1985 Legislative Session: 3rd Session, 33rd 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, MAY 15, 1985

Afternoon Sitting

[ Page

6127 ]

CONTENTS

Oral Questions

Reforestation. Mrs. Wallace –– 6127

Timber appraisal. Mr. Williams –– 6127

Vancouver Transition House. Ms. Brown –– 6128

School district funding. Mr. Rose –– 6128

Government advertising. Mr. Hanson –– 6129

British Columbia Railway Dispute Settlement Act (Bill 39). Committee stage –– 6129

Mr. Gabelmann

Mr. Lea

Division

Assessment And Taxation (Miscellaneous Amendments) Act, 1985 (Bill 6). Committee stage 6135

Mr. Stupich

Mrs. Dailly

Mr. Williams

Mr. Skelly

Division

Third reading

Social Service Tax Amendment Act, 1985 (Bill 11). Second reading

Hon. Mr. Curtis –– 6139

Mr. Stupich –– 6140

Mr. Williams –– 6141

Mr. Nicolson –– 6141

Hon. Mr. Curtis –– 6142

Workplace Act (Bill 4). Committee stage –– 6142

Mr. Gabelmann

Mrs. Wallace

Third reading

Hotel Room Tax Amendment Act, 1985 (Bill 13). Committee stage 6144

Mr. Stupich

Third reading

Business Licence Repeal Act (Bill 16). Committee stage 6144

Third reading

British Columbia Transit Amendment Act, 1985 (Bill 17). Second reading

Mr. Stupich –– 6145

Hon. Mr. Curtis –– 6145

Division –– 6146

Medical Service Amendment Act, 1985 (Bill 41). Hon. Mr. Nielsen

Introduction and first reading –– 6146

Corporation Capital Tax Amendment Act, 1985 (Bill 7). Committee stage –– 6146

Mr. Williams

Mr. Stupich

Third reading

Tobacco Tax Amendment Act, 1985 (Bill 12). Committee stage –– 6147

Third reading

Committee of Supply: Ministry of Industry and Small Business Development estimates.

(Hon. Mr. McClelland)

On vote 44: minister's office –– 6147

Hon. Mr. McClelland

Mr. Williams

Tabling Documents –– 6150

Appendix –– 6151

The House met at 2:05 p.m.

Prayers.

Oral Questions

REFORESTATION

MRS. WALLACE: Mr. Speaker, my question is for the Minister of

Forests, and it's a very simple one. Has he decided to provide the $22

million to fund the Vancouver Island mayors' silviculture program?

HON. MR. WATERLAND: Mr. Speaker, I thank the member for her question. The answer is at this time no.

TIMBER APPRAISAL

MR. WILLIAMS: A further question for the Minister of Forests,

Mr. Speaker. Can the minister advise the House of the status of the new

appraisal system of his ministry?

HON. MR. WATERLAND: Well, Mr. Speaker, the appraisal system

used today has been in use for many years, and we have no new system in

place right now.

MR. WILLIAMS: I have a copy of a memo, Mr. Speaker, dated May 1, sent out to all regions. It says:

"Re: new appraisal system.

"Attached is the working plan for development and

implementation of the new system as it stands now. I expect an

executive decision shortly, giving the green light to proceed with the

new system along the principles and conceptual basis developed by

industry."

There is a further paragraph. It's signed by Mr. Waelti, director of

the valuation branch. It went out to all parts of the ministry. Would

the minister care to correct his statement?

HON. MR. WATERLAND: Not at all, Mr. Speaker. The system we

have in place now is the system that has been in place for many years.

Over the last number of months and perhaps going on for over a year we

have been trying to find ways of simplifying somewhat the appraisal

system, and we are getting very close to being able to do that. But

it's not in place yet. I hope that at some time in the very near future

it will be, because in my opinion far too much time and expense is used

in the appraisal system we have now, and it does not necessarily lead

to a more equitable or fairer system. So we're trying to maintain the

equitability and fairness of the system, and yet simplify it. We are

getting close to that, but the new system is not yet in place. I'm not

sure just when or if it will be.

MR. WILLIAMS: Could the minister advise the House what he

anticipates in terms of the impact of industry's new system for pricing

public timber, and what the impact will be on Crown revenues? Will they

go up or will they go down?

MR. SPEAKER: An anticipatory question, hon. member.

MR. WILLIAMS: I'm sure, Mr. Speaker, there's been an

analysis. Can the minister advise us of the analysis that's been

undertaken and whether revenues will go up or down?

HON. MR. WATERLAND: Mr. Speaker, there is no industry

appraisal system contemplated. The industry and this government have

always worked very closely to ensure that we have a very healthy and

viable forest industry in British Columbia. Any changes to the

appraisal system will not be centred around changes in revenue. One of

my mandates is to ensure that the Crown's interest in Crown timber is

realized for the people of British Columbia by the government of

British Columbia.

MR. WILLIAMS: The memo says it was developed by industry and

by your senior valuation staff. Could the minister advise us if the

operational allowances given the companies under the proposed system

would increase?

HON. MR. WATERLAND: It would be nice indeed if the world were

as simple as that member likes to make us believe. The allowances for

operating costs, both in logging and in manufacturing, and other

responsibilities that licensees have, are very complex matters. There

will be adjustments, I'm sure, because some inequities exist now. But

the idea and the whole thrust of the appraisal system has always been

to make sure that the Crown's interest in the resource is realized by

the Crown for the people of British Columbia. That will continue to be

a guiding principle of our stumpage appraisal system.

MR. WILLIAMS: It's a little different, Mr. Speaker, when industry designs the system and the cash register for the Crown.

Could the minister advise this House what concern he has with

respect to this new system, in terms of the implications with respect

to protection attitudes in the United States regarding this problem

that we already have under the existing system?

HON. MR. WATERLAND: The stumpage appraisal system that we've

had in place for a number of years in British Columbia stood up to the

minutest of scrutiny by the International Trade Commission in the

United States a couple of years ago. One of the things that we have to

assure ourselves of.... And that is one of the reasons of many that we

work cooperatively with the private sector in British Columbia and

don't isolate ourselves as a government from the private sector. One of

the guiding principles in addition to equity has to be that we do not

and cannot be accused of subsidizing our industry through our stumpage

appraisal system.

That, as I said, stood up to a very minute and detailed scrutiny by

courts in the United States, and it was proven beyond any doubt that we

in British Columbia have a fair and equitable system. Any changes to

that system must also be fair and equitable. That type of terminology

may be somewhat strange to that member, but we do believe in fairness.

We believe that industry is a basic part of our economy, and we do not

approach them as if they were a bunch of crooks, as some people seem to

do. Our industry in British Columbia has served a very important role

in our economy for years and years, and will continue to do so in the

future.

Together with our appraisal system and the industry itself, there are the very important aspects of investment in our

[ Page 6128 ]

industry in British Columbia from abroad and our

ability to compete in those marketplaces. All of these things are

either encouraged or discouraged by the appraisal system we have and

the approach and the attitudes of the provincial government. I would

hope that that will continue to be the case, and that eventually we

might get over the discouragement of investment in this province that

took place during the early part of the 1970s, and about which I still

hear when I do my travels abroad in the marketplaces of the world — in

areas of the world where major investments could perhaps come from.

[2:15]

VANCOUVER TRANSITION HOUSE

MS. BROWN: Now that that ministerial statement is over, my

question is directed to the Minister of Human Resources, but in her

absence I am hoping that her executive assistant will be able to help

us. It has to do with the decision by the YWCA not to renew their

contract for the Vancouver Transition House. I am wondering whether he

can tell me whether the government has decided to resume responsibility

for that very important service.

MR. REYNOLDS: I will take the question as notice and report back to the member as soon as I can.

MS. BROWN: A related question, Mr. Speaker. In view of the

fact that the Vancouver Transition House is the only resource in the

Vancouver area dedicated exclusively to meeting the needs of women and

children in an emergency battered situation, I wonder whether he would

also draw that fact to the attention of the minister in asking her to

resume responsibility for this service.

MR. SPEAKER: Further statement, the member for Coquitlam-Moody.

MR. ROSE: Mine is a question to the Minister of Education.

MR. SPEAKER: That would be refreshing, hon. member.

SCHOOL DISTRICT FUNDING

MR. ROSE: I'll reserve my statement for the other side.

I have a question for the affable Minister of Education. The school

district at Hope has joined a growing number of school districts who

are forced to seek charitable donations in order to keep classes open.

As much as hope and charity are appropriate in any society, has the

minister decided to improve the framework of our public school funding

so that our schools do not need to exist on charity.

HON. MR. HEINRICH: Mr. Speaker, I would never discourage any

school district, any community or any parents in any community from

seeking funds to assist any particular program or the purchase of any

equipment. It doesn't matter where we go throughout the province, this

has been a practice for years. If somebody wishes to incorporate a

society under the provisions of the Society Act of British Columbia and

get a tax number from Ottawa so that any contribution is tax deductible

and the funds would be there, I see nothing wrong with that at all.

MR. ROSE: Mr. Speaker, the minister insisted that the reason

he has clung so desperately to his framework is that it is fair and

equitable to all school districts, whether they be rich or poor. If

that is so, why has the minister permitted some school boards — notably

Vancouver and Burnaby and Coquitlam — to sell property in order to get

enough funds to run the school, when in turn those funds exceed the

minister's own framework?

HON. MR. HEINRICH: Mr. Speaker, for two years, since I've had

responsibility for the portfolio, I have encouraged all school

districts to dispose of surplus inventory. In my own school district I

believe there were something like 20 parcels covering an area of 250

miles across. In many parts of British Columbia, where there has been a

significant decline in enrolment or in parts of the area or the school

district where no school will ever be built again, as a matter of board

policy, it seems to me that it's in the interests of all of us — the

local taxpayers, the provincial taxpayers and everyone in the House —

that a school district disposes of surplus inventory. What is even more

important is that what we did was to divide the proceeds of the

disposition between shareable and nonshareable, and we doubled the

amount of the non-shareable, which becomes the exclusive property of

the school district. If the school district wants access to this, which

they asked me if they could have, and which I agreed to 18 to 20 months

ago, I see nothing wrong with them enhancing their own budget by....

Interjection.

HON. MR. HEINRICH: Nothing whatsoever; this is the limit. If

they are able to generate funds, is there anything wrong with that?

Absolutely nothing. They ought to be encouraged to do it. Remember, Mr.

Speaker, they are autonomous bodies. They've got property; and they can

dispose of those properties. There are windfalls; there's money there

to be had. They just need to be encouraged. We're going to make sure

that there's an opportunity to take full advantage of it in Vancouver,

where they've got all the property in the world; they don't need it.

MR. ROSE: In the name of equity and all that's fair and holy,

does the minister not agree that districts rich enough, or that have

declining enrolment, with property to sell are in a better position to

increase beyond the minister's framework than those districts that are

poor? Where's equity in that situation?

HON. MR. HEINRICH: Where the equity is is as follows; if the

member could be patient for a moment, I'll explain how. There's pretty

well a ratio of about 80 to 20 provincewide when it comes to debt

service. Make a distinction between the acquisition of land and the

construction of plant. The provincial taxpayers, through consolidated

revenue, have usually contributed something like 80 percent on average

towards that cost; the balance comes from the local taxpayer. On the

disposition of a piece of property, that same formula applies, and the

money comes back the same way; hence the reason for shareable and

non-shareable. Under the non-shareable portion they have access, and

they can use it.

[ Page 6129 ]

Richmond, as a matter of fact, took full advantage

of it. I know a number of other school districts who have been able to

take advantage of it and get access to those funds. Mr. Speaker, if I

may continue, the reason why we maintained that formula is so that

those funds are distributed equitably provincewide. The non-shareable

portion always remains the property of the school board. Do you want to

take that away from them?

