1985 Legislative Session: 3rd Session, 33rd Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

THURSDAY, JUNE 20, 1985

Afternoon Sitting

[ Page

6765 ]

CONTENTS

Oral Questions

Strategy for survival. Mrs. Wallace –– 6765

Student loan remission program. Mr. Nicolson –– 6765

Grape imports. Ms. Sanford –– 6766

Community colleges. Mr. Rose –– 6766

Conflict-of-interest guidelines. Mr. MacWilliam –– 6767

Workers' Compensation Board. Mr. Cocke –– 6767

Tabling Documents –– 6767

Committee of Supply: Economic Renewal Program estimates. (Hon. Mr. McClelland)

On vote 5: economic and regional development agreement –– 6768

Hon. Mr. McClelland

Mr. Williams

Mrs. Wallace

Mr. Lockstead

Mr. MacWilliam

Special Enterprise Zone And Tax Relief Act (Bill 49). Second reading

Hon. Mr. McClelland –– 6770

Mr. Williams –– 6771

Mr. Lea –– 6772

Mr. Davis –– 6773

Mr. Rose –– 6774

Hon. Mr. McGeer –– 6776

Mr. Lauk –– 6779

Hon. Mr. Phillips –– 6780

Mr. Blencoe –– 6781

Mr. Nicolson –– 6783

Hon. Mr. Rogers –– 6784

Mr. Skelly –– 6785

Mr. R. Fraser –– 6786

Mr. Kempf –– 6788

Mr. Reynolds –– 6789

THURSDAY, JUNE 20, 1985

The House met at 2:05 p.m.

MR. PARKS: On behalf of the Hon. Garde Gardom, it's my

pleasure this afternoon to welcome to the House the Canada Day

committee, which has been doing a most stalwart job on behalf of the

citizens of British Columbia. We have in your gallery, Mr. Speaker,

that committee, chaired by Mr. Mike Latta of Kamloops: Ms. Maureen

Albanese, from Vancouver; Ms. Madeleine Coudert, from Dawson Creek; Dr.

Green, from Prince Rupert; Mr. Bill Silver, from Fort St. James; Ms.

Janice Pelletier, from Cranbrook; Mr. Harry Dewar, from Kelowna;

Alderman Sherry Baker, from Chilliwack; Alderman Janet Baird, from

Victoria; Mr. Andrew Lai, from Vancouver; Ms. Frances Fridge, from

Vancouver; Mr. Claude Hazel, from Richmond; Mr. Hugh Wakeham, from

Vancouver; Ms. Alice Niwinski, from the city of Vancouver

Unfortunately, one member, who devised what I think is a most

appropriate flag for British Columbians to show — for that matter, for

all Canadians to show — on July 1.... It's a "proud to be a Canadian"

flag. I would urge all of you to distribute it to your offices. I will

be supplying copies to every MLA today. I would also ask the House to

bid them very welcome.

MS. SANFORD: For the past several months all of the MLAs have

benefited from the presence of the interns, under the intern program,

which, as you know, Mr. Speaker, has been ongoing in this House for

some ten years or more. This program has been an excellent one. The

interns are seated in the gallery today. This is their last day in the

Legislature. Tomorrow, as I understand it, they are all leaving for

Ontario to see what happens in the Ontario Legislature. I would be

interested to receive a comparative report, Mr. Speaker, once they

return from Ontario. For those interns who have worked so hard for our

caucus, I want to thank them today, and I want to wish all of the

interns well. All the best in the future to you, and thank you again.

MRS. JOHNSTON: I would like to add our congratulations to those expressed

by the member for Comox. I am proud, Mr. Speaker, to introduce to the House

today four very bright and energetic young people. They are the legislative

interns assigned to the Social Credit caucus during our current legislative

session. They are: Mandy Gaunt of Victoria, a graduate of the University of

Victoria; Nicola Marotz of Burnaby, a graduate of Simon Fraser University; Haidee

Parker of Armstrong, a graduate of the University of British Columbia; and Douglas

Reimer of Kelowna, a graduate of the University of Victoria. Individually and

collectively they have contributed to the efforts of this House to approach

its business in an informed and analytical manner. They have brought to their

tasks a refreshing enthusiasm that speaks well for them and for all the young

people of our province. I believe I speak for all members of this House in extending

our many thanks to Mandy, Nicola, Haidee and Doug and in giving them our best

wishes in all their future endeavours. I hope they have learned something in

their stay with us. Their presence has certainly reminded us of the great promise

held by our province's and our nation's young people.

MR. LEA: I would like to join with other members in thanking

and saying goodbye to the interns. Next year, though, I wish I could

get one.

AN HON. MEMBER: You won't be here next year.

MR. LEA: Ah! The election call is on, Mr. Speaker. I'm sure

these interns left university full of hope and ideals. I just hope that

their experience here hasn't made them jaded.

AN HON. MEMBER: Never!

MR. LEA: Well, if we haven't done it, maybe when they get to Ontario....

MRS. WALLACE: I have a guest in the press gallery today. I

would like to thank the chairman of the press gallery for arranging a

pass — as he said, for him — and welcome Ms. Sharlene Sommer from CKAY

Radio, Duncan.

HON. MR. SEGARTY: I'd like the House to join with me in

giving a very warm reception to an outstanding citizen of Cranbrook,

Ms. Janice Pelletier.

Oral Questions

STRATEGY FOR SURVIVAL

MRS. WALLACE: I have a question for the parliamentary

secretary to the Minister of Forests (Hon. Mr. Waterland) in the

absence of the Minister of Forests. Now that the ERDA agreement is

signed, I wonder if he can tell me whether the government has decided

to make funds available to support the strategy for survival, as

purported by the mayors of Vancouver Island.

MR. MICHAEL: Mr. Speaker, I thank the member for her

question. I will take it as notice and have the minister bring back a

response at the earliest possible time.

STUDENT LOAN REMISSION PROGRAM

MR. NICOLSON: To the Minister of Universities, Science and

Communications. Can the minister confirm that the student loan

remission program — the one that was announced in the 1984 throne

speech and again in the 1985 throne speech — is now in place in time

for the 1985 university grads to apply before they have to start paying

interest on their outstanding student loans anticipated next January?

HON. MR. McGEER: Yes, Mr. Speaker, they don't become eligible

to repay their loans until six months after their graduation, and the

program will certainly be in place by then — much sooner, I hope.

MR. NICOLSON: Can the minister confirm that he has decided

that the amount of the loan remission will be limited to one year's

tuition — at current rates, approximately $1,500 — and that only those

grads in receipt of a B.C. loan will be eligible?

HON. MR. McGEER: No, Mr. Speaker, I can't confirm any of those things.

[ Page 6766 ]

MR. NICOLSON: To the same minister, has the minister decided

that students from the same town and with the same need will attract

the same amount of loan remission, or has the minister decided to vary

the loan remission according to the course selections and programs

undertaken?

HON. MR. McGEER: The details of the program will be available

at the time the program is officially announced, Mr. Speaker, but I

want to assure him that we believe it will be the finest program in

Canada.

GRAPE IMPORTS

MS. SANFORD: Mr. Speaker, I have a question for the alternate

Minister of Consumer and Corporate Affairs. I notice that the Minister

of Health (Hon. Mr. Nielsen) is looking in his desk. He's quite

correct; he's the one.

B.C. grape growers were protected previously by an 80-20 formula

which restricted imports of grapes and wine by B.C. wineries to 20

percent of their total B.C. grape purchases. In a period of rising

demand, however, that flexible application of their formula by the

Minister of Consumer and Corporate Affairs has meant an open border.

B.C. wineries now import about 50 percent of their grape and wine

supply. Has the minister now decided to enforce the 80-20 formula, and

will he spell it out in firm regulation to protect B.C. growers, who

are facing cancellation of all contracts with respect to this year's

grape crop?

[2:15]

HON. MR. NIELSEN: Mr. Speaker, I'll be pleased to take the question as notice and communicate it to the minister as soon as possible.

MS. SANFORD: Mr. Speaker, the 79 grape growers that we have

in British Columbia — the crop is worth about $2.5 million — are now at

stake. Flexible import policies by the minister have delayed good

management decisions by the wineries. Unfortunately, the fault falls on

the government because the leadership has not been there. Does the

minister not accept that 80 percent of each bottle of B.C. wine should

be made from B.C. grapes, and what long-term strategy has he developed

to reach that goal?

HON. MR. NIELSEN: Mr. Speaker, I'm sure the member will be very pleased with the answer when the minister responsible provides it to her.

COMMUNITY COLLEGES

MR. ROSE: Mr. Speaker, I have a question for the Minister of

Education. Discussions are going on now about the amalgamation of

several lower mainland community colleges. The minister himself has

discussed his ideas to rationalize course offerings by the colleges in

the lower mainland. Would the minister be prepared to tell the House

whether he plans to order the colleges to specialize in their course

offerings?

HON. MR. HEINRICH: Mr. Speaker, about two or three weeks ago in Nanaimo

I met with the chairmen and chief executive officers of the colleges and institutes

in British Columbia. The concern among the colleges themselves, which they have

raised on a number of occasions, involves course offerings and some degree of

rationalization. I left it with them. To be very candid, I would just as soon

not be involved with it, but this is something of some concern to them. They

have raised it, and they wish to address it. I'm advised that some of the

colleges on the lower mainland have already had a meeting — perhaps more than

one — to discuss the issue. If you are making reference to the amalgamation

of other institutes, as we did with PVI and BCIT, the only knowledge that I

have of that is that which has been advanced from the field. There is some interest

with one particular college becoming a campus of a major college in Vancouver.

I have not advanced that idea; it has come from the field.

MR. ROSE: Supplementary. The minister, then, categorically

denies that what is under discussion here is a situation where the

colleges must rationalize themselves or amalgamate, or he'll do it for

them. That's really what he has indicated to me.

HON. MR. HEINRICH: That's not what I said at all.

MR. ROSE: You deny that then?

HON. MR. HEINRICH: Ask the question.

MR. ROSE: That is the question.

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

MR. ROSE: Thank you, Mr. Speaker. Is the minister then

denying the fact that he has given the colleges to understand that if

they do not rationalize or amalgamate on their own, he will do it for

them?

HON. MR. HEINRICH: Mr. Speaker, I don't really understand

what the member is driving at. First of all, to the last point, that

I'll amalgamate it for them if they don't do it. The fact of the matter

is that they raised the issue, not me. I'll give you the college in

question. It seems to me there was discussion by members and faculty

involving Capilano College on the North Shore teaming up with Vancouver

Community College. I didn't raise the idea; they did. I have received

no formal submission. As a matter of fact, since the discussion was

raised with me approximately two or three weeks ago, I haven't heard

about it again.

With respect to courses, one of the first items that the B.C.

Association of Colleges raised with me when I was assigned the

portfolio was the rationalization of some programs that are being

offered in each of the colleges in the lower mainland, which are

reasonably close, one to the other. That is something which they have

raised, and something which they wish to address, and I understand that

they're doing it on their own as autonomous groups.

MR. ROSE: The minister is aware, Mr. Speaker, that under

Bills 19 and 20, he can establish all these courses. He took the power

unto himself, so he has the power to do that. Is the minister aware

that if they were reducing the range of options in the individual

colleges, it's going to increase travel costs in the lower mainland for

certain students?

I wanted to know whether the minister has made any representations

to his colleague responsible for transit, making concession fare cards

— that is a particular name —

[ Page

6767 ]

available in the transit system for post-secondary

students, since the students are required to pay up to $70 a month if

they are over 20.

HON. MR. HEINRICH: The answer is no.

MR. ROSE: I wonder if the minister could tell us what actions

he has taken, or does he intend to take any, to overcome the problems

of students facing a 40 percent transit increase in their fares.

