1982 Legislative Session: 4th Session, 32nd Parliament

Hansard

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

( Hansard )

WEDNESDAY, JUNE 16, 1982

Afternoon Sitting

[ Page

8231 ]

CONTENTS

Routine Proceedings

Presenting Reports

Select Standing Committee on Standing Orders and Private Bills, reports No. 1 and 2.

Mr. Strachan –– 8231

Oral Questions

Use of government aircraft. Mr. Passarell –– 8231

Formaldehyde gas safety level. Ms. Sanford –– 8232

Mr. Barrett

B.C. Packers Ltd. Mr. Lea –– 8233

B.C. Hydro borrowing. Mr. Stupich –– 8233

Small business bankruptcies. Mr. Leggatt –– 8233

Expenses of minister. Hon. Mr. Nelson replies –– 8234

Use of government aircraft. Hon. Mr. Fraser replies –– 8234

Tabling Documents

British Columbia Buildings Corporation annual report, March 31, 1981.

Hon. Mr. Wolfe –– 8234

B.C. Hydro annual report, 1981-82.

Hon. Mr. McClelland –– 8234

Social Service Tax Amendment Act, 1982 (Bill 30). Report. (Hon. Mr. Curtis)

Third reading –– 8235

Housing and Employment Development Financing Act (Bill 39). Committee stage.

(Hon. Mr. Curtis)

section 2 –– 8235

Mr. Stupich

Hon. Mr. Bennett

Mr. Gabelmann

Ms. Sanford

Ms. Brown

section 3 –– 8238

Mr. Gabelmann

Ms. Brown

Mr. Mitchell

Mr. Davis

Mr. Brummet

Mr. Ritchie

Mr. Leggatt

Mr. Lea

section 4 –– 8244

Mr. Stupich

section 5 –– 8245

Mr. Stupich

Mr. Davis

Mr. Leggatt

section 10 –– 8247

Mr. Stupich

section 13 –– 8247

Mr. Stupich

Third reading –– 8247

Division

Land Amendment Act, 1982 (Bill 54). Second reading. (Hon. Mr. Chabot)

Hon. Mr. Chabot –– 8247

Mr. Hanson –– 8247

Committee of Supply: Ministry of Human Resources estimates. (Hon. Mrs. McCarthy)

On vote 49: minister's office (continued) –– 8247

Ms. Brown

Mr. Levi

Appendix –– 8255

WEDNESDAY, JUNE 16, 1982

The House met at 2 p.m.

Prayers.

HON. MR. GARDOM: I rise on a point

of both public and private importance, and that is that this happens to

be the natal day of a very good friend of all members of this

Legislative Assembly. Mr. Speaker, I know that all sides of the House

would like to wish you the happiest of birthdays and continuing good

health.

Might I conclude by bearing small reference to two

horoscopes, which I found in competing daily newspapers in British

Columbia. One says: "If you find rewards in the area of romance,

finance and employment this year...." I'm not going to comment on that,

Mr. Speaker, but I would continue in reading this: "If considering

marriage, be absolutely certain that your prospective mate shares your

commitments and high ideals." We know Little Red does and has.

MR. BARRETT:

I would ask the House to congratulate the member for New Westminster

(Mr. Cocke) on becoming a grandfather this last 24 hours. It is a great

moment in his family.

HON. MR. WATERLAND: In the

precincts today are a group of grade 4 and grade 6 students from

Spences Bridge Elementary School. They are accompanied by their

teachers, Mr. Irvine and Mrs. Dickinson. I would like the House to

please bid them welcome.

MR. GABELMANN: In your

gallery this afternoon are a group of people from Campbell River who

are down here meeting with government members in an attempt to make

sure that Campbell River will always be the salmon capital of Canada.

Their names are: Gary Young, Eileen Smith, Ken Phillips, Dr. Dick

Murphy, Thor Peterson, Don McIver, Rob Bell-Irving and Betty Hampton.

MR. KEMPF:

It's my great pleasure to introduce in the gallery today some people

from the great north country. With us this afternoon are Mayor Maxine

Douglas, Alderman Paul Hamoline and Mr. Ray Parfitt. I would ask the

House to make them all very welcome.

MR. LOCKSTEAD:

In the members' gallery today we have two constituents of mine from the

beautiful Sunshine Coast, Peter and Gladys Sluis. In the Speaker's

gallery we have a former constituent of mine, Gary Young, who is a

baseball-playing colleague of mine. I ask the House to join me in

welcoming them.

MR. DAVIDSON: Mr. Speaker, visiting

with us this afternoon is a good friend and a resident of Delta, Mr.

Neil McLeod, and I would ask the House to give him a warm welcome.

MRS. WALLACE:

Mr. Speaker, in the precincts today is a very large class of grade 7

students from Mill Bay elementary school together with their teachers

and chaperones, and I would ask the House to welcome them.

MR. GABELMANN:

Mr. Speaker, the member for Comox reminded me that I left out one

person on my list. I'd like the House to welcome Mr. Phil Frost as well.

Presenting Reports

Mr.

Strachan, Chairman of the Select Standing Committee on Standing Orders

and Private Bills, presented the committee's first and second reports,

which were read as follows and received:

"Report No. 1, June 16, 1982:

"Mr. Speaker, your Select Standing Committee on Standing Orders and Private Bills begs leave to report as follows:

"Standing

orders have been complied with relating to the petition for leave to

introduce a private bill intituled

An Act to Amend the Vancouver

Charter, except for late filing; but with respect thereto the

petitioner has paid double fees in accordance with standing order

98(3). Your committee recommends that a refund of one-half of fees paid

be made. Your committee recommends that the petitioner be allowed to

proceed with the said bill."

"Report No. 2, June 16, 1982:

"Mr. Speaker, your Select Standing Committee on Standing Orders and Private Bills begs leave to report as follows:

"Standing

orders have been complied with relating to the petition for leave to

introduce a private bill intituled Seaboard Assurance Company Act,

1953, Amendment Act, 1982, except for late filing; but with respect

thereto the petitioner has paid double fees in accordance with standing

order 98(3). Your committee recommends that a refund of one-half of

fees paid be made. Your committee recommends that the petitioner be

allowed to proceed with the said bill.

"All of which is respectfully submitted. W.B. Strachan,

Chairman."

MR. STRACHAN: Mr. Speaker, by leave, I move that the rules be suspended and the reports adopted.

Leave granted.

Motion approved.

Oral Questions

USE OF GOVERNMENT AIRCRAFT

MR. PASSARELL:

I have a question for the Minister of Transportation and Highways. When

did the government change the policy about allowing spouses and family

members of cabinet ministers to travel on the government aircraft

unaccompanied by the ministers themselves?

HON. MR. FRASER: Mr. Speaker, the change was made for spouses on July 31, 1979.

MR. PASSARELL:

The government aircraft logs tabled yesterday indicated that the spouse

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

unaccompanied on ten separate occasions, in addition to accompanying the

[ Page 8232 ]

minister

on 15 separate occasions in flights all over the province. Can the

minister assure this House that Mr. McCarthy did not use any of these

occasions to conduct business in the many interior towns where he holds

property?

HON. MR. FRASER: I would think that the flights he was on were authorized flights, but I'd have to check the detailed logs.

MR. PASSARELL:

The aircraft logs tabled yesterday also show that a certain J. Jordan

and S. Jordan travelled unaccompanied on a government aircraft on

December 12, 1980. The following day a Dr. Jordan travelled on the

craft. Can the minister state to this House that these people were

travelling on government business?

HON. MR. FRASER: Mr. Speaker, I granted this permission on compassionate grounds.

FORMALDEHYDE GAS SAFETY LEVEL

MS. SANFORD:

Yesterday I asked the Minister of Health a question with respect to

formaldehyde levels, and I'm wondering if the minister has decided to

reduce the 0.1 parts per million to 0.03 parts per million for portable

classrooms, as is the stated objective of his own ministry.

HON. MR. NIELSEN:

Mr. Speaker, I have asked officials to review the question posed

yesterday by the member for Comox. It would be of some use to me if the

member would like to tell me to whom she is referring when she says

that it was a recommendation of the ministry. I understand that a

specific medical officer has made that recommendation, but it might be

of assistance if we knew what reference she made. It is being reviewed

by our people in the ministry.

MR. SPEAKER: Perhaps those kinds of comparisons could be made outside of question period.

MS. SANFORD:

I'm concerned about the children who may be suffering adverse health

effects as a result of the formaldehyde gas levels, and the fact that

the minister, the parents, the health officers and everyone else

involved may not be aware that those adverse health effects are as a

result of formaldehyde gas levels. Has the minister now decided to

conduct tests through the Ministry of Health and at government expense

to ensure that all children have a safe environment in which to conduct

their studies?

HON. MR. NIELSEN: I understand that a

considerable number of tests have been made where queries have been

offered with respect to the levels of the gas, particularly in portable

units. I have no problem in assigning that duty to the responsible

medical health officer when such queries or complaints are received.

MS. SANFORD:

That's my point: parents may not be aware of the cause of the health

problems that they have. It is not good enough to respond to requests

from parents. Has the minister decided...?

[Mr. Speaker rose.]

Interjections.

MR. SPEAKER: Order, please, hon. members. Question period shall not be used up in debate, according to the rules.

[Mr. Speaker resumed his seat.]

MS. SANFORD:

Has the minister decided to undertake what is his responsibility as

Minister of Health — that is, to ensure that those kids have a safe

environment?

HON. MR. NIELSEN: I have no hesitation

in relying upon the capability and expertise of the medical health

officers who have a responsibility in the field of public health. I'll

certainly speak to the senior medical health officer to determine

whether any of the medical health officers in the field are having any

difficulty carrying out such tests as they deem necessary to ensure, as

the member asked, that the health of these youngsters is protected.

That's their duty, and I know they carry out their job.

MR. BARRETT:

A supplementary question: because of the concern of parents in this

province, would it not be advisable for the minister to order that all

such facilities be tested immediately by the Ministry of Health?

HON. MR. NIELSEN:

It may be advantageous from a political point of view to second-guess

our medical health officers. I don't hesitate to suggest that the

people engaged in that activity take their jobs very seriously and, I

think, conduct themselves accordingly. I'll speak to the senior health

official to determine if there is any impediment on any of the medical

health officers to carry out their duties. But if the Leader of the

Opposition feels it would be politically advantageous to, in effect,

wave the big stick and order them to do this, notwithstanding what

their recommendations may be, I'll consider that.

MR. BARRETT:

The minister, in answering, brought in politics. This is a matter of

public health. As a matter of public health, are the parents of British

Columbia's children expected to wait until they make the request for

the studies to be made, or is the Minister of Health going to assume

the responsibility for public health and order that all such facilities

are tested across the board in British Columbia?

HON. MR. NIELSEN:

Once again, I can only repeat that we have responsible people in the

field who are responsible for particular programs within the Ministry

of Health. I would rather take the advice of our senior medical health

officers than the Leader of the Opposition.

MS. SANFORD:

Last week in this Legislature the minister said that the medical health

officers were only responding to the requests of parents and school

boards. In view of the fact that the medical health officers are only

responding to parents and that parents may not be aware of the cause of

the difficulty, has the minister now decided to undertake those tests

on his own?

HON. MR. NIELSEN: Unlike the member for

Comox, I don't have the medical expertise to undertake those tests on

my own, but we do have competent people within the ministry who can

conduct and have conducted such tests. I will specifically ask the

senior medical health officer responsible if he feels that it is

imperative that such tests be conducted on

[ Page 8233 ]

all

units in the province. I will also ask him to provide me with a resumé

of the tests that have been conducted and the results of these tests. I

will ask a number of the medical advisors within the ministry for their

advice in carrying out such a program. I can assure the House that if

the medical advice from the ministry and from those senior officers

indicates that it is advantageous and necessary or desirable that

massive tests be undertaken, we will certainly do so.

