2008 Legislative Session: Fourth Session, 38th Parliament

HANSARD

The following electronic version is for informational purposes

only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

TUESDAY, MARCH 4, 2008

Morning Sitting

Volume 27, Number 8

CONTENTS

Routine Proceedings

Page

Petitions

Hon. M. Coell

Introduction and First Reading of Bills

Forests and Range Statutes Amendment Act, 2008 (Bill 8)

Hon. R. Coleman

Second Reading of Bills

Budget Measures Implementation Act, 2008 (Bill 2)

Hon. C. Taylor

B. Ralston

J. Horgan

M. Karagianis

C. Trevena

G. Robertson

[ Page 10171 ]

TUESDAY, MARCH 4, 2008

The House met at 10:03 a.m.

[Mr. Speaker in the chair.]

Prayers.

Hon. M. Coell: I wish to table a petition.

Mr. Speaker: Proceed.

Petitions

Hon. M. Coell: I have a petition from a number of people

from Saltspring Island who have concerns of ferry fares and wish a moratorium be

placed on ferry increases. I wish to table it.

Introduction and

First Reading of Bills

FORESTS AND RANGE STATUTES

AMENDMENT ACT, 2008

Hon. R. Coleman presented a message from His Honour the

Lieutenant-Governor: a bill intituled Forests and Range Statutes Amendment Act,

Hon. R. Coleman: I move that Bill 8 be introduced and read

for a first time now.

Motion approved.

Hon. R. Coleman: Today I am introducing Bill 8, which

proposes amendments to three statutes: the Wildfire Act, the Forest Act and the

Forest and Range Practices Act. This government is committed to responding to

the needs of our communities, first nations and the forest sector.

This bill responds to the needs of rural communities who have

asked for greater clarity around the rules of reporting and responding to

wildfires in their local areas.

As well, first nation communities expressed a desire to access

timber for domestic use, and this concept has been upheld by the Supreme Court

of Canada. This bill will assist first nations in accessing public timber

through new permitting processes.

This bill also responds to the needs of the forest sector in a

number of operational and administrative areas. For example, it proposes

amendments to streamline timber-marking requirements on the coast of British

Columbia as per the coast forest action plan.

I move that the bill be placed on orders of the day for second

reading at the next sitting of the House after today.

[1005]

Bill 8, Forests and Range Statutes Amendment Act, 2008,

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

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

Orders of the Day

Hon. M. de Jong: I call second reading of Bill 2, the

Budget Measures Implementation Act, 2008.

Second Reading of Bills

BUDGET MEASURES

IMPLEMENTATION ACT, 2008

Hon. C. Taylor: I move that Bill 2, the Budget Measures

Implementation Act, 2008, be read a second time.

Bill 2 amends 18 provincial statutes to implement many of the tax

measures announced in Budget 2008. It also includes legislative amendments to

support the 2008-09 estimates.

The major income tax reductions in Bill 2 are designed to return

to taxpayers all of the revenue raised from the proposed revenue-neutral carbon

tax that will be introduced later this session for the Legislature's

consideration.

[K. Whittred in the chair.]

First, provincial personal income taxes will be cut by 2 percent

in 2008, rising to 5 percent in 2009 on the first $70,000 in income. Further

reductions are planned in future years, as revenue from the carbon tax

increases. Over three years these personal income tax reductions will put $784

million back into the pockets of British Columbians. By 2009 British Columbians

earning up to $111,000 will pay the lowest personal income taxes in all of

Canada.

The second pillar of revenue neutrality in Bill 2 is income tax

cuts for both large and small business. Effective July 1, 2008, Bill 2 reduces

the general corporate income tax rate from 12 percent to 11 percent. Over the

next three years we plan to reduce it to 10 percent, on par with the lowest

corporate tax rate in the country.

In recognition of the importance of the small business sector to

the provincial economy, effective July 1, 2008, the small business corporate

income tax rate is cut to 3.5 percent from 4.5 percent. Again, it's our

intention to cut it further, to 2.5 percent, by 2011.

The final pillar of revenue neutrality in Bill 2 is a measure to

ensure that lower-income families can afford the move to a lower-carbon economy.

The new, ongoing, income-tested climate action tax credit will provide an annual

payment of $100 per adult, $30 per child, rising to $105 per adult in 2009.

Individuals earning $30,000 or less and families earning $35,000 or less will

receive the full credit.

Approximately two-thirds of the proposed carbon tax revenues will

be paid by business, but we are returning, through these income tax cuts and the

low-income climate action tax credit, almost two-thirds of that revenue to

individuals and families. In total, over

[ Page 10172 ]

three years we will cut personal and corporate income taxes by more than $1.8

billion, the same amount expected to be raised from the proposed carbon tax.

Bill 2 also provides a one-time climate action dividend of $100 to

be paid to every man, woman and child resident in the province on December 31,

2007. The dividend payment, which is funded from the 2007-08 surplus, will be

paid in June, before the carbon tax takes effect, and it will help all British

Columbians begin their adjustment to a greener lifestyle. Although most British

Columbians file annual income tax returns and will receive the dividend

automatically, outreach programs will be established to help ensure that all

eligible British Columbians receive their dividend.

Bill 2 provides a number of new tax incentives as well, totalling

$64 million over three years, to complement the many incentives already in place

to help British Columbians reduce their greenhouse gas emissions. These include

a point-of-sale tax reduction on the purchase of eligible conventional

fuel-efficient motor vehicles that, together with the federal ecoAuto program,

reduce the cost of a new fuel-efficient vehicle by up to $4,000; an exemption

from the passenger vehicle rental tax for leases of eight hours or less; and

exemptions for ecologically friendly products such as adult tricycles and

appliances.

[1010]

Responding to our responsibility to future generations by tackling

climate change must not be undertaken at the expense of the economy,

competitiveness or jobs for British Columbia. So to ensure a strong and growing

economy, Bill 2 extends the production services tax credit and Film Incentive

B.C. tax credit for five years. It increases the basic Film Incentive B.C. tax

credit rate to 35 percent from 30 percent and the basic production services tax

credit rate to 25 percent from 18 percent for two years. It also introduces a

higher regional credit for production activity in distant locations beyond the

lower mainland and capital regional district.

As previously announced, the Ports Property Tax Act is amended to

extend the ports competitiveness initiative for ten years and, starting in 2009,

to increase the compensation available to municipalities. To build on British

Columbia's attractiveness as an international financial centre and as a home for

head offices, the International Financial Activity Act is amended to clarify and

expand the range of eligible activities.

The existing Corporation Capital Tax Act has hindered financial

institution investment and growth in B.C. The financial services sector provides

high-paying, high-skilled jobs, and there are opportunities for this sector to

grow with our newly forged links to Asia. The capital tax will be phased out

over three years and replaced with a minimum tax to ensure that large financial

institutions continue to face a base level of taxation in this province.

Bill 2 also includes changes to enhance the fairness of the tax

system. Under the Property Transfer Tax Act, the first-time-homebuyers threshold

is increased to $425,000 from $375,000, and first-time buyers are no longer

required to have registered financing of 70 percent in order to be eligible for

the exemption. This will help many young British Columbians achieve their dream

of home ownership.

The Income Tax Act is amended to reduce the dividend tax credit

rates in response to the corporate income tax cuts to ensure that the treatment

of income taken in the form of either salary or dividends continues to be

comparable.

In addition, several initiatives in Bill 2 will improve the

fairness of the Social Service Tax Act, including allowing registered charities

and hospital auxiliaries to claim refunds of PST paid on medical equipment

purchased with bingo affiliation grants and, consistent with current practice,

expanding the trade-in allowance to allow trade-ins on the purchase of motor

vehicles from other Canadian jurisdictions for use in B.C. A variety of other

minor amendments are made to various statutes to enhance clarity and

administration.

Finally, Bill 2 implements a number of recommendations from the

Ministry of Small Business and Revenue's final phase of the PST review. These

changes, like those implemented last year, will benefit businesses across the

province by improving provincial sales tax administration and will reaffirm our

commitment to an efficient and effective tax and regulatory system. I'd like to

thank the Minister of Small Business and Revenue and his officials for all of

their hard work on this project.

In addition to these tax measures, Bill 2 amends the Special

Accounts Appropriation and Control Act to create two new special accounts: the

B.C. arts and culture endowment special account and the park enhancement fund

special account. Contained within the B.C. arts and culture endowment special

account is a new $150 million BC150 cultural fund. This fund honours our 150th

birthday as a province. The B.C. Arts Council will advise government on how the

interest on this fund can best be used to support arts and cultural initiatives

in every community, from our smallest communities to our largest.

