1981 Legislative Session: 3rd Session, 32nd Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

MONDAY, MARCH 16, 1981

Afternoon Sitting

[ Page

4549 ]

CONTENTS

Routine Proceedings

Act Respecting the Televising and Other Broadcasting of Debates and

Proceedings of the Legislative Assembly of British Columbia (Bill

M202). Mr. Leggatt.

Introduction and first reading –– 4549

Oral Questions

British Columbia Systems Corporation. Mr. Levi –– 4549

B.C. Rail resignation. Mr. Leggatt –– 4550

Northeast coal development. Mr. Leggatt –– 4550

Resignation of Don Watson. Mr. Leggatt –– 4550

Mr. Barrett –– 4550

Budget debate

On the amendment.

Mr. Cocke –– 4551

Hon. Mr. Phillips –– 4556

Mr. Stupich –– 4560

Mr. Howard –– 4563

Division on the amendment –– 4567

Hon. Mr. Waterland –– 4567

Tabling Documents

Public Service Commission annual report for the 1980 calendar year.

Hon. Mr. Wolfe –– 4568

The House met at 2 p.m.

Prayers.

HON. MR. HYNDMAN:

In the members' gallery today we have a special visitor from Vancouver

South. On behalf of the Minister of Environment (Hon. Mr. Rogers) and

myself I ask members to join in welcoming Mr. Bill Keeley.

MR. GABELMANN:

Every year Crown Zellerbach arranges tours of the precincts of the

Legislature for students in high schools in constituencies in which

Crown is a major employer. In the gallery today is a large group of

students from the Campbell River area together with some of their

teachers and officials of Crown Zellerbach. I'd ask like the House to

make them welcome.

MR. RITCHIE: I ask the House to

welcome a group of students under the leadership of Mr. Arthur Ross, 15

of whom are from Cape Breton College and approximately 15 from the

Fraser Valley College. It is a student exchange program, and I'd the

House to welcome them to British Columbia and to this House.

Also,

I have a younger sister of mine and her husband, Lillian and Peter

Berry, visiting us from Toronto, Ontario. Would the House please

welcome them.

HON. MR. PHILLIPS: It's my pleasure

today to welcome visitors from that great province of Manitoba.

Visiting us in the gallery are the Hon. Frank Johnston, Minister of

Economic Development and Tourism, and his lovely wife Hazel. I hope the

House will make them feel warm and welcome in the great province of

British Columbia.

HON. MRS. McCARTHY: I would like to

ask the House to welcome a gentleman who is no stranger to this

Legislature, but who I believe is visiting for the first time as a

member of the private sector after doing a very good job for the

province of British Columbia in the public service. I'd like the House

to welcome Mr. David Brown.

Introduction of Bills

AN ACT RESPECTING THE

TELEVISING AND OTHER BROADCASTING

OF DEBATES AND PROCEEDINGS OF THE

LEGISLATIVE ASSEMBLY OF BRITISH COLUMBIA

On a motion by Mr.

Leggatt, Bill M202,

An Act Respecting the Televising and Other

Broadcasting of Debates and Proceedings of the Legislative Assembly of

British Columbia, introduced, read a first time and ordered to be

placed on the orders of the day for second reading at the next sitting

of the House after today.

Oral Questions

BRITISH COLUMBIA SYSTEMS CORPORATION

MR. LEVI:

I have a question for the Minister of Finance. I have a small

preamble:

last year I tried on three different occasions to get an answer from

this minister on the Systems Corporation, and I'll try again this year.

Last July the B.C. Systems Corporation announced that they were opting

for the IBM main-frame architecture, and I would like the minister to

tell the House what steps have been taken to dispose of $11 million

worth of Honeywell equipment that presumably will become surplus to the

needs of the Systems Corporation.

HON. MR. CURTIS:

Mr. Speaker, I have a little bit of a

preamble in return: I think I did

assist the member to the fullest extent possible last year. In order

that I can deliver an absolutely complete and correct response to the

hon. member, I'll take the question as notice and will bring it to the

House just as soon as possible.

MR. LEVI: I have a

new question, Mr. Speaker. Just to remind the minister, I asked him on

April 29, 1980, and July 24, 1980, and ironically he gave exactly the

same reply as he just gave now, that he was going to assist me, but he

never did.

I have a new question: can the minister confirm

that the conversion to the IBM main-frame option that the Systems

Corporation has opted for, which is proposed to be completed by

September of this year. will cost in excess of $25 million more than

what appears in the budget?

HON. MR. CURTIS: Mr.

Speaker, I think that I would also want to be completely accurate in

responding to that question. I will also take that question as notice.

Of course I remind the hon. member that my estimates were presented

last year; there was ample opportunity then to discuss the question of

the B.C. Systems Corporation. I think Hansard will show the extent to which the member pursued these several questions at that time.

MR. SPEAKER: The question is taken as notice. A new question from the member for Maillardville-Coquitlam.

MR. LEVI: It might interest the minister to know that I was on government business down in Winnipeg last year when his estimates came up.

MR. SPEAKER: Order, please.

MR. LEVI:

Can the minister confirm that the B.C. Systems Corporation's staff has

ballooned to nearly 600 people? That is not counting the number of

people who are hired through what are known as body-shop operations

within the data processing system.

HON. MR. CURTIS: Mr. Speaker, I think that the member would want to check his figures very carefully.

MR. LEVI:

Is the minister saying, Mr. Speaker, that the figures are not correct?

If they're not, would you mind telling me on what he bases his

information?

HON. MR. CURTIS: Mr. Speaker, I simply

advised the hon. member that he should check his figures very

carefully. I did not deny the figures offered in the question.

Interjections.

HON. MR. CURTIS:

I don't take questions lightly in this House, and I trust that members

opposite won't take the answers lightly. I will also review that

particular point in preparing information for the hon. member and bring

it to this House as soon as possible.

MR. LEVI: Last

year at one of its meetings the Committee on Crown Corporations passed

unanimously a motion recommending that the government add to the

schedule of the

[ Page 4550 ]

committee

the B.C. Systems Corporation and the B.C. Buildings Corporation. Has

the minister decided to recommend to the cabinet that the B.C. Systems

Corporation in fact be added to the work of the Crown corporations

reporting committee?

HON. MR. CURTIS: Mr. Speaker,

that matter is under review with respect to the B.C. Systems

Corporation. The member will know that I am not the minister

responsible for the B.C. Buildings Corporation.

MR. LEVI: I didn't mention it in the question.

MR. SPEAKER: Order, please.

MR. LEVI:

Mr. Speaker, the minister appears to be uninformed about the B.C.

Systems Corporation. Can he tell the House when he last attended a

board meeting of the B.C. Systems Corporation?

HON. MR. CURTIS:

Mr. Speaker, some months ago. I have not attended regular meetings of

the B.C. Systems Corporation board. One step, which I took last year

because I believed it was appropriate, was to step down as chairman of

that particular Crown corporation. That is in line with this

government's policy with respect to inviting individuals from the

province at large to serve on various boards of directors. I must

confess that other activities, including three months of Treasury Board

work in preparation of the budget, precluded my participation in a

number of activities which I would normally have attended to.

MR. LEVI: My God, it's tougher getting answers out of this minister than that little minister of economic development.

Can

the minister tell us, on the basis of what he knows about the operation

of the Systems Corporation — which is somewhat miniscule — whether he

is satisfied with the operation?

Interjection.

MR. LEVI:

He is the minister who has to answer this. Is he satisfied up to this

point in time with the operation of the Systems Corporation?

MR. SPEAKER:

The first part of that question is clearly out of order. Its scope is

beyond the time of question period. But the second

part is in order.

HON. MR. CURTIS:

Mr. Speaker, there is no corporation managed by people which cannot be

improved. I am generally satisfied with the operation of the British

Columbia Systems Corporation. We have added to the board of directors,

as the member would know from public record as well as from questions

answered in this House. I am satisfied that we have a very competent

board of directors and a good senior administration. That is not to say

that there is no room for continued improvement in the performance of

that or any other corporation, whether private or public. I am

satisfied that the board, senior management and employees are striving

toward that perfection.

B.C. RAIL RESIGNATION

MR. LEGGATT:

Mr. Speaker, my question is addressed to the Minister of Industry and

Small Business Development. In his capacity of having responsibility

for B.C. Rail, can the minister advise the House whether anyone on the

board of B.C. Rail has tendered or submitted a resignation since

January of this year?

HON. MR. PHILLIPS: Mr. Speaker, the answer to the member's question is no.

NORTHEAST COAL DEVELOPMENT

MR. LEGGATT:

The minister's principal advisers — both his private consultants,

Dalcor, and the senior officials in his department — recommended that

there should be a six-month delay in the delivery date for northeast

coal, expressing doubt that that coal could come on stream at the

projected delivery date. Would the minister advise the House what

penalty is to be incurred in the event northeast coal is not delivered

on time.

HON. MR. PHILLIPS: I'd like to correct the

answer to my previous question. Mr. Don Watson resigned as a director

of the British Columbia Railway due to his interests in B.C. Cellulose

— reasons which he made known at that time.

In answer to the

second question, there could be problems with the development of the

coal mine in view of the weather conditions. There could be strikes.

There could be problems in bringing the mine on stream, and there are

no penalties that I'm aware of at the present time.

RESIGNATION OF DON WATSON

MR. LEGGATT:

I appreciate the minister's correction to the first question. I'd like

to follow that up with this question. Can the minister give this House

an assurance that none of the reasons that Mr. Watson has for resigning

are related to BCR's involvement in the northeast coal development?

HON. MR. PHILLIPS:

In answer to the member's question, I'll put it this way. In my

deliberations and discussions with Mr. Watson when he was advising me

of his reasons for resigning, none of them, let me assure this House,

had anything to do with the development of northeast coal. I would

suggest that if the member wishes to pursue that matter further he

should do so directly with Mr. Watson. But I want to assure the House

once and for all that none of the reasons given by Mr. Watson in his

discussions with me had anything to do with northeast coal, and I

regretted that Mr. Watson had to resign, because he was of a great deal

of assistance to me when we were trying to put our first independent

board of directors together.

MR. BARRETT: Now that

the minister has recalled that Mr. Watson has resigned from the board

of B.C. Rail, can he tell us whether or not he was present at the board

meeting at which Mr. Watson submitted his resignation?

HON. MR. PHILLIPS:

Mr. Speaker, I want to make sure that I'm accurate in this. I'm not

aware that Mr. Watson resigned at a board meeting. If he did resign at

a board meeting I was not present, but Mr. Watson personally delivered

a letter of resignation to me which I have on file.

MR. BARRETT:

Can the minister tell the House whether or not he was present at any

board meeting attended by Mr. Watson at which northeast coal was

discussed?

HON. MR. PHILLIPS: My answer to that

question would have to be yes, if I can recall from memory. I'd have to

check the records because I want to be perfectly honest with

[ Page 4551 ]

the

House, and I have nothing to hide. I want to tell the Leader of the

Opposition that I have nothing to hide. I would have to check the

records, but I do know that at least prior to September.... But I'd be

quite happy to check through the minutes of the board meetings and

advise the Leader of the Opposition at what meetings Mr. Watson was

present and what aspects of northeast coal were discussed at those

meetings.

MR. BARRETT: On a supplementary, Mr. Speaker, I did not accuse the minister of lying to the House.

MR. SPEAKER: Order, please.

MR. BARRETT: Well, I didn't, and I want to make that clear.

ask the minister: does he recall specifically any meetings of the B.C.

Rail board at which he was present where details, any aspects, general

terms, or any conversation about northeast coal...? I'm not asking the

Premier: he'll get his turn. I'm asking the minister. Were you present

at any meetings, through you, Mr. Speaker, at which any aspect of

northeast coal was discussed, and did you have any exchange that you

recall with Mr. Watson about northeast coal at those meetings?

