1983 Legislative Session: 1st Session, 33rd Parliament

Hansard

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

( Hansard )

TUESDAY, OCTOBER 4, 1983

Morning Sitting

[ Page

2347 ]

CONTENTS

Routine Proceedings

Social Service Tax Amendment Act, 1983 (Bill 15). Second reading.

Mr. Lockstead –– 2347

Mr. Cocke –– 2351

On the amendment

Mr. Kempf –– 2355

Mr. Stupich –– 2355

Hon. Mr. Curtis –– 2359

Mr. Nicolson –– 2359

Hon. Mr. Phillips –– 2363

Mr. Hanson –– 2363

TUESDAY, OCTOBER 4, 1983

The House met at 10:06 a.m.

Prayers.

Orders of the Day

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

Leave granted.

HON. MR. GARDOM: I call adjourned debate on second reading of Bill 15.

SOCIAL SERVICE TAX AMENDMENT ACT, 1983

(continued)

MR. LOCKSTEAD: Here we are on a Tuesday morning on Bill 15,

which I am frantically searching for, because the government won't tell

us what they're doing, jumping around like gophers from bill to bill.

HON. MR. GARDOM: Don, it's between 14 and 16.

MR. LOCKSTEAD: Thank you, Mr. House Leader. I got it. This is the bill. Regressive legislation, that's what it is.

The Social Credit government, prior to and during the last election

campaign.... Did that Premier, who is running away once again and

leaving the chamber, mention once throughout the last election campaign

that they were going to increase the sales tax, put tax on restaurant

meals, put tax on long-distance telephone calls, and impose taxes here,

there and everywhere? Did the Premier tell you that, Mr. Speaker? He

didn't tell us that. He didn't tell the electorate that. He did not

tell the electorate at that time that they were going to do any of

these things. Here we are in the early part of October in this

Legislature. We haven't discussed the spending estimates. We've been

here all summer.

Look who's back from Yugoslavia! My favourite minister, who spent

two weeks, along with the Minister of Tourism (Hon. Mr. Richmond), all

over Europe at the taxpayers' expense. Now I know why we have Bill 15

before us. It's to pay for that minister's travel expenses, so that he

can travel around Europe. I'm sure the voters out there won't mind that

we're increasing the sales tax even though the government said they

wouldn't increase the sales tax in the last election campaign. I think

they said they would not increase taxes and user fees, but, in fact,

they did.

Here we are debating the bill before us, Bill 15, which deals with tax increases

for all the citizens of British Columbia. Why does the government need the money?

I'll tell you why I think they do. I think it's been sheer fiscal mismanagement

on the part of the Social Credit government. It's as simple as that. Over

the last three years there's been sheer fiscal mismanagement on the part

of the Social Credit government. This year's budget, if we ever get to debate

the spending estimates in this House before next year's budget comes in,

allocates $18 million for government propaganda — advertising. It's hidden

away in that budget. Well, it's true. There is $18 million for government

propaganda, while you're cutting out $50 a month to the handicapped. They're

being cut, as well as a lot of other services in British Columbia, and we have

before us Bill 15, which increases tax to all the residents of British Columbia.

It's far worse than that. I think that I've always opposed

regressive taxation in this House. Regressive taxation, to me, means a

tax that hits the poor as hard as the rich. A one-point increase in the

sales tax, for example, to someone making $50,000, $100,000, $200,000,

and in some cases half a million dollars a year.... There are salaries

in British Columbia that equal half a million dollars a year. I think

they can withstand the one-point increase in the sales tax. But when

you have people in this province living on minimum income — sometimes

on human resources, sometimes on UIC — some of these people have been

living that way because of the mismanagement of the economy by this

government for several years now. They have no choice. The jobs don't

exist.

[10:15]

This kind of tax hits those people very hard. This government has a

habit of hitting the low-income people in this province. Witness the

tobacco and alcohol tax increase recently. Witness the gasoline tax

increase. I believe a percentage increase in the price of a litre of

gasoline went into effect yesterday. All of those taxes are regressive.

I resent regressive taxation. The government had alternatives at its

disposal. They could have brought in a tax which would have slightly —

for the amount of money they are going to get out of this tax anyway —

increased the tax to the high-income people. But they would never do

that, would they? They wouldn't bring in a graduated tax like that,

would they, Mr. Speaker? They haven't in the past. There must be a

reason for that. Could it be that this government doesn't wish to

impose tax increases on its rich friends, or on some of the large

corporations that support this government? Could that be the reason?

When a large corporation supports this government and that's the

reason for Bill 15 before us today — they expect something in return.

They don't come along and say: "Our philosophy just happens to coincide

with the Socreds. We think that your philosophy is just great." No,

they don't operate that way in big business — sometimes small business,

but certainly not big business. When a large corporation makes a

donation or in some way assists the present government, they want

something in return. I think what they are getting in return for their

support of that government over there right now is no increase in

taxes, tax reductions in a couple of major areas for large

corporations, and the deal was....

HON. MR. PHILLIPS: Aye.

MR. LOCKSTEAD: I shouldn't say "deal." The understanding was....

HON. MR. PHILLIPS: Aye.

MR. LOCKSTEAD: Did you do that in Yugoslavia? Did you go all

over Yugoslavia, Mr. Minister, and say: "Aye, aye, aye"? You must have

looked pretty foolish doing that. Beside which, how many Yugos did you

actually talk to in Yugoslavia? That's what I want to know.

Interjection.

[ Page 2348 ]

MR. SPEAKER: Order, please, hon. members. Clearly we have before us an example of how interjections can affect the course of debate.

Interjections.

MR. SPEAKER: Order, please! Order! When the Chair is

addressing the House, members will remain silent or they will be thrown

out of this House. The member for Mackenzie continues uninterrupted.

MR. LOCKSTEAD: Thank you, Mr. Speaker. I didn't mean to get

everybody in a lot of trouble. It started out like such a nice quiet

Tuesday morning, and I was talking about regressive taxation under Bill

15, not Yugoslavia at all.

Mr. Speaker, I know there are some lighthearted comments made back

and forth in this House and it possibly detracts from the presentation

that we try to make from time to time in this Legislature — sometimes

all night. However, I really do resent regressive taxation, and as far

as I can recall, I don't think I've ever voted for a regressive tax

measure in this House. Now I may have, but I don't recall any.

Hopefully I will continue to fight that kind of taxation. This is the

kind of bill that separates the New Democratic Party from the Social

Credit Party. It is a very basic philosophical type of measure we have

before us right now. The Social Credit government has no problems at

all, philosophically, in taxing the poor people and the low-income

people, working people of this province, and imposing higher and higher

taxes. We, on the other hand, feel that those people who can afford to

pay more should pay more. It is well known in North America and in

Canada that many large corporations pay no actual income tax at all at

some point and in some years. That's true, Mr. Speaker. They have to

pay property taxes, I know, but the reason....

Interjection.

MR. LOCKSTEAD: The government House Leader says to get back

to the bill. I'm trying to point out why the government found it

necessary to bring this type of measure in in the first place. What I

am actually saying here is that the government can amend or withdraw

this measure. I know this measure has been in effect since the budget

was brought down on July 7 as part of the package — the misnamed

"restraint package," because there are actually very few restraint

measures in this budget package that the government brought down on

July 7. Many of these bills have absolutely nothing to do with

restraint.

Another factor, Mr. Speaker, is the effect this bill will have on

the small business community in this province. When you take money —

hard-earned cash, cash in any form — out of people's pockets.... And

that's what you're doing with Bill 15. This is less disposable income

to spend on their families, their children and on the consumer products

they may buy in their local communities. You're indirectly hurting

every small business community in this province by bringing in this

type of regressive tax measure. It has that secondary effect. I would

have thought the government, in its deliberations prior to preparing

the budget — which I presume was prepared sometime last February of

this year, but not brought into this House until July 7 because the

government didn't have nerve enough to go before the people with a

budget until they had an election.... And they were pretty cynical

about it. They said, "We won't bring in the budget in February," the

normal time, the custom any time in this province to bring in a budget.

They said: "We'll go to the people and have an election. If we can

spread our line of b.s. and the people buy it, then we'll have an

election. And if the people buy the line that we've preached during and

prior to the election campaign and we become the government, then of

course we'll bring in the budget. If we lose that election, we'll heap

the whole pile, all of our financial mismanagement, on the heads of the

new government, and let them take the flak."

Well, the government obviously did win, because they're sitting over

there and we're sitting and standing over here on this side. So now the

government, rather than meet the challenge of these difficult times

head on, bring in a package which they call a restraint package — many

of these bills have absolutely nothing whatsoever to do with restraint.

And here we are, debating under Bill 15 a tax increase that the

government said they would never impose on the people of this province.

I do have a couple of other items. I just want to discuss briefly

the increase in the.... Well, it's an imposition. In the bill,

subsection (

c) of the explanatory note says: "to impose a 7 percent tax

rate on the purchase of prepared meals for consumption on the premises

where sold, if sold at a price of $7 or more." I know this has been

discussed a number of times, but I want to get it on the record that

the tourist industry people and the B.C. Restaurant Association — I

believe that's the correct name — are very unhappy about this

particular tax increase. First of all, they weren't consulted before

this tax measure was brought in, as far as I'm aware. Nowhere can I

find it that the government consulted with these people who are

directly affected — aside from the consumer, who is as well directly

affected. But they did come up with an alternative. They said: "Why not

put a 3 percent increase right across the board on prepared meals in

restaurants, and avoid a lot of the troubles and hassles that we know

have developed because of this tax increase?" Of course, the reason for

that is that the government won't listen, won't compromise, won't meet

with anyone, and when they do meet it's after the fact. Or when they

meet with any given group in our province it's not to consult but to

tell them what they're going to do, come what may.

I just want to quote briefly from the Vancouver Sun of July

8: "Meal Tax Angers Restaurateurs." I have quite a number of press

clippings, and I'm not going to read all of them; as a matter of fact,

just this one and part of another, for the purposes of this debate.

"The Finance minister's extension of the 7 percent

provincial sales tax to restaurant meals left a sour taste Thursday in

the mouths of restaurant owners and patrons.

"'Despicable,' Don Bellamy, executive director of the Restaurant and Food Services Association of B.C. said. A dirty, low blow.'

"Retailers were disappointed when Hugh Curtis raised

the sales tax by a full percentage point to 7 percent. But the

restaurant industry, exempt from the tax until now, was livid.

"'This will add considerably to our bookkeeping costs,' Bellamy fumed. 'It is obvious the wrong government got in...'"

[ Page

2349 ]

I'll certainly agree with that, Mr. Speaker, and I think most people in

British Columbia would today agree with that statement. I guess that 70 percent

would, anyway.

"'...and I'm a Socred. I'm bloody angry.'

"Doug McLean, owner of the Greenhaus Restaurant on

West 4th, said: 'It's going to kill the business. A lot of restaurants

have folded, or they are only hanging in by the skin of their teeth.'

"Joe Milano, co-owner of the Portobello Restaurant, said: 'I thought the government wanted to help small businesses.'"

