1983 Legislative Session: 1st 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 )

MONDAY, OCTOBER 3, 1983

Afternoon Sitting

[ Page

2289 ]

CONTENTS

Routine Proceedings

Oral Questions.

Railway passenger service. Ms. Sanford –– 2289

Conformity of B.C. statutes to Charter of Rights and Freedoms. Ms. Brown –– 2289

Mortgage rates. Mr. Blencoe –– 2289

Northeast coal agreement. Mr. Lea –– 2291

Social Service Tax Amendment Act, 1983 (Bill 15). Second reading.

Mrs. Dailly –– 2291

Mr. Barrett –– 2295

Mr. R. Fraser –– 2299

Mr. D'Arcy –– 2299

Mrs. Wallace –– 2304

Alcohol And Drug Commission Repeal Act (Bill 8). Second reading.

Hon. Mr. Nielsen –– 2304

Mr. Cocke –– 2308

Mr. Lockstead –– 2310

Tabling Documents.

Ministry of Provincial Secretary and Government Services annual report, 1982-83.

Hon. Mr. Chabot –– 2312

The House met at 2:06 p.m.

Prayers.

HON. MR. GARDOM: Mr. Speaker, it is indeed with regret that

the Rt. Hon. Bernard Weatherill, the Speaker of the House of Commons,

and Mrs. Weatherill are unable to join us today in Victoria. We had

extended an invitation to them through your good offices, and I know

that all members would have been very happy to have the Speaker of the

House of Commons here. They're en route through Vancouver from Japan on

their way back to London. But it is with great pleasure that we do have

with us Mr. Beaumont, OBE, who is secretary to Mr. Speaker, and Mrs.

Beaumont. I'd like all members to bid them a very cordial welcome.

MR. BARRETT: Mr. Speaker, I would like to add my words of welcome to Mr. and Mrs. Beaumont and ask if they have a current copy of Beauchesne or May that they could leave as a welcome gift to this chamber. We'll send them some of our decisions.

MR. REID: Mr. Speaker, I'd like to introduce three people in

the members' gallery today. First of all, I'm pleased to have one of my

four lovely daughters in attendance today. My daughter Gail is in the

members' gallery. They take after their mother. I also take pleasure in

introducing two free enterprise people in the members' gallery, both

young businessmen from Delta: Mr. Bill Sullivan and Mr. Terry Allen.

MR. MOWAT: Mr. Speaker, it is my pleasure to introduce six

people to the House today. The first is Mr. Garth Pither and his wife

Dorothy. Mr. Pither is one of the few western Canadians who have ever

received the lifestyle award from the federal government. He is the

former chairman of Premier Cablesystems. With them today are Mr. and

Mrs. Norm Delgado from Durban, South Africa and Mr. and Mrs. Bob Moog.

Mr. Delgado is an executive with the South African Sugar Association

and is touring Canada and the United States. Mr. Moog is chairman of

the Canadian Paraplegic Association, British Columbia division, and Bob

and Eleanor were celebrating their thirty-fifth wedding anniversary

this past weekend in Victoria. I'd ask the House to welcome these six

people.

Oral Questions

RAILWAY PASSENGER SERVICE

MS. SANFORD: I have a question to the Minister of

Transportation and Highways (Hon. A. Fraser). By announcing last Friday

that the government will intervene at the E&N hearings, it has — at

the last moment, I might add — recognized the importance of the

passenger service on Vancouver Island. Will the government reinstate

the policy that it had the last time this issue arose, and offer

funding for community groups and individuals who are leading the fight

to save passenger service on the railway?

HON. A. FRASER: To the member, the answer is no.

MS. SANFORD: Thank you.

CHARTER OF B.C. STATUTES TO

CHARTER OF RIGHTS AND FREEDOMS

MS. BROWN: My question could have gone to the

Attorney-General but he's so elusive that I'm going to ask the.... Ah,

here he comes — the Attorney General!

MR. SPEAKER: And the question, hon. member?

MS. BROWN: My question to the Attorney-General has to do with

human rights in the province and the Charter of Rights and Freedoms —

just as he settles himself.

Can you advise, Mr. Attorney-General, whether the government is

reviewing B.C. statute law to determine whether it conforms to the

Charter of Rights and Freedoms?

Could you have answered that, Garde?

HON. MR. GARDOM: I answered it last year. Read last year's Hansard .

HON. MR. SMITH: Indeed, not only is my colleague the Minister

of Intergovernmental Affairs correct, but the review of our statutes

commenced some time ago. They are being examined to see if in fact they

do conform with the Charter of Rights and Freedoms. Furthermore, I

expect that the Law Reform Commission of British Columbia will also

undertake some examination as well of our civil law to see if it

conforms.

MS. BROWN: Is it the policy, then, of the government to

resolve any serious doubt as to potential conflict between provincial

action and the Charter in favour of the Charter of Rights and Freedoms?

MR. SPEAKER: That is a policy statement, hon. member.

[2:15]

HON. MR. SMITH: I'm amazed that that question would be asked,

but the hon. member should know that in every province in the country,

and indeed in Ottawa, within their own spheres the various levels of

government are examining their statutes, going back to Confederation,

to see if they conform. If they do not conform, then a judgment will

have to be made as to whether those statutes should be repealed or

whether some other determination should be made.

MS. BROWN: Mr. Speaker, I'm amazed that the Attorney-General

is amazed when one looks at the human rights legislation on the books

and what's happening to human rights in this province. However, as we

share our amazement, my question to the Attorney-General is: is the

minister reviewing actions which have been taken by your government to

abolish human rights enforcement mechanisms in this province, to

determine whether that action contravenes the Charter of Rights and

Freedoms?

HON. MR. SMITH: Mr. Speaker, under the guise of concern about

the Charter of Rights, this member wants to debate a bill that's before

this House, a bill which will be debated in due course. She will have

her opportunity at that time. If she wants to stick to the Charter, I'd

be very glad to do my best to address her questions.

[ Page 2290 ]

MS. BROWN: Well, I want to thank the minister for saying he'd

do his best to answer the questions on the Charter and state the

question again.

What is the ministry doing in terms of reviewing its actions to see

whether the abolition of enforcement mechanisms dealing with human

rights in the province do not contravene the Charter of Rights and

Freedoms?

HON. MR. SMITH: This member knows, if she has read that bill,

that what she advances here is preposterous, that there is no violation

of the Charter, nor is there a derogation of human rights. There is

simply another mechanism being created to deal with human rights in a

more efficacious and appropriate form.

MS. BROWN: Mr. Speaker, I think that I'm not making myself

clear to the Attorney-General or to his colleagues. I'm talking about

the mechanism — the abolition of the Human Rights Commission and the

closing of those offices....

Interjections.

MS. BROWN: That's not a bill. I want to know whether that

mechanism contravenes the protection of rights of British Columbians

under the Charter of Rights and Freedoms. Is his ministry doing any

examination of it?

HON. MR. SMITH: Last week her national leader thought it was

violating some international treaties to which Canada wasn't even a

signatory. Now, apparently, we are violating some unstated sections in

the charter. I challenge her to show me where we would come within a

country mile of doing that. The bill that my colleague has introduced

in the Legislature better protects human rights than the previous one.

MR. SPEAKER: Hon. members, matters on the bills must be clearly avoided in question period.

MS. BROWN: Precisely, Mr. Speaker. I am not dealing with

legislation. I am dealing with an action of the government, and the

minister keeps talking about legislation. I want to thank him for

pointing out to the House that our national leader is also seeking to

protect the rights of all Canadians, even as we are doing here in

British Columbia. This is the last time I am going to ask the question

so that his tutor, the Minister of Intergovernmental Affairs (Hon. Mr.

Gardom), can give him the final answer, as he has been giving him all

the others today. The question again: is the minister reviewing the

actions taken on the part of his government, shutting down the Human

Rights Commission, wiping out the mechanisms whereby people in British

Columbia had access to the protection of their human rights, to find

out whether by that act, not by legislation, his government contravened

the Charter of Rights and Freedoms?

HON. MR. SMITH: We did not, and I am not.

MS. BROWN: You should have said that in the first place.

MORTGAGE RATES

MR. BLENCOE: I have a question for the Minister of Consumer

and Corporate Affairs. Many families in British Columbia continue to be

stuck with 18 to 20 percent mortgages which banks refuse to negotiate

despite the fact that rates have dropped dramatically. What action has

the minister taken to require banks and other lending institutions to

reduce the hardship of high mortgage interest rates on these homeowners?

HON. MR. HEWITT: Mr. Speaker, the matter of interest rates

charged on mortgages is, of course, between the mortgagee and the

mortgagor and a condition of that contract. I haven't taken any action

to set aside a contract between two parties, although we have had

consultation with the banks. In some instances, I may say, some of the

lending institutions have worked with the borrowers in trying to

resolve some of the misunderstandings and some of the possible comments

that were made by staff whereby the borrower felt that they could

renegotiate the mortgage. Some of those things have happened.

MR. BLENCOE: I'm not sure we got an answer there, Mr. Speaker.

Supplementary. Despite what the minister says, the sharp increase in

mortgage foreclosures during 1982 has continued and increased by 28

percent in 1983. There is no question that lending institutions are not

prepared to renegotiate, despite the fact that rates have dropped. They

continue to make horrendous profits from people while they try to keep

hold on their homes. My question to the minister is: what consideration

has the minister given to proposals to protect homeowners from threats

of foreclosures? Food, clothing and shelter are the prime things in

this society. Has the minister considered the problem of foreclosures?

HON. MR. HEWITT: Mr. Speaker, the member is aware of the

contract between the borrower and the lender. Some mortgages were one

year, three years or five years in duration. The determination by the

borrower was to accept the rate that they felt was reasonable. When

rates fluctuate — if they go up or go down — the borrower has certain

rights. The lender, who acquires the money through deposits, in some

instances, pays interest on the three- or five-year term, comparable

rates to offset those rates that are charged on a mortgage. This

minister is not about to get into the business of overruling proper

legal contracts made between a borrower and a lender.

MR. BLENCOE: Supplementary to the minister. Many of those

lending practices are highly questionable and due to be looked at by

this government. I don't think the obfuscation of responsibility is

appropriate to these times that many people are facing. My question to

the minister: will he take a look at some of the practices of these

lending institutions and make recommendations to cabinet and to this

House?

HON. MR. HEWITT: Mr. Speaker, where we have had complaints by

consumers we have looked at them and assisted wherever possible, but if

the member opposite has certain specific instances where there has been

abuse in the field of lending in this province, I'd be more than

pleased to receive those instances from him.

[ Page

2291 ]

MR. BLENCOE: A supplementary for the Premier, Mr. Speaker, The Premier

is on record in this House as having voted for the establishment of B.C. Savings

and Trust, an institution that would be able to give direct mortgages to British

Columbians, the money to be retained in this province. Given that the Premier

has supported the establishment of B.C. Savings and Trust, can the Premier indicate

to the House and to the people of British Columbia that he will be bringing

forth proposals to see that this trust company is established so that mortgages

can be operated and run properly by the province of British Columbia?

HON. MR. BENNETT: The answer is no.

NORTHEAST COAL AGREEMENT

MR. LEA: I have a question for the Minister of Industry and

Small Business Development. Over the past month we have asked from this

side of the House that the minister please table in the House the

master agreement surrounding northeast coal. The minister has not ever

refused; he said it would be "in due course." We think, of course, it's

due. I wonder if the minister has decided at this point whether he

would let us and the people of British Columbia have a look and table

that document in the House.

HON. MR. PHILLIPS: Mr. Speaker, I'll have to answer that

question by asking the member for Prince Rupert what agreement he's

referring to. If he's referring to the comprehensive agreement, I think

he'd better go look in the library.