HON. MR. HEINRICH: Mr. Speaker, I sometimes find the questions....

AN HON. MEMBER: Nonsensical.

HON. MR. HEINRICH: I didn't want to raise that.

It's not hard to answer. In the interior and the northern part of

the province, we're not talking about going a mile or two or three from

the North Shore to the centre of the city of Vancouver. What we're

talking about is 60, 70,100 or 250 miles. Do you want us to bring in

transit subsidies for that too?

CONFLICT-OF-INTEREST GUIDELINES

MR. MacWILLIAM: My question was for the Minister of Tourism

(Hon. Mr. Richmond). I see he's decided to hide from the rest of the

debates and the questions. However, I will....

[Mr. Speaker rose.]

MR. SPEAKER: Order, please. The member will be seated.

Hon. members, this is question period. For members to rise in their

place in question period with statements, as that member consistently

does, is totally out of order. The Chair will no longer tolerate that

abuse of the rules of the House. The member will ask....

Be seated! The member will ask a question in this period, as is his

place to ask a question. It will be done properly or it will not be

done at all.

[Mr. Speaker resumed his seat. ]

MR. MacWILLIAM: In view of the absence of the minister, I

will direct the question to the parliamentary secretary for the

minister. In 1975 the present government promised all British

Columbians that they would pass new conflict-of-interest legislation

for politicians and senior government officials. I would ask what

consideration the minister gave to this campaign promise before

approving the so-called conflict-of-interest guidelines which he tabled

in the House yesterday.

HON. MR. SMITH: In the absence of anyone else, I will take the question as notice for the minister.

MR. MacWILLIAM: I will address a new question to the minister who has

responded. The so-called conflict-of-interest guidelines should, I think, be

called kiss-and-tell guidelines because they don't prohibit any business

dealings between directors and the company, They provide for internal disclosure

only. Why is there no such prohibition in these guidelines?

HON. MR. SMITH: Mr. Speaker, I will seek to distill from that

rather verbose

preamble a question that might be taken as notice for

the minister responsible.

MR. MacWILLIAM: One last question to the same minister. The

late W.A.C. Bennett made it a point never to do business with the

government or any Crown corporation. He made it a personal point. The

Constitution Act provides strict guidelines prohibiting MLAs from

entering into beneficial contracts with the government. My question to

the minister: what is happening to the standards of conduct in public

life in British Columbia?

HON. MR. SMITH: I will refer that question to the minister responsible, and also to those who are writing reminiscences.

WORKERS' COMPENSATION BOARD

MR. COCKE: Mr. Speaker, during the estimates of the Labour

minister's portfolio, we had a very short discussion. I'd like to ask

the Minister of Labour a question with respect to that discussion. I'm

talking in terms of the outstanding legal bill for a Mr. Temnoff. Has

the minister decided to see that Mr. Temnoff obtains the modest

compensation required for the disposal of that fee?

HON. MR. SEGARTY: I thank the member from New Westminster for

his question. I have a great deal of sympathy, as I said in the debate

on my estimates, for the individual involved in this particular case.

I've asked my staff to review it and try to find some way that the bill

can be paid without opening up the floodgate for every other . for the

Workers' Compensation Board to pay every legal expense that comes

before the board.

Hon. Mr. Chabot tabled the 1984-85 annual report of the British Columbia Heritage Trust.

Hon. Mrs. McCarthy tabled the 1983-84 annual report of the Ministry of Human Resources.

Hon. Mr. McClelland tabled the 1984 annual report and financial statements of the British Columbia Cellulose Company.

MR. PARKS: Mr. Speaker, I ask leave to make an introduction.

Leave granted.

MR. PARKS: Mr. Speaker, in introducing members of the Canada

Day committee, I was remiss in not acknowledging a group from the

Secretary of State's office who have worked in conjunction with our

committee. I'd ask the House to make welcome Mr. Bob Robertson, Ms.

Connie Harper, Ms. Roxanne Hughes and Ms. Luce Turgeon.

[ Page 6768 ]

Orders of the Day

The House in Committee of Supply; Mr. Strachan in the chair.

ESTIMATES: ECONOMIC RENEWAL PROGRAM

On vote 5: economic and regional development agreement, $65,000,000.

HON. MR. McCLELLAND: Mr. Chairman, I don't think we need to

say very much about this; it's fairly straightforward. It provides for

the first year of the five-year ERD agreement recently reached with the

federal government and the funding for the subagreements that will

subsequently be signed under that agreement.

MR. WILLIAMS: Mr. Chairman, as the minister says, the vote

does involve the overall ERD agreement, part of which is with respect

to forests and part within his own administration with respect to

manufacturing, tourism and the like. But the amount allocated for

forestry is relatively modest. In this annual budget it's $22 million.

It is the beginnings of a major involvement of the federal government

in what has heretofore been totally provincial jurisdiction, so that

they will be establishing a Canadian Forestry Service presence,

locating offices in Prince George, I might note, to monitor this

agreement and the progress with respect to it.

As I understand it, the breakdown of that $22 million is

primarily.... The bulk of it is for central operations in terms of the

provincial Forest Service: that is, $9 million-plus to be handled

centrally, the remainder to be allocated in the regions. I don't know

if the minister is on top of the subagreements or not, particularly

with respect to forestry. But I would say that we should understand how

modest this amount is, in terms of dealing with our backlog problems in

nonsatisfactorily restocked lands in the forests of the province.

I've mentioned before that the NSR lands in British Columbia — that

is, land left fallow in weeds — is the equivalent of a swath 200 miles

long and 50 miles wide. The intent of this is noble, but the amount of

dollars available to do the job in cleaning up the mess that this

administration has left behind is somewhat inadequate.

[2:30]

Interjection.

MR. WILLIAMS: Yes, partly. But you've had so many years over

there, and the cleanup is getting monstrous in terms of dealing with

our mismanaged forests.

Part of the problem is that it's viewed as a political problem. The

program with respect to forestry under the ERD agreement will be partly

to deal with perceived political problems. It isn't a matter of

optimizing or maximizing benefits from expenditures. The intent under

the agreement is to see that the backlog does not increase. That means

expending funds probably on poorer sites, because logging may well be

taking place on poorer sites, and under the agreement the backlog must

not increase. So in any kind of cost-benefit analysis, we're losers. In

that sense the agreement is not as useful an economic document in this

sector as it might be. We should be looking at the biggest bang for our

dollars, to use the phrase that some use, and if we can expend these

dollars with greater benefit, with greater growth and the rest, then

all of us in British Columbia will be better off. But that isn't what

the document moves us toward.

We have prime sites, good sites, in British Columbia that should be

managed first, that should be planted first. They are the most

productive sites and will give a greater return for the dollar invested

in them. That will not happen under this agreement. There will be a

range of things happening under the agreement, most of which, of

course, are beneficial. But we're not going to get the greatest return

on our investment and the federal government investment.

This also moves your ministry into this management sector. As I

understand it, there will be two appointees with respect to the

monitoring of this agreement — two from the provincial government and

two from the federal government. It will be, as I understand it, a

Mexican standoff arrangement. If there's no agreement, then that's it:

there's no agreement. It'll be interesting to see how that works. But

this does insert this ministry into the forest sector, just as it

inserts the federal government into the forest sector, and we have not

had that before.

I understand, too, that we forgo some of our jurisdiction with

respect to private lands in British Columbia, and I also wonder if much

thought has been given to the implications of that. I know that various

members want to discuss different aspects of the agreement — mining in

particular, and others and that will be undertaken by other members on

our side.

MRS. WALLACE: While we're dealing with forestry, I asked a

question of the Minister of Forests (Hon. Mr. Waterland) in question

period today, but he wasn't here. Ever since this ERD agreement was

signed I've been getting calls from people on Vancouver Island, in my

own constituency and outside my constituency, as to whether or not this

means there will be funding available for Vancouver Island, and

particularly for the strategy for survival which the mayors of

Vancouver Island have been pushing so hard — in the amount of some $22

million. I wonder whether or not this minister can tell me that,

inasmuch as the Minister of Forests was not present.

HON. A. FRASER: He's out planting trees.

MR. LOCKSTEAD: I'm very pleased to hear the Minister of

Transportation and Highways tell us that the Minister of Forests is out

planting trees, because as I understand it, we have 1.2 million

hectares of NSR land in British Columbia today. So the minister is

going to be pretty busy for the next 5,000 years, I would guess. I

might add on that topic, since we're still discussing forestry — and I

know that we'll have an opportunity to debate this under the spending

estimates of the Minister of Forests — that Professor F.L.C. Reed from

UBC, a forest policy expert, says that B.C. needs to spend at least

$300 million annually — not over the next five years, but annually — to

renew our forests if we are going to rescue our forests from the

disastrous state they're in now.

What I'm on about, and would like the minister to comment on in

closing debate — although this is not really second reading — is the

portion of the ERD agreement dealing with our mining industry. I'd like

to know if the minister took

part in those negotiations, and how those

negotiations went and were carried on. I'll tell you why. Over the next

five-year period B.C., along with the federal government, has allocated

$10 million for mining exploration and things relating to mining in

British Columbia, one of the largest mining

[ Page

6769 ]

provinces in Canada. What disturbs me is the small

portion of money allocated to our number two industry. Anyway, it used

to be number two; I'm not sure what it is now — in any event, $10

million to this very vital industry.

The minister may be interested to know that Nova Scotia has

concluded the same type of ERD agreement, and got $26.9 million for its

mining industry — a much smaller province in terms of population and

mining activity. Saskatchewan has $12 million. I don't know what they

mine in Manitoba, but little Manitoba has $24.7 million for the same

purpose — the mining industry; the promotion of mining exploration and

these types of things — in the same type of ERD agreement over a

five-year period. Well, I could go on. I've got the whole list for

every province. Ontario concluded an agreement just yesterday, I

believe, or the day before, for $30 million over the same five-year

period for mining exploration and activities related directly to mining.

So I'd like to know from the minister why B.C. got shortchanged in

this very vital, number two industry in the province — $10 million over

a five-year period in this province, where 14 of the 29 metal mines

have shut down over the last four years? I'd like to remind you, Mr.

Chairman, that not one single metal mine shut down between 1972 and

1975 in this province. But we've had 14 mines shut down since. So I'm

pointing out the need for increased funding for this very vital

activity in our province.

HON. MR. McCLELLAND: First of all, on one point made by the

member for Vancouver East on the joint management, I look at that as a

plus, because in the past we've had not joint management but simply

directions from the federal government about where money was going to

be spent — certainly in lot lesser amounts than we've had now. But it's

not correct to say that there's a Mexican standoff if there's not

agreement at the joint management committee. I might say that we have

joint management committees in the other subagreements as well. But

rather, if there is an agreement not to agree on a specific item, then

it's referred to the ministers involved, and then that decision can be

made by the ministers involved at that point.

For the member from Cowichan — who seems to have left the chamber —

I can't answer the question about where the specific money will be

allocated. That opportunity will come in the Forests ministry

estimates, which I assume will be coming forward very quickly.

Finally, to the member for Mackenzie, my negotiations were on an overall amount

of money with the federal government. Specific letters of understanding between

ministers regarding the subagreements were signed, and then the total negotiation

took place between myself and Mr. Stevens and our staffs. The $10 million was

a figure that was there right from the beginning. It was in the letter of understanding.

I must say, though, that that $10 million will be for very specific projects.

In British Columbia, as you know, mining exploration is usually done by the

private sector; they raise their own capital and they go out and look for metals.

We expect that to continue. There are a lot of other opportunities, though,

for the mining sector to take advantage of the other programs which are available.

