2010 Legislative Session: Second Session, 39th 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)

Thursday, April 1, 2010

Afternoon Sitting

Volume 13, Number 5

CONTENTS

Page

Routine Business

Introductions by Members

Statements (Standing Order 25B)

Cancer awareness and treatment in B.C.

D. Black

G. Hogg

Maria Ho

J. Kwan

Autism awareness

J. Thornthwaite

Wolf encounter in Prince Rupert

G. Coons

St. John Ambulance

M. Dalton

Oral Questions

Impact of harmonized sales tax on sports organizations

B. Ralston

Hon. C. Hansen

M. Sather

S. Fraser

Implementation of harmonized sales tax

N. Macdonald

Hon. C. Hansen

Court fees and access to justice system

L. Krog

Hon. M. de Jong

Addiction services for problem gamblers

S. Simpson

Hon. R. Coleman

Funding for crime prevention in Surrey

H. Bains

Hon. R. Coleman

Minimum wage

R. Chouhan

Hon. M. Coell

Tributes

Chester Johnson

J. McIntyre

Petitions

M. Mungall

Orders of the Day

Second Reading of Bills

Bill 9 — Consumption Tax Rebate and Transition Act (continued)

B. Ralston

J. Les

D. Donaldson

P. Pimm

N. Macdonald

J. Rustad

B. Routley

Proceedings in the Douglas Fir Room

Committee of Supply

Estimates: Ministry of Tourism, Culture and the Arts (continued)

Hon. K. Krueger

M. Sather

D. Donaldson

S. Chandra Herbert

N. Simons

Estimates: Ministry of Agriculture and Lands

Hon. S. Thomson

L. Popham

J. Kwan

[ Page 4029 ]

THURSDAY, APRIL 1, 2010

The House met at 1:33 p.m.

[Mr. Speaker in the chair.]

Routine Business

Introductions by Members

N. Simons: I'd like to welcome all the guests to the House today. It should be informative, if not entertaining.

Hon. I. Black: I've got my entire family here today for the first time since I was elected in 2005, and today I'm actually going to remember their names. I think it's a by-product of this job, perhaps.

Interjections.

Hon. I. Black: I'm hearing the endearing comments from across….

My wife, Chris, is here; and my son Thomas and my son Jordan and my daughter Danielle are all in the precincts, a couple of them brave enough to watch question period. Would the House please join me in making the most important people in my life feel most welcome.

Hon. I. Chong: Earlier today I was pleased to be joined by members from both sides of the House to help mark April 9, next Friday, as Daffodil Day. As many of us are aware, it has to do with the Canadian Cancer Society promoting education and awareness about a preventable disease but one that nonetheless affects so many of us.

Joining us in the gallery today are two representatives from the Canadian Cancer Society: Barbara Kaminsky, the CEO of the Canadian Cancer Society, B.C. and Yukon chapter; and with her, Catherine Loiacono, who is the manager of media relations.

[1335]

While I would like the House to make them welcome, I just wanted to add that so many of us have been affected by cancer, and even members of the Legislature have, as we all know. In the 14 or 15 years that I've been here, former members Penny Priddy, Helmut Giesbrecht, Chuck Puchmayr and our beloved Stan Hagen have all been affected, and even current members now, during this time — the Leader of the Opposition, the member for Juan de Fuca and others.

It really knows no boundary. Each and every one of us who can work together to deal with this disease will make our community stronger.

I would ask the House to please make Barbara and Catherine very welcome today.

J. Rustad: It's a pleasure to introduce Kellen Vaesen, who is a political science student from Camosun College. He is here to see what we do and how we do it. Would the House please make him welcome.

Statements

(Standing Order 25B)

CANCER AWARENESS AND

TREATMENT IN B.C.

D. Black: One in three British Columbians will be diagnosed with some form of cancer during their lifetime. More than 20,000 people will be diagnosed with cancer here in B.C. this year alone. This is a disease that has affected all of us, either directly or indirectly.

B.C. achieves some of the best cancer outcomes anywhere in the world. We've been leaders in cancer screening and treatment. Research in B.C. has led to breakthroughs that have benefited cancer patients here and around the world, but there's still a long way to go.

Like most of us, my family has been directly affected by cancer. I'm the mother of three sons, two of whom have experienced the cancer journey — one as an infant and one as a young university student. I know personally that cancer not only affects the person who is diagnosed; it affects everyone in the entire family.

The B.C. cancer clinic is among the best in the world. The incredible doctors, nurses and related health professionals are truly a godsend to the patients and their families undergoing difficult treatment.

Both my sons recovered and now lead healthy and productive lives. It's a tribute to the work that's done by the Canadian Cancer Society, the programs they fund and the ongoing research that will bring us to the day when a diagnosis of cancer is nothing but a bad memory.

I urge all of us to proudly wear our daffodil pins, to show our support for the Canadian Cancer Society and to also show those people who are now undergoing treatment that they are not alone.

G. Hogg: The statements on cancer in this House today, I think, indeed do reflect the impact it's had on all of our lives. Barry, John, Stan, Carole, Sindi, Wally, Penny and Chuck — names of our friends, friends from this House. Names that will be joined by over 20,000 more names this year — names from houses across British Columbia. All names of people who have dealt or will deal with cancer.

Every three minutes another Canadian is called to the challenge of dealing with cancer, and one in three of us will be diagnosed with cancer during our lifetime.

The Canadian Cancer Society, British Columbia and Yukon, has shown us how we can provide support. With 20,000 volunteers and over 24,000 more event participants, the society has raised awareness, promoted prevention

[ Page 4030 ]

and funded research. Survival rates have improved from 30 percent in the 1960s to over 60 percent today. With our support, with everyone's support, these rates will continue to improve.

We ask that we please show our support. Our daffodil is our badge of commitment. We should wear it proudly. We want everyone on a cancer journey to know that we support them — that we are here to support each other and to eradicate cancer.

April is Daffodil Month. April 9 is Daffodil Day, and B.C. is the first province to use these durable daffodils. Let us also be the first province to show that we care every single day.

MARIA HO

J. Kwan: I rise today to pay tribute to a woman who was deeply committed to her family and equally committed to being a teacher, both by profession and in the community she served so energetically for over 40 years.

[1340]

Maria Ho, known as Mimi, fell ill suddenly on Wednesday, March 10. She was diagnosed with an inoperable brain condition at the hospital and died peacefully the next evening surrounded by her husband, three daughters, grandson, and other close family members and friends.

Mimi founded the Strathcona Chinese Dance Company at the community centre in 1973 and was artistic director for 37 years until her death. The company has performed countless times in locations across Canada and in many places around the world.

Mimi's dedication to dance as a cultural expression did not end with her artistic leadership. She was also a very determined and successful fundraiser so that the costs of productions, costumes and travel were covered. In fact, I ran into Mimi just a few months ago at a fabric store, and — yes, you guessed it — she was looking for material for her dancers that she could produce for their productions.

Mimi was a recipient of many local, national and international awards of recognition, too many to list here, but they include a Civic Merit Award from the city of Vancouver in 1996, several cultural services awards from the government of Macau and a Certificate of Merit from the Prime Minister of Canada in 1998.

Mimi's efforts extended to other community organizations and causes as well. Among other things, she was a founding and life member of the SUCCESS Foundation and a life member of the Chinese Benevolent Association of Vancouver. Over the years, she raised money for the cancer research fund — very fitting that we're wearing daffodils today — Vancouver's Children's Hospital, flood relief in China in 1991 and 1995, and she raised over $10,000 for the Sichuan earthquake relief in 2008.

There will be a memorial service to honour Mimi April 3 at 2 p.m. at the Chinese Cultural Centre. I invite all who knew her to attend.

AUTISM AWARENESS

J. Thornthwaite: I rise to speak in recognition and support of Autism Awareness Month and to acknowledge World Autism Day, which takes place tomorrow. Autism is the most common neurological disorder, affecting an estimated one child in every 110. It is more common than pediatric cancer, diabetes and AIDS combined. Tens of millions of people throughout the world are affected.

Across my riding of North Vancouver–Seymour I have numerous friends and colleagues who are parents of children with autism from all levels of the spectrum, and I cannot begin to appreciate their day-to-day struggles.

There is much we don't know about autism, but what we do know is that it affects four times as many boys as girls. There has been a marked increase in the numbers of children diagnosed in recent years. It knows no geographic, ethnic, racial nor socio-economic boundaries and may impact verbal and non-verbal communication, social interaction, cognitive ability, behaviour and sensory perception, making it difficult for those affected to tell us how they are feeling, what they need and how they see and interact with the world around them and the people in it.

It is a lifelong disorder, and at this time there is no cure. Someone once said that to know one child with autism is to know one child with autism, a line that speaks clearly to the truly unique way autism affects the life of each individual it touches.

In the House today I'm sure many of us have a personal connection to autism — a son or daughter, grandchild, niece, nephew, a child of a colleague. Autism Month and World Autism Day remind us to support those affected by autism, ensuring that all children and youth are valued, respected, and supported in achieving their potential.

WOLF ENCOUNTER IN PRINCE RUPERT

G. Coons: Wildlife is a daily feature of the north coast — whether it's deer, eagles, ravens, whales, bears or wolves — but recently on the streets of Prince Rupert, we had a community rescue of Bob the pug.

There have been several situations in the last couple of weeks of brazen wolves prowling the streets. Last year there were 136 sightings. Reports to the RCMP and media seem to alleviate most fears, but when Norm Hebert came home and thought he saw Bob the pug playing with another neighbour's larger dog, he was a bit taken aback when poor Bob was in the jaws of the wolf.

[ Page 4031 ]

Aiming to end the attack, and as a typical Canadian, Hebert rushed out and whacked the wolf with the first weapon at hand, a Sher-Wood featherlight hockey stick. Despite all manufacturer claims that the stick's carbon-fibre shaft allowed for accelerated recoil and energy transfer, the Sher-Wood failed to have the desired effect on the seasoned predator. The animal merely trotted off with poor Bob neatly clutched between its jaws.

[1345]

The call went out, and Trevor Deschamps rushed out to help — Bob's owner. Eventually, the neighbourhood posse arrived. They cornered the wolf, and the wolf dropped Bob. Bob had been punctured, but his pride was still intact — well, mostly. But it may have been Bob the pug's pudgy waistline that prevented the potentially fatal attack. Apparently, he was too fat for the wolf to get a good bite on him, Deschamps said.

Since this thwarted apprehension, Bob has refused to eat his dry food. Apparently, only Black Forest ham and cheese will do. The Deschamps were commenting a week before that maybe they should put Bob on a diet because he's getting kind of fat, but now they realize that that might have saved his life.

We may have learned a valuable lesson from Bob the pug. When wolves are at the door, that extra serving that we traditionally hold back from may come in handy.

ST. JOHN AMBULANCE

M. Dalton: I'm pleased to recognize the work of St. John Ambulance here in British Columbia over the past 127 years. As Canada's standard for excellence in first aid and CPR services, St. John Ambulance plays a valuable role in our society. The origins go back to one of the world's oldest humanitarian organizations, the Order of St. John, which began 900 years ago in Jerusalem.

Today there are 25,000 volunteers in Canada who provide an incredible two million hours of volunteer help annually, from teaching an 11-year-old how to care for children while they're babysitting to teaching a dentist CPR for health care providers, to teaching a family how to resuscitate their family pet.

St. John Ambulance trains 550,000 Canadians annually. St. John Ambulance volunteers serve communities with top-level first-aid response in health care services.

