1981 Legislative Session: 3rd Session, 32nd Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

FRIDAY, MAY 22, 1981

Morning Sitting

[ Page

5727 ]

CONTENTS

Routine Proceedings

Miscellaneous Statutes Amendment Act, No. I (Bill 24). Hon. Mr. Williams.

Introduction and first reading –– 5729

Committee of Supply: Ministry of Transportation and Highways estimates. (Hon. Mr.

Fraser)

On vote 189: minister's office –– 5729

Mr. Lockstead

Mr. Passarell

Social Service tax Amendment Act, 1981 (Bill 12). Second reading.

Mr. Stupich –– 5734

Mr. Cocke –– 5735

Mr. Hall _ –– 5737

Hon. Mr. Curtis –– 5738

Division on second reading –– 5739

Finance Statutes Amendment Act, 1981 (Bill 13). Committee stage. (Hon. Mr. Curtis)

section 33 –– 5739

Mr. Howard

Reading and Receiving Petitions

Establishing the Windy Bay--Dodge Point ecological reserve.

Clerk-Assistant –– 5742

The House met at 10 a.m.

Prayers.

HON. MR. FRASER:

Mr. Speaker, I would like to advise the Legislature that yesterday,

during the discussion of my estimates in committee, unknowingly I used

a phrase that I find completely unsuitable. I wish to assure everyone —

and I believe all members well know — that it was certainly not my

intention to be offensive or disrespectful to anyone. Nevertheless, it

was most unfortunate that the phrase was used. I wish to apologize most

sincerely and unconditionally for it.

MR. SPEAKER:

Hon. members, the Chair has no knowledge. Apparently what the minister

is speaking of must have happened in committee. Perhaps the best place

to have made the correction would have been in committee. With leave of

the House, I'm sure it's acceptable here.

MR. BARNES: Mr. Speaker, I want to make a point of personal privilege.

MR. SPEAKER: I don't know if that exists, but please proceed.

MR. BARNES:

Whatever the procedure would be, I would like to make some comments in

reference to the same remarks that were made by the Minister of

Transportation and Highways, if that's permitted.

MR. SPEAKER: We'll accept the minister's statement as a statement and then we will allow a response.

MR. BARNES:

First of all, I would like to accept the minister's apology on behalf

of the members on this side of the House. Obviously the minister is a

person held in high regard by all members in the House. He has had a

long, successful career in public service. I can appreciate the

sincerity with which he made those remarks regarding a comment he made

yesterday in Committee of Supply. However, he did not state what those

remarks were. For the edification of those who are here today and the

people in the gallery — in order to put things into perspective — I

would like to refer to those remarks that were used. I would further

like to make some comments with respect to how these things can happen

inadvertently. This is why all of us have to be constantly on guard

with respect to ensuring that we are not taking leave of our

responsibilities when we are in public service and carrying on our

duties in official capacities.

The specific remark that the minister was referring to has to do with his estimates

yesterday in debating the returns to this province from gas tax revenues and

use of the highways and the problems that the province is having with Ottawa

in terms of a fair return for taxes that had been collected from the use of

the roads in this province. The minister referred to Ottawa as having questionable

principles in this matter, indicating that he does appreciate the importance

of principles. He went on to say, Mr. Speaker, that the "nigger in the

woodpile is Ottawa," which I'm sure he meant as an expression of condemnation

of their attitude with respect to British Columbia. In that respect he was indicating

that Ottawa has become the nigger and the troublemaker. In other words, the

people of Canada, who are Ottawa, are in disrespect in the eyes of that minister.

Although

he did say that inadvertently, there can be little question in my mind

that subconsciously it is an attitude that even that minister has been

unsuccessful in avoiding. This is why, Mr. Speaker, we on this side of

the House have attempted time and time again to raise questions of

human rights, human dignity and justice to ensure that our Human Rights

Code is effective in dealing with problems of discrimination and racist

attitudes and to ensure that our educational system reflects our desire

to ensure that people are not going to unconsciously make expressions

that they would not make had they thought about it. That should be part

of the educational system.

As well, Mr. Speaker, we have

even attempted to get the Attorney-General (Hon. Mr. Williams) to

exercise his authority under the Criminal Code of Canada with respect

to a racist organization called the Ku Klux Klan in this province.

Again we've been denied opportunity to express, on behalf of the people

of British Columbia, the indignation they have experienced as a result

of the indifference on the part of that government in dealing with

these matters.

The question is one that cannot be taken

lightly, notwithstanding the fact that the minister apologized to this

House — and I accept his apology. But I think that the Legislature is

the final place of authority in this province and the ultimate place to

which people took for redress and support of principles that we all

live by and the traditions that we cherish and regard as inalienable as

far as individuals are concerned. To have the minister, even

inadvertently, have such a slip indicates to me that we have gone too

far in expressing our personal views and are being too comfortable and

cosy in this chamber at a time of a crisis in housing and people being

displaced because of indifference on the part of government fiscal

policies and different programs that are coming down without reference

to the public. I suggest we could all do with a little refresher course

on what the concept of parliamentary democracy is all about and what

duties those officials who are in a position of authority have to be

familiar with and understand.

This is not a condemnation of

the minister, it's really a condemnation of all of us. I'm sure that we

have allowed ourselves to relax too much and not get on with the

serious responsibilities we have. Sometimes it takes an unfortunate

situation such as happened yesterday to bring us to our senses. I do

not believe this is an isolated incident. I think it occurs all the

time, and to have had it happen in this Legislature absolutely and

undeniably exemplifies my point. If it happens here, where people live

or die on their political faux pas, and where individuals survive by

their successes with respect to the electorate, then I think that

clearly illustrates that we have begun to lose our senses, and we're

showing a great deal of disrespect for this chamber. I don't believe

that it can be left unaddressed. I personally would like to have the

government indicate that its rhetorical comments are more than that,

and that it is prepared to take the initiatives that it should take

with respect to showing the public that it really is not inclined

toward racism or supporting racism, and to take affirmative action

particularly to undermine any initiatives that are happening on the

part of any groups that would deny any Canadian or British Columbian

their rights on the law.

Perhaps the minister should sponsor some of these initiatives himself. We've been trying to get a human rights report

[ Page 5728 ]

that

was done by the Minister of Labour (Hon. Mr. Heinrich) and submitted by

Mr. John McAlpine. Why hasn't that been tabled? That's an example, Mr.

Speaker.

MR. SPEAKER: Order, please, hon. member. In

a reply to a statement it is not proper to enter into a debate.

Therefore I would like to have the hon. member keep his remarks within

the bounds of the statement made by the minister.

MR. BARNES:

Thank you, Mr. Speaker. I appreciate your advice. I would suggest to

you that everything that I'm saying is directly relevant to what the

minister said yesterday, notwithstanding the fact that he did

apologize. What I'm suggesting to the minister is that if he is sincere

about what he said.... He said that he is apologizing, and he wants the

chamber to believe that he means what he said. I would suggest that he

implore his colleague the Minister of Labour to table the document that

was commissioned to Mr. John McAlpine with respect to the effectiveness

of the Human Rights Code against racism in this province.

MR. SPEAKER: Order, please.

MR. BARNES: To me that is not out of order. It certainly cannot be out of order.

MR. SPEAKER:

The hon. member may feel that his remarks would be in order, and they

certainly would be in the proper order of business in the House, but

not at this particular time. I trust the hon. member would soon reach

the conclusion of his remarks.

MR. BARNES: Thank you,

Mr. Speaker. I would just like to advise the Speaker that it is rather

unusual, sir, that a Minister of Transportation and Highways would be

referring to Ottawa as "a nigger in the woodpile" when he's talking

about highways. If that is in order, I can see no way in which I can be

out of order, no matter what I say with respect to that issue.

MR. SPEAKER: Order, please.

MR. BARNES:

So I'm saying that it has happened. I did not create the situation. The

minister has apologized, but that does not mean that he has the right

to stymie anyone who wishes to make a comment with respect to what he

said. I think that it is appropriate. I don't believe that any member

in this House should desire to have this matter cut short. In fact, I

would hope that other members would stand up and express their views

with regard to this matter. It is probably one of the most important

things that's happening today, sir, in this chamber.

MR. SPEAKER: It would not be in order at this time, hon. member.

MR. BARNES: I would implore the Minister of Highways to contact the Minister of Labour and ask him to table that document...

MR. SPEAKER: Order, please.

MR. BARNES: ...that was used to cut off...

MR. SPEAKER: Order, please. I must now ask the member....

MR. BARNES: ...protest by the people of British Columbia against racist activity.

MR. SPEAKER: Order, please.

MR. BARNES:

This is is what it's all about. I am offended by what that minister

said, and I think that other people in this province are — black, white

and all other colours. I don't believe, sir, that I should be ruled out

of order on the question of asking him to put up or shut up.

MR. SPEAKER: Order, please.

MR. BARNES: I'm not just interested in his remarks. I would like to know what action he intends to take.

MR. SPEAKER:

Order, please, hon. member. I think that the hon. member knows full

well the rules of the House, and that there would be a vehicle by which

the debate on which the member is now entering could be in order.

However — if I could speak to the member without being interrupted —

the member knows full well that in response to a statement it is not in

order to embark upon a full-fledged debate upon any subject, merely to

respond to the statement. I think that all members are aware that the

debate upon which the second member for Vancouver Centre has embarked

has now gone far beyond the bounds of the statement which the minister

himself made. I trust that the hon. member would soon conclude his

remarks.

MR. BARNES: Mr. Speaker, I shall do that. I

appreciate your advice. I would simply ask how one determines the scope

and consequences of the remarks which were made yesterday by the

minister. It's affected me in a number of ways, and I'm sure there are

other people who are affected. I would just like to use the opportunity

to explain to the House that it doesn't necessarily mean that one has

to condemn another person for such remarks. It simply reveals the fact

that the remarks exist. Whether they are subconscious or whatever, they

did happen and they do have a negative effect upon other people who are

the recipients of the remarks.

Saying "I'm sorry" when

you've run over someone with a bulldozer is little consolation. Those

remarks go down in the permanent records of this parliament and they

will be circulated all over the province, perhaps all over the world.

They're there for people to read for ever and a day. I think it should

be clear that this House does not condone such remarks. Not only do we

not condone them, but we're going to go a step further and indicate

that we're prepared to ensure they are not made again, inadvertently or

otherwise, by members of this House. We will seek to raise the level of

consciousness and responsibility on the part of public officials, and

do something about the school system — do something about spending

money to enlighten people about their responsibilities as citizens of

the province.

That's what I'm suggesting that side of the

House do instead of holding gala events, as they will be doing next

week with B.C. Place and the stadium, while there's no housing for the

people....

