospital programs and $107 million into community and family health services. Those are commitment dollars that we think are well worthwhile, and are something that all of the people of British Columbia want to start to look at.

I acknowledge that the Minister of Advanced Education, Training and Technology is with us today, and I want to congratulate that minister for being one of the very few on the government side of the House who kept his word and froze tuition fees for students attending our universities, colleges and technical institutions in this province.

[3:00]

I think the fact that the freeze of tuitions was something that was promised to the students, and given that we recognize there is a definite need toward training of our people so that they can be the most trained, the most competent -- that is something we recognize as being most important. I once again congratulate the minister for having fought whatever battles were fought in caucus to make sure that students do not bear the brunt of the fiscal problems in post-secondary education.

This is not to say, however, that the freeze on tuition solves the problems of financing our post-secondary education institutions. Indeed, this is not to say that there isn't more room for us to move with respect to the financing of post-secondary education. We will have something to say about that shortly.

It is important to note that we applaud the fact that this government froze MLAs' salaries. Even though financially this is a relatively insignificant amount in the total budget, symbolically it is important to have demonstrated that to the people of British Columbia.

It is also important that this government has taken a move with respect to the Board of Internal Economy, which I spoke out so strongly against in terms of its closed nature and the lack of debate. The members opposite, when they were sitting in opposition, worked with the former government to put in place one of the most offensive severance packages for MLAs in any jurisdiction in Canada. We would have liked an opportunity to review that and to repeal it. Notwithstanding that, an independent assessment and review of MLA salaries is something we would welcome.

It is important for this government to note that the Board of Internal Economy does a lot more than just set severance pay and salaries for MLAs. It sets the budget for this legislative precinct. We have grave concerns that despite the fact that it has removed the opportunity for meaningful discussion and debate by all members of this House on what is a proper and adequate budget for

[ Page 444 ]

this legislative precinct, this government has not put in place any legislation to change the authority that is going to provide for that budget. We take issue with the fact that this government feels it is their purview, their exclusive jurisdiction, to determine through the budget process what the legislative authority is going to have in recognition of the recommendations put forward by the administration of Treasury Board.

It is not enough simply to do away with the Board of Internal Economy and the budgeting process for the Legislature; we have to replace it. We must replace it with a mechanism that will be open to public scrutiny, that will provide representation from members of all parties. There must also be an opportunity to give adequate debate and notice as we start to establish the budget for the operation of all offices under this jurisdiction in this precinct.

Having said that there are some matters in this budget that we can accept, I have the greatest concerns with respect to the forecast upon which the government has based this document, a forecast that suggests there's going to be 3 percent growth in British Columbia over the next year. It is a forecast that suggests that the real gross domestic product in millions of 1986 dollars essentially will have that 3 percent growth.

Yet if we look at those areas in terms of fiscal spending where we could encourage that financial growth, it is telling indeed to notice that the Ministry of Energy, Mines and Petroleum Resources, for example, has had its budget cut by 41.2 percent. In Economic Development, Small Business and trade, a most important area that we believe needs to have assistance, the budget has been cut by a full 51 percent.

We notice also that despite the hard work and efforts of the Minister of Tourism, who I know has been diligent in her efforts to put in place this critically important industry, this government has decided to ignore those recommendations, to ignore those wise words, and to cut that ministry by 10.5 percent.

It is hard for us to believe that this government recognizes what finances are all about. It is hard for us to understand how this government that talks a good line about looking for economic stimulation and growth to a 3 percent rise is going to provide a base upon which the tax demand that it is making can in fact be accommodated. Not only have they cut those very areas in government that would allow us to establish a level playing field for economic development; they have also put a punitive tax against the very sector of the economy that is going to facilitate that growth and development.

They have gone with a capital corporate tax, a tax so insidious that it is going to tax corporations whether or not they make profit.

We find it interesting indeed that this government, which appears to be following the same path as their cousins in Ontario, albeit in a much more clever manner, did not listen to their cousins in Ontario, who commissioned an independent report on the implementation of a corporate capital tax. That report made it very clear that such a tax would be regressive and would only provide greater fuel for businesses to relocate and take advantage of better tax advantages in competing jurisdictions south of the border.

If we knew about this and the possible problem for British Columbia, if we communicated this very clearly to the Minister of Finance.... When one does any even rudimentary analysis of B.C.'s economy, it is clear that the capital corporate tax is going to have a negative impact; so it is very difficult for us to understand how this minister, who purports to have a fair and open and direct budget, was going to accommodate that growth.

It seems to me that this minister hasn't learned even yet. Having heard from this opposition, having gone through the Peat Marwick report, having seen all of those who have written to suggest that this budget is not good, we find the Minister of Finance saying even today that our corporate tax burden remains over $300 million lower than it was prior to 1985, a figure that has absolutely no meaning in terms of any comparative analysis of today's economy. He has suggested that tax rates are still in the middle range compared with other provinces.

In talking to the board of trade on this budget today, the minister told them there is nothing wrong with doing a comparative analysis of tax jurisdictions in provinces east of British Columbia. He has yet to come forward and provide any detailed analysis whatsoever of the impact of this budget with respect to corporations and the competing interests in those jurisdictions that we referred earlier.

One finds it hard to believe that the budget we debate today was written by this minister or was perhaps part of the million-dollar contract for Peat Marwick. In the delivery of the budget that was provided, the name of Peat Marwick came up over and over again as the authority by which this minister was prepared to put in place the documents that we debate today.

The minister also suggested that British Columbians would not have to fear from taxation. I suggest that this is in fact not so. We are looking now at a 16.5 percent increase when inflation is sitting at 3 percent, an increase that is a tax grab with respect to the impact of the present government's policy on homeowner grant cancellation.

Not only has that put an undue and unnecessary burden on homeowners in British Columbia, which it surely has, but it has also put an enormous and undue burden on those elected municipal representatives who now find themselves, in the dying days of their own fiscal budget application, having to deal with a situation that they had no prior knowledge of. They had no advance warning of any sort and in fact had been given some assurances that it would not be in place.

A 16.5 percent increase is hardly what we on the official opposition side of the House would address as a position that is acceptable for British Columbians.

Furthermore, I think we have to look at the whole approach taken by this government with respect to the maintenance of investment potential in British Columbia. If we indeed put in the corporate capital tax, if we remove the homeowner grant and therefore increase by 16.5 percent the demand on the property owners of British Columbia, and if we are now going to look at the income tax implications of this budget, with every individual in B.C. having to pay increased tax either directly on income or with respect to the services taxes that have been imposed against them, which we in the

[ Page 445 ]

official opposition took issue with on the very first day, it's very difficult for us to understand how this government thinks there is going to be enough liquidity in terms of the dollars that people still have in disposable income for the kind of investment that will fuel the 3 percent increase that they're projecting.

Furthermore, I think it is important to look at the government's own forecast figures. The Minister of Finance needs to explain, and in some detail, how it's possible. They are projecting a 0.4 percent increase in housing starts in 1992, when in 1991 there was a 13.2 percent reduction. What does this minister think is going to stimulate a turnaround from a negative to a positive?

How can this minister remove more of people's disposable income, take away more of the money that they can discharge in their communities for expenditures on items such as housing, and at the same time expect to provide the stimulus that is required in our forest sector, in our sawmilling industry, in our industries involved in the retailing of merchandise that goes toward the construction, maintenance and furnishing of our houses? They simply won't be able to. They will not be able to meet that kind of turnaround.