In addition, Bill 2 establishes the park enhancement fund as a new

special account. This bill also grants the Minister of Environment new

flexibilities in setting fees, and it expands existing merchandising

authorities. Revenue, including that from merchandise and donations, will flow

into the special account and will be used to fund activities such as

interpretative programs, new or improved park facilities as well as research and

restoration activities within protected areas.

In addition, the Budget Measures Implementation Act, 2008, amends

the Financial Administration Act so that the current policy of paying per diems

to MLAs can be extended to parliamentary secretaries and MLAs who are members of

boards, councils or commissions performing government business.

[1015]

Finally, this act provides for amendments to other acts, including

amending the Hydro and Power Authority Act to remove the B.C. Hydro debt cap;

expanding the regulatory power in the Transportation Act to provide support for

matching revenues with the associated road maintenance costs; and eliminating

the South Moresby

[ Page 10173 ]

Implementation Account Act, which was effectively wound up in fiscal 2007.

In

summary, Bill 2 includes many amendments that will implement

many of the measures in Budget 2008. In particular, it gives back to taxpayers

all of the tax that will be collected under the proposed carbon tax while

maintaining and enhancing the competitiveness and fairness of our provincial tax

system.

B. Ralston: This bill provides the legislative support to

implement the measures set out in the budget. I do have a number of general

comments about specific sections of the bill. Before that, I'd like to begin

with some introductory remarks in the sense that this bill and the budget that

it seeks to implement — and I'm speaking of the budget — is striking for what

problems in British Columbia it does not address.

Everyone acknowledges a serious crisis in forestry, and the budget

is completely silent on any measures to deal with the crisis in forestry —

10,000 jobs lost in the last year. In the Speech from the Throne the only

proposal is a round table and a commitment to some vaguely defined action.

That's it. So this budget is completely absent on any measures for one of the

major economic crises in this province, completely devoid of any action.

Other jurisdictions in the country have taken very determined

action to set out poverty reduction plans, and this is not a particularly

partisan issue. The Premier of Newfoundland, who is a Tory; the Premier of

Quebec, Jean Charest, who is now a Liberal; and the Premier of Ontario, Mr.

McGuinty, who is a Liberal, have all in recent years set out very specific goals

in terms of poverty reduction. The Premier of Newfoundland has taken a personal

charge of that file on behalf of his government. This budget does not address

any of those targets.

I think the changing pressures that globalization and the

pressures in the world economy bring to individual citizens are acknowledged by

many. I was recently reading a comment by David Frum, who is a Canadian but who

spends most of his time in the United States and advises the Republican Party,

the party of President Bush. He said recently in an interview in Maclean's

magazine that "the fact that the families of the wealthiest…of Americans are

becoming more stable while families in the bottom third are becoming more

unstable is as important as globalization or trade or technology."

What this budget fails to address, I would suggest, is that

growing instability for a large part of the population. People at the top of the

income ladder are understandably doing well, but many others are not. That

growing instability is not addressed in this budget at all, where other

jurisdictions have sought to do that.

This budget doesn't address in any substantive way the issue of

public safety. One of the reasons that people like living here, are attracted to

live here and will continue to live here and to come here in the future is

because of the social climate that we have. One of those very essential

ingredients of a social climate is public safety — the belief that you can walk

in the streets of our cities without running the risk of being shot dead. That,

regrettably, is a crisis that faces us in many of the cities of the lower

mainland. This budget does not address that. There are very few measures to

address that whatsoever.

Public transportation — allied to some of the themes that are set

out in the throne speech and the budget. A very ambitious plan — I stress plan —

was trumpeted which relied upon substantive federal dollars to be contributed in

the recent federal budget, probably because of shifting economic circumstances

and the shifting circumstances under which the federal budget is put together.

[1020]

Much of the ambitious goal of federal financing in that budget

was…. Some was there, but far less than was expected. With those preliminary

comments, I would then turn to the measures that are set out in the budget.

The Arts Council Act and the fund that it seeks to create are

products of a very determined citizens lobby that lobbied the Finance Committee

— and, I'm sure, individual members of the Legislature, but particularly the

Finance Committee. In the last two years that I've been part of the committee,

representatives of arts groups throughout the province came forward to the

committee and expressed the belief and, I think, the reality that culture forms

an important part of social life in all the communities of British Columbia and

that it was deserving of more financial support from the government.

This setting up of the fund, though, relies on recommendations

from the Arts Council, but the recommendations are only that. They are not

binding, and the minister is left to make the decision on the awards and,

presumably, to make the announcements. What the relationship will be, in terms

of the relationship of Arts Council recommendations to actual implementation by

the minister, will be seen, and I'll be probing that a bit more in the

clause-by-clause reading of the bill later.

The British Columbia Railway Act is amended to permit the

Lieutenant-Governor-in-Council to give grants in lieu of the school tax. There

are some changes proposed in the provincial school tax to municipalities, so I'm

not certain. I expect that in the more detailed debate we will press for the

position of the government in terms of a commitment on making those grants. I'm

assuming from the tone of the legislation that those grants will be made in lieu

of taxes. It confers the discretion on the cabinet, but it's not clear at this

stage whether that, in fact, will be the case since it is only by discretion.

The corporation capital tax is something that I'd like to devote

some time to. The minister's rationale for removing this tax has fluctuated

somewhat. Some news reports have stated that it's to give Asian banks a better

position in British Columbia,

whereas in other interviews…. One, in the

Indo-Canadian Voice newspaper, says: "What has happened as a result is that

big banks don't want to come and expand in B.C. They don't want to have more

offices in B.C. because they get taxed on it. So they pull out everything they

can into Ontario."

Like other members, I met with the representatives of the Canadian

Bankers Association. At a time when the banks are expanding in British Columbia

— they're

[ Page 10174 ]

opening new branches; their loans portfolios are expanding; and their

profits, up until perhaps the last quarter in the case of CIBC, were expanding —

the suggestion is that investment decisions were being altered and, in the words

of the minister, "all pulled back to Ontario."

I asked for any studies, any justification that the lobbying

association on behalf of the banks could provide or suggest to support the

assertion that these investments were not being made. All evidence that I could

discern and glean from a review of any literature in the public domain was that

it was not having that effect on bank expansion in British Columbia. That's

domestic banks. None was forthcoming, despite my request. I would be interested

in hearing from the minister at the committee stage: who made those

representations and what studies or modelling were done to justify the removal

of this particular tax?

[1025]

The other suggestion is made that Asian banks might be more

inclined to establish themselves in Canada, and particularly in British

Columbia, if this tax were to be removed. Again, I've not been made…. No one has

approached me with that view directly. It's a view that seems to be reported in

the news media. I would be interested in seeing what modelling or justification

the ministry, with all its resources, and the Treasury Board in particular could

offer to support that.

What is clear is that there is a so-called International Financial

Centre in British Columbia. It was set up in the 1980s. Mel Couvelier was the

Minister of Finance. It was established in response to some federal legislation

that gave provinces the opportunity to exempt certain business activity from the

application of provincial tax providing that the business activity was oriented

outside the country.

That international centre — I met with the CEO, I believe, last

year — was set up, and he gave me some examples of how it functions. For

example, he gave an example of a company — I think it was a European company —

with its headquarters in the United States that had its treasury operation in

New Jersey and was attracted to move its eight-person treasury operation for the

company from New Jersey to British Columbia and, given that their business

activity was oriented outside the country, would not be obliged to pay any

provincial income tax.

That International Financial Centre has been in existence since

the 1980s. At one point this tax, the capital corporation tax, also applied to

non-financial institutions. That was removed. There doesn't seem to have been

any…. If the justification for removing the tax was that Asian financial

institutions or banks would locate in this International Financial Centre

because the tax was removed, there doesn't appear to have been a surge in

establishment or activity by non-financial players when the corporation capital

tax, as it applied to non-financial players, was removed. Again, I'd be

interested in any studies that the ministry has or any justification, beyond the

rhetorical and ideological, to justify this particular decision.

The International Financial Centre has among its members a number

of domestic banks, some foreign banks as well, I believe — I've got the list

here from their website — and certainly a number of Canadian banks. The Hong

Kong and Shanghai bank of Canada is here, and it has a number of its

subsidiaries as members of the International Financial Centre, as do a number of

the domestic banks and some of the British Columbia credit unions as well. In

addition, there are some brokerage firms, some financial firms and some

securities firms. It is particularly oriented externally and is well

established.