GOVERNMENT ADVERTISING

MR. HANSON: Mr. Speaker, I have a question for the Provincial

Secretary. In the current fiscal year the provincial government has

budgeted $18.6 million to buy advertising. In addition, Expo 86

Corporation has budgeted $25 million for advertising. Additional

advertising will be done by Crown corporations, boards, commissions,

agencies and the lotteries branch. Is the minister aware that this

level of advertising expenditure is higher than all but the two top

national advertisers in the country — the federal government and

Procter and Gamble?

HON. MR. CHABOT: Mr. Speaker, a great revelation this

afternoon. The member knows that the bulk of the advertising budget

that we have in this ministry, through the government information

services, is statutory in nature. Most of those expenditures are called

for in the laws of this province, and I hope the member's not

suggesting that we violate the law by not doing the necessary and

compulsory advertising we have to carry out.

Orders of the Day

HON. MR. GARDOM: Committee on Bill 39, Mr. Speaker.

BRITISH COLUMBIA RAILWAY

DISPUTE SETTLEMENT ACT

The House in committee on Bill 39; Mr. Strachan in the chair.

section 1.

HON. MR. SEGARTY: I move the amendment standing under my name on

the order paper. [See appendix.]

MR. CHAIRMAN: The amendment is in order and has been published in Orders of the Day .

On the amendment.

MR. GABELMANN: Mr. Chairman, the difficulty of course is that the Orders of the Day

have just now arrived, or half an hour ago, and the timing on this kind

of thing is somewhat difficult. So I would appreciate it if we could

take just a second on this.

MR. CHAIRMAN: By all means.

HON. MR. SEGARTY: On the same point, Mr. Chairman, the

correction is to change the

section to the correct legal name of the

company, which is B.C. Rail Ltd. The correct legal name of the employer

on the railway is B.C. Railway. The confusion arose in the drafting

process because of the collective agreement under which the operations

have been continuing for the past 15 months. It was formerly the

British Columbia Railway Company and is now called B.C. Rail Ltd.

I hope that helps the hon. member.

MR. GABELMANN: Thank you. That does help on the first one,

which isn't the one I was concerned about. The second one that the

minister did not refer to — which is still part of the first amendment,

as the Chairman pointed out — is an issue I was going to raise. In

terms of the definition in the original legislation as debated

yesterday, trade union means a trade union certified as a bargaining

agent for some of the employees. Pretty.... I don't want to use the

word "sloppy," because it implies a criticism of someone who did some

drafting, but I'm curious as to how that kind of language could

possibly have even emerged in the first place, necessitating the kind

of change that was made.

HON. MR. SEGARTY: Mr. Chairman, I am advised that it is a

tactical matter. Some of the employees are unionized and some are

non-union. But I understand the member's concern, and my staff have

advised me that it's a problem that happened with the drafting process.

Amendment approved.

Section I as amended approved.

section 2.

MR. LEA: Mr. Chairman, throughout this session I have given

the government the benefit of the doubt. I have not questioned their

motives. I have tried to make up my mind on how to vote in this House

as the legislation is written.

Section 2 of Bill 39 frightened me. As I

stated in the debate on second reading, there is no reason for this

legislation; there isn't anything that the government wants to do that

cannot be done under existing legislation. This

section 2 seems to me a

harbinger of what may come.

I believe that the government — and I'm not going to give them the

benefit of the doubt on this legislation — is going to use labour as a

whipping boy in this province. They've read their polls; they have seen

in the last Decima poll that 63 percent of the citizens of this

province are disconcerted about labour. They're not happy with some of

the directions the labour unions are going in. They're not happy with

some of the labour union leaders.

AN HON. MEMBER: What does it say about the United Party?

MR. LEA: Well, you've got the polls, you read them. We paid

for them — the taxpayers — and you get to read them. But I've seen the

polls too, and 63 percent of the people in this province are very

dissatisfied with some aspects of the trade union movement.

It seems to me that the government is using those polls and the

finding in those polls to find enemies. They're using legislation,

they're using this Legislature, and they're using the power of

government to go after people who the polls tell them are not popular

at the moment. That's what this act is all about. That's what

section 2

is all about. Is it a harbinger if

[ Page 6130 ]

this gets through and there's not too big an

outcry? Then the next piece of legislation, the next section, will have

no strike or lockout anywhere in British Columbia for a period of three

years, two years, five years? Is that what the government is leading

to? Do they want the fight? Are they looking for the fight?

[2:30]

That seems to be what this government is all about. They're looking

for fights with other British Columbians. Get conflict going. Get

confrontation going. That's what this

section will do, especially if

it's only a harbinger of things to come. That is deplorable. If the

government is doing it by design, it is unpardonable. If they're doing

it because they don't know what they're doing and they're stumbling

from one decision to another, that is unforgivable. But neither way do

they come out okay.

Mr. Chairman, in my opinion this bill, this section, is nothing more

than a design to turn one British Columbian against another British

Columbian. That's what it's all about, and it's regrettable. At the

time when we need to think together as British Columbians, when we need

to act together as British Columbians and plan together as British

Columbians, this government insists on creating conflict where there is

no need. I believe that the government knows that. I don't believe that

they're just stumbling along. I believe that they're using those

polling devices to find out who is not happy with whom today, and

they're taking advantage of that information in the most insidious way.

MR. CHAIRMAN: Hon. member, some latitude has been allowed,

but we are in the committee stage of the bill now and must be specific

to the section.

MR. LEA: We're talking about

section 2, Mr. Chairman, no strike or lockout.

MR. CHAIRMAN: Yes, which deals specifically with strike and lockout. It does not deal with polling, nor with the principle of the bill.

MR. LEA: That's right, and I'm talking about the implications of

section 2, and what it could mean to this community and this province.

I am on record as not being a toady of the labour movement, although

I'm on record as not being against the labour movement. Sure the labour

unions and the leaders have warts. Are they perfect? No, they're not.

Do we throw the baby out with the bathwater? I hope not. But I am just

afraid that

section 2 in this legislation is going to create conflict,

doing away with harmony where maybe harmony is possible.

It is the first time that I've ever seen legislation brought in to

order workers back to work before they've gone out. Something must be

wrong. You look at it and on the face of it you can only draw one

conclusion: that this government is pushing forward, and they are

pushing forward hoping to bring themselves up in the polls, and they're

going to use any group of British Columbians that they can use — and I

mean use — in order to reach their own partisan objectives.

MR. CHAIRMAN: To the section, please.

MR. LEA: I'm talking about the section, Mr. Chairman. That's

what this section's all about. It's a further attempt by this government

to divide British Columbians, not bring them together; rhetoric saying one thing,

action doing the other. It is regrettable.

In closing, I say that I have given this government the benefit of

the doubt for a long time, but there comes a time when you have to draw

the line, and you have to put it on the table. I think that's what I'm

doing here today. I believe that this is a dangerous act. I believe

that the motivations behind it are dangerous and unsavoury. I believe

that this government is acting in the most despicable way, in

partisanship. I can only hope that the people of this province know

about it, and can see through it, and won't go along, and will rise

above the actions of their duly elected government.

MR. GABELMANN: Mr. Chairman, I want to associate myself with

the comments made by the member for Prince Rupert. I don't do that all

the time, but I certainly do on this section. This

Section is the guts

of the legislation, because the principle involved is that no strike or

lockout shall take place on a particular endeavour in this province,

before any strike or lockout has occurred; even before there was any

serious indication that there would be one. That's a departure for

governments in British Columbia, and a serious one.

I'm not going to make the philosophical speech; I made that in

second reading yesterday. But I just want to say, before I ask a

question, that I trust that we will never again see introduced in this

Legislature bills to become law that tell workers or employers that

they will not be allowed to go out on strike in the future sometime.

Because that's what this one does. It violates the International Labour

Organization's code — absolutely and flagrantly violates the standards

to which this country is a party. We have the gall and effrontery in

this country to talk about human rights and labour standards in other

parts of the world, and then we violate those same agreements that we

sign. We've done that in public sector bargaining; we're doing it here

in what I would refer to as the quasi-public sector. God only knows if

the private sector is next. It is inexcusable and it's wrong.

The government has, if it wishes to use it, legislation on the books

which would have enabled it to do what

section 2 does. I want to ask

the minister why he didn't use that legislation that now exists.

HON. MR. SEGARTY: Perhaps the member would like to elaborate a little bit on what legislation is on the books.

In answer to the member for Prince Rupert (Mr. Lea).... He came in

here yesterday and made a similar speech, and then when it came time to

vote he ducked the issue and left the House. He mentions some political

polls that he may have access to; I certainly don't. I didn't discuss

that with the mediator or the director of mediation services or my

deputy minister, who spent a great deal of time with the parties

involved in trying to resolve this very difficult issue of collective

bargaining between these two parties. They worked hard night and day,

day in, day out. The parties themselves negotiated this collective

agreement for 15 months — two months before the expiry date, and over

the past while they have been working with the parties day in, day out

to try to get this agreement resolved.

I dare say that if we really wanted to make this a political issue,

it would be convenient for all of us to let them go out on strike and

turn the communities against each other and turn union member against

union member out in the workplace and then turn that into frustration

in the community. If you

[ Page 6131 ]

wanted to make a political issue of it, it would be a good thing to do, I would guess.

Instead we took a little leadership and said that there would be no

lockout or strike on the British Columbia Railway and that we would not

play politics with this particular issue at this particular time in our

economy in British Columbia. That may suit the member for Prince

Rupert's purposes and goals, but it does not suit my purposes and goals

as British Columbia's new Labour minister in 1985. It would be

convenient to have the parties argue about sharing the pie, while our

competitors around the world are nipping at our ankles and stealing the

pie from us altogether. I don't think any British Columbian today would

sit by and take comfort from that fact. And I don't think, quite

frankly, it's anything that the parties involved want at this

particular time in our economy, when we've got to be working together

to try to find ways to build our economy,

1 resent, too, the fact that both members who got on their feet

today would blame me for the industrial relations problem of the

British Columbia Railway and the employees. I took over this portfolio

two months ago, and I resent the fact that somebody would say that I'm

the cause of all the problems and that I'm a failure because I've been

unable to resolve the issue. More expert people than I have tried their

hand at this particular problem. What we have to do is find new

solutions.

The Vancouver Board of Trade recently brought up a series of new

solutions that I hope we will be able to put into practice. Labour

relations isn't a daily thing, a weekly thing or a monthly thing; it's

an ongoing process. It's not very dramatic, but it's a process that we

have to work at day in, day out to eliminate all barriers, all slogans,

suspicion and emotions. Only through development of that process will

we be able to solve our problems.

MR. CHAIRMAN: Some latitude is being offered. The member for North Island.

MR. GABELMANN: Mr. Chairman, I didn't agree with very much of

that, but I'm delighted to see the minister abandon his prepared text

and get up and stand on his own feet and say what he thinks, rather

than reading the stuff that he was reading yesterday. That was much

more fun, Mr. Chairman, than....

Interjections.

MR. GABELMANN: Mr. Chairman, if you take what the minister has just

said and you put it into the context of what the Minister of Lands, Parks and

Housing (Hon. Mr. Brummet) said yesterday, the clear message that we're

being given.... This relates to

section 2, because the principle here is

to prevent a strike or lockout in anticipation that there might be one. The

clear indication of the government policy from this day forward is that legislation

will be introduced to prevent strikes or lockouts in industrial disputes at

the government's whim. That's the implication that everyone has to draw

from the speech made by the member for North Peace River, and, to a certain

extent, the speech made by the Minister of Highways (Hon. A. Fraser), and the

member's comments now combined with this legislation. When you look at it

all in context, we are on a new policy direction in British Columbia. Because

the minister said a few minutes ago, among other things, that they've been

bargaining for 15 months and they haven't been able to put it together,

so we've got to intervene — my words; his idea, I suspect, pretty closely.

