1985 Legislative Session: 3rd Session, 33rd Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

FRIDAY, MARCH 15, 1985

Morning Sitting

[ Page

5293 ]

CONTENTS

Provincial-Municipal Partnership Act (Bill 25). Hon. Mr. Ritchie.

Introduction and first reading –– 5294

Revenue Sharing Amendment Act (Bill 22). Hon. Mr. Ritchie.

Introduction and first reading –– 5294

Provincial-Municipal Partnership (Taxation Measures) Act (Bill 21). Hon. Mr. Curtis.

Introduction and first reading –– 5295

Industrial Electricity Rate Discount Act (Bill 28). Hon. Mr. Rogers.

Introduction and first reading –– 5295

Budget debate

Mr. Stupich –– 5295

Mr. Kempf –– 5304

The House met at 10:07 a.m.

Prayers.

HON. MR. GARDOM: Mr. Speaker, I'm sure all hon. members would

like to bid a very cordial welcome to Mrs. lva Mann from the great

constituency of Vancouver–Point Grey, a lady who is extremely

interested in and works hard in provincial affairs.

MR. VEITCH: Mr. Speaker, I know you're not supposed to be

political in introductions, so I won't be, but suffice to say that from

the gem of the lower mainland, that great municipality of Burnaby, the

best mayor in the lower mainland: Bill Lewame. I'd like you to welcome

him, please.

HON. MR. RITCHIE: Mr. Speaker, it is an honour to welcome,

not only to your gallery but to the precincts, a large number of

distinguished people, too numerous to mention individually. We have

approximately 125 representatives from our 144 municipalities

throughout the province. I must, however, mention three gentlemen: we

have Mayor Mel Couvelier, the president of the UBCM, along with two

staff members of the UBCM, Messrs. Richard Taylor and Jeff McKelvey.

In addition we have Mr. Joe Oberhoffner, president of the B.C.

Chamber of Commerce, and Mr. Bill Goldie, general manager of the B.C.

Chamber of Commerce. Representing the B.C. Real Estate Association are

Mr. Herman Wiebe, president, and Mr. Bob Chaplin, executive officer.

Would the House please welcome these people.

MR. BLENCOE: Mr. Speaker, on behalf of our party and our side

of the House, I would also like to welcome to the House

representatives, mayors, aldermen and other people from local

government. Welcome to the House. I know that today is a big day. I

will be meeting with many of them. We hope that we indeed will see real

municipal partnership in the province of British Columbia.

MR. MOWAT: I would like the House to welcome today two

special guests from Kitimat: Joanne Monaghan and Mr. David Morris. I

know that from your constituency, Mr. Speaker, Mayor Ernie Burnett of

Delta is here. I must also welcome the financial director for the city

of Vancouver, Mr. Peter Leckie; Fritz Bowers, our city manager; and our

mayor, Mike Harcourt, so that I can get back into Vancouver today — but

I understand even Mikey likes it.

MR. MACDONALD: Mr. Speaker, I was going to introduce my own mayor, Mr. Mike, but this fellow beat me to it.

HON. MRS. McCARTHY: Mr. Speaker, I have great pleasure today in introducing

the president of Chow Yin Enterprises and a director of the Overseas Union Bank

of Canada: from Vancouver, Mr. Howard Wong. With Mr. Wong today are: from Singapore,

Mr. Lee Hee Seng, managing director of Overseas Union Bank of Singapore and

the deputy chairman of the Overseas Union Bank of Canada; and from Toronto,

accompanying them, is Mr. Heah Hock Meng, director of the Overseas Union Bank

of Canada. Will the House please welcome them.

MR. MacWILLIAM: I'd like to take the opportunity to welcome a

distinguished gentleman to the House today: the mayor of the city of

Vernon, His Worship Lyall Hanson. I might add that it shows you how far

we go in the spirit of cooperation up in the North Okanagan: we both

share the same name. I'm not sure if other members of council are with

Mayor Hanson, but if they are here today I'd like to welcome them also.

HON. MR. WATERLAND: Mr. Speaker, there are some eight

incorporated municipalities in the constituency of Yale Lillooet. I

don't know how many of the mayors are here today; I have spotted two in

the gallery. If there are others, my apologies to them. In any event,

would the House please welcome Mayor Baird from the city of Merritt and

Mayor Christensen from the town of Logan Lake.

HON. MR. PELTON: Having firsthand knowledge of how busy

mayors are, and the fact that they don't have too much time to come

over and visit us, I would like to take the opportunity of introducing

the mayors from the Dewdney riding to the assembly today. First, I

would like to introduce His Worship Danny Sharpe, mayor of Pitt

Meadows, and his administrator, Joe Antalek. I would like also to bring

to the attention of this House the fact that Mayor John Agnew and his

administrator Dr. Norman Cook, from the city of Mission, are with us

today. Last but not least, Mr. Jerry Sulina, the administrator of the

beautiful district of Maple Ridge, is here. I would ask the House to

make them all welcome.

MR. REE: From the area that looks over the Greater Vancouver

Regional District, I'd like to ask the House to welcome the two mayors

from the North Shore, Jack Loucks of the city of North Vancouver

and.... I don't see Mayor Marilyn Baker here; she told me she was

coming. She's a woman who always does what she says, so I presume she's

here. I ask the House to welcome the mayors of the city of North Van

and the district of North Vancouver.

[10:15]

MR. KEMPF: Not to be outdone by Yale-Lillooet, I too have

eight incorporated municipalities in my constituency. A great number of

their representatives are with us here today, certainly if not in the

galleries, in the precincts and in the city of Victoria, our beautiful

capital city. I would bid all of them welcome. However, I see one of my

prominent mayors, His Worship Mayor Len Fox, in your gallery, Mr.

Speaker. I ask the House to welcome him and all of the delegates from

Omineca.

MR. STRACHAN: We're really on a roll this morning with our

civic administration, many of whom from my riding have been introduced.

But two special guests have not had the pleasure of being introduced in

this House. I'd like all members to welcome His Worship Ken Jones from

McBride and city clerk, Ron Brown.

MR. STUPICH: I'm not sure how long the introduction period is

going to be today; it's well that we waived the statements and question

period. I do have two mayors here from my own constituency — Mayor Alex

Stuart from Ladysmith, and Mayor Graeme Roberts from Nanaimo. My

colleagues all have mayors from their ridings too, and they may

[ Page 5294 ]

want me to introduce all of them; I can't do that, but can I just say welcome to all of them.

HON. MR. ROGERS: I very seldom rise to introduce guests, but

I did see some people in the gallery who are not publicly elected. I

see a group of young Girl Guides from North Vancouver. And if there's

anybody here who hasn't run for public office and is just here today,

and you feel that no one wants to welcome you, you're all welcome.

HON. MR. CURTIS: Mr. Speaker, thank you for your indulgence.

I'm not going to move that the House adjourn. I wonder if the House

would permit me to make a couple of remarks with respect to a great

sport in this area, basketball. The University of Victoria Vikettes

women's basketball team has just won the Canadian university women's

championship for the fourth times in six years — one of the best UVic

teams ever. And perhaps, with your permission, Mr. Speaker, we could

think about the University of Victoria men's team, who will be playing

the University of Waterloo in Halifax tomorrow for the Canadian men's

championship. They're seeking their sixth consecutive men's

championship. I think that greater Victoria and British Columbia can be

proud of these two teams.

HON. MR. CHABOT: I'd like to make a brief statement on the

death of Henry Hunt. Members of this House are aware, no doubt, of the

passing of Henry Hunt, the noted Kwakiutl carver.

Mr. Hunt, the preeminent native Indian carver, died March 13 at the

age of 6 1. It would be difficult to overstate the contribution Mr.

Hunt made to the cultural rebirth of his own Kwakiutl people and to the

cultural life of British Columbia. Mr. Hunt was born in Fort Rupert

near Port Hardy in 1923 and moved to Victoria in 1954, where he began

his apprenticeship as a carver with Mungo Martin at the B.C. Provincial

Museum. One of his major accomplishments was the carving, with Mungo

Martin, of the totem pole erected in Beacon Hill Park in 1956.