They've recognized that people can benefit physically and emotionally from regular contact with the unconditional love of a dog. With their therapy dog services, volunteer handlers and their dogs visit hospitals, seniors residences and nursing homes on a weekly basis to help raise the spirits of those people who need it most.

In my constituency, Adriana Smith heads up our local St. John Ambulance brigade in Maple Ridge. With 25 adult and 30 cadet volunteers, it seems that whenever and wherever there are major events happening, you'll find them there, providing first-aid support for our community.

The worldwide mission of the Order of St. John is simple: to prevent and relieve sickness and injury and to act to enhance the health and well-being of people of all races and creeds anywhere in the world — a straightforward but powerful message for all.

Oral Questions

IMPACT OF HARMONIZED SALES TAX

ON SPORTS ORGANIZATIONS

B. Ralston: It looks like the newest name for the HST may well be the hockey season tax. The Abbotsford Minor Hockey Association says that the introduction of the HST will cost them an extra $30,000 a year for ice time. The result: "We will have no alternative but to increase our registration cost. This will make hockey less affordable for some Abbotsford families, thereby taking away the opportunities for some kids to play this wonderful game."

My question is to the Minister of Finance. Why is he taking away hockey from kids?

Hon. C. Hansen: Actually, I would like to put a question to the Finance critic. Why is he taking jobs away from British Columbians? This shift to the HST is one that, as Prof. Jack Mintz has outlined in his report, will generate 113,000 jobs. I know that for families in British Columbia who like to send their kids to hockey camps, having a job is a pretty important part of being able to afford that.

Mr. Speaker: The member has a supplemental.

B. Ralston: It's not just hockey that will cost more. The Abbotsford figure-skating club is also facing increased costs because of the HST. This is what they say about the impact the government's HST deception will have on their organizations: "In order to make up any losses, we will have no alternative but to increase our registration costs. This will make figure skating less affordable to some Abbotsford families, which takes away the opportunity for some kids to participate in this athletic and graceful sport."

[1350]

Again to the Finance Minister, and maybe he could address this question rather than some fictitious question he's conjured up in his own mind: when will he abandon his plan to tax hockey and figure skating?

Hon. C. Hansen: That's exactly why we brought in two very important measures to offset the very small incremental costs that some families may bear as a result of the harmonized sales tax.

[ Page 4032 ]

One of them is the HST tax credit, which results in 1.1 million British Columbians receiving a cheque in the mail every three months, and the other is the increase in the basic personal exemption to now $11,000 a year, to make sure that British Columbia families are paying less in terms of income tax. They'll have more money in their pockets so that they can actually use that to cover some of those things that will cost slightly more.

Maybe when the member gets back on his feet for his next supplemental, he can tell us what is going to happen to the HST if — God help us — the NDP ever got elected. Are you going to repeal it, or are you actually going to stick with it, as the Finance critic had said previously?

Mr. Speaker: The member has a further supplemental.

B. Ralston: The HST won't just hit winter sports like hockey and figure skating. The HST also applies to field rentals, meaning that spring and summer sports like soccer will be hit by this government's HST agenda as well. Again to the Finance Minister: how can he justify slamming minor league hockey and soccer clubs with a 7 percent tax increase?

Hon. C. Hansen: I'll tell you who's skating. It's the Finance critic. Is he in favour of the HST staying in place, or is he going to repeal it? Does he agree with the member for Cariboo North that harmonized taxes are good, or does he agree with the Energy critic that it should be repealed and a whole bunch of other taxes should be jacked up? Tell me, Mr. Speaker.

My question to the Finance critic is…. Quit skating on this issue, stand up, and tell us what the NDP position is.

Interjections.

Mr. Speaker: Members.

M. Sather: It's not this side that's confused about the HST. It's that side that's confused. We're against the HST. Lori Josephison….

Interjections.

Mr. Speaker: Member. Member. Just take your seat for a second.

Continue, Member.

M. Sather: Lori Josephison is vice-president of the Meadow Ridge Female Hockey Association. She is concerned — and her organization is — that they won't survive because of decisions made by this government. First of all, they knocked their gaming grant from $28,000 down to $6,000, and now, unless this government sees the light, they're soon going to be paying the HST on their ice time. That's two-thirds of their costs.

She said: "It's frustrating. We're all volunteering, trying to provide these kids with an opportunity to play hockey and be active, but it seems like we're getting no help."

To the Minister of Finance: will he give a helping hand to sports organizations in my community and across this province by cancelling the HST?

Hon. C. Hansen: I'm not sure whether I heard yet another policy pronouncement there from the NDP back bench. I think that might be now five different positions we're up to in terms of their position on the HST.

Let me, just for the benefit of the House, inform the members opposite that in fact registration fees for programs for children 14 years of age and under at public recreation centres and in not-for-profit sports organizations are currently exempt from the GST, and they will be exempt from the HST.

[1355]

S. Fraser: The reality is that this minister is taxing hockey. This is Canada. This place should have a penalty box, and that minister should be in it for misconduct.

Five years ago this government promised to make B.C. a model for healthy living and physical fitness — remember? It was part of their five great goals of the golden decade. How's that going for you? Taxing hockey….

Interjections.

Mr. Speaker: Members. Members.

S. Fraser: More like fool's gold decade. We're not….

Interjections.

Mr. Speaker: Member, just take your seat.

Members.

Continue, Member.

S. Fraser: We're not even halfway through this so-called golden decade, and this government introduces the HST, an extra 7 percent tax on ice time and field rentals, a tax that makes sports like hockey and soccer less accessible, more expensive for kids and families in this province.

Again to the Minister of Finance: how will introducing a tax on soccer and hockey improve fitness in this province and live up to the model of healthy living and the best fitness in the country?

Hon. C. Hansen: Actually, it's this member from Port Alberni who is on pretty thin ice with this subject. We are the jurisdiction in Canada that has the best health outcomes. We are the jurisdiction that…. We are the government that has actually provided more support

[ Page 4033 ]

for amateur hockey around the province than any other government prior to us. That includes the funding that went into the new sportsplex in my hometown and birthplace of Port Alberni — in his riding.

IMPLEMENTATION OF

HARMONIZED SALES TAX

N. Macdonald: Gerry Taft, the mayor of Invermere and a restaurant owner, has written a number of letters in the local paper about his strong opposition to the HST. For his business, a tiny PST saving is insignificant compared to the additional $30,000-plus in taxes collected from customers.

HST is a major problem for his business. He also has a problem — and he's articulated this in letters — with the way the B.C. Liberals have gone about this: "No public consultation, no discussion…a concerted and deliberate attempt to force this on British Columbians mere months after an election campaign."

[1400]

That is one of the 82 percent of British Columbians who are opposed to the HST — people who understand the HST, people who reject it still, people who thought they were rejecting it during the election.

My question for the minister is this. How can he proceed, with no mandate on this? Or does he have a mandate? Can he point to the mandate that this government has to proceed with the HST?

Hon. C. Hansen: We were elected in 2001 on a mandate to get this economy back on track and to undo the damage done by the NDP government. In 2005 we were re-elected on a mandate to protect health care and education by making sure we have a strong economy in British Columbia. We were re-elected in 2009 to keep B.C. strong and to make sure that we create jobs, that we get back out of this economic downturn stronger and faster than any other jurisdiction. The HST will allow us to do that.

Mr. Speaker: The member has a supplemental.

N. Macdonald: The facts speak differently — don't they? This is a government with record deficits, with jobs bleeding, and yet the minister can stand up and say that.

That is why a full 1/10 of British Columbians support the HST. After eleven months of this minister's propaganda, a full 1/10 of British Columbians — one in ten.

A gentleman phoned my constituency office — Buzz Harmsworth. Buzz Harmsworth is a well-respected and long-serving member of the B.C. Liberals, a constituency president in Columbia River–Revelstoke, and he's resigning from the B.C. Liberals. He's a senior. He doesn't like the HST. He does not like the duplicity the HST represents. People do not want the HST. They have been clear on that.

Why such utter contempt by this government for the views of British Columbians? How can the minister stand and justify utter contempt for the democratic will of British Columbians?

Hon. C. Hansen: That's interesting, coming from a member who is part of a party that drove jobs out of British Columbia in the 1990s, net out-migration. Coming from a member of a party that took British Columbia from have status to have-not status.

I would be interested in what this member said back to Buzz. What did this member say back to Buzz? Did you tell him you were going to keep it? Did you tell him you were going to repeal it? Or did you tell him that you were just as wishy-washy as that member's leader is?

COURT FEES AND

ACCESS TO JUSTICE SYSTEM

L. Krog: The B.C. Liberals have apparently decided that justice might be blind, but it can still see dollar signs. High court fees are placing a significant burden on people of modest means. The B.C. branch of the Canadian Bar Association says that these fees disproportionately block First Nations, the disabled, immigrants, single parents and women from full access to justice.

Can the Attorney General explain why, in British Columbia in 2010, the size of your wallet should have priority over the merits of your legal argument?

Hon. M. de Jong: First of all, let me say that I think there is a balance that needs to be achieved between providing a forum that citizens can take disputes to and have those disputes resolved, and understanding that there is a contribution to be made for availing themselves of that infrastructure.

I'm surprised, though, that this member would preface his remarks in the way that he did. He knows, because he was at the announcement, that as a result of the new civil court rules that were announced a few months ago — and they're due to be enacted — for the first time, litigants will be able to go to court for three days and not pay those hearing fees.

[1405]

Mr. Speaker: The member has a supplemental.

L. Krog: Well, the minister well knows that there are only four jurisdictions in Canada that charge these fees, and British Columbia is the highest. So when access to justice, which is an essential tenet of democracy, is diminished by these fees, why is it that in British Columbia we can't eliminate these fees — when you've got other provinces that eliminated these fees, when the U.S. Supreme Court says fees like this shouldn't be charged? In British Columbia in 2010 why not eliminate these fees?

[ Page 4034 ]

Hon. M. de Jong: Well, I guess they are a relatively recent phenomenon in British Columbia, having only been introduced in 1914.

The short answer is this. The fees last year that the member refers to, under the old regime that is coming to a close, resulted in revenue to the Crown of between $1.6 million and $1.8 million. So you could eliminate them. You could eliminate them, and then ask the balance of society, through the reduction of other services, through the increased taxation, to make up that difference.

I think there needs to be a balance, but I do not think it is unreasonable to ask litigants to contribute to the cost of the judicial infrastructure that is there to assist them in solving disputes.

ADDICTION SERVICES FOR

PROBLEM GAMBLERS

S. Simpson: The B.C. Medical Association has identified 159,000 people in this province who are problem gamblers. Of those, 31,000 people have serious gambling addictions. We also know that the number of people with severe gambling addictions has more than doubled since 2002, yet the B.C. Liberals have cut supports for the programs to assist those people.

We now have the Minister of Tourism promoting a large new casino to help pay for the half-billion-dollar roof on B.C. Place. We know that this minister has previously raised issues about gambling addiction and the impacts on families.

Is the Minister of Tourism confident that the government has done all it can to ensure that problem gambling will not increase due to this casino?

Mr. Speaker: Minister of Housing.

Interjections.

Mr. Speaker: Continue, Minister.

Hon. R. Coleman: I should remind the member opposite that during the '90s, when the members opposite actually decided to expand gaming, they never put any programs in place for problem gaming until it was brought to their attention.

The reality is the budget….

Interjection.

Hon. R. Coleman: I said "until it was brought to your attention," hon. Member, but I know you can't listen, because you're talking too much. But that's okay.