[Mr. Speaker rose.]

[ Page

5729 ]

MR. SPEAKER: Order, please, hon. member. I have reminded the

hon. member on at least two occasions that his remarks have now gone

beyond the bounds of orderly response to the statement made. I would

ask now that the hon. member soon conclude his remarks or else we will

have to ask him to resume his seat.

[Mr. Speaker resumed his seat.]

MR. BARNES:

Mr. Speaker, I am concluding my remarks by simply asking the minister

if, when he takes his place in the debate which will follow, he will

indicate to the House his intentions with respect to my suggestions

concerning the Human Rights Code and his colleague the Minister of

Labour, and the Attorney-General and the Criminal Code of Canada, with

respect to prosecuting hate-mongers, We'll leave it at that, Mr.

Speaker, and see what the minister and his colleagues do from here on

in.

HON. MR. GARDOM: Mr. Speaker, I would like to refer this assembly to

a gentleman with whom I've had the honour and privilege of close association

since 1966, a gentleman who has served and continues to excellently serve the

people of this province, and a gentleman whose horoscope today says he is versatile

and that members of the opposite sex find him challenging and attractive. I

ask all hon. members to join with me in wishing our colleague and good friend

the Attorney-General (Hon. Mr. Williams) a very happy birthday.

MR. SPEAKER:

I would remind hon. members that in making introductions they should

refrain from making statements which could be seen to be argumentative.

MR. GABELMANN: Mr. Speaker, I'd like the House to join with me in welcoming a group of students here today from Zeballos.

HON. MR. ROGERS:

Mr. Speaker, I'd like the House to join me in welcoming Craig and

Michael Duggan, two students from North Vancouver who are visiting the

Legislature for the first time. They are accompanied by their mother,

who is also my executive assistant.

Introduction of Bills

MISCELLANEOUS STATUTES

AMENDMENT ACT, NO. I

Hon. Mr. Williams presented a message from His Honour the Lieutenant-Governor:

a bill intituled Miscellaneous Statutes Amendment Act, 1981.

Bill

24 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

The House in Committee of Supply; Mr. Davidson in the chair.

ESTIMATES: MINISTRY OF

TRANSPORTATION AND HIGHWAYS

(continued)

On vote 189: minister's office, $213,962.

MR. LOCKSTEAD:

I have one or two very short questions for the minister this morning.

Mr. Minister, I hope you can answer one question for me right off the

top regarding your announced intention to increase ferry fares

throughout the system in the B, C. Ferry Corporation and on some

Highways-operated ferries as well. Before you answer that question, I

do want to remind you that on the coast of this province those ferries

are our highway links. We had people living in the metropolitan areas

and people who don't have to utilize the system standing in this

Legislature yesterday talking about user-pay, saying that we shouldn't

subsidize and on and on. On much of the coast of British Columbia we

have no choice. We need that transportation system. As much as it needs

modernizing, upgrading and all these things, the fact is that we

totally rely on that system. I just wanted that on record.

You

might look at it another way, Mr. Chairman. What we could be saying is

that if we're going to have tolls on our highways on the coast of

British Columbia, then why not have tolls into Prince George, Kamloops

or Kelowna? Of course, we couldn't do that, could we? I'm suggesting to

you that these vessels are our highways. I wonder if the minister would

be good enough to tell this committee right now when and by how much he

intends to increase those fares.

HON. MR. FRASER: The

member for Mackenzie has asked about ferry fares. I think what you

really requested was the policy of increases if and when required. I'd

just like to say that yes, there is a new policy which was announced

last year. Following what happened, we had two increases last year.

Following the second increase it was announced that we would only

increase annually from then on, and only if required, of course. That

is the policy of the B.C. Ferry Corporation and it will be carried out

in relation to its 1981-82 operations.

I'm not so sure that

a fare increase is required. I emphasize that. The way it looks now, it

certainly will be required for fuel costs alone, which have just

skyrocketed. They do burn a lot of fuel. It will not be increased until

after the busy season that we're just entering. I don't want to get

specific, but I would suggest that if and when it is required, the

amount would be decided on before October 1 in each year. It wouldn't

confuse the travelling public of British Columbia or affect them at the

high-volume time. It appears to me that we will unfortunately have an

increase again this year because of fuel prices alone. It has nothing

to do with any other operational costs. I don't like to be pessimistic,

but I think we have to live with that for some time to come. I'm

referring to Canada trying to get up to world oil prices and relieve

the federal treasury, so the consumer pays and not just the treasury of

Ottawa. It appears that we are maybe about halfway on the road to that.

We're looking at doubling the existing fuel costs that we all use,

wherever we use them — whether in an automobile, a ferry or whatever

type of transportation — for the next two to three years in moving up

closer to world oil prices.

As far as the government is

concerned, Mr. Chairman, this year in the estimate books we're

budgeting for $63 million for a subsidy for B.C. Ferries from general

revenue of the province. This is after all fares have been collected.

As a member of government I feel that they're fairly generous in this.

The amount of the subsidy advances every year. It is based on the

principle that the cost of maintaining or building a mile of highway is

incorporated per mile into the subsidy; it

[ Page 5730 ]

also based on the mileage that the ferries travel. We don't have an ad

hoc situation; we have a fairly definite principle and policy to

follow. As an example, if we add mileage to the routes that B.C.

Ferries run, which we have been doing, this automatically triggers the

subsidy to go up. Alternately, if we reduce routes — we haven't done

too many — it would automatically trigger in that way and reduce the

subsidy. In turn, it would reduce the operating costs if they were to

cut back on routes.

While I'm on the subject, there's one

that may be in the offing. The board of directors have made no

decisions, but as you know in the summer months our base is Bella

Bella–Prince Rupert. In the winter months the vessel runs from

Tsawwassen to Port Hardy and from Bella Bella to Prince Rupert. We're

looking at whether it is really necessary to run from Tsawwassen in the

winter months. We're looking at the other option of having it based

year-round at Port Hardy. There are pros and cons on that. If we

decided to run it year-round from Port Hardy and not in the winter

months from Tsawwassen, there would be an example, as I see it, of a

reduction in subsidy of whatever the mileage is from Tsawwassen to Port

Hardy. I might say that we're having a lot of observations made to us,

particularly by the people in North Island, to have exactly this

happen. In other words, they want the economy that the ferry system

brings to that community of Port Hardy on a 12-month basis instead of

the four to five months during the summer. So I say, no decisions have

been made.

The other observation I have is that I really

think that when the run from Tsawwassen north was instituted it was

done for the purpose of drawing from a larger customer area. It appears

now, with the change of times, that this mightn't be necessary, and

that they would get all the business they could handle 12 months a year

running out of Port Hardy. We're looking at those options now.

Regarding

B.C. Highways ferries, those policies will be reviewed in the same

manner as B.C. Ferries, and I think the same conditions exist, based

mostly on the spiralling cost of fuel.

MR. PASSARELL:

Mr. Chairman, at the beginning of my presentation I'd first like to

praise the minister — I know it's been a difficult morning for him —

for the television reception in Good Hope Lake. After our discussions

in 1979 the minister took my suggestion, and he has benefited a number

people up north by installing the television reception units in Good

Hope Lake, Dease Lake, Meziadan, Bob Quinn and a number of other

Highways camps in the north, and it's been a tremendous benefit to the

Highways employees. But one of the problems is that there are a number

of residents who live within a small distance of the camps and are

being denied television reception from the units put in place by the

Ministry of Transportation and Highways. A suggestion — and I know the

minister and I have held discussions on this matter — is to see if some

improvement could be made to the present television reception,

particularly in Good Hope Lake so that the the residents who are living

directly across Good Hope Lake, within 100 feet of the Highways

maintenance camp, could pick up television. We have the technology

right now. I know the minister is in a difficult situation because of

federal licensing involved with television reception, but it would be a

tremendous improvement for the children who live across from the camp.

as well as the miners who live down Highway 37, if they could pick up

television from the Good Hope Lake repeater earth satellite station

that the ministry has put in. It would cost a few thousand dollars, but

it would be well worth it for the public relations of this government

and a definite improvement to the lifestyles of the individuals who

live around the area.

The second issue I'd like to discuss

is the government aircraft that the minister is responsible for. In the

last tabling we noticed over 1,300 flights were allowed by the

government last year. Some ministers have used this government aircraft

as a commuter service. I've seen a change in the position of the

government — and a position I agree with — concerning spouses going on

the flights. I totally agree with this; I think it's a good idea, and

maybe it would help improve the level of debate in this Legislature if

we had our wives travelling with us more often. It's a good movement, a

new change of position, and I hope the minister would encourage more

cabinet ministers to travel with their spouses.

Secondly, on

the same issue, because it is a government aircraft, there is no reason

opposition members should be denied travelling in it also at times. I

think the present policy is that a cabinet minister has to invite a

member from the opposition to fly in the aircraft. Is that the

position, Mr. Minister?

Interjection.

MR. PASSARELL:

He has to be invited. The case I'm making is that when the government

aircraft goes into my riding, for instance, there seems to be no reason

why we can't save the taxpayers a few dollars, if the government

aircraft is going into it, instead of incurring the higher cost of a

commercial flight and the longer time that it takes. There could be a

little bit of cooperation in this House if we knew a little bit about

where the government aircraft was going — just in discussion in the

hallway or something. If the minister is going into a particular riding

of an opposition member, it might be worthwhile to take that member in.

third point on the government aircraft is that presently the system

works with the air-ambulance service being under involved. My concern

and, I think, the concern of a lot of individuals across this province

is that if a cabinet minister is flying on the government aircraft, you

could — I underline the word "could" — run the risk of having that

cabinet minister flying in one part of the province when the air

ambulance is needed in another part of the province. Hopefully it will

never arise that an individual who needs air ambulance service would

have to wait an additional hour or two while a cabinet minister was

flying somewhere. I don't know what suggestions could be made. Maybe we

could have one government aircraft for government travel by cabinet

ministers or whatever and another aircraft particularly for evacuation

by air-ambulance service in this province, so that we don't risk that

government aircraft being in the air when it is needed.

1979, as the minister is aware, we had a very similar situation where

the government aircraft was involved in the southern part of the

province when it was needed up at Watson Lake. That was resolved. I

state again that it wasn't because a cabinet minister was involved. The

craft was coming over to Vancouver when it developed some mechanical

problems, and it took an extra three or four hours — I think it was —

to go up to Watson Lake.

