2004 Legislative Session: 5th Session, 37th 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, MARCH 23, 2004

Afternoon Sitting

Volume 22, Number 6

CONTENTS

Routine Proceedings

Page

Introductions by Members

Introduction and First Reading

of Bills

Supply Act (No. 1), 2004 (Bill 21)

Hon. G.

Collins

Miscellaneous Statutes Amendment Act,

2004 (Bill 18)

Hon. G.

Plant

Water, Land and Air Protection

Statutes Amendment Act, 2004 (Bill 16)

Hon. B.

Barisoff

Railway Safety Act (Bill 20)

Hon. M.

Coell

Statements (Standing Order 25 B )

Cowboy Hall of Fame

J. Wilson

Anniversary of Williams Lake

W. Cobb

Volunteer rate in B.C.

R. Nijjar

Oral Questions

Audit involving Doug Walls

J. MacPhail

Hon. R.

Coleman

Hon. C.

Clark

Call for public inquiry into case of

Frank Paul

J. Kwan

Hon. G.

Plant

Hon. R.

Coleman

Audit services by

PricewaterhouseCoopers

M. Hunter

Hon. G.

Collins

Financial implications of government

caucus suspensions

Brenzinger

Hon. G.

Collins

Status of Bulkley Valley District

Hospital

D. MacKay

Hon. C.

Hansen

Petitions

K. Krueger

Committee of Supply

Supplementary Estimates (No. 4):

Ministry of Community, Aboriginal and Women's Services

J. MacPhail

Hon. G.

Collins

Hon. M.

Coell

Introduction and First Reading

of Bills

Supply Act, 2003-2004 (Supplementary

Estimates No. 4) (Bill 22)

Hon. G.

Collins

Second Reading of Bills

Supply Act, 2003-2004 (Supplementary

Estimates No. 4) (Bill 22)

Hon. G.

Collins

Committee of the Whole House

Supply Act, 2003-2004 (Supplementary

Estimates No. 4) (Bill 22)

Report and Third Reading of

Bills

Supply Act, 2003-2004 (Supplementary

Estimates No. 4) (Bill 22)

Introduction and First Reading

of Bills

Ministerial Accountability Bases,

2003-2004, Amendment Act, 2004 (Bill 23)

Hon. G.

Collins

Second Reading of Bills

Budget Measures Implementation Act,

2004 (Bill 5)

Hon. G.

Collins

Taxation Statutes Amendment Act, 2004

(Bill 6)

Hon. G.

Collins

J. MacPhail

Social Service Tax Amendment Act,

2004 (Bill 7)

Hon. G.

Collins

Ports Property Tax Act (Bill 8)

Hon. G.

Collins

Halsey-Brandt

Environmental Management Amendment

Act, 2004 (Bill 13)

Hon. B.

Barisoff

J. MacPhail

Proceedings in the Douglas Fir Room

Committee of Supply

Estimates: Ministry of Agriculture,

Food and Fisheries (continued)

J. Kwan

Hon. J. van

Dongen

V. Roddick

[ Page 9575 ]

TUESDAY, MARCH 23, 2004

The House

met at 2:04 p.m.

Introductions by Members

Hon. C.

Clark: Today we are joined in the gallery by five social workers who are

helping us celebrate the beginning of Social Work Week this week. These social

workers are representatives of the 4,500 people we have working on the front

lines in British Columbia doing social work every day, many times unrecognized

or underrecognized for the tremendous work they do in contributing to building

healthy families and making healthy homes for kids across British Columbia.

[1405]

Today we're

joined by Raylene Bryce from Prince George, in my ministry's north region; Mary

Dowdell from North Vancouver, from the Vancouver coastal region; Nancie Hanson

of Victoria, from the Vancouver Island region; Craig Hunter of Oliver, from the

interior region; and Cathy Kwantes from Langley, from the Fraser region. We had

a terrific lunch today. The Premier joined us and joins me today and, I know,

all members of this assembly in thanking these five social workers for the

incredible work they do every single day on behalf of all of us in British

Columbia.

Stewart: It's my pleasure to introduce a couple of people who have been in

the legislative buildings today to meet with some ministries. These folks are

involved in risk management including, among other things, earthquake

preparedness. It is my pleasure to introduce operations manager for ER Plus,

Scott Blessin, and general manager Jean-Francois Landry. Would the House please

make them welcome.

Weisbeck: In the gallery this afternoon we have a former Speaker from

Saskatchewan, John Brockelbank. Mr. Brockelbank is visiting Victoria today with

his wife, Ina. They are accompanied by Richard and Shirley Weigel and Mel and

Wendy Person. Would members please make them welcome.

Jarvis: I have residents of my riding, about 70, in the audience today. They

are mainly made up of 55 grades 4 and 5 students from St. Pius church school in

North Vancouver, in the Seymour area. Accompanying them are their teachers, Ms.

Francis Macapagal and Mr. Karl Rydlo. Also accompanying them are parents Rita

Rella, Kaz and Alev Giannubilo, Kathy Campbell, Lilia O'keefe, Sandy Lee, Carol

Lindsey and Khris Bjornson, and then there's my son and daughter-in-law Dan and

Kathy Jarvis. Would you please make them welcome.

MacPhail: I had lunch with a wonderful young woman today, a student at UVic,

the daughter of good friends of mine. Megan Stewart is joining us to observe

question period. She is the daughter of Cindy and Charles Stewart. Would the

House please make her welcome.

B. Kerr:

I should just say that my little granddaughter has been accepted into St. Pius

starting kindergarten next September. Looking forward to that.

The

beautiful Cowichan Valley is a regional district, and it's made up of a number

of electoral areas. These electoral directors work very hard in their

communities to make it a better place for them all to live. Today we have the

electoral area B director for beautiful Shawnigan Lake here visiting the

gallery. I'd like the House to make Mr. Rick Spencer feel very welcome.

J. Bray:

I would ask that the House congratulate a very special group of girls from my

constituency. The First Emily Carr Trex Unit of the Girl Guides of Canada won

the Scouts Canada — boy scouts — second annual Klondike Derby. They were the

only girls group that was in the competition and entered into the boy scout

event, which tested outdoor skills such as first aid, orienteering, shelter

building and knot tying. The group was also headed up by two leaders, Leigh-Anne

McIsaac and somebody well known to this chamber, a former member of the press

gallery, Ms. Barb McLintock. Would the House please send a round of

congratulations to these girls and their leaders.

G. Hogg:

Thomas Jefferson once said that given the choice between democracy and

newspapers, democracy without newspapers or newspapers without democracy, he'd

choose the latter. While some would say that he was just plain wrong and others

might suggest that his thoughts are no longer relevant today, others — like a

couple in the House today — would, I'm sure, support at least his premise.

Would the House please join me in welcoming a newspaper couple, one from the Peace

Arch News and one from the Surrey Now . Please welcome Anita and Ted

Colley.

[1410]

Introduction and

First Reading of Bills

SUPPLY ACT (No. 1), 2004

Hon. G.

Collins presented a message from Her Honour the Lieutenant-Governor: a bill

intituled Supply Act (No. 1), 2004.

Hon. G.

Collins: I move that the bill be introduced and read a first time now.

Motion

approved.

Hon. G.

Collins: This interim supply bill is introduced to provide supply for the

continuation of government programs until the government's estimates for 2004-05

have been debated and voted upon in this assembly. The bill will provide interim

supply for government operating expenses for the initial two months

[ Page 9576 ]

of the 2004-05 fiscal year. This will allow time to debate and pass the

estimates. The interim supply is required because existing voted appropriations

will expire on March 31, 2004.

This bill,

as in past practices, will also provide interim supply for other financing

requirements. The bill seeks supply for 50 percent of the year's financing

transactions, requirements for capital asset expenditures and loans and

investments, and 100 percent of the year's financing transaction requirements

for revenues collected for and transferred to other entities. This will allow

time to debate these requirements. This interim supply is also required because

existing voted appropriations will expire on March 31, 2004.

I move that

the bill be placed on the orders of the day for consideration for second reading

at the next sitting of the House after today.

Bill 21

introduced, read a first time and ordered to be placed on orders of the day for

second reading at the next sitting of the House after today.

MISCELLANEOUS STATUTES

AMENDMENT ACT, 2004

Hon. G.

Plant presented a message from Her Honour the Lieutenant-Governor: a bill

intituled Miscellaneous Statutes Amendment Act, 2004.

Hon. G.

Plant: I move that the bill be introduced and read a first time now.

Motion

approved.

Hon. G.

Plant: I am pleased to introduce Bill 18, which amends the following

statutes: Business Corporations Act; College and Institute Act; Community Care

and Assisted Living Act; Community Financial Services Act; Corporation Capital

Tax Act; Crown Proceeding Act; Finance and Corporate Relations Statutes

Amendment Act; Financial Information Act; Freedom of Information and Protection

of Privacy Act; Health Professions Amendment Act, 2003; Hydro and Power

Authority Act; the

Interpretation Act; the Jury Act; Land Title Act;

Miscellaneous Statutes Amendment Act (No. 2), 1999; the Private Managed Forest

Land Act; Royal Roads University Act; Social Workers Act; Tobacco Sales Act;

Transmission Corporation Act; Trinity Western University Act; University Act and

Workers Compensation Act.

This bill

also validates a bylaw that was enacted and ratified by the Association of

Professional Engineers and Geoscientists of British Columbia. I will elaborate

on the nature of these amendments during the second reading of this bill.

I move that

the bill be placed on the orders of the day for second reading at the next

sitting of the House after today.

Bill 18

introduced, read a first time and ordered to be placed on orders of the day for

second reading at the next sitting of the House after today.

WATER, LAND AND AIR PROTECTION

STATUTES AMENDMENT ACT, 2004

Hon B.

Barisoff presented a message from Her Honour the Lieutenant-Governor: a bill

intituled Water, Land and Air Protection Statutes Amendment Act, 2004.

Hon. B.

Barisoff: I move the bill be introduced and read a first time now.

Motion

approved.

Hon. B.

Barisoff: This bill contains amendments to a number of provisions relating

to compliance and enforcement in five statutes administered by the Minister of

Water, Land and Air Protection. These statutes are the Ecological Reserve Act,

Environmental Management Act, Integrated Pest Management Act, Park Act and

Wildlife Act.

Over the

last three years the ministry has developed a broad program of legislative

changes and has implemented a new environmental protection framework. Today's

amendments clarify and harmonize a number of the authorities that will improve

the administration of that framework. The changes will standardize limitation

periods for prosecuting offences under these statutes, clarify the appointment

process and enforcement powers of conservation officers and generally improve

the wording of a number of provisions in order to provide greater clarity and

certainty in the legislation.

[1415]

I move the

bill be placed on the orders of the day and read at the next sitting of the

House after today.

Mr.

Speaker: The motion is that the bill be put on the orders of the day for

second reading at the next sitting after today.

Bill 16

introduced, read a first time and ordered to be placed on orders of the day for

second reading at the next sitting of the House after today.

RAILWAY SAFETY ACT

Hon. M.

Coell presented a message from Her Honour the Lieutenant-Governor: a bill

intituled Railway Safety Act.

Hon. M.

Coell: I move Bill 20 be read a first time now.

Motion

approved.

[ Page 9577 ]

Hon. M.

Coell: I am pleased to present the Railway Safety Act — legislation which

reflects the province's current roles and responsibilities regarding railways.

Transportation

and enhanced public safety are both vital to the B.C. economy and quality of

life. The Railway Safety Act addresses both and reflects our commitment to

economic revitalization through the reduction of red tape. The new act will

result in the repeal of over 10,000 regulations and harmonize provincial

legislation with the federal railway safety jurisdiction.

While

enhancing rail safety in British Columbia, the new act will also provide for

smarter regulation with rail companies and their employees together establishing

a quality management system. The proposed act also provides for the delegation

of railway safety administration to outside agencies such as the B.C. Safety

Authority and Transport Canada.

I move that

the Railway Safety Act be placed on the orders of the day for second reading at

the next sitting of the House after today.

Bill 20

introduced, read a first time and ordered to be placed on orders of the day for

second reading at the next sitting of the House after today.