MR. LEA: Does he mean just sort of look at the outside of the library? I realize that's as close as he's gotten in his lifetime.

Mr. Speaker, I'd like to ask a supplementary of the minister. Does

the government of B.C. have any specific guarantee that the Japanese

market, and the steel producers and coal buyers — whether there is any

preclusion agreement that would mean that there would be some penalty

if they either didn't meet the cash per volume of coal or the price of

coal. Is there any penalty for that?

HON. MR. PHILLIPS: I would like to answer that question and

tell him that if he was really aware of what was going on in the world,

he would recognize that a year ago last March we brought in restraint,

and what we are doing right now is cutting back so that we can keep our

industries in British Columbia competitive in a very competitive world,

That's what it is all about, my friend. I understand that in my absence

you played a bunch of games over there....

MR. SPEAKER: Order, please.

HON. MR. PHILLIPS: I want to tell you that what this little

Social Credit government is doing is leading a world trend so that our

industry and this government will not be spending the profits of

tomorrow's business people.

MR. LEA: Mr. Speaker, I guess the answer is no, that there is no specific

clause in the agreement that would not allow for a negotiation downwards of

tonnage or price. The minister didn't want to say that, so he went on a

rampage. I would just like to have it confirmed. Is the minister agreeing with

me that there is no specific clause that will not allow for a downward tonnage

or price? Is there a specific clause that won't allow that?

HON. MR. PHILLIPS: I think that the member for Prince Rupert

is trying to get me to negotiate commercial contracts here in the

Legislature. I have no intention of doing so.

Orders of the Day

HON. MR. GARDOM: Leave to proceed to public bills and orders.

Leave granted.

HON. MR. GARDOM: Second reading of Bill 15.

SOCIAL SERVICE TAX AMENDMENT ACT, 1983

(continued)

MRS. DAILLY: Mr. Speaker, the bill that we are into second

reading for, on which the opposition has just started the debate, is a

bill well known throughout British Columbia. It is the one that will

increase the sales tax for all citizens to 7 percent.

At this time, when the economy is in recession, it seems almost

incomprehensible to the members of the opposition and also to many

people in British Columbia and probably to some who supported Social

Credit during the last election that this government would add to the

burdens of the people of British Columbia by increasing the sales tax.

At this time there has been no attempt by the Social Credit

government to alleviate the problems faced by many people in the

low-income bracket and the senior citizens who are suffering the most

in a recession. Nothing has been done to help them through this

recessive period. Instead, the Social Credit government seems bound and

determined to make sure that it's the poor and the low income who

suffer the most. Let's face it, the increase in the sales tax to 7

percent may not have that much of an effect on those people who have a

very good income and who are working in a fairly high income bracket

today, but those who are not, every time they go to buy anything today,

find that this increase in the sales tax is making their standard of

living increasingly lower.

[2:30]

[Mr. Strachan in the chair.]

Once again, this is the kind of bill — similar to the one which

brought about the elimination of the special tax credit for those in

need — which shows that the Social Credit government does not have an

empathy with or a sense of compassion for those in our province who

will suffer most during a recession. There have been many debates

throughout many legislatures, I know, on the pros and cons of the sales

tax. The New Democratic Party has always felt very strongly that a

sales tax is a regressive tax and does affect primarily those who can

least afford to be affected, particularly in a time of recession. I

don't think there is any question, putting aside the ones in the low

income bracket who are going to find this adding to their burdens, but

I think the Minister of Finance, who brought this in, is well aware

that many businesses have protested further increases in the sales tax.

So it is not just the poor, the low income and the

[ Page 2292 ]

senior citizens who are being affected, but also

businesses who find any increase at this time in the sales tax is

simply going to increase their problems of trying to run a business in

a time of recession, with the result that if the businesses find it

more difficult to survive with increased taxes such as the sales tax,

in time it means loss of jobs. As a matter of fact, I shouldn't even

say "in time," because we know that the job situation in B.C. has

worsened ever since the Social Credit government embarked on their

so-called "restraint program."

In our opinion the so-called restraint program is actually going to

result in the exact opposite to what the Social Credit government is

attempting to put across to the people of British Columbia. They are

trying to suggest that an increased sales tax is actually necessary at

this time so that the government can pull itself out of its operating

deficit. But here again we part with the Social Credit government and

their policies because we say that their policies of increasing taxes

at this time — particularly on those who are having great difficulties

in business and in their own personal lives — are going to bring about

the opposite. The results show, because I think we're all aware that

British Columbia is not coming out of the recession, and compared to

other provinces, unfortunately British Columbia shows, instead, more

foreclosures, as was mentioned earlier in the question period today,

and a worsening unemployment situation, not an improving one. What we

are primarily trying to bring to the attention of the government in

discussing another increase brought in the Social Credit government for

the people of British Columbia is that it is a regressive measure that

will not help the economic situation but will worsen it.

I referred to it as a regressive tax, and I understand that many

people far more knowledgeable in the study of sales tax and its

imposition on citizens have made a number of comments stating very much

what I have tried to open up with today in the debate: that it is

really not going to help our situation. In a study entitled "The

Redistribution of More in Canada," Prof. Irwin Gillespie of Carleton

University estimated that the B.C. tax system — for taxes imposed by

all levels of government — is second only to Ontario's in

regressiveness. But we continue to find that despite a promise by the

Premier — I believe he did make this promise, and if he did not, he

should refute it — never to increase sales taxes, apparently, out of

concern that Ontario should have succeeded in being more regressive,

first we find that the Social Credit government of British Columbia is

not only following Ontario in bringing their spirit of B.C. with all

that that goes with it, bringing people from the Ontario government who

have actually worked with Premier Davis there, and who are now here

advising the Premier of British Columbia, but along with that is coming

this very reactionary, regressive approach to handling the economy. It

is too bad that the Social Credit members cannot try to convince the

Premier of this province that perhaps it would be better to stop taking

advice from people who have recently come from eastern Canada and try

to work out the solutions here themselves.

If I may be so modest to say it, I think that if the Social Credit

government would not just always close their minds when the members of

the opposition speak, but would listen to some of the arguments that

are being made against the imposition of a sales tax, perhaps the

members would talk to the Premier and get him to take a second look at

another regressive measure on the people of British Columbia. Making a

bad tax system even worse is reason enough not to adopt a tax measure.

But in this case we have other reasons. As I have said, many of us do

not believe that the sales tax, to begin with, is a good tax. I suppose

the only fair tax we can find is the income tax, because we do know if

that is applied fairly, which, unfortunately, it still is not.... We

find that the sales tax is not a fair tax, because, as I said in my

opening remarks, the sales tax affects those who can least afford to

pay.

Most people agree that this province is in a particularly fragile

state at the moment as far as the economy improving. We see the

problems with housing in the United States, and what we had hoped would

be an increase is apparently not coming through, and the province of

British Columbia is in a very fragile state because of what is

happening in the United States. That is why, at this particular time,

we do not see any reason whatsoever for the Premier, his cabinet or the

Minister of Finance to bring in further regressive measures which will

not help the economy but will hinder its recovery.

Adding 17 percent to the sales tax rate and dramatically extending

its incidence — as you know it now applies to commodities that it did

not apply to before — discourages consumer spending. It diminishes

business revenues, and it frustrates recovery.

Interjection.

MRS. DAILLY: One of the government members said that that

statement I just made was wrong. For those who didn't hear it I want to

repeat it again: adding 17 percent to the sales tax rate and

dramatically extending its incidence discourages consumer spending,

diminishes business revenues and frustrates the recovery. I claim, in

reply to the person who just called out on the floor of the House, and

I hope that they will follow me and elaborate why they said no....

Mr. Speaker, I contend that it has already been proven that this increase in

the tax and the increase in the incidence is affecting the economy. When someone

from the back bench shouts across the floor that my statement is incorrect,

I simply must say to them: have they not been watching what is happening in

the province of British Columbia, compared to other jurisdictions? I think that

they would have to admit that these unnecessary taxes are not helping to improve

the economy. The record speaks for itself.

Over the weekend most of us were certainly concerned and very upset

to see the increase in foreclosures of homes in British Columbia. When

these things start increasing in our province, more than you see

anywhere else, you have to say to yourself: what is wrong with British

Columbia? I'm contending in this debate that one of the basic things

wrong with the Social Credit policy, which is what makes something

wrong in British Columbia, because after all they're the government, is

this obsession with imposing taxes which will affect consumer spending

and small businesses in the province. That is our contention. I want to

repeat that the record shows it, unfortunately.

The matter of foreclosures, I think, is a direct result of people

who not only have been caught up in high interest rates but who have

lost their jobs because of regressive taxation and are unable to meet

their mortgage payments. As I read that

article over the weekend, I

read about one particular case of a man who had striven so hard and yet

had great difficulty for about two years in trying to forestall a

foreclosure. It was a most pathetic situation. You could understand how

this man felt. For the first time he and his wife had a home. Suddenly

[ Page 2293 ]

the whole world falls apart around them, and this

home that they hoped would be theirs for the rest of their lives is

suddenly going to be taken away from them by the banks.

As I read through it, I don't think anything symbolized more some of

the tragedy that is being inflicted upon people in our province today.

Surely one of our main objectives in this Legislature is to alleviate

these tragedies, not to increase them. I contend that these regressive

taxation policies are creating more hardship, not less. That particular

man spent two years trying to avoid the foreclosure. He had to resort

to everything he could, hoping that in those two years before he faced

the court and had his house taken away from him.... He hoped and hoped

that the economy would show signs of improving, as he said, so that

somehow or other, magically, he would have a job again and could stay

in his own house. But in the last two years — and I want to remind the

House — the Social Credit government alone has been charge of the

economy. It's their policies that everyone in British Columbia has to

suffer from. Under those policies of the Social Credit government, this

man obviously had to give up hope at last. He has no job, and he lost

his house.

[2:45]

Surely the Social Credit members must be concerned. I'm sure many of them

are, because they have constituents who are also suffering the same as mine.

We're simply trying to say: "What you've been doing isn't working.

Your policies are creating more of a burden." If anything showed it, it

is this particular act that we're dealing with today. As someone has said,

albeit rather facetiously, administering the sales tax changes will probably

turn out to be the government's significant job creation proposal. Maybe

that's rather cynical, facetious or whatever, but I'm afraid there's

a lot of truth to it. How on earth is this increased taxation going to assist

in job recovery in the province? Somehow or other the government does not ever

outline in detail to us, when they bring in these regressive tax measures, how

they are actually going to turn the economy around or how the measures are going

to help the government. You see, the government, in the long run, may bring

in more money from those who are wealthy and still go on spending, because let's

face it: the rich continue to get richer and the poor poorer under Social Credit

policies. You're still going to have a certain amount of extra money coming

in, but that's going to be outweighed by the thousands of other B.C. citizens

who will simply stop buying.

I know most of us in the Legislature are in a fairly good financial

position compared to most people. I know that when I go now, and they

ring up that 7 percent, I'm amazed at the extra amount. If I'm amazed

and express concern, how on earth is someone who is out of work — or is

on welfare, UIC or living on a very low income, or is a senior citizen

struggling along — going to feel when that cash register rings up these

extra dollars, which means so little to those who are rich but mean so

much to those who cannot afford to buy any more? That's why they're not

buying. You see, it's a very short-sighted approach to solving an

operating deficit, because in the long run the increases will not be

that great. There are more and more people who are going to say: "I

simply have to put off buying those things that I wanted to buy before,

because that increase that I'm going to have to pay through the

increased sales tax is going to make a difference to me in just paying

for my regular food bill." I think the problem is that we sometimes

forget what an increase in the sales tax actually means to someone who

is in a very low income bracket.