It would be nice if we could have some additional funding to maybe have a government air-ambulance jet stationed right

[ Page 5731 ]

Prince George to take care of all the northern constituencies. Instead

of having a government aircraft stationed in Vancouver or Victoria,

have one stationed, particularly, right in Prince George. It has a fine

medical centre that could be the terminus for many medical problems in

the north. Have the government aircraft stationed right in Prince

George, increase the hospital funding and have Prince George as the

terminus for all northern health care and have the air ambulance

service in the north. I think the member for Prince George South (Mr.

Strachan) would agree with me on that.

A specific

constituency issue I would like to talk about is Highway 37. I know the

minister has travelled it a number of times. The major problem right

now is the dust. You're never going to get away from it. It's picking

apples out of the air if you think any government can build a dirt road

and not have dust. But the minister will be receiving a petition soon

from the residents of Cassiar because the problem has really gotten out

of hand with the Arrow trucks going on the road now and the need for

calcium to be put on the highway. I know there was a starter project

last year, if I'm not mistaken, to do approximately 30 miles of calcium

between Cassiar and Dease Lake. This is an excellent program and we'd

like to see it stretched right along Highway 37. With the tourists

coming up Highway 37 now, it's a very dangerous situation, driving

behind a large Arrow truck in the dust conditions. I would certainly

hope that the minister could find additional funding to put calcium

right along Highway 37 on the unpaved stretches. If I'm not

mistaken.... Was the calcium part of the budget increased by 10

percent, Mr. Minister? It's in that area. That's an excellent start. I

would certainly hope that we could find an additional sum of money to

put calcium on Highway 37. A human life can never be valued at a

thousand dollars or a million dollars. We're not asking for pavement;

we're asking for calcium. I think it's something the minister could do.

The

fourth issue I'd like to talk about is the Nass road. The minister,

myself and a number of residents have held meetings on the Nass road.

Right now the residents of the Nass valley have a 300-name petition

that they would like to give to the minister. The minister is aware

that the Nass road is a private logging road owned by Can-Cel. A Mr.

Argon wrote a letter to Mr. Martyn, the secretary of the IWA up in the

Can-Cel operation. This is becoming a big issue in the area.

[Mr. Strachan in the chair.]

Just

to paraphrase part of his letter, he said: "I came into the Nass with

my parents in 1914. The road problems have dogged the Nass valley ever

since." It's kind of difficult to even look at any of the roads in 1914

and try to make a comparison, with the vast improvements that have

happened this year. "In 1950 Can-Cel came to this area and built a road

just good enough to exploit the timber and for the millions of dollars

taken out of the valley. There certainly has not been much put into the

roads, unless one counts the desolate looking slash throughout the

area. More power to your effort. And don't forget the gas tax we all

pay to use this road. The tax goes up and the road gets worse."

The

residents of the Nass valley do pay gas tax on this particular road,

even if it is a private road. The only way out is through the private

logging road that Nass owns — to get to Terrace. I'd like to give this

to the minister now. He'll be getting a formal copy; it's just to see

the amount of people who are concerned about the Nass road. I don't

know what the minister can offer on this suggestion. It would be very

difficult to take over the Can-Cel road, because it is a private

logging road, and the intent of the road is to bring timber out of the

Nass camp and take it to their mill in Terrace.

I would

certainly hope the minister could do something about the road, such as

straightening parts of it. Another issue on this matter is that the

children from Greenville going to school every morning have to go onto

the Can-Cel road. There are approximately 60 children going to school

on a bus, and there are logging trucks and poor conditions on the road

itself, portions of which fall off into the Nass River. I would

certainly hope that the minister could bring forward some positive

suggestions.

Another issue is the pavement on the Stewart

road. This has been appreciated by a number of residents; I think just

about everyone in Stewart is pleased with the pavement aspect, from

Stewart south to Kitwanga. This is an excellent program and I hope it

will start to go further north from Meziadin up towards Dease Lake.

That area certainly needs some type of pavement.

On the

issue of spending money on highways, we see what the hon. member for

North Island (Mr. Gabelmann) said concerning headlines yesterday about

the $100 million-plus for a new highway north on the Island, and the

question of its being perhaps another campaign issue. What I suggest to

the minister is that you have an excellent highway in place now — the

Stewart-Cassiar highway. It needs improvement, but the problem is that

we improve the highway one year, do a little bit of work for 20 or 30

miles, and then leave it. Within two years it's fallen apart again.

What we have to do is have a concerted effort to start from the north

or the south and just work to the middle point to improve the highway.

If we just do spot-type improvements over 20 or 30 miles, leave it for

two or three years and have that fall apart again, then do the same

work every two or three years all over, that's a burden on the

taxpayers. We have a good road and it's probably going to be one of the

major tourist highways in the north, if it's not already.

appears that more tourists are using Highway 37 than are using the

Alaska Highway. Years ago residents and tourists would take the Alaska

Highway up into Alaska and the Yukon, and follow it back. What we see

now is that residents are breaking up their travelling by going up the

Alaska Highway and coming back on Highway 37. For the encouragement of

better roads in this province, as well as the tourist industry, we

should definitely start improving Highway 37, and not just in small

parts.

Another issue which the minister has been helpful

with to a certain extent is local employment. We know that around many

highway camps there are large concentrations of native people. To have

some kind of special program to encourage local employment of the

native people.... I know you have a successful program in the

summertime, and I would hope the program hasn't been cut back in hiring

local help on summer programs.

Another issue is the rest

spots the Highways ministry makes along Highway 37. We have found many

of the highway rest spots on Highway 37 are in a deplorable condition.

Garbage in many of them has been hanging around for two or three

months. It's difficult to have a weekly service at times, but there

should be some type of monthly service, because with spring and summer

coming there are more tourists. There will be more garbage, and we're

finding more bears

[ Page 5732 ]

and

other pests coming to the highway rest spots. It's difficult for the

Ministry of Highways to run provincial camping spots, but the four or

five areas along Highway 37 should be cleaned up, and we hope the

minister can help with this. It is a black eye for the residents up

north, and an eyesore for the tourists who are using our roads and

seeing these deplorable conditions in rest spots along the highway.

hope Mr. Gallagher can offer some suggestions on the issue of ferries.

There are four northern MLAs who would like to use the Prince Rupert

run. There have been discussions with the minister and ourselves about

using our ferry passes. I was told approximately three months ago, when

I asked B.C. Ferries if I could use my plastic ferry card on the Rupert

run.... The office in Victoria said no, it's only good for this run.

Consequently

I talked with the minister and he said that wasn't the case — you can

use your ferry pass to go up north on the Prince Rupert. It was just

erroneous information given by a staff member from this office. But my

concern, and probably that of other northern MLAs, is the use of the

staterooms. If we're going to be on this ferry for approximately 18

hours, the four northern MLAs should be entitled to a stateroom on the

ferry. The minister was cordial enough to give us correspondence he had

in which directors were entitled to the staterooms on the Rupert ferry.

There was no mention of MLAs. I would certainly hope that policy could

be changed so northern MLAs are entitled to have staterooms on the

ferry and so all MLAs are entitled to use the ferry route and not just

leave it for directors to get staterooms. I know it's difficult to

travel that length of time. Once we get off the terminus at Prince

Rupert it would be nice to have a stateroom for the long trip.

Could

the minister clarify another situation on that northern Prince Rupert

run? Are we entitled to take our family once on one family pass on the

Prince Rupert run? The minister could elaborate on that. I would hope

that could be increased. For some of us who do have families, I know

that would be an encouragement.

On some specifics in the

minister's estimates, could the minister stipulate here, in the House,

what new contracts there are for Highway 37 this year?

HON. MR. FRASER: Just repeat that again, please.

MR. PASSARELL:

What new construction is there for Highway 37 this year? I was pleased

to see the minister's booklet yesterday concerning the Highways. But

that went for last year. I'd like to know a little bit and I think the

residents of the Atlin constituency would also like to know what new

contracts there are.

In highway maintenance we've seen

grants, contributions and subsidies down by 22 percent in the budget

this year. Maybe the minister could elaborate why there is a cutback on

that specific program and if it's being picked up in another

section of

highway maintenance. I think all of our northern MLAs as well as the

rural members of this province have to depend on highway maintenance

for the improvement of their roads in our particular ridings.

Highway

construction is up by approximately 11 percent or 12 percent this year.

The specific question is: what is the cost to the northeast coal

projects this year? I think approximately four tenders have been put

out for new highways in that particular new project in the northeast. I

would like to know what type of comparison that is to the new projects

in the Atlin constituency.

Another issue in the minister's

estimates is Hydro development. The description in the estimates

themselves stipulates exactly what that is. If and when — and hopefully

the Stikine dam will never be built.... Just as a suggestion to the

minister, right now you have a beautiful bridge at the Stikine. That

bridge would be approximately 300 feet under water if this dam goes

through. I would certainly hope that before this dam ever goes through

that bridge could be used in the Nass or moved somewhere else and

certainly not just thrown away, wasted and left on the bottom of the

backup of this Hydro development.

In the engineering branch,

last year there was $50,000 for motor vehicles. I would guess this is

for the buying of new motor vehicles in the engineering branch. This

year there is not a penny allocated for new vehicles. One of the

problems that engineers have is that they come out of a regional office

and they have to drive to a specific area. It's too expensive, so the

ministry can't get into flying engineers around in a helicopter. I'm

just wondering why there is not a penny this year for motor vehicles.

One of the situations in the engineering branch is that they have to

monitor any construction and do the final inspection of projects. It

could be — by cutting back from $50,000 to not a penny this year for

new vehicles — a detriment to having proper monitoring programs on new

highway projects in this province.

I'd like to speak briefly

on the motor-vehicle branch and Mr. Whitlock, concerning the Kitsault

project, Mr. Chairman, through you to the minister and hopefully to Mr.

Whitlock. We had an issue with Kitsault concerning individuals who are

just moving up into the area having to go to Prince Rupert to renew

their driver's licence. This was becoming an expense because the only

way out was to fly. There is no road out of Kitsault so individuals

were going down to Prince Rupert to renew their licence and change of

address, for new drivers coming into this province. I would hope that

the motor-vehicle branch could bring an individual into this camp,

maybe once a month, for renewals.

Last year there was

$52,000 in the area of motor vehicles; there's not a penny this year

for new vehicles. Last year there was nothing for interministry

rentals; this year there's almost $300,000. I'd like to know why there

is the large increase of $300,000 for rentals between ministries.

With

regard to the air services branch, I made suggestions earlier

concerning the government aircraft and the air ambulance service being

stationed in rural and northern areas and not in Vancouver and Victoria.

