July 10, 1986 ALBERTA HANSARD 459 LEGISLATIVE ASSEMBLY OF ALBERTA Title: Thursday, July 10, 1986 2:30 p.m. [The House met at 2:30 p.m.] PRAYERS [Mr. Speaker in the Chair] head: INTRODUCTION OF BILLS Bill 14 Small Business Term Assistance Fund Act MR. JOHNSTON: Mr. Speaker, I request leave to introduce Bill 14, the Small Business Term Assistance Fund Act. This is a money Bill, Mr. Speaker, and Her Honour the Honourable the Lieutenant Governor, having been informed of the contents of this Bill, recommends the same to the Assembly. Mr.

Speaker, the small business term assistance fund is extremely important to the province of Alberta in terms of our economic policy for this spring session and essentially parallels a similar Bill, the Farm Credit Stability Fund Act, which was introduced just a few days ago. Mr. Speaker, this legislation confirms our campaign commitment to establish a $750 million fixed rate, 9 percent interest program for the small business sector of this prov­ ince.

This Act provides for the establishment of the fund and provides for the legislative authority to make regulations under the Act which will set out the terms and criteria of the loans themselves. Through this legislation, Mr. Speaker, we will find that in Alberta, in the small business sector in particular, we will generate new jobs, new investments, and a new vitality. [Leave granted; Bill 14 read a first time] Bill 9 Department of Economic Development and Trade Act MR. SHABEN: Mr. Speaker, I request leave to introduce Bill 9, the Department of Economic Development and Trade Act.

This being a money Bill, Her Honour the Honourable the Lieutenant Governor, having been informed of the contents of the Bill, recommends the same to the Assembly. Mr. Speaker, the purpose of this Act is principally to reflect the changes in organization that occurred in January as a result of the restructuring of the Department of Economic Development and Trade from the former Department of Economic Development. [Leave granted; Bill 9 read a first time] Bill 4 Department of Forestry, Lands and Wildlife Act MR. SPARROW: Mr.

Speaker, I request leave to introduce Bill 4, the Department of Forestry, Lands and Wildlife Act. This being a money Bill, Her Honour the Lieutenant Governor, having been informed of its contents, recommends the same to the Assembly. Mr. Speaker, this Bill formally establishes the Department of Forestry, Lands and Wildlife. [Leave granted; Bill 4 read a first time] head: TABLING RETURNS AND REPORTS DR. REID: Mr. Speaker, I wish to file with the Assembly the report of Mr.

Al Dubensky on the disputes inquiry board into the dispute between the United Food and Com­ mercial Workers Local 280 P., Edmonton, Alberta, and Gainers Inc. of Edmonton, Alberta. MR. DINNING: Mr. Speaker, I wish to table the 68th annual report of the Workers' Compensation Board of Alberta for the year ended December 31, 1985. MRS. CRIPPS: Mr. Speaker, I wish to file a response to Question 137. MR. STEVENS: Mr.

Speaker, I wish to table the report of the Chief Electoral Officer on the general election of the 21st Legislative Assembly held Thursday, May 8, 1986, and to note that there will be a supplement when the information is available, expected in mid-August 1986, on the financial addendum for the election. head: INTRODUCTION OF SPECIAL GUESTS MR. MUSGROVE: Mr. Speaker, it is my pleasure today to introduce a couple of very special guests the from Bow Valley constituency. Mr. and Mrs. Don Alberts are seated in the members' gallery. Don is the chairman of the directors of the Eastern Irrigation District.

He's also a feedlot operator and a very progressive farmer. Mrs. Alberts was for several years the principal of the school in my hometown. They're seated in the members' gallery, and I would now like them to stand and receive the warm welcome of the Assembly. MR. STEVENS: Mr. Speaker, in your gallery today, I would like to introduce to you and to members of the Assembly Mr. Patrick Ledgerwood, Chief Electoral Officer for the province of Alberta. He is accompanied by Mr. Brian Fjeldheim, director of election operations. Would these two officials please stand and receive the warm applause of the Assembly. MR.

WRIGHT: Mr. Speaker, I'd like to introduce the Rev. Joseph Curcio and Mr. Hank Zyp. Father Curcio has been a parish priest in various Third World countries throughout most of his life, but also for two years he was a parish priest in the Boyle Street area of Edmonton, in which he founded Our Place drop-in centre for addicts, prostitutes, and others. Mr. Speaker, he is currently and has been for two years a parish priest in a parish in Nicaragua to which he will be returning shortly. In that parish Mr.

Hank Zyp helps run a Change for Children farm co-operative assisted with, amongst other sums, a $12,000 grant from the government of this province. It's a development project in the Muelle de los Buyes area in Nicaragua. Would the gentlemen in the public gallery rise and receive the welcome of this Assembly. MR. SPARROW: Mr. Speaker, it is indeed a pleasure today to introduce special guests visiting our city from the Wetas­

460 ALBERTA HANSARD July 10, 1986 kiwin-Leduc constituency, Richard and Violet Martin. Their daughter married Stockwell Day, who is in the Legislature. Along with them are Ray and Barb Schmalz. They're all in Edmonton because of the big Gideon convention. I wish they would rise and accept the warm welcome of the House. MRS. MIROSH: Mr. Speaker, I would like to introduce to you, and through you, a lady who is currently running as a candidate in the Calgary municipal election, ward 13, which is in my constituency, Calgary Glenmore, and the Calgary Shaw constituency. I'd like you, Mrs.

Flo Volcko, to rise and receive the warm welcome of this Assembly. MR. DAY: Mr. Speaker, I'd like to introduce to you, and through you to the members of this House, a constituent of mine keenly interested in the political process, coming from the fine constituency of Red Deer North and within that fine constituency the even finer area of Oriole Park. I would like Valerie Ward to rise and receive the warm welcome of this Assembly. MR. ADAIR: Mr. Speaker, it's my pleasure to introduce to you, and through you to the members of this Assembly, Mr. and Mrs.

George Janzen of the hamlet of La Crete, 25 miles south of Fort Vermilion, the second oldest com­ munity in the province of Alberta. The Janzens have been very active in the community, both with the Chamber of Commerce and with the committee attempting to put in place an ambulatory care facility in the community of La Crete. I would ask them to stand and receive the warm welcome of this Assembly. head: ORAL QUESTION PERIOD Economic Outlook MR. MARTIN: Mr. Speaker, I'd like to direct the first question to the Premier.

It refers to the Treasurer talking about the private sector, and we'd like to talk about what is really happening. Dun & Bradstreet has done an alarming survey of Alberta business failures, which indicates that in the first six months of this year there has been a 46 percent increase in numbers of business failures over the same period last year. My question to the Premier: has the premier asked his cabinet colleagues, perhaps co-ordinated by the minister of economic development, to go back to square one at this particular time and thoroughly review provincial economic policies?

If he hasn't, I'd like to know from the Premier what he's going to do to stop this tide of red ink. MR. GETTY: Mr. Speaker, certainly nobody is pleased when there are bankruptcies, and if there were just one, we would be concerned. Obviously, there are more than that. I might draw to the attention of the hon. Leader of the Opposition, though, that there are some conflicts in the statistics. I have a

summary which shows that there are 10 percent less this year over last year. I don't think the hon. member should just take any report that arrives and consider that it is the gospel. Perhaps we should try and see how the statistics differ so markedly, and then perhaps we could discuss it. MR. MARTIN: A supplementary question. I'm glad the Premier asked, because we did check it out. He's going by bankruptcies, but Dun & Bradstreet are talking about business failures, which include receiverships, proposals to creditors, receiving orders, and bankruptcies. That's the difference in the figures.

But the major point I want to make to the Premier and come back to is recognizing that we're having these prob­ lems. Is there now a new economic strategy that is being developed by this government to compensate for these major problems that we're having? MR. GETTY: Yes, there is, Mr. Speaker. MR. MARTIN: A supplementary question. The Premier may be cute and say, "Yes, there is." I think the people of Alberta would like to know, but let me ask one other question to the Premier. The Premier indicated that he hadn't bothered to read the previous government's vaunted white paper.

I take it now that he's gotten around to reading it, seeing that the Treasurer was one of the authors. Is this still the direction that this government intends to go, to move towards? MR. GETTY: Mr. Speaker, again the Leader of the Oppo­ sition is incorrect with the allegations leading up to his question. I certainly read a great deal of the white paper. I just didn't read every word of it, which is what I said to somebody, and they have since passed it on, I gather, to the Leader of the Opposition. Mr.

Speaker, the white paper had a great deal of valuable information, and as a result of it, members of the government were able to garner a tremendous amount of input from Albertans all over Alberta. Certainly the valuable portions of that will continue to be used in future government planning. I might say that if the Leader of the Opposition is looking for new directions, he only has to look at the throne speech and the budget. MR. MARTIN: I'm glad the Premier is now a speed reader. His idea of new is slightly different than mine, because I think we've had an election campaign on those particular things.

My question is to the minister of economic development, and it has to do with some other piece of bad news. Spot world oil prices are now falling below $10 U.S. a barrel. Is the minister doing any ongoing studies correlating oil prices and business bankruptcies? If so, can he give us some idea of what an oil price of less than $10 will do for our business economy? MR. SHABEN: Mr. Speaker, I'm not sure whether the hon.

Leader of the Opposition was in the Assembly the other evening when we began to deal with the estimates of the Department of Economic Development and Trade, but in it I outlined the priorities of the department, particularly with respect to small business, international trade, and diversification. I also made the comment that all of us recognize oil and natural gas and agriculture as the key ingredients of our economy, and having those two main elements of our economy being battered at the same time cannot but affect the overall economy of the province. Our response, Mr.

Speaker, has been, as the Premier indicated, outlined in the throne speech and the budget speech very effectively, and today the Provincial Treasurer introduced a piece of legislation that provides for a three- quarter-billion-dollar fund to support small business. If the hon. Leader of the Opposition would also refer to the April 9 Hansard, when my predecessor outlined the

July 10, 1986 ALBERTA HANSARD 461 initiatives that had been taken by this government in div­ ersification and broadening our economic base, I would think that his question would have been answered both there and earlier by the Premier. MR. TAYLOR: A supplementary, Mr. Speaker, to the Premier, who may want to pass it on to the Provincial Treasurer. In view of the fact that Sheik Yamani is now selling oil for less than $8 a barrel, what does he forecast his new deficit will be? MR. GETTY: Mr. Speaker, that is something I would imagine the hon. Provincial Treasurer might want to respond to.

However, I would think that the gentlemen opposite shouldn't take such pleasure in sad news. They seem to just glory in the fact that there are problems. Everybody recognizes problems, but I can hardly see them restrain themselves when they see that there are problems for the energy industry with low energy prices. We have a great deal more confidence in this province than they do, obviously. We feel that the people of Alberta can handle the problems, and the people of Alberta will handle the problems despite the negative thinking of the members of the opposition. MR. R. SPEAKER: Mr.

Speaker, a supplementary question to the Premier. It's a question of confirmation from the Premier. The Leader of the Official Opposition has indicated that 46 percent of business failures in the province of Alberta through various means — I was wondering if the Premier could confirm or reject the policy of government as to whether it accepts the proposal of the New Democratic Party that feels that the solution to saving those businesses is pumping in public funds in order to maintain them in the province of Alberta. MR. GETTY: Mr.