Statements

(Standing Order 25b)

COWBOY HALL OF FAME

Wilson: The B.C. Cowboy Heritage Society founded the British Columbia Cowboy

Hall of Fame in 1998. The Hall of Fame is located at the Museum of the Cariboo

Chilcotin in Williams Lake. That museum is the only museum in British Columbia

that focuses on ranching and rodeo. Members of the Hall of Fame are honoured at

the museum with photographs, biographies and memorabilia.

This year's

inductees are credits to their communities. Peggy and Laverne McLeod of Westwold

were introduced in the category of ranching pioneers. Laverne and Peggy have

been ranching together near Kamloops since the fifties and operate their ranch

with their son, Scott.

In the

category of horsemen, the British Columbia Cowboy Heritage Society is proud to

introduce Frederick James Alexander Long, known as Fred to his friends. Fred

Long had a lifelong passion for horses, cattle ranching and western lifestyle.

He was born in Belfast on December 28, 1938. At the age of 21 he immigrated to

Canada, passed through Saskatchewan, Alberta and settled in British Columbia. He

bought his first cattle in Vanderhoof. He hired on at the Alkali Lake Ranch to

break horses. He chased wild horses south of Alexis Creek, and he caught nine by

roping them one at a time. From '65 to '69 he worked at the quarter-horse barn

at Douglas Lake. Then he set up a training stable at Barriere. In '74 Fred went

back to the old country and joined the King's Troops of the Royal Horse

Artillery, but he missed British Columbia so he returned. He started a stud farm

at Barnhartvale, and he trained racehorses. Then he took on a job as deputy

brand inspector.

In 1980 he

moved to Williams Lake as a full-time brand inspector. That's when I met Fred.

Fred passed away on October 24, 2003, and today he is up there on the big spread

— no doubt breaking out a string of horses for some of us when we arrive.

ANNIVERSARY OF WILLIAMS LAKE

W. Cobb:

This must be Cariboo day today.

On March

15, along with Her Honour the Lieutenant-Governor, I had the privilege of

participating in the civic ceremony celebrating the date of incorporation of the

city of Williams Lake. We had tea at that famous cowboy museum in Williams Lake.

[1420]

This date

not only marks the seventy-fifth anniversary of the incorporation of the city of

Williams Lake, but also this year the city has been named the forest capital of

B.C. for 2004. The spinners and weavers guild presented a newly designed

Williams Lake tartan and are having it registered. The Cariboo piecemakers quilt

club presented an anniversary quilt in the shape of a cowboy boot.

As a city

we are planting 75 trees to coincide with the 75 years and the 75 different

events we have planned for this year. Some of these events include, later this

month, a heritage gala event complete with an authentic chuckwagon-style dinner,

followed with a multimedia performance by Jack Jackson. On June 13 we'll host

the second annual Rick Hansen Wheels in Motion event with our hometown hero Rick

Hansen in attendance. On the July long weekend the famous Williams Lake

Stampede, of course, will happen once again. That's an annual event. On July 17

and 18 there will be Aboriginal Days celebrating our native heritage. The

Canadian Forces Snowbirds will be performing on July 31. An old-time fiddlers

and bluegrass festival with participants from across Canada and a pioneer dinner

will happen August 1.

The long

weekend in August will be the official homecoming weekend, with many families

and school reunions planned at that time. September will bring the Williams Lake

Harvest Fair as well as a Great Canadian Lumberjack Challenge with participants

from as far away as Australia. I understand our Minister of Forests is being

invited to participate in the axe-throwing contest, so we'll see what his skills

are like. Last but not least, in September we will host the Cariboo fly-fishing

tournament and trade show.

There are

many fun-filled events planned over the summer, and I hope to see many of you at

one or more of the events so you can enjoy the real Cariboo hospitality.

VOLUNTEER RATE IN B.C.

Nijjar: All my colleagues and I are proud to be British Columbians. I'm sure

it would surprise many in B.C. to know that we have the third-lowest volunteer

[ Page 9578 ]

participation rate in Canada. B.C. has the lowest donor rate in the country.

This is nothing of which to be proud.

I reckon

this is as a result of B.C.'s reputed state of dependence on government to solve

all of society's problems. We have seen this dependence on a sense of

entitlement decay our social fibre, reinforced by a former government that

believed British Columbians should rely more and more on Victoria as part of

their "we know best for you" governance style.

Everything

this current government has tried to do over the past three years is to build

community capacity and community decision-making. We have taken decision-making

away from Victoria and put it where it belongs — in local hands — from

changes to the powers of the health boards to changes in education, with more

powers to school boards, parents and PACs, to changes in community-based service

delivery models in the Ministry of Children and Family Development. The overall

message is that all of us collectively must work together to make our

communities healthier and that communities should be supported to find the

solutions that work for them.

For this

reason, I held an annual chili and charity and Variety Club Bowlathon event in

my riding of Vancouver-Kingsway. The chili and charity raises dozens of boxes of

donated food for local families in need while serving free chili to those who

bring canned or non-perishable items. The Variety Club Bowlathon, in conjunction

with my East Vancouver colleagues, raises money through pledges for the children

of Variety Club. This is my way of setting an example for my community, taking

ownership of our own issues and giving something back of ourselves, leading the

way by showing that our communities are our own responsibilities.

As this

province strives to be number one again, I hope British Columbians will also

make it their goal to have the highest rates of volunteerism and donations in

Canada.

Oral Questions

AUDIT INVOLVING DOUG WALLS

MacPhail: Yesterday the Minister of Children and Family Development refused

to say whether criminal charges would flow from the Doug Walls investigation.

The police did not deny that they were involved. Can the Solicitor General

please tell the House whether criminal charges may flow from the Doug Walls

affair and if the police have had any involvement in the case?

Hon. R.

Coleman: I am not aware of any information with regard to an ongoing

investigation in this regard.

[1425]

Mr.

Speaker: The Leader of the Opposition has a supplementary question.

MacPhail: Well, we do know that there's an investigation going into Mr.

Walls. It's an external audit investigation. We're talking about an

investigation involving a top Liberal insider — a relative of the Premier —

and a $400,000 loan that was magically written off, violating the Financial

Administration Act. There are still many, many unanswered questions.

British

Columbians deserve to know that every effort is being made to prosecute those

involved in the misappropriation of public dollars. They don't want another B.C.

Rail–style internal government whitewash. If there is the potential for

criminal charges, can the Solicitor General then tell us if a special prosecutor

has been appointed to get to the bottom of the scandal involving the Premier's

relative? It's a very simple question. Hundreds of thousands of dollars

apparently have been given away without appropriate oversight.

Hon. C.

Clark: There are many unanswered questions that need to be answered. That's

why there's an audit. That's why our government acted very quickly to make sure

that an audit was done and initiated as fast as possible. Like every other

British Columbian, I am looking forward to the results of those audits coming

forward as soon as humanly possible, because as the member said, there are many

questions that need to be answered. We are looking forward to having those

answers.

Mr.

Speaker: The Leader of the Opposition has a further supplementary.

MacPhail: Well, Mr. Speaker, unlike every other British Columbian, that

minister will actually see the full report. No other British Columbian beyond

this most secret cabinet will see the full report.

Yesterday

the Minister of Children and Family Development refused to say whether there

were criminal charges. Today she still won't say that. It's another typical

answer. The police raid of the Finance minister's office — "nothing to do

with us," says the government. The B.C. Rail deal is the subject of a

criminal investigation. "Don't worry; the fairness report takes care of

everything." Now we have a relative of the Premier getting a huge

government loan write-off — no scrutiny — and the B.C. Liberals want British

Columbians to believe that a company with Liberal ties will make the problem go

away.

To the

Premier: will you now reverse your decision that you're going to keep the audit

secret? Will you now commit to releasing all of the audit, from beginning to

end?

Hon. C.

Clark: There were dozens of audits of government activities that happened

under the NDP, and they never released so much as a conclusion of those audits.

Not only has this government moved quickly to make sure that this audit happens,

to make sure that the questions…

Interjections.

[ Page 9579 ]

Mr.

Speaker: Order, hon. members.

Hon. C.

Clark: …that have been raised are answered….

Interjections.

Mr.

Speaker: Order, please. Order, please.

Interjections.

[Mr.

Speaker rose.]

Mr.

Speaker: Order! Hon. members, we will have order during question period, or

we will terminate question period.

[Mr.

Speaker resumed his seat.]

Mr.

Speaker: Please continue.

Hon. C.

Clark: Not only has our government moved quickly to make sure that this

audit happens, we've also moved to make sure that the audit is looking at the

full scope of the details. We will be releasing the conclusions of the audit. We

will be fast-tracking an FOI release of as much information as we can possibly

make public. I think the fact that this audit has been initiated and was

initiated as quickly as it was is a credit to the fact that our government wants

to make sure that as much information about as many questions that have been

raised as possible is answered as quickly as possible.

CALL FOR PUBLIC INQUIRY INTO

CASE OF FRANK PAUL

J. Kwan:

So much for openness and accountability. The minister just said that she would

not release the full audit. Shame on the government on that.

[1430]

On December

20, 2001, the Solicitor General rejected a request from the independent police

complaint commissioner to hold a coroner's inquest into the death of Frank Paul.

Why? Because he was worried that it might bring up charges of racial

discrimination. God forbid that we discuss racial discrimination in the case of

an aboriginal man left to die on the streets of Vancouver by the Vancouver

police.

At the time

it was the Attorney General, not the Solicitor General, who had the power to act

on the police complaint commissioner's recommendation. But the Solicitor General

blocked the recommendation, saying that he was concerned that the issues

"of racial discrimination are likely to become the central features."

Did the Attorney General agree with his colleague's rationale for blocking the

coroner's request?

Hon. G.

Plant: The Solicitor General is the minister responsible for the Police Act

and for any of the provisions under that act that are of interest to the member.

Mr.

Speaker: The member for Vancouver–Mount Pleasant has a supplementary

question.

J. Kwan:

This is a serious matter. A man was left to die in the streets of Vancouver, and

the Attorney General was in charge at the time, when the recommendation was made

to him. He passed the buck then, and he's passing the buck now.

Since the

Solicitor General denied this request, a new independent police complaint

commissioner has now asked that a public inquiry be held based on new evidence

and new witnesses. The new commissioner points out that the case of Frank Paul

is not an isolated incident, citing the Stonechild inquiry in Saskatoon.

"Not

my problems anymore," says the Attorney General. "I handed over

responsibilities for this to the Solicitor General two weeks ago in cabinet

through an OIC."

MacPhail: Secret.

J. Kwan:

Secretly — with no fanfare, no public acknowledgment that he has passed the

buck. Instead of passing the buck…

Mr.

Speaker: Please, order.

J. Kwan:

…on the death of the aboriginal man….

Mr.

Speaker: Order, please, hon. member. Time for the question.

J. Kwan:

Here's the question: instead of passing the buck on the death of an aboriginal

man who was dragged from his jail cell and left to die alone on the streets in

Vancouver, will the Solicitor General now call for a full public inquiry into

the case so that we can face up to legitimate questions about racial

discrimination and possible wrongdoing by the police — any possible wrongdoing

by the police — so that the man who died, Frank Paul, is not in vain?

Hon. R.

Coleman: Frank Paul died in 1998. The member was in government in 1999, 2000

and 2001. Her previous government saw fit to not do any more than take the

advice of a coroner's inquiry. There was a coroner's inquiry done at the time

that this took place. There was discipline given to the police. Two previous

police complaint commissioners made it very clear that they did not request and

did not ask for a public inquiry.

In addition

to that, the chief coroner has reviewed the file from the police complaint

commissioner and has come to the opinion that the coroner's inquiry acted

correctly at the time of the incident. I think the member should recognize that

what we'd like to do — and I've already started this process and will continue

it…. We need to find long-term solutions for people who would be found in

situations like Frank Paul in her constituency and others. That's what we need

to do from this. I have not seen anything as yet that would actually lead

[ Page 9580 ]

me to see that in the public interest, a public inquiry would serve any

purpose.

AUDIT SERVICES BY

PRICEWATERHOUSECOOPERS

Hunter: Yesterday and again today the Leader of the Opposition has called

into question the integrity of a public audit into the affairs of the Ministry

of Children and Family Development. It turns out that rather than being a

company with Liberal ties, PricewaterhouseCoopers and its predecessor companies

actually got contracts from the last government of British Columbia to the tune

of over $10 million between 1992 and 2001.