The industrial funds can be used for mining projects. Some of the IRDP funds

that were devolved to British Columbia from that old program might go to mining-related

activities if they fall into the other criteria. We have an airport assistance

program, which you know about, that could be very important in terms of developing

mining opportunities. We already have one request, for instance, from a mine

in northwestern British Columbia which has the potential to be a very large

copper mine, but which could get started out using some of the gold deposits

there if we could put a small airstrip in. So those are available.

The hydro discounts are going to be extremely important to mining

operations in British Columbia, and the critical industries

commissioner, of course, has one of the two most important industries

in the province as his jurisdiction, and he'll be able to recommend

other things that would go directly to the mining industry to help out

those ailing industries that we think can be saved or those that have

been shut down and we think can be reopened. So it's a danger to put

the $10 million in isolation, because the mining industry can be looked

after in many other ways as well.

MR. LOCKSTEAD: Just to clarify that question, I understand

and I appreciate the minister's response, but really what I was on

about was that every other province, excluding the Territories,

received much more. The relatively smaller province of New Brunswick

received $22.3 million for this purpose. My question was simply why the

B.C. allotment of $10 million was less than half of that of, say, New

Brunswick. Well, I've got the whole list here, but there's one example.

For the minister just to clarify why the allotment was so small....

Perhaps the question would be better put to the Minister of Mines. I

don't know.

HON. MR. McCLELLAND: No, Mr. Chairman, I don't think so. I

think it's just a matter of what we saw we could achieve, and where we

needed to go in order to develop jobs in a hurry, and how much we were

trying to get from the federal government. I mentioned when we talked

earlier in my estimates that we have literally gotten between three and

four times as much money from the federal government over a five-year

period than we've ever had in the past. In the last 10-year agreement,

which expired last year, I think the total amount of money spent — the

total amount — was something less than $250 million by both parties.

We're talking now about a $525 million five-year agreement. Everybody

agrees, I think. Certainly, from the comments of the member for

Vancouver East — although he says it's not enough — I think everybody

agrees that forestry was our number one priority. So we went for our

number one priority with most of the money, and then we looked at where

the other jobs could be created more quickly and how we could stimulate

other industrial opportunity. So it was a matter of looking at what

might have been available, and setting them out in some kind of

priority list. That's not to say that the mining industry is not in

need of additional help. But as I said to the member, you can't look at

only that $10 million. I doubt whether some of the other provinces —

Nova Scotia, for instance — have an opportunity for electricity

discounts for mines; nor do they have a critical industries commission

which can come in and recommend other drastic measures that might be

put in place by all parties. So I think if you take that on balance,

we've looked at the mining industry pretty carefully and have been

extremely aware of the needs, Mr. Chairman.

[2:45]

MR. MacWILLIAM: I don't intend to say very much on this. [Applause.] They are touchy today, aren't they?

I certainly am in agreement with it. The $30 million, particularly in the area of tourism, is good to see; I'd like to

[ Page 6770 ]

have seen more. Tourism has become the second major

industry in British Columbia. It's the one area that has the greatest

potential for growth. Because of its labour-intensive nature and low

capital investment it is an area of real growth in terms of jobs. But I

am happy to see the commitment is there. In

summary, let's get on with

it.

Vote 5 approved.

HON. MR. NEILSEN: Mr. Chairman, I move the committee rise, report resolution and ask leave to sit again.

Motion approved.

The House resumed; Mr. Speaker in the chair.

The committee, having reported resolution, was granted leave to sit again.

HON. MR. NEILSEN: Second reading of Bill 49, Mr. Speaker

SPECIAL ENTERPRISE ZONE

AND TAX RELIEF ACT

HON. MR. McCLELLAND: In rising to move second reading of Bill

49, Special Enterprise Zone and Tax Relief Act, I shall make just a few

brief comments.

The intention of the bill is primarily twofold. It is to position

the province as a competitive participant in the innovative investment

climate of the Pacific Rim and other parts of the world, and to ensure

that all regions of our province can cooperate fully in new industrial

development opportunities.

[Mr. Kempf in the chair.]

Everyone in our chamber, I think, would recognize the importance of

trade to our province's economy, and the importance of establishing new

trade partners around the world. To develop and grow, to ensure the

creation of quality employment opportunities, we need to look in our

province to industrial diversification, developing new products to

market, and encouraging private sector confidence and investment.

The international competition among industrial countries for new

investment is more severe than it's ever been, particularly for the

innovative, high-income, high-growth industries of the future. If we in

British Columbia want to attract these industries and provide

employment opportunities that will suit our skilled workforce, we must

provide a competitive cost, tax and regulatory environment. This act

has been designed to provide these opportunities and to allow all

regions of the province to participate.

The central portion of the bill provides for the establishment of

the zones. They will be designed to allow the province full flexibility

in attracting new types of industry to the province. I would like to

stress that the special enterprises will be just that: industries that

we do not have in the province at present, and industries that will not

compete with existing industry in the province.

We want to use the zones as an incubator, to diversify the industrial structure,

with the longer-term objective of having these industries form the nucleus of

a future generation of industrial activity. It should provide for an exciting

new opportunity, Mr. Speaker, for service and supply industries who are already

here.

The act provides for the authority to establish the zone. The zone

itself will be withdrawn from its present municipal or regional status

and placed under the direction of a zone authority. The responsibility

for developing and administering the way in which these zones will

operate will rest with the British Columbia Development Corporation, or

perhaps a wholly owned subsidiary.

Provision is made for the zone authority to make grants in lieu of a

portion of forgone property taxes to the governing municipality, The

zone authority will assume responsibility for those municipal

obligations necessary for the efficient operation of the zone. It will

also be responsible for contracting on a fee-for-service basis with the

statutory body for any services required for the zone. The intention is

to limit costly regulation and administration and to eliminate a

substantial cost burden in new investment of real property taxes.

In order to ensure that the investment is incremental, and truly

incremental, and that any new investment will not disrupt existing

industrial activity, the bill provides for a zone approval board. This

board will examine every application for special enterprise status, to

ensure that it meets the entry criteria and the industrial development

objectives of the zone and tax relief act — and of the province, of

course. Any investment meeting the criteria that receives special

enterprise status will be required to undertake, by contract,

obligations in relation to its business plan, in order to retain its

status. In the event that the zone approval board considers that a

service or industry would be a useful addition to the zone — say for

the efficient operation of the special enterprises — the bill also

makes provision for their location. However, this will trigger an

increased tax grant as part of the lease that will limit tax losses to

the participating municipality and ensure that the zone does not

provide incentives to companies that don't require them.

Recently the Ministry of Industry and Small Business Development

introduced the Industrial Development Incentive Act, which includes the

industrial development assistance program, small manufacturers

incentive program and the industrial incentive fund. Small Business

Venture Capital Act has also been introduced to improve access to

venture capital.

These new programs, as well as other existing support programs such

as low-interest loans assistance will all be available to special

enterprises where applicable. In addition, assistance with training new

employees will be undertaken where necessary on a case-by-case basis.

This bill contains further tax relief that will open the way for

capturing new investment opportunities.

These tax incentives include relief from the corporation capital

tax. This augments the phased elimination of this tax that was

announced in the March 14 budget. In addition, this bill provides for

the exemption in the zones from the social services tax on construction

expenditures as well as purchases or leases of machinery, equipment or

apparatus used by a special enterprise in manufacturing and processing,

as well as on those goods consumed in the manufacturing process.

The bill will also make possible two very significant corporate

income tax relief measures. Firstly, special enterprise corporations

will be accorded relief from provincial corporate income tax for a

period of ten years. This provision

[ Page

6771 ]

is accompanied by another provincial corporate

income tax relief measure that will ensure that all regions of the

province will benefit. This bill augments the incentives announced in

the March 14 budget under the Provincial-Municipal Partnership Act. It

provides for a five-year provincial corporate income tax relief period

for eligible corporations undertaking substantial new investment in

municipalities or in an area not in a municipality. The municipalities,

of course, will be those that have entered into an agreement under the

Provincial Municipal Partnership Act.

I'm sure that we can all see the opportunities that these incentives

will make possible for all regions. As an additional incentive, you

will have noted in the federal budget recently reference to a

streamlining of federal tariff relief programs. The federal government

has agreed to British Columbia's request to bring the variety of

tariff-related relief programs under one statute. This will ensure that

the province can utilize the federal programs as part of an overall

investment marketing package.

This new legislation will be developed by the federal government

over the coming months and will be applicable on a nationwide basis. I

would ask that the hon. members give their careful consideration to all

aspects of this bill, because we have before us, I think, a very unique

piece of legislation that states very clearly to the investors of the

world that this province is prepared to work with them in building for

the future.

We have before us a bill that will allow British Columbia to take

its place in the dynamic economic environment of the Pacific Rim and

the rest of the world. This bill as proposed will ensure, Mr. Speaker,

that British Columbia can tackle the difficult job of industrial

development and diversification. I would hope, and I know in my heart,

that all members will support this very timely and historic legislation.

I move second reading, Mr. Speaker.

MR. WILLIAMS: Well, you know, we have files this thick in

terms of the great anticipation with respect to this legislation. The

leaks were like a sieve last summer in terms of the other minister who

was responsible for this so-called initiative. Getting around those

terrible federal problems and avoiding the tariff problems and custom

problems and all the rest of it was the core justification for the

special enterprise zones.

What does the new minister, who has to carry this lump along, have

to say? He says: "Well, we've met with the federal government. What do

you know? They're going to bring all their statutes into one big fat

new statute," What's that worth? One big fat federal statute, what's

that worth?

That's the end achievement of a year's industrial strategy by our

Social Credit administration, one big fat federal statute that simply

consolidates all the language in one place. The intent was something

very different indeed. The intent was to establish enclaves outside the

nation, in effect, in terms of avoiding all these federal rules and

regulations. The feds have laughed in your face. British Columbia has

become the laughing stock on that one. You haven't qualified.

If there is something to be said for this sort of thing, they may

entertain it in Cape Breton, but they will not entertain it now in

British Columbia. So all of that huffing and puffing over the last

year, in terms of special enterprise zones and all the rest is to what

avail? The previous minister was talking in terms of removing all the

labour laws too in the special enterprise zones. Fortunately, that

element has disappeared.

That is not before us today, in terms of excluding these areas from

provincial labour legislation. So that element that the previous

minister was endorsing, at least, is not there. I hope that the present

minister can take some credit for that, or the new Minister of Labour,

because that is a modest improvement.

But what you do to the municipalities that these zones are within,

there you take them, and they are enclaves removed from the

municipalities totally. That is, in the special enterprise zones, as

now envisioned, there will not be the municipal regulations that have

developed over this century in terms of zoning regulations, fire

regulations, safety regulations, amenity regulations or pollution

regulations. All of that goes by the board. It disappears. So we now

have the prospect in Delta municipality of none of those regulations

prevailing that the municipality of Delta presently has in Tilbury

Island.

[Mr. Strachan in the chair.]

Is it any wonder that the largest city in British Columbia has

thumbed its nose at this legislation? Is it any wonder that the entire

city council in the city of Vancouver said: "No thanks"? That's a city

council that includes part of your farm league. Alder-men from the

Non-Partisan Association, so-called, like George Puil and the others

have said: "No thanks, we want no part of this deal. What we're doing

is running a city here. What we're doing is establishing standards here

in terms of the kind of city that we want. We don't see this as part of

what we want in the most important city of British Columbia." That has

to tell you volumes about how grand this legislation is. It has to

indeed.

I wonder how much of it is, in fact, just dealing with some of your

own problems in your own ministry. BCDC is going to be the parent

corporation in this whole exercise. Let's think about British Columbia

Development Corporation's industrial estates. How successful have they

been? BCDC has several industrial estates around the province. There's

Duke Point in Nanaimo; there's Tilbury Island in Delta. There are

others in Prince Rupert and Kamloops and elsewhere. How many acres have

you got in those industrial estates? What you have is 5,358 acres. How

many are occupied? This is after over a decade of activity in the

industrial estate business. The amount that you have occupied is about

582 acres — 11 percent.