Speaker, on that matter I think the hon. leader of the Representative Party and myself have very similar views. Dubensky Report MR. MARTIN: Mr. Speaker, the minister obviously has had a chance to review the Dubensky report although, of course, we in the Assembly have not yet. Will the minister tell us which of Mr. Dubensky's recommendations he will be implementing first? DR. REID: It's not a matter of my implementing the recommendations, Mr. Speaker. I have already sent copies of the report this morning to Mr. Pocklington, representing Gainers, with a copy to Mr.

Ponting, his legal counsel, and have also sent a copy to Mr. Ventura, the president of the local union here in Edmonton with, again, a copy to Mr. Derraugh, the representative from Toronto. We will now wait for the responses of the two parties to the report from Mr. Dubensky. MR. MARTIN: A supplementary question, Mr. Speaker. Now that the report has been given, the minister really has no more excuses. My question to the minister: will he be announcing a mechanism for a speedy review of our, if I might say so, terrible labour laws next week at the latest? If not, will he tell us now what he's waiting for? DR.

REID: Mr. Speaker, I'm not going to take the oppor­ tunity to get into a debate about the quality of our labour legislation in this province although the leader gave me ample opportunity. That review will be announced shortly, and it will be done with reasonable speed in order to review the legislation, to see if there are problems with it and what can be done to correct it. The nature of the review will be announced in due course. MR. MARTIN: That's what we like, "shortly" or "due course." That could mean in the 20th century sometime. To follow up, Mr. Speaker, Mr.

McMillan of Fletcher's has emphasized the importance of national parity at Gainers for the whole meat packing industry in the province. My question to the minister: given the Dubensky report, has the minister seen any evidence that anything other than parity and a change to our laws will lead to a Gainers settlement? DR. REID: Mr. Speaker, perhaps I should quote from some other information from Mr. McMillan, which is included in Mr.

Dubensky's report: Because neither firm goes along with Canada Packers' trend-setting agreement, contends Fletcher's president, Garry McMillan, the eastern-based unions now want to shut down what's left of the hog industry in Alberta. He contends that AFCWU members are ignorant on the larger issues and do not realize that they could close the plants for good with unrealistic wage demands. "They don't have a clue. Their jobs are on the line, but their unions played a fairly large game with their jobs and I'm afraid they're not going to like the consequences." Mr.

Speaker, I quoted that to indicate that apparently Mr. McMillan has made several statements in relation to this dispute. Also, in relation to the Gainers dispute specifically, it's not up to me to judge the calibre of those statements; I presume that other people will do that. MR. MARTIN: A supplementary question. That wasn't the major point, but I'll come back and discuss the piece of paper. Apparently, Mr. Dubensky does not recommend parity, and his starting rate for new employees is only a bit above the $7 rate which they conceded in 1984.

My question, given that report: does the minister see any evidence at all that this will lead to a resolution of this dispute? DR. REID: Mr. Speaker, I hope that the two sides will look at the 25 recommendations that are included in the report and that they will study the recommendations care­ fully. I would hope that it will reach a settlement. The specific number that was mentioned by the hon. leader in his question — the figure quoted by Mr. Dubensky is exactly halfway between the $7 that was existing in the previous agreement as a starting wage for new employees and the $9.38 requested by the union. MRS.

HEWES: Mr. Speaker, to the Minister of Labour. Mr. Dubensky, however, does recommend serious consider­ ation be given to examining the labour Act, particularly in the area of replacement employees. Would it be the minister's intent to consider bringing in amendments to the Act in this regard, which in Mr. Dubensky's mind is clearly a serious problem, while the further study of the whole labour Act review is taking place? DR. REID: Mr. Speaker, I would regard Mr. Dubensky's last paragraph in the whole report, which is the one men­

462 ALBERTA HANSARD July 10, 1986 tioned by the hon. Member for Edmonton Gold Bar, as a recommendation to me that we give consideration to exam­ ining the specific provisions of the labour Act. That will certainly be a part of the review of labour legislation that I was just talking about. He also said there are several possibilities, and he didn't pick any particular one. He obviously left it to the review to take place and to make that decision. MR. R. SPEAKER: A supplementary question to the min­ ister.

Could the minister indicate whether at this point in time any time line has been established in terms of acceptance or rejection of the report by the two parties? I'll leave the question there. DR. REID: There are provisions within

section 102 of the labour Act that acceptance has to be given to the Labour Relations Board within 10 days or the board carries out a vote of the employer or the employees. So there's a 10- day interim during which they have the chance to respond to the Labour Relations Board. MR. NELSON: Mr. Speaker, could the Minister of Labour respond that, considering that the NDP and others like that would like to shut down the Gainers plant [interjections] and lose jobs to eastern Canada, is it not the objective of the government to see to a peaceful settlement and keep Albertans working and a plant operating in Alberta?

DR. REID: I'm sorry, Mr. Speaker. I didn't hear the centre part of the question. MR. SPEAKER: Will the hon. member refrain from debate but ask the question, please. MR. NELSON: Mr. Speaker, the middle part of the question, as bur thin-skinned friends have heard: is it not the objective of the government to see to a peaceful settlement and keep Albertans working and a plant operating in Alberta? DR. REID: Mr.

Speaker, I have said repeatedly that the main aim of all the fairly intensive efforts of this government and the department — and I have listed those before in the Assembly, so I won't repeat the information — have been aimed at achieving a settlement, preferably by the normal collective bargaining process. That continues to be our aim and, I think, was also the aim of Mr. Dubensky. MS BARRETT: Mr. Speaker, a point of order. MR. SPEAKER: I'm sorry, hon. member, points of order will be raised at the end of question period, but I will recognize you then. Main question, leader of the Liberal Party.

Energy Industry Assistance Programs MR. TAYLOR: Mr. Speaker, to the Premier. I might first remind the Premier that the only joy that the $8 oil brings is to his national leader in Ottawa and not to anybody in this House.

But in view of the Premier's singular lack of success in getting the Husky upgrader built, getting the PGRT removed, establishing a proper price after cancelling the NEP's floor price of $22.50, and lastly, standing idly by while the national Tories give a billion-dollar grant to the east coast energy industry, when will the Premier start putting pressure, real pressure, on the federal government? MR. GETTY: Mr. Speaker, that certainly is being done in a variety of ways every day. It is a matter that we're concerned about. We are concerned about the problems facing our energy industry.

We get no enjoyment out of it, nor do we try to play political games with those facts. But we are working to help, in every way possible, the energy industry through a very difficult time. MR. TAYLOR: Mr. Speaker, a supplementary. When will Albertans begin to see some long-term proposals from this government now that Sheik Yamani has put the price of oil down below $10? MR. GETTY: Mr.

Speaker, we have assisted the energy industry, as the hon. leader might know, very dramatically: starting last year, a very dramatic decrease on a long-term basis in royalties, which supplied hundreds of millions of additional dollars to the energy industry. That decrease goes on years and years into the future, a long-term assistance. Also, we reduced the royalty tax credit by $100 million, and that continues long into the future.

We've also come up with additional assistance for the remainder of this year in order to give time to work with industry to come up with additional projects that may be able to help them on a longer term basis. It's important that we know that the long-term assistance is devised in a way that will have the needed results, and we are working with industry and the federal government to come up with that kind of scheme. MR. TAYLOR: A supplementary, Mr. Speaker. Royalties are still higher than they were in the 1970s.

What insurance does the Premier have that the federal government will support last week's Minister of Energy's statement that aid to small producers could take the form of an equity package? MR. GETTY: Mr. Speaker, as the Minister of Energy mentioned, that is one option that's being looked at because it was raised by a certain portion of the industry. Therefore, since the industry has raised it, we think it should be given serious consideration. There are other ways to look at it, and there are a variety of proposals coming from industry.

They're all being evaluated, and we will try and see if we can't come up with one that really does the job. I should point out that the province can only do so much. This is a national industry, and it's important that we are able to come up with a scheme that will involve support from all parts of Canada to help the energy industry. It's so important in the future. MR. TAYLOR: To the Premier, Mr. Speaker. I have an easy one. When will Albertans see some sort of leadership from this government? For starters, when can we expect Ottawa to remove the PGRT? MR. GETTY: Mr.

Speaker, nobody in this House has any better idea, I suppose, about that one, except the federal government. We have been asking them to remove the PGRT, we've made very serious representations to them, and they are giving it very serious consideration. The Alberta Members of Parliament are fulfilling their responsibility and also pushing very hard to have the PGRT removed. I think that it is the least that can be done on behalf of the federal government, considering the tremendous contribution that

July 10, 1986 ALBERTA HANSARD 463 Albertans made to the rest of Canada during the period of high energy prices. Some small amount of money, relatively speaking, that's involved in the PGRT should rapidly be removed, I think. Then some additional assistance, which regardless probably of how large that would be, wouldn't come close to the contribution to Canada that Albertans have made over the past five to 10 years. MR. MARTIN: Mr.

Speaker, now that the spot world oil prices are below $10, I would like to ask the Premier what price it will take this government to ask the federal government to renegotiate the Western Accord and bring in a floor price and import quotas. Is it $9, $8, or 20 cents a barrel? MR. GETTY: Mr. Speaker, the hon. Leader of the Oppo­ sition has only one idea, which he keeps referring to, which is a floor price. I've told him and other members of the Legislature that it is way down on our list because it has a great number of deficiencies in it.

There are certainly various other proposals that we are also considering, ones which we think will do the job far more effectively than the one that the Leader of the Opposition has mentioned. MR. R. SPEAKER: Mr. Speaker, my question is to the Premier with regard to the discussions going on with Ottawa. I understand the two ministers of energy are discussing the matter. Because of the seriousness of the matter, in the interim is the Premier speaking with the Prime Minister? If that has happened, what is the current attitude of the Prime Minister with regard to this subject?

Is it only concern, or has he placed himself on record in terms of some substance, particularly with the question of the PGRT? MR. GETTY: Mr. Speaker, I've discussed the matter with the Prime Minister on various occasions. However, I'm afraid I'm unable to disclose to the House the conversations I had with him, and therefore I can only say that the Prime Minister is aware of the desires of our government and the needs of our energy industry. We only hope that awareness is translated into assistance. MR. SHRAKE: Mr.

Speaker, the previous question by the Member for Westlock-Sturgeon seemed to confuse me, and I think it left some confusion. He was asking about a commitment to the Husky upgrader. I was just wondering if the Premier can't clarify that for me. Did we not get a commitment for millions of dollars to start the engineering and design work, which takes a few years? Is that not going ahead? Was there not a commitment there? MR. GETTY: I'm glad the hon. member mentioned that, Mr. Speaker. I didn't touch on it, although it was raised by the Member for Westlock-Sturgeon.

It is true that the Alberta government, the Saskatchewan government, and the federal government have worked with Husky in a co­ operative way, and that project is proceeding. We hope that a final go-ahead on construction and full completion will be given after the engineering work, which was essential to be done, is completed. Farm Credit and Small Business Assistance MR. R. SPEAKER: Mr. Speaker, my question is to the Provincial Treasurer is with regard to the Alberta farm credit stability program.

A number of farmers wishing to make some new purchases and also looking at refinancing current credit are asking what they should do in the interim while the minister and the government are trying to put this program in place. I was wondering if the Provincial Treasurer could indicate what steps the farmers should take during this interim period of time. Should there be short- term borrowings? Should there be refinancing and negotiating with the bank that can be refinanced and renegotiated again after the 9 percent program and application are in place? MR. JOHNSTON: Mr.

Speaker, I think there are several general explanations that can be given for the period between now and the time that the farm credit stability program is up and operating. The first thing I would suggest is that the farmer get his financial position in order; that is to say, the information that's necessary for him to provide to the financial institution some evidence as to his cash flow and describe for his own financial institution the purposes for which this money may be required.