Throughout his career Mr. Hunt carved many beautiful works of art, and

he continued to carve after he resigned his position with the

Provincial Museum in 1974.

Not only did Mr. Hunt encourage and train many young men and women

of his own Kwakiutl tradition, but he also shared his craft and talents

with aspiring Haida, Nootkan, Coast Salish and other native peoples.

Mr. Hunt will be greatly missed but his contribution to this province

will live on forever in his works of art and in the many native Indian

artists he has inspired.

MR. HOWARD: Mr. Speaker, we want to join with the Provincial

Secretary in expressing our regrets at the passing of Henry Hunt,

member of a renowned, distinguished and honoured family within the

Kwakiutl nation. He made a tremendous contribution as an artist, a

creator and an advancer of the culture of native Indian people. He and

his family will be remembered — and rightly so — long after we are gone

from this place. The contribution that Henry and others in his family

have made to the culture and advancement of the art form of totemic

carving will live forever. We appreciate the opportunity to associate

ourselves with the minister in the expressions with respect to Mr. Hunt.

Introduction of Bills

PROVINCIAL-MUNICIPAL PARTNERSHIP ACT

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

a bill intituled Provincial-Municipal Partnership Act.

HON. MR. RITCHIE: Mr. Speaker, I would like at this time to

make a few brief remarks, but first let me say that after introducing

the representatives from all over our province, I noted in the gallery

a mayor from my community whom I don't see so often now since becoming

involved in the ministry. I am delighted to see here today Mayor George

Ferguson and his alderman Vic Wiebe.

Since becoming the minister, I have had the pleasure of visiting

over 80 municipalities throughout this province, and from those visits

I get the very distinct feeling that there is indeed a new feeling out

there. There is a new direction. There is a desire, Mr. Speaker, to

bind our forces and talents in a challenge to create new jobs in our

communities — bind together the chambers of commerce, the business

associations and the workers of our communities and municipalities.

They themselves have already been demonstrating that desire. This bill

will make possible the laying of the cornerstone to economic renewal,

best done at the grassroots level, and best done in a voluntary way.

We at the grassroots municipal level have a major role to play at

that level. We must create in each of our communities a healthy

investment climate, a climate consisting of fair property taxation, no

red tape, no bureaucratic roadblocks, so that those potential investors

attracted to our communities by our Minister of Industry and Small

Business Development, Mr. McClelland, and by our new Minister of

International Trade and Investment, Mr. Phillips.... Mr. Speaker, we

want them, when they come, to look at us. We want them to stay and

invest. This bill gives us the tools, gives us the opportunity and,

hopefully, will strengthen the desire that is already out there to make

that all possible.

Bill 25 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.

REVENUE SHARING AMENDMENT ACT, 1985

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

a bill intituled Revenue Sharing Amendment Act, 1985.

HON. MR. RITCHIE: I move that the bill be introduced and read a first time now.

Very briefly, revenue-sharing indeed means sharing of the revenue of

the province, which unfortunately has its ups and downs. We have

experienced recently that in some cases the spending at the local level

has been such that whenever we hit a downturn we are finding ourselves

in some difficulties. Of course, at that time we also get criticism

from our opposition because we are unable to provide all the funds they

think should be provided, forgetting indeed that we are talking about

revenue-sharing — revenue which we, most times, have very little effect

on, as far as international markets are concerned.

[ Page

5295 ]

Mr. Speaker, this bill gives us the opportunity to establish a reserve that

will take out the humps and hollows of that program, so that we can have healthy

development, and we can have ongoing programs, not criticized as time goes on.

Bill 22 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.

PROVINCIAL-MUNICIPAL PARTNERSHIP

(TAXATION MEASURES) ACT

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

a bill intituled Provincial — Municipal Partnership (Taxation Measures) Act.

HON. MR. CURTIS: Mr. Speaker, my remarks will be very brief. This is

a significant companion to the first message bill introduced by my colleague

the Minister of Municipal Affairs (Hon. Mr. Ritchie) earlier this morning.

Bill 21 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.

INDUSTRIAL ELECTRICITY

RATE DISCOUNT ACT

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

a bill intituled Industrial Electricity Rate Discount Act.

HON. MR. ROGERS: Mr. Speaker, in line with the brief

statement allowed on the policy involved in a bill, this bill

authorizes the Lieutenant-Governor-in-Council to receive and approve

applications from existing and new industries in British Columbia for

rate discounts on incremental consumption of surplus hydroelectricity.

Industrial customers are defined to be manufacturing, mining and

processing plants with an electrical consumption of five megawatts or

more.

Under this bill discounts will be offered for the following

categories: incremental electrical consumption using existing plant

capacity which is currently shut down; industries experiencing

difficulty in continuing to operate or resuming operations; new

industrial plant with electrical consumption of five megawatts or more;

and expansions of existing industrial plants where the expansion will

consume at least five megawatts.

quantity and period of eligibility, will be negotiated on a

case-by-case basis in accordance with need.

Also included in this bill are provisions whereby industrial

customers located in a utility service area other than B.C. Hydro's can

receive electrical discounts. By that I mean we have made provisions

for customers within the West Kootenay Power and Light area for whom

this may be applicable.

Industrial customers located in a municipality will be able to

receive the discounts only if that municipality has entered into an

agreement under

section 2 of the just introduced Provincial-Municipal

Partnership Act.

Prior to ordering that a rate discount apply to the sale of surplus electricity,

the Lieutenant-Governor-in-Council will have to be satisfied that the sale would

not have occurred without this discount. This will ensure that the surplus sales

will generate additional revenue for B.C. Hydro.

In

summary, Bill 28 will provide industry with a powerful incentive

to expand production and employment. At the same time, revenues earned

from this incentive will assist all British Columbia Hydro customers in

keeping rates down in order to ensure that we have the lowest levels

possible.

Bill 28 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.

[10:30]

Orders of the Day

HON. MR. GARDOM: Mr. Speaker, I call resumed debate on the

budget. The hon. member for Nanaimo (Mr. Stupich), the designated

speaker of the official opposition, adjourned the debate yesterday. In

the event that the hon. member requires a reasonable extension of time

to develop his remarks, that indeed will be satisfactory.

ON THE BUDGET

(continued debate)

MR. STUPICH: Mr. Speaker, my thanks to the government House

Leader. I won't ask him on a sunny Friday morning leading into a sunny

Friday afternoon just what is a reasonable extension of time. I think

I'll just proceed with my remarks.

There is one thing that the Minister of Finance (Hon. Mr. Curtis)

and I can agree on with respect to the budget: that a large measure of

the budget introduced yesterday by the minister has a single economic

thrust. The direction is that of tax reduction for industry and

commerce. Most other elements in the budget are relatively status quo.

This is not a new pattern, Mr. Speaker. It has become a

one-dimensional government. They do one thing at a time to the

exclusion of everything else. They do that one thing with a vengeance,

doing it all at once. Ignoring everything else — including the

consequences, unfortunately. When they were into restraint, that was

all they were into. The economic recovery ended and the economy slipped

back into recession. But they were into restraint, and that was all

there was to it.

Now they are into tax cuts for industry, and that's just about all

there is in the budget. For example, most of the spending estimates are

within a few percentage points of the previous year. The government has

no apparent will and no apparent interest in reforming its spending

practices. We can only hope there is a pause in the settling of old

scores, and that there will be some degree of stability in the

government's fiscal policy for the short period of time that this

government will remain in office.

[Mr. Ree in the chair.]

All the government's eggs are now in the basket of tax reductions

for industry. Taxation of industry is a complex and important subject.

It is one that will be dealt with in detail not only in this budget

debate but during consideration of the actual legislation involved.