As a result, this tax grab against the people of British Columbia will not fuel the kind of increase we would like to see.

[3:15]

In the few moments that I have left today, I'd like to turn my attention to the $1.8 billion, which, if one looks at a realistic projection, is likely to be considerably more by the time this budget sees the light of the final days and we start to look at the estimates of next year's expenditure. We in this opposition wanted to provide constructive alternatives, and we did that. While this Finance minister was flying trial balloons of a 1 percent sales tax hike, a 7 percent restaurant tax and service taxes, we in this opposition had a consistent message: Mr.

Finance Minister, do not increase taxation against the people of British Columbia, because we cannot afford it. Yet this minister chose not to listen to our words. This Finance minister was successful in flying those trial balloons to put the fear into the people of British Columbia on what they could expect. He then worked and manipulated like a conjurer would do, setting the trick that would eventually be played upon his audience: the Peat Marwick report. He let us all believe that this runaway expenditure was going to be something British Columbians would have to absorb with massive tax increases.

We in the official opposition asked the government in November why it did not curb spending. This opposition sat all night last night so that we could examine those special warrants and find out why. All of that work we did last night showed us that this government had a choice; that this great big deficit does not belong entirely to the former government. Much of that deficit belongs to this government because of choices it made in November, knowing full well that they could allow that expenditure to run and simply hang the blame on the former government because they had lost so heavily at the polls.

That is not an honest way to do business in British Columbia. That is not the kind of honesty and integrity that people wanted to see from their Finance minister when he brought down this, his first budget.

Members of this official opposition said that we would go through a full and detailed scrutiny. We wanted the people of British Columbia to see that we were able and prepared to look at every dollar expended and know that the budget we are debating today is indeed a true and accurate reflection of the choices that were before this government. Sadly, we find that it is not. The members opposite and even some of those who observe and report on this House sat in amazement that the Liberal opposition would sit all night and go over every dollar expended, over special warrant spendings line by line.

We heard many negative comments and interjections from the members opposite who were forced to sit here and account for their spending. The reason they were amazed, the reason that the people who observe and sometimes report found this a peculiar kind of example, is because for the first time in two decades the people of British Columbia have witnessed an opposition that is doing its job. If the former opposition had taken the same time that we did last night and the day before to look at and analyze the spending of the former government, we wouldn't have a $1.8 billion deficit now in British Columbia.

Let it be clear that not only is this budget an inaccurate representation of the choices that were before this government; not only is this budget formulated upon documents that were prepared in a so-called independent report that is flawed in its fundamental analysis; not only does this document take an unfair tax against the people of British Columbia; but the resulting expenditure, which the minister was saying today at the board of trade essentially reduced the deficit, does nothing of the kind. It is a record deficit -- $1.8 billion.

This government has to hang its head in shame, because had it taken the same care and scrutiny that this opposition has done over their special warrant spending, this deficit would not now be a burden that the people of British Columbia have to pay for through their hard-earned money in taxes.

We look forward with interest to the same level of detail and scrutiny on the expenditures that are part of this budget. The people of British Columbia will know that as the moneys are being outlined in this budget, we in opposition are going to be vigilant to make sure that those moneys are expended as this budget commits. We are going to be vigilant in analyzing and detailing, wherever possible, the impact of this budget on the corporations, the small businesses, the consumers, the educators, the health employees' union, the labourers of British Columbia.

Our greatest fear is that there is even more chicanery involved in this document, even more hidden expenditure; that there is an outline, a strategy, a kind of agenda planned which is not clear even by the figures as we have seen them today.

What we are anxious to see is how much of the lift in health care is in there because we are going to have fair wage legislation that will put up the cost of building every hospital in the province. We are anxious to know how much is the so-called fixed fair wage in terms of educational expenditures for every new educational

[ Page 446 ]

facility built in British Columbia. This opposition is going to watch, and watch carefully, the expenditure of those dollars. If we find that the cost projected by those people who have been working with and analyzing the situation is anywhere close to the $200 million that has been told to this opposition, then we will want a full accounting of why that money went to those people who currently earn $20 an hour and not to the delivery of education, of health care, of social services to the people on the low end of the economy scale. We will have a proper assessment in terms of the effectiveness that those moneys can provide for the people of British Columbia.

In closing, let me say this: this budget is based upon flawed assumptions. This budget is based upon an assumption that suggests there is room to move on taxation in British Columbia, and I say there is not. I have to give credit to the Minister of Finance, who is able to spin this web so thickly that he has entrapped many. He was able to weave this wonderful fantasy that he had no choice, which is now confirmed partly through this so-called independent report. This Finance minister had a choice, and that choice was to start to seriously resize government.

The choice was to put in place a single spending authority. The choice was to put in place a fixed election day. The choice was to put in place an exchequer that would provide a check on the kind of deficit spending we've seen in this province for a long time. The choice that this minister had was to put in place comprehensive tax reform, a form of taxation that would be more equitable and provide to the people of British Columbia an opportunity to keep just a little bit more of their hard-earned wage.

This minister had choices: the least cost to the user or the highest cost to the payer. The model of the least cost to the user, as those who are familiar with this concept in resource management know, means that you do as little as possible for maximum personal gain. That's what this government has done: the least cost to this government and the greatest cost to those who pay.

This budget is the complete antithesis, the complete opposite of what we witnessed when the Premier of this province, on his television ad, took that well-worn penny and put it into that tiny, little, pink piggy bank. Hon. Speaker, there is indeed a piggy bank on the opposite side of this House, but it isn't going to be taking pennies from the people of British Columbia; it's going to be taking dollars in a record number -- 1.8 billion of them -- and we in this opposition cannot support this document or this budget.

L. Hanson: Hon. Speaker, it was an interesting night last night.

An Hon. Member: Where were you? You were sleeping.

L. Hanson: I was here until about two, but I didn't stay for the full of it.

In any case, it's my privilege to rise and speak on the budget that has been presented to us. The budget, of course, as everyone knows, shows about a $1.8 billion deficit, probably the largest forecast deficit ever in British Columbia. But more importantly, I think we should look at the comparison that they have used to justify this budget. They have, through various means, spent as much as they possibly could legitimately, to increase the deficit from last year and to make this $1.8 billion deficit look kind of reasonable.

They even went to the expense of hiring a reputable firm, at a cost to the taxpayers of something like a million dollars, to justify what they were doing. The Minister of Advanced Education, in discussion the other day, even acknowledged that some of the write-offs that are part of this $2.4 billion deficit were from as far back as the seventies.

Interjection.

L. Hanson: Hon. Speaker, the minister says to me that he didn't. Well, that was my understanding from listening to the Minister of....

J. Weisgerber: Economic Development.

L. Hanson: Minister of Economic Development. My apologies.

The Speaker: The hon. minister rises on a point of order.

Hon. T. Perry: It was just for the correction, thank you.

L. Hanson: My apologies, hon. Speaker. It was apparently the Minister of Economic Development.

In any case, hon. Speaker, the budget before us is totally the responsibility of the government in power. The expression that has been used is that they are now driving the bus. If the bus goes off the road, at a cost of $1.8 billion, you've got the driver's wheel in your hand. To try and justify that deficit by runaway spending over the last five months, and somehow have the taxpayers of British Columbia believe it is the fault of the past government, won't wash with the people of British Columbia.