HON. MR. PHILLIPS:

The question from the Leader of the Opposition has a tendency to

insinuate some discussion or something, and I know the Leader of the

Opposition would not want to insinuate that to the Legislature.

Therefore I will provide the Leader of the Opposition with the dates of

the meetings at which Mr. Watson was present when there was discussion

of northeast coal. I'm happy to advise the House that I shall take that

question on notice.

MR. PASSARELL: Mr. Speaker, I

rise under the provisions of standing order 35 to request leave for the

adjournment of the House to discuss a definite matter of urgent public

importance.

MR. SPEAKER: Please state the matter.

MR. PASSARELL:

Within two weeks Amax of Canada will start dumping 12,000 tonnes of

toxic waste a day into the Nishga food fishery at Alice Arm. An early

acceptance of this motion will spare the residents of the Nass Valley

and other coastal communities the adverse effects of toxic wastes upon

their lives. I have a motion to move, should the urgency of this matter

be recognized by the Chair.

MR. SPEAKER: While I am

waiting for the motion, I would like to thank the hon. member for

advising the Chair in advance of the session so that proper

consideration could be given to the motion.

My review of the

motion indicates that it would be out of order on the grounds that we

have an opportunity at hand, being in the budget debate, for full

discussion of the matter suggested in the motion. There is no question

about its urgency; it is only a question of whether it can be discussed

without adjourning the business of the House. I say the motion is out

of order.

MR. BARRETT: On that point, Mr. Speaker....

MR. SPEAKER: There is no point, hon. member.

MR. BARRETT: I would just like to bring to your attention that we are on an amendment, not the main motion.

MR. SPEAKER:

Hon. members, on a quick review of the amendment itself, it appears as

though the amendment was designed to provide for as broad a debate as

possible....

Interjection.

MR. SPEAKER: The motion is out of order.

Orders of the Day

ON THE BUDGET

(continued debate)

On the amendment.

MR. COCKE:

Mr. Speaker, I rise to support the amendment for a number of reasons,

and I am shocked that there are no speeches in support of the amendment

from the other side of the House. I am particularly shocked when I've

seen what some of the members across the floor have had to say about

this government, its way of doing business, northeast coal and so on,

in the recent past.

Mr. Speaker, we've been treated by one

of those members to a series of theorems — as I would represent them —

his theory being that what we have to do here is to get away from

demand-side economics. We've got all this new language — supply side,

demand side. We've got Milton Friedman and all sorts of other

economists. some of whom lead us astray. I heard the member for North

Vancouver–Seymour (Mr. Davis) speak in criticism — but very mild

criticism — of the budget and the taxation that's going on. I heard him

mention that we should get down to something in the order of 12 percent

of the gross provincial product as a realistic amount for a provincial

budget.

I know that Great Britain listened to Milton

Friedman, and we've seen what happened to Great Britain since. I know

the United States is taking a similar line. Somehow that kind of

economics always ignores the huge budgets for armaments. They manage to

rationalize them off to the side, that they really don't count. In this

province I don't think we're spending a lot on our arsenal.

Notwithstanding the Minister of Human Resources (Hon. Mrs. McCarthy)

and her imagination, we have very little, I guess, to spend on defence.

Therefore most of the money that is being spent in the budget on our

kind of economics is for people services, as we have all noted.

would like to draw the members' attention to the United States versus

Canada in terms of the cost of health care. In Canada the cost of our

entire health-care system — when I last saw that costed out — was 7.1

percent of our gross national product, paid for on a cooperative basis

by all of us, either through taxation or some other form of premium. In

the United States, where they don't have the same kind of proposition —

people have to pay for their own for the most part — it’s 9.2 percent

of their gross national product. We have to make up our minds whether

we let the poor devil who is sick suffer economic hardship beyond

endurance, and go for that sort of system, or whether we adopt the kind

of system we

[ Page 4552 ]

have

here where we share, as brothers and sisters, the good and the bad luck

in terms of cost. Ours is a more economical system; that goes without

saying.

You can go into many other areas of human services.

I'm not standing here recommending that we as government should pick up

the tab for everything, but I am suggesting that there are vital

aspects of living, such as health care, which were once regarded as an

area for the private sector but which are now adopted almost

universally in those countries that have decided to go that route,

which is to say that they should be a public obligation. I remember the

days when medicare was looked upon as a commie plot. Nowadays even

doctors' wives will admit that it's a first-class program — and I'm

looking at one. Wouldn't you admit it?

MS. BROWN: Yes.

MR. COCKE:

In any event, if we listened to reactionary statements such as, "Let's

get it down to 12 percent," after having paid a miniscule part of the

health-care program and a little bit for education and something in

terms of human resources for those less privileged than the rest of us,

there'd be nothing left. It's unrealistic, because we find that if they

total the cost of health care alone in the United States, it would cost

9.2 percent of their gross national product until they became as

efficient as we are — that is, if they went into a system such as ours.

Over the 9.2 percent.... And if you're going to go up to only 12

percent, you haven't got a lot left — something over 3.8 percent left

to pay for everything. That's the fallacy.

I'm not very

pleased with this budget from a number of standpoints, but that isn't

the one. I am displeased with the deceit of the budget. I'm very

concerned about the fact that the budget ignores resource industry

development and its return to the people in this province. It shows

massive cuts. We've got the Minister of Finance, on the one hand,

telling us that this province is going to have virtually a depression

over the next year, if you believe his budget figures regarding the

return of revenue from the resource sector. On the other hand we have

the Minister of Energy, Mines and Petroleum Resources (Hon. Mr.

McClelland), speaking on February 27 of this year — that's not an

archaic speech; that's relatively contemporary — to the Mining

Association of British Columbia, And what did he say? He said at that

time: "I'm sure we all agree it's been a good year." No, he rethought

that. He said: "No, it's a great year for B.C. mining." Having said

that, he went on to say: "The government is on your side." We know

that. Then he went on to say: "We're not afraid to say we're bullish on

mining." And we would agree they're bullish on mining and other things.

"We're not afraid to admit we're pro-development when development is in

everyone's best interest."

However, what is the telling part

of this speech? The telling

part is where he says — and remember this

in the context of our budget that we're discussing now showing a return

from mining and forestry dropping down to practically zilch: "Right now

the mining industry in this province is booming. We're in the middle of

a period of expansion" — not depression, recession or bad times for the

mining industry — "which approaches, and will soon surpass, the boom

times of the late sixties and early seventies." How do we put those two

statements together — the statement of the Minister of Energy, Mines

and Petroleum Resources and the statement of the Minister of Finance?

We can't put them together; it's impossible. Logic is out the window.

goes on say: "The surge of activity in recent years is partly due to

the cyclical nature of mining, exploration and development, but is also

due, in large measure, to industry-government cooperation and to

industry-government sharing the same goals." Great! So they're sharing

the same goals, they're going to have a boom, and yet we look at the

budget and it says we're expecting much, much less from that particular

sector. Who are we trying to kid? Are the cynics correct — the cynics

who say that by underestimating to this extent we are really trying to

produce a surplus, so that next year there can be massive homeowner

grants, massive goodies for the folks? Then suddenly the Premier goes

to Government House and asks that a writ be dropped. Oh, heaven help

us. Can't we be saved from that kind of politics?

MS. BROWN: Again.

MR. COCKE:

The member says, "again" and another member says: "Call an election

now." Mr. Member for Prince Rupert (Mr. Lea), they're not going to call

the election now. How could they on this budget? Have you been home to

your constituency? They'll tell you.

The Minister of Energy,

Mines and Petroleum Resources went on: "I don't want to spend much time

going into details on these projects" — he's referring now to the

northeast coal project — "or making apologies for those who feel the

government did not act swiftly enough." He then started to speak

considerably about northeast coal. He said: "The fact of the matter is

that northeast coal is being developed now and it has far-reaching

implications for British Columbia and for Canada. Once again the mining

industry, working with government, will be making a crucial

contribution to the prosperity of our province and our nation."

We've

been asking questions of the Minister of Industry and Small Business

Development (Hon. Mr. Phillips), asking him to give us just a few basic

details of the northeast coal development. How much are the taxpayers

of this province going to be asked for as their contribution, as their

subsidy to this development and, in the long run, their subsidy of the

steel industry in Japan? We're getting no answers. It is interesting to

me that the Minister of Energy, Mines and Petroleum Resources gave no

answers. He said: "The fact of the matter is that northeast coal is

being developed now and it has far-reaching implications...." That says

nothing.

Then he goes on with another vague statement: "Some

have criticized the government's involvement with industry in

developing northeast coal. Some say that the costs incurred by

government establishing the necessary infrastructure will exceed the

benefits accruing to British Columbia and Canada." Does he then say

they are wrong? No. He says: "Well, these critics fail to see how

northeast coal will be good for the provincial economy." Hey, that's a

very incisive statement — something like the minister who is

responsible for that northeast coal. He says: "Especially when other

coal prospects in the region are made into mines...." We've been told

that there is no further market. Even the member for North

Vancouver–Seymour indicated that there would have to be a massive, 11

million tonne increase in order to make it a paying proposition. Since

then we've heard from Japan and all the other regions in the world

stating that there just is not that market, but the minister is leaning

on that and suggesting that other mines will be developed. I wonder if

we will be paying for the infrastructure there as well. How far afield

are they? How far away from the central development are they?

[ Page 4553 ]

Anyway,

Mr. Speaker, I suggest to you that we are really in a great quandary.

I'm going to come back to northeast coal in a minute. I just want to

read a couple more comments. He suggests here that: "The critics also

failed to recognize the importance of northeast coal to the B.C. mining

industry. Right now the industry's bright outlook is based mainly on

the development of new metal mines. Yet from 1983 to 1985, and perhaps

thereafter, coal will become more and more important to the industry

and also the provincial economy."

I say that the minister's

speech spoke for itself. If it were not going to be a cost factor, if

it were such a tremendous boom, if it were such a tremendously great

economic venture for the taxpayers of this province, who do you think

would be told first? The taxpayers. Governments do not like to be

unpopular, so therefore when they make a good deal they say they made a

good deal and they tell you how they made a good deal. But this

government has told us nothing other than the fact that there have been

some possible deals made.

If it goes ahead one more inch

before there is a revelation of everything going on in that situation,

I say it is an absolute sin. There is no way this government or any

government should get away with making all their decisions behind the

closed doors of cabinet, not revealing who they're helping and why

they're helping them. I say to you again, Mr. Speaker, that if they

were actually helping the taxpayer they would have already told us how

and why. Is it any wonder then that we on this side of the House have

to say that we can't support the budget, and therefore must support the

amendment? We're not alone, Mr. Speaker. Let me get off that aspect of

it for a minute and let's look at the other side; let's look at another

area.

Remember we're paying a marked increase in personal

taxes. That regressive sales tax has been increased despite the fact

that the Premier announced two years ago that it was permanent. We all

remember it; we sat here and heard him tell us that it was permanent.

And what do we find? Now it's up. The 7 percent went to 4 percent; the

4 percent goes to 6 percent — a 50 percent increase. For what? Putting

it into that context, we know that resource revenues are

underestimated. They must be — either that or we're going into a bust.

Listen

to the other aspect, the other side of things. I want to quote to you

from the B.C. School Trustees Association report. They've given all the

MLAs, I'm sure, a fact sheet. If you haven't got one, I'll certainly

get mine copied and send it on to you. What did they say the facts are?

In order to get at the facts, they ask a few questions:

"Why

are school district budgets doubling or tripling in some areas? Answer:

they're not. The average school district budget is up 15 percent for

1981 — that's just 2 percent more than inflation to pay for additional

programs such as education for the gifted and handicapped.

"How

is it that Victoria can get involved in setting local school taxes?

Answer: the provincial government sets the basic mill rate that school

boards must levy on their taxpayers. This mill rate has nothing

whatsoever to do with how much the local school boards plan to spend

during the year. It's based on a province-wide, cost-sharing formula."

