2010 Legislative Session: Second Session, 39th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

official report of

Debates of the Legislative Assembly

(hansard)

Wednesday, March 3, 2010

Afternoon Sitting

Volume 10, Number 9

CONTENTS

Page

Routine Business

Introductions by Members

Statements (Standing Order 25B)

Amyotrophic lateral sclerosis

L. Reid

Morrell Nature Sanctuary

D. Routley

North Shore Volunteers for Seniors

R. Sultan

Fundraising for CT scanner services in Nelson

M. Mungall

World Masters tournament in Kamloops

T. Lake

Margaret Prevost

J. Kwan

Tabling Documents

Report of the Chief Electoral Officer on the 2009 Provincial Enumeration

Oral Questions

Comments on harmonized sales tax

C. James

Hon. C. Hansen

B. Ralston

J. Kwan

A. Dix

Harmonized sales tax on bicycles

L. Popham

Hon. C. Hansen

Surgical services at Kootenay Boundary Regional Hospital

K. Conroy

Hon. K. Falcon

M. Mungall

Petitions

H. Bains

L. Popham

J. Brar

S. Hammell

B. Ralston

Orders of the Day

Budget Debate (continued)

B. Ralston

D. Barnett

D. Donaldson

J. Les

S. Fraser

R. Howard

N. Macdonald

R. Sultan

[ Page 3103 ]

WEDNESDAY, MARCH 3, 2010

The House met at 1:34 p.m.

[Mr. Speaker in the chair.]

Routine Business

Prayers.

[1335]

Introductions by Members

L. Popham: I'd like to introduce some guests who are joining me today here in the House who were here for the No HST on Bikes rally. I would like to introduce Kerry David Hayes, Sarah Deyell, Daniel Chowne, Susanna Grimes, Genna Woolston, Jamie Ollivier, Samuel Godfrey and Ben Johnson. Could the House please join me in welcoming them.

Hon. M. Stilwell: I rise to introduce 21 members of the Ministry of Advanced Education and Labour Market Development who are in the gallery today. They all do outstanding work on behalf of the people of British Columbia, and I ask the House to please make them welcome.

J. Brar: I would like to welcome two wonderful teachers from the Surrey school district. We have with us Sandy Collins, who is a speech and language pathologist; and Angèle Thibault, who is a teacher at Fraser Heights School. I would like to ask the House to please make them feel welcome.

J. Rustad: It's a great pleasure today to introduce a couple of young ladies to the House that are down here from UNBC. They came down to see the budget as well as to check out question period and watch how we do things, as they have a keen interest in politics. Would the House please welcome Karen Muir and Serena Lundquist.

N. Simons: It's my pleasure to introduce a constituent of mine from Powell River, Dr. John Silver, who is a former professor of dentistry at the University of British Columbia. He's down to take in a performance of Pacific Opera Victoria's Capriccio , which is, I think, on for a couple more nights. Would the House please make him welcome.

S. Hammell: I'd also like to welcome a teacher from the Surrey school district who is here today to not only lobby their MLAs but to enjoy the activities of the House. Would people please make welcome Joya Bereda.

R. Chouhan: It gives me a great deal of pleasure to welcome a good friend, Gordie Larkin, a great labour leader. Please join me to welcome him.

H. Bains: There are two fine people here in the House. Ren Morley is a Surrey elementary school counsellor. He's a part of the delegation that is meeting with all the MLAs trying to educate us about the needs of the Surrey education system. Mike Bruce is the director of communications with the Canadian Office and Professional Employees Union. Please join with me and give them a warm welcome.

J. Horgan: Joining us in the precincts today was David Clark from FOXTEL television network in Sydney, Australia. David had the spent the past month in the basement of the convention centre covering the Olympics for FOXTEL. He spent only two days in Victoria, but he was able to pass on to me — and I wanted to share with the House — that as much as he enjoyed the games, of the four that he has covered this was the best. But he said that if he had his druthers, he would live in Juan de Fuca, not in Vancouver. Would the House please make David Clark welcome.

L. Reid: I'd like the House to join me today in acknowledging the birthday of a very special man in my life. My son Will is six years old today, and I just want to wish him a very happy birthday.

Statements

(Standing Order 25B)

AMYOTROPHIC LATERAL SCLEROSIS

L. Reid: Imagine a disease which is all-consuming for both you as the patient and for your family. Know that each week in British Columbia a person is diagnosed with this disease and a person dies from this disease.

Imagine being between the ages of four and 94 and living with this disease. Know that amyotrophic lateral sclerosis, ALS, is a rapid, progressive and fatal motor neuron disease for which there is no known cause or cure, resulting in weakness and wasting in arms, legs, mouth or throat. Typically the person is immobilized or deceased within two to five years of initial diagnosis. This disease is today affecting our friends, our neighbours and our families.

[1340]

It was an enormous privilege for me to tour the ALS Centre and meet with the rare and wonderful human

[ Page 3104 ]

beings who each week provide hope and support to countless British Columbians and their families. The ALS Centre team is a multidisciplinary outreach provincial team providing comprehensive consultative services to people with ALS. The team is composed of clinicians in social work, nursing, occupational therapy, speech therapy, pathology, dietetics and physiotherapy. In addition, the team has a consulting physician of physical medicine and rehabilitation.

In British Columbia there are approximately 300 people living with ALS at any given time. The sad reality is that this number remains constant. As one person dies, another is diagnosed. Today 92 people with ALS live in the Fraser region, 59 people in the Interior, eight people in the north, 55 people in Vancouver Coastal, and 49 people on Vancouver Island.

The majority of people living with ALS in B.C. are currently being supported at home as a result of the services provided by the ALS Centre and the ALS Society of B.C. The ALS Society was founded 29 years ago by ALS patients through families and health care professionals to meet the physical and emotional needs of people with ALS and their caregivers.

To my colleagues, please join with the ALS Society when they visit Victoria on March 29 and April 20. Your support would be very much appreciated.

MORRELL NATURE SANCTUARY

D. Routley: I'd like to speak to the House today about a wooded wonderland in the city of Nanaimo. That's right: a wooded wonderland in the city of Nanaimo. Less than a kilometre from Vancouver Island University is the Morrell Nature Sanctuary. With conservation on his mind, William Morrell, a local contractor, donated this land in 1973 for the public's enjoyment.

The Morrell sanctuary is 111 hectares of preserved second-growth forest with 11 kilometres of walking trails. The public is free to enjoy the sanctuary year-round from dawn to dusk. Last logged in the 1920s, the sanctuary is owned by the Nature Trust of British Columbia.

It's managed by the Morrell Sanctuary Society for Environmental Education. This non-profit organization, supported by hundreds of volunteers, consists of a group of people who maintain the trails, organize a variety of exciting programs and raise funds for the park's upkeep. To preserve and promote the essential character of the sanctuary's evolving ecosystem is the purpose. It is a model of coexistence and a source of information, inspiration and understanding of the enjoyment of nature.

The Webster dictionary defines "sanctuary" as a place set apart as refuge. The Morrell sanctuary has been set aside, but it's certainly not set apart. Over 3,500 students per year pass through the park, enjoying their programs of nature and appreciation of the environment. They have in-school programs that they partner with the school districts to provide. They also do seniors walks and park visits for seniors with a disabled-access trail. They have partnered with the Vancouver Island University forestry program as well.

I'd like to invite all the members who find themselves in Nanaimo to enjoy the Morrell nature conservancy. It is a fantastic place. If you're in Nanaimo April 3, there's a family scavenger hunt that I'm sure you'd all enjoy.

NORTH SHORE VOLUNTEERS FOR SENIORS

R. Sultan: Who will look after us when we're old and grey? This is of particular concern in my riding, with one-quarter of the population over 65, not to mention the other half-million in British Columbia.

Will it be the government? The Finance Minister points out certain fiscal realities. Will it be our children? Not when they're chasing careers a thousand miles away. Will it be capable care aides from away? Well, there are hardly enough of them, and they've got their own parents to look after. By elimination, the answer is increasingly clear: it will be mainly seniors who look after seniors.

Trudy Hubbard of the North Shore Volunteers for Seniors offers one outstanding model. About 120 volunteers contribute 700 hours a month looking after 300 clients who are 80 to 98 years old, frail, isolated and living independently. Referrals come from Vancouver Coastal, families and friends.

Living healthy is the key. NSVS answers the call through such activities as Nordic walking, chair exercise, socialization, playing bridge and one-on-one discussions. Transportation and recordkeeping are part of the package. They also help people navigate the health care system and teach families about isolation, diet and exercise.

[1345]

So who's going to look after seniors? Increasingly, it's other seniors. Trudy's North Shore Volunteers for Seniors is the way of the future.

FUNDRAISING FOR

CT SCANNER SERVICES IN NELSON

M. Mungall: Nelson and area residents felt a great loss in 2002 when we lost many of our health services at Kootenay Lake Hospital. Since that time, the community hasn't wavered at all in its advocacy to ensure accessible and quality health care in our community. Part of that advocacy included a CT scanner at Kootenay Lake Hospital. This CT scanner, of course, wouldn't just be for residents alone. Nelson is host to many guests throughout the year — mountain bikers, back-country skiers, rock climbers, hikers, whitewater rafters and kayakers and out-of-bounds

[ Page 3105 ]

snowboarders, not to mention the most extreme sports enthusiasts, the arts and culture connoisseurs.

Nelson and area is a beloved tourist destination attracting people from all over the world, not to mention many people right from this House. But don't get sick or hurt yourself, because without a CT scanner, we can't do our very best to get you better. The good news is that this is about to change. The Kootenay Lake Hospital Foundation has been raising $1.5 million for a CT scanner since last April. In less than a year, we are at $815,000 — very, very impressive for a town of 10,000.

The hard work of volunteers and the foundation are reflected in the generous donations from Kootenay residents. But don't be daunted if you live outside of our region, because we will take donations from anyone. So for everyone who enjoys visiting the very super, the very natural and the very incredible Nelson, B.C., you can donate on line at www.kootenaylakehospitalfoundation.com. One more time — www.kootenaylakehospitalfoundation.com.