That wasn't the language used last summer when, after a longer

period of negotiations, Metro Transit was shut down by either a strike

or a lockout, depending on your perspective. The position of the

government at that time was a continuation of the policy and of the

philosophy of the government, at least as it was expressed, which was:

"Collective bargaining is almost sacrosanct, and we're going to allow

it to continue even at the cost of interrupted bus service in the lower

mainland and in Victoria." That was the government's policy last year,

and they endured a lengthy dispute and finally sought this

Legislature's assistance in ending it.

In the previous dispute, in what I would call an effort by the pulp

industry to raise prices, we had a two-month shutdown in the pulp

industry. The government let that go, assisting the companies in

raising prices, defending it on the basis of free collective

bargaining. Not any more — we're into a new principle here, expressed

section 2. It's curious to me that this new policy of the government

— not expressed directly or proudly by press release or by speech, but

expressed indirectly through this legislation and through speeches in

the House — comes in at the same time as we get a new Minister of

Labour, one in whom some of us had some confidence that he understood

that his role was to protect collective bargaining, not to destroy it.

[2:45]

Now I asked earlier why.... Let me say what the basis of my question

was: why not use existing legislation? I'll refer, since the minister

doesn't know what it is, to it in a moment. What parties in our

society, what people in our society, need to know when they are

involved in daily routines in their work life or anywhere else is what

the rules of the game are. In labour relations that's as important as

it is anywhere else. They need to know what the rules of the game are.

The rules of the game in this province are spelled out in various

statutes, depending upon where you work. For the most part, and in

respect of this particular dispute, the rules are spelled out in the

Labour Code and in the Essential Service Disputes Act. That's where the

rules are spelled out. The parties know what the rules are; they

understand them; and then along comes the employer in the guise of the

Minister of Labour — because let's not forget that he is the employer,

because there is at least one cabinet member who's in the chamber at

the present time on the board of directors — who changes the rules of

the game in midstream. That's what we've had happen here.

I don't like the rules of the game as they're spelled out entirely,

in both the Labour Code and the Essential Service Disputes Act. I made

that clear many times in debating amendments, and again yesterday. I

don't like them all, but at least those were the rules that were

expressed; people knew what they were, and bargained and conducted

themselves knowing what those rules were. The employer comes in and

uses the Legislature to change the rules. The minister talks about fair

— that's not fair. To go back to my question, why wasn't

section 8 of

the Essential Service Disputes Act used?

HON. MR. SEGARTY: Well, now that the member has brought that

to my attention, it provides for a 90-day cooling off period, and I

suggest to the member that the parties have

[ Page 6132 ]

been cooling off for 15 months. I want to know what that would have done.

MR. GABELMANN: It's unfortunate that ministers don't get to serve an apprenticeship before they take on the real responsibilities.

HON. MR. SEGARTY: Tell me.

MR. GABELMANN: Well, let me tell the minister, Mr. Chairman.

Those people who are practitioners of the art of collective bargaining

will tell you that the processes that are available need to be gone

through in sequence, and that as you get further and further along that

process the pressure increases. Now one of the latter stages is a

strike or a lockout, which puts an immense amount of pressure on. The

government has chosen in this case, at this stage, not to allow that

particular element of pressure to be imposed upon the parties. But at

the same time, having made that decision — which I don't agree with —

if it wants to go that route, it at least has to allow all of the other

levers of pressure to be pushed.

In order to make sure that happens, you need to go through all of

the available opportunities. Like it or not, the Essential Service

Disputes Act allows for a message to be delivered to the parties. That

is that the government is not prepared to see you go out on strike;

therefore we're invoking that legislation to impose a cooling-off

period. That's a signal to the party that the government is serious,

that it means business, and that it's concerned, and additional

pressure is thereby imposed on the parties.

That's not the only thing that can be done. There are other avenues

that can be taken, and I talked about some of them yesterday: the

minister's involvement; at some final stage, perhaps the Premier's

involvement. Hammer some heads together in a committee room. Don't say

to me that on a Monday morning you phone the parties, and one of the

parties says, "It's not convenient to come over today." Maybe it's

convenient to come over tomorrow. If they turned down a series of

reasonable options, then you'd know you had a problem. That's

bargaining too, when somebody phones you up for a meeting and you say:

"No, I can't make it today; I'll make it tomorrow." You want to put a

little bit of pressure on the person who has just called you up, or

vice versa.

Mr. Chairman, this stuff is done with stilettos, not broad axes.

It's difficult, but it's important that everybody knows the game, knows

what the rules are, knows what the procedures are. For the government

to abandon the options it has in sequence, and to interfere and

intervene at a stage that's totally miles apart from the next step, is

going to leave not just B.C. Rail negotiators next time....

Forget about this dispute; it will get resolved. What about the next

time? What about other industries, both in the public and the private

sector?

Section 2, for the House Leader's edification, allows for this

advance denial of the right to strike or lockout, whether or not it's

going to happen. There are a lot of things that governments do that are

popular that history often judges not to be right. History often pretty

severely condemns activities of government that were popular. Mussolini

made the trains run on time, and that was popular. Let's not ever

forget those lessons of history.

Back to this particular procedure. The cooling-off period would have been a

signal; it was available without legislation. That comes back to the point that

the member for Prince Rupert made. We have seen a number of bills this session

— more than I can ever remember — that aren't necessary but are brought

in for political purposes, so that the government can have the public see that

they're taking decisive action on a particular course, through legislation.

The opposition may have raised some concerns about it, but in fact you don't

need legislation. You don't need the Coquihalla bill; you don't need

a whole series of other bills. It's political. Why not go through the process

as laid out in the ground rules?

MR. CHAIRMAN: Hon. members, before recognizing the Minister

of Labour, I must observe that we have allowed some wide-ranging

latitude; it's been extended to the member for Prince Rupert, the

Minister of Labour, and the member for North Island with respect to

section 2, which I acknowledge as being a very important

section of

this bill. However, after allowing that latitude, hon. members, we

really have discussed, to some degree, the principle of the bill. If we

could return to the specifics of

section 2, the committee will be well

served.

HON. MR. SEGARTY: The process has taken its course for a period of 15 months. The member talks a good philosophical story, in all honesty.

The process has taken its course. Last December it was let go to

that end. There was pressure on both of them, and they sent part of the

agreement to an arbitrator. It was followed then by the interjection of

a mediator, Fred Geddes, who worked very hard with the parties to try

to resolve the dispute. Last week both parties asked me, as a means of

putting on pressure, to ask the mediator to file his report. I was

reluctant to do so. I asked, then, the director of mediation services,

Clark Gilmour, to get involved. After some time of negotiation, again

they asked me to ask the mediator to file his report.

I talked to both parties on the phone, and they told me that that

would provide the stimulus necessary for a collective agreement. So I

followed their advice and the advice of the professionals in the

system. We followed that course. On Monday morning I phoned both

parties and invited them to meet with me in Victoria, again, to find

ways for the parties to resolve the dispute. A 90-day cooling-off

period, in my opinion and in the opinion of other people, would not

have suited any particular purpose. It would have continued to erode

the ability of our industry to guarantee delivery of their products to

world markets.

What I wanted to take into consideration too was, yes, the impact of

the process on these two parties. The member talks about the transit

bill, and he talks about the pulp bill, but in all honesty the transit

bill was confined to British Columbia and had nothing to do with

offshore markets or people in the private sector and their ability to

produce resources and sell them abroad. The pulp dispute, in effect,

was a dispute between two parties, and it didn't affect so many other

people on the sidelines: coal exports, pulp exports, lumber exports,

and a variety of other exports that many people in British Columbia

have struggled hard to gain over the past few years.

When I asked them to come over on Monday morning, it was convenient

for one of the parties, not convenient for the other. It would have

been convenient for me to meet with them, or it would have been

convenient for one of the parties to invite me to a meeting in

Vancouver at 11 o'clock Monday night. I felt that we would bring the

bill in and have it debated in the House.

[ Page 6133 ]

The process is still here, in this bill, for both parties to sit

down and negotiate an agreement. We haven't taken that away from them

at all. That option is still there. I hope that both parties will

continue to do that. I have a responsibility to all of the people of

British Columbia. I made some comments about that in response to the

member for Vancouver Centre yesterday.

MR. CHAIRMAN: Again, hon. members of the committee, we have

canvassed second reading debate very well in second reading and now

again in committee. Could we return to the section?

MR. GABELMANN: I'll be very brief on this point. Does the

minister not understand that an ability to reach a collective agreement

is severely hampered without the right of strike or lockout? That's my

point number one. The minister makes this great speech about how

they're able to reach an agreement. The fact is there's no incentive

for the employer to reach an agreement. Because you're the employer.

Mr. Chairman, the Minister of Labour may pretend that he's not the

employer because he's the independent Minister of Labour, but he's a

part of a cabinet which has representatives sitting on the board of

directors. He's the employer. There is no incentive to conclude a

collective agreement when the right to strike or lock out is removed.

So that argument is totally a waste of time.

My second point. Based on what the minister tells us that B.C. Rail

is different from Metro Transit because they have foreign markets —

every employer and every trade union in this province that has foreign

markets should now understand that the minister's policy is no strikes

or lockouts. Free collective bargaining is finished, if you have

foreign markets. But if you just provide services to people, you can

have all the strikes and lockouts you want, month on end. That's the

new policy of the government of British Columbia as just spelled out by

the Labour minister. I hope he understands what he's just told us.

HON. MR. SEGARTY: Mr. Chairman, that is not the policy of the

government. But if we look at British Columbia Railway, it's not just a

dispute between two parties. There are many other bystanders in many

areas of the private sector across our province dealing with pulp,

coal, potash, copper, lead, zinc and a variety of other areas. People

who work in the private sector have struggled hard to maintain those

markets over the past few years. I dare say that the company and the

railway employees recognize the seriousness of the dispute. What we

tried to do is find a way that would be fair to the employees by the

appointment of an industrial inquiry commissioner that would conclude

the collective agreement in a fair and impartial way and get it away

from government.

Section 2 approved.

section 3.

HON. MR. SEGARTY: Mr. Chairman, I move the amendment standing under my name on the order paper. [See appendix.]

MR. CHAIRMAN: The amendment on the order paper is in order.

MR. GABELMANN: Just a brief technical question on this one.

Historically in Canada bridging has been taken for granted. The idea is

that — I'll explain what it means to the minister — when a contract

expires, and before the new one is negotiated, the old one remains in

force in terms of the conditions and benefits until the signing of the

new agreement, which may then be made retroactive. Why is it necessary,

therefore, to build into the legislation what is in effect a bridging

clause?

[3:00]

HON. MR. SEGARTY: Yes, the rule that you're talking about does not have the force of law, and that, I guess, is a legal technicality.

MR. GABELMANN: That's the answer I was afraid of, Mr.

Chairman. If that's the case, if bridging no longer has the force of

law in this province.... I hope that's not what the minister was

telling us. If he wants to change his answer, I'll sit down so we don't

prolong it, but if that is the answer, then we've got a serious problem.

HON. MR. SEGARTY: It's a difference between contract and statute.

MR. GABELMANN: Mr. Chairman, I hope the minister understood

what he was saying. Do you know what you mean when you say that? He

should take a minute or two to be told what he means.

Mr. Chairman, let's just take a minute while you collect your

thoughts too. Fifteen months or so ago, a contract was in place. The

contract expired. Under what I guess you might call common law

tradition or precedent in this society, the contract remains in force

despite the fact that no agreement has been signed, commonly referred

to as bridging, as I understand it. Why would it be necessary to put

into law in this legislation something that is already there by law, if

not written?

HON. MR. SEGARTY: As I understand it, hon. member, the

contract is between two parties through a collective agreement process.

What we're doing here today is bringing in statute law and basically

saying that this is the law, however in doubt the other ones might be.