B.C. PACKERS LTD.

MR. LEA:

I have a question for the Minister of Environment, Mr. Speaker. As I

understand it, the Cabinet Committee on Economic Development met with

B.C. Packers, and you have made a decision to support B.C. Packers'

closure of the groundfish plant in Prince Rupert. Will the minister

make available to the Legislature and to the public the information he

received from B.C. Packers which led him to make the decision to side

with B.C. Packers in this plant closure?

MR. SPEAKER: A future action of the minister — do you wish to answer? Please proceed.

HON. MR. ROGERS: No, Mr. Speaker.

MR. LEA: Why?

MR. SPEAKER: That question is in order.

MR. LEA:

I would like to ask the minister why his government can be so firm when

dealing with a cooperative, like the Prince Rupert Fishermen's

cooperative, but when it comes to B.C. Packers, they roll over and play

dead.

HON. MR. ROGERS: The two situations are not related.

MR. LEA:

Has the minister decided to make the information from B.C. Packers

available to the public and to the workers who've been affected by the

layoffs in Prince Rupert because of the closure, or does he expect us

to take the word of the cabinet committee that B.C. Packers have a

legitimate reason? Maybe they have. Can we see the reason?

HON. MR. ROGERS: I have already answered the question.

B.C. HYDRO BORROWING

MR. STUPICH:

Mr. Speaker, I have a question to the Minister of Finance. B.C. Hydro

has borrowed $1.5 billion in U.S. funds over the past two years. B.C.

Hydro told the Utilities Commission yesterday that it has to find an

extra $30 million this year to meet interest payments on its total $3

billion U.S. borrowings. Can the minister advise why he has

concentrated in the U.S. market during this period that the Canadian

dollar has been in steady decline?

HON. MR. CURTIS:

Mr. Speaker, in order to be completely accurate, I will take the

question as notice. However, to draw the inference that I have

concentrated on a particular market is perhaps to ignore the facts of

the markets themselves.

MR. STUPICH: I have another

question: in view of the fact that the minister's policy of massive

borrowing in U.S. financial markets will cost B.C. Hydro customers in

excess of $30 million in extra interest payments this year, has he

decided on a policy of spreading borrowings among a variety of

currencies to minimize the risk associated with dealing in the U.S.

market alone?

HON. MR. CURTIS: It is a matter of

public knowledge that in fact we are borrowing in Canadian and U.S.

dollars. In some instances, those dollars have been found in Europe and

in the Canadian and United States markets. I would be happy to expand

on that when I respond with the balance of the question at a later time.

MR. STUPICH: I don't recall Canadian borrowings for Hydro, but that could be.

third question: in view of the fact that several Canadian provinces

have successfully borrowed for their utilities from the Alberta savings

trust fund, why has the government not succeeded in making a similar

arrangement with our Alberta neighbours?

HON. MR. CURTIS:

I indicated a moment ago, in answering the second question from the

hon. member for Nanaimo, that we've investigated a number of markets.

Indeed, on at least a couple of occasions last year, I reviewed the

SMALL BUSINESS BANKRUPTCIES

MR. LEGGATT:

My question is also directed to the Minister of Finance. The tax

notices are out now for this year, and there is the beginning of a

Poujadist revolution in regard to small business people who find their

municipal land tax increasing by up to 50 percent, 60 percent, 70

percent, 80 percent. Given that this year we have seen bankruptcies in

this province at a staggering 140.8 percent above last year, has the

minister, who took something like $90 million away from the

municipalities in this budget, decided to restore revenue-sharing

grants and provide some emergency relief to municipalities so that they

can help their small business community stop being savaged in this

economy?

HON. MR. CURTIS: I think the member is aware....

believe he was in this House during the debates with respect to

revenue-sharing. In response to the question, I think that the

revenue-sharing program administered by this government, and

particularly by my colleague the Minister of Municipal Affairs (Hon.

Mr. Vander Zalm), still stands as the best in the country.

HON. MR. NIELSEN:

On a point of order, yesterday the member for Skeena (Mr. Howard) asked

a question in question period which I took as notice. The member said:

"On October 15, 1979, the Minister of Health hosted a dinner for 16

people in Prince George." The Minister of Health did not host a dinner

for 16 people in Prince George at that time. It was the Minister of

Consumer and Corporate Affairs.

MR. SPEAKER: Order, please. This is not a point of order.

[ Page 8234 ]

HON. MR. NIELSEN:

Mr. Speaker, the point of order is this: I took the question as notice,

but upon researching the rules of the House, I find that the question

appears to be out of order; and I'm somewhat perplexed about how to

respond to a question which is out of order, unless I could receive

leave of the House.

Leave granted.

EXPENSES OF MINISTER

HON. MR. NIELSEN:

The member for Skeena asked a question yesterday with respect to an

official luncheon hosted by the Ministry of Consumer and Corporate

Affairs in Prince George on October 15, 1979, about two and a half

years ago. Yesterday afternoon I received from the press copies of

documents which apparently relate to this luncheon. I've asked a number

of public employees to advise me of the circumstances with respect to

that occasion.

The member for Skeena suggests that the first

invoice from the Inn of the North in Prince George separated the

charges for liquor and meals. That's correct. The invoice was forwarded

to the ministry accounting division upon being received in the

minister's office. An employee in the accounting division offered the

advice that the invoice could not be processed in that form, saying:

"We cannot reimburse for alcohol; only the food." I'm advised that the

information at that time within the Ministry of Consumer and Corporate

Affairs was that such expenses for an official luncheon were proper and

payable.

However, there apparently was the belief that such

invoices were to be submitted in a manner that showed the overall cost

for catering and hospitality. There was no argument, I'm advised,

whether expenditures for liquor with meals were allowed. The

understanding was that these legitimate expenses would be paid, as they

had been previously and have been since. I'm further advised that the

confusion over processing this invoice was resolved with a subsequent

invoice being submitted by the hotel for the same amount, but submitted

in a different form: that is, an all-inclusive price for the luncheon,

food and beverages included, as well as a breakdown of details of

expenditures, including costs of liquor and food. Subsequent research

indicates to me that the policy at that time permitted such

expenditures, and that policy remains in effect today.

The

dinner was held to meet with a number of citizens in the Prince George

area with respect to ministry policies and other government business.

Among the guests were the mayor, superintendent of the RCMP and various

other people. Lunch occurred between visits by me and officials to

Consumer and Corporate Affairs offices in Prince George. All

arrangements were handled by staff, and all arrangements for payment

were handled by staff. I'm advised that at no time did any of the paper

relating to the expenses of the lunch go over my desk.

The

payment of the account for the Inn of the North was viewed by members

of staff to be routine. In review, it certainly was routine. That there

was a difference of opinion as to the form of the invoice probably

recognizes the staff concern about detail. The matter apparently was

resolved after a series of communications between my ministry office,

the accounting division and, presumably, the hotel.

The

lunch was proper, including beverages, and the total cost was never

altered. No invoice was doctored or altered, despite the charges of the

member. Rather, a subsequent invoice was supplied by the hotel with a

detailed breakdown to meet the accounting procedures of the ministry

and the comptroller-general's office. There appears to be no conflict

with respect to policy or rules, but one of the form of the invoice.

conclusion, the luncheon was correct, the charges were correct, and the

payment was correct. I'm not advised by anyone that there is a question

with respect to this. There was some disagreement with respect to the

manner in which the invoice was tendered, and presumably a staff member

advised the hotel of the form acceptable to the ministry and

comptroller-general's office. I'm advised the invoice....

Interjections.

HON. MR. NIELSEN: I wonder if that member could come to order for a moment, Mr. Speaker.

MR. SPEAKER: Order, please, hon. members. Let's hear the answer.

HON. MR. NIELSEN:

I am advised that the invoice which was paid included an attached

printout separating the costs of food and liquor, and I am advised that

invoice No. 0784 in the comptroller-general's office has attached to it

a printout slip, No. 159456, which was the official record and clearly

indicates that there was no doctoring or altering of invoices. Mr.

Speaker, perhaps if those members feel they were doctored or altered,

they might make the statement outside identifying who made the

alterations.

HON. MR. FRASER: Mr. Speaker, I would like permission to reply to a question I took on notice on Monday last.

Leave granted.

USE OF GOVERNMENT AIRCRAFT

HON. MR. FRASER: The member for Atlin (Mr. Passarell) asked on Monday

last: "Have any British Columbia government aircraft travelled outside Canada

since January 1, 1982, and if so, will the minister provide all the details?"

Mr. Speaker, the answer is yes, they did. On January 21, 1982, there was a flight

from Victoria to Olympia, Washington, and return; on March 21, 1982, there was

a flight between Victoria, Vancouver and Seattle, return; and on May 2, 1982,

there was a flight from Victoria, Vancouver, Kelowna, Juneau and Anchorage,

Alaska, back to Victoria. One exception to that is that in approaches or takeoffs

our aircraft enter American airspace constantly when they are going in and out

of the Victoria airport.

Hon. Mr. Wolfe tabled the annual report of the British Columbia Buildings Corporation for the fiscal year ending March 31, 1982.

Hon. Mr. McClelland tabled the annual report of B.C. Hydro for 1981-82.

[ Page 8235 ]

Orders of the Day

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

Leave granted.

HON. MR. GARDOM: Mr. Speaker, I call report on Bill 30.

SOCIAL SERVICE TAX AMENDMENT ACT, 1982

Bill 30 read a third time and passed.

HON. MR. GARDOM: Mr. Speaker, committee on Bill 39.

HOUSING AND EMPLOYMENT

DEVELOPMENT FINANCING ACT

The House in committee on Bill 39; Mr. Davidson in the chair.

Section 1 approved.

section 2.

MR. STUPICH:

section 2 under "Purposes," in the second line it says, "other

capital projects." Now, that would seem to leave the door open to

almost anything that would create employment, including northeast coal,

for example. There are no strings on it that I see, and I just wonder

what the minister has to say.

HON. MR. CURTIS: Mr.

Chairman, with respect to

section 2, that is correct. It is

sufficiently broad, I think, because we speak of it as a housing and

employment development act. I don't think that it would be employed in

connection with the project that the member mentioned, but it was drawn

deliberately broadly.

MR. STUPICH: Again, Mr.

Chairman, with respect to purposes, it says "to create employment by

financing housing." Now I wonder whether the minister has any plans as

to exactly how the government is going to go about financing housing.

Will it be lending money to purchasers of homes or to contractors? Are

there any plans?

HON. MR. CURTIS: I thought that

second reading made it quite clear that this was for the issuance of

bonds which would lead to the construction of housing and to employment

associated therewith.

HON. MR. BENNETT: Mr. Chairman,

I'd like to speak to

section 2 of this bill. Obviously, in debate on

second reading not all members of this House were clear on the intent

of the government to do everything it can, on a provincial basis, to

fight a recession that is affecting our country as well as our

province. The recession is international in nature. Our provincial

government isn't going to sit back and say that it can only be resolved

by the United States doing something, or that it can only be resolved

if the Trudeau government, supported by the New Democratic Party, would

withdraw its disastrous spending policies and economic policies and the

national energy policy.

We've said that there are a number

of areas in which the people of this province should be given an

opportunity to be assisted. It does not have to be a handout. The

concept of development bonds and housing bonds is to be able to float

bonds — hopefully, with the agreement of the federal government — over

the next two, three, four or five years, depending on what's deemed

appropriate by the Minister of Finance, and that they would be

tax-free. You must understand that the province and the federal

government would be recognizing that we're in a very severe recession

in 1982. Our people are hurting. Rather than plunge the province into

debt by massive borrowings, you would issue development and housing

bonds that could meet a variety of needs and which would be tax-free.