The funding that is in place for problem gambling in British Columbia is based on the usage by people who can phone on a 1-800 line or access services for free — whether they get into difficulty with the gambling be it in a legal opportunity, like we offer, under the management of the province of British Columbia, or an illegal activity. The budget is predicated on the usage and is always there for any problem gambler and will continue to be there at the level that the uptake is there.

Mr. Speaker: The member has a supplemental.

S. Simpson: The Minister of Tourism has been vociferous in his condemnation of gambling in the past, going so far as to suggest people will be dying in the streets. Yet today he's the lead minister to build the biggest casino ever in British Columbia. Where's the hypocrisy in that? This at a time when the gaming policy and enforcement branch notes that B.C. has the highest proportion of problem gamblers over seven other provinces in this country.

Clearly, the minister has reconciled his contradictions on these positions, particularly when his government does so little to support British Columbians who have gambling problems.

[1410]

Can the Minister of Tourism tell us why British Columbians should have any faith in him when he promotes this initiative on one hand after condemning it only a few years ago?

Hon. R. Coleman: I'll repeat for his information. Last year the actual expenditure on problem gambling was $5.4 million. That was the number of people that actually sought help from us on a free basis across British Columbia that had problems with gambling, no matter where they developed the problem that they had. That program is in place. It will continue to be in place, and we'll continue to support problem gambling in British Columbia.

FUNDING FOR CRIME PREVENTION

IN SURREY

H. Bains: Last week there were three murders, and a cab driver was beaten and robbed in Surrey. The community is banding together to fight this violent crime, but unfortunately, this government is cutting funding to one of the organizations that is leading this work — the Surrey Crime Prevention Society. Come next year, they do not even qualify under the provisions of the safety community gaming grants.

My question is to the Solicitor General. How can he justify cutting funding for the Surrey Crime Prevention Society at the very time when Surrey families are looking for solutions to address this violent crime?

Hon. R. Coleman: The member opposite knows well that the grants that are available under the category of public safety and human and social services last year were kept at 100 percent. It will continue to be kept at 100 percent in 2010.

[ Page 4035 ]

If the organization has an application or a difficulty, they're welcome to contact the branch. They may have issues with regards to how their society status may be. It may be that they haven't filed the information properly when they made their application. I know that as an MLA you can actually help them with that process, and you can also contact the branch on their behalf with regards to any difficulties with an application.

Mr. Speaker: The member has a supplemental.

H. Bains: Under the funding priority for 2010 and '11 community gaming grants, this is who qualifies under public safety: the search and rescue organizations, the marine rescue organizations, volunteer fire department, amateur radio clubs. Under these rules this society will not qualify for the funding again next year.

This is a society that worked directly with the RCMP, the city of Surrey and Surrey school district. But instead of fostering this volunteer-run crime prevention program, the B.C. Liberals are cutting their funding.

My question again is to the minister. Will the minister commit today that the Surrey Crime Prevention Society will continue to receive funding, without any reduction, so that they are able to continue to provide public safety programs in Surrey?

Hon. R. Coleman: I will repeat that public safety is an area of the grants that wasn't cut, that continues to be fully funded. If people qualify under the program itself, they can make an application. The application will be adjudicated like every other application.

If in the past they were eligible, they may have problems with how they're doing their application, what the eligibility is. They may not actually be delivering a program that actually qualifies. You have to understand something, hon. Member. The grant program isn't to pay for administration or rent; it's to pay for actual programs on the ground on behalf of people in British Columbia that need it the most.

MINIMUM WAGE

R. Chouhan: Yesterday Ontario boosted its minimum wage to $10.25 an hour. Today minimum-wage workers in Nova Scotia, New Brunswick, Northwest Territories and the Yukon are also getting a raise. But here in B.C. our lowest-paid workers haven't had a raise in almost a decade and are the worst paid in Canada.

My question is to the Minister of Labour. Why is he refusing to give B.C.'s lowest-paid workers a raise?

[1415]

Hon. M. Coell: The member may know that between December 2001 and today, 391,000 jobs have been created in the province of British Columbia. The average wage in British Columbia is $22.60 an hour, the third largest in Canada. There are 325,000 low-income earners in British Columbia who've paid no tax since 2001 in British Columbia. People earning less than $20,000 a year in British Columbia pay no medical services premiums.

Our job as government is to make sure that people are employed in British Columbia, and we're doing that.

Mr. Speaker: The member has a supplemental.

R. Chouhan: This is such a ridiculous statement that was made. Even Pinocchio wouldn't make a statement like that.

B.C. has the highest level of child poverty in the country. Most of the children live in households where at least one of their parents works full-time. It's a shameful reflection on the B.C. Liberals, but there is one thing the minister could do. He can increase the minimum wage now.

Will the minister do the right thing and increase the minimum wage today and follow the lead of Ontario and other provinces?

Hon. M. Coell: I can remember in the 1990s when truckloads of our young people were moving to Alberta because there were no jobs in British Columbia. This government….

Interjections.

Mr. Speaker: Members.

Continue, Minister.

Hon. M. Coell: In the 1990s the only people who were in business was U-Haul, taking our young people to Alberta for jobs. Mr. Speaker, 390,000 jobs have been created in this province in the last eight years. We've done that through reducing taxes — all the taxes that the NDP refused to support and voted against.

[End of question period.]

Interjections.

Mr. Speaker: Members.

Tributes

CHESTER JOHNSON

J. McIntyre: Before we leave the House today for our Easter break, I thought it would be most fitting to mark the passing of a gentleman who played a significant role in building this province that we all love and are so proud of. Sadly, Chester Johnson passed away Monday, March 29.

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He was born in Vancouver in 1925 and was a UBC graduate. He gave himself to family and to his work throughout his life.

He made a significant contribution to this province with his leadership in a number of major B.C. businesses. He led Whonnock Industries, West Fraser Timber, B.C. Hydro, Western Pulp, YVR airport, and the Whistler Land Co., where he was instrumental in Whistler's transformation to the huge international resort where we've just hosted the 2010 Olympic and Paralympic Games. He also cofounded Casa Bella Wineries and Fibreco Export, and he served on a number of boards, like Scott Paper, Domtar and Expo 86.

In recognition of Chester Johnson's lifetime of service, he was awarded the Order of Canada, the Canada 125 Medal, the Queen's Golden Jubilee Medal, the Order of B.C. and a lifetime achievement award from the Institute of Chartered Accountants of B.C. He will be truly missed.

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Mr. Speaker, I ask that you send condolences to his family, who will be grieving their significant loss, on behalf of all of us here in the House.

M. Mungall: I rise to present a petition.

Mr. Speaker: Proceed.

Petitions

M. Mungall: I have a petition from 3,047 people in support of the Nelson Health Task Force's call for a resident surgeon and three critical care beds at Kootenay Lake Hospital in Nelson.

Orders of the Day

Hon. M. de Jong: I call, in Committee A, Committee of Supply — for the information of members, the continuing estimates of the Ministry of Tourism, Culture and the Arts — and in this chamber, continuing second reading debate on Bill 9.

Second Reading of Bills

Bill 9 — CONSUMPTION TAX REBATE

AND TRANSITION ACT

(continued)

Mr. Speaker: Member for Surrey-Whalley continues debate.

B. Ralston: I will take up my remarks from where I left off this morning. [Applause.] I'll give you something to clap about in a moment, I hope.

What I want to look at now in these remarks…. I'm not sure I'm going to have enough time to cover all the topics that this bill presents, but in the brief time that's been afforded to me here this morning and this afternoon, one of the areas that I want to look at is the issue of what studies were done and what support there is for many of the very grandiose claims that are made by the members opposite about the impact of the HST.

[L. Reid in the chair.]

In the fall when we were here, a number of my colleagues asked questions of various ministers in what's called the estimates process. For those of us who may not be familiar with that, that's a process where a minister comes before a committee of the Legislature and is asked — doesn't always answer, but that's their right — a series of broad-ranging questions about the budget and the administrative matters of that particular ministry.

There were a number of questions asked of various ministers, and I can perhaps quote a few here. The Minister of Forests was asked a question about what would be the impact of the HST, and he really didn't have much in the way of an answer. I'm going to quote from the minister. "I'm working from a graph here, so the numbers are going to be a bit rounded. I haven't actually done the exact math."

The Minister of State for Mining was asked about the impact on the mining industry. He said: "Frankly, I'm prepared to accept them at their word, and that benefits British Columbia." So no scrutiny by the government, simply accepting what the industry had to say. That may be one way to do things, but some may say that that doesn't really show much due diligence on the part of the minister in an area he's responsible for.

The Minister of Tourism was asked, on October 26, 2009, by the member from West End, in reference to the HST: "Can the minister table the studies and analysis that show who are the winners and who are the losers under this tax hike?"

This was the response from the Minister of Finance: "I can tell the member that there is not a single business in British Columbia that will not see their costs come down as a result of the implementation."

As you can see, there's a certain rhetorical consistency between these responses, but there's not an answer that's forthcoming. Really, it seems that very little study, if any, was done.

Now, there was one study that was done by the Progress Board. That is a research institute or research think tank appointed by the government. It provides advice to government, although the results of its studies are published publicly.

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They did a report on investment in British Columbia, and they did point out the prospective impacts of introducing an HST. Let me quote from that:

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"Revenue that would be lost from rebating taxes on business inputs would be replaced by broadening the tax base. Consumers would face higher taxes on a wide range of services and new housing currently exempt from the PST. Assuming a rate of 7 percent for the provincial portion of the harmonized sales tax, the total federal-plus-provincial sales tax…would rise from 5 percent, the current GST rate, to 12 percent on items such as restaurant meals, home heating, basic cable and phone, and new condo units. In the short and medium term, lower-income British Columbians could see declines in real income as consumer prices rise."

That's the think tank appointed by the government, analyzing the HST.

Contrary to what members of the government have said, what the Minister of Finance has said…. Obviously, there's a strong difference of opinion here, but these are, as the ministers sometimes like to say, "economists" or "respected economists"; the adjective varies. They are firmly of the view that in the short and medium term, lower-income British Columbians could see declines in real income as consumer prices rise. So that's their analysis of the effect of the HST. No wonder that people out there are concerned about the impact of the HST on their budget, on their ability to buy the things they need.

Now, the minister has a response for this. I'm sure if I don't provide it, the public affairs bureau in one of their attack releases — they're, of course, paid by public dollars to attack us — will probably want to point out…. I want to, at least, give a suggestion as to what the answer might be, and then I want to explain just how that answer is wrong.

There will be a credit introduced, according to the minister, and it's in the legislation, for those whose taxable income is less than $20,000, net taxable, or a family income of less than $25,000. The minister very proudly says: "Well, there are 1.1 million people in the province who'll get that credit."

That's really a measure of the breadth of low-income poverty in this province. I don't think it's anything to be particularly proud of, but that's what the minister's answer is. Since there are over four million people in the province and over three million people in the workforce, most British Columbians in that range of two million people or so who are in the workforce and earning more than those net taxable incomes…. They will be paying more. They won't be receiving the credit. They will be paying more.

So it's the impact on what people sometimes call the broad middle class, most people. It's not the people below $20,000 net taxable, who will get the credit, but the impact on the majority of the citizens of the province where the impact will be felt. For the most part, since the lower your income, the more likely you are to spend a higher percentage of your income on necessities, the more likely it is that you will see a decline in your real income as consumer prices rise.

So that's not too along ago. It's not a group that can be accused of having any particular alignment or sympathy with the official opposition. Their board of directors is appointed by the government, and they're there to provide advice to the government. So that's what they said the impact would be. They also said, and this is probably fairly significant: "Public opposition to such a shift would be a substantial concern to policy-makers." Obviously, that's turned out to be very true.