That may well be in addition to the existing line of credit which is established by the farmer at his own bank or financial institution. Secondly, Mr. Speaker, I believe that with the introduction of this legislation, both the small business legislation today and the farm credit stability Act a few days ago, the financial institutions are now well aware that the government's commitment to make this program work is clear. The money will be available to make it effective, and we can give all the private sector, the farm and the small business sector, the assurance that the program will be up and running.

Therefore, this pause will allow the existing financial insti­ tutions to at least provide a recess in terms of foreclosures or putting additional pressure on the private sector. So I'm hopeful, Mr. Speaker, that by the time we get our negotiations completed with the financial institutions in the next few days, we can move with the program, and the comfort we have described, which will flow to the farming and private-sector community, will in fact be avail­ able to them. MR. R. SPEAKER: Mr. Speaker, a supplementary to the Provincial Treasurer with regard to the source of funds.

The Heritage Savings Trust Fund is mentioned as potential interim funding; secondly, the offshore or other countries and, as well, banks. Could the minister indicate at this time whether those sources are in place and negotiations have been finalized? MR. JOHNSTON: Of course, Mr.

Speaker, in terms of the provision of immediate resources to make the program operate — that is, the funds which will be transferred to financial institutions — I can give the assurance that we do have a variety of Alberta-based resources to do just that; that is, the Heritage Savings Trust Fund and whatever surpluses are available within the General Revenue Fund itself.

Secondly, we are investigating the best possible set of options for us to secure long-term borrowing for these two programs to flow into the funds and therefore provide the resources for both the farm credit stability program and the small business program itself. I cannot give any specific commitments at this point or further details about the way in which this financing will take place except to say that we're examining all the possibilities.

The rates seem to be trending in the right direction, and the currencies which obviously set in place some of the problems in terms of swapping or the exposure which we take are now being examined very carefully so

464 ALBERTA HANSARD July 10, 1986 that we can get a matrix or a combination of exposure in a variety of markets and a variety of currencies to make the programs operate. MR. R. SPEAKER: Mr. Speaker, a supplementary. Will the funds that will be diverted into this program be funds that are currently earning an interest rate or a net benefit, I guess, to the Heritage Savings Trust Fund? Will those be the funds that will be diverted? MR. JOHNSTON: Mr. Speaker, obviously we have main­ tained in a liquid form a fairly sizable pool of assets within the heritage fund itself.

I'm not absolutely clear as to the exact amount, but it does approach $1.75 billion to $2 billion. That money would be available for transfer to these two funds which have been set up by legislative authority and then on to the financial institutions to make the program operate. We will be using that as a first drawdown until we can put the long-term financing in place at the most advantageous rate. The rate charged by the Heritage Savings Trust Fund to these two funds, should it be operative, would be determined by the current T-bill rate or some other appropriate rate.

Therefore, we would pay from the General Revenue Fund and from the operations of the fund to the heritage fund some reasonable rate for the use of those funds over that term. MR. R. SPEAKER: Mr. Speaker, as clarification in terms of timing, the minister indicated that shortly or in about a week there will be further announcements of concrete sub­ stance. Could the minister be a little clearer with regards to that timing? Are we talking about the third or fourth week of July as to more of a public pronouncement about the program? MR. JOHNSTON: Mr.

Speaker, I think some of the fun­ damental details with respect to those two programs have already been put forward by my colleague the Minister of Agriculture and will be made available today by my colleague the minister of economic development — enough information at least to provide general direction to the financial com­ munity and to the farming and small business communities themselves so that they can tailor their own program as to whether or not it will fit within these programs. Obviously, Mr.

Speaker, it should be clear that some farmers and some small businessmen will be ineligible for the program, but in both cases it's designed to take in as broad a cross

section of farmers and small businessmen as possible. We're doing that by using our financial resources of the province, both in terms of the funding which the member has inquired about and in terms of providing guarantees to the programs and financial institutions to ensure that in those difficult cases the farm loan or the small business loan is made. In terms of specific dates of the program, I've been here for at least two or three years, and I can assure you that I know, from my hon. colleague's experience at least, that you don't want to get tied down too specifically to a date.

I have already said we would like to have the farm credit program operating by the end of July, and I fully believe we can meet that commitment. If we can do it sooner, obviously we will. In terms of the small business program, as we have indicated before, Mr. Speaker, it will take us just a touch longer to put it in place. Probably that will take into August sometime, because our priority right now is to deal with the particular problem raised by my colleague; that is, to satisfy the farm credit sector. We're rushing with all our resources and efforts to get that done as soon as possible. MR. FOX: Mr.

Speaker, a supplementary to the hon. Provincial Treasurer. Would he confirm that one of the reasons for the inordinate delays in the implementation of this program is the difficulty he's having in persuading private lending institutions into accepting 9 percent loans on loans for which they're receiving a rate of prime plus 1.5 or prime plus 2? That being the case, will all the refinance type of loans under this program be directed through the ADC? MR. JOHNSTON: Au contraire. To the contrary, Mr. Speaker. I should indicate that, in fact, the financial insti­ tutions have been extremely responsive and supportive.

I don't anticipate any problem at all with respect to any of the banks or credit unions or trust companies who are involved. I have had the greatest deal of confidence that we can put a package together which will work. None of the suggestions which the member leaves in the Assembly are in fact a problem. We have only to get down to the details as to what the costs are and how the guarantees will work, and that's a question of across-the-table nego­ tiations. The fact is that the banks and credit unions are extremely supportive, and that's the kind of co-operative spirit we're working with in this province. MR.

JONSON: Mr. Speaker, I wish to pose a further supplementary question related to the possible source of funds for this program. Could the Provincial Treasurer advise as to the

schedule of repayment of principal under the Canadian investment division of Heritage Savings Trust Fund and whether it will be government policy to redeem those amounts in full as they come due? MR. JOHNSTON: The member is testing my memory just a touch, Mr. Speaker, but it is my recollection that through '86 and '87 a significant portion of Alberta's contribution to Confederation and the assistance to other provinces in bor­ rowing funds will be returned to the province with very high interest rates.

I would expect that between now and the end of '87 approximately $450 million to $550 million will be coming back to the heritage fund as those inter­ provincial loans come due. Unfortunately, those rates were higher than is now available in the commercial market, but I don't anticipate that the provinces in particular will use this source of money — that is, the heritage fund — to roll the loans over. They will probably instead go to the other sources of commercial money in Canada and the United States and offshore. MR. SPEAKER: Member for Westlock-Sturgeon, final sup­ plementary on this subject. MR.

TAYLOR: This is just the official supplementary I thought we'd followed, Mr. Speaker. MR. SPEAKER: The supplementary. MR. TAYLOR: Mr. Speaker, the supplementary question is to the Minister of Agriculture, who may want to pass it on to the newly sophisticated Treasury minister here. Could he tell us, in view of the wait that appears will have to take place before these things can be put into place, that

July 10, 1986 ALBERTA HANSARD 465 he will have the Farm Credit Corporation declare a mor­ atorium on any procedures that are moving towards fore­ closures or anything while we're waiting for the new plans to come into place? MR. ELZINGA: Mr. Speaker, I'm surprised that the hon. Member for Westlock-Sturgeon doesn't recognize that Farm Credit Corporation falls under the federal government. Energy Industry Assistance Programs (continued) MRS. MIROSH: Mr.

Speaker, through you I'd like to ask the Energy minister if he could please give me an update on the shared industry/government programs relating to the oil service companies and a follow-up as to the development of these programs, as well as the effect that these programs have had with the private sector. DR. WEBBER: Mr. Speaker, one aspect of that program was a question that was asked yesterday in terms of the take-up on the incentive programs that were announced last April and in June.

The exploratory drilling program, which has a deadline of the end of the year, is a program where the take-up hasn't been as great as I had hoped it would be. However, having said that, we do go through a yearly cycle where most of the exploratory drilling occurs in the fall and winter, and the expectation is that we will see a larger take-up on that program in the fall. The other two programs that are being responded to reasonably well are the developmental drilling program and the well servicing program.

I say reasonably well as best we can tell at this particular time, because the applications for those programs would not be coming in in a large way until after the work is done and the contractors have been paid. So the expectation is that during the later part of the summer those two programs that have a deadline of the end of September will be taken up. The geophysical assistance program is more tied in terms of timing with the exploratory drilling program, and we expect that there will be further take-up on that program later in the year as well. Oldman River Dam MR. YOUNIE: Mr.

Speaker, for the Minister of the Envi­ ronment. Yesterday in his lengthy dissertation the minister said a number of things which demand clarification. Esti­ mates now see the cost of the Oldman dam escalating from $200 million to $349.6 million. Every other major dam this government has built ended up costing at least two and a half times the estimated cost. What real evidence does the minister have that the final cost of the Oldman River dam will not be over half a billion dollars? MR. KOWALSKI: Mr. Speaker, I don't quite know how I can look into the future.

In the overview statement that I gave yesterday with respect to the estimates of the Oldman River dam, I talked about three components with respect to the dam: component number one, which would cost X amount of dollars; component number two, which would cost X amount of dollars; and I talked about land acquisition costs, environmental, archaeological, paleontological, and mitigative costs. I pointed out that in terms of land acquisition some individuals have received upwards of $700,000 for land prices. That was more than we had originally antici­ pated.

They eventually found they were working here for the NDP in Edmonton. I indicated as well that part of the dam infrastructure is the land associated with roads. The road to the dam is not an actual cost factor with the dam. But some recent correspondence from folks in the Cayley area pointed out and indicated to us that they thought it would probably be appropriate for the government to not only build a dirt road but perhaps pave it. If the decision is made to pave it, there's no doubt at all about the fact that the price will go up. MR. SPEAKER: Hon. minister, we're in question period not in estimates.

Supplementary question, please. MR. YOUNIE: Mr. Speaker, is the minister doing anything at all to try to curb these alarming cost over-runs, or is he content just to let the cash register for the dam keep on ringing until we have our first billion-dollar dam in this province? MR. KOWALSKI: The answer to the question, Mr. Speaker, is an emphatic yes. MR. YOUNIE: Glad to hear it. A supplementary, Mr. Speaker. What studies does the minister have comparing the benefits of more irrigated land in southern Alberta at a cost of over $7,000 an acre to developing new agricultural land in other areas of the province? MR.

KOWALSKI: Mr. Speaker, in terms of the guidance that you gave me in response to the first question, I want to clarify my response to the second question. The member very, very specifically asked me if the minister was con­ cerned about the costs and if he was taking steps to ensure that they would not escalate, and my answer was a very emphatic yes. MR. YOUNIE: My figures were based on present costs, by the way. Mr. Speaker, could the minister confirm that dams will be built regardless of cost because the government is running out of parks to name retired Premiers after?

We will soon need a billion-dollar monument for the current Premier. MR. SPEAKER: Excuse me, hon. member. Additional supplementaries from other parts of the House? MR. R. SPEAKER: Mr. Speaker, supplementary question to the minister, and this wasn't covered in his remarks yesterday. It is a concern of mine with regard to the Oldman dam. Could the minister confirm that the major purpose of that Oldman dam is to give reliability and stability to water in the Lethbridge Northern Irrigation District during years that we have severe drought and severe problems with obtaining water for that respective district? MR.