I go on to some other things that I don't think will wash with the people of British Columbia. As an example, I believe the Finance minister suggested that the tax measures incorporated in this budget would have little or possibly no effect on the average-income earner or the low-income earner.

I ask you, hon. Speaker, some questions. First of all, a tax has now been applied to legal services. That is a precedent that hasn't happened in the past as far as the provincial sales tax is concerned. It is a tax applied to a service, and that hasn't occurred. That's one precedent, but to suggest that someone on a middle income or someone on a low income doesn't from time to time have the need of a lawyer, be it for a will or for whatever purpose, is absolutely ridiculous. Quite often they need legal assistance to some extent.

I know that the Finance minister suggested that it was a method of raising funds to allow free legal service to people who needed it, or to justify or to help defray those costs, but I don't think the

[ Page 447 ]

people in the middle income bracket generally qualify for legal aid. It is going to be a cost to them. That's one.

[3:30]

The second one is the cancellation of the supplementary homeowner grant. The Minister of Finance suggested yesterday, and read off a number of figures in question period, that very few people in British Columbia would be affected by that. Hon. Speaker, I suggest that well over 70 percent of the people in British Columbia will pay far more tax this year on their residential property as a result of the supplementary homeowner grant disappearing. Few will have the benefit of the $20.

Without getting into too much detail, and too technical, the government last year took the original homeowner grant from the school taxation on residential property, and then provided a supplementary grant of 50 percent of whatever the balance was. In my own home community, a residential property assessed at $150,000 will pay $300 more in taxation this year.

[J. Tyabji in the chair.]

Now I suspect someone with an $150,000 home is probably not in the $100,000 or $200,000 a year income category. They're probably those middle-income wage-earners, and probably both of the people are working. They are going to pay more taxes on legal fees, which they will have to use from time to time, and they are going to pay more taxes on their residential property as a result of the homeowner grant supplement being cancelled.

Even further, the corporate capital tax that they have put in place does not apply to a company making profit differently than a company close to bankruptcy. It applies to everyone, regardless of profitability. It is a tax that must be paid regardless of the financial position of the company. It's easy to say that it applies only to those corporations, but let's take as an example B.C. Hydro, which I believe it applies to. I think B.C. Hydro has assets of something in excess of $9 billion. Take that corporate capital tax and apply it to that, and where is B.C. Hydro going to get the money to pay it?

Is it going to be through efficiencies? I don't think so. I think it's going to be through applications to the Utilities Commission for an increase in user rates.

[The Speaker in the chair.]

Now, are we going to suggest with that logic that the middle-income and low-income earner doesn't have the need of hydro? They're not using hydro, so they won't be affected by these tax applications. I note in a newspaper

article to do with B.C. Gas: "The new corporate tax will be passed on to users, hearings at the public utilities commission are told. The extra tax will add about $4.50 a year to a residential gas bill." Now that's not a lot of money, but take the cost of electricity, take the cost of gas, take the cost of ICBC increases -- they're going to be susceptible, I heard today, to the corporate capital tax -- take the homeowner's grant supplement that has been removed, and I don't know how a member can possibly stand up and say that the middle-income earner is not going to be affected by the tax measures that were brought in.

On top of that, they have increased the income tax by 1 percent, albeit to those people who have incomes in excess of $60,000, which does in most minds classify that earner as slightly above average. I don't know what the total average is.

I go on to so many things. If there's a tax on corporate assets, taxicab companies will have an added tax. Airlines in British Columbia will have a corporate capital tax on their assets. All these things add to the cost of living, and they add to the cost of the middle-and low-income wage-earner. I note another thing in the airline industry. A 2 cent tax is going on fuel. So again there's going to be an increase in those costs.

I'd like to spend just a minute talking about the highways budget in the context of the total budget. It's my understanding -- and it's been well published, although I don't have the figures exactly -- that there has been about a 15 percent reduction in the highways budget for this coming year. I believe this famous Peat Marwick report, which has been used so many times by the government to justify their actions, mentioned that there was a need to increase and catch up on the maintenance of this asset that we British Columbians own, namely the highways in our province.

My mind doesn't understand how you can reduce the budget by 15 percent and still catch up on the needed maintenance that those highways are reported to need.

The highways mean various things to various parts of the province. The highways in my constituency are the single most important mode of transportation. That applies to not only the southern interior of British Columbia but the northern interior. I suggest that without highways and rails, those parts of the province would be far from developed to the extent that they are now, with good, adequate, modern transportation systems -- which include highways.

We were fortunate enough, hon. Speaker, to have in place the contractors who are going to maintain those highways day-to-day. I suspect that because those are contractual obligations, the government will have to fulfil those contractual obligations. What the reduction in the ministry budget means is that the pieces of road and highway around British Columbia.... Not only will capital projects such as the Island Highway be discontinued; all sorts of highways are in need of resurfacing and major maintenance -- not what would be considered capital construction, but major resurfacing. I suspect that most of that is going to disappear with this reduction in the highways budget.

I believe there is some calculation or some small amount of money set aside in the budget for a wage equity program. But then we bring into the Legislature by motion a policy that they call the fair wage policy. We spend, as a result of that policy, ten times the amount of public money that we have dedicated for the wage equity program.

In my opinion, hon. Speaker, the rhetoric that has gone with the introduction of this budget lacks the credibility that should be attached to a budget. I guess I could go on and on, but I would really like to finish my remarks with a challenge to the government side. The

[ Page 448 ]

government has taken this Peat Marwick report and made it their bible. They have taken it and used it to justify almost everything they are doing, including things other than the budget that was presented. It has been told to us so many times that they are an open, honest, consultative government. With that knowledge in mind -- and if it is true -- I suspect that this government would agree to hire, before the next election, the same Peat Marwick people to do a report of the affairs of the government at that time, so that when the voters are faced with a choice in the next election, they'll have the same information that they have now, in the same manner.

An Hon. Member: Two snapshots.

L. Hanson: That would in fact be another snapshot of the finances and the affairs of British Columbia, to give people the opportunity of truly measuring, in the same way that the government is encouraging the people to measure the Peat Marwick report.

Hon. Speaker, I cannot support the budget as it is presented.

R. Chisholm: Isn't it amazing that the government isn't putting anybody up to defend the budget? Maybe it isn't defendable.

Hon. Speaker, in the spirit of constructive criticism of the budget, I will first identify what I feel are its positive aspects. Not raising fees for post-secondary education was a positive move. We cannot afford to jeopardize the future of our young people.

I realize the difficult task the government faced in preparing a budget in these difficult economic times. I agree with the government that we must reduce our deficit and get back to a balanced budget. To do this, all British Columbians will have to cooperate. Therefore I am happy to see that the members of this House will set an example by not taking any pay raises this year, but will pay higher taxes.

What I am concerned about is that in spite of the many cuts from various sectors and the increased taxes, this government will have a record-breaking $1.7 billion deficit. I do not see where the NDP government has cut spending. Since they were elected in October, I do know they have increased spending by 4.7 percent -- much greater than the inflation rate. The Finance minister's forecast of a deficit of $1.79 billion is probably wrong. It will most likely be much higher, since his estimate is based on a very optimistic estimate that revenues will grow by 9.2 percent.

That rests on projected real growth of 3 percent in an economy from which he plans to extract close to $700 million in additional taxes.