Let me say at the outset, Mr. Speaker, that it is a mistake to put

too many eggs in one basket. This is true for individuals, for

companies and for governments as well. I want to go

[ Page 5296 ]

on record as saying that the official opposition is

extremely concerned about the effectiveness of the government's program

in terms of stimulating economic growth. We believe it is insufficient

to achieve the major employment growth required in our province in

1985. We find that the government has failed to present a financial

plan on how it will pay for the tax reductions involved. Where is the

money coming from to pay $995 million in corporate tax concessions over

the next three years? This government doesn't have the money. It is

funding this year's portion through increasing the deficit. It is

borrowing the money. Where will it come from? Who will pay? We believe

that the government has not chosen the most cost-effective package of

incentives and stimuli to create jobs in the economy.

I want to briefly cite a study prepared by the Canada immigration

centre in Ottawa. This study paper is very important to the debate on

this government's budget. I wish to seek leave to table it in the House

at the conclusion of my remarks.

The study provides a computer simulation of three types of

government employment initiatives. They are: (1) government expenditure

initiatives, (2) government investment initiatives, and (3) tax cuts.

In this study the employment creation effects of the three approaches

were analyzed and compared. The main findings of the study are clear.

Corporate tax cuts are the least effective way of creating jobs in an

economy. Expressed in dollars per job created, the options break down

as follows: general government expenditure, $13,000 for each job

created; personal income tax cuts, $16,000 for each job created;

investment in non-residential construction, $14,000 per job created;

investment in machinery and equipment, $16,000 per job; corporate tax

cuts, $77,000 per job created — by far the least cost-effective. Not

only are corporate tax cuts the least efficient method of creating

employment; they are between five and seven times less efficient than

the other options. Yet this is what this government has chosen to the

exclusion of all else.

More particularly, expenditure initiatives in primary industries,

including investment in basic resource industries, which is the policy

long advocated by members on this side of the House, are shown to be

among the most efficient methods of job creation. I think that even

government members will be forced to admit that there is nothing in the

government's program which provides for the creation of new jobs in

return for new tax concessions. No strings on the money, Mr. Speaker.

In point of fact, there appears to be nothing that requires the

retention of existing jobs in order to qualify for new tax concessions.

Moreover, the minister has not tabled any studies on the employment

impact of any or all of these tax concessions. The government has not

even set targets for employment growth, other than to forecast an

unemployment rate of 14 percent for 1985. If 14 percent unemployment is

an acceptable target for this provincial government, then B.C. needs a

new provincial government.

Because of the program of tax hikes, cutbacks, downsizing and

layoffs — sometimes referred to as the restraint program — the B. C.

economy has performed worse than any other province in Canada, with the

sometime exception of Newfoundland. We can be a better province. The

lack of recovery in B.C. has severely harmed the lives of thousands of

B.C. families, especially youth and wage earners. The Socred program

has not only failed to deliver the promised recovery but has actually

worsened the situation.

Mr. Speaker, I want to state the matter just as clearly as I possibly can.

B.C. has undergone two recessions in the past four years: an international recession

and a Socred depression. The second is more than any provincial economy should

have to bear. During the international recession markets plummeted. That's

true; we recognize that. B.C.'s economy shrank by 5 percent, just slightly

worse than the national average. In 1983 the recovery began in B.C., along with

other economies, but something happened. In July 1983 the present government

declared war on the social and economic fabric of the province of B.C.

There is a bill to be paid for the political excesses of this

government in 1983, and it is being paid by the B.C. economy. During

the international recession unemployment in B.C. jumped by about 5.5

percentage points to 12.1 percent. During the Socred depression it

jumped by a further one and one-half points to 13.8 percent. The

recovery of 1983 was stalled, and in fact reversed, by the program of

this government. In the second half of 1983 the B.C. economy slipped

back into recession. The rest of Canada experienced a recovery. The

opportunity for economic recovery was passed over by this government,

which was too busy settling old political scores.

The present government has brought in economic program cuts which

harm the future economic prospects of the province. The government has

attempted to save money at the expense of small business and jobs.

Consider the following, Mr. Speaker, quite a list: cancellation of

reforestation and silviculture projects, including the layoff of staff;

cutting the energy resources division budget in half, achieved

primarily through the cessation of all provincial activity in support

of renewable energy resources and energy conservation industries;

cancellation of all provincial direct lending programs for small

business; a 25 percent reduction in all remaining assistance programs

for small business; employment training programs cut, spending

authorizations left unexpended; provincial research and development

grants cut to B.C. based research projects.

The provincial government has brought in social program cuts which

harm families and children. It has attempted to save money at the

expense of those who lack political power or are poor. It has been

particularly hard on families in crisis. Consider the loss of

family-support workers, child-abuse workers, post-partum counsellors,

etc.

Mr. Speaker, every member in the House is aware of the cuts that

this present government has made in education and in job-training,

attempting to save money at the expense of the next generation. By the

end of the current year, school services will have been cut by 25

percent. Is that something about which we can be proud at this time?

Something is wrong when leading educators have no alternative but

resignation to show the public how deeply and cynically this government

is chopping educational opportunities for our youth and children.

In the gallery today there is a group of parents from my own

constituency who brought down a pile of letters, signed by people in

the constituency, complaining about the cuts in education. I think none

of us, in our experience in the B.C. Legislature, has ever had as many

individuals — in every constituency, those represented by government

members and opposition members alike — raising questions about what the

government is doing to the education system. These letters are coming

in all the time. These arrived today, and I would like to ask the

attendant to put them on the desk of the

[ Page 5297 ]

Minister of Education (Hon. Mr. Heinrich). Mr.

Speaker, I don't expect that he will read each and every one of those

letters, but I want him to be impressed by the number of people who are

taking this method of expressing their concern. It's just one method

that's being used, but I would like him to be impressed by that.

The present government has refused to consult, let alone cooperate

with, the people of this province. They have developed policy by fiat,

prime-time TV broadcast, and public opinion survey. The economic

effects of this program are severe, and they are extremely negative. If

B.C. had Manitoba's or Ontario's unemployment rate, we would have

nearly 100,000 more British Columbians back at work earning and

spending an additional $2 billion a year.

The years 1983 and 1984 were marked by economic recovery in the rest

of Canada, the U.S. and elsewhere. In B.C. this period was marked by

declining production and declining capital investment. Unemployment

continued to increase, along with business bankruptcies. Every British

Columbian should be aware of what has happened to the B.C. economy. All

Canadian provinces suffered a downturn in 1982. Most, along with B.C.,

began to recover in 1983, but then came the July '83 provincial budget,

and the present government turned our economy upside-down. The recovery

was killed in its infancy by a government pursuing an election

timetable.

[10:45]

At that time, on behalf of the New Democratic Party, I made two

comments which are, I think, still relevant. One was that the July 1983

program was based on a big lie: that the brand of restraint practised

by Social Credit would lead to economic recovery. It did not, Mr.

Speaker. All of B.C. Is paying the price for the government's acting as

if that lie were the truth. The second was that the Social Credit

government was up to its old tricks, trading the province's future away

against an election timetable. There was a hidden agenda. The present

government had some dirty deeds to get out of the way with its fresh

election mandate, so it could slowly seduce the public back to Social

Credit. I recall quoting Machiavelli to make this point, and I think

he's worth quoting again, Mr. Speaker:

"Examine closely into all those injuries which it is

necessary...to inflict, and do them all at one stroke so as not to have

to repeat them daily.... For injuries ought to be done all at one time

so that, being tasted less, they offend less; benefits ought to be

given little by little so that the flavour of them may last longer."

You cannot run a province on the Social Credit election timetable.

It just doesn't work for the benefit of the people. This time the

effort to settle scores has cost the economy badly. It is difficult to

see how the economy could ever recover fully from the fallout of the

last two provincial budgets.

How bad is the fallout? Retails in B.C. have now declined for four

consecutive years, according to the Conference Board and B.C. Central

Credit Union. Retail sales are a reliable indication of economic health

and well-being. They also demonstrate the effect of the government's

program on small business in the economy. Along with others, small

business has taken a beating from its part under this program.