WORLD MASTERS TOURNAMENT

IN KAMLOOPS

T. Lake: Many British Columbians are still basking in the glow of the 2010 Winter Olympics and eagerly anticipating the opening of the 2010 Paralympic Games, but for the people of Kamloops, there is no withdrawal from their fix of high-calibre competitive sport.

This week the fourth World Masters athletic championships is being held at the Tournament Capital Centre, featuring over 1,400 masters athletes from over 30 countries. We don't have to leave our sporting careers once kids, the house and jobs consume our focus. Lifelong athletes from 35 to 90 years of age are competing in Kamloops in the first World Masters athletics competition to be held in North America. That includes 90-year-old Olga Kotelko of North Vancouver, who is entered in the 60-metre dash.

The masters is a perfect fit for Canada's tournament capital, where healthy living through sports and recreation is not only part of many citizens' outlook; it's embedded in the city's strategic plan. The fabulous Tournament Capital Centre is the direct result of the community's vision and began when people like Sandy Watt and Neville Flanagan teamed up with the Kamloops Track and Field Club to put forward a bold plan for an indoor field house.

The idea was embraced by city council and the residents of Kamloops and resulted in over $50 million of tournament capital infrastructure, making Kamloops the host city for many provincial, national and international events, including this month's Canadian Interuniversity Sport men's volleyball championships.

Like the 2010 Olympics and Paralympics, the World Masters relies on the hard work of many organizers and volunteers. I would like to recognize event co-chairs Judy Armstrong, whose son Dylan is an Olympic shot putter, and Bob Cowden for their tremendous work over the past two years and the hundreds of volunteers who will make our guests from all over the world welcome during B.C.'s golden season of sport.

Finally, here's to the 1,400 masters athletes who are in Kamloops this week making new friends and enriching their lives through the power of sport.

MARGARET PREVOST

J. Kwan: Margaret Prevost, also known affectionately as Princess Margaret, passed away on February 6, 2010, after a heart attack at the age of 54. A catastrophic car accident left her paralyzed from the waist down when she was only 18. Unfazed by the setback, Margaret became a member of the Canadian national wheelchair basketball team, and in 1992 the team won gold at the Pan American Games.

[1350]

Margaret, also known to her community as the mayor of the Downtown Eastside, was a tireless advocate for the people of the neighbourhood. She went from store to store telling store owners to remove rice wine from their shelves because it was killing people who were drinking it. She lobbied vigorously for wheelchair-accessible ramps to make the city more accessible. She served on the Vancouver Native Health Society board and volunteered at the community policing centre.

Margaret Prevost officially retired from the Carnegie community centre board of directors last year after serving on that board for 20 years, ten of which she was the president. The Carnegie Centre currently celebrated its 30th anniversary. To this day it's the busiest community centre in the city of Vancouver.

Margaret's contributions were immeasurable. She was a steady hand and a rock during these turbulent times. From housing to poverty to addiction to policing, Margaret fought every battle on behalf of the community. She sat in rooms with politicians, bureaucrats, police officers, community workers and the media. When she finished her say, it was impossible not to take her side.

She had the gift of bringing people together when divisions were everywhere. Margaret demonstrated that women in this community can be strong leaders. She mentored dozens of future leaders. Margaret was awarded the Queen's Jubilee medal in recognition of her community service.

I had the pleasure of knowing Margaret for close to 20 years. I will miss her e-mails raising issues that she's passionate about. I will miss her calls just to say hello. I will miss her great hugs. Thank you, Margaret — Princess Margaret.

[ Page 3106 ]

Tabling Documents

Mr. Speaker: Hon. Members, I have the honour to present the Report of the Chief Electoral Officer on the 2009 Provincial Enumeration .

Oral Questions

COMMENTS ON HARMONIZED SALES TAX

C. James: After campaigning on a promise not to do it, after telling British Columbians they wouldn't, the B.C. Liberals brought in the HST. They weren't straight with the public about B.C.'s finances during the election, they brought in the HST to try and cover that up, and now, in a frantic attempt to convince voters, they're saying the HST will pay for health care.

Well, my question is to the Premier. Why is he treating British Columbians with such contempt?

Hon. C. Hansen: We've made our position on the HST very clear. It's what the economists are saying is the single most important thing that this government can do to stimulate….

Interjections.

Mr. Speaker: Minister, just take your seat.

Members. Members.

Continue, Minister.

Hon. C. Hansen: All of the leading economists in Canada are saying that the introduction of the HST is the single most important thing that this government can do to stimulate the economy and create jobs.

We expect next week that there's going to be more evidence about the literally tens and hundreds of thousands of jobs that will be created over the next decade because we are reducing the tax on investment by 41 percent in British Columbia.

We met with business executives from around the world and investors that would actually like to be part of the tremendous business opportunity and job-creating opportunity in British Columbia. In those meetings that we had over the last month this move is something that is very significant. It's caught their attention. They're coming to British Columbia. They want to be part of the future of this province, and they're going to create the jobs for literally tens and hundreds of thousands of British Columbians.

Mr. Speaker: The Leader of the Opposition has a supplemental.

[1355]

C. James: The Finance Minister leaves out the hundreds of thousands of jobs that will be lost with this regressive tax that hurts businesses in British Columbia. The government's actions are getting more desperate every single day. Instead of a strategy to deal with…

Interjections.

Mr. Speaker: Members.

C. James: …these tough economic times, the voters yesterday got a gimmick from this government, a gimmick to try and fool them into supporting a tax that they know is bad for them and their family and businesses in British Columbia.

Again, my question is to the Premier. Why can't he just be straightforward about the HST with the people of British Columbia?

Hon. C. Hansen: Actually, I believe that the opposition should be straightforward with the people of British Columbia in terms of their HST policy. We have heard the Leader of the Opposition….

Interjections.

Mr. Speaker: Just take your seat.

Continue, Minister.

Hon. C. Hansen: The Leader of the Opposition has said that if they were ever to form a government in British Columbia, they would actually keep the HST. The Finance critic said exactly the same thing.

We now hear a new policy pronouncement from the official opposition, not coming from the Leader of the Opposition, not coming from the Finance critic. We actually have a new NDP policy on HST coming from the Energy critic when, on February 10, he was speaking on CFAX Radio and said that if they were elected, they would eliminate it completely but that they would jack up other taxes to replace it.

Now, I have a question for, perhaps, the real Leader of the Opposition or the real Finance critic. Perhaps the member for Juan de Fuca can stand up and tell us which taxes he is going to increase.

Interjections.

Mr. Speaker: Members.

Just take your seat for a second, Member.

The Leader of the Opposition has a further supplemental.

C. James: It's very clear. The minister and the rest of the government are continuing to make it up as they go along. This government has absolutely no credibility on the issue of the HST — absolutely none. One day the

[ Page 3107 ]

government says it's good for the economy. The next day they say they're not going to bring it in. The next day they say it's good for health care. The B.C. Liberals think they can pull the wool over the public's eyes.

Well, British Columbians will not be fooled, not by this government. They know it's a desperate sales job by a government that is caught in a web of deception of its own making.

My question, again, is to the Premier. Will he do the right thing? Will he keep his campaign promise and get rid of the HST now?

Hon. C. Hansen: When it comes to a credibility problem, I think the NDP have to look at themselves. One day we have a Leader of the Opposition saying that they would keep the HST. Another day we have the Finance critic saying they would keep the HST. And then we have the Energy critic, the member for Juan de Fuca, saying that they would eliminate it.

I would be glad to share the transcript of the February 10 Joe Easingwood show with all of the members of the opposition so that they can find the pronouncements that their Energy critic is saying. He says, and I quote directly: "We would have to find revenue to offset that from other taxes."

They need to come clean with the public. Are they going to jack up income tax? Are they going to jack up other taxes? I think that they are the ones that have the credibility problem with British Columbia voters.

[1400]

B. Ralston: Since July the B.C. Liberals have been trying to sell the HST, and one of the claims that's made is that it's revenue-neutral. That clearly wasn't resonating with the public. No one was convinced by that. Now they're saying it will be used to pay for health care.

Clearly, the Minister of Finance is unwilling to defend that assertion, made only yesterday in the budget. So my question is to the Premier. Does he think British Columbians will swallow his attempts to sugar-coat the HST?

Hon. C. Hansen: I have never used the words that HST is revenue-neutral. What I have said from the beginning is that the HST will bring in approximately the same amount of revenue as the PST system is today. That is actually quite a contradiction to what the NDP members have been saying when they've been fearmongering around British Columbia, saying that this is a huge tax grab on British Columbians. This actually will result….

Interjections.

Hon. C. Hansen: I refer the members to the table that's in the budget documents from yesterday, which sets out how much money we collect under PST compared to HST. As that table shows, the bottom line is that we actually receive about $113 million less in an HST world in the coming fiscal year than we would have received had we maintained an archaic, out-of-date provincial sales tax system.

Interjections.

Mr. Speaker: Members.

The member has a supplemental.

B. Ralston: This tax clearly is a tax shift from big business to consumers and small business. The minister can wriggle all he wants, offer different explanations. That is the fact, and British Columbians know that and have clearly demonstrated they understand that in their reaction to this tax over the last eight months.

But the B.C. Liberals have shown incredible contempt for the intelligence of the voters, so my question is again to the Premier. Why should British Columbians accept a single word he says about the HST?

Hon. C. Hansen: The member doesn't have to accept what we say. What the member should do is actually read what some of the leading economists in Canada are saying about the HST. It is what will generate jobs. It is what will bring back a strong economy. That's why 130 countries around the world have adopted this type of value-added tax system.

We know, for example, that in the forest sector alone it will result in about $140 million of costs coming out of the system. That makes their product more competitive both on the domestic market and on the export market. That creates jobs for British Columbians in forest-dependent communities.

In community after community, in sector after sector, this is an initiative that makes British Columbia more competitive. It allows us to attract the investment dollars we need from around the world to build our economy in the future. It is the single biggest thing that we can do to create jobs for British Columbia families.

[1405]

J. Kwan: Let me get it straight. Before the election, the B.C. Liberals said they will not bring in the HST. After the election, British Columbians are saddled with a $1.9 billion consumer tax shift known as the HST. Then, the story goes, it's good for the economy. Then it's roughly fiscally neutral. Then: "There's no more revenue under the HST system than we do under the current PST system." Then the story keeps changing, because now supposedly it's good for health care. The deception continues.