Now, the suggestion is made that, well, this is in the short and medium term that the impact will be felt, but in the long run…. This is what the minister likes to say: "In the long run, there will be some benefits from the HST." Certainly that's his hypothetical that he puts forward. Mr. Mintz, similarly…. His time horizon is ten years. The minister is very fond of quoting what he calls eminent economists. Another eminent economist, John Maynard Keynes said very famously: "In the long run, we're all dead."

So the idea that somehow there's some intangible benefit too far beyond the political reach certainly of this government, in a couple of successive mandates, where the results or not of this measure will be judged is politically convenient, perhaps.

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In an era when an economic prediction and economic forecasting have been buffeted and found very deficient in even making predictions six months hence, to make a suggestion that ten years from now something likely will result is not very helpful and not very credible. I don't think many people accept it.

The other document that sometimes the minister likes to quote, and this was the only document that he cited in support….

The reason that I talk about these documents is because when one is making a major tax change that's basically turning the tax collection system and the retail sales tax and the provincial sales tax over, one would expect, given the resources of government and given the policy alternatives that are available to the government, that there would be some significant study before embarking upon this, before venturing off into new directions with huge impacts on everyone in the province — huge impacts on business, huge impacts on consumers — that there would be some study to justify it.

Otherwise, I think, then, my argument that the minister's immediate concern was getting the $1.6 billion in swag from the federal government and beginning to work on his deficit problem really has much more force.

If there are a lot of studies that support this position — the ministry has done its due diligence; the Minister of Finance can show that he did this — then I'd be perhaps more inclined to give him some credit for the strength of his position. Regrettably, Madam Speaker, there's very little evidence of any study done whatsoever. Indeed, in the budget, the fall update, the only document that he cited was one by someone out of Toronto, Michael Smart,

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called Lessons in Harmony , and it's footnoted in the September 2009 updated budget. That's the only study.

To look at that budget before Mr. Mintz came along…. I think the reason Mr. Mintz came along is that the government did go to the cupboard and looked for studies and found that it was completely bare indeed. They felt they had to have at least one study, some kind of fig leaf to cover the argument that they were making.

That's why we saw Mr. Mintz come forward — mind you, well after the decision to take the decision had been made. We're now eight months down the road, on the eve of introducing the bill into the House, and the study was then forthcoming — not something that was done before the decision was made in order to have a rational debate or some alternative options put forward. No, no, this was done afterwards, more as a justification of a position taken, rather than as policy advice as to what might be done.

As the minister says…. He doesn't quote this paper too much any more, but he did rely on it back in September 2009. It's useful to have a look at the paper, because I somehow think the minister supposes that maybe by simply asserting the fact that there is a paper, no one will read it. It may be true that most people don't read it, but I read it with some interest. I think it's worth pointing out what this Mr. Smart does say, because it doesn't really support the minister's argument.

Let me quote from the paper on page 1. One of the arguments that's made as well, and we hear this in very grandiloquent terms, is that there's going to be new investment. There are going to be billions of dollars. This is somehow projected out over ten years. Now, that's not what Mr. Smart says. This is the Lessons in Harmony , C.D. Howe Institute commentary. I'm going to read a quotation from it, and let me begin.

"It is important to emphasize that the increase in investment caused by the HST reform is a short-run phenomenon, as firms have acted to adjust to the new higher-capital stock that is desired when taxes are lower.

Whereas the investment effect is transitory, the effect on capital stock and labour productivity is presumably long-run and permanent. However, my empirical methodology, discussed below, does not allow these long-run effects to be estimated directly."

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What he's saying in more simple terms, because he's a professor and has a very good grasp of the language, is that there's a temporary short-run increase in investment. It's what he calls transitory, and one can well imagine that companies or firms, knowing that a new tax regime is coming, might well delay investments to take advantage of the new tax regime, thereby causing a temporary bump in investment. It's transitory, and then it's over. Indeed, that's what he catalogued when he was looking at these lessons in harmony in the Atlantic provinces.

So for the minister to say that this paper supports his argument, that there's going to be this dramatic increase in investment that is extending out ten years, isn't supported by this paper or by this professor. Yet this is the very document that he relied on in the budget in September 2009.

There is no support for his argument from this document. The long-run effects…. He can't evaluate them. He quite frankly says that. So the minister is engaging, I suppose, in hyperbole or speculation, put most gently, and I probably shouldn't say what I think I might use if I were to characterize it more harshly. This paper doesn't support his position at all.

Then the other thing that the minister wants to insist on — and this is part of the attack that we hear from the B.C. Liberals and justification as to why this is a great economic initiative — is that, well, you know, prices are going to fall. We hear this argument about embedded taxation. It's all going to come out, and the minister assured us this morning that for sure, he was certain it was going to come out.

That's not what Mr. Smart said when he looked at the Maritime provinces. And don't forget that when the Maritime provinces switched to the HST, they knocked five points off their PST in Newfoundland and four points in New Brunswick and Nova Scotia. So there was a major reduction in the tax itself when it came in, as well as an expansion of the tax base.

What did he find there? Again, let me…. I don't want to be accused of distorting what he said. He said, and this is in his conclusion: "Overall, consumer prices in the harmonizing provinces fell with the reform, although prices rose somewhat for shelter and clothing and footwear, and that fact tended to make the reform slightly regressive." In other words, it wasn't favourable to low-income people. In other words, they paid more. So investment is transitory and the changes are slightly regressive.

That's the paper that the Minister of Finance and the finance department, with all their research capability, with all the Treasury Board people, with all their connections across the country, with all their business contacts…. That's the best they could come up with in September 2009, a single paper that doesn't support the conclusion that they claim and they trumpet here in the Legislature and around the province. Frankly, it's pathetic. It's just pathetic. It really is. That's apparently the best they can do.

Now, I think, sensing the deficiency of this analysis, sensing the weakness of the argument — because one can only carry, I suppose, so far on the kind of faith-based arguments that those on the other side like to advance — they commissioned Mr. Mintz to write a report. Now, what's significant and interesting about Mr. Mintz is that he wrote an earlier report with a couple of other economists back in September 2008. It's called Growth-Oriented Sales Tax Reform for Ontario : Replacing the Retail Sales Tax with a 7.5 Percent Value-Added Tax .

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His co-authors were Peter Dungan, Finn Poschmann and Thomas Wilson.

What's significant in this paper is just what the effect of running what they did in this paper, because they obviously had some research money, was. They ran a simulation, they call it. Basically, you take a number of variables and you plug them into a big computer model that attempts to simulate the economy. Of course, it's not the real economy, and not all the variables are there, so there are always some problems in drawing conclusions from such a simulation. But that's what was done.

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What happened when they did this simulation was rather striking, because this is somewhat at variance with what Mr. Mintz does later in the other paper that he did for British Columbia. Basically, what happened was that the effect of the simulation with the 7.5 percent — and I appreciate it's not 7 percent, and that there are slight variations, and the numbers look slightly better…. It's really striking what happens. What happens, and what he says in this simulation, is that in the early years:

"In the first year of harmonization" — this is done for Ontario — "Ontario's GDP is 0.3 percent below the base case, and estimated employment declines by just over 9,000 relative to the base case.

"In the second year GDP loss is estimated to be smaller — 0.18 percent of the base case — but the employment loss is somewhat larger at 16,000, since employment responds with a lag to output changes. Positive GDP gains finally begin in the fifth year of harmonization, although there are still small employment losses through that year."

So five years out in the simulation…. This is Mr. Mintz talking. This is not me talking. This is not some wild-eyed New Democrat. This is not something that the public affairs bureau can say that I made up or something. I'm reading directly from the paper here. Five years out in the simulation there are still job losses when the HST is introduced in this simulated model.

He has an explanation for that. Now, this is nothing like what we've heard from the Minister of Finance. The Minister of Finance: "Hey, it's go. It's straight up. It's job gains all the way. Man, it's just fantastic." Maybe he doesn't like to use that any more. It has a certain association with a former Premier that he's not too fond of these days.

There's no suggestion in anything that he says that there are going to be job losses. Yet here are Mr. Mintz and his colleagues, in 2008, running a huge simulation model of the impact of the HST on Ontario, and the job losses for the first five years.

He goes on to explain this: "There are…two reasons for the model's reported short-term job loss." He calls five years "short term." Ten years is the length of the study that he does for British Columbia. They get back to even, in terms of the number of jobs, in ten years. So it goes down and down and down, and it comes back up. By the tenth year you're at the same level of employment you started out with ten years before.

Very different from what Mr. Mintz has put together for British Columbia, because it's just straight up from year one all the way for ten years — very different. Mr. Mintz, in his paper, doesn't explain that.

In this paper the authors say that it takes…. First, then, they want to explain why this is the case.

"First, it takes longer for investment and imports and exports to respond to the positive opportunities made available by harmonization than it does for consumption — and to a lesser extent, residential housing — to react negatively to the relative price increases that harmonization causes for these categories.

"Second, the CPI shock caused by shifting the indirect tax burden to consumption under harmonization…."

That's his word — CPI shock. That's his word. Consumer price index shock as a result of introducing this tax. It's his word, not mine.

So when people have an apprehension about that, they're supported by Mr. Mintz in this September 2008 paper. CPI shock is how he describes it. That's what's going to happen when the HST is introduced. There's going to be a CPI shock.

Let no one say that Mr. Mintz didn't warn the government, however indirectly, if they'd bothered to read his earlier paper. "It's caused by shifting the indirect tax burden to consumption under harmonization, leads to attempts by workers who are trying to maintain the real purchasing power of their wages to raise nominal wages."

He goes on to say: "Since employers enjoy no corresponding price increase to match the higher nominal wage demands, however, they respond by cutting back output and reducing their workforce relative to the base case."

So workers try to respond to hang on to their salaries. The employers respond by cutting back on hours and laying people off. But there's a conclusion that he has on how this is resolved.

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He says: "This is why exports did not appear to respond to improved competitiveness in the first three years of the simulation." Then he says, and this is the key part here for ordinary people:

"After several years of somewhat higher unemployment" — so CPI shock, higher unemployment, job loss and falling exports — "workers come to accept the real wage losses inherent in raising indirect taxes on consumption and the base-case employment levels can be restored with no additional inflationary pressures."

Workers basically fight the attempt to reduce their real wages, and his view is that after three or four years they give up. They accept lower wages. That's what he's saying here. That's the effect of introducing this.

"By the tenth year of the simulation, real wages are almost back to base-case levels and are continuing to catch up to the labour productivity gains achieved by that year. Overall, real personal disposable income is above the base case by the tenth year and continues to rise in later years." So that's Mr. Mintz and his colleagues talking

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about the impact of the HST in a simulation done for the C.D. Howe Institute.

It's 7.5 percent. The numbers are slightly better when you do it for 7 percent, but the basic pattern is clear. Employment goes up. There's a CPI price shock, real wages go down, employers respond by laying people off and gradually they give up. Maybe by the tenth year the employment levels are back to what they were, but there's been, in his view, some gain for that long-term pain over the course of ten years.

That's not the picture that's being presented by the members opposite. That's not the picture that's being presented by the Finance Minister. I'm not sure he's even read this paper. He did have Mr. Mintz out, but Mr. Mintz has a different view in the paper that he did for British Columbia just fairly recently.

He talks in rather different language here. The detail, though, is absent. I'm loath to criticize such an eminent figure, but when one compares — and I'm only comparing between the two — Mr. Mintz's work and his colleagues' in the first paper with the second paper, the second paper is very skimpy indeed, and doesn't really answer the questions, other than to provide the opportunity for the minister to get a clip, if we could put it that way, of professing support for increased jobs over the next ten years.