And because of the no-tax provision, the bonds could be issued at a

much lower interest rate.

MR. STUPICH: On a point of

order, Mr. Chairman, I think I was in error in discussing

section 3

under

section 2. I think the Premier is also in error; his discussion

really belongs under

section 5.

MR. CHAIRMAN: The Premier on the same point of order?

HON. MR. BENNETT: No, Mr. Chairman.

continue, establishing the bond itself would relate to the

purposes...and that's the authority established. I can sympathize with

the member for Nanaimo, who is having some difficulty with.... It is

complex for the layman. I would like to assist him by explaining how

the bond would work and how it will be applied. Of course, because of

the tax-free provision, the lower coupon rate would provide money to

the provincial government at a low interest rate. For example, to draw

a parallel, if the federal government agreed and the bond didn't have

federal and provincial income tax, then presumably, if interest rates

are 18 percent, and someone is in a 50 percent tax bracket, the bond

could be issued at about 9 percent. If you could get money today at 9

percent, it would mean that the province could turn around in a variety

of ways to assist housing development, small businesses and other

things. The province could lend money at half the current interest

rate, plus the cost of handling. True, we would be forgoing future

income. We would be putting it to use today when our people need help.

find it strange that a member of this assembly, who should be concerned

about the economy in all its aspects, would question the broad uses to

which this money could be put. We must have a government that is ready

to act in any area where government assistance will genuinely help the

employment or housing of our people. The government is working on a

number of proposals covering employment and housing. We've gone beyond

the normal line-ministry responsibility and have set up a cabinet

committee consisting of a number of ministries that would have some

input on job training, housing, land or business development. All of

them are part of this committee in seeking a common solution so that

this government can have a united front in fighting some of the effects

of a recession. It should not be lost that in all of these uses it

would be impossible for a single provincial government to fight off the

disastrous economic policies of the Trudeau government. It would be

impossible for our taxpayers to spend the kind of dollars that could

completely

[ Page 8236 ]

counteract

the federal financial policies and ten years of wild and profligate

spending by the federal government at times when they ran the debt of

this country to such a level that now 25 percent of all our federal

taxes go to pay deadweight interest.

In speaking to

section

2, I would say that the deadweight interest policy and running into the

debt that started in '73 during the minority government years of the

Trudeau government, where they were held in power and almost

blackmailed.... No, that's too strong a word. They were almost

encouraged into that type of spending by the New Democratic Party

opposition and were propped up in government during that period. They

have created the inflation, the declining dollar in our country, a sick

economy that is responding more poorly than in most industrialized

countries.

Anyone that doesn't understand the basics of what

is wrong economically, because even the socialists in France, who the

grinning member for North Island (Mr. Gabelmann), who will go anywhere

to get elected, having been defeated in North Vancouver–Seymour and who

says, "Have election pamphlet, will travel," because this is much

easier than having to try to find a job in the private sector.... Even

he will know that his socialist government in France, who are following

the policies of deficits, high spending and increased inflation that

the socialists in Canada are advocating, have now completely turned

away from that policy after this short time in government after

seriously hurting their economy even more and creating inflation, and

have now gone for wage and price freezes. They're cutting back the cost

of government and government services in France....

AN HON. MEMBER: What's that got to do with

section 2?

MR. CHAIRMAN: Order, please, hon. Premier.

HON. MR. BENNETT:

That's why

section 2 in this bill is necessary — to have the

flexibility in which this little provincial government, despite all of

the opposition, is able to carry out a number of programs.

The

economic recovery program of this government isn't just restraint. The

other side of the economic recovery program will be developed by this

bill, particularly because of the flexibility of

section 2. I could see

that the members opposite don't want this government to be able to help

the people, but I want to say that in the areas of housing and

mortgages and the areas of small and medium-sized businesses in

forestry that getting affordable money when a provincial government

doesn't have the constitutional power to control a monetary supply or

the price of money in this country.... Where that is a federal measure,

this government will take the means that it has. This bill seeks the

cooperation of the federal government, but I want to say that I'm not

confident that we can get their cooperation. Therefore this bill allows

the minister to issue these bonds in the name of the province on its

own, and the flexibility in

section 2 is the important thing, because

that's what we can do over the coming months and year to be able to

help the people of British Columbia, who are hurting. To restrict the

Minister of Finance and the government from having the flexibility at

this time to respond to needs, some of which are identified now and

some of which may not be identified yet, would be to handcuff the

government from trying to lead our people through a very difficult and

serious time. The members opposite should know that

section 2 then will

give us that flexibility. There has not been a period of recession such

as this since the Great Depression. There has not been a period in

which governments have needed the type of legislative flexibility and

monetary flexibility that this Minister of Finance is asking for in

section 2, to respond not just to the needs but to the hurts of our

people. It is a very important bill in this Legislature, perhaps one of

the most important we'll deal with this year. While the government has

other programs in its economic recovery program which will be unfolded

and implemented over the coming months, Bill 39, with the great

flexibility of

section 2, is going to be the cornerstone of the

economic recovery that this provincial government is trying to

implement for our people.

I am surprised that the member for

Vancouver Centre is still here. Usually he is golfing at this time of

the day. Mr. Chairman, you should advise the hon. member not to walk on

the carpet with his golf shoes, because the cleats are creating great

damage. Public accounts won't have the money to fix the damage done to

the carpet by the golf cleats of members of the New Democratic Party.

MR. STUPICH:

I hope the Premier realizes that on both sides of the House we were

laughing at him. His remarks might have had some relevance in second

reading, but they had very little relevance to the second

section of

this bill. May I just say that in questioning the broadness, I was

simply asking whether or not it was the government's intention that the

money raised under this program would be available for any purpose at

all. That really isn't in

section 2; it's in

section 3.

I'd

like to make one other point. The Premier, in talking about this

program, said it could be the single most important program introduced

in this session. I hope we accomplish something much more worthwhile in

this session than this particular legislation. The Premier suggested in

the course of his remarks that if the current interest rate is around

18 percent, these bonds would be issued at a rate of around 9 percent,

which mathematically adds up if they're not paying any income tax —

those who are in the 50 percent bracket. But that certainly limits it

to those who are in the 50 percent bracket; anyone earning less than

that is not going to be so interested in the program.

I have

another question that I'd like to ask, Mr. Chairman. The man touting

these bonds, the one who just spoke in this debate, is the same person

who persuaded the people of British Columbia to invest some $450

million in BCRIC shares at $6 a share. During the three years they've

held those shares, it has cost them something like $3.60 in interest,

for a total cost of $9.60; today they're worth $2.40, which is a loss

of $7.20 per share in three years. Does the Premier really think he

could persuade the people of British Columbia to follow him again

simply because he says it's a good deal for them?

MR. GABELMANN:

Mr. Chairman, I wanted to make the same point. The last time the

Premier was so enthused about a project, it was BCRIC. I hope this one

doesn't go to the same grave as that one.

[Mr. Strachan in the chair.]

May I, Mr. Chairman, be the first person in this debate to talk about

section 2? I actually wanted to ask some questions

[ Page 8237 ]

about

section 2; I didn't want to get into second reading. We have had a

second reading debate here for the last little while, which seems to me

really strange in committee.

I gather that the Minister of

Finance is the chairperson of this corporation. Who will administer the

programs conducted within it? In other words, if there is a housing

program, will the housing minister (Hon. Mr. Chabot) be involved in

conducting that program or will it be the Minister of Finance? If there

is an employment program, will it be the Minister of Labour (Hon. Mr.

Heinrich), who is properly the minister responsible for manpower

programs; will it be the Minister of Human Resources (Hon. Mrs.

McCarthy), who for some reason has been given his responsibility in

those areas; or will it be the Minister of Finance (Hon. Mr. Curtis)?

The Minister of Housing whispers across that it will be the Minister of

Finance. I'll wait for the official answer from the Minister of Finance

before I make any comments about that, but it's a peculiar way to run a

government, taking programs away from their respective ministries and

giving them to other ministers to implement. Does that demonstrate a

lack of confidence in some ministers and more confidence in others?

Just what is involved in that?

While the minister is

responding to that — and I may want to come back at him, depending on

his answer — page 252 of the estimates book is entitled "Summary of

Proposed Expenditures: Employment Development Account, fiscal year

1982-83." The minister will be familiar with the funds.

Schedule B

totals $132 million. The first item is "New Funds." It says: "A total

of $25 million is being made available for job creation initiatives

emphasizing housing and forestry. These initiatives are to make use of

available federal unemployment insurance funds, with additional

provincial funding to provide needed employment opportunities." This

new fund is given $25 million. It's my understanding that $10 million

of the $25 million has gone to the youth employment program, and

another $10 million is being allocated to the Axworthy program, for

lack of a better name. Is the other $5 million going into this program

that the Minister of Finance will be administering under

section 2?

HON. MR. CURTIS: The answer to the question just posed by the member is a very clear and distinct no. It is not.

The

member for North Island perhaps would care to reflect on the process

which has been in place for a good number of years with respect to

construction of schools and hospitals — certainly with respect to the

funding of the provincial share with the School Districts Capital

Financing Authority and the hospital financing authority. This is set

up in precisely the same way and follows that model. It certainly is

not my view that the Minister of Finance would determine the programs

to be undertaken by the money raised through this act; rather, the

minister appropriate to whatever activity it might be would determine

this — Lands, Parks and Housing or the Minister of Municipal Affairs or

whatever. One can draw all the examples.

The member, I

think, would know, and members of the committee would also know, that

as the minister designated for the Regional Hospital Districts

Financing Authority and the School Districts Capital Financing

Authority, of course the responsibility for the allocation of moneys

and the raising of moneys rests with the Minister of Finance of the

day. It was practised that way between 1972 and 1975. Then the minister

responsible for the construction program, whether it be hospitals or

schools, is obviously the key and responsible minister as to the

activities which take place once the money has been raised or after the

money has been raised.

The member for Nanaimo (Mr. Stupich)

spoke about tax credit. The inference that he has drawn is not correct.

I appreciate that it might appear that way, but we're speaking here of

the amount of tax credit. Therefore it is not as exclusive a club as it

might appear to be if we followed the level of taxation that is paid by

an individual.

MS. SANFORD: I'm still not quite clear

what the minister means in terms of the responsibility for determining

what housing will be built under this program resting with the minister

responsible — presumably the Minister of Lands, Parks and Housing (Hon.

Mr. Chabot). I understand there is to be a cabinet committee

established to develop the policy with respect to what is going to be

built. If it's a cabinet committee, then I assume that it is the

responsibility of that whole committee and not just the Minister of

Lands, Parks and Housing. If it's under the committee, there must be

two housing programs that are carried out by that committee. I know the

minister doesn't have his estimates book in front of him, because I saw

him looking for it, but under

Schedule B there is a separate $25

million set aside for development of housing. Does that mean there are

two separate housing programs that are going to be established? If so,

how do they differ and how much money is being allocated to the second

one?

HON. MR. CURTIS: I am surprised that there is

difficulty on the other side. I wasn't looking for my estimates book; I

was looking for a mint or a candy or something.

Interjection.

HON. MR. CURTIS:

This question from the member for North Island and now from the member

for Comox developed along the lines of the extent to which the Minister

of Finance would be involved in determining the activities carried out.

It is correct that there is an employment committee of cabinet, but

there is certainly no need for and no possibility of conflict between,

as an example, the Minister of Lands, Parks and Housing and housing

activities which might be taken under this

section in this bill and the

employment committee which is looking at a variety of employment

initiatives.