Many large companies, such as The Jim Pattison Group, indicated that they planned to move to the U.S. before they heard this budget. You can rest assured that this budget will only convince them to leave British Columbia. If large British Columbia companies like the Pattison Group cannot survive in British Columbia, guess what will happen to small business? It will die.

[3:45]

The deficit figure is much larger than the record $1.79 billion that the budget shows. It does not include the $1 billion for capital projects which will be borrowed by Crown corporations. Therefore, even if the Finance minister's economic forecast is right -- which seems doubtful -- the total government debt will rise by $3 billion to a total of $21.5 billion. That is a $7,000 debt for every man, woman and child in this province. This is after hitting British Columbia residents for more than $800 million in extra taxes in this year's budget. This road map to recovery is obviously sending us in the wrong direction. This government's spending is out of control.

Why does the government need more government employees than ever before in the history of British Columbia? The spending estimates for 1992-93 indicate that the government will increase the number of civil servants by 5.5 percent. This government is 50 percent to blame for the huge 1992-92 deficit. They were responsible for the spending from October until March 31 -- six months. During that time they increased spending using special warrants. Our deficit would be much smaller if they had curtailed spending. Now they plan to continue this spending spree in 1992-93 and put us even further in debt.

I am against a huge deficit, and my constituents are against a huge deficit. We want to reduce the deficit, not increase it. We do not want to pay higher taxes and still have a larger deficit.

As I am the Agriculture and Fisheries critic, I will tell you what the budget did for Agriculture and Fisheries: absolutely nothing. They were left out of the budget: no help, no guidance, just higher taxes and another nail in their coffins.

After listening to both the Premier and the Agriculture minister less than a year ago tell this House how critical agriculture is to our economy, I cannot understand why agriculture was not mentioned in this budget, particularly after what the present Minister of Agriculture said in this House on May 23, 1991, less than 11 months ago, about the Socred government. I quote from page 12174 of the Hansard

"Agriculture wasn't mentioned in the budget. In seventy-five minutes of reading the budget, there wasn't one word about agriculture. Agriculture provides $1.2 billion for the economy of British Columbia per annum. It's a steady industry. It's our third-or fourth-largest industry; it's extremely important. This government did not see fit to mention agriculture in the budget. And when you examine the record, agriculture gets 0.6 percent of the budget -- 0.6 percent for the farmers and the producers of British Columbia, 0.6 percent for the individuals who are keeping the agricultural land reserve, the greenbelts of this province, intact.

"... you'd better ask the wheat producers of the Peace River country, or the berry producers of the Fraser Valley, or the orchardists of the Okanagan-Similkameen and Creston areas. These people have their backs to the wall.... I believe in judicious accounting, but not where it's foolish. If we are to preserve the farmers of British Columbia, the greenbelts and our quality of life, then let's take a very analytical look at it.

"I know individuals on their last mortgage. They cannot even hold their farms together."

[ Page 449 ]

I am astonished that 11 months later the Minister of Agriculture and his government have cut the Agriculture budget by $16.17 million from $111.5 million -- which he felt was not enough for farmers 11 months ago -- to even less, $93.5 million, while increasing farmers' taxes. What is the 5 percent rural tax increase? How will it be implemented?

Apparently the Premier understood the importance of agriculture in British Columbia, or at least he said he did when he was opposition leader in this House on May 9, 1991. I quote Hansard , page 11957, for anybody who is interested:

"I think we all agree that with British Columbia being 95 percent mountain, the 5 percent of prime farmland in the river valleys and on the floodplains of the great rivers of British Columbia -- 2 percent of which is arable and good soil -- has to be preserved for future generations. That is why we are committed to strengthening the independence of the agricultural land reserve and the commission, which we were proud to pioneer in the 1970s to make sure that there was food for future generations.

"When California is running out of water, when it is blacktopping its agricultural land, when Mexico is poisoning its soils with pesticides, we will have farmland for our farmers to make a good living and grow the agricultural products we need in British Columbia and can export around the world."

After the Premier stated this in this Legislature 11 months ago, why such a blow to our agriculture sector in this budget? The impact of the free trade agreement was not mentioned in this budget, yet the Agriculture minister, in May 1991, on page 12174 of Hansard , said:

"The one thing that really amazes me is that they didn't mention the impact of the free trade agreement. We all know that this government was 100 percent behind the free trade agreement. There wasn't an exception on the government benches. They thought it was a marvellous deal. They thought it was a level playing-field. Well, they make me laugh. I'll tell you about the level playing-field. They said we had to compete. How can the Canadian farmer compete? He pays more for land and more taxes. Washington State doesn't have an individual income tax; we do. He pays more for fuel -- about double.

He pays more for wages and more for equipment. If the government calls that a level playing-field, I am astonished. But really, I'm not astonished. I accept it now."

Obviously the Agriculture minister has accepted the Socred position, and this government plans to do nothing for the farmers or the fishermen who have been hurt by the free trade. Instead they put up property and rural school taxes and the income tax. The budget makes the farmer even less competitive. British Columbia farmers could compete. They have in the past, so there is no reason why they cannot in the future with a fair competitive climate.

This does not have to be subsidies for farmers, but it would mean giving British Columbia farmers the same breaks as their competition south of the border and rejecting surplus and subsidized products dumped at less than production prices by other countries. Due to the free trade agreement, cross-border shopping, possible subsidy decline due to the GATT talks, as well as development taking over the agricultural land reserve, agriculture in British Columbia is in danger.

Our party firmly believes that the best investment we can make in our agriculture and food industry is in education of our young people. Young men and women will continue the long tradition and legacy of progressive agriculture in the Fraser Valley, in my constituency and in all British Columbia. We must ensure that the agricultural industry is strong and viable, and that new agriculture technology centres with natural labs are available to educate our young farmers. There is no indication in this budget that this will happen.

This government must work in consultation with the private sector in developing more of our primary agricultural products into marketable and processed and packaged goods. Underlying agriculture and farming is a dynamic, thriving processing industry that our government must tap into. It is apparent that the agrifood industry plays a major role in the economy, and Chilliwack -- my constituency -- is a major player. This budget is killing the agriculture industry.

The budget will increase cross-border shopping in my riding of Chilliwack, the Fraser Valley and all other border areas in British Columbia, placing more hardship on British Columbia businesses. The budget did not increase fuel taxes, but instead presented taxpayers with a markup to be applied to gas prices. This will only encourage people more to go the U.S. for cheaper gas and, while there, purchase cheaper agricultural and retail goods, which otherwise would have been purchased in British Columbia.

Fisheries was another area omitted from the budget, indicating that the government has no vision or policy in this area. No provision was made in the budget to encourage onshore fish-processing facilities in British Columbia, such as for the hake industry in Ucluelet. There is a potential for the fisheries to contribute as much as $40 million annually to the provincial economy, and this government has ignored it. We are processing only about 5 to 10 percent of the hake quota this year. There is plenty of room in this marketplace.

Having groundfish processing equipment on shore enables processors to adapt to the seasonal nature of the fisheries. It also enables processors to change a production line quickly. The establishment of shore-based processing plants would provide more jobs and a broader tax base for the coastal communities. Jobs and taxes are now going to foreign offshore processing plants rather than to British Columbians.

The Hazardous Waste Management Corporation is gone. What about the commitment to the environment this government had? Nothing in the budget shows measures for job creation, so how does the government expect the economy to grow? The big expenditure cuts are in natural resources and economic development -- down nearly one-quarter or $340 million. Transportation spending is down about one-eighth from last year, yet transportation networks are the key to economic development.