MR. GABELMANN: Mr. Chairman, I have to pursue this. If you

say, in the case of B.C. Rail and their council of trade unions, that a

statute is required to ensure bridging, that a provision in this bill

is required to ensure that the old collective agreement remains in

force until a new one is reached, however it's reached, the implication

of that.... Why do you need it in a statute?

[Mr. Ree in the chair.]

HON. MR. SEGARTY: The hon. member should know that the

provisions of a collective agreement are always open to dispute between

both parties. There will be different

interpretations between both

parties on that collective agreement. What we're saying is that when

this act comes into force, there will be no strike or lockout.

MR. GABELMANN: I don't think the minister understands me. That's perhaps my fault for not being very clear.

[ Page 6134 ]

We're not talking about any of those issues. I want to.... Maybe I

don't understand it. I'd be happy to have the minister.... No, this is

important, and I'll tell you why it's important. The issue has been

raised before, and there has been concern in the industrial relations

community about the validity, the legal standing, of bridging. It has

always been judged to be lawful. In other words, the old contract

continues without any statutory provision, without any contractual

provision. An old agreement expires; in the period between that date

and the date of the new contract being signed, the old agreement

applies, and then it can be changed retroactively — all of that,

bridging. That should apply here too, in B.C. Rail's case, without any

statutory

interpretation, unless — and this is my point — there is a

concern on the part of the ministry that in fact bridging no longer has

legal force in this province.

HON. MR. SEGARTY: Mr. Chairman, what the member says is

correct, but this bill is an insurance policy that the provisions of

the collective agreement will remain in force, and remain in force by

law.

MR. GABELMANN: So it's an insurance policy. In other words,

it would apply by "common law" but now it applies both by common law

and by the statute.

To most members of the House, Mr. Chairman, this may seem like a

picky technical point, but to employers and trade unions this is a very

significant issue. If your contract becomes non-functioning on the day

of its expiry, we've got really serious problems. That concern has been

expressed. When I see this kind of wording in a bill, and referred to

as an insurance policy, insurance against what? Insurance against the

fact that bridging may not be legal?

HON. MR. SEGARTY: No, Mr. Chairman. That contract is in place

between the two parties, and they can agree to carry on the contract

through the negotiations of another collective agreement. What we're

saying in this act is that this act is superior to any agreement that

they may make between both parties.

Amendment approved.

Section 3 as amended approved.

Section 4 approved.

section 5.

MR. GABELMANN: Just another technical question on

section 5,

Mr. Chairman. It says that within 72 hours after coming into force, the

mediator appointed shall report. Maybe I'm too long away from this

whole business. Maybe I forget how it works, but I thought when the

mediator booked out, he reported. I thought he would have done what

this

section calls for. Did he, or what happened?

HON. MR. SEGARTY: If it will do the member any good, that's

what I thought too, but what they do is, both parties ask the mediator

to file his report but both parties continue to use the service of the

mediator. Under the statute he's required to make a report to me on the

outstanding issues in the dispute within the required period of time

after the passage of the legislation.

MR. GABELMANN: This really is just a technical point. What

the mediator is really doing then, if I understand it correctly, is in

effect booking out the second time, the first time under the regular

provisions of the Code, the second time under

section 7 of this

particular bill. Is that right?

Interjection.

MR. GABELMANN: But without the implications of the first booking-out?

HON. MR. SEGARTY: Mr. Chairman, there are no implications.

It's just an up-to-date report on the happenings of the last week of

negotiations between the parties.

MR. GABELMANN: I guess this is my concern with the wording of

this section. If after 71 hours the mediator said to himself, "Wow,

another day and I've got this thing put to bed, " but the bill says

within 72 hours he must report, what options does he have?

HON. MR. SEGARTY: There is no finality to this report. He can

continue to work beyond that period of time if that's what the mediator

wishes and if that's what the parties wish.

Section 5 approved.

section 6.

MR. GABELMANN: Just a few brief comments, Mr. Chairman,

because

section 6 is quite an important section, but it was canvassed

yesterday in second reading and is properly, for the most part, a

second reading debate. I'll try to avoid doing that.

I'll be careful about what I say here. The minister and I have had

conversations on occasion about the whole concept of

section 122 of the

Labour Code — the industrial inquiry commission

section — and I have

long felt that this is an underused

section of the Code. But I'm

afraid, Mr. Chairman — I must say this — that by the way the minister

has done 6 and 7, because they go together, we may well find that we'll

revert to the old days of not using

section 122. In my view, it

subverts the whole purpose of an industrial inquiry commissioner; the

ability of a commissioner to go into a dispute and have the confidence

of both parties and using

section 122 (8)...agree to have some or all

of the issues in dispute made binding — the report of the IIC made

binding. This way, when the Legislature imposes a binding settlement

route on the IIC, it destroys the whole concept of 122.

I said yesterday I'm opposed to this whole idea of arbitrary binding

arbitration. That's redundant, but you know what I mean. But apart from

that, if the minister was going to choose to bring in a binding award

through this process, I find it distressing that he has damaged, I

believe, the whole concept of the IIC by using that particular

section

in this act in this way. That's not what it was designed to do. If the

minister chooses to appoint an individual to bring in a binding

recommendation, then please, Mr. Chairman, may I urge him never to use

the industrial inquiry commissioner concept, because it really was

meant for a different purpose and one that the parties could have some

confidence in. This process leaves no room for the parties to have

confidence. What's required is that the parties choose the person,

really. If they can't, then

[ Page

6135 ]

the minister should. The parties should agree that

perhaps some part of the award or all of it would be made binding. But

when the government does it, it subverts entirely the whole point of

section 122 of the Code, and I find that quite distressing.

Sections 6 to 11 inclusive approved.

Title approved.

HON. MR. SEGARTY: Mr. Chairman, I move the committee rise and report the bill complete with amendment.

Motion approved.

The House resumed; Mr. Strachan in the chair.

MR. CHAIRMAN: Mr. Speaker, the committee reports the bill complete with amendment.

DEPUTY SPEAKER: When shall the bill be considered as reported?

HON. MR. SEGARTY: At the next sitting of the House after today.

[3:15]

[Mr. Speaker in the chair.]

Motion approved on the following division:

YEAS — 24

Waterland

Brummet

Rogers

Segarty

McClelland

Heinrich

Hewitt

Pelton

Michael

Johnston

Kempf

Parks

Chabot

Nielsen

Gardom

Curtis

McGeer

A. Fraser

Schroeder

Reid

Ree

Strachan

Veitch

Reynolds

NAYS — 17

Dailly

Cocke

Howard

Skelly

Stupich

Nicolson

Sanford

Gabelmann

Williams

Lea

D'Arcy

Hanson

Lockstead

MacWilliam

Wallace

Blencoe

Passarell

HON. MR. GARDOM: I call Committee on Bill 6.

ASSESSMENT AND TAXATION

(MISCELLANEOUS AMENDMENTS) ACT, 1985

The House in committee on Bill 6; Mr. Strachan in the chair.

Sections 1 to 16 inclusive approved.

section 17.

MR. STUPICH: I started a discussion of this briefly during second reading,

and as I recall the minister didn't respond to concerns that I expressed.

You'll note in

section 17 we're referring to different acts — the Assessment

Authority Act, the Education (Interim) Finance Act, the Hospital District Act,

the Municipal Finance Authority Act, the Municipal Act, the Vancouver Charter

and this act — all having to do with raising revenue based on the assessment

of property within the area concerned.

Whether or not we agree with that method of raising revenue for some

of these purposes is not the point right now. The fact is that it does

cost something to administer and to look after all of the duties of a

municipal authority or education or whatever. It costs money to manage

this kind of property, and the money is collected by appraising the

property within these areas and by assessing them each their

appropriate share of whatever it costs in total.

By exempting any particular area — and in this instance it's a

significant area, but the principle is the same — from the total area,

what we're saying in effect is that we're not doing anything about the

total cost. They're going to be at least as large — maybe even a little

larger, but certainly at least as large — as they were before we

exempted this area. So what we're saying in effect is that certain

properties, certain assessed values within this taxation area, are not

going to pay or even have recorded against them their share of the

servicing costs of that area. Somebody else is going to pay for it. Of

course, that "somebody else" are the other taxpayers within that area.

Now I advanced the argument in second reading: why not assess them?

Why not levy the tax, and then if the government prefers it can give a

grant in lieu of tax. At least everyone will know what cost should be

attributed to that particular land and improvements, and we'd at least

be doing this in some knowledge as to what we're giving away, rather

than simply saying that everybody who isn't within a certain confined

area within the total area is not going to pay tax and everybody

outside of it will bear some share of the costs within that area.

HON. MR. CURTIS: Thank you to the hon. member for Nanaimo. I

think in this instance we will agree to disagree. I heard what the

member said — without reflecting on the vote — in second reading with

respect to this element of an omnibus bill, and I've listened carefully

today. Yes, it is correct — if one wants to just review the whole thing

very quickly — that the government could have decided to follow the

grant in lieu of taxes route. But in this particular instance it was

felt — indeed, I felt, and recommended to the executive council — that

I wanted to provide for the exemption of ALRT at the outset.

While I'm on my feet, may I also deal with comments which were made

regarding this

section by the member for Burnaby North in second

reading debate. She indicated, I think, that she would also raise the

issue in committee stage; she alluded to it in second reading. The fact

of the matter is, as I indicated during second reading, that there are

three municipalities, the city of Vancouver, the district municipality

of Burnaby, and the city of New Westminster, which will be affected by

this portion of Bill 6, this particular amendment, and yet there are

many other property taxpayers — if one only wants to look at the lower

mainland, quite apart from any other part of the province — in the

lower mainland who will be contributing to the cost of ALRT and other

aspects of transit.

[ Page 6136 ]

Again, I think I indicated in second reading that there is an easy

comparison, in my view, with respect to this particular form of

transportation when one considers highways and bridges in the province,

whether they be in an urban setting or a rural one. This is simply

something rather new in terms of a means of moving British Columbians

and visitors to the province. It is for that reason I believe that we

are paralleling here. I believe that we are doing the appropriate

thing, but I understand that some of the members opposite at least hold

contrary views.

MR. STUPICH: If I may pick up on the same parallel the

minister mentioned, at least when we build a highway we have some way

of determining how much it cost. We know what consolidated revenue is

paying for that particular highway. Here we don't know what the annual

charges should be that would be allocated against this particular land

and improvement. It's as though we didn't want to know, as though we

were trying to hide from ourselves the knowledge as to what this is

costing — and then if we don't know, well, then it's not so bad.

There were other mistakes with this. I think it was a mistake, for

example, to embark upon such a project without any idea at all as to

how it was going to be paid for, who was going to pay for it and in

what proportions. There was talk that it would be paid for by the

users, the people who use the system; that some portion of it might be

borne by the property owners in some undefined area; that some of it

might be paid for by a surcharge on gasoline or on hydro. After

spending some half billion-plus dollars on the project, the government

did come up with a proposal that the municipalities reacted to. But I

still do express this concern, Mr. Chairman. I would like to know what

subsidy somebody is giving to ALRT each year by way of forgiven

property taxes — property taxes for all of these purposes. I think

that's information we should have.

I disagree with this. As the minister said, when it comes right down

to it we had a vote. The fact that he's wrong and I'm right would not

be reflected in the vote that we had. So the minister's will will

prevail.

MRS. DAILLY: Mr. Chairman, as the member for Nanaimo just stated, I guess we're going to disagree with the minister on this one.

I'm not aware of whether the minister or his officials have met with

the Burnaby council since this bill was introduced, but I did, and the

finance committee did have a couple of questions. Perhaps you've met

with them and answered them. I don't know, but I met just two weeks

ago. I don't know if you're aware of it, but because of this, if this

bill passes — as obviously it will, with the numbers, unless with my

eloquence on this particular clause I can persuade every member over

there to support me — the Burnaby taxpayers are going to have to

forfeit up to $1,366,841. That is what they presumed would be the

amount of money that they would be getting from the annual tax rates.