To the Premier: when will this government own up to the fact that British Columbians were misled, and it is time for them to tell them the truth about the HST?

[ Page 3108 ]

Hon. C. Hansen: I can tell the member that what is good for the economy is good for health care in British Columbia. We want to make sure….

Interjections.

Mr. Speaker: Minister, just take your seat.

Excuse me. Member for Vancouver–West End, will you retract that statement, please.

S. Herbert: Yes, Mr. Speaker. I'm not sure what I said, but….

Mr. Speaker: Member, will you unconditionally retract that statement, please.

S. Herbert: Yes, I unconditionally withdraw.

Hon. C. Hansen: It is the responsibility of governments to make sure that we build a strong economy for the future of this province. That is exactly what the shift to the HST will do. That's exactly why 130 countries around the world will do it. When you realize that we are competing on international markets where we are trying to sell increasing amounts — we are selling increasing amounts — of dimensional lumber….

Interjections.

Mr. Speaker: Members.

Minister, just take your seat.

Continue, Minister.

Hon. C. Hansen: You know, Mr. Speaker, we have had great success at opening up new markets in China and selling increasing volumes of dimensional lumber into China. But as we export product into those markets, we are competing with Scandinavian countries, for example, that don't have any embedded consumption tax in their product. British Columbia exporters do. It's like asking them to export and to create jobs for British Columbia with one hand tied behind their back.

This is a move which I think will increasingly be demonstrated as a big job creator for British Columbia. The international investors that came to this province during the Olympics recognized that. That's why they're coming back. That's why they're going to invest in the future of this province and build and create jobs for British Columbia families.

Mr. Speaker: The member has a supplemental.

J. Kwan: I'll tell the minister what's good for British Columbia. The truth — that's what is good for British Columbia. Media spin….

Interjections.

Mr. Speaker: Continue.

J. Kwan: Mr. Speaker, media spin is not an official sport. There is no Olympic gold medal for this. No one buys the spin from government, and taxpayers are not stupid. Will the Premier just admit that British Columbians were misled during the election about this much-hated sales tax?

Hon. C. Hansen: Let's ask the member: what is the spin, and what is the truth? Is the NDP…?

[1410]

Interjections.

Mr. Speaker: Minister, just take your seat.

Continue, Minister.

Hon. C. Hansen: When the Leader of the Opposition said they would keep the HST, was that truth, or was it spin? When the Finance critic said that the NDP would keep the HST, is that the truth, or is that the spin?

Now, when the Energy critic says that they would get rid of the HST and jack up a whole bunch of other taxes, is that the truth, or is that the spin?

I think it's the official opposition that has a credibility problem. British Columbians would like to know where they stand.

A. Dix: Flimflam….

Interjections.

Mr. Speaker: Members.

A. Dix: Flimflam, sleight of hand, a joke, stupid, transparently phony, contemptuous, lame, laughable, silly.

Interjections.

Mr. Speaker: Member, just take your seat for a second.

Members.

Continue, Member.

A. Dix: Those were the reviews of the minister's HST health gimmick yesterday. If anything symbolizes the mountain of disrespect this government feels for the voters after nine years in office, it's this canard. Is there nothing…? Is there no tactic the Liberals won't use to justify their broken promise on the HST?

[ Page 3109 ]

Hon. C. Hansen: The NDP that we see today is the same NDP that we saw in the 1990s. There is a total disconnect on the part of the members of the official opposition between where revenues to government come from — in taxes — and how they are spent.

We are a government that actually recognizes that those services that the public depends on are important. Health care is obviously one of the top priorities of what the public expects from government.

With this move, we are actually making the connection between how services are funded and how services are delivered. The commitment we have made is that we are going to earmark all of the revenue from the HST, in addition to all of the revenue from MSP, all of the revenue from tobacco tax, all of the revenue from health transfers from the federal government and all of the revenue from the health special account in the lottery funds.

All of those revenues together are earmarked for health care in British Columbia. I think there is nothing more that demonstrates the connection between the need for taxes, as much as people dislike them, and the services that the public depends on.

HARMONIZED SALES TAX ON BICYCLES

L. Popham: Mr. Speaker, I can tell you what's good for health care in B.C. That's more bikes in B.C., not more taxes on bikes in B.C. Cycling is good for our health. It's good for our environment, and it's good for the economy, so 5,000 people signed a petition calling for no HST on bikes in B.C.

Will the Premier listen to the people in B.C. and scrap the HST?

[1415]

Hon. C. Hansen: It's actually surprising that the member would want to get rid of an initiative that's going to eliminate a PST that saps jobs in British Columbia, and would resist the shift to an HST, which is going to be a job creator in British Columbia.

We recognize that there are some things that are going to cost a little bit more at the end of the day under HST. We also recognize that there are a lot of things that are going to cost less at the end of the day in an HST world. But the fact that there are some things, including bikes, that are going to cost a little bit more is exactly why we have put in an HST tax credit — a cheque in the mail that's going to be delivered to 1.1 million British Columbians every three months to help offset those costs.

It's also the reason that we have increased the basic personal exemption on income tax from $9,373 to $11,000 so that British Columbians have more money in their pockets to pay for the little bit extra on things like bike purchases.

SURGICAL SERVICES AT

KOOTENAY BOUNDARY REGIONAL HOSPITAL

K. Conroy: The doctors at Kootenay Boundary Regional Hospital have passed a motion of non-confidence in the Interior Health Authority. They are appalled by its shortsighted decision to create a health crisis in the Kootenays by cutting the hospital's surgical program. This program took years to build and serves two regions of the province. But now the IHA is deciding to cut surgeries, increase wait times and lay off nurses who were recruited at great expense and effort.

Will the Minister of Health protect health care in the Kootenays today by reversing the cuts that his health authority made?

Hon. K. Falcon: I'm always required to remind the member that in an era of massive increases in the Health budget, only the NDP continues to refer to health care cuts. So I've got to correct the record there; $2 billion more is actually more money. It is not less.

Now, having said that, the member talks about the reduction in surgical OR time at the Kootenay Boundary Regional Hospital, and that is true. But the member should know that the Wait Time Alliance, which is an alliance made up of doctors from one end of the country to the other, actually looked at wait times for important procedures like cardiac, hips, knees, cataract. They found that British Columbia was the leader in the country. We got an A in every single category.

You'll be happy to know that in categories of surgical procedures taking place at that hospital, they are actually ahead of the provincial average. They are beating the average in British Columbia at Kootenay Regional Hospital.

Mr. Speaker: Member has a supplemental.

K. Conroy: That's little comfort to the people who are waiting two and three years for surgery in the Kootenays and even less comfort to the rest of the province, who are going to have to wait longer if we're doing that much better.

These doctors are taking it upon themselves to fill the vacuum caused by these cuts. They recognize that these cuts waste years of public investment that should be going towards reducing the wait times — big wait times as far as we are concerned.

So they're now contemplating rescuing this surgery program by paying for the nurses themselves, by actually taking the money out of their own pockets and saying: "We want to help the patients in our region, so we're going to pay for these nurses that are being laid off, these nurses that have been recruited, who have cost considerable dollars to recruit. We're going to do that because we

[ Page 3110 ]

are so appalled by the cuts that the IHA is making under the duress of this Minister of Health."

So to the Minister of Health: will he stand up today and defend the rights of patients in the Kootenays and say no to these cuts in their area?

Hon. K. Falcon: What I will do is remind the member that the wait times at Kootenay Boundary Regional Hospital are actually lower than the provincial average. The wait time for a knee surgery is about 40 percent lower on average than the provincial average. So the adjustment that's being made in OR times will move it up to the provincial average. It will still be better than comparable facilities and hospitals in the region.

[1420]

I'll tell you, Mr. Speaker. That is not to say that we don't still have challenges in the health system. But what is fascinating to me is that in an era when we're adding over $2 billion to the health care system, the NDP still say: "Don't change a thing. Just throw more money into the system. Don't change a thing. Nothing can change."

No, Mr. Speaker. We are going to change, improve, innovate, do better with the dollars we put into the system. That's what British Columbians demand.

M. Mungall: Well, the negative effects of these OR cuts are hurting real people throughout the Kootenays, and I would like to remind the minister that these are real people. For example, Tracy Mercer has already been waiting a year for surgery to her shoulder. I would doubt that anybody would call that a letter of A in grading. This procedure is not a frill. Tracy needs it just to live her life, and her situation is not unique. At last count over a thousand Kootenay residents have been waiting a year or more for medically necessary surgery. So Minister, take that fact of information.

Will the minister intervene so patients do not have to wait even longer in pain for the surgery that they need?

Hon. K. Falcon: I know the members opposite never like to take my word for it, so I refer the member to the 2009 report by the Wait Time Alliance. That's made up of doctors from one end of the country to the other. They looked at the wait times in British Columbia, compared them with all the other provinces, and British Columbia got an A in every single category.

I pointed out that at Kootenay Boundary Regional Hospital, they are in many cases better than the best in the country already. They are already better.

I understand that the members are opposed to the decisions that Interior Health is making to try and bring that level up to the provincial average. I understand they disagree with that decision. You know, Mr. Speaker, there are challenges in our system as there are across the country, but you never hear any solutions from that side except to just pour more money into the system. Ask no questions. Just pour more money.

[End of question period.]

H. Bloy: I seek leave to make an introduction.

Mr. Speaker: Proceed.

Introductions by Members

H. Bloy: It's my honour today to introduce the future leadership of British Columbia. We have the privilege of having Westridge Elementary School in our gallery today along with their teacher, Mrs. Janet Pritchard. A few of them have indicated that they want to continue a life in politics, and I hope we encourage them today. If the House would please make them all welcome.

H. Bains: Petition to introduce?

Mr. Speaker: Proceed.

Petitions

H. Bains: I have hundreds of petitions collected by parents and teachers in Surrey asking for additional funding to cover the education needs of the Surrey students.

L. Popham: I rise to present a petition.

Mr. Speaker: Proceed.

L. Popham: I am presenting a petition from 5,000 people in B.C., including bike store owners, cyclists, the pedicab industry and people who believe that there should be no HST on bikes in B.C.

J. Brar: I seek leave to submit a petition.

Mr. Speaker: Proceed.

