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, AUGUST 29, 1983

Afternoon Sitting

[ Page

1103 ]

CONTENTS

Routine Proceedings

Oral Questions

McKim Advertising contracts. Mr. Cocke –– 1103

Conservative party's booth at PNE. Mr. Macdonald –– 1103

Use of government aircraft. Mr. Passarell –– 1103

Government loans to BCR. Mr. Lea –– 1104

Privatization of motor vehicle branch. Mr. Passarell –– 1104

Crofton-Vesuvius ferry. Mrs. Wallace –– 1104

Property Tax Reform Act (No 1), 1983 (Bill 7). Second reading.

Mr. Blencoe –– 1105

MONDAY, AUGUST 29, 1983

The House met at 2:05 p.m.

Prayers.

MR. REYNOLDS: Mr. Speaker, in your gallery this afternoon is

a friend of mine from Richmond, B.C., and I'd like the House to make

him welcome. He's Mr. Gary Baldwin, the president of Deltaire

Industries in Richmond.

HON. MR. RICHMOND: In the members'gallery today are my

brother-in-law, Mr. Bruce Simpson, his wife Brenda and their son

Cameron, all of Calgary, and Brenda's mother, Mrs. March of Vancouver.

I'd ask the House to please make them welcome.

MR. PASSARELL: Mr. Speaker, in your gallery today are two

ladies from Hyder, Alaska, who have served the public very well:

Rosemary and Colleen. I hope the House would pay them due today.

MR. SPEAKER: The member for Atlin continues.

MR. PASSARELL: Mr. Speaker, I missed the most important

person today. In your gallery is the most important woman in my life —

taking a line from the hon. member here. Visiting today is my mother. I

hope the House gives her a good due.

Oral Questions

McKIM ADVERTISING CONTRACTS

MR. COCKE: Mr. Speaker, I'd like to ask the Provincial

Secretary a question. Has the Provincial Secretary now determined

whether McKim Advertising remains in substantial control of the

government's $20 million advertising fund, and that they remain as

agent of record?

HON. MR. CHABOT: The answer is no.

MR. COCKE: Such total incompetence.

Mr. Speaker, has the government decided whether McKim has a role in the government's...?

Interjection.

MR. SPEAKER: Order, please.

MR. COCKE: If you want to ask me a question, stand up and ask.

Has the government decided whether McKim has a role in the latest

exercise in spending taxpayers' dollars to prop up the government's

fading image?

MR. SPEAKER: Hon. members, I commend to all of you Beauchesne's fifth edition, page 359, subsection (1), about argumentation and debate.

MR. COCKE: Is McKim the agent of record in the new advertising program

designed to sell the government's budget and legislative program for this

session — the one announced by the Premier, which he hasn't told you about

yet?

HON. MR. CHABOT: I've taken the first question as notice. If

I determine that they're an agent of record, then I'll be able to

answer the question. Until such time as I have found it out, it is very

difficult for me to identify for the member as to whether they'll be

involved. Needless to say, if they do become the agent of record or are

the agent of record, then they'll have some involvement. If they have

no involvement their contractual arrangement should be terminated. In

the meantime I'll attempt at the very earliest opportunity to find out

for the member whether they are an agent of record for the Ministry of

Provincial Secretary and Government Services.

MR. COCKE: Just one more question for the minister. Are you truly the Provincial Secretary of the province of British Columbia?

CONSERVATIVE PARTY'S BOOTH AT PNE

MR. MACDONALD: I have a question for the Minister of

Intergovernmental Relations. The Social Credit Party has always taken

space for a booth at the PNE, but this year, after reserving the space,

they transferred their lease over to the Conservative Party of Canada,

although it is still plastered with Socred-type advertising. When did

you decide to make arrangements to transfer your space at the PNE to

the Conservative Party of Canada?

HON. MR. GARDOM: I'm afraid I'm not an expert in booths at

the PNE, but if the hon. member would like to put a wager on the

outcome of the election today, I'd be happy to take it from him.

MR. MACDONALD: I have another question for the minister. Oh,

he's running and hiding. He's an expert at jumping parties if not at

answering questions.

My second question to the Minister of Intergovernmental Relations,

who mentions the by-election, is: is the transfer of the lease made in

prospect of that by-election in Mission-Port Moody? Are you playing

footsie with Mulroney and is Mulroney playing footsie with you? You

know the answer. Come on!

[2:15]

HON. MR. GARDOM: The last person I played footsie with was my wife.

MR. LEA: Does she know?

HON. MR. GARDOM: I hope so.

USE OF GOVERNMENT AIRCRAFT

MR. PASSARELL: I have a question for the Minister of

Transportation and Highways. In view of the fact that there have been

no government aircraft logs tabled in this House for the last two

years, has the minister decided to table the recent aircraft logs?

HON. A. FRASER: Logs were filed here about a year ago and there are more to come.

MR. PASSARELL: I have a question for the Minister of Intergovernmental Relations. How many...?

[ Page 1104 ]

Interjection.

MR. PASSARELL: Oh, that! No wonder this government is in such a shambles, eating that stuff all day long.

How many trips, Mr. Minister, have you taken on government aircraft in the last two weeks?

HON. MR. GARDOM: I'll have to take that as notice.

MR. PASSARELL: To the same minister: does the minister use

the government aircraft to commute from his residence in the lower

mainland to the Legislature in Victoria?

HON. MR. GARDOM: I use the government aircraft to commute

from the city of Vancouver and from the great riding of Vancouver–Point

Grey to Victoria.

MR. PASSARELL: To the Minister of Health: in view of the fact

the government has embarked on a restraint program, could the Minister

of Health give the Legislature an answer on how many times he has taken

the government aircraft in the last two weeks?

HON. MR. NIELSEN: Well, I will have to take the question as notice, to be precise. I don't keep count.

MR. PASSARELL: We are really hitting well with these

ministers today. A question to the Minister of Energy, Mines and

Petroleum Resources: in view of the restraint program that the

government has embarked upon, can the minister explain how many times

he has been on the government aircraft in the last two weeks?

HON. MR. ROGERS: I don't think I could explain how many

times; I might be able to tell the member how many times. The answer is

several. However, in order to give you a precise answer I will check my

records and see how many times I have made the trip and bring an answer

back.

GOVERNMENT LOANS TO BCR

MR. LEA: To the Minister of Finance. When the northeast coal

project was announced it was announced by the government as

pay-as-you-go. Circumstances changed and there were short-term

borrowings that had to be made by the BCR in order to carry out their

business. At the end of the year, when the BCR wasn't able — or we

assume wasn't able — to pay those short-term loans off, grants were

given by the government to the BCR that they used to pay off the

shortterm loans. Last month the provincial cabinet approved long-term

borrowing of $450 million for the BCR. Can the minister tell me whether

or not those grants that were paid to the BCR to pay off the short-term

loans will be paid back to the British Columbia treasury by the BCR out

of the long-term borrowings?

HON. MR. CURTIS: The question is sufficiently convoluted that

I would like to take it as notice in order that I may be very precise

in the answer to the member for Prince Rupert.

PRIVATIZATION OF MOTOR VEHICLE BRANCH

MR. PASSARELL: A question to the Minister of Highways. The

motor vehicle branch at Ganges has been privatized by Salt Spring

Insurance Agencies, a company known for its active support for the

Social Credit member for Saanich and the Islands (Hon. Mr. Curtis). Can

you explain why you have decided to Tozerize the motor vehicle branch

in this way?

HON. A. FRASER: Mr. Speaker, I will have to ask the member to repeat the question.

MR. PASSARELL: I will speak very slowly, Mr. Speaker. The

motor vehicle branch at Ganges has been privatized by a company called

Salt Spring Insurance Agencies, a company that is known for its active

support of the Social Credit member for Saanich and the Islands. The

question, Mr. Minister, is: why have you decided to Tozerize the motor

vehicle branch system in this way?

HON. A. FRASER: Mr. Speaker, to the member for Atlin, it is

the policy of government to privatize the motor vehicle branch for

licensing purposes, and that's what is going on. I don't know what else

you're referring to.

MR. PASSARELL: I have another question, Mr. Speaker, to the

same minister. Why has the minister awarded several motor vehicle

branch franchises to prominent Socreds without competition bids being

offered?

HON. A. FRASER: Again he makes accusations with a question,

Mr. Speaker. It is my information that in every community people are

covered by the motor vehicle people to see whether they're adequate to

carry out the duties of licensing and so on.

MR. PASSARELL: Will the minister undertake to review the

practice of awarding motor vehicle branch franchises as political

favours, and has he decided to develop guidelines for competitive

proposals and bids?

MR. SPEAKER: The question is out of order.

CROFTON-VESUVIUS FERRY

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

Transportation and Highways as well, who is responsible for B.C.

Ferries. On Thursday in the Legislature he indicated that he would try

to have an answer for me today relative to the Crofton ferry — the

timing of the rebuild of the wharfing facilities and also whether he

was prepared to put on an alternative form of transportation as was

done before when that wharf was out. I wonder if he has an answer for

me.

HON. A. FRASER: Mr. Speaker, to the member, we will be putting on a water-taxi service, and it hasn't been resolved about rebuilding the dock.

MRS. WALLACE: Can you tell me when the water taxi will begin,

and what the fare will be? Will it be comparable to the fee on the

ferries? Because what we have now is a $10 return-trip fare, which is

prohibitive for commuters.

[ Page

1105 ]

HON. A. FRASER: Going back to the member for Atlin (Mr. Passarell),

I believe they're going out today for competitive bidding for the taxi,

so I don't think it'll be very long. Hopefully it'll be settled

within a week.

MRS. WALLACE: My question is really related to what the fare

of that taxi will be. Can you tell me whether or not you're prepared to

ensure that commuters, particularly, have the same rate that is

available to them on the ferry? It's very difficult when you have to

work in that area if you have to pay that extremely high rate. The

existing taxi service was forced to charge $5 in order to make their

expenses, so I certainly have some concerns about that. Can the

minister assure the House that that will not happen with the taxi

service that he's talking about?

HON. A. FRASER: I didn't specifically ask that. B.C. Ferries

is putting it out for tender, and I assume that it will be at the same

rate to the people using the service as it would be if they used the

ferry.

MRS. WALLACE: A final question on the same issue: does the

fact that you're going for a taxi indicate that you are perhaps not

going to rebuild that facility at Vesuvius? Is that what I'm reading

into what you're telling me? Have you decided not to rebuild the

wharfing facilities at Vesuvius?

HON. A. FRASER: No decision has been made.

Orders of the Day

HON. MR. GARDOM: I ask leave to proceed to public bills and orders.

Leave granted.

HON. MR. GARDOM: Adjourned debate on second reading of Bill 7.

MR. BARRETT: Mr. Speaker, last week I raised a point of order

on the question of standing orders 82 and 87. Since the House is no

longer operating in the manner of having the Whips arrange ahead of

time the order of bills, it's impossible for the official opposition to

know whether or not the Clerks have fulfilled the proper requirements

as instructed under the standing orders. If the Whip system were

working, Mr. Speaker, we would have no need to bring this to your

attention, but I wish to be assured that both standing orders 82 and 87

are fully complied with in the calling of Bill 7 by the House Leader.

MR. SPEAKER: Hon. member, neither of the standing orders has any effect on the calling of bills by the House Leader.

MR. BARRETT: My point is that....

MR. SPEAKER: A further point?

MR. BARRETT: Yes. Normally standing orders 82 and 87 would not be questioned.

However, there is absolutely no communication between the government and the

opposition in terms of the order of bills, other than their popping out of a

hat, without any notice. The only reason I raise this, Mr. Speaker, is to be

assured by the Chair that indeed all of those standing orders have been followed,

regardless of what bill is called.