The

B.C. Ferries issue that's been brought to this House's attention a

number of times is the need to get some type of ferry service into

Stewart. It's been a dream of many people up north to have a ferry

service into Stewart. It's the most northern ice-free port in the

province. With the opening at Kitsault, and to give some encouragement

to it, we could run some type of northern line out of Prince Rupert —

maybe twice a month or once a week — up into Kitsault and Stewart for

the movement of freight and individuals on their daily jobs.

the air transport assistance program, it's a good program. I've seen a

large increase in development of airports in rural areas in this

province. I certainly hope that will continue. I notice there's been an

increase of $200,000 or $300,000 — to almost $4 million, Mr. Minister?

Interjection.

[ Page 5733 ]

MR. PASSARELL:

Okay. It's a good program to put this type of funding into airports

across this province — not into areas that have airports but into

isolated rural areas. One case in point is Atlin, where the ministry

started to build an airport and, I guess, is continuing. Presently the

new community organization that was set up by the Ministry of Municipal

Affairs has voted unanimously — all 11 members — to state their

opposition to the further development of this airport in this

particular area. The majority of the residents of Atlin are not opposed

to the airport concept but to where the airport is located. It's within

the townsite, and the residents of Atlin feel that that area could be

used for residential use and not for an airport. Most people don't want

to build around an airport or, once they've secured Crown land in a

residential area, to know that there's an airport in their back yard. I

certainly hope the minister would take a second look at spending any

further money on the Atlin airport before some type of secondary

feasibility study has been done. A number of studies have been done at

the local level on where that airport could be moved — outside the town

area, further up the highway going north on the north side of the road,

to move the airport out of the residential area and put it north of the

townsite.

Another concern I have is the cutback in B.C. Rail. Hopefully we in the northwest will receive BCR one day.

hope the minister can offer some answers to the numerous questions I

raised, particularly on the new construction cost and what's going on

on Highway 37, which many residents up north want to know about.

HON. MR. FRASER:

To the members of the committee and specifically to the member for

Atlin, he's raised lots of points on that great part of British

Columbia. However, I'll try and go through them. I don't think I'll

give everything a complete reply, but we can get started on some of

them.

First of all, television in Good Hope Lake. Yes, our

ministry put television in for our crews in the remote areas — Good

Hope Lake, Dease Lake and places like that. We had a real problem with

staff turnover. As you know, there really isn't much to look forward to

without television. I'd remind the member that at that time I had the

responsibility of communications as well. Everything worked together,

but to get stability of employment we put television reception in these

remote areas — with the dish. The problem now is that where our staff

have got it, it expands to other members of the community who are not

directly connected with Highways, and, of course, they want it. I

believe there's ben correspondence on this. Now we're very reluctant to

their licensing. I think we've made a recommendation that if the

community — other than the Highways people — would form their own

group, we would gladly cooperate on that basis — in other words, their

own group applied for the licensing.

AN HON. MEMBER: With funding?

HON. MR. FRASER:

Well, I guess it would amount to that to a degree. I can't speak for my

colleague, because the funding would come out of his.... I was thinking

that we have the base apparatus in the Highways ministry. It's

something to be worked out, but I think the licensing part has to be

done at the local level.

Regarding government aircraft, you

touched on that slightly, Mr. Chairman. Yes, government aircraft are

the responsibility of this ministry. As you know, we have a fine

government air service that serves all of our province. They are not a

Tuesday-to-Thursday group; they work seven days a week, 24 hours a day

and 365 days a year. Our pilots and mechanics do an excellent job. I

guess we have some pilots with 20 years' experience flying just in

British Columbia. There isn't much that they don't know. They do a

first-class job. Their job priorities are: first, air ambulance, and

second, the ministers and government staff. We have lots of occasions

when we burnp, as they call it, ministers' flights or staff flights we

have lots of staff flying on the government air service for the air

ambulance. I would just like to make this comment on that. You

mentioned something about an aircraft located in Prince George. I guess

that's certainly worth looking at. We take our direction on the

ambulance from the health services branch. They have not recommended

that that happen. I would think the reason is that so many facilities —

the dispatch and everything — are here in Victoria. Certainly we don't

close the door on that. We'd like to bear the health services side of

that, but they haven't requested that up to the present time.

would make another observation regarding the air ambulance. The

government has eight aircraft; four of them are jets. Of the four jets,

two of them have now been permanently equipped for air ambulance alone.

In other words, all the kits and what they require for emergency

services are in those two aircraft on a permanent basis. They are the

ones that are prioritized for air ambulance. As a matter of fact,

there's only one seat available on those two aircraft for any

passengers. The rest of the seats have been pulled out. They have all

their life-saving apparatus bracketed in the back of the aircraft, so

that it's not pulled in and out and transferred from one aircraft to

the other. We've upgraded that service to the degree that we have two.

That's all they really do. But they will take the odd flight — I'm not

saying that they won't — for a cabinet minister or a staff member.

There's only one proper seat, so they can only haul one passenger. I

was pleased to see that the government air service has done that on

their own.

Regarding Highway 37 and the dust problem, I'm

aware of that. Last year we tried, Mr. Member, to put calcium on bridge

approaches and where we still have some of the famous Bailey bridges.

Calcium's not the best to give better visibility, but last year we also

went to asphalt oil as a dust retardant. We got a lot of complaints

about that. The fact of the matter is that I don't know whether the

application was wrong or right. These are always the dangers. I think

we had the usual thing happen to us: we started the program and then it

started to rain. I got a lot of very nasty letters about that, but we

are going to try that again this year, and we hope the weather is with

us when we do it.

You mentioned the Arrow Transportation

operation that hauls from Stewart to Cassiar — a distance of 300 miles.

That was freight and commerce that was going out the other way through

Whitehorse. Now we've got that all based in British Columbia's economy,

We're trying to accommodate both the economics — jobs and so on — as

well as tourism. I might say that Arrow Transportation are now doing a

lot better job themselves. But for the first six months they were

having difficulty in coping with the roads. They put more miles on the

roof of those large B-trains than they put on the wheels. But that's

been cut materially, and the drivers are better experienced; and we're

glad of that economy coming from

[ Page 5734 ]

them. Also, on a gravel road it complicates things for the other type of traffic. We're trying to get a handle on it.

The

Nass Valley. Well, Mr. Member, we have a real problem that's been there

forever. As you know, we have said that we'll get some access for

Greenville — build a bridge across the Nass River. We're now in

the process of leading up to that. Drilling for the foundations is now

going on, and a contract will probably be called this fall. When you

get on the south side of the Nass, all the way to Terrace the roads

belong to Can-Cel; and they're not very cooperative, I might say. They

want to haul with 16-foot bunks. They maintain their roads; they're in

a TFL — a tree-farm licence. It's important to the economy of that

area. Again, we have interaction, as we call it, of the people with

their vehicles. I haven't got a ready solution to that. I think that

Can-Cel and the 2,000 people who live on the north side of the Nass....

I think we've all got to get together to see if they can't do something

better cooperatively. What Highways would like to see, and what the

people of the Nass don't want to see.... We'd like to take them over

from Aiyansh and get them to connect to 37; but that's a fair distance

too, and it's easier said than done. They're going out of the road that

way; they're really going around. The other way is more direct to

Terrace.

Regarding paving, yes, we've done a lot of work on

the road. There is a paving contract to be completed — another lift to

put on. That's what will happen there this year. We're going to do some

more work from Meziadin north — a fair amount of maintenance.

Employment locally is our policy. We do the best we can. We even hire

the natives where they have equipment for snowplowing, I understand.

I'm getting back into the Nass area now.

Rest stops. I agree

with the member that there should be no reason for that at all. I'm

sure our senior people will follow that through. We have a district

manager at Dease Lake, and we have maintenance out of there. Again, I

think that more traffic means more litter. We just have to maintain

them more. I've seen the black bear and the grizzlies eating this; it

does attract them. I think we should do a little better job.

You

mentioned passes for northern MLAs on the B.C. Ferry Corporation.

Really what you're saying is that some ferry staff have said that your

passes are not valid on what we call the north run — either Tsawwassen

or Port Hardy to Prince Rupert. I think that's been cleared up; if it

hasn't we'll take it up with the board of directors. My feeling is that

all MLAs, whether they're from the north, south, east or west, should

have a valid B.C. Ferry pass. I'm not saying that I would win that, but

I think it has to reviewed and clarified. I don't blame the staff; I

think we have to deal with that matter at the board of directors level,

and we intend to do it. Regarding the four northern MLAs, it has

already been cleared up. I really don't think that any of our MLAs will

abuse the pass by making a steady run from Tsawwassen or Port Hardy to

Prince Rupert. In other words, I don't think it's going to have a heavy

impact on the system. If it does, other means may have to be found.

Regarding

staterooms, I agree that it should be cleared up in the same way, that

MLAs on the 20-hour north run should be entitled. Again, the board of

directors will have to clarify that.

The family part. I

think that's taking it one too far. Most or all of our benefits, as

elected people, apply to us and not to the family. I don't know whether

we can stretch the family side to get the ferry pass, but we'll try to

bring that too.

AN HON. MEMBER: We're given one family pass on that route, aren't we?

HON. MR. FRASER: I'm not even sure myself, Mr. Member.

There

is construction on 37. The Miller job, as I call it, is still going on

south of the Nass. The L.G. Scott paving job is still going on for this

year.

I would like to go into the cost of northeast coal in

more detail. I believe there is a figure in the budget this year. It's

funded in this budget at approximately $18 million, and that's

upgrading two existing roads. By "upgrading" I mean putting 12 to 18

inches of gravel on it. One is called the Boundary road and the other

is the Fellers Heights road. The roads exist, and they're of a low

standard. We have to get them up to a better standard for access to

Tumbler Ridge.

We have awarded one large contract already.

The contract is at work, and I think the price was approximately $5

million. That's a new road access from Chetwynd to Tumbler Ridge. We

anticipate letting two more contracts in the 1981-82 year on that

specific road.

You mentioned the Stikine is flooded. I'm not going to get into that because

you're getting me drawn into a controversy regarding future dams. If that

happens — and every thing's "if" — I'm sure we'll retrieve

that fine bridge we have across the Stikine. That's been our policy at Mica

— retrieving the bridge and using it elsewhere. Yes, the Nass River's a

good place to ' use it. I think they want me to sit down and shut up, so

I'll accommodate them for now.

The House resumed; Mr. Speaker in the chair.

The committee, having reported progress, was granted leave to sit again.

HON. MR. GARDOM: Second reading of Bill 12, Mr. Speaker.

SOCIAL SERVICE TAX

AMENDMENT ACT, 1981

(continued)

MR. STUPICH:

Mr. Speaker, one of the things I wanted to say about this was that in

the 1976 budget the Minister of Finance of the government of the day

introduced legislation and imposed measures the need for which he

attributed to the mismanagement of the province's financial affairs for

some three years. Because the NDP government had been in government for

just over three years, it was necessary for the government to levy new

imposts to bring in an extra approximately $300 million. Now we find

that after some five years of Social Credit good management, as far as

the government is concerned, $300 million wouldn't be nearly enough.