My question

is to the Minister of Finance. In the circumstances, how can this House be

comfortable that PricewaterhouseCoopers is a company capable of doing this

audit?

Hon. G.

Collins: I think the reputation of PricewaterhouseCoopers is well known

internationally as well as in British Columbia. I suspect that's why the

previous government, as well, used them extensively when they were in office.

[1435]

The point

that I found interesting in doing some additional research on this was the issue

that was raised by the member for Vancouver-Hastings when she talked about the

political contributions that have been made by PricewaterhouseCoopers to the

B.C. Liberal Party. What she failed to mention was that in 1998, 1999 and 2000

they donated $12,150 to the New Democratic Party.

But, Mr.

Speaker…

Interjections.

Mr.

Speaker: Order, please. Order, please. Order, hon. members.

Hon. G.

Collins: …the best is yet to come, though.

Interjections.

Mr.

Speaker: Order, please. Order, please.

Interjections.

Mr.

Speaker: Order, please. The Minister of Finance has the floor.

Hon. G.

Collins: I'm glad to let her go a little longer if she wants, because the

point I found very interesting with this was that in the year 2000 apparently

PricewaterhouseCoopers donated $3,700 to the B.C. Liberal Party but donated

$5,000 to the leadership campaign of one Joy MacPhail.

Interjections.

Mr.

Speaker: Order, please.

Interjections.

Mr.

Speaker: Order, please.

Interjections.

Mr.

Speaker: Order, please, hon. members. The member for Surrey-Whalley has the

floor.

FINANCIAL IMPLICATIONS OF

GOVERNMENT CAUCUS SUSPENSIONS

Brenzinger: Suspensions from caucus have financial implications which are

open to the scrutiny of the comptroller and the general public.

Interjection.

Mr.

Speaker: Order, please, so I may hear the question and other members may

hear it. Will the Leader of the Opposition please come to order.

Brenzinger: My question is to the Premier: will this government come clean

on the cost to taxpayers for all suspensions imposed on members of this

government, including myself, by the caucus Whip?

Hon. G.

Collins: Once again, that question is out of order. As well, there are no

financial implications.

Mr.

Speaker: The Chair has ruled on this, and matters pertaining to how caucus

is run are out of order. Financial matters are in order.

STATUS OF

BULKLEY VALLEY DISTRICT HOSPITAL

MacKay: My question is to the Minister of Health Services. A couple of weeks

ago in Smithers about 800 people showed up for a meeting having to do with

health care and, more particularly, the Bulkley Valley District Hospital. I was

quite surprised at the numbers, so I made some phone calls to find out why so

many people turned out to this meeting. Some of the people I spoke to said

they'd been phoned five times to say that the hospital was closing. Is it any

wonder we have 800 people show up to a meeting?

It made me

think back to what has happened in this House in the past also. I've listened to

the Leader of the Opposition and her partner here talk about the health care

system. I've heard her talk about what's going to happen to people on welfare,

what's going to happen to people with disabilities and all those people that

were going to be taken off the rolls.

Again to

the Health minister: in spite of all those….

Interjection.

Mr.

Speaker: Order, please. Order. Order, hon. member, so we may hear the

question.

Would you

please start over.

[ Page 9581 ]

MacKay: A couple of weeks ago there was a large meeting in Smithers attended

by about 800 people. Eight hundred people showed up because they had been

phoned.

Interjection.

Mr.

Speaker: Order, please.

MacKay: Some of the people had been phoned several times to say that the

hospital in Smithers was closing and that they'd better come to the meeting. If

you stop and think about what has happened in this House lately — with the

fearmongering by the NDP that thousands of people were going to be cut off

welfare, thousands of people would be cut off disability allowances by our

government, when in fact none of that was true… It made me stop to realize

where those phone calls were coming from. I suspect they were coming from NDP

supporters in my riding.

Interjections.

Mr.

Speaker: Order, please.

[1440]

MacKay: My question to the Health minister is: is the Bulkley Valley

District Hospital in Smithers closing?

Hon. C.

Hansen: I think the member brings up an example of the kind of fearmongering

that is going on in communities throughout British Columbia where there are

individuals, for whatever purposes, scaring seniors, scaring individuals that

somehow their health care services are being compromised.

I can

assure the member that not only is the Smithers hospital going to continue to

serve the residents of…

Interjection.

Mr.

Speaker: Order, please.

Hon. C.

Hansen: …the Bulkley Valley, but in addition, in fact, they're working

with the medical staff to recruit new visiting specialists to that community.

They are actually looking at expanding some new equipment and X-ray services in

that hospital.

I think the

member can go back and reassure his constituents that the hospital in Smithers

is going to continue to serve the residents of that area and that, in fact, the

services will be strengthened in the months and years to come.

[End

of question period.]

Interjections.

Mr.

Speaker: Order, please. Does the Leader of the Opposition seek the floor?

MacPhail: Am I alone in this, Mr. Speaker?

Mr.

Speaker: It appears so.

Petitions

Krueger: I rise to table a petition signed by several hundred of my

constituents requesting upgrades to the Trans-Canada Highway between the

communities of Pritchard and Chase because of a number of very unfortunate motor

vehicle collisions.

Orders of the Day

Hon. G.

Collins: In Committee A, I call Committee of Supply. For the information of

members, we'll be beginning with the estimates for the Ministry of Agriculture.

In this House I'll be introducing supplementary supply.

Supplementary Estimates

Hon. G.

Collins presented a message from Her Honour the Lieutenant-Governor:

supplementary estimates (No. 4) for the fiscal year ending March 31, 2004.

Hon.

G. Collins moved that the said message and the estimates accompanying the same

be referred to Committee of Supply.

[1445]

Motion

approved.

Committee of Supply

The House

in Committee of Supply B; J. Weisbeck in the chair.

The

committee met at 2:46 p.m.

SUPPLEMENTARY ESTIMATES (No. 4):

MINISTRY OF COMMUNITY, ABORIGINAL

AND WOMEN'S SERVICES

On vote

16(S): ministry operations, $72,000,000.

MacPhail: Mr. Chair, could we have a 15-minute recess, please, while the

estimates are distributed and we have a chance to examine them?

The

Chair: We will take a 15-minute recess and reconvene at 3 o'clock.

The

committee recessed from 2:46 p.m. to 3:06 p.m.

[J.

Weisbeck in the chair.]

On vote

16(S) ( continued).

Hon.

G. Collins: We're now 20 minutes, I guess.

[ Page 9582 ]

I want to

speak for a moment, if I can, about supplementary estimate No. 4 before my

colleague moves the motion. This is a fourth supplementary estimate in the

fiscal year. There were a number of others earlier. The issue with regard to

this one is funding for the Olympics. It was an expenditure that was identified

in the budget of February 17 as a priority expenditure for government as we

reached the end of the fiscal year.

There are a

number of things that we're able to do with regard to the year-end funding based

on savings that have occurred primarily through reduction in debt service costs.

There is $72 million being requested in this supplementary estimate in order to

fund a portion of the venues going forward for the Olympics, since we

transferred to the Olympic authority, as well as fully fund the endowment that

will continue to maintain those facilities in the years post-Olympics.

It has been

a tough year fiscally, obviously, for government, but we are coming in, in fact,

under budget slightly. I'm pleased to note that today we received an outlook

change from Moody's Investors Service, one of the credit-rating agencies that

rates the government's borrowings. You'll recall that British Columbia's credit

rating was downgraded twice under the previous administration by two of the

credit rating agencies: DBRS, Dominion Bond Rating Services, and Standard and

Poor's, S&P. Moody's Investors Service only downgraded the province once

during the previous administration. As a result, we are generally acknowledged

to be a notch higher with Moody's than we are with the other two.

This

afternoon we received confirmation from Moody's that they've provided an outlook

change for Aa2 positive, which I think indicates…. Their press release goes

into detail about some of the improvements they've seen in the accountability

and fiscal management in British Columbia in the last couple of years. So that's

very positive for British Columbia.

What it

does is tend to provide opportunities and reductions in debt service costs and,

therefore, opportunities for government to do other things with those funds.

That's the case here where there is $72 million going to go into funding the

Olympics.

These are

expenditures that we obviously need to flow before 2010 so the facilities are up

and running. Government made a corporate decision this year to use these savings

from debt service costs to fund the Olympics in this fiscal year, and that is

what brings this supplemental estimate to the Legislature.

With those

introductory comments, I turn it over to my colleague the minister responsible

for community, aboriginal and women's services.

[1510]

The

Chair: The Leader of the Opposition, speaking to vote 16(S).

MacPhail: Is the Minister of Community, Aboriginal and Women's Services in

charge of the Olympic secretariat after April 1?

Hon. M.

Coell: No — until the new year.

MacPhail: And after that, it is who?

Hon. M.

Coell: Small Business and Economic Development.

MacPhail: I'd like to refer to…. I think it's page 112. There's a

summary,

the third-quarter

summary, of the forecast in the estimates for the fiscal year

ending…. No, I'm sorry, Mr. Chair. It is the '03-04 updated financial

forecast, the third quarterly report in the Budget and Fiscal Plan, 2004/05

– 2006/07 . It's at page 112, and then this estimate at page 11. I'd like

to compare the two, if I may, for an explanation.

In the

budget speech of the Minister of Finance on February 17, he predicted that there

would be a deficit of $1.7 billion and said: "That's $590 million better

than the target set in last year's budget." In fact, that is what the third

quarterly forecasted as well. Can the minister explain the changes in the

deficit as it's now listed in page 11 of this supplementary estimate?

Hon. G.

Collins: I'm anticipating staff coming into the chamber, so I'll just wait a

moment.

[1515-1525]

We are

still waiting for staff, but I think I can answer the question for the member.

I went back

and checked the supplementary estimates No. 3, which I'm glad to get a copy of

to the member as well. Suffice it to say that the estimate is a spending

estimate, so in estimate No. 3 there is no

schedule that looks like the one on

page 11, which actually has all the year-end revenue — that last column. There

is nothing like that in the other estimate.

I'm not

sure of the reason why; I'm glad to find that out for the member. For example,

on this

schedule that you see on page 11, there is no adjustment of other

revenues that have come into government, improved Crown corporation returns,

etc., which bring the deficit number down to what it was in the third quarterly

report forecast. What you see here, for example, if you look at the top part of

page 11, are all the revenues. They are unchanged, with the exception of the in

and the out with the supp estimate last spring for health care of $319 million.

[1530]

Normally,

the last column that you see on page 11 would not be part of this type of a

document. If you go back to supplementary estimates No. 3, which I'm glad to

send over to the member, she'll see that in fact that is the case as well. There

is no overall government in-and-out number across the board. I can send that

over to the member. I don't know why it's been attached on this schedule.

There's no need for it. But there are other revenues that have come in to

government. The one-time land sale wouldn't show up here. The increased proceeds

from Crown corporations and other tax revenue that have come in higher than

forecast don't appear on this as well. The forecast that you saw on the third

quarterly report stands. In fact, it's probably improved a little bit since the

third quarterly report.

[ Page 9583 ]

MacPhail: The reason why I asked the question about who is responsible for

the Olympic secretariat is because I'm trying to figure out what votes we're to

compare here.

Does the

minister want me to wait for staff?

Hon. G.

Collins: If the member wants to ask questions about the Olympics and how

that relates, I'm sure they can do that. She asked a question which baffled me,

actually. I didn't know why that number would be there. In trying to find the

answer, we've been trying to get somebody from Finance here.

Having

looked at the third quarterly report, that's my assumption based on it. This

schedule doesn't appear in the third supplemental estimate, so it's an

additional column that's been added for reasons I don't know of, and it doesn't

reflect the true state of revenue. I answered that question. If she has

questions specifically on the Olympics, the minister is available here to answer

that.

MacPhail: Well, I'm just going to ask my questions, and I'm fine to wait for

staff.

preparing to ask questions about the supplemental estimate, in the fiscal year

ending '04 I am looking at vote 16, which has broken out culture, heritage and

sport as a budget of $29.403 million, and the 2010 Winter Olympic-bid

secretariat and community initiatives, which has a budget of $40.53 million.