J. Brar: I have a petition signed by 250 concerned citizens from the school district of Surrey. They're very concerned about the funding cuts and are asking for an increase in funding for public education.

S. Hammell: Hon. Speaker, I also rise to present a petition on behalf of the Surrey residents requesting that funding be increased to the school district of Surrey.

Mr. Speaker: Member for Surrey-Whalley, are you presenting a petition?

[1425]

[ Page 3111 ]

B. Ralston: Yes, Mr. Speaker. I'm presenting a petition signed by a number of Surrey citizens seeking increased funding for public education in Surrey.

Orders of the Day

Hon. M. de Jong: Mr. Speaker, I call the budget debate.

Budget Debate

(continued)

B. Ralston: I rise to continue my remarks and my response to the budget. What many people were expecting and hoping for yesterday from the government was taking advantage of an opportunity to present a vision of British Columbia that arises at this crossroads in the life of the province after the crowds have gone home from the Olympic Games.

[L. Reid in the chair.]

Indeed, just as we planned and marked off on the calendars the date of the Olympic Games, one would have expected that the government similarly would have marked off the date of the budget and made plans to launch a longer-term vision of the province's future.

It's clearly evident at this time in the economy not only of the province but of the country — particularly the North American economy and our largest trading partner, the United States of America — that the economic recovery that is underway is very fragile. Indeed, just today senior banking officials, central banking officials in the United States have expressed concern that the recovery is much weaker than hoped for, and the American economy may begin to move slightly backward.

The jobless numbers in the United States have reached record levels, certainly the highest level of official unemployment in many years. It is the deepest recession, as we know, since the 1930s. So it's a major economic calamity in the American economy.

Traditionally the American economy has come charging back from recessions, and usually the growth in the first, second and third quarters leading out of a recession has been very strong and begins to do all the things that a resurgent economy does, which is see job numbers increase. Employers begin to take on more employees, and slowly but surely the number of unemployed diminishes.

That is not the case thus far in the United States and is a major risk. Indeed, the Ministry of Finance has expressed just that view in its documents supporting the budget, in the

section where they talk about key risk indicators for the B.C. economy. Once people speak in the United States and people speak in the Ministry of Finance — officials…. This is not a political view. This is simply an objective catalogue of the risks to the recovery of a number of just those risks. It is important to bear that in mind when we approach the budget and when we look at the long-term future of the economy here in British Columbia.

There's an opportunity that the government had and has apparently chosen not to take. Realistically, I think what most people will take away and what most people will glean from the budget is that this government is bound and determined to make the HST the centrepiece of their strategy for recovery from the recession here in British Columbia.

[1430]

I will deal a little bit further on in my speech with some of the claims that have been made, particularly by the Minister of Finance on behalf of his party and the government, about the economic benefits, so called, of the HST.

The actual examination of some of the claims that are made is not supported by the experts that the minister refers to. Indeed, the only expert report cited in the budget in the September update was a paper by Mr. Michael Smart. What the minister claims, and I think the latest formulation that I've heard a couple of times was hundreds of thousands of jobs, is just not borne out. There's just no basis for claiming that. The economist cited by the government doesn't even say that in the paper that is cited there in the budget.

One can understand a certain verbal exuberance, a certain rhetorical excess — that sometimes comes with the territory in politics — but this is a serious economic matter. These claims are being made in a kind of argument from authority as: "Well, you may not understand, but these economists understand, and they say this about the HST." And it's just not accurate.

It seems the government has made a decision to hammer away at a deficit number. Later in the speech I'll talk about some of the jiggery-pokery that has gone on in order to achieve a deficit number. Certainly, there's the very creative use of the $1.6 billion signing bonus, if I could put it that way, transferred from the federal government to the provincial government — although probably it's inaccurate to say it was transferred just yet, or at least that's the latest explanation — and how that was used in September in the budget update to achieve a putative bottom line, and how it's again being used this time out to achieve a bottom line as well.

I think what people are looking for in this climate is not so much a tax cut strategy as they're looking for a job strategy. They're looking for, in this time of unemployment…. B.C. did very, very badly in 2009 — the worst employment record and, since the recession began in July 2008, really devastating job loss here in British Columbia.

We're looking for a job strategy, and this is not a lens that we hear from the government very often. The

[ Page 3112 ]

only time in the minister's speech…. It was mentioned yesterday three times, two times in very general context and a third in conjunction with the HST. The HST, if that's the job strategy of this government, is a sham. It's just not a strategy that anyone should take seriously.

But I don't really think it is a job strategy, because that's not the focus of this government. The focus of this government — and I'll go through some of the instances of that in this budget — is on a tax cut strategy, and tax cuts which are unexamined. They're not studied in their effect. There's no modelling done in advance, and there's no demonstrable benefit from some of the tax cuts that have been brought in.

I'll give an example that I discussed with the minister in estimates debate in the fall, which is a lifting of the provincial sales tax on machinery and equipment beginning in 2001 and continuing through with some modifications in the 2006 budget to this very day, so approximately $110 million a year in forgone revenue. That was confirmed.

[1435]

The minister — and I'll deal with it a little bit later on — was not able to point to a single study on its effect, notwithstanding the importance of machinery and equipment in some of the productivity indices and productivity studies.

For that tax cut, what benefit was achieved for British Columbians, other than the loss of tax revenue? The minister wasn't able to point to that, yet he has at his disposal an array of highly skilled economists and officials and the Treasury Board who examine these things if requested, but no study apparently exists. No study is forthcoming. Tax revenue is forgone, and there's no effort to study the effect of it.

I think part of the reason why the government doesn't have a jobs strategy is that in the B.C. Liberal philosophical approach to the economy, labour is merely an input into production. Labour is a factor; labour is a cost.

That probably explains why the Liberals have stubbornly and resolutely refused to raise the minimum wage since the last increase was brought in by the outgoing NDP government. It came into effect in 2001, and over the last eight years the government has not raised the minimum wage. The minimum wage has fallen from the position of being among the highest of the provinces in Canada to now being the lowest. That's a view of the dignity of labour, of those who work, that sees labour as an input, as a cost to do business, as a factor of production and less as a human being.

However ordinary the work may be, it's nonetheless vital. It's essential to the dignity of that person that they be compensated fairly, and there doesn't seem to be any recognition of that. By their actions or, rather, by their failure to act on the minimum wage, it's a

summary of the view that is taken of the people who work at jobs. What flows from that is that a consideration of a jobs strategy is, therefore, a lower priority, if it's a priority at all.

I've never heard a convincing explanation from anyone on the B.C. Liberal side as to why the minimum wage should continue to plummet relative to other provinces, and I gather from the approach that's been taken thus far that we can expect to continue to be eclipsed here in British Columbia by other provinces.

Certainly, this is not an ideological view among Canadian Premiers, because whether it's an NDP Premier in Manitoba, whether it's a Liberal Premier in Ontario or whether it's a Tory Premier in Newfoundland, all of those Premiers have taken steps to increase their minimum wage.

Indeed, the irrepressible Danny Williams, Premier of Newfoundland, has on his home page, on his website, the strategy to combat poverty in Newfoundland. He has taken that as a personal priority, and the minimum wage there is part of a strategy that they've set out — not an NDP government, not a Liberal government, a Tory government — in Newfoundland to combat poverty. They have a number of measures and real targets and an active monitoring of their progress on those targets.

I'm sure that this is not the only reason, but he does enjoy immense popularity in Newfoundland. Obviously, this is not particularly an ideological view across the spectrum in Canadian provinces. This is a view that is unique to British Columbia, unique to the B.C. Liberals and, I suppose, unique to the world view of the Premier and the Minister of Finance and his cabinet colleagues. I sense that there were a few at the table, prior to the election, who had a different view, but they're gone now. Maybe one of the reasons why they're gone is that they didn't share the view on the minimum wage.

[1440]

Certainly, the kind of policy that Premier Williams has in Newfoundland or the anti-poverty strategy, for example, that Premier McGuinty — again, not a New Democrat — has promulgated in Ontario, shows a broader understanding of the challenges that families face, because not everyone is a high-flyer. Not everyone is earning $100,000 taxable or more.

Indeed, the figures that the minister referred to in talking about the HST dividend…. People receive that dividend — if it's appropriate language to call it a dividend — if they earn less than $20,000 net taxable if they're single, and earning $25,000 or less net taxable if it's a family.

When the minister speaks proudly of the number of people who will be receiving that benefit, it's really a measure of the breadth of low income and, arguably, poverty in the province — that there are over one in four citizens whose income falls below that level of taxable income. That is not a lot of money. In some cases, those may be….

The usual example that's thrown out by members of the government, as it is with the minimum wage, is kids

[ Page 3113 ]

who are young adults living at home with their parents, where they're essentially supported by their parents but have some of their own income. As in the minimum wage that's the minority by a long shot. So this is a widespread measure of just how stratified the province is in its incomes and how broad low income is across the province.

When one considers a budget and an economic strategy, it's important to consider a number of things, and obviously, tax policy is a part of that. But by any of the usual measures that economists use or that people use in making decisions about where to live, the things that they look at are far broader than merely tax policy. The levels of public investment and infrastructure are important. Public services such as health, education and literacy are important.

It's too often forgotten here in Canada, although the United States has been consumed by the health care debate, that the public health care system here in Canada and in British Columbia, challenged though it may be, is a significant business advantage to companies who do business in British Columbia and other Canadian provinces. Indeed, at one point in the health debate I recall citing a quotation from the president of the Toronto Stock Exchange, who said that the public health care system in Canada is a major competitive advantage compared to the United States.

CEOs and corporate boards in the United States spend a lot of their time worrying about the cost of the health care plan that they provide to their employees, probably about the cost of the health care plan that they provide to their senior executives and the cost of health care benefits to the retirees who may be part of the company pension plan. It's a huge concern, a huge competitive pressure, on companies in the United States and consumes a great deal of managerial and entrepreneurial energy simply to manage.

That's a significant business advantage that we have here that's sometimes forgotten when we go to make the kinds of comparisons urged upon us about relative tax rates — and I'll get to that a bit later — because the international activity centre legislation that's proposed does look at some comparative income tax rates and corporate tax rates in a rather startling way.