If the justification is that that is what's going to take place,

then I think it's incumbent upon the minister and the ministry to demonstrate

that, rather than to simply expect the public to take that on some kind of

faith.

[1030]

I'd be particularly interested in what lobbying efforts were made

by representatives of Asian banks. If that were the case — and I'm unaware of

any myself — I'd be interested to hear the more detailed justification for the

position that's taken.

The International Financial Centre. There's also a similar

international shipping centre. It has enjoyed the same exemption from taxation.

It has succeeded in drawing, I think, one major shipping company to set its

international headquarters — again, it's externally oriented, outside the

country — in Vancouver. I'd be interested in hearing whether there will be any

spinoff effects on that.

That is a similar financial arrangement, exempting the company

from local taxation in that particular sector. It's well established. The

corporate capital tax doesn't apply to it. Although it's had some initial

success, it doesn't appear to be growing at any particular velocity.

My query is on the extent of this forgiving of revenue to the

government for domestic banks. The justification offered — that it will

encourage their competitors, Asian banks, to locate in Vancouver — is a somewhat

convoluted argument. I'd be interested, at the committee stage, in hearing the

minister justify that somewhat further and in more detail. So I expect that we

will have that discussion.

The other area that I wish to address in dealing with it…. There

are some minor changes in terms of the definition of a financial institution.

Indeed, the reference is to institutions rather than to corporations. I'm not

quite sure why that is, but that's a minor detail that we will pursue.

I suppose, ultimately, the other calculation in this tax that's

set out is that there will be what's called a minimum tax. But the preliminary

calculation of that minimum tax — including the ability to reach back seven

years for unused tax credits, and forward three years — and the way that the

calculation of the minimum tax is structured…. It seems unlikely to me that any

institution will actually be obliged to pay the minimum tax, although there's a

method for calculating what might be due. Based on that, it seems unlikely, but

I may be in error in that. So I look forward to a more detailed discussion.

Section 3.7 sets out deductions from the minimum tax payable. They

may deduct all of their provincial

[ Page 10175 ]

corporate income tax and any unused corporate income tax credits from the

previous seven years and the three coming years. In effect, although the minimum

tax is talked about — and I will perhaps, no doubt, see the minister clarify it

for me when the time comes — in my view, it seems unlikely that any of these

banks will pay the so-called minimum tax at all. If that's the case, one wonders

why it was included in the legislation — perhaps a political fig leaf to cover

the reality of the tax that's being removed. I'm not sure.

[1035]

The next area that I'd like to address is the changes to the

Financial Administration Act. This is particularly striking. I travelled with

the Finance Committee as the vice-Chair. That's a committee composed of members

of both sides of the Legislature. It receives input in hearings throughout the

province and also receives written input from a number of citizens.

This proposed change to the Financial Administration Act is not

one that I recall a single citizen advocating for. Now, that doesn't mean it's

in and of itself a bad idea, but it's striking that there's no public pressure

for this change. What this change proposes is that MLAs who are already

compensated…. We've been through the extensive debate on the increase in

compensation, where dramatic increases were given to the Premier and all MLAs.

Those of us on this side of the House have offered and are, in fact, returning

our pay increase to charities in the community as a consequence of….

Interjection.

B. Ralston: That's a matter of public record. I see some of

the typical disdain that one sees on the government benches for any kind of

gesture in that direction, but that's the reality on this side of the chamber.

My colleagues and I — that's what we're doing.

This change to the Financial Administration Act permits those MLAs

who are acting in their official capacities as members of boards, councils,

commissions; acting under the directives of ministers; or acting as ministers or

parliamentary secretaries…. It gives Treasury Board the power to compensate them

for those duties.

Typically, those members who are appointed to those positions will

be members on the government side, I would think, almost without exception. I'm

hard pressed to think of an example where they would be on the opposition side

and appointed to act on behalf of the government. It wouldn't be the way in

which things were done.

What this amendment proposes is to take those MLAs whose

compensation was recently substantially, by any public measure, enriched —

certainly far in excess of the compensation guidelines that guided public sector

negotiations — and add to their compensation for performing duties which many

might think were simply a part of the duties that they signed on for.

This appears to allow the government, for those it chooses to

appoint to various bodies, the opportunity to earn even more income. I'm not

surprised that there was no public call for this.

Once the public becomes more aware of this, I'm sure there will be

opposition to this. I suppose it's buried deep in this legislation and may not

attract much notice, but those members of the public who become aware of this

I'm sure will be surprised to learn that in addition to the — by any standards,

certainly by ordinary members of the public — handsome compensation that members

of the Legislature already earn, especially after their increases, they'll be

able to supplement that by doing work that many would have seen as simply part

of the duties they were obliged to undertake in any event. That will be

something we will want to explore more fully when the time comes.

Now, there are some changes to the Home Owner Grant Act. Those

seem to be largely technical changes. I suppose the question of what motivates

those changes does arise. Some of these may be driven by changes suggested from

within the ministry. I'm not aware of any fraud or any difficulties in the

administration of the homeowner act.

[1040]

It's usually administered by the municipalities. When you go to

pay your taxes, you check off and sign a declaration that entitles you to the

reduction, and then that statement and position is passed on to the province.

I'm unaware of any difficulties, and it's not clear — other than changing the

threshold, which I think is straightforward — why these changes in the

definition were required. There are a number of fairly detailed changes to the

finer points of the eligibility for homeowner grants, which will be pursued

further in committee.

The Hotel Room Tax Act reduces the room tax that goes to the

province and increases it to Tourism B.C. No doubt, that will be welcomed by

Tourism B.C., and I assume that's the motivation for that particular change.

The Hydro and Power Authority Act. There are some changes

proposed. I'm not clear from my initial reading of the proposed changes and the

very brief rationale that I've heard here this morning just what those changes

are intended to accomplish and why they're necessary. So that's certainly

something I will want to follow more fully in the detailed debate.

Certainly, the government did sign an order-in-council — No. 28,

which provides for the heritage special direction HC2 to the B.C. Utilities

Commission — that changed B.C. Hydro's deemed equity from 20 percent to 30

percent. That seems to be what is being talked about here, but I will pursue

further at another time the motivation for that and the necessity or not of that

proposed change in the legislation.

The Income Tax Act changes are fairly straightforward in their

application. That's fairly straightforward. There are some questions that arise

about how the climate change dividend will be calculated as it relates

particularly to those people eligible at the lower end of the income scale and

how it will be treated. Whether it will be treated in a way that exempts it from

income that individuals would otherwise receive or not isn't crystal-clear when

I read the legislation. The Minister

[ Page 10176 ]

of Employment and Income Assistance said in a radio program that welfare

recipients in B.C. will not see their benefits reduced after getting the $100

carbon dividend cheques.

In response to a researcher for the official opposition, two

ministry staff said that the ministry intends to exempt income, both the

dividend and the subsequent tax benefit, but apparently, there's some

uncertainty as to how that will be accomplished — whether regulations need to be

changed by order-in-council or whether there will be an exemption under the

current regulations.

That's obviously an administrative detail but is of some

significance to those who might receive that cheque who are in that financial

position. They will want answers, and I expect that by the time we get to the

more detailed stages of this, the minister will be able to answer that question.

[1045]

There are changes to the film credit regime, and certainly, I'm

aware of some anomalies. I'm not sure that the definition of "distant location"

is entirely clear. There is an administrative division line that crosses the

valley, which seems to drive some productions out to Langley and beyond, because

the tax treatment of the production is different beyond that division line — in

Langley and Mission, I believe, is where it crosses the valley — as opposed to

running and engaging in the same production in Vancouver. So certainly, any tax

regime creates those kinds of anomalies, and I'm interested to hear the extent

to which this new definition will perhaps alter that or not.

Deputy Speaker: Excuse me, Member. Time has expired. Are

you the designated speaker?

B. Ralston: Yes, I am.

The film tax credits, particularly the labour component, were a

substantial innovation, and I'm pleased to see that they're continued. I know

that some jurisdictions, I've been told, give some preference in tax treatment —

and these are not Canadian jurisdictions, I don't believe; I think they're

American jurisdictions — to unionized labour as opposed to labour that is not

unionized.

Now, I know that's not the case here in British Columbia. I'm

wondering if that had been considered in these revisions of the film and

television tax credits. The labour component does appear to be enhanced, and I'd

be pursuing the rationale for this process.