Don't

forget, because they don't mention it here, that the Minister of

Education in concert with the cabinet decides what that mill rate

should be, not just the formula. They decide what the mill rate would

be, which affects the formula and takes the taxing process back to the

homeowner, sloughing it off.

For five years I've been

standing in this House, along with my colleagues, saying that they were

on a very bad track. They have increased that mill rate over 50 percent

since they've been government. Then you go home and your constituent

says: "What's happening to the cost of education?" The cost of

education is going along at a normal increase.

MRS. DAILLY: An average of 15 percent.

MR. COCKE:

Roughly 15 percent this year, but it wasn't that high last year. But

they blame the school boards. They blame everybody but the actual

people who decided the policy — the government. I only wish people

could understand the hypocrisy of what goes on over there; I only wish,

Mr. Speaker, that even people who are relatively close to government

would get a better handle on what's happening.

We see a

Premier who's suggesting that we should be out of here by the May 24

weekend, justifying it by saying there is going to be very little

legislation. Well, I can tell my colleagues not to expect much

legislation. Over the last three or four years we've been seeing the

Legislature reduced in its power by vesting the power of the

Legislature in the cabinet. Where do they make their decisions — in

open debate? No, Mr. Speaker. not in open debate or in public debate;

they make their decisions behind closed doors. What are their

decisions? So far their decisions have been very bad.

Sometimes we smile in opposition. I sent a note to a government member the

other day. He was saying something about lacklustre this or that or the other

thing. I said: "You listen to the press, who don't listen to the Legislature."

I said in the note: "Well, you know, what we're actually doing is watching

you take a step at a time, and each step you take, you step on a banana skin."

When will it end? I predict never. There is someone up there watching this process.

want to go onto another question asked in this BCSTA report: "Then why

hasn't the mill rate declined as property values have risen?" It says

here that that's been a decision of the provincial government.

Basically it's a matter of dollars and cents — the more a local

taxpayer pays towards local education, the less the provincial

government has to contribute. That's the key.

We asked the

minister from Point Grey (Hon. Mr. McGeer); we're now asking the

minister from Oak Bay (Hon. Mr. Smith): for heaven's sake get a little

courage, act into that cabinet room and turn this process around. It's

gone too far. It's absolutely asinine. The only reason it's in this

particular bailiwick is by virtue of the fact that you can blame

someone else — at least it looks that way.

I say that we've

got to really think very carefully in this province about what we're

doing, but until such time that this Legislature gets the facts, there

is no way there can be properly considered debates in this House. We

need the cabinet to come in here, open their books, tell us what's

going on and let us know what we can anticipate in terms of future

policy.

We have the amendment. The government has decided,

one way or another, to not give it too much attention in terms of

speaking or defending their position. Because of the northeast coal

proposition I'm going to give them an opportunity to get up and say

their piece. So I would move, seconded by the member for Skeena (Mr.

Howard), that the amendment be amended by adding the following words....

HON. MR. CHABOT: Can't you make up your mind?

[ Page 4554 ]

MR. COCKE:

We made up our minds, Mr. Minister, that we would wait for a day or two

and find out whether or not you would answer questions. You haven't.

MR. SPEAKER: Order, please. Let's hear the amendment.

HON. MRS. JORDAN: You're amending your own amendment.

MR. COCKE: That's right, we're amending our own amendment.

HON. MRS. JORDAN: That's sloppy.

MR. COCKE: It's not sloppy at all. The jade queen speaks again.

MR. SPEAKER: Order, please. Please address the Chair.

MR. COCKE:

Mr. Speaker, the amendment is that the amendment be amended by adding

the following words: "to provide a public subsidy for the export of

coal from northeastern British Columbia to Japan." Add that to the

substance of the words in the amendment, and that is the subamendment.

MR. SPEAKER:

Hon. members, the amendment, even if it were otherwise in order, would

not be in order at this moment because a subamendment, like an

amendment, requires notice in this House. So perhaps the member would

like to give notice of a motion. It would appear on the order paper at

the appropriate time and could be considered at that moment.

MR. COCKE:

Mr. Speaker, on a point of order, the standing orders and all

precedents have been researched for this particular amendment, and

there has been no precedent with respect to that, nor any Speaker's

decision. Mr. Speaker, I think it would be a very dangerous decision to

set a precedent such as you are now thinking about, because that

silences a question being put before this House, and I think that that

kind of thing should never be tolerated in terms of House decisions.

There's no question that the amendment is not substantive. It's a

subsidiary amendment. On that basis I see no reason why it should not

be accepted.

MR. SPEAKER: I have listened carefully

to the member's opinion. I would be very happy to look at any precedent

which the member would care to show which would support that particular

opinion. Nonetheless, it would appear to the Chair to follow logically

that if an amendment requires notice, then a subamendment would also

require at least the same notice. That particular logic prevails in

many of the other precedents that are established, not as touching this

particular issue but as touching other issues. In the absence of a

precedent which would clearly indicate this, I would be prepared to do

a little further research and come back momentarily with a decision in

this regard. I will accept another opinion though. The hon. member for

Skeena on the same point of order.

MR. HOWARD: Yes,

or a new one, whichever you prefer. I take it from your last sentence

that you are going to take this matter under advisement.

MR. SPEAKER:

Hon. members, it's under advisement right now. I'm accepting an opinion

on either side, because if it is a precedent-setting decision that I'm

going to make, I would certainly enjoy the opinions of both sides of

the House.

MR. HOWARD: Then on the same point of order, I think what you identify as logic is probably peculiar logic, Mr. Speaker.

MR. SPEAKER: Order, please. That's out of order.

MR. HOWARD:

There are two classes of motions or amendments by which we can proceed:

one is substantive and the other is subsidiary. A subamendment is

always identified as being subsidiary in this category. I think you

have no choice, Mr. Speaker, but to accept it. If you want to proceed

otherwise, then precedent-setting as it may be, the only other course

available to us is to challenge that decision.

MR. SPEAKER: Thank you.

I'll accept an opinion from the member for Prince Rupert.

MR. LEA:

Mr. Speaker, first of all you said that what led you to your conclusion

was logic and common sense. I'm afraid that if you're going to follow

that rule, we may be ruleless in the House for some time to come. I

think that we do have to go by the rules, not by what we might assume

at any given point is logic or common sense, whether we so regard them

as logical or commonsense. But anything that I have read in this matter

— and I spent considerable time in the last day and a half reading some

of the work that has been done by this Legislature by the Clerks

themselves....

MR. SPEAKER: Order, please. We don't refer to the Clerks in this House.

MR. LEA: We don't refer to them? Oh, in that case — by those who we're not allowed to refer to.

Anything

that I've read in those papers have led me to the conclusion — as a

matter of fact, it's in black and white in those papers — that there's

an awful difference between a substantive motion and a subsidiary

motion. That's what we're dealing with now, a subsidiary motion to the

substantive motion, and it does not follow logically or reasonably that

because one needs notice the other doesn't. So I don't think, Mr.

Speaker, with all due respect, that it's us that has to do the research.

MR. SPEAKER: Thank you. I appreciate that opinion.

I'll accept an opinion from this side.

HON. MR. HEWITT:

Thank you, Mr. Speaker. The subamendment or amendment to the amendment

that's been raised would appear to me to be of considerable material

importance to the original amendment. As a result it would only follow

that as an original amendment requires notice, this amendment to the

amendment, which is material, should also require notice in order for

all in this House to be prepared to debate the issue should it be

accepted.

MR. SPEAKER: I appreciate that opinion. I already have the hon. member for New Westminster's opinion.

[ Page 4555 ]

MR. COCKE:

Mr. Speaker, on a point of order, the argument that the Minister of

Agriculture raises — giving members an opportunity to discuss it or to

think about it for two days.... How does he, therefore, hold with the

policy in the throne debate where there's no need for any kind of

notice? Frankly, though notice is historical and precedent, I think

it's rubbish myself, but that's the size of it. As far as his argument

is concerned, how does he put the two in tandem?

MR. SPEAKER:

Hon. members, I believe I have sufficient opinion. I think I have your

opinion, hon. member. On a point of order? How can you seek the floor?

MR. LEA:

Mr. Speaker, because of the impasse we seem to be into and because of

the importance of the subamendment to us, and I believe to all members

of the House, a brief recess would be in order so that we can continue

with a smooth flow of this House.

Interjections.

MR. LEA: They just don't want to discuss what's going to happen to the taxpayers' money in coal.

MR. SPEAKER:

Hon. members, there is no impasse. The Chair is simply listening to

opinions. A decision will be reached. I declare a short recess until

such time as the decision has been reached, and I will ring the

division bells at such time as I require your attendance.

The House took recess at 3:10 p.m.

The House resumed at 3:31 p.m.

MR. HOWARD:

Mr. Speaker, I want to raise a point of order dealing with an instance

in 1973 where a subamendment to an amendment "that Mr. Speaker do now

leave the chair for the House to go into Committee of Supply" was moved

and accepted without the requisite notice for the subamendment having

been given. I apologize for not having this information available

earlier, but we were not able to find any rulings to the contrary and

therefore felt there would be no difficulty.

I would draw to your attention the Journals of the House dated February 22,

1973, 2 p.m.: "...the House resumed the adjourned debate on the motion

'That Mr. Speaker do now leave the chair'... The debate continued.

Mr. D.A. Anderson moved in amendment, seconded by Mr. Gardom, that the motion

'That Mr. Speaker do now leave the chair'.... Then there proceeds

an amendment, which I don't need to read. That notice in the Orders of the

Day , for that day, February 22, appears under item 26 as: "Mr. D.A.

Anderson to move," and is an exact recitation of the motion he subsequently

moved, notice having been given.

the same day, February 22, 8 p.m. — that was when we had evening

sittings — " 'That Mr. Speaker do now leave the chair' for the House to

go into Committee of Supply. The debate continued." This is at page

105: "Mr. Phillips moved a subamendment, seconded by Mr. Smith, that

the amendment to the motion 'That Mr. Speaker do now leave the chair'

be amended by adding after the word 'taxation' in the fourth line...",

which is a subamendment.

There is no indication in the order paper for February 22 of notice having

been given for that particular subamendment. I also draw your attention to the

fact that on that particular day the debate was adjourned on the motion of one

Mr. Schroeder. So I wonder if Your Honour would take those into recognition:

a subamendment was moved, the requisite notice not having been given; it was

accepted by the Chair, and I submit that constitutes practice where there are

no rulings to the contrary.

MR. SPEAKER:

The fact that the sequence of events to which the member has just

referred has notice, although notice was proceeded upon with only one

day of elapsed time, according to my review of the records.... The

implication is definitely there that it was the original intent that

notice was required, or else it would not have appeared in the Votes and Proceedings of February 21.

have all of the opinions which I require, and I would bring the

following ruling. Standing order 56 says: "Only one amendment and one

subamendment may be made to a motion for Mr. Speaker to leave the chair

for the House to go into Committee of Supply or Ways and Means." The

eighteenth and the nineteenth editions of May reflect the drastic

changes in the supply procedure in the United Kingdom, and as such are

not of assistance in providing guidance on the

interpretation of this

standing order. As in other amendments, the ordinary rules of debate

apply to amendments to this question with these exceptions:

(1) amendment to this question is unaffected by the relevancy rule —

Beauchesne's fourth edition at page 171; (2) the rule which prohibits

reference to matters involving legislation does not apply to this

amendment — May's seventeenth edition. page 756; (3) only one amendment

and one subamendment are permitted; and (4) notice is required — May's

sixteenth edition, page 728, and also in the B.C. Journals ,

April 11, 1918, page 148. Rules regarding the amendment to this

particular motion are well established, both in the United Kingdom and

in this House. A subamendment, by nature, is intended to amend the very

same amendment which requires notice. Sometimes we assume that because

we say subamendment it is less in importance than the amendment.