There is no end in sight to the Socred recession, making it the

longest since the 1930s. There is no other way to interpret the fact

that unemployment in B.C. is still at record levels. Housing starts are

at a 20-year low in the province of British Columbia. Recent trends in

interest rates and a general decline in personal income in the province

have hurt many areas of employment and trade in B.C. Incredibly, with

the major importance of the housing industry to B.C., the provincial

government has no plans in progress to stimulate affordable housing for

our people. Incredibly, in retrospect, the alleged justification for

the program included the allegation that the program would stimulate

investment.

In many ways our economic future is determined by capital

investment. It is here that the restraint program has had its most

spectacular failure. Far from the investment boom predicted, there has

been an unprecedented nose-dive in all types of capital investment over

the restraint period. The real growth rates in public and private

investment demonstrate this point clearly. In three short years public

and private investment is down by half in B.C. In real terms.

Investment is down sharply in each and every year of the so-called

restraint program. No such drop has occurred in any other Canadian

province. Even the government's friends are alarmed, B.C. Business

Council's Jim Matkin, for example, has said: "The economy hasn't

recovered. It hasn't turned around, and that was what we were all led

to expect and anticipate."

Is it any wonder the word "restraint" does not appear in the throne

speech? The present government has taken a perfectly normal and

respectable word and turned it into a nightmare for the people of

British Columbia. A whole generation may grow up believing the economic

chaos and political revenge sought by the present government in the

past three years has something to do with restraint. Some may come to

an entirely inappropriate conclusion as a result. The matter should be

restated clearly.

The NDP supports restraint in government, if it means that

taxpayers' money should be treated with great respect and used

efficiently for necessary public purposes. The program we are suffering

from in B.C. is one of tax hikes, layoffs, cutbacks and political

revenge meted out to serve an election timetable. It is this crucial

distinction which is at the heart of our problem in B.C. today. The

restraint program, according to Patrick Kinsella, was brought in to

give the premier a tough-guy image. It is being phased out today to

change or alter the image of the present government. It seems that any

policy is acceptable if it contributes to the re-election of this

government. My question is: when is this government going to recognize

that it is playing with our economy, with our future? It is playing

with people's lives.

There is something crucial missing from the current budget,

something fundamentally as obvious as it is profound for the people of

British Columbia. British Columbia must now develop a fiscal strategy

based on rebuilding our economic infrastructure and faith in the future

of our province. The role of government must be changed to one which

supports local economic growth. It is now obvious that you cannot lay

off, tax and cut back your way into prosperity. Government by fiat and

confrontation is a dead end into continued depression. A cooperative

and consultative framework around a reconstruction plan for B.C. offers

significantly more promise.

Where does the money go? The present government has produced its

sixth consecutive deficit budget — never since 1952, except for the

last six years. That's a milestone of some sort. It is not, however, a

milestone of which we should be proud. Somehow Social Credit has

succeeded in racking up combined budget deficits of approximately $4

billion in six

[ Page 5298 ]

short years. It has done so without maintaining

services. If we had something positive to show for this, it would be

one thing; but they haven't maintained services. In fact, the irony is

that the deficit has been made worse by their attempts to cut

government spending. The deficit has been made worse, as I stated

earlier, and the economy has been made worse by their program. The

present government's programs are wasteful of the taxpayers' money.

It's often said that governments do not have money of their own to

spend — and I've heard that from the other side of the House time after

time. They say that governments only have taxpayers' money to spend.

But they also have taxpayers' credit to spend. Social Credit stopped

spending the taxpayers' money years ago. They've been spending the

taxpayers' credit, and attempting to hide the fact, for most of the

last decade. They got away with it earlier. Now they are hopelessly

addicted to the pay-later or pay-never plan.

It's time this side blew the whistle on them. It is time we told the

people of British Columbia what has happened under this Social Credit

administration. When they took office in December of 1975, after 104

years of careful management by previous governments of various

political stripes, the combined debt of the province and all of its

Crown corporations and agencies stood at $4.4 billion. Here we are,

just nine short years later, and what is the debt position today? We

were told yesterday; it's in the budget. I regret to say that it is now

in excess of $17 billion. This group of money managers has managed, in

nine short years out of our 113-year history, an increase in our debt

of some $12.7 billion — a fourfold increase in nine out of 113 years.

The interest on this debt incurred by this Socred team in just nine

years is costing the people of British Columbia $3.7 million a day. By

the end of the fiscal period for which this budget is leading us, it

will be in excess of $4 million each and every day. That's the interest

alone on the public debt amassed. By then it will be ten years of

Social Credit rule.

The debt has all but quadrupled. The increase over this period is

mind-boggling. How could they do it? It has grown at a compound annual

rate exceeding 17 percent. Nothing else has grown that fast in B.C.,

with the exception of bankruptcies and unemployment. How dangerous is a

17 percent compound growth rate in the government's debt? The

quadrupling of the debt in the past nine years is just part of the

story. It's the path that this government is taking the province on

that scares us.

If the present government continues to use the taxpayers' credit to

buy votes, using projects at election time, the debt can only increase

further. The government has shown that it is prepared to spend and

waste any amount of the taxpayers' credit to buy votes. If the

government's program continues to sap the economic strength of the

province, the cost to the treasury of lost revenue and income support

will continue to eat away at taxpayers' credit. What if, God forbid,

this government were to be maintained in office? What if they continue

to spend the taxpayers' credit as if it were their own? What if the

present Premier succeeded in his ambition, as some say, of surviving

two decades in office, as did his father? The debt could approach $100

billion if they were permitted to continue the fiscal gluttony of the

past nine years. Of course, it won't happen: this government will not

survive the next election, let alone the next decade.

Is it any wonder this government has lost the province's triple-A

credit rating? Think about this: the socialist-leaning administration

of the city of Vancouver has preserved the triple-A credit rating of

that city, while this government has failed. The sources of waste of

taxpayers' money need to be recalled. I think we should review these

briefly, Mr. Speaker, so that all British Columbians can be aware of

the need for change in our province. B.C. has undergone two recessions

in the past four years, an international recession and a Socred

depression. The second is more than the provincial economy should have

to bear.

Mr. Speaker, I would like to consider for a moment the matter of

income support. Provinces such as Manitoba and Ontario have an

unemployment rate of about 10 percent, compared with B.C.'s current

rate of about 16 percent. In those provinces, however, they have

governments, widely different in political outlook, that do not believe

in poking their citizens and their economy in the eye. In our province

the cost of income support for the victims of the Socred recession has

reached staggering levels. Income assistance payments have reached $1.2

billion, more than double pre-depression levels; and yet the budget

that was delivered yesterday projects a further increase in GAIN

payments.

What better evidence do we need that the government itself admits

things are going to be worse in 1985 than in 1984? We have been told

there will be no increase in allowances paid to people on human

resources support, and yet the government is providing more money than

they know they are spending in the current fiscal year because they

know things are going to be worse next year. That of itself is an

admission. Yet in Ontario and Manitoba, governments of widely different

political outlook are working on behalf of their people.

[11:00]

Unemployment insurance payments in B.C. will exceed $1.4 billion

this year, almost triple pre-depression levels. Each 1 percent increase

in unemployment costs the taxpayer more than $160 million for increased

welfare and UIC payments alone. If B.C. had an unemployment rate

similar to Manitoba or Ontario, the taxpayers would save $1 billion a

year. This is where the money goes: to help victims of the Socred

depression to survive; to support the one in four British Columbia

families that have been reduced to seeking help to put food on their

tables. Unfortunately, the costs do not end there.

So many people not working, not spending and not paying taxes is a

further cost to the economy. It is also a cost to the provincial

treasury. If B.C. had Manitoba or Ontario's unemployment rate, we would

have nearly 100,000 more British Columbians back to work, earning and

spending an additional $2 billion a year. Virtually every dime that the

present government claims to have saved by chopping family support

programs, for example, is wasted in the 24-hour, seven-day-a-week drain

of welfare and UIC.