KOWALSKI: Mr. Speaker, yesterday in pointing out the reasons for the dam, I pointed out that water management in the southern part of the province was a primary, primary reason for the construction of the Oldman River dam. Hon. members will recall the various questions and debates that occurred in the House during the heavy drought years in the early 1980s through 1985 and the need to move forward with a very sophisticated and important project for the long-

466 ALBERTA HANSARD July 10, 1986 term future viability of agriculture and economic diversi­ fication in the southern part of the province. MR. TAYLOR: A supplementary, Mr. Speaker, to the minister. Is the minister conducting any studies or is he going to commission any studies to give him an idea of when that dam will be silted up to the extent that it will no longer be supplying water? MR. KOWALSKI: Mr.

Speaker, the Oldman River dam, as so rightfully pointed out by the Member for Little Bow, is extremely important to the long-term viability of the southern part of this province in terms of agriculture and the like. If the hon. Member for Westlock-Sturgeon had been in the Legislature yesterday afternoon, he would have noted that I spoke for some period of time with respect to the importance of the dam and the variety of studies that were being undertaken. I would like to point out, Mr. Speaker, that the Blues that were printed as of yesterday cover 33 pages of text.

Of those 33 pages 16 were taken up by comments made by the Minister of the Environment on one of the most important economic diversification and agricultural projects that we have in this province. Seventeen pages of that were initiated by procedural wranglings established by the socialist NDP. MR. SPEAKER: There are three minutes left in question period. The Chair recognizes the Member for Calgary Buffalo. Energy Prices MR. CHUMIR: I have a question for the hon. Premier. In the Western Accord the government agreed that the market should determine the price of natural gas.

Yesterday in contradiction the Premier stated that the government will insist that Alberta gas not be sold below fair value, thereby rejecting the market. Will the Premier tell the House and those companies which are currently in the midst of nego­ tiating gas contracts just what he considers to be a fair market value of natural gas and the principles that he would apply in determining that fair value? MR. GETTY: Mr. Speaker, natural gas is an extremely important resource to the people of Alberta; they own it.

Obviously, if the market is operated between a buyer and seller in a fair and reasonable way, then they will end up with fair market value. We're not rejecting market value. People who were here long before me or the hon. member knew that the importance of that resource should also have built into our legislation and our leases the ability to ensure that it is sold at fair market value and not wasted by being sold too cheaply. I've expressed that in the House two days now. I think it's something that's extremely important to the people of Alberta that that be known.

I'm not sure whether the hon. member would suggest that we should not fulfill that responsibility and have the resource wasted by having it sold too cheaply. I think that Albertans would say no. I'm not sure what the hon. member is suggesting in that regard. Any government I'm part of will insist that before we approve a gas removal permit, we must be assured that it be sold at a fair price. MR. CHUMIR: A supplementary. MR. SPEAKER: Forgive me, hon. member. The time for question period has expired. Does the Assembly agree to finish this series of questions, the questioner plus his own series of supplementaries?

HON. MEMBERS: Agreed. MR. CHUMIR: Mr. Speaker, a supplementary to the Pre­ mier, who does not seem to realize that it was his government that set in motion the collapse of gas prices. Would the Premier be prepared to state whether he would consider the cost of competing fuels in the sales market to be the primary test it would use for establishing fair value in its own mind? MR. GETTY: That would certainly be one of the tests, Mr. Speaker. MR. CHUMIR: A supplementary, Mr. Speaker.

Is the Premier aware that the government is currently circulating proposed amendments to the provincial Arbitration Act which would have the effect of reducing the price we receive for gas by moving away from this competing fuels test? Is the Premier aware of that? MR. GETTY: Yes, I am, Mr. Speaker, and that would be another test. MR. CHUMIR: In light of the government's concern over receiving fair value for its gas, would the Premier undertake to maintain the current provisions of the Arbitration Act in order to prevent the disastrous collapse of our natural gas prices? MR. GETTY: Mr.

Speaker, I don't believe there will be a disastrous collapse of natural gas prices. They will move with the market, and we will continue to exercise our responsibility to make sure they are not sold excessively cheaply, because that is a waste of the resource. Perhaps in debate the hon. member could tell me whether he would encourage us to not fulfill that responsibility. I'd be interested to know his position. While I'm on my feet, Mr. Speaker, I want to respond to the Member for Edmonton Glengarry, who I think does not do himself a service by taking cheap shots at a former Premier of this province.

If he, in his period of time in this House, is able to contribute even a little bit of the amount that the former Premier contributed, he will be doing himself a big credit. MR. MARTIN: On a point of order. MR. SPEAKER: The Chair recognizes the Member for Edmonton Norwood on a point of order, since we've come to the end of question period. MR. MARTIN: Mr. Speaker, we're told that we can't make points of order officially but we cannot do the sort of thing that the Premier did just now, in question period.

I would suggest that perhaps the Premier try to learn the rules of the House too, instead of trying to be cute. Mr. Lougheed can look after himself. A lot of people were concerned about the name of that park, Mr. Premier. MR. GETTY: Mr. Speaker, I have every right to supplement a question that has been presented. If the hon. members

July 10, 1986 ALBERTA HANSARD 467 are so thin-skinned that they can't take an answer, then they shouldn't ask the question. When you take cheap shots, you'd better duck. MR. SPEAKER: The Chair recognizes the legitimate concern of the Leader of the Opposition when he raised the matter with respect to the Premier's comment, but it did occur after question period had come to an end. AN HON. MEMBER: Orders of the Day. MR. SPEAKER: Thank you, hon. members. If you would like to continue to tell me my job, perhaps we could take consultation in the back chambers. Is that the Member for Edmonton Centre?

We have another point of order to deal with. The Chair recognizes the Member for Edmonton Highlands. MS BARRETT: Mr. Speaker, in light of what has just gone on, I'd like to refer back to some comments made by the Member for Calgary McCall. I do recognize that a little sparring goes on in this place. However, when it comes to making allegations — well, I'll quote the Standing Orders: making "allegations against another member" or imputing "false or unavowed motives to another member," in this case collectively, under the provisions of Standing Order 23.

We have to note that we take objection to the motives being imputed to us collectively with respect to support for anybody in the Gainers dispute. We do not at all want to see the closure of a plant, and I believe that was the allegation made. Similarly, we do not at any time ever want to incite violence under any circumstances. I just call the attention of the Speaker to that point of order. MR. SPEAKER: The Chair recognizes the point of order. At that time during question period the Chair also rose and called the Member for Calgary McCall to order on that point.

The Chair has had a request from a minister to supplement information requested in a previous question period. Do we have unanimous consent of the House for that to take place? SOME HON. MEMBERS: Agreed. MR. SPEAKER: The Minister of Community and Occu­ pational Health. MR. DINNING: Mr. Speaker . . . MR. SPEAKER: Excuse me, Mr. Minister, we haven't gained unanimous consent. All those in favour, please say aye. SOME HON. MEMBERS: Aye. MR. SPEAKER: Opposed, if any, please say no. MR. TAYLOR: No. ORDERS OF THE DAY head: MOTIONS OTHER THAN GOVERNMENT MOTIONS 207. Moved by Mr. Heron:

Be it resolved that the Legislative Assembly urge the government to consider the elimination of school taxes on summer cottages. MR. HERON: Mr. Speaker, the intent of this motion is to eliminate dual school taxes on temporary, seasonal dwell­ ings in summer villages. It does not urge the elimination of tax on any primary residence or rental property, even if they are located in a summer village. I emphasize that this motion covers only the second or the seasonal residence.

Some 46 summer villages are located in Alberta, and they're taxed $1.6 million or about one-tenth of 1 percent of the total school tax requisition in the province. We are not talking about a great amount of money when we take the total provincial school tax into consideration. I urge all members of this Assembly to discard the old myth which simply argues that those fortunate enough to own a cottage should pay all the taxes that they can. With that up front, let me present some information which makes a case for support of this motion, the elim­ ination of school taxes on seasonal, secondary residences.

Consider two families. Family number one purchases a trailer or a motor home and utilizes the campgrounds. The provincial campgrounds cost all Alberta taxpayers $33 mil­ lion last year, and that figure is net of all fees received. Family number two purchases a small summer cottage; about 800 square feet is a typical summer cottage in the Edmonton area. This small summer cottage typically has a value of $30,000 to $35,000, but it can run up to $80,000 to $100,000 if the cottage is located at the water's edge.

But we're talking about the vast majority of cottages, which are back of the waterfront and fall into the $30,000 range. This family number two pays from a high of 78 percent of its total taxes in school taxes; that is at Mewatha Beach. Taking all summer villages into account, dual school tax averages 49 percent of the total tax paid. At present the owner of a summer cottage is assessed a school tax by trustees and school boards over which he has no control through the democratic process. By this I mean cottage owners have no say in how the local school board spends its money.

Section 2(

b) of the Local Authorities Election Act gives only permanent residents a vote in electing a school board. A serious problem exists for the summer village. The present tax system effectively discourages property improve­ ments as the family struggles to keep the tax bill down. The summer village is penalized in that many lots remain undeveloped. Residents use temporary mobile structures to keep the property assessment as low as possible. Let me relate my personal experience gained over seven years as mayor or councillor of a summer village.

This village operated on an annual tax revenue of $35,000 — a pretty skimpy figure considering the demand for road main­ tenance, snow removal, park improvements, administration, and many other demands for service. This figure of $35,000 is small when compared to the vast amounts expended for provincial park maintenance, for example. This small sum­ mer village is typical. It provides services for 300 lots, many undeveloped but used by lot owners who put temporary structures, trailers, and motor homes on them to enjoy them and keep the tax bill down. Consider my motion.

Summer cottages pay $1.6 million annually, or one-tenth of 1 percent. Compare this number to the provincial campgrounds, which cost Alberta taxpayers $33.9 million minus the $1.1 million in camping fees collected for a net cost to Albertans of $33 million. There are 46 summer villages in Alberta, and they affect all of us here in this elected Assembly, in that nine are located in Athabasca-Lac La Biche, one in Banff-Cochrane, eight in Barrhead, two in Bonnyville, eight in Drayton Valley . . .

468 ALBERTA HANSARD July 10, 1986 Without going through a list of all of them, I think I've made my point that they're widely dispersed throughout Alberta. It has been estimated that close to 10,000 members of families enjoy their properties, often with several families enjoying a single property. Compare this figure to the very expensive provincial campgrounds and the lots which provide a service to Alber­ tans.

In 29 of the summer villages more than 50 percent of the total municipal taxes collected in 1984 were committed to school jurisdictions, schools which they do not use and schools over which they have no control as to how their money is spent. As elected members of this Assembly we have all at one time or another pledged to meet the interests of our constituents. Consider this motion, taking into account the numerous presentations made by the elected officials of each summer village and the many resolutions presented by the Association of Summer Villages.

I ask that my colleagues in this Assembly encourage the use and development of one of our most important natural resources by supporting the elimination of this unfair tax. We have numerous lakes with the 46 villages, which in many cases provide year-round enjoyment to countless fam­ ilies. Consider Motion 207 in terms of the equities exem­ plified here and in terms of the very small percentage of loss of school tax revenues to the municipalities involved.

Cottages, with the odd exception, are owned by — if I may coin a phrase often used in another part of this House — ordinary Albertans, often at a sacrifice to provide whole­ some outdoor activity to their family. I again ask for your support of this motion. MR. BRASSARD: Mr. Speaker, we are all very sensitive when we refer to taxation of any kind. School tax has always been a very contentious issue because those paying do not always participate in the direct benefit. Unless you have children currently in the system, your input into the spending is not always encouraged nor welcome.

It is true that we all benefit from an educated society. It is also true that we must all participate in the cost. Someone paid for my education, and I am equally responsible to do likewise. However, that does not justify tax duplication. Most cottage owners already pay full tax on their principal res­ idence. If the cottage is indeed the principal residence, then the owner should pay the full range of taxation; I have no quarrel with that.