I've had a number of senior citizens speak to me about it. They say:

"You know what we don't understand? We keep getting told that the

senior citizens do get their increases in time, but every time we get

one small increase from the government" — the federal government has

primarily been responsible for the old age pensioners' increases — "we

find that the provincial government is imposing extra costs on us, so

instead of keeping up with the high cost of living, we're going back."

At the same time that the Social Credit government is increasing the

sales tax, they are doing absolutely nothing to curtail some price

increases in our province. I know that some of the areas are out of

their control, but when we hear that the government is also now

planning to lift the lid on the rates for our Crown corporation

utilities in this province, you can't help saying to yourself: "What is

this government really thinking about? How can they possibly think that

they can ever come out of this economic mess that we're in by putting

more burdens on the people of the province who are the consumers?" Only

when the consumer gets out there and buys and spends money can this

province ultimately come out of the mess they're in. Yet we're going to

find that people in the low-income brackets, senior citizens and others

are all going to be faced with increased utility prices because of this

government's policies. They're going to be faced with increased sales

taxes. They're going to have tax credits which they had before taken

away from them. Members who will follow me will outline many other

hardships that our senior citizens and others in the province are faced

with by the Social Credit government.

I want to go back specifically to the whole area of the sales tax

and how it relates to business. I know that as soon as it was announced

in the budget that the sales tax was going to be increased, there was

an immediate and strong reaction from people, groups, merchants and

businessmen, many of whom, I know, are supporters of the Social Credit

government. Here is what Mark Startup, executive director of the B.C.

division of the Retail Merchants' Association, said after the

announcement of the increase: "At a time when recovery seemed to be

falling into place, we're surprised that the government has done this.

Six percent was too high. We want to be assured that when things get

better, the government rolls back the sales tax." But the problem is

that it is a vicious circle. How can things get better, as I tried to

point out at the beginning of my speech, if the government, by their

very own measures of tax increases, encourage a downgrading of the

economy? This is something that not only the NDP but many other people

who are citizens of our province and who want to cooperate with the

government.... They are willing to make sure that everyone pulls in a

little bit to help out. Even those people are saying today: "Well,

we're watching those policies of the Social Credit government, but if

they continue to impose taxes on those who can least afford to pay

them, how on earth are we ever going to get out of this mess?"

I think everyone agrees that if there are abuses in government

services, then those abuses should be looked after. We all agree that

such abuse imposes excessive cost on government. Let's get that out of

the way, Mr. Speaker, because the Social Credit government tries to use

this business of abuse of services that aren't needed — of people,

school boards and municipal councils not restraining themselves. They

use this over and over again to convince the rest of the taxpayers that

[ Page 2294 ]

there have been some terrible excesses going on,

and therefore people really must be punished. But the interesting thing

is that most of the excesses have taken place within the Social Credit

government itself. I don't think anyone can deny that.

As we have said out in this House many times during the debate in

the last months, many of the excesses take place within the

government's own policies. We see enormous sums of money put aside for

Doug Heal and his new coordinated propaganda machine, excessive amounts

of money at this time to try to sell the public of British Columbia on

the fact that the "restraint" program is indeed working. At the same

time, I doubt very much if the Social Credit propaganda machine will be

coming out with the actual figures on the state of the economy today,

which is a direct result of stupid, regressive tax measures. So we

simply cannot agree that to impose a regressive form of taxation — and

to increase it, as this bill does — is ever the answer. We cannot agree

that overtaxing the poor at any time is the way to go for any

government which has an ounce of compassion.

If we want to talk about something constructive, positive — we are

always being asked, "What are the answers of the NDP?" — why not

increase the income tax surcharge on high-income earners instead? Why

not? Why does the Social Credit government always look to those who can

least afford to pay? I really question the reasoning behind that. Is it

because they are the most helpless when it comes to expressing their

concern? Are they the ones who can least organize and speak for

themselves? Are they the ones who do not come through during election

time to support the Social Credit government? Why is it that the

low-income earner and the poor always seem to have to suffer under

Social Credit government policies? The NDP says: "Why not look at

increasing the income tax surcharge on high-income earners?" Was that

ever even discussed? When the Minister of Finance closes this debate I

hope he will tell us if any consideration was given to doing that. If

the situation is as desperate as we have been told and something had to

be done to decrease the present operating budget deficit, could the

burden have been put on the high-income earners in our province,

instead of on the low?

The House and the people of B.C. should have some answers from the

Minister of Finance on that matter. I think most people in British

Columbia would agree. They want fairness, and fairness is certainly not

imposing regressive tax measures on the poor. The people of B.C.

deserve an answer from the Social Credit government. Why did you not

consider...? Or did you perhaps consider placing a surcharge on

high-income earners? Was that ever considered? I think that is

something we should know, Mr. Speaker.

When the government allows a system to remain which takes a greater

proportion of income from the poor than the rich, when a system exists

which imposes greater hardship on some in our society than others, the

government becomes almost indecent. A government without compassion, a

government that does not show fairness, is indeed an indecent

government. When the government makes conscious attempts to increase

the proportion of income extracted from the unemployed, when it raises

fees to the sick and imposes more hardship on low income families, it

indeed does show a lack of concern for the poor of our province. In the

area of increased taxation, when you think of user fees.... I know this

is getting into the health area, which we will discuss later, but it

falls in the whole area of increased taxation, because user fees are a

form of taxation. Here again it is the same thing; it is still a

regressive tax. And who does it affect the most? The user fee affects

those who have the least.

For a government that came from the so-called grass roots and was

supposed to have sprung up years ago out of the motivation — as I'm

sure most governments originally start off — to raise the standard of

living of all the people; to be fair; to bring about policies that

would particularly always remain loyal to the fact that the poor of our

province must be looked after — and I don't mean in a benevolent,

patronizing way — I think that is shameful.

[3:00]

What I'm saying is that I believe the people of British Columbia who find

themselves in a low-income situation, most of them through no fault of their

own, don't want to be treated in a benevolent manner. They don't want

this business of: "We'll look after you." They want what is their

right, and the right of all people in this province is to be treated fairly.

When we hear cabinet ministers saying, "Well, the people who can't

manage can always go to the Salvation Army; the volunteer agencies will help

them out," it's insulting to those who, through no fault of their

own, have found themselves in a situation that is very difficult to manage today

in this economy. A government that implies that the only way these people can

be helped is by increased tax measures, and if they can't manage to survive

then they must turn to the Salvation Army or to volunteer agencies, is turning

back the clock in British Columbia. You measure the strength of a society by

how it treats its weakest members. By "weak," I do not mean through

the fault of those people alone; I mean because of their present financial situation.

Most of the senior citizens of this province are in need of proper living standards.

The majority of them worked hard all their lives, but most of them found themselves

in the position where their pensions were inadequate for a good standard of

living when they retired. They do not want to be treated with handouts, and

of course that was the basis for creating the old-age pension, when it became

accepted that every senior citizen in this province deserved an old-age pension.

Prior to that time they were sent, if they had no family, to the poorhouse.

We've all read Dickens. I may sound somewhat extreme and maybe exaggerating,

but when you have a government that doesn't seem to care any more about

imposing further hardships on the poor and the senior citizens, then you have

to ask if this government really wants to turn the clock back to the days when

people had to put out their hands to government and hope some volunteer agency

would look after them.

The NDP has always supported any legitimate effort by this

government to reduce unnecessary expenditures, but there is no way the

NDP can ever support a regressive tax measure in order to try to meet

some of the problems which by and large the Social Credit government

have brought on themselves — not in all cases, but in many. When we

look at the United States and the kind of things that have been done

there, exactly the same policies are spilling over into our province.

The Premier and his cabinet obviously seem to be getting advice from

the Tories in eastern Canada, who seem to have the same idea of

imposing taxes on the poor and not the rich. Then they seem to be

looking at what is happening under Reagan in the United States. It's

very clear that most of the moves there are for the benefit of the

privileged and not the underprivileged. We see the results of that.

Suddenly, here in British Columbia, where we have an opportunity to

stand out as a very strong province when it comes to commitment to its

citizens.... A province that does not look

[ Page

2295 ]

after, with great care and humanity, the poor and

the low income cannot be called a province that is really meeting its

commitment to the people of British Columbia.

At a time when the cost of living is going up and many of the

reasons for the cost of living going up are because of the government's

policies.... We in the NDP cannot understand why the Social Credit

government wants to continue to add to the cost of living for the

people of British Columbia. As I said at the beginning of my remarks,

underlying this tax increase is the basic philosophical difference

between the Social Credit philosophy and that of the New Democratic

Party. For once, I hope the Social Credit government will not continue

to be stubborn and obstinate, and say that anything the NDP is pointing

out must obviously be fallacious. I wish they would just say for once

that perhaps the NDP, in their concern for what is going to happen to

the people who can least afford it in this province by this increase in

sales tax.... Perhaps just for once they will withdraw a bill that we

consider absolutely regressive.

I see the light is on. I had volumes more to discuss with you today, Mr. Speaker, but I thank you for your attention.

MR. BARRETT: I want to raise my small — and I hope

significant — voice against this increase in taxation at a time when

the government is talking about restraint. What this particular bill

does is prove that the government has a number of policies, all of them

intended for politics, and having very little to do with economics. At

the same time that the government has embarked upon a series of

so-called cutback measures, there is no measuring of the fact that the

government itself is one of the biggest spenders and essentially has

shown no control, in terms of tax collection around how much they take

out of consumers' pockets and inhibit the natural return to some

stabler economic development.

Mr. Speaker, a government that is bent on fuelling the private

sector as the engine for the recovery of the economy would not bring in

this kind of legislation. The government has embarked upon a hodgepodge

of cliché policies, a hodgepodge of economic porridge, in an attempt to

give the impression that somehow they are restraining themselves, at

the same time increasing the burden of taxation on the citizens of

British Columbia; and concurrent with this it's taking the limits off

the increase that the public utilities can charge. There is no

restraint on the Crown corporations any more. That has been lifted by

the minister. Along with this bill and concurrent with this bill is an

increase in taxation on essential services as well, such as an increase

in taxation on the use of the telephone.

How can the government sell the argument that they intend to cut back government

involvement in the economy when they indeed have exploded their involvement

in the economy in an unprecedented manner? How do they expect to convince the

citizens of this province that they are showing some modicum of restraint when

they indeed have gone wild both in taxation policies and charges on service

policies? The minister has given no public explanation. On the one hand he is

saying to people in the community: "You can't have this" and "you

can't have that." On the other, he's taken the position: "We

can have everything we want as government." Where are those hard choices

that the minister spoke about which are so difficult to sell to the people of

British Columbia? When it comes to government making money, there are no hard

choices; it's easy to increase taxes. Just ask the Minister of Finance.

He's doing it.

1 want to examine a number of sectors of the economy that have been

affected already by this, Mr. Speaker. I'm sorry the minister stepped

out, but I'm sure it'll be for just a few brief moments. I know the

Minister of Consumer and Corporate Affairs (Hon. Mr. Hewitt) will make

notes and add his voice against this particular increase in taxation,

as it affects consumer matters. Would we not expect that minister to

protect the consumers of British Columbia? Or would he just go along

endorsing the government, forcing him to be embarrassed publicly as the

Minister of Consumer and Corporate Affairs for not protecting consumer

interests? For example — and I want to spend a few moments on one area,

Mr. Speaker — the 7 percent taxation on meals over $7. How much money

does the government expect to gamer from that new tax? Would it not be

useful, Mr. Speaker, in the course of the debate on the subject, to

have some idea of the economic gain — i.e. hard cash for the government

— that causes this much dislocation in an important part of the

economic life of British Columbia: the tourist industry.