Thirdly,

in the absence of any Speaker's decision or any other authority which

would exclude the subamendment from the restrictions which are

ordinarily attached to the amendment itself, it must surely follow that

the rules applicable to the amendment are equally applicable to the

subamendment. The absence of objection means that the consent of the

House was implied and, of course, with leave, notice could be waived. I

so rule.

MR. HOWARD: I challenge your ruling. Mr. Speaker.

Mr. Speaker's ruling sustained on the following division:

YEAS — 29

Waterland

Hyndman

Chabot

McClelland

Rogers

Smith

Heinrich

Hewitt

Jordan

Vander Zalm

Ritchie

Brummet

Ree

Davidson

Wolfe

McCarthy

Williams

Gardom

Bennett

Curtis

Phillips

McGeer

Fraser

Nielsen

Kempf

Davis

Strachan

Segarty

Mussallem

[ Page 4556 ]

NAYS — 23

Macdonald

Barrett

Howard

King

Lea

Stupich

Dailly

Cocke

Nicolson

Lorimer

Leggatt

Levi

Sanford

Gabelmann

Skelly

D'Arcy

Lockstead

Barnes

Brown

Wallace

Hanson

Mitchell

Passarell

Division ordered to be recorded in the Journals of the House.

MR. KING:

Mr. Speaker, I didn't see the Minister of Municipal Affairs (Hon. Mr.

Vander Zalm) on his feet when the voting for the affirmative took

place. Perhaps I'm mistaken, but it looked to me like he was sitting

down.

MR. COCKE: Mr. Speaker, I ask leave that we go to the subamendment.

Leave not granted.

MR. MUSSALLEM:

On a point of order, I officially notify you that it has come to my

attention that when the first division bells rang they were not heard

in three of the offices, and if they were heard it was only poorly.

This is not a new situation, and I appeal to your judgment that this

could be rectified.

MR. SPEAKER: Hon. members, during

the recess, if not during the last session, we had undertaken to spend

a considerable number of dollars to make sure that division bells are

heard in every office. If we have failed, I must accept that

responsibility, and I apologize to the House.

On the amendment.

HON. MR. PHILLIPS:

I must say that I'm certainly very happy to be able to take my place in

the debate and to inform the House that I intend to vote against the

amendment which the socialists have before this Legislature. The reason

I have to vote against it is that it is very typical of the socialists

to put an amendment on the floor and really say nothing. It is meant

strictly to criticize this very sound budget. It is probably one of the

best budgets ever brought down in the province of British Columbia, at

a time when other governments across this nation are bringing in

deficit budgets.

I'm also very pleased to have the

opportunity to take my place in the debate this afternoon and to say a

few words about northeast coal, I want to tell you just how pleased I

am that the socialists opposite have finally stated their position

emphatically. They are against the development of northeast coal. So

far in this debate — and since the announcement of northeast coal —

they have been reluctant to come out and really show their true

colours. But this afternoon they have finally put their position

forward. I want all the people of this great province to know that the

socialists opposite are against the development of northeast coal. I

want to tell you that that group opposite has great rear vision,

without even using a rear-view mirror.

[Mr. Strachan in the chair.]

want to recall for the people of this great province of ours that that

group opposite has been against every development that has ever taken

place in the province of British Columbia. They were against the

development of our two-river policy. I want to tell you that if we had

listened to them we'd be reading with candles in the province of

British Columbia today. They've been against the development of our

dams. They've been against the development of highways. They have been,

and still are, against the development of bridges to carry the commerce

of the lower mainland. They're against powerlines. They're against gas

pipelines. They're against mining development. They're against the

development of our natural resources. Generally they're against

everything that is good for the economy of this great province we live

in. When I listen to the opposition and to other critics of this great

development, I have to ask myself this question: where has the vision,

courage and foresight gone from this great nation of ours — the vision,

the courage and the guts that our forefathers had to develop this

country?

If we had continued to listen to the carping

socialists opposite we'd still be riding on horses and reading by

candlelight. Their policies are against development. Sometimes I think

they think that all we have to do to find the money to provide the

services that we enjoy in this great province today is to go out and

pick the money off a tree. They fail to realize that it is a strong and

growing economy which provides the tax money to pay the social services

bill in this province.

I'm not against social services. With

this great and growing province which we have, I think we can all enjoy

the benefits of our natural resources. But we can't enjoy the benefits

of those natural resources unless they are developed. We can't enjoy

the results of those developments if the resources stay in the ground.

But they talk about subsidizing economic development. Their policy is

that they want to use taxpayers' money to go and buy the economy that

already exists, and not create one single new job. They want to use the

taxpayers' money to go out and buy companies that are going broke so

that they can truly use the taxpayers' money to subsidize those

enterprises.

I want to say once and for all that there is no

subsidization of northeast coal by the taxpayers of British Columbia.

Let's get that straight: there is no subsidization of northeast coal. I

guess what bothers the socialists is that they thought northeast coal

would never be developed. Then, when they heard the announcement, they

were so amazed that they didn't really know how to criticize it. They

didn't know whether they were going to criticize it or not. They didn't

know whether they were for it or against it. But finally, this

afternoon, we smoked them out, and they have come out emphatically.

What

amazes me is that the socialists over there — if I recall the budget

debate last year — were saying that we weren't doing anything as a

government to create new jobs. Here we have a project that will create

thousands and thousands of jobs, diversify our economy, provide

economic development for decades to come, and they've finally come out

against it. I think their attitude must be that they're really unhappy

with this government because we're not spending a huge portion of our

budget to pay off debts, because we haven't borrowed for the future.

We're paying as we go — let every government in Canada try and follow

our example — and we can pay as we go. We can take money and invest in

the future economy of this province because we've done a good job of

running the finances in this province, and because of no other reason.

[ Page 4557 ]

remember that not long ago in this Legislature there was some criticism

of how the federal government didn't put enough money into northeast

coal. I'll tell you why they couldn't put money into northeast coal.

They didn't have it to put in. They don't have it to put in because

they haven't done a good job of running the finances of Canada. When I

pay my income tax bill and 20 cents out of every dollar goes to

alleviate a debt which has been created by that government, as a

taxpayer it doesn't make me very happy. But in this province, because

we have had sound fiscal policies, we are able to take some of that

money and we are able to invest it in the future economy of this

province. If we hadn't run this province the way we've run it and had

good fiscal responsibility and paid as we went, we wouldn't have those

dollars to put into developing the economy for decades and decades —

we'd be paying it off to the banking system in repayment and in

interest.

No, in this province, because we have been

fiscally responsible, we can take a very small portion of our overall

budget — it is a very small portion of our overall budget — and we can

invest it in the future economy. When a government or a country fails

to invest in the future, then that country is destined to financial

ruin. All you have to do is look at what's happening in Ottawa today to

realize how true that is, because that is what is happening.

Now

there has been a lot of talk about whether it's a grant or a loan. I

want to tell you, when it comes to the federal government putting money

into the future economy of this province or developing any

infrastructure, whether it's a grant or a loan or a subsidy depends on

what part of the country it is going to.

Interjection.

HON. MR. PHILLIPS:

Yes, I'm right. When it comes to western Canada it seems to be a

subsidy, but if it's in any other province in this country, it's called

a loan or a grant. But if the federal government had a surplus, I'm

sure we might have been able to talk them into investing in the future.

But as it is, thank heavens, they are putting some money into the port

at Ridley Island.

I don't want to talk too much about port

development on the west coast other than to say this: we are told by

the federal government that only the National Harbours Board can run

the ports in this country. British Columbia, Alberta, the city of

Victoria, the city of Prince George or the city of Prince Rupert were

not capable of running a port. It has to be run for the good of Canada.

You go to Rotterdam, Antwerp, Hamburg, Sydney or practically any port

in the United States, and who runs the ports? They're not controlled

3,000 miles away by a bureaucracy called a National Harbours Board.

They're run by independent entities within those cities.

MR. LEGGATT: You've seen them all.

HON. MR. PHILLIPS: Yes, I've seen them all. You'd better believe

I've seen them all. I just wish I could instil into the people of this

province some of the vision and courage that the port authorities in those individual

cities have. If you go to Rotterdam they've got thousands and thousands

of acres reclaimed out of the sea for future port development. You go to the

little country of Singapore and they've got thousands of acres prepared

for future development. But we as Canadians have to look backwards because we

have no courage or guts — either that or we haven't got the money to put

into the development of our ports. If you look at any country and the history

of any country without port development and transportation facilities, that particular

country doesn't survive for long; it goes backwards.

I'm

looking at the member for Nanaimo (Mr. Stupich). Who had the courage to

go into Duke Point and develop that harbour facility? It wasn't the NDP

or the federal government. I had to drag them kicking and screaming

into the development of Duke Point. But the member for Nanaimo knows

how beneficial that port development will be to Nanaimo. As a matter of

fact, because of the great development at Duke Point, Nanaimo looks to

the future with a great deal of courage because they know they're going

to have a strong economy. The NDP have faith in it because they're

building a new multimillion dollar hotel on the backs of the

development put in by this government and the British Columbia

Development Corporation — the Comrade Hilton.

I'm happy to

speak against this motion. This amendment really says that we should

not increase taxes. In saying that we should not increase taxes. that

means that we're either going to cut programs.... They don't want to

cut programs, because they stand in this Legislature and say we should

be spending more and that we're not doing enough for Health, Human

Resources or Education. So they want us to spend more money, but they

don't want us to raise taxes. That, leaves only one alternative; that

alternative is deficit financing.

Surely we can learn from

history. All you have to do, my friends, is look, for instance. at the

city of New York. It's a financial disaster because of overspending on

social programs that they couldn't afford. All you have to do is look

to our own country — overspending, not being fiscally responsible and

building up huge debts that every taxpayer today, the sons and

daughters of the taxpayers of today and the grandchildren of the

taxpayers of today will be paying for. I'm glad that I'm not part of

any government that spends today and asks my son or my grandsons to pay

for it. I want to be part of a government that is fiscally responsible

and says "pay as you go."

MR. LEGGATT: What about B.C. Rail?

HON. MR. PHILLIPS:

There are the merchants of gloom over there. I'll talk to you about

British Columbia Railway, which has been the best economic tool of any

investment by the taxpayers of British Columbia and has done more to

make this economy sound. It's this government that was the first

government in history to put money into B.C. Rail and recognizes how

great a contribution the British Columbia Railway has made to the

economy of this province. It's because of B.C. Rail that we can

subsidize the ferry system to Vancouver Island and transit on the lower

mainland. It's because British Columbia Rail has had the vision and the

courage, and it opened up the economy of our north country. One dollar

generated in the north country is multiplied into $5 or $10 in the

lower mainland area.

Taxes. I want to tell you, Mr. Speaker,

that we are recognizing for the first time in history that the

taxpayers of this province owe a great debt to the British Columbia

Railway. We wouldn't have the economy that we have today if it wasn't

for British Columbia Rail. Those merchants of gloom over on the other

side — those socialist hordes — are against everything that we on this

side of the House have ever done.

[ Page 4558 ]

They

say that we're putting onerous taxes on the people of this great

province. Mr. Speaker, I want to tell you that we're reducing taxes to

the people of this province. Maybe the gang on the opposite side of the

House is against a reduction in personal income taxes for about 40

percent of the taxpayers in this province. Maybe the socialist hordes

are against that, Maybe, on the other side of the House, they're

against having a reduction in the tax for small businesses. I think

they are because their amendment really says that. They say we're

putting onerous taxes on the people of British Columbia. I say we're

reducing taxes to a large number of the people of British Columbia, and

we're putting the taxes on the people who can most afford to pay them.

We're relieving those who are not as fortunate as others of some of the

onerous burden of taxation. I want to tell you that in the five years

that we've been government this is the only government in the

jurisdiction that has increased services to people, at the same time

building a strong economy and reducing taxes. We will continue to

follow that philosophy.

The only reason that we can invest

some of our money in the future economy is because we have the money to

invest. It's a very small portion of our overall budget that we're

investing in the future economy, so that the young people who are

growing up today will have the same opportunity to have a job that we

had when we were growing up in this province.