Now, that's basically what the minister draws from this paper. It's going to be 113,000 jobs over ten years — about 11,000 jobs a year. In an economy where you have 2.3 million people working, 10,000 jobs a year obviously is nothing to be sniffed at if, in fact, that were true. But given what Mr. Mintz says in his other paper, the simulation, I fear that is far from true.

When you balance that against — and I'll get to this a bit later in my presentation…. You have groups such as the Council of Tourism Associations saying that in year one — they've had an economic study done by a respected accounting firm — they're going to lose 7,000 to 10,000 jobs.

Even if you take Mr. Mintz at his word in the B.C. paper as opposed to the Ontario paper where there's going to be job loss in the first five years, and it's going to go down rather than up, you still have the 10,000 hypothetical jobs that he talks about being offset by the 7,000 to 10,000 jobs in one sector alone, the Council of Tourism industries, and they say that will impact in year one.

The grandiose projections of jobs that the minister talks about just aren't supported by this Mintz study at all. When you add in other groups — and I'll get to it in more detail…. We've heard much from the restaurant association and Mr. von Schellwitz. They've made a number of presentations, a number of representations to the government. They've done studies, and they've made presentations. They're very convinced that this is going to have an adverse effect on their industry.

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Indeed, when the GST was introduced in 1991, there was a 9.1 percent decline — I believe from memory, but I have the document here if I need it — in their gross revenue. They're predicting a $750 million loss in revenue for their industry.

It's a big sector. It has, I think, 187,000 jobs. So they don't project a job loss number, because that's the choice that they made. But clearly, if you lose $750 million worth of revenue, there are going to be layoffs. There's going to be people moved from full-time to part-time or reduced hours. There's going to be, to use a term that the minister uses, a cascading effect on employment in that sector.

So hypothetical — 11,000 jobs a year from Mr. Mintz. Real people with industry knowledge saying 7,000 to 10,000 in the tourism sector, a $750 million loss in the restaurant sector and consequential job losses and time reduction there.

How are we doing on the job front? I don't sense that the hosannas that we hear from the other side are justified. I don't know why there is this resistance. Obviously, we have a collection of some industry associations. They seem to think that it'll be a good thing for their sector, but the claim is made not specifically for sectors but for the economy overall.

Indeed, Mr. Mintz says…. I think this is a rather unrealistic assessment, but this is what he says. This is from the B.C. paper, because it's a bit different, as I've said, from the Ontario paper: "Even though some particular business activities might not benefit directly from sales tax reform, the significant increase in business activity that will result from reform will help all sectors of the province's economy."

So again, no modelling of this; no suggestion of how this might be so; no suggestion, as in the Ontario case, of initial job loss; the investment lag; the decline in exports; the CPI shock that he talks about — none of that is here.

If you sense a certain skepticism about Mr. Mintz's B.C. paper, you're right. It doesn't fit. It doesn't coincide with what was done in the Ontario paper. I'm loath to criticize such an eminent figure, of course, but it does seem very inconsistent with what he and his group said earlier.

In fact, for that reason, it's just not, I don't think, very valuable, and the conclusions that the minister is drawing from it for political purposes are not justified, not supported and completely consistent with the lack of support that one finds in Michael Smart's paper that was used in the budget of 2009.

There are some arguments that Mr. Mintz advances which I think have to be addressed. One of the things that he talks about is the marginal effective tax rate. A lot of what he bases his judgment on in coming to the conclusion that he does is that the changes that this will bring out will reduce the marginal effective tax rate on capital.

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This is something that comes with a lot of debate. It's certainly not accepted in the economics profession, and there are very contrary views. But in fact, to begin with, B.C.'s marginal effective tax rate is already lower than that of the United States, Japan, France, the United Kingdom, China, Brazil and Australia. That being said, it's still a questionable measure. It's hard to calculate, and economists often produce vastly different results when they do. A number of economists have questioned just how valuable it is.

The Manitoba government did do a study, and they do have some comments on that argument. I want to quote from them on the limits to the marginal effective tax rate analysis. This is a report that was done for Manitoba Finance: Sales Tax Harmonization in Manitoba: What It Would Mean for Households, Businesses and Public Finances , dated December 14, 2009.

[1455]

They were engaged in a very similar debate, although, unlike British Columbia, they did a study and published it before they made a decision, which is something that didn't happen here. This is published by the Manitoba Department of Finance.

They refer to Queen's University's David Chadwick Smith Chair in Economics Robin Boadway. Here's what Mr. Boadway said: "METRs" — that's the marginal effective tax rate analysis — "capture the effects of taxation in one margin alone, and that is the decision to invest in some capital assets. They do not capture the incentive for firms to hire labour, including the substitution of labour for capital; to innovate; to invest in knowledge; to train workers; or to engage in risky enterprises…. METRs also do not differentiate among industries according to their capital intensity, and therefore according to the magnitude of the distortion that might occur."

There's a note of caution about basing everything on this marginal effective tax rate measure, but yet that's what Mr. Mintz substantially does in his paper. So you have a difference of opinion. What the Manitoba study does is look at some of the other questions that I've also raised. I note parenthetically that they do a précis of the Michael Smart study, and they come to the same conclusion that I do, which is the accurate one.

I'm quoting from the paper here: "This July 2007 report by Michael Smart on the impact of the HST in the Atlantic provinces concluded that overall consumer prices fell 0.3 percent but rose somewhat for shelter, clothing and footwear, while investments in machinery and equipment experienced a short-run increase greater than 10 percent. These results, though empirical, should be interpreted cautiously because the adoption of the HST in Atlantic Canada entailed not only a shift in tax bases but…a significant reduction in the average provincial sales tax rate from 12 percent to 8 percent."

They adopt the same position, in my

interpretation, and that's, I think, the accurate view of that particular paper — not one shared by the government, obviously.

When you look at decisions to invest, though, and what the METR analysis doesn't contain…. Manitoba went on to look at other business costs and their effect upon investment. They note that KPMG regularly reports on tax competitiveness and finds that virtually all Canadian cities, including Vancouver, which ranks 58th out of 59 U.S. cities for manufacturing tax competitiveness and for overall business tax competitiveness….

"However, when taken together with other factors influencing the decision of where to locate a business, including labour costs, exchange rate, facility costs, transportation and utility costs, Canada ranks only slightly ahead of the U.S., which shows that the focus on improving Canada's business competitiveness does not need and cannot come through tax policy alone."

The Manitoba Department of Finance also maintains a manufacturing competitiveness model which simulates — this is another simulated model — the start-up, operating, financial and tax costs over a 20-year period for a manufacturing firm with revenue of $45 million and 220 employees. In the crucial measure of internal rates of return, Vancouver ranks fourth for small manufacturing firms and third for large manufacturing firms of eight larger Canadian and U.S. cites compared, and still ahead of Calgary, Minneapolis, Toronto, Chicago and Atlanta.

Furthermore, the report notes that even if Manitoba implemented the HST along with B.C. and Ontario, the tax competitiveness of its manufacturing centres would improve only by 1/10 of 1 percent, and the relative ranking would not change. The Manitoba report concludes that Manitoba and B.C. already enjoy very competitive tax rates as it is now without the implementation of the HST.

There's more that goes into and more that should go into the kinds of comparisons that are made about tax competitiveness, the decision to invest beyond the METR analysis, yet Mr. Mintz is….

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Really, when you read this very brief paper on British Columbia, that's the gist of his analysis. He makes some assumptions further in his analysis, which is criticized by other economists, about how he calculates the effect of the substitution of capital for labour. Ordinarily, if you substitute capital for labour, you get fewer jobs, not more jobs. He doesn't really have an effective answer to that, and there are some questions about that.

Overall, I think it's fair to say that the weight that the Minister of Finance…. He's kind of done it all or nothing on this one. This is the document that he waves around and says — and we've heard him in question period; we've heard him in his speech introducing this: "This eminent economist — this is the argument

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that justifies what we're doing." It just doesn't bear the weight that he puts on it, and frankly, the argument is very weak indeed. It's very weak indeed.

Why would you engage in this kind of huge tax change on such a weak basis? I think the answer is: because the minister needed the cash. He needed the $1.6 billion. All the rest of it was an ex post facto justification or rationalization for a decision that he made for a very different purpose. He's been scrambling ever since to try and find some arguments that work, and he hasn't succeeded.

This Mintz report is…. You know, there's something there. I'm sure that some jobs maybe will result. Whether they can be attributed to the change in the HST, which is hypothesized, is not really entirely clear. Certainly, what I think the minister was looking for is a simple statement without a footnote that he could use in news clips. That's what he got, and that's what he's using it for. It doesn't mean that it's something that's accurate or bears the weight of analysis that he would seek to put upon it.

Now, just to return momentarily…. Time is just rushing by here, and I don't have very much time to speak here today. I want to look at the conclusion that the Manitoba government came to about the HST and why they came to the conclusion that they did.

They're very conscious, in their study, of comparative, competitive business costs. They're very attuned to that, and they make that very clear. This is a serious analysis. This is not something that's taking lightly the issue of business competitiveness with other jurisdictions and the need to continue to attract investment and maintain jobs, although they probably put a little bit less emphasis on footloose global capital than they do. Manitoba has had historically, I think, some difficulty in attracting capital, given its location and relatively small population.

What they do have in Manitoba is, I think, regarded as a fairly diversified economy for its size. It's not known for rapid growth, but it's been known for steady growth. They've certainly tried to maintain that — encourage and support business and jobs in Manitoba. I don't think that's any surprise.

When they came to consider seriously the issue about whether to sign on to the HST, they did their study and came to their conclusion.

Deputy Speaker: Thank you, hon. Member.

B. Ralston: I had so much more to say. I'm looking forward to resuming this at a later time.

J. Les: It's a great pleasure for me this afternoon to rise and make a few comments on Bill 9, the Consumption Tax Rebate and Transition Act. I want to make very clear at the outset that I am 100 percent supportive of this legislation.

[1505]

I believe very strongly that this helps lay the foundation for a strong and secure future for British Columbians, a future where jobs will be more plentiful, where taxes will be more modest. I think the families of British Columbia will know — perhaps not today, because there's an awful lot of misinformation that's being propagated in various sectors, not least of which by members opposite — as time unfolds that this is a shift that is beneficial for all British Columbians.

I think it's fair to say that a measure of this nature is complicated and legitimately raises questions in people's minds, and that's fair. There's no question that a lot of these questions are legitimate. But I think it's equally important, then, that we all do our best to make sure that we keep a few facts in mind.

As I listened to the member opposite — and I listened to his entire speech as it unfolded this morning and again as he continued this afternoon — I found precious little in his remarks that would have persuaded myself and perhaps other British Columbians who have an open mind on this issue. I found precious little in his remarks that was anything like persuasive.

I've listened to other members opposite in response to the Speech from the Throne, for example, just a few days ago. One of the experienced members of the opposition, a member who has been here for 15 years, made a comment: "The simplest way to determine what items or services will go up by 7 percent on July 1 is to look to see if you pay GST on it now. If you are, then with a few exceptions, it's going up." Well, all that betrays…. A statement like that simply betrays that that member has no idea as to how the HST will apply to the economy.

When you look at the comments that were made in a brochure, apparently by the member for Delta North suggesting to his constituents that a $20 meal would now be costing in the neighbourhood of $25…. Again, a complete fabrication. It is no wonder, then, when that kind of so-called information is propagated to British Columbians that they become bewildered and confused. I think even members of the opposition owe their constituents and all British Columbians a better deal than that. I think they actually should provide an even-handed evaluation of the HST, as it will come into place in British Columbia.