Again, I have to draw the parallel with

established authorities in place now where a minister, in this case the

Minister of Finance, is responsible for raising the money before or

after the fact. The policy is established not by the Minister of

Finance but on the recommendation of the appropriate minister and

endorsed by the executive council. Nothing has changed in that regard.

Then there is the administration, the carrying out of the program or

the policy as defined by the executive council. Clearly, however, the

Minister of Finance is the minister responsible for the raising of the

money which fuels this program.

MS. BROWN: The key

thing that we need the minister to give us a hint on is "other

persons." I think that's what my colleagues are trying to find out. In

the

section where it says the authority consists of "the Minister of

Finance and other persons," we want to know if those other persons would

[ Page 8238 ]

include

the ministers included in

schedule B on page 252. For example, would

the Minister of Labour or the Minister of Human Resources be involved?

HON. MR. CURTIS:

Mr. Chairman, again I would expect that upon passage of this bill, the

Lieutenant-Governor-in-Council would want to set up an authority as is

the case in the authorities which have been in existence for a number

of years. Again, I draw the parallel of the existing practice with

respect to the Minister of Education on the school districts' financing

authority. Very clearly, that would be an appropriate minister to have

in that event, but I use it only as a parallel example. Other persons

would be other members of the executive council of the day, who would

have an appropriate role to play in this authority in its housing and

employment activities.

MR. GABELMANN: Mr. Chairman, I

think I understand the procedure, and I apologize to the minister if he

thinks we're a bit dense. Sometimes it's important to clarify these

things. I'll have the minister tell me whether this is the way it's

going to work: the Minister of Finance is going raise the money, the

Minister of Human Resources and her committee will make decisions about

how that money will be spent, and the appropriate ministers in

whichever area that money is being spent in will administer whatever

programs flow from this money. Is that correct?

HON. MR. CURTIS:

Mr. Chairman, that tends to compartmentalize it more than would be the

case — certainly more than I envisage and certainly more than the

government envisages. There is an employment development committee,

agreed. But that employment development committee, and I may be

straying away from

section 2, Mr. Chairman....

MS. BROWN: No, you're not.

HON. MR. CURTIS: Well, we'll leave it for the Chair to decide. I don't want to stray too far from

section 2.

Obviously

the employment development committee cannot and does not, even in the

stage at which it's operating now, function in isolation from other

ministries involved in the generation of employment and development.

You have to have the Minister of Finance, whoever that may be,

responsible initially for the authority established under this section.

Then the activities would flow through government. Again I would only

have to recite examples which I indicated earlier, and become

repetitious.

Section 2 approved.

section 3.

MR. GABELMANN:

Mr. Chairman,

section 3 is the

section we began the debate on half an

hour ago. The purposes of the authority are to create employment by

financing housing and other capital projects. Has the government

decided in which areas of housing they intend to spend some of this

money?

HON. MR. CURTIS: Mr. Chairman, I indicated in

second reading that Bill 39 would have to be viewed as a companion

piece to other legislation that is before the House, or that has been

passed by the House, and other initiatives that can be taken by the

executive council. To answer that the government has not decided would

be incorrect and would be misleading the committee. The government has

made a number of decisions, but those decisions are by no means

complete. So we're in the developmental stage.

MS. BROWN:

I wonder if the minister can tell us whether any criteria have been

developed to cover something like "any other programs." We're back with

schedule B on page 252, which has responsibility for creating

employment. The purpose of the authority is to create employment, and

it says: "...by any other program the committee considers advisable."

Have any criteria been designed or developed yet for that?

HON. MR. CURTIS:

The answer is that criteria are in the process of being developed.

Again, this bill simply establishes the authority with the tax

exemption, which we hope will be accepted by the senior government in

Ottawa. This is the mechanism. This is not the total initiative. This

is simply the means by which we achieve that which is required in order

to undertake activities which were first identified in the throne

speech.

MR. MITCHELL: Mr. Chairman, it's under this

section not so much housing but the other capital projects — that I

would like to ask the minister to recall the debate that we had back in

the closing hours of our fall session, when members of this side of the

House brought to the attention of the government the need for projects

that were going to create employment. At that time we felt that the

government must plan capital projects that can be utilized when there

is a downturn in employment in the province. We can't wait until we're

in the midst of a depression and then start bringing in bills of this

type. This is why we asked the government to continue in session to

bring in the programs that we outlined.

It's under this

particular

section that I would give to the minister and to the

government some of the suggestions that.... I think that if we are

going to have a program that will create employment, we must consult

with the municipal and regional governments in the province and look at

programs that they need in their various communities. I bring it to the

minister's attention that in the western communities of my particular

riding, because of the disastrous planning that has been taking place

under the Highways ministry — allowing massive housing developments and

subdivisions to go in there without taking into consideration the

flooding problems that they have created.... I feel that this is one of

the programs that the provincial government can work on in cooperation

with the regional governments, to get a solid capital program of flood

control into the municipalities.

One of the things I'm

afraid of is that if you do not consider municipalities and regional

districts throughout the province for these capital programs, someone

in the cabinet may decide that it is more desirable to spend the money

on their sport palaces or their convention centres in Vancouver. I

think it's vitally important to the province of British Columbia that

capital programs for job creation be spread throughout the province.

They shouldn't be utilized in one particular area for some programs of

the government.

I feel that if we are going to go this way —

and I think it shouldn't be a short-term program that is only going to

be on call for a political reason for the next two or three years — we

should consider capital programs throughout the province

[ Page

8239 ]

that will take into consideration the need for job stimulation and job creation

that will pick up the slack when the slack is there. They should be on stream

or on the back burner when the economy needs them. There should always be projects

that are ready to go at the time when you need that training for youth employment.

Capital projects could be put into operation. You could coordinate apprenticeship

training, training with equipment, for kids who are coming out of school, and

out of work, so they can go on to other projects when the economy improves.

I think we should look at the capital program and the housing program as a means

of job creation, not just window-dressing for a political election or something.

It should be part of economic planning by the government for the people of British

Columbia.

MS. BROWN:

I want to complete my line of questioning. I was very pleased to hear

that the criteria are still being developed, because it means that it's

still possible to have some input.

When programs to create employment are developed, the problem is that we always tend to leave out the same group of people.

HON. MR. CHABOT: Women?

MS. BROWN:

Women, right. See how clever the Minister of Housing can be when he

really puts his mind to it, Mr. Chairman? So there you have it.

However,

this is for the Minister of Finance, the heavy we're dealing with now.

I just want to bring to his attention the Statistics Canada report that

came out on Monday, which stated categorically: "Families headed by a

woman trying to feed at least one infant were the hardest hit by

unemployment in 1981." When programs are designed to create employment,

very rarely is this group ever taken into account. The report goes on

to say that unemployment among single mothers with at least one child

was at an alarming 32.5 percent. If we're really serious about

addressing the poverty of these families — that is, the single mother

and her child or children — and about cutting down the numbers on the

income assistance rolls and on the welfare rolls, then this particular

group has to be taken into account when these programs are designed by

the minister who has the authority to design them.

Very

briefly, I want to repeat that the Statistics Canada report said that

the unemployment rate for men and women in 1981 was on the average

about 7.6 percent, but in the instance where a widowed, divorced,

separated or unmarried mother was the head of the family, it was a

staggering 18.8 percent. There have been programs designed that address

themselves to this. For the most part, they create jobs that pay the

minimum wage. We find that these programs enshrine the poverty of the

single-parent family and of the single mother and her child.

I am hoping that the Minister of Finance, when developing the criteria for

creating employment that will have access to the money outlined in this bill,

will look at a different kind of employment for the single mother, for the women

who are heads of families — not necessarily your minimum-wage jobs, but

good programs that pay decent salaries, give a decent income, so that these

women can break the poverty cycle. I would appreciate it if you would take that

into account, Mr. Minister, when you design your criteria.

HON. MR. CURTIS:

I wouldn't want to leave the committee with the impression that I will

develop these criteria single-handedly. I don't think that was intended

by the member in her remarks. Obviously the criteria are being

developed by a number of the members of the executive council,

including my colleague the Minister of Human Resources (Hon. Mrs.

McCarthy), who will want to consider the points raised in those remarks.

am sorry that the member for Esquimalt–Port Renfrew (Mr. Mitchell) did

not stay for my response to his comments. Nonetheless, it should not be

seen that this authority which is being established would replace

programs where there is direct aid to municipalities for works. I think

that is relatively unlikely in the context of this bill and this

section, because there are other programs in place, other than in the

case of new housing. As he observed, in the case of new housing it

might well have a role to play, but not in terms of correcting problems

which may or may not exist.

I think he also asked that this

be provincewide. I can assure the committee that indeed the activity

seen in this particular piece of legislation is very much provincewide;

that is a very fundamental thrust of that which we are undertaking. My

colleague the Minister of Human Resources, who is chairing the

committee, and all of us, as members of the executive council and

members of government, want to ensure that moneys generated in this way

are utilized provincewide. That is why, much earlier in the debate on

an earlier section, and because the example has been raised, I

indicated it was very unlikely that this would relate in any way to

northeast coal as a project. It might relate to the area for something

which is occurring there, but only to the extent that it might relate

to any other area.

MR. DAVIS: We're on

section 3 —

purposes. I understand that this legislation is designed in such a way

as to enable funds to be raised more easily in the province for

projects that are job-intensive. Essentially, this legislation gives a

tax break to those who might not otherwise be prepared to lend for the

purposes for which this authority spends the money. I'm personally

comfortable with the idea that this authority would lend this special

money, this lower tax liable money, for housing.

I am

somewhat concerned about the phrase "and other capital projects." As to

the extent of the tax break, if interest rates were in the order of 20

percent for housing purposes, this is a tax break of up to three

points. So it is more attractive as far as both the builder and the

buyer of the house are concerned, because the monthly or annual capital

charges will be less to that extent. If interest rates were of the

order of 10 percent, there is still a tax break of the equivalent of

1.5 percentage points — and that's true if only the province pursues

this program. If the federal government were also to develop a parallel

program, the interest rate that is effectively paid by the purchaser of

the home in monthly or annual installments would be half of that

charged generally in the marketplace. If the marketplace was charging

20 percent, the ultimate owner of this home would only be paying the

equivalent of 10 percent, or of that order, if both the federal and

provincial governments were to pursue a program of this kind. If the

market rate was 10 percent, the effective rate would be more like 5

percent as far as the purchaser of the home is concerned. Clearly,

therefore, it is a tax break designed to attract more capital towards

housing.

[ Page 8240 ]

Housing

in this country, and generally on this continent, has tended to be a

private enterprise sector activity Certainly it has an income as well

as an outgo; it's a viable financial operation. I wonder what these

"other capital projects" are, as it seems to me that they again would

have to be of the nature of activities in the private sector. I don't

imagine that this project, as the minister said, is designed to raise

money bearing less tax for large projects of the nature of northeast

coal, but there are other projects that one could envisage — numerous

ones perhaps, but essentially in the private sector. I assume, because

greater employment or more jobs is one of the purposes of this

legislation, that it would be a tax assist or a tax break for those

activities that are job-intensive in terms of jobs in B.C., as distinct

from jobs outside — high B.C. job-content types of activities.

would like the minister to give us some idea of the nature of these

"other capital projects." Viewed from the perspective of the private

sector, this is an area of government involvement in that private

sector, government deciding which kinds of projects — if indeed not

which individual projects — will get a tax break. I would like to know

a little more about the "other capital projects" and perhaps what

proportion of this initial $250 million. Eventually, perhaps annually,

that figure will be increased. What is the nature of these

private-sector type activities that are going to have a tax-break

advantage?