As well, if the summer home is clearly located in an area that is fully established as a permanent residential area, such as Banff or Canmore, then perhaps there need be special consideration of these casual residents. However, one thing should be remembered: many cottages are located on property that could be used for little else, particularly in the case of lakefront properties, as desirable as they may be.

We must remember that these cottages supply their own services in many cases: no garbage pickup, no water or sewer services, higher than normal electricity charges, little or no road maintenance, and certainly not the higher than normal cost of winter road and sewer maintenance. Compare this with the casual daily or weekly resident of a government- or privately-owned campground. These people enjoy similar facilities as far as a home away from home is concerned without any of the responsibilities of maintaining or upgrad­ ing the property, let alone paying any taxes at all.

Summer cottage owners, as was pointed out, have absolutely no input into a school system which they are forced to support, which they have absolutely no input into, and which they will not have an opportunity to utilize. In most cases individuals have the opportunity of supporting the educational system of their choice. This too is denied the summer cottage owner, since the limited size of the area seldom justifies more than one educational system. Summer residents are forced to support a system with which they are sometimes diametrically opposed. Mr.

Speaker, we seem to take the attitude and assumption that if someone owns a summer cottage, they are in a financial bracket such that an additional tax, even though it may be objectionable, nonetheless is affordable. This is not always so. It certainly does not make it right in any event. In fact I have a difficult time understanding just how we can justify such a duplication of taxation. I suppose one might consider a gradual phasing out of an existing tax which might place an abnormal financial burden on a given area if it were removed. But this is not the case in this instance.

It has been proven that if the school taxes levied on summer cottages were removed, it would result in a loss of only 0.1 percent of the municipal taxes collected in Alberta in any one year. This is hardly a burden on our economy. Conversely, it has also been shown that school taxes sometimes comprise as high as 78 percent of the municipal taxes collected in summer villages. There is clearly an injustice existing which is demonstrated to place an unfair and onerous burden on the individual affected, but it would have little or minimal impact on the overall economy of that area if it were removed. Mr.

Speaker, in light of the fact that this is clearly a duplication of taxation, that those paying this tax receive little or no benefit from the tax, and that there is clearly a demonstrated discrimination against the summer cottage owner versus the more casual and transient campground resident, I support this motion that the government consider the elimination of school taxes on summer cottages. Thank you, Mr. Speaker. MR. WRIGHT: Mr.

Speaker, the hon. member moving this motion, the Member for Stony Plain, did say that summer cottages maintained as principal residences should be exempted from the effect of the motion. However, that's not what the motion says. The motion simply attempts to exempt summer cottages from taxation. That would obviously be quite unfair if the summer cottage were being used year- round. I presume it would still remain a summer cottage, being in a summer village. For that reason alone I would submit that this motion should not find favour with the Assembly.

Surely if there is complaint about the incidence of double taxation on summer cottages, the answer is to accept the recommendation of the task force on school financing that the government established in 1983, which was that 85 percent of the cost of schools be supplied by the government itself and not by the local authority, as distinct from the approximately 66 percent that the government supplies at present. Then the incidence of tax on the summer cottage would not be such as to give cause for complaint and would eliminate the extra paperwork and red tape that would go with implementing this motion.

In any event, Mr. Speaker, the motion does not answer to the purpose that its mover claims. For that purpose I move that debate on this motion be adjourned so that the mover, if he so wishes, can put the motion in good shape. SOME HON. MEMBERS: Question. MR. SPEAKER: There is no debate on the question?

July 10, 1986 ALBERTA HANSARD 469 There is a call for the question to adjourn the debate. All those in favour of adjourning the debate, please say aye. SOME HON. MEMBERS: Aye. MR. SPEAKER: Those opposed? SOME HON. MEMBERS: No. MR. SPEAKER: Debate continues. The Chair recognizes the Member for Bow Valley. MR. MUSGROVE: Mr. Speaker, I certainly appreciate the Member for Stony Plain bringing this motion to our attention and certainly listened very carefully to his arguments in favour of Motion 207. However, I have a problem in supporting this motion in principle.

Municipal taxes are collected to pay for the services that are provided by the municipality, including education. Taxes are collected on the assessment of the property, and municipal taxes are levied on that assessment. The assessment is not generally an assessment on wealth. However, the value of the assessment does give an indication of ability to pay. To say that a person should not have to pay taxes because he does not use the services that are provided by the taxes would again be against the principle of taxation.

To say that he pays them to another municipality is again a problem, because there are lots of people who pay taxes to more than one municipality. We have people who have cottages within the boundaries of our provincial parks — some of them are in my area — and they argue that they should not pay any municipal taxes, because all the municipal services in the park are provided by the province. However, the principle is still carried out that because they live within that municipality, they must pay taxes to it. What do we do with a farmer who has some farmland and a house in town?

He pays taxes on his farmland to one municipality and taxes on his house in town to another one. This again is the same argument that we heard. Then we have the older couple who have long since had anyone attending school, yet they're still paying their school taxes the same as when they had students from their home going to school. What about the single people who have never had anybody whom they're educating in school? They are still charged with school taxes. Mr. Speaker, for many years during my time on municipal council there was an ongoing debate about pipeline and power line assessment.

Many municipalities argued that pipeline and power line assessment required very few, if any, municipal services, so that assessment should be col­ lected by the province and divided between all municipalities within the province. We do have a formula today for school purposes. There is some sharing of the pipeline and power line taxes within the province, but generally the majority of the school levy and all of the municipal levy go to the site municipality. I just had to point out some of the principles involved when we start changing our principle of taxation and what could happen in some of these other areas.

Although I realize that there is certainly a lot of frustration by cottage owners paying taxes to municipalities that don't provide any service, I think by supporting this motion we would have a problem with the principle of taxation that could affect a lot of other types of assessments. Thank you, Mr. Speaker. MS LAING: Mr. Speaker, I rise to speak against this motion. I believe that people living together in a society agree to share through the process of taxation the costs that permit the continuation and enhancement of that society and the well-being of all its members.

Taxation is based in some way on our ability to pay, rather than on our need for the services as individuals. We all recognize that we do not all use all the services provided by society, or we may, in fact, use them in unequal measure. Education of our children is one of the responsibilities held in common by all members of society. We do so to provide for the continuation of our society and to educate our children so they can take their places in society and contribute to our society to the best of their abilities. We educate them so they can also lead full and meaningful lives.

As a society we would pay a high price if our children did not receive an adequate and appropriate education. As a society we are collectively responsible to educate the children of the society. It is a shared responsibility not to be divided up and assigned arbitrarily to one group or another. I suggest that removing school taxation from summer cottages would be an arbitrary measure and in some real sense capricious. Municipalities are bearing an increasing percentage of education costs at this time. It is wrong to eliminate from the tax base one type of property.

We would not, I suggest, tax only part of a house or part of a city property; we would not eliminate, say, the value of a garage or basement development. If we believe in fair taxation practices, we must defeat this motion. Many people do not own summer cottages but spend their summers in their backyards, sometimes paying for extra-large backyards which serve as an alternative to the summer property. It would border on the ridiculous to suggest that we would reduce taxes on such a property because the owner uses it for summer recreation purposes.

I believe that as members of a society, we must accept our fair share of the cost of maintaining and enhancing society. I believe that this motion deviates from that prin­ ciple, and therefore I oppose the motion. MR. JONSON: Mr. Speaker, I wish to take this opportunity to make a few comments on Motion 207. Mr. Speaker, this motion is certainly a matter of current concern in my constituency. I note that constituents at Gull Lake, Pigeon Lake, Red Deer Lake, and Pine Lake have all been in contact with me complaining about the recent tax notices, specifically as they apply to their cottages. Mr.

Speaker, I'm also aware through the debate this afternoon, particularly that of the mover of the motion, that this is a province-wide concern, and I could certainly verify that. Recently I was at Mewatha Beach, which is located on Skeleton Lake in the Member for Athabasca-Lac La Biche's riding, and it's my understanding from talking to the residents there that 78 percent of the taxes paid by the owners of property in that particular village go for education, a service not used by any of those temporary residents. Mr.

Speaker, I mentioned this last example because it illustrates the extreme to which the situation dealt with in the motion can go. While it may well be that we should keep the tax base as broad as possible, it also has to be a taxation system which is fair. There's certainly an element of unfairness in the present situation. Mr. Speaker, I do support the motion in that it does address a problem. As previous speakers have indicated,

470 ALBERTA HANSARD July 10, 1986 there are many aspects of the current situation which are unfair if we regard taxes on property as being related to service provided. If we look at property tax as being a tax on wealth and having a broader application, there are still some problems in the application of the motion. Mr.

Speaker, I wish to raise three or four additional points on this particular motion, not from the point of view of putting down the idea as not being relevant and important but from the point of view of suggesting that as an alternative to the motion we perhaps should be looking at taking up the issue in a different way. First, Mr. Speaker, one of the difficulties in implementing this motion is certainly going to be an administrative one.

The application of changes through summer villages is relatively simple, because you have a corporate body to deal with which can easily identify the properties that would qualify. However, cottages — and I believe the intent of the motion is to apply to temporary residences used for recreational purposes — are located throughout the counties, municipalities, and improvement districts throughout this province. To identify them and to apply this particular change is certainly going to be a large administrative task, one which I do not feel we're currently tooled up to deal with.

As a second cautionary note or reservation about this motion, Mr. Speaker, there is the problem, which has to some degree already been identified, of identifying just what constitutes a summer cottage; that is, identifying this in a reasonable and fair way. Are we talking about those that we traditionally think of, located around lakes? Is that exclusively the area we're talking about here? Or of a certain size? What do we do with cottage-type dwellings located in a town such as Canmore? Are they going to be exempt from the school tax?

Then we can extend that to talk about rental properties and even go to the example of a rural family purchasing a residence in the city to, say, house their college students. Are we going to extend the argument to those people? Certainly they have as good a purpose for perhaps wanting some tax consideration as do the cottage owners. Mr.

Speaker, in this overall debate I think you ultimately have to talk about exempting second residences, and that will lead to a much greater loss of tax revenue across the province which has to be picked up in some area other than the $1.6 million that's been figured out for cottages and summer villages. The terms of the identification of just what we are going to be applying this change to in a fair and equitable manner is, I think, also a reason for caution. Thirdly, Mr. Speaker, there is the far different but very much related problem whereby a person living on a quarter

section — permanently or temporarily, with or without a school-age family — can under the present system pay little or no school tax or any other type of property tax. That is the overall point that I would like to make in my comments on this motion. I understand that within a relatively short period of time, we are going to have some consideration of the overall property tax system in the province.

The motion certainly raises a priority concern that should be considered in that overall and general discussion, debate, and study on property taxation, but to move on this particular issue at this time would, I think, be unwise. Perhaps hon. members have a better feel for this situation than I have and think it would be received with considerable favour. But, Mr. Speaker, in the Saturday morning coffee sessions that I attend in my constituency, this is one complaint from constituents which I don't have to worry about.

Of the 10 people around the table, the two who complain are shot down by the eight others, and I can just sit back and benefit from the debate. I do not think it is an item that is by any means unanimously or even overwhelmingly supported, but perhaps the merits of the case would come out in an overall discussion of property taxation in the province. I look forward to that particular item coming forward at a future time. There's one other comment that I'd like to make on the motion, and that's the overall issue of school taxation as it applies to property.