When one

looks at vote 18 of the budget for this upcoming year, this government has…. I

mean, it's moved the vote because it's under the responsibility of a new

minister — fair enough — but this government has now combined the B.C.

Olympic Games secretariat, sport and culture together for, as I see it, a total

budget of $30.503 million. Can I just have those figures confirmed?

[1535]

Hon. M.

Coell: I can confirm that for vote 16 those two numbers are correct. The

other number you asked — could you ask that one again for me, please?

MacPhail: It's vote 18. Sorry — 18 of the estimates for fiscal year ending

'05. What I have here under vote 18 is a combination. It says B.C. Olympic Games

secretariat, sport and culture. The gross is $30.504 million; the net is $30.503

million.

The reason

why I'm asking these questions is because, apparently, this supplementary

estimate is a prepayment on future expenditures.

Hon. M.

Coell: I think the problem is that when I look at vote 18 for this year's

expenses, that's a transfer to the Royal B.C. Museum. I wonder which book you

are using.

MacPhail: Why doesn't the minister just tell me what the vote is for the

B.C. Olympic Games secretariat, sport and culture for this year?

[1540]

Hon. M.

Coell: It's the Ministry of Small Business and Economic Development, vote

34. The B.C. Olympic Games secretariat and sport and culture is $30.503 million.

MacPhail: Could I please have the details of what the debt servicing costs

were estimated for the year '03-04 and what they're estimated for '04-05?

Apparently, this is from debt service savings.

Hon. G.

Collins: If the member goes back to the third quarterly report and looks at

the expenditures to date, she'll find what the forecast was at the time the

budget was put together, and then she'll find what they were at the time that

the third quarterly report was issued. If she gives me about 30 seconds, I'll be

able to pull it out of the document for her, but I think she has a copy in front

of her.

If she

looks on page 13 of the budget report from this year, from February, she'll see

"Management of Public Funds and Debt." She'll see that for '03-04

there was a forecast of it being — at budget time last year, so it was little

over a year ago — $926 million. The updated forecast at the time of the '03-04

budget — so a little over a month ago — was $755 million. I believe that's

improved a little bit since then as well.

MacPhail: Is the estimate for '04-05 remaining the same?

Hon. G.

Collins: The estimate for '04-05 was made a little over a month ago. It may

have changed a bit. I'm not aware. It might have gotten better. If it's improved

a bit for this year, there's a possibility that it may have improved a bit for

next year. We haven't even started next year's fiscal year, so we won't,

obviously, be adjusting that forecast until September at least, when the first

quarterly report comes out.

MacPhail: That's fair comment. I would assume it would get better, because

interest rates have fallen since that time.

The

minister says, from his budget speech…. I'll just read into the record what

was said in the throne speech and in the budget speech around this matter.

The throne

speech, $30 million for the 2010 Games LegaciesNow fund: "Bringing out the

best in sport, music and culture. As British Columbians prepare to host the

Olympics, your government will embrace the spirit of 2010 with new initiatives

to bring out the best in sports, music, arts, culture, literacy and

volunteerism. Over $30 million in one-time exceptional funding will be invested

to support those initiatives, largely under the auspices of LegaciesNow."

There is no

other comment in the throne speech for other spending around the Olympics. Could

the minister tell me where the $30 million in one-time exceptional funding is

being made? Is that part of what has now become $72 million?

[1545]

Hon. G.

Collins: It's part of the $72 million. That's correct.

[ Page 9584 ]

MacPhail: In the budget speech the minister says: "In addition, we're

using year-end savings from lower debt service costs to meet a significant part

of our previous financial commitments to the 2010 Olympics…. We're investing

$55 million to fully fund our share of the Olympic endowment, offsetting future

costs for operating venues. We're also investing $51 million as the first

instalment in our funding commitments for venue construction…."

I need help

here. The original commitment in the throne speech, which was just a week before

the budget speech, was for a $30 million advance payment. In the budget speech,

we then had a commitment of $55 million to fully fund the share of the Olympic

endowment, and then the government was saying that they're advancing a payment

on venue construction, which I assume is capital. I would appreciate a detailed

explanation of what happened between February 10 and February 17 and how that

changes the books.

Hon. G.

Collins: The $30 million for LegaciesNow is not…. I apologize. We thought

it was a different question. It is not part of this $72 million. LegaciesNow is

funded through other ministries. There's a commitment in year-end savings from

various ministries. That is being flowed into LegaciesNow.

That's

actually, I think, on page 118 of the budget document if the member wants to

look there. The funding for the Olympics, the $72 million…. I can perhaps give

the member a sense of what that is. In the 2003-04 estimates….

I will just

wait, if you want. I can come back and walk the member through page 118 if she

wants, but I can deal with the $72 million for a moment for the member. In the

original budget estimate in '03-04 there was a total of $37.2 million for a

range of items. There was $15 million for the athletes village. There was $21

million for Hastings Park, Hillcrest and others. That's for a total of $36

million for venues. A first nations….

Interjection.

Hon.

G. Collins: Yeah, Hastings Park, Hillcrest and others. There are venues.

There's a series of venues, so that's the one.

The total

for the athletes village and the other venues was $36 million. There was also $1

million for….

Interjection.

Hon.

G. Collins: Thirty-six. Sorry, I'm just trying to walk the member through.

Interjection.

Hon. G.

Collins: Okay. Sorry. I'll try and speak up.

What I'm

going to walk the member through first of all is what the breakout was in the

original '03-04 estimates that were tabled with the budget at the beginning of

last year — okay? Let's start from that. For venues, there was $15 million for

the athletes village. There was $21 million for Hastings Park, Hillcrest and

other venues, for a total of $36 million. That's for venues. There was also $1

million for the first nations legacy agreement and $200,000 for security, for a

total of $37.2 million. That's what was in the vote last year that already

passed the House.

The

supplemental estimate does the following. There is an additional $15 million for

the athletes village. There was $15 million, and we've added another $15

million. There is $55 million for the endowment fund and $2 million additional

for the first nations legacy agreement. The $15 million additional for the

athletes village, the $55 million for the endowment fund and the $2 million for

the first nations legacy agreement come to $72 million. That's what's in the

supplemental estimate that is before us now — okay?

[1550]

MacPhail: In the budget speech it said that these are prepayments. I don't

have the '03-04 to '06-07 budget and fiscal plan. I assume that these

expenditures would be part of the '04-05 three-year fiscal plan, if they're

prepayments. I would just like a page citing for it. I don't have the book here

anyway — just a page citing where that is demonstrated. I'm trying to figure

out in what year these were originally budgeted for that they're now being

prepaid.

Hon. G.

Collins: I don't have the numbers here. I can try and get those to the

member. I just don't have it in front of me, the full service plan that we

tabled last year. I'm sure the member has copies as well, but I don't have one

here either.

Some of

these are not new. They are not all new expenditures. They are expenditures that

would have been in the plan last year for '04-05 and '05-06. That would have

been the last two years of the three years. We said at the time of the budget

that we were able to accelerate those contributions to the Olympics through

year-end spending this year. We are accelerating those expenditures, and there

have been lengthy discussions, I expect — or discussions, anyway — with the

comptroller general and the auditor general to ensure that is an appropriate

decision of government to make.

MacPhail: Well, I can go look. I must confess that I have trouble moving

from book to book, so if the minister could provide me with what expenditures

are prepayments. I want to know how much this Olympics bid is going to cost us

— that's all. And I'm a supporter of the Olympics bid. If the minister could

provide me with, out of the last year's three-year fiscal plan, where these

expenditures were listed for what year that we're now prepaying.

In terms of

the $55 million for the Olympic endowment, where in the documents — I would

particularly like to look at it for this one for the supplements to the estimate

of the year ending '04 — is the endowment listed? Or — I don't care — in

any book.

Hon. G.

Collins: I'm told if the member goes and gets last year's, the '03-04 to

'05-06 budget document —

[ Page 9585 ]

the purple one — she will find at the front, I think, a table that talked

about the Olympics. These expenditures you see are not additional. They're not

sort of add-ons to the budget for the Olympics. The budget for the Olympics

remains intact. We haven't sort of ratcheted it up.

What we

have done is said that we have year-end savings this year, that we can

accelerate the funding for venues, for endowments, etc., and try to take

advantage of getting those done more quickly, reduce interest costs, etc., and

reduce inflation risk. We will try and get for the member, if we can…. I don't

know if I can have it right here, but she could find those numbers in last

year's budget document. But I think in answering her question, we're not

expecting that there is any…. There is no addition to the budget for the

Olympics.

MacPhail: No, and I want to know what's being prepaid. I can find that

information given the direction the minister's given.

[1555]

In terms of

what the comptroller general says, nothing's happened at Hastings Park in my

riding. How does one prepay something that isn't even contemplated to be started

for months? I think that's true of the village as well.

Hon. G.

Collins: As the member mentioned very early in her comments today, the

Olympics moves outside of the government's entity this year. As part of

"now we've received, now we've won…." Previously in the budget there

was the bid, the money that went to the bid, and then there was planning for the

eventuality should we win it. Once we won it, then it makes sense to go ahead

this year and actually move the Olympics outside of government's entity. It's a

stand-alone. We're providing funding, the federal government's providing

funding, and the local government's providing funding.

obviously have a guarantee, but it does move outside the reporting entity.

Therefore, it is a grant to the Olympics, and the accounting treatment under

GAAP is appropriate.

MacPhail: How much is left, then, that government must…? If OCOG, the

Olympic committee organizing…. O-C-O-G — I don't know what it stands for.

Interjection.

MacPhail: Anyway, whatever. It's OCOG; it's O-C-O-G.

The

government is prepaying for venues, and then OCOG gets set up with its own

budget. What was the budget for OCOG prior to this supplementary estimate, and

what will it be after this supplementary estimate of government transfers?

Hon. G.

Collins: First of all, what we're doing with this is paying for and making

the contribution that we're required to under the agreement. OCOG is outside the

government entity. The Olympics aren't run by the provincial government; they're

not run by the city of Vancouver. They're run by the Olympic organizing….

Whatever. I don't know what OCOG stands for. I can't remember; neither can the

member, I guess.

The

Olympics organizing committee is out there on its own. They're pretty adamant

about that. They would like to be at arm's length from government. So we have a

funding commitment to them. That funding commitment hasn't changed, so we are

able to flow the funds for some of the funding commitments with savings in this

fiscal year. As I said, it's a commitment that we've made. It has not changed.

Our obligation to the Olympics hasn't changed. The Olympic committee, to my

knowledge…. OCOG's budget has not changed either, but after March 31 they're

an independent entity.

MacPhail: If the minister could just confirm this for me. I'm looking now at

the supplement to the estimates for 2010 Olympic-bid secretariat. Sorry. I'm

looking at this book.

Interjection.

MacPhail: Oh, sorry. Fiscal year ending March 31, 2005, page 138. It's vote

34, ministry operations for the B.C. Olympic Games secretariat.

We have

confirmed that the estimates for '04-05 are $30.503 million. Perhaps the

estimates for '03-04 are $62.944 million. Perhaps the minister could explain the

reduction in that.

Hon. G.

Collins: The funding for our contribution to the Olympics will not

necessarily be sort of a straight-line contribution. It may be higher in one

year, it may be lower in another year. It could change throughout the year, as

it just did.

I would

hope — and I said on budget day as well — that if in future years we have

additional savings, perhaps we can flow additional funds to complete our

contribution to the Olympics ahead of schedule. Certainly, those numbers will

change up and down. As I said, the total contribution that we will be making has

not changed.

[1600]

MacPhail: Perhaps just for my clarification, then, what will show in the

'06-07 budget for Olympic expenditures?

Hon. G.

Collins: If the member takes the green budget book from this year and goes

to page 25, there's a

section on the Olympics. In fact, table 1.11 has the

Olympic funding for '03-04, '04-05, '05-06, '06-07, and the numbers are there

for the member to see.

MacPhail: Okay. Mr. Chair, I need a little bit of help here. Looking at vote

34, it says the funding is $30.503 million for Olympics funding out of the secre-

[ Page 9586 ]

tariat of sport and culture. That's for '05-06. I can't find a number that

matches that in this table 1.11.

Hon. G.

Collins: I'll try and walk the member through this. I'm just trying to check

the proper page in last year's budget document for the member, as well, because

I know there was a

section in there that dealt with the Olympics.