HON. MR. CURTIS: It will be recognized

that in drafting legislation of this kind, you seek words which provide

as much flexibility as possible. I've already indicated the kind of

project for which the moneys raised would not be utilized. Indeed, the

cabinet committee on employment is seeking, from any and all within

British Columbia, suggestions as to the kind of project which should be

undertaken. That is why we wanted — I notice my colleague the Minister

of Human Resources (Hon. Mrs. McCarthy) nodding in concurrence — this

flexibility. It might be a community hall; it might be a facility for

seniors in another community; it could be a whole range of things which

will generate housing and employment. I trust that assists the member.

MR. BRUMMET:

Originally I had considered making comments under

section 5, but I

think it would be as appropriate under

section 3, in that the intent

here is clearly to raise money for those purposes by the issue of

housing and employment development bonds. It is with some trepidation

that I enter into debate in the world of high finance. However, I would

like to suggest a basic concept or principle that might be workable

within this bill and that would also provide considerable money for

this purpose.

As I understand this bill and concept, it is

to raise money by issuing bonds and then making the interest income-tax

exempt. That would encourage people who can earn the interest. I would

like to suggest that this limits the participants to those people who

have enough money to buy the bonds. They will benefit from the income

tax exemption on the interest. I would suggest there is a large fund of

money in the private sector that could be tapped in another way by any

citizen who pays any income tax whatsoever. So my suggestion is

basically that to raise money, you allow any person who does pay income

tax to deduct from their income tax a certain amount. A maximum figure

could be established; that could be $500, $1,000. There are a lot of

people that pay that much provincial income tax, if they don't pay it

in total. If the federal government could be enticed to be included in

a scheme such as this, then that would certainly make a great deal of

money available in, this province from personal income tax. So I'm

suggesting that these people invest money in this program at a lower

interest rate, instead of paying income tax.

To illustrate,

suppose a person, after all calculations, pays $2,000 in provincial

income tax. If that person could invest $1,000 at 10 percent.... I

can't think of anyone in this province who would not rather invest

$1,000 at 10 percent than to pay it in income tax to any government. So

you have a very strong incentive built in. It would pay them to take

money out of a savings account at 15 percent or 16 percent, because

this would be money they could deduct from their 1983 income tax form.

Using

that example of $1,000, it would almost pay them to take their money

from a savings account. That money could be made available at a

preferred interest rate for the purposes outlined in this act. Using

the 10 percent that they would earn on this money, instead of paying it

in income tax next April — and allowing the institution to charge, say,

2 percent handling charges — I would suggest there would be a lot of 12

percent money available. It could be controlled by the very conditions

that have been outlined in this act. It would, in effect, not cost the

government anything at this time to make this money available quickly.

Next spring it would reduce the amount of income tax that the

provincial and federal governments would collect, of course, but I

would like to think that through the savings that are made, and the

extra sales tax and so on that is generated, we would recover a certain

amount of it.

The reason this suggestion appeals to me is

because there would be no need to create another bureaucracy to handle

this. There would be no need for government to take this money as

income tax and then put it into various programs. Let that happen out

there with the government only setting the guidelines, as indicated in

this act. I think this act could almost cover it with just a few slight

changes.

In effect, you have the credit unions — or any

banks could handle this — setting up a separate account for this type

of money with a special receipt guaranteeing that the people would get

10 percent on their money. They would then loan this money out at 12

percent and use the same guidelines for how much they would loan and

where they would loan this money that they do now for mortgages or for

housing of any type. In other words, they would use their same

evaluations. I'm basically saying to leave the money in the hands of

the people and give them the break. Let the little guy invest that

amount at a lower percentage rate instead of paying it in income tax.

Of course, as the money came back into that account — say, at the 12

percent — that money could in turn be limited to that account so the

fund would become self perpetuating. If it were continued in another

year, you would find that we would get away from government collecting

the money for private enterprise and from individuals and then using it

to subsidize programs. I think it could happen right out there if we

just set some guidelines for these purposes and then left it alone.

I indicated, I think it would make quite a bit of money available

immediately. That money would not cost the government until the income

tax returns next year, by which time I'm hoping a lot will have

happened to recoup some of it. Certainly if we don't, we would have to

spend that much more in subsidy programs, etc.

[ Page 8241 ]

do have some reservations. There's a lot of talk about having to

subsidize housing. I know that I have some trouble with taxpayers

putting a lot of money into subsidized housing or rental accommodation

in the Vancouver area, because people prefer to live there, when the

vacancy rate in, say, Fort St. John is around 40 percent. I've made

this point before. If people earn their own money and are dependent on

their own income, then certainly they should have the right to live

wherever they choose. But if they are dependent on funds from the

taxpayers, surely those taxpayers, through their government, could say

we are not going to pour a million dollars out here when there's a

million dollars of accommodation somewhere else where you can be

subsidized just as well. I know that many members will argue with this,

because they say: "Why should people have to move somewhere else to

benefit?" That's actually aside from the concept that I was making. I'd

just like this to be considered. I think it could be done fairly

quickly. I think it could be a very beneficial program.

mentioned at the beginning that it was with some trepidation that I

enter into the field of higher finance, and I think the technical

aspects would have to be worked out. I would like the minister, even if

he can't respond to it at this time — I realize it's not that simple —

to consider that basic simple concept that allows any and every citizen

in this province to go in.... You'd have to set a maximum — be it $500

or $1,000. Any one of these people would, I think, invest their money

in something of this nature and a great deal of private sector money

would be handled by the existing institutions without having to do much

more than set the guidelines.

I think that anyone in this

province or in this country would rather invest money at even 5 percent

than pay it in income tax. I won't use that ridiculously low figure,

but I think there's a lot of money available there. It's an opportunity

to allow anyone and everyone to participate — not just the people who

have the big money to make the loans and buy the bonds.

MR. DAVIS:

Mr. Speaker, when I asked the hon. minister about other capital

projects, he mentioned community halls. The projects which will be

financed this way and which indeed will have a tax break have to have

an income. They have to generate an income flow not as great as that of

normal market operations, but a significant income flow, so it seems to

me that no project of the nature of a community hall is going to be

financed by this. It has to be industry, either in the private or the

public sector. It could be a Crown corporation, for example, which has

a substantial income in order to service the debt, because this

particular authority has to get the money back. It requires less money

back because the tax is not charged, but it has to get a large amount

of money back. So it seems to me that the capital projects, be they

housing or otherwise, have to be largely projects which have an income

as well as an outgo. Housing qualifies, obviously, because there are

annual payments by the owner monthly, perhaps, but over a long period

of time paying back this money.

So my concern is still over

what private-sector type capital projects, which are job intensive,

will be financed by this corporation. If this is related exclusively to

housing, which is a private-sector type of activity, I have no problem

at all supporting lower-cost money for housing. Incidentally, one of

the selling points to me in this legislation is that this money is not

only free from provincial income tax, but it also, by virtue of a

provincial guarantee of the payment of principle and interest, probably

reduces the interest rate. So there is a significant interest rate

reduction. There is a significant lending of the credit of the province

to whichever activities are identified by this authority as being

eligible. My concern, and I hope I've expressed it clearly, is what

other capital projects, generally of the nature of projects which have

been carried out in the private sector in the past, are going to

qualify for this provincial income-tax-free money — this income tax

break. I'm sure that the minister and many other members know that

certain industries get income tax breaks as compared to other

industries. Manufacturing in this country generally pays a 40 percent

rate, mining as high as 60 percent. Manufacturing is preferred over

mining, at least in overall income tax terms. This legislation will

give certain activities an income tax break relative to others. My

question really focuses down onto which activities of the nature of

capital projects, other than housing, are going to get an income tax

break.

MR. RITCHIE: I can be fairly brief. During the debate on the throne

speech I put forward the suggestion that our government look at a method of

raising capital for such things as stimulating business, mortgages and agriculture

development in our province. Knowing that there are tremendous investments out

there by the private sector with the banks, we know the money is there. Mr.

Chairman, we also know that the reason for loss of jobs is that businesses are

closing down or are having difficulties keeping up to the cost of money. We

also know that the reason why we lose jobs is that housing starts to falter.

We know too that the major reason for this is the cost of money. The federal

monetary policy has allowed the cost of money to rise to the point where businesses

can no longer stand it. If it weren't for the NDP in Ottawa joining up with

the Liberals, we wouldn't have had this horrendous problem on our hands

today.

am really delighted that it is the government of British Columbia that

has at long last seen the opportunity here to take the matter in their

own hands, to see that funds can be redirected into an area where we as

a provincial government can have some say as to how they're going to be

used for the benefit of the people of British Columbia. As far as

business is concerned, not too many years ago whenever a business could

borrow money at somewhere around 6, 7 or 8 percent, that business would

be grossing maybe 18 to 20 percent. Today we find that the gross return

of the business hasn't changed much, but the interest cost has reached

a level higher than their gross. Therefore there is a built-in profit

on that money before it reaches a place where it will create jobs. I'm

really delighted that something has been done about it.

Mr.

Chairman, I share the concern of the member who mentioned the question

of other projects, and I would certainly hope that the committee does

not allow this money to end up in some type of public works project,

but earmarks it and directs it into those areas where we will really

stimulate the economy by creating jobs that will be producing

something. We know that this country has been suffering because of the

vast amount of spending that has taken place throughout the country,

and there has been no real return to the economy.

Speaking

of the enticement to invest — and I hope to have an opportunity to

speak to the committee on this at a later date — as mentioned by the

member for North Peace River (Mr. Brummet), there are different levels

of income tax. I would like to suggest to the minister that, as they

consider the level

[ Page 8242 ]

interest paid on these bonds, they consider the small investor as well

as the large investor. The large investor, as we all know, is usually

someone in a high tax bracket and therefore can afford to take a lower

level of interest earnings,

whereas the person in the lower tax bracket

requires a little higher interest earnings in order to really obtain

the benefit that we are attempting to put through. I'm suggesting that

the minister, if it's at all possible, consider an interest policy that

would relate to the amount of investment which, I think, might reflect

the level of tax savings to the investor.

Mr. Chairman, I

want to close my remarks by saying how refreshing indeed it is that we

should see a government now taking the approach of raising funds from

the private sector and hopefully getting it out into the private

business sector and the mortgage sector, and not taking the old

approach of simply increasing taxes and using a horrendous bureaucracy

that eats up a large portion of the dollars in administration. I am

very supportive of all sections of this bill, and I hope that it's only

a start of a new wave of raising funds in British Columbia and,

hopefully, Canada. While we do not have any assurance from the federal

government yet as to whether they will support this or not, I am indeed

proud that our government decided to go ahead on their own. I do think,

however, that the federal government will see the great opportunities

here and work with us on the program. Again, Mr. Chairman — to our

Minister of Finance — I am very pleased indeed, and encouraged, and I'm

sure that it's going to get the support of all the members of the

opposition.

MR. LEGGATT: Mr. Chairman, one of the

things that we forget when we propose this kind of legislation — and

the legislation may have some modest impact on streaming capital....

HON. MR. CURTIS: Which

section are you on?

MR. LEGGATT:

I presume we're still on

section 3, Mr. Minister. If you want to have

some comment about relevancy, the purposes of the authority are to

create employment by financing housing and other capital projects in

British Columbia and any other programs, and also to raise money for

those purposes by the issuing of housing and employment development

bonds.

The first point I want to make is that when you

provide an additional tax loophole — and that's what this is, another

loophole to allow less revenue to flow to government — there's no

question about the impact of this kind of legislation. It in fact

results in a small

section of the community not merely deferring their

tax, but simply avoiding their tax and putting it into an admittedly

socially useful purpose — these housing and development bonds. Mr.