I'm also pleased to see the tax credit extended by five years for

film and television. Again, in an increasingly competitive film production world

British Columbia's highly skilled industry, technicians, workers and allied

trades seem to be surviving notwithstanding the competition. But it's important

that this industry be nurtured, so I'll be exploring that further in debate at

another stage of the proceedings.

There are changes to the International Financial Activity Act, and

again, I'm not clear on the motivation for these changes. They appear to be

definition changes. Some of that is somewhat cryptic, but I would be interested

in understanding and receiving some further explanation of why these changes

were considered.

There's a definition that refers to active businesses now being

defined as qualifying businesses that will be defined in the regulations. The

regulations, of course, at this stage are not included, so I would be interested

in receiving some indication from the minister how that active business will be

defined in the regulations, what the ultimate proposed ambit of that definition

is and the purpose for adding it to the international financial activity centre.

As I've said, this centre has been established for some time.

There are a number of members who are listed. Again, I'm not sure of the

motivation for these changes.

A definition of the securities corporation is removed from

section

2, so there seems to be a focus on securities corporations and what business

they might be bringing to the international financial activity centre.

[1050]

I suppose the broad tax concern and the public policy concern

would be that while this measure seeks to encourage business that's oriented

externally to locate in British Columbia and to locate specifically in

Vancouver, I'm not aware, except in perhaps other…. There are some members who

are located elsewhere in the lower mainland. It does appear to be a measure

that's focused entirely — perhaps understandably, from the perspective of those

moving their business here…. It doesn't offer much to those outside of the lower

mainland or even outside of Vancouver in terms of an opportunity to get this

business.

Perhaps that's understandable, but given the crisis that I've

spoken of in the forest industry earlier, the prospect of adding international

financial activity that's externally oriented from an office in Vancouver is

probably cold comfort to a sawmill worker in Quesnel or Mackenzie. I suppose it

may add something to the provincial treasury, but it's relatively unrelated to

the crisis that's sweeping much of the province outside the lower mainland and

the Okanagan and the lower Island.

The broader tax policy question then becomes: if this measure is

being expanded unduly and business that would otherwise legitimately locate in

British Columbia and pay provincial corporate income tax…? Would they be given

an opportunity to enter into the International Financial Centre and be relieved

of the obligation of paying provincial income tax without the consequent

benefits to the economy, broadly?

The International Financial Centre. The present act also permits

the company locating and qualifying in the centre to designate some of its

personnel as International Financial Centre personnel. They are exempted, as I

understand it, from paying the provincial portion of income tax.

Not only is the company income, as I understand it, exempt from

paying provincial income tax, but the key personnel, if they have to apply and

be given the exemption, are exempt from provincial income tax. So there's….

Deputy Speaker: Member for Alberni-Qualicum.

[ Page 10177 ]

Introductions by Members

S. Fraser: I'm here to give my learned colleague from

Surrey-Whalley, to the right of me, a break. I have an introduction to make.

There are a number of students — I think over 40 — here from ADSS. That's

Alberni District Secondary School. The teacher Nick Seredick is also here with

four adults to view the proceedings today. Would you all join me in making them

feel very, very welcome.

Debate Continued

B. Ralston: So that would be the broader concern. I know

the government, in the last budget, also gave the opportunity to biotech

companies to receive patent income through a subsidiary located in the

International Financial Centre, which again would exempt it from provincial

income tax.

These kinds of tax-free zones ebb and flow in fashion. Certainly,

tax-free processing zones are placed in many locations throughout the world. In

Mexico the maquiladora zones are a different form of tax exemption for

processing.

[1055]

I suppose the policy question is whether these are effective. Thus

far, beyond rhetorical flourishes, there's been little substantive justification

for these measures. Ordinarily, as I understand it, for tax changes, the

capacity of the ministry is the ability to model the changes and to give some

indication of what the likely effect of a tax change would be. So I would be

interested in pursuing that at another stage in the proceedings.

The next area that I want to deal with is the proposed changes to

the Motor Fuel Tax Act, and I could just locate my note on that point if I may

have a moment.

Section 70 repeals the definition of "family farm" and replaces

it with a definition of "farm," which is classified as a farm under the

Assessment Act.

I know some members who represent rural ridings or even suburban

ridings. I know there was a recent controversy in Saanich about the assessment

of farms, where land previously assessed as a farm was partially reclassified as

residential land and had to pay a higher tax rate. I think the Minister of

Advanced Education may be familiar with that issue in his riding. The minister

who is responsible for small business and revenue has announced a farm status

review panel, so I'm interested in the relationship between the change in the

definition in this act and its impact on the definition under the Assessment

Act.

There are some other changes that rural colleagues will be

interested in. There was a change in the definition of "farm truck" and the

definition of "farm" itself. It's not substantially different — or it doesn't

appear to be — from the old one, but I'd be interested in hearing the rationale

for that.

There are some other references to the context in which someone

can claim an exemption from tax on coloured fuel. That's a substantial relief

from tax under the act. That will be of some interest and will be pursued

further.

Section 73 of the act increases the Victoria regional transit

service tax on gasoline and diesel from 2.5 cents to 3.5 cents a litre. This

will probably increase the transit service's revenue, by our estimation, by $3

million to $3.5 million a year. I'd be interested in confirming that. That would

appear to be on top of the impact of the new carbon tax on the price of gasoline

and diesel here in the capital regional district. That will be something that

will be pursued at a later opportunity.

I'm not going to deal with the proposed amendments to the Park

Act, but under the Ports Property Tax Act, there are some amendments that

continue the cap on property tax for designated port properties. This has been

the subject of some controversy, and I think I can probably sum it up most

accurately — the municipal reaction. The reaction has been — this is from the

municipalities — that if the provincial government wanted to help the port, they

should have paid for it themselves.

I'm reading from a news report a quotation from Port Moody Mayor

Joe Trasolini. "We have no objection to provincial and federal spending to make

the port industry more competitive" — and I continue to quote — "but they should

spend their money, not ours."

In other words, ports serving a provincial or federal need should

not be subsidized by local property tax payers simply because they have a port

within their municipal boundaries."

For Port Moody — and this is an example — the cap meant a 35

percent decrease in taxes paid by port industries, or an increase of nearly 3

percent for municipal taxpayers.

[1100]

I know there has been discussion with the Minister of Finance and

other relevant ministries from many of the municipalities. There are eight in

number: Vancouver, Port Moody, North Vancouver, Burnaby, Surrey, Richmond, Delta

and the district of North Vancouver in the lower mainland. In addition, my

colleague the MLA for North Coast is also concerned about the impact on the tax

revenue for Prince Rupert.

One well understands the desire that ports be internationally

competitive. The government completed a ports strategy document back in 2005.

This would appear to be the

interpretation of the government as to one of the

ways in which to make the ports more competitive. But municipalities, given the

narrowness of their revenue base, are understandably concerned about bearing the

cost for these — which I think are properly regarded as provincial and national

initiatives — on the backs of local taxpayers.

The property tax is not necessarily regarded as a popular tax, and

municipalities are very limited in their revenue sources. Notwithstanding many

representations over the years and much discussion about the importance of

cities and their economic dynamism and its contribution to the growth of the

broader economy, their sources of revenue are rather limited.

[H. Bloy in the chair.]

[ Page 10178 ]

This particular measure continues that tax cap for another ten

years, and it doesn't appear that the issues that were raised when it was first

introduced have been resolved. There are some inflationary increases built into

the new proposed…. They begin from the base that ignores what's happened in

recent years. I haven't heard yet directly from the affected municipalities, but

I expect that they will be concerned and troubled by this particular measure.

There will be a requirement, I think, to have some further debate on that issue

as we proceed.

The Property Transfer Tax Act is also revised. There are some

measures to change that. Those amendments appear to be relatively

straightforward, although there are some changes to the first-time homebuyers'

guidelines which I will want to pursue in some detail.

The next substantial revision to a statute is to the Social

Service Tax Act. These appear to be technical amendments, but I note a change to

section 99. The passenger vehicle rental tax doesn't apply to passenger vehicles

leased for eight consecutive hours for less than 28 days. It's not clear what

relation that bears to the car share co-op.

There was an issue that arose recently, raised by some of my

colleagues — I think the member for Vancouver-Fairview and the member for

Victoria-Hillside — concerning the application of this tax to car co-ops. I

think it's generally thought that car co-ops — which are a form of organization

to give people the opportunity, rather than owning a vehicle, of access to a

vehicle at fairly short notice on a regular basis and paying a membership fee

for that right — are an environmentally benign approach. They give people the

opportunity to have occasional access to a private vehicle but without the cost

or, I suppose, the environmental impact of running a vehicle all the time and

all that that implies.