So part of this exercise, as I see it, is to flog off that 4,776

acres that you still have sitting idle — that is, that you haven't been

able to handle. That's part of it. Part of this exercise is to make use

of the land you've put on the market and have not been able to flog in

any other way over this past decade. To do it, you're willing to gut

all the municipal rules, you're willing to throw the corporation income

tax of the province for the next decade into the pot, and on and on and

on. Still, all the tax benefits will flow to the federal government.

You're setting up a beggar-your-neighbour system with respect to

municipality to region and municipality, and you're willing to let the

feds run off with all the boodle in terms of the tax system. I think

the feds must be laughing about this one.

[3:00]

What about a forecast in terms of forgone revenues for the province

of British Columbia? Have you got one? When the press has asked you, I

think the answer has been that no, you don't. Nobody prepares this kind

of program at the federal level or in other provincial administrations

and doesn't have forecasts in terms of forgone revenue. If you've got

the

[ Page 6772 ]

numbers, please bring them forth to the House, but to date we haven't seen them at all.

The whole business, though, of gutting the municipalities is one

that should concern us all. You've got the hammer in the bill. You say

the municipalities are to provide the services for these zones — that

is, the water, sewers, and all the rest of it — and if you don't, the

cabinet will force you to do so. That's the big hammer in this bill.

The cabinet can force the municipalities, which have already been

gutted, to provide the services on demand for the special economic

zones.

And what about forgone taxes in terms of the municipality property

tax for the municipalities affected? Well, there will be a grant in

lieu of taxes, but what will the grant be? The grant will be factored

on the residential land base rate, and in the city of Vancouver and

elsewhere that represents something like one-quarter of the normal

industrial tax income for the community. So what you're telling these

municipalities is: "You forgo 75 percent of your municipal tax revenues

on these special economic zones, but you've got to service them; you've

got to provide the sewers and the water. That's the deal." And you call

this whole blanket program — what was it? — a partnership. A

partnership! You've got legislation that is just full of hammers in

terms of dealing with the partner. Not even a junior partner; they have

no say. And there was no consultation. Check with the municipalities.

Were any of them talked to in terms of these details? Was the Union of

B.C. Municipalities conferred with? The answer is no. And this is

supposed to be the new partnership — the new deal — from this

administration.

It's unfortunate that we really have to face this kind of proposal,

which was originally intended to deal with federal problems. The feds

have kind of laughed at you and said: "You're farther back in the

lineup, boys. Cape Breton is far ahead of you. We'll entertain it

there, but we won't entertain it in British Columbia; certainly not

today." What you do is open up this whole thing to favouritism and

specialization. Cabinet can declare an enterprise a special enterprise.

The guidelines are certainly not clear at this stage of the game and

the opportunities are all there in terms of discriminatory decisions

that would be negative with respect to existing industry. The

protection is not built in in this legislation. It might be developed

at some administrative level, but the evidence isn't there yet that

that's going to happen.

What we have in British Columbia are industries that have hung in

through the bad years, through a major recession, which don't get these

benefits. The industries within the city of Vancouver will get none of

these benefits whatsoever. We have no real guarantees that there won't

be favouritism in terms of decisions to be made. It would be

interesting to see if the minister can give us a list of the activities

of the Premier and the Minister of International Trade and Investment

in terms of enterprises that are going to come here which wouldn't have

come otherwise. If you check other special enterprise zones, such as

Britain, where they've been established with the federal enclave

situation resolved — unlike British Columbia, where there are federal

benefits for them; national benefits, in Britain's case — what were the

numbers? Twelve percent of them were new industries that wouldn't have

been there otherwise. Twelve percent is all there was. In your case you

don't have any of those federal benefits with respect to these zones.

So it doesn't make a heck of a lot of sense.

I think what has happened is that this minister was stuck with the

bum work of the previous minister and has decided to carry on

regardless. He has been abandoned by the federal government in terms of

this exercise, and still carries on with the bubble-gum and baling-wire

proposal that we have before us now. What will these enterprises be?

Might they be interesting ones? Might they be something fascinating and

productive, like munitions? Might that be one of the new enterprises?

Let us know. If I remember correctly, the miserable exercise

developed...the papers prepared by your department last July — July 9,

to be exact — talked about pharmaceuticals, automobile parts and

electronics as the great new enterprises in these zones. There's no

talk about any of that stuff now. You're still trying to make the great

flying leap into new pharmaceuticals, electronics and automobile parts.

It has not been well thought out from the beginning. It's tattered

and torn. It has been falling apart as you've tried to patch it

together. Now we have something that's far less than was originally

intended, with no indication whatsoever that we're going to get those

industries. The evidence abroad indicates that even with greater

concessions the benefits are modest indeed. So we on this side of the

House will have no trouble in voting against this legislation.

MR. LEA: When a piece of legislation like this is put

forward, you try to sort it out in your mind and ask: will it or will

it not be of assistance to British Columbia? Governments have been

known in the past to put forward programs, policies or legislation that

are nothing more than public relations vehicles to enhance the image of

government. Will they work? That has to be the question. Will it do the

job the minister says he wants done?

The minister, I think accurately, outlines some of the problems and

some of the future directions that we have to go in in British

Columbia. Do we need a more diversified economy? I don't think anyone

can question that. All you have to do is take a look at the fact that

our credit rating was lowered by both Moody's and Standard and Poor's.

The reason given by Standard and Poor's for lowering our credit rating

was the lack of diversification in our economy, and they couldn't

foresee that it was going to happen. Therefore they didn't feel that

B.C. deserved the kind of credit rating that we previously had; they

couldn't see that diversification coming down the tube. Obviously we

want a diversified economy. We have to go for more value-added in our

basic industries — in forestry, fishing and mining. There's no doubt

about that. We have to go for new manufacturing jobs. We have to try to

create new wealth, new employment and new revenue for government. The

minister has put that eloquently. But he has not drawn the connection

between the problem, the desire for the future and how these special

enterprise zones will enter into the picture. That just isn't there.

There are two pieces of legislation that have come in in this

session that, to me, create one big problem. I think the member for

Vancouver East who just spoke put his finger on it. What if you have

been in business for some time in this province? You've suffered the

storm; you've managed well. You've kept your debt load down as much as

possible. You've had good cooperation between workers and management.

You've looked after your markets. You've served them and you've gone

after new markets. You've been innovative. You've used initiative. Then

all of a sudden you see someone who has been making the same widgets,

trying to sell into the same market, who is going to be put into either

a critical

[ Page 6773 ]

industry situation by the other legislation or a

special enterprise zone by this, and you're going to see your taxes

subsidize your competition. Do you think that is going to be met with

approval by the people who are already in business and have toughed it

out and suffered? I don't think so. It's not fair. Taxation has to be

fair if it's going to work.

It seems to me that this legislation centralizes the decision-making

process. Government is going to say where it would be best for you to

locate. They're going to direct you into a location by tax incentives,

not direct you into new wealth creation or new employment creation

necessarily, but into a location. They're saying that if you're going

to do it, you're going to do it here or you're not going to be eligible

for any of these incentives. But if you decide to start a new business

outside the zone because it may be where it should go — in the

entrepreneur's decision-making process — then you don't qualify. If you

happen to have located your business outside and it's not going to be

included — that's an old business — then you're out of luck. It is

going to be an administrative and taxation nightmare. It's going to be

a quagmire of regulations and misunderstanding.

Having read about other special enterprise zones in other parts of

this country, I've found that one of the biggest benefits that came out

of one special enterprise zone in Nova Scotia was that entrepreneurs

working in that enterprise zone were made aware of some things that

were not generally known to entrepreneurs, and those were all the

regulations about tariffs and duties. People were missing out on tax

rebates — border crossings.... It was just a nightmare of regulations.

There were people who went in there and said: "Look, we're going to

give you a hand in understanding some of the things that are available

to you." One manufacturer imported from the United States and then sold

the finished product back into the United States. He found out that all

the time he was doing business there was a rebate he could have applied

for in that transaction, but hadn't because he didn't know all of the

regulations surrounding it. That business person was helped by the fact

that that advice was there. But does that advice necessarily have to be

confined to a special zone? Shouldn't that kind of advice be made

available to all business people? It's centralized decision-making.

It's going to be a quagmire of regulations. It's going to be a quagmire

of taxation policies. It doesn't appear to me that this legislation is

going to do the very worthwhile thing that the minister says he wants

to be done. If the minister is serious, it wouldn't surprise me in the

final vote if he votes against this himself.

[3:15]

How can you lay out so eloquently the problems and the solution in

general terms, and then bring in a piece of legislation that won't have

anything to do with taking you in the new direction the minister wants

you to go in?

Interjection.

MR. LEA: Well, it was fairly eloquent, but it was written for him. You have to take that into consideration.

Yes, we have to diversify. We have to look for new markets for those

things we do produce, We have to have available to our business

community the methods by which they can see what products are being

consumed in other areas that we possibly could produce here. I think we

have to take a look at an import....

AN HON. MEMBER: Substitution.

MR. LEA: Yes, an import substitution — I can't remember the

exact technical terminology. You have to take a look at what it is you

consume in your province or in your jurisdiction — import replacement

program. As I understand it, the minister is thinking of bringing in an

import replacement program, if not in the near future then in the

future. If that happens we can discuss whether that should be done

sector by sector or in a more general sense also. Ontario has had some

success with their import replacement program, going sector by sector.

But having looked at their experience, I would doubt whether government

should become so involved in the import replacement program that they

start centrally telling them where it is they should look for those

import replacements in a general sense also.

Will this legislation work in a general sense? I don't think so. The

minister hasn't convinced me. The legislation as it's written on paper

doesn't convince me that it will work. As a legislator, would I be

doing my job if I were to say to myself: "The government is doing a

fairly decent job in terms of the public relations around this

legislation and their package. So if I were to vote against it, will

people out there say: 'Gee, Lea's just negative. He's not voting

against it because he's a negative person and he doesn't want to give

the government any credit for a job well done"'? So you always have

that to face as a legislator. But, Mr. Speaker, regardless of the

thousands of taxpayers' dollars that are going to be spent on promoting

this legislation, I can't in good conscience vote for it, because I

don't think it will — I'm positive that it won't — do the job that the

minister says he wants it to do.

Again, as the member for Vancouver East said, thank God they've

moved away from a few concepts that they had in mind; that they were

going to use it as a manufacturing centre to put together other

people's work. In other words, Japan as a higher economy than ours and

more a value-added economy, is actually going out and trying to find

other countries that will assemble some of the products that they want.

We have one here — the wheel assembly plant. We cannot compete with

other jurisdictions in this world with labour costs in those kinds of

plants, nor do we want to. We don't want our people to work for a buck

an hour, and if we decided to, some of those Third World countries

would go to 75 cents an hour overnight. There's no way we can compete

in that area. So the special enterprise zones are not going to be used

for that, I gather from the minister. And as I say, thank goodness for

that. Are you going to do away with labour laws? No, not in the

legislation. Thank goodness for that.

But if you don't do some of those things — and I'm not saying you

should — then these special enterprise zones have no edge over anybody,

even in the short term. So to vote for it would be, I think, abandoning

the principle of going for a more diversified economy. I think it would

be abandoning the principle of local decision-making. I think it would

be abandoning the principle of simple taxation — understood taxable

measures. I think it would be abandoning the principle of

entrepreneurship at an individual level. Therefore I will be voting

against this legislation. I will not be voting for a public relations

program for government. I don't think that's my job.