Chairman, I would like the minister to get up sometime and quit

screaming about deficits all over the country, when his government

continually proposes legislation which dries up revenues to government

which they must have in order to meet the costs of government.

have a tax structure that is rife with loopholes from one end to the

other, because every pressure group has been successful in coming along

and saying: "My particular group can't pay taxes. We'd rather defer

them. We'd rather do something else." Perhaps the most persistent group

was the group that persuaded the federal government to go into the MURB

program. Now the MURB program, at this point, is a disaster. The

present housing situation, for example in the lower mainland, has

improved only with regard to high income earners who can afford to pay

the rent. There is in effect a zero vacancy rate for affordable

premises. The reason is that the MURB program came along and they

brought in what they called "soft costs" to be deductible. The soft

costs kept escalating. The money was going to planners, architects,

engineers and landscapers, and the costs became inflated to an

incredible degree.

MR. REE: And lawyers.

MR. LEGGATT:

And lawyers. Thank you, Mr. Member, I agree with you completely. I

didn't mean to leave the lawyers out; the lawyers have a high

responsibility in the charges that were made into the MURB program.

The

reason I'm raising this is that the kind of program that results from

this streaming of capital — this tax loophole that the minister is

endeavouring to create with the cooperation of the federal

government.... The management is absolutely key as to what you do once

you've received the capital into the authority. If the management is as

loose as the MURB program, it's not going to solve the problem that the

minister is trying to solve, which is to create additional housing, and

presumably housing that is affordable to the great mass of people who

need housing.

Each time you bring in a bill to stream

capital, and the carrot to stream it is the avoidance of tax, there is

a cost, and that cost is to the government. That cost means that

government cannot receive those revenues to try to balance its books.

So we see the incredible news today that the federal government is

looking at a $16 billion deficit for this year.

HON. MR. CURTIS: Call it $20 billion.

MR. LEGGATT:

Call it $20 billion, call it anything you want, but I'll tell you this:

the minister is going back to Ottawa to make it $22 billion by getting

them to agree to use this to avoid taxes. He can't avoid the logic of

that argument; frankly, Mr. Chairman, the logic is unassailable. He is

attempting to reduce revenues to government, stream them into tax-free

bonds and use them for a socially desirable purpose. I'm not saying

that's wrong, but I do think fiscal responsibility means that you look

at the other side of the coin: government has to have revenue with

which to survive.

The easy way to do that is to provide more

tax loopholes to those at high income levels. It has been a tradition

in our tax system all along. Whenever we have decided to do something

about a social problem, the way to solve it has been to tinker with the

tax system: to provide, for example, accelerated depreciation in the

oil industry when we need to find oil. We don't look to the government

sector to find oil; we always simply say: "Well, don't pay taxes, and

you guys find oil." So it is really a redirection of capital.

Make

no mistake: you don't get something for nothing. We are redirecting

capital and reducing revenue flows and therefore the capacity of

government to pay for the necessary services that government must

provide. At the present time this government's option has been to

squeeze the municipalities of revenues in order to balance its budget

on the backs of municipalities. This proposal would reduce government

revenues even further and admittedly stream them into an authority for

investment into housing and employment development bonds.

[ Page 8243 ]

think the minister might be a little more full — and I apologize to him

if I didn't hear all the debate. Could the minister be a little more

specific with us, if he can, on what projected rates are going to be

with respect to the housing development bonds, a little more full about

the kinds of employment programs he seeks to create with the bonds? We

realize the housing sector is a very key sector.

But there

is no free lunch. This bill will dry up government revenues and

redirect them for another purpose. So I hope the minister won't try to

deficit-financing, about not having enough money to pay the services of

government, about how the government, about how the municipalities

can't get as much revenue-sharing as they used to because revenue flows

are down. Well, I want to tell you, Mr. Chairman, one of the reasons

revenue flows are down is these loopholes constantly created by

governments, both provincial and federal.

MR. CHAIRMAN:

Hon. members, it's become clear to the Chair that from both sides of

the House we're entering into a style of debate which would be most

appropriate in second reading, but is not really specific in committee.

I'm sure all members are aware of that. The Chair has allowed some

latitude, but if we could get back to

section 3, and the purpose of the

section, the committee would be well served.

MR. LEA:

I'm going to support this legislation. I suppose it's like a drowning

man grasping at anything to keep from going down. However, I think we'd

be remiss if we didn't point out to the government and the minister

that the policy the government has backed, at least since 1978, is one

of the larger causes of why we need this emergency legislation to deal

with the problem.

In 1978 the government put out a paper,

over the signature of the Premier, on their industrial strategy, in

which the government backed the Bank of Canada policy of moving towards

monetarism. Both the United States and Canada went into this new

gradual monetarism in 1974. If you look at the deficits that both

federal governments have piled up since 1974, you'll see that those are

the major deficits we face, and that monetarism is the instrument that

brought about those huge deficits in the federal government, backed by

this provincial government in 1978.

[Mr. Davidson in the chair.]

Obviously,

we'd like to be collecting revenue from a thriving housing industry;

we'd like to be collecting tax moneys so that we can provide services

to people in the province. But we're not going to do that. As the

member for Coquitlam says, what we're going to do is increase our

deficit or cut the services to people. This is just a redirection of

capital. It's one that I suppose we have to support in an emergency

situation, but I think it's deplorable that the bill has to be here.

Obviously we would like to have a thriving economy so that we could be

taxing a thriving housing industry, providing even more services to the

people of the province. But the government can't have it both ways.

I noticed today that the Minister of Finance talked about letting the dollar float; he's against exchange control.

HON. MR. CURTIS: That's got nothing to do with this section.

MR. LEA: It's got a lot to do with this section.

can understand why the minister doesn't believe it has a lot of do with

this section, because I honestly believe the minister isn't really very

aware of how money works. He believes you can separate government

fiscal policy from the general economy. This government has

persistently done that; they believe the government budget is really a

separate item from the general economy. They don't understand that you

can use a government budget to stimulate the economy or to dampen the

economy. In 1978 they backed high interest rates, as put forward by the

Bank of Canada in 1974. Their backing of that policy, has led us to a

housing crisis and the need for this bill in which we are going to

provide tax loopholes to people. I'd much rather see profit going into

housing than use a tax loophole to put money into housing.

First

of all, I'd like to understand what economic policy this government

follows. They've never explained that. Never has the Minister of

Finance — neither did the one that preceded him — stood in this House

or anywhere else and said, "We, the Social Credit government, believe

in a certain economic policy." Never! As far as the public is

concerned, this government has no economic policy; it's

catch-as-catch-can all over the place. This is what we're seeing: a tax

loophole bill instead of a healthy economy.

I think the

member for North Vancouver–Seymour (Mr. Davis) has raised an

interesting question: which industries are going to enjoy the tax

loopholes? Because of the downturn in our economy, we in this House

would probably all agree that at this point some industries should

receive them; other industries probably shouldn't. But the minister has

not come forward and said which industries are going to receive these

tax loopholes, which industries are not, and what the rate is going to

be. Probably the debate we're having isn't going to amount to much,

because I don't think the federal government will go along with the

legislation. The minister indicated, as I understand it, that there

doesn't seem to be much hope of the federal government's going along;

so we're probably wasting our time, the time of the House and

everything else, because the bill will never be enacted; no program

will come out of the legislation.

But the minister cannot

get away from the fact that this bill will bring in less revenue to

government. That's what it will do. If you want to maintain the same

service to the people of the province, then you can't. You have to do

one of two things: you either have to go out and borrow more money to

provide the services or you have to cut the services. It has to be one

or the other. I would feel a lot better if at some point the minister

would stand up and state a certain economic policy that this government

agrees with. At one time they said they believed in monetarism, they've

now reversed themselves. They've said: "We don't agree with monetarism,

but we'll replace it with nothing."

Interjection.

MR. LEA:

Well, they're probably going back to A + B, because they've now

denounced monetarism that they first of all said they were for. They

have now said they are not in favour of monetarism any longer, but

they've never said what they are for. I'd like the minister to tell us

just once what they are for. What economic policy does this government

put

[ Page 8244 ]

forward,

except the old one of "balance the budget," which they've never done,

and "set the proper climate"? Are tax loopholes the proper climate that

this government is talking about? Is it going to be carrots for the

rich and Kraft Dinner for the poor? Is that what this government is all

about?

MR. RICHMOND: I'll take the Kraft Dinner.

MR. LEA:

You'll take the Kraft Dinner over carrots. Well, I guess that's a

preference. If you have a lot of money, of course you'll take the

carrots.

MR. COCKE: When Graham talks about carrots, he talks about gold.

MR. LEA: That's right — green gold.

Although I think this government criticizes the federal government correctly, they have no alternative to put forward.

HON. MR. CURTIS: Incorrectly or correctly?

MR. LEA:

You correctly criticized the federal government, but the federal

government has done what you agreed with in 1978. Before you can

criticize, you have to admit you were wrong in 1978, and put forward

some sort of policy now. It isn't good enough for the minister to

criticize the federal government for their economic policies unless he

has something to put forward. This minister, or any minister of the

Crown in British Columbia, has not yet put forward an alternative to

the federal government's economic policy. It's easy to criticize, but

what's your plan? What economic policy are you going to follow? Surely

you must have something.

You're against high interest rates;

you're against exchange controls; you're against wage controls; you're

against price controls; you're against everything, but you don't seem

to be for anything. That's why we see this piecemeal piece of

legislation aimed at doing some little bit of good. I will say that

I've talked with senior people from three different banks who believe

that the money isn't going to flow into this program even if the

federal government goes along. They aren't going to do it, because

there is more money today in putting your money into speculative things

than productive things. There is more return putting your money into

what they call sinking areas — into art and gold and all of those

things that might return a yield but don't produce a thing. That's

where the return is on investments today. Real estate was one of them

but it no longer is. We've been treating real estate as a trading

commodity in the marketplace as opposed to housing for people.

Governments, like the government the minister represents, treat housing

as a commodity in the marketplace as opposed to homes for people.

That's why we have the problem we have. As long as you treat that very

important necessary item in our economy, shelter, as a commodity you

are always going to run into this problem. You can't treat it as a

commodity; you have to treat it as something other than a commodity

that can be sold back and forth for speculative profit.

When

the minister summarizes, we don't need a

summary of why he thinks the

federal government and their economic policy isn't working — a policy

that this government said they agreed with in 1978. Tell us why you

don't agree with it anymore and what policy you are going to put

forward. It's because of that 1978 policy.

MR. MUSSALLEM:

On a point of order, I have no objection to the eloquent speech of the

member, but I believe that the purpose of debate in committee is

strictly the issue that is in

section 3. We're debating the principle

of the bill, and the questions that he asks the minister are absolutely

out of order and irrelevant. I trust the minister will never answer

these questions, because that's not the purpose of this section.

MR. CHAIRMAN:

Had the member risen earlier in debate today when we began on this

course, we wouldn't be at this particular stage right now. Nonetheless,

hon. members, we do have a commitment to abide by our standing orders.

To put it mildly, the Chair has allowed wide latitude in debate, and I

would hope that in concluding his remarks, that latitude allowed by the

Chair will come to an end and we will specifically begin to address the

points as we discuss the bill

section by section.

MR. LEA:

In concluding, I think that at some point the Minister of Finance has

to come out and state the kind of economic policy that this government

is for. It's not good enough to just criticize. They're always saying

across the floor: "You people are very, very negative; you're always

very quick to criticize anything we do, but where are your positive

suggestions?" You know, the minister is surely guilty of what they

accuse us of — criticizing the federal government for following a plan

that this government officially approved in 1978. They approved a plan

that has failed; now they criticize the plan and try to exonerate

themselves from ever having backed it.