[ Page 4043 ]

Clearly, it's fair to say that the federal government has become more flexible and that as a result, the 2008 report is very likely out of date. For the member opposite to suggest that Dr. Jack Mintz's report — the most recent report commenting on the implementation of the HST in British Columbia — is incorrect or is somehow a distortion is, I think, very disappointing. I think the reputation of Dr. Mintz is beyond dispute, and I take at face value the suggestions that he puts forward.

However, let's just put on the record exactly what Dr. Mintz had to say. He said: "British Columbia's harmonization of its sales tax with the federal goods and services tax will result in a giant leap in the province's competitiveness, both domestically and internationally." Not just a tepid leap, not a small leap, but a giant leap forward is what Dr. Mintz is talking about.

[1510]

Now, that giant leap in the province's competitiveness — there is no question — will result in lots more jobs, lots more investment in this province, which we're already expecting. But this will be an increased tonic to the economy of this province.

He goes on to say: "It will also reduce the marginal effective tax rate on capital for all industrial sectors and all sizes of business" — small business as well as large businesses, in British Columbia.

Don't forget. It is businesses, both small and large, that employ British Columbians. When their marginal effective tax rates go down, they are more likely to create jobs. They are more likely to be able to pay their employees more money. I think that is the kind of future that British Columbians are interested in.

I know that members of the opposition sometimes are very leery of tax relief. I think it's now about 120 different measures of tax relief that have been put in place by our government since 2001, and somehow that never seems to engender any kind of enthusiasm on the opposition benches. There's always that look of regret on their faces as tax relief is implemented.

They actually favour more taxes. We've heard the opposition Finance critic talking about the machinery and equipment tax and the removal of that actually not being worth very much. That was certainly disappointing to hear from that member.

The member for North Island — I think it was about two years ago, with the implementation of the carbon tax — spoke up in this House, and she admitted to regretting the fact that that carbon tax was being offset by personal income tax reductions. I might be paraphrasing slightly, but she said: "And then they went and wasted it on tax cuts."

Well, most British Columbians would entitle that "tax relief," and they are pleased when government actually doesn't raise taxes and provides tax relief. But the member for North Island actually termed tax relief a waste. I think that was a defining moment, actually. There are many, but that was one of them. On this side of the House, on the government side of the House, we enjoy tax relief on behalf of British Columbians, but on that side of the House, amongst the opposition benches, they never saw a tax increase they didn't like.

The opposition Finance critic quoted at some length from a couple of studies. I noted there was one study he did not quote from, and this was a study that was authored by the Canadian Centre for Policy Alternatives — or the NDP-funded Canadian Centre for Policy Alternatives. They recently did a report on the Ontario HST. I will say straight up that their comments were with respect to the Ontario HST, but the principles are the same. There will be a few marginal differences in terms of the implementation of HST in Ontario versus British Columbia.

Here is what they said in terms of the

summary of their recommendations: "Families in a wide range of incomes from $30,000 to $90,000" — annually — "should be better off or worse off by no more than about $50 to $75 per year which, given our assumptions and the limitations of the data, amounts to a wash." So when we listen to the stories of the members opposite that this is all gloom and doom, it's not.

The impact, in most cases, is going to be extremely marginal at worst. As I did a couple weeks ago in my remarks on the budget, I would encourage the members opposite to read this study by the Canadian Centre for Policy Alternatives, and I would encourage them to refer to it in their debate on this legislation.

[1515]

You know, given that the Canadian Centre for Policy Alternatives has been funded by the NDP in the past, I would assume that they would give it some….

Interjection.

J. Les: Funded by the NDP.

D. Routley: At least be factual.

J. Les: The member for Nanaimo–North Cowichan says to me: "At least be factual." Well, I'm prepared to be very factual on that one. On their way out the door, the NDP government in 2001 gave the Canadian Centre for Policy Alternatives several hundred thousand dollars. You can check the record, and I would encourage the member for Nanaimo–North Cowichan to do that. He will find that that was, in fact, the case — NDP-funded Canadian Centre for Policy Alternatives.

Now, it appears the member opposite was a little bit confused on this issue, but you know, there are other members opposite who are somewhat confused. I found the comments from the member for Cariboo North particularly interesting where he said: "You know, the harmonized sales tax was not necessarily a bad thing."

[ Page 4044 ]

He had some issues, apparently, with implementation. But he made a straight-up statement. He said that harmonized taxes are not necessarily a bad thing.

I wonder how that squares with what we heard, for example, from the opposition Finance critic this morning and this afternoon, who would have, I think, invited us all to come to the conclusion that it is never a good thing. I found that interesting.

I'm looking forward actually to the remarks from the member for Cariboo North in due course. I think he perhaps lowered his guard for a few moments and, in a moment of candour and honesty, actually betrayed his true position.

There are, of course, numerous people who have come forward and have roundly endorsed the province's decision to enter into this harmonized sales tax arrangement. Let me say, first of all, that it isn't exactly as if this had never been done anywhere before. Some 130 countries around the world have already implemented an HST. It is often referred to as a value-added tax.

If it was so wrong in British Columbia, why did all of those countries implement an HST? Some of those countries are actually countries with a socialist government. Yet they have in place, and have put in place, a value-added tax. So, you know, I suspect that the opposition that we hear from members opposite maybe isn't even rooted in ideology. It is simply rooted in a populist political opportunity. That's what I suspect it is, and that is why their arguments tend to ring rather hollow.

It'll be interesting to see as the next several days unfold, as various members opposite rise to respond to this bill. I would encourage them to explain to the House why various socialist administrations around the world have a value-added tax in place, but in British Columbia somehow it is not the thing to do.

Now, we already heard this morning that Dr. Jack Mintz from the University of Calgary has commented directly on the implementation of the HST in B.C. and has found that over a period of ten years we'll see a net increase of 113,000 jobs, along with the investment that goes with that.

But Dr. Mintz wasn't alone. There was Glen Hodgson, who is the chief economist for the Conference Board of Canada. He's come out in support. John Winter is with the B.C. Chamber of Commerce. He speaks on behalf of all small businesses in British Columbia. He's been extremely outspoken in his support of this measure. Jock Finlayson is with the Business Council of B.C.

From a somewhat different sector, Richard Rees is with the Institute of Chartered Accountants of British Columbia — obviously someone who is very familiar with what works in business and the kinds of choices that governments ought to be making to help to strengthen the economy. He's come out very strongly supportive.

[1520]

An academic, Dr. Kevin Milligan is at the UBC department of economics. At one of our pan-provincial companies, Robert McFarlane is the chief financial officer at TELUS; Kenneth McKenzie, who is with the Canada West Foundation; Tim McEwan, who is the CEO of Initiatives Prince George, involved, obviously, in economic development at the grass-roots level in that part of the province; Ben Dachis and Alexandre Laurin of the C.D. Howe Institute.

Here in the Lower Mainland David Baxter, who is with Urban Futures, has been a commentator on social and economic issues in the province of British Columbia for a considerable period of time — all of these people have commented on the implementation of the HST and have come to the conclusion that this is the way forward for British Columbia and that this is the way we are going to build a secure future for our children and grandchildren.

There are many, many others who have stood up and said yes, this is the right thing to do.

The B.C. Agriculture Council. Garnet Etsell is their chair. He speaks on behalf of agriculture in British Columbia — by the way, a very important segment of the economy in my particular riding with dairy, poultry, horticulture, blueberries, raspberries. I could go on and on and on. It's a very long list. All of these producers, all of these people involved in the agriculture industry in my riding and across British Columbia will benefit, and they have stood up and spoken clearly and said that this is good for agriculture in British Columbia.

The B.C. Lumber Trade Council. They've made no bones about it. They've said that this is excellent news for British Columbia.

The Canadian Manufacturers and Exporters Association. I'm sure members opposite are quite aware of that particular organization and how they speak for businesses across British Columbia involved in manufacturing, some of which are in my riding.

I'm referring, for example, to IMW Industries, which is a significant business located in my riding.

Hon. B. Penner: And a growing business.

J. Les: It's a growing business, as the Minister of Environment points out, that is involved in developing leading-edge technology and solutions for compressing and liquefying natural gas, exporting to dozens of countries around the world. About 150 people are employed there. As a result of moving to the HST, it secures the future for those 150 employees and is making it more likely that IMW Industries and others like them are going to be able to employ more people at good, well-paying jobs in British Columbia.

The Mining Association of British Columbia has spoken out and said very clearly that this is good for the mining industry in British Columbia.

[ Page 4045 ]

Interjection.

J. Les: Now, I hear the member for Maple Ridge–Pitt Meadows having something to say about minimum wage. Well, let me advise that member. He probably is not aware of this, but the average wage in the mining sector in British Columbia is over $100,000 a year. That member sits there and heckles me and denigrates the mining industry. Frankly, he should be ashamed of himself.

The Retail Council of Canada is going to be unhappy if their customers are not happy, but the Retail Council of Canada has recognized clearly that there will be more retail opportunities, because more customers will be buying their retail goods. The Retail Council has come out and been very supportive of the implementation of the HST.

The B.C. Trucking Association has been very supportive. That's Mr. Landry and his group.

The Road Builders and Heavy Construction Association. They have recognized that the construction industry is one of the biggest beneficiaries, to the tune of about $880 million a year. They are one of the biggest beneficiaries of the implementation of the HST, again enhancing the ability of the construction industry to hire more people, to put more people to work and to keep more people at work.

[1525]

The Coast Forest Products Association has been very, very supportive, as has the lumber industry generally. Again, that is no surprise. This is an industry that requires a lot of capital investment. The existing PST regime, as we all know, penalizes that capital investment. This will provide less of a penalty on those investments.

Interjection.

J. Les: I would assume that the member for Columbia River–Revelstoke, for example, would be pleased that the forest industry agrees with this government that this is good for their industry and is more likely to lead to a recovery sooner in that industry than what might otherwise be the case.

The New Car Dealers Association of B.C., the B.C. Construction Association and the Pulp and Paper Steering Committee are in favour, as well as — I must point out — the Motion Picture Industry Association of British Columbia. I know that there are a variety of members opposite that are very interested in this industry. They have come out and have clearly said that the implementation of the HST is a good thing for the motion picture industry.

And on it goes. The Railway Association of Canada. The Independent Contractors and Businesses Association of British Columbia. Initiatives Prince George, that I've already talked about before. Grass-roots economic development is what they represent. They're in favour. The Association for Mineral Exploration. New Media B.C. The B.C. Shellfish Growers Association. I'm sure that if we worked at it, we could develop a list of companies and organizations of that nature that have spoken out in favour of the HST implementation.

The Canadian Taxpayers Federation has commented numerous times and has said: "Anything that lowers the costs to businesses will ultimately be better for consumers." Another quote: "The HST is a good thing because it simplifies our already very overly complicated tax system, and anything that makes the tax system simpler and more transparent is a good thing."

[C. Trevena in the chair.]

Just let me comment a little further on that. We heard from the Finance Minister this morning that of all of the provincial sales taxes that are collected today, actually 40 percent of those taxes are hidden taxes. They are embedded in the supply chain and are not paid by the consumer at the retail counter. They are hidden from the consumer. That is always a bad thing. It is best when taxes are plainly on view for all to see.