[1445]

Also, what one considers when one is looking at an economy and an economic strategy — and these are the sorts of things that the opportunity is there to look at as one looks longer term — would be early learning. Those years, the preschool years, the years three to five, are very key years in childhood development — not to minimize the ones that come before and those that go after.

Certainly, the former governor of the Bank of Canada, David Dodge, in a paper a few years ago made the point that in an era when demographic trends show that the number, gradually, of those who are over 65 will be steadily increasing and the number of those younger and joining the workforce is decreasing proportionately, it's important.

Beyond the justice or the equity for the individual of a proper education, it makes good economic sense, speaking as an economist, to invest in education in the early years. Then you identify the learning disabilities, the physical impairments, the hearing loss that may prevent those children from fully participating in the public education system, from being educated, well-trained and coming out able to take their place in the world of work and contribute to the community and the economy and paying some of the bills that we as a society run up. So one would look for that sort of a strategy.

Again, in taking a broader view of the economy, one would also want to look at the capacity of the economy to innovate, to do research and development, and I'll have a little bit more to say about that later on. But certainly, what is often pointed out is that in Canada over the last ten or 15 years research and development has declined — certainly, spending in the private sector.

Often research and development in Canada is carried by public universities, the great public universities of our country, and not so much by the business sector, particularly those large firms. One of the hallmarks of an effective and vibrant business community is the capacity and the willingness to undertake research and development innovation. This bears on the problem that economists talk about called the issue of productivity, and I'll have a little bit more to say about that.

It's important to look at competition policy, important to look at trade and immigration. The minister, in his remarks here today and yesterday, has talked about increasing trade to China. That is certainly welcome. But when you consider that B.C. exports to every other country other than China have declined…. It is one bright spot, and I suppose the minister can't be blamed for picking out the one bright spot and talking about it.

But overall when, for example, trade in wood products…. According to the B.C. Business Council, from 2004 to 2009 exports of B.C. wood products to the United States have declined 60 percent. That has huge long-term implications for the province, and a shift to China is not something that can be achieved overnight or even in five or ten years.

These are the kinds of concerns that one would hope that the government would have seen fit to look at in more of an analytical way, more of a visionary way, in the budget, in the throne speech, and that wasn't done.

Another concern that people bring to their decision to live somewhere, to stay somewhere, to become a citizen somewhere or perhaps to invest or do business, is also their perception of public safety, of crime and safety, the efficacy and fairness of the justice system and all those broad public concerns that fall into that category.

[1450]

[ Page 3114 ]

Certainly, while gang warfare appears, fortunately, to have abated, there are continuing broad concerns about the environment in which criminals operate, in which organized crime operates, in which gangs operate and its impact in the long run — its corrosive impact on our community, on our ability to trust one another to live openly in our communities and to make the kinds of investments, the kinds of choices that are necessary when people feel secure and comfortable and confident in their community in the long term.

That wasn't addressed at all. Beyond that, the government does and the minister did speak somewhat of the quality of life, but the quality of life is something that's been analyzed, I think, a little bit more seriously than the rather casual way the term is sometimes used.

I'm thinking here of Richard Florida, who has talked about the kind of communities throughout North America that attract the kind of people that he's called the cultural creatives, although I think he's careful to point out — I did hear him speak publicly at one point — that he views everyone as having the creative spark, and how one expresses one's creativity is different for each person. So it's not a narrow definition; it's a broader definition.

But certainly the level of tolerance in a community, the level of tolerance of different races, of different cultures and of sexual orientation…. That index of tolerance becomes a very important factor in people deciding why they will live in a community, why they will stay there and why they will invest.

The other thing that he does say, interestingly, in light of some of the decisions that this government has made in a very narrow way, I think — and it's been broadly agreed in the arts community — is that many people are…. One of the decisions that they make about living in a place, investing in a place, being in a place, finding a region, a town, a community exciting and vibrant is the degree to which there is cultural activity there. The self-expression that comes with cultural activity, whether as an audience, as a viewer or a participant, becomes very important for people in making that decision.

These are all the kinds of things that go into the consideration that's necessary in developing a bit longer view of where we're going and what we might do here in British Columbia, and those weren't really touched upon in the budget.

So if I might return then to just offer a few specific details about the economic outlook for British Columbia. Certainly British Columbia has been hardest hit among the provinces. Certainly B.C., Alberta and Ontario were the three provinces hardest hit by the recession.

Mr. Finlayson at B.C. Business Council has pointed out that the structure of the B.C. economy is really weighted to consumption and to housing — which is obviously compatible with certain interests. During the boom six of the ten leading industries were housing or construction or construction-related, and construction has been an important part of the B.C. economy in recent years. Construction alone and housing and consumption, while they certainly attract certain kinds of investment and create certain kinds of jobs, is not a solid basis for a long-term future for the economy here in British Columbia.

When you look at some of the traditional industries and the export orientation, particularly the resource sector…. It has been rocked in recent years, and I quoted earlier the 60 percent decline from 2004 to 2009 in wood product exports.

[1455]

That's been a mainstay of the B.C. economy, and that has really, really dramatically shifted, all under the watch of the B.C. Liberals, all when they have all the levers of policy available to them. They've had it all their own way on policy changes — whether it's ending appurtenancy, whether it's returning private lands to, for example, Western Forest Products. All of those changes have occurred under the watch of the B.C. Liberals.

We see the results — literally tens of thousands of jobs, mill closures throughout the province, a complete downturn in the forest industry of catastrophic proportions — which the B.C. Liberals have presided over.

The exports of British Columbia — all exports — are down in every market, other than China. But those exports to China are dwarfed by the traditional exports and the strength of our two historic major trading partners, the United States of America and Japan.

What Mr. Finlayson, on behalf of the B.C. Business Council, does point out in expressing his concern…. The B.C. Business Council is engaged in an activity about identifying where the future growth and what the future direction of the B.C. economy should be longer term. That's not something the government appears to be preoccupied with, judging by the budget and the Speech from the Throne. But they have expressed that concern.

One of the hallmarks of that concern has been to note in a presentation that he made that B.C. has the weakest export intensity of any province in Canada — that is, as a percentage of GDP, British Columbia's exports both internally to other provinces and externally when combined and compared to all the other provinces is the lowest. That poses real challenges. From that fact, it's easy to see the challenges. It's more difficult to discern a recipe for prosperity as we look out over the next five, ten or 15 years.

Now, obviously B.C. has considerable strengths, resilience. As the GDP growth in the United States and Europe has declined in recent years, particularly rocked by the recession, the Asian economies have continued to grow. Certainly, GDP growth in China last year was 9 percent. There are obviously opportunities there that have to be developed and seized upon.

[ Page 3115 ]

B.C., relative to other Canadian provinces, is obviously the Pacific province, therefore positioned more closely to trade with the Pacific. That's certainly geographic positioning.

Given some of the skilled immigrants that have joined us here in British Columbia over many generations — and I include myself as, ultimately, a child of immigrants; my grandparents, certainly on my mother's side, were immigrants — that have added to the economic prospects for British Columbia….

We have a skilled workforce here in British Columbia, although there are requirements to meet the kinds of demands of a changing economy in terms of retraining and investments that need to be made that have not been referred to in the budget and seem to be being ignored.

Obviously, there are challenges here: the pine beetle fallout continues, the high cost of housing and sluggish productivity, and what is clearly the need for diversification and new engines of wealth and of growth.

The challenge that the B.C. Business Council puts is…. This is what they're working on, and I think they're really joined by many of the public bodies — certainly the B.C. Federation of Labour, representing organized workers in the province, share this concern. How can B.C., as a small open economy, continue to prosper in a more competitive and increasingly knowledge-based global economy?

[1500]

Rather than austerity, which seems to be the recipe of the government in this budget, the people are looking to the sources of post-Olympic prosperity. They're not evident from this budget at all.

If I might just make reference to some of the more, I suppose, what might be considered or called expert opinion. Mr. Kevin Lynch is a former Clerk of the Privy Council and Secretary to the Cabinet. He wrote a recent opinion piece in the Globe and Mail which talked about the challenges that Canadian businesses faced and in his view did not meet.

The problem is that too often, I think, the solution that's offered by the B.C. Liberals is: "Well, business will take care of it." But generally, there's a fairly uncritical view of business and business solutions. Mr. Lynch doesn't seem to have the same inhibitions and certainly has some, I think, wise advice to offer. I'm going to just quote from this opinion piece that he wrote:

"Consider the possible impact of the long decline in the Canadian dollar. A lower dollar paradoxically improves competitiveness but reduces wealth. It encourages business to use more domestic inputs and fewer imported inputs, which the lower dollar makes more expensive.

"Since Canadian business imports much of its machinery and equipment, firms employed more labour and less capital than their competitors. This reduced short-term costs but impaired medium-term productivity, as business used older capital and less innovative technologies.

"This orientation saw Canadian business invest relatively little in home-grown research and development and spend relatively little to license leading-edge technologies developed elsewhere."

He goes on to say:

"A key source of U.S. productivity growth has been the development and production of information- and communication-related goods and subsequently the broad application of these throughout the U.S. economy, particularly in the service sector. Sustained increases in service sector productivity have had a profound effect on the economy; services account for 80 percent of the U.S. economy and 70 percent of ours. Unfortunately, the intensity of the usage of information technologies by Canadian business is only half that of the U.S.

"International comparisons again demonstrate the research gap between Canadian businesses and their competitors. In 2007 Canadian business ranked 14th among OECD countries in research and development expenditures as a percentage of GDP. Canadian business spending on R and D was only 1 percent of GDP, well below the OECD average of 1.6 percent, roughly half of what U.S. business spends as a percentage of GDP and about a third compared to Sweden, Finland and Korea.

"This suggests Canadian business has less capacity to be receptive to innovation and less of a focus on innovation as part of integrated business strategy in Canada."

What he does go on to say…. He does have some comments about…. I don't necessarily endorse all of these, but I think they're useful to consider.

"What will not work are one-off approaches, small fiddles to address a systemic problem and the view that it is someone else's responsibility. In short, a continuation of the status quo will not work. What is needed is behavioural change by Canadian businesses in their long-term strategies and a shared sense of purpose by business, governments and the research community.