[Mr. Strachan in the chair.]

A society is always judged by how it treats its poorer citizens. We

recognize that we will always have people in our midst who need our

assistance and support. For this reason we are most concerned that the

government has not listened to the many city councils, municipal

councils, church groups and community groups from around the province

that have called for an increase in income assistance rates. Have our

cabinet members no shame? How can they hold up their heads in meetings

with their colleagues from other provinces, or in the other countries

where they are so anxious

[ Page 5299 ]

to travel, and answer questions about breadlines and soup kitchens in British Columbia?

The budget also reveals cutbacks in essential social services,

support programs for families and children, residential care for those

children who through no fault of their own have become wards of the

government, special programs for the retarded, services to seniors. Mr.

Speaker, are we so poor that we cannot maintain those services?

Cutbacks in social services have the greatest impact on the working

poor, the unemployed and young people. High unemployment such as we are

experiencing in British Columbia leads to social problems such as

family stress, mental illness and suicide. It also leads to low

consumption of goods, less patronage for small business owners, lowered

public revenue and increased welfare costs.

We should therefore be willing to strive to lower unemployment and

to combat the social effects of unemployment through adequately funding

both social programs and assistance benefits. B.C.'s current social

assistance rates, which have not been increased since 1982, are less

than half the poverty level by every definition.

B.C. municipal councils, school boards and community groups, by

calling for the government to increase welfare rates, recognize that

when the population is poor, their economies are poor. Low-income

people have the highest marginal propensity to consume. As the Catholic

bishops said in their ethical reflections on the economic crisis, what

is required first is a basic shift in values. The goal of serving the

human needs of all people in our society must take precedence over the

maximization of profits and growth. The government claims to have no

money for education, health care and human services. They claim that

they really secretly support these services, but the money just isn't

there. But the government continues to siphon federal transfers for

health and post-secondary education into other projects — welfare

payments, interest on debt, international travel, just to name a few.

B.C. has become the first province in Canada whose post-secondary

institutions are entirely funded by Ottawa and by student fees. Last

year the federal government earmarked $478 million for post-secondary

education. Overall, federal transfers in respect of post-secondary

education are up, so there is $515 million from Ottawa for

post-secondary education in B.C. Take away the university operating

grants — $271.6 million — and that leaves $243.4 million. The colleges

have been assigned $240 million, which leaves $3.4 million. There's

another $27.6 million in the two ministerial slush funds, or adjustment

accounts, which bums up the last of the federal money. At last some

provincial dollars are assigned — $24.2 million. That is a not an

insignificant sum, Mr. Speaker, but it's just 0. 3 percent of the

provincial budget that we're dealing with today.

I'm sure that the hon. Minister of Universities, Science and

Communications (Hon. Mr. McGeer) is now about to leap to his feet and

say, "That's unfair, " because some of the federal money goes to pay

half the costs of our grade 12 programs.

AN HON. MEMBER: He can't leap; he's not here.

MR. STUPICH: It's Friday afternoon; I'm not surprised that he's not here.

That would be something over $30 million — half the cost of the

grade 12 programs. But since the hon. Education minister (Hon. Mr.

Heinrich) denied all knowledge of that in the House on Tuesday, I've

left that out of my calculations.

If federal transfers aren't used to provide their intended services,

and provincial income tax payments aren't used to support their

intended services, the government has some explaining to do. British

Columbians pay taxes. They do so expecting certain services. Under this

government no one knows from one day to the next what services will be

provided and at what level. Some communities, such as the model town of

Tumbler Ridge, have everything approved, built in and funded 100

percent by the government. Others have had to abandon the fight for

similar-quality services in an attempt to stop the Socreds from closing

their schools, their hospital beds and their libraries.

Where does the money go? Megaprojects. Getting real, hard,

trying to find the combination to Fort Knox. You assume that someone

has the information, but you have a lot of trouble trying to nail it

down. There are all sorts of numbers available, but it proves

impossible to tell which are the right ones.

Some of what can be gathered from one independent source is rather disturbing.

Consider the following: B.C. Place, like most government projects, has only

borrowed money to spend. The corporation has now spent more than $300 million

of borrowed money, all of it repayable by the taxpayers. In this case. however,

the corporation's debt has been cleverly laundered through another Crown

corporation: B.C. Buildings Corporation. In 1982 B.C. Buildings Corporation

borrowed $205 million in the marketplace. It gave the money to B.C. Place as

"contributed surplus." In return, B.C. Buildings Corporation holds

the one nominal-value equity share.

In one swift move, the debt of the stadium construction, land

acquisition and development costs was lifted from the books of B.C.

Place. These considerable costs are no longer reported by B.C. Place,

and B.C. Place claims that income on the basis of the land and stadium

— a $205 million bill — is free. The debt-servicing costs are being met

by B.C. Buildings Corporation, which gets its revenue from the various

government ministries that are paying rent to B.C. Buildings

Corporation, and the various government ministries, of course, get

their money from the taxpayers of British Columbia. So it's the

taxpayers of British Columbia — all over British Columbia — who are

paying the debt-servicing costs that were incurred to build B.C. Place.

It amounts to a direct subsidy by the taxpayers, who will be paying the

costs of this BCBC loan of some $25 million every year, forever. That's

not providing anything at all for paying it off.

Expo 86. Expo 86 Corporation has taxpayer-supported borrowing of

some $93 million at present. This will have to be increased very

shortly. Expo chairman Jim Pattison has placed the Expo deficit at some

$300 million. Some UBC economists prepared an economic impact

assessment of Expo and a survey of similar world's fairs in North

America. They found that the typical mistake made by fair planners is

to underestimate site rehabilitation costs after the fair is over. The

question remains: how much debt will be left after the fair is over,

and how will it be repaid?

Automated light rapid transit. B.C. Transit advises that some $850

million has been spent on the ALRT project to date. The government

introduced a bill yesterday bringing B.C. Transit's authorized debt up

to $1.5 billion. It is difficult to pin down a figure for the final

costs, because so little of the

[ Page 5300 ]

financing details have been set. The government

will have to raise a total of some $1.2 billion in borrowed money to

finance this project. Who will repay the debt? The government has said

it will amortize the debt over 50 years to lower the cost. That means

the repayment costs would exceed $4 billion in current dollars.

Apart from the certain knowledge that fares go up, taxpayers are

uncertain, not about whether their taxes will go up to pay for this but

by how much and when. We are thus far along with the project, a project

that is going to cost $1.5 billion, and there is still no decision, to

the best of my knowledge. There is no real discussion as to how the

total costs of that project are going to be amortized and how they are

going to be shared by the riders of that system — by the property

owners in that area or by some other means municipalities will be

levied charges. We still don't know, even though the line is at an

advanced state of construction. This government of planners apparently

thought it was not important to reach a conclusion as to how the bills

would ever be paid — $1.5 billion.

The government claims on page 97 of the budget that BCR has no debt.

This is called Social Credit economics. Perhaps to make a long story

short, the minister could tell British Columbia how B.C.'s $720 million

investment in northeast coal is financed. Perhaps he could also advise

what revenues can be applied against this investment, say, in the first

year of operation. BCR has borrowed more than $400 million to provide

funds for the Tumbler Ridge railway line. Some of this debt is called

preferred shares.

What revenues does the government have to pay off this debt? My

point is fairly straightforward. In these four projects alone, the

taxpayer has sunk somewhere between $2 billion and $3 billion. There is

no evidence whatsoever that any of these projects will pay for

themselves, let alone provide a return to the taxpayer for the funds

invested.

B.C. Place is certainly not paying for its $300 million debt. Expo

requires massive subsidies from lottery proceeds and special taxes or

no taxes on site and then may not break even. ALRT is a financial

enigma, to say the very least. It is guaranteed to cost users and

taxpayers a large bundle for a very long time, and northeast coal is

certainly not providing a return at this moment, if indeed it ever will.