Mr. Speaker,

for the record I want to give you a few facts and figures on northeast

coal. What I'm going to do is give you a breakdown of the estimated

private and public sector investment for the Bullmoose and Quintette

mine development as a result of the agreed sale to the Japanese steel

industry. I want to tell you that these are 1980 dollars, and they are

the best preliminary estimates that we have. They are for costs only

and they do not include interest or inflation. It is estimated that the

private sector will invest $881 million in bringing their mine

developments on stream, versus the provincial government investing

$111.3 million in infrastructure. That figure for private sector

investment includes: Quintette coal-mine development, $530 million;

Bullmoose mine development, $150 million; private-sector port facility

investment, $73 million; private-sector investment in the townsite,

$128 million — for a total investment by the private sector of $881

million.

The British Columbia Railway will invest in a

spurline, which will serve for decades to come and will serve other

mine development in the area: upgrading the existing line, $35 million;

the Anzac branch line, $310 million; rolling stock, $27.2 million — for

a total of $372.2 million. The investment in the Anzac spurline of $310

million will not be totally recovered by the first two mines.

don't think that it would be fair to ask for the first two mine

developments in that new inland empire to be saddled with the total

costs of that spur line, because that spur line will be there for

decades and will be available for use by other coal-mines in the area.

It's

been said that that is a large investment — $310 million to build a

short spur line. In that figure is $150 million for approximately ten

miles of tunnels. A little quick arithmetic and you will find that we

have estimated over $15 million a mile to build the tunnels. I want to

tell you that that investment of $310 million today will be worth

billions of dollars by the turn of the century. I want to give you a

small example, When we were building the first power dam on the Peace

River, I remember the socialist hordes saying in those days when it was

going to cost $880 million: "Oh, it's going to break the province. It's

too soon. We should wait." We moved forward with our two-river policy

and thank heaven we did, or, as I say, we'd be reading by candles in

British Columbia today. I want to contrast the cost of constructing

that first dam for $880 million. We're thinking about building a tea

kettle in comparison to the size today at Site C. What's the cost to

the people who use hydro in this province? We're talking about $2

billion to $3 billion for a dam a fraction of the size of the original

one.

So I am saying to the people of British Columbia that

this investment of $310 million to build a railway into a resource rich

area which is capable of shipping 30 million tonnes of coal is a good

investment, and the longer we leave it the more costly it will be. It's

an investment in the future and one which will not depreciate even

though we may have to depreciate it on the books of the British

Columbia Railway. The cost of that line will not depreciate. The value

of that line will appreciate and will be there for future generations.

The

Canadian National Railway's upgrading of their line from Prince George

to Prince Rupert will be paid for by the movement of coal, but that

upgraded line will be there for the movement of grain and other bulk

commodities from western Canada because it is being upgraded. Upgrading

costs $125 million; rolling stock costs $62 million. The total is $187

million. We're going to build a townsite, and there have to be some

community services. For these community services, it's estimated that

the bill will be $25 million. What is the federal government putting

in? They would be contributing $20 million for port site preparation

and $4 million for the townsite, because of shared programs, totalling

$24 million. I want to reiterate that the provincial government and the

local government will be putting in $136.3 million versus $881 million

being invested by the private sector.

Not too long ago there

was some criticism of the environmental aspects of northeast coal. I

want to set the record straight and tell this House and the people of

British Columbia the story on environment when it comes to northeast

coal. Time sure does fly. We have completed 37 studies with regard to

the environment during the pre-feasibility stage in planning for

northeast coal. The provincial and federal governments spent and

cost-shared $2,160,389 on these studies. During this period, our own

Ministry of Environment spent an additional $500,000 to $800,000 on

environmental impacts. I have ensured that in order to process permits,

monitor progress and manage the development the Ministry of Environment

will have sufficient funds in its budget this year to do so, and,

indeed, there is $750,000 in the budget of the Minister of Environment

(Hon. Mr. Rogers) to monitor the progress of northeast coal development.

date, this is one of the best planned projects, environmentally, of any

project of this magnitude ever undertaken in this province. The

province has accepted responsibility for environmental studies and has

met the spirit and intent of processing guidelines for all major

off-site support facilities — for example, the railway, highway, hydro

and townsite. The province also initiated studies of potential coal

dust problems in the Prince Rupert area. These studies, done by some of

the best experts in private and public sectors, proved that he problems

could, and would, be overcome.

With regard to the coal mines

themselves, they will meet the requirements of every act and regulation

that exists. I want to emphasize, for the record, for all British

Columbians inside and outside of this House, that there will be no

changes

[ Page 4559 ]

those laws to accommodate these developments. I hope that, once and for

all, those who are concerned about the environmental impacts of

northeast coal will now have those concerns relieved, because I want to

emphasize again that no project of this magnitude has ever had so much

emphasis on environmental studies and environmental impact.

just want to get back to speaking against this amendment. I want to

assure the members opposite that when my estimates come up or when I

have an opportunity to speak in this House again there will be lots of

opportunity to ask further questions on northeast coal. I will be quite

prepared to answer them. I'll be quite prepared to answer all your

questions.

MR. LEGGATT: In question period too?

HON. MR. PHILLIPS: Well, yes, in question period, if you phrase the question so that you give me an opportunity to give the proper answer.

MR. LEGGATT: I will.

HON. MR. PHILLIPS:

As I said before in this House, I don't have the courtroom training of

some of my critics on the opposite side of the House, and I must be

very careful that I hear the question properly and that I give the

proper answer. But I want to assure the House that I will do my utmost.

I will call on all my resources and all my training as an MLA, and I

will do my utmost to ensure that the story is out.

I want to

say something against this amendment. I want to tell all members of

this House that even though the NDP — the socialist hordes over there —

may criticize and try and make the people of British Columbia believe

that things aren't so good in British Columbia, nowhere else in any

jurisdiction in North America, or in area that I've travelled in in the

world — and it's been extensive travel — is there more opportunity for

the people than exists in our great province of British Columbia. I

defy the socialist hordes opposite to find me a jurisdiction that

enjoys more social benefits than are enjoyed by the people of British

Columbia under a free enterprise government. Yet they say we're putting

on onerous taxes. Did I not read an

article in the newspaper the other

day that said wages outstrip inflation? I know that

article wouldn't

have been in the paper if the socialists had still been in government,

because they had runaway inflation in the three years they were

government. Runaway inflation is one of the biggest problems in any

socialist country. I also want to say that I think you'd be hard

pressed to find any jurisdiction anywhere where there is more stability

in the economy than exists in the province of British Columbia. I

think, also, you'd be hard pressed to find another jurisdiction that

pays better wages than we do in the province of British Columbia — all

accomplished because of good fiscal management under a free enterprise

government. I think you'd be hard pressed to find another jurisdiction

anywhere that has a lower rate of inflation than we have here in

British Columbia.

HON. MR. GARDOM: The opposition should resign.

HON. MR. PHILLIPS:

No, I don't think they should resign, because at times they're a pretty

good opposition. At other times they're not a very good opposition, but

that's where they belong. They're better at that by far than they are

in government, because we've had an example of that.

What

I'm really pointing out to the House, Mr. Speaker, is that with regard

to opportunity, security, stability, wages, inflation and environment,

you won't find a better place anywhere in the world, my friend. than

exists right here in British Columbia. It exists because of the good

policies of a free-enterprise government, not because of anything the

socialists created. It's been created by opportunity for investment in

the private sector. Certainly we tax them, but we tax them fairly. We

ensure that out of the development of our natural resources there

indeed is a fair return to the people of British Columbia. Let me tell

you that there is also a fair return to the workers in our natural

resource and manufacturing industries and, indeed. In all areas of our

business community in British Columbia.

The socialists

opposite are great theorists, but name me one jurisdiction anywhere in

the world that has had a socialist government or has followed a

socialist philosophy and enjoys the benefits as we do in British

Columbia under a free enterprise government.

HON. MR. GARDOM: Name one!

MR. LEGGATT: Saskatchewan.

HON. MR. GARDOM: You used to say "Sweden."

MR. LEGGATT: I can go on endlessly: Denmark, West Germany. Would you like another list?

HON. MR. PHILLIPS:

I don't want to talk about another country and I don't want to talk

about that great land across the sea. Under a socialist Labour

government, Britain had the lowest return to their workers of any

country in the European Economic Community. That's why Henry Ford built

his plant there. The workers were paid less than they were.... You talk

about subsidization, Mr. Speaker! What did the socialists do to Henry

Ford when he wanted to put up a plant in England? There were massive

subsidies. Oh, I want to tell you, they talk about subsidies. What was

the Leader of the Opposition going to do when he was in government?

What did he say about subsidies? He was going to build a railway; it

was called "the way out." He was going to subsidize a railway to Alaska

to haul American products through our province with no benefit to the

economy of British Columbia.

Interjections.

HON. MR. PHILLIPS: Oh, you remember that, do you? I have to laugh, Mr. Speaker.

Interjection.

HON. MR. PHILLIPS: I wish I had more time, because I do have some more to say.

But

there is just one thing I want to say. When those socialists opposite

start talking about subsidizing a rail line or subsidizing a

development, what did the then leader of the NDP say? What did the

second member for Vancouver East say when he was going to build his

railway to Alaska? He said: "Forget the report" — and he's talking

about the royal commission report — "let's build the railroad." And

Barrett pointed out the government put $357 million annually into the

provincial highways system. which doesn't generate any money. He's

saying: "Let's build the railway. If we have to

[ Page 4560 ]

subsidize it, fine." But now that they're in opposition, oh, how they've changed their tune.

I've

just got one more word I want to say — I have lots more to say — but I

want to put this firmly on the record, Mr. Speaker. What did their

leader say on March 26, 1979, when he was talking about the British

Columbia Railway, and building the railway into Alaska? He said: "The

first agreement ever signed between British Columbia and the federal

government was arrived at between the New Democratic Party when we were

in power and the federal government to arrange for a subsidy and

cost-sharing for building the railway right through to Alaska." It was

subsidizing the railroad right through to Alaska, and here they're

against northeast coal when we're going to build a spur line into a new

inland empire that will be there for generations and will serve British

Columbia, and not the Alaskans and not the Americans to the south. It

will serve British Columbians, provide thousands and thousands of jobs

and increase in value every day.

Mr. Speaker, they're

against it, but when they were government they were willing to

subsidize the construction of a railway to Alaska to haul American oil.

What about that railway? Where was it going to start? It was going to

start in Prudhoe Bay and end up in Watson Lake — start nowhere and

finish nowhere.

My time is up. I want to thank you for

bearing with me. Very shortly I will certainly avail myself of the

opportunity to say a few more words about the economy of British

Columbia.

MR. STUPICH: I'm going to say something

that I think will get an immediate response from the other side of the

House: there are times when I sit in this House and think I've been

here far too long.

You won't remember it, Mr. Speaker, but

there are some in the House who will remember that up until the end of

1975 it was the practice for ministers when they spoke in the throne

speech debate and the budget debate to tell us something about what's

going on in their ministries. We've just listened to a 39-minute speech

from the Minister of Industry and Small Business Development. For three

of those minutes he talked about northeast coal; the rest of the time

he was telling us about socialism. Certainly he's well versed on that

subject — his version of it. There were three minutes out of a

39-minute speech to tell us about his ministry. We've heard other

ministers speak in this debate, and we heard them earlier in the throne

speech debate. Very few of them had anything at all to say about what

was going on in their ministries. They simply carried on the political

campaign of the last election; and apparently we're getting ready for

the political campaign of the next one, whenever that might come.

[Mr. Davidson in the chair.]