MR. SPEAKER: Hon. member, notwithstanding previous points of

order that have dealt with this issue, I must advise again that

undertakings by the Whips are not the business of the House, nor are

they to be discussed in the House. I would hope that such arrangements

could be conducted outside the House. Such discussion will not be

permitted on the floor of the Legislature.

MR. BARRETT: In speaking to standing orders 82 and 87, I

appreciate your admonition not to raise that issue; I no longer will. I

just want to be assured by the Chair that the Clerks, regardless of the

random calling of bills, are following standing orders 82 and 87.

MR. SPEAKER: Thank you, hon. member.

MR. BARRETT: Are you instructing me that they have been followed, Mr. Speaker?

MR. SPEAKER: I'm instructing, hon. member, that the Chair has

said that the reference by the Leader of the Opposition has no effect

on the calling of bills.

MR. BARRETT: Thank you, Mr. Speaker. I had assumed that, but I wanted to be sure.

MR. SPEAKER: Adjourned debate on Bill 7.

PROPERTY TAX REFORM ACT (No.1), 1983

(continued)

MR. BLENCOE: It's a pleasure to return to debate on Bill 7.

It's been a number of weeks since the House had the opportunity to

consider this particular aspect of reform of taxation at the municipal

level. We seem to have jumped all over the map in the last few weeks.

The people of British Columbia are certainly wondering what this

government is doing with this legislation and its budget. The

government has the budget debate just about wrapped up.

[Mr. Strachan in the chair.]

AN. HON. MEMBER: Speak to the bill.

MR. BLENCOE: I am speaking to the bill, and the intent and

principles behind what's happening in this House. This government had

its budget debate virtually wrapped up when suddenly, for whatever

reason, they have flipped back to considering bills again, of which

Bill 7 happens to be one of the numerous pieces of legislation before

us in this House.

[2:30]

Interjections.

MR. BLENCOE: Mr. Speaker, perhaps you could give me a little protection down at this end of the chamber.

First, I'd like to inform the House and our guests in the chamber

exactly what is happening here. Bill 7 has been called this afternoon,

without the official opposition being informed at all.

[ Page 1106 ]

DEPUTY SPEAKER: Hon. member, that matter is not before the House now.

MR. BLENCOE: Well, Mr. Speaker, I think it's very important that that be....

DEPUTY SPEAKER: I will advise the hon. member that....

MR. BLENCOE: The public have a right to know, Mr. Speaker.

[Deputy Speaker rose.]

DEPUTY SPEAKER: I will advise the hon. member to take his

seat while I'm standing. We are on a discussion of Bill 7. The

principle of that bill must be discussed. Those are our guidelines.

House business is not within our guidelines. Please proceed.

[Deputy Speaker resumed his seat.]

MR. BLENCOE: I have to say that indeed....

Interjection.

MR. BLENCOE: Mr. Speaker, I need some protection again from the member over there.

I'm trying to tell you what is happening with this government and

this legislation. It's not even telling the official opposition what

they want to do in this House. That's a gross misrepresentation of the

democratic system.

DEPUTY SPEAKER: Hon. member, I will advise you once again

that you should be relevant to the bill before us; otherwise I will

have no choice except to have you discontinue your speech. The bill

before us is the Property Tax Reform Act, and it's quite clear in its

principle. I'm sure the member has the resources available to him to

address that bill.

MR. HANSON: On a point of order, Mr. Speaker, I think it is

entirely relevant to note for the House the readiness at which the

opposition has given.... If you would please attend to that little

cadre of noisemakers and chirpers down in the corner, who constantly

interfere with the speakers on this side of the House, we would

appreciate that very much.

DEPUTY SPEAKER: That will be done, I can assure you.

Interjections.

DEPUTY SPEAKER: Order, please.

MR. BLENCOE: Perhaps, Mr. Speaker, if we are to talk about

innuendo and attacks, and try to bring the official opposition to

order, perhaps you could see fit to bring certain members of the

government to order, with their nasty remarks and personal insults to

members of the House. Perhaps you could play fair on that particular

issue as well.

It's most unfortunate, I have to say....

DEPUTY SPEAKER: One moment, please. The hon. member for Prince Rupert has risen on a point of order.

MR. LEA: Mr. Speaker, I'd like to go back and get some

clarification on your ruling of a few moments ago on the relevancy of

debate. As I understand it, you're saying that any agreement between

the two sides — Social Credit and the New Democratic Party — is

irrelevant to any debate we're having in the House.

DEPUTY SPEAKER: It certainly is not relevant to Bill 7.

MR. LEA: Not relevant to Bill 7? Would that make it irrelevant to every other bill that comes up?

DEPUTY SPEAKER: Hon. member, that would be a decision of the Chair at the time. I hardly see how it could be, though.

MR. BLENCOE: Again, Mr. Speaker, it's most unfortunate that

the government didn't see fit to allow us to prepare for today's

particular debate. However, we are now prepared to continue the debate

on Bill 7.

Interjection.

MR. BLENCOE: Mr. Speaker, perhaps you could bring that member to order.

MR. HANSON: On a point of order, Mr. Speaker, I find the

remarks of the Minister of Industry and Small Business Development

(Hon. Mr. Phillips) offensive and ask that he withdraw them.

DEPUTY SPEAKER: That point of order is well taken. If the

minister has offended any hon. member or his motives in this House,

will the minister please withdraw.

HON. MR. PHILLIPS: Certainly, Mr. Speaker. I would in no way ever want to offend either of the members representing the great city of Victoria.

DEPUTY SPEAKER: The minister withdraws. Thank you very much.

MR. BLENCOE: Before I get into some new particular issue....

Interjections.

MR. BLENCOE: Mr. Speaker, it's becoming very difficult today even to start the debate. A number of the Socred members continue to interrupt.

AN HON. MEMBER: It's been that way all session, so what's the difference?

MR. BLENCOE: They're having a rough time in this government, a rough

time in this province. They know the people are against them and they're

going to try to stop the opposition. That's what they're up to. The

people of British Columbia know the game you're playing. They know you've

declared war on the handicapped, on senior citizens and

[ Page

1107 ]

renters, and now you're going to try to embarrass the official opposition

as it attempts to bring you to your senses. Introduce legislation that is fitting

for 1983 in a progressive and civilized society, not one returning to the Victorian

or Edwardian era. In speaking to Bill 7, or to any particular bill that is part

of this budget, the opposition is determined to try to convince this government

that it has gone on a mission that most British Columbians do not accept and

find unpalatable, and that they wish you to reconsider your actions as quickly

as possible.

It would be a magnanimous and indeed a friendly gesture to the

people of British Columbia if this government, after nearly two and a

half months....

Interjections.

MR. BLENCOE: Mr. Speaker, protect me. Being a new member of

this House, I'm not well-steeped in fancy tactics; I just try to talk

to the bills as effectively as I can, bringing forth the issues. We

have these long-in-the-tooth Socreds over there who try to stop a young

guy from doing his job for the official opposition, who try to stall

him in his attempts to speak to Bill 7.

HON. MR. PHILLIPS: Get your hands out of your pockets. You're worse than Charlie.

MR. NICOLSON: On a point of order, Mr. Speaker, I draw your

attention to standing order 17, which says: "When a member is speaking,

no member shall pass between him and the Chair, nor interrupt him

except to raise a point of order." There have been numerous

interruptions and I would suggest with respect that they have been

unilateral. They have been neither returned nor invited. I would think

the obligation is very heavily upon members not to interrupt during

this debate,

DEPUTY SPEAKER: The point of order is well taken. I'm sure if the member addresses the bill, we can continue with parliamentary debate.

MR. BLENCOE: I was indeed trying to get to Bill 7, but every

time I try to enter into some logical debate, I have some objection

from the other side.

Bill 7 is part of the package that this provincial government

brought down some months ago. For those who don't recall Bill 7, it is

about property tax at the local level. It introduces a variable mill

rate for municipal purposes. It's been some weeks since we've had this

particular debate. I went over some particular theories and

commissioned reports from other jurisdictions, trying to show this

government that what they're doing is really no great panacea for the

local taxpayer. I'm trying to recall, for those government members

across, where we left off with Bill 7 last time. To remind them, we

said on this side of the House that in terms of a bandaid or a minor

reform of the property tax system at the local level, indeed, that's

all Bill 7 is: a minor band-aid.

To some degree, unfortunately, the government is trying to give the impression

in the province that it's a major undertaking in terms of resolving the

taxation problems for local government, not only in terms of how government

allocates their valuable resources, but that the local taxpayer will somehow,

through Bill 7, save money. I remind my colleagues on the government side of

the House that Bill 7 will do none of that.

Interjection.

MR. BLENCOE: I've already suggested it a number of times.

Interjection.

MR. BLENCOE: Well, if you had continued with the normal

proceedings in this House we might indeed have got to some normal,

logical debate in terms of the allocation of time for bills, Mr. House

Leader. But we've been all over the place, as you know, and you've been

one of the major reasons why we're there.

MR. REID: Let's put a few things to the vote — that will decide. Let's vote on something.

MRS. WALLACE: Let's vote on the budget.

MR. BLENCOE: We'd certainly like to vote on the budget.

Bill 7, Property Tax Reform Act (No. 1), 1983, very simply

introduces a variable mill rate for municipal purposes. The variable

mill rate does very little for municipalities in terms of trying to

resolve their revenue shortfall problems. Indeed, Mr. Speaker, what

Bill 7 and the accompanying Bill 12 — which doesn't come into effect

until next year — do is make the job of running municipalities even

more difficult, because at the same time the government is removing

itself from trying to establish formulas for taxation purposes at the

local level, it is saying to local government, "You choose your own

poison in terms of taxation formulas and levels," and, at the same

time, the provincial government is removing....

Interjection.

MR. BLENCOE: Mr. Speaker, it is most unfortunate that senior

members of the government continue to be extremely rude in this House.

Perhaps I should take my chair while they continue their discussion.

DEPUTY SPEAKER: Please proceed, hon. member.

MR. BLENCOE: What's happening with municipal government has

to be of deep concern, I think, not only to the opposition but also to

the government of the day. Their revenues are extremely short and their

ability to create new taxation systems is virtually nil. They don't

have the power to add on extra taxes whenever they wish to if they have

a revenue shortfall. By law they cannot run a deficit, and that's

probably one of the reasons why municipal government is probably the

most efficient level of government in this country today, and is also

probably why it's trusted the most. You look at the poll results when

people answer the questions: "Which part of the government do you trust

most?" and "Where do you think you get the most for your tax money?"

The answer is municipal government.

[ Page 1108 ]

[2:45]

Yet this government, in its wisdom, not only introduces Bill 7,

which removes itself more and more from the action of trying to

establish formulas that are fair, but also the government, through its

granting process, is cutting back its share of revenue to municipal and

civic government. I refer to one particular move under this new

minister: he's trying to say it's not a major shift in policy, but of

course it's a major shift. This government has changed the formula in

terms of the cost-sharing for underground services, sewers and storm

drains. It's not something everyone gets particularly excited about,

but I have to say, after serving at the municipal level for six years,

that it's an extremely important part of the municipal infrastructure.

If you abandon the underground services, the sewers and the storm

drains because you have not enough money to fix them up, what happens

is that you really hurt your infrastructure and your city operation

beyond belief in the long term. We've only got to look at the United

States and what's happening down there. Billions and billions of

dollars are being faced by municipal operations because they put off

maintaining and upgrading the basic municipal infrastructure.