They've already included it in their budget, so it came as rather a

shock to them to find that with no negotiational warning this was

imposed on them. That's one point I want to make. I think that was

unfair to the council. Also that means that the taxpayers of Burnaby,

the property-owners, are going to have to come up with this money, in

essence.

[3:30]

Now I want to ask the minister.... That is the total amount. I don't

know what you've decided to do. Are you going to leave some on, or is

the whole thing going to encompass that $1 million? Burnaby didn't have

the answer to these questions when I met with them, because if you only

exempted the guideway, they would lose $779,902, and of course when I

talked to them they were concerned because they didn't have any answers

at that time. They wondered also if this agreement supersedes the

existing agreement between B.C. Transit and Burnaby. Does it supersede

it?

Those were basically the questions I want to bring up on their behalf to the minister. But maybe you've discussed it with them.

HON. MR. CURTIS: Mr. Chairman, I'm subject to correction with

respect to a request from the mayor and council of Burnaby. To the best

of my recollection, I did not receive a request for a meeting with the

entire council. I did respond to a request for a meeting from the mayor

of Burnaby; I met him, and a couple of officials from the Ministry of

Finance were present at that meeting. We canvassed the matter pretty

thoroughly. This was several weeks ago. Mayor Lewame certainly

presented the municipality's point of view on the matter very

thoroughly. I considered that discussion and made the decision to

continue.

One could argue for a moment, I suppose, the question of whether it

was a surprise. I have had a little bit of time in local government.

They were notified on December 31 or, if not on that precise day, on

the first business day following, because the decision was made in

Victoria just prior to that time. As far as I can recall, municipal

budgets are not in any final shape by that particular point of the

calendar, so if the decision had been taken.... That was one of the

motivating factors in terms of making the decision as early as

possible, in the course of the winter. If the decision had been taken

and announced on April 30, then I think the municipality — indeed any

municipality — would certainly have had every justification for saying:

"It is just not fair to tell us this late in our budget process." So we

wanted to get that decision out pretty quickly and got it out as soon

as we could, which was, as I say, if not the last working day of

December, then the first working day of January — '84 straddling into

'85.

The whole system will be exempt. I suppose it's appropriate to

indicate, since we're discussing the removal of some revenue to a

municipality, that clearly ALRT is going to generate significant

property tax revenues for the municipality of Burnaby, for the city of

Vancouver in that portion through which the system travels, as well as

in New Westminster, and then later across the river into Surrey.

I'm conscious of the fact that it is a revenue loss in the 1985

municipal taxation year — I won't deny that for a moment — for

Vancouver, Burnaby, New Westminster. Burnaby has been the most

outspoken in terms of its concern; not to the same extent have we heard

from New Westminster or Vancouver. But the benefits that will flow to

those municipalities — and particularly to Burnaby because of its sheer

size, Madame Member — I think will, a few years down the road, offset

the concern that's been expressed regarding one year.

Sections 17 to 20 inclusive approved.

section 21.

[ Page

6137 ]

MR. STUPICH: Mr. Chairman, I don't intend to repeat the same

arguments that I used with respect to

section 17, but noting that the

land and improvements to be used for Expo are going to be exempt from

taxation, is this forever and a day or just until tomorrow? What's

going to happen? Eventually Expo 86 will be a thing of the past. From

that date on I suppose the Crown is the owner. Will the Crown be

paying? I know Expo 86 is the legal entity, but what will happen after

Expo itself closes its gates?

HON. MR. CURTIS: Mr. Chairman, this

section 21 clearly deals

with Expo for the life of Expo, and this is the site. The site is being

exempted and, as has been indicated by the government and by the

minister responsible for Expo and B.C. Place, other activities will

occur on that site post-Expo. I would think the government would then

want to ensure that property tax revenue is generated from that site.

This deals only in the narrow sense with Expo, and is in place only for

the period of '85-86. It deals specifically and only with Expo.

MR. STUPICH: The minister is telling me then that this

section of the legislation will cease to be in effect after 1986?

HON. MR. CURTIS: Well, Mr. Chairman, looking at the

legislation earlier and again now, it is not sunsetted, but the site

ceases to be an exposition site in the tag end of 1986. Prior to that

time, the government will want to address what should be in place

regarding that particular site in Vancouver. I won't anticipate what it

will be. I gave you an indication of what I think it would be: it

should revert to paying property tax.

MR. WILLIAMS: Mr. Chairman, on the same point, Expo has only

three months' life after the exposition itself is complete, as I

understand it. Then the property reverts to B.C. Place. At the time it

reverts to B.C. Place, taxes should be levied against the property,

since it is then clearly a major commercial development. It would

appear, from what the minister has said, that that's certainly his view

of what would be reasonable.

Interjection.

MR. WILLIAMS: Yes, I think they presently pay taxes, and that's why the legislation is necessary. But I might be wrong.

HON. MR. CURTIS: Mr. Chairman, in the relatively narrow sense

of this section, I hear what the second member for Vancouver East has

said, and the member for Nanaimo.

This deals only with, Hey, we've got an exposition site, and it

should be exempt from paying property tax. Yes, the second member for

Vancouver East is correct; I don't know how long it will take to remove

what has by then been a very successful exposition, but we had to do it

for the '85 and '86 taxation years.

Section 21 approved.

section 22.

MR. SKELLY: Mr. Chairman, I've spoken on these kinds of

things before, and I'm concerned about the direction that the tax on

residential property is going under this government, and especially

what they've done to the homeowner grant.

The homeowner grant used to be an exemption for the first increment

of tax on homes. People who owned homes of lower assessed value were in

some cases exempt from all municipal or rural property taxes because

their homes were of such low value that the homeowner grant covered the

total amount of taxes payable. In spite of the fact that the NDP did

not support the homeowner grant when it came in — I think there were

some political reasons for that, because the government of the day was

using it for political purposes — in fact the homeowner grant is an

excellent idea because it provides an exemption from property taxes for

the first increment of assessed value. In other words, it relieves the

burden of property tax on the poor, on lower-income people who can only

afford homes of lower value.

What this does is totally destroy the progressivity of the property

tax system that was brought about by this homeowner grant. By requiring

a minimum tax on residential property, whether inside municipalities or

outside, this

section destroys the progressivity of the tax on homes.

We're going to vote against it for that reason. We feel that the

homeowner grant system is being destroyed by this type of legislation,

and we would hope that the minister would reconsider it.

Possibly the minister can answer this question: what type of studies

has he done? Has he done studies.... . ? Clearly he knows how much

money is going to be raised by this exemption, because that was

included in the budget speech. But it's being raised on the first

increment of assessed value;

whereas we feel it should be raised on the

higher increments of assessed value on the more expensive homes,

because that represents more ability to pay. Wealthier people naturally

own the more expensive homes. We would hope that the minister and the

government would reconsider this kind of tax legislation, which bears

more harshly on the poor and those who have less wealth than another

system which might distribute the taxes according to ability to pay. Is

the minister aware how much revenue this will generate during this

taxation year, and how much the mill rate would increase on homes of

higher assessed value throughout the province if he did it the other

way — if he taxed the next increment rather than the first increment of

assessed value?

HON. MR. CURTIS: Mr. Chairman, the amount of revenue to be

raised by this measure, as the Leader of the Opposition indicated, is

specifically stated in the budget. I have a few papers on my desk; I

can't quite reach my budget. It's a relatively small amount.

Let me, if I may, just explain to the committee.... I hope that

members who disagree with this move will not fault the government, but

rather will understand that this was a revenue measure. Therefore I did

not canvass this with the members of the executive council, nor did I

any other revenue measures. That is one of the duties of the Minister

of Finance.

Because it actually deals with an increase in the minimum tax

payable.... I've said before in committee, in previous years, that I

believe there should be a minimum amount of property tax paid by

homeowners. I don't know that it should increase every year. I don't

know that it should increase dramatically. But I feel that for many

homeowners, over years gone by, it was far too low. It is also

important to note that those who are 65 and over, handicapped or in

receipt of a

[ Page 6138 ]

war veteran's allowance — people in that

traditional category in B.C. — will continue to pay $1 minimum property

tax. When one considers the services available to a residential

property, I don't believe that $200 per year is an onerous amount for

that residential property owner to pay. One can say that services are

relatively limited in some rural areas, but certainly in most of the

145 municipalities — 146 municipalities now — I think the services

provided through the property tax are pretty important, when one

considers education plus the actual physical services given to

properties.

[3:45]

MR. SKELLY: That answers some of my questions, Mr. Chairman:

the fact that this was imposed as a revenue measure exclusively, and

that who pays wasn't really considered.

The minister says that everybody should pay a minimum level of tax

in view of the services they receive, whether from a municipality or

from the provincial government. The simple fact is that they don't

apply that principle to income tax, where there is an exemption from

the first increment of income. Regardless of what services the income

earner may receive from the provincial government, there is an

exemption from the first increment of income in order to allow those

people who are at a fairly low level on the income scale to just

survive. Now $200 is not a large amount to people who are earning

incomes such as MLAs and cabinet ministers earn. It's not a large

amount for people who are working in industry, and many people are

working in industry. But for people at the lowest income levels — and I

would assume that those are the people who own homes of fairly low

assessed value, because they can't afford anything else — $200 minimum

tax is a very difficult burden to pay.

This

section may mean the difference between that person owning a

home and losing it to the tax man, or not being able to pay mortgages

or other payments, which may result in that person losing their home.

This government said that it's interested in the right of people to own

property. We support the right of people to own property. But this

makes it more difficult for poor people, or people at lower income

levels, to own property. We would hope that if the minister is only

interested in the revenue-generation potential of this tax, he might

look at putting it on the next increment of assessed value. Those

people who own houses of greater assessed value are generally those

people who have the ability to pay the additional few dollars that will

result from the tax being added onto the top rather than onto the

bottom end. We would hope that the minister, if he refuses to do it

this year, would consider doing it in subsequent years — although

hopefully the minister won't be here in subsequent years, Mr. Chairman,

and someone else can take care of that.

MR. STUPICH: I'd like to join the Leader of the Opposition in

opposition to this section. We did show our support of the concept of a

homeowner grant by annually increasing the homeowner grant in every

budget we brought in. There has not been an increase in the homeowner

grant since the Social Credit administration was elected in December

This current increase that we're looking at, while it's only 14

percent over the figure of last year, nevertheless applies, as the

Leader of the Opposition said, against those least able to afford to

pay increases in any costs. Certainly it must include a lot of people

who are on welfare, who have had no increase over the past three years,

and in some cases actually a decrease. People who are still getting by

on unemployment insurance have certainly not experienced an increase as

the rate of unemployment in the province of B.C. has increased. People

who are trying to exist on the minimum wage: there has been no increase

in the minimum wage since this government was elected in December 1975.

They have allowed the cost of everything to increase. They have not

increased the homeowner grant itself.

As far as the $200 figure is concerned, while it has increased over

the last three years at the rate of $25 a year, when this government

was elected in December 1975 the figure stood at a dollar; so there has

been a 200 percent increase in this figure since the government was

elected. It would seem as though they are prepared to do everything to

take more out of the people least able to afford it, yet to do nothing

to help those people improve their incomes.

Mr. Chairman, until the government is prepared to try to help the

people at the bottom level of the income scale, we can't support any

move that is going to those people and saying: "Look, it's not fair

that you get by paying so little simply because you have so little;

that's no excuse. We're going to get more out of you."

Mr. Chairman, we oppose this section.