The budget has not addressed our unemployment problem. There is nothing to make our industries more competitive and stop cross-border shopping. It is a budget to boost the U.S. economy.

[ Page 450 ]

My constituents voted against abortion clinics by not voting for an NDP MLA. I urge this government to respect the wishes of my constituents.

[4:00]

Even though this government criticized the former government on special funds, this government created one of their own: the British Columbia Endowment Fund, created from the former government's privatization benefits fund. The Finance minister said it could grow to $500 million, and $100 million was to go for investments in business and venture capital. However, there is no indication where the rest of the money would go or come from.

The British Columbia Endowment Fund and the Working Opportunity Fund, both created by this government, are the type of account that just last year this government, when in opposition, claimed would disguise the true state of the provincial books -- and they were right. Now this government is using the same tactics to shuffle money around and mislead the public.

This is a pickpocket budget. Everyone has been taxed. And guess who will pay the tax on lawyers' fees. It won't be the lawyers; no, it will be passed on to the clients. It is the citizen who is being taxed, and it will be charged when a person buys a home. If B.C. Tel pays more income tax, the phone rates go up. So ultimately, who pays the tax? The consumer. Property taxes have increased for all British Columbia homeowners. Homeowners will pay $100 million more in property taxes, because the supplementary homeowner grant has been eliminated.

The Finance minister claimed the tax shift would tax only the owners of high-priced homes. This is not true. Finance ministry figures show that even lower-priced homes will be affected.

In Prince George, for example, where the average assessed value is $75,000, property tax will increase by $80. Therefore low-and middle-income earners have once again been hit with taxes by this government. This is in addition to the income tax rate increase of 1 percent.

This has been described by many as a pickpocket budget, due to the hidden tax increases -- increases on fees, licences and fines massive enough to generate $40 million in the current year and $50 million over a 12-month period.

Motor vehicle licences and permits are up by $12 million. Safety inspection fees are up by $1 million. Coquihalla Highway tolls are up by $1 million, and the ominous other fees and licences will bring in $10 million more than last year. The little guy gets hit from every angle. Travellers will be facing increased airfares due to the new 2 cents per litre tax on jet fuel filters and corporate tax on the airlines. Those who cannot afford to fly will pay more to ride the ferries. The minister taxes Hydro; Hydro passes the cost on to the consumer.

Hon. Speaker, in closing, taxpayers can be assured that every penny stolen from them by this NDP government and by this Finance minister is stolen in the name of open, fair and always a loving government.

L. Reid: Hon. Speaker, it is with a great deal of disappointment and dismay that I rise in this House to comment on the government's first budget. As I speak, there are thousands of British Columbians without jobs. Over one quarter of a million people are on the welfare rolls in this province, and 188,000 people are collecting UI.

This government had an opportunity with this budget to create a stronger economic environment and to boost confidence in British Columbia's potential. Unfortunately, this government has not taken up the challenge. It has reverted to the NDP's traditional methods of attacking the recession it helped to create. The easiest way out: tax and spend.

Those British Columbians who were looking to this government for hope and economic leadership have been let down. In fact, the most surprising thing about this budget is that it gives us what we've come to expect from NDP governments. It's surprising because this Premier and his colleagues have spent the last four years telling British Columbians that they are fiscally responsible social democrats. This sounds like a contradiction in terms. It's funny for us, but hardly amusing for the British Columbians who took this Premier and this government at their word. Because this is a budget of broken promises.

It puts a hollow ring on the Premier's pledge last year of no new taxes. It has reduced pay equity from being a promise to merely a goal. It does away with dozens of NDP promises used to buy their way into power. In short, this government has not been honest with British Columbians.

Perhaps the real dishonesty of this budget is its portrayal as a means of bringing British Columbians' financial resources under control. Yet the Minister of Finance tables the largest deficit ever recorded in this province's history -- $1.7 billion. And because this government lacks the moral courage to make tough decisions, young British Columbians can look forward to an even greater debt to pay in their future.

At the same time, I've got to tip my hat to this government's clever sales job. The Minister of Finance, the Premier and their colleagues have spent the last five months flying around British Columbia flashing tidbits from what they officially called an independent financial review, but what some of them misleadingly referred to as an audit. In fact, this is the first budget in our history to have been written by a private consulting firm and not by a Minister of Finance. It's a new spin on the concept of privatization. And you know, it worked.

This minister was able to table the largest budget deficit this House has ever seen and call it prudent fiscal management. But that's no surprise, given the inherent dishonesty that is replete in the rest of this budget.

This year's deficit does not represent an insignificant amount. Each British Columbian will, at some point, have to shell out an additional $1,000 to pay off the principal and initial servicing of this minister's deficit. That's a 15 percent increase to the provincial debt. Look ahead. We cannot keep borrowing forever. How can we as legislators expect to maintain important services when we'll be paying a greater proportion of revenue into debt servicing? And how will we fund these services ten or 20 years from now when we are borrowing simply to service the same debt? That's what's happening in Ottawa today. The federal operating budget is in a surplus state, and the federal deficit

[ Page 451 ]

reflects debt servicing costs -- nothing more. How do we sustain programs in the future? Has the government asked itself these questions?

It's a question of sustainability. This government was not elected to be popular and all things to all people. It must confine itself to the same balance sheet as do the people who pay for it. It's true the Premier is no longer mayor of Vancouver and thus no longer legally bound to a balanced budget, but this government stressed fiscal responsibility last fall, and British Columbians expected exactly that from this budget. But what excuse does the government offer? We didn't know the true financial situation, they tell us. We really wanted a balanced budget, they insist.

However, what they aren't able to tell us is how they could sit in opposition for the last five years and still claim to know absolutely nothing about the finances of this province. The concept of wilful blindness springs to mind. If that's true and if they couldn't see what was going on two and a half sword lengths away from them, then they were an ineffective opposition and are doomed to be even worse in government.

I believe that this government is responsible for the province's affairs, and not only for the next three or four years. It must do everything within its power to ensure the sustainability of provincial services for as long as possible. That means long-term vision. It means prudent fiscal management today, because it's unfair to saddle young British Columbians with the results of this government's indulgences.

This budget has also deceived our small business sector. I wonder if, in his many chamber of commerce luncheons over the past four years, this Premier would have found such a warm welcome if he had begun musing about raising the small business income tax rate by over 10 percent in his government's first budget or, even better, applying the corporation capital tax to businesses -- including small businesses with a paid-up capital of only $1 million. That isn't targeting the Fletcher Challenges or the Texacos of British Columbia. We're talking about corporate welfare bums.

This government has scored a direct hit on any small business in my constituency that owns its own building, for example, or deals in expensive equipment or heavy machinery. I wonder if these employment generators in our communities realized that when the government spoke of fair taxes, they really meant more taxes and that small business was going to be singled out and punished with higher taxation simply for taking risks and creating jobs.

What this government doesn't seem to realize is that small business is the key to recovery. A confident investment climate is absolutely essential. We are not going to put our people back to work by driving their sources of employment out of operation. In short, this budget savages the small businesses which employ the majority of our people. This budget is no laughing matter for them.