Have there been any studies at all by the government as to the

adverse — or otherwise — impact of the imposition of this 7 percent on

meals costing over $7? To my knowledge there has been no research

whatsoever, no economic analysis whatsoever, no in-depth study

whatsoever of the impact of this 7 percent charge on the whole tourist

industry?

Far be it from me to repeat the comments of Mr. Bellamy, an alderman

in Vancouver who is also the representative for the Restaurant

Association, and a well-known Social Credit supporter. What were his

comments, which I am uncomfortable repeating? He says he's been

betrayed by this government. I don't know what kind of deal he may or

may not have had with the government, but the words "been betrayed"

indicate to me that he, as a representative of the Restaurant

Association, had no idea whatsoever that the government was planning to

implement this increased tax burden on restaurant customers. Should

that indeed be the case — and I suspect that it is; that Mr. Bellamy

and the tourist industry were not consulted in this matter — then of

course we have a government that is operating essentially on an ad hoc

basis, with no long-term economic strategy, no fiscal accountability as

to why they're moving in this direction. It's purely a government

acting out in knee-jerk response to the situation they find themselves

in; hardly a fitting way to lead the province out of the mess they

created.

[Mr. Ree in the chair.]

They have created the mess, Mr. Speaker. They've increased the debt

in British Columbia from some S4.8 billion in 1976 to just under $12

billion in 1983. A tripling of the provincial debt in eight years,

under a government that has been completely out of control in terms of

fiscal accountability; a government that has seen fit to wallow in

personal luxury when it comes to the travel of cabinet ministers, both

singularly and in groups. We have seen public funds expended, these tax

funds.... For instance, Mr. Speaker, one minister, because he was an

hour's drive away from home, spent 100 nights in a hotel in downtown

Vancouver, eating his meals, collecting his per diem, and then

travelling back to Victoria the next day in a government jet. Then we

have to pay for it out of increased taxes.

[3:15]

Mr. Speaker, would that the citizens of British Columbia fully appreciate the impact of the fact that the government is

[ Page 2296 ]

increasing taxes here, and at the same time is

telling citizens, particularly the handicapped, that they must do

without an additional $50 a month. They're putting the people of this

province into massive debt from unjustified projects such as northeast

coal, when the minister today couldn't even answer a question as to

whether or not there is pressure to downsize the amount of money that

is being paid per tonne of coal, or the amount that is being shipped,

and at the same time burden small businesses in this province through

the restaurant industry with a 7 percent tax on a $7 meal.

Perhaps we should be thankful for small mercies. Perhaps the

ministers who are eating those meals at public expense have to return

some of that money through an additional tax. Perhaps the benefit of

this meal is that rather than chastising ministers for running up huge

bills and living in luxury, the best way is to charge a tax so that we

pay ourselves some of the money back. Or maybe it's an invidious

attempt to stimulate the economy by having cabinet ministers lead the

way. Maybe indeed it is a mysterious anti-Friedman approach to the

economy: wild spending to prime the pump. Maybe these cabinet ministers

are sacrificing their bodies in the name of economic restraint. Maybe

we should not criticize this approach, because if they are waxing fat —

and I use that term literally, not figuratively — at the public trough,

they are sacrificing their bodies to spend more tax money to eat well,

so that the money is returned to the people of British Columbia. Why

else would we have a minister spending 100 nights in the Hotel

Vancouver, lapping up food that is served to him on a pushtray at the

taxpayers' expense, with no explanation of why this money is being

spent? Perhaps it's an attempt to recover from that minister the 7

percent tax. He could pay it out of his per diem.

Maybe what we are witnessing, Mr. Speaker, is a massive personal

sacrifice by the cabinet to personally go out there and stimulate the

restaurant industry. Maybe there is indeed a master plan. Maybe they

have been told not to go home at night and sit down and eat their pork

and beans, like any other family in British Columbia. Instead, they

must sacrifice to stimulate the economy to accumulate more taxation

through this approach, staying at hotels at a cost of $80 or $90 a

night in B.C., or $300 to $400 a night outside of B.C. As a matter of

fact, we'll have to raise the taxes; the Premier has a habit of staying

in hotel rooms that cost $600 a night in Ottawa. Six hundred dollars a

night in Ottawa! I wouldn't give you $100 to travel there. What kind of

person would spend $600 a night for four rooms and a carpeted floor?

That's the kind of bills they run up, Mr. Speaker. Somebody's got to

pay for it. So who's going to pay for it? The citizens. How are we

going to get the money out of the citizens? We're going to charge them

on their telephone calls. We're going to charge them on their

restaurant meals.

We don't have any explanation of this policy. One minister has just

come back from Yugoslavia — we saw some evidence of his Adriatic antics

today — but we don't know how much he spent over there. We don't know

what these fellows are doing with public money.

Interjection.

MR. BARRETT: Learning about stable government in Yugoslavia and Albania?

Perhaps. But, my friend, I'd like to see the hotel bills. Do they pay in

rubles? How do they pay, and who is paying the tax there? This government has

gone on junkets. Two of them are going to India. Maybe they're going to

talk to some financial guru over there. Maybe the remnants of the raj in India

will give them an example of how they too can travel in potentate style.

Speaking of rajahs, let us not forget, as an aside, that a certain

cabinet minister spent 100 nights — Arabian nights — in a hotel room.

That same cabinet minister appeared at an election rally on the back of

an elephant, so maybe he does have the rajah syndrome after all. In the

1979 election campaign that same minister showed up on an elephant and

left behind his campaign promises. In examining those droppings of

wisdom, we discover that that minister was suggesting that his

lifestyle be upgraded, as only that of a cabinet minister in Social

Credit should be, while the rest of the peons pay money to support this

lifestyle.

Where does the money come from? A 12 percent increase in

expenditures this year alone. A tripling of the public debt in eight

years alone. An increase to now of $180 million a year, just on

interest payments of Crown corporations of the new borrowings by this

government. The shovelling out of $45 million cash in the last week of

fiscal year 1981-82 into the pockets of B.C. Rail, without any

explanation to this House — an additional debt on the taxpayers. It

took us 18 months to discover that that $45 million was handed in cash

to B.C. Rail on the basis of an advance that is no longer accountable

as a debt. And then they have the cheek and the nerve to announce to

the public, after they gave $45 million to B.C. Rail, that B.C. Rail

made a profit that year. Is there a citizen in this province who would

not like to have his mortgage paid for so they could announce they

saved money on accommodation? That is Social Credit financing. Give the

money out one door, increase the expenditures at an unprecedented rate,

eliminate the Crown Corporations Committee, do away with public

accounting — but bring in this kind of legislation for financial

increase and gain to the government, without any explanation.

Most normal people would be embarrassed by what has gone on fiscally

in this province. Most normal people would show some signs of frugal

behaviour and some timidity in checking into hotel rooms that cost $600

a night in a time of restraint. Most people would show some caution in

not buying wine that cost $37.50 a pop to sit around and talk politics

over. But we're not talking about a normal government with normal

restraint. There is no restraint when it comes to this government

spending money on itself.

We have an example of how this pious government in this legislation,

in terms of fiscal goals, is going to take just a little more money out

of the pockets of British Columbians. If I were the Minister of

Finance, I'd run out of the House too. Why should I deign to listen to

this lowly opposition criticize how they spend money? After all, we're

just socialists. They're capitalists. When it comes to wasting money,

they know how to better than anyone else. Who else would increase the

debt by three times without public explanation and tell the people of

this province that they're actually saving the money by borrowing their

way into this mess? Who else would spend public money to subsidize a

coal deal that guarantees massive profits to the private sector and

guarantees the subsidy of an energy supply to our Japanese customers,

other than a capitalist government that wants to rush to give away the

treasures of this province and put us in debt at the same time, and

have the taxpayer subsidize it by this legislation? Who else would sit

up at night to figure out a way of deregulating the price of natural

gas so that the international oil companies will make more money in the

sale of our

[ Page

2297 ]

gas, so that we, the taxpayers of British Columbia,

have to make it up with taxes of our own? After all, if the citizens of

this province have access to those God-given resources and continue to

make money from those resources, such as the petroleum corporations

have done, they might become sloth-like. They might want to become

dependent on the state for a good meal, and only cabinet ministers

depend on the state for a good meal.

Mr. Speaker, can you share with this House what the cabinet does

when they're on these luxuriating tours? Can you tell me what 100

Arabian nights in the Hotel Vancouver have produced on behalf of the

taxpayers of this province? Can you tell me what staying in a

$600-a-night hotel room in downtown Ottawa does to titillate the

recovery of the economy of British Columbia? Can the government tell me

how it will look people in the face on television and say: "Well, we've

got to gouge a few extra bucks out of you because it costs money to go

to Broadway shows"? We're paying for this. The taxpayers of this

province are paying for it. The old, the poor, the retired, the

low-income earners, all are paying for this. I know I would be out of

order if I made reference to Bill 4, which takes $72 million out of the

pockets of the handicapped, the low-income earners and the elderly of

British Columbia, so I won't refer to it. But if I were able to refer

to it, I would make a comparison between that money gouged out of the

pockets of the low-income people to build on taxes such as this that

make the rich wax fatter.

Let us take our minds to the expenditure of these tax funds. Here is

a restaurant called Toby's. I don't know if it's frequented by cabinet

ministers; it's not close to the Hotel Vancouver. It's at 620 Trounce

Alley, here in Victoria. The telephone number is 604-382-2923. "Dear

Sir or Madam, Social Services Tax on Food." This is an ad taken out in

the newspapers. I will not comment on the cynicism that prompts such

ads from small business. I'll leave it to the imagination of citizens

to do their own examination.

[Mr. Strachan in the chair.]

I'll quote directly from this ad, the particular part on restaurant meals:

"In order to avoid any confusion (usually done

deliberately by government?) which inevitably follows a tax

introduction, we wish to clarify the recent tax levied on food served

in restaurants in British Columbia. The intention of the new tax is to

gain 7 percent from any unfortunate individual who dares to consume

food in excess of $7. Alcoholic beverages are not affected — the

addition of another hike would drive everyone to drink anyway!"

Now this is a citizen of the community, a small businessman, whom

this government purports to speak for. This government's entire raison

d'etre is to serve that small business community — and this is their

reaction.

"If the total amount of food, coffee or tea or pop on

your individual bill exceeds $7, a tax of 7 percent will be added to

that bill. If two or more customers share a bill, providing no person's

individual bill exceeds the magic figure, the total bill cannot be

taxed. In other words, no matter what the total comes to, that bill

will not enjoy(!) tax. Our staff have been briefed on this issue, so

please assist us by not asking for separate cheques unless it is clear

you intend to purchase more than $7 of food. If you do, then please ask

your table attendant to give a separate cheque for yourself, and the

others at your table can combine their expenses."

Can you see this, Mr. Speaker? What the government has done is

engage in a whole new enterprise when it comes to public entertaining.

This is a new form of trivial pursuit. It's trivial tax pursuit. Can

you not see the games in the coffeehouses, the inns, the restaurants

here in British Columbia, calling this whole thing a tax pursuit — a

trivial tax pursuit? Maybe we could incorporate this game. Can you not

see citizens who are not at the level of cabinet ministers actually

comforting themselves over a $7 meal, knowing they have a night's

entertainment to figure out who's going to pay the bill to avoid the

tax? I think it could be a great social event. Bring along a cabinet

minister. Buy him a meal and he'll tell you how to beat the tax. Just

get on the public dole. This is a public ad, and I've seen no response

by the minister. They're fiddling with your tax formula, Mr. Minister.

Have you chastised them publicly? Have you said naughty, naughty? In

the military service they call it dumb insolence. I just call it

silence.

The last paragraph says:

"We shall be pleased to assist our valued customers should

they have any questions regarding this tax. We cannot guarantee we can explain

the sanity or logic of the minister who introduced it."