That's a good point, Mr. Speaker. Over the last several years this

government has said: "We're going to do this for small business, we're

going to do that for small business. We're going to bring in grants to

help small business." Yet every time they turn around they're hurting

small business. One way is by taking disposable cash out of the pockets

of people under a bill like Bill 15, and other legislation before this

House, which has absolutely nothing to do with restraint. They're

taking disposable cash away from the consumer, money that is now not

being spent in the small businesses in local communities. That's one

way they're hurting small business. There are many other ways as well.

"Customer Michael Heinze added: 'If you spend $20 or

$25 on a meal, the tax will be an extra few dollars — like leaving two

tips, an extra one for the government.' The B.C. Hotels Association

said the tax places a further burden on the troubled hospitality

industry.

"The B.C. Motels, Resorts and Trailer Parks

Association sent a letter to Premier Bill Bennett saying the tax could

not have come at a worse time."

Good point. It could not have come at a worse time.

At a time when the economies in most other provinces in Canada are

picking up, it was a deliberate and conscious decision of this

government to depress the economy in the province of British Columbia

with this type of legislation, Bill 15.

As I understand it — I'm looking at the Minister of Finance, and

he'll let me know if I'm wrong — British Columbia has the slowest

turnaround in the economic growth rate of any province in Canada today.

The only possible exception I can think of is Newfoundland, and I think

even little Newfoundland, in spite of high unemployment and its

economic problems, has a higher growth rate today than does British

Columbia. A sad commentary. This whole financial mess was inspired by

the government sitting opposite me here this morning.

Interjection.

MR. LOCKSTEAD: You are, Mr. House Leader. You've made some

very bad decisions over the last few years. You've sunk literally

hundreds of millions of dollars of taxpayers' money into northeast

coal....

HON. MR. CURTIS: On a point of order, Mr. Speaker. I would be

guided by the Chair, but it seems to me that a bill dealing with sales

tax on goods which are purchased by the consumer cannot be related to

northeast coal, the economy in Newfoundland and growth rates of various

provinces. We're discussing a relatively narrow issue, are we not, sir?

MR. SPEAKER: Thank you, hon. minister. The point raised by the minister,

hon. members, is indeed a valid one and I would commend it to the member as

he continues his address specifically related to the sales tax.

MR. LOCKSTEAD: I'll heed your words, Mr. Speaker. I

understand what you're saying. I was trying to point out to the House

why the government found it necessary to bring in this regressive tax

measure which affects low-income groups and the unemployed in our

province more than it does rich people like the cabinet ministers

sitting over there, who live in the lap of luxury, travelling around

the world at taxpayers' expense, living in the Vancouver Hotel like

sultans even though their homes may be a few miles away. Somebody has

got to pay for all of that, and the people who are going to pay are

those who have to pay this increased sales tax, and a number of items

that prior to the last election the government said they would never

bring in. That's what we're talking about here: why the government

found it necessary to break its promise and bring in increased tax

measures, regressive tax measures that affect the poor, the working

poor and the unemployed, and don't really affect the rich, like the

members sitting on treasury benches over there.

[10:30]

The

article goes on to say:

"Curtis said the removal of the restaurant exemption,

along with a similar measure affecting long-distance telephone calls,

'will generate an additional $44 million in revenue this year and $60

million in a full year.' Merchants and business leaders said they were

hurt and disappointed by the one-percentage-point sales tax increase,

and several said it threatens the fragile recovery beginning to sprout

in the B.C. economy."

I just tried to speak about the fragile economy —

hopefully that was starting to take place in spite of this government,

not because of it. This government has gone out of its way to put a lid

on that fragile recovery.

"L.A. Raphael, B.C. manager of the Retail Council of

Canada, said the tax hike is badly timed. 'We feel that at the very

beginning of a possible recovery of consumer confidence this will have

a dampening effect, and we don't feel it is good for the retailers or

the consumers because recovery has to be led by consumer purchasing.'"

We were just talking about that a short while ago.

"Curtis said the increase will provide $126 million in

additional revenue this fiscal year and $170 million next year. Even at

the new rate, he said, B.C.'s sales tax is as low as or lower than

those in six of the other nine provinces.'"

What's that got to do with British Columbia? Here

the minister was on his feet a few minutes ago on to me because I

wasn't sticking to Bill 15 and was trying to relate my remarks to Bill

15, and here he is talking about other provinces.

"Raphael said he had hoped for no increase, since

Statistics Canada figures show that B.C.'s recovery is probably the

slowest in the country, outside of parts of Alberta. He predicted many

consumers in eastern B.C. will travel to sales-tax-free Alberta to

shop."

People do that. We have a member of this House who

has been known to go to Alberta occasionally to do his shopping to save

a few bucks on the sales tax.

"B.C. Central Credit Union economist Richard McAlary said he was very surprised by the increase.

[ Page 2350 ]

'It seems to make very little sense,' he said, predicting

that it will likely depress consumer sales, retarding the slow economic recovery."

Who have you got in favour of this tax? Who has

actually come out in favour of this sales tax increase in this

province, aside from Socred Treasury Board members and the

backbenchers, who don't even read the legislation but go along with

treasury benches because they're hoping to get into cabinet some day?

Lots of luck!

"'The revenue forgone would appear to outweigh any possible

benefits,' he said. 'Why in a time of restraint of government services

are we increasing taxation?'" That is the very question we are asking

here. "Mark Startup, executive director of the B.C. division of the

Retail Merchants' Association of Canada, said: '...we were not

consulted on this issue and that hurts.' But Startup said his

association would support the increase if the government could show the

collected revenue will be spent wisely."

I want to assure Mr. Startup that the revenues are being spent

wisely, in spite of the fact that the government has taken away the $50

a month to the handicapped, has wiped out human rights.... A whole lot

of things are happening. These revenues will be spent wisely. I

understand in a week or two we're sending two more cabinet ministers to

India and Korea with a lump of coal, at taxpayers' expense: two weeks

in downtown Tokyo, carting around a lump of coal at taxpayers' expense,

living in $450-a-day hotel rooms in the exotic capitals of the world,

while we slave away day and night in this Legislature. That's how their

tax dollars are going to be spent, jetting home in their private jets —

taxpayers' jets, but the government members are using these jets like

their private taxis. That's how this tax increase is going to be spent.

Somebody's got to pay for all that. Under Bill 15 the government is

hoping to raise the money to pay for these niceties that government

members enjoy.

The

article concludes: "Curtis pointed out there still are thousands

of exempt consumer items, including food, children's clothing,

electricity, fuel oil and natural gas for residential use." However, we

know that there will be an increase in the cost of natural gas to

consumers. In fact, the minister over there has as much as told us that

just last week.

There are two other aspects of this bill which I want to mention

just briefly. One is, of course, the increase in the sales tax on

automobiles. This government, I suppose to get some Brownie points with

the voters, reduced taxes on certain classes of small automobiles to 4

percent, and now that they've won the election they've brought the tax

on all automobiles back to 7 percent. I'm sure that didn't make their

used-car-dealer friends too happy, but nonetheless they've done it.

They've got four years to get over that before the next provincial

election.

I'm going to make a prediction, Mr. Speaker, that revolves around

Bill 15 –– I predict that this government will, at least a year prior

to the next provincial election, reduce the sales tax — economic

recovery or not. Yes, I predict that this government, cynical as they

are, will go out and take expensive television ads that will be paid

for by the increased sales tax that we're debating under Bill 15, and

will tell the people that they've reduced the sales tax. Yes, they will.

Interjections.

MR. SPEAKER: Order, please, hon. member.

MR. LOCKSTEAD: I'm talking about Bill 15, the sales tax.

MR. SPEAKER: We're talking now about future action, hon. member, which....

MR. LOCKSTEAD: I'm just making an honest prediction, Mr. Speaker.

MR. SPEAKER: Nonetheless, hon. member, as honest as the

prediction may be, and possibly as accurate, it does not fall within

the purview of the discussions at this stage.

MR. LOCKSTEAD: It was just a harmless little prediction that

almost certainly will come true under Bill 15. They're a cynical lot

over there, and they know that three or four years from now people

won't remember that sales tax was increased. In fact, most people don't

remember now. This sales tax has been increased, and people take it for

granted. The sales tax was increased without legislation before this

House. Well, the legislation was before the House but not debated. For

months we sat here with this legislation on the books but not debated,

and yet the government increased the sales tax on long-distance

telephone calls, automobiles and meals in restaurants, and the general

sales tax.

Interjection.

MR. LOCKSTEAD: Some back-bencher is saying that we're wasting

time, that members in this House don't have the right to debate, Mr.

Speaker. Well, that is not so. Except when the government invokes

closure, we all have a right to make our views known in this House.

MR. SPEAKER: Order, please. Hon. member, the Chair has

repeatedly advised the member that we are currently discussing Bill 15,

the Social Service Tax Amendment Act, 1983.

MR. LOCKSTEAD: I'm doing the best I can, Mr. Speaker, but I

keep getting those interjections. We have a disorderly House, and I

can't let those misconceptions, which the hon. member over there is

hurling across the floor with great velocity, go by without an answer.

MR. SPEAKER: Nonetheless, hon. member, we must try.

MR. LOCKSTEAD: Yes, we must try, Mr. Speaker. What I'm saying is that this government....

Interjection.

MR. LOCKSTEAD: Yes, well, you brought in closure. You're the only provincial government in Canada that has used closure. Are you not?

Interjections.

MR. LOCKSTEAD: Ontario? Well, they're another....

MS. BROWN: What a role model!

[ Page 2351 ]

MR. LOCKSTEAD: I just wanted to point out quietly, Mr.

Speaker, that the government, when they said they wouldn't, did

increase sales tax, which is a regressive tax in this province.

The one tax I haven't discussed yet is the 7 percent tax on

long-distance telephone charges. Once again it's an unfair tax. If

you're living in the lower mainland, the overwhelming majority of your

calls are going to be to people within the city area. I know there are

a lot of exceptions, and I know that you and I, Mr. Speaker, as MLAs,

make long-distance calls by necessity. We know that people in business

have to from time to time. But generally speaking, the ordinary

consumer does not make that many long-distance telephone calls. But if

you're living in the country, or anywhere outside of the lower

mainland, and the centre of activity for business, travel or any

purpose whatsoever happens to be the greater Vancouver area, most of

us, some way or another, have to phone or write to the greater

Vancouver area and, to a lesser degree, the Victoria area. What I'm

saying is that this tax, once again, affects rural members, rural areas

and rural people to a larger degree than it does the 1.5 million people

living on the lower mainland. It's an unfair tax.

This tax was also brought in without any consultation with any

consumer group that I'm aware of and without prior knowledge to the

voter. I don't even know if B.C. Tel was consulted about the tax — I

doubt it very much. Certainly the research notes that I have here

indicate that they were not consulted. They may have talked with Mr.

MacFarlane privately, I'm not sure. Nonetheless, these taxes are

regressive taxes.

I certainly will not support this bill. I don't think any of my

colleagues will, but I certainly won't. What really disappoints me

about the government in this particular bill, once again, for the

record, is that the bill has absolutely nothing to do with restraint —

as many of the bills before us have nothing to do with restraint — and

certainly this bill hits the working poor, the unemployed people and

working people the hardest, as usual. It seems to be a pattern of this

government. Mr. Speaker, I just want the government to know that I'll

be voting against this bill. Hopefully some of the back-benchers will

take a closer look at this bill and read the sections contained in it —

all four of them; that shouldn't take them too long — and, perhaps, for

once in their lives stand up on their feet and vote against a

government that brings in regressive taxation.