Section 22 approved on the following division:

YEAS — 24

Waterland

Brummet

Rogers

Segarty

McClelland

Heinrich

Hewitt

Pelton

Michael

Johnston

Kempf

R. Fraser

Parks

Chabot

Nielsen

Gardom

Curtis

McGeer

A. Fraser

Schroeder

Reid

Ree

Witch

Reynolds

NAYS — 17

Dailly

Cocke

Howard

Skelly

Stupich

Nicolson

Sanford

Gabelmann

Williams

D'Arcy

Brown

Hanson

Lockstead

MacWilliam

Barnes

Wallace

Blencoe

Sections 23 to 48 inclusive approved.

Title approved.

HON. MR. CURTIS: Mr. Chairman, I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 6, Assessment and Taxation (Miscellaneous Amendments) Act,

1985, reported complete without amendment, read a third time and passed.

[4:00]

HON. MR. NIELSEN: Second reading of Bill 11.

[ Page

6139 ]

SOCIAL SERVICE TAX AMENDMENT ACT, 1985

HON. MR. CURTIS: I rise to move second reading of Bill 11,

Social Service Tax Amendment Act. In some respects this is an omnibus

bill; however, I think that a few comments would be appropriate.

[Mr. Ree in the chair.]

The measures introduced in the bill reflect positive action by the

government to a very wide range of recommendations which were made by

individuals and those engaged in business, small and large, during the

series of public meetings on taxation and economic development last

fall.

The bill establishes new exemptions from tax, in some instances, and

broadens existing exemptions. It also clarifies a number of tax

provisions and establishes new administrative and enforcement measures.

There is only one revenue measure in the bill: pay-television

services, as announced on budget day, March 14, are to be taxable. But

I emphasize for the House, as I did earlier, basic cable television

charges remain exempt from tax.

If I could turn to the category of amendments regarding exemptions,

I'm pleased to have been able to establish the new aquaculture

exemptions, which indications already suggest will foster significant

growth in the field of aquatic farming. An extensive list of items to

be prescribed by regulation will be exempt when used for aquaculture

purposes. This exemption is somewhat similar or analogous to the

longstanding exemptions supporting commercial farming and fishing

activities. The qualifications which determine who is a bona fide

aquaculturalist will be provided in the regulations.

An exemption is also provided to purchases of milk bottles which are

returnable to a dairy after use. Disposable milk containers are

currently exempt from tax. This additional exemption is required to

ensure that the tax system does not discriminate on the basis of the

type of container into which milk is put and sold. It was an anomaly,

and there were a number of members on both sides of the House who said

that in their view this was not fair, and it was in fact discriminatory.

Two existing exemptions have also been expanded. Firstly, propane

and natural gas purchased by farmers for grain drying has been added to

the list of exempt items in a regulation. We also have a regulation

which provides an exemption for a list of items used or consumed in the

manufacturing or servicing of goods. This includes items such as film,

grinding wheels and abrasive paper, just as examples, and will benefit

a broad cross-section of firms engaged in manufacturing activities, in

photography, in printing and publishing. Some have told me — in

business and in industry — that as far as they are concerned the list

is a good one. Perhaps it doesn't go far enough, but that is the nature

of dealing with exemptions from social service tax.

Changes have also been made which institute a point-of-sale exemption for non-resident

purchasers of vehicles and aircraft, provided that these items are not registered

in the province. This eliminates the existing and formerly cumbersome procedure

which was widely criticized by the purchaser and the vendor — the awkward and

time-consuming process of paying tax when a purchase is made and then applying

for a refund when the purchaser returned to his jurisdiction of residence. I

thought we would encounter this concern only in the eastern portion of British

Columbia in communities such as Cranbrook, Fort St. John and Dawson Creek, but

indeed we encountered it in many other parts of the province, where vehicles

and aircraft are sold to people who do not live in B.C. and are not about to

move to B.C.

The second category of amendments clarify or amend the application

of tax in specific circumstances. The first in this category concerns

the taxation of ready-mixed concrete. This amendment clarifies that the

purchase price for ready-mixed concrete includes any charges made by

the supplier for delivery of the concrete to the place where it will be

used by the purchaser. This action reaffirms the long-standing

application of tax to ready-mixed concrete, and it is well understood

by the industry.

The second amendment, frankly, closes a loophole that has developed

in provisions dealing with leases. It's occurred that to avoid paying

tax on major purchases, some individuals make large down payments on

their lease-purchase agreements. This payment is not subject to tax

because of a deficiency in the legislation. This amendment will end the

revenue deterioration that we have seen develop. With the immunity

afforded me in the Legislature, I can describe this as the

Mercedes-Benz loophole. It was identified as such in the course of the

tax study last year.

The third amendment concerns computer software sales. The act is

amended to clarify that sales of packaged or prewritten computer

programs designed for general purposes are subject to tax. This

includes sales, leases or rights to use such software, as well as

modifications to the program. I point out also that custom software

designed solely for a particular customer's needs will remain exempt

from tax.

A fourth amendment clarifies that purchasers can be issued a notice

of assessment for tax they failed to pay on purchases. A recent

decision in the court noted that the act was deficient on this point,

and so the amendment is necessary to reconfirm what has been a

long-standing assessment practice that ensures that every purchaser

pays his fair share of taxes. In addition to that amendment, a

purchaser who was assessed between January 2, 1984, and March 15, 1985,

and did not appeal to either the Minister of Finance or the courts is

guaranteed the right of appeal. That January 2, 1984, date corresponds

to 60 days before the court decision was received, and I'm informed it

is the usual period in which an appeal must be made. Many purchasers

became aware of the case and simply did not appeal because they thought

that it was not necessary to do so. I'm confirming the assessment of

purchasers, but I'm also providing the right of appeal for persons who

did not do so.

Another amendment clarifies for vendors that payments received on

sales made on credit are first used to extinguish tax liabilities, and

then may be applied to a customer's account. The reason for this is

that tax is payable at the time of purchase, regardless of the

arrangements for payment which are made between the vendor and the

purchaser. If the vendor subsequently finds the account is a bad debt,

then any amount he has sent that exceeds what he has received from his

customer will, of course, be refunded.

Another amendment concerns tax application to advertising flyers and

circulars. Until now, only those flyers delivered with a newspaper have

been exempted. Again, we are attempting to ensure equitable treatment,

and so all flyers and circulars will now be subject to tax.

[ Page 6140 ]

The bill, by way of regulation, will also provide for a change in

the method of collecting tax on specified equipment used for seismic

studies or petroleum and natural gas exploration and development. We

had a couple of very compelling presentations on this in the

northeastern part of the province and also in the central interior.

Operators will now be allowed to pay tax monthly on one thirty-sixth of

the purchase price for each month or part thereof that the equipment is

in the province. Before this, operators were required to pay full tax

at the time the equipment was brought into the province. Clearly this

had a discouraging effect on drilling activity in the northeast; it was

seen to be unfair, and I concur with that observation. In conjunction

with this measure, the 50 percent tax remission on this equipment was

rescinded effective midnight, March 14, 1985. The remission provided

some relief from payment of tax in full at the time of entry. With the

introduction of the temporary-use formula, this remission is no longer

required.

The final clarifying amendment concerns applying tax to materials

used for constructing portable buildings. A recent court decision

indicated that the legislation did not achieve this intention, but

rather taxed sales or leases of the buildings after construction.

Examples of these buildings are portable cookhouses, bunkhouses and

classrooms — buildings of that nature; items which really should be

treated as real property and therefore clearly should not be taxed

under the act. The act is amended to make it clear that tax is owed

only on the purchase of materials used in construction of the

buildings. This treatment will also be consistent with that which

applies to conventional buildings. In this particular case, as I say,

we believed — and perhaps previous governments believed — that the law

was clear. A court told us otherwise, and we're moving to correct it.

The final category of amendments is of an administrative or

enforcement nature. One amendment reduces the audit period from ten to

six years. Clearly, in the view of the government, this amendment is

fairer to both business and government. It will help businesses by

reducing the tremendous burden of keeping detailed records for a period

of longer than six years. The previous ten years was just too long, in

my view, for the auditor to reach back and say: "Would you please

provide material from eight years ago, nine years ago, ten years ago."

In the case of wilful default or fraud, however, there will be no

limitation on the audit period.

In an amendment related to the establishment of the six year audit

period, the Crown will limit the time period for taking formal

collection proceedings to seven years from the date the tax initially

became due. This amendment will allow one additional year beyond the

six-year audit period to resolve appeals or, where required, take

formal collection proceedings.

The last group — and I thank you for your patience, Mr. Speaker —

provides for increased penalties and fines on and after July 1, 1985,

and will be effective at the end of the consumer taxation amnesty

program, which has been introduced for all the consumer tax statutes. I

said in the budget that in recent years there has been an increase in

the level of tax evasion, not only in B.C. but also in a number of

other jurisdictions. Our amnesty program is allowing time for

individuals and businesses to put their affairs in order, and then the

increased penalties and fines after the end of the amnesty period will

ensure that this very important component of the province's revenue

base is protected.

In cases where a vendor has collected tax but wilfully withheld it

from the government, this bill provides for an increase in the penalty

from 10 percent to 100 percent of the tax which has not been remitted.

In cases where taxes payable by the purchaser are evaded by wilfully

making a false or deceptive statement or by wilful default or fraud,

the penalty is increased from 10 percent to 25 percent of the amount of

tax evaded. But in other circumstances, such as late tax returns where

the business has already received one warning notice within a 12-month

period, the penalty remains at the current 10 percent rate. In the case

of fraudulent evasion of tax, this bill also introduces provisions for

the courts to impose a fine of not more than $10,000 or imprisonment

for not more than two years, or both, and a fine equal to the tax not

collected, remitted or paid.

In

summary, Mr. Speaker, this bill responds on a very wide basis to

a number of points which were made in the course of the tax studies

last year. We continue to amend the Social Service Tax Act, as previous

governments have, and undoubtedly it will continue in the future. We're

determined to establish through these measures the appropriate

environment in which business in British Columbia can grow and prosper,

We're determined to provide the opportunity for business in B.C. to be

competitive. We're confident in the ability of business to provide new

jobs that are essential to the well-being and prosperity of all British

Columbians. A number of the measures are quite progressive in terms of

correcting ills of the past.

I thank the House for its patience. It is an omnibus bill. I move second reading.

MR. STUPICH: Mr. Chairman, the opposition will support this

legislation in second reading. There may well be some discussion at

this stage, but I would think most of it will take place in committee

stage. But I do want to say a few things about the general remarks that

the minister made.

First, with respect to this policy that has been going on, I

suppose, ever since the sales tax legislation was introduced in 1948,

there is this business of adding to an every growing list of

exemptions. While the minister expected everyone to applaud that, and

while I may be speaking for myself rather than for my caucus as the

debate leader in this, I must say that I'm not satisfied that that is

the best way for the government to spend taxpayers' money. Although

we're not spending the money directly, we are forgoing revenue, and as

far as the Crown is concerned the net effect is the same. I wonder

whether it wouldn't be better to go on in some cases collecting revenue

from people who might very well be in a good position to pay it, and

use some of that money to help people who are at the other end of the

income scale. So I've long wondered about this business of, as I say,

increasing exemptions for sales tax and thus impairing to some extent

the Crown's ability to pay more to people who need it, because they're

trying to exist on minimum wages, welfare, etc. However, in the absence

of any action by the government to help those people, of course we have

to support this. So the opposition will be supporting this.

Just, if I may.... The minister said there was just the one example

of an increase in revenue, and that is with respect to pay-cablevision.