If you look

at the table, the $30 million for '04-05 that's reflected in the estimates

document ending next March — the current one that we're heading into — where

it says $30 million. She can look in the same book for the number for last year.

At the time the budget was $62 million. If she goes to page 25 of the green

budget document from this year, she'll see that the '03-04 number has changed.

It goes from roughly $63 million to $111 million — right? The $60 million got

changed to $111 million.

There would

have been contributions that in the original plan last year…. I said it will

go up and down year to year, probably. The original $30 million — there would

be expenditures in there that are now being made through this supplemental

estimate in '03-04. That means that the contribution that's required in '04-05,

'05-06, '06-07, you know, will possibly — maybe not all of them, but at least

this year, '04-05, and I think '05-06…. It's lower than was originally planned

last year. The '06-07 is a new number. It wouldn't have been in the plan last

year, because we just added that fiscal year on to the three-year plan at this

point.

[K.

Stewart in the chair.]

So we have

savings in the budget for this year, through debt service costs as well as

ministry underexpenditures, and we said during the budget that we were going to

accelerate the funding that was in the plan to the Olympics, to the entity which

is outside government on the Olympics. We're doing that through the supplemental

estimate, and as a result the contribution required in the out-years goes down

as part of the plan.

I mean,

then those numbers could go up again. You know, next year, in the year we're in

now, if we find we get towards the end of the year and there are additional

savings, government could choose at that point to come back to the House and

seek approval for an additional appropriation to advance even further those

funds to the Olympic authority. That's an option. But as I said earlier, the

total contribution that's required by the provincial government has not changed.

MacPhail: The reason why I'm exploring so much of this is because, of

course, once OCOG is formed, it's no longer subject to the Public Accounts

Committee, and it's also no longer subject to freedom of information.

In this

government document, the fiscal plan tabled about a month ago, on page 25, it

seems to make sense, I guess, that the original budget for '03-04 was $63

million. Then the government is just now saying they're adding $51 million and

$55 million. That makes a total of about $111 million, but if you look at what

they tabled for the upcoming budget year, '04-05, they're planning on spending,

theoretically, $30.503 million. Yet the budget in Olympic funding for '04-05 is

$11 million. I can't figure out the discrepancy.

[1605]

Hon. G.

Collins: Let me take the member back to this document that ends in 2005 —

so the year we're just heading into. She can look at that document.

Interjection.

Hon. G.

Collins: Yeah. If she looks at page 138, she will see where it says B.C.

Olympic Games secretariat, sports and culture. The secretariat is the $38.590

million number, and the $6.290 million number — that's right, though I

scribbled on it so I can't read it very well — is the number that is for the

Olympic secretariat. The other stuff is the sport and culture part of the vote

for the ministry. When she looks at $62 million and the $30 million, there are

other funds there for physical fitness. There's culture, an arts council, the

Olympic arts fund special account and sports. There are a range of other things

in that $62 million number. The one she needs to focus on is the $38 million.

There are some other little transfers back and forth. It's essentially the $37

million number that if she goes to….

I'm sorry.

I steered you wrong the last time. It's actually in last year's document. It

wasn't in the purple one; it's actually the blue one. If she looks at page 3 of

that, she'll find that in '03-04 the Olympics venue legacy was $37 million,

which is pretty close. There's also $2 million for the bid, I guess, so that's

what takes it from $37 million up to almost $39 million. That number is the same

— the $37 million versus the $39 million here. They are basically the same

number.

Then in

'04-05 it was $21 million, and in '05-06 it was $45 million. Now, if she looks

at page 25 of this year's budget document — the green book — she'll see that

instead of '04-05 being $21 million, it's $11 million. And instead of '05-06

being $45 million, it's actually, all in, going to be $99 million. Then, of

course, the 2006-07 is a new year, so there's a bit less in one and a little

more in another year. But again, the contribution hasn't changed.

MacPhail: Given that OCOG is going to become a corporation that is not

subject to the Auditor General Act or subject to freedom of information, is this

the document upon which British Columbians will rely in order to figure out how

much of taxpayer money is going to the Olympics — the table 1.11? I just need

a point for future reference.

Hon. G.

Collins: As far as contributions from the provincial government to the

Olympics, the expenditures will be reflected in our budget. They'll be in the

votes for the ministry. They'll probably be outlined each year as part of these

budget documents. I expect it

[ Page 9587 ]

will be a topic box until 2012, when things actually wrap up and they're all

finished and sent on their way. I expect it will be a topic of disclosure in the

budget documents and the service plans going probably for the next six, seven or

eight years.

MacPhail: I can ask this of the Minister of Small Business. Or, yes, I guess

I'll have….

Has OCOG

chosen its auditor yet?

Hon. G.

Collins: No. I am advised they have not.

Vote 16(

S) approved.

Hon. G.

Collins: I move the committee rise and report resolution.

Motion

approved.

The

committee rose at 4:10 p.m.

The House

resumed; Mr. Speaker in the chair.

Committee

of Supply B reported resolution.

Mr.

Speaker: When shall the report be considered?

Hon. G.

Collins: Forthwith, Mr. Speaker. I move that the report of resolution

from the Committee of Supply on March 23, 2004, be now received, taken as read

and agreed to.

Motion

approved.

Hon. G.

Collins: I move that there be granted from and out of the consolidated

revenue fund the sum of $72 million. This sum is in addition to that authorized

to be paid under

section 1 of the Supply Act, 2003-2004, and is granted by Her

Majesty towards defraying the charges and expenses of the public service of the

province for the fiscal year ending March 31, 2004.

Motion

approved.

Introduction and

First Reading of Bills

SUPPLY ACT, 2003-2004

(SUPPLEMENTARY ESTIMATES No. 4)

Hon. G.

Collins presented a message from Her Honour the Lieutenant-Governor: a bill

intituled Supply Act, 2003-2004 (Supplementary Estimates No. 4).

Hon. G.

Collins: I move the bill be introduced and read a first time now.

Motion

approved.

Hon. G.

Collins: The use of the supplemental estimates is consistent with the spirit

of the Budget Transparency and Accountability Act. The supply bill is introduced

to provide supply for the operation of the government programs for the 2003-04

fiscal year as outlined in the supplementary estimates (No. 4) discussed earlier

this afternoon. The bill will provide the additional funds required to defray

the charges and expenses of the public service of the province for the fiscal

year ending March 31, 2004. In accordance with established practice, the

government seeks to move this bill through all three stages this day.

Mr.

Speaker: Hon. members, in keeping with the practice of this House, the bill

will be permitted to advance through all stages in one sitting.

Bill 22

introduced, read a first time and ordered to proceed to second reading

forthwith.

Second Reading of Bills

SUPPLY ACT, 2003-2004

(SUPPLEMENTARY ESTIMATES No. 4)

Hon. G.

Collins: I move that Bill 22 be now read a second time.

Motion

approved.

Hon. G.

Collins: I move the bill be now referred to Committee of the Whole House for

consideration forthwith.

Bill 22,

Supply Act, 2003-2004 (Supplementary Estimates No. 4), read a second time and

referred to a Committee of the Whole House for consideration forthwith.

[1615]

Committee of the Whole House

SUPPLY ACT, 2003-2004

(SUPPLEMENTARY ESTIMATES No. 4)

The House

in Committee of the Whole (Section

B) on Bill 22; K. Stewart in the chair.

The

committee met at 4:16 p.m.

Sections

1 and 2 approved.

Schedule

approved.

Preamble

approved.

Title

approved.

Hon.

G. Collins: I move that the committee rise and report the bill complete

without amendment.

Motion

approved.

The

committee rose at 4:17 p.m.

[ Page 9588 ]

The House

resumed; Mr. Speaker in the chair.

Report and

Third Reading of Bills

Bill

22, Supply Act, 2003-2004 (Supplementary Estimates No. 4), reported complete

without amendment, read a third time and passed.

Introduction and

First Reading of Bills

MINISTERIAL ACCOUNTABILITY BASES,

2003-2004, AMENDMENT ACT, 2004

Hon.

G. Collins presented a message from Her Honour the Lieutenant-Governor: a bill

intituled Ministerial Accountability Bases, 2003-2004, Amendment Act, 2004.

Hon. G.

Collins: I move that the bill be introduced and read a first time now.

Motion

approved.

Hon. G.

Collins: This piece of legislation has a similar impact to what was done

earlier in this session with regard to additional supplemental estimates that

have been provided for the expenditure of ministers in the fiscal year just

concluding. The ministerial accountability act requires that ministers come in

on or under budget for the budget which they are responsible for in each fiscal

year.

Mr.

Speaker, you'll know that just previous to this, just moments ago, the

Legislature passed a supplemental estimate for the Minister of Community,

Aboriginal and Women's Services to permit the funding out of savings that

occurred in this year's fiscal year that we're just concluding to fund the $72

million in commitments to the Olympics. As we've done in previous examples of

these types of supplemental estimates — starting last year with the Ministry

of Forests as well as with the Ministers of Health, through the contributions of

the federal government — it's required to provide an exemption for those

members when the in-year expenditure is increased for these types of

occurrences.

I want to

point out that the minister is forecast to come in on or under budget for the

budget he started at the beginning of the year. We don't anticipate any problems

with his budget whatsoever. This is a decision of government corporately to fund

$72 million out of savings that have occurred in the fiscal year this year.

Government as a whole will continue to hit its fiscal target, and ministers, as

well, will continue to hit their fiscal target. That's the exemption that's

being provided under this act.

I move that

the bill be placed on the orders of the day for second reading at the next

sitting of the House after today.

[1620]

Bill 23

introduced, read a first time and ordered to be placed on orders of the day for

second reading at the next sitting of the House after today.

Hon. G.

Collins: I call second reading of Bill 5.

Second Reading of Bills

BUDGET MEASURES

IMPLEMENTATION ACT, 2004

Hon. G.

Collins: Mr. Speaker, I move that Bill 5, the Budget Measures Implementation

Act, 2004, now be read a second time.

Bill 5

amends five statutes, repeals five statutes and contains a number of

transitional provisions with respect to non-tax initiatives related to the

2004-05 provincial budget.

The Budget

Transparency and Accountability Act is amended to make provisions for

government's move to full compliance with generally accepted accounting

principles. The main change required is the inclusion of schools, post-secondary

institutions and health care organizations in the government's reporting entity.

Specifically, the definition of the government reporting entity has been

amended, along with changes to other sections of the act, in order to clarify

what sections are relevant to the SUCH sector.

addition, this act includes a transitional provision under the Budget

Transparency and Accountability Act that allows for additional time to prepare

accountability statements for the ministers of state. Under this transitional

provision, ministers of state have until May 15, 2004, to table their

accountability statements.

The reason

for that, obviously, is that there was a change in the makeup of the ministers

of state as the budget was being put together, and while there were new members

appointed to a number of ministers of state, there was not sufficient time to

put in place, prior to the budget going to print, the performance outcomes that

are required and their accountability statement. This piece of legislation

provides additional time, until May 15, 2004, for them to table their

accountability statements. They'll remain accountable as they would have been

had those statements been introduced with the budget on February 17.

The

Balanced Budget and Ministerial Accountability Act is amended under

section 5 to

exclude expenditures of the B.C. timber sales program from the estimated amount

for the Minister of Forests for the purposes of calculating the ministerial

salary holdback. Removing the program effectively provides the Minister of

Forests with the necessary flexibility to generate additional revenues.

Mr.

Speaker, with that provision, you'll know from the budget speech and the

documents that the goal with the B.C. timber sales program is to generate

additional revenue to government, and obviously it's required to provide

additional expenditures in order to do that. In a not dissimilar but not exactly

similar way to some of the additional expenditures that were provided —

although small amounts — in the Ministry of Energy and Mines for natural gas

exploration, we anticipate that the new investments in the B.C. timber sales

program will generate revenues over and above the costs of the expansion

[ Page 9589 ]

of the program. Rather than have the minister accountable for his

expenditures, therefore resulting in an inappropriate or insufficient level of

investment in the B.C. timber sales program, we've excluded that from his

ministerial accountability provision and hope to generate additional revenues to

the government of British Columbia as a result of the change.

The Build

BC Act is amended to eliminate the Build B.C. special account on March 31, 2004.