Mr. Minister, do you hear what they're saying about you out there?

This has been a matter for court cases before, vis-à-vis the famous

"com flakes in the morning" case. But there has never been a direct

assault in the public media as to the sanity or.... What is the other

word here? "We cannot guarantee we can explain the sanity or logic of

the minister...." This is obviously a public attempt to besmirch the

reputation of the minister, and I want to know if the minister is going

to sue them for libel or for telling the truth.

[3:30]

Now I want to go on further to quote the rest of this paragraph. It says: "We

do, however, recommend that you watch what you consume, and if you dare to enjoy

our food and spend more than $7, not only will you be taxed but you could run

the risk of having the Ministry of Health taking some punitive action against

you for overeating!" This is signed: "Yours sincerely, Toby's

Restaurant." It's an advertisement that appeared in Monday Magazine

on the twenty-first day of the seventh month in the year of our Lord 1983. I

ask the minister: does he intend to take legal action against the slanderous

statements against him personally by the manager of this restaurant? That's

one issue we have to deal with. Does the minister intend to initiate libel action

against these people for questioning his sanity? We need to know, because if

the minister's not prepared to defend his sanity, what are we dealing with

here? It is a puzzle and a conundrum, Mr. Speaker: if the House is asked to

debate legislation about the introduction of which citizens are questioning

the sanity of the minister, we are entitled to know whether or not that minister

claims sanity or any defence against libel.

DEPUTY SPEAKER: Hon. members, at this point we are engaging

in personal reflections on another hon. member of this House. Perhaps

if we could avoid that type of reflection and stick to the principle of

the bill, the parliament would be well served.

[ Page 2298 ]

MR. BARRETT: Mr. Speaker, it is not I, sir, who am raising

these questions. I am bringing to the attention of the House — which

indeed, sir, since you've raised this, may be a matter of privilege....

Do citizens have the right to call ministers of the Crown crazy? Do

they? Not me; I know what the rules of this House are, but here we have

citizens in a paid for advertisement in the newspaper questioning the

sanity of a minister of the Crown.

MS. BROWN: It's not for the first time.

MR. BARRETT: It's not the first time, but it's unique nonetheless. I am not a psychiatrist, but I am a student of human behaviour.

MR. KEMPF: You badly need one; there's no doubt about that.

DEPUTY SPEAKER: Order! That's also a personal reference.

MR. BARRETT: That's right, that is a personal reference; it's not a newspaper ad.

DEPUTY SPEAKER: A device such as a newspaper ad may not be used to make unparliamentary references to another hon. member in this House.

The member for Omineca on a point of order.

MR. KEMPF: Mr. Speaker, I'd certainly be very willing to withdraw that remark if the hon. Leader of the Opposition would do so as well.

DEPUTY SPEAKER: I think that point's well taken. If we can

stick to the principle of this bill and not use devices to bring

unparliamentary references to the House, then the Legislative Assembly

will be well served.

MR. BARRETT: Mr. Speaker, to my knowledge withdrawals are not

conditional on bargaining. The rules have to be adhered to in this

chamber. However, if the member for Omineca is concerned about the

question of sanity, the ad does not refer to that member. As

unfortunate as that may be, the ad does not refer to that member;

therefore my private opinions of that member cannot be changed. I have

the highest respect for his mental capacity and his emotional

stability; not so much his political judgment, but that's a separate

matter.

Having said that, I want to know whether the House will initiate

action against the owner of this restaurant for daring to question the

sanity of a minister of the Crown. That, sir, is in order. Will there

be a matter of privilege initiated by the government against this

restaurant that has placed this ad calling into question the sanity of

the minister? Now, sir, I ask you to rule on this: will you initiate

proceedings in this chamber on privilege against this restaurant for

daring to question the minister's sanity?

DEPUTY SPEAKER: I will rule on it right now. Questions of

privilege are entirely in order when they're introduced at the earliest

convenience. However, they would not be in order during debate on Bill

15, and I would therefore ask the member now taking his place in debate

to relate his remarks to Bill 15 or to discontinue his speech.

MR. BARRETT: Thank you, Mr. Speaker. I will not make any

further reference to this, but I was so moved, sir, by your argument of

privilege that I was forced to embark upon some straying from my

otherwise confined notes on this subject — the fact that the minister

was being besmirched by this ad. Perhaps, sir, with your advice, I will

bring in a matter of privilege to have this restaurant owner called to

the bar, sans alcohol, to explain why he's questioning the sanity of

one of the members of this chamber — not as a group, but as an

individual. It's threatening. However, we'll leave that to another day.

Nonetheless there is such disrespect flowing throughout this land

because of the lack of logic of this legislation that there are

murmurrings from the unwashed out there about the sanity of the

government — not the minister, because that would be incorrect for me

to suggest. But the sanity of the government collectively is something

that is a matter of great dispute amongst the population. Why have they

driven small businesses to write such ads? Why have they driven

supporters of their own party — albeit without too much faith —

publicly to call the government collectively "dumb-bells," as reported

of the assessments of Mr. Don Bellamy, the alderman in Vancouver? I

would not call the government "dumb-bells," but it took a member of

their party to call them "dumb-bells" around this legislation.

There is no logic to this legislation. There is no financial

accountability to this legislation. This is a government that is

squeezing pennies out of the ordinary citizens of British Columbia,

making a mockery of some sense of responsibility in spending money,

while at the same time luxuriating in expenditures on their creature

comforts.

Interjection.

MR. BARRETT: No, not you, Mr. Member. You're being cut out of

the picture. You were almost up to the trough until they shut off the

Crown Corporations Committee.

DEPUTY SPEAKER: Order, please. To Bill 15, please.

MR. BARRETT: Yes, Mr. Speaker, you're quite right, but I

wanted to point out to that member that he has been relegated to the

dense-pack. These taxes will go to pay for the accounts of the

ministers and of Crown Corporations Committee chairmen who will no

longer have the opportunity of tasting the benefits of office. I know I

am stretching it, so I'll leave it at that point.

Somebody pays. Somebody has to pay for those hotel rooms. Somebody

has to pay for the meals. Somebody has to pay for the $12 billion debt

that this government has piled up, an increase of $8 billion in eight

years — a billion dollars of debt a year. Who is it they are asking to

pay? They're asking the citizens of British Columbia to pay, pay, pay.

Restraint? In a pig's eye it's restraint! This is a move to gouge the

public of British Columbia. That gouging pays for, albeit a small

amount, the spending habits of the cabinet and this government.

There is a tremendous flood of statistics and studies and

examinations of the import of the increase in sales tax. But let me

quote to you a brief analysis from the Vancouver Province of

Wednesday, August 24, 1983. I want to quote the headline: "B.C. Budget

Pushes Up Cost of Living." Is that restraint? Is that caution? Is that

a government demonstrating that we must bring the cost of living down?

This is big government on the

[ Page 2299 ]

backs of little people in the name of restraint. Who's kidding whom? The Vancouver Province

is a known free-enterprise newspaper. It even supports this government.

That stretches anybody's credibility, but they are willing to risk

their own credibility. Nonetheless, this is what they say: "The Bennett

budget has driven up consumer prices in B.C. In its latest consumer

prices report, Statistics Canada says the cost of living in Vancouver

in July jumped 1.1 percent from June." The government did that, not the

private sector and not the trade unions. The government alone, in

initiating action through this budget, drove up the cost of living 1.1

percent in 30 days. That's the second highest in the country, according

to the article, after Regina, and compares with just 0.02 percent in

Calgary and Toronto, the lowest in the nation. The annual inflation

rate in B.C. in July was 5.8 percent, up from 5.1 in June. In one

month, seven tenths of a percent increase in the rate of inflation in

the province of British Columbia, and it is directly related to these

increases in taxes, all in the name of so-called restraint or

masqueraded in a program that wasn't fully explained to the citizens of

British Columbia.

"The report says the escalating cost of living here is

due to tax hikes in the Bennett budget, plus higher telephone and

cablevision rates. B.C.'s tax rate on all goods and services subject to

the social services tax was raised to 7 percent in the budget and

extended to cover more items.

"Nationally, the annual inflation rate eased slightly to 5.5 percent in July, down from 5.6 percent in June."

Even the hated Liberals — and Lord knows there are no adherents to

that particular government's philosophy, except a few malcontents who

joined the present administration.... I think about four of them were

Liberals before they saw the light and sang "Hallelujah!" and adopted

Social Credit colours and have gone on to rewards ever since. Far be it

from me to invoke the name of the Prime Minister, but even the federal

Liberal government could take some comfort from the fact that they

actually dropped the rate of inflation by one-tenth of one percent in

the month of July, and British Columbia bucked the trend and went up

seven tenths of a percentage point.

"The annual inflation rate is now almost half the 10.9

percent recorded in July 1982. However, the rate is up from 5.4 percent

in May, which represents the lowest increase in more than ten years.

Food prices rose 0.6 percent in July, compared with an increase of 0.2

percent between May and June, leaving them 2 percent higher than a year

earlier."

Mr. Speaker, let us talk about food as a required commodity. When we

see a significant increase in the price of food, the price of clothing,

the price of housing, that is the one time we have an opportunity to

measure wage-earners, pensioners and millionaires. If one is a

super-wealthy person and a multi-millionaire, does a 0.2 percent

increase in the cost of food or a 0.7 percent increase in the cost of

living affect them very much? The answer is no. But if one is a

marginal income-earner such as an MLA — as compared to a cabinet

minister — that 0.7 percent could be very threatening. Now I don't see

a caucus revolt, but those poor lowly back-bench MLAs, Mr. Speaker, who

live on such timid wages and can't live the way cabinet ministers are

living, have to pay the same increase. So if it's unfair for them, it's

unfair for other citizens.

Mr. Speaker, as I come to the end of my participation in debate, I

want you to know that 1, sir, am considering a personal move on a

matter of privilege attacking this ad for questioning the minister's

sanity. Furthermore, Mr. Speaker, I want to point out that luxuriating

cabinet ministers cannot expect the public to be unconcerned about

their spending habits out of the pockets of the taxpayers. So I

suggest: why increase the taxes? Just pay some of the bills yourself.

We're not in the business of providing high-style living for

politicians, and that's what's happening with this bill.

Mr. Speaker, I do not intend to support this legislation.

[3:45]

MR. R. FRASER: Mr. Speaker, I'm pleased to add some remarks

to this debate, and would point out that it's my observation that when

the government spends money on programs, some people complain they're

not spending enough, and when they don't spend money, complain they are

not cutting back enough. If the ministers go out on a sales junket on

behalf of the province, they complain, and if they don't go out on

behalf of the province, they complain. I also note that some of the

debates on other bills — namely, the Tobacco Tax Amendment Act, where

we had some 15 hours plus of debate deciding whether or not the

government should raise the tax on a package of cigarettes by a

dime.... I suggest to you that some of those arguments were far from

serious when it came to content; in fact, they were more interested in

time. And the fact that the two recent speakers on this bill spoke for

the full term indicates to the public the kind of problems we have, the

problems the government has in getting some of the legislation passed.

With respect to this particular bill, I'd like to point out a few of

the things that are exempt from this tax: food products for human

consumption, school supplies, children's clothing, printed and bound

books that contain no advertising and are published for educational

purposes, some medical supplies, fire-alarm devices, yard goods sold

for making clothing, work-related safety equipment, wood when used as a

fuel, and draft beer — Mr. Speaker, a very important one indeed. A 1

percent increase in the sales tax will make no difference whatsoever,

and I would suggest to you — to the buying public at least — that if

you want to put it into perspective, if a merchant had a sale, you

would hardly expect people to come charging into the store if you said

you would cut the price by 1 percent. In fact, if you want to get a

sale going, you have to go 20, 30, 50 and sometimes higher. So the

significance of 1 percent is lost, Mr. Speaker, but it does bring some

revenue to the government so that the government can provide those

programs that are determined to be essential. That is why I will be

supporting this bill.