I rather welcomed the ministerial speeches of previous days, because it was

an opportunity for the ministers to report to the House and to the public, and

it was an opportunity for the members to hear something about what they were

doing or why they weren't doing what they should be doing. We get very little

of that now. During the course of that same 39-minute speech we were told that

the minister will have something to tell us later on, if we'll simply be

patient. Someday maybe he'll answer a question. Someday perhaps he'll

tell us something about what he's doing, what he's trying to do or what

he isn't doing. But certainly not today. He needed more time. He had only

39 minutes at his disposal, and it required 36 of those minutes to talk about

socialism, which left him only three minutes to talk about his ministry. That

certainly was a great contribution to the knowledge of the members in the House

and of the public generally.

couple of the ministers — one is in his seat right now; the other

isn't; they are the Minister of Transportation and Highways (Hon. Mr.

Fraser) and the Minister of Consumer and Corporate Affairs (Hon. Mr.

Hyndman) — had something to say about a project in Nanaimo. They've

invited me to respond. I'm not sure just how it fits into this

amendment, but since they raised it I think I'd like to say something

about it. And there's the newspaper story here: "NDP Hotel Draws More

Barbs." The Minister of Transportation and Highways had quite a bit to

say about it during the course of his speech. He had not very much to

say about transportation and highways but quite a bit to say about a

hotel being built in Nanaimo. He raised the question of why we didn't

do something for low-cost and senior citizens' housing, if we really

wanted to do something in the community. The Minister of Consumer and

Corporate Affairs picked up the ball and ran with it for some 25

minutes. There was very little about his ministry but a lot about what

we are doing in Nanaimo. They didn't tell the whole story at that. I

think most people in the province are aware right now that one of the

things this very same organization is doing is assisting in a very

substantial way in the development of a senior citizens' housing

project. They didn't bother mentioning that.

One of the

things they didn't mention was that the only commercial project of any

size going on in downtown Nanaimo is the office building that is

currently being built by the Nanaimo Commonwealth Holding Society. One

of the things they didn't mention is that were it not for the hotel

proposed by the Nanaimo Commonwealth Holding Society, and the

assistance it will give to the parking project, downtown Nanaimo would

likely die on the vine. This is in spite of a $25 million fund for

downtown redevelopment set up one year ago. At that time I predicted

that none of that money would be spent in the next fiscal period. If

you'll look at the budget speech, Mr. Speaker, you'll see that we've

still got that $25 million sitting there in a fund doing nothing for

downtown development anywhere in the province — as I predicted one year

ago. In Nanaimo the lead is being taken by the Nanaimo Commonwealth

Holding Society, which is made up almost entirely of NDP members but

not completely so.

There is one other thing that the

Minister of Transportation and Highways and the Minister of Consumer

and Corporate Affairs forgot to mention. After the 1979 provincial

election campaign, when the Socred candidate in Nanaimo didn't do all

that well, the Social Credit Party in Nanaimo reached the conclusion

that one of the reasons for our electoral success in Nanaimo was the

high visibility of our property involvement in that community. So they

were going to do the same thing. They went out with great fanfare and

bought a building. And then what? Silence. Finally I asked one of the

news media representatives in Nanaimo: whatever happened to that

building that the Socreds bought? Oh, they had to let that go; they

weren't able to make the payments. Well, they forgot to mention that

when they were talking about what we're doing in Nanaimo. We've been

doing it since 1954; we've never missed a payment and we've never lost

anything. They tried it for six months; they were unable to run that

kind of business in the community of Nanaimo and they had to give up.

[ Page 4561 ]

Interjection.

MR. STUPICH:

I've been asked what the Socred mayor has to say about our project in

Nanaimo. I think the Socred mayor of Nanaimo is trying to forget that

he ever had anything to do with the Socred Party.

The

Minister of Industry and Small Business Development said the NDP is

against northeast coal. He said we're against everything. We have never

spoken in opposition to northeast coal as such. What we are opposed to

is using taxpayers' money to pay for it.

I made notes. At

the beginning of his remarks he said he was going to tell us all about

the northeast coal development. He said we were opposed to the two-dam

policy. What he went on to say about this northeast coal not costing us

a penny reminds me of what the Columbia River power deal was not going

to cost us. Remember "Nothing is freer than free, my friends"? The

Premier and Minister of Finance of the day said it wasn't going to cost

us a nickel. The fact that we sold the downstream flood-control

benefits for something like $117 million, which at that time were

conservatively estimated to be worth $12 billion, didn't matter,

because we were getting all these dams built and losing all this land

that was being flooded — we were getting all that for nothing. The

latest figures that have come out.... We put this question on the order

paper every year and the answer last year was over $1 billion — we're

one year behind. This project that was not going to cost us anything

has cost the taxpayers of B.C. over $1 billion. That was supposed to be

freer than free. Now the minister tells us that it's not going to cost

us a nickel. Well, at least it has gone up a little — inflation.

Then

he started telling about the things we were putting money in. But that

doesn't really count because the railroad that we're going to pay for

is going to be used for something else — maybe. Maybe something else

will happen. Maybe somebody else will open up a coal mine. If they do,

that will help pay for the line — maybe. Maybe there will be contracts

for more coal. Right. But it's still maybe, isn't it?

At the

present time the only known contracts for selling coal — if they are

really contracts; there's still some doubt about that, I understand —

will not come anywhere near paying for the $2.5 million that is

mentioned in the budget as the cost for the infrastructure of this

program. And we're asked to believe that the taxpayers are not going to

pay anything. Sure, we're going to put money into the Ministry of

Environment and they're going to do work. Sure, we're going to put

money into B.C. Hydro and it's going to do work. We're going to put

money into Highways and it's going to do work. We're going to put

money, I suppose, into Industry and Small Business Development. We're

going to borrow hundreds of millions of dollars for BCR, but none of

that is going to cost the taxpayers anything. I wonder where it's going

to come from.

He told us about the benefits of this

northeast coal. It's going to diversify our economy. I wonder what

diversification means in the mind of that minister. Currently we are

shipping coal from the southeast corner of the province. It's going on

the railroad and it's going to Japan. He's proposing now to start

shipping it from the northeast as well. That's the same thing. We're

shipping coal out of our province to another country. Is that

diversification? It's certainly not what I understand by

diversification. And that was the first benefit he mentioned.

Thousands

upon thousands of new jobs. I agree. They're in Japan, but at least

they're new jobs. That's something, but there's precious little for

B.C. in that. And then this business of not one cent. He said not five

cents — another time he said not one cent — of the taxpayers' money,

and then started detailing all the areas to which taxpayers' money

would be going.

I was interested in his reference to the

announcement of the Duke Point development — when he had to drag the

federal government, kicking and screaming, into Duke Point. I shouldn't

be saying this because I think Duke Point is a great development in

Nanaimo. We need it there, it's going ahead, and I'm personally pleased

that it is going ahead. But I can recall the occasion when it just

happened, by coincidence, to be right in the middle of an election

campaign — as a matter of fact two election campaigns, provincial and

federal at the same time. Our Minister of Industry and Small Business

Development shared the platform with the federal representative, Hon.

Ray Perrault, and, with their arms around each other, they told the

assembled crowd what a great pair they were, how great the Liberal

government was in making this contribution to Duke Point, and how great

the provincial government was in making its contribution. They were

both there, hoping to elect a Social Credit candidate provincially and

a Liberal candidate federally. And they both failed in those attempts.

Certainly at that time there was no indication that either one of them

was a reluctant bride or bridegroom. They seemed to be very happy in

each other's company and very pleased to be assisting each other in

their respective election campaigns.

There was something in

his remarks that really puzzled me. I took it down — perhaps

incorrectly — I'm going to be interested in looking at the Blues

tomorrow. "This government," he was talking about the one currently in

office, "was the first to put money into B.C. Rail." I just don't

understand what he means. Certainly the first Social Credit government

sunk hundreds of millions of dollars into B.C. Rail. And one of the

first things the NDP government did when it was elected was to have an

investigation with experts from the CNR and the CPR to determine what

sections of BCR desperately needed upgrading. We found out what a sorry

state of maintenance and repair it was in and immediately took action

to have it improved. There was a second investigation by experts

equally as good to determine the safety and operating standards on that

railroad. Again the report was acted upon.

Those were

positive steps we took, although we didn't like it because it was a

railroad going to open up resources. We continued the construction of

the Dease Lake line — we weren't the ones who stopped it. Mr. Speaker,

he said this government in office now is the first one to spend any

money on the BCR. They were the ones who first stopped any construction

on the BCR. No other government in the history of British Columbia has

ever stopped any construction program on the BCR except the one that's

in office right now. They didn't quite have the political nerve to stop

the Fort Nelson line; they certainly considered it very strongly, but

they were getting too close to the election. That could happen yet, I

suppose.

We're told that there's no taxpayers' money going

into it. Well, we know that hundreds of millions of dollars of

taxpayers' money have gone into it already. We know that in the budget

this year there's an amount of $70 million to pay interest and that

when BCR proceeds to borrow several hundreds of millions of dollars

more in connection with the

[ Page 4562 ]

northeast

coal development, the interest cost for B.C. Rail will escalate. We

know that the $70 million provided in the budget this year will

probably be only half enough three or four years down the road. The

annual subsidy to BCR which must be paid by the taxpayers will

represent money going out of the pockets of B.C. taxpayers to provide

jobs in Japan — thousands upon thousands of jobs, to use the minister's

own words — but unfortunately not in B.C.

He said we were

always against development. When we arrived in office, the first thing

we had to deal with was the plan of the previous Social Credit

administration to let Prince Rupert be closed down — Canadian

Cellulose's operation. It would have been the end of Prince Rupert for

the time being. They were letting it happen. We took steps to see that

it didn't happen because we were interested in the economic development

of B.C.

The next thing we had to deal with almost

immediately was the Social Credit program to allow Ocean Falls to die.

They've been re-elected and, of course, they've proceeded with that

plan. They've killed that town. We're against development! They're the

ones who have been losing these job creating possibilities.

Because

there was a desperate shortage of railroad cars on the continent, we

were the ones who took steps to open up a railcar manufacturing plant —

that was the next thing we had to do. The government led by the present

Premier threatened to close down that plant. He promised the workers

that he wouldn't really do it until he'd gone up to talk to them; he

forgot that promise. They closed it down. Within two months B.C. Hydro,

looking for railcars, had to go down to the States to try to get some

extra railcars within two months of closing down Railwest. In the event

that the northeast coal development actually does start shipping coal

and there is any kind of economic improvement on the North American

continent, where are the railcars going to come from? We've closed down

the only facility we had for making them. We couldn't get enough

railcars in 1973 to keep up to the expanding economy when the NDP was

in office. We had to build our own. We haven't needed them since.

That's been no problem since.

In the event that we do use a

couple of billion dollars of taxpayers' money, directly or indirectly,

to get this northeast coal development going, where are we going to get

the railcars? The whole thing will flounder because of a shortage of

railcars, because this government that believed so much in economic

development closed down the opportunity that we would have had to build

those railcars.

AN HON. MEMBER: Then they'll blame it on somebody else.

AN HON. MEMBER: Then they'll blame it on Ottawa.

MR. STUPICH:

Yes, they're very good at blaming things on somebody else. Remember

they had to put through a 50 percent increase in sales tax and they

blamed it on the previous three years of NDP administration. That was

the second largest increase in sales tax ever implemented. The previous

one was a two-thirds increase implemented by the previous Social Credit

administration. But then, of course, we have had the benefit of some

five years of Social Credit administration in the province. Now, once

again, it is necessary to increase the sales tax by 50 percent. Because

of what this government has accomplished in the last five years in

office, it's necessary to put through the largest increase in terms of

dollars of any tax ever imposed by any administration in the province

of British Columbia: 50 percent increase in the rate to bring in an

extra $400 million-plus. Mr. Speaker, that's Social Credit progress.

I've just had something referred to me from the Vancouver Sun Saturday edition. It's headed "Recovery":

"The last time the provincial sales tax was burnped up two

percentage points, it was to enable the provincial economy to recover from three

years of NDP government. The latest increase, presumably, is to enable it to

recover from five years of Social Credit."