I don't think a lot of people realize what this government is doing

— although it has been reported well in some areas — in terms of

hurting municipal operations and local taxpayers. This government has

decided to reverse the formula in terms of the sharing for such

underground services. The province used to pay approximately 75 percent

and the municipality 25 percent. There are all sorts of health reasons

why that sharing formula was well established and supported by all

governments over the last number of years. This government has now

reversed the formula. The local taxpayer will meet 75 percent, and 25

percent will be paid for by the provincial government, which has far

greater sources of revenue than municipal government.

I have talked to a number of people in the municipal area on all

political sides — Social Credit, Liberal, Conservative and New Democrat

— and they all say that the deep implications of the funding or formula

adjustment for municipalities could create real problems for municipal

infrastructure in terms of underground services, roads, those sorts of

things. In its wisdom the government is deciding slowly but surely to

abandon its position as a partner with municipalities in ensuring that

municipal operations are adequately and safely maintained. This is a

major shift in government policy.

Mr. Speaker, it's been long-touted and supported by everyone — not

in government, unfortunately — that we need the provincial government

to play a far greater role in terms of cost-sharing for municipal

operations. I won't get into the McMath report now; I will probably get

into that a little later. But the McMath report on education costs, for

instance, recommended 75 percent provincial government funding and 25

percent local taxpayer. Today we have virtually the reverse of that

formula. More and more this government is transferring the load of

essential services to the local taxpayer, who pays it through a

property tax system that's archaic, unfair and has nothing to do with

ability to pay, one that needs to be totally revamped and perhaps in

time eliminated. We need a municipal tax system that's based upon the

ability to pay, not on what some real estate fellow down the road says

he might get for your house. To use that as the base upon which you pay

your taxes is ridiculous and unscientific in 1983. We have in British

Columbia and Canada — in fact, in the world — all the best minds on

taxes and financial arrangements, on computer analysis and how to run

financial programs, yet we continue to support a taxation system that

was born 150 to 200 years ago. It has outlived its time and doesn't fit

anymore.

Bill 7 adds another band-aid to the thousand already on that

particular taxation system. My party and I have already said that we

have no particular argument with the variable mill rate per se. We see

it as a band-aid. But we do have some deep concerns with particular

segments of this bill which I think the general public don't realize

are there. The UBCM and other municipalities across this province are

beginning to recognize that some things in Bill 7 have serious

implications for the traditional autonomy enjoyed by local government.

The minister knows that to which I refer, because he's been hearing

from local government since he started introducing some of these pieces

of legislation. Bill 9, which I won't talk about today, of course is

giving him the most concern. I assume that in a few weeks at UBCM the

minister will indeed hear the concerns again about particular pieces of

legislation now before us.

I really wish the government, if it is serious about reforming the

taxation system of local government, would undertake over the next year

or so a major analysis of the intricacies and problems with the real

property tax system, with the intention of introducing a new tax system

for municipal operations, one that wherever possible is geared towards

the concept of ability to pay, or is income-related. Our party has no

argument with the view that indeed there may still be some aspects of

the property tax system for local government, but I would suggest that

that should be applied only to services directly related to property.

On the other side, many services now provided by municipalities have

nothing at all to do with property. Those services should not be paid

for from property tax but in some way should be paid for by a system

that relates more to the local taxpayers' income or ability to pay.

I know it's a major undertaking, a major jurisdictional fight, to

say that in British Columbia the government is seriously interested in

trying to help the beleaguered local taxpayer in the long term. I know

it's a major chore, but commission after commission — and I went over

some of them in the last part of this debate — have looked at this

particular problem and have all admitted that the property tax system

for the sixties, seventies and eighties is no longer appropriate for

many services that are maintained by local government. Somehow,

governments have not been able to take that bull by the horns and say:

"With all the experts we have" — and there are good ones — "all the

incredible expertise and money going out to pay them or keep them

employed, we can't utilize that expertise in devising a municipal tax

system that is fair, is just, has equity built into the system and

meets the changing times in municipal operations."

That's the solution, and I've already suggested to the government —

and will suggest it again this afternoon — that we, as part of the

opposition, recognize that we cannot work out the intricacies of a new

system like that over the floor or overnight or in a confrontational

government-versus-opposition kind of atmosphere. What it's going to

take is both sides, in the interests of all British Columbians, having

the ability and the will to sit down together — a new concept, it might

be, for this particular session: members of the opposition and members

of the government, asking the right questions, as I mentioned the other

day, about the taxation system we have,

[ Page 1109 ]

and saying: "In the interests of British Columbians, we are determined

over the next year to really study all the evidence" — and it's there —

"that indicates we have to bring in more than just a band-aid like Bill

7 or, later on, Bill 12, the Property Tax Reform Act (No. 2).

That's the way we should be going: problem-solving together. Maybe

within the confines of a selection committee we could do some

problem-solving on the property tax system, Mr. Speaker. What I'm

suggesting may perhaps be novel in the province of British Columbia,

but in other jurisdictions there are the standing committees or working

committees of the House; they are something that's well accepted. I

think if we collectively got together over this particular issue....

We'll take Bill 7 as the start, if you like. If we got together and

tried for at least maybe an hour or two a week to forget that we have

particular partisan views on a lot of issues, but in terms of the

taxation system for municipal operations, what our goal should be is

introducing once and for all a tax system that people understand, that

is simple, just and fair, and that is based at least partially — or as

close to it as possible — on the taxpayer's ability to pay....

I've talked about it in this House before, and I'm going to talk

about it again today: in this particular riding there are thousands of

people on fixed incomes, particularly senior citizens over 65 or

slightly less, who currently still maintain their homes. Many of them

are single; one or the other of the spouses has passed on. Of course,

as you know, Mr. Speaker, when you are on a fixed income, pension or

whatever, maintaining your single-family home can be extremely

difficult. Some have managed to get the mortgage totally paid off; a

lot haven't. I can say, having dealt with many of those taxpayers at

the city of Victoria over the last six years — and certainly over the

last two, as chairman of finance — virtually on a daily basis.... A day

didn't go by that I didn't have delegations of senior citizens talking

about how they were going to pay their property taxes, particularly a

couple of years ago, which I am sure we all recall, as we saw the

assessments go crazy and consequently taxes jumped on many properties.

It is my contention that when you reach retirement age and you have

contributed to your community and to your country, you shouldn't have

to be deeply concerned about the assessment on your property because

what is happening in the real estate market may force that assessment

so high, and in consequence taxes so high that you have to consider

annually whether you will be in that home the following year.

[3:00]

That's not right. I think all of us in the House have an interest in

that particular segment in our ridings. In this riding it is of deep

concern. Two years ago when the assessments went up incredibly high

some of the senior citizens did have to sell their homes. Our party's

contention is that if this government is deeply concerned about the

property tax system, and it's concerned about helping those who have

retired and shouldn't have to fight the endurance fight that a certain

member talked about last week, then they should introduce a system that

ensures that those people on fixed income, particularly senior

citizens, live their lives out knowing that their homes will not be

taken from them because a particular real estate company decides to

speculate down the street and gets a 100 percent increase in that

property. The ripple effect affects everybody, and consequently that

person on a fixed income, a senior citizen, would end up paying the

same kind of taxes as those who are earning a regular salary.

[Mr. Pelton in the chair.]

Why should we subject our senior citizens to that kind of

speculation and game-playing in property in this province? Why should

it be that every time a house sells down the street, when they don't

want to move, when they see it go up 20 or 30 or 40 percent, they

wonder what that is going to mean for their taxes or their home when

they only want to live out their days in their family home? That's the

kind of system this government supports. That's the kind of people,

those developers and ripoff artists, that this government got many

thousands of dollars from in the campaign. That is one of the very

reasons they will not make fundamental and radical changes in the

property tax system in this province. They know that to do that they

will have to control some of those fly-by-night people who flip

property daily and see properties go up by 30 or 40 percent in one or

two weeks. Who pays for that? We all do. It is a blight; it is unearned

wealth; it's a syndrome of this system that this government supports

that cannot be accepted in a modern democratic society any longer.

If you are to continue with a property tax system based on

speculation, do not con the people of British Columbia that Bill 7 will

resolve their tax problems. Don't con the people, because it won't. You

still have in place a real estate property tax system about which for

100 or 150 years learned people from all walks of life and all

financial institutions have been saying: "For heaven's sake, change it

and gear it to what someone can afford to pay."

Let me give you an analogy. For most levels of government we have

developed a taxation system that is reasonably fair. It's close to

ability to pay, and we all refer to the income tax system. No one likes

taxes; we all know that. But I think most British Columbians and most

Canadians accept the fact that there are certain services, certain

principles, certain ideals that we all have to share collectively and

pay for collectively. Consequently we have an all-purpose tax system

for provincial and federal purposes. But the nature of that taxation

system is radically different from the one in place for municipal

operations. We may not like paying it. Some may not pay enough, because

they have various ways to escape income tax. We won't go into that

today, but we know there are so many loopholes and that if you have

enough money you can afford the fanciest lawyers and accountants in the

world. Not only do individuals escape, but some of the biggest

corporations also escape. We won't talk about those kinds of welfare

burns. Generally speaking, that taxation system for provincial and

federal purposes is reasonably fair and is geared to income.

Imagine deciding to move from that taxation system for, say, health

purposes and deciding to pay for health on the basis of the real

property tax system. How ludicrous, crazy! You can't do it. Why do it?

Mr. Speaker, that's my point. There are many services being maintained

by local government today that really have nothing to do with property

at all anymore. That's why we really have to take a look at that system.

Last time, when I closed debate on this particular bill, I was

talking about a very important aspect of costs the municipalities face.

The background to what I said about half an hour ago is that municipal

governments today are more and more facing very difficult revenue

shortfalls. We all know that next year grants to municipalities will be

cut quite significantly. They've already had various cuts in their

storm-

[ Page 1110 ]

drain and sewer work. Municipalities and local

officials are always very accountable and accessible to the concerns of

the local taxpayer. Consequently they are trying to ensure that those

property taxes are kept to a reasonable level. But that means that

revenue to run the municipalities properly becomes shorter and shorter.

I was trying to give this government some indications last time of

the particular problems that municipalities are having in paying for

their operations. One of the major concerns is paying for police costs

in municipal operations. Some years ago — July 1978 to be exact — a

task force report on municipal policing costs in British Columbia was

tabled and given to the provincial government policy board on policing

costs. It was a very intricate and detailed report on policing problems

and costs in the province of British Columbia, particularly municipal

operations. The report was done because major municipalities today — if

you take a look at their charts in terms of where their dollars go —

are paying between 17 and 20 percent of all their revenue for police

costs. It's close to, I think.... I don't know. I don't have the

figures right at hand, but when you add up police and fire it comes

very close to 30 to 35 percent of all revenue spent by municipalities —

in major urban areas particularly. That's a drain of horrendous

proportions on the municipal coffers. This report was an attempt to try

to recommend to the provincial government of the day — the Social

Credit government of the day.... It was a task force that tried to

address those particular policing problems. It was an attempt to

convince the provincial government that there should be some

costsharing for municipal policing.

The municipalities' concern was that in these unfortunate times

crime rates don't seem to be going down. There seem to be new types of

crime that are taking more and more police time and costs. As a

consequence, what municipalities are facing — I know certainly in the

one I worked in for six years — is whether they will be able to pay for

policing. Will they be able to ensure that safety standards are

maintained? Will they be able to ensure the residents — particularly in

urban ridings — that they are protected adequately and that the

response time from police is satisfactory, quick and reasonable? There

is deep concern now. You only have to talk to police chiefs and police

board chairmen, who are beginning to think that they will not be able

to maintain their operations as satisfactorily and as well as they have

in the past because of dwindling revenues.