MR. D'ARCY: It's a delight to be speaking at this time of the day for a change.

Interjection.

MR. D'ARCY: In answer to the shouted comment from the member

for Omineca (Mr. Kempf), I'm far more experienced at speaking at 3:00

in the morning than 3:00 in the afternoon. I'm looking forward to

having that opportunity again, and I hope to hear the member for

Omineca speak at that time of day. We haven't heard him yet, and I know

we will. We'll have the opportunity.

[ Page 2300 ]

Mr. Speaker, to quickly comment, the member for Vancouver South said

that draft beer was not affected by a sales tax. I think the breweries

of British Columbia would be delighted to hear that they weren't going

to be taxed any more on the beer they produce, if that's what he's

trying to say. However, according to what the brewery operators tell

me, they pay provincial taxes through the nose — considerably in excess

of 7 percent of the selling price. And the beer drinkers of the

province are aware of that too.

MR. R. FRASER: On a point of order, Mr. Speaker, I believe I am permitted to correct or enlarge on any statement I've made....

DEPUTY SPEAKER: Not enlarge; I'm sorry. Standing order 42 allows you to....

MR. R. FRASER: Well, not enlarge. I didn't mean enlarge. What

I meant to say is that that is when draft beer is sold on licensed

premises — to make it quite clear and easy for the member on the other

side.

DEPUTY SPEAKER: Thank you. Just to explain standing order 42,

and without taking from the member's time, it allows a member to

correct a quotation that might have been materially misquoted. I don't

believe that happened.

MR. D'ARCY: Getting into the details of the principles of

Bill 15, it is different from most of the other bills which have been

debated over the last month or so in this House. It definitely is not a

restraint bill. It is certainly not a restraint bill, except to the

extent that one could argue — as many spokesmen within the business

community have argued — that it puts a restraint on the recovery of the

economy of this province. However, in no other way is it a restraint

bill. Even excepting the government's sometime adoption of the federal

government's guidelines — getting into bed with the federal government

over 6 and 5, or over less, as they have in the last few years — we

find that this bill, taking the sales tax alone, represents a 16 2/3

percent increase in the retail sales tax in this province. It's

certainly nothing to do with restraint, nothing to do with federal

guidelines, nothing to do with downsizing government, if the government

assumes to take this kind of money out of the private sector.

Obviously, when you effect any tax increase, particularly one of

this size — nearly 17 percent in one shot — you are not downsizing

government. You are not showing restraint on the size of government.

You are in fact expanding the role of government as part of the gross

provincial product. You're expanding the government's role in the

marketplace, and you are restraining the ability of the economy of

B.C., which is all the non-governmental persons in business or

otherwise, who want, hope and need to see the economy of B.C. restored,

and ultimately — hopefully — to expand to provide the jobs and business

opportunities which we all desire for the citizens of this province.

Mr. Speaker, once again we find the Finance minister wanting to make sure that

low-income people, the elderly, the poor, the working poor, the underemployed

and the unemployed pay not only their fair share, but more than their share.

As we've commented before in debates in this House, low-income people have

no discretionary spending power. They spend all of their income on essentials.

As the previous speaker mentioned, a number of essential items, such as food,

are exempt from sales taxes in this province, and have been for some time; it's

certainly not new under this Finance minister, or even under this government.

The fact remains that a low-income person, a senior citizen, a working poor

person attempting to raise a family with dignity, must pay sales tax on many

of the items they buy, because they are essential. Those people do not have

the discretion to not spend their money. People in our situation, MLAs, probably

have some discretionary spending power and can make decisions as to how much

to invest, how much to spend and how much to save, and in what ways to spend

their money. The working poor, the elderly and the underemployed do not have

that kind of power, but the minister gives them no choice. He impacts the effect

of this bill on those people.

I'm going to get to the effect on the restaurant and tourist

industry in a while. One could effectively say that poor and low-income

people will not likely be buying meals over $7, and that's true. But a

very important part of the impact of this bill — and I don't believe

it's been mentioned in detail by previous speakers — is that very often

the only way elderly and low-income people have of contacting friends

or relatives, even in emergencies, is by placing long-distance calls,

and for a change we find the minister is in fact impacting on those

people. Many parts of this province are not served the way greater

Victoria and greater Vancouver are, by being able to phone through most

parts of the region on a basic exchange bill. There are many parts of

this province.... For example, in my riding it costs 30 cents to phone

a matter of 15 miles between Castlegar and Trail. That may sound like

peanuts, but the fact is that it has quite an impact on low-income

people who in many cases must make those calls for health purposes or

for emergency purposes, or in some cases simply to phone a friend or a

relative.

The Social Credit government in B.C. professes to admire the

Progressive Conservative Party of Canada. They take great glee when a

poll shows the Tories doing well. They took great pride in a recent

by-election victory in Mission–Port Moody. I'm not sure the Progressive

Conservative Party admires the Socreds that much. But one thing has

been noted by tax analysts' commentaries across Canada. With these tax

changes — the tax changes package, of which this Bill 15 is one of the

most significant — the province of B.C. is now perhaps the most

regressively taxed province in Canada. I think that the Social Credit

government has to have a real look at that. Although it is suggested

that the Davis regime in Ontario is perhaps more regressive, we do know

there are close ties between that government in Queens Park and this

government in Victoria in terms of technical advisers and political

advisers.

Even though sales taxes on specific items in some of the Progressive

Conservative–governed provinces in Canada are in fact higher than we

find in British Columbia, the range of exemptions in all cases, with

the possible exception of Ontario, is much wider than we find in

British Columbia. Once again, independent tax analysts whom I have no

reason to believe have a political axe to grind — that is, they're not

coming from the right or left, or even necessarily the centre; they're

simply doing a technical analysis — suggest that the taxation system as

it impacts on ordinary citizens and consumers in Progressive

Conservative–governed provinces in the Atlantic area — all four of

them: Newfoundland, Prince Edward Island, Nova Scotia and New Brunswick

— are in fact less regressive than the taxation regime that we have

here in British Columbia. It's also true that Tory-governed

[ Page

2301 ]

provinces on the western prairies, Alberta and

Saskatchewan — again, by independent analyses — have taxation systems

that are less regressive than the system in British Columbia. When we

say "less regressive," Mr. Speaker, not only does that mean that those

provinces are more human in their approach as far as ordinary or low

income people are concerned; it also means that they have a more

enlightened view in terms of retail trade and the multiplier effect

that retail trade gives to an economy which is trying fitfully to

recover from the economic events of 1981-1982.

For all I know, there may be some regressive taxes in the province

of Manitoba, but the point is that we have more of a recovery to

accomplish in British Columbia than any other province in Canada,

because during the depression of the last year and a half we suffered

more in British Columbia. That is in part due to world conditions and

in part due to the fiscal and resource mismanagement of the Social

Credit government. Nonetheless, we have a long way to go before we get

into an expansionary phase in British Columbia. At best we may, by the

end of this year, recover a quarter of what we lost in real terms in

gross provincial product in 1982. We have a long way to go, and this

kind of a bill, this kind of sales tax increase....

MRS. WALLACE: On a point of order, Mr. Speaker, I would draw your attention to the fact that there does not appear to be a quorum.

DEPUTY SPEAKER: The point of order is well taken. As is common practice, I will ring the bells and see if we can summon some members.

There we go. Standing order 6 is satisfied. The member continues.

MR. D'ARCY: Thank you, Mr. Speaker. With the hours we've been

keeping around here, it's always easy to see ten people in here whether

they're there or not.

[4:00]

Getting back to my comments about regressive taxation and the effect on recovery,

let alone on expansion of the economy, we have known that the real income gap

between what are generally referred to as low-income people and the middle classes,

or the well-to-do, has been widening in recent years. I feel this sort of bill

is not conducive to narrowing that gap.

The minister has talked — and I'm glad to see him back in the House — in

this bill and in others about the government's ability to pay. I would like

to talk about the government's ability to tax. When you extract $170 million

out of what was in the private sector, even in the most difficult year of 1982

and even during the first part of fiscal 1983, it has the opposite effect of

the multiplier effect. Depending on which economist one speaks to — and, once

again, it doesn't really matter what part of the political spectrum an economist

might see himself in — the fact is that most economists think that if you create

spending at the retail level, or at the developmental level, you can have a

multiplier effect of perhaps as high as 10 to 1, in terms of jobs that are created

at the secondary and tertiary level, increased velocity of funds, expansion

of retail sales and that sort of thing. If that is true — and, once again, we

all know that economic theories are just that — one must make the presumption

that extracting $170 million out of the private sector — the retail and service

industry sectors — of the province is going to have exactly the opposite effect,

that it could have a contracting and dampening effect on economic activity,

on gross provincial product in the province, of perhaps as much as 10 to 1.

Here we are dealing with no small amount of money — $170 million is no small

amount of money. As I've illustrated, if the contracting-effect theory is

true, then we have to assume that this could have a dampening effect on economic

activity in the province of perhaps in excess of $1.5 billion in fiscal 1983-84.

Mr. Speaker, I really don't see how we can expect the private sector

and the people of this province — the business people, the working

people and the investment community in this province — given the dismal

state of international and Canadian markets for our products, to

recover, let alone expand, when the government deliberately has that

sort of dampening effect on the economy of B.C.

[Mr. Speaker in the chair.]

We on this side of the House.... It's interesting that we're looking

at S170 million out of the economy. I'm sure the minister regrets

taking that out of the economy. I don't say that casually; I'm sure he

genuinely does regret having to bring in this measure. But he brought

it in on the grounds that the government had to have the money in an

attempt to reduce its deficit. Of course, we know why the government

has a deficit. The government has a deficit because it spent far too

much when times were good, and has difficulty when times are tough. But

the $170 million the minister says he must take out of the economy, and

dampen it by a figure of perhaps $1.5 billion in fiscal '83-84, is

almost exactly the amount of money that opposition members suggested

the government should restrain itself by in spending during the last

two fiscal years ending March 31 of this year. We're talking about

discretionary cuts. We're talking about downsizing government, such as

the minister says he wants to do, although he's certainly not

downsizing government or the government portion of the economy with

this bill. It's not part of the restraint package in the normal sense

of the word. But the people on this side of the House, I'm sure you

will recall, argued and moved motions, in the two fiscal years ending

March 31, 1983, that the government should indeed downsize itself, or

at least restrain its growth. We actually didn't go so far as to say

the government should downsize at that time; we said that the

government should at least restrain its growth to the extent of $170

million in such discretionary things as ministerial travel, ministerial

advertising, new office furniture — we didn't see why the old furniture

budget shouldn't be adequate, if not the old furniture itself — and, of

course, new charges for rental accommodation. When the government was

supposed to be being downsized, or at least not expanding, we couldn't

understand why there needed to be these massive increases in allotments

for rent and increased borrowing for the B.C. Buildings Corporation and

so on. So, Mr. Speaker, while I know this is perhaps an historical

aside — but this is very recent history — if the government had

listened to even a part of the opposition's efforts to restrain the

growth of government spending in the previous two fiscal years, the

minister would have had no need to bring in this legislation and dampen

the recovery the way he is doing.