That's

an editorial, Mr. Speaker, not a letter to the editor. The only thing

wrong with the increase, from their point of view, is that it won't be

nearly enough to recover from five years of this particular government.

did want to throw in a couple of things about what's happening in my

own constituency in connection with this. I was pleased, as the member

for Nanaimo, to see two cabinet members in my riding attending a

function on Sunday. That's great. I like all this attention, and

certainly the group sponsoring the event was very happy to see two

cabinet ministers there. Everything was going well; it was the opening

of a new Navy League Cadet building, very welcome in the community.

There was no problem. They didn't have to deal with any arguments or

anything like that. Things were going along very well; everybody was

very happy.

There were a couple of other instances, though,

when they would have liked to have had at least one cabinet minister

present. But there was a problem, so the cabinet ministers didn't

appear. There was the meeting in Ladysmith on Thursday evening, when a

couple of civil servants had to be there to present their report on

behalf of the Minister of Lands, Parks and Housing (Hon. Mr. Chabot) —

a report that completely ignores all environmental concerns, a report

that has been attacked by the Ladysmith city council and by the

Cowichan Valley Regional District, all of whom have tried to get input

into what they are proposing to do with Ladysmith harbour and all of

whom have been ignored. That minister is determined to go ahead with

his plans in spite of all the local opposition, in spite of all the

concern locally about what this is doing to the Ladysmith harbour. But

did the minister concerned have the courage to go to that meeting and

try to explain his position? He was not able to be there. He could be

in Nanaimo on Sunday, attending something else where there was no flak,

but he couldn't be at the meeting in Ladysmith Thursday evening to

defend what he was pushing down the throats of the Ladysmith people.

The

following evening there was another meeting, this time in Nanaimo. The

subject of Brannan Lake came up. I don't suppose there's a topic that

has exercised the community as much as that one — not just this time,

but three years previously. One of the newspapers sent out a coupon

that people had to take positive steps to clip, fill in, and mail or

bring into the office. In a couple of weeks they received 2,000 of

these coupons back, which gives you some idea of the feeling in the

community — that's a very positive response. You can get people to sign

a petition if you hand it to them and say, sign here; some will sign

very easily, But to actually clip a coupon, fill it in and mail it or

bring it in requires some positive step. So there is real concern in

the community about this. Was there a minister there to tell the people

why it was being turned over to Corrections? Mr.

[ Page 4563 ]

Speaker,

the minister couldn't make it. We can get two of them on Sunday, when

nobody's really bothered about anything — everybody's happy — but we

can't get them to come on occasions when the local people are worked up

about something and would like one of the political representatives

there, so that he or she might be questioned. They just aren't able to

make that.

This is an interesting note in the budget.

They're still blaming the NDP for the problems they're having today.

They're blaming the federal government. They're blaming forestry

revenue for running short of money. The 1981 budget speech on page 8 —

this may have been raised previously: "While forestry revenue declined

as expected...." This is one of the reasons we're having to put the

sales tax up 50 percent. Unfortunately there didn't seem to be any

consultation with the Minister of Forests, because we see the deputy

minister's message, page 1 of the report tabled in the House very

recently, the first paragraph: "Forest revenues to the province

increased to $514 million, surpassing the 1979 record by $55 million."

The year 1980 was $55 million higher than the previous record, and yet

the budget has the nerve to tell us that forest revenues declined, as

expected. How can one credit anything in the budget when we're given

figures and statements like that?

When I spoke in the debate

on the original motion I expressed some concern about the

Canada-bashing that is so much a feature of the budget and of most of

the speeches we hear from across the way. The Minister of Industry and

Small Business Development (Hon. Mr. Phillips) went into that at great

length today. He talked about his pay-as-you-go policies. He didn't

read the last

section of the budget, where it points out that this year

B.C. taxpayers will be borrowing $1.5 billion. It's coming out of the

other pocket, but it's still $1.5 billion being borrowed. On top of a

$6 billion budget they're borrowing $1.5 billion. That's pay-as-you-go?

I really don't understand it.

But apart from that the

Canada-bashing, the complaining about what the government is doing

about their deficits.... A report that came out in the news media

recently attracted a lot of attention. The particular news story I have

is dated March 5, 1981. This is the headline: "$12 Billion Means Every

Person Taken for $500." Then the story goes on:

"What

does $12 billion really represent? When the Consumer and Corporate

Affairs department says the oil companies ripped off the Canadian

public for $12 billion during a 15-year period, that means every man,

woman and child in Canada would have been bilked of $500. To put it

another way, $12 billion would have paid the salary of 600,000 families

earning $20,000 annually."

I haven't heard every word of the

debate that has taken place during the past week, but can you recall

hearing one cabinet minister express any concern at all about this $12

billion ripoff? I can't. They're complaining about Ottawa not spending

enough money in B.C. The Minister of Industry and Small Business

Development did that in his speech just minutes ago at the same time as

he was talking about them running a deficit: they should still be

spending more in B.C., and they're doing such a bad job of handling the

finances of the country, but not one word about this $12 billion —

according to this story — bilked from the people of Canada at the rate

of $500 per capita.

It's great fun knocking Canada; it's

great to be against the federal government. They all do it: the budget

speech is full of it. But when it comes to really protecting the

interests of Canadian taxpayers.... After all, the federal government

is our government. Sure, we're paving the taxes, paying the costs,

getting the benefits and whatever. But most of this money is going to

foreign owners of international oil companies, and there is not one

word of concern from the cabinet ministers opposite about $500 being

taken out of the pockets of every man, woman and child. It's much more

fun to attack Canada. These people, loyal ministers of the Crown, so

much enjoy attacking Canada. but they have not one ounce of concern for

the people of Canada when they will accept without one voice, one note,

one word, this kind of ripoff, this kind of bilking of the people of

Canada.

I doubt that there is, but if there is any one

member opposite with any kind of conscience left, that member will join

us in voting for this subamendment.

MR. HOWARD: There

are obviously no Social Credit members at this moment interested in

dealing or, probably, able to deal adequately with the amendment,

because they know in their heart of hearts that the amendment is right

on the mark. This is onerous taxation, unnecessary taxation and

politically and foully expedient taxation. If you want to identify the

budget.... You know, there are a few words that come to mind, as come

to everybody's mind from time to time when faced with a budget of this

nature. Some adjectives describing it can be developed into an

appropriate acronym, and maybe that's what I can do here. I certainly

see this budget as being: (1) hypocritical; (2) ugly; (3) grabbing; and

(4) harmful. You put those together into an acronym and it spells Hugh.

The "Hugh" budget — it just happens to be the minister's first name,

and it is quite appropriate, I think, to point out what it is.

has been mentioned on other occasions by other speakers that it is a

budget which feeds upon inflation and glories in the fact that

inflation is taking place. The very fact that there are tax positions

in the budget that are indexed to inflation indicates how shameful this

government is. It has indexed taxes, hoping thereby that inflation will

continue its rampant run. The Minister of Finance will not have to

worry any longer, insofar as a few taxes are concerned, about any

projections or tax increases. They can just roll along automatically.

The medical-care premium is one of those; it's been there for a while.

The tobacco and gasoline tax are two others that are indexed.

There

is also an index in reverse. One would expect that if the government

says, "Yes, we want to index taxes on the take side," then we should

index them on the give side as well to give some benefit to taxpayers.

We have a 10 percent surcharge at the provincial level on taxes above

$3,500 to raise an expected $15.4 million. There is no indexing there

to elevate that $3,500 figure or to preserve some balance or integrity

to it. But the Minister of Finance knows full well, in his anticipation

and hope, that inflation will continue, and as salaries increase along

with inflation more and more people will be moving into that $3,500

figure and more and more people will be paying the 10 percent

surcharge. The minister will rub his hands and say: "That's lovely,

because the more money they make, the more we get." That's a shameful

procedure.

I think, and I've said this on other occasions, that as long as this government or anybody in it persists in making a

[ Page 4564 ]

reference

to the $261 million debt, I believe it was, which this government

manufactured in 1976, then someone has to put forward the countering

argument. So long as they continue to tell that myth, then the truth

has to be put there for balance purposes if for no other reason.

[Mr. Speaker in the chair]

The

Minister of Municipal Affairs (Hon. Mr. Vander Zalm) was on "Capital

Comment" the other day. I wrote down his words while he was talking

about debt, and he said this: "We don't create a debt for future

generations."

AN HON. MEMBER: Did he really say that?

MR. HOWARD:

He said that. I saw him; others saw him. I wrote it down. Maybe others

wrote it down. "We don't create a debt for future generations."

Interjection.

MR. HOWARD:

I wouldn't call that a fib, because somebody in the House may say that

that's unparliamentary. That $261 million in 1976 — and I say it again

— was manufactured by the former Minister of Finance. It was contrived.

It was developed. It was false, and any continued reference to that

being the legacy that this government found in financial matters when

it came to office is likewise false and has to be put into some

context. Do you know what's happened, Mr. Speaker, as a result of that

manufactured debt, that fictitious debt? One of the things that's

happened is that this government has squandered about $125 million of

the taxpayers' money in interest charges to service that debt. That's

the taxpayers' money — all for the purposes of keeping alive a

falsehood in the first place.

The budget makes a reference

to debt at the federal level, Mr. Speaker. It says that every household

in British Columbia will be paying $1,500 a year to service the

national federal debt in Ottawa. I suppose, if you worked that out on a

per capita basis, every man, woman and child in B.C. pays $600 just to

pay the interest on the national debt. I have no quarrel with those

figures — I assume they're accurate — but I would like to point out a

couple of other figures. Debt at the provincial level — which this

government denies exists, but which in fact does exist — is going to

cost every household in this province this year $570 to service the

debt — $570, or $228 for every man, woman and child in B.C., just to

service the debt created by this government's management or

mismanagement of the finances. That's worth putting on the record. They

contemplate in this coming year, Mr. Speaker, $1.5 billion in

borrowings. That's going to load every man, woman and child in this

province with an additional $84 to service that $1.5 billion. Why don't

they talk about that in terms of debt?

This is a government

which glories in the idea of debt and yet denies that it exists. It

wants to see it happen and yet hides from the fact that it's there. It

requires the residents of this province to pay the debt-service charges

on that debt, and yet refuses to acknowledge the fact that it does

exist. That's hypocrisy, Mr. Speaker.

Speaking of debt, I

want to get to that decision by the Minister of Finance — and probably

by his deputy as well — to attempt to borrow for the B.C. Railway $100

million in Europe in the first part of February — February 5, I

believe, was the date. The rate at that time would have been about 13.5

percent, and that was the thing that the investment people who were

handling this issue — although it didn't get to be an issue in fact —

were looking at. In February of this year they were seeking to borrow

$100 million in U.S. dollars at 13.5 percent — not taking into account

the discount rate, because that would add dollars to it. What that

meant was that the government of this province was prepared to drive

B.C. Rail further into debt, and was also prepared to pay at least

$13.5 million a year in interest charges to foreigners. They didn't

even bother to try to raise the money on the Canadian market. They

weren't even concerned enough to say to people in this province: "How

about you putting up some of this $100 million that we'll need, so that

when we pay the interest we'll at least be paying it to our own

residents and to our own citizens?" No, sir, they went to Luxembourg,

out of the country, The minister extended his long arm out there,

through some investment dealers, on behalf of B.C. Rail and said: "I'd

like to get $100 million for B.C. Rail." B.C. Rail didn't even know

about this to start with, that's one thing: B.C. Rail wasn't borrowing

the money; they found out about it afterwards.

Now what was

the purpose of that attempt to raise $100 million from the U.S.