What it means is that the provincial government, if it's concerned

about the safety of citizens in municipalities — particularly in those

municipalities that pay 100 percent of their policing costs.... If the

provincial government is serious about tax problems and why it

introduces Bill 7 and such legislation, it has to tackle the problem of

things like policing costs and those long-term problems. Otherwise

municipalities will not be able to maintain their operations. It's

simple. They won't have the dollars to do it. I'm not talking about

adding hundreds of more policemen to the staff or more sophisticated

machinery; I'm talking about maintaining their basic operations. If the

Minister of Municipal Affairs is serious about being a good Municipal

Affairs minister, he'll take on these particular kinds of problems.

He'll try to tackle them. They've been around a long time, but they're

going to have to be tackled. There should be a formula whereby the

provincial government contributes funds to municipal operations for

policing.

When I finished the debate on this particular bill last time, I was

going through some of the particular sections of the task force report,

and I will carry on a little bit with that to give you some of the

thoughts of this very important report on policing costs.

The present arrangements for policing costs in British Columbia vary

from no direct contribution by local residents toward policing — in

areas under provincial contract — to total coverage of police costs by

the local taxpayers in municipalities with their own police force. The

major task of this task force was to consider alternative methods of

cost-sharing that would distribute the policing cost burden on a more

rational and equitable basis throughout the province. In considering

alternative cost-sharing arrangements, we first examined the

contributions of the three types of government and formed the following

opinions.

Firstly, it is inequitable that taxpayers in unorganized territories

and municipalities with less than 5,000 population do not contribute

directly toward policing. Secondly, municipalities with RCMP contracts

receive benefits from the federal government which are not available to

those with their own force. The task force believes that municipalities

with their own police force should receive assistance from senior

levels of government. Thirdly, some municipalities incur greater police

costs as a result of special problems which they experience. The task

force believes that these municipalities should receive special

assistance. Current municipal contributions for police protection place

a strain on local taxpayers in municipalities responsible for their

policing. Furthermore, the proportions of municipal expenditures going

toward policing is increasing annually. I can vouch for that. It's

something we really must pay attention to very quickly. The federal

government is not a likely source for additional funding for policing

costs; in fact, indications are that the federal government will play a

diminishing role in municipal policing over the next few years. Last,

there should be increased provincial involvement in municipal policing

costs.

[3:15]

Let me reiterate: if this government is serious about local tax

problems and local taxpayers, it cannot deal in isolation as it does in

Bill 7 with the intricacies of running municipal and civic governments

properly and efficiently. I've chosen policing as an example of where

municipalities, who have to pay all police costs, are running into

serious problems. Bill 7 does not resolve those kinds of problems. It

does nothing at all; indeed, it is just a hollow piece of rhetoric with

no basis for long-term solutions for tax problems at the local level. I

go on with this very important document, which was done on behalf of

this government in 1978:

"Increasing the provincial government's contribution

would appear to be a logical way to shift a portion of the cost-sharing

burden from the municipalities. However, before considering methods

through which the province can share a greater portion of the costs, it

is worthy to consider the reasons why the province should become

involved in financing an increased percentage of the costs."

And I want to go through some of those: why this eminent and well-respected

task force tried to convince the provincial government that if they were serious

about municipal operations and their tax problems, then they must try and get

involved in some of the cost-sharing for police operations. Otherwise, policing

operations at the local level, particularly in the major urban areas....

[ Page 1111 ]

I know that slowly but surely municipal councils and police boards

are going to have to admit to the public they will not be able to

maintain the kind of police coverage, security and safeguards that they

have in the past, because they just don't have the money. This

provincial government will say: "Well, it's the municipal

responsibility and they've got to bail themselves out." But that is not

the case. The provincial government has a very important role in

helping municipalities and ensuring that there are sufficient revenues

and fair formulas so that the costs which are continuing to escalate,

like policing costs, don't come totally from the local taxpayer and the

property tax. This report was well accepted, I understand, but

unfortunately there has been no action upon it by the current

government.

Why should the province become involved in financing an increased

percentage of the costs? First it would be consistent with the general

trend of provinces assuming greater responsibility for services to

people in areas such as health, welfare and education. The general

trend is toward this area. In the city of Victoria, where we police the

core area, what happens is that we're paying for policing far beyond

the costs of some of our adjacent municipalities, because as you know,

Mr. Speaker, downtown cores attract particular kinds of problems.

[Mr. Strachan in the chair.]

Interjection.

MR. BLENCOE: That was a nice comment. It's too bad the public

can't hear some of the comments that are made on this floor. They would

be really shocked, Mr. Speaker — they really would. It is most

unfortunate. Personal insults and innuendo. This is not the right place

for that sort of thing.

Secondly, the provincial government is able to use methods in

addition to property tax to raise the necessary funds. That's a very

important statement. Currently municipalities are having to escalate

property taxes to pay for things like policing. The provincial

government has more avenues they can explore for acquiring additional

revenues than municipalities have at their disposal. Currently, because

municipalities tax solely on the basis of property, it can be argued

that this does not equitably distribute the cost. It's a very fair and

accurate statement.

Thirdly, a very small amount of police members' time is spent on the

enforcement of municipal bylaws. Boy, is that ever true, If police

forces were actually allowed to administer some of the municipal

bylaws, we might not have some of the little problems that irritate

local residents so much. However, we all know that our local police

forces administer many laws on behalf of senior government at great

expense, and many of those are provincial laws. Yet in the province of

British Columbia we do not get any direct provincial funding for police

costs.

That's why I believe that Bill 7 — although on the surface a

variable mill rate may be a small improvement — is a small band-aid in

the overall system. In terms of the long-term solutions it is indeed

only a band-aid. In fact, many municipalities pay the cost of hiring

bylaw-enforcement officers and commissionaires to do their own bylaw

enforcement. They don't have the police officers to do it, because they

are administering and taking care of other kinds of activities. Yet

they pay those costs totally on their own. Much police time is spent in

the enforcement of provincial and federal statutes.

As costs for policing escalate and absorb a greater portion of total

municipal expenditures, it is appropriate for the provincial government

to recognize its responsibility to assume a fair share of this expense.

If this government, in the next three or four years of its term, is

going to bring in bills like Bill 7, which won't really do much in

terms of the escalation of costs of municipalities in meeting such

things as policing costs.... If the government is serious about helping

the beleaguered local taxpayer, it will look at cost-sharing formulas

for municipalities that pay all the policing costs in their

jurisdiction. Fortunately, since 1974 the provincial government,

through the B.C. Police Commission, has had the direct authority to set

standards and regulations, many of which may have costing implications.

I know that they have. To give you an example, one that's already in

effect and is a simple one that people recognize, all police cars in

all municipalities are now going to be the same colour — blue with

white trim. That instruction was, I guess, part of trying to have a

uniform image for all police forces, but there was some cost to the

local taxpayer.

MR. MOWAT: Provincial identity.

MR. BLENCOE: Yes, provincial identity.

MR. MOWAT: You've put a lot of work into this speech. I can't believe that none of your colleagues will come and listen to you.

MR. BLENCOE: That's called having confidence. They're

preparing their notes on some kind of bill that you may call next time,

without notification to the opposition.

MR. MOWAT: They should have the courtesy to listen to you, though.

MR. BLENCOE: Oh, they're listening.

That member talks about a provincial image. That's quite correct; they're trying to create a provincial police force.

MR. MOWAT: Provincial identity, not image.

MR. BLENCOE: All right, provincial identity. They instructed

that all police cars be painted the same — a uniform approach. I have

to inform that member that there is no provincial funding for trying to

create that provincial identity.

That's what the task force is trying to say. If this government is

serious about taxation problems, things like Bill 7 and the

implications of the property tax, if the government is serious about

calling things tax reform acts, then you've got to pay attention to the

nitty-gritty of municipal operations, to where the costs are, and to

the lack of provincial support for maintaining them.

Finally, the sociological factors that contribute to crime are not

generally influenced by municipal boundaries. The causes of crime are

therefore not usually a direct result of conditions in one municipality

as opposed to another. Criminals tend to be highly mobile, showing

little concern for local borders. While it's logical that each

municipality should pay a share of policing costs, communities are no

longer isolated from one another. Thus it can be argued that the

province should take responsibility for a portion of the policing costs

[ Page 1112 ]

generated by a highly mobile, interdependent

population. Yet many municipalities continue to have to fund 100

percent of their policing costs. The nature of British Columbia and the

pattern of criminal activity has changed dramatically. We're really in

this together, and we should be combating it together.

[3:30]

If indeed the provincial government is concerned about property tax,

and about introducing reform acts, this kind of cost is the crux of it.

You can introduce all the variable mill rates that you want; you can

ask municipalities to slip back and forth on who is going to pay this

kind of tax and how much this year; but if municipalities do not have

sufficient revenues to maintain their operations and are tied down to

where they cannot get additional money, it doesn't matter what you do

in terms of where you shift. The municipalities won't be able to afford

or maintain the services, and they will deteriorate. That's the

critical thing.

The Minister of Municipal Affairs may not have any direct

responsibility for policing, but as Minister of Municipal Affairs he

knows that it is a major problem for the larger municipalities — the

ones who pay all their own costs. If he is determined to try and get to

the bottom of property tax problems and introduce things like variable

mill rates, then really he should familiarize himself with the serious

funding problems that municipalities are having with such things as

policing. Mr. Speaker, I'll come back a little later on and talk about

some of the policing costs in the province and options that the task

force gave to the provincial government for trying to introduce some

equity — or trying to convince the provincial government to pay some of

the costs for policing.

Mr. Speaker, I want to take the opportunity to go through a very

useful document that turned up during our research into this particular

issue. Again, it goes back to the problem of the property tax system

not being satisfactory for the 1980s; certainly it hasn't been

satisfactory for many, many years. I refer to the Bureau of Municipal

Research (Civic Affairs). They put out a very interesting document in

1973 called "Property Taxation and Land Development." They go through

some of the particular concerns they have; indeed, they give some

thought on where governments can try and improve. I would like to go

through some of them this afternoon.

In this very useful document they start their deliberations by

saying: "The Canadian property tax is not a fresh subject of inquiry."

It certainly isn't, Mr. Speaker. I just have perhaps one one-thousandth

of the documents that are available in our library or in various other

libraries. Government and academic studies are being published almost

daily on this particular aspect. I said earlier on in this debate this

afternoon that because it is such a major chore in terms of trying to

resolve it in the long term and being fair and equitable....

I've suggested that we have a special select committee or a standing

committee — whatever you want to call it — of this House, made up of

all sides, to try to resolve for once and for all the property tax

problem, and to make some recommendations to the House. Bill 7, Mr.

Speaker, won't do much in terms of the real difficulties property

taxpayers are facing in British Columbia.

Municipalities have long been entirely dependent on property tax as

a source of revenue. Secondly, the tax is highly visible in the public

eye since it is assessed and collected externally by government

officials. Often it is payable in one lump sum. Maybe it's one of the

reasons a lot of people don't want to get rid of it. It's fairly easy

to administer, I suppose. One of the reasons governments tend to stay

with an unfair system and not to change anything is because a lot of

people really don't understand it, or have not thought about any

alternatives.

In turn the revenues generated are used to provide services at the

local level so the taxpayer is able to conduct his or her own personal

evaluations of the tax and its administration. A perusal of the

literature reveals that researchers and government officials have

documented and exploited only one aspect of the relationship between

property taxation and land use planning. They show that land uses have

a direct effect on the property tax rate, since property use determines

needed municipal services and property assessment determines the tax

base. But at the same time the property tax may also affect the land

use itself, and this part of the relationship has been totally ignored.

The important effects of the tax on its base, i.e. taxable real

property, have been overlooked to such an extent that less is known

about the impact of any other major tax. The property tax, like any tax

system, is an instrument of public policy as well as a revenue system.