[10:45]

MR. COCKE: Mr. Speaker, going along with the spirit of

cooperativeness in the House, I thought that I would say a few words

with respect to the sales tax. I think that maybe one or two of my

colleagues will also join me in this rendition. I think that we owe it

to the public to let them know exactly what's happening. I think we owe

to the public the responsibility of saying that here is a government

that on one hand talks restraint and about reducing expenditures, and

on the other hand turns on the public and says: "But you must increase

yours." It's a one-sided restraint program that we see before us. We

see a 17 percent increase in sales tax, in the face of 6 and 5 or 8 and

12, or whatever you want to put as your parameters. That, in itself, is

regressive, but put it in tandem with a 15 to 20 percent increase in

user fees across the board in terms of health care, and everywhere else

that the government can place an increase on user fees. For heaven's

sake, now it costs you $26 to go out and get a freshwater fishing

licence in this province for yourself and your wife — $13 each — and

then you have to pay another $13 each to go down and fish in the sea.

So you pay $52 maybe to catch one fish a year. This is the kind of

regressive taxation that this government has imposed on the people in

this province ever since they've been in power, and yet on the other

hand they go to people and say: "We're a government of restraint."

You can't have it both ways, Mr. Speaker. If you're a government of

restraint, you should be able to restrain your revenues, particularly

those on the backs of working people, old people and people who are

most severely affected by the sales tax. Most of the people in this

House are not severely affected by this sales tax, but a pensioner with

a fixed income is severely affected by any increased impost of

government fees. This is just an addition. Every working mother with a

dependent family.... By virtue of the fact that she is a she, her

income is bound to be lower by average, and beyond that she has the

responsibility of bringing up a family alone. There are certainly many

in my constituency in that situation. They are the people who are

really paying. They are the people who are hit with every one of the

new government imposts. They are the ones who are hit by all the new

regressive systems of taxation.

It doesn't matter what we say here; we know in our heart of hearts

that if there's a requirement for increased revenues for government,

the fair taxation system is through income tax. We know also that it

can be circumvented by the very wealthy with a good battery of lawyers,

accountants and so on. But at the same time it is the least regressive,

and it's the alternative to this kind of taxation.

The maximum amount of money raised here would be something in the

order of $120 million to $130 million. It sounds like a lot, but what

do we pay for that $120 million to $130 million? We pay by reducing the

number of people working in our province. Every time we increase

prices, no matter how little we increase those prices, we price

somebody else out of the market. And each time you price somebody else

out of the market, you have reduced the number of people working and

producing whatever people are buying. It’s as plain and simple as that.

Mr. Speaker, if we are dedicated to an improved economic situation

in our province, why are we doing everything backwards? When the member

for Mackenzie (Mr. Lockstead) said that there had been no hint of this

during the election campaign, was he ever right! The government

ministers were running around telling the world that there would be no

increases in anything and that you needn't worry; Bob's your uncle. But

beyond that, do you recall when the sales tax was lowered by that

government? It was before an election, I might recall for those who

can't. The Premier then promised that it would never go up again, ever,

ever, ever. "Never" has become a very short time. We are now faced with

arguments such as: "Oh, we're not as bad as one or two other

jurisdictions in the country." Isn't that marvellous!

The reason we're faced with this increase in sales tax is that it's

so easy to do. It's as easy as can be to set another percentage point

on the sales tax. There is no major bookwork, other than the bookwork

that is done by the retailers who are our tax-collectors all over the

province: those blessed retailers, those public servants who don't

realize that they are public servants, those tax-gatherers for the

provincial government. Mr. Speaker, they do it so lovingly, and most of

them do it and vote for you. I don't know what they think they're

gaining.

[ Page 2352 ]

[Mr. Strachan in the chair.]

But in any event, let me say this: now you've gathered in a whole

new bunch of tax-gatherers, and that's restaurateurs. Because anybody

buying a meal for more than seven bucks is going to have to pay tax on

that meal. That $7 was guffawed at by some of the government members,

saying: "Well, who ever buys meals that are more than $7? Whoever does

can well afford to pay the 7 percent." It's not so much that. In my

opinion, it is further reducing our prospective glowing economy, or

reducing our economic progress. It does that because, again, we reduce

the numbers of people using our restaurants. The problem is that when

you have this kind of taxation, the word gets out. It's very difficult

to seal the border of British Columbia and the United States, the

United Kingdom, West Germany, Japan — wherever our tourists come from.

It's very difficult to say: "Shush! Don't say a word and they won't

know and then when they get here, they're going to have to pay our

taxes." No, they find out before they come here. They find out that

B.C. has a very high sales tax. Then they decide: "We may as well

compare B.C. with some other island in the sun." And they find a place

that is more hospitable taxwise, and that's where they go.

Tourism is down in this province, despite the minister's

protestations that it's not. Tourism has been down for the last three

years. It may have a marginal increase over '82, but believe me, '82

was such a disaster that any increase would have to be so substantial

to really count.

This is a regressive piece of legislation because it harms our

economy rather than helps our economy. It harms our people rather than

helps them. And what does it do? It gives a few moments of respite to a

government that is totally disorganized, who can't plan and don't know

how to run the financial empire of British Columbia. It's true in every

respect, Mr. Speaker. Everybody watching the way B.C. is going into the

vortex of debt knows full well that there's bad management out there.

And that bad management has made one other bad decision and that other

bad decision is Bill 15.

Mr. Speaker, there's a study out by Dr. Irwin Gillespie of Carleton

University, and that study is entitled "The Redistribution of More in

Canada." What does he say about B.C.'s tax system in that study? He

estimates that B.C.'s tax system for taxes imposed at all levels of

government is second only to Ontario's in regressiveness. Ontario is

notorious not only in our country but notorious, for heaven's sake,

around North America in terms of its regressiveness and its taxation.

You see, it's not only their sales tax, but it's their across-the-board

regressive user fees. User fees are analogous to the regressiveness of

this kind of increased taxation. Although there is no government user

fee here, there is certainly a user fee in terms of buying goods and

services. That's another joke. Imagine services being taxable. That's a

long-standing question that we keep asking ourselves. I know there are

colleagues of mine who say: "Well, if you must have sales tax, you may

as well have it across the board." I, for one, can't see how one can

justify sales tax on services. There's nothing tangible there,

certainly not tangible in the common sense of the word. You can't lift

it or weigh it.

This sales tax increase is just making a bad tax system that we have in B.C. even worse.

[11:00]

How long will it be before we're going to be able to make any impression

on the government? And I don't mean the opposition, because obviously

there's no way the opposition is going to make any impression on this government.

Yesterday was the best example that I've ever seen. This side had a spirit

of cooperativeness, and the government decided to totally run over it roughshod,

the same as they will do with the suggestions that I'm making on Bill 15.

It's unfortunate, but you know, we're not the only ones crying out.

We're not the only ones saying that this is a regressive measure, that this

piece of legislation is not here to help. Mr. Speaker, we're continually

told of a fragile economy. When you think of a fragile economy, you think of

something that can be so quickly crushed, so easily dented, so easily impaired.

Mr. Speaker, this fragile economy continued to be fragile and will continue

to be fragile as long as we have measures like the one before us.

When we should be giving assistance and strength to our economy, why

should we insist that we reduce consumer spending? No matter how

marginal or minimal that reduction, it affects the economy, and

particularly a fragile economy. It affects it significantly. How many

people do you have to cut out of the market in order to put other

people out of work? And so the spiral grows and grows. Virtually

everything that this government has done, including their firings, have

gone along this line. Then everybody raised their hands in horror when

the rest of the country was getting out of the recession to some extent

in August and improving their employment situation. What happened in

British Columbia? Should I remind you, Mr. Speaker? Ten thousand more

people were unemployed, in a month that should have given rise to

increased employment.

DEPUTY SPEAKER: To the bill, please.

MR. COCKE: Mr. Speaker, this is to the bill.

DEPUTY SPEAKER: The sales tax.

MR. COCKE: This is the kind of legislation that is destroying

the economy of this province and putting people out of work. Every time

you raise taxes on merchandise, you reduce the market for that

merchandise, and every time you do that another few jobs have gone down

the line. It goes beyond that. People say: "Okay, I'm going to wait to

buy that fridge, that new suit, or whatever else it is, until things

get even worse and there are big sales on and so on." They wait and

wait and put their money into the bank. Savings grow, but what also

grows, in line with that, Mr. Speaker, are bankruptcies.

I would like to take this House for a walk along Columbia Street in

New Westminster. There are empty buildings after empty buildings.

AN HON. MEMBER: Modernize it.

MR. COCKE: Modernize it! We got diddled by a government in 1976, but we can go into that in a different debate.

Interjection.

DEPUTY SPEAKER: The members will come to order. The member will speak to the bill.

[ Page 2353 ]

MR. COCKE: That's the kind of situation that we have. You go

to wealthy shopping centre after wealthy shopping centre, and you find

exactly the same thing.

Interjection.

MR. COCKE: That's right. Your policies — and this is part of

the policy of the Socreds — are increasing the price of consumer

products, and in so doing driving other people into bankruptcy and out

of work, and on and on it goes. When will you ever learn? It might be a

long time. Let me assure you, Mr. Speaker, we have all the time in the

world to do our best to get this story across to this recalcitrant

government. I say that adding 17 percent to the sales tax has

dramatically increased the incidence of reduction in consumer spending.

It had to.

I'm not going to read the ad that was placed in the paper by a

particular restaurant here in the Victoria area. But he was just one of

many restaurateurs who have come out and said: "Why make us tax

gatherers also?" I would like to ask why, after there has been no tax

on food — and I'm talking about restaurant food — for years, we

suddenly go back to that regressive situation? If anything can

discourage tourism, this government has done so to the extent that many

people will go elsewhere — and have done so — because of our regressive

taxation policies. Restaurateurs are not happy about voting for a

government and then having the kind of surprise that has been visited

upon them. Can you imagine waking up on July 7 and finding that what

you voted for isn't what you got? A nasty surprise, isn't it, Mr.

Speaker? But that member sitting in the corner said it all. When

somebody said that they're counting on them not remembering, he said:

"That's right." People tend not to remember. I heard it coming from

that ozone zone down there.

Interjections.

MR. COCKE: I don't know what you're talking about, Mrs.

Member, but anyway, I'm sure someday you'll put it.... You're talking

about Hartley's proposition? Government car insurance?

DEPUTY SPEAKER: The members will come to order, please. The member for New Westminster will speak to the bill.

MR. MOWAT: She's asking for her $25 car insurance.

MR. COCKE: I can sell you that. I'll underwrite it myself.

A part of that proposition, also, when they said that the people

will not remember, was the fact that the opposition is wasting time,

and now it's $90,000 a day that we're taking out of this sales tax;

that's who's paying for it. The argument that this House is costing

much above what they pay the year round is specious. The only time that

we pay significant sums extra is when we work overtime into the night

and all night, and you're paying the poor attendants and the guards....

DEPUTY SPEAKER: Hon. member, you're out of bounds now. This is the sales tax bill.

MR. COCKE: I just thought I would answer that kind of proposition down there.