"Eurodollar market? Was it for northeast coal? The minister has said —

and I've got a couple of quotations from the newspapers around that

time — and he said it in the House the other day, although he misstated

it, but I understand he has since corrected Hansard: "No, the purpose

of going to Europe to try to borrow $(U.S.)100 million was not for

northeast coal. It was for B.C. Rail generally." Now that's important,

Mr. Speaker — "for B.C. Rail generally." Remember, the minister was

acting as the fiscal agent for B.C. Rail under an order-in-council

passed on February 6. After the government decided to go to the market

to get that money, they thought they better regularize it and appoint

the minister as fiscal agent.

What's the function of a

fiscal agent? The function of a fiscal agent, and the minister knows

this, is implied in the word "agent." The minister acts as an agent for

B.C. Rail, not as its master. B.C. Rail, in this instance, would have

decided: (1) how much money they required to borrow on the money

markets; (2) what they would require it for; (3) how much they were

prepared to pay in interest rates from the advice that they would get;

and (4) the term of the borrowing, which would have something to do

with the reason for borrowing it. B.C. Rail would have decided all that

and would then have gone to the minister as fiscal agent and said: "Mr.

Minister, we want to borrow $100 million for purposes A, B, C, D, etc."

That's what a fiscal agent is.

In this instance no such

decision was made. The minister decided that B.C. Rail was going to

borrow $100 million. The roles were reversed. The minister decided that

he was going to have some political interference in the operation of

B.C. Rail and determined for that company how they were going to get

this money. He talked with Mr. Norris, the president of B.C. Rail. Do

you know what he said? "I can't talk about that." I asked him myself,

on the telephone. I had a number of questions about that attempt to

borrow $100 million — purpose, capital expenditures and what it was

for. He said: "I can't talk about that." That's all Mac Norris would

say. At one point he loosened up and said that I had better talk to the

Minister of Finance about that. That's who we're talking with.

[ Page 4565 ]

MR. BARRETT: Who said that?

MR. HOWARD:

Mr. Mac Norris, president of B.C. Rail. He can't talk about it. Nobody

made a decision in B.C. Rail. They just suddenly woke up one morning

and found out that the Minister of Finance was going to drive them $100

million in debt. What does the minister want the $100 million for? It's

worth asking what the minister wanted $100 million for B.C. Rail for.

He wanted it for B.C. Rail so it could meet its $71 million debt

service charges that it owes this year on debt that it already has.

That's why he wanted it — borrowing money to pay interest on money that

they've already borrowed, That's the purpose. It's also for refinancing

some $(U.S.)10 million that's coming due this year on the books of B.C.

Rail. You can argue validity....

MR. LEA: Is that a + b?

MR. HOWARD:

That's the a + b theorem. I've often wondered what Social Credit was

all about and now that I'm seeing what they're doing here with juggling

the books I can see. There's the minister of little business shaking

his paper. He didn't even remember that one of the board of directors

of B.C. Rail resigned.

That's what they wanted the $100

million for, Mr. Speaker. They'd borrowed $100 million in order to pay

the interest on the money that they'd already borrowed. That's

financial irresponsibility, and it's destructive to the financial

integrity of B.C. Rail in this province and injurious to B.C. Rail's

future attempts to borrow money for whatever purposes it needs it. That

kind of activity is even worse than that engaged in by the federal

government in its creation of debt, and the minister sits there and

fiddles away with his paper and so on.

Why did they go to

the U.S. market in Europe? Let's ask that question. Why did they go to

the U.S. market in Europe rather than the U.S. market in the United

States? They're borrowing U.S. dollars. One simple reason is this, and

the minister knows this: if he had gone as self-appointed fiscal agent

for B.C. Rail to the United States' market in New York, he would have

had to file a prospectus outlining in detail what they wanted the money

for. The securities and Exchange Commission of the United States would

say: "Look, man, you may be an exempt institution in Canada or in B.C.,

but you're not here. We want a prospectus of what you want that money

for."

The minister knows that by going to Luxembourg and

trying to borrow on the U.S. "Eurodollar market the requirements for

disclosure there are minimal, to say the least. That's why they went to

Europe: because they didn't have to tell the truth. They didn't have to

disclose the purpose of borrowing the money, because the requirements

of the exchange in Luxembourg are down near the bottom. Even the

Liberals in Ottawa, as much as I dislike that crowd of phonies that run

this federal government, would not be so — "dishonest" comes to mind as

the word, but I wouldn't use it, Mr. Speaker — even they wouldn't be so

devious and irresponsible in their dealings as this Minister of Finance

has been in his attempt to find that money in Luxembourg. It's an

unconscionable act.

MR. SPEAKER: Order, please. Hon.

member, we cannot attribute to another member of this House any word or

description that would question the minister's integrity or his

honesty. I find that the word "devious" is clearly unparliamentary.

Would the hon. member please....

MR. HOWARD: With

great respect to the Chair, Mr. Speaker, you need go no further. I will

not use that word "devious." If I did use it, I withdraw it.

"Unconscionable" is more fitting, in any event.

That's why

they went to the U.S. dollar market in Europe. They wouldn't have to

tell anybody what they were doing over there; they just want to borrow

the money. Let's deal with that attempt a little bit further. They went

to the U.S. market. They could have done that in the United States as

well. They went to borrow U.S. dollars so that they could, because of a

particular provision in the Railway Finance Act, increase the debt of

B.C. Rail above the statutory limit of $900 million. They can do that.

I don't know what B.C. Rail owes at the moment. Its net debt position

is $730 million, or something of that sort. The statutory limit of $900

million.... They borrow $100 million on top of that; it's up to $824

million. They're approaching the limitation mark. But if they borrow in

U.S. dollars, then they can go above the mark. That's just a side

reason for going to Luxembourg.

Another question comes to

mind, with respect to this fiasco attempt to borrow this money. Who

handled it? Who was the investment firm in Canada that the minister

dealt with? Was it the traditional consortium or syndicate of

investment dealers that handled B.C. government-backed bonds, or was it

somebody else? People in the investment community tell me it was Wood

Gundy on the Canadian side that was the lead manager in trying to put

together that package of $100 million.

Let's have a review

of what the Eurodollar market is all about over the past little while,

to see whether or not they could get the $100 million, The other day

the minister talked about these windows that are there, that are open

from time to time. You reach in the window, you get your money and you

give them a note saying you'll pay it back again. Then the window slams

shut before the next guy in line gets a chance. The reason for that is

that there aren't too many U.S. dollars floating around in Europe.

available to be borrowed, as compared with the amount of U.S. dollars

on the U.S. market. So there are small amounts of money available. In

the U.S. Eurodollar market from January 1980 until just a few days ago

the maximum amount of money available for borrowing and borrowed on any

given day was $150 million — the limit.

There's a committee

meeting over there, Mr. Speaker. They're discussing whether they should

vote for this amendment or not. Let them continue.

Numbers

of days go by when there's no money at all. When there's no market

there's no borrowing. Week after week sometimes go by. So remember,

first, if it was Wood Gundy or whoever it was, that they should have

known that the maximum amount of money they could get in Europe anyhow

was $150 million in any one day, and B.C. Rail wanted $100 million.

That's one point to remember. Secondly, for borrowings on the U.S.

Eurodollar market in the last year the maximum term has been 12 years.

Most of them are shorter term — five-year, seven-year and ten-year

borrowings. That's just the complexion of that market. The investment

dealers that you dealt with should have known that as well. First, they

anticipated borrowing more than they knew would be available, given a

couple of other factors that I'm going to tell you about in a minute.

Second, they wanted

[ Page 4566 ]

borrow it for a period of time longer than had been the case in the

last year or so on that same market. They were almost out of the

ballpark before they started.

On the day in question....

This brings us to Wood Gundy, the investment community. I say again,

friends and companies in those businesses tell me that Wood Gundy was

the key investment dealer in Canada seeking to put together this

package to get that $100 million. On February 5 Wood Gundy, the same

company representing the same outfit, was the lead manager — meaning

they handled the show — for a $50 million U.S. borrowing for Eldorado

Nuclear Ltd. That's on the same day that they were talking about $100

million for B.C. Rail. Wood Gundy was successful in getting $50 million

at 13 1/4 percent. Those notes are due in 1986 — five-year borrowing.

On the same day Ontario Hydro borrowed $100 million at 13 1/2 percent,

U.S. bearer bonds. Whose name do I see right down here? Wood Gundy Ltd.

If Wood Gundy was the company doing this — that's what I was told; if

I'm wrong I'll retract it — Wood Gundy was involved in two borrowings

that self-same day, the net result of which was borrowing $150 million

on the same market on which they were also seeking to borrow $100

million for B.C. Rail. They knew they couldn't get it.

Either

Wood Gundy took the Minister of Finance along the garden path and led

him to believe they might get it and then dumped it or Wood Gundy

didn't know what it was doing in the first place. I don't know which,

but I do know that here's a news clipping that the Minister of Finance

certainly needs to explain and expand upon. This is February 14, 1981,

in the Sun . The

article says that in response to questions, I

suppose, about this matter, "Finance Minister Hugh Curtis, Friday,

accused investment dealers of 'a disturbing absence of

professionalism.' "

Interjection.

MR. HOWARD:

I don't know. I only know what the

article says — that he accused

investment dealers of "a disturbing absence of professionalism." That

reference that he made, related to what the

article says, was spreading

a rumour — spreading a rumour that B.C. Rail would borrow $100 million

to finance northeast coal development. We will take the minister at his

word — it's in the newspaper and he said it near his house — that they

didn't want the $100 million for northeast coal. Was that the rumour?

Was that the absence of professionalism? I talked with three separate

divisions of investment dealers in Canada. Each one of them told me

that they knew the $100 million attempt was not for northeast coal.

Each one of them singly, individually and voluntarily said: "Oh, no, we

understood that was for general purposes of B.C. Rail and did not

relate to northeast coal." Who's spreading the rumours? I don't know.

The minister himself has said it was not for that. But what he has said

is that there's a disturbing absence of professionalism, and he has

thereby smeared the whole investment community — everybody except him.

Either whoever handled that issue made a fool of the minister or the

minister was a fool in the first place to attempt to see if he could

borrow money on a market where it wasn't available.

The news

clipping also says in the minister's own words: "Any decision in this

matter will be made by the underwriters." Now, a question has to be

asked. Did the investment dealers, or the investment dealer — and if it

was Wood Gundy, that would be worth knowing — underwrite this issue;

and if so, why doesn't B.C. Rail now have the $100 million?

There

are two ways of getting money in the bond market. One is through an

investment dealer that underwrites, and says: "I guarantee you'll get

your money." The other is on a best-efforts basis, which says: "Well,

we won't guarantee you'll get your money, but we'll try to flog the

bonds through the system. We'll try to raise it for you." But if

underwriting is a guarantee, any reputable investment dealer is bound

to stand up to that. There is a reference by the minister to

underwriting. That's worth knowing.

That activity in

February of this year has injured B.C. Rail's chances of borrowing

money at the going rate. Oh, they can borrow money, but they're going

to have to pay through the nose for it, which means the taxpayers of

B.C. are going to have to pay through the nose whether that money is

for paying interest on debt already created or for northeast coal. The

investment community knows what happened with this fiasco, and they've

been in the business for a long period of time. They know very well

that entering the market to try to borrow, say, $100 million, you can

easily move within a range of a quarter or half a point. And I say

today that that fiasco, that abortive attempt, which one investment

dealer told me it was — he put it in stronger words — cost the

taxpayers of this province an untold amount of money in interest

charges a bit above the market, whenever we go to market to get that

money. It was all to satisfy the feeling in the investment community

that this minister, through his attempts to borrow that money, tried to

make fools of the investment community, tried to pull a sandy on them,

tried to do an end run around the investment community and tried to

mislead them into thinking one thing that was not the case. That's

regrettable.

MR. BARRETT: Evan, you look good for once.

MR. HOWARD: Yes, the former minister would not have tried anything so unconscionable as that.

That

activity alone, that attempt alone, that one move in the first part of

February this year — all in secret, all behind the scenes, all done to

try to circumvent the normal relationship between government and

consortiums and syndicates in the investment business, for what purpose

no one really knows except the minister — that