[1105]

So if that is an amendment that is meant to exempt those and

change the taxation status of car co-ops, that's probably a good thing, but it's

not clear from this legislation at this stage that that's the likely consequence

of the change.

There are a number of other PST exemptions. There's an exemption

for chemical substances used as catalysts in manufacturing. That's not something

I'll address here, but it appears to require some further explanation.

The remainder of the statutes here are minor amendments to the

Taxation (Rural Area) Act, the Taxation Statutes Amendment Act and the

Transportation Act. They will be pursued in committee, but they're not something

that I'll pursue here.

Those are the measures that the government seeks to introduce to

implement its budget. Strikingly, of those measures, perhaps the most

significant tax measures are the change in the corporation capital tax and the

change in income tax. Those would be the two measures with the most impact.

Those will be issues that I'll be pursuing at committee in some further detail.

The other issue I want to pursue and just raise briefly here

before I conclude is that the budget also continues measures that subsidize the

drilling for oil and natural gas. Those measures are vigorously defended by the

minister, yet they appear to be increasingly out of sync with thinking from

other jurisdictions where, similarly, oil and gas are a significant factor in

provincial budgets.

In Alaska…. Just today in the newspaper, there's an

article about

the Alaska Governor playing hardball with big oil. That's a Republican Governor

of Alaska who's taken a very determined stand to raising taxes on oil profits by

$1.5 billion a year and rejecting industry ownership of a $25-billion-a-year

pipeline — I think a measure that puts a new price on the resource and

recaptures for the public treasury the kind of returns that are more consistent

with the world price for oil and, to some extent, the price for natural gas as

it increases.

Again, it's not simply a refrain of the opposition here. In the

American House last week, the American Congress, the Democratic-led Congress

passed a measure that approved $18 billion in new taxes on the largest oil

companies, citing that money collected over ten years would provide tax breaks

for wind, solar and other alternate energy sources and for energy conservation.

Even the President of the United States, in a speech he gave in

2006 where the price of a barrel of oil was $55, said: "Record oil prices and

large cash flows also mean Congress has got to understand that these energy

companies don't need unnecessary tax breaks like the write-offs of certain

geological and geophysical expenditures or the use of taxpayers' money to

subsidize energy companies' research into deepwater drilling."

He talks about Congress taking away $2 billion of these tax

breaks: "Taxpayers don't need to be paying for certain of these expenses on

behalf of the energy companies."

[1110]

The Republican Governor of Alaska and the Republican President of

the United States have taken a very different position from this government, but

this government, from its budget, is very clear on the special interests that

they feel they represent. They have given a big tax break for the banks without

any justification that's apparent on the public record. They continue oil and

gas subsidies in a manner that's contrary to what even Republicans in the United

States are doing.

It's very clear who this government feels they represent. They

feel they represent the big banks, and they feel they represent the big oil and

gas companies. They are less concerned about other members of our population. So

this budget bill, which seeks to implement the budget, implements those measures

that the government sees as its priorities. I suppose the people will judge in

the public debate around this budget what course of action is better for British

Columbia, but certainly this government is clear on the record as to who they

represent.

J. Horgan: It's a pleasure, as always, to rise in debate in

this place. I know that when I rose to debate the budget last week, it got quite

raucous in here. I'm hopeful that my remarks won't elicit the same level of

hysteria on the government side. I'm confident….

Interjections.

[ Page 10179 ]

J. Horgan: Already it starts. I'm 30 seconds in, and the

catcalls are starting. Well, that's good. I'm glad that people are getting their

hearts pumping. The ActNow minister will be pleased to see this much activity in

the Legislature.

Deputy Speaker: I'm sure we'll all follow the decorum of

the House and allow the speaker to have the floor.

J. Horgan: I appreciate that.

I just want to rise on Bill 2 and discuss a few of the items in

that piece of legislation. A number of comments made by the Minister of Finance

this morning caught my attention, and I felt it was important that I rise on

behalf of the constituents of Malahat–Juan de Fuca and say a few words about

those comments.

I also, as a

preamble, want to echo the comments of my colleague

the Finance critic, the member for Surrey-Whalley, about what was not addressed

in this document and what priorities of British Columbians were left on the

table, as it were.

As a member of the Finance Committee I travelled with you, hon.

Chair, around B.C. last fall and the fall before that, listening to British

Columbians give their views on what should be in Budget 2008. We were charged by

the minister to seek input and guidance on climate change, in particular, and

through the course of our hearings — I think we were in 15 towns — our

bipartisan committee was seeking the views of residents of British Columbia.

There was surprisingly — and you'll recall this, hon. Chair — very

little discussion about a carbon tax at the committee. There were certainly

discussions by academics, by economists, by those promoting books, pundits and

others about the importance of a carbon tax, but very little of that discussion

broke out before the Finance Committee. That being said, though, when the

minister tabled her budget some weeks ago, the focal point of that was in fact a

carbon tax.

I have to look then at the entire climate change plan and whether

or not this is exactly the direction we would want to go. Or is it in fact

flawed? I've come to the conclusion that it's flawed, primarily because it's

been a secretive process. It's been a process driven by elites, and it has left

ordinary British Columbians to foot the bill.

The minister today spoke about this being about choices. Well, it

may well be about choices if you live in proximity to the SkyTrain line, if you

have access to public transportation. It may well be about choices in those

circumstances, but the people that I represent in the Cowichan Valley have no

opportunities to access transit. They're forced and compelled to use an

automobile to get to and from their place of employment, to get their children

and others to places that they need to be.

The notion of choices rings a bit hollow in my constituency.

Certainly if you live in Sooke, you can get a bus every hour unless you're

trying to get a bus around midday, and then it becomes a bit of a problem.

[1115]

The Minister of Transportation, with much fanfare, delivered a $14

billion promise to deliver transportation alternatives some time in the distant

future. I would have thought that this would have been an ideal time — with Bill

2, the Budget Measures Implementation Act — to have some substance or some

content behind those lofty promises that were made in January. Nonetheless, they

weren't there.

What else wasn't there? We've heard my colleague the member for

Surrey-Whalley speak about the forestry crisis, and this is a topic of debate in

this Legislature. It's on the pages, at last, of the daily press — the prospect

of 10,000 British Columbians being without work in the forest sector as a result

of a whole host of issues. The Minister of Forests will inventory his

perspective, our able critic from Cariboo North will inventory the real

challenges, and the public will have to decide just what exactly the truth in

these matters is.

That's why we have debates in this place, so that the public can

have a clear understanding of what the alternatives and options are. That's

what's missing from the climate change plans of the member for Vancouver–Point

Grey and his cabinet. No one knows who's been invited to these secret sessions.

No one knows what's going on in these secret sessions, while public policies are

being developed and devised to beset British Columbians with new taxes and new

challenges in their daily lives.

These are the sorts of things I would have thought that the

Premier would have wanted to bring to this Legislature into open dialogue and

perhaps to strike a committee, as was suggested by the Leader of the Opposition

— so this could be a truly non-partisan affair, so that all of us in this place

could address this challenge of our times.

It's all well and good for the members on that side of the House

to say it's a non-partisan issue and then exclude members on this side of the

House from the process. It seems to me that that very act is partisan and puts a

lie to the whole process.

That's certainly what I'm hearing from my constituents. This isn't

about choice for them; they weren't consulted. We went around the province as a

committee, the Finance Committee. We were ably assisted by those in Hansard and

other services of this place, and we didn't hear a lot of talk about a carbon

tax. People weren't lining up to pay more taxes.

Now, the minister has alleged…. The documents we have before us

today, this particular bill, put into place some of the aspects of the

neutrality that we heard about, but my experience in government was that it was

revenue-neutral to the counters of the beans at Treasury Board. It wasn't

necessarily revenue-neutral for the people back home. That's where the public

seems to lose confidence in what we're doing here and in what we do when we

travel around the province.

I remember one town — I think it was Terrace — where we stopped.

There's certainly a crisis in the northwest. You'll recall this, hon. Chair and

other members in the House today who were on that committee. There is a crisis

in the northwest. The forest sector, as I've said, is in a significant downturn.

Employment opportunities

[ Page 10180 ]

in the northwest are limited. Opportunities for the mining sector are

apparent but not yet realized.

The challenges in Terrace are significant. People in the community

came forward to the committee and laid out those challenges, and they're not

reflected in the budget document or the Budget Measures Implementation Act.

Again, what's not there is a bigger problem.