"A concerted productivity strategy should encompass innovation, the labour force, markets and attitudes, bearing in mind that there is no single or simple or immediate fix to this structural problem."

He goes on to talk about:

"Canadian business spending on research cannot remain below the…pack of the OECD if we are to spur innovation on the scale needed. Our public research capacity has improved greatly, but we need to focus on building global centres of research excellence, better commercialization of our research efforts to create jobs and wealth, better models of business-university partnerships and better market-based means of financing the application of innovation, particularly a stronger venture capital market…."

Then he goes on to talk about the necessity of excellent public education to train the workforce in a knowledge-based economy:

[1505]

"In a knowledge-based economy, high school completion and rigorous minimum literacy standards should be givens, not aspirations. We have fewer Canadians with university degrees than many of our competitors, fewer still in scientific disciplines, and we have to design new incentives to encourage the education outcomes we need as a nation. Immigration can offset our demographic trends, but its labour effectiveness depends on attracting skilled immigrants."

So that's a challenge that he puts out to Canadian business, and I think that's particularly apt here in British Columbia.

What the B.C. Business Council points out is that there are relatively few of the firms which are here in British Columbia — export-oriented — with the capacity to build the kind of international brands that generate the wealth, generate high-paying jobs and generate the ability to undertake the research and development, to build the innovation that's necessary to move the economy forward.

[ Page 3116 ]

If anything, there has been a flight and a reduction in head offices here in British Columbia over the last ten years. A lot of that has to do with consolidation in the forest industry, but many of the forest firms now, as in the past and even more so lately with the few exceptions, are not owned by owners in Canada. They're owned outside the country. That's obviously legally permissible but has certain consequences in terms of that willingness to make the kind of investments that will lead to the kind of growth of export-oriented firms of the size and capacity and vision necessary to create the jobs and harness the resources and lead us into the future.

So that's a challenge to Canadian business that Mr. Lynch throws out. He's a former Clerk of the Privy Council, presumably expert in giving advice to the senior level of government, the federal government.

I have another similar piece by Mr. Dezsö Horváth, who is the dean, and Tanna Schulich, Chair in Strategic Management of the Schulich School of Business at York University.

He says this. This is, again, written just a few days ago in the Globe and Mail . I want to assure members of the media that I don't only read the Globe and Mail ; I'm a big fan of many other publications, but these two articles caught my eye. He says:

"As Canadians cheer on our athletes in their quest for gold at the Winter Olympics, little focus is being given to an arena where Canadian competitors are falling behind: the global competition for markets, investment opportunities, knowledge industries and job-creating business expansion. The gradual decline in our global competitiveness has been in the making for nearly three decades."

He goes on to talk about how that has come about:

"Dramatic events, of course, were occasioned in recent years by foreign takeovers of big-name Canadian companies with long legacies. They attracted media attention and gave rise to a public debate on the 'hollowing out' of Canada. Little attention was paid, however, to the underlying truth. There is not much left in Canada to be hollowed out, due not so much to foreign takeovers as our chronic failure to create globally competitive corporations.

"One reason for this is that Canadian firms have remained content to stay put at home, venturing at most to ship products to the United States. Some would argue that a relatively small size precludes Canada from creating truly transnational corporations. But some of the world's smallest countries, such as Switzerland, Sweden and the Netherlands, consistently produce many of the world's largest transnationals — companies such as Nestle, Ericsson and Philips.

"By contrast, the number of Canadian transnational corporations among the world's top 100 has fallen to just one by 2007: Thomson Reuters Corporation, which occupied the 100th place from four Canadian firms on the list a decade ago.

"Why? We may complain about aggressive foreign takeovers, but there is no reason why Alcan, Inco, Dofasco and other large Canadian firms could not have been themselves the aggressive buyers of foreign assets and become the hunters instead of the hunted.

"We may point an accusing finger at our history of high tariff barriers and protected home markets, but the success stories of Japanese and South Korean companies vividly demonstrate it is possible to use the cover of a domestic shelter to grow into world leaders. Whatever the argument, it boils down to saying: we are too small to go global.

[1510]

"This thinking is not going to win us any gold medals in the economic Olympics. In fact, it's a disqualifier to start with. To stop us sliding on a downward trajectory, we need to put our thought process into reverse. We are not too small to go global."

He goes on to talk — speaking, I think, more in his capacity as someone from business school — about what's necessary in terms of encouraging and training business entrepreneurship.

This view of Canadian business is taken by very respected and knowledgable members intimate with the business community. This is a professor and head of the department of business studies at the Schulich business school. So this is not a rogue view, an errant view. This is a very considered view from the mainstream of Canadian business.

It's interesting that the Minister of Finance says, as part of his defence of the HST, that simply by introducing these measures, Canadian business will make the investment. This is not the view that's taken by Mr. Lynch or Mr. Horváth about the pattern of Canadian business over the last several decades. Indeed, the tendency has been rather the reverse.

For example, one of the hallmarks of challenging productivity is investment in machinery and equipment. Machinery and equipment investment, by the very virtue of acquiring it and deploying it in business, is thought to increase the capacity of the company, its output, its efficiency, and therefore is kind of rolled all up into the description of productivity.

There is an example that I spoke with the minister about in estimates debate back in 2001. The government introduced an amendment to the provincial sales tax act exempting machinery and equipment — not all machinery and equipment, but a fairly broad band of machinery and equipment. It cost about $110 million a year. That, one would expect, would be something that would be….

Rather than simply doing away with the provincial sales tax, this was a focused, targeted tax reduction on a key element in business strategy and, according to the theory, should have incented some investment in sectors and should have generated the obvious economic effects that one looks for. But when I….

Did the member want to make an introduction?

Deputy Speaker: Thank you. Would you be so kind as to yield the floor?

B. Ralston: Oh, certainly.

Introductions by Members

R. Lee: Thank you to the member for Surrey-Whalley for giving the floor to me.

In the gallery today we have 27 grade 4 and grade 5 students and five parents from Confederation Park Elementary School in North Burnaby led by their teacher,

[ Page 3117 ]

Geetu Parmar. They are here today to learn about the Legislature, and I would like the House to join me to give them a very warm welcome.

D. Barnett: Today I have a guest in the House, a young gentleman who grew up in the 100 Mile area. His father has been a lawyer there for 40 years and is a good friend of mine. His name is Greg Messner, and I ask this House to welcome him here today.

[1515]

Debate Continued

B. Ralston: I want to continue to focus on that exemption from PST, provincial sales tax, on machinery and equipment purchases, which was brought in, in 2001. What I did ask the minister on November 23 in Committee A…. I asked him to explain or point to any studies that measure the efficacy of that particular tax relief and its effect on productivity. He confirmed that it was $110 million a year. If you look at that…. Assuming for the moment that the tax would have stayed the same, arguably, that's a billion dollars of forgone revenue, approximately, by 2009.

That's a major change in the tax regime — arguably, forgoing a billion dollars in tax revenue — focused on machinery and equipment. There were some minor revisions to that change in 2006. Had there been any studies? Was there any attempt to analyze the effect of forgoing a billion dollars in tax revenue? Obviously, companies would have to make that investment in machinery and equipment.

The minister said that there were no specific studies that looked at that precise measure. He had some anecdotes. He spoke about the general tax environment, but no studies focused on that particular measure at all.

When the minister says that was a tax change, doubtlessly expected or promised, that it would incent investment, that investment would result…. When the minister says, here in the Legislature or outside in interviews, that this HST is going to encourage investment, I say that given the track record — and I have other examples that I'll give — there's no evidence or reason to expect that that kind of investment will be made.

In fact, Mr. Don Drummond, the chief economist of the TD Bank, said…. This issue of productivity is one that troubles economists and people who think about these things in the long run. It's a concern for the competitiveness of the Canadian economy and the British Columbia economy long-term. He said in a recent speech — I went to hear him in Vancouver; he spoke to the Vancouver Board of Trade — that in 2005 to 2008, Canadian businesses had good balance sheets. The cost of machinery and equipment had actually fallen, and his words were: "Canadian business blew it. They didn't invest."

That probably goes back to some of the more long-term trends that Mr. Lynch or Mr. Horváth talks about — the propensity of Canadian business to remain in a comfort zone, perhaps look at exporting to the United States, not building the kind of export-oriented global firms that even…. The examples of Sweden, Finland, Switzerland, the Netherlands, Korea were given. I suppose one could add in Taiwan as well.

The expectation that somehow by simply cutting the tax in the way that is proposed and shifting it from business onto consumers and small business…. The proposition that's advanced that investment will flow is just not warranted.

Indeed, people who think about these things, people who examine these things…. Mr. Drummond — once again, hardly a New Democrat, but certainly a serious economist, a well-respected national authority on these things — said that Canadian business blew it. They had the opportunity to invest in machinery and equipment, to make those kinds of investments that would increase the productivity of their firms and enhance the overall productivity of the Canadian economy. They didn't do it.

Why should one expect, given this tax measure that the government is introducing, that Canadian business will invest or that international business will invest? There's just no reason to expect that.

[1520]

When one looks at other aspects of the HST, one of the concerns or one of the aspirations of the tax, I suppose on the minister's part, is that forestry firms…. It was mentioned again today that because the forestry firms will be relieved of the PST burden, they will be relieved of some costs. They will make investments, and this will be part of this recipe of hundreds of thousands of jobs.

But what in fact happened here in British Columbia when the softwood lumber money was returned after the settlement? In fact, British Columbia firms didn't reinvest in British Columbia. There's no requirement when the HST…. In theory, should the HST come to pass here and become part of the law of the province, there's no requirement on any of these firms to take the reduction in their costs, relieving them of some of the burden that the former PST may impose on them…. There's no obligation on their part to invest in British Columbia — none whatsoever.

There's no requirement. There's no reciprocal obligation. There's nothing. It's simply what I think some people have described as faith-based economics. There's an assumption that the investment will be made. In the case of Mr. Drummond and the opportunity to invest in machinery and equipment, 2004 and 2008, Canadian business didn't do it.

What did some of the timber barons, timber companies, here in British Columbia do with some of their

[ Page 3118 ]

money when they had an opportunity? I don't begrudge them this opportunity. I'm just saying that the expectation that the minister talks about, that new investments will be made in the forest sector because of the HST, is just not borne out.