As does any form of taxation, it has effects and implications which may

be used to regulate specified activities in order to achieve social,

economic and political purposes. In general, the property tax directly

and indirectly affects the quality and character of land use as well as

investment in new development and renewal. The investigation of this

particular municipal affairs research bureau looks specifically at

these effects in order to eliminate conflicts between land use goals

and local tax policy, and to develop local areas in a more orderly

fashion.

There's a headline here: "The Present System of Property Taxation:

The Indictment." That's from another in a long line of documents that

indicate the property tax system is not right for our times and needs

to be reassessed and revamped. I've already said that we can work

collectively, as other jurisdictions have done, to look at a two-tiered

system of taxation: one based upon property for services directly

related to property, but another for municipal purposes — a second tier

more based upon the ability to pay, or income-related.

Today, despite substantial criticism and changed circumstances, the

tax scheme — and this book here refers to Ontario, but it's very

applicable to British Columbia because we have the same system —

remains basically intact. Briefly, the real property tax is according

to value, which is based on the full market value of a property. The

tax base then is the value of real property, including any

improvements, subject to taxation in the jurisdiction of the local

government.

The total tax revenues are obtained from three sources: tax on

taxable real property; business taxes, which are a percentage of the

taxable real property varying according to the nature of the business;

and third, special-classification properties which are impossible to

assess in the normal way, such as telephone companies and things like

that. Tax revenues are calculated by applying a predetermined mill rate

— well, we now have the variable rate — against the assessed value of

the individual property. A mill, used for purposes of accuracy, is

one-tenth of 1 percent. I won't go into these specifically; I'm sure

everyone knows how that works.

The report goes on to say that it's clear that the present property

tax must be strained in order to generate sufficient revenues to

finance the expanding services being provided in developing centres.

This is particularly true in urban areas, where the soft-services

budget is beginning to expand

[ Page 1113 ]

rapidly. The bureau of municipal research uses the

Ontario examples, and I won't give those today. It goes on to say that

property taxes are deteriorating to the point where local governments

are deeply concerned about continuing to add more and more to the

property tax system. So what's beginning to happen — and we're already

starting to see it in many municipalities — is, indeed, the

deterioration of many of the basic infrastructures of those

municipalities. This report from Ontario says the same thing is

happening in Ontario — a general deterioration in municipal operations.

Beyond the problem of revenue generation, there are more telling

charges to be levelled against the present property tax. First, a major

difficulty lies in the fact that a real property base cannot cope with

the urbanization process. Historically, the ownership of real property

has been regarded as evidence of an ability to pay taxes and a

manifestation of benefits received in the form of various services.

This general assumption that the measure of ability to pay is the

market value of the taxable realty owned ignores the capitalization

effect of the tax on the value or income stream of the property itself.

Land taxes are capitalized at a prevailing rate of interest of the sum

paid as taxes on a piece of land. The result of such a calculation is

the amount by which the capital value of the land might be reduced if

it were offered for sale. For example, if the annual taxes on a piece

of land are $100 and the prevailing interest rate is 4 percent, a

capital sum of $2,500 will be needed to yield an amount equal to the

taxes. This sum of $2,500 may be taken into consideration by a

prospective purchaser and deducted from the price that he would

otherwise be willing to pay. Furthermore the actual incidence of the

tax must always be carefully considered.

First, a tax may be imposed on some person; secondly, it may be

transferred by him to a second person; and thirdly, it may be

ultimately borne by the second person or transferred to others by whom

it is finally assumed. At the same time the social, political, economic

and institutional climate as well as the character and significance of

the real property have changed vastly. In previous times environment

was characterized by minimal and decentralized government and the

predominance of agricultural land use. Municipal governments were not

required to perform a significant positive servicing function.

Investment and salary incomes were also generally uncommon. Wealth was

primarily held in the form of realty, and local tax policy was

established accordingly.

We don't have that situation today, but we still have a taxation

system that was born out of those times. Today, however, individual

wealth is held in new and different forms of complex and diverse

interests. Consequently other measures such as income flows have

pre-empted real estate holdings as more realistic indicators of ability

to pay. I go back to that theme: ability to pay.

Real property is no longer an accurate measure of benefits provided

by the taxing government. Historically, the real property base was

justified by the belief that the provision of services enhanced the

market value of land and that the financial burden of the servicing

should therefore be borne by the property owner. Quite reasonable.

However, there no longer seems to be any true relationship between real

property values and the worth of services received.

[3:45]

Today local governments provide many soft services which are at best

only vaguely related to real property values. Admittedly the property

tax is still used primarily to fund essential hard services, but with

respect to the provision of these property-related services,

real-property ownership is often not congruent with the benefits

received. For example, few equally valued parcels of property place

identical demands on municipal services, since the consumption of

services differs according to land use. Thus by using real property as

a base, certain types of land use are in effect discriminated against.

I think we have all known that for quite a while too.

In short, neither ability to pay nor benefits received can justify

the use of the present real estate tax any longer. First, income rather

than real property is a superior measure of ability to pay in our

economic society. Secondly, the yield of the tax greatly exceeds the

cost of local expenditures which directly benefit the owners of real

property.

HON. A. FRASER: You will have to repeat that.

MR. BLENCOE: I will get you a copy.

AN HON. MEMBER: You might as well repeat it.

MR. LEA: I missed that.

MR. BLENCOE: For those who missed that I will quickly go over

this portion. It is a very important aspect of the argument that we are

putting forth. First, income rather than real property is a superior

measure of ability to pay in our economic society. Do you disagree with

that? Secondly, the yield of the tax greatly exceeds the cost of local

expenditures which directly benefit the owners of real property. In

particular, education and social services benefit the entire community

but do not even serve the realty.

MR. LOCKSTEAD: On a point of order, Mr. Speaker, I thought I

might draw to your attention that we don't appear to have a quorum at

the present time.

DEPUTY SPEAKER: Pursuant to standing order 6, I'll ring the division bells. The quorum is now satisfied. The hon. member will continue.

MR. BLENCOE: I was just trying to give my learned colleagues

further insight into the real property tax, as well as some learned

opinions that have come from other jurisdictions. I was quoting from

the Bureau of Municipal Research civic affairs document. I had just

repeated some important pieces from this document, It was basically

saying that income, rather than real property, is a superior measure of

ability to pay in our economic society.

A third criticism often made of the real property base is that it is

unstable over a business cycle. Critics contend that since real estate

is available only to a finite quantity, the supply is fixed and cannot

be manipulated according to demand. Consequently, since market value of

land is highly variable, the yield of a land tax must be unstable. In

practice, however, this is not the case, for it is the supply of

serviced land which is relevant in an economic sense, and this supply

can be manipulated. In addition, assessments have not directly mirrored

market value changes since assessors have purposely created time lags

in evaluations. As a result of assessment tag — and you're now building

that in, of course, so you're not going to be doing a roll every year;

it's every two years now, I think, with Bill 22 — the revenue yield of

the tax remains relatively stable during fluctuations in the

[ Page 1114 ]

amplitude of the business cycle. While the

deliberate delaying of valuations may be desirable practice, other

administrative problems make the tax particularly unpopular.

AN HON. MEMBER: I've never heard of a popular tax.

MR. BLENCOE: You're quite right there, but this is the most

unpopular and the most unfair, and you've got a responsibility to do

something about it.

MR. LEA: Just in Boston.

MR. BLENCOE: Don't throw the tea out. Don't throw the bathwater out either.

Interjection.

MR. BLENCOE: In my riding? Come and run in my riding. I

invite you to come and run in Victoria in the next election. Come on

over. Any of you members. I'd love to have a real Socred run in

Victoria.

MR. LEA: He isn't a real one.

MR. BLENCOE: Isn't he a real one? Are there any left? No? They sold their principles, right? No principles left.

Interjection.

MR. BLENCOE: Oh, dear! Mr. Speaker, the minister doesn't like to be told he doesn't have any principles.

DEPUTY SPEAKER: Hon. members, we could return to orderly debate, please.

MR. BLENCOE: I was trying to be orderly, but someone across

the way started off on a tangent, and I couldn't help but respond when

they talk about real Socreds.

Interjection.

MR. BLENCOE: That's right! Bible Bill. They used to stand outside Hyde Park.

DEPUTY SPEAKER: Hon. member, please, could we return to the

bill, and I would ask the other hon. members not to interrupt the

member who is now speaking.

MR. BLENCOE: Mr. Speaker, I'm trying to give this government

a little insight into some of the property tax problems that local

government faces. Many jurisdictions have recommended that there are

avenues open to introduce different systems. If you are serious about

Bill 7, then this is only the start of really reforming the property

tax system of local government.

I was talking about the deliberate tactic of delaying valuations, and that

may be a valuable practice. Other administrative problems make the tax particularly

unpopular. A main irritant is, of course, that the amount of tax payable is

not decided by the taxpayer himself, like most other taxes, but by government-appointed

assessment officials. Furthermore, in determining this amount, the official

must rely on the valuation of real property, which, because of the heterogeneous

nature of realty, is necessarily a baffling task. Boy, is it ever a baffling

task. To arrive at this valuation, assessors are directed to use one of the

three assessment methods to determine the market value of the property: the

cost of replacement, less depreciation; the comparative sales figure; or the

income capitalization rate. Yet despite the formulae and sophisticated manuals,

valuation remains an art rather than a science.

Because of the uniqueness of property, inadequate data and the

element of futurity, introduced by highest and best use assessment, the

final decisions must often be based on value judgments. I've got to

step out and talk a little bit about that. When you are trying to

collect revenue for the very serious purpose of maintaining municipal

operations, and you have to admit, as many do, that acquiring that

revenue through the tax system is based on value judgments and that you

assess and tax people on value judgments, that really is quite an

admission. Whatever happened to science and to those expert tax

officials and people who purport to know all the things about these

particular problems? Where are they when it comes to trying to

eradicate a value judgment system for tax purposes at the local level

and to introduce one based on a scientific analysis, on a formula

that's fair and just? Value judgments for collecting taxes! How crazy!

Interjection.

MR. BLENCOE: The human element? Well, you know, that may be

right, but when it comes to someone paying high taxes, particularly, as

I already indicated, someone who is on a fixed income or a senior

citizen, that value judgment can be a great hardship. I would say

rather than relying on value judgment, let's rely on a formula that's

fair and just, and that everyone understands and can accept. That's

what we need.

[4:00]

I'll go back to my little book. As a result in practice, inaccuracy

and gross inequalities can be commonly found. Boy, can they ever. Since

a 20 percent coefficient of dispersion, which would be outrageous in

the income tax field, is generally considered to be accdptable,

property owners can be, and are, treated in a way that is both

dramatically and erratically different. When you are paying a high

portion of your income, either as a wage-earner or as someone on a

pension, based on a system that's erratic and based on value judgments,

an unscientific analysis of the marketplace, you have really got to

finally admit that perhaps the time has come to introduce a system that

takes out some of those little flaws. Maybe that's what's needed. With

respect to the government, and with respect to the minister responsible

for this bill, Bill 7 does nothing in those areas at all.

Leaving aside these applied administrative inequalities, the real

estate tax itself is inherently regressive in nature. Certainly the tax

does tend to redistribute income from higher-to- lower-income people by

financing many social services. But this redistribution is often

uneven. The incidence of the tax, with few exceptions, bears relatively

more heavily on lower-income groups. This is due, first, to the fact

that higher-priced houses and properties have in the past been

consciously undervalued. However, since the Assessment Act was recently

amended to direct assessors to avoid such fractional valuation in

favour of full assessment, this particular problem should be

alleviated, according to the report here.

The economic fact remains, however, that expenditures on housing show a relatively low order of income elasticity.