Let me put this matter in perspective, Mr. Speaker. It is always

possible to dream up projects and spend money on them. The hard work is

finding and developing projects which are economic — that is, projects

which pay back their debts and provide a return to their owners. What

we need is a government which can develop such projects and make them

pay for the people who provide the cash. That is the kind of government

which the New Democratic Party wishes to bring to B.C.

In its politics, another source of waste and political abuse of

taxpayers' money is the government's use of image politics. A few

months prior to the 1983 provincial election, we were all subjected to

a multitude of television and radio advertisements paid for by the

taxpayers, telling us how wonderful it was to live in British Columbia.

Is the government again going to embark on a similar ad campaign?

This year the government plans to spend almost $2.3 million on its

propaganda empire. According to the latest budget estimates, the

division responsible for government advertising and public relations

spending has an increased budget of approximately $2 million, The NDP

believe the taxpayers of this province deserve to know if this $2

million is earmarked for another Social Credit propaganda blitz.

Another series of ads are the wrong priority for government. People

living in this province already know how great B.C. Is. What they

really need are answers to the present economic crisis. They need jobs.

They need hope for a safe and secure future.

Travel budget. Another area of blatant misuse of public funds is

cabinet minister's out-of-province travel funds. From 1983-84 estimates

to today's 1985-86 estimates, the costs have skyrocketed. In 1983-84

the costs totalled $215,250. In 1984-85 the costs increased 153

percent. Wouldn't Education have liked to have had some of that

increase, Mr. Speaker — 153 percent in that one item, to $545,460? The

1985-86 estimates have increased another 86 percent to $1,017,815, this

time under the guise of a new ministry, the Ministry of International

Trade and Investment.

[11:15]

It should be stressed that these figures are for out-of-province

travel only. Bangkok, Djakarta, Hong Kong, Singapore, West Germany,

Sweden and many more destinations have all been part of a government

policy to establish a presence in foreign countries by sending cabinet

ministers abroad, courtesy of the taxpayers of this province. What has

been the success rate? What enormous economic benefits have been reaped

for the people of British Columbia? Have any foreign contracts been

signed? Why should the 226,000 unemployed British Columbians believe

increased foreign travel will now bring relief to them? It seems

obvious that money spent on this travel is for free trips for

ministers, with any business dealings being incidental. The new

estimates will only allow cabinet ministers to pursue their travel

hobbies at our expense. Ministerial travel abroad is insufficient to

attract overseas investment to British Columbia or to create stable

markets for B.C. exports. Overseas investors and buyers are far too

sophisticated to be impressed by visits of government officials. What

overseas investors are looking for is a proven track record of

political and social stability which provides the foundation of a

healthy and stable economy. If the budget has a clear direction, it is

continued unproductive foreign travel by cabinet ministers.

Taxation. As I said earlier, taxation is the one-dimensional theme

of this budget. More precisely, the budget focuses on corporate tax

reduction. It is important that all of the current tax reductions be

measured against tax increases, particularly those of the last two

years. When you add the tax increases of the past two budgets — income

tax, sales tax, room tax, restaurant meal tax and indexed fuel and

tobacco taxes — to the increases in user fees, the cumulative effect of

these tax increases in 1985-86 is estimated to exceed $1 billion. Over

three years it will be in excess of $3 billion. The bulk of these taxes

are paid by individual wage-earners. It is the largest single item of

revenue in the budget.

When the minister talks about giving back $1 billion to corporations

over a three-year period, he should also talk about $3 billion in tax

increases imposed on people from the tax hikes levied since the 1983

election. He should also talk about the fact that he doesn't have $1

billion to give back to the corporations in the first place.

The budget proclaims continued support of health care services.

However, operating grants to acute-care hospitals have increased by

only 3.5 percent, in spite of our survey results, which indicate

acute-care hospitals will require an increase of 6 percent to maintain

services at existing levels.

[ Page

5301 ]

The administrators of acute-care facilities report genuine concern

over the growing numbers of patients who do not have medical coverage

and are unable to pay acute-care daily charges.

There's an interesting line in the budget that lumps together Human

Resources, Education and Health. It says that in total they have increased by

6.9 percent in this budget, which sounds reasonable. If each one of those categories

were to get the 6.9 percent increase, I'm sure Education would be pleased

to have an increase rather than an effective decrease; Health would be pleased.

But when you separate them you find that Health is getting an increase of 4

percent and Education is getting a comparable increase, while Human Resources

is getting an increase of some 24 percent, because more and more people are

having to rely upon social assistance payments. Then the figure doesn't

look nearly as good.

All the cuts that can possibly be made have been made. We face the

real danger that our acute-care hospitals may be forced to return to

the 1982 levels of service, when we saw waiting-lists for surgery

number in the thousands, and entire wards being closed to save money.

Furthermore, the Social Credit government continues, in defiance of the

Canada Health Act, to charge acute-care user fees, at a loss of over $2

million a month in federal revenue.

We welcome the consideration of low-income taxpayers, who have been

contributing more than their fair share of provincial taxes. These are

the people who have been denied the B.C. personal tax credit and the

renter's tax credit since 1983. These are the people who have been

paying more in provincial income tax than they pay in federal taxes;

but the legislation before us now is at least correcting that. That is

legislation we will support. There's no question that it was an

oversight, one that we didn't pick up, so we can't really blame anyone

for missing that.

In light of the hardship and poverty endured by thousands of B.C.

taxpayers as a result of Social Credit restraint measures, we believe

the Income Tax Amendment Act should be retroactive to January 1, 1984,

in order to provide further relief to low-income taxpayers.

The main thrust of the 1985 budget is to aid the private sector by a

series of tax cuts and incentives, in the hope that it will create the

jobs which we so desperately need in B.C. However, numerous studies

have clearly shown that the tax cuts are the most costly and least

effective way to create jobs. Federal Auditor-General Kenneth Dye, in

his 1983-84 annual report, noted that we in Canada spend billions of

dollars a year in corporate tax breaks, which constitute a huge hidden

budget. We have no way of knowing whether these tax programs are

effective or efficient, or how much we lose through tax breaks.

Significant tax relief is promised to the commercial and industrial

sector, in the form of reduction and elimination of property taxes on

machinery and equipment. My colleague the member for Okanagan North

(Mr. MacWilliam) would like to take credit for that change.

It is the government's contention that these tax cuts will stimulate activity

in the short run and, in the long run, start an investment boom in British Columbia.

Again, there is no indication of where the money to replace this forgone revenue

will come from. The government has generously offered to remove from the commercial-industrial

sector their school tax burden; instead, this will be shifted to general revenue.

Residential taxpayers will be unaffected as far as municipal property taxes

are concerned, at least for now. But to the extent that every homeowner and

every resident of B.C. contributes through other tax changes to general revenue,

eventually they will be forced to pick up their share of the school taxes formerly

borne by the non-residential machinery and equipment taxes.

By the government's own admission, these school tax cuts to the

commercial and industrial sector alone amount to $514.7 million over

three years. In addition, the government offers another $400 million in

corporate tax breaks. What assurances does the government have that in

exchange for surrendering that $515 million there will be offsetting

investment, new job creation? Certainly these incentives will lower

barriers to some investment. But where? How many jobs will be created

for this $515 million? There are no strings on it. These are not

rhetorical questions. Surely if the government is prepared to surrender

this much revenue, it should have a clear idea of what it will achieve.

Yet no assurance is put forward. There are no targets. There is no

apparent goal. We are told that some 70 percent of the value of the tax

reduction will accrue to the forestry and mining sectors. Would it not

be prudent to receive some guarantee covering investment and job

creation in exchange for these tax reductions? Is it not possible that

the benefit could be dissipated and little economic gain recorded? Our

concern is that the government, in its simplistic approach to corporate

tax breaks, has been less than creative. We fear that the government

has failed to guarantee the new jobs and investment which could be

secured with tax breaks of this magnitude.

A new economic strategy for B.C. What are some of the principles on

which a sound, multi-pronged economic strategy for B.C. might be based?