I would like to remind you that on August 24 there was a discussion of the Bennett budget in the Province.

It says: "The Bennett budget has driven up consumer prices in B.C. In

its latest consumer prices report, Statistics Canada says that the cost

of living in Vancouver in July jumped 1.1 percent from June." That is

significant because the rest of the country.... I have a comparison of

the consumer price increase across the country. We led all the rest by

far. This proves the point that I made in the first place that the

regressiveness of this government's policy with respect to taxation,

user fees, and so on, is the thing that sets us apart. Why else would

the consumer price index go up so quickly and go so high in this area?

It's so utterly obvious, and yet, to bail themselves out of a deficit

situation, they visit this $100 million-odd impost on the people of

B.C. The people don't deserve that kind of government.

Now 50 percent of the people are not going to be severely affected,

but those who are are severely affected. They are affected to the

extent where this, in tandem with all the other things that have been

going on and happening to them, puts them in a very precarious economic

situation. Others, as I pointed out, may resist buying and, therefore,

hoard their money. But there are those who must buy, those who have no

choice but to buy, those who go to the store every week and purchase

many taxable products. They're stuck. Their cost of living in one month

— the month of July — jumped 1.1 percent. Compare that with just 0.2

percent in Calgary and Toronto, which were the lowest in the nation.

Regina was second-highest; we were marginally higher than Regina. It is

interesting that Regina has a relatively new government, and it's the

same ilk under Mr. Devine — with the "Devine wisdom" — as the

government we have here in B.C., who also think that they have divine

wisdom. But their divine wisdom is not real wisdom. The averages in

Canada that month — July — were an increase in the cost of living of

0.4 percent. We were 1.1 percent. That's almost triple. Doesn't that

tell us something? Doesn't that tell us that maybe we're on the wrong

course? Here we were trying to cure inflation by throwing people out of

work and doing all those dramatic things that we said would damp down

the economy. Yet we are still the worst in the country with respect to

increased prices and we have one of the worst unemployment rates in the

country. We can't win, and the reason is that we are desperately poorly

governed. We are not well served at all. This — along with all the

other legislation that we've seen, or most of it — tells us that.

I wouldn't mind, Mr. Speaker, if it hadn't been for the promise of

the Premier, the last time it was reduced, when he said: "We will never

increase sales tax again." He as much as admitted the regressiveness of

the sales tax situation at that time. Where did he go to get his soul

won over again? Could it have been the Fraser Institute? Where did he

go to get that tremendous, dramatic change of mind that he would renege

on a promise that he would never increase sales tax again? We are faced

with an increase in sales tax — a significant one — and a broadening of

the sales tax. Don't forget that when we're talking about an increase

of 1 percent, that's across the board. But we're talking about a 7

percent increase for restaurant meals, because there was no tax on

restaurant meals — I shouldn't say a 7 percent increase, but an

increase of manifold sums; in other words, a new tax of 7 percent on

those meals is what we're looking at. It doesn't sound like much, does

it? But to me a $7 meal is a 50 cent sales tax. You

[ Page 2354 ]

add them up and you're coming to some fairly dramatic sums after a while.

I don't see that this is the course of action that should be taken

by this government. They gave us no excuses during the election; they

should have given us no policy after the election. They didn't come out

and say: "We want your vote, but we want to tell you first that there

will be an increase in sales tax; there will be an increase of hospital

user fees, medicare fees, and so on." None of those things were said;

as a matter of fact, they were denied by no less a light than the

Premier. So that's how long they keep their promises. It is too bad for

this province, but that's the situation.

Somebody said: "The Canadian Federation of Independent Business urges

me as a member to communicate support for B.C. government restraint measures

to the office of the Premier." This is from Action Alert. "I can't

do that. I am angry with the government for introducing the most reprehensible

budget in its history." That's the kind of response that the federation

got from this particular person. Mr. Speaker, that's people in business

— many of them.

Interjection.

MR. COCKE: Oh, the House Leader snorts. Have you gone and

talked to the business people in Point Grey, or have you even been home

to Point Grey? Mr. Speaker, if he had he would have a different

attitude towards what they've done.

I suggest that that is regressive. We're in a situation where family

income has dropped significantly in this province. Yet the government

continues to push increased costs at us. How much suffering has there

got to be in order for this government to be satisfied? They will

collect a lot more from sales tax in the long run if we have an

expanding, burgeoning, booming economy than we do under the situation

that we have now.

I notice that the members of the government are getting restless.

HON. MR. CURTIS: No.

MR. COCKE: I'm glad that the Minister of Finance isn't,

because all the people who are getting restless were part of that very

cooperative group that we had in the House yesterday. I felt that it

would be a good idea for them to hear some of the things that we have

to say.

As a matter of fact, I think it is necessary that we have some more

history of the sales tax, and that we go through, step by step, where

this whole regressive tax thing came from. And in the cooperative mood

of the House....

AN HON. MEMBER: He did a good job.

MR. COCKE: Yes, he did, and he's going to be afforded the opportunity to do more.

Because we're in a spirit of cooperativeness in this House — as we

saw yesterday when three bills passed second reading, and then the

government threw the Spetifore amendment at us at 11:45 last night.

That's cooperation. In that spirit of cooperation, Mr. Speaker, and out

of real respect, I'm going to move that the motion be amended by

leaving out the word "now" and adding the words "on this day six months

hence."

HON. MR. GARDOM: I wonder whether or not, Mr. Speaker, the

amendment would violate standing order 66, because the net effect of

the hon. member's amendment would certainly be to delay an impost.

DEPUTY SPEAKER: The point of order raised by the hon. House

Leader is interesting, but the tradition in our parliament advises us

that this type of amendment is in order.

HON. MR. McGEER: Further to the point of order, Mr. Speaker,

if amendments to this bill were to be brought in, as the bill itself

was a message bill, this particular amendment not to read the bill

would need to be brought in by message from the Lieutenant-Governor.

The tradition of the House notwithstanding, if the member who made the

motion can do it by message from the Lieutenant-Governor, then of

course we could entertain it. But I would submit that the amendment is

an offence to the Crown. If Your Honour is in some doubt, perhaps we

ought to call a small recess while this point is very seriously

considered, notwithstanding any tradition of the House. I submit, sir,

that that judgment is very seriously in error.

DEPUTY SPEAKER: Hon. members, the amendment as moved by the

member for New Westminster is not an amendment to the bill; it is an

amendment to the motion for second reading.

HON. MR. McGEER: Mr. Speaker — very seriously a delay in the

introduction of this bill is an impost on the Crown. All money matters

are dealt with in this House by message. Any change to legislation that

has an impost on the Crown is not done by members of this Legislative

Assembly, but by message from His Honour. Here we have something

affecting Crown revenues for six months not dealt with by message. I

think, with due respect, Mr. Speaker, that we in this Legislative

Assembly would not wish to have the wrath of the Lieutenant-Governor

brought down on this House for having ignored the wishes of legislation

brought in from him by message. That's why every resolution appearing

on the order paper that directly or indirectly affects the revenues of

the Crown is automatically out of order. All amendments to this bill

must be brought in by message. Here we've got an amendment to the bill.

DEPUTY SPEAKER: I think I can deal with this.

MR. LEA: If I'm not mistaken, Mr. Speaker, I heard you rule

already. Just because the Minister of Universities didn't get the

message is no reason for him to bring up the same point of order after

Mr. Speaker has ruled. You have ruled, and I would ask that the House

abide by that ruling.

DEPUTY SPEAKER: Points of order are always considered. It's a courtesy to all members.

HON. MR. McGEER: It's time for a very fast consultation

between you and your Clerks, who well recognize that this amendment is

out of order because no amendments come in this House on bills that are

brought here by message if they affect the revenues of the Crown.

DEPUTY SPEAKER: I will hear one more point of order, and then I will dispense with the matter.

[ Page 2355 ]

MR. ROSE: I was intrigued by what the Minister of Science

mentioned as the "wrath" of the Crown. That was particularly

interesting. I hope he's not attempting to abuse the House and take a

lot of time on what I think is a spurious point of order. If a hoist

to, say, the Tobacco Tax Amendment Act was ruled in order, and it

anticipated certain kinds of revenues coming to the Crown, then I say

that the motion for a hoist on this particular measure is equally in

order.

DEPUTY SPEAKER: I think we have entertained abundant points

of order from both sides of the House. I will repeat what I said

earlier and maybe add some further explanation. This is not an

amendment to the bill. This is an amendment to the motion for second

reading. Second reading does not come to us by message. Second reading

simply comes to us from a motion from the House, and that motion may be

amended by another member in the House. I therefore find that the

amendment is in order.

[11:30]

On the amendment.

MR. KEMPF: I was going to speak very briefly to the bill, but

possibly it's much more in order, considering what I have to say, to

speak to the hoist.

I think, after what the member for New Westminster (Mr. Cocke) had

to say when speaking to the bill, that there is a definite point to be

made. Certainly, in thinking it over, it should be made on the motion

for a hoist. That point is for a single tax. We have in this province

and in this country a virtual melee of different taxes. To a certain

extent — and it will probably come as a surprise to the member for New

Westminster, but I agree with what he had to say — there are far too

many tax-gatherers.

MR. NICOLSON: Have you been reading one of Bob Williams' old speeches?

MR. KEMPF: No, I don't read Bob Williams, Mr. Member.

The member for New Westminster, when speaking to the bill, said that

there were people being cut out of the market. I think there is a very

real point to be made for many people to be cut out of the market.

There are far too many tax-gatherers. There are far too many

bureaucrats. There are far too many civil servants on the backs of the

taxpayers, not only in this province but in this entire country. There

are far too many people on the public payroll.

DEPUTY SPEAKER: Hon. member, we're on a hoist to a sales tax act. I think the member might be offending the rule of anticipation.

MR. KEMPF: Yes, Mr. Speaker, and I'll relate this to the

hoist of the sales tax. Possibly there's a point to be made for

hoisting this legislation, if during that period serious consideration

was given to a singular tax which would cut significantly the need to

raise the sales tax to 7 percent. Think about it. If you were to have a

singular tax you wouldn't need that multitude of tax-gatherers out

there, all of those people who police the system, who gather the tax

and who in their counting-houses count that money. If 90 percent of

that bureaucracy were eliminated in this province, think of the saving.

MR. LEA: How much?

MR. KEMPF: Well, I didn't have time when I was making my

notes, Mr. Member, to get exact figures together, but we need only

think about it. How many taxes do we have in this province? I'll bet

not one member in this chamber knows how many taxes we have in this

province. I'll bet not one member knows how many tax-gatherers we have

out there because of that multitude of taxes.

I think it's very valid to talk about this under this hoist motion,

because the hoist, as I understand it from the members of the

opposition, is to give the government time to think about what they're

doing. Correct me if I'm wrong, Mr. Member.

MR. LEA: That's true.

MR. KEMPF: It's true. Well, Mr. Speaker, in that time....

DEPUTY SPEAKER: Just let me observe that the member is on the

principle of a hoist, and that is correct, but I have a sense that the

member also might be entering into debate which might be better

discussed under the estimates of the Minister of Finance. If we could

get to the hoist on the tax, that would be appreciated.