Nor is it a laughing matter for average British Columbians who are now having to pay more for this government as well. Not just the wealthy -- more than any other group in our province, middle-class British Columbians are being forced to bear the brunt of this recession and of this government's spending habits. On average, individual British Columbians will pay 10 percent more to their provincial government than they did last year. In a year of negligible economic growth, that's nothing more than a tax grab. You heard it here first, from the government that promised no new taxes and balanced budgets.

The greatest fear many members on this side of the House have is that the middle class will simply say "no more." It may not happen as a result of this budget, but at some point average British Columbians who are simply making an honest living and seeking no more out of life than they put into it are going to launch a tax revolt.

If government thinks that's impossible, they should take a look south of the border. In addition to finding lots of British Columbia businesses that have left the province, they'll find entire school districts in California that have gone bankrupt, not because of government underfunding but because voters have passed referenda against tax increases. It's not going to end there. It is now clear that no political candidate in the United States is going to get elected without advocating a tax cut of some sort.

The middle class, the average British Columbian, is tired of being taken for granted by government. Is that what we want for British Columbia? Do we want a system of government that has lost its credibility and has so drained the taxpayers that they refuse to pay more? If this government is serious about its commitment to health care, education and the numerous other responsibilities to which it has pledged its tender loving care, it had better find other answers.

In the few days since this budget, I've had constituents write, phone and meet with me in my Richmond office, telling me that they've had enough tax hikes. These aren't millionaires. They don't have a cushy contract with the government's communications department, they're not some faceless corporate entity that is polluting our environment, and they're not taking advantage of their employees. They are average people making an average wage. They don't deserve this government's insinuation that anything more or less than that.... They don't deserve this government's attitude of "soak the middle class."

Worse still -- and I plan to devote a great deal of attention to this today -- this budget offers absolutely no hope to those British Columbians who, as the Finance minister himself stated, voted for a change in the way government operates. Health care, education and those most important areas of this government's responsibilities are not functioning on a sustainable level.

Health care now requires over one-third of all revenues, and that rate is growing annually. This year increases in health care spending total 15 times last year's economic growth rate. For the benefit of members on the other side of the House, for whom economics may be a new concept, this means that costs are outpacing our constituents' ability to pay by a fifteenfold margin. But that's all right, says the minister; we'll simply take more from small business.

[4:15]

[ Page 452 ]

What this really indicates is that the minister and the government have no economic strategy, no vision for creating employment. They are making up solutions as they encounter the problem. Their solution to the centralized, inefficient, Victoria-based health care bureaucracy is to shovel more money.

They'll encounter another problem soon enough. The small businesses they're punishing aren't going to be able to pay or to employ more people. Instead of reinvesting earnings in their communities and businesses, they're sending them to Victoria. Businesses operating on a small margin are not going to survive this budget, and neither will their employees. The government anticipates that real economic growth this year will keep our health care system adequately funded. However, that assumes a vital business climate, particularly for small business. This is the same government that went back on its word and imposed a huge new tax burden on small business.

Where will the growth be -- in bailiffs? This government has driven B.C. business into the ground and south of the border, and has seriously threatened B.C.'s potential for economic growth this year. So economic growth won't meet the demand.

Clearly, the answer to exponential increases in health care costs is systematic reform. I've already spoken in the House of the urgency of health care reform. Sadly, this government, which wasted its first six months, has now let another precious year, and billions of our constituents' dollars, slip by. Creative solutions are required, hon. Speaker -- far more creative, for example, than the minister's little experiment in doctor-bashing.

I agree without reservation that a system that allows ordinary general practitioners to bill over $350,000 annually needs reform. But what the minister proposed is not reform, but politically motivated tinkering. And it's not without a price. Our best specialists have already left the province. The already intolerable waiting-lists for surgery are only going to get longer.

It wouldn't be so tragic if it was merely a well-intentioned, though mistaken, policy. Capping doctors' salaries as a means of ensuring sustainable health care delivery really is nonsense, and the minister knows it. Fees for service account for only 20 percent of the total health care budget in the province of British Columbia. Clearly this is not the solution to reducing health care costs. It's politics, Speaker. Doctor-bashing is a crass political game, and it's easier to defend than underpaying our hospital employees.

The Premier has already played politics with our health care system. Just ask the people of Kamloops or, for that matter, the Minister of Transportation and Highways. I really am disappointed that the Minister of Finance has joined the Premier in putting policies before the needs of British Columbians, because it completely misses the point of health care reform.

Over the past six months I have toured hospitals in this province and spoken to doctors, nurses and other employees. These people have many positive and constructive ideas for reforming the system, which they know best. Something the minister ought to know is that doctors have told me that they are prepared to explore treatment protocols and the concept of salaried physicians. Clearly the opportunity exists to work together with doctors instead of creating chaos and conflict in our hospitals.

The minister having simply capped doctors' salaries and presented that as a means of ensuring "the viability of our health care system" means that this government has not been listening. I hope the minister will sit down with people who work in all aspects of health care delivery. I think she'll find other more meaningful solutions that don't merely mask a symptom and fail to cure the illness. Because nobody wins, least of all the patients, if we pit one aspect of the health care system against another. Surely this government can rise above the desire to win political points and work towards a progressive, interactive solution to health care spending.

Management of our health care system must become a more interactive process involving more than a government making arbitrary decisions. Last year the Premier told British Columbians that governments can't do anything they want; they have to listen. It's about time this government started listening to physicians and people in the health care system.

As I just mentioned, I've been privileged to tour many hospitals across our province, and I want to publicly thank those people with whom I met for taking time to share their valuable perspectives with me. It is in speaking with doctors and others that I have found them to be keenly aware of the challenges facing the system. They can also cite specific problems which, if the government had taken a moment to consult with the doctors, might have been addressed in this budget. For example, doctors in rural areas are calling for a central registry for locums.

This may not strike the government as a particularly important suggestion but, in fact, the inability of doctors to readily access a list of substitute doctors is one of the major disincentives for practising in rural areas of our province.

These same rural physicians are also making a case for a clinical support phone line. In larger city hospitals, there are clinical support teams which, for example, discuss and compare notes on possible diagnoses. It's an effective way of bringing more experience to bear on a patient's case. In rural areas, where there are fewer doctors, this advantage is not available.

The idea of a clinical support line clearly addresses this need, and if this government took a moment to sit down and discuss this issue with doctors, they'd understand that through common-sense measures such as these, patients in rural British Columbia could benefit from treatment based on the medical experience which lower mainland patients enjoy.

Doctors have also put forward a case for a central registry for pharmacists. This is another sensible solution to what I understand is a huge problem of overmedication and overuse of drugs by patients who use several pharmacies. Sadly, many patients denied pharmaceuticals at one outlet for perfectly sensible, health-related reasons, need only visit another outlet where their condition isn't so well known to the pharmacist. It's a simple matter of installing a computer system for the 700 pharmacies in British Columbia. It's

[ Page 453 ]

also a significant step forward in our focus on health care as a preventive process and not merely a treatment-based process.

This government has jettisoned so many of its election promises that I must say that I was caught off guard when the budget actually announced that it had fulfilled the commitment to earmark half of the lottery funds to health care. Closer examination, however, reveals that the government has in fact not honoured its commitment to those concerned citizens who campaigned last year for this measure. Their primary goal was to have those funds earmarked to reduce surgical waiting-lists -- probably the single most distressing feature of our health care system and the greatest individual case for reform.

What the government has established, however, is a health special account, with a mandate to fund measures such as preventive health, health education and related matters. But despite this budget's pronouncements, nothing of an urgent health care nature is to be funded. That was the promise, hon. Speaker, made to buy the votes of British Columbians with their own money. That's another broken promise.