My colleague also spoke about the child poverty issues in British

Columbia. It's not the opposition that are making these assertions; it's the

Premier's own Progress Board and Stats Canada. These are organizations that

certainly are held up in high esteem when the numbers work for the government,

but when the numbers don't work, we get into a debate: "Oh well, those are old

numbers; those are from 2006. Perish the thought — almost a whole 14 months ago.

The data is invalid."

Yet I hear data from the 1990s every 15 minutes from this side of

the House. Stats Canada produces numbers in 2006 that say British Columbia has

the highest child poverty rate in Canada. That's refuted by those on the other

side saying that in 1994, something happened.

Well, here's something that happened in 1994. I think it speaks to

the inclusive nature of what could be a dynamic climate change plan, should we

all be participating in that — unlike the one that we have before us. In 1994

the member for North Vancouver–Seymour said the following, and I'll quote from

Hansard:

"If the Minister of Energy does not make energy policy,

who does? Could it be Dr. Mark Jaccard, the Simon Fraser professor who was the

government's appointee to regulate energy utilities in British Columbia? What

assurance do we have that bill-paying energy customers won't be put adrift in

the sea of his academic theories or his economic notions, which ignore the

real-life opportunities and benefits of energy but disregard the real-life pain

caused by costs imposed in the pursuit of his economic theories?"

[1120]

Now, that's an outstanding argument, and I know the member well remembers

making that case. It was 14 years ago, but it speaks to the very problem we have

today.

I was at a dinner earlier in the week. I don't know if you were

there, hon. Chair. I know some members of the House were. A great number of

government backbenchers were there listening to Dr. Jaccard, who I had the

pleasure of working with — a very, very bright man and very committed to his

issues.

Mr. Jaccard spoke to the B.C. energy conference sponsored by the

B.C. Chamber of Commerce. It was a nice, interesting speech, and there were

raving reviews from the government members, with lots of clapping at various

times throughout the proceeding.

I don't recall the member for North Vancouver–Seymour clapping as

vigorously as some of his colleagues. That's because perhaps he wasn't as

advised as other members of the cabinet and other members of the caucus about

just what was in the budget documents — what led to the creation of this carbon

tax.

I know it's a divisive issue for some members on that side of the

House, those further to the right of the centre lane on the highway perhaps, but

that's for them to work out. I wish the member for North Vancouver–Seymour and

his colleagues well in understanding these academic notions that are having

real-life impacts on people in our communities. I know he supports me on that,

which is probably unique in this case.

The other issue within Bill 2 that I wanted to touch upon was the

amendment which will eliminate the corporate capital tax on financial

institutions. The minister said in her comments that the tax hindered growth in

this sector, and that's an interesting statement.

Again, as we travelled the province, we did hear from the banking

association, and I do believe they did mention that they would prefer to see

lower taxes in that sector. Message heard; message received. Message delivered

here in Bill 2.

The banks get a free pass — $220 million forgone that could have

gone to other activities. It could have gone to social programs, could have gone

to other initiatives, could have gone to address some of the challenges of

climate change — more innovation, accelerating the green building code.

There's a whole host of opportunities for $220 million, not least

of which in my community would be commuter rail on the E&N corridor, a real

green initiative and something that would immediately address greenhouse gas

emissions on southern Vancouver Island ignored by this government — again, an

opportunity, a choice made to give banks $220 million and not to give people in

my constituency transportation alternatives to meet the challenges of climate

change.

Another interesting issue that came to my attention.… I note in

the explanatory notes that there is going to be an extension of PST exemptions

for car share programs and other fuel-efficient vehicles, and I commend the

government for that. I believe those, again, were initiatives that were

initiated in the 1990s, and I'm pleased to see the government carrying forward

with those.

I had an interesting e-mail from a Campbell River resident. I'm

not a car aficionado, but the Citroën 2CV is a 12-horsepower-transported

vehicle. It was registered by this citizen of Campbell River in 1994 as a

collector vehicle, and he's been registering it every year since then. He has no

other vehicle. He rides his bicycle when he's not using his, I assume, extremely

energy efficient 12-horsepower Citroën vehicle.

He went to ICBC, says his e-mail, to register his car again, as he

had done last year and the year before and the year before, and they said that

he couldn't do it. He needed another vehicle for general transportation

purposes. I thought that was odd, and I'm looking forward to the committee stage

debate when we get to the government's drive to encourage citizens to use more

fuel-efficient vehicles.

I'm going to ask the minister, when I get the opportunity in

committee stage, why it would be that this individual has to own two vehicles to

register the one that he wants to drive. That seems passing strange to me, and

I'll certainly be taking it up with the minister responsible.

Here's an example of an individual in our community wanting to

participate, wanting to assist in the global

[ Page 10181 ]

challenge of reducing our greenhouse gas emissions. Through a regulation that

makes little or no sense to you or me, he is denied that opportunity and in fact

is told that in order to register the fuel-efficient vehicle, he has to have

another vehicle for general transportation use. It seems passing strange to me.

[1125]

The other issue that caught my attention is again from the

minister's comments this morning with reference to

section 81 of Bill 2, and

we'll get into this, of course, in greater detail at committee stage.

The minister talked about the park enhancement fund and how this

will allow the minister to set fees and merchandise plans for B.C.'s parks and

protected areas. Now, that just kind of makes me shiver — the prospect of

corporatizing and marketing in a revenue-generating way the natural beauty of

British Columbia. I mean, this is a supernatural place; it's a beautiful place.

My son said to me: "Don't you think 'The best place on earth' is a

bit boastful, dad? Don't you think that's a little bit over the top?" Why not a

statement of fact — it's a beautiful place, it's a supernatural place, or it's a

wondrous place? Best place on earth — that's boastful. I taught him better than

that. I'm very pleased he said to me that he thought that was wrong.

Wait until I tell him that through Bill 2, the Budget Measures

Implementation Act, we're going to be able to market that all around the world.

We're going to put it on little teddy bears' bellies and say, "Come to our park

here," and we're going to let people sell British Columbia one little beautiful

piece at a time. Makes me shiver.

I'm certainly looking forward to my colleague from

Vancouver-Hastings taking up this issue directly with the Minister of

Environment when we get to sections 81 and 82 of the bill. I know other members

are equally concerned about these issues.

As well, I'd like to touch on the arts endowment fund, the $150

million fund with the opportunity…. The minister said it twice now, both on the

introduction of the budget and again today, that with respect to the endowment,

the Arts Council will advise how that money will be allocated. That's

interesting, because that's certainly not what we heard on the road.

Hon. Speaker, you'll remember very well the arts councils in

various communities lined up to give us their views. We didn't have any song

this year. Last year we had some song and some interpretive dance. This year we

just had the straight goods. There's not enough money for arts in British

Columbia. We rank very, very low.

The economic benefits of the arts are well known by all members of

this House. I was pleased to see the minister allocate moneys for an endowment,

but I'm concerned about what "advise" means. Again, these are issues that we'll

probe more deeply in committee stage of this bill.

It caused me to pause, and I spoke to a couple of my friends in

the arts community. They were overjoyed at the quantum, the size, the number. It

looked very impressive. But again, over time, where will this money be going?

Will it be more money down the sinkhole of Vancouver?

Now, God bless Vancouver. I don't want to discourage any members,

particularly my good friend from Fairview, about Vancouver, but for those of us

on the periphery — and I see many members here from outside of Metro Vancouver —

it seems to be a big hole that sucks in lots of money.

The arts are as important in Kitimat as they are in Kitsilano. I

know my colleague from Burrard agrees with that. We're going to want to ensure

that the interest from this endowment is distributed equitably right across the

province. Again, at committee stage, I'm certain that the minister will have

answers to those questions, and I look forward to exchanging ideas with her at

that time.

We go into the

section with respect to removing the debt cap on

B.C. Hydro. I'm very, very interested to hear what the Minister of Energy has to

say about that when we get to committee stage. I'm certain he'll bluster about

the 1990s and how absolutely awful it was.

I think it rained every day in the 1990s, didn't it? Every single

day — not a day passed without torrents of rain coming down. The gloom and doom

in British Columbia was palpable. We could all feel it. In fact, those on that

side of the House are continuing to live it day after day after day. It's

unfortunate.

I said the other day — I think this is probably what got everybody

riled up — that people on that side of the House are either living in the 1990s

or the 2020s, where the rest of us are living in 2008 or feeding our families.