Eight years ago in 1976 I did not anticipate getting up here and

having to defend the interests of the retail automobile industry in

this province. But the fact is that at a time when we were hoping — and

by "we" I mean everyone in this House and in the province — to see a

consumer-led

[ Page 2302 ]

recovery, we find that, apart from restaurants and

the long-distance telephone charges, which I'm going to expand on

later, the one retail area that's really been hammered is automobile

retail sales. Clearly there was a good rationale and it was supported

by this side of the House in having reduced sales tax on small,

efficient cars and on automobiles that burned B.C.-produced fuels such

as compressed natural gas or propane. With the changes in this bill, we

find that not only does the automobile retail industry — the new car

industry — see these tax privileges removed, which I think were

important and were endorsed by this side of the House, but the whole

industry is seeing an increase to 7 percent.

Mr. Speaker, as I mentioned earlier, this is far beyond restraint

and far beyond any federal or provincial guidelines — a general 16 2/3

percent increase in sales tax. For the automobile retail industry and

for consumers who would be contemplating buying a car in '83-84, it's

an increase far in excess of that.

Mr. Speaker, I feel it is very, very bad to bring in any legislation

which may discourage those people with savings — those people who may

need to buy consumer goods and services — from spending that money, by

any overt action of government. Lord knows, that government, being the

clumsy organization that it is, is going to do a number of things

accidentally that could dampen recovery. It seems very strange for

government to want to do something overtly which is clearly going to

discourage people from using their regular income or even any of their

savings. Study after study in this country have shown that if we are to

have a recovery, it's going to have to be consumer led, and that much

of that consumer-led recovery is going to have to come from people

using savings, perhaps taking advantage of profit-taking from

investment. Hopefully it won't be profit-taking from the Vancouver

Stock Exchange. I don't think there's too much profit to take there,

but perhaps if they've invested money on other stock exchanges they

will have an ability to cash in some of their well-earned profits over

the past year and perhaps inject that money into the economy of B.C.

and help our recovery along in that way.

But certainly, with this kind of legislation, that is not what

people would be encouraged to do — shall we say reinvest their savings

or earnings in the provincial economy. They are more likely to leave it

in something blue chip or even speculative, but outside the province.

That's not something that we on this side of the House want to see; we

want to see people encouraged to turn their money over in the B.C.

economy in some way.

Mr. Speaker, we know that this bill, by having a major effect on

consumers, has a major effect on business. Certainly we know that the

area where we have seen the largest growth in employment and where most

people feel the greatest hope for new employment and recovery in

British Columbia, certainly in the short run, lies in the tertiary

sector of the economy, especially commercial operations. We read in the

business pages of the newspapers that one of the few areas that are

bright right now is the commercial operations and the amount of office

space taken up by them, especially in the city of Vancouver.

The tertiary or service sector, in general, depends tremendously on

the use of the telephone. I spoke earlier about the regressive effect

on low-income people and the working poor of the extra tax on

long-distance charges. The application of this 7 percent increase on

long-distance calls impacts tremendously heavily on the commercial

sector of the economy and on the tertiary industry. It impacts on all

business and all consumers, but far more, I think, on the tertiary and

commercial sectors than on the primary industry sector in terms of

percentage of cash flow or gross operations. I would hope that the

minister will consider this area of taxation. Whether or not he will

make a change this year, I certainly hope that he will consider it at a

future time. Once again, if we are to look to recovery, let alone

expansion of the economy in B.C., we must look to those areas which are

and have been healthy, and not apply sudden new taxes to them.

Mr. Speaker, government spokesmen — apologists on the government

side and ministers — have spent a great deal of time talking, both

within and outside this chamber, justifying their legislation because

of the need for restraint in the province. Well, Mr. Speaker, there has

not been a single person on this side of the House, and I know of no

one outside this chamber, who has not qualified all their criticisms of

government policy by saying that they agree with restraint. I think

that, philosophically, everyone in the province agrees with restraint.

But there's an old saying about justice and courts....

Interjection.

MR. D'ARCY: I know you're going to be delighted to speak in a

little while, member for North Peace River (Hon. Mr. Brummet). You're

going to get up and justify your position on this bill.

[4:15]

Mr. Speaker, a saying in the courts is that not only must justice be

done, but it must appear to be done. The same thing is true of Social

Credit's restraint; not only must Social Credit and the Minister of

Finance, when they approve expenditures, be committed to and practise

restraint, but they must appear to practise restraint. There is a lot

of skepticism among the tax-paying public towards politicians and

governments of all parties out there. When they see legislation such as

this, which takes $170 million out of the marketplace — out of the

private sector — or they read of expanding the government's operations

for advertising and travel or of people making trips to the Adriatic,

Korea or India, even though there may be some value out of some of

those trips, the fact is that the tax-paying public's belief in

restraint, as practised by the government, or their faith in

government, becomes somewhat strained.

Mr. Speaker, this sort of unrestrained junketing — when you're

talking about downsizing government, an idea we endorse — makes the

government's efforts or rhetoric in this regard simply lack

credibility. I would hope that when the speakers on the government side

get up to defend this bill and justify taking the $170 million out of

the marketplace, the private sector, as part of a restraint measure —

as I've said earlier, the only restraint aspect of Bill 15 is that it

restrains recovery — they will attempt to put some credibility back in

the government's promises to make a sincere effort to downsize

government and get certain aspects of government out of the

marketplace, because this bill puts the government into the marketplace

in a much larger way — to the tune of $170 million in this fiscal year

alone. And there is no question about it, it has a dampening effect on

recovery in this province to the amount of perhaps $1.5 to $1.7 billion

in terms of economic activity.

We still do have some inflation in this country and in this province. One would think that with the general level of

[ Page

2303 ]

economic activity and growth there would be little

or no inflation. A few years ago — I believe it was in '73-74 — when

inflation hit 5 percent, and that was when times were booming along, it

was considered to be a crisis by political spokesmen of both the

provincial and federal governments. Now we get down to 5.5 or nearly 6

percent in the province of B.C. and it's considered to be good. Well, I

don't consider it to be good, but we heard all throughout the sixties,

seventies and early eighties, when inflation went into double-digit

figures and people saw their savings and retirement benefits eaten up

by inflation, and senior citizens in particular got very disturbed and

distraught at huge wage and salary settlements, that the terrible thing

was that wage and salary increases were causing inflation and crippling

the economy.

All those things were only theories, but one thing we know for sure

is that in 1983 — I think the Employers' Council will probably talk in

greater detail on this when they issue their next economic review —

wage settlements in the province of British Columbia have been either

zero or very near it. Certainly they have been a a good deal less than

the 5.8 or 5.9 percent inflation rate that we have in the province of

British Columbia. So whether or not wage and salary settlements

contributed to inflation or merely followed it back in the sixties and

seventies and early eighties, the fact is that, hopefully, wage and

salary settlements are certainly not contributing to inflation now. One

of the major components — and certainly a leading component in the

sense of being very influential in the B.C. economy — is the smelting

and refining and mining operations in Trail and Kimberley, where there

was a zero wage settlement this year. There are some clauses which

could kick in if metal prices rise substantially and some clauses which

could kick in a year or six months from now, but the fact is that

during the first year of that contract, May 1 to April 30, there is no

increase payable. So one can certainly argue that with little or no

increases having been paid in many other contracts, both public and

private, we certainly cannot assume that wage and salary settlements

have contributed to inflation in British Columbia during 1983,

certainly not to the 5.8 percent that we've had most recently.

However, I think it can be argued quite strenuously that because the

government, through bills like Bill 15, is expanding its role in the

marketplace, taking money out of the retail trade sector of the

province, the government itself is contributing to inflation in the

province of B.C., not just through this bill but also through the

recent application of an ad valorem tax increase on petroleum fuels in

the province of British Columbia — and through other bills which have

been considered by this chamber.

[Mr. Kempf in the chair.]

We note, for instance, that the inflation rate in the province of

British Columbia is half a percentage point higher than the inflation

rate in the rest of Canada. This is significant when you consider that

for the last 18 months or so, and ending this June or July, the

inflation rate in British Columbia was usually less than the inflation

rate in the rest of Canada. Hopefully, we were moving towards a

situation where it did not cost more to live in British Columbia than

in most of the rest of Canada and, perhaps more importantly, did not

cost more to do business in British Columbia than in the rest of

Canada. Now we find, in July and August, that once again B.C. is

leading all of Canada in cost-of-living increases and

cost-of-doing-business increases. The major significant thing which has

happened over the summer, which has not been to do with the private

sector, wage and salary settlements or profit-taking in the

marketplace, has been Bill 15 and its companion legislation surrounding

the budget.

We can only come to the inescapable conclusion — as many people

within the business community as well as many independent analysts have

— that the one major inflationary factor in British Columbia, apart

from certain structural things which are common all across Canada,

which is peculiar to British Columbia is legislation such as Bill 15. I

don't think there's any question that the sales tax measure will cost

jobs in the economy — not only jobs which are not going to be created,

but jobs that will have been lost.

Let's just take the restaurant industry in particular for a moment.

We know that they have said some rather uncomplimentary things about

this particular piece of legislation. I know the previous speaker from

Vancouver East spoke at length about a paid commercial advertisement

surrounding the sales tax as it applies to meals. I want to give that

company credit, because many of the complaints that I, and I'm sure the

minister and others in this House, have heard from individual

restaurateurs and from the industry in general certainly were not

printable; they certainly weren't the kind of thing that you could put

in an advertisement.

I'm not going to go into the detail of this particular

advertisement, but at least they took a light-hearted approach in

filing their objections to the tax. Sometimes the most effective

opposition is showing the silliness in a sort of a Monty Python style

of certain things that politicians and governments do. And there's no

question that this is a silly application; it is silly not only to

apply it to the restaurant industry, but also to apply it only on meals

over $7. We know that when the tax came in there was an incredible

amount of confusion, which to some degree still exists out there, as to

how it should be applied — whether you issued separate checques,

whether it was to be averaged or whether everybody should pay it.

Obviously, the application and administration of the tax had not been

well thought out. But we know the minister and the government have a

lot of pride and so they didn't see fit to pull back on it. Mr.

Speaker, we're hoping — and I know that the general public, let alone

the restaurant industry, would have a tremendous amount of respect for

the minister and others in the government if they would say, the way

W.A.C. Bennett used to say: "We made a mistake not only in the

philosophy of applying this tax to restaurant meals but in the way that

it is to be applied and brought in." It would be a major breakthrough

in the public's respect for government and the credibility of

government if a public admission of failure and lack of planning could

be made.

I see the minister returned at the same time my green light came on.

I have a number of other things to say; I have no idea whether the

opposition is going to desire to give the minister six months to

consider this piece of legislation. But I want to talk just for a

second, before the red light goes on, about the restaurant industry in

general terms, because we are speaking on the principle of the bill

here.

We know that in British Columbia over the last couple of years on a

per capita business basis we have been unfortunate enough to lose more

businesses than other provinces of Canada. I think that's been

indicative that our gross provincial product has drawn back more; we've

lost more economic activity than other provinces. One of the sectors of

the private

[ Page 2304 ]

sector that has suffered the most and had the most

bankruptcies — and I think this is true in greater Victoria; it's no

doubt true in your area and it's certainly true in mine — has been the

restaurant business. It has been the area which has been most heavily

hit. There may have been one or two others hit harder, but I think it

has been the area that has been the most heavily hit.

Along with many people struggling, many restaurateurs and their —

employees are working very long hours, families are working very long

hours — six and seven days a week — to stay afloat. Then along comes

the government and not only hits them with a new tax, which they must

expend employee time and wage cost in collecting a complicated tax, but

at the same time discourages individuals with a limited amount of

consumer dollars from eating out because anything more than $7 is going

to hit the consumer with a 7 percent sales tax. Once again, this is an

incredible imposition in terms of the size of the bill. It's far more

than any restraint program of 6 and 5 or zero. It's a huge impact and

has had a dampening effect not only on what British Columbians spend

but on what tourists spend.