Some of these were outlined by the hon. Leader of the Opposition in his

speech in this chamber on March 7, 1985:

Economic strategy must originate with the people, rather than being forced

on them by the central government in Victoria.

It must be based, as far as possible, on the principle of regional and community

self-sufficiency within a provincial economy; and, to the greatest extent

possible, control over regional and local economies should be decentralized,

It must build on the strengths of our natural resource endowment and our

basic industries: forests, fisheries, minerals, water and agriculture. Each

has tremendous potential for employment and value added, if the government's

attention could be focused in this way rather than continuing to treat them

as sunset industries.

An economic strategy must recognize the legitimate role of a range of enterprises

— small business and large, private ownership, public ownership and cooperative.

Government fiscal policy should revise existing tax and other legislation

which allows large corporations favoured access while imposing barriers to

small business.

It must serve the people rather than an ideology. It must recognize the

right of labour to decent incomes and appropriate benefits, a safe, healthy

workplace and involvement in management decisions which affect workers.

I think these principles merit serious consideration. They reflect,

first and foremost, a sense of deep regard for all of the people of our

beautiful province. It is this commitment which is so vitally needed

during these tough times. But it is precisely the commitment which is

so seriously lacking in the government's program and its budget. They

reflect, as well, a deep respect for the diversity and dignity of the

communities of this province.

[ Page 5302 ]

While I commend the minister for holding hearings throughout the

province, it is a mistake to confuse this process for the substance of

a regionally based economic strategy. Economic redevelopment is made

necessary by a pro longed economic slump and a protracted failure to

diversify and strengthen the economy. There has been a chronic failure

to reinvest resource grants in economic development at the grassroots

level. Megaprojects dreamed up and announced to coincide with a

political timetable do not fill the bill. A one dimensional program of

corporate tax concessions does no meet the challenge either. There's a

price to be paid for many of the projects of the past and the tax

concessions of today. The fact is that the people have not been able to

pay the bills for the government's previous election promises. I repeat

how are they going to pay for these?

In general, it is time we considered a policy of investing as much

of our resource rent as possible in the development of economic

projects which support themselves from revenues and earn a return for

public investment. This question of the wise management of our

province's resource heritage is fundamental to an alternative economic

strategy. When we sell our resources, we must get something in return

for the people. The people are, after all, the owners of the resource.

The government has allowed the few to cart resources in unprocessed

form out of our province. They have spent, rather than invested the

proceeds, according to a political timetable. The budget shows this

government is not prepared to implement a new strategy based on

economic diversification and decentralization. The government should

use a development fund to channel and apply resource revenues to

economic development projects on a scale which will have some impact.

It should promote the regions of B.C. and make available the means of

successful local economic planning. Such policy must be informed by an

understanding of the regional nature of B.C.'s economy. Strong regional

economies are the key to a strong B.C. economy.

[11:30]

The problems of a decade cannot be resolved by solitary action of

the provincial government. That is why the NDP has proposed, as a first

major step, that the elected members in this House get the ball rolling

now. It is time for the Legislative Assembly to enter into a serious

dialogue with the people of the province concerning our economic

future. We have proposed structuring a Select Standing Committee on

Reconstruction to hold hearings throughout the province. Holding this

kind of dialogue is no guarantee of success, but without a commitment

to the principles spoken of by the NDP leader, and in my remarks today,

it is unlikely that any new policy can hope to succeed.

The name of the game is survival. A new, robust decentralized

economy is the absolute key to our economic survival. Decentralization

of economic power is the only w to regain public control of public

resources and to guarantee balanced regional development. Political and

economic concentrations have stifled local initiative and have cost

B.C. Jobs.

The Socreds have centralized political power in Victoria. Social

Credit has diminished the powers of locally elected authorities —

municipal governments, regional districts, school boards, hospital

boards. The provincial government is dominated by large vertically-

integrated corporations. Vital economic decisions are made in decision

centres which are remote from the communities affected.

Local government is the most responsive and accountable level of

government. There are more than 1,440 locally elected representatives

in the province of British Columbia. Dismantling of the land planning

process has diminished local control over the type and location of new

development. Constant fiscal and political pressure from the Social

Credit government has stifled the positive economic role which

municipalities can play.

The basic road transportation system of the province is critical to

regional development. The present government has perverted highway

construction and the maintenance process for its own political ends.

Road projects are introduced at election time; little is done in

between. Many roads throughout the province are in poor shape because

the present government prefers ribbon cutting on a political timetable

to a proper maintenance schedule. Priorities for roadwork should be

determined on a regional basis. Work should be phased to keep workers

and equipment operating every year and not just at election time.

Decentralization is aimed at smaller regional units, greater citizen

control of regional resources, social — in contrast to state —

ownership, and a technological infrastructure designed to sustain

smaller concentrations of population and to increase their

self-sufficiency. The province must take steps to secure strong

regional economies, because the route to a strong provincial economy is

through strong local economies.

For example, it is time to consider: (

a) transferring management of

lands, especially public lands, to regions — local responsibility would

include inventory analysis, planning and management of the land bases;

(

b) developing regional management structures parallel to regional

district organization; (

c) redistributing powers and responsibilities;

(

d) geographic reassessment of selected government or Crown corporation

functions; (

e) encouraging diversity of entrepreneurial forms,

including small business, community enterprise and employee co-ops.

These are the major elements which are needed. They are almost

completely lacking, passed over by a one-dimensional government in

search of a quick fix for its political problems.

[Mr. Ree in the chair.]

Number six, the forest industry. Forestry is the key sector of the

B.C. economy. It still is, Mr. Speaker; it will be for some time. It

accounts for about 60 percent of all provincial exports and about 42

percent of total B.C. manufacturing. One in five B.C. workers depends

directly or indirectly on our forest industry. Despite the obvious

importance of this sector, the Social Credit government has allocated

only about 3 percent of total government expenditure to the Ministry of

Forests in 1985-86. The ministry's budget will see only a 5 percent

increase in the next fiscal year.

Reforestation and silviculture are widely recognized in this

province to be an urgent need if our forest industry is to have a

future. At present, the Social Credit government is replanting only

half the area which we harvest annually. Over one million hectares of

potentially productive forest lands are not sufficiently restocked, yet

the government refuses to make this a priority concern.

In 1982 the B.C. government used its $83 million forest and range improvement fund in part to offset the provincial

[ Page

5303 ]

government deficit. Since that time, eight other

special forestry funds have been diverted. Once again the silviculture

program in the Ministry of Forests, instead of being increased, has had

its budget lowered by 8 percent for 1985-86. This means that about $4

million has been slashed from silviculture programs at a time when

forestry workers across B.C. are demanding more replanting and more

intensive forest management, and a time when unemployment levels are at

a record high. Meanwhile, the estimates show that the harvesting

program for the Ministry of Forests has had its budget increased by 7

percent. This surely indicates that the Social Credit government is

indeed treating forestry as a sunset industry. They are more concerned

with continuing to chop down our woods, without sufficient thought to

longterm economic planning and resource renewal. Cut them down faster

and plant them slower.

Meanwhile, ERDA, the long-awaited economic and regional development

agreement, has still not been signed with the federal government. The

1985 budget commits $65 million for this year as the provincial

contribution to the total ERDA package, whatever that may prove to be.

But the government does not have signed agreements specifying what

percentage will be devoted to our number one industry — forestry. It

doesn't have a signed agreement for anything, Mr. Speaker, this late in

the game.

However, it is widely recognized that even the entire $65 million,

let alone the $30 million the government says it will put into

reforestation, is insufficient to rescue our liquidated forest

resource. The Vancouver Island mayors have calculated that $23 million

annually is needed to effectively carry out silvicultural efforts on

Vancouver Island alone. Forestry experts have estimated that as much as

$300 million is required annually to sustain our existing harvest, let

alone increase it, as is apparently contemplated. Given the disrepair

that the forests have been allowed to fall into, the job of managing

the forests just isn't being done satisfactorily by this government. It

is high time that it was.