I note that this particular issue has come up in the last couple of years. Perhaps there's another general problem that also has to be addressed, and that is that we have an increasing amount of the overall cost of public and separate school education being borne by the local property tax. Like all taxes, if the tax is not too high, not going up too rapidly, and not unreasonable, it can be accepted and paid without complaint, because I think all Alberta residents realize there has to be general support for education.

I would hope that at a future time — I have a motion on the Order Paper for later on — we could also get into consideration of this particular problem. It is very much related to the sharp increase in cottage property taxes for education purposes, which is dealt with in this particular motion. We might then be able to analyze and discuss the merits of the province perhaps making an effort to take over a greater portion of the share of the cost of the basic education program. Mr. Speaker, I think the motion has raised an issue which is of concern to many Albertans.

I would like to re-emphasize that the matter dealt with in this motion should certainly be part of a general review of property taxation. I would hope that the debate this afternoon goes on the record and that the points raised are going to be dealt with in that overall review. Thank you, Mr. Speaker. MR. PIQUETTE: I also rise to speak against the motion. I probably have the constituency with the largest number of summer villages in Alberta, with nine. It's probably because it's one of the nicest constituencies in Alberta. That's probably the reason why a lot of hon. members have their cottages in my riding.

I would surely hate to lose the tax bases they're providing to the constituency. A good part of the county of Athabasca taxes — a property tax collected for school purposes — do come from the summer villages in my constituency. Unless there was a fairer taxation system to replace that money lost by the motion provided by the hon. member, the Athabasca school committee would be facing quite a dramatic deficit. I think the greater issue that should be addressed is the whole question of the property tax.

If the government was providing approximately 85 percent of the educational foun­ dation program in terms of bearing the educational cost in Alberta, the whole issue that was brought up today would not be a sore point with many of the summer villages. I would recommend to the government that in their review of property taxes they have to look at a new taxation system — a fairer way of taxing for the school foundation — and that they should go to what they promised back in 1971: to pay 85 percent of the school foundation cost and the total cost of education in Alberta. Otherwise, many muni­

July 10, 1986 ALBERTA HANSARD 471 cipalities, counties, and constituencies would be losing a lot of their property return for education. I would like to thank you for providing more revenue for the areas in the county of Athabasca. I would very much oppose this thing, although I realize that a lot of the people who have summer villages are temporary residents and, with the downturn of the economy, can ill afford paying a lot of school property taxes. But in terms of buying property outside of Edmonton or outside of the constituency of Athabasca, it is a choice that they made and it was a free choice.

If they wish to address the larger issue of school taxes, they should perhaps request a change in the whole taxation system in Alberta. MR. HYLAND: Mr. Speaker, as I rise to participate in the discussion of Motion 207, I can well understand how the hon. Member for Stony Plain feels, as after I spoke two days ago in this Assembly, everybody that rose spoke against my motion. Not even my colleagues to my right, who are politically to my left, supported my motion. When that happened, I knew I was really in trouble. Mr.

Speaker, we're talking about taxation, and any time we talk about taxation, we talk about revenue or movement of revenue from a body, either a school board or a municipal body. We're talking about taxation on cottages where people are there part of the time, and I want to talk a little bit about cottages in provincial parks. The Member for Bow Valley talked about them as part of his comments. In Cypress park in my constituency, there are numerous cottages, and the park rules are that you can only live in that cottage X number of days out of the year; you can't live out there all the time.

Our tax system is based on the premise that you have the ability to live in the facility you're being taxed on all year. We have systems in our taxation where motions can be passed by municipal councils calling for obsolescence. The local municipal authority has the ability to tax a portion of a building or reduce the taxes because the building isn't being used. Perhaps that might be a cutoff on this motion or a proposal could be added.

I want to add to the debate on this motion and say that you should only be taxed on that building for the amount of time you're allowed to occupy it, and when you're not allowed to occupy it, the obsolescence clause of the taxation Act should come into play and thus reduce the taxes because of the way the law is written. Mr. Speaker, I think that would help alleviate many of the concerns that I've had expressed to me relating to taxation, and especially school taxation, in a provincial park and the fact that the people paying the taxes are already paying taxes in town.

They are not allowed to live in those facilities year-round. Why should they pay a full year's tax on that facility? They feel it's unfair. In many cases, except for the need to pay municipal taxes that go toward providing facilities — because at least in this case the municipality does do some things with the parks department to provide services to the cottages in the area. I think there is a better case for municipal taxation in the area than there often is for school taxation.

I guess another concern is that if you camp or have a trailer and use recreational property, in many ways you have the best of both worlds, because you don't have to pay taxes on the spot that you use. You pay a user fee of $4, and I think some hon. members in their debate outlined what portion of the cost that was. When you look at the rate paid for the use of camping stalls, I don't think it's a great portion of the cost of operating a provincial park.

As a policy of government, the remainder of the operational cost has been from the general revenue of the province through the budget that is accepted by this Legislature. I wonder what the outcry would be if we started sticking property tax on those. A lot of people would say a lot of things, because the cost would increase and we might be prone to do things. But in this case, because of a limited number of people as a percentage of the population per se, I think we sometimes let things ride because we don't hear from that many people.

We say that it may not be a big problem, so we'll think about it later and maybe do some­ thing later. That may be okay if we're going to look at the whole taxation system. I've said before, both inside and outside this Assembly, and I say again: this system of taxation, or what we use as taxation now, contrary to what some people say, is not on one's ability to pay. If you have a house that's assessed at a certain rate of taxation, it doesn't have any relation to your ability to pay or not. It comes out of the book; that's the rate you pay on the house.

And if you want to make that house a little nicer and put a coat of paint on it, right away you're taxed more. In my opinion, it's a retrogressive tax; the more you put into your home or your business, the more taxes you pay. Perhaps we should look at it and have a set level. If you improve it, it either remains the same or there's a reduction on it. That would encourage people to improve their house or facility, and later they would have pride in it and the town or village or wherever it was would be much better for it. Mr. Speaker, I've outlined some of my concerns with the problem outlined in the motion.

I think that the percentage of the income to school divisions from taxes would in most cases be — the hon. Member for Athabasca-Lac La Biche noted that he has a lot of these cottage developments in his area and it would make a large difference in his area. I don't really think it would make a big difference in the total overall tax dollars in very many municipalities. Granted, it would make some difference; every dollar is some dif­ ference. But on a total school budget in a municipality, I don't think it would make a great deal of difference through­ out the province, with the exception of some areas.

Another example concerns not exactly school taxes on summer cottages but on government facilities in provincial parks. The minute the government is running a facility or has a building, they don't pay tax. In provincial parks they don't pay tax in lieu of, but the minute you lease that space out to a private operator, bingo, he starts to pay tax as if the building were his. We know that a private operator would put up a building to provide a service and that would be the extent of his building.

I don't think you would see many private developers or private operators that would lease a space and put the amount of money into a building that the provincial government does in a provincial park. I use as a prime example in my constituency the concessions in Cypress park at Elkwater townsite. I know that an individual wouldn't build a restaurant and a store to that extent and then have to pay tax on it. That's another problem closely associated with this. My understanding of taxation on summer cottages is that the lot is owned by the person who has the cottage.

In other areas where they receive taxation, the lot is leased from the government by the person. I think there is a definite distinction there, Mr. Speaker, that could also be looked at. If we pass this motion, I think that's something that would precipitate. People would quickly review the situation and we could come to some sort of agreement on it.

472 ALBERTA HANSARD July 10, 1986 Mr. Speaker, I think that about covers the comments I would like to make, and I would like to hear others speak on the subject too. MR. ALGER: Mr. Speaker, I would also like to participate in this debate on Motion 207, which recommends the elimination of school taxes on summer cottages. Can you imagine that? The issue of property taxation in one context or another has come before this Assembly many times over the years. I know. I have participated in some of these debates, and no doubt I will rise to speak on this issue again and again in the future.

I guess paying the tax man makes for a great deal of discussion with a lot of difference in opinion. In previous debates on property taxation I have always been of the opinion that the tax burden for municipal services should be distributed equally and fairly among property owners, whether they be acreage owners, farmers, urban dwellers, or summer cottage owners. I believe, Mr. Speaker, that this motion on property taxation has to be acknowledged and taken into consideration when we are debating the issue of summer cottage owners paying school taxes even when they are not using these services.

I think it is also important to note that the whole concept of property taxation is based on the principle that the wealth be shared and the burden be spread so that as many special services as possible be provided to all members of the community. Property taxes help to pay for a number of services to a municipality: road maintenance, snow removal, garbage collection, the provision of various community and recre­ ational services, and the list goes on. Education is but one component of what our property taxes pay for. I like to think that when we pay our property taxes, Mr.

Speaker, we are putting our money into one big pot so that collectively we can provide for a wide range of services which indi­ vidually we could not afford. On the other hand, the motion introduced today indirectly supports a system of paying for services by way of user fees; that is, you pay for what you use and I pay for what I use. After all, by exempting one group — that is, summer cottage owners — from paying a portion of their property taxes, I think you have to be able to exempt other groups from paying a portion of their property taxes for the services they don't use. Mr.

Speaker, I cannot support such a motion. If we start assessing property owners simply on the services they use, which I believe is what is essentially being argued here, then we not only forfeit the whole concept of property taxation but, in the long run, we open ourselves up to a whole new crop of problems. One which comes to mind is the administrative nightmare that would ensue by having such a system. A user-fee system would require that separate calculations be carried out for the particular services utilized by the individual taxpayers.

Using the school taxes as an example, we would be looking at making separate calculations based on the number of children attending school. There would have to be a special calculation for those taxpayers who have no children and for those whose children have grown up and no longer need to attend school. There would also have to be an exemption for the treaty Indians whose education is funded by the federal government. An exemption would also have to be made for business and industry, who obviously do not require these services. The possibilities are endless.

Ironically, I would be willing to bet that this kind of system would probably result in higher costs and fewer services. In consideration of these points I've just made, Mr. Speaker, I cannot support Motion 207. I believe that we cannot start excluding certain groups from paying for par­ ticular services paid for through property taxes just because they don't use the service. What I do believe, though, is that we must work toward making the method of property taxation in this province a more equitable one which ensures that everyone pays their fair share. Good afternoon, Mr. Speaker. MR. CLEGG: Mr.

Speaker, I rise this afternoon to bring out some points. I know a lot of them were brought out earlier, and on some points I agree with the hon. member to the right. I rise today because I've been involved with assessment and taxation for the last 19 years. In fact, 19 years ago at the AAMDC convention a person from the south, Les Miller, Dallas Smith, and myself were in a debate on part of what we're talking to today, which lasted two hours. We talk about fair and proportional tax and assessment.

When we take summer villages and say that we're going to exempt them from education costs, we can't do that without taking a firm look at all parts of assessment and taxation. I know that summer villages are a very small part of the all-round assessment in any given municipality in this province, but if we take that small portion away, we get another sector that says, "Well, if summer villages can be removed from education costs, then why can't we get farmland or nonfarmland," and it just goes on and on.

Taking that out just wouldn't work unless we change all the assessment policies, when in fact the assessment policies of this province are very good. There are some changes to be made which hopefully will be made in the years ahead. I better check my notes here. I also had the privilege of sitting on the equalized assessment board for a year and a half. We only met about three times a year, so I guess I can excuse myself for not knowing everything about equalized assessment, but I'm not too sure if everybody here realizes that the summer villages did get some exemption from taxes from the overall requis­ ition.