[ Page

1115 ]

That is, the response of the demand for housing to changes in the real income

of consumers is generally slight. Housing choices are generally made infrequently,

and thus higher income people remain in their accommodations while their income

rises rapidly. As a result, the rich tend to spend proportionately less than

the poor on housing accommodation. Moreover, the property tax payable can often

be shifted from property owners to tenants or to consumers of the corporate

taxpayers' final product — i.e., from the more affluent to the less affluent.

Thus a higher percentage of the income of low-income taxpayers is ultimately

captured by a real property tax.

In addition to its oft-quoted adverse fiscal effects, the present

real estate tax exerts many pressures on land use which are largely

unintended and unexplored. These pressures are felt more severely by

the core areas of urban regions. In the central city, the conflict

between local tax policy and land use goals is particularly acute. Two

major sources of the problem are: the composite nature of the tax —

i.e., both land and improvements are subject to taxation — and

assessment based on the highest and best use of the property. As a

residential area, the central city generally attracts relatively more

inhabitants of low income, old age and other disabilities. Yet as an

occupational area it is the heart of the metropolis, attracting

commuters from the suburbs and beyond. Consequently, the central city

must provide a high level of services while its tax base is being

eroded. This problem is aggravated by the fact that since improvements

are taxed, new construction, refurbishing and maintenance are not

encouraged. The improvement tax is in effect, higher on new buildings

than on deteriorated buildings, and yet the latter have higher

municipal costs. Consequently, the landowner is tempted to discontinue

good upkeep since proper maintenance and remodelling would reduce his

net return as well as result in a higher assessment.

AN HON. MEMBER: You just want to raise taxes.

MR. BLENCOE: I'm just pointing out to you some of the problems with the assessment and property tax system. There are so many of them.

MR. BARRETT: I rise under standing orders 6, 7 and 8. Mr. Speaker.

DEPUTY SPEAKER: There is a quorum, hon. member.

MR. BARRETT: We do not have ten members.

DEPUTY SPEAKER: Yes we do, hon. member.

MR. BARRETT: One, two, three, four, five, six, seven, eight, nine.

DEPUTY SPEAKER: Ten, including the Speaker.

MR. BARRETT: Do you intend to vote, Mr. Speaker?

DEPUTY SPEAKER: No, but the Speaker is included. If the member will read standing order 6....

MR. BARRETT: Is that your ruling, that you call yourself part of a quorum?

DEPUTY SPEAKER: No, that is not my ruling; that's from the standing orders. Hon. member, if you look at standing order 6....

MR. BARRETT: "...the presence of at least ten members of the House, including Mr. Speaker...."

DEPUTY SPEAKER: Right.

MR. BARRETT: You're the deputy.

DEPUTY SPEAKER: Standing order 14 covers that one.

The hon. second member for Victoria continues or loses his place.

MR. BLENCOE: Mr. Speaker, the member across asked what the

problem is. He didn't understand what it's got to do with Bill 7. What

I m trying to point out to that member, and to other members is that

the real property tax system, because it has so many flaws and

loopholes, creates all sorts of problems for local taxpayers and local

governments. I was pointing out here that because of the particular

problems with it, it can persuade — let's put it that way — landowners

in certain parts of cities not to maintain their buildings adequately.

Indeed, they become rather an eyesore and we all know why that is: if

you improve it your taxes go up. We need to take a look at that; don't

you agree?

Interjection.

MR. BLENCOE: A member of the government wishes to take a look

at this particular problem. I'm finally getting through to some of

them. That's good.

[Mr. Pelton in the chair.]

The residential developer engaging in new construction in the core

is also faced with a hidden burden. The cubic foot construction expense

of residential units declines as the unit size increases, due simply to

the economics of scale; yet the property tax, by taxing the combined

assessment of land and improvement, encourages smaller units.

Consequently, investment in new construction may be economically

inhibited unless the tax can be shifted to tenants. This has an

additional effect. When the tax is shifted, rental charges are

increased and disposable tenant income is therefore decreased.

Consequently, the demand for quality accommodation declines, which

results in inadequate maintenance.

These aren't all things we think of when we talk about real

property, but what I'm trying to do is to give this government little

insights: that some little ripples affected by property tax have a

marked impact on our communities. They all should be taken into

consideration.

The availability of and, more especially, the type of accommodation

in the downtown area is also affected by highest and best-use

assessment. Because the central city is zoned for highly intensive

uses, underdeveloped parcels such as a single-family dwelling lot are

valued as potential sites for high-density development. Consequently,

the taxable assessment of the lot will be inflated beyond any relation

to its existing use. The downtown owner must then attempt to shift the

tax to tenants, who can pay the increased rent to absorb

[ Page 1116 ]

the increase, probably by forgoing all but

essential up keeping expenses, or attempt to sell the property to

others who are able to develop it.

Interjection.

MR. BLENCOE: Right. Flows to other developers. You should wait until I finish before you agree, because you may not agree with some of this.

Depending on the owner's course of action, downtown structures tend

to take three separate forms: highrise developments, dilapidated

unrefurbished structures, and a restricted number of properly

maintained structures owned or rented by persons who are willing and

able to pay the increased costs. It is sometimes suggested that a

simple reduction in present tax rates would stimulate new construction

and adequate maintenance. In all likelihood a tax decrease would, in

effect, reduce expenses and increase profits. New construction would

thus be encouraged, thereby increasing the supply of accommodation,

which in turn would reduce rents, everything else being equal. However,

the resultant demand for land would eventually increase prices and

curtail new construction. Consequently, a short-term increase in the

supply of new private development, which would subsequently

deteriorate, would probably be the best result that could be expected

from reducing taxes.

The central city finds itself in a vicious circle of high taxes,

decreased construction and increased deterioration. Eroded tax base;

high taxes. To break the circle, most cities engage in highly intensive

commercial zoning, density bonusing and density transfers. Less

intensive uses are effectively prohibited, as only a highly intensive

development could bear the increased tax burden. According to

conventional theory, these taxes cannot be shifted; it must be kept

capitalized, which results in lower property values.

The supply of downtown serviced land, however, is not constant.

Thus, in cities of economic growth and high demand, tax increases need

not be capitalized and land prices continue to spiral, causing further

dislocation of low-density uses. Principles of social planning are thus

ignored, and the necessary balance of diverse land-use patterns is

destroyed. The situation becomes especially ironic when mill rates must

again be raised to buy the parkland recommended by planners.

In the face of rising taxes, the central city often experiences an

increased migration to the suburbs and beyond. Early studies of the

locational effects of property taxation on non-residential landowners

had assigned to it only a marginal impact. However, more recent

studies, while agreeing that property tax plays only a slight role in

the initial location decision, have found that once the decision is

made to locate or relocate in a particular area, the property tax rate

becomes an important determining factor: that is, the correlation

between tax rate and location becomes much stronger as the area of

future location becomes more specific. Once the issue narrows as to

which part of the metropolitan area should be chosen, the decision will

probably be made according to Gresham's law: all things being equal,

firms will tend to gravitate to the low tax rate. We all know that

happens. That's one of the reasons why the industrial base of British

Columbia is in serious trouble. We cannot get an overall handle on

what's happening in certain areas. This particular problem could very

well be aggravated by this variable mill rate.

[4:15]

You could conceivably have municipalities fighting for industry

because they now have the right to lessen the taxes on particular

categories of property. You could have municipalities fighting tooth

and nail to try to attract industry from one municipality to another.

Base your industrial policies on what's good for all British

Columbians, not on industry locating where it's going to have a low tax

rate. The bill that you've introduced could very well encourage that.

Indeed, that very thing could happen.

If the province were serious about industrial and business property

in British Columbia, it would develop an overall industrial policy that

takes those tax problems into consideration, and does not allow

exemptions or special privilege for industrial and business properties

in the act. That's what this act is doing. Because of the assessment

system and the speculation on land around those industrial properties,

they are faced with huge increases in assessments and in taxes, not

because of what they're doing but because of what somebody else is

doing in the surrounding hinterland.

The impact of the property tax rate on the migration of individuals

rather than on commercial and industrial taxpayers may still be

questionable. Nevertheless, when these pressures are combined with

differential tax rates between neighbouring municipal jurisdictions,

inefficient spatial distribution and interpersonal inequities will

inevitably result. Did you get all that? I'll explain it to you later,

if you like.

This migration effect and the rapid urbanization pressures on fringe

areas have resulted in rapid speculation and a diversity of land use

patterns. These new developments, particularly residential communities,

create heavy public service demands. Expenditures are further increased

by land speculation, as the provision of these services must be

extended past stretches of open spaces which have been held for

speculative gain.

Due to political fragmentation and local autonomy with respect to

the tax rate, urban areas attempted to compete for high-base and

low-cost taxpayers. Through the use of selected tax incentives and

mercantilist zoning, light industry and shopping centres are solicited

while high-cost, low-based residential developments are discouraged.

Suburban tax shelters and industrial enclaves are thereby created which

result in distorted land uses.

The Provincial Secretary has returned to the House. We all know of

some of his attacks on the local council on industrial property. I am

going to take the opportunity to talk about industrial property and tax

base. That minister made a statement in the House about a week ago

saying that in 1972 Bapco paint, one of the industrial bases in

Victoria, left because of the local council. That was a totally

erroneous statement and he knows it. It has been proved in a Times Colonist editorial.

Interjection.

MR. BLENCOE: I'm talking about industrial properties and assessment, so please be quiet.

MR. BARRETT: I rise under standing order 93. I want to point

out that there has been no evidence to me that the order was placed on

the table for this House's consideration today. Had this come to my

attention earlier I would have raised it at the start of the debate. It

does not appear to me that indeed

[ Page 1117 ]

standing order 93 has been followed. I want your ruling on that, Mr. Speaker.

DEPUTY SPEAKER: I would suggest that the order was placed on the table today.

MR. BARRETT: Is that your ruling, Mr. Speaker?

DEPUTY SPEAKER: Yes.

MR. BARRETT: I challenge your ruling.

[Mr. Speaker in the chair.]

Deputy Speaker's ruling sustained unanimously on a division.

MR. BARRETT: Mr. Speaker, on the point of order, I wish to

have the House take note that it was brought to my attention, shortly

after I challenged the Speaker's ruling, that I was incorrect. I regret

that very much. The orders of the day are in order, and I don't want

anything to impugn the record of the Clerks.

[4:30]

[Mr. Strachan in the chair.]

MR. BLENCOE: Mr. Speaker, in the last hour or so I've been

trying to go through some of the less obvious problems with the

property tax system; indeed, one or two members on the government's

side were nodding their heads in agreement. It does lead to a number of

problems that really should be taken in hand and properly and

rationally resolved.

In

summary to this particular

Section I am going through now, the

property tax, which currently forms the backbone of the municipal

revenue system, can be criticized on many grounds. First, the tax is no

longer in touch with the economic realities of the modern day. This has

resulted in serious problems of inadequate generation and a questioning

of the philosophical justification of real property tax. Secondly, the

difficulties of accurately and fairly assessing and administrating a

real property tax remain. Finally, the costs and impacts of the tax in

terms of land-use planning principles merit a considerable

reconsideration of municipal taxation, not only in British Columbia but

in in nearly every other province in Canada.

What a brilliant opportunity for this government of British

Columbia! Because it seems to want to go on record as being the leader

in so many things — and I won't go into some of the things it's

becoming leader for, not only in Canada but around the world.... It has

a brilliant opportunity to come to terms with the real property tax

system that is no longer appropriate. It's archaic, inadequate and

unfair We've got to have a new system for municipal purposes. Here's a

brilliant opportunity for this government to do something right for a

change.