MR. KEMPF: Thank you, Mr. Speaker, and certainly I'll speak

about this once again under the estimates of the Minister of Finance,

but I think a point has to be made here in view of what was said by the

member for New Westminster (Mr. Cocke) in speaking to Bill 15. There's

a definite point to be made for government consideration of a singular

tax in this province. Why do we need this multitude of taxes? We only

need a certain amount of tax money. Why can't it be collected at one

source? If it's collected at one source, it'll take a lot fewer

bureaucrats to look after it, and that will be a definite saving to the

taxpayer of this province — eliminating, possibly, the need for not

only raising the sales tax but having a sales tax at all. I think

that's very real to this debate. I just want to make that point.

There's a terrible burden on the taxpayer because of the tax-gatherers

and tax-counters and tax-policers. We have far too many taxes in this

province, in this country and probably all over the world, and it's

made even more onerous because of the sheer numbers that are required

to collect that multitude of taxes.

So as not to be out of order in speaking to this hoist motion, I

will leave it at that. But certainly, as you have suggested, Mr.

Speaker, I will bring the subject up once again in the estimates of the

Minister of Finance.

MR. STUPICH: Perhaps just a brief reference to the preceding

speaker. We used to have a Social Credit member in the House who was an

original member of the Flat Earth Society. We now have one who is

promoting the Henry George economic theories of some hundred years ago.

That's much more up-to-date than was the one who believed in the flat

earth. It was an interesting proposition at the time, and won a lot of

disciples, and apparently still has one. I would recommend that before

the member does raise that in the minister's estimates he read Henry

George's proposition, and he might present some interesting arguments

to the House. I would perhaps remind him also that it was Henry George's

[ Page 2356 ]

proposition that that single tax be levied only on property. I'm not sure whether he would want to go along with that or not.

Mr. Speaker, I started second reading on this and went through some

of the history of how we came to have a sales tax in the province of

British Columbia. Speaking now to the hoist, I think it's worth

recalling some of the early objections when the tax was first levied in

1948. At that time, Mr. Speaker, you'll remember that there was

widespread objection in the community. The Colonist

of March 18, 1948, is quoted as saying: "Stiff opposition to B.C.'s

projected 3 percent sales tax loomed today among municipal governments,

labour unions and merchants. The tax will not be put into effect until

the Legislature approves it." That's another matter.

HON. MR. NIELSEN: On a point of order, Mr. Speaker, I wonder

how a history lesson on when sales taxes began relates to a six-month

hoist. Perhaps I could see that in second reading, but on a six-month

hoist I don't understand how it relates.

DEPUTY SPEAKER: That point of order is well taken. Further, I

think the records will show that the member for Nanaimo has canvassed

the history quite well and to the benefit of the House, but now we

would be offending standing order 43 if that type of debate were to

continue. The point of order raised by the Minister of Health is most

valid; we are on a hoist amendment at this point, and debate must be

strictly relevant to the principle of delaying or hoisting this

particular measure.

MR. STUPICH: Mr. Speaker, the reason for delaying

implementation of the increase in the sales tax, I submit, is that

there has been so much disagreement in the community as to whether the

sales tax should indeed have been levied at all in the first place,

whether it should be raised at this particular point in our economy or

whether, indeed, it should be lowered, whether exemptions should be

increased or decreased, and whether there are other means of raising

the revenue required. I believe this is all part of the argument to be

raised in favour of hoisting this bill for six months while we give

some consideration as to whether or not we should, indeed, at this

point in our economic history increase the sales tax. My argument is

that we should not increase it at this time, and the basis for my

argument is the widespread disagreement in the community as to whether

it is good or bad for the community at this time. To do that, I'm

laying the groundwork by pointing out the differences of opinion that

have existed in the past — and some of them still exist today. My

remarks to 1978 were intended to be very brief, simply to summarize the

ground that I had covered Friday so that members would be up to date,

but since that is all recorded in Hansard I'll skip that point and go on a little further.

The sales tax was introduced in 1948 and was increased in 1951. At

that time it was a significant part of our revenue. But it was still

argued about. I quoted Winch to the effect that this was a terrible tax

to impose. In 1951, that same Mr. Winch argued at a CCF convention that

it was too important a source of revenue for us to do without, so in

three years that one person had changed his opinion as to whether or

not B.C. should indeed levy a sales tax. It's a reason for us to

consider now. The history is there, Mr. Speaker. We've considered for a

long time the imposition of a sales tax, and we've increased it and

decreased it many times over the 35 years since it was first

implemented. At that convention, Mr. Speaker, I argued that we should

do away with it.

HON. MR. NEILSEN: On a point of order. I'm sorry, Mr.

Speaker, but the hoist is to delay second reading for six months, not

to delay the imposition of the increase in tax. I think that the

argument should relate to delaying second reading, not to the

implementation of it, because it's not affected by the hoist.

DEPUTY SPEAKER: That point of order is well taken, and the

Chair has already expressed to the member for Nanaimo the concern that

we are revisiting other debate that the House has already heard, and

that we are on a hoist motion. Will the member please relate his

remarks to the principle of delay and hoist, and the House will be well

served.

MR. STUPICH: Mr. Speaker, I know you're not in a position to

answer questions, but I put it to you, and to anyone to whom you wish

to refer: in the event that this hoist motion passes, what does that do

to the implementation of the tax? The legislation before us now says

that it comes into effect the day that it was introduced, July 7 or

July 8. In the event that we do agree at this point in time to hoist it

for six months, it would seem to me the Legislature in effect is saying

that we don't want this implemented today, and we would have to

postpone implementation of the tax.

DEPUTY SPEAKER: The Chair cannot answer a hypothetical question.

MR. STUPICH: I appreciate that, Mr. Speaker, but I'm saying

that I can argue as to whether or not the tax should be increased or

decreased when I'm talking about hoisting the bill for six months,

because it's my position that if the House shows its displeasure with

this legislation by hoisting it for six months, the hoist is

instructing the government to cease collecting that increase in tax

until a decision is made as to whether or not the bill should be

proceeded with.

Mr. Speaker, there are other avenues to go. I suggested when we were

first considering this legislation that the Minister of Finance might

give some consideration to the idea of making the bill effective at

some date in the future, rather than immediately. I suggested to him,

and I think that's part of the reason for postponing consideration at

this time, that that particular

section of the bill should be changed —

which of course we could do in committee — so that it would become

effective at some time in the future, and that such a move on the part

of the government would do a great deal to increase consumer confidence

in our economy. Knowing that the tax was going to be increased at a

certain time in the future, people would rush out to take advantage of

the relatively low tax today, and would keep on buying afterwards. My

argument is that we should postpone consideration for six months so

that the minister might give some consideration to the possibility of

changing the effective date of the legislation.

[11:45]

I suggest the government should accept this motion to postpone consideration

because of the very arguments this same government introduced in the House in

1978 and 1979, when they did reduce the sales tax in the interests of improving

the economy. Those were the arguments used in 1978. At the time they forgot

to tell us that the federal government was

[ Page 2357 ]

paying the major cost of it. Nevertheless, the

federal government did persuade all provinces to participate in a sales

tax reduction program, because they felt the economy needed that kind

of a consumer stimulus. They felt it would encourage consumers to buy

and stimulated that encouragement by reducing the sales tax. Today

we're supposed to be in a similar position, in that there is a fragile

sense of recovery in the community. We need to encourage that recovery

rather than discourage it, and reducing rather than increasing the

sales tax would work that way, according to the government's own

arguments in 1978 and 1979. So the government should agree to postpone

consideration of this bill until such time as they have considered

whether or not it is important to stimulate consumer buying today, in

1983, and the way to do that would be to decrease rather than increase

the rate of sales tax. They need time to think about that.

It has been argued by myself and many others how regressive this

sales tax is. If that is the case, then increasing it makes more of an

impost on those who are least able to afford it. I think even that

should be studied by the Minister of Finance before this bill is

passed. I think he should consider some of the arguments that this is

indeed a regressive tax, but also some of the arguments that in view of

the exemptions it perhaps may not be as regressive as it appears.

I quoted a paper, when I was speaking in the budget debate, to the

effect that when it comes to levying taxes, B.C. and Ontario are the

two most regressive of all provinces. Yet there are the exemptions to

the sales tax, and that particular tax may not be regressive. I think

the minister needs time to consider that before increasing the rate of

the sales tax. He needs time to consider whether the increase in

exemptions makes it more or less regressive, whether it's doing

anything to stimulate the economy at this time. Certainly one of the

reasons for bringing in the budget that they did and one of the reasons

for the restraint program they have announced is to stimulate the

economy. If a bill comes in that is going to have the opposite effect,

then the government would be wise indeed to postpone consideration of

that bill for six months, to look at all the ramifications of it and

reach a conclusion as to whether or not there isn't a better route to

go, either by amending the bill when it's considered six months hence,

by actually changing or dropping it altogether, or by coming up with

some quite different system, as the hon. member for Omineca (Mr.

Kempf)....

DEPUTY SPEAKER: Hon. member, as the Chair pointed out to the

member for Omineca, that could be best discussed under the minister's

estimates. I will once again remind the member that his argument would

be fine during second reading, because the member is opposed to second

reading, but I believe there is some confusion here. We are on a hoist

motion to second reading at this point, and I would ask the member to

relate his remarks to the principle of a hoist on second reading of the

bill.

MR. STUPICH: Mr. Speaker, I am indeed opposed to second

reading. At the moment, as you say, we are discussing whether or not we

should have second reading now or six months hence. I'm advancing

arguments as to why I believe the minister needs more time to consider

what he's doing before proceeding with this bill. I am advancing

arguments that the economy at this particular time could do better

without this kind of attention, and for that reason the minister should

do further research. After all, this bill was brought in with the

budget, very soon after the House convened on June 27, some seven weeks

after the election. The minister, I submit, didn't have time in that

period to properly research, and because he didn't have the time and

hurried this legislation along, he needs time to look at the effect of

it, time to consider whether there isn't a better way of achieving his

objectives. So I'm arguing now that the minister should be supporting a

move to postpone consideration of this bill. I'm not urging at this

time not to consider second reading; I did that before, and I would do

it again if I had an opportunity. Right now I'm simply saying that he

needs more time to look at it, more time to consider the effect on the

economy and to consider alternatives, other ways of doing what he wants

to do for the economy.

The minister introduced, along with this sales tax legislation,

further exemptions, and also brought in things that were not taxed

before. Was that the right way to go? Was there any research? In

committee we'll have an opportunity to ask the minister just what

research was done. I would suggest to him that if this kind of increase

is going to be imposed now — has been imposed now — or is going to be

postponed for six months, that he might consider some system of giving

credits to the needy as a way of making it less regressive.

That's not an argument opposing second reading. It's simply asking

the minister to get more information, to do more study, to look into it

more thoroughly before proceeding. I suspect that the minister's staff

has not really had the time to consider the effect of increasing the

general rate of tax to 7 percent. The arguments of his own government,

as advanced in 1978 and 1979, indicate to me that they're speaking at

cross-purposes. In 1978 and 1979 they spoke in favour of a tax

reduction to improve the economy. Now they're saying that to improve

the economy and maintain services we have to increase the tax. Either

they were wrong in 1978 and 1979 or they're wrong in 1983. They should

look at it, research it, consider it, and then decide six months hence

whether they wish to proceed with second reading.