They have to levy tax increases and rely on inflationary measures which

are built into many of these tax increases to produce not an extra $300

million but an extra billion dollars. That kind of good management we

can't afford for too long.

Of course, one of the examples of

this is the sales tax increase. If you recall, the last time the sales

tax was increased was in the spring of 1976 when the need for raising

the sales tax was, as I say, laid at the feet of the outgoing NDP

administration. Now we find it necessary to increase the sales tax by

an even greater rate, because in those days we were increasing it from

five points to 7 points, a 40 percent

[ Page

5735 ]

increase.

Now we're increasing it by 50 percent. The rate has gone from 4 percent

up to 6 percent. As I say, that kind of good government we can't really

afford too long.

Not only that, but when the sales tax was

last reduced.... You may recall that by coincidence the budget speech

was delivered the day after April Fools Day, and it did refer to this

reduction in the sales tax, and the election was called the very next

day. But when the budget was introduced, the Minister of Finance of the

day said it was a permanent reduction from 6 points down to 4 points.

He reassured people that never again would it be necessary in the

province of British Columbia to raise the sales tax. The Premier also

went on record as saying that it was a permanent reduction. Premier

Bill Bennett was quoted in the press as saying the B.C. sales tax cut

was permanent. He added later that he could not bind future

governments. Of course we all realize he cannot bind future governments.

I'm

sure the implication he intended at the time was that in the event

there was a change in the administration and he lost his position as

Premier with someone else taking over, it was possible that the

incoming administration might do all kinds of irresponsible things. But

certainly the assurance was given to the people of the province that

never again would an administration led by him increase the sales tax.

But of course that was two years ago. That was the day before the

election was called. The election was called and this administration

was returned to office. We now find that things have gone so badly in

the province that the promise given by that Premier and by the Minister

of Finance that we were experiencing a permanent reduction in sales tax

because of the administration of this government.... You can't have it

both ways. Well, they can have it both ways; they're certainly going to

try. The need to increase it in 1976 was our fault; the need to

increase it in 1981 is somebody else's fault. It's never the fault of

this government when this government happens to be in office. It's the

fault of the government if they're out of office; it's the fault of

some other factors if they're in office.

It isn't necessary

to increase the sales tax by 50 percent at this point in time. We don't

believe it's necessary. We're opposing this. We opposed it during the

budget speech debate. We're opposing it now that the legislation is

before us, and we intend to vote against it.

MR. COCKE:

On second reading of Bill 12, I would first like to say that we were

absolutely shocked that a bill of this kind and this magnitude would be

put before the Legislature. You see, we believed some of the statements

made by the Premier and some of the members of the Social Credit caucus

that what happened previously — a reduction from 7 percent to 4 percent

— was a permanent thing and that we could probably look forward to even

further reductions of the sales tax in this province,

I see

here a quote from the then Minister of Finance. On April 2, 1979, he

said: "The new sales tax of 4 percent is lower than the rate in effect

at any time in the last 25 years. Isn't that magnificent. Then he went

on to say: "British Columbia is the only province that has ever lowered

the general sales tax rate permanently."

MR. HOWARD: Permanently?

MR. COCKE: In perpetuity. As one past member of this House used to say

when he really got going: "In perpetuity and even longer." I'm

not sure how he rationalized that. The then Minister of Finance said: "British

Columbia is the only province that has ever lowered the general sales tax rate

permanently, and now has the lowest sales tax rate of any province in Canada

that charges the tax." That obviates Alberta. He was believed. Let me tell

you who believed the marshmallow maverick himself.

AN HON. MEMBER: Kempf?

MR. COCKE:

That's the man. What did the member for Omineca say in the debate? He

said: "The government and the Premier have made a commitment to the

citizens of British Columbia that the reduction in sales tax is here to

stay." I'll bet that when we vote in second reading the marshmallow

maverick will once again melt and will get up and support the increase

in sales tax that Bill 12 faces us with.

I'm also surprised

that we're debating Bill 12 on May 22, when it's retroactive to April

1. I know the community has all been well apprised and well appraised

of what's going on.

I would like to go on and further quote the member for Omineca.

MR. KEMPF: Good stuff'.

MR. COCKE:

Good stuff is right. I want that member to get up in the House and

explain how he felt the way he did. He went on to say: "There is a

long-term commitment, straightforward honesty and planning for the

citizens of this province." Yes, straightforward honesty. I'm not sure

what kind of honesty that is. Honesty is usually honesty, and any

descriptive adjective around honesty is probably redundant, but that's

neither nor there.

Interjection.

MR. COCKE:

Mr. Speaker, that witty member for North Peace River (Mr. Brummet) has

me in stitches, and it's very difficult for me to stand here and oppose

the bill with a smile on my face from all that wit across the way.

Mr.

Speaker, the whole thing is a question of what we can expect from a

government that a few short years ago made a promise and gave an

undertaking that was so reliable that that MLA believed every word they

said. That MLA now sits in this House. How do you think the public

felt? He probably should have been a little more sophisticated and a

little more cynical in his outlook. But the general public were duped

when that bill was brought in reducing the sales tax from 7 percent to

4 percent in 1979.

Interjection.

MR. COCKE:

Mr. Speaker, the member implores me to read his remarks. I have read

enough of his remarks now to realize that the reading of his remarks

doesn't really give one much edification. Let me tell you why. He goes

up into his constituency and tells them how he opposes the Minister of

Energy, Mines and Petroleum Resources (Hon. Mr. McClelland) and this

minister and that minister. Then he comes back down here, that

marshmallow maverick, and doesn't get up to vote against them, doesn't

get up to say a word against them; and he's not going to get up on this

issue.

MR. KEMPF: That's absolutely untrue.

[ Page 5736 ]

MR. SPEAKER:

Order, please. The member for New Westminster would help me to maintain

order if he would contain his remarks to the bounds of the bill before

us.

MR. COCKE: I don't know how it is I walk the straight and narrow and then all of a sudden get this magnetic force moving me off.

MR. KEMPF: To the left. Always to the left.

MR. SPEAKER: Order, please.

MR. COCKE:

Always to the left, Mr. Member. If you're on the right, I never want to

be any closer to it than I am now — and that's two sword lengths across

this legislative chamber.

MR. SPEAKER: Order, please. Back to the bill.

MR. COCKE: Mr. Speaker, I'm sorry that I have departed from the bill.

HON. MR. McGEER: You were never on it.

MR. COCKE: The member for Point Grey — my dear friend — says I didn't get on it. I am on it.

am suggesting, Mr. Speaker, that on April 11, 1978, the Premier was

quoted as having said that Ottawa will pick up half the cost of the 2

percent cut in B.C. sales tax. Mr. Bennett said he had no qualms about

accepting the money, saying: "It's not a gift. It comes from the B.C.

taxpayers anyway." He told a news conference in Victoria that B.C.'s

sales tax is permanent. That wasn't in the chamber; he told a press

conference it was permanent. He made a deal. He also said that Ottawa

was going to help us pay for it. Good enough. What's happened? We're

still getting the money from Ottawa. That well hasn't dried up, so I

suggest that this was a very bad trick played on the people of British

Columbia.

Mr. Speaker, I would hope against hope that we'll

have a good look at this whole question. You know this government is

very handy at reminding us of the good old days of 1975 and 1976 and

comparing it to now.

Interjection.

MR. COCKE:

Yes, I remember what's good and what's bad. I remember that in 1975

there was a tax burden of $1.4 billion. Now there's $3.36 billion worth

of taxes in our province. There has been inflation, but in that short

period it hasn't been an inflation as great as the inflation in terms

of the demands of this government on the taxpayers of this province,

even if in return the people were getting adequate service. What are we

getting for this additional sales tax? Are more hospital beds

available? I'm not suggesting more are needed. I see no evidence. I see

waiting lists of 12,000 for elective surgery in this province. Is the

sales tax going to help that?

I say that this is a wastrel

government. They could be spending less in that particular area and

getting better service, but they don't know how to go about it. It's a

government of boondoggles. They've been so busy trying to improve their

image and overcome their mistakes that they have not given a good

account of themselves in running this province like you'd run any good

business. It is not being run properly. That's why we're facing this 50

percent increase in our sales tax. At the time it was lowered the

government admitted it was a regressive kind of tax. They just didn't

want to make a move on the income tax — I mean, to the extent they

could have — which is not nearly as regressive.

This tax

affects poorer people to a far greater extent. The lower your income,

the more demands are made on that income in terms of percentage. This

tax affects that greatly. If I could afford to go out and buy a

Rolls-Royce — and I'm sure that ability could be found in this House —

I could afford to pay the sales tax. On the other hand, if I happen to

be a working-poor person and have to go out and buy clothes for myself,

my wife and my family over the age of 12 — welcome, Mr. Minister — I'm

hard pressed to raise that additional money.

MR. BRUMMET: Let's put it this way: under the NDP you wouldn't have a job.

MR. COCKE:

Look at it this way: under the NDP everybody in this province had a

smile on his face. Now look at them. We've got the longest faces — you

would agree, Mr. Speaker — in this province since the advent of this

government. The folks in this province expected something besides the

bungling and mismanagement that have brought us to the point where

we've had to have a 50 percent increase in this tax rate.

AN HON. MEMBER: Your lie didn't work in Kamloops.

MR. COCKE: Just in case Hansard

recorded that statement, it didn't do badly. We are up 1.5 percent;

you're down 6 percent. That's not bad. That's 41 on our hit list. We're

referring now to Kamloops.

I suggest that the province has

been duped by a very simple, little bill — Bill 12. It has come along

very quietly and informed us that when we go to the store and purchase

most items — or for that matter, when we purchase most items in the

province beyond food and certain other exclusions — we're going to be

paying a good deal more for those items. Why were we told at the time

that it was permanent? What has changed? The Minister of Finance tells

us that resource income is down. What evidence do we see that resource

income is down? So far, Mr. Speaker, I see very little evidence of it.

As a matter of fact, it would appear to me that even our natural gas

revenues are going to be improving, because our market is improving.

Interjection.

MR. COCKE:

"Can't get much worse," the minister says. If the announcements that

are coming out in terms of our market are true, then it would strike me

that we're not doing all that badly. Mr. Speaker, thank heaven the

government found a way to improve access to those revenues by taking

over that important asset at the wellhead. Otherwise we were locked in

for years at 30 cents per thousand cubic feet.

The 1981-82

budget tells us that the $6.6 billion budget is necessary. Well, Mr.