I think the time has

come for this government to be smoked out. Surely they have some

economic values that they're willing to share with the House and with

the people of British Columbia. I'm saying that it's because of the

lack of values in economics that we are being faced with giving the

rich a tax loophole in a bill that we're sure might do some good. It

will do very little good in the overall. It's much better to be taxing

a healthy housing industry from the profits they make than subsidizing

the rich with tax loopholes to try to create a minuscule amount of

housing.

Section 3 approved.

section 4.

MR. STUPICH:

Section 4 provides that "the authority may lend," and it doesn't really

say to whom. It could include, I would think, home purchasers, B.C.

Rail or any other Crown corporation. Again, it's wide open and I just

want to establish that that is exactly what is meant — that it's

completely under the authority of the minister and the

Lieutenant-Governor-in-Council.

HON. MR. CURTIS: With

respect to

section 4, obviously there has to be the permissive aspect

of the

section in order that it can happen. B.C. Rail — I don't think

so at all. I think B.C. Rail would be a very unlikely recipient of

funds which were generated by the Housing and Employment Development

Financing Act which is before us in committee. There could be loans,

obviously, to individuals. I indicated in second reading that that is

one of the main reasons. There could be loans to local government in

certain instances. I think it was the member for Esquimalt–Port Renfrew

(Mr. Mitchell) who spoke about public works, and I indicated that

[ Page 8245 ]

was not likely for public works as such, but it's possible in the case

of new public works associated with housing or the development of

community. To a very large extent, it will apply to the private sector

as it undertakes a project that is highly intensive in generating

employment and providing jobs. I don't see too much, Mr. Chairman,

flowing between the government and the Crown corporations, other than

in the context of a particular project which generates employment.

Section 4 approved.

section 5.

MR. STUPICH:

Section 5(

l) permits the authority to borrow money. This seems to be

separate from subsection (2), which talks about issuing bonds. I take

it from subsection (1) that the authority can actually go out and

borrow money anywhere it wants to get the program going, subject to the

overall limitation in this bill, but that the authority can borrow

money apart from issuing bonds.

HON. MR. CURTIS: The authority is required.... It's not likely after startup, but certainly at startup it would be necessary.

MR. STUPICH:

Dealing with subsection (2), I wonder if the minister has any idea at

all at this point in time just exactly what interest rate would be on

these bonds. I'm going to recall just a little bit of the conversation.

The member for North Peace River (Mr. Brummet) entered into the debate.

HON. MR. CURTIS: On another section.

MR. STUPICH:

Yes, it was on another section, but he was talking about the effective

interest rates. I think the hon. member for Coquitlam-Moody (Mr.

Leggatt) dealt adequately with that. If the government is going to

forgo tax revenue in one course, then it's going to lose total revenue,

and I thought that very adequately dealt with it.

In talking

about this, the Premier said that the bonds could be issued at roughly

half the rate. I pointed out that that would apply only to people who

are in a 50 percent income tax bracket and only after the first $1,000

of interest. So even people in the 50 percent bracket aren't going to

be interested in investing here at half the rate. There has to be some

extra incentive. They're doing that well now, so it would have to be

higher than half. Anybody at less than the 50 percent marginal rate is

not going to be interested unless it's substantially more. And when you

get down to the great unwashed, most of the people in the community who

are earning incomes that are much less than the 50 percent marginal

rate are going to need something much more attractive than half the

rate. I wonder if the minister has any idea at this point in time just

what rate he will have to offer.

In commenting on what I

said about the Premier's speech, the minister said that it was a tax

credit. As I read subsection (2), it's not a tax credit; it's income

free of income tax. The interest will not be taxable. That's what I'm

saying. It's not a tax credit at all; it's just that it's not taxable

income.

HON. MR. CURTIS: Mr. Chairman, we are

examining a number of possible ways to approach this with the federal

government. The point I made on an earlier

section is correct: it could

be any one of two or three routes of tax credit and tax forgiveness.

That is part of the negotiation which commenced, in fact, in mid-winter

and which continues. It depends, first of all, on whether Ottawa will

agree to participate. If the answer is yes, then very well. If the

answer is no, then of course we will have to make certain requests of

Ottawa with respect to the provincial portion.

Interjection.

HON. MR. CURTIS: The member interjects. I can't hear the interjections, but I'm aware of them.

The

member for Nanaimo (Mr. Stupich) asked if I have any idea of the

interest rate reduction that would be likely in this legislation. No, I

do not. I don't see how I could. Certainly we are looking for something

which would be attractive, but in the volatility in which we find

ourselves, I cannot give the committee that answer. That answer is

simply not available to give. The members know that.

MR. STUPICH:

Mr. Chairman, I can appreciate the answer. To me it says also that the

program is not far enough in advance for it to be of any immediate

relief when it comes to housing or employment. It's going to be some

long time down the road. The government, through the opening speech or

the budget speech, for three years now has talked about different

schemes for using the Income Tax Act to encourage people to invest in

different opportunities in the province of British Columbia, and none

of these have come to fruition. We never did hear whether the

provincial government dropped them, whether they just found that there

was so little interest in Ottawa that they gave up, or whether they

were turned down.

I wonder whether the minister can tell us

anything further about the negotiations on this particular program as

to when he thinks we might know whether he's going to be successful or

to what degree he's going to be successful. Also, as I read subsection

(3), it doesn't leave the door as wide open as the minister suggested,

because it does say the interest paid "under the Income Tax Act

(Canada) or the Income Tax Act, or either of them, wholly or partly

excluded from the income...." So the income paid on the bonds is

excluded from income for purposes of taxation. It doesn't allow for any

of the other possibilities that the minister suggested, unless the

legislation is going to be changed.

HON. MR. CURTIS: Mr. Chairman, depending on the answers from Ottawa, there might have to be a consequential amendment to that.

MR. STUPICH: Can you tell us when you might get the answers?

HON. MR. CURTIS: I've indicated that there might have to be an amendment in an omnibus bill.

MR. LEA: This session?

HON. MR. CURTIS: Mr. Chairman, I'm sorry, again, I cannot hear interjections.

With

respect to the likely date of an answer from Ottawa, it is a matter

that I have pursued on a regular basis. I telexed Mr. MacEachen once

more last Friday and have not had the courtesy of an acknowledgement of

the telex, let alone any definitive answer. In fact, I had intended to

perhaps try to

[ Page 8246 ]

reach

Mr. MacEachan today by telephone. I want an answer. If it's no, fair

enough. If it's yes, then we can proceed with designing a number of

actions which will flow from this bill. But, Mr. Chairman, I think it

is shocking and typical that we should have been waiting this long for

a Minister of Finance in Ottawa who is suffering from a degree of

paralysis unparalleled in this country in many years.

MR. STUPICH:

I have just one question, Mr. Chairman. Is the government determined to

go it alone on this in the event that they do not reach an agreement

with Ottawa?

HON. MR. CURTIS: I'll answer afterwards.

MR. DAVIS:

Mr. Chairman, it's obvious if Ottawa were to participate in a scheme

like this it would be more attractive, particularly from the point of

view of those who would end up owning the housing — owners of

individual houses who have to make the monthly payments on the

mortgage. But assuming Ottawa does not participate, several points on

the interest rate charged are very important. If you can get money and

pay at 15 percent, when otherwise you'd have to pay 18 percent interest

on your mortgage, that in itself is a significant reduction in the

monthly or annual payments on the home. The eventual homeowner or

renter will benefit, and benefit appreciably.

There's

another aspect to this which I believe is significant. It was very

important in the earlier federal National Housing Act legislation. As I

read this bill, I see that the province can also — and, I expect, will

also — guarantee the principal and interest paid on these bonds. If the

province in fact does that — lends the credit of all of the people of

British Columbia to these particular transactions — that in itself is

worth one or two percentage points. It was worth one to two percentage

points in the 1950s and 1960s when interest rates were much lower when

the federal government guaranteed National Housing Act loans. That is

precisely what the province is doing in this case. There are two layers

to this benefit as far as the eventual homeowner is concerned — the

eventual mortgagee. One is the provincial guarantee which reduces the

effective interest rate which he or she will pay. Secondly, because

those who lend the money get a provincial income tax break, there's

another couple of percentage points. For two reasons the money will be

cheaper, for two reasons the monthly payments will be less, and for two

reasons housing will be more financeable, particularly when interest

rates are high in this province.

MR. LEGGATT: Mr.

Chairman, I direct the minister's attention to

section 5(3). It says:

"The power of the authority to issue bonds includes, subject to this

act, the power to issue bonds (

a) on which the interest paid is, under

the Income Tax Act (Canada) or the Income Tax Act, or either of them,

wholly or partly excluded from the income of the owner of the bond or

deductible in whole or in part from the income tax otherwise

payable...." The next word is "or," not "and." What I was concerned

about was whether the minister has put no manoeuvring room in the bill.

In other words, does the "or" mean that the bond must come under either

(

a) or (b) ? Sub-subsection (

b) says: "in respect of which (

i) any

other tax exemption, reduction or adjustment, or (ii) any benefit or

payment to the owner of the bond...."

The reason I raise

this, Mr. Minister — and I do it quite seriously, and not in any

critical way — is that if the minister is intending to use the bonds to

be deductible from income.... Let's make an assumption that someone

wants to buy a $15,000 bond. One of the benefits he may seek is to be

able to reduce his income by that $15,000 and invest in the bond. That

could be a benefit — as we do now, for example, in investing in film

development and things like that, which are present tax loopholes. The

minister doesn't have the option of making it both. According to this

section, it looks as though the minister will have to have either the

interest that's received tax-free, or the initial investment tax-free

without the interest being received tax-free. The key word is "or"

between sub-subsection (

a) and sub-subsection (b). Perhaps the minister

would check that out with his officials. I was a little concerned that

the use of the word "or" limits your capacity to issue a bond which,

for example, may have both benefits in it — both the deducibility

provision of the initial purchase, and the interest-free provision on

receiving the money on the bond. I was questioning the word "or"

between the two sub- subsections.

HON. MR. CURTIS:

Mr. Chairman, I don't know if the member was in the House when I

answered the question posed by the member for Nanaimo (Mr. Stupich)

earlier. There may have to be some consequential amendments. I dealt

with that. The member nods his head. I assume he was not in the

committee when I answered earlier.

The member of North Vancouver–Seymour (Mr. Davis) has quite correctly observed the advantages.

The

member for Nanaimo asked earlier on: is the province of British

Columbia prepared to go it alone in the event that Ottawa says no? The

answer is very definitely yes. But we have observed that....

MR. LEGGATT: You can't do it.

HON. MR. CURTIS: I'll let the members participate, Mr. Chairman, as they wish.

MR. LEGGATT:

I just have a clarification on the minister's last remarks. Assuming

the federal government doesn't wish to participate in the scheme, would

the minister not still have to have the federal government's agreement

to allow the province to go unilaterally on the scheme in view of the

fact that the income tax collection agency is the federal government?

Therefore the minister still cannot do it alone without the consent of

the federal government. Am I not correct in that assumption?

HON. MR. CURTIS:

Yes, the member is correct. The question as posed was: is the province

prepared — I paraphrase the member for Nanaimo — to forgo its share of

tax in order that this program could proceed? We're still going to need

federal approval, because we are under a federal-provincial taxation

collection agreement. The member is quite right, but my answer was

directed to the forgoing of tax. Provincially, the answer to the member

for Nanaimo is yes.

MR. LEGGATT: Arising from that,

is the minister prepared to unilaterally levy provincial tax if the

federal government refuses to participate and to consent to allow the

provincial government to go it alone? In other words, the only option

the minister would then have would be the option of levying a separate

provincial tax with a separate provincial

[ Page 8247 ]

form

and the whole scheme. I don't know whether the minister has got that on

his mind. I think he's probably assuming that he'll get permission. If

the federal government doesn't wish to participate fully, it would be

unlikely that they would deny the province the right to proceed. But if

they deny that, the only option the minister is going to have — am I

not right? — is that he would have to levy a separate provincial income

tax and withdraw from the federal-provincial agreement on income tax.