MR. DAVIS: Mr. Speaker, I have trouble with several pieces of

legislation — or several policies, at least — that the government

appears to be endorsing. One is the purchasing

[ Page 6774 ]

policy. It appears to be protectionist. If in fact

we are going to endeavour to buy preferentially in British Columbia,

that bothers me from a broad economic point of view.

The critical industries legislation bothers me, because, again,

there is a measure of direction by government. A few people appointed

by government make the decisions. Particular firms will have an

advantage which others will not. Special enterprise zones — the

terminology begs a number of questions. I think special enterprise

zones, to the extent they will be useful in British Columbia or

elsewhere, perform a very limited function indeed. The discussion so

far has been broad-ranging. I believe that the best economies are

generally the largest economies in which resources can move freely from

industry to industry, from area to area, where industries locate

because the costs naturally are least and where the market advantages

are greatest.

Any country, any province, any state which endeavours to divide up

its territory and then give by decree special advantages to industries

which locate in those particular territories is defying the fundamental

concepts of economics. It is engaging in the old infant industry

argument, for example, which was the principle germ on which

protectionism began to grow in the last century and flourished

particularly in the 1930s.

Special enterprise zones, where there are special advantages decreed

by government, are likely to flourish most where costs generally in the

economy are high. We have in British Columbia, for good reason, high

wage rates because our labour is productive and can by and large earn

its way. But we have high wage rates. If low wage rates were to be paid

in the special zone, then certain industries would certainly go there.

I gather that's not going to be the case.

If the rules we have for environmental protection, which are quite

stringent in this province, were to be relaxed in certain zones, there

is a cost-cutting device. I trust that our environmental laws —

national, provincial and local — will be enforced in these zones, so

that won't be a cost advantage in these zones. But there are many other

costs which industry faces in British Columbia which will be reduced, I

understand.

Our power rates are among the highest in Canada. Are we going to be

offering bargain power rates in these special zones? Certainly that

will discriminate against other industry in the province; indeed, to

the extent that these are subsidized rates, other industries will pay

even higher charges for their energy.

We have the highest or about the highest property taxes in Canada.

Are we going to give special property tax concessions to industries

entering these zones? We've had, uniquely in Canada, a tax on machinery

and equipment that is being phased down if not phased out. Is that tax

to be eliminated in these zones? We have the highest corporation tax in

the nation. Are we going to charge a much lesser tax or a zero

corporation tax in these zones? We still have a capital tax, at least

for sizeable companies, and recently an increased capital tax for

banking institutions, institutions at least which don't have their

headquarters in British Columbia. Are we going to eliminate those kinds

of taxes, that capital tax particularly the banking tax in these zones?

What we're really saying, if we mean to do these things is that

there are certain zones, the boundaries of which are to be defined,

where virtually all the growth, certainly the cost advantage growth,

will occur. The minister says this will be new industry, industry which

we don't have in the province

Well, what about the forest products firm that may be going — has

announced, at least — to the Britannia area? There are forest products

companies which have had aspirations in that direction for a long time.

Is their diversification into the fine papers area, etc. to be

curtailed unless they too go to Britannia to locate and operate there?

You can't really draw a line between new industry and old industry

if you look ahead over any period of time. Industries evolve and

develop new techniques, new technology; new processes come along and

the existing industry adopts them. So you're really truncating the

development process if you mean seriously to have zones in which all

these cost preferences exist. Looking at this legislation, therefore, I

have to really believe that virtually all of the industries which we've

had or are likely to have will not locate in those zones because the

preference will be so flagrant that it won't occur.

I think there may be a few functions, such as products brought from

another country to be assembled for re-export to a third country, that

make sense. It's much more akin to a wholesaling, warehousing function.

There may be some activity along those lines which follows from this

legislation, and which is not offensive to the companies operating

otherwise throughout the province. But I have great difficulty

identifying more precisely the kinds of industry where, fairly and

legitimately, we can hope to attract new activity through special

economic zones which isn't highly discriminatory relative to all our

other industry, present and future.

I listened to the hon. member for Vancouver East. His presentation

was a mixture of envy and concern about the development process. He was

concerned that companies entering these zones would escape the

regulatory process, at least as far as the municipalities were

concerned. I believe in freer markets, in greater opportunity for

enterprise, in less regulation, but I would want the same degree of

regulation to prevail generally across the province, ideally across the

nation. I wouldn't want us to be fostering the development of a

particular industry, a hothouse industry if you like, which is created

because government decrees for a short while to set up these special

preferences.

[Mr. Veitch in the chair.]

I'd feel much better about this legislation if I could put my finger

on the kind of industry which we will get as a result of passing this

bill, which doesn't offend my basic instinct — which fits broader

markets, not special zones; more enterprise over larger areas, not

less; industry locating because of basic cost and efficiency

advantages, and not simply because of government legislation, perhaps

government legislation of this kind, which tends to offend my basic

feeling about what is economic and what is not.

[3:30]

MR. ROSE: I'd like to thank the member from North

Vancouver-Seymour for a thoughtful presentation and analysis of the

inadequacies, really, of the bill. I have no quarrel with the

government's seeking some way around this sort of structural change in

our society, its social and economic consequences. I think that's a

laudable objective, and I think it's the role of government. I have no

quarrel with that. But it's based on perhaps insufficient evidence and

insufficient analysis, and I find very worrisome the fact that it

appears to be a sort of simple approach to a very complex problem. We

really haven't had a chance yet to examine in any great depth

[ Page 6775 ]

the kinds of directions we are going in and what's

really in store for us. All we know is that they're going to be

socially disruptive, they're going to be severe, and the old simple

answers to the questions that once faced us will be increasingly

difficult to find. Floundering around looking for them is, I suppose, a

worthy approach — at least the thought of it is, and the activity of it

is. This is not a solution, in my view, because it fails to analyze the

problem sufficiently, and looks to turning certain parts of British

Columbia — in desperation, really — into some other sort of Philippines

or Singapore, or some other way that will affect taxes or invite people

here in a competitive way to be lured away from some other place which

will give them even more in the way of incentives and tax breaks.

I think it fails to recognize that the technology today is really

worldwide. It's not something that occurs in just one little area, and

you can't lure a plant from one place to the other simply because of a

few tax breaks. Nevertheless, it's an exercise that has had a lot of

currency — all over North America and perhaps in Europe and Asia as

well — because it seems to be a simple solution: that if you make

things attractive enough, if you give away enough of the public's

resources, somehow you're going to get the benefits provided by an

industry locating in that area.

I would like to refer — I hope briefly, because I know your

feelings, Mr. Speaker, about people who read lengthy documents; I know

that upsets you and irritates you.... I recommend that the House read

in full a page 5 article, reprinted from the Washington Post, that appeared in the Vancouver Sun

on May 27. It's by Nicholas Lemann, a man that I don't think is a

well-known radical; I wouldn't think there'd be many of them employed

by the Washington Post. Under the title "The Fraud of Boosterism," Mr. Lemann has this to say:

"The fraud I'm talking about is 'economic development.'

"Now you may think that as far as gigantic frauds go, I

might have come up with something a little more glamorous. But this one has

by now worked its way into every fibre of American life. As a widely shared

faith, it's gaining fast on religion, with less proof that it works.

"Obviously

there is such a thing as economic development. What I'm talking about is

the belief by numbers of states and cities that they can create it by pure force

of Chamber of Commerce boosterism — or by that and throwing around a lot of

public money, which is called 'creating incentives for business."'

He goes on to talk about the phony development of luring the sports

team into a particular area. I'm reminded of the Minister of

Communications' former colleague, Senator Perrault, who is now rushing

around the country trying to lure a professional baseball team here. It

could have some great advantages, we are told. But if you have to give

away all the benefits of that industry in order to attract an industry

here, it doesn't seem to make much sense to me. It doesn't seem to make

any more sense than firing 2,000 school teachers so that you can hire

somebody to work in a fertilizer plant. The total number of people

employed is going to be the same, or perhaps even less, and the

public's income is probably going to be a lot less.

"When governments have generated prosperity, it has been

through huge public works projects like the Erie Canal, rather than whiz-bang

public relations. Next time you hear about a place's impressive efforts

to bring in, say, high-tech business, ask how many jobs have actually been snared,

and notice the long throat-clearing that follows."

The

article concludes by saying this:

"Quite often the tax breaks, free land, and other

concessions that economic development commissions offer companies turn

their new plants into actual financial drains.

"Even apart from that, though, the cult of economic development

turns heads. It causes the people who should be thinking about delivering the

garbage and making the schools good to concentrate their mental and emotional

energies on that big trip to Silicon Valley instead.

"Providing basic service is what local governments are supposed

to do, and it's also probably the best way to encourage true development."

What are the municipalities going to do now, instead of

concentrating on their garbage and sewers and roads, and delivering

services? They're going to be threatened, because within these zones

they're actually going to be under an official trusteeship, just like

the Vancouver and Cowichan school boards. There's another name for it,

a euphemism, but it amounts to the same thing: you've got a zone

authority. Whether it's a single individual or a board, once the zone

authority establishes a zone in a particular part of a municipality....

I don't know that the municipalities have anything much to say about

it. I would like to ask the minister how he would have enjoyed it when

he was a municipal alderman in the city of Langley if the big, bad

provincial government had suddenly come in and, without any particular

regard to the local municipal council, established a zone. This zone

has the potential of changing all of the zoning and planning that has

gone on previously in that particular municipality. I'm not saying it

will every time.

The minister makes a face. He makes a face often when I speak.

Section 4. Just to show him that I've read at least as far as

section 4 of the bill, "Land or land and improvements established as,

or included in, a zone by a regulation under

section 3 (l) (a).... But

here's the thing under

section 3 (l) (b): ".... becomes rural area and

ceases to be part of a municipality, regional district...." Special

status for zones. I would think that that's reasonably clear, even

though I only read the high spots of it — and I'm certainly not quoting

it. It ceases to be part of a municipality or regional district.

What we've done is taken a municipality, part of it or all of it as

the case may be, and thunk! — we put it under special official

trusteeship called a zonal authority. Municipalities are worried about

that. I have been discussing this matter with some of the municipal

administrations that I am honoured to represent. They don't like it.

They're afraid — especially those that have signed partnership

agreements — that what it's going to do is to jeopardize those

partnership agreements. They're really worried about how it's going to

affect their ability to deliver services. They're worried about the

effect on pollution control, roads, sewers, safety, fire protection —

all the rest of those responsibilities where the zone settles in a

particular area serviced by a municipality or a regional district. Many

of those costs will be borne by the municipality over an island within

their municipality or regional districts over which they have virtually

no control. Also, if they cut off the roads or fire services, guess

what they get under the

[ Page 6776 ]

offences

section — $100,000 fine potentially. This

has got a lot of clout in it, this particular piece of legislation, and

they're not really very pleased to have it. I can say without fear of

too much contradiction that the municipalities I represent are less

than enchanted by the prospect of coming under one of these special

enterprise zones.

They are also concerned that there may be, hovering in the wings, an

enterprise or an industry that they have, through their own development

branches or councils or teams, on the verge of settling in their

particular zone. They've done all the wooing. They took the girl out to

dinner several times, then along comes the special enterprise zone, and

the girl runs off with another guy. She flees the coop after all those

good dinners. They're a little bit worried that they may have loved and

lost a particular industry, and what they were going to receive from

them — unless they were going to give away the store themselves — were

certain kinds of tax benefits. There would be no purpose in having that

industry locate in an area unless there was some benefit to it. It

either provides taxes or it provides employment for the residents of

that area, so desperately needed in this province.