I'll give a couple of examples here. Canfor, in 2006, signed an agreement to acquire all the outstanding shares of New South Companies in a transaction valued at $205 million U.S. New South is headquartered in Myrtle Beach, South Carolina, and operates three sawmills, two treating plants, a finger-joint plant and a European lumber import business. All operations are located in North and South Carolina.

Interfor announced the completion of a Crown Pacific transaction. This is, again, in 2004. They entered into an agreement with Crown Pacific to acquire the company's three mills in Port Angeles and Marysville, Washington, and Gilchrist, Oregon, along with the shares of Klamath Northern Railroad and 290 railcar leases for $57.3 million U.S. plus working capital, estimated at $16 million U.S. — another investment in the United States.

Interfor in the same time period announced that its subsidiary Interfor Pacific had reached an agreement to buy the assets of Floragon Forest Products Molalla, a well-established, successful independent sawmill in the U.S. Pacific Northwest, for $50 million U.S. plus an amount for inventories. The Floragon operation is located at Molalla, Oregon, approximately 30 miles southeast of Portland. The mill produced 220 million board feet in 2004 and generated total sales of $91.5 million.

Brookfield Asset Management in the same time period today announced they're entering into a definitive — this was an agreement with Longview Fibre — agreement for Brookfield to acquire all the outstanding shares of Longview for cash at a price of $24.75 U.S. per share. Total transaction value $2.15 billion U.S., including assumed debt. With this transaction Brookfield will acquire 588,000 acres of prime freehold timberlands in Washington and Oregon, the heart of the Pacific Northwest.

These are deals. Again, there's nothing wrong with the deal in the legal sense obviously. It's simply that those Canadian-based companies made decisions to take their money and invest it in the United States. So there's no obligation, if there's somehow an additional cash flow brought on by the HST here to the forest sector, for those companies to invest one dollar more in British Columbia.

[1525]

Past indications are that those companies are interested for business reasons in making investments in the United States, and there are a number of other examples over this time period. So the blind faith that's exhibited by the minister, this profession of the imminent arrival of hundreds of thousands of jobs, of investment that's going to be made, in light of the reality of the business world…. There's an example in the forest sector. There's a concern expressed by Mr. Drummond. It's just not factual. There's no reason to have that expectation.

It might happen, but the declaration that this is the single best thing that can be done economically, that this has to be done, that it's going to lead to new investment, that it's going to create hundreds of thousands of jobs is just balderdash. I'd use a more unparliamentary term, but since I am here in the Legislature, I won't.

There's just no reason to accept that, unless you're desperate to justify the deal, to justify the bringing in of the legislation, desperate to justify breaking the commitment that was made in the election by the party of the members opposite — that commitment was made in writing — and attempt to persuade the public that somehow this will be good for them in the long run because investment will flow.

Indeed, it's just not borne out. Mr. Smart, the author of the paper Lessons in Harmony , a paper from the C.D. Howe Institute, footnoted…. This is the authoritative paper referred to by the minister in the document in the budget last year. He did a study of what happened when the HST came into effect in the maritime provinces. He looked at that very closely, and here's what he said.

This is a direct quote from his paper. "It is important to emphasize that the increase in investment caused by the HST reform is a short-run phenomenon, as firms have acted to adjust to the new, higher-capital stock that is desired when taxes are lowered." It goes on to say: "Whereas the investment effect is transitory, the effect on capital stock and labour productivity is presumably long-run and permanent. However, my empirical methodology, discussed below, does not allow these long-run effects to estimate it directly."

[C. Trevena in the chair.]

What he's saying is that basically he doesn't know. There's the short-run effect, and that may be explained simply by investors artificially delaying a decision until the new tax regime comes into effect. Once that short-term effect is dissipated, it returns to the same level as before.

So that's the key intellectual pillar. That's the reasoning on which the government bases…. This is the paper they cite. I didn't choose it; they did. It's in the budget. That's the paper they chose. That's the argument, and that's what the author of the paper says. So there's just no reason to think that the investment that's thought of here and promised and the hundreds of thousands of jobs that the minister does talk about have any basis in fact whatsoever.

I want to give a third example of this same approach that's taken by the government in terms of its tax policy. The government, when Carole Taylor was the Minister

[ Page 3119 ]

of Finance, introduced legislation to reduce the corporate capital tax on banks. This was to be phased out over three years. We've now heard from the minister that any minimum tax that might be owing — an estimated $100 million — the banks will not be obliged and financial institutions will not be obliged to pay. They'll be relieved of that obligation, and the legislation that has been tabled proposes to do that.

[1530]

But when the minister was questioned in the House — Carole Taylor, as she then was the Minister of Finance — similarly, I asked her: where is the…? I mean, obviously the Ministry of Finance has the capacity to model this tax change. Where were the studies? Where were the analyses that showed that if this revenue was forgone, economic benefit in the form of investment would result? Nothing. Nothing at all — decisions involving tax revenue of hundreds of millions of dollars.

No responsible person in business would undertake that. I've sat at a boardroom table. I chaired Vancity Savings now with assets of, I think, $14 billion. No responsible business would undertake that kind of change without a study, without an analysis, without a serious consideration of what that might mean.

Members opposite sometimes like to think of understanding business. No responsible business, no business that wanted to continue to exist, would take measures like this that affected its revenue, without some kind of a study.

The only evidence, the only support the minister, Minister Taylor at the time, could offer to support this tax change was that she had been told anecdotally by the head of the International Financial Centre that this would be a good thing. That conversation wasn't reduced to writing — no exchange of correspondence.

I am acquainted with the person. He's now since retired. He's a very decent and honourable person. I have no doubt that he said that. But surely the obligation when making these kinds of decisions about revenue goes beyond simply accepting a single anecdote or a single word of advice from one source.

So that decision — again made without any study, without any analysis and with the promise, unsupported, that investment would flow…. And it hasn't. It hasn't in the way that it was described. There's been no evidence and certainly no evidence at the time that Asian financial institutions were lobbying or interested in establishing offices here in British Columbia in a way that they hadn't been before — nothing to support that.

In all of these cases where one looks at the way the government analyzes legislative changes in the tax environment, there's not any real consideration of the consequences of forgoing that revenue. Yet they persist. And the reason they persist, I suspect, is not because they're particularly troubled by the fact that there are no results to show. They simply believe that it will happen because they believe. That happens to be their political outlook. That happens to be their political ideology. That happens to be their faith.

But it's contradicted by reality in these cases at every turn. It's a heck of a way to run a government, and it's a heck of a way to make tax policy, but that's what the government appears to want to do.

There is an indication that this thinking about the International Financial Centre…. It was originally conceived back in the 1980s by the then Finance Minister — I think it was Mel Couvelier — as a way of attracting international financial activity to Vancouver. It wasn't terribly successful initially and has really not enjoyed a great deal of success, although some moderate success in attracting some firms.

[1535]

In the budget speech the minister made reference to a proposed amendment to the International Financial Activity Act that was going to bring about some changes. Rather than simply confine the act to international financial activity, it's now proposed to expand it to emerging growth areas of the economy. So not content with the tax environment that has been created for corporations, the minister is now proposing and the government is now proposing to create a super-reduction of tax by expanding the number of activities that can take place inside this international financial activity centre.

The way the centre works is that if you're a designated activity or a designated company, you're forgiven from paying any provincial income tax on your corporate income. Similarly, you can, as part of the program, designate key personnel who will be forgiven the obligation to pay provincial income tax on their personal tax.

The Vancouver International Financial Sector Steering Committee issued a phase 1 report of its recommendations not too long ago. I believe it was last week, although the days tend to blur together at this time of year. What they said was: "Here's what we're looking for." And they gave an example of the combined effect of relieving the company of paying provincial income tax and the reductions in the federal corporate income tax that are proposed. On page 11 of the report they talk about it. They have a little chart, and they talk about the international income tax rate.

For Vancouver, a firm in Vancouver, it would be a combined 16.2 percent. They compare this to Beijing, 25 percent; Hong Kong, 17.5 percent; Seoul, 35 percent; Singapore, 18 percent; New York, 39 percent. So not content with being….

And PricewaterhouseCoopers…. No, I don't think it's…. It's one of the other accounting firms. I think it's KPMG that regularly prepares a report about business costs, the total cost of running a business usually compared to all the American jurisdictions — the continental United States in any event — and other Canadian jurisdictions.

[ Page 3120 ]

Vancouver, the Lower Mainland in British Columbia, is always very, very competitive and has been for some time. But usually the comparison is made with other Canadian provinces, traditionally with Alberta, and also our neighbours to the south — Washington, Oregon, California.

But now apparently, the measure is to be lower in taxation than Beijing, Hong Kong, Seoul and Singapore. To what effect? What studies have been shown? It's difficult to conceive of why it would be necessary — to attract a company to come to British Columbia — to offer a lower tax rate than Beijing, Hong Kong, Seoul or Singapore. Surely that's not what's required in order to attract a company.

I go back to what I said at the outset of my remarks about the decisions that go into making an investment going somewhat beyond the corporate tax environment.

So this is the mindset of the government, I suggest. If it were proposed that this be narrowly focused on financial activity, that would be one thing. But what is proposed is that, beyond the original purpose of this legislation on this to focus on international financial activity…. It's now proposed to expand it.

Not content with proposing to attract international financial activity without any study, the government is now proposing — I'm just looking for a note that I have on this topic, but I can't find it — to put clean tech, the carbon trading and some of the emerging areas of the economy…. The sole criterion and the principal one seems to have to be that they establish a presence in British Columbia and that they be export-oriented.

[1540]

What the dimensions of that will be, we will doubtlessly explore as we debate the proposed legislation which has already been tabled at first reading, and I don't propose to have that debate here.

This is again, if you then compare, the lack of study — the absence — on the machinery and equipment tax cut in 2001 and the billion dollars of forgone revenue, the decision to end the corporate capital tax. It's an absence of study — no study of any possible benefits.

If you look at the reduction in the incenting to the forest industry and those investments that went to the United States and the expectation that somehow a reduction in costs of forest firms here will result in investment in British Columbia — again, no requirements, no obligations, no studies — it's very clear that the government really simply lives in hope.