But I would think the fact that he found the need to define the

delivery price of ready-mix concrete, for example, means that there has

been some apparent revenue slippage there. So in effect that is an

increase in

[ Page

6141 ]

revenue, or else there wouldn't have been need for

the definition — I may want to talk about that later; I don't know. But

I recall the present Premier, when he was Leader of the Opposition,

promising to remove sales tax completely from all building materials,

because building was suffering a bit of a recession at the time. It's

not suffering in this recession now; it's in complete depression. I met

someone from Alberni this last weekend who said that the unemployment

rate among carpenters in that area now is 100 percent. So the only

consolation in all of that is that it can't get any worse. If ever the

construction industry needed some kind of help, it's now. This is going

in the other direction. Now maybe it isn't going to make much

difference in revenue, and it wouldn't help much not to have done this,

I suppose. But that is going to represent an increase.

The minister mentioned one more that I didn't bother noting. I

support him in the approach of increasing penalties and fines to people

who are wilfully evading.

I wonder whether he might consider, between now and the time we go

into committee stage, reducing the audit figure even further. Even six

years is a long time for a business to maintain all of the original

documents with respect to sales. I'm thinking, for example, of a

restaurant that is taxing parts of the meals. To save all those bills

for a period of six years in the event that a sales tax auditor might

come around I think is asking much. May I just say that Revenue Canada

looks at a figure of four years as the maximum period beyond which they

will go unless there is some evidence of fraud. So I would recommend to

the minister that he consider bringing in an amendment — I would do it

myself, but it's got a better chance of succeeding if he brings it in —

of reducing it to four years, which would at least put us in step with

Revenue Canada's approach on this.

If I could speak perhaps just a little more generally about the need

to increase penalties and fines and to allow this period for people to

confess. I believe, Mr. Speaker, that it's not always a matter of

wilful evasion. It used to be the practice to have quite a number — I

don't know the figure — of sales tax auditors traveling the province

regularly visiting businesses and often finding mistakes — perhaps

wilful, perhaps innocent, or sometimes kind of grey as to whether they

were wilful or innocent. But I recall in the period when I was Minister

of Finance — a very short period; but I was a Treasury Board member for

quite a while — the Deputy Minister of Finance telling us that every

sales tax auditor would bring in a minimum, on the average, of

$100,000, which recovered his salary and costs some three times over.

Looking at the figures — and we'll get into this more in estimates,

perhaps, if the minister isn't prepared to comment now or in committee

stage — for the staff people in his department, it would appear to me

as though the sales tax auditors have been cut back severely. I wonder,

is it because of that cutback and the reduction of the number of sales

tax inspectors that the minister is now having to threaten people with

increased fines and penalties if they don't avoid wilful evasion — if I

may say it that way, Mr. Speaker? Is there a considerable revenue loss

in part because we don't have the number of sales tax inspectors that

we should have?

As I say, Mr. Speaker, it's not just looking for guilty people; it's

looking for people who have collected money that is due to the Crown, where

mistakes have been made. I believe it helped them. I think on many occasions

these business people would welcome the auditor coming in. They would know then

that they were cleared for a certain period, and they could then get rid of

a lot of old documents even though these weren't old enough to be covered

by the ten year period, being fairly secure in the knowledge that no one would

be coming back to look again. So I think it was a help to business to have auditors

coming in and giving them the green light or the okay sign. So I'd like

the minister to comment on that, but it may be that it would be more appropriate

when we get to estimates.

The opposition will support this bill in second reading.

MR. WILLIAMS: I'd just like to make a general comment in

terms of the sales tax itself. In a province with a resource base like

we have, despite international markets, we rely greatly on this as a

source of revenue. If one reflects for just a minute on our revenue

from forests, which I think is estimated at $150 million this year, and

our expenditure in terms of administration and related matters, which

is $250 million — a negative position of a hundred million — it does

make one pause and reflect that we have to rely on taxes such as this

for our income. It's an indication of something rotten in the state of

Denmark. There's really something desperately wrong when a

resource-rich province like British Columbia has a negative position

from its forest inheritance and has to rely on these kinds of taxes for

the bulk of its income.

On behalf of one of my constituents, however, who happens to own the

Avalon Dairy in the southeast part of the city and who is turning out a

product that's generally not available in the local market, I'm sure he

will be very happy to see that he doesn't have to pay the tax on his

bottles for milk. I'm sure that it's in keeping with that family

tradition, since his father went to jail with respect to the poll tax

that the city used to levy on all citizens who just happened to be

citizens, which was what the poll tax was all about. A poll tax didn't

make much sense in a resource-rich province, and much of the sales tax

doesn't make sense in a resource-rich province either.

MR. NICOLSON: I would like to ask the minister to reconsider

the timing on the introduction of sales tax on pay-television. We've

seen various pay-TV channels actually close down. It's not a lucrative

business as yet; it's still fledgling. I think the timing.... I don't

dispute the principle of taxation on what I suppose for the consumer is

a luxury, but as far as business is concerned.... And I think that's

the thrust and that's the principle of this bill: this bill is supposed

to help business. I realize that the minister is not going to impose a

tax on the basic cable service. But for those pay-TV channels, those

options, they're not in a very strong situation. I could have run down

to my office and brought up the rates at which people are cancelling,

as opposed to the rates at which people are signing up.

When it first came out, I thought, number one, as the communications

spokesman on this side of the House that it was almost my duty to sign

up and see what it had to offer as a technology; I did. After about

three months we decided to cancel. So it isn't in a strong....

HON. MR. CURTIS: But not because of the sales tax.

MR. NICOLSON: Not because of the sales tax, and that wasn't

my reason for signing up either. What I am saying is that I think it is

a very vulnerable industry at this time. I'm not saying that it

shouldn't be taxed; I don't think the timing is right for it. I think

that if this industry is going to flourish.... It might go the way of

the hula hoop. But if it's

[ Page 6142 ]

going to be given a chance, I don't think that it should be taxed at this time.

DEPUTY SPEAKER: The minister closes debate on Bill 11.

HON. MR. CURTIS: Mr. Speaker, I trust that the members

opposite will not be offended.... I think that I would prefer to

respond to their several points in committee debate....

Interjection.

HON. MR. CURTIS: Well, with a couple of exceptions.

The member for Nanaimo (Mr. Stupich) speaks of the ever-growing list

of exemptions from sales tax in British Columbia. I don't use this as

an apology or as an excuse, but we have had exemptions; I think he

alluded to that. We've had exemptions virtually from the time the sales

tax was first introduced. He of all people would know, as a former

Minister of Agriculture and a former Minister of Finance, but

particularly as the former Minister of Agriculture from 1972 to 1975 —

the summer of '75, the spring of '75 — that the bulk of those

exemptions are to be found...

Interjection.

HON. MR. CURTIS: I was thinking of when you changed portfolios.

...in the agricultural segment of our economy. I don't say that in

any critical way. Yes, we noticed in the course of the tax study that

several participants said: "What about the exemptions? They're

complicated. There's such a long list." But I've maintained the

tradition of several of my predecessors: that is, to review the list of

exemptions. We get an incredible number of requests throughout each

year for more and more exemptions. I guess it's the duty of any

Minister of Finance to try to be as selective as that particular person

can be, and see if they can be targeted and if they make sense.

The audit period of six years alluded to by two members opposite:

yes, I will look at that between now and committee debate. I'm not sure

that I will make any change, but I will very earnestly review it with

my officials, and then we can discuss it at the time of committee.

Interjection.

HON. MR. CURTIS: No, I don't think so. They are some interlocking considerations, as the members would know, Mr. Speaker.

The question of auditors in the revenue division of the ministry: I

have indicated over time that I considered that to be a very important

element of the activities of the entire Ministry of Finance. They

continue to assist the taxpayer or the tax collector — that is, the

person in business — within B.C., and of course they do, as they did

before, travel beyond the borders of British Columbia. Those are useful

trips in assisting national firms or regional firms who have activities

in B.C. As the member observed, perhaps that's more appropriate for

discussion in the estimates.

The member for Nelson-Creston (Mr. Nicolson) spoke about the tax on

pay-television. It was the first monthly billing period after April 1.

I have received some representation since then. Whenever a tax appears

on a new activity or a new tax appears on an activity, Mr. Speaker,

undoubtedly it's going to be found awkward or difficult or not welcome

by that industry.

MR. NICOLSON: It's just a child.

HON. MR. CURTIS: The member interjects and says that this is

a young industry. I agree with that. May it grow to maturity, and may

it contribute to consolidated revenue in the province of British

Columbia.

Interjection.

HON. MR. CURTIS: Well, it may grow. The member interjects the amount.

I move second reading of Bill 11, and I look forward to committee debate and will consider the points that have been raised.

[4:30]

[Mr. Speaker in the chair.]

Motion approved unanimously on a division.

Bill 11, Social Service Tax Amendment Act, 1985, read a second time

and referred to a Committee of the Whole House for consideration at the

next sitting of the House after today.

HON. MR. NIELSEN: Committee on Bill 4, Mr. Speaker.

WORKPLACE ACT

The House in committee on Bill 4; Mr. Strachan in the chair.

Sections 1 to 4 inclusive approved.

section 5.

MR. GABELMANN: I wonder if the minister would mind giving us a brief outline of his intention in terms of the home worker provision.

HON. MR. SEGARTY: We're adding the home worker in there, but

the employment standards branch is looking at that particular situation

now. We will be able to report back to the House at a later date with

respect to that — or to the hon. member.

MR. GABELMANN: That's fine, but the problem is that we're

presumably passing the legislation now. May I ask the minister if this

section was included to begin to deal with the developing situation of

people working in their own homes? For example, if they are computer

operators and, rather than working on a computer at the place of

business, computers are placed in their homes by the employer, and they

stay home and all the work that might ordinarily be done at the

workplace is now done in the home, is that the kind of situation

envisioned, or are there other things? What is this about?

HON. MR. SEGARTY: It's to deal with residents who work in

their own home, whether it's knitting sweaters or working on a

computer, and so on. Regulations will be brought in under this at a

later date.

[ Page

6143 ]

MRS. WALLACE: Cottage industry.

MR. GABELMANN: That's the cottage industry type of situation

that the member for Cowichan-Malahat refers to. How does it affect, if

at all, the question of domestic workers?

HON. MR. SEGARTY: Hon. member, it doesn't apply to domestic workers at all.

MR. GABELMANN: So this refers only to work that a person who

resides in a dwelling does in that dwelling. If that person employs

someone as well.... Let's say the employer places a computer in this

person's home, and the homeowner who also is the home worker works the

computer for six hours a day and hires someone to come in for another

six hours a day to work on the computer in his home. Is that covered?

HON. MR. SEGARTY: My

interpretation of that would be that

that's outside the area of home worker. Home workers are covered under

the Employment Standards Act.

MR. GABELMANN: What we're talking about in this legislation

is proper standards and protection in terms of health and workplace

safety. But it's clear that this trend that's developing in our society

for more and more work to be done at home for an employer —

occasionally contracted out directly to the home dweller, the home

worker.... If it's contracted out, it presumably wouldn't be covered.

If the home worker hires additional help, it's also not covered.

This is not a great philosophical thing; I'm just trying to

determine where we're going on this, what the intention of the minister

is. At first glance and on my reading of it, it seems to me that the

intent is good. What we're trying to do is make sure that workers are

protected at their place of work, which may well happen to be their own

home. I just want to serve notice, in effect, by raising these

questions under this section, that it seems to me that you've got a lot

of difficulties with this particular

section in terms of primary and

secondary contracting out, neither of which situations, as I read this

legislation, would be covered.

Hopefully, in the development of the regulations there will be some

consultation with people in the field who know more about it than I do,

which is virtually nothing. I would just seek an assurance from the

minister as to what his intent is in bringing in this kind of

section

in this bill.

HON. MR. SEGARTY: When you start employing somebody in your

own home to perform a particular function in your home, then you start

branching out from there, and under that you would be covered under the

Employment Standards Act. I will take the hon. member's suggestion

under advisement and look at the regulations when we bring them in,

with respect to the categories that he mentioned.