I don't know what the score is. All I do know is that these things

have not worked very well in the past in Canada. Special incentive

zones have not worked very well. It hasn't pulled Cape Breton Island

out of the doldrums. It may have saved it from going completely

belly-up, but I know there's been a lot of money shovelled off the back

of a truck, through DRIE and its predecessor DREE, that hasn't done a

heck of a lot. It may have caused Michelin to settle down in New

Brunswick for those benefits, when it could have settled in Toronto and

provided benefits for that area. I'm just waiting for somebody to get

up and say: "There he is favouring central Canada again." We didn't get

much of that stuff. We didn't get much of the DREE pogey out here. We

were cut off. A certain

section of the province, that little CPR

empire, got part of it; they were in a DREE area. But beyond that there

wasn't very much coming to us.

I think that the councils are sincerely worried about all this, and

they certainly have a right to be. Before any of these are entered into

and we go very far, we should have an analysis. What kind of jobs in

our society are likely to be on the increase? From what we know, high

tech is not going to be the solution. It's going to replace people, and

it's going to expand certain jobs, but they certainly are not the

high-skill jobs, nor are they the high-paid jobs at all. I think it's

an illusion. It's fraudulent to tell people that this is what's going

to happen to them.

This is a response to government's pressure to appear to be doing

something. I think it was the member for Prince Rupert (Mr. Lea) who

said: "After all, we're always considered negative. We've got to try

something." Why don't you try something that doesn't take away powers

from the municipal councils to develop certain kinds of agreements

based on a regional development of industries and occupations native to

and natural to the industry? I don't think you can make the place

another Singapore. I don't think it's possible. I don't think you have

enough of a skilled and beaten workforce. You don't have enough

peasants here yet; if you keep it up, you will. I think that the effort

to provide diversification in the economy and employment for the people

of British Columbia is laudable enough, but wage slaves and wage

peasants do not make very good consumers.

If that's the effort that is going to be directed in here, and if in

addition we are going to have a low-paid workforce and we're going to

provide more giveaways to the municipalities than can be gained from

benefits establishing these zones, then I think it's really an effort

in futility. We can't look to very much development from it, but it may

be great PR.

[3:45]

MR. PARKS: May I have leave to make an introduction?

Leave granted.

MR. PARKS: I trust all of us in the House have noticed that

young lady up in the Speaker's gallery who is using sign language to

communicate with a group of young people up in the gallery. I am very

pleased to say that I have just attended a meeting with the hon.

Minister of Labour, who has just announced that pursuant to the

vocational rehabilitation service program we have agreed to further

fund ongoing studies for a group of nine young handicapped British

Columbians to attend Gallaudet College in Washington, D.C.

This is the only degree-granting college which is able to deal with

students who have the handicap, and I am pleased to advise the House

that we have nine of them here this afternoon: Avonne Brooker, A.J.

Brown and Michael Cizick; Steven Fredrickson, one of the group that

will be going to Washington, is presently in Saskatchewan competing in

a chess tournament. We also have with us Tracey Leinster, Paolo Serena,

Ester Shinkawa. and Mark and Patrick Tarchuk. It is just very

gratifying to see a group of youngsters who notwithstanding their

handicap have made a tremendous effort to overcome it and are dealing

with it. I am proud to ask the House to join me and make them welcome.

MR. COCKE: Mr. Speaker, on that same matter, the opposition

is very happy to have found that the minister has seen fit to send

these students to Gallaudet, which is an outstanding university in this

particular area. We would like to congratulate those people who are

going and congratulate the minister for this particular move.

HON. MR. McGEER: Mr. Speaker, just before dealing with the

bill in question, I too would wish the very best to our young people

who are going to Washington and say that the wishes of all the members

of the Legislature are with them to have a great success.

I know they and other members in the gallery are listening to what

is being said today. The members opposite may be hearing, but I hope

they are listening too, because there aren't very many bills in the

Legislature that I would want to be on firm record as supporting that

would equal this particular bill in its significance.

Mr. Speaker, I have been a member of this House for nearly a quarter

of a century. In that time, I have heard endless speeches about how we

are giving things away to business. It has been a consistent theme of

the members opposite, with no one more insistent upon the subject of

giving away to business than the second member for Vancouver East who

led off the debate objecting to this particular bill.

In that period of time, the commitment of the gross national product

to government has increased from less than a third to almost one-half.

While we have been taking for granted the industry of our country,

believing — I think, in some cases, with the socialists opposite, deep

in their hearts — that industry has been given something in Canada and

has not, as the truth lies, been carrying government on its back,

[ Page

6777 ]

that has been the circumstance. People in Canada,

perhaps even the socialists, are beginning to realize that the load is

too heavy. What sorts of things bring that realization? Soaring

unemployment brings that realization. Displacement of union workers

without new jobs to take their place brings that realization. The

slumping of the Canadian dollar from $1.10 U.S., when the member who

has just finished speaking sat in the House of Commons in Canada, to

less than 73 cents — not quite half, but down by some 40 percent....

These are all indicators of an inability of Canada to compete

industrially.

MR. LAUK: You're always putting Canadians down.

HON. MR. McGEER: We don't put Canadians down, but what we

must do in Canada is put socialists down. We must put them down,

because if we do not, they will wreck the Canadian way of life.

Interjections.

HON. MR. McGEER: I pity Ontario, now under the yolk of the NDP, starting today.

Interjections.

DEPUTY SPEAKER: Order, please.

HON. MR. McGEER: Mr. Speaker, you watch the problems created

in the province of Ontario now, as in that province they begin to put

to work the socialist theories that did such damage in British Columbia

from 1972 to 1975. Yes, the people of British Columbia knew enough to

put the socialists down in 1933. They knew enough to put them down in

1937. They knew enough to put them down in 1941. They knew enough to

put them down in 1945. It wasn't putting Canadians down; no, it was

allowing Canadians to rise because the socialists were put down.

I have no objection to the socialists as fine Canadians. It's their

economic theories that need to be put down — the crazy economic ideas

that you're giving something away. No one, Mr. Speaker, has more

dangerous economic ideas for British Columbia than the member for

Vancouver East and his understudy while he was in power, the Leader of

the Opposition. For radical economic views that are hostile to

business, you only have to look at that pair, the Leader of the

Opposition and the second member for Vancouver East (Mr. Williams).

When he first came to the House, he was the understudy of the member

for Vancouver East.

DEPUTY SPEAKER: Hon. minister, back to Bill 49,

HON. MR. McGEER: I want to tell you, we've heard the

attitudes to business just today. We've heard it this afternoon. They

are afraid of business success in British Columbia because it has to be

because something was given away.

Interjections.

DEPUTY SPEAKER: Order, please. I'll ask all the members to come to order, please.

HON. MR. McGEER: Well, it only indicates how much the truth hurts. It

was not theory. It was not speeches when the member for Vancouver East was ruining

the resource industries of British Columbia. That was practice, and you have

to listen carefully to the anti-business, anti-industry, anti-employment rhetoric

that we are getting from the members opposite now to realize just how dangerous

it would be. I can only think of one thing worse for the poor people of Ontario

today, and that would be to have the NDP from British Columbia rather than the

NDP from Ontario calling the shots in that province.

MR. COCKE: On a point of order, Mr. Speaker, for a person

that has been in our chamber for nearly 25 years, as he indicated, and

doesn't know the rules better than he does.... He is totally off the

bill, totally outside the parameters of the bill. Mr. Speaker, could he

be brought to order?

DEPUTY SPEAKER: The hon. minister continues on the principle of Bill 49.

HON. MR. McGEER: I'm endeavouring to concentrate narrowly on

these special enterprise zones. If only the members opposite would not

remind me continually of their abysmal record in office, I would

certainly be much more capable of directing the attention of this

debate to the future and the importance of this bill on special

enterprise zones to that future.

It's an important positive signal that we in British Columbia do not

believe that there has been any giveaway to business. What the special

enterprise zones say is: "We believe we need more business in British

Columbia. We need more investment. We need more jobs." Are you against

that?

Interjections.

HON. MR. McGEER: Not against that; just against the methods to bring it about.

When their methods are introduced, it's a disaster. We've had that.

We don't have to compare speeches or theories. You were there when you

brought about despair in the resource industries at a time of record

prices.

DEPUTY SPEAKER: Order, please. The Chair must insist that we

go back to the principle of Bill 49. Would the hon. members not

interject while the hon. minister has the floor, or any other member.

Please continue.

HON. MR. McGEER: One of the responsibilities that I carry for

the people of British Columbia is to attempt to do some business

recruiting for the province. To that end, I've been to California, to

Texas, to Massachusetts, to North Carolina, to Europe, to Japan, to

Hong Kong, and to most areas of the world which are generally

considered to be the fastest growing in terms of economic performance.

Most of this....

HON. MR. PHILLIPS: They sure aren't socialist countries, are they?

HON. MR. McGEER: No way. There is no socialist area in the

world today that is booming in high-technology performance. There is no

socialist area in the world that is performing even modestly in that

field. There is no socialist area in the world today that has any

significant development at all in

[ Page 6778 ]

high-technology industry — no socialist area in the

world. I want to tell you, you think very hard and you may consider

that in the United States under President Reagan that country has had

an economic disaster. I know that the country's economic direction is

not to the liking of the NDP, but this is the....

Interjections.

HON. MR. McGEER: There, you see, the applause. This is the

area in the world that is fuelling the technological revolution, that's

producing the dynamic economic growth, that's drawing investment from

all over the world — and they're against it.

I just want everybody to note the applause when the idea that

they're not in favour of the type of economy that United States has is

underlined, because they want to go against that proven record of

success. That's their ambition over there. They want the kind of

socialism, I suppose, that characterizes eastern Europe or

characterizes other areas of the world that practise a different

economic system than this government believes is appropriate for

Canada. It's entirely in that line that this particular bill has been

introduced, because what it says is that we believe in business and

this is our way of saying it.

[4:00]

I want to tell you, when I travel and meet industrial leaders around

the world, we have a problem here in British Columbia. That problem is

in the New Democratic Party caucus; that problem is in the record of

British Columbia during the years when they were in power. You say that

was a long time ago, and it's been forgotten about around the world. It

has not been forgotten about, nor will it be quickly forgotten about.

The federal government policies.... With the greatest respect to the

former national government, it was considered to be a highly

nationalistic, far-left government, hostile to world investment, and

people just did not want to come to Canada, because they felt

uncomfortable. When I go to these various areas and say, "We are

contemplating in British Columbia setting up special enterprise zones,"

that's when the notebooks and the pencils come out. It means we are

seriously intent in British Columbia on developing business in the

future.

The scornful laughs of the members opposite are not lost on others.

The record of the New Democratic Party and those in the labour movement

who control your politics are well known abroad, because this alliance

between big unions and NDP politics is unhealthy for industrial

expansion, for providing the jobs that this country and this province

so badly need.

Interjections.

DEPUTY SPEAKER: Order, please. All hon. members will have

their opportunity to stand in debate. The minister has been recognized.

And would the minister direct his comments through the Chair.

HON. MR. McGEER: What's so useful about a debate of this kind

is that it brings out the truth opposite, doesn't it? You begin to get

an insight into the kind of economic thinking that dominates the

socialist caucus opposite, and it's dangerous for the economic

prosperity of British Columbia. That's why they were defeated all those

times during the thirties. You know the years you were defeated. You

were defeated in '63 when you were there. You were defeated in '66, in

'69. We've gone over what happened when that disaster of your election

occurred in '72. But you were defeated in '75, and then you quit. We've

been over once today why you quit.

[Mr. Ree in the chair.]

HON. MR. PHILLIPS: What are you talking about, quit! He didn't quit; he was bought off.

HON. MR. McGEER: Well, all right.

They were defeated in '79, in '83, and you'll be defeated again, Mr.