This is a housekeeping amendment to eliminate an account that has been inactive

for many years and is no longer required.

The

Financial Administration Act is amended to change the vote recovery provisions

to allow ministries to spend excess credits, recoveries and receipts without

seeking prior approval from Treasury Board unless otherwise directed. In

addition, this act is amended to eliminate the provincial treasury program

special account effective March 31, 2004. The program, which is related to the

borrowing function, will continue to operate with all future transactions and

related profit recorded under the MOPD, ministry of public debt, vote.

The medical

and health care services special account is repealed effective March 31, 2004.

This special account is eliminated because the reserve account used to

facilitate arrangements to manage year-to-year fluctuations in payments by the

Medical Services Plan to members of various health care professions is no longer

required.

The Special

Accounts Appropriation and Control Act is amended to establish a new special

account effective April 1, 2004. The provincial home acquisitions windup special

account includes an opening balance of $15 million for the purpose of making

expenditures for the winding-up of loans and other financial assistance under

several other acts. These other acts are the Home Conversion and Leasehold Loan

Act, the Home Mortgage Assistance Program Act, the Home Purchase Assistance Act,

the Homeowner Interest Assistance Act and the Provincial Home Acquisition Act

— all of which are repealed on March 31, 2004.

Mr.

Speaker, I move second reading of Bill 5.

[1625]

Motion

approved.

Hon. G.

Collins: I move the bill be placed on orders of the day for consideration by

the Whole House at the next sitting of the House after today.

Bill 5,

Budget Measures Implementation Act, 2004, read a second time and referred to a

Committee of the Whole House for consideration at the next sitting of the House

after today.

Hon. G.

Collins: I call Bill 6.

TAXATION STATUTES

AMENDMENT ACT, 2004

Hon. G.

Collins: I move that Bill 6 be read a second time.

Bill 6

amends 13 provincial statutes to implement many of the tax measures announced in

balanced Budget 2004. The measures encourage continued investment in research

and development, improve fairness, protect revenue and confirm existing

administrative practices. I am pleased to explain the rationale for each of

these amendments.

Bill 6

amends the Corporation Capital Tax Act to clarify that property must have been

used directly for a listed purpose in order to qualify for a deduction from the

tax base. This confirms the original legislative intent and protects revenue

collected in accordance with that intent from April 1, 1993, to August 31, 2002.

Bill 6

amends the Income Tax Act to limit the pension income, dividend and overseas

employment tax credits to individuals that are resident in British Columbia.

This change only affects people who have business income and who are subject to

tax both in British Columbia and another jurisdiction. Bill 6 also amends the

Income Tax Act to extend the scientific research and experimental development

tax credit for a further five years to August 31, 2009. Over the five years the

credit has been in place, qualifying research and development has increased by

more than $700 million annually. Extending the tax credit will ensure that

British Columbia continues to be a location of choice for research and

development, one of the cornerstones of our new economy.

The

Property Transfer Tax Act is amended to improve the fairness and effectiveness

of the exemptions for transfers of specified property to related individuals. In

particular, the amendments achieve the following. The definition of "family

farm" is expanded to include more familial relationships and also to expand

to siblings and their spouses eligibility for the exemption for transfers

between related individuals. The existing exemptions for transfers of family

farms to related individuals are expanded to include transfers to family farm

corporations where trustees are required to act as intermediaries, such as

transfers related to a deceased estate. New exemptions are provided for

transfers to and from the province's public guardian and trustee on behalf of

minors, to ensure the minors are able to benefit from the exemptions for

transfers between related individuals when they reach the age of majority.

Amendments also clarify the longstanding administrative practice of applying the

related individual test to the transferee, the recipient of the land, rather

than to the transferor.

The Tobacco

Tax Act is amended retroactively to December 20, 2003, to increase the tax rate

for tobacco, other than cigars, by the equivalent of $3.80 per carton. It is our

sincere hope this will discourage smoking, particularly among our youth, and

that over time it will help to reduce health care costs associated with smoking.

Some of the new revenue will be dedicated to augment anti-smuggling programs and

improve tobacco enforcement in British Columbia. On the enforcement side, the

director will now have the authority to deny a permit or retail authorization to

sell tobacco products if the permit application is for a location where the

previous permit was suspended or can-

[ Page 9590 ]

celled and the new applicant is not arm's length from the previous permit

holder. Where denial of a permit is not clearly required but justifiable concern

exists that illicit tobacco may be sold from that location, the director is

authorized to require payment of a bond by the applicant.

The Motor

Fuel Tax Act is amended to provide authority to implement by regulation a tax

exemption for the alternative motor fuel portion of low-level blends of

alternative fuels and either gasoline or diesel fuel. This will help to offset

the higher costs of supplying these environmentally beneficial fuels and make

them more competitive with conventional fuels. For the purposes of the motor

fuel tax exemption for bona fide farmers, the Motor Fuel Tax Act is amended to

expand the definition of "family farm corporation" to recognize

changes that have occurred in family farm structures, while maintaining the

original intent of the family farm fuel tax exemption.

[1630]

The

Community Charter is amended to grandparent an exemption for dust and

particulate matter eliminators, other than equipment, for those properties which

received the exemption in 2003. This grandparenting will improve the fairness of

the exemption as amended in prior years in budget 2003.

The Home

Owner Grant Act is amended to increase the property value thresholds at which

the homeowner grant phase-out begins. For 2004 the thresholds are increased from

$525,000 to $585,000. This will ensure that for the province as a whole, 95.5

percent of homeowners will continue to receive their full homeowner grant, the

same percentage as last year.

Finally, a

number of statutes are amended to establish that the limitation period for

collecting unremitted or unpaid taxes begins on the date an assessment or

reassessment is issued, rather than on the date the liability arises. This is

consistent with longstanding administrative practice, protects revenue and

ensures that the province is able to continue to efficiently collect taxes owed

to the Crown.

Mr.

Speaker, I move second reading of Bill 6.

Mr.

Speaker: We are at second reading stage of Bill 6. The Leader of the

Opposition.

MacPhail: Bill 6, Taxation Statutes Amendment Act, 2004, is the point at

which the opposition will show that they cannot support this government in the

way it taxes British Columbians. We will be voting, by division, against this

legislation for a couple of reasons.

It is what

one might think of as a routine tax bill attached to a budget, but there was

nothing routine about the budget that this Minister of Finance tabled on

February 17. The trends in it were disturbing and the consequences devastating

for certain families.

I want to

take one example. In this bill it talks about defining who an income tax payer

is, changing it — just little tweaks. That's what the bill says, but here's

what the budget did to taxpayers in this province. Buried in this budget that

was tabled on February 17 is news that B.C.'s provincial taxes for low- and

middle-income families are going up this year. According to the government's own

numbers, a two-income family of four making $30,000 a year will pay $435 more in

taxes. A two-income family of four earning $60,000 pays $128 more. A senior

couple with a pension whose income is $30,000 also pays $128 more.

When the

Minister of Finance was pressed on that, he said: "Oh no, no. It has to do

with the fact that property values are going up, and therefore people are paying

more taxes in that area." So I checked. I checked in the neighbourhood in

which I live now, Kitsilano, which is a very nice middle-income neighbourhood

— not my riding, but the neighbourhood in which we're raising our son. Someone

who's earning $60,000 isn't buying a house or an apartment in Kitsilano, so that

didn't make much sense to me.

Then I

checked in my own riding, where I lived for 18 years, where the property values

are not as high as in Kitsilano but still substantially high and rising. I asked

a family that was making $30,000 whether they were paying more in taxes. No,

because they're renting; they can't afford to buy. I asked a person who was

earning $60,000 whether that was why they figured they were paying more taxes.

They were renting as well, because they can't afford to buy a house.

[1635]

While the

glib explanation may have worked to get the minister off the hook for himself,

in his own budget documents, saying that families earning $30,000 and families

earning $60,000 are paying more taxes from last year to this year…. It doesn't

pass the nod test for British Columbians. It doesn't pass the nod test for

people who live in Skeena, where in some towns in Skeena riding over one-third

of the houses are on the market and property values are plummeting. It doesn't

pass the nod test in Cranbrook, where property values are going down as well,

while these same families are paying more taxes than they did last year.

Then the

second explanation coming from the government caucus was: "Well,

everybody's paying $200 a year less taxes than they were in '01" — when

they point to me and they say — "when your government left office."

Well, isn't that great progress? Isn't that great progress? Unprecedented high

budget deficits, rapidly increasing debt — not because this government is

building anything but because they're running operational deficits — and they

say: "Well, at least we're, for some families, 200 bucks…. Those same

families are 200 bucks better off than when you were tossed out of government,

member." They say that to me. Well, no, that's not the complete story

either.

Those same

families, with incomes of $30,000 to $60,000, have had that measly $200-a-year

tax break eaten up by ICBC premiums. My ICBC premiums went up more than $150 in

the first price increase that this government brought in. It went up again in

the second year, when my status remained exactly the same.

Families in

my riding are coming to me now and saying: "John/Karim has got great grades

in grade 12, but we can't afford to send him to university because of

[ Page 9591 ]

the tuition hikes and the elimination of grants. We can't afford to take on

that debt." So Karim and John will be sitting this year out.

Hydro rates

are going up, and those numbers were not included in the tax increases listed in

the budget books. So even this government's feeble justification that they may

have improved the lives of some British Columbians by $200 a year from 2001

doesn't cut it.

But who is

paying less provincial tax this year than they did last year? Well, it is true

that a single, unattached individual earning $25,000 pays $8 less a year. A

two-income family earning $90,000 pays $154 less. The single, or I guess the new

word for it is unattached, individual earning $80,000 pays $221 less this year

than last — the very people that would be affected by property value increase,

and yet they're still paying less tax. How is it that this government can say

that the budget has worked, and yet low- and middle-income families are paying

more tax this year than they did last year, as well as huge increases in fees

and licenses, tuitions, premiums that aren't even calculated in this tax shift?

[1640]

The concept

of tax shift is an interesting one. Who knew that this government would

institute a tax shift where the rich pay less and the poor and the middle-income

pay more? Only a Liberal government, with their failed economic policies, would

say that that's the kind of tax shift that works. I was very pleased to hear the

Minister of Finance earlier today tout the Moody's outlook, but I became

suspicious because if it had been earthshaking, they would have had one of their

backbenchers stand up and lob a question at the Minister of Finance — one of

those soft lobs: "Please tell us what a great job your government is

doing."

It is

interesting that they need to rehearse those questions, that they need to use

their time to rehearse the backbencher saying, "Here's the question I'm

going to ask," and then the minister rehearsing and people watching them

and critiquing them. My standard offer is that I will give this government

professional acting advice. Maybe they will actually be able to then

represent….

Interjections.

Mr.

Speaker: Order, please, hon. members.

Interjections.

Mr.

Speaker: The Leader of the Opposition has the floor.

MacPhail: Then maybe they'll actually be able to stand up and represent the

interests of their constituents, instead of their dogmatic, blinders-on,

ideological path they're hell-bent on going down, regardless of how it affects

their constituents — regardless. All the nastiness, the personal nastiness

particularly from the front benches of this government, serves them ill and will

come back to haunt them. I guarantee it will come back to haunt them, because as

they make personal attacks on people who are standing up for British Columbians,

as they stand up and make personal attacks against those who are actually

representing the interests of British Columbians, their own lack of

representation is heightened.

I looked at

the Moody's outlook, and yes, the minister actually describes it. It does move

from a stable outlook to a positive outlook — not one iota of change in the

credit rating. I actually checked to see what that would mean in terms of

borrowing practices. Nothing. Absolutely nothing. After three years of brutal

budgets in this province, the best the Minister of Finance can tout is an

outlook that moves from stable to positive and doesn't change the rating at all.

The other

thing that they're claiming, which was actually met with a little bit of

perplexity by their own friends, was that 2,000 people moved into British

Columbia from other parts of the province in 2003. That's the success they're

claiming. The ridicule that could be foisted upon them perhaps knows no bounds,

but the fact is that this government is standing up, and the great economic

managers that claimed there was going to be such success have those two little

things to claim as credit — two little things.

They sit

there and say: "Look what a great job we're doing." Well, it's

actually sad, I must say. It's actually embarrassing to see a Premier of a

province stand up and repeat over and over again, "Look what a good job I'm

doing economically because of these two factors," and at the same time

families earning $30,000, families earning $60,000, are paying more taxes this

year than last.