MR. GABELMANN: Fair enough about the Employment Standards

Act, but that covers other issues. This act covers a narrow band of

issues: health and safety, right? Or as it says in the act, "health and

safety, etc.," which I find amusing.

We potentially have some possibilities of abuse that could come from

this. I'm not raising it to make a big point or take any time about it,

but just simply to alert the minister to a minefield here. Hopefully, I

believe it's the minister's intention, because I think the bill's a

good one on balance.... I think it's the minister's intention to make

sure that these proper standards are enforced in every workplace, but

the way this is worded at the moment, I'm not entirely sure, unless the

regulations are really quite expansive, that it accomplishes that

purpose.

HON. MR. SEGARTY: Again, I thank the member for his advice.

The very thing we're trying to correct in the act is abuses in the

system. We will carry out extensive consultation with the various

groups before applying the regulations.

MRS. WALLACE: Just a similar type of question to the

minister. What is a residence? You might not be operating a computer in

the upstairs of your residence; you might be making grapple grommets or

whatever they are in the basement. That would be in your residence. But

supposing you had a workshop and you were making something on contract

or by the hour. What is a residence? Would that cover a building

separate from the dwelling? I assume it would cover the basement, but

just what is a residence?

HON. MR. SEGARTY: That was already covered under

Section 1 of the act.

Sections 5 and 6 approved.

section 7.

MR. GABELMANN: Just a brief question here as well. Were

discussions held with both unions involved in this merging of seniority

lists, and was there agreement reached as to putting this provision in?

Or was it put in without discussion?

HON. MR. SEGARTY: I wasn't party to those discussions, hon.

member. The act was prepared before my appointment. Apparently it was

put in with discussions with the groups. I did meet with the union that

is the bargaining agent for the Workers' Compensation Board yesterday

in my office, and they did express some objections to this particular

section. I can understand their objection, but if it was the other way

around, where it may have been suggested at one time that the areas

that are duplicated be transferred to the Ministry of Labour, probably

the same would have taken effect in that particular case. So I had a

discussion with them yesterday about it. I understand their concern,

but it won't affect any of the parties involved, because they're

involved in a particular category of work under the new

responsibilities.

Sections 7 to 19 inclusive approved.

[4:45]

On the title.

MR. GABELMANN: I wonder if I can do this under the title. The

minister said something under

section 5 that upon checking doesn't

appear to be quite right. Can we do just a quick backup?

MR. CHAIRMAN: By all means.

[ Page 6144 ]

MR. GABELMANN: The minister said that the definition of "residence" was covered under

section 1. Where?

HON. MR. SEGARTY:

Section 1, hon. member, covers "owner" and a private house.

MR. GABELMANN: On a quick reading, I don't see that that answers the question of whether the garage is part of the residence, but....

MR. CHAIRMAN: Is there further debate, hon. members?

Title approved.

HON. MR. SEGARTY: I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 4, Workplace Act, reported complete without amendment, read a third time and passed.

HON. MR. GARDOM: Committee on Bill 13, Mr. Speaker.

HOTEL ROOM TAX AMENDMENT ACT, 1985

The House in committee on Bill 13; Mr. Ree in the chair.

Section 1 approved.

section 2.

HON. MR. CURTIS: Mr. Chairman, let the member for Nanaimo

catch his breath. I noted he was out for just a moment. I have a pretty

good idea of what he's going to speak about, because this

section deals

with moving to a maximum period of six years for any audit assessments.

Earlier today in committee on another bill, the member spoke about

whether we would review six years. He made the point that perhaps it's

a little long. The bill has been called this afternoon, and frankly, in

terms of hotel room tax, which is a fairly straightforward business, I

think the six years is acceptable. I don't feel inhibited therefore by

asking for committee approval of this section. I don't feel that it

contradicts the commitment I made in the earlier committee discussion

on another bill, which was a very sincere commitment that I would at

least review that. Obviously I haven't had a chance to do that in the

space of the few minutes in between.

I would like to stick with the six years on this particular bill

because it is far less complicated than auditing sales tax on thousands

of items, Mr. Chairman. That may not satisfy the member, but that is my

view.

MR. STUPICH: Mr. Chairman, I had in mind moving an amendment to this

section, but I feel rather strongly about this four-year proposal. For fear

that I will weaken the case for having the sales-tax-in-total audit period reduced

from six to four years by moving an amendment now, which the government would

of course oppose, I'm not going to move the amendment. Just tear up that

piece of paper, wherever it happens to be floating around.

May I just remind the minister that the discussion we had was not in

committee; it was in second reading. So there is still an opportunity

for him to give it some thought before....

HON. MR. CURTIS: I stand corrected.

MR. STUPICH: You sit corrected.

In any case, even with the hotel room I would prefer it to be four

rather than six. I think the strongest argument I have is that it will

bring us into line with Revenue Canada. The income tax approach is that

four years is adequate for obliging people to keep the quantity of

paper that they have to keep to provide for this. So I feel quite

strongly about it. I'd rather not pursue the amendment right now

because it might hurt the chances of succeeding on the other one.

Sections 2 to 7 inclusive approved.

Title approved.

HON. MR. CURTIS: Mr. Chairman, I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Strachan in the chair.

Bill 13, Hotel Room Tax Amendment Act, 1985, reported complete without amendment, read a third time and passed.

HON. MR. GARDOM: Mr. Speaker, committee on Bill 16.

BUSINESS LICENCE REPEAL ACT

The House in committee on Bill 16; Mr. Ree in the chair.

Sections 1 and 2 approved.

Title approved.

HON. MR. CURTIS: Mr. Chairman, I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 16, Business Licence Repeal Act, reported complete without amendment, read a third time and passed.

HON. MR. GARDOM: I call adjourned debate on Bill 17.

BRITISH COLUMBIA TRANSIT

AMENDMENT ACT, 1985

(continued)

MR. SPEAKER: I believe the minister adjourned debate.

[ Page

6145 ]

HON. MR. GARDOM: I adjourned debate, Mr. Speaker.

MR. SPEAKER: Does anyone wish to speak?

MR. STUPICH: I'm wondering, Mr. Speaker, how the minister can open debate, and then the House Leader move adjournment.

Interjections.

MR. SPEAKER: Order, please. Hon. members, we'll just hold for a moment, until we....

On a point of order, the House Leader.

HON. MR. GARDOM: On a point of order, to the Member for

Nanaimo, the hon. minister was not present, and I adjourned debate.

There was debate from your side of the House. The minister opened

debate, so if he carries on speaking now, he'll be concluding second

reading debate.

MR. STUPICH: Mr. Speaker, on a point of order, can you tell me whether or not I have spoken on this bill?

MR. SPEAKER: I believe the hon. member has addressed the chamber on this bill.

MR. COCKE: No, he hasn't; he wasn't here.

Interjections.

MR. SPEAKER: One moment.

A quick review of the records, hon. member, indicates that you have not addressed the chamber in second reading.

MR. STUPICH: Mr. Speaker, I can recall, in the fall of '83

when we gave so many speeches, and all of them the same speeches, on 28

pieces of legislation. Then there was cause for confusion; it shouldn't

be quite the same this year.

Perhaps, Mr. Speaker, if I may, just on a point of order, quietly

ask you to check the record and see what other people have spoken, so

that you'll know the answer immediately after I speak.

It's already been said that the opposition will oppose this

legislation. We're opposing it because it's approval of the

government's spending program, not just in this instance but in total.

It's authorizing the government to borrow another $600 million, either

because the government misjudged the cost of this project in the first

place or has changed its position in the meantime. We are concerned

about the amount of money that's being spent on the ALRT program;

whether it will ever be repaid; who is going to repay it; whether it

will ever serve the citizens in the area that it's intended to serve,

in the way a public transit system should. There are some real concerns

about that and some real doubts.

I suppose the only thing you can say for it is that it is providing

some economic activity in B.C., and there isn't very much going on

these days. Although it's not directly in this bill, it's hard to knock

any kind of economic activity, but we would like the economic activity

to be productive. We have some real questions as to whether this is.

The government has been on a spending spree, one massive project after another,

including this one. One would think that by now they would have had enough experience

in planning public works projects, which indeed this is — as was northeast coal

and as is Expo. It's not that I'm knocking any of them individually;

I'm simply saying that their program has been to spend massive amounts of

public money, borrowed money, on very large single projects, to the glory of

the people that are planning these, perhaps, without looking into the planning

of them to see whether or not they're going to serve the needs of the citizens

beyond the time of construction.

We have in the past opposed borrowing when we felt that it was

wasteful borrowing. We opposed borrowing when B.C. Hydro was coming to

the Legislature and asking for massive increases in its borrowing

authority, because we questioned the spending plans of B.C. Hydro. I

would think that events have come to prove that we were right, at least

in recent years, in opposing the massive increases in borrowing. This

is another massive increase in borrowing for one single public works

project, and we are concerned about it. We're not so much opposed to

this particular project individually, but it is simply one of a package

of proposals for which the government has come to the Legislature and

asked for endorsement, not just of the borrowing itself but also, by

implication, of the spending plans.

We've long argued that if the government is going to get involved in

public works projects it should be prepared to do so throughout the

province, rather than putting everything into one area at a time. Most

recently the projects have all been in the lower mainland, where the

depression that is being felt in almost all of British Columbia is not

being felt to nearly the same extent because of government activity.

Had the government shown a willingness to spend money for needed public

works projects, projects that could be demonstrated as being in the

long-term interest of the people in the area as well as in the

short-term interest, then we would welcome that kind of spending

program. But when the spending program is directed so intensely to

single projects that, while they do provide employment in the short

term, have questionable value in the long term, then the only way we

can bring to the attention of the government that we have concern about

the way in which they are handling the financial affairs of the

province of British Columbia — I will certainly have more to say about

that when we come to estimates — and the way in which they have hurt

the province of British Columbia by their financial handing of our

affairs, is to vote against legislation such as Bill 17. The opposition

will oppose it.

[5:00]

HON. MR. CURTIS: Mr. Speaker, there has been considerable

debate on Bill 17, and I apologize for any confusion I caused in the

House several days ago when the bill was called but I was not present

to participate in the debate. I will very quickly review the purpose of

this bill. It is a borrowing authority bill. As I indicated in the

opening remarks, it will ensure that B.C. Transit has increased

borrowing authority of $600 million to $1.5 billion, which clearly will

be sufficient to meet borrowing needs for all capital projects of

transit over the medium term. These capital projects include the

replacement or upgrading of existing assets, phase one of ALRT and, of

course, in case there was some doubt on the part of the members of the

opposition, phase two of ALRT.

The debate focused on ALRT, and that's understandable, but perhaps

it is useful to reflect on the fact that the $1.5 billion authority

will include a forecast $110 million for conventional transit, i.e.

buses. That should be taken into

[ Page 6146 ]

account, I think, when one is considering the significance or the size of the total borrowing.

In addition, the member for New Westminster (Mr. Cocke), I think on May 9 — Hansard

would indicate if I've got the date wrong — stated: "We have per capita

debt in this province, if you include the debt of Crown corporations,

that makes the Liberal federal government which sunk us into deficit

after deficit look good." Well, a little bit of hyperbole may have

occurred that day. As of March 31, 1986, it's estimated that net direct

and guaranteed debt of the province of British Columbia will total

$5,700 per capita. This compares with an estimated $8,730 per capita

for the debt of the federal government. But further than that, the

provincial debt includes both direct and guaranteed debt, while the

federal figure is direct only. If the debt of commercial Crown

corporations in the province of British Columbia is excluded, and in

many jurisdictions that is the accepted practice, then the province's

net debt per capita is $2,518 — less than 30 percent of the federal per

capita figure and, Mr. Speaker, the second lowest among all the

provinces of Canada. Only Alberta is lower. So when we're discussing

borrowing authority and debt, whether direct or associated with Crown

corporations, I think it's important to at least have the perspective.

Hopefully those f