I think it has disappeared in the last six months, but certainly they were getting a break in that end. It wasn't a large one, but I think it was in the neighbourhood of . . . MR. SPEAKER: I hesitate to interrupt the hon. Member for Dunvegan, but the time limit for consideration of this item has concluded. head: PUBLIC BILLS AND ORDERS OTHER THAN GOVERNMENT BILLS AND ORDERS (Second Reading) Bill 206

An Act to Amend the Labour Relations Act MR. STRONG: I'm a little disappointed. All my colleagues are going to miss my debut. Mr. Speaker, I have the honour and privilege to present Bill 206,

an Act to Amend the Labour Relations Act, for second reading. The primary purpose of this amendment is to create a balance within the Labour Relations Act for employees and an employer in a collective bargaining envi­ ronment by, firstly, ensuring public peace and, secondly,

July 10, 1986 ALBERTA HANSARD 473 by balancing the economic effect of a work stoppage between the parties to such a work stoppage. The purpose of the Labour Relations Act in any juris­ diction is to conduct and encourage the parties to a collective agreement to meaningful collective bargaining resulting in the resolution of a dispute. Currently and during the last two to three years, Mr.

Speaker, fair and meaningful collective bargaining has not been possible in all sectors of Alberta's economy due to the ability of the unscrupulous employer to take advantage of the massive unemployment Albertans are currently faced with. With this massive unem­ ployment and economic unrest, a new stratum of Albertans is being created in this province. These Albertans are desperate, economically disadvantaged, and vulnerable. They are vulnerable to abuse, Mr. Speaker. They are vulnerable to manipulation. They are virtual economic slaves in our society.

They are especially vulnerable to being utilized as tools to interfere in the collective bargaining process. These unfortunate, financially distressed, and desperate Albertans are compelled by circumstance to become strikebreakers. Does it come as any surprise that Gainers Inc. is recruiting these economic unfortunates from single men's hostels in Alberta and elsewhere? Is it any surprise that these desperate Albertans in the main come from among the disadvantaged and desperate in our society, our youth? Is this the heritage the government intends to leave for the youth of Alberta?

This is not the opportunity I wish to leave for my children, Mr. Speaker, nor is it the policy of the Official Opposition to condone this flagrant abuse of Alberta's youth and disadvantaged due to an imbalance created by poor labour legislation which allows this abuse by the privileged few. Collective bargaining must be finely balanced if it is going to be successful. It must weigh two competing inter­ ests: the economic might of an employer against the collective action of his employees.

It is obvious to the majority of Albertans that the scales are weighted against all working Albertans, be they union members or not. The economic sanction is the ultimate step in a labour dispute and should not be taken lightly by either party. In order for a union to strike, it must first conduct a government-supervised strike vote and receive the consent of the majority. In order for a union to strike, it must have the consensus of all affected employees in that bargaining unit, and that consensus must be a vast majority of those individuals. This is an example of the true democratic process, Mr. Speaker.

Once those employees have made their choice, the choice is for economic and severe hardship. On the other hand, a lockout in these economic times is a licence given to the employer to ignore the wishes of his employees and to secure an economic advantage through hardship and economic loss. These people that suffer this economic loss are being taken advantage of through the use of the desperate in our society. The strikebreaker is no more than an economic tool used against employees to deny those rights granted under the Labour Relations Act.

The strikebreaker nullifies collective bargaining, as it eliminates the necessity for an employer to bargain in good faith with his employees. We as Canadians and Albertans take for granted the historic and hard-won rights that were intended by legislation within a free and democratic society: freedom of association, freedom of speech, freedom to collectively bargain, the right to belong to a union, and the right to strike. Were these rights and freedoms intended to be easily discarded when they became inconvenient to an employer?

Many labour statutes contain a statement of purpose and clearly define these rights and freedoms as to the traditional view of society. These proposed statements are not neutral, Mr. Speaker, but rather affirm the positive commitment to free collective bargaining and the rights granted to each member of a free society. We expect no less as Canadians, and we demand no less as Albertans. We in the New Democratic Official Opposition firmly believe that every Albertan has a right to fair employment as well as an equal opportunity of employment.

But where individuals collectively choose to choose a collective bargaining agent to voluntarily represent them as a certified collective bargaining agent, these rights should not be interfered with or tampered with. Mr. Speaker, this creates an imbalance that must be addressed by this Assembly. Labour relations is a delicate balance that must not only be perceived as being fair but must, by its action and operation, be fair. If a work stoppage creates economic hardship, it must be shared and shared equally. The proposed amendments itemized in Bill 206 must be addressed. The hon.

Minister of Labour has gone on record as supporting the rights of the employees at Gainers Inc. to return to their previous employment when this work stoppage is ended. We in the Official Opposition congratulate him for this statement and his stance in this matter. In addition to that, in the disputes inquiry board decision that was just tabled in this Assembly, that statement is confirmed by Mr. Alex Dubensky, who chaired that disputes inquiry board.

He says: It would be our suggestion to the Minister of Labour that serious consideration be given to examining the Labour Act particularly in the area of replacement employees. Since there are several options we will not specifically suggest any one. Mr. Speaker, proposed

section 81.1 in Bill 206 enshrines that statement in legislation and guarantees that right. Pro­ posed

section 112.1 forbids the use of strikebreakers during a work stoppage. Proposed

section 112.2 provides that during a work stoppage, an employer may take all necessary and any necessary measures to avoid imminent danger to persons or the destruction or serious deterioration of his property and equipment. Mr. Speaker, I urge all members of this Assembly, regardless of party affiliation, to support this Bill. Firstly, it is fair and, secondly, the alternative, that being the status quo, places the public at serious jeopardy and risk. Simply put, we as a province cannot afford to provoke or condone violence on the picket line.

Where there can be no stri­ kebreakers, picket line violence does not exist. The last three months have demonstrated to all Albertans the new depths to which labour relations in this province have sunk. Mr. Speaker, this hasn't happened overnight. During the last three years, this government encouraged, by legislation and proposed legislation such as the ill- conceived Bill 110 in the construction industry, the employ­ er's right to unilaterally disregard collective agreements and the collective bargaining process.

The advent of the 24- hour lockout for the unilateral changing of terms and con­ ditions of employment, coupled with the ease of obtaining injunctions, makes the use of the strikebreaker inevitable. Mr. Speaker, how would you or any of the members of this Assembly feel if as faithful, loyal, sincere employees, and an employee of 26 years service, your employer decided to unilaterally replace you with a strikebreaker to whom that employer was willing to pay more? Mr. Speaker, in St. Albert there are a number of Gainers Inc. employees, and this is now reality to them. These hardworking, honest,

474 ALBERTA HANSARD July 10, 1986 loyal employees are frustrated, bitter, and unable to accept that this could happen to them in 1986 in Alberta. Are we as Albertans watching reruns of 1930s reels, when men and women were forced by financial necessity to work during the Depression for a nickel an hour for up to 16 hours a day, without any choice, due to total economic hardship? The emotional stress created by this feeling of aban­ donment, bitterness, frustration, and disbelief is evident every night on your television sets. The only thing that astonishes Albertans and makes this so remarkable, Mr.

Speaker, is that these media events are not taking place in South Africa, Poland, Chile, or the Philippines but rather in Red Deer, Fort McMurray, Slave Lake, and no more than two miles from this Legislative Assembly. These events have disgraced Alberta both nationally and internationally. Mr. Speaker, how many members in this Assembly knew of Edmonton's riot squad? How many members of that riot squad expected to be used against their neighbours?

I have no doubt these dedicated police officers, who swore an oath to uphold the law, expected their expertise would be directed toward criminals, thugs, rapists, and murderers, not the guy next door, not the Brownie leader, not a minister, and not a union member who supports the United Way through payroll deductions. These police officers have been accused of being Pocklington's Pinkerton's. I cannot believe the police officers in this province, funded by our taxes, are being mobilized against hardworking, honest, and sincere Albertans.

That isn't only repugnant to me; it's repugnant to a lot of those peace officers. Nor can I believe their mandate is a labour relations one, allowing an individual to break a union, because breaking a union is an attack on all working Albertans, and it's also an attack on their standard of living. This argument, Mr. Speaker, is not an argument between union and nonunion but an argument over what the living standard and wages are going to be for working Albertans in this province in 1986, 1987, and 1990. This situation isn't any different when it applies to the RCMP in the province of Alberta.

The spectacle of hundreds of Albertans being arrested in the province of Alberta ignores their right to exercise their traditional rights and freedoms. It's a disgrace. These hardworking, sincere Albertans are not criminals. The closest they've come to the courts is to pay a parking ticket or answer a summons for jury duty. In maintaining the status quo, does this Progressive Conserv­ ative government realize they are pitting the employed against the unemployed, the police against their neighbours, fathers against sons, mothers against daughters, brothers against brothers, and friend against friend?

This lack of leadership cannot be tolerated, because it's tearing at the very existence of our society. Mr. Speaker, in my working life in Alberta I can't recall the use of strikebreakers to lower the standard of somebody employed at $7 an hour. Can anyone in this Assembly raise a family in dignity on $7 an hour when you're already below the poverty line? It's obvious that this aspect of labour legislation is wrong, as it creates civil disobedience and violence.

It's essential in Alberta's Assem­ bly that we as legislators remove these incitements to violence in our Labour Relations Act and restore meaningful, free collective bargaining in the province of Alberta with no interference from strikebreakers. Mr. Speaker, this Bill to amend the Labour Relations Act is patterned after legislation from a sister province, where civil disobedience and violence existed when stri­ kebreakers were utilized to compel honest and hardworking individuals to accept substandard and unsafe terms of employ­ ment over which they had no control.

By legislating an end to the strikebreaker or the opportunity of an employer to hire a strikebreaker, civil disobedience and violence on legal picket lines will be ended. Mr. Speaker, I would suggest to all hon. members of this Assembly that in order to give full meaning to the definition of the word "lockout" as it is now found in the existing Labour Relations Act, this amendment must be approved. If the existing definition of lockout is to have any meaning, then an employer must not be allowed to hire strikebreakers, thereby avoiding the consequences of his economic action. Mr.

Speaker, we as Albertans must eliminate all methods and manner of circumventing the free collective bargaining process if the Labour Relations Act is to mean anything in the province of Alberta. Although this Bill offers only a partial solution to a particular abuse, it is clear that the people of Alberta recognize the labour legislation in this province demands reform and an immediate review. When is this government going to address the concerns of the thousands of Albertans that gathered on the steps of the Legislature on June 12, 1986? What were these Albertans seeking?

What concerns did these Albertans express? I can tell this Assembly that they were not seeking preferential treatment, they weren't seeking an unfair advantage, and they weren't seeking sympathy. In addition to that, they weren't asking for social assistance, which is one of the few growth industries in the province of Alberta today. Under the labour legislation in the province of Alberta, they were demanding that this government give them fair and equal treatment under the law. They were demanding reasonable labour legislation, of which Bill 206 is only a small part.

They were demanding that this government take the necessary steps to immediately correct all areas of flagrant abuse by employers of Alberta's labour legislation. Mr. Speaker, these Albertans were not only union members but Albertans who believe in justice, fair play, human dignity, and above all that 2.3 million Albertans in this province cannot and will not accept the premise that working Albertans have no rights when these rights are denied the majority in the interests of an employer's greed. In closing, Mr. Speaker, the members of this Legislative Assembly have a decision to make.

They can opt for the status quo, thereby denying Albertans the rights guaranteed by law. But in doing so, they must also accept the respon­ sibility for escalating civil disobedience. Or they can opt for reform, thereby recognizing the wishes of the vast majority of Albertans in our society, by restoring a small measure of social justice. I would also urge all hon. mem­ bers, through you, Mr. Speaker, to not be blinded by any party affiliation but to address the concerns and wishes of those working Albertans. Thank you, Mr. Speaker. MR. STEWART: Mr. Speaker, I would like to speak against this Bill.