I agree that redirecting dollars may ease the situation somewhat, but I can't help noticing how this government seems attracted to short-term band-aid solutions. The minister must realize -- whether it's capping doctors' salaries or shovelling more money into the system -- that the hard decisions still have to be made and that a community-based system of health care delivery is ultimately the answer. I realize that such reforms require enormous political courage, but we were sent here to make those very decisions on behalf of the people who pay for our health care system.

It is somewhat heartening to hear the minister speak of putting more emphasis on prevention and a community-based health care service. The Royal Commission on Health Care and Costs has presented this government with a challenge to reform, with a specific focus on local choices and local control. So I want to acknowledge certain initiatives contained in this government's budget that are steps in the right direction -- such as enhanced funding for community-based family health and prevention programs and new disease and public health initiatives in schools and communities.

That second initiative is most important, hon. Speaker. As I have noted in this House, community-based health care requires support systems, including schools, volunteer organizations and employers. But these are minute changes in the face of a huge challenge of reform. The government's commitment to community-based health care totals $79 million -- big numbers. But when the system's total cost approaches $6 billion, the numbers are put in some perspective. Just slightly over 1 percent of the health care budget is going to community-based health care in British Columbia. That is not health care reform, hon.

Speaker; that is lip-service and nothing more. This government must give stronger emphasis to preventive health care and locally based health care delivery.

It's a matter of priorities. Do we have the will to ensure a sustainable health care system? The need for cost-efficient solutions isn't going to go away just because the government chooses to ignore it. The Minister of Finance is quite correct when he says that redirecting health care dollars towards community-based and preventive programs is essential for the very survival of universal medical care. Those are the stakes. The minister would do well to act on them.

Other schemes in this budget are of interest. The budget for mental health services, perhaps because it lacks specifics, fails to address the primary concern of people in the field. How do these dollars translate into the services for clients? This is an excellent example of a centralized Victoria-based bureaucracy at work. Community-based workers have told me and this government that there is enough administration of mental health. Focus on services. Focus on developing a plan to help the employers in the field integrate their clients into their communities.

Turning to MSP premiums, I am pleased that the government is taking a year, presumably, to address the different options available. We on this side of the House would support this government's efforts to streamline premiums, perhaps through a yearly payment schedule. This would avoid the bureaucracy and cost associated with the present system. However, it is misleading to British Columbians to present the removal of premiums altogether without some discussion of the alternative. The money must come from somewhere, and whether it's a direct premium or taxation, the public still pays.

It is also important that our constituents understand the cost of health care and that premiums fund only a fraction of the cost of the entire system. I believe that if British Columbians understood the cost of the health care system, they would support reform. All it requires is a government that is honest and upfront with its citizens.

I want to turn to the matter of our province's seniors and how we as a Legislature may ensure active, healthy and contributing lifestyles for them. It is important we focus on that today, because we didn't hear a peep from this government on budget day about seniors. I really couldn't believe that this government completely neglected the needs of our seniors to the extent that the minister failed to even mention services or housing for seniors, or, for that matter, any issue related to seniors. That indicates this government's priorities.

I don't know who's looking after seniors, but it's not this government. I believe seniors deserve better than this government's neglect. They deserve better than the minimal funds allocated in this budget to multilevel housing. I have spoken in this House about the importance to senior couples that they remain together as long as possible. I have noted the cost-efficient concept of mediflats, which allow those couples to remain together despite one spouse's disability. Multilevel seniors' housing is not costly and could feasibly involve no more than the cost of long-term care.

Again, it's a simply a matter of the government consulting with seniors. They want to contribute. They don't want to be a financial burden, and they don't have to be, if only the government would stop relegating them to the fringes of its fiscal responsibilities and priorities.

Given its record on consultation, I doubt the government knows how important rapid transit is to the seniors in my constituency of Richmond East. Certainly

[ Page 454 ]

it is not a concern to the Finance minister, who has imposed a huge cut on the Ministry of Transportation and Highways. Richmond is a growing community, and so are the communities to the south, which use Richmond as a commuter route to and from Vancouver. Rapid transit is long overdue, and the case has been made many times over. Rapid transit really is essential to allow the seniors of my community to remain active, involved members. It is the key to improving the environment of the lower mainland and to reducing the traffic bottlenecks that plague my community twice each weekday.

Members on this side of the House shouldn't be the only ones calling for rapid transit. The Minister Responsible for Seniors and the Minister of Environment are there to be advocates, and if they aren't telling the Minister of Finance how important this initiative is, in my view they are not doing their jobs.

[4:30]

In this budget the government has just begun to address an issue of fundamental importance to the women of British Columbia: pay equity. It was a promise of this government, although I understand from the Minister of Women's Equality that it is now a goal. I'd be interested to know when this promise became a goal, but I'll save that for the estimates.

Given this de-emphasis, however, you might understand my concern when the Minister of Finance says this goal cannot be achieved overnight. Perhaps that is true, but overnight the minister has managed to find a possible $200 million for the construction workers of this province -- essentially an alternative pay equity program for non-union construction workers, nearly all of them male. Let's put this in its proper perspective. This minister has taken nearly seven times the amount dedicated to pay equity for this year and passed it along to a sector that is 98 percent male.

At the same time he can't find a fraction of that amount for public sector pay equity or for the government's own health employees, whose union membership is predominantly female.

The Minister of Women's Equality is genuinely committed to her mandate, but she clearly cannot convince the Premier and the Minister of Finance that equality for women is more important than appeasing the demands of labour's backroom boys. The friends and insiders of the Socred administration have simply moved over to make room for a new set of friends and insiders. The pre-election promises made to British Columbia women are taking a back seat to the post-election promises made to labour leaders.

I truly hope the Minister of Women's Equality doesn't lose heart, because I think she is an important advocate for women in this province, but I also believe that her mandate must be expanded to include the education of some of her cabinet colleagues.

In responding to the Throne Speech, I noted that the federal government's recent decision to abandon its draft child care legislation presents a huge obstacle to an enhanced child care program in British Columbia. I am pleased that this budget has nonetheless allocated funds for child care support. But as with mental health, I am concerned about direct translation into service. How many spaces will be created? The minister didn't offer any specifics in this budget, and the dollar figure is meaningless without those details.

Are we increasing bureaucratic staffing, or are we providing services to the women and children of our province? That's important information, and it's not coming from this budget,

I am pleased, however, that this budget identifies violence against women as an issue of women's equality. Clearly women and children cannot participate as full members of society without a sense of security for their physical safety. It's heartening that this budget increases funding for programs aimed at preventing crimes of violence, but again this is a very vague and general budgetary provision. Violence against women is a problem that requires solutions on several fronts. The solution is to be found partly, but not entirely, in counselling and the provision of shelters. Those are important factors, and I have commended the government for its recent enhancement of shelter services.

This budget also has to recognize the role of prosecution and the criminal justice system. Yes, violence against women and children is a social problem, but it is also a serious crime, and it's high time the Criminal Code reflected that.

It's also high time that all of our judges understood that. This government must make representations on behalf of British Columbia women to the federal Minister of Justice, because the instances of violence and abuse require more than counselling and support systems; they require the force of law, and they require prosecution. This government must take a proactive stance calling for stiffer criminal sanctions against such behaviour and for measures designed to ensure that our judges understand the seriousness of the offense of violence against women and children.