Mr. Speaker, they are taking away a number of other things in

various pieces of legislation, but here's their chance to introduce

real legislation that would introduce fairness and equity into the

taxation system at the municipal level. I would urge this government to

take it. You've got the time and your mandate to do it. You've got all

the resources at your disposal to get an accurate reflection of the

problems of the real property tax system. You've got enough experts,

reports, documents and commissions to give you the evidence that what

you're doing in Bill 7 is not satisfactory. In a moment I'll get on to

some of the sections in there which really are centralization of power,

which we all abhor — an erosion of local autonomy and government that

no one can accept on this side of the House. Here's an opportunity —

the only one left — for the Social Credit Party of British Columbia....

And after three years that won't be left either. Like the real property

tax system, Social Credit is archaic, unfair and unjust, and should be

eradicated.

MR. PARKS: On a point of order, Mr. Speaker, pursuant to

standing orders 17 and 36, I wonder if the Speaker might clarify the

process of "addressing the Speaker." The hon. second member for

Victoria insists — in fact, persists — in addressing fellow colleagues

in this House and, even more disturbing, members of the gallery. My

understanding of parliamentary procedure is that when one rises in his

place he is to address the Speaker and not the galleries. I appreciate

that the hon. second member for Victoria is a neophyte, and he might

wish to play to the galleries, but I wonder if you, Mr. Speaker, might

give him some direction.

DEPUTY SPEAKER: The point is well taken. Before recognizing

the member for Nelson-Creston, let me just comment on the point of

order raised by the member for Maillardville-Coquitlam, which is that

every member must address himself to Mr. Speaker. I will commend that

to all members: not to address comments to other members of this House

or to other precincts in the building. That is most unparliamentary.

MR. NICOLSON: However, Mr. Speaker, when quoting

standing order 36, the hon. member didn't quote it in its full context.

He omitted certain important words: "Every member desiring to speak is

to rise in his place, uncovered, and address himself to Mr. Speaker."

Mr. Speaker....

MR. BARNES: Lawyers' tricks.

MR. NICOLSON: Yes. We're seeing some of those slick semantics in this House here, I suppose.

The member is in order. He doesn't have a hat on, Mr. Speaker. I

think that hon. members should at least quote a whole standing order,

instead of skipping over certain words when drawing attention to

standing orders in this House.

MR. PARKS: I guess this is another point of order, Mr.

Speaker. I take it the hon. member is somehow impugning my integrity,

that I incorrectly quoted. If the hon. member really was interested in

listening to my remarks — and I'm sure that if he's that interested,

he'll make sure he looks at them in Hansard — he will have

heard me say words to the effect.... And then I gave the expression

"address the Speaker." I was very precise, Mr. Speaker, in referring to

my quotations from standing order 36.

DEPUTY SPEAKER: I think we've covered both points of order

extremely well, and the Chair will once again reinforce what the member

for Maillardville-Coquitlam said, that point being: "Every member

desiring to speak shall address himself to Mr. Speaker, and not to

other members or other parts of the precincts."

MR. HOWARD: Mr. Speaker, I'm sure this....

[ Page 1118 ]

MR. NICOLSON: Before the member for Skeena, might I, Mr.

Speaker, withdraw my imputation of wrongdoing to the member for

Maillardville-Coquitlam,

DEPUTY SPEAKER: That's accepted. Any imputation of improper motive is withdrawn.

MR. HOWARD: I'm very pleased that the member for

Maillardville-Coquitlam drew that standing order to your attention,

because he belongs to a group of people who persist in disobeying that

very standing order in their process of continuing to heckle directly

the member who has the floor. They entice the member who has the floor,

then, to have to reply in some way. I think that's where the

commencement point should be in the enforcement of that particular

standing order.

DEPUTY SPEAKER: That has been brought to the Chair's attention before.

The second member for Victoria continues.

MR. BLENCOE: Mr. Speaker, I'm trying to address my remarks to

the Chair and to the learned members, and indeed, Mr. Speaker, to the

members of the public who are with us today. I will continue with the

debate. Hopefully those members, rather than being concerned with

fatuous points of order, will indeed listen to some of the reports that

have been made in other jurisdictions. This is very important business,

because every single British Columbian in some form or other is

directly affected by real property tax in this province, either through

ownership or as a tenant, of course, as they pay those taxes through

their rents. It's something that is regressive and unfair, and I think

we will all admit that it needs some serious thought. That's why we're

taking some time to debate this particular piece of legislation. We're

convinced that there's a better way to go.

Now we don't have all the magic answers in one day, but we do know

that there is substantial evidence to indicate that just introducing a

variable mill rate and allowing municipalities to spread the load onto

one particular category or another at the expense of another property

category is only a band-aid and is not a long-term solution.

The minister knows that. He knows that if he was serious about the

problems faced by the local taxpayer he wouldn't have reversed the

funding formula for underground services and sewers grants. He wouldn't

have done that. He would have made sure that those grants were

maintained and that the safety of local taxpayers was enhanced — that

the sewers and underground services were maintained properly. Yet we

now know that what's going to happen in the province of British

Columbia is that municipalities will not be able to afford to do that.

This Bill 7 does nothing to resolve the long-term revenue problems

experienced by local taxpayers and by the municipalities that represent

them. That's what we've got to come to terms with in this House. The

New Democratic Party is prepared to come to terms with those things.

We're prepared to sit down with representatives of local taxpayers'

organizations, with all categories of owners and their representatives

and work out a formula for property taxes that meets the 1980s, not the

1880s. It's the 1880s formula we have in place today. We know that in

other pieces of legislation this government has gone back to the 1880s,

but here is an opportunity for this government to do something

worthwhile for that beleaguered local taxpayer. Allow the local

taxpayer to pay for municipal operations based upon something to do

with their ability to pay and income. I'm going to emphasize that over

and over in this debate because that's the long-term solution. Have a

system that encourages people to revitalize their downtown properties,

for example, or revitalize certain residential areas that have

deteriorated and become areas that are a bit of a blight on the local

landscape. Have a tax system that doesn't penalize those owners who try

to improve their properties by making them pay more taxes.

Every single British Columbian, when they add a rumpus room or a

playroom for their children, trying to improve the quality of life in

their home or in their neighbourhood, knows what happens: they get

hammered by the taxation system. Relate it to income. Relate it to

ability to pay. I know there are indeed supporters of this government

who support that theory. Maybe they'll say something public about it

one day. You ask the members of the chamber of commerce about

assessments and what has happened to some of their properties in the

downtown area in the last two or three years. You ask what proportion

of the taxes they're being asked to pay on an annual basis. It has

nothing to do with those little shopkeepers' ability to pay those

assessments and those taxes. You know what happens? The actual property

owner, under the triple-net system, passes on those increases to that

little tenant, that little shopkeeper or that little family business.

The actual owner of that property escapes that system. Maybe that's why

they're not speaking up enough about the inadequacies and the

inequalities in it.

[4:45]

I'm talking directly to the business

section of this government, who

purport to represent small business holders and property owners and

small business tenants. Under the assessment and the property tax

system that's currently in place in British Columbia, they are being

hammered on an annual basis. They're being forced to pay taxes. For

instance, on Fort Street in the city of Victoria, property sold about a

year ago for $162 a square foot. That has nothing to do with reality.

It's sheer speculation. What happens? Not only the tenants and the

small business in that particular building, who try to hang on, pay

incredible tax increases because of that, but the ripple effect on that

Fort Street land is horrendous. Because it's a value judgment theory

that processes assessments, the ripple effect goes right up and down

that street.

Consequently, what happens is that the little business person can't

afford to operate and maintain a local business on Fort Street, one of

the most attractive streets in Victoria. I know for a fact that

especially the upper portion of the street, where many members have

walked — a lot of antique stores; sort of a quaint, unique area — is

indeed threatened today by those high assessments and speculation

trends. One hundred and sixty-two dollars a square foot. It's the very

nature of downtown and the very special atmosphere and environment in

the downtown area that everyone loves, and it has attracted millions

and millions of tourists to this community over the years. We have not

developed like other downtown areas. We have kept a semblance of

smallness, where the urban landscape and architecture does not

overwhelm the individual. Somehow or other those properties have

escaped massive assessment and taxation increases. But the signs are

there, and they're coming into place. I'm deeply concerned for the

small property holder downtown who holds onto a heritage property or a

two-storey building because he happens to love

[ Page 1119 ]

it, and the citizens of Victoria love it and the

tourists love it. That very uniqueness and beauty is being challenged

by the property tax system in place in British Columbia. If we want to

maintain Victoria, its beauty and uniqueness, and its two or

three-storey buildings, the turn-of-the-century styling, this

government has to....

Interjection.

MR. BLENCOE: Move the government out of Victoria? Oh, oh!

MR. REID: Then we wouldn't need aldermen.

AN HON. MEMBER: Tell that guy to address the Speaker uncovered.

MR. BLENCOE: Well, actually, Mr. Speaker, I don't take much notice of this member to my left.

What I'm trying to say is that the very community that purports to support this government to the utmost....

They believe it supports them; I suggest it's fast not — the small

business and little tenant in that building. If they believe in small

business and family businesses — real free enterprise, not private

enterprise or corporation enterprise, which this government supports —

then they will take the real property tax burden off the backs of those

small business tenants and introduce a system that's based upon what

they're earning in their business.

I hear from many on a daily basis who know that the speculation in

land in the downtown area is continuing. They know that the Trizecs and

the Cadillac Fairview corporations and the latter Daons are all there,

lingering on the fringes, waiting to radically change the nature of

downtown Victoria. We've had those pressures, and they are certainly

there now. What is starting to happen is that the beautiful downtown

area, with its characteristic small heritage buildings and small

streetscapes where people can mingle and shop and don't have to look at

a 40- or 50-storey tower and feel the city isn't theirs any longer, but

it belongs to some multi-national corporation; where they can feel

Victoria is still owned by the people....

If the system that's in place for assessments and property taxes is

maintained, and the $162-per-square-foot transactions continue to

occur, that Victoria we know will disappear. That's very serious. This

community is the focal point of tourism in British Columbia. Those of

us who live in Victoria boast a little about this community, but we do

believe we have a national and international reputation which has been

won in trying to preserve that small-scale urban environment.

MR. REID: A good tourist minister, too.

MR. BLENCOE: We'll get on to that one in estimates.

MR. REID: You're talking about tourism — give credit to the government.

MR. BLENCOE: I'll give credit to the government. I have no problem giving credit to the government when it's due, Mr. Speaker.

We can put all the money in the world into tourism in Victoria. If

we want to, we can do all the promotions, but if you radically change

the visual image of Victoria, and the perception abroad that we are

changing and becoming just like downtown Vancouver, with all those big

buildings, etc., that we're radically altering that, we will hurt not

only the small business community but also the major industry of

tourism in this province of British Columbia.

Interjection.

MR. BLENCOE: I'm asking you, Mr. Speaker, with respect to

that member, to ensure that those small businesses can be maintained in

their current operations.

MR. REID: We'll do our best.

MR. BLENCOE: If this government wants to do their best, Mr.

Speaker, then they will go back and rewrite Bill 7 and come in with a

property tax system that's based upon the ability to pay, not because

somebody flips a property at $162 a square foot, and next year's tax

bill comes in and it's a 100 percent or 200 percent increase, and that

little business has to move out. That land value has to go up and the

multi nationals and transnationals buy up the property.

Interjection.

MR. BLENCOE: The member for Omineca (Mr. Kempf) disputes that, but the evidence is there, Mr. Speaker.

Interjection.

MR. BLENCOE: That's very disappointing, but I suppose to be expected.

MR. KEMPF: Move the seat of government out of here, and then

we'll see where your little city goes — right down the bloody tube! And

you with it.

MR. BLENCOE: Am I hearing right? That member wants to move

government out of Victoria? Abandon these beautiful buildings? Where

does he want to put government? Up in his riding, maybe?