I hope to have the opportunity to speak at greater length on some of

these things when we get into committee stage, or perhaps if an hon.

member brings in an amendment to the bill.

MRS. WALLACE: I'm really pleased to have the opportunity to

speak on this bill while the Premier's in the House — oh, don't tell me

he's going to leave — because I was quite intrigued hearing him on the

media over the weekend talking about the fact that the only papers he

liked to read any more were the weeklies. I thought it would be very

interesting if I read to him some of the clippings that I have out of a

couple of the weeklies that deal with the sales tax bill. I thought

that I would be very happy to do this while the Premier was in the

House, and I hope he remains while I do this.

The two papers that I want to read from are the Cowichan Leader — an editorial in that one — and the Ladysmith-Chemainus Chronicle — just a news release in that one. Both of these deal with the sales tax on meals.

I think I will start with the editorial from the Cowichan Leader , which I would like to read into the record. This was July 14, 1983:

"We fail to see the logic in Thursday's B.C. budget,

which has slapped a 7 percent sales tax on restaurant meals over $7.

The measure is a shortsighted one which is uncalled for. In an apparent

attempt to gain a measly $15 million in revenue, Finance Minister Hugh

Curtis has further increased an already heavy burden on the

restaurateur. The last 18 months of recession have been anything but

kind to the operators of eating establishments, and those in the

Cowichan valley are no exception.

"Now, with some reason to believe that recovery is

nearing — and with it a partial return to a better business climate —

restaurants are being told to implement a tax which is sure to cut into

business. Just how deep the cut will be is unclear. In these times,

eating out has become a rarity for most families. Over a year, the 7

percent tax on a family of five could easily amount to more than $100 —

and how many dinners would that buy? We can foresee some diners

forgoing a meal out because of that. And that's plain bad for business.

[4:30]

"The owners are not the only unfortunate ones. Consider

the plight of the waiters, waitresses and busboys. They normally draw minimum

wage; tips are counted on to supplement their income. But with this new tax

we would wager that the consumer is going to cut down on monetary acknowledgments

for good service. The tax can be seen as a tip for the government. Hardly a

thought to whet your appetite.

"There is also the chaos caused by uncertainty over

how the tax is to be applied. Some restaurants are levying it on the

total bill; others are dividing the total by the number of diners and

then setting the tax if applicable. Others still aren't even bothering

with Victoria's bidding at all. If the Finance minister isn't careful,

he could face a full-scale rebellion. If he has to hire more staff to

ensure that his regulation is enforced, then the whole process has been

defeated."

HON. MR. CURTIS: What date is that?

MRS. WALLACE: It's from the Cowichan Leader , July 14.

"With that in mind, we strongly urge Curtis to

reconsider. He may lose a little face, but he will win the gratitude of

restaurateurs. And if he really wants to make that $15 million, we

suggest a 1 or 2 percent tax on liquor, the government's most

profitable product. Booze has to rate as more of a luxury."

Well, that was the editorial from the Leader , and I think I will carry on and read the comments from the Ladysmith-Chemainus Chronicle .

It was on August 17, 1983. It says: "Owners Perplexed by Meal Tax.

They're Unanimous — It Stinks." This particular

article is done by one

of the reporters. There's no byline under it.

"It's confusing, unfair, discriminatory. expensive to

implement and another drain on the economy. The new 7 percent

provincial tax on restaurant meals over $7 is the target of the dislike

of all the restaurant owners contacted by the Chronicle

last week. Some owners say the tax has already hurt business, while

others say it is too early to tell. They all agree it is time-consuming

and expensive to calculate.

"Announced in the provincial budget speech, July 7,

the tax does not pertain to take-out food. A consumer taxation branch

memo says the cost of food served to a group of people can be averaged

among the eaters if the items ordered by each are not easily

identified. However, an example of a sales cheque for two indicates

that the cost of the items has been allocated individually to the

customers.

"Managers of the Omega, Inn of the Sea and Napoli's

say the tax has already hurt business. Owners of Mariana Lodge in the

Ladysmith area and El Meson in Chemainus report that it's too early to

judge the effect of the tax. The staff at Napoli's was interviewed

prior to the business being sold to" another owner — it had just

changed hands at this particular time. "The Esplanace business is now

called Northbrook Restaurant."

Interjection.

[ Page 2305 ]

MRS. WALLACE: This is not a magazine, Mr. Minister; this is a

news report in a weekly paper — the weekly papers that your Premier

said he liked to read over the weekend. I felt it was worthwhile

reading this. It's in my constituency and these are concerns of my

constituents.

"Tony Monco of both the El Meson and the Chemainus

Coffee House says his coffee house business remains stable since menu

items are under the $7 mark." A cup of coffee hasn't quite reached the

$7 mark yet. "Monco thinks that in general the tax helps to scare

tourists away. 'The government isn't cooperating with working people

like us. They don't give us a break. We are so pressed by the

government in so many ways,' he says."

"Says Omega manager Jim Giannakos: 'We could use a

full-time accountant to do this.' He has some examples of confusing

situations and says that ministry officials haven't answered his

questions. Maybe four people sit down to a dinner and order meals

costing $6.95 each. No tax. Then they finish the meal with coffee. Now

each meal costs over $7, and all meals must be taxed. But what if one

person pays for all four coffees? Does that mean that only his meal

must be taxed?

"'Today the restaurant business in general is dead,'

says Mr. Giannakes. 'This has cut into business.' Manana Lodge co-owner

Thelma Sickle also would rather see an across-the-board tax on meals of

all prices — if there has to be a tax at all. She finds the tax

discriminatory, since lower-price restaurants and take-out outlets

aren't affected at all. Her $4,000 cash register doesn't have a food

tax key — she paid $4,000 for a cash register, and it still doesn't

have a food tax key — "and is not capable of discriminating between

meals under and meals over $7. '1 don't even have a column in my ledger

where I can put this damn tax,' she says.

"Napoli's owner William Golf recently sold his

business, but if he had remained the owner he says he would have billed

the government for the time it is taking to calculate and collect each

tax. 'We are cheap employees of the government. It's a hassle. Food is

an essential part of our livelihood and should never be taxed,' he

contends. 'Next you'll be going to Safeway and paying a tax to feed

your family.'

"Inn of the Sea manager Bashi El-Khalafawi calls the

tax 'a blow below the belt. It's an added cost to the customer which we

don't need,' he says. Although Inn of the Sea revenues usually pick up

in the summer, El-Khalafawi" — we have some exotic cooks in the

Cowichan-Malahat area — "says...the tax is time-consuming to calculate

because the food and bar totals must be separated manually, and meals

over $7 separated as well. And he thinks the tax is discriminatory."

So just as a beginner, there are a couple of articles from local

papers which indicate the feeling that greeted the introduction of this

particular tax on the part of the people who operate food outlets in

the Cowichan Valley. In fact, there were some comments that were

stronger than that, and I don't intend to read those into the record,

but there were some....

Interjection.

MRS. WALLACE: No, they were not very nice as far as the

Minister of Finance goes, and I don't intend to read those into the

record. But I had several calls from operators of eating

establishments. I had one the day after the budget was introduced from

the operator of York Town Inn in Duncan. He was just fuming. He said:

"I've just been taken over the coals by a family that came in here and

ordered dinner." The husband's meal came to $7.50, the wife's order was

$5.75, and the 12-year-old son's came to $8.95. The husband's meal was

taxable. The wife's at $5.75 was not taxable. The 12-year-old's meal

was taxable. The mother had been most loud in her condemnation of the

manager and owner of York Town Inn because he was charging tax on food

for someone 12 or under, someone who would not pay tax on clothing, for

example. She was extremely upset about that, and as a result he was

dressed down for charging this tax and felt he had to talk to somebody,

so he phoned me. He was very upset at having to take this kind of abuse

from a customer when he is involved in applying a tax which this

government has introduced — a tax, incidentally, without authority of

legislation. As is the way with sales tax, we always find that they

become effective at midnight the day following the introduction of the

budget, and that of course was July 7. Here we are, almost three months

down the road, and we are still just beginning to discuss second

reading of this particular bill. I think we've had it up once before

for discussion. So without any legislative authority, these people in

the restaurant business have been asked to collect this tax. As the

local owners from the clippings I read from indicated, they felt they

should be reimbursed for collecting the tax — that they were being

asked to be cheap employees, in fact almost slaves working for nothing

for the government, in collecting this tax.

I think one of the points that was made too in one of those

clippings that I read was the fact that the people involved in serving

the food — the waiters and the waitresses — do work in nearly every

instance for minimum wage, $3.65 an hour. That works out to something

like $540 a month, a pretty minimal standard of living if you're trying

to support a family on that amount of money. It's impossible to do it,

really. So they depend upon gratuities. What is happening and what the

restaurateurs are suggesting will happen is that people who have to pay

that extra money for tax will consider that as a portion of their tip

and there will be less money being left in the form of gratuities

because the government is taking its little bit. So once again, this

government is following its usual trend of hitting at the people least

able to pay. Certainly I would agree that there will be less funding

left for gratuities. People will just not leave as much money to assist

those people who are working for that minimum wage at a level that is

far, far below even the poverty level.

As I've indicated, $3.65 an hour works out to $584 a month. That's

for 20 working days. The urban poverty level, as defined by the

National Council of Welfare back in 1982, came to $1,520 a month. Now

here we are, asking someone who is living, or attempting to live, on

$540 a month.... I think a family of four is what we were talking about

in this particular article. The poverty level for a family of four is

$1,520. Gratuities become a very important part. I don't agree with

this necessarily; I think that those people should be paid at least the

poverty level. But the way our system works, that doesn't happen. So

the only thing that they have to depend upon is their gratuities. And

they try to give good service and to be extra pleasant in order to get

some extra money. It's an unfortunate part of our social structure that

[ Page 2306 ]

people have to do that — that they don't have a

living wage as a salary. But that's the way it is. Now this particular

tax is going to take away some of those gratuities.

[4:45]

The B.C. Restaurant Association was also upset about the same things

the restaurant owners in Cowichan-Malahat were upset about. The

president of the association — he's from Okanagan South, incidentally,

the premier's constituency — met with the Minister of Consumer and

Corporate Affairs (Hon. Mr. Hewitt). He said that extra staff would

have to be hired in many restaurants to ensure that the complicated tax

system is handled properly. He said the association would take the

matter to court if necessary. This is a direct quote from Ed Gowe of

the South Okanagan Restaurant Association: "No judge in the land would

deny me my labour costs for money I spent during the collection of

those taxes."

So certainly there has been a lot of antagonism raised by this

government in introducing sales tax on meals on the part of people

involved in the food industry in British Columbia. And certainly

because of its retroactive nature.... It's retroactive from the point

in time that the legislation will finally.... I don't have any doubts

that it will finally become law, but certainly it's not the fault of

the opposition that this has not already become law. It hasn't been

called by the government for discussion. So in the meantime, restaurant

owners and others — small businesses required to up the tax already in

existence to 7 percent — have been obliged to move ahead with

collecting this money without any legislative authority and without too

much in the way of guidelines, certainly from what the restaurant

people are saying. I wonder if those guidelines were in place at the

time the budget was presented. Or were they made up hit and miss, after

that happened? Certainly we found all kinds of situations occurring

where people didn't know how they were to apply this. Was it to be on

the total bill divided by the number of diners? Was it to be on each

individual meal? If you all had meals that were $6.95 and then somebody

decided to order coffee for everybody, did that put all the meals up

above the $7 or only the meal of the person who ordered the coffee? I

think this is another case of the government jumping into something

without really looking at where they were going or having the

regulations in place to be able to provide the operators with some

specific rules to follow as to how these things were to be calculated.

We had some restaurants advertising a main course at $6.95 and then,

as a separate item, dessert