Speaker, I contend it's necessary for one reason. Despite the fact that

many previously budgeted items are now being moved out into Crown

corporations, I suggest the reason that budget is as high as it is is

because we have a

[ Page

5737 ]

wastrel government. We have gone over the estimates

to date. We've moved resolutions in committee to reduce government

spending in areas where we feel that government spending is wasteful. I

know you don't know, Mr. Speaker, what happens in committee. But let me

inform you for the first time ever that not one of those resolutions

has been accepted by that government. The resolutions have been

reported, but not the content thereof. Therefore I'm just informing

you. We've asked the government not to be wasteful and not to throw

away money.

If they had followed our advice, we wouldn't be

in a position today where we're standing in the Legislature on May 22

arguing about a 50 percent increase in the sales tax that hits the

pocketbook of every British Columbian. Around this issue there has to

be a great deal of anger. The anger is mainly owing to the fact that

the people were promised this reduction would hold — promised by the

Finance minister, by the Premier and by other members of the

government. As citizens, we feel that when the Premier speaks, he's

giving us information that's valid and information that will carry. On

April 11, 1978, he said that this is permanent — a 2 percent provision

is permanent.

The whole question of a sales tax cut — back

then — was one that the opposition and the government applauded, and

the backbenchers believed. Now here we are with this increase. I just

want to ask this question: if this government is re-elected — and don't

say "when, " because you're no more sure than fly to the moon — are

they going to do it to us again? Are we going to go from 6 percent to 7

percent to 8 percent? Where will it stop?

MR. HOWARD: It'll come down just before the election.

MR. COCKE:

Maybe the day before. The people in the province have been told a

message by Bill 12, and the message is: they're not to be trusted. I

hope the people in this province remember that clearly, because it was

such a short time ago, and at a time when they claimed they were in

difficulty because of a previous government. What's happened now? I

suggest two things: they're in difficulty because of their own

governing, bungling and mismanagement, and they're prepared to go and

take it out on the people of British Columbia with this absurd increase

in tax.

We won't be voting for it. We will vote against it,

and we will hope that responsible members of that back bench will

either withdraw from the vote — put on their running shoes — or will

have the courage to stand up in this Legislature and put their votes

where their mouths are.

I had hoped the member for Omineca

was going to follow me in this debate. He's gone. I still hope that

he'll have the courage to come in here and say that his statement in

April 1978, on page 649 of Hansard , that "our government and

our Premier have made a commitment to the citizens of British Columbia

that the reduction in the sales tax is here to stay...." I hope he'll

take the government on for placing him in a position where he made that

statement. He went on to say: "There is a long-term commitment of

straightforward honesty and planning for the citizens of this

province." Just on the basis of those remarks, he has to come in and

clear the air. Help us all out, and help the government see the wrong

that's been perpetrated by Bill 12.

MR. HALL: Mr.

Speaker, of all the taxes we have in this province the sales tax is one

of the most interesting. If you examine the genesis of this tax and the

vagaries of the fortunes surrounding the tax it could, I suppose, be

the basis of a

chapter of political history in the province that would

be of interest to both economists and political scientists. Possibly,

because it's of interest to both political scientists and economists,

it might be worthwhile looking at it from those points of view.

However, it is a little unfortunate that the treatment of this tax is

so very often used in ways that are less than savoury in the eyes of

the political parties in the province, always to the complete exclusion

of the government of the day.

What bothers me is that when

the tax goes up for economic reasons the government uses politics to

explain it, but when the tax goes down for political reasons they use

economics to explain it away. That really is the most cruel and

unsatisfactory reasoning for responsible cabinets to try and get away

with that kind of fiscal behaviour.

Let us examine what has

happened since 1978. I won't bother going back to the original acronym

SSMA to describe the tax all those years ago. Let's just deal with the

most recent years. In 1978, in a fairly hurried and pressure-ridden

series of meetings, province after province agreed — I presume with the

necessary arm-twisting by the federal government — that if they reduced

their sales tax they would get some accompanying benefits. This

province was one that agreed. I can't remember whether this minister

was then the Minister of Finance. He shakes his head, so it was

obviously his predecessor.

A deal was made as of that day

that if they reduced the sales tax, which had gone up, by the way,

according to them, for economic reasons — but we know it was really for

political reasons.... The tax had gone to 7 percent. In a signed,

sealed deal with the federal government they received benefits in

income tax from the federal government that allowed this government to

reduce the sales tax by 3 percent. That was the same in other

provinces, with differing figures. Basically there was no net loss in

revenue to the Crown provincial. In short, we should have seen a joint

thank you trumpeted around the province in large black letters from one

government to the other for an attempt by the two of them to put more

money in the hands of people — to try and reduce the effects and

ravages of inflation and of the hard times that people were having in

That cut, as my colleagues from New Westminster (Mr.

Cocke) and Nanaimo (Mr. Stupich) said, was supposed to be permanent.

Now we've seen a different kind of thing altogether. We've seen the tax

go up 50 percent. The same paper that included this 50 percent tax

increase by these taxmasters opposite bashes Canada. It has the

almighty gall to kick Canada in the teeth and to go on a sort of

self-congratulatory exercise throughout the budget document, pummeling

Ottawa, when, in actual fact, the very root, basis, cause and financial

support in this particular exercise was provided in the first place by

their handshake in 1978. That's really a bit much. It's no wonder that

people start to — as my colleague from Saanich and the islands (Hon.

Mr. Curtis) knows, and I've talked about this — get cynical in their

turn and say that politicians are all the same. That's just too much

for the public to swallow. That you can put it up from 5 percent to 7

percent and blame an outgoing government, bring it down and not

congratulate and share with the federal government the benefits and

praise that should accrue to you, and then go to this extent and attack

Ottawa, who really provided you with the base income from the first

year.... I just don't think that's good politics or fiscal wisdom.

[ Page 5738 ]

What

about the sales tax? Why are we using the sales tax as one of our main

sources of revenue? Why haven't we gone on, as the Social Credit Party

has always stated and believed, basing taxes on ability to pay and on

income tax? Why are we using this regressive tax method that is now 7

percent of our purchases? Why have we taken this route — a route that

has been described by most economists as regressive? It's been

described by my colleagues as hurting people with lower incomes the

most. We know that food's exempted. We know that clothing for children

up to the age of 15 is exempted. Nevertheless, people with lower

incomes pay a larger percentage of their incomes out in sales tax. I

just can't understand a government, which purports to stand for people,

using a tax like this in the way that it does. What we should be doing

is going towards reducing sales tax, not increasing it.

[Mr. Strachan in the chair.]

just think that in this day of inflation and spiralling costs, when

we're seeing costs of essential products like, for instance, gasoline,

which I consider to be next door to an essential product, especially in

view of the failure of this government to provide a decent

transportation system, rising quickly towards $2 a gallon and soon no

doubt — within our time in here — towards $3 and $4 a gallon, as it's

getting to be in Europe, rising in a geometric kind of progression, we

should certainly be looking at our tax structures in a different way,

rather than just piling on simple regressive sales tax. I think it's a

sign of hopelessness and a sign that the government really is doing the

easiest thing it can. It's just juggling figures.

As I said

in the budget speech, it is really planning for a budgetary surplus,

planning for a programmatic announcement in the spring of 1982 so that

they can buy their way back to stardom. This minister can then say that

by the sweat of his brow and by dedication to duty and all those other

things, spoken in the mellifluous tones he uses, he single-handedly

brought the province up again, and we can all go to an election.

That's

his plan. I've said it before and I'll say it again. He thinks we're

going to go out through those revolving doors in February of next year

in the middle of the budget speech with the kinds of surpluses he knows

the public accounts are looking at. I think it's time we all started to

put the public on notice that that's their plot. This sales tax is part

of it. It's unnecessary and I won't vote for it.

HON. MR. CURTIS:

Mr. Speaker, the remarks which were made two days ago in the opening of

debate on Bill 12, and then made at greater length today with respect

to the social services tax increase, have focused on two or three

particular points, with the exception of a few remarks made by the

second member for Surrey just moments ago. We can engage in semantics,

I suppose, and that is sometimes a cop-out response. I don't believe in

cop-out responses, but when the federal assistance for sales tax was

announced by Ottawa it was referred to as a temporary measure. I think

it's important to put that in the correct historical context.

an example, when that arrangement was accepted, the province of Ontario

said: "Very well, we're going to reduce the sales tax in Ontario from 7

percent to 5 percent, and we will do it for six months. And indeed,

that drop lasted for six months, if not exactly six months — I'm

subject to correction by the record. In fact, British Columbia stayed

down for three years, and contrary to the comments by the hon. member

for New Westminster, it did not go down in one jump. The record will

show that it went from 7 percent to 5 percent, and then to 4 percent.

like the second member for Surrey, Mr. Speaker. I get along well with

all members in the chamber most of the time. There are the odd

exceptions. When I hear the second member for Surrey make reference to

some master plan as far as this Minister of Finance is concerned, to

indicate that in about nine, ten or eleven months from now, by dint of

hard work and through my great skill, we are suddenly going to have a

massive surplus, I wish that member's prediction was likely to come

true. But I fear that it won't.

In closing debate, I'm not

going to revisit all the points which were made in the 1981 budget

document presented to this House on March 9. I will take credit for one

thing only: that the budget document of March 1981 was probably the

most detailed and straightforward and open budget presented to the

people of British Columbia in the history of this province. We raised

the sales tax — and I realize we're speaking of the sales tax in this

particular bill — because it was necessary.

Interjection.

HON. MR. CURTIS:

You know deep in your heart that I speak the truth, Mr. Member, through

you Mr. Chairman. We had one unacceptable alternative, an alternative

which has been taken by our sister provinces in recent years and which

we do not want to face in British Columbia — a deficit budget. That was

the alternative.

Interjection.

HON. MR. CURTIS: "Terrible," the second member for Vancouver East (Mr. Macdonald) says. Well, I hope Hansard

heard that but I'll offer the interjection in order that the record

will show that the socialists still believe that deficit financing and

losing money each year is acceptable. Let the record show that. We went

through all of that in 1972 to 1975 and the people of British Columbia

will not forget that. "Lose as you go, " is their motto.

MR. HOWARD: That's false, Hugh, and you know it.

MR. SPEAKER:

The House will come to order. All members are reminded that

parliamentary language is always a feature of the Legislative Assembly.

HON. MR. CURTIS:

In any event, Mr. Speaker, we have the interjection by the second

member for Vancouver East. I think we will enjoy using that in the

years to come, particularly at the time of the next election.

The

social services tax in British Columbia is still among the lowest in

Canada. While the sales tax was not increased in the great province of

Ontario in the 1981 budget earlier this week, a number of other taxes

were. We stand by the necessity of the increase. I believe that all

members should support the increase. I'm confident that all members on

this side of the House will support the increase, as unpalatable as it

was to introduce.