Leader. You will be defeated next time you run for election, because

your policies haven't changed. You'll be defeated because you still

adhere to the economics of the member for Vancouver East. You'll be

defeated because you're still a captive of the major labour unions in

British Columbia. You'll be defeated because when the chance comes, as

it does now, to support the sort of legislation that will bring about

economic development in British Columbia, you're going to turn your

back on it again.

MR. WILLIAMS: On a point of order, Mr. Speaker: is there any order in this House? The matter we're debating is the bill.

DEPUTY SPEAKER: The member is not imputing disorder to the

Chair, is the member? The Chair would appreciate an apology from the

second member for Vancouver East.

MR. WILLIAMS: Indeed. And I would hope that the member from

Point Grey would apologize to the House as well in terms of his unruly

behaviour this afternoon.

DEPUTY SPEAKER: Thank you, Mr. Member. The minister on Bill 49, and not the Election Act.

HON. MR. McGEER: That's correct; we're on Bill 49. What I was

saying when I was rudely interrupted, Mr. Speaker, is that here's an

opportunity for the New Democratic Party to reform. That's what is

required if the Leader of the Opposition hopes to have any success:

reform and repent economically. Here they have the opportunity to get

advice in the House — good political advice — but instead they're

captive. They're captive of the past that led to the defeats during the

thirties, the forties, the fifties and the sixties. No one is a

stronger advocate and a greater captive of the past than the second

member for Vancouver East, who put those old economic ideas into

practice with such disastrous results, and his protege, the new Leader

of the Opposition. So I say to that caucus over there: reject the plan

that you get from the member for Vancouver East. That's what got you

into trouble before. He was a disciple of previous NDP leaders who got

their party into trouble. Look to the future. Drop all of that.

I say to the member for Coquitlam-Moody: you're a new member of this

party; rescue it from its past. Rescue it from those economic mavericks

who do such damage. Take that Leader of the Opposition and straighten

him out while there's still time. Go and caucus again now. Take this

bill as your first opportunity to show that you understand the

beginning elements of economics.

[ Page

6779 ]

MR. ROSE: On a point of personal privilege, I was accused of

being a tyro and a new member of this party. As one of the signatories

of the Regina Manifesto I resent that remark.

DEPUTY SPEAKER: Hon. member, that is not a legitimate point of order.

HON. MR. McGEER: I recognize the lengthy and honourable

history of that member, but he's in a different atmosphere now. He's in

with this cabal of economic illiterates who are captives of the trade

unions. That's the thing that needs to be taken into account. If we

could only have some common sense preached in caucus there, maybe they

would come out supporting progressive legislation like this and cast a

new image for themselves in British Columbia. Here I am pleading for

the New Democratic Party to have a change of heart, to become a

positive force for the future. But no, I get shattered every time we

have a debate and start talking about something which means economic

progress in British Columbia; we get this virtual eruption from the

other side because it's so painful for some of those members to listen

to.

In any event, if we can't, after all these years, get any common

sense at all into the members opposite, at least we can bring in

progressive legislation, vote for it and say it's this kind of thing

that separates this side of the House from that side of the House. It's

going to enshrine our socialist friends opposite as the permanent

opposition in British Columbia.

DEPUTY SPEAKER: The Chair recognizes the second member for Vancouver Centre — in anticipation of temperate debate in the House.

MR. LAUK: Absolutely.

I always like following the hon. doctor from Point Grey. I'll tell

you something, Mr. Speaker. Every time that hon. member stands in his

place on any bill, any resolution, any motion, he talks about ten years

ago. Why doesn't he talk about the past ten years? Why does he believe

that Bill 49, with its special economic zones, is going to be a panacea

for this province?

AN HON. MEMBER: Panacea.

MR. LAUK: Cabal, cabal. Panacea, panacea. Tomato, tomato. You know the rest of it. Go for coffee.

Why does he stand in his place and say the same thing time after

time after time? Because he hasn't got very good judgment, Mr. Speaker.

But he's got sufficient intelligence to recognize that he cannot brag

about the economic record of this government for the past ten years. It

doubled unemployment, and took a small deficit in this province and

made it into $14 billion in accumulated deficit. His government, the

government that he joined as a former Liberal because he was out in the

woods too long and felt lonely.... When he joined that government he

started ten years of downslide in this province. We went from economic

prosperity to disaster. We went from jobs and industrial parks around

this province, from high employment and prosperity, to soup kitchens in

the ten years in which this government.... And we heard the Premier

yesterday on a similar motion talk about....

HON. MR. CHABOT: Gary for leader.

MR. LAUK: Don't use personal names, hon. Mr. Provincial

Secretary. "The hon. second member for Vancouver Centre" or "Your

Honour" will do — either designation — or "sir." Just because I don't

wear a toupee like the hon. minister, he shouldn't attack me.

Interjections.

DEPUTY SPEAKER: Order, please. Hon. member, please address the Chair and not direct your comments to other hon. members.

MR. LAUK: Well, they're attacking this member, and you know I never interrupt other speakers myself

Every time the hon. member for Point Grey, together with the Premier....

Interjections.

MR. LAUK: I'm talking about Bill 49. I've hit a sore point

with you because you don't defend the economy under your regime any

more than anybody else, and there's a good reason why you don't.

HON. MR. PHILLIPS: On a point of order, Mr. Speaker, I have

been listening with a great deal of interest to the first member for

Vancouver East, to wonder what he's saying about the bill. I haven't

heard him mention the bill. All he's been doing is chastising the

previous speaker. I wish, Mr. Speaker, that you would bring him to

order and get him to speak to the principle of the bill.

[4:15]

DEPUTY SPEAKER: Thank you, hon. minister. The Chair is

waiting in anticipation for the member's debate and his impeccable

record of addressing the Chair and not other members.

MR. LAUK: Mr. Speaker, I appreciate the hon. minister's

interruption. I would like to follow his example in sticking to the

principle of resolutions that have been before this chamber in the 20

years that he's been here.

I wanted as a further example to bring to the attention of the

people of British Columbia under Bill 49 — the so-called "panacea,"

this solution to all our economic woes.... Where have they been for the

past ten years? They virtually abandoned the industrial park projects

of the New Democratic Party government. They virtually let it go. They

abandoned the development of a steel mill and an oil refinery. They

said we couldn't do it. They didn't have faith in the people of British

Columbia, and that gang over there has no faith in the people of

Canada. They say we have to have special economic zones. Why? To

attract expertise from Korea; from Third World countries we have to

attract expertise. And soon we'll have to attract expertise from south

Borneo and every other place in Canada, because that Minister of

Universities, Science and Communications (Hon. Mr. McGeer) is shutting

the post-secondary education system in this province.

He has the nerve to stand up under Bill 49 and say that we're moving

forward in a direction. He's a feudal elitist who wants to educate the

upper classes of which he's been a part and his family has been a part

since the beginning of this province. They've run things very well, Mr.

Speaker, and he

[ Page 6780 ]

wants to continue the centralization of power in

the hands of the McGeer family and the established families of this

province. We say no to that, and we also say that you have never had

faith in the people of British Columbia and you don't have it now, when

you give souvenir contracts to the Americans. You say that British

Columbians can't even put a logo on the side of a beer mug. That's the

faith they have in the people of British Columbia, and now they're

coming up with this legislative claptrap about special economic zones

and attracting expertise from Third World countries. What absolute

nonsense!

They have spent ten years as government slapping the face of the

people of this province. They put them in lines for soup-kitchens and

food banks. And they're offering these silly right-wing, fuzzy-minded

Doctor Strangelove economic ideas that haven't worked in Britain and

haven't worked in the United States.

I'll tell you, Mr. Speaker, we're in for a bad time, because of the

funny-money, fuzzy-headed Social Credit right-wing nonsense economic

ideas that have been put into place for ten years. All they know how to

do is to spend taxpayers' money. They go to south Borneo, they go to

Japan, they go to Australia, they go to China, they go to the European

countries and they come back and they say: "Oh, things are very

interesting." They haven't brought one job into British Columbia — not

one. They've spent millions of dollars in traveling all over the world,

because they're in the porkbarrel. They're drowning in the public

trough. They think that by the smoke-and-mirrors legislation for

special economic zones they're going to fool the public once more.

But they're on to them, Mr. Speaker. The people of B.C. know that

they are playing a shell game in politics. They know now that this

government is made up of the worst, most backward economic thinkers —

so-called — in the country. They are making speeches, Mr. Speaker....

If you go to the press of 1931-32, the same speeches were made by Simon

Fraser Tolmie, the same clichés: "Tighten your belt. Old-age pensioners

have to give up that extra piece of cauliflower; it's in the interests

of the economy and the sacred right to profit. Soup-kitchens are good

for the soul." R.B. Bennett, Simon Fraser Tolmie: "It didn't work

then," says the current Premier of British Columbia, "so let's try it

again."

Interjections.

MR. LAUK: Listen, that's the wittiest member on that side of the House. I pay deference to that.

Bill 49 is smoke and mirrors. It's not going to do a damn thing. I

think it's already been said. Go down and look at the special economic

zones and see how they're run. You don't even have a concept of it. The

government doesn't even have an idea of what they are talking about.

All they know is how to get first-class tickets on a flight to the next

foreign country, especially in the winter. They love to travel in the

winter at our expense.

The people who are paying taxes in this province — the people whose

money they are using — are then asking for jobs and for economic ideas,

and they come back and say: "I'm sorry, you're too stupid and unskilled

to do your own souvenirs for Expo. You can't manage Expo. We got to

hire a Yankee trader to do it because you're too stupid. You don't know

how to administer Expo. We're not going to give any contracts to B.C.

businessmen because they're not skilled enough. They're not good enough

as businessmen. We've got to hand them out all over the world."

MR. MICHAEL: We're on budget; we're on time.

MR. LAUK: Yes, this is Socred thinking: a $311 million

deficit today, and it's on budget. They figure they can go across the

province and say: "Expo is on budget and on time," and if they repeat

it often enough, then people are going to believe it.

Interjections.

MR. LAUK: This is a vicious attack, Mr. Speaker. I am against

mindless stupid right-wing economic policies that believe that spending

$1 million to create one job makes economic sense. That's the kind of

stupidity we're dealing with on the part of the government of the day.

Interjections.

MR. LAUK: If you can't do it, get out of office, because

you've been in there too long. You've been a disaster for the economy,

and it's not enough for the Premier to say: "Well, it's the

international marketplace." We've gone from the best standard of living

in Canada to one of the worst. We've gone from one of the highest

employed areas in Canada to one of the highest unemployment areas in

Canada. We've gone from one of the highest productions of secondary

manufacturing output in Canada to one of the worst. We've gone from one

of the highest participating rates in post-secondary education in

Canada to one of the worst. All under the auspices of the Social Credit

government and under the deft intellectual guidance of Dr. Strangelove

of Point Grey. I'm going to oppose this bill because I am sick and

tired of Socred funny money economic ideas.

DEPUTY SPEAKER: The minister rises...

HON. MR. PHILLIPS: ...to speak on the principle of this bill.

I am very happy to do so, Mr. Speaker, because this puts British

Columbia into the world of today and the world of tomorrow. It is

evident by the speaker who stood up and espoused the policies of the

socialists opposites that they have no concept of what is out there and

what is happening in the real world. Some 400 special economic zones

being put up around the world, 14 of them just recently in China — in

every port on the coast of China. But, oh, the socialists opposite

continue to bury their heads in the sand and not understand the

realities of the real world and what is happening. I want to tell you,

Mr. Speaker, that's typical of their policy.

This legislation puts British Columbia in the forefront of bringing

in new industry and new technology and will put it in a competitive

position with any area in North America or any area in the world.