I listened

to the president of UBC on the radio this morning, a woman I admire greatly.

Mr.

Speaker: Hon. member, we've allowed considerable latitude on the bill. Could

we return, please, to second reading of Bill 6.

[1645]

MacPhail: All right, Mr. Speaker. I'm sorry. I really do need brushing…. I

accept your logic. I thought I was talking about budget and taxation.

Well, let

me address my last part, then, given the direction from the Chair. The tobacco

tax. On December 19 the Minister of Finance started collecting a tax. He claims

this is standard practice. Well, no, Mr. Speaker. It's not standard practice to

announce a tax, say, "I'm going to bring in legislation," and then

start collecting it. At best, one could describe the practice of previous or

different legislatures as announcing a tax and introducing legislation at the

same time or at least before the tax starts being collected.

This

government stretches it right to the nth degree, claiming they're just doing

what every previous government did before. Well, in fact, I checked. Going back

to 1956, I can't find any examples of that — where they actually stand up in a

brazen, arrogant fashion and say three days after a legislature rose, "Oh,

by the way, we're starting to collect taxes from you now. But don't worry, we're

going to introduce legislation," and they start collecting those taxes.

[ Page 9592 ]

And then

the Minister of Finance says: "Well, vote against it. It is a tobacco tax

increase. Why don't you just vote against it? Are you against tobacco tax

increases?" I was the Minister of Health who took on the tobacco industry

on behalf of a government….

[Interruption.]

Mr.

Speaker: Yes, it's the division bells in Committee A. We'll just pause for a

couple of moments.

[1650]

Hon.

members, we are at second reading of Bill 6, and the Leader of the Opposition

has the floor.

MacPhail: The Minister of Finance starts collecting a tax that he says is

going to be about 40 million bucks a year. He says: "Well, vote against it.

Are you against tobacco taxes?"

Even though

the Minister of Children and Family Development sneers at this, it was a huge

step to take on the tobacco companies and to institute a very successful program

to reduce tobacco use, particularly amongst youth, and to generally try to

reduce tobacco use. It met with huge success and support from the then

opposition. It was exactly the right thing to do. We also know that raising the

price of tobacco is the most effective tool to reduce tobacco use.

[1655]

I'm not

against this tax — the collection of this tax or the amount of tax. I'm

against the way in which this government announced this — 72 hours after this

House adjourned, and the Minister of Finance starts collecting the tax. When we

vote against this legislation, it will not be against the tobacco tax. It will

be against the arrogance of this government at almost every level when it comes

to taxation changes this government has made.

This

morning, Mr. Speaker, you made a ruling with which I agree, and I want to quote

from it. This morning the Speaker ruled in this fashion. This is how the Speaker

characterized the government's actions. I'm reading from the decision:

"Speaker

Rogers's decision of April 10, 1990, makes it clear that the announcement

outside the House of pending legislation does not amount to a breach of

privilege but may, according to the nature of the announcement, involve a

contempt of the House. In that decision, the Speaker stated in part as follows:

'It is apparent, however, that Mr. Speaker Fraser, in the course of his ruling

of October 10 last, did deliver a stern warning that the general public must not

be given any impression that proposed changes to the taxation system were a fait

accompli and that parliament, in fact, had no role to play in examining and

approving any proposed changes.'"

Then

to carry on with our Speaker's ruling:

"'To

give such an impression,' Mr. Speaker Fraser said, 'may tend to diminish the

authority of the House in the eyes of the public.'"

Our

Mr. Speaker concluded his ruling this way this morning:

"After

a careful examination of the authorities and Speakers' decisions in this House

and elsewhere, I am persuaded that the transaction relating to the Tobacco Tax

Act does not constitute a breach of privilege or a contempt of the House. I do,

however, agree with the observation of Speaker Fraser that proposed changes to

the taxation system, absent statutory authority or an opportunity to debate the

matter in this House, would be unacceptable in a parliamentary democracy."

agree with the Speaker's ruling. However, it is true that legislation is

introduced to retroactively collect taxes, but I don't know of an example where

a government has actually collected the tax and then introduced legislation,

even retroactive legislation. This government didn't do it at the first

opportunity. They waited until February 17. That's when this legislation that

we're debating now was introduced, with the budget. We had sat for four days

previous to that, and the tax started being collected on December 19. In fact,

on December 19 of last year the Finance minister announced an increase in the

tax on tobacco effective at midnight the next day. The government started

collecting the extra revenue — some $10 million to be added to the bottom line

of this fiscal year that we are now just concluding, the fiscal year ending

March 31, 2004.

Nearly two

months later the Minister of Finance introduced legislation legalizing this tax

grab, and here we are, over three months after the announcement, finally getting

around to second reading of this bill — a bill that wasn't even introduced at

the first opportunity.

At issue

here is not what the retail price of tobacco should be or whether or not price

is a deterrent to those who might consider starting to smoke. At issue here is

the arrogance of the Minister of Finance and the executive council, of which he

is a part, that feel free to flout the practices of this House and, in the

process, demean the very nature of our democracy.

[1700]

Mr.

Speaker, in his wisdom, was quite correct in stating that retrospective

legislation is not foreign to our system of government. However, in most if not

all cases, retrospective legislation is first passed by parliament and then

applied retroactively. What this Minister of Finance has done is collect a tax

first and is now here today to pass that authority. In the coffin of B.C.

Liberal openness and transparency, we see many, many dead bodies. If the coffin

of B.C. Liberal openness and transparency were not already buried so deeply that

it will be another millennium before it is uncovered, this action would be its

last nail.

Government

has the right to raise revenue through taxation. However, its legitimacy in

doing so is predicated on the fundamental principle that it does so only with

the consent of the government. We know this government cares little for most

British Columbians. What astounds us is that they are so blatant in their

contempt for them.

Mr.

Speaker: On second reading of Bill 6, the Minister of Finance closes debate.

Hon. G.

Collins: I don't want to comment too exhaustively on the ruling of the

Speaker because it's not

[ Page 9593 ]

appropriate, but I do want to just deal with the issues raised by the member

opposite.

The fact of

the matter is that the contempt allegation and the privilege allegation that the

member opposite made against the government failed on all counts. She may not

like that, but that's the reality. The member continually stands up in this

House and launches all sorts of allegations against members opposite, almost as

if she were handing out peanuts. Those allegations are repeatedly, over and over

and over again, proven to be nothing more than hysterical rhetoric that comes

from the member opposite.

We saw that

with regard to the hysterical rhetoric that member put forward in this House,

she and her colleague, around the number of people with disabilities who, she

alleged, would be taken off the social assistance rolls. In fact, more people

were added. People weren't taken off; there were more at the end of that process

than there were previously.

I recall

the member standing up — again, with hysterical rhetoric — talking about the

hundreds of thousands of senior citizens she alleged were going to be thrown off

Pharmacare. Not one of them was thrown off Pharmacare. The thing that makes it

so hysterical and so irresponsible is the fact that repeatedly, day after day

— for weeks if not months, if I remember correctly — the Minister of Health

responded to her allegation with the facts saying that no senior would be thrown

off Pharmacare. Yet the member opposite continued in her hysterical rhetoric to

try and frighten seniors. We saw a little bit of it again today, just a moment

ago, in response to Bill 6. Again, hysterical rhetoric put forward by the

member. The facts end up being proven to be false.

So let me

just touch on the area that the member opened her comments with today when she

talked about taxation revenues and two-income families, four-income families,

etc., earning $30,000 and $60,000. This is something the NDP put out a couple of

days after the budget. It took them a couple of days to respond to the budget,

and they put forward some information that said the government was raising taxes

on low- and middle-income families. It simply was not the case.

To rebut

the comments made by the member opposite, I'm glad to know she did a survey of

exactly three people — actually, two people in her constituency — and came

to the conclusion that in the community she lives in, Kitsilano, nobody there

could afford a house earning $60,000. What she fails to take into consideration

is that there may well be people who have incomes of $60,000 in her community

who have lived in those homes for a long time, since well before the rapid

appreciation in housing over the last 20 years or so. I think that's inaccurate,

first of all. The comprehensive, broad survey that she did of her constituents,

comprising two individuals, again is not the basis upon which to analyze a

budget.

[1705]

What we do

is collect data from across British Columbia, using StatsCan numbers, B.C. Stats

numbers, taxation numbers, revenue numbers, assessment numbers that government

has at its disposal.

In response

to her issues, there were three factors — which I stated the day she made,

again, her hysterical allegations about what government allegedly, according to

her, was doing to the low- and middle-income families. The fact of the matter is

that this year, relative to last year, in the taxes that are laid out there's a

series of taxes that are identified and measured year to year. It's true that

property taxes went up marginally in British Columbia, and that was as a result

of the way the calculations are done for that data and the assessed values and

as a result of the property tax revenues or levies that are applied by municipal

governments as well.

I happen to

live in Vancouver, with that member. Lots of her longtime colleagues are now in

control of Vancouver city council. I know that her taxes and my taxes are all

going up in Vancouver. As well, I think the city of Vancouver's credit rating

was just downgraded this last year. This isn't just provincial taxation; this is

the tax burden of British Columbians.

There are

other ways that taxes get levied as well. A big component of that comes from

city councils, municipalities, etc. Again, this is average. The member will

undoubtedly be able to find some communities where the amount of property tax

people pay went down. It's very possible that their assessed values probably

went down in some parts of the province. Their total tax revenues or tax bill on

property may well have gone down, depending on what the local government's doing

in that community, although they adjust those up and down based on their needs

or what they perceive to be their needs, not just on assessed value.

That

refutes, I think, the first comment the member makes — the first of those

three taxes — and explains why some property taxes for an average family may

well have gone up.

There are

two other taxes that were a factor in moving up and down. The other one is sales

tax. The total amount of sales tax that those families would be forecast to pay

this year went up, and it went up slightly. The reason it went up is because

their disposable income went up. They're taking more home, and they are able to

spend more. The assumption is — and the elasticity is different for different

income levels in doing the statistical comparisons — that lower-income

families tend to spend more of their additional disposable income, and that is

what drove the sales tax numbers.

The third

item where there was a tax change was, actually, that personal income tax rates

went down.

Interjection.

Hon. G.

Collins: I hear the little cackle coming from the member opposite; she

doesn't believe it. Those are the stats. If she'd like a briefing, I would be

prepared to provide it for her so that when she stands up and makes comments in

the Legislature, they're based on fact rather than based on her survey of two

people. I

[ Page 9594 ]

think it does a discredit to herself when she makes those kinds of comments

that are clearly inaccurate.

She also

made a comment on ICBC premiums going up post-election. We've been through this

before in the House; we've had this discussion. The member continues, much like

Rumpelstiltskin, to forgot the fact that she was in government for a decade and

forgets the fact that her government, in a brazen attempt to get itself

re-elected, sent cheques to British Columbians from ICBC — refund cheques —

at a time when they knew they had an unsustainable revenue stream. They knew

that; ICBC knew that. The new administration at ICBC made that very clear right

after the election. That was clearly just an attempt to buy votes. She was part

of that government. She sat, I think, actually in this seat at the time when

that was done. Then she wonders why, in an effort to put the company on a

sustainable footing, costs rise.

The other

thing she fails to mention is that she was the minister responsible for ICBC at

the time those cheques were sent. She was the minister responsible for ICBC who

tried to buy votes with $100 cheques to British Columbians, with money that ICBC

didn't have, in an effort to get re-elected. What she also fails to mention is

that while she was the minister responsible for ICBC, under her watch — she

sat on the board of ICBC — they invested $250 million in a building that's

worth $150 million. As a result, the shareholders or the ratepayers of ICBC had

to come up with $100 million to pay off the costs of the building that was

constructed under her watch.

[1710]

She was the

minister responsible. She sat on the board of ICBC. People on the board of ICBC

made it clear to the then chair and others that it was an unwise investment, but

she chose to go ahead with it anyway. As a result, the ratepayers in British

Columbia now pay additional funds in order to pay off the debt she incurred as

the minister responsible for ICBC.

The

hysterical rhetoric we get from the member opposite…. It's always really

enlightening to go back and actually look at the facts and look at the truth

behind some of the comments she makes. I think it is enlightening.