Consider, for example, how we compare to Sweden, one of our

competitors in the forest industry. Sweden has a forest land base about

one-half the size of British Columbia's, but it harvests more from that

land than we do — about 75 million cubic metres. They employ three

times as many people as we do in B.C. — 206,000 compared to 75,500.

Industrial wages are substantially higher than here, and private sector

wage increases were running at about 6 percent in 1984. Unemployment,

Mr. Speaker, is about 3 percent. Of the 206,000 Swedish forest industry

workers, 58,000 are employed in the forests: seven or eight times the

number that B.C. employs, to achieve about the same cut from twice the

land. What do those 58,000 do? For one thing, they plant more lodgepole

pine from the Cariboo than we do, and because they have developed

better stock, they get 30 percent better yield. Let me quote from a

1984 circular of the Swedish Pulp and Paper Association: "Assessments

made in the late seventies show that the total growing stock, which at

the start of the forest surveys in the 1920s was barely 1,800 million

cubic metres of solid volume, now adds up to more than 2,500 million

cubic metres...annual growth is also on the increase, and the gross

amount is put at close to 85 million cubic metres" — which is also a

record.

The budget has not really done well by the forest industry. The

public resources on which so much of our future prosperity depends

remain a neglected asset. There are some who say that the present

government views the forest industry as a sunset industry. The budget

does nothing to ease this concern.

Small business. Present Socred policies have been directly harmful

to locally owned business enterprises. As I said earlier, small

business has been banned by both the recession and the depression in

B.C. Ninety-eight percent of all B.C. businesses have sales under $2

million per year. Between 1975 and 1981, 7 percent of all new jobs were

created in small business. From 1981 to 1983, 100 percent of all new

jobs were in the small business sector. This says more about the

weakness of the general economy under Social Credit than it does about

the strength of small business.

Small business has faced an unfair tax burden, which has been

worsened by various tax hikes in the last two provincial budgets. A

recent Canadian Federation of Independent Business survey reports high

interest rates, availability of financing and weak consumer demand as

the key issues facing small business in B.C. All three have been

seriously worsened by provincial government policy. Unfortunately, they

are not addressed by the Socred budget.

The present government unfortunately created false expectations

through the 1983 LIFT and LILA lending programs. Despite having

under-utilized their allotment of funds raised specifically for the

purpose, the direct lending programs were quietly killed within months

of their initiation. I note the government announced several future

policies for small business in the budget yesterday. These include the

industrial incentive fund, the industrial development assistance

program, the small manufacturers' incentive program and the tourism

infrastructure incentive program. These are all titles lifted from the

program of the New Democratic Party. They say that emulation is the

sincerest form of flattery.

The accompanying legislation tabled by the minister shows the total

amount of money available between now and 1990 is $85 million. Some $10

million is for small manufacturing. Funded at this level, the program

should be called "very small manufacturers' incentive program." Some

$25 million is for tourism incentives, which are loans to communities.

How much tourist attraction can be funded throughout the whole of B.C.

for a total of $25 million? Some $50 million is for industrial

incentives, but $170 million in such loans were promised prior to the

1983 election. The present promise is less than one-third of the

pre-election program of 1983. Does Social Credit think votes come twice

as cheap in 1985 or 1986? Perhaps they merely remember that only one

third of the promised loans were delivered last time.

Of the small business program generally, I would say there is much

less here than meets the eye. The NDP caucus is saying the economy

needs stability and consistency from government policy. You cannot open

the treasury or, more precisely, borrow on the financial markets to

support half-baked, half-funded economic plans only to have these taken

away after the votes have been counted. We are, however, pleased that

the government has recognized some of the high taxation costs facing

B.C.-owned businesses, particularly those imposed in the past two

budgets.

The NDP has proposed a tax credit for small business to recognize

the unfair burden of high payroll and property taxes. We are happy to

see the government has accepted this proposal. I would like at this

time to recognize the efforts of the member for Okanagan North (Mr.

MacWilliam), who originally made this proposal to the Minister of

Finance at the taxation hearing in Kelowna on October 11, 1984.

[ Page 5304 ]

The NDP also proposed expanding the small business income tax rate

to a larger number of firms, including profitability and partnership.

Unhappily, the government has taken no action on this recommendation

whatever. The small business venture capital corporation tax credit is

an overdue step for this province, and it has been promised in two,

three or four budgets and throne speeches. British Columbia is the

ninth Canadian province to introduce such a provision. Only

Newfoundland does not have one, and they are expected to introduce one

if the government is re-elected.

To summarize, small business still needs consumer demand and more

favourable financing terms. The government is finally addressing some

of the financing needs of small business. Unfortunately, it comes far

too late for many of the casualties of the Social Credit-inspired

program of some two or three years ago. Some of the measures affecting

small business in the budget are good and will be supported. Some of

the assistance provided is not the right kind and does not seem to be

enough for many more.

Mr. Speaker, you will be pleased to hear me read the word "conclusion."

The present budget is a political exercise. I spoke on Monday to a

group about the budget. I certainly didn't know what was coming, but I

said: "Look for the political message, because budgets in B.C. are

political messages." Reviewing the government's plans, it is clear that

the people look to a provincial election sooner rather than later.

The Socreds have but one theme: tax cuts for business. They have no

plan on how to finance it. The Socreds have produced no targets for job

creation and only poor economic performance as an outlook. They have a

few big projects. They have allocated $2 million in additional tax

dollars for political advertising from propaganda central. Theirs is

the same old political timetable. It is simply not good enough. It is

now clear that a restraint program which failed is to be followed by

another scheme which is no more likely to succeed.

Fortunately, along with the political timetable comes political

choice, and there will be that choice, Mr. Speaker. There will not be

another budget before the next provincial election, because the

promises that are being made for two and three years down the road will

not have to be met if there isn't another budget — as was the case in

1983, when the budget was delayed until after the election. The only

difference is that this time the budget will be brought in by a

different government. It is now clear that a new political choice, new

leadership and new ideas are required to achieve the new economic

strategy of which I have spoken. The New Democratic Party stands ready

to meet that challenge.

[Mr. Strachan in the chair.]

MR. KEMPF: Mr. Speaker, it's very interesting to hear the

debate coming from the opposition critic this morning. It would appear

that all they can talk about is another election — another election

when this parliament is not even two years into its mandate. They speak

of elections. They want the people of this province, during very tough

economic times, to expend $10 million when this parliament has been

here for less than two years; they want to subject the people of

British Columbia to that cost.

Mr. Speaker, I'm proud to stand up on behalf of the people I

represent and speak in favour of this budget. It's a budget that

clearly recognizes the need to assist small business and industry

during these very difficult world economic times by providing long-term

employment for the citizens of this province. It's a budget that

recognizes the views and the wishes and the aspirations of British

Columbians, particularly northerners. That alone gives me great

initiative to very actively support this budget, as the budget gives

our people in British Columbia great initiative, hope and new energy.

The socialists opposite, through their finance critic, have talked

of deficit financing. Yes, we have unfortunately had to deficit-finance

once again, to encourage real and long-term jobs in this province. But

I can remember the hollow speeches of the members opposite, who over

and over and over again in this House advocated deficit financing to

create jobs in this province — to create the short-term jobs that they

would advocate by shovelling money out of the back of a truck to the

people who don't create any wealth in this province.

The members opposite can oppose this budget, and I would hope that

after this budget debate we would go to the polls in British Columbia,

because that would mean the complete demise of that party opposite.

British Columbians won't oppose this budget. In my mind that's the

important part. That's the important reason behind bringing in this

kind of budget during these very difficult economic times. I'm fully

prepared to continue this debate. I'm fully prepared to provide the

socialists opposite with the reasons that the people of British

Columbia will support this budget and this government in its attempt to

create real jobs where they're really needed in the province of British

Columbia.

With that I would adjourn this debate until the next sitting of the House.

Motion approved.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 11:53 a.m.

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