Mr. Speaker, that is not just my understanding of the policies that

we've brought down, Bill 49 being a part of it, but it's done by an

independent study done by Price Waterhouse. They say that from the

policies analyzed in what's going on around the world, this will put

British Columbia up front. I want to tell you that with the economic

climate that we have created here.... And I want to tell you more than

that. It is happening since the budget was brought down

[ Page 6781 ]

almost on a daily basis. The phone is ringing, new

projects are coming almost on a daily basis. I want to tell you it's

happening, and it's got those guys over there baffled. People are

looking at British Columbia to invest.

Interjection.

HON. MR. PHILLIPS: Oh, he says it hasn't happened, and it

hasn't worked. He doesn't know. Head in the sand. They don't face the

realities of really what is happening out there in a much more

competitive world than it has ever been. You know, British Columbia

just didn't go through a recession. The world went through a recession.

The world is facing new realities. The business communities are facing

new realities. British Columbia is facing those realities head-on, and

we're doing it because we did what we had to do three years ago, and we

quit taking too much out of the pockets of the business community, and

now we're giving it back in the form of incentives. Indeed, it is

working here in British Columbia. Project after project after project,

almost daily, is being announced here in British Columbia. Our policies

are working, and that's why we'll be government not just next year but

into the future, because we recognize what is going on in the world.

It's great for those guys over there to talk about us getting on a

plane and going somewhere. You better believe we will, and we'll be

doing more of it, because we'll be selling the policies of British

Columbia, and we'll be selling British Columbia as a good place to

invest in. When we travel, we don't go to Japan to play football or

volleyball or whatever kind of ball it is. We don't go to China to

plant trees and make good fellows of ourselves. We go there to sell

British Columbia and British Columbia products and open doors for our

businessmen.

You talk about people taking jolly trips around the world. Just look

at the record for three years of that government. Yes, they went to

Japan, and they came home clean. I remember standing over there in

opposition and asking the member for Vancouver Centre: " What did you

do in Japan?"

MR. REID: What did he do?

HON. MR. PHILLIPS: He couldn't think of anything, but on the

way home in the plane he thought I might ask him a question. He said:

"Well, we bought a little steel."

I want to tell you that our investment policies are attracting

interest from around the world. Just look at the figures. I'll give you

the figures on trade — how trade has doubled in Japan in the last ten

years since we've been government, how it's gone up ten times in China,

how it's gone up four times in the ASEAN countries. I'll tell you how

trade has gone up. I'll tell you how much investment is coming in here.

You know it's happening.

Mr. Speaker, I'm happy to support this bill, because it's part of

the overall package of economic development that is making things

happen here in British Columbia.

[Mr. Strachan in the chair.]

I happen to have just come back from a trip. The interest already in

investment in British Columbia and in Canada now that we have thrown

out that socialist policy of FIRA, where the government actually drove

out investment and didn't want investment, supported by the NDP in

Ottawa.... I remember standing in this Legislature, being chastised by

the NDP for okaying investment policies here in British Columbia. "Oh

yeah, you're bringing in the foreign investment. It's going to be run

by foreigners." You were against foreign investment. It's going to be

new foreign investment that's going to create the jobs for our young

people, that's going to secure our future and is going to bring

additional trade markets with it.

This bill will go a long way toward being part of our economic

package and attracting investment. Mr. Speaker, those guys over there

evidently have never sold, because when you go out you need a few

loss-leaders. I recognize that all of the industries in the world are

not going to come settle in these special economic zones, but it's

going to attract people. Once you get the customers coming, then you

can fit them into the numerous other programs that we have, and that's

what it's all about. It's a good bill, and I support it.

[4:30]

Interjections.

DEPUTY SPEAKER: Order, please. We will return to Bill 49.

MR. BLENCOE: Mr. Speaker. we have heard this government, in

its desperation, trying to defend this piece of legislation — absolute

desperation as this government sinks further and further into the

quagmire of ten years of total incompetence in government. This is the

ultimate in incompetence.

SOME HON. MEMBERS: You're against it?

MR. BLENCOE: Oh, we certainly are against it, and you'll find a lot more people are against it, Mr. Speaker.

We have heard that this government attacks us for being against this

and against that, and we're negative. What we are against is government

incompetence. We are against incompetence and the ability to manage the

province, which you have not been able to do. Once again, you are

proving it with this piece of legislation.

British Columbia deserves better than this. They deserve legislation

that makes sense. They deserve legislation that won't cost the

taxpayers thousands and thousands more dollars and hurt local

government, which this piece of legislation will do. This government

constantly puts its programs on the backs of municipalities and local

taxpayers, and we're seeing it once again with this piece of

legislation. Once again we have a piece of legislation that is going to

hurt existing businesses which have put up with this government and its

policies for the last ten years and struggled to get through this

recession. They are not going to profit by this piece of legislation at

all. It's about time we did something in this province for the

businesses that have struggled through this recession, instead of doing

a PR number and trying to say that this is going to be a marvellous

piece of legislation which will solve the problems that British

Columbia has today.

Interjection.

MR. BLENCOE: I'll tell you what we wouldn't have done. We

wouldn't have got the hole in the wrong place, as that minister did

across there. He should resign, he is so incompetent. He can't even get

the hole in the right place, and we all know that.

[ Page 6782 ]

Interjections.

DEPUTY SPEAKER: Order, please. Hon. members, we are on Bill

49, and the second member for Victoria will avoid any personal

reference to another hon. member of the House.

MR. BLENCOE: Well, Mr. Speaker, we're talking about

incompetence, and this is an extension of incompetence. We continue to

see the incompetence of this administration over and over again, Once

more we have a piece of legislation that just entrenches that

incompetence, and it will create further problems for the province of

British Columbia.

As the debate leader for municipal affairs for our caucus, I want to

talk about what this is going to do to municipalities. A few months ago

we saw this government bring down their so-called Partners in

Enterprise program — partnership in enterprise; tax relief for

businesses that locate in municipalities prepared to give tax relief.

They're prepared to give this tax relief and create new jobs in

municipalities. A few months ago we had this great partnership deal

that is going to attract industry to municipalities, and they're going

to give tax reliefs. The municipalities were told by the minister: "If

you're not interested in this proposal, then we don't want to talk to

you." That was their partnership. Now what do we have? We have another

piece of legislation that is going to give tax relief in these special

zones. What happens to your partnership deal in terms of the

municipalities which you have promised are going to have the new

industry in their regions, and who are going to participate in getting

the...? What is going to happen to them?

AN HON. MEMBER: Read the bill.

MR. BLENCOE: Oh, I know what he's referring to:

section 21. I'll get to that.

So one month you tell the municipalities they're going to get all

the new industry and profit by it; the next month you bring in a piece

of legislation here that is going to attract those very industries in

those municipalities that you have conned into participating in your

tax giveaway program into those special enterprise zones with greater

benefits. You tell the municipalities one thing, and then you sell them

down the drain with another piece of legislation. That's exactly what

you're doing with this. You're once again turning your backs on local

government. If any industry is attracted to this, they're not going to

go to municipalities, because there's far greater relief under this

piece of legislation.

So what have we got here? We've got a partnership deal that clearly

isn't working. It's a turkey that won't fly. The minister is running

around the province trying to get this turkey to fly, and only about

half a dozen municipalities have signed up. Then they come along with

this piece of legislation which is going to totally destroy that

partnership deal. They've shot the turkey that won't fly. Do you know

where they're going to bury that turkey? They're going to bury it in

the hole that that minister didn't get in the right place. Then they

destroyed municipalities. They've destroyed the partnership deal that

they've spent thousands and thousands of dollars on telling local

government that this is the great panacea for local government. You

should be ashamed of yourselves, trying to pull the wool over the eyes

of local government.

They'll say that the cabinet at its whim can apply certain

additional reliefs to those industries which locate outside the zones,

if they've entered into one of these partnership deals. Well, you know

what that does to local government. For instance, in those enterprise

zones there will be no zoning regulations and all sorts of other

regulations. So what's going to happen? For those local municipalities

to be able to attract, outside those zones, industries into their

municipality, they're going to have to forgo all the civilized and

progressive zoning regulations and land use policies that those

municipalities have established over the years. That's what's going to

happen. You're going to have a glorified Scottsdale, Arizona, all

across this province, with no regulations, no control, and

environmental control will go down the tube. That's what you're going

to do to local government. It cannot be accepted. It cannot be

tolerated.

Interjections.

MRS. JOHNSTON: What have you got against Scottsdale?

MR. BLENCOE: Have you ever been to Scottsdale, Arizona?

MRS. JOHNSTON: Have you?

MR. BLENCOE: Have you been there? It's wide-open zoning, no regulations....

Interjections.

DEPUTY SPEAKER: Hon. members....

AN HON. MEMBER: If it's good enough for Barry Goldwater, it's good enough for them.

MR. BLENCOE: You're absolutely right.

DEPUTY SPEAKER: If we can't return to Bill 49, could we at least return to the province of British Columbia?

MR. BLENCOE: The legislation says the formula for grants in

lieu stipulates that a calculation can be made on the basis of the

residential rate, and the

section empowers the British Columbia

Development Corporation to develop its own formula for assessment of

land values. The BCDC is going to be extremely powerful in this piece

of legislation.

The question of what services will be provided to the zones

complicates the grants in lieu. Could municipalities, for instance,

continue to receive grants in lieu without supplying services? These

are basic questions that local government is asking.

The bill empowers cabinet to impose a service contract on any

municipality if the nature of the relationship they wish to develop

cannot be settled with any particular zone.

Mr. Speaker, the UBCM has already indicated quite clearly that they

don't understand this legislation, that they want more time to look at

it. The implications for local government are horrendous. As a matter

of fact, Mr. Speaker, they were not consulted one bit; not one bit of

consultation with a representative of municipalities of the province of

British Columbia. Again, here is supposed to be a government that

believes in partnership and consultation with local government, and

once again they bring in legislation that does not enter into

consultation at all. It's put out there. They

[ Page 6783 ]

have to scramble around to try to find the legislation, to find out what it means....

Interjection.

MR. BLENCOE: You know, Mr. Speaker, it's about time this

government recognized that they cannot introduce legislation that

impacts upon local government without proper due consultation that

respects local government. This does not respect local government. It's

a continuation of the Big Brother, centralized Socred government that

says: "We know best, and to hell with the rest of you." That's what

this government is doing again.

Interjections.

MR. BLENCOE: Well, Mr. Speaker, it's time this government

consulted with local government. These zones will be removed totally

from municipal jurisdiction, and the normal planning process will be

removed. There is no opportunity in this legislation for public

involvement or public participation in the development of zones — no

opportunity at all — or in the approval of the type of industries which

will be located in the zones; absolutely none. It is, once again, an

example of top-down industrial strategy. Well, it's not even industrial

strategy. It's desperation by a sinking government to try to tell the

people of British Columbia they're serious about creating jobs.

It is time we had a proper industrial strategy based on real jobs in

the province of British Columbia, and based upon building back our

traditional industries instead of treating things like forestry as a

sunset industry. It's time we built a strategy around those things, not

some trumped-up....

AN HON. MEMBER: You don't want any new jobs.

MR. BLENCOE: New jobs!

Interjections.

DEPUTY SPEAKER: Order, please. The second member for Surrey (Mr. Reid) will come to order.

Interjections.

DEPUTY SPEAKER: Hon. members, order. If the second member for

Surrey and the member for Nelson-Creston (Mr. Nicolson) wish to

continue the discussion in the hallway, that can be accommodated for

the rest of the afternoon. The second member for Victoria continues.

MR. BLENCOE: Thank you, Mr. Speaker. I appreciate my good colleague responding to some of the insults.

Mr. Speaker, this is serious legislation for local government. I

really do have to urge this government to once again consider its modus

operandi in bringing in legislation that impa