AN HON. MEMBER: Put it where we can afford it.

MR. BLENCOE: This is the heart of government in British Columbia. This is where it was born and where it will stay.

Interjections.

DEPUTY SPEAKER: Hon. members, this is all very interesting, but it's beside the debate.

MR. BLENCOE: Do you want me to sit down?

DEPUTY SPEAKER: No, I'd like you to proceed, please, and the other members will stay in order.

MR. BLENCOE: I was just trying to talk about this beautiful

little community that we have here, and one of the government members

says they want to move it out of Victoria.

AN HON. MEMBER: That's a different bill.

[ Page 1120 ]

MR. BLENCOE: We have to see that bill yet.

Interjections.

DEPUTY SPEAKER: Hon. members, please, could we return to Bill 7.

MR. BLENCOE: The government hasn't had a member in Victoria

for some time, as you know. They haven't elected a Socred here in some

years, so it's up to us to give the business person's side of things in

this House, and to talk to Bill 7 in terms of what it doesn't do for

them. I was trying to tell government that there is indeed a serious

problem in my particular riding. I'm using it as an example, but I'm

sure it's the same for a number of ridings in terms of the impact of

the property tax on local business.

Victoria is particularly blessed with small business, particularly

little family businesses that have been here for a long, long time. I

happen to know many of them. They don't want handouts, special

privilege or exemptions, like this bill gives.

Section 10 deals with

exemptions for industrial or business property. The

Lieutenant-Governor-in-Council — which means the cabinet — can at will

change the regulations and exempt tax levies under the act for

industrial land or improvements, or for business land or improvements.

This government is saying they recognize that the inadequacies of

the property tax system for the business and industrial component are

indeed out of hand, so they've got to create special privilege in the

act. I believe small business people in my riding don't want special

privilege, don't want exemption from the laws of the land. What they

want is a fair and equitable tax system, one they know will recognize

their ability to pay, will know what their income is. That's the system

they want. They don't want exemptions under the act. If a friend of the

government says, "Look, I'm paying a little too much tax this year,"

the cabinet can have a little exemption for them, while those little

homeowners continue having to pay under that same system. No, those

businessmen and women are prepared to pay their fair share. They're

prepared to live up to the tax rules of British Columbia if they're

fair, equitable and just. They don't want special privilege and

exemptions through the back door by cabinet order, which we see

happening over and over and over with this government. They want to be

treated fairly and equitably, and they want a formula that applies to

all British Columbians.

Section 10 really is an insult to the integrity and the decency in

the business community of this province. You are saying to them: "Yes,

the tax system is not right; you pay far too much." Because the

assessments went up 1,000 percent last year, B.C. Forest Products had a

tax bill of $1 million and was closed down. Somebody or other was

messing around in the hinterland talking about condo development, so

the taxes went up.

They don't want to have to come to this government through the back

door for a little cabinet order and say: "Let me off my taxes." Yet the

act does that: "exemptions for industrial business property" — special

privilege.

[5:00]

The single-family property owner, the person on.... I was going to

say handicapped pension or income assistance but I won't get into that

particular part of this government's track record on those on fixed

income, those owning single-family homes and those senior citizens. If

it is right to create exemptions for a particular class of property —

the industrial and business property, which this government believes it

has a lot of support from — then why shouldn't those single family

owners organize and say: "Hey, I want

section 25 exemption for

single-family owners through the Lieutenant-Governor- in-Council"?

That's only right; that's only fair. You are talking about equality,

and this minister says that Bill 7 is a way to introduce some fairness

into the system, yet it has exemptions and has special privileges in

the act. He knows darned well it does nothing to resolve the long-term

problems. You have to have exemptions and privilege for all.

This government continues to build further inequalities and

injustices into the real property tax system in British Columbia. They

admit in

section 10 that there are so many problems for the property

holder and industrial property holder that they have to create special

privilege for them and exempt them at will when cabinet meets.

It's not good enough. You can't sell that to the average British

Columbian. On behalf of those small business tenants and business

people, in this riding particularly, I ask the government to seriously

consider their plight. Fort Street is $162 per square foot. Can you

image what that is going to do to the assessments on that property?

MRS. DAILLY: I'm not sure if this is on a point of order. I just wish to draw your attention to the fact that there is not a quorum.

DEPUTY SPEAKER: I believe there is a quorum. Please proceed.

MR. REID: Say something positive.

MR. BLENCOE: I have been giving you positive suggestions for

the last two hours, but unfortunately the positive suggestions don't

seem to go well with this government. Assessments at $162 a square foot

on Fort Street have serious implications for the business community in

Victoria.

MR. REID: We have been sitting here for two months waiting for a good idea from you guys. How about giving us one?

MR. BLENCOE: Perhaps it is because they are under so much

attack.... This government is under attack all across Canada and all

across North America. Perhaps they are under the gun so much they just

haven't had the opportunity to rethink their policies. Maybe they will

take some time to rethink some policies. That's certainly what we on

the opposition side would like them to do. We would like the government

to rethink property tax legislation. We'd like them to rethink a course

of action and bring in legislation that all British Columbians can

accept as fair and just, not legislation that creates exceptions and

special privileges right in the act. They know darn well they are just

tinkering with it, not resolving it in the long term.

There is apprehension about this particular bill in municipal

operations, not necessarily over the fact of the variable mill rate

concept coming into effect. I don't have any particular problems with

that, except to say what I've said many times: it resolves nothing.

The real concern is the continuing move by this government to

centralize power into their own hands to take over certain areas of

municipal jurisdiction. It's been a long-

[ Page 1121 ]

standing tradition that municipal governments have total autonomy to regulate their own affairs.

The government in its wisdom has decided to put certain limits on

revenues that municipalities can recover from property taxes. That may

look good on the surface. It may be part of this magic thing they try

to bandy around this province — that they're interested in restraint —

but it's only in certain central areas.

If they are going to restrain government in its funding and

revenue-generating system, then they have a responsibility to ensure

they have adequate funds to maintain essential services. I've already

related to this government the problems with policing in municipalities

that pay for their own.

This legislation is a further move by this government to take over

the financial role which municipalities have held for themselves for a

long time. I could understand that this government would want to get

involved in the financial affairs of municipalities if I thought they

had their own financial affairs in hand. If they could tell the people

of British Columbia that they hadn't just lost their credit rating at a

cost of $9 million this year, and that the $12 billion debt isn't

really there, I could understand how they would want to try to run the

financial affairs of municipalities. But I say that this government

should get its own financial backyard straightened out first before

they try to interfere with local municipalities and local governments.

This government's record in financial affairs is the worst in the

history of this province. Now, through this bill, they want to take

their way of doing things into local government. Local government is

highly efficient, and it is trusted; its services are appreciated. You

get the best value for your dollar at the local level.

This government believes it has such great financial aptitude that

it can resolve municipal financial problems, but the people of British

Columbia know that that is totally inaccurate.

In 1975, after 104 years under provincial governments of all

parties, there was a total debt of $4 billion in the province of

British Columbia; approximately $1,000 per British Columbian. In seven

and a half short years the Social Credit government — the only

government — has tripled the provincial debt. Today in the province of

British Columbia we have a debt in excess of $12 billion — more than

$5,000 per head,

Interjection.

MR. BLENCOE: I would remind that member that the Socred promises were far in excess of the Now Democrats' policy, You know that to be true.

MR. PARKS: Oh, balderdash!

MR. BLENCOE: Mr. Speaker, in the province of British Columbia

we have a debt of $12 billion, which is $5,000 per head. In seven and a

half short years they have tripled the debt to $8 billion more than 104

years of other governments.

AN HON. MEMBER: Except for the NDP in Manitoba.

MR. BLENCOE: Mr. Speaker, the debt in this province is

astronomical, and the only government responsible — the only party

responsible — is the Social Credit government.

They have put the burden on all British Columbians, and they bear the brunt and the attacks for that — no one else.

Now when they were told some years ago by financial institutions

across North America that they were in trouble, that they'd better

diversify the economy, that they'd better do something about what was

happening to their debt, they didn't do anything. At the last minute

they introduce various pieces of legislation that are so draconian

that.... If they'd taken the appropriate action a number of years ago,

the people of British Columbia would have been relieved from having to

put up with Socred 1983 government.

Today, however, they did not heed the warnings of learned men and

women in other jurisdictions that they were in trouble. And now they

won't tell us, of course, how much they're going to save. But we do

know what they are cutting. We know that they got us into this problem,

and they're going to blame the child abuse teams, the child-care

workers, the family support workers. That's who they're going to blame.

AN HON. MEMBER: Order!

DEPUTY SPEAKER: To Bill 7, please.

MR. BLENCOE: I'm trying to make the point, Mr. Speaker, that

this government, through Bill 7, now wants to get involved in municipal

financial operations. Well, the financial record of this government in

the last seven and a half years.... Nobody will give a reference, from

this government's financial affairs, for it to try and take care of the

financial operations of municipal governments. Nobody would give them a

reference.

I would suggest that before you take up the cause of municipal

financial operations, you resolve your own first. You're the ones who

did it to British Columbia.

AN HON. MEMBER: We're trying to correct the NDP mess.

MR. BLENCOE: Well, Mr. Speaker, I'll respond to that in the

budget debate. Suffice to say that the government records, in terms of

eradicating debt in the province of British Columbia, were never better

than during our administration. When they got back into power, up went

that debt load, and it stands at nearly 30 percent of provincial gross

product today. This government did that, and when we were there we

eliminated that debt. When we left it, we left money in the coffers.

DEPUTY SPEAKER: Bill 7, please.

MR. BLENCOE: Just on the simple fact of today, that what we

know in terms of the financial administration of this government.... As

a reference for getting involved in local government, let's take an

example where we know what the dollar value is — in terms of a

reference for Bill 7, getting involved in municipal operations, and the

credit rating situation.

It's very important that we refer to the financial ability of the

government in being able to say that it's going to be heavily involved

in telling municipal governments how they should administer dollars in

their policies and priorities. It's very important, because their

ability to do that has been seriously questioned by leading financial

institutions in North America. That's no reference for certain aspects

of Bill 7 which now are going to centralize financial decisions of

[ Page 1122 ]

municipalities within cabinet if they so desire. That's no reference

at all. As a matter of fact, the $9 million that's going to cost the

people of British Columbia this year alone, in terms of their credit

rating.... If that hadn't happened, and if this government had been

wise in diversifying the economy, we could be paying for the office of

the rentalsman, for consumer services, and for 75 percent of all the

child-care workers that have been fired.

Interjection.

DEPUTY SPEAKER: Hon. member, I would advise you that you are

taxing the Chair. I believe that we have had quite enough latitude

expressed here. I will ask you now to return to Bill 7. There's an

awful lot of latitude within the bill — many sections, many different

principles. Would the member please relate his remarks to the

principles of Bill 7.

MR. BLENCOE: Thank you, Mr. Speaker. That's what I'm trying

to say — what I am saying: that there is no reference for this

government to get involved in administering municipal financial

operations, because the record of this government is abysmal.

HON. MR. PHILLIPS: That's why we're government, I guess.

MR. BLENCOE: Mr. Speaker!

Interjections.

[5:15]

MR. BLENCOE: Why didn't you tell the people before the

election what the debt was? You never told anybody what the situation

was before May 5.

Interjections.

DEPUTY SPEAKER: Will the House please come to order? I'll

remind the hon. second member for Victoria that if he makes his debate

relevant to the bill, the outbursts will probably subside. I shall also

remind the hon. member of standing order 43, which states that tedious

and repetitious argument, if continued, may be discontinued by the

direction of the Chairman or the Speaker. If he relates his remarks to

Bill 7, the member can avoid that.

MR. MITCHELL: On a point of order, it