As you know, Madam Speaker, I was once involved in municipal politics. One of the characteristics of municipal government is that they actually send a bill to their ratepayers once a year — very open, very transparent. Every municipal taxpayer is always highly aware of precisely when they're paying the taxes and exactly how much those taxes are. The harmonized sales tax tends to do that as well. I think that is a good thing.

Again, though, it's important to point out that we should not look at the implementation of the harmonized sales tax in isolation. There have been numerous occasions of tax relief over the last decade in British Columbia. One of the best days that we ever had in this province was June 6, 2001, when we reduced income taxes to British Columbians by 25 percent in one day. But we didn't stop there. We continued to reduce taxes and fees a total of about 120 different times as the next ten years unfolded.

Today if you have a senior couple in their retirement earning $40,000 a year…. In 2001 they actually paid $902 in taxes. Today they pay zero in provincial taxes. An individual earning $50,000 a year in 2001 paid just over $3,600 in taxes. Today that individual pays $2,200 in taxes — a saving of over $1,400.

In addition to all of that tax relief, I think it's important to look at all of these measures in context. What we are consistently doing is creating a tax regime in British Columbia that is conducive to job creation, conducive to putting as much money as possible in people's pockets, and allowing them to keep this money to make their own personal choices.

[1530]

[ Page 4046 ]

When you look at the provincial income taxes on up to $118,000 worth of income, British Columbians pay fewer taxes than any other Canadians. That remains true. We even pay fewer taxes in British Columbia than they do in Alberta, but the differences are pretty stark. In British Columbia an individual earning $118,000 pays $9,800 in taxes. In Quebec that same individual pays $17,600 in taxes. So the difference is pretty remarkable, close to $8,000 a year.

That is a great competitive advantage as we compete with all other provinces for talent and for skills that are increasingly mobile today. As these people look for places that they can come to, to start a career, to build a family, to create a future, B.C. has really, I think, recommended itself over the last decade as a place where you can come and do that.

I suspect my time is starting to run short. I've got a lot more material here that I could work with. I understand the controversy that attends this kind of a shift in taxes — I really do — and I have not made my decision to support the harmonized sales tax at all lightly.

All members of the House will be quite aware that I'm from a fairly large family. I have six children. I have 13 grandchildren. I have 11 brothers and sisters, all but one living in British Columbia. I can look each one of them in the eye and say: "You know what? This is the right thing at the right time in British Columbia. This is what is going to give our children and our grandchildren a secure future in our province."

Again, as I've said, the opposition that we hear from the members opposite…. I understand their need to scrutinize and look very carefully at the legislation that government introduces, but so far I've heard very little of substance from the members opposite. I've heard a lot of politicking. I've heard a lot of misinformation. I've heard a lot of preference from members opposite for higher taxes, and frankly, I don't share that agenda.

The agenda that I share is allowing British Columbians to create a strong future with low taxes and with unparalleled opportunities so that we, going into the future, will be able to lead our country in economic development and in job creation and to a sound and secure future for our children and grandchildren.

I see the light is on, Madam Speaker. Before I get cut off by the red light instead of the green one, I just want to say thank you for the opportunity to address this House on this very important matter, but to be very clear, I support this 100 percent.

D. Donaldson: I rise to address Bill 9 in this second reading. Everybody in the province knows it's the HST bill, so I will talk about that in detail. Before I start, I'll make some comments about the Finance Minister's address to the second reading of the bill.

It reminded me somewhat of Alice in Wonderland . I think the Finance Minister has gone down the HST rabbit hole with his spinning and his hard time escaping. People on this side have opinions about who the Mad Hatter is down that hole. But the spinning has gotten out of control, and it's a fairy tale — what the minister was describing this morning.

Here's some history behind the bill that shows that and proves that. This is history that took place around the HST before the election. Some would say and some have typified…. What happened before the election and what this government has said after the election would be typified as misleading. I'll let the electorate decide on that, and they seem to have — with an overwhelming majority not in favour of the HST.

[1535]

In speaking about what was on before the election, the Premier is quoted on one of the radio programs down here. We don't listen to it too much up in the northern part of the province, but apparently lots of people do down here. It's called CKNW. On August 7 the Premier was quoted as saying around the HST: "The fact of the matter is that it wasn't on our radar." That's a famous statement now. "It wasn't on our radar. We didn't engage in any discussions. I wasn't thinking about it until after the election."

Well, that's very interesting. In December 2009, well before the election, the Premier's own Progress Board recommends the HST to the government. That's four months before the election. I suppose the Premier wasn't listening to his own Progress Board when they were recommending the HST. I guess that means when your own Progress Board is recommending it to you, it's not on the radar.

Sorry. That was December 2009, so that was after the election.

In January 2009 the Ontario Premier says that the government is considering adopting the HST. This is the Premier of the largest economy in the country, so this is what other provinces pay attention to. To think that it wasn't on the minds of the Finance Minister or others here is a little hard to believe.

In March the Ontario province adopted the HST. Again, if you're doing your job well, you're paying attention to what the largest economy in the country is doing. Therefore, you would expect that this would have been something that this government would be discussing and considering.

Then we enter the election campaign, April 14 to May 12 of this previous year. B.C. Liberals made no mention of the HST except in response to a survey from the B.C. Restaurant and Foodservices Association in which they say that they're not contemplating adopting the new tax because of its adverse effects. Not contemplating adopting the new tax because of its adverse effects.

That's the history before the election. What happens after the election? Just a matter of six weeks after the election, June 23, the HST is announced by the Premier

[ Page 4047 ]

and the Minister of Finance — just a mere six weeks. It flies in the face of what happened before the election.

They still maintain that there was no contemplating implementing the HST before the election, but through freedom of information, we found that on April 4 the Minister of Finance's calendar shows a scheduled call from the federal Finance Minister, Jim Flaherty. This is one of the major topics in Canada and in the province of Ontario. It's just beyond believability that this HST was not discussed before the election in these kinds of calls.

Afterwards, in some of the explanations around when the first time the HST came up, the Finance Minister maintained that it was on May 25 — so a couple of weeks after the election — in another casual conversation with federal Finance Minister Flaherty, by the coffee machine. It must have been at a summit of Finance Ministers from across Canada.

Again, in casual conversation around the coffee machine, one of the most important legislative implications to our tax policy…. The Minister of Finance says it was the first time he had spoken to the federal government about this seismic shift in B.C. policy.

We have a believability problem here. In fact, people who follow this in the media have said: "Well, if….

[1540]

Indeed, if we give the believability factor to those statements, then that means the Minister of Finance was oblivious to Ontario's actions for several months before the campaign. That would raise cause for concern that the Finance Minister wasn't keeping track of what the largest provincial economy in Canada was undertaking.

Again, from the media. One of the noted columnists who follow these items closely, Vaughn Palmer, was on a radio show on August 6, 2009. He said: "Well, if this HST idea is such a humdinger for the future of the economy, why didn't they do it before the election?"

That brings us to the question of credibility. Credibility and, you know, lack of credibility around saying one thing and doing another. That leads to cynicism. I'm going to touch on that a little further along in my comments, but it's cynicism that we have to combat. With actions like that — saying one thing, doing another — around the HST…. That increases cynicism in the public around what politics is all about and what the important decisions that we make in the Legislature are all about.

The real reason the HST is being brought in, in many people's minds, is for the $1.6 billion in transfer from the federal government that this government needs because it has mismanaged the economy to one of the largest deficits in history. In order to balance the books, they were dangled $1.6 billion from the federal government, and they took the bait. They needed it because they mismanaged our provincial economy into the largest deficit that we've seen in a long, long time.

Going back to the theme of saying one thing and doing another. The government, before the election, was maintaining that the deficit would never be more than $495 million, a considerable deficit for this province — considerable from where I come from anyway, $495 million — but manageable. It was one of those moments where this government and this minister are on record as saying that it would never be more than $495 million. That was before the election. They stuck to it: "Never more, never more."

Well, after the election, what do we find out? This isn't very far after the election. The Finance Minister introduces a $2.8 billion deficit for 2009-2010 — $2.8 billion, six times, seven times more than what was anticipated before the election. Obviously, people would say: "What's going on here? How come this government doesn't have better economic forecasting? When did the government know about this ballooning deficit figure?"

If they had come clean with that deficit, if they had come clean with their plans to implement the HST, then maybe the election results…. People might have voted differently. If they had at least come clean, people would have had the ability on May 12 to make an informed decision about the policy to implement the HST, about financial management around the deficit.

However, the Finance Minister was quoted on September 1, 2009, saying: "The first time that I ever had any indication from the Ministry of Finance staff that our revenue projections might be taking a bigger hit than we anticipated was actually a casual conversation I had in the middle of the election."

The middle of the election. That's a fine time to actually reveal this to the people of the province — don't you think? If you're running an honest election campaign, you would want to have all the facts out so that people could make an informed decision about who they'd like to have voted for. Putting that information in front of the people of B.C. — that they were going to implement the HST, that they were managing our province into one of the largest deficits ever — would be some good information for people to arm themselves with.

Then, again quoting the Premier, on September 1: "I had heard that revenues were coming off, yes, a week before the election. Well" — then he goes on to say — "maybe the Thursday before the election."

You would think that if the ballooning deficit, which this government professes to be concerned about and professes to be sound fiscal managers around…. You would think that that would be a shocker to them — a shocker — and that they would want the people of B.C. to know about it.

[1545]

But instead, no, in the middle of the election campaign, a week before the election, they still weren't able to provide that information to the public so that the public could make an informed decision.

[ Page 4048 ]

Same with the HST. If they had allowed the public to hear about their plans for the HST — like the Ontario government did, before the election — then the electorate would be able to make a decision based on those factors.

Why this is disturbing is that it shows disrespect, I believe, for the electorate and adds to cynicism in the political process. We have to combat that cynicism, because we know that without people participating in the democratic process, what we do here in the Legislature is at risk. It's at risk.

Another area that doesn't provide much faith and points to a lack of credibility is the maintenance by this government that the HST is revenue-neutral. We heard that many times: revenue-neutral. Well, if you do a proper analysis of the HST and look at all the rebates and write-offs that are associated with it, the input tax credits and others, then analysts have said the government will actually collect $113 million less total revenue under the HST. Less — that's not revenue-neutral. That's actually less.

In fact, another noted columnist who pays close attention to these things, Michael Smyth, wrote recently: "The HST is actually a tax-burden transfer from business to consumers and will not generate a dime to pay for new public services." Not generate a dime. Well, we see that, because it's actually generating less revenue by the implementation of the HST.

Now this again — saying one thing and doing another. "It's going to be revenue-neutral," but in fact after you look at the rebates, the input tax credits, it's going to be hundreds of millions of dollars less than the revenue generated currently. So again, the HST is not revenue-neutral.

Then let's look at one other area, again going back to credibility. After the announcement before the election that there wasn't going to be an HST, then after the election there was. The government understood that there was a huge grassroots backlash against this new tax — and understandably. The public was not informed of the plans before the election, so they couldn't make an informed decision on this government's platform.

What happens afterwards? Well, it's full spin mode, and next the government's saying that the HST is actually going to be allocated to health care. Health care. This is an absolutely ludicrous claim, and it's been roundly drubbed by those in the know in the economic field and elsewhere. In fact, notably in the introduction of this bill, in first reading, we didn't hear the Finance Minister reference the fact that HST was being implemented to pay for health care. So they've dropped that spin. But again, it's a ludicrous claim that revenues pay for health care.

The truth is that almost all revenue, including MSP premiums, goes into the consolidated revenue fund and is spent on all government priorities. So it's interesting because the Finance Minister knows this, and those who are in the know on the government side know about the consolidated revenue fund, know that the premiums and HST revenue go into these kinds of things to pay for other government services and priorities.