HON. MR. CURTIS: Considerable time would be required for the province to withdraw from the agreement in force, as the member would know.

Sections 5 to 9 inclusive approved.

section 10.

MR. STUPICH:

As I read this, it limits the aggregate of borrowing to $250 million.

In the event that the authority went out and borrowed, say, $150

million to start with, then it would be limited to issuing $100 million

in bonds, forever.

HON. MR. CURTIS: Yes. However, the

member will know that in answer to a question in an earlier section, I

spoke about the start-up. It might be a very short-term borrowing of,

for example, $100 million to commence, and then the issuance of bonds,

with a rollover.

MR. STUPICH: Is that the way it reads?

HON. MR. CURTIS:

Yes, the

section says: "The aggregate of the sums that may be borrowed

by the Authority under this act shall not exceed $250 million."

MR. STUPICH:

Mr. Chairman, I should perhaps let the lawyers handle this, but as I

read that, the total borrowing, because it doesn't provide for any

paybacks of some initial borrowings and then reborrowing.... As I read

this section, I'm not sure if that's what's meant. As I read it, it

means that the total amount that may be borrowed is S250 million, and

if some paying back is done, that doesn't increase the total that may

be borrowed.

HON. MR. CURTIS: The heading above the

digits of the

section is "Borrowing Limitation." That is, I'm sure,

comparable to that which we would find in other limitations which are

amended from time to time in this House.

Sections 10 to 12 inclusive approved.

section 13.

MR. STUPICH:

This announces the termination of the bond-selling program. It doesn't

mean that the Authority would go out of business. It might go on

borrowing from other sources and continuing to operate. Is that what is

intended?

HON. MR. CURTIS: It is intended that

no new bonds would be issued after March 31, 1984. We wanted to

indicate the relative time limit of this particular program, although

that could be the subject of debate at some other time in thisHouse, with respect to extending the time. But that's the way in which it would seem....

Sections 13 to 16 inclusive approved.

Title approved.

HON. MR. CURTIS: Mr. Chairman, I move that the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Davidson in the chair.

MR. CHAIRMAN:

Mr. Speaker, the committee rises and reports Bill 39, Housing and

Employment Development Financing Act, complete without amendment.

DEPUTY SPEAKER: When shall the bill be read a third time?

HON. MR. CURTIS: Now, Mr. Speaker.

[Mr. Speaker in the chair.]

Bill

39, Housing and Employment Development Financing Act, reported complete

without amendment, read a third time and passed unanimously on a

division.

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

HON. MR. GARDOM: Second reading of Bill 54, Mr. Speaker.

LAND AMENDMENT ACT, 1982

HON. MR. CHABOT:

Mr. Speaker, this amendment act to the Land Act contains a variety of

housekeeping amendments that are administrative in nature and that I

believe could be best debated in committee stage. Under those

circumstances I move second reading.

MR. HANSON: Mr.

Speaker, because of the fact that this bill was introduced only two

days ago — and we are aware of the propensities of this particular

minister — and the fact that he was not at all exhaustive in his

explanation of the principles of the bill. we move adjournment of this

debate until the next sitting of the House.

Motion approved.

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

ESTIMATES: MINISTRY OF HUMAN RESOURCES

(continued)

On vote 49: minister's office, $262,008.

HON. MRS. McCARTHY: Yesterday when we began our estimates, there were a couple of things I wanted to state

[ Page 8248 ]

for the record, because they should be said about our Ministry of Human Resources.

was speaking about the family support system within our ministry. I had

referred to the day-care increases of 27 percent, the increase in the

allowable income level, and the significant grant funds allocated

towards the development of new spaces. I don't know whether I mentioned

this, but I'd like the House to know that just in these past few months

since the increase of grant funds, we have created 1,200 new additional

spaces.

I want to refer to the Helpline for Children. As far

as services to children are concerned, I feel that a significant step

forward has been taken against child abuse in this province. As you

know, we were the first province in Canada to have a Helpline for

Children. It has been copied by the province of Alberta and has been

looked at by many jurisdictions in North America. It is the Zenith

line, where children and adults can phone in when there is suspected

child abuse. Because it's unique and because it was an experiment, I

just want to pay tribute to the emergency services organization which

looks after that Helpline. It is working; it has worked. I'm very

pleased about the success of that Helpline.

I want to also

mention that, as far as our ministry's commitment to women is

concerned, just recently, within the last ten days, changes to the

Family Relations Act have been enacted through my colleague the

Attorney-General (Hon. Mr. Williams). That amendment is significant. It

will change the enforcement of maintenance orders in this province. You

know what that means to many women who have been deserted or, by virtue

of difficulties in their marriage, have left their husbands, or their

husbands have left them with their responsibilities. Unfortunately many

of them have been forced onto income assistance because of the way the

system has worked in the past; it was a burden that should not have

been carried by them.

I just want to say that if this

Legislature does nothing else this year except pass that amendment....

As I say, in recent days it has been passed and accepted by His Honour.

It is one of the most significant changes in legislation. The program

will allow as to set up in the next few years a special maintenance

unit which will give tremendous assistance and help, on a priority

basis, to new applicants for income assistance; and we will gain more

experience with the new program. The second priority will be those

people already in the system who have been living for many years on an

income less than what was promised by the spouse; the court order

hasn't worked. Hopefully we will be able to bring that whole system

into a more fair situation. The third phase will be to give help on an

income-tested basis to those who are not already on income assistance,

but who indeed may have to be forced onto income assistance. Therefore

it's important that we go into the third phase.

I just want

to say that the changes, I believe, will be great. Again, if we do

nothing else in this House, in this Legislature — and much is being

done; we're accomplishing a great deal of work; I'm quite pleased to

see how much work has been accomplished in these few weeks — it is a

most remarkable step forward for the deserted spouses of our province.

It will take out the indignities, reduce the indignities; it will

reduce the hassle, and it will be a great step.

Could I just

also say to our Minister of Labour (Hon. Mr. Heinrich) that I am

pleased to see the appointment of Isabel Kelly, a new deputy of women's

programs in our province. Our minister deserves our respect for his

foresight. It is the first such deputy minister of women's programs

position, and I look forward to working with her on problems and

programs which are presented to our ministry from time to time. I know

that Mrs. Kelly will responsibly and sensitively represent the women's

point of view, and that's going to be a very challenging job indeed.

know that you will join with me now in welcoming to the floor of the

House my deputy minister, John Noble. As you know, as deputy minister,

Mr. Noble has the responsibility for the administration of our

ministry, and he is ably assisted by members of the executive group.

We're very proud of that. I've had the opportunity to meet with them on

many an occasion where they're discussing our total programs, and it's

a delight to meet with them as we go through the different things which

our ministry is faced with. We have very many things, a variety of

programs, those which I mentioned yesterday and those which I have

added today.

I also want to introduce Martin Cook, our

comptroller, who is on the floor of the House to assist the members

with any details that may be needed in that regard.

Again I

would like to just point out to all of those who are going to be taking

part in this very important debate on a very important portfolio in

this government, one that has been give financial backing by our

Ministry of Finance and by our total government, that the year of

achievement just past is significant. We hope that in the months and

the years to come our responsibilities to the elderly, the handicapped,

and the families in need will be enhanced in an even greater way. This

care and this attention and responsibility is a measure of our

effectiveness as a society, and how we are perceived by other provinces

— indeed, by other nations. Whether we are focusing on our acclaimed

Helpline for Children, our increased awareness of the needs of the

handicapped, or our wide range of programs for seniors, we are looked

on with respect by our counterparts in other provinces, in other

states, and in other parts of the world. In paying tribute to my deputy

minister, whom I believe has just done a remarkable job in this

ministry over some years, I want to also pay tribute to the staff which

he oversees, our executive staff, and all of those in the Ministry of

Human Resources who sensitively and caringly look after those things

which come before our ministry.

I know that the member for

Burnaby-Edmonds (Ms. Brown) was interrupted in her response yesterday

afternoon, so I will be pleased to take more questions from that member

and then answer them all at the same time.

MS. BROWN:

I have had a chance to go over some of the programs outlined by the

minister yesterday, and I wondered if she would make some notes,

because I have a couple of questions dealing specifically with them.

The

SAFER program, in which there has been an increase.... I want to say

that I'm pleased about the increase, but I want to ask specifically why

the minister did not respond to the resolutions passed by the Council

of Senior Citizens organizations at their convention in fall of 1981

when they asked for two specific things. They asked first of all that

the SAFER formula be scrapped and that instead it be reconstructed so

that the rent which a senior citizen had to pay would be 25 percent of

income, exactly the way in which it is if that person has the good

fortune to live in B.C. housing.

I want to tell you what

this actually means. It means that a senior citizen, for example, who

has — for the sake of easiness — an income of $100 a month and lives in

B.C. housing pays $25 a month in rent. No matter what the rent

[ Page 8249 ]

may

be, that is precisely how much that person would pay from his or her

income. Under the SAFER program, if the rent for that particular

accommodation was $40, SAFER would kick in to pay 75 percent of

anything above $30, which means that that same person would end up

paying $32.50 in rent. What the seniors are saying is that if they have

to pay 25 percent of their income in rent, it makes it easier for them

to afford accommodation. What they would like SAFER to do is to kick in

at the 25 percent of total income, rather than the present formula of

75 percent above 30 percent.

The reason I support what

they're saying is that under the present formula what we see is that

fewer and fewer people every year become eligible for SAFER. So though

it's wonderful that the benefits are being increased, there are still

fewer and fewer people who are eligible for those benefits. This is

evidenced by the fact that in 1978-79 the ministry had to allocate

something in the neighbourhood of $12.2 million to cover the SAFER

program,

whereas in their 1982-83 budget they've allocated $9 million,

and that we saw a decrease last year of people who were eligible for

SAFER from something like 13,500 down to 11,350. So it's not just the

dollars and cents that need to be adjusted, it's the percentage in

terms of the eligibility. That's the resolution that was passed at the

council, and which is the one I had hoped the minister would implement.

The

second resolution dealing with SAFER, which was passed by the council,

has to do with SAFER for spouses under the age of 65. They pointed out

that SAFER is terminated for the under-65 spouse of a former recipient

six months after that recipient dies. They point out that this creates

a financial burden on the surviving spouse. The resolution said: "Be it

resolved that the SAFER program be continued until the surviving

spouse, if 60 or over, reaches the age of 65 or remarries." In other

words, they're not asking, if the spouse is in his or her thirties or

forties, that SAFER should apply then. They're very clear that it

should apply only to the surviving spouse who is 60 or over. The 60 to

65-year-old should remain eligible for SAFER until that person becomes

65 and is eligible, or at least until that person remarries.

That

is my comment on SAFER, except to say that although I welcome the

increase, it still doesn’t really meet the housing ceiling for the

lower mainland, where we're dealing with an average rent — which we got

from the statistics of the Ministry of Lands, Parks and Housing — of

$391. The average in Victoria is $334, so there's still a bit of a gap,

but that wouldn't be as important if the formula ware scrapped and the

25 percent of income — which is what the seniors asked for — were

implemented instead.

I have a number of questions that I

really would like to ask the minister about the mentally retarded. How

many mentally retarded persons are receiving income assistance on their

GAIN under the handicapped program? How many mentally retarded people

living in boarding homes are receiving the comforts allowance? I'm

asking these questions separately, but what I'm really trying to find

out is the total number of mentally retarded people in the province who

are getting some kind of assistance from government,