I am a supporter of labour relations legislation in the fullest sense, but I believe this particular Bill is not appropriate for a number of reasons. I think Bill 206 must be assessed from a number of angles. Firstly, we must look at the purpose of labour legislation and the Labour Relations Act itself. Secondly, I think we must examine the existing situation with respect to our labour force in Alberta. Thirdly, I think we must examine the fundamental changes that are occurring within our economy and which impact upon the labour relations scene.

Fourthly and most importantly, we must examine the proposed amendments in this Bill.

July 10, 1986 ALBERTA HANSARD 475 Firstly, Mr. Speaker, with respect to the purpose of labour relations legislation and the Act itself, surely the purpose of the Labour Relations Act is to govern the relationship of employers and certified bargaining units of employees with the object of providing a legislative envi­ ronment in which collective bargaining can take place in a balanced and fair manner without favour to either the employer or the union.

The Act obviously as well governs the relationship, upon the termination of a collective agree­ ment, in order to provide a basis which encourages a resolution of the issues leading to a new agreement and at the same time discourages practices that would derogate from that goal. Therefore, it is perhaps appropriate within the context of our consideration of Bill 206 to look at what the Labour Relations Act should not be and should not do. Firstly, I would suggest that it should not direct itself to the particular circumstances of a given labour dispute.

Rather, it should direct itself to governing a relationship between the parties in a general manner, taking into account the fact that it must have equal application to a variety of industries, service employers, and indeed public institutions and their respective unionized employees. It must also take into account the fact that its provisions will have to apply equally to a variety of regional areas with regional economic differences. Secondly, I would suggest that the Labour Relations Act cannot deal restrictively with one set of economic conditions as they may exist at a given point in time.

The legislation must fairly and equitably govern the relationship in both good times and bad, and it must therefore be flexible enough in its general application to take that into account. Thirdly, Mr. Speaker, I would suggest that the Labour Relations Act must not give a leg up to either the employer or the unionized employees. The basic principle of labour relations is that of balance, a balance of the risk of loss of production to the employer and the risk of loss of pay to the employee.

Fourthly, the Labour Relations Act must not be such as to encourage strikes or lockouts but rather to encourage the parties themselves to negotiate in good faith through a collective bargaining procedure and without undue interfer­ ence by government or any other third party. Secondly, Mr. Speaker, I believe we should look at the existing situation of our labour force in Alberta today. Of our nonagricultural labour force, 298,070 employees or 31.9 percent are members of organized unions in Alberta.

There­ fore, 68.1 percent choose not to be so organized and rely upon the Employment Standards Act for protection of their employee rights. Of the 31.9 percent who are organized union members, 66 percent are employees of public employ­ ers, as it were, and 34 percent are employees of private employers. This is important because while some of those employers should be able to carry on business during the course of a strike, others would not, regardless of the provisions which may allow or disallow temporary employees during any period of a strike.

Public employers, and indeed many private employers, are not likely to be able to substitute temporary employees in any event. So we are dealing with a proposal that would in any event affect only a fraction of the situations. Secondly, I don't believe the Act should ever become a lever to promote the organizing of employees for purposes of certification as a bargaining unit. I would suggest that this is precisely what would happen if the Act were to be amended as proposed by this Bill.

There is a host of learned commentary in the area of labour relations which reinforces the principles of neutrality of the legislation so that it does not favour one or the other and thus provides a balance of bargaining strength. Mr. Speaker, I believe it is also critical to assess the fundamental changes occurring in our economy as they relate to the proposals before us today. There are several factors which are influencing attitudes towards labour rela­ tions on the part of employers and labour unions. Of course, there are attitudes of the public generally, which impact on this situation as well.

I'd just like to briefly mention a few of these. Firstly, there are substantial changes in technology, which alter the way goods are produced and services per­ formed. This is progress, and the manufacture of buggy whips is no more. There must be sufficient flexibility built into any labour relations legislation to allow such progress to take place yet preserve the protection and the rights of both employer and employee. Secondly, we are no longer an island to ourselves, and world markets and exports have taken on a new significance in our economy.

We must compete, and there is a growing awareness that to do so effectively will require all of our costs of production, including labour, to be reasonable in the circumstances. If we do not, then there will be more unemployment. Thirdly, I also sense an attitude of the public at large that the people of Alberta want to see labour disputes settled on a co-operative and consultative basis, rather than through the tactics of confrontation and violence. Therefore, our Labour Relations Act must, through its provisions, establish the type of environment which encourages the former and discourages the latter.

Fourthly, I also sense an attitude of the public against government involvement in the collective bargaining process, Mr. Speaker. Again, any labour relations provisions which we, may consider should achieve that balance of bargaining strength. If either party is at a disadvantage, it will be the first to call upon government intervention. Therefore, we must be cautious to ensure that the balance of bargaining strength is maintained. Finally, I sense as well that there are many different and new approaches in the area of labour relations.

In many instances we have seen employers and employees working together through profit-sharing plans and other incentives to ensure full co-operation and common goals. Surely that is something to encourage. Now to turn to the provisions of Bill 206. As I mentioned, Mr. Speaker, I cannot support this Bill. Having regard to all of the general principles I have discussed, I believe the amendments proposed in this Bill are contrary to those principles and are not in the interests of either the employers or unionized employees.

In addition, I do not feel the proposed changes are in step with current economic cir­ cumstances or the views of Albertans generally. Furthermore, I would say that a one-hour debate is hardly appropriate consideration of the very significant ramifications which would flow from any such amendments being adopted. One cannot help but feel that the Bill is prompted at this particular time as part of a strategy to apply to particular labour disputes which currently exist. I do not feel that constitutes a responsible legislative process.

As all members are aware, this government is committed to a responsible review of the Labour Relations Act. The review will be fully consultative. It will take into account the entire spectrum of labour relations. It will receive thoughtful input from all sectors, and it strikes me that that is far more appropriate than any piecemeal amendment to the Act. Any such amend­

476 ALBERTA HANSARD July 10, 1986 ment must take into account the overall picture, since the impact of such an amendment may have unwanted conse­ quences upon other provisions of the legislation. I believe the review the minister has proposed is a recognition that things are indeed changing out there. It is a commitment of this government to ensure that its legislation responds to those changing circumstances. Two basic amendments are proposed by this Bill, Mr.

Speaker; firstly, a legislative guarantee that all workers who are members of a bargaining unit prior to a strike or lockout will be reinstated after the strike or lockout has ended. Much has been made by members of the New Democratic Party about labour legislation in this province, implying that this particular matter is not addressed in our current legislation.

This is of course not true, as the current legislation clearly provides that a refusal on the part of the employer to employ or continue to employ a person who has participated in a legal strike is an unfair practice, leaving that employer open to the sanctions provided by the Act. In other words, while the Act does not expressly state that striking employees must be reinstated,

section 137 provides for a basis upon which the failure of an employer to do so can constitute an unfair labour practice. This provides the added benefit that both parties can exercise their dem­ ocratic right of appeal, and a decision can be effected in a much shorter period of time. It is my understanding that this parallels that of all other provinces in Canada with the exception of Manitoba, Ontario, and Quebec.

I suggest that while those provinces deal with the matter of reinstatement in a different manner, all prov­ inces, including Alberta, properly address the rights of the worker who has participated in a legal strike and desires to be reinstated. The second proposal being made by the sponsor of this Bill, Mr. Speaker, is to prohibit employers from replacing striking or locked-out employees with other workers, except management personnel, who are already employed prior to the work stoppage.

There is no doubt that this particular amendment would significantly alter the balance of bar­ gaining strength that is traditional and essential to labour relations legislation. If the sponsor of this Bill intended balance, where is the comparable proposal that would provide that employees are not permitted to seek other employment during a strike or lockout? Where is the proposal by the sponsor to provide that strikers may not receive strike pay? Where is the proposal from the sponsor that states that nonemployees, even professional picketers, may not participate on the picket lines? It seems to me, Mr.

Speaker, that the proposals before us today are totally one-sided and far removed from the principles of fairness and equity. The balance of bar­ gaining strength, as mentioned before, is the very essence of labour relations legislation. If the employer is to be denied the possibility of continuing operations with temporary employees and maintaining some cash flow, then I would think the sponsor of this Bill would have suggested that the employees should likewise be denied the possibility of personal cash flow. However, Bill 206 is totally silent in this regard.

Unfortunately, Bill 206 appears to be totally directed to current disputes. Our Labour Relations Act must have equal and effective application to all potential disputes, many of which, as mentioned before, are with employers where the hiring of even temporary workers is just not feasible. It will apply as well to many situations in which the shutting down of one part of an employer's operation indirectly shuts down other operations of that employer which are not covered by a particular bargaining unit.

In other cases there is indirect adverse effect upon employees of other companies, otherwise totally removed from the situation. While some may consider the domino effect fair game and part of the bargaining strength of the union, there are many workers and their families who want to and have the right to work but find themselves totally caught up in a situation not of their own doing. Mr. Speaker, jobs and employment are also very much on our minds these days and on the minds of many workers who want work to put bread on the table but are unable to find employment.

Recent disputes have indicated just how far these persons will go to seek employment and earn a living. In many instances they have risked injury just to have the opportunity of putting in an honest day's work for an honest day's pay. [interjections from the galleries] SERGEANT-AT-ARMS: Order! MR. STEWART: I don't think the timing of this particular provision is appropriate in view of the economic situation today. Mr. Speaker, Manitoba legislation has often been held up by certain members of this Assembly as the be-all and end-all.

Isn't it interesting that not even Manitoba prevents the hiring of temporary employees during the period of a legal strike? The sponsor of the Bill had to take his reference from another province, not the NDP province. Obviously, even the government of Manitoba recognizes the imbalance that would be created with the type of provisions that are placed before us today. Labour unions today are making every effort to increase their membership and become more effective in the bar­ gaining process.

Giving labour unions a leg up in the legislation itself and thereby substantially altering the bal­ ance, a bargaining power is not an appropriate way to accomplish increased membership and more effective bar­ gaining. As mentioned earlier, nearly 62 percent of the labour force of this province apparently do not even wish to be organized for collective bargaining purposes. Many of those that are desperately want disputes to be settled orderly and quickly.

They rely upon the legislation of this province to encourage fair and equitable settlements without interference or undue advantages being given to either one side or the other. There are many of us that feel that if a man or a woman has a job and wants to work, he or she should have the right to do so. Finally, Mr. Speaker, I think this province has indeed been fortunate in its labour relations over the years, and this is a credit to both employers and unions and the employees themselves.

The legislation has worked well in creating the type of environment that I have described as being so essential to the process. Settlements have been reached without interference by government. There is a basic belief by this government that collective bargaining will work within the confines of fair and equitable legislation as an environment. The myth that is being perpetrated by certain members that our legislation is unlike any other province's in its discrimination against workers is just that: a myth.

However, our legislation must always be responsive to changing cir­ cumstances, and it must constantly be reviewed to ensure that the principles I have mentioned are maintained.

July 10, 1986 ALBERTA HANSARD 477 Therefore, Mr. Speaker, I look forward to the review of our labour legislation which is forthcoming. I trust that the same principles will govern any future proposals for change, and I therefore urge members to defeat this Bill. MR. SIGURDSON: Mr. Speaker, let me start by offering my congratulations to the Member for Calgary North Hill for his calm participation in this debate. When we talk about proposed amendments to labour legislation in