Mr. Speaker, with respect to Bill 12, I move second reading.

[ Page 5739 ]

Motion approved on the following division:

YEAS — 27

Waterland

Hyndman

Chabot

McClelland

Rogers

Smith

Heinrich

Jordan

Ritchie

Brummet

Ree

Davidson

Wolfe

McCarthy

Williams

Gardom

Bennett

Curtis

Phillips

McGeer

Fraser

Nielsen

Kempf

Davis

Strachan

Segarty

Mussallem

NAYS — 17

Macdonald

Barrett

Howard

Stupich

Dailly

Cocke

Hall

Leggatt

Levi

Gabelmann

Lockstead

Barnes

Brown

Barber

Hanson

Mitchell

Passarell

Division ordered to be recorded in the Journals of the House.

Bill

12, Social Service Tax Amendment Act, 1981, read a second time and

referred to a Committee of the Whole House for consideration at the

next sitting of the House after today.

HON. MR. GARDOM: Committee on Bill 13, Mr. Speaker.

FINANCE STATUTES AMENDMENT ACT, 1981

(continued)

The House in committee on Bill 13; Mr. Davidson in the chair.

Sections 31 and 32 approved.

section 33.

MR. HOWARD:

Mr. Chairman, this

section seeks to increase B.C. Hydro's borrowing

capacity or limit from $6.4 billion to $7.2 billion — an $800 million

increase in debt for B.C. Hydro. Before we start to examine that, I

wonder if I could pose some questions to the minister about the

intention here and just what this means in the context of one of the

appendices in the budget about Crown corporation financing and so on.

In appendix D on page 57 of the printed budget speech, Crown

corporation financing projections for 1981-82 are identified for B.C.

Hydro as being $925 million. Could the minister advise the House if

B.C. Hydro has borrowed any of that $925 million projection within the

current fiscal year? If so, how much has been borrowed, where and on

what terms?

HON. MR. CURTIS: Mr. Chairman, with

respect to this section, answering the last part of the hon. member's

question first, we have undertaken three very successful public issues

for British Columbia Hydro since December 22 last. Those three issues

comprised a $150 million Canadian public issue which was priced on

December 22, a $100 million Canadian issue which was priced in March,

with a closing in April — I believe it was April 14, as I recall — and

then the last of the three, a $400 million public issue in United

States dollars in the U.S., which was actually in two tranches — it

comprised $150 million of ten-year bonds and $250 million of 30-year

bonds. One of the significant things about all three issues is that the

emphasis was on the longer term. The first one was $150 million with a

30-year term; the second issue was 25 years. Then, as I've indicated

already, we took two bites of this particular U.S. issue, which is

priced toward the end of April at $150 million in short and $250

million in long.

I think that the member was seeking an

indication as to what this additional borrowing authority will be for.

Through the Chair, is that correct?

MR. HOWARD:

You're anticipating. Of the $925 million identified in the budget as

being a borrowing or a fund requirement for B.C. Hydro in the fiscal

year 1981-82, how much, if any, of that projected $925 million has been

borrowed? And then, of course, how much is left to borrow?

HON. MR. CURTIS:

Mr. Chairman, I think the best way to answer that is that we have not

reached the borrowing ceiling which is in existence now until the

passage of this bill. The outstanding borrowing limitation as of May

15, 1981, was $351 million. So we're really looking at two things. The

hon. member referred to the borrowing requirements as set out for Crown

corporations on page 57 of the budget document. I'm sure he understands

— and he identified it as such — that those are the borrowing

requirements of $925 million. I think historically, and quite

correctly, you seek a higher ceiling than you actually foresee as being

required, specifically in the year in question. So we're increasing the

borrowing limit in this

section by an amount of $800 million, but we

have some of the previous ceiling unused.

MR. HOWARD:

Perhaps I'm not phrasing the question properly. The budget says $925

million of long-term borrowing requirements. The minister said a while

ago that he classified a ten-year term as short-term. I've always

understood that fell in the category of being medium-term borrowing.

But apart from that, whatever that means, in the fiscal year 1981-82,

within which we are now, long-term borrowing requirements with British

Columbia Hydro were projected at being $925 million. Of that $925

million, how much has been borrowed, if any?

HON. MR. CURTIS:

Mr. Chairman, I think we're very close to the right question and the

right answer here. Really the borrowing started in December after the

receipt of the triple-A rating last year and so on. We borrowed $150

million, then $100 million and then $400 million. We have borrowed a

total of $650 million in this most recent period through long-term

bonds. The member and I are going to have a discussion in the corridor

— a very friendly discussion — as to whether ten years is medium or

short. That can be debated ad nauseam. I think that answers his

question. We have already borrowed $650 million in the Canadian and

U.S. market for this particular Crown corporation. We have not offended

against the borrowing limit, which is already in statute. Through this

section we now seek to raise the borrowing limit. We had a cushion, and

indeed we will still have a cushion in the ceiling.

[ Page 5740 ]

[Mr. Mussallem in the chair.]

MR. HOWARD: Mr. Chairman, it's such a pleasure to see you in the chair, sir.

Let's

go back to page 57, appendix D, of the budget speech. It says at the

top of the page: "Crown Corporation Financing, 1980-8l." As I

understand it, that's the period ending on March 31, 1981, the last

fiscal year. During that period, it is expected that the investment

requirements of Crown corporations met by borrowing will total so much

money. This consists of $710 million for British Columbia Hydro. Within

that figure of $710 million for that fiscal year, was there included

the $150 million Canadian borrowed in December and the $100 million

Canadian borrowed a bit later than that? That was borrowed in that

1980-81 fiscal year, so I assume the two Canadian issues of $150

million and $100 million, for a total of $250 million in the previous

fiscal year, was part of the $710 million. Am I correct?

[Mr. Strachan in the chair.]

HON. MR. CURTIS:

Mr. Chairman, first of all on appendix D, page 57, which has been

raised by the hon. member, he's quite correct. During the current

fiscal year, the year now ended since we're working with a March

document, the investment requirements of Crown corporations met by

borrowing will total $1.06 billion. Then he speaks specifically of the

$710 million. That was the best estimate, and I would think it would be

very close to the completely accurate estimate for that fiscal year.

Much of the $710 million would have been borrowed short-term and then

later covered by at least the first long-term issue which was priced in

December, but I would think probably not the second issue, the $100

million issue, because it did not close until April 14, which would be

the start of this fiscal year.

So we're talking about three

things, really. What did Hydro require for borrowing in last fiscal

year — that's $710 million; what will it require in this fiscal year —

that's $925 million. I may have unintentionally misled the member and

confused the debate by pointing out that we have through this year-end

period raised $650 million, the bulk of which would, in fact, retire

the short-term borrowing undertaken by Hydro.

MR. HOWARD:

What I'm trying to get to is this. Of the $925 million projected as a

requirement for this fiscal year, within which we are now, some has

been borrowed — presumably the second hundred Canadian 25-year issue —

because of the closing date of that; also, I would assume, because of

the date of the prospectus for the U.S. borrowing of the $400 million

being April 16. So presumably that $400 million is part of the $925

million. That's all I was trying to get.

HON. MR. CURTIS: Yes, that's correct.

MR. HOWARD: That was the first question I asked. That leaves roughly

$425 million left to borrow on behalf of B.C. Hydro in the current fiscal year.

How, within that, do you compute or identify borrowings in U.S. funds? For instance,

of the two tranches, as the minister referred to them, the $400 million U.S.

borrowed in April would bring in — at a rough exchange rate, in very round figures

of, say. 20 percent — $480 million or $475 million or $970 million Canadian,

or something of that sort. Because you borrowed it in U.S. funds, do you have

to include that as being a portion of the $925 million?

HON. MR. CURTIS:

It would not be correct to include that, because, again — to use the

phrase which shows in the budget on page 57, "long-term borrowing

requirements" — a considerable portion of the $400 million U.S.,

translated into the appropriate Canadian amount would be employed to

retire short-term debt which Hydro.... In a number of instances, of

course, the province itself is loaning in the short-term to B.C. Hydro

at market rates — managing the trusteed funds which have been discussed

a number of times. So we're in process.

If the question is

also where we think we will go for the next issue, that depends

entirely on the market of the moment. We have our group ready in the

Canadian market, our group ready in the United States market, and we

also have a group ready in Europe. Whether that group is to be used or

not is a matter for some debate. A rollover is occurring here in terms

of transferring from short-term borrowing by Hydro to long-term secured

financing.

MR. HOWARD: The minister is saying that

Hydro needs another net amount of roughly $425 million out of this $925

million. Whether they're U.S. or Canadian funds and whether part of the

funds will be to retire bank debt is not material to what we're getting

at now. Roughly $425 million might go to the Canadian market, the U.S.

market or the Eurodollar market in Europe. There is no clear idea when

or how. There's no idea when Hydro will need the money. That should be

fairly understandable.

HON. MR. CURTIS: Now we're

speaking about two very specific things. Hydro needs the money and,

given the increased borrowing limit, we can accommodate Hydro through

the trusteed funds to which I referred. They're borrowing within the

context of the act which is before us and are amending the B.C. Hydro

and Power Authority act. That money might be loaned to them for a

two-week period by the province of British Columbia, using our cash

flow and trusteed funds. It might be loaned to them on a day-by-day

basis, because we are loaning in the short term. As the market appears

right to us and to Hydro, we would then go into the long-term market.

Given the legislative authority which is requested in this amendment,

we would not withhold money from Hydro, but rather they would be

borrowing from the province's available cash at current, very

short-term market rates. Clearly, Hydro doesn't like to borrow at those

high rates.

MR. HOWARD: Some of the borrowing from

the funds which are under trusteeship by the province.... The minister

was kind enough to provide this information to me. I don't have the

letter in front of me right at the moment, but it did indicate that

some of those borrowings were at 17.25 percent — not all, but the $250

million of the long-term or 30-year U.S. borrowing was at 15 percent. I

believe the other was at 14.5.

To me there's a very serious

thing happening here, because there's only one group in society that

pays for this: the people who use the services of B.C. Hydro. When we

look specifically and simply at electricity, which is Hydro's greatest

source of income, by far the greatest number of people in

[ Page 5741 ]

the

province use electricity for lights and cooking, generally speaking,

and for heating in many regards — even though they use oil, they still

use electricity to run the oil burner.

I submit that B.C.