We're trying to make ends meet. Costs are going up; salaries are not — except in

this place, of course. Across British Columbia public sector wages are below

inflation. Private sector wages, outside of the residential construction

industry, are down. Jobs in the forest industry are gone.

So it's all well and good to sit here and be Pollyanna about the

great state of affairs in the province of British Columbia — the best place on

earth. Boast, boast, boast. But the reality for many British Columbians,

certainly in my constituency, is what we hear in this place has no correlation

to their reality — none whatsoever.

[1130]

So when we talk about revenue-neutral…. I know very well my good

old friends at Treasury Board are saying: "It all balances out. We can take a

little bit from here and put a little bit from there." Jimmy Pattison is going

to get a hundred bucks. Good for Jimmy Pattison. That's $440 million in the most

unprogressive way possible.

Markus Naslund's going to get a hundred bucks. Matt Cooke now

lives in Washington. He was traded by the Canucks, but on December 31, a hundred

bucks. Give him a hundred bucks.

N. Macdonald: He got a goal last night.

J. Horgan: He got a goal last night for the Capitals. Well,

there you go. There's his bonus from the Minister of Finance — $100 for Matt

Cooke, who just got out of town. It doesn't make a lot of sense to me.

What's Jimmy Pattison going to do with his hundred bucks?

Fluorescent bulbs, I think. He'll probably get

[ Page 10182 ]

some fluorescent bulbs or buy some groceries at Save-On Foods. Who knows? But

good on Mr. Pattison. He's an entrepreneur of great renown, a great British

Columbian, and I'm sure he's absolutely delighted to start his drive for

greenness by getting a hundred greenbacks from the Minister of Finance.

Again, I don't want to belittle Markus Naslund, because I think

the world of Markus Naslund, and I think that, for a 25-goal scorer, $6 million

is just fine. He doesn't need another hundred bucks from the Minister of

Finance.

Why would we give $440 million back to British Columbians that

don't necessarily need it? I am all in favour of giving a hundred bucks to those

who need it — absolutely, without doubt. But I'm confident that everyone in this

place could do without the hundred bucks. There are 79 right there — 79 cheques

that don't have to go into Canada Post's system, don't have to get into the back

of the truck, don't have to drive up the hill, don't have to create greenhouse

gases to deliver people a hundred bucks. That makes sense to me. Let's not give

it to those who don't need it. All in favour?

I think there's a friendly amendment right there. It'll get

support from Burrard and from my friend from Tynehead, and I know my friend from

North Vancouver–Seymour will not want $100 going to someone who doesn't need it,

especially if they've got abstract academic notions about the economy, as Dr.

Jaccard does. Dr. Jaccard's going to get a hundred bucks. Why not?

Anyway, I know that people have enjoyed my time here. I certainly

have. I'm going to take my place, and I look forward very much to committee

stage of Bill 2 so that I can ask these very probing questions to the Minister

of Finance. I'm sure she's going to have all the answers at her fingertips, and

she'll be able to explain to me why it is that Matt Cooke, now resident in

Washington, D.C., gets a hundred bucks from the taxpayers of British Columbia.

M. Karagianis: In standing today to speak to Bill 2, I know

that a number of my colleagues have covered several topics here. But I do have a

couple of concerns that I think need to be considered and certainly some issues

that I'll be raising at the committee stage on this. A number of things being

implemented here are things that I have been calling for in the House, and I'll

speak to those shortly. Some of those are very supportable.

I do have a great deal of concern here with the continued

trivialization by the government of climate change. Again, in implementing a

number of the things within this bill, I think it highlights the fact that the

government seems to have really kind of missed the big picture in the climate

change issue entirely.

The continued glorification of this climate action dividend says

to me that, in fact, government is treating this in such a superficial manner

and is really missing the larger opportunity here to make British Columbia a

leader in climate change action. It's not about dividends. It's not about trying

to give people $100 to offset a gas tax that's been implemented. In fact, the

missing opportunity here is in a much larger investment and a serious initiative

by government to get people to change, to motivate people to actually change

their behaviours.

The gas tax being implemented does not do that. The climate change

dividend being implemented here does not do that. It does not change people's

behaviour in a significant way.

I think that the government has missed such a huge opportunity

here to invest in real alternatives for the future. I know that the citizens in

my community, my constituents, are very concerned, and they see through this.

They see that a gas tax is not going to significantly change their behaviour at

a time when what we really need is a number of alternatives to be developed.

[1135]

Now, there are a few little things scattered throughout the

implementation bill here that offer, again, little tiny crumbs off the table of

the bigger issue here. But we have such misplaced priorities in this province by

this government in giving a corporate capital tax of $220 million to banks,

without actually seeing a significant investment in all kinds of alternatives

for people to make significant choices and lifestyle changes.

That's where we're really missing the boat. We have missed that

larger topic. In fact, I'm surprised that the environmental organizations here

in this province have been so easily hoodwinked and have not been pressuring for

more significant application of a real climate change action out of this

government.

That would include much more dramatic investment in alternatives —

in alternative transportation, in alternative technologies that we could be

developing and showcasing here in British Columbia. We could show real world

leadership by making this province a real centre for environmental and green

technology development. I think we're missing a huge opportunity here in that.

I will say that there are a few things within this bill here that

I do find supportable. The issue of the Home Owner Grant Act. This was an issue

that I raised. I will say a thanks to the Minister of Finance for listening to

the issue that I brought forward last year with regard to seniors on fixed

incomes who, through no fault of their own, found their properties assessed in

the million-dollar range. Yet on a fixed income they found themselves unable to

meet the threshold for a homeowner's grant.

The Minister of Finance was very gracious in seeing that as a real

problem for seniors and in making those adjustments. My constituents have been

very thankful for that. To continue to recognize that, in some cases, issues

around real estate and the increase in real estate values have put many seniors

at a disadvantage, I think, is very supportable.

Certainly, the move toward alternative fuel investments is

something that everyone in this House knows I've been calling for since the day

I was elected — looking at alternative fuels and trying to find a way to get

production and promotion here of those alternative fuel uses into British

Columbia.

I really will watch with interest to see how this is implemented —

in a sustainable manner, of course — so that we don't involve ourselves in the

larger controversy

[ Page 10183 ]

around non-sustainable alternative fuels that's happening in the U.S. But I'm

certainly very pro–alternative fuel use here, and I see it as a bridging

technology. For that, I'm looking forward to seeing exactly how that's

implemented. I hope it's a real investment that gives us a real return in the

end and helps offset our dependency on U.S. products like U.S. biodiesel.

Also, the PST reduction on electric motorcycles. This is a motion

I had on the order paper since the day I was elected here as well. I put that on

the order paper very shortly after coming into this House. I'm glad to see that

a couple of years later we have recognized that alternative transportation

options like scooters and electric motorcycles actually are worth investing in

by the government. So from that part of the bill I'm quite happy to see that

implemented.

Again, I would have to say that the bill continues to speak to

government's misplaced priorities in a whole number of ways — not just on the

climate change portfolio, but certainly on the issue that faces most of my

constituents, which is affordability. For those families who are living with the

responsibility of caring for seniors and who have seen the erosion of home care

and the concerns around the consistency and quality of long-term care, those are

real concerns that my community feels every day.

I have to continue raising those issues here, because those are

things that concern my constituents the most — making sure that, while they're

caring for their parents, there are home care alternatives and that there is not

a continued erosion of care for seniors that causes a lot of angst for seniors.

In addition to that, my constituents are also grappling with

having to work, having to hold jobs by both income earners in the house.

Therefore, child care continues to be a huge concern on the minds of my

constituents. The fact that we have misplaced our priorities on dealing with

child care here in this province is greatly disappointing to me again in this

budget in 2008.

Child poverty. I know that previous members have mentioned this as

well. We do feel this in my community because the demographic in my community

speaks very much to that. A lot of the child poverty is from the working poor

that live in many parts of my constituency.

[1140]

Again, that missed opportunity to put funding and real initiatives

in place to deal with this now and into the future means that this bill is not

adequately addressing the needs of my constituents.

At the end of the day affordability for families continues to be a

huge challenge that I know will dog us into the future. Without a government

that sees that as a top priority — making it affordable for average working

families in British Columbia — we will continue to miss the boat. We will

continue to miss the opportunities, and we will continue to have misplaced

priorities.

That's what I see coming from this. Much of what Bill 2 implements

here are things that miss the climate change action plan by a mile, don't speak

to affordability for my community and, at the end of the day, provide such a

superficial amount of real incentives for families that, in fact, often only the

very affluent families can take advantage of. I don't think that serves my

constituency well.