That's the basis of my argument. I was suggesting some alternatives.

I suggest that he consider reducing the sales tax at this time as a way

of improving the economy.

DEPUTY SPEAKER: That would not be within the confines of the

present debate. It would be better addressed during the minister's

estimates or second reading. We're on a hoist motion now.

MR. STUPICH: I would suggest to him further that he consider

the number of exemptions that we currently have under this legislation

and whether or not there are too many already. I would ask him to

consider in the research that he could do in the next six months

whether or not he would consider some alternative way of making what

some have described as a very regressive tax less regressive. That

would take time. Six months would not be too long a time for this kind

of research. It's the kind of research where he could well look to the

outside community for help.

It’s not consumers who pay all this tax. By putting questions on the

order paper year after year, we've established that roughly half of

this tax is paid by the business community. I think they should be

consulted as well in this six-month period when the minister is

considering what should be done in the interests of improving our

economy. The minister needs that time if he's going to do the kind of

research necessary to bring in legislation that would actually improve

[ Page 2358 ]

our economy. That's why I'm arguing that he should

agree to a six-month hoist, that the government should agree to a

six-month hoist. Six months is little enough, but that's the motion

before us now. I would hope the minister would take it under

consideration and agree that he hasn't thoroughly examined the effects

of this legislation on the community, agree that he hasn't taken into

account the effects on individuals, on poor individuals, on business

people; that he hasn't looked at the alternatives, hasn't looked in

detail at the exemptions — surely that's a reason for taking time to

consider it — and hasn't looked at whether the rate he's picked is too

high or too low. He simply added one point to it. I wonder how

scientific that was. It may be that....

Interjection.

MR. STUPICH: Mr. Speaker, does that member for South Peace (Hon. Mr. Phillips) have to go on proving over and over again how stupid he is?

DEPUTY SPEAKER: Withdraw.

MR. STUPICH: I withdraw.

DEPUTY SPEAKER: Please speak to the hoist. I'll ask the minister to come to order.

MR. STUPICH: I am in favour of the hoist. I am in favour in

view of the history of opposition, of questions, of the concerns

expressed by the many people I quoted previously, that this is not the

way to raise government revenue; that even if it is the proper way,

there are better ways of administering it. When I say that, I'm talking

about the exemptions. There are better ways of making it less

regressive than by simply adding to the list of exemptions. I suggest

that one of those ways would be....

HON. MR. NIELSEN: Mr. Speaker, I'm sorry to interrupt once

again, but the member for Nanaimo is speaking with respect to the

hoist. He is speaking to the substance of the bill before us. And when

the member is speaking about exemptions and speaking about specifics,

percentages and so on, I would suggest that he has strayed completely

from the concept of hoisting second reading for six months. If I could

bring to your attention

section 7 of the bill, it speaks about the

commencement of this act, and I would suggest if the member for Nanaimo

wishes to consider a six-month delay in implementation of the tax,

perhaps that

section may be the area where it is most appropriate to

debate that. But with respect to hoisting second reading for six

months, I think the member is completely out of order, and I would ask

you to review standing order 43.

DEPUTY SPEAKER: Order, please. The point of order is valid,

and the member has been warned now on two occasions that he is speaking

to second reading and not to the hoist motion which was presented to

the House. Standing order 43 does apply, and the member appears to be

offending it with remarks that the House has previously heard.

MR. STUPICH: I'm not suggesting that the minister sit on an

infertile egg that never will hatch. What's the point in hoisting it

for six months unless he's going to review all of the arguments? What's

the point in hoisting it unless he's going to review the effect of this

bill on the community? What's the point in hoisting it unless he's

going to look to see whether there aren't improvements that could be

made in the bill? It's not a case of putting it on a shelf and letting

it grow dust and cobwebs. In asking that the government agree to a

hoist of this legislation, we're asking them to take six months to

reconsider — possibly to change it, amendments, possibly to change the

effective date. The possibilities are endless as to what they might do.

But there's no point in moving a hoist if the government is simply

going to sit on it and do nothing at all. My arguments are that they

should be doing something in that six-month period. My arguments are

that they should be researching the effects and looking into the

possibilities of doing something better. Why else would they hoist a

bill if it were not to reconsider their position and ask themselves,

ask others, seek advice as to whether or not they are doing the right

thing in proceeding with this legislation at this point in time?

DEPUTY SPEAKER: Hon. member, you may have some very

compelling arguments. However, they would not be applicable during a

hoist motion. They would be applicable, as you have indicated, in

committee if you're considering amendments or, if you are opposed to

the principle of the bill, during second reading. But we are on a

motion to hoist second reading. Technical debate as it relates to the

bill would be out of order and is certainly repetitive.

MR. STUPICH: Well, Mr. Speaker, I would have to ask: what

could possibly be in order under a debate on a hoist if it is not to

ask the government to reconsider, to research? Why else would the bill

be hoisted for six months? If we are simply voting against second

reading, then we achieve that by voting against second reading. But

we're not doing that at this point. We've moved an amendment to the

effect that it be considered six months hence. Not done away with, not

dropped, not burned or destroyed, but that they reconsider their

position over the intervening six-month period and decide, as I said

before.... Right now I'm arguing that I should be allowed to pursue

these arguments in favour of the hoist, because there's no reason for

moving a hoist unless someone is going to do something in the

intervening period. And it's what the minister should be doing in that

intervening period that I have been presenting in favour of hoisting

the legislation for some six months.

Mr. Speaker, have I convinced you that I should go on in this vein?

[2:00]

DEPUTY SPEAKER: If there are new arguments to the hoist, the Chair and the Legislative Assembly would be prepared to hear them.

MR. STUPICH: Mr. Speaker, do we adjourn at 12 o'clock for lunch today?

Interjections.

MR. STUPICH: Mr. Speaker, I would like to advance all kinds

of arguments in favour of the hoist, and I have lots, but I seem to be

walking a very tight rope this morning.

DEPUTY SPEAKER: The hoist motion is confining, hon. member. Please proceed.

[ Page 2359 ]

MR. STUPICH: Mr. Speaker, I have never known it to be quite

so confining as it is on Tuesday morning, October 4. However, there is

not too much more I can say at this time. I think the minister might

well consider changing the effective date. It would have a tremendous

positive effect on consumers and hence on the total economy. He might

consider a reduction in the sales tax, as was implemented in 1978 and

1979, to improve the economy. He might study the regressivity, or lack

of regressivity, of the sales tax, having in mind the exemptions that

there are. He might consider changing the exemptions, even eliminating

some of them and substituting a tax credit for needy individuals as a

way of....

DEPUTY SPEAKER: Hon. member, we're now anticipating other legislation.

MR. STUPICH: I'm finished, Mr. Speaker, so just give me a moment. I've reached the end of my list.

He might give tax credits as a way of making the tax less regressive

as opposed to adding to the list of exemptions. Mr. Speaker, that's my

point. For those reasons I would urge the minister to accept the

amendment in favour of a six-month hoist.

HON. MR. CURTIS: Mr. Speaker, it should be explained that the

government will not accept the amendment for a six-month delay in

second reading of this bill, for a variety of reasons. Now that I am on

my feet, I appreciate the very narrow path which one must walk with

respect to a hoist motion.

May I observe that some of the reasons advanced for a six-month

delay in second reading, such as more research, more study of the

impact of the sales tax as it was and as it is now.... That is an

ongoing process in the ministry. Indeed, this topic is monitored weekly

and is discussed at least two or three times a month with officials in

the ministry. The same applies and can be said with respect to

exemptions. I believe the minister for Nanaimo spoke of those in terms

of why the second reading should be delayed. I may be faulted in other

areas, Mr. Speaker, but I believe that the impact of sales tax, the

complexity of sales tax, what sales tax does in terms of government

revenue, what sales tax does to the consumer — whether it be an

individual or a corporation or a business — are subjects monitored very

carefully. Frankly, we do not need a further six months to study that

which was very carefully studied up to July 7.

[Mr. Speaker in the chair.]

MR. NICOLSON: Mr. Speaker, the Minister of Finance gets up

and says that we've been studying and this has been ongoing. But there

is need for a six-month hoist. The minister says that the studies have

been going on, but I recall many occasions upon which the social

service tax was increased and we have called for some of this data,

some of the studies. One can hardly assail studies that are kept

secret, and if these studies are unassailable, if these are unshakeable

facts, then I'm sure that they could stand up to public scrutiny. I

should think that it's about time we had some real opportunity to look

at this whole business of the way in which we increase sales tax — not

for economic reasons but sometimes purely for psychological reasons. I

think that it's been a signal from the government not so much to

increase revenues, because it can have a very negative effect in

increasing revenues.... It can have a negative psychological effect.

But the psychological effect that they use is one that says: "We're

into a period of restraint, so we've got to send a signal to everybody

that they've all got to suffer a little bit."

This is a very dangerous way and an unresearched way in which to

alter the taxation structure. There is need for a six-month pause.

We've heard some speakers refer to the effect on restaurants. I guess

the Restaurant Association came up with what they thought might be a

compromise, a 3 percent tax on all meals, whether it be at McDonald's

or Hy's, or even at one of the more expensively priced restaurants. But

this whole business of sales tax can have such a negative effect on the

economy and some of the things that we are trying to accomplish. A

six-month pause in enacting this piece of legislation could be a

hopeful sign.

The legislation is in effect when it is read in the budget speech,

but the Legislature still has the power to ratify this piece of

legislation. There have even been a few amendments or changes brought

in by the minister subsequent to the introduction of the legislation

and the implementing of it by reading it out on budget day. So it is

not too late to make some changes. There are many things which, given

some time, if this bill is kept alive for a further six months — not

killed for six months — there will be an opportunity for people to have

some input into ways in which this sales tax can work for British

Columbia and ways in which we can stop it working against the people of

British Columbia.

I live very close to the Alberta border. My colleague from Kootenay

and the Provincial Secretary (Hon. Mr. Chabot) are contiguous to the

Alberta border.

Interjection.

MR. NICOLSON: Am I interrupting your interruptions, Mr. Minister?

I would propose that it is not generally understood in this

Legislature, so distant from that Alberta–British Columbia border, the

negative effect of sales tax.

HON. MR. NIELSEN: On a point of order, once again the

speakers on the other side of the House are speaking with respect to

the content of the bill and not to the motion to hoist second reading

for six months. The bill, with respect to its commencement, says that

the tax shall be imposed July 8, 1983. If the members wish to modify

the date when this tax becomes effective, perhaps an amendment could be

offered in third reading, but I can't see how this relates to hoisting

second reading for six months.

AN HON. MEMBER: That would be out of order.

HON. MR. NIELSEN: The member says it would be out of order.

That doesn't mean it should be out of order with respect to speaking to

the hoist. Mr. Speaker, I would ask you to advise the members to relate

to the hoisting of second reading for six months and perhaps you could

bring to their attention as well standing order 43 with its reference

to irrelevance and tedious repetition.

MR. SPEAKER: Prior to recognizing a member, clearly a hoist

motion does not allow us to continue to canvass as if we were in fact

still in second reading. It is not an opportunity to continue second

reading. Notwithstanding the fact that the

[ Page 2360 ]

referral of the subject matter to a committee has

been ruled out of order in this particular chamber, to do one way what

we cannot do another is equally out of order and it is beyond the scope

of the Chair to rectify the particular problem. However, hon. members

have an obligation that when a specific amendment vis-a-vis a hoist

motion is put before us, the comments must relate to the hoist motion.