As one commentator pointed out how ludicrous this claim would be…. Would it mean that if not enough revenue was being generated by the HST, we would end up cancelling surgeries? That's how ridiculous this claim is around the HST going directly to pay for health care. Just ludicrous.

[1550]

As another media commentator who follows these things closely, Paul Willcocks, said: "The hokiest part of the budget was the announcement that the HST revenue would be dedicated to health care. It's an obvious attempt at phony spin; all the money flows into general government coffers and is allocated as the politicians choose." An obvious attempt at a phony spin, so it's understandable why we don't hear that anymore — because the electorate didn't buy it, the pundits didn't buy it and most economists don't buy it.

Again, these flip-flops before and after the election on the HST; before and after the election on the size of the deficit, record deficit; the claim that the HST will be revenue-neutral, while in fact it's not — it actually does not generate as much revenue as the current system — and then the claim that the HST is going to go directly to pay for health care…. These are all myths and flip-flops. Again, it leads to cynicism in the electorate.

I took to heart and really concurred with the comments that the member for Richmond East made last week in a statement to this Legislature when she talked about voting patterns and the lack of voter turnout. We've seen a steady decline in that, and I understood the member for Richmond East's passion about this.

She pointed out that in the 18-to-24-year age group we've seen a deep decline, from 75 percent participation rates in elections to 26 percent. One in four people in the 18-to-24-year age group is voting. That is just a terrible, terrible statistic, and part of the reason for that is a cynicism about politicians and about what goes on. What feeds into that cynicism is when you say one thing and do another. That's what's happened with this HST, and that's what this government has done — is add to the cynicism in this province.

In my constituency in Stikine we were lucky enough to have a higher-than-average voter turnout — in fact, eight or nine points higher than the average. I believe that's because when people see that they have a candidate that could represent them well and possibly make a change, they'll come out and participate and get involved. But when they get bombarded with messages from this government that says one thing and does another, then it's very hard to motivate people and engage them around the process.

[ Page 4049 ]

Again, I'm very, very concerned, as is the member for Richmond East, about the voter turnout in the younger age group. It does not bode well for the future. You know those are the people that are moving into being part of the contributing part of society even more so as they move up into the older-age demographics after 24 years old. If they're not participating now, then it does not bode well for the future.

What will encourage them to participate more is more truthful and honest debates, and that requires revelation of details, revelation of intent, revelation that the HST was going to be implemented before the election as part of the policy platform of this government so that we could have had an honest debate.

I'm very concerned about that cynicism and the low voter turnout that we see. I believe it was 58 percent, or perhaps even less, in the province in the last provincial election — even under 50 percent in some of the urban ridings. We're talking about only one of every two people voting. Part of that is due to the cynicism and what people feel is a lack of credibility, and that's because of things like how the HST was not talked about before the election and then was implemented just six weeks after the election.

People feel that…. It's not just me saying this. I mean, we've heard of surveys — whether it's 82 percent or 89 percent, it's a phenomenal number — of people opposed to HST in the province. What they feel is that this government has no mandate at all to implement this new tax. They wonder what happened. What happened between May 12, when they believed that this was not on the government's agenda, to then just six weeks later and to now? What we're faced with is the implementation of this tax.

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That's why so many people are upset. They don't believe that the government has a mandate to do this. There's been lots of talk on the other side about the different groups that are in favour of the HST. It's hard to understand some of that list, because we have people, grassroots organizations, who've spoken out publicly against the HST. I'd like to list some of those here.

The Council of Tourism Associations CEO is a person who knows tourism intimately in the province and knows what it means to this province, knows how important that sector is. They've spoken out against the HST.

The Surrey Board of Trade. There's something — the Surrey Board of Trade — a board of trade speaking out against the HST.

Up in northern B.C., where I come from, the Canadian Home Builders Association of Northern B.C. has spoken out against the HST. So we have homebuilders. We have people affiliated with trade. We have tourism. The B.C. Technology Industry Association has spoken out publicly against the HST — technology now. The list goes on.

Don Monsour, chair of the Victoria branch for the B.C. restaurant and food association — someone who knows that sector very, very well — an expert in the field, has spoken out against the HST. Mark van Schellwitz, a regional vice-president for the Canadian Restaurant and Foodservices Association, has spoken out against the HST.

Food industry, tourism industry, technology, trade, tourism associations, homebuilders — these are the wide variety, the broad spectrum of people who have spoken out against the HST. The Fellowship of Christian Camps has spoken out against the HST.

A little closer to home for some of the members who spend time in Victoria, the owner of Spinnakers gastro brewpub, Paul Hadfield, has spoken out against the HST. Martin Claremont, the owner of Russ Hay's, the Bicycle Shop, here in Victoria, has spoken out against the HST, and I'll talk about the impact of the HST on bicycles a little further on in my comments.

Philip Nyren, owner of Philip Nyren Menswear and Womenswear in Victoria, has spoken out against the HST. Some of the members here might have frequented that store. For that store, the impacts of the HST, obviously, are not welcome, because the owner of that retail outlet is speaking out against the HST.

Big White Ski Resort's vice-president, Michael Ballingal. The ski resort has spoken out against the HST. So it's not just the members on this side.

What the members on this side are doing is representing the vast majority of people in B.C., the over 80 percent, who have said: "No, do not implement this HST. We're not in favour of it." We're speaking out to represent the majority of the people of this province against what this government is doing with no mandate — implementing the HST against the will of the vast majority of the people that live here.

Again, people who've spoken out against the HST…. Just last week, I believe it was, we had a representation of people who travelled to Victoria from up in the Interior, from 100 Mile House and Williams Lake. We met them — we being opposition MLAs — on the steps of the Legislature. They had a petition with more than 3,000 signatures opposing the HST. They made several eloquent speeches on the steps.

Gerd Braune was one of the speakers. He's a senior, and here's what he said. I know that through parliamentary or legislative procedures we're not supposed to name directly other members, so I'll abbreviate his comments and just refer to the actual constituency.

"We want our MLA from Cariboo-Chilcotin and the B.C. Liberal government to recognize that like the rest of British Columbia, the people of Williams Lake and 100 Mile House do not want the HST. If the member from Cariboo-Chilcotin is to represent her constituents and stand by the promises made during the election, she has no choice but to vote against the HST…. We travelled all the way to Victoria to make our voices heard."

All the way to Victoria at their own expense, their own cost. This was a senior saying these statements.

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Obviously, if he had been given the choice before the election, you know, he might have made a different choice during the election. Who knows how he voted? We all know that voting is a personal matter, and it's not anybody else's business. But he's pointing out that if people had listened, if this information had been made available before the election, things might have been different.

Again, why are these people speaking out? They are speaking out, and in that instance, that was a senior on a fixed income. People on fixed incomes are going to be some of the hardest hit by the HST, and I'll give an example why. People will pay 7 percent more now for restaurant meals and catered foods, so the ability to partake in those activities is decreased if budget is a concern. Budget is a concern to many people in this province — many people in my area especially.

People will now pay 7 percent more once this legislation is pushed through for many groceries such as snack foods and other prepared foods like salads, sandwiches, heated foots or beverages, like a muffin or a coffee. Sandwiches and salads — salads are something that we want to promote people to eat. Healthy living, active living, but they'll be taxed 7 percent more now under this legislation.

School supplies. We have a new school year coming up in the fall. Pretty soon now we'll be seeing all those ads that go in the newspapers and in our flyers that we get in our mailboxes about school supplies: "Come and buy the school supplies."

Well, I know people in my area who already have difficulty affording the school supplies that their children need to participate in the educational system, and now there will be 7 percent more on those school supplies. Now, how does that level the playing field in this province for everybody to get the education that they deserve, which is going to be the foundation for the future of the people of this province?

Services. Services such as membership fees for clubs and gyms. Again, we're supposed to be encouraging people to be active. We know that in the long term that will decrease health care costs to an overburdened health care system. What are we going to do under this legislation? What does this government want to do? Increase by 7 percent membership fees for clubs and gyms.

Interjection.

D. Donaldson: Yes, as a colleague of mine says: "Punish people for going and trying to be active."

Professional services of architects and accountants. Haircuts, services at beauty salons. Veterinary care. It's a very important aspect of the rural economy, veterinary care, whether it's agriculture-related or pet-related, but agriculture-related especially in my area. Again, 7 percent more for veterinary care, when farmers are having a hard enough time as it is trying to make a living.

Live theatre. We can assume that if the prices go up by 7 percent for live theatre, then some people will decide not to go. Fewer people in the audience, fewer revenues generated, less grants for these kinds of organizations under this government's policies. That means less theatre, less jobs for people in the theatre.

Services such as repairs to home appliances, such as refrigerators.

Deputy Speaker: Thank you, Member.

I recognize the member for Peace River North.

P. Pimm: Thank you, hon. Speaker, for allowing me to take my place and speak to Bill 9, Consumption Tax Rebate and Transition Act.

Okay, so why HST, and why HST now? Although the idea of harmonized sales tax has been around for many years, it's only been this last year that the federal government actually made it flexible enough and attractive enough for our Finance Minister to do the right thing and implement HST. B.C. can set its own tax rate, which is going to be the lowest in the country. B.C. can tailor its own specific needs with point-of-sale rebates.

Ontario's going to implement their HST on July 1, 2010, and once that happens, that means that all provinces Ontario and east will have a value-added tax of some description, so the writing is pretty much on the wall. The rest of Canada is going to follow suit, and probably sooner than later.

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And of course, the $1.6 billion transfer of funds from the federal government — I think we would be silly to pass that up as well.

Let's have a look at where HST has been implemented at this point in time: Ontario, Newfoundland and Labrador, Nova Scotia, New Brunswick, Quebec. British Columbia will join them on July 1 as well, and I'm very proud to say that our rate of 12 percent will be the lowest in the country.

The other thing that we must know is that more than 130 countries, including 29 of the 30 OECD countries, have adopted similar taxes. B.C.'s move to implement an HST will bring us into line with what's viewed as the most efficient form of sales taxation in the world.

How does PST work presently? Let's talk about that a little bit. Currently PST is applied at every step in the creation of a product. Multiple PST charges are embedded in the price you pay at the store. Even though you don't see it, you're paying for it.

Let's look at a simple made-in-B.C. product like a chair. Let's just walk you through the process of that. Under the current system, taxes are paid at every step in the production and passed on to consumers.

When the logger cuts a tree down in the bush, he pays tax on his chainsaw at the present time. B.C. tax is included in that. That's all part of his rate. The trucker that

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is hauling the logs from the forest into the communities, he's paying tax. He's paying tax on his truck. He's paying tax on his tires. Taxes all the way along.

Once it gets to the mill, the mill has got saw blades. Everything that the mill buys — tax is paid on that as well. Then, of course, we've got to transfer it back to the retailers. Those people have the same trucks that transport stuff back.

Then when it gets to the retail outlet, there's your chair, sitting there prime and pretty, and you pay another 7 percent on top of it there. So HST definitely is a good way to go. It's going to get rid of all the embedded tax that we see at the present time.

Under HST, let's talk about that same chair. Now that same logger cuts down his tree. He gets reimbursed for HST on his chainsaw, so his costs in the bush come down. The logger, his truck — he gets that 7 percent back on his truck. When he buys that truck, his $150,000 or $100,000 truck, he gets that $7,000 back, so now he can afford to pay for tires, which he doesn't have to pay HST on now.

When you get into that store, you pay HST on the final product, and that HST is exactly the same as the 5 percent and 7 percent that you