I will be asking some questions on the implementation of the

issues that I've spoken of here and the parts of the bill that I do want to know

more about, like alternative fuels. I'll be asking those questions in committee

stage. I feel that it's imperative for me to stand up here and continue to call

for the things from this government that my constituents need.

C. Trevena: Like my colleagues, I'd like to take on some of

the issues that they have been raising about Bill 2, the Budget Measures

Implementation Act.

One of the issues that my colleague from Esquimalt-Metchosin was

talking about was the fact that there are fewer services for very vulnerable

people in her constituency. In fact, right across B.C. we are seeing…. We quote

regularly the figure of one in four children in poverty, which is an outrageous

figure. We know that there is no child care. We know that we have many, many

people living in very difficult circumstances.

One of the problems that I find with the Budget Measures

Implementation Act is the concept of revenue neutrality. Climate change is

obviously important, and having a carbon tax is very, very important. I

mentioned in my response to the budget speech that I think that it's a brave

step to start with a carbon tax. We have to start putting a price on the use of

our fossil fuels.

Sadly, what has happened is that this

interpretation of revenue

neutrality through carbon tax is cutting people's personal income tax. Now,

that's not revenue neutrality. That's an agenda for a political philosophy,

cutting the income tax so that you have fewer services so people then have the

"choice" to shop around and buy their services. Unfortunately, those who have

more money get a better benefit by the tax cuts that come through with this

so-called revenue neutrality.

This is what is really very troubling. We are seeing cuts in

services right across the board. We're seeing a lack of investment in the areas

that we really need to see it, and we're having a government that boasts,

through a carbon tax budget, through an allegedly green budget, that it's

cutting people's personal income tax.

I think, really, that the government through this budget, through

setting up the concept of revenue neutrality in this way, through saying that

what it means is we cut your income tax and you get more money if you have more

money, is very…. It's a con job, frankly. It's saying: "Well, it's the shell

game. We'll take here, and we'll give here."

We have a carbon tax that people have been calling for. We have

seen people wanting to have a price on carbon, on our use of fossil fuels, but

this is not the way to go about it. If you're going to be charging for our use

of carbon, as we have to as we go into the coming years and the coming decades,

we have to act responsibly. One of the ways we act responsibly is through

financial measures, which is through taxation, which is through having a carbon

tax.

[Mr. Speaker in the chair.]

[ Page 10184 ]

If you want to have it truly revenue-neutral, you don't just sort

of give people 100 bucks here and there and say: "Okay, if you earn a lot of

money, you're going to get a pretty handy tax cut." You invest it. You invest

that money. That's what real revenue neutrality means. It means that you shift

the taxes. So you're taxing one area, but you're investing it elsewhere.

[1145]

If this government really had the courage of its budget, if it

really had the courage to say that we are doing a carbon tax that will have a

huge impact, that will have an impact on the future of B.C. — and we are all

hoping that a carbon tax will eventually have that sort of impact — you don't do

it through a shell game and say: "Well, yeah, we've got a carbon tax, but your

fuel costs are going to go up. So here's 100 bucks, if you were here before

December, and you're going to get an income tax cut."

You invest. You invest in services. You invest in seriously

allowing people to retrofit. You invest in alternative energies. You invest in

the ways that you can deal with the issue that all of us are trying to tackle,

that all of us are trying to deal with, which is climate change. It is a matter

of investment. It's not a matter of saying: "Here, have a tax cut."

That, I think, is what is so sad about this and so unfortunate. We

had the opportunity — a huge opportunity — here to say: "We are going to have

the first province that's going to introduce a carbon tax, and we're going to

invest it."

This side of the House has been quoting the contradictions for the

last couple of weeks now — the subsidies to the oil and gas industry, the cuts

to services, the fact that we are not seeing a real investment in our

communities in the way that we need them and that would seriously address

climate change.

If we were looking, instead, at revenue neutrality that shifted

from what literally paid Peter to take from Paul and actually invested — looked

at tax shifting, looked at changes in the way our taxation system worked…. That

would be a brave budget. That would be a budget that really addressed the whole

issue of carbon tax and really took us forward.

Sadly, this isn't allowing us to do that. It is allowing us to

simply…. If we've got money, we've got more to spend. It is a wasted

opportunity. It is a real wasted opportunity.

I think that we have all seen, in the different areas, the ways

that we could see money invested. But it's not there. The money isn't going to

be going back in. We're seeing that it's going just into people's pockets. We're

seeing the $100 rebate. We're seeing an income tax cut.

If this government wants to show courage, if it wants to show real

leadership on this, it imposes a real carbon tax that really prices the cost of

our footprint on our environment. Then it shifts the tax and allows for a real

investment in retrofitting, in alternative energy, in issues that are going to

change the way that we all live and work in the coming years and decades.

G. Robertson: I just wanted to raise a couple of concerns I

had regarding Bill 2, specifically addressing the issue of the port tax cap.

The port tax cap has already cost the city of Vancouver about

$800,000 since it was launched in the ports competitiveness initiative in 2004,

which unilaterally capped municipal taxes that port businesses pay. Obviously,

this is a big concern for the city of Vancouver — again, downloaded costs on the

municipality — as with other municipalities on the coast.

It is confounding that this government, in a time when city

resources in particular are so stretched and municipal governments are feeling

the pinch as more and more gets downloaded by federal and provincial

governments, is extending this particular port tax cap in Bill 2. It's a

difficult pill for the city of Vancouver to swallow and only adds to the fiscal

imbalance that affects the municipality.

So I wanted to start by registering my real concern about the

extension of this port tax cap, who it really benefits, and the fact that,

again, the province is absolving itself of fiscal responsibilities when

municipalities have a very difficult time managing through a shortage of

resources.

[1150]

I also wanted to raise the issue here related to the arts. I want,

first of all, to commend the government on the significant level of funding put

forward into B.C. arts to benefit the arts and culture communities around the

province. I have concerns about the way this is being structured and the way the

provincial government will continue to dictate, essentially, where these funds

go within the arts community, rather than empowering the B.C. Arts Council,

which of course is best suited to make those decisions to benefit arts and

culture in the province.

Commending the resources being allocated, as they should have

been…. B.C. has been trailing way behind — really, an abysmal record as a

province in this country supporting the arts. It's good to see some money

finally flowing into a much-needed arts and culture community. But I will not

hesitate in raising concerns about how that's structured.

Again, overall concern, as I expressed yesterday in my response to

the budget, about the lack of programs…. It is, of course, important and worth

recognizing that there is a billion dollars, give or take, with the general

purpose of addressing climate change needs.

However, it's dwarfed by the tax cuts related to the carbon tax —

or the fuel tax, more accurately. There is a dearth of meaningful incentives,

programs and enabling budgetary measures to ensure that our emissions as a

province meet the targets that have been legislated, and in fact exceed them.

I will raise those concerns and more in committee stage of Bill 2.

With that, I'll close my remarks.

Mr. Speaker: Seeing no further speakers, the Minister of

Finance closes debate.

Hon. C. Taylor: I move second reading of Bill 2, the Budget

Measures Implementation Act, 2008.

[1155]

Second reading of Bill 2 approved on the following division:

[ Page 10185 ]

YEAS — 43

Falcon

Reid

Coell

Ilich

Chong

Christensen

Les

Richmond

Bell

van Dongen

Roddick

Hayer

Lee

Jarvis

Nuraney

Whittred

Horning

Cantelon

Thorpe

Hagen

Oppal

de Jong

Campbell

Taylor

Bond

Hansen

Abbott

Penner

Neufeld

Coleman

Hogg

Sultan

Bennett

Lekstrom

Mayencourt

Polak

Hawes

Yap

Bloy

MacKay

Black

McIntyre

Rustad

NAYS — 32

Brar

S. Simpson

Fleming

Farnworth

James

Kwan

Ralston

B. Simpson

Cubberley

Hammell

Coons

Thorne

Simons

Puchmayr

Gentner

Routley

Fraser

Horgan

Lali

Dix

Trevena

Robertson

Karagianis

Evans

Krog

Austin

Chudnovsky

Chouhan

Wyse

Sather

Macdonald

Conroy

Hon. C. Taylor: I move that Bill 2 be referred to the

Committee of the Whole House for consideration at the next sitting of the House

after today.

Bill 2, Budget Measures Implementation Act, 2008, 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. M. de Jong moved adjournment of the House.

Motion approved.

Mr. Speaker: This House stands adjourned until 1:30 this

afternoon.

The House adjourned at 11:59 a.m.

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