The most important measure that this government can make to address the incidence of family violence is to revive the local economies of our province's resource-based communities, because we have to recognize that stresses in families in communities too often lead to tragic results.

This is going to be a recurring theme as this House considers the estimates of each ministry in the coming months, because this government has delivered a budget that lacks vision and economic strategy. It simply throws money in the wrong direction and in quantities which British Columbians cannot afford. The budget has exposed this government as a let's-pretend friend of small business. The deception lasted five years, and ended last week with the same old NDP line of taxes and deficit spending.

There are lots of other questions to be asked about the budget, and they will be given the full consideration of this House during estimates: questions about education underfunding; about the burden of school funding being placed on homeowners; about the arbitrary slashing of the sustainable environment fund.

I am committed to working constructively with this government for the sake of my constituents and I'll honour that commitment, but this budget contains nothing constructive. It doesn't reflect any sort of consultative process, and it smacks of the arbitrary

[ Page 455 ]

decision-making that was the hallmark of the worst years of Socred arrogance.

J. Tyabji: I would like to take some time to speak about the budget this afternoon. There are several things I think we should talk about. The premise of the budget is openness and honesty. That seems to be the hallmark phrase being used to indicate the kind of philosophy that guides the budget. However, I fail to see how most of the things that are coming out address this principle, particularly when we look at the way the budget is structured.

Prior to the budget we had the Peat Marwick report, which provided us with information that we could have received from the auditor general. That would be the same information -- we have to assume that the auditor general is an objective body -- and instead we spent $1 million prior to the budget. Now we have a budget with the highest deficit in the history of B.C. We've got increased government spending and we've got an increase of taxation.

The removal of the supplementary homeowners grant especially is going to affect individuals in B.C. drastically, as they end up paying higher property taxes in most jurisdictions.

If we look at the economic impact of the budget, we can consider small and medium-sized businesses. We've got an increase in the taxes small businesses have to pay -- when the economy is in a lot of trouble, when we don't have small businesses doing very well. We've already had a problem with cross-border shopping -- and I'll talk about that a bit more later. The taxes that small businesses have to pay are going to help to drive the nail in their coffins.

In addition to the increased taxes we have a corporation capital tax being introduced for businesses. This corporation capital tax is, I think, what goes to the heart of the principle of openness and honesty. Prior to the budget coming out we had several trial balloons being flown to lead the people of B.C. to expect that we would be receiving perhaps an increase in sales tax and an increase in other taxes. Those didn't come about, and instead much more insidious taxes, I would say, have been introduced.

Where you have these corporation capital taxes being brought in, the 0.3 percent translates into several million dollars for some businesses whose assets might be high but not their revenues, especially in these economic times. This budget does not address the fact that we are in tough economic times, and I believe, based on this budget, times are going to get tougher.

We have a fair wages package -- at least that's what it's being called. The fair wages package makes no sense whatsoever. What it's doing is just dealing with one aspect of one industry, and in these economic times this is once again an additional burden to business.

This is going to be widely debated, and I think one of the most unfortunate things about the increased taxes on small business, the corporation capital tax, the fair wages legislation, and the fair wages package under the budget, is that it signals to the rest of Canada and to the rest of the world that B.C.'s economy is in a turmoil, that any problems that we have with our economy are just going to get worse, that our government is not considering the free market to be an effective way of dealing with the economy and that they must interfere with the free market and legislate it.

[G. Brewin in the chair.]

The cross-border shopping issue is something that also impacts businesses. A fact of life is that retail businesses rely on customers: they need consumers in order to survive. They will not be able to survive if the consumers are heading south of the border. In addition to the corporation capital tax, the fair wage package under the budget, the increased tax on small business -- these are all forces that drive businesses south of the border -- now we have incentives to increase cross-border shopping, which is going to be detrimental to our own economy.

It's going to send consumers south of the border, and any business with any sense is going to see that the consumers have headed south of the border, that taxes are lower; that the cost of doing business is lower, and they are going to head south as well. We're going to see an economic downward spiral in the province.

As for individuals, they are going to be pressured by this through the increase in property taxes with the elimination of the supplementary homeowner's grant, with the increased pressures for cross-border shopping and with the the loss of the surtax from the federal government that we had just received back. This is now gone; this has been taxed back by the provincial government. We're going to see individuals impacted in two ways: (1) their disposable income is going to go down with the increased taxation; and (2) they are going to lose confidence.

This budget has indicated not just to individuals but also to businesses that this is the time to lose confidence in the government's initiatives for the economy.

Being a representative from the interior, I look to the budget for some kind of economic initiatives. B.C. has traditionally been a resource-dependent economy. What we've found is our resources.... With the environmental pressures that have been coming around, it's not enough to concentrate on primary extraction of resources. We really need economic initiatives with regard to job creation. Where we should be looking is things like secondary manufacturing.

We should be looking to environmental initiatives for some indication of what we should be doing with regard to the economy and job creation. We can look at creative ways of generating jobs under the Environment portfolio, for example, in terms of waste management. We could have some kind of initiatives for revenue generation under waste management with composting, recycling, some alternatives to our current disposal methods, and with that revenue generation have a decrease in the burden on the taxpayer and perhaps some environmental initiatives at the same time.

This would lead to job creation: there would be some form of secondary manufacturing, and we would close the loop of disposal of goods.

In addition to not seeing any job creation and seeing an increase in taxes, an increase in government

spend-

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ing and the highest deficit in the province, now we can look to some of the initiatives we have seen with regard to the environment. Unfortunately, what we have seen are fines that are being brought under the Environment portfolio for polluter-pay, which sounds like a great idea in theory. However, what we've found is that the increased fines in the polluter-pay principle are also factored in as revenue in the Environment portfolio. The government is actually not only counting on people polluting, but they are counting on them paying the fines, and they have already spent the money under general revenue in the Environment portfolio.

What we should actually be doing is trying to eliminate the pollution in the first place. We can't have polluters continuing to pollute and then paying for it. We can't have fines factored in as the cost of doing business in B.C. What we should be doing is immediately churning any fines generated through the polluter-pay principle back into a special cleanup fund for the environment. I don't see in the Environment portfolio any separate portfolio set aside for research and development into alternatives to creating pollution and also for cleanup. There is no specific fund for environmental cleanup.

The time in B.C. is long past for an environmental cleanup initiative. More to the point is that this government promised us when in opposition that they would be the green government -- the environmentalists. Yet in the Environment portfolio we see the polluter-pay fines factored into the revenue, which means they're expecting money to come in, and it has already been spent. We see a negligible increase in the portfolio and a very significant decrease in the sustainable environment fund, which I think is of great concern. Of course, we'll be debating that more later.

What we should also have been seeing was some kind of creative solutions with regard to air pollution. Our member for Fort Langley-Aldergrove, who is the critic for Labour, proposed an excellent solution with regard to ICBC rates, which impacted air quality. He proposed that in exchange for car-pooling, which cuts down on the amount of air pollution produced, people would have a reduction in ICBC rates. That would lessen the burden on the taxpayer, lessen the cost to government of the eventual cleanup of the environment and be a creative solution with regard to finances.

[4:45]

An Hon. Member: Excellent suggestion.

J. Tyabji: It's a good suggestion.

I want to talk for a minute, while we're on the Environment portfolio, about reforestation, which used to be under the sustainable e