It is not an opportunity to continue to canvass as if we were in second

reading, nor is it an opportunity to present old arguments which have

already been discussed. Clearly it is an opportunity for new discussion

and new arguments relating specifically to the hoist.

Those are the restrictions, hon. members, that your Chair must abide by and must enforce in this chamber.

MR. D'ARCY: Mr. Speaker, on the point of order as raised by

the member for Richmond, the philosophy behind the hoist motion is to

give the Minister of Finance and his colleagues on the treasury benches

an opportunity to reconsider the bill and its effect on the economy at

a time when the government is attempting — or so they say — to downsize

their role in the marketplace. I would suggest that the member for

Richmond's point of order is in fact an attempt to enter into debate

under the guise of raising a point of order without in fact taking his

place in debate, and that the reasons for a hoist motion and the reason

the government should reconsider are exactly what is being canvassed by

my colleague from Nelson-Creston and are completely in order under all

philosophies ever expressed under hoist motions in this chamber.

MR. SPEAKER: It is, however, the responsibility of the Chair

to determine what is completely in order and what is not completely in

order. It is an undertaking that the Chair does not take lightly;

nonetheless, we must abide within the rules that guide us in this

chamber.

[2:15]

MR. NICOLSON: Just before I continue on the motion, I would

like to say on that point of order that I think the Chair's advice is

well taken. Of course, the House is guided by practice, and the

practice has allowed sufficient flexibility that while one is

expounding upon reasons for a hoist new and fresh material may be

injected into that. It has always been the practice of this House that

such debate on a hoist motion is in order.

It is something like the ruling that was made in a football game on

Monday night, which I didn't see but which I read about. A person was

called for interference on a pass play. As I understand it, the

practice in the National Football League is that if the ball is not

anywhere near the participants, interference is not called. In this

particular instance I would suggest that we have rules, but it is

practice in parliament that governs the way and manner in which we

debate.

MR. SPEAKER: Hon. members, notwithstanding our mutual

attraction to the particular reference, only by the widest stretch of

the imagination could we consider that to be relevant to the discussion

at hand. The Chair had been of the impression that the point of order

raised by the member was concluded and we were now back into the actual

motion.

MR. NICOLSON: I'm sorry I offended. I was trying to put it

into terms.... Being a school teacher, Mr. Speaker, I was seeking to

put it in terms that some of these people could relate to. I know some

of them watched the Monday night football game, which I didn't.

I am saying that a hoist for six months is an opportunity to leave

this subject of the social services tax open for input. If we proceed

with second reading now, we will lose this opportunity to leave this

matter open, and it may then remain closed for several years, until

there is some improvement in the economy. There might be some

opportunity then to reopen the subject by reducing the sales tax —

maybe when there is an election. Here we are at the beginning of a

mandate, and this is a splendid opportunity to leave this subject open.

The government is not losing revenues in the meantime; the taxes are

being collected at these rates, restaurants are collecting the next

tax, but a whole host of things could be examined while this remains

open.

For instance, if a person who is resident in Alberta comes into

British Columbia and purchases an automobile, they can apply for a

sales tax rebate. This is good for people in automobile retail sales

who live near the border. But the same principle is not applied in the

case of someone buying a pleasure boat, for example, which may indeed

have a sale price even greater than that of an automobile.

HON. MR. CURTIS: On a point of order, Mr. Speaker. It seems

to me that the member is now entering into debate as to whether sales

tax should or should not be charged at any rate, whether it's 2 percent

or 10 percent. He speaks of large, durable goods being purchased in

British Columbia by Albertans, and that does not relate to a six-month

delay in second reading.

MR. SPEAKER: Hon. members, the chair will again call to the

attention of all members the fact that we are not canvassing the main

bill, the Social Service Tax Amendment Act, but we are now on a

six-month hoist. Those hon. members who have been in this chamber for

some time know the rules of relevance and know what can and cannot be

discussed under the terms of a hoist motion. I repeat, we are not in

second reading of the bill; we are in a specific amendment which is in

fact a six-month hoist. The Chair must advise that there is a necessity

for members to address the specifics of the amendment before us.

Failure to do so contravenes the standing orders of this House. It is

the responsibility of each member to relate their remarks specifically

to what is before us, in this case the six-month hoist.

MR. NICOLSON: Are you asking me to discontinue my speech, Mr. Speaker?

MR. SPEAKER: Hon. member, the Chair is directing the member

to the six-month hoist relevancy factor, which the member is abundantly

capable of addressing, should he so desire.

MR. NICOLSON: Mr. Speaker, it has been my desire, since the

beginning of this particular opportunity to address the House, to be in

order, and with all sincerity, I believe that is exactly what I've been

doing. I further believe that it is what the Chair believed I was doing

until various cabinet ministers jumped up and drew attention to their

interpretation of the rules. I don't have to read standing order 43 to

know,

[ Page 2361 ]

for instance, that Mr. Speaker may direct a member

to discontinue his speech. I'm quite aware of it without having to read

that out of our rule book.

I do believe that there are many good reasons, and one of the

reasons that we might leave this whole question open is to leave the

question of sales tax, and whether it is serving the best interests of

the people of British Columbia in the various ways it is being applied.

For instance, what we're doing in the bill is taking away the exemption

on restaurant meals over $7. Is that the area in which we should be

making some change? Should we be reducing the number of exemptions in

order to really create a positive cash-flow benefit to this province,

or should we actually be looking at further exemptions? One of the

reasons for leaving this question open and in front of the business

community in this province for another six months would be to ask — to

use this very real and concrete example and problem that we're

experiencing in my part of the province — how many boats we are simply

not selling and therefore getting no revenues to the province....

MR. SPEAKER: Order, please. Hon. member, the Chair had just

concluded, on that very specific point that the member had raised, by

trying to indicate in as subtle a way as possible that that particular

line of argument could not fall within the scope of a hoist. The Chair

tried to advise the member that that would be an unacceptable line of

argument to take. At another place or time in our proceedings it would

have been a most proper course, but not in this current debate. I am

sure that upon reflection the member will realize that he has ample

opportunity to pursue that particular argument at another stage.

MR. NICOLSON: The marina operators who have been working very

hard all summer to bring dollars into British Columbia have not had the

opportunity this summer to make their questions known, but perhaps

during the hiatus of the winter season, if there is a six-month hoist,

if the question is not closed, they will have.

HON. MR. CURTIS: On a point of order. Mr. Speaker, the member

persists in straying from the motion to delay this reading for six

months. If I may briefly answer without transgressing the rules, the

question of boat owners and marina operators in the member's riding is

a matter which he and I have canvassed, and which could be canvassed, I

suggest, in my estimates. It has nothing to do with a six-month delay

of second reading of this bill.

MR. D'ARCY: Further to the point of order just raised, Mr.

Speaker, and to the points raised earlier by Your Honour, I think we

need to make it quite clear that when a member is speaking in second

reading of a bill — in this case, I believe the member for

Nelson-Creston is opposed to the bill — he is speaking in favour of

having the bill scrapped or defeated right now. The member for

Nelson-Creston is eloquently canvassing reasons as to why the minister

should give consideration over a period of time as to the detrimental

and deleterious effects that this bill will have, not only on the

province as a whole but on his constituency and his taxpayers in

particular. Arguments for cancellation or defeat of the bill would in

fact be out of order on a hoist. He is quite correct in relating his

arguments why the minister should reconsider. I suggest that he should

be allowed to continue because I am very interested in the points he is

raising; they are of great value to the province of B.C.

MR. SPEAKER: Hon. members, there is no question that the

points raised have an appropriate place, and very likely have a great

deal of interest for a great number of people. Nonetheless we simply

cannot allow a debate which would be in place in second reading to

continue on amendments or subamendments. We must be specific to those

particular points. I would again ask the member for Nelson-Creston to

remind himself that we are speaking on a hoist motion on Bill 15.

MR. NICOLSON: Mr. Speaker, I haven't been speaking against

the bill; I've been speaking in favour of a hoist. If the bill were to

be hoisted for six months and if some slight modifications were made,

one might feel honour-bound to support it.

I am arguing that this question should remain open for the next six

months. I am arguing that it is not injurious to the government,

because the revenues are being collected as if this bill were in

effect. A six-month hoist can do the government no harm. It could,

however, bring some improvements to the bill. The government is saying

that they have to create a climate in this province for free

enterprise. They are reducing employment opportunities very heavily in

my riding, because it's been a regional governmental centre and the

government is stripping away regional employment jobs....

MR. SEGARTY: From Cranbrook.

MR. NICOLSON: If you want to be a marauder and steal jobs

over to Cranbrook, where you already have several fairly thriving

interests, you can say that if you wish.

HON. MR. CURTIS: On a point of order, Mr. Speaker. I cannot

follow the rationale in the member's argument with respect to

employment levels in his constituency on a motion to delay the second

reading of the Social Service Tax Amendment Act for six months.

MR. SPEAKER: Hon. member, the Chair cannot help but concur in

the point of order raised by the minister. Under standing order 43, I

must formally advise the member that unless he is prepared to engage

either upon new argument or upon relevant debate, the Chair will have

no alternative but to enforce that section, which the Chair is

reluctant to do, particularly when the Chair fully recognizes that a

member has the ability to specifically address the motion before him if

he so desires. The member may wish to continue on the hoist amendment.

[12:30]

MR. NICOLSON: The Minister of Finance interjects and says

that he cannot see the connection with employment opportunities in my

riding, and I would say that the government has said — and this

particular piece of legislation is part of the whole package — that we

must reduce the size of government and create a climate for the private

sector. This particular piece of legislation is not doing much, if

anything, to create a climate for the private sector. It is continuing

problems for the private sector and introducing new ones. These are

problems which have been resolved in certain instances, such as the

sale of automobiles which are made in

[ Page 2362 ]

Japan or back east, which I have mentioned. But in

the case of boats, which are manufactured right in the Kootenays, there

is no sales tax exemption even if a purchase is over $5,000.

HON. MR. NIELSEN: Mr. Speaker, on a point of order. You have

brought to the attention of the member standing order 43 with respect

to relevance. The member now is engaging in tedious repetition, because

we've heard the same argument several times since he's been standing

this noon hour. With respect, I believe the House has been most

tolerant in listening to this member's attempt to speak to the hoist

motion. I think he has failed to do so. It has been brought to his

attention several times, and I would ask if you might consider

directing him to discontinue his speech.

MR. SPEAKER: As I stated earlier, the Chair is reluctant to

enforce standing order 43 unless sufficient advice has been offered,

but the point raised by the Minister of Health is one which the Chair

must take cognizance of, particularly because on three different

occasions, when the member has engaged on a specific argument, it has

been brought to his attention that that particular line of argument

does not fall within the scope of debate presently before the House —

vis-a-vis the boats that the individual member refers to. I must advise

that if further order has to be referred to the member, the Chair will

have no alternative but to enforce standing order 43, which it is

reluctant to do, hon. member, in the knowledge that the member is

capable of carrying the debate in order — if it is the wish of the

member. I will advise so at this time. I would ask the member to

continue, bearing in mind the rules that are before all members of this

House.