Hydro's activity in terms of what it wants to do is completely out of

control with no authority in government except this desire and this

response on the part of government to Hydro's saying they need more

money: "Okay," they said, "we'll bring in a bill, and we'll increase

your borrowing capacity. We'll raise the ceiling. You can borrow more

money." I don't think there's any attempt whatever by government and

the fiscal agent of B.C. Hydro, the Minister of Finance, to say to

Hydro: "Wait a minute, what are you doing with this massive debt load?"

Let's

show what happened, Mr. Chairman. I don't know if you look at your

Hydro bill this way or if anybody else does. In 1979 on the electricity

bill of residents of this province — to keep the lights on in the

house, to operate their stove, to keep the furnace going in the winter,

dress up the Christmas tree with lights — for every $10 that every

resident in British Columbia paid to B.C. Hydro, $3.88 went to pay the

interest on Hydro's debt. Of the Hydro bill visited on the general

public in this province, 38.8 percent went to pay interest. That was in

1979. There was a lot of low interest by today's figures and interest

rates in any event. There was a lot of low-interest money that Hydro

had to pay interest on. Its annual report shows that Hydro had bonds

outstanding ranging anywhere from 3 1/4 percent up to 7 percent through

12 3/4 percent, which was the highest interest rate I can pick out

quickly, looking over their

schedule of long-term debt.

Now

we're talking about $(U.S.)150 million at 14 1/2 percent already

committed; $(U.S.)250 million at 15 percent already gone, 30 years; and

$150 million Canadian in December — and I think the interest rate was

13 1/2 percent — 30 years. The minister just now said we're looking for

another $425 million of the $925 million looked for. At what interest

rate will that be in long-term money today? I haven't looked at any

recent bond sheets to find out where it's going, but it's higher than

15 percent.

Two years ago, residents in this province paid

38 percent of their hydro bill to pay the interest on Hydro's debt.

Last year that percentage of the hydro bill went up to 39.6 percent,

and that's with relatively low-interest carrying charges, a maximum of

12 3/4 percent. The more Hydro's low-interest borrowings mature, the

more they're going to have to refinance at a higher interest rate. On

December 16, 1981 — that's this year — $100 million in 9 3/4 percent

bonds is coming due. I don't think anybody has any way of projecting

what the interest rates are going to be in December of this year. All

of the analysts and people who talk about it indicate that they're not

going to come down significantly from where they are now. But even if

they are at the 15 percent level, which Hydro had to pay to get $250

million in the U.S. market in April of this year, that's a 5 1/4

percent increase in interest rate payable on a rollover of that 9 1/4

percent stuff that's coming due in December. All the way down the line

it goes that way. In 1982 some 8 7/8 percent bonds and some 5 1/4

percent bonds are coming due. In December 1982 some 9 3/4 percent bonds

are due, and so on. It goes on in that fashion, not to mention the 4

percent and 3 1/4 percent bonds that were issued by the former B.C.

Power Commission or the bonds that were issued by the old B.C. Electric

Co., some of which are coming due within the next year or two at 4 1/4

and 5 percent and so on.

Hydro does not have a history of

paying its debts. It has a history of borrowing more money to roll it

over, to refinance it. The more it refinances that at the higher

interest rates, the more it's going to sock it to the average general

public in this province who need electricity to keep homes warm, lit

and running. At the end of March last year, as I said, 39.6 percent of

the residential Hydro bill went to pay the interest on the debt. At the

rate we're going, well above 40 percent of the Hydro bill will go to

pay the interest on the debt. That is not a very attractive or

appealing thing to look forward to.

I'm not going to get

into the question of whether or not, at this point, Hydro is doing the

proper thing in terms of the size of the projects that it looks at.

That's an engineering and technical argument which we can have another

time. Incidentally, I think that once you embark upon it, there is a

certain validity to questioning Hydro's perception of the size, the

style and the magnitude of the projects that it's looking at. It can do

a similar sort of thing without having multibillion dollar dams sitting

around the province. But the point I want to get to on this situation

here is that the government is coming to the House and saving: "We want

to increase the borrowing potential, increase the limit" — maybe they

won't get up to the limit, but basically that's what the government is

seeking to do — "by another $925 million in the budget." Some of that —

$500 million — will be within the S800 million increase; they had $300

million residue from the earlier limit. All those are just minor

figures when you look at the fact that what is sought to be

accomplished here is to permit B.C. Hydro to drive itself and the

people in this province further and further into debt at higher and

higher interest rates.

The net result, Mr. Chairman, is when

you get your hydro bill in your house, figure out the percentage and

find out that you're paying 40 percent for Hydro's mismanagement and

for the provincial government's inability to get a handle on what Hydro

is doing. Mr. Chairman, you and other members in the House should look

twice as to whether or not we should go along with this request

contained within this clause before us. I think Hydro has got a lot to

account for. The Crown corporations committee was set up by this

Legislature after a glowing speech by the Premier saying how that Crown

corporations committee, in theory, was going to be able to operate to

make Hydro accountable to the general public. It hasn't happened. It

hasn't happened partly because Hydro's approach to accountability to

the Crown corporations committee is to look upon that committee with

some disdain and some disinterest.

MR. KEMPF: Not true.

MR. HOWARD:

"Not true," says the Chairman of the Crown corporations committee. How

does he know? He hasn't even got the guts to stand up and call meetings

of the committee. He's receiving money under false pretences.

MR. CHAIRMAN:

Order, please. I'm sorry, hon. member, but I will have to ask you to

withdraw the imputation towards another hon. member of the House.

MR. HOWARD: Which was what, Mr. Chairman?

MR. CHAIRMAN: The reference to guts, hon. member. Would the member please withdraw in good parliamentary tradition.

[ Page 5742 ]

MR. HOWARD: Well, if that's a word, Mr. Chairman, that you find offensive, then there's no question about that at all.

MR. CHAIRMAN: The member withdraws.

Hon.

members, although I recognize the concern of the member for Skeena, we

are discussing a borrowing authority

section of the bill. All members

of the committee are reminded of that.

MR. HOWARD:

That's exactly what I'm doing. I'm discussing the borrowing, the

effects of the borrowing, the interest rates payable and the effect on

the residents of this province who have to use Hydro's services.

was expanding that to say that Hydro is coming to this Legislature —

through the Minister of Finance — without having given any account of

what it wants to do with the money or anything else. The only avenue of

accountability that B.C. Hydro is required to follow is another statute

of this Legislature called the Crown Corporations Reporting Act. That

was set up specifically so that this Legislature could establish a

committee which would say to B.C. Hydro: "You have got to be

responsible to the general public and you're going to do it through

this committee." I'm saying that it's offensive to our concept of

democracy and legislative sanction to have Hydro come to the

Legislature to ask for this increased borrowing capacity and power and

yet at the same time have members in this Legislature who refuse to let

that Crown corporations committee meet so we can find out from Hydro

what they want the money for. That's offensive to democracy.

You,

Mr. Chairman, I and other members of that Crown corporations committee

unanimously directed that member for Omineca (Mr. Kempf) to call

meetings of the Crown corporations committee on the third Thursday of

every month. He's failed, refused and neglected to do it. He's wilfully

obstructing the instructions of that committee.

As a result

of that, we're now faced with a request by B.C. Hydro, through the

fiscal agent thereof, for an additional $800 million in borrowing

capacity. We can't get to B.C. Hydro to find out what that's for.

That's shameful and disgraceful. Every time the general taxpayer picks

up his hydro bill from now on and sees in there that more than 40

percent of his hydro bill is going to pay the interest on this massive

and offensive debt, I hope he remembers at election time that it ain't

B.C. Hydro that's the problem; it's its fiscal agent, the Committee on

Crown Corporations and the Premier, who are refusing to permit some

sensible examination of what B.C. Hydro is doing. That's the force of

the argument I wanted to make.

HON. MR. CURTIS: I think there are a couple of things which should be

offered for the committee's consideration following the remarks we've

just heard from the member for Skeena. I would not want him to leave the impression

with the committee that Hydro is labouring under such a debt load that it is

unable to retire debt as it proceeds, because indeed, almost without exception

— that's the caveat that I have to apply — the debt which is now retiring,

the Hydro debt itself, would have had the sinking fund provision. Therefore

the principal amount to be retired has been reducing as well through the sinking

fund process. Clearly in terms of rollover — debt being transferred into other

debt — that applies again in the majority, where there is the very short-term

debt incurred by the Authority and financed through the trusteed funds to which

I referred earlier which are available to the province of British Columbia.

Mr.

Chairman, I note also that the increase in borrowing limit for B.C.

Hydro also occurred during the years 1972-75. We have to put it in

context. We have to recognize that this has happened over a good number

of years. In October of 1974 the increase was one-half billion dollars

in borrowing limit for B.C. Hydro. In July 1975 that was raised a

further $750 million, so that's a total of $1.25 billion dollars in

that relatively short space of time. Bills of this nature come before

the Legislature on a fairly consistent basis. I will take full

responsibility, as I must and as I happily do, as the fiscal agent for

British Columbia Hydro and other Crown corporations, when we are

discussing the borrowing activities of British Columbia Hydro or

British Columbia Railway, and I won't duck that responsibility at all.

think the member would admit that his remarks did stray into other

areas of responsibility for British Columbia Hydro which do not fall

under my portfolio. I'm the fiscal agent, admittedly. Not an easy job;

it's fairly tough job, in concert with being the fiscal agent for a

number of other Crown corporations. I will answer all the questions

that relate to that in my estimates, bills and sections of this kind. I

can't — without offending the Chair — respond to other points raised

with respect to a very large Crown corporation such as British Columbia

Hydro.

I think the record should also show today that in

general terms — I think the committee will find it of some use — the

capital expenditure program for this fiscal year 1981-82 is estimated

to be $458 million for electric generation facilities, $267 million for

electric transmission facilities, $152 million for electric

transportation facilities and $272 million for electric and gas

distribution, and other services. In very general terms there's the

very broad breakdown as to what the capital plans are on the part of

British Columbia Hydro for this particular fiscal year.

HON. MR. GARDOM: I move the committee rise, report progress and ask leave to sit again.

Motion approved.

The House resumed; Mr. Speaker in the chair.

The committee, having reported progress, was granted leave to sit again.

Reading and Receiving Petitions

CLERK-ASSISTANT: Mr. Speaker, pursuant to standing order 73(6), in

the matter of the petition presented to the House on May 21, 1981, by the hon.

member for Atlin (Mt. Passarell), the said petition is irregular in the following

respects:

In contravention of standing order 73 (5), the petition is not

subscribed by at least three petitioners on the sheet containing the

prayer of the petition.

[ Page

5743 ]

2. The additional signatures appended to the petition subscribe to a resolution

not identical in terms of the prayer of the said petition.

All of which is respectfully submitted, Ian M. Horne, QC, Clerk of the House.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 12:55 p.m.

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