The member

also talked a little bit about the credit rating agencies and how she thought it

was completely insignificant that Moody's Investors Service had actually

provided a comment today that adjusted our credit rating from an Aa2, stable, to

positive. Historically, that is generally the precursor to a credit rating

upgrade, and the positive component of that is in itself a huge feather in the

cap of the province, I believe. It says that the people who invest here, who

lend us money as a government, but more importantly the people who invest money

in British Columbia and lend that money to businesses who are hoping to build

here, have a far more positive outlook on where British Columbia is headed,

where our economy is headed and where future growth may lie.

It's also

important to note that our credit rating would have been a lot better had that

member not been Minister of Finance and had the NDP not been in government for

ten years, because actually, under her watch and under the watch of the NDP —

partially while she was Minister of Finance — British Columbia's credit rating

was downgraded by Moody's. More importantly, I would say, or more dramatically,

it was downgraded twice each by the other two credit rating agencies: DBRS,

Dominion Bond Rating Services, out of Toronto and Standard and Poor's out of New

York. Both those credit agencies downgraded British Columbia's credit rating

twice in the ten years that her government was in office.

I find it

interesting that she failed to mention that in her comments when she talked

about credit rating agencies and the reflection on British Columbia's economy.

That's an important component, because you'll recall that earlier this afternoon

we actually had a discussion about debt savings, interest savings. The

government was able to put money into the Olympics, and last year there were

other things, other expenditures government was able to make, because its

interest costs have been coming down.

Interest

costs have been coming down, well, worldwide, but what's important to note is

how British Columbia has been doing relative to other jurisdictions. When we

took office, British Columbia was paying a higher interest rate than many other

provinces. Ontario, Manitoba and Saskatchewan were close. What's happened in the

intervening period is that now British Columbia trades not only as low as

Ontario but actually lower than Ontario. Our interest rates have come down now.

Interjection.

Hon. G.

Collins: Well, in response to the comments the member opposite made, I think

it's appropriate to comment appropriately.

The

interest rates that British Columbia's bonds trade at are now lower than

Ontario. They're lower than Quebec. They're lower than Manitoba, lower than

Saskatchewan — lower than every other province with the exception of Alberta,

which really doesn't trade because they virtually have no debt. That's a major

improvement. The fact that the member opposite didn't get that is an indication

of how reckless her government was when they were in government and the damage

they did to British Columbia's credit rating and British Columbia's reputation

internationally.

She

commented, as well, on another indicator. She said it was pathetic, and she said

it was embarrassing, that members on this side of the House would raise the fact

that people are starting to return to British Columbia for the first time in

seven years. In fact, in 1997 a longstanding historical reality changed. Prior

to 1997 more people came to British Columbia from other parts of Canada than

left British Columbia for other parts of Canada, so there was a net inflow here.

People were voting with their feet. They chose to come to British Columbia.

Through the nineties, when that government was in power, you could see that

trend start to

[ Page 9595 ]

decline. In 1997 it flipped. More people actually left British Columbia than

came to British Columbia. That persisted through 1998, 1999, 2000, 2001. We

could start to see the trends change to come back, and this year we just

completed, 2003, we restored the historical standard, which is that more people

came to British Columbia from other parts of Canada than left British Columbia

for other parts of Canada.

[1715]

Now, that's

people voting with their feet. That's people choosing to come to British

Columbia. Those are the facts. Those are StatsCan numbers. The member may not

like that….

Interjection.

Hon. G.

Collins: I hear once again her hysterical rhetoric flowing across the House

here — not based in fact, just based in her own revisionist history.

The reality

is that British Columbia is turning around. The tax changes this government

brought into effect when we took office are part of that. A sense of confidence

we see in British Columbia is part of that. We lead the country in small

business investor confidence. We've led the country in job growth over the last

two years. We've led the country in new housing starts.

All of

those things are part of turning the economy around. There is no secret. There's

no one thing you need to do. You need to do a whole bunch of things. We've been

doing that, and the tax changes that are contained in this bill are part of

that.

I move

second reading.

Second

reading of Bill 6 approved on the following division:

[1720-1725]

YEAS — 60

Falcon

Coell

Les

Chong

Brice

Hansen

Bell

Bruce

Santori

Barisoff

van Dongen

Bray

Roddick

Wilson

Masi

Lee

Thorpe

Murray

Plant

Collins

Clark

Bond

Christensen

Abbott

Neufeld

Coleman

Penner

Cobb

Jarvis

Anderson

Orr

Hogg

Nuraney

Nebbeling

R. Stewart

Hunter

Chutter

Mayencourt

Trumper

Johnston

Bennett

Belsey

Krueger

J. Reid

McMahon

Stephens

Locke

Bhullar

Wong

Lekstrom

MacKay

Halsey-Brandt

K. Stewart

Bloy

Suffredine

Sultan

Hamilton

Sahota

Hawes

Kerr

NAYS — 2

MacPhail

Kwan

Hon. G.

Collins: I move that the bill be referred to a Committee of the Whole House

for consideration at the next sitting of the House after today.

Bill 6,

Taxation Statutes Amendment Act, 2004, read a second time and referred to a

Committee of the Whole House for consideration at the next sitting of the House

after today.

[J.

Weisbeck in the chair.]

Hon. G.

Collins: I call second reading of Bill 7.

SOCIAL SERVICE TAX

AMENDMENT ACT, 2004

Hon. G.

Collins: I move that Bill 7 be read a second time.

Bill 7

implements a number of amendments announced as part of Balanced Budget 2004. The

amendments improve fairness, enhance competitiveness, protect revenue and

clarify the application of tax.

The

application of tax to sales of taxable and non-taxable goods and services sold

for a single price is amended to minimize the imposition of tax on the

non-taxable or exempt portion of the purchase price. Most businesses itemize

their sales and only collect tax on taxable goods and services. For example,

when somebody buys groceries, which are exempt, and paper towels, which are

taxable, at the local grocery store, the purchaser is billed separately for each

item and only pays tax on the taxable goods.

However, in

some circumstances transactions can be quite complex and involve a combination

of both taxable and non-taxable goods and services sold for a single price.

Under the previous legislation, if more than 10 percent of the total value was

taxable, goods and services tax could be payable on the full purchase price,

including a significant value of goods and services that were not intended to be

taxable.

Bill 7

changes the application of tax so that tax is generally only payable on the fair

market value of the taxable goods and services. Exemptions are provided for

packages under $500 where more than 90 percent of the total value is either

taxable or exempt. Fairness is also improved by addressing an inappropriate use

of the tax exemption for gifts to avoid tax on goods — particularly

automobiles purchased outside the province.

The sales

tax helps to pay for all the services government provides, including health care

and education, and it's only fair that all British Columbians pay their share of

those costs. The amendment will have no af-

[ Page 9596 ]

fect on British Columbians who purchase gifts in B.C., because they pay tax

at the time of purchase. Similarly, it will not change how the tax applies to

gifts British Columbians bring home for friends or relatives from outside the

province, because like most jurisdictions with retail sale taxes, the obligation

to pay tax on those goods has long been in place. Rather, the amendments

disallow the gift exemption in a narrow set of circumstances to deal with a very

specific and contrived transaction that has been used by some people to avoid

paying tax that is paid by others in similar transactions. In those cases where

the new provisions apply, tax will be payable on the fair market value of the

gift.

[1730]

Fairness is

also enhanced by excluding interest charges from the definition of purchase

price under conditional sales contracts. Under these contracts, the purchaser

makes payments to the seller, including interest payments, over the term of the

contract and only obtains title to the goods after all payments have been made.

The application of tax to the interest payments is different from the

application of tax to purchases using third-party financing, because under the

latter no tax is paid on the interest charges. The result of this amendment,

which is consistent with the application of tax in other provinces with retail

sales taxes, is to treat purchasers under conditional sales contracts like

purchasers who obtain third-party financing.

Bill 7

reduces the percentage of qualifying content to qualify for the newspaper

exemption from 25 percent to 20 percent, and this change is effective December

18, 2003 — the date the government announced its intention to introduce

legislation to make this change. This change and related regulatory amendments,

effective April 1, 2000, ensure that applications that are generally considered

to be newspapers qualify for the exemption.

The current

exemption for purchases of software which is incorporated into other software

for retail sale is also expanded. The amendments expand the exemption to include

software incorporated into other tangible personal property for resale and

software that is relicensed to others for resale. These changes bring the

application of tax to software acquired for resale into line with the

longstanding application of tax to other tangible personal property and will

enhance the competitiveness of businesses that purchase software for those

purposes.

The

application of tax to returnable and reuseable containers is clarified to

provide a level playing field for British Columbia's suppliers, to protect

revenue and to enhance the competitiveness of provincial exporters. Returnable

and reuseable containers are generally subject to tax because they are purchased

by business for its own use. Prior to these amendments a technical flaw in the

legislation only imposed tax on returnable and reuseable containers purchased in

British Columbia. Containers purchased outside the province were not subject to

that tax. Effective February 18, 1998, the act was amended to impose tax on

purchases of such containers for use in British Columbia, regardless of where

they were purchased. The amendments also provide authority to exclude from tax

containers unlikely to be returned or reused. As a result, tax will no longer be

charged on glass beverage containers, such as beer bottles, that are shipped out

of Canada as part of our growing export market.

The

definition of sale is amended in response to a court decision to clarify the

treatment of services that are not subject to tax under the act. Architectural,

accounting, research and many other services are not subject to provincial sales

tax. However, when a person hires an architect to design a building, for

example, the end product of the service is often a drawing, which is considered

tangible personal property. The legislation is amended to clarify that tangible

personal property that is incidental to the provision of a non-taxable service

is not a sale and is not subject to the tax.

The

application of tax to manufactured homes is amended retroactively to 1997 to

impose a constitutionally direct tax on the final consumer. The amendments

maintain the longstanding arrangement to treat manufactured homes and portable

buildings like conventional buildings for tax purposes and, because they

validate tax paid in the past, have no impact on past purchases or sales. The

overwhelming majority of sales of manufactured homes will not be affected by the

amendments. Only where a manufactured home is sold as tangible personal property

under a time-and-material contract — a relatively rare occurrence — will

sellers and buyers be affected. In these cases, the change will be limited to

requiring the seller to collect tax from the purchaser on a percentage of the

purchase price rather than paying tax on a percentage of the seller's purchase

price.

Nevertheless,

these amendments make important changes. They correct a constitutional problem

by imposing a direct tax, bring British Columbia's tax into line with that of

other provinces with retail sales taxes and allow exempt purchasers, such as

members of first nations, to obtain the benefit of the Indian Act exemption on

purchases of manufactured homes for use on reserve.

I move

second reading of Bill 7.

Motion

approved.

Hon. G.

Collins: I move that the bill be placed on the orders of the day for

consideration by a Committee of the Whole at the next sitting of the House after

today.

Bill 7,

Social Service Tax Amendment Act, 2004, read a second time and referred to a

Committee of the Whole House for consideration at the next sitting of the House

after today.

Hon. G.

Collins: I call second reading of Bill 8.

[1735]

PORTS PROPERTY TAX ACT

Hon. G.

Collins: I move that Bill 8 now be read a second time.

[ Page 9597 ]

British

Columbia's ports are crucial to the province's economic future. The port of

Vancouver already generates over 20,000 direct jobs and moves cargo valued at

$29 billion annually. In the right environment significant further growth is

possible. Our bulk, break-bulk and container port facilities play a crucial role

in the efficient and competitive transportation of goods to market, which

benefits all areas of the province. In addition, our ports are important for

Canada to realize the full benefits of our status as a trading nation.

It became

apparent in recent years that municipal property taxes were a contributing

factor, making it difficult for many B.C. port facilities to compete with other

ports along the west coast. This lack of competitiveness has made it difficult

to attract the investment required to secure the long-term viability and

development of this vital economic infrastructure.

Bill 8 is

designed to address the challenges identified after extensive consultation with

local governments, federal port authorities and port terminal operators. The

main objectives of the ports competitiveness initiative and this bill are to

encourage new private sector investment in our ports while maintaining the

integrity of the local property tax system, to protect affected municipalities

from reductions in existing property tax levels and to address the major

property tax concerns raised by port terminal operator