MR. D'ARCY: Mr. Speaker, on a point of order, I fully

appreciate the Chair's patience with the matter on both sides of the

House, but I would like to point out that ever since he got to his feet

the member for Nelson-Creston has been interrupted constantly, both

officially on points of order and unofficially by caterwauling from

members on the government side. I am quite confident that the member

for Nelson-Creston might well have finished his entire remarks — not

only the remarks in the very eloquent arguments that he has been giving

out, but completed all of his remarks — had he not been constantly

interrupted by points of order and interruptions from people's chairs.

I would hope all members of the House would appreciate that a member

could finish his speech in much better time if allowed to do so

uninterrupted.

MR. SPEAKER: An excellent point, hon. member.

MR. NICOLSON: Mr. Speaker, I appreciate the difficulty that

the Chair perhaps finds itself in. However, I also feel that as a

member of this House I have a duty to see that the freedom of speech

and the rights of hon. members are pursued as far as can possibly

happen, and not allow bad precedents to take place; a duty to preserve

the freedoms of speech which I think have been established by the

practices of this House. I will try to make both of our lives as simple

as possible for the next few moments. I will try. I cannot guarantee

that it will find favour with the government House Leader or the

Minister of Finance (Hon. Mr. Curtis), or the minister of economic

development.

What we see in this bill is more or less a continuation of the

status quo. The question on social service taxes is open once again.

The social service tax came into this province about 30 years ago and

here we are opening the question, tinkering with the system and yet not

looking at it in a very fundamental way. If the government did accept

the motion to hoist this bill for six months, it would be a clear

signal to the people of this province that the government is willing to

listen and take some new direction in this practice which we have been

very glibly supporting and perpetuating for over 30 years. Surely after

30 years there are things that could be improved. I don't think we have

reached the day, desirable as it might be, when we can eliminate the

social service tax. If we were given six months, it would really get

the attention of everybody. If such a motion as this were to pass, a

lot of people would start putting their heads and their energies into

looking at the areas of this tax that serve our best interests and at

those that don't serve our best interests.

You can't collect a tax when you don't make a sale. That is the

first thing about this tax. That is axiomatic. If you don't make a

sale, the government doesn't get its cut. If you don't make a sale of

something that is being produced.... We should be looking at the things

that are produced in British Columbia. We could get the economists of

this province to focus on this whole business of sales tax. We could

have the sales tax as a discriminating tax in this province if we had

the focus of six months and what might be a.... Well, I wouldn't go so

far as to say " hithertofore," because I might trip up on that. But

just imagine the stimulation to the people in the business communities

in this province, the economic thinkers, the think-tank people, whether

they be from the Fraser Institute or the New Pacific Institute, or

other think-tanks in between. Think what they could do if they were

given this signal: that we are really ready to examine some of the

fundamental tax structures in the province and fine-tune them to see

that wherever possible they encourage industry and economic activity,

rather than simply saying that we need so many more dollars, so taking

what we raised last year, if we increase the tax by 10 percent it'll

probably bring in about 10 percent more.

I think I have made the point, and I have talked with the minister

about the specific example that I sought to use. I'm sure other members

of this House have other specific examples of how the sales tax is not

serving us, of where it is a deterrent that discourages sales, and you

can't collect a tax on sales that aren't made. That is why, with six

months and a clear signal from this government, the whole issue of

sales tax could be open for scrutiny and question. We could energize

people in this province by looking into this problem and making

positive suggestions, and that is why I'm supporting the motion. I'm

not going to take 40 minutes to say that, Mr. Speaker.

MR. SPEAKER: Hon. members, prior to recognizing the Minister

of Industry, the Chair must point out that one area which seems to be

creating a small problem is the area of the bill itself. When we talk

about an increase from 6 percent to 7 percent, it does not allow us the

licence to discuss the entire issue of social service tax, nor the

entire issue of tax at all. It is a very limiting debate, hon. members,

and it is necessary for members, when discussing the hoist amendment,

to remind themselves that the explanatory notes themselves must be

adhered to generally; otherwise we do run the risk of widening a debate

beyond the scope intended. I put that forward as some guidance to

members in hopes it may assist in the scope of debate.

[ Page 2363 ]

MR. NICOLSON: On a point of order, Mr. Speaker might

inadvertently have placed more emphasis on the strength of the

explanatory note in a bill — and I see Mr. Speaker is agreeing. Also,

the bill does go into the area of exemptions, so it is a little broader

than what we've sometimes seen in this House, where we have merely

changed a percentage from 6 to 7 percent.

MR. SPEAKER: Thank you, hon. member. The Chair was trying to

make it more of a guide than anything else, to prevent the wide scope

of debate.

HON. MR. PHILLIPS: Mr. Speaker, I wish to speak against the

amendment put forth by Her Majesty's Loyal Opposition, and I wish in my

short remarks to introduce some logic into the debate as to why this

particular amendment should not go forward.

First of all, if you look at where we would be six months from now,

you would readily understand that it would be the end of March, when a

new budget would probably be introduced into this Legislature. But the

opposition is bringing this six-month hoist to the bill because they

don't really want to study the ramifications of sales tax; they wish to

use this amendment as a delaying tactic. The reason the six-month hoist

won't work is because we're already collecting the tax and we will be

collecting the tax for the next six months. If Her Majesty's Loyal

Opposition were really interested in taxation in this province, they

would be urging that the Minister of Finance, when he prepares his next

budget — which will be about six months into the future — give

reconsideration to this tax. But for all practical purposes they know,

as do you and every level-headed member of this Legislature — of which

there aren't too many sitting in the opposition — that it will be of no

use whatsoever to suspend second reading of this bill to increase the

sales tax. So it is being used as a delaying tactic and an opportunity

for some of the leaders over there to make additional speeches.

[12:45]

But I want to tell you, Mr. Speaker, that I'm speaking against this particular

amendment for another reason. You know, the general public out there understand

what is going on in this Legislature, and the opposition evidently don't

understand what the public is thinking. The public understand what the opposition

are doing in delaying the business of government. They understand how many tax

dollars are being spent in this delay. It's too bad that there is no leadership

on the opposite side of the House; that's why I have to speak against this

motion, because....

MR. SPEAKER: Order, please. The member, who has sat — not

necessarily quietly — in the House for the last little while has

noticed that the Chair has been very insistent that the specifics of

the hoist be covered. The motives for the opposition's introducing the

amendment are not part of the debate, nor the imagined motives, nor,

hon. members, leadership or other attempts. Hon. member, the Chair has

tried to constrain the debate totally to the hoist motion, and for the

minister now to introduce areas that don't fall within it would be most

unfair and will suffer the same admonishment from the Chair. On that,

hon. member, I would ask that the hoist motion be referred to

specifically.

HON. MR. PHILLIPS: Well, I want to tell you, Mr. Speaker,

that this speaker appreciates your drawing that to my attention. That

is why I have been so logical in my debate thus far, in saying why we

should not....

MR. D'ARCY: Mr. Speaker, with the greatest of respect, I would ask that you not ask the member to discontinue his speech.

MR. SPEAKER: Hon. members, the rules of the House must be adhered to by each and every member.

HON. MR. PHILLIPS: Mr. Speaker, I said I would be brief and

logical. Once again I want to say that this hoist does nothing, which

is why I'm speaking against it. Six months from now when the hoist is

raised you cannot have people coming back, if you decided to change the

tax, and have them applying to get their tax back. What would you do?

Have line-ups at the liquor store inviting people: "If you paid the

tax, come and get your tax back"? There is absolutely no logic to this

amendment. Would you say to the car-buyer who sells his car: "Come and

get your car back"? What would you do with the person who has eaten the

meal? Maybe he didn't get a receipt, and he certainly can't produce the

meal. I mean, it's totally illogical and irrelevant to have such a dumb

amendment before the House. That's why I'm speaking against it. I don't

know how, if you decided to change the tax, you would refund the tax.

So as I say, I'm speaking against this because if the opposition had

any logic whatsoever, they would be imploring the Minister of Finance —

and I know he will do that — to take a look at the sales tax and when

he brings in his new budget to maybe reduce it and take the interim

period....But this amendment is completely illogical, irrelevant, and nothing but a delaying tactic; and therefore, no.

MR. HANSON: The Minister of Industry and Small Business was

essentially, whether he understood it or not, speaking in support of

the hoist, because he was saying that when a government embarks upon

the wrong course it's better to follow through and pursue the wrong

course than change direction or have a second look. What we are saying

in this motion is that the government should set this measure aside for

six months to give us a chance to establish a committee of this House

to travel throughout the province and carry out studies.

For example, in this bill they are increasing the tax on

fuel-efficient cars from 2 percent to 7 percent, at a time when the

Canadian auto industry has undergone the wrenching experience of

retooling to try to compete with foreign markets in fuel-efficient

small cars. This committee could examine the impact not only in our own

British Columbia economy but for the economy of the country, because

there are many theoreticians who argue that the auto industry is — no

pun intended — the engine of the Canadian economy; that it actually

leads the forest industry. House-building in the United States is

clearly a major force, but there are many who argue that the auto

industry in central Canada is the driving engine which generates the

capital in the Canadian economy. I see the Provincial Secretary shaking

his head. I'm arguing, Mr. Speaker, that to increase by that major

percentage — from 2 percent to 7 percent — the tax on fuel-efficient

automobiles, which is now the Canadian industry's mode, impairs not

only British Columbia but all of the Canadian economy. It puts an

inhibiting factor on it. The number of dollars that work their way

through the British Columbia

[ Page 2364 ]

economy through the auto industry alone — through sales, through

repairs, through servicing, through advertising, through dealerships

and so on — is a major force in our economy. To slap a 7 percent tax

that was formerly 2 percent onto that car is an inhibiting factor. What

it does is encourage Canadians who want to purchase an automobile to

take second looks at foreign imports, when that 5 percent reduction in

tax was a built-in incentive to buy a Canadian product.

We often hear from that side of the House references to buying

Canadian technology — buying the ALRT, and so on. I'm saying that a

committee of this Legislature travelling the province and examining

questions such as the impact on Canadian regional economies of British

Columbia taxation would serve our overall economy very well.

So that is one example: to increase from 2 to 7 percent the taxation for automobiles that get 33 miles per gallon....

HON. MR. WATERLAND: On a point of order, Mr. Speaker, I'm

afraid the member is not addressing the amendment motion on the floor

of the House. He is on some wild flight of fancy regarding some

perceived disadvantage the Canadian auto industry may have or may not

have because of a tax change. I would ask that you direct him to

address the specifics of the motion before the House.

MR. SPEAKER: Thank you, hon. member. Again, hon. members, the

Chair must advise that there is an opportunity at hand for those

specifics to be addressed — in fact, two or three, or even possibly

four opportunities. But at this time, hon. member, we are specifically

on the hoist, and I would ask the member to refer his remarks

specifically to that point.

Mr. Hanson moved adjournment of the debate.

Motion approved.

Hon. Mr. Schroeder moved adjournment of the House.

Motion approved.

The House adjourned at 12:55 p.m.

[ Return to Legislative Assembly Home Page ]

Copyright © 1984,2001: Hansard Services, Victoria, B.C., Canada