It closes its eyes and says: "Oh golly, I guess we're introducing this legislation, and good things are bound to happen because we say they will and we believe they will." That's just not the way to run a tax policy. It's not the way to run an economy. Frankly, people are looking for better than that, and they have every right to.

The long-term problem is that these decisions impact government revenue, and there's no compensating economic activity that generates tax to make up for the forgone revenue. That is a long-term problem for the economy. It doesn't meet the test that the B.C. Business Council sets out of new engines of wealth that are going to create jobs and hire people, and those people and those firms will pay taxes here in British Columbia, pay for the kinds of things that we want.

Apparently, it seems to be seriously proposed that our obligation now is to meet the tax levels of Beijing, Hong Kong, Seoul and Singapore and to be lower — not just to be competitive but to be substantially lower. In the case of Beijing, 25 percent is the number cited as the corporate income tax there, and to be lower is really a new dimension in tax policy in a Canadian jurisdiction.

One wonders how carefully that's been thought through. What I fear is, given the absence in the three major examples that I've cited, that there's no thought been given to that at all.

What I think needs to be done is a review of tax policy in a more systematic way. A tax commission needs to be struck — I know that the NDP government in Saskatchewan struck one; Jack Vicq was hired, commissioned by the government there, to look at several aspects of the regulatory and tax environment — and talk about that. The HST certainly will not do the kind of things that are talked about.

One of the other aspects of the HST that is sometimes mentioned, although the minister's enthusiasm for this argument seems to fluctuate because sometimes he doesn't mention it at all, is that it will assist export industries. What has been pointed out by commentators is that the biggest single beneficiary, according to the statistics that the government has put forward, will be the construction industry.

The construction industry is not really an export industry. You don't build a building somewhere else and then move it to British Columbia. One of the reasons why construction is so popular in terms of infrastructure spending is that it is local. It requires local labour, local materials for the most part and an end product that obviously, by virtue of the fact that it's a building, resides in the jurisdiction in which it's built. So it's not an export industry.

[1545]

Yet ironically, the biggest single beneficiary of the HST will be the construction industry. I believe that $880 million is the figure that's derived from the Statistics Canada stuff in 2004 and that the minister talked about in estimates in the fall.

It's not a bad thing to incent the construction industry. In some ways it's probably a better aspect of the HST than some of the other arguments that are made. But the construction industry is really driven by interest rates — certainly the residential side — and by the economy in general, so the kind of incremental advantage that may be achieved by the HST rebates will be slight in comparison to all the other factors.

[ Page 3121 ]

The home-building industry has viewed the HST as largely negative and has fought for and achieved some exemptions on new home construction, which the government appears to have conceded and will bring forward as part of the whole package.

The argument that the HST is there to benefit globally competitive export industries is somewhat undercut by the fact that a significant minority of the $1.9 billion that will be shifted — $880 million — will go to the construction industry.

I want to begin to conclude my remarks about the failed opportunity — the opportunity this budget presented, the opportunity to present a vision, a longer-term view of the economy. Instead, it's something centred on a tax shift that will not have the desired effect that's proposed by the minister. The hundreds of thousands of jobs will not materialize.

There is no doubt that the HST will, for many businesses, be welcomed in the sense that rather than pay tax to two tax collection agencies, they'll pay tax to one. I know, running my own business as a law firm over the years, that the obligation to fill out two sets of forms and send them in was not a major aggravation, but it was an increased burden. It might have taken a little extra half-hour or so to fill out an extra form. Certainly, that will be welcome.

I'm not sure that dealing with Canada Revenue Agency, given what we sometimes hear about from the consumer perspective or the taxpayer perspective, will be easier for business. I guess we'll see that if the legislation comes to pass. But certainly that part of it will be welcome. The province will make some savings.

I think that's probably the only area of the HST policy where reasonable people might concede that there is some marginal advantage to the policy. Other than that, it isn't going to bring about what the minister says, and it really seems remarkable that this is the centrepiece of the economic approach of a government running an economy that's recovering from a deep recession.

The other thing I want to say before I conclude is that there are, one would have hoped, looking at the future, opportunities for real economic growth in British Columbia that have not been given the attention that they deserve — certainly not in this budget particularly.

There are opportunities in agriculture, in food production. The Finance Committee heard over the years from food processors who have talked about and argued for the necessity of innovation in food processing. Alberta has done some work in this area, where food processing and the jobs that it provides could be an important strategy. Closed containment aquaculture has some long-term possibility for generating jobs and food production.

[1550]

The opportunity provided by the Olympics to study and to assist high-performance athletes. Simon Fraser University, particularly at its Surrey and Burnaby campuses, has a department of kinesiology which has some real possibilities for creating the opportunities in the future for assisting high-performance athletes. There's a whole world of training athletes that could be used as a launching pad from the Olympics, research based in Simon Fraser University in either Surrey — which of course, as a Surrey MLA, I think might be a good idea — or Burnaby.

Those are the universities, as Mr. Horváth and Mr. Lynch have pointed out, that have been the drivers of research and development, and those opportunities in our research capacity in our public universities should be used. In addition, Simon Fraser has a department of cybercrime, which one can well imagine is a growing area, and I think just in the throne speech today the federal government has talked about the need to combat cybercrime.

There is an opportunity in futuristic law enforcement that could be developed, create jobs, law enforcement officers, skilled technicians who can deal with that issue in the long run. Certainly the whole area of the justice system and its complementary institutions, whether their research into addictions and mitigation of addictions and their impact on the justice system…. There's lots of work that could be done there.

SFU has a department of mechatronics, which is an aspect of engineering. There are opportunities there. The digital media, which the government is moving on — but certainly only latterly, just in the recent weeks, largely under pressure from, I think, the member for Vancouver–West End…. He has advocated strongly for recognizing, through a labour tax credit, the growing importance of the digital media industry and its need to create jobs.

These are just a few examples of the kinds of opportunities that could be created by a government that was willing to look at a job strategy, put jobs and people at the centre of the equation, as opposed to what appears to be the default position for the B.C. Liberals, which is a tax strategy and a tax strategy that doesn't yield jobs.

Certainly, the corporate supporters of the government might like it because it benefits them and their companies personally, but it doesn't create the kinds of obligations to invest, to create new jobs, new opportunities here in British Columbia. At a time when unemployment is high, when the recovery is weak, that's what people are looking for. They're looking for a government that's prepared to put jobs at the centre of the strategy in all its aspects and make that the measure by which the budget is a success or not, rather than a tax strategy.

Clearly, this budget doesn't do that. It's a missed opportunity, and it shows the narrowness and the lack of vision of a government that's been too long in office. I don't think we can expect any change in the future. If anything, the capacity of the government to innovate is

[ Page 3122 ]

diminishing, not expanding. With that, I will conclude my remarks, and I hope I've given a number of clear reasons why I will be voting against this budget.

D. Barnett: I wish to begin with a tribute to my constituents in the Cariboo-Chilcotin. We are communities of hard-working, industrious people who strive to contribute to our economy and our society every day. We work hard, and we play hard in some of the greatest outdoor recreation on offer. We pay our taxes, and we entrust our government to responsibly manage our tax dollars. I am proud to be part of a government that makes fiscal responsibility its top priority.

[1555]

I am honoured to rise and support this government in our efforts to keep British Columbia strong. As a government we have been challenged by unprecedented global economic decline, but we have proven that we are capable, competent and committed to meeting that challenge. That is what British Columbians ask of their government, and that is what we are providing. The people have looked to our government to navigate us through these troubled times. Shirking our responsibility is not an option.

In the 1990s we witnessed what happens when a government loses its vision, loses its soundness and loses its confidence. We are steady, and we are ready. We will not let British Columbians down.

Just as we achieved victory in our hosting of the 2010 Olympics, we will be victorious in overcoming economic adversity. It sets the foundation for decades of renewed economic growth. It protects our vital services such as our treasured health care system and our public schools, which set the stage for our future. We are adding to British Columbia's competitiveness and building on the tremendous momentum of the 2010 Olympics. We are enhancing support for B.C.'s families, are meeting our financial targets and are on track to return to balanced budgets by 2013.

This is about job creation. When I think about job creation, I think about the young people in my riding that want to stay in the community where they grew up, that want to stay near their families, that want to commit to the future growth and development of their communities. This budget invests in our communities, our infrastructure, and it creates jobs that will all contribute to the growth of our provincial economy. But it is important to put this budget in the context of the global economy and the impact that that economy has had on our province's revenues.

Let's think about the setting that led to this budget. As of our last budget in September 2009, provincial revenue had declined $3.9 billion cumulatively over the three years before $1.6 billion of federal government HST transition payments. Revenue losses in 2009-2010 comprised over 50 percent of the total three-year cumulative reduction. Before the $750 million HST transition payment, 2009-2010 revenue was down almost $2 billion, mainly due to lower taxation and natural resource revenues.

In addition, lower commodity prices and markets resulted in over $1 billion lost in natural resource revenues. Federal, provincial and state governments across the continent and around the world are facing similar fiscal challenges due to declining revenues.

What does that all mean, Madam Speaker? It means we require sound financial management, and that is what we are delivering. Following two years of declining growth in 2008-2009 and 2009-2010, revenue is now expected to average 4.9 percent annual growth over the next three years. In the time that we have been in government, we've paid down the province's operating debt by more than $9 billion and built new opportunities that have reinvigorated our province.

That is why international agencies have increased B.C.'s credit rating seven times since 2001. It remains at triple-A, the highest rating possible, despite the challenges that we have encountered.

Our economy is on the mend. We can expect to see higher commodity and lumber prices and increased forest harvest volumes, all of which will contribute to funding our cherished social programs. All you have to do is take a closer look at business and consumer confidence, and you will see that confidence is rising in British Columbia more than anywhere else. In fact, B.C. has amongst the strongest confidence levels in Canada, and we are seen as leading the country in economic growth for the year ahead and beyond.

[1600]

Hosting a highly successful Olympics and reaching a global audience in the process has certainly played a role in our province's economic recovery. Thousands of people visited our province over the past few weeks, and billions watched us from around the world. These are the people that will now help us to attract further dollars into our economy.

We are a province of many strengths, and that includes our people, our resources, our geography and our innovation, all of which are contributing to a stronger future. The corporate income tax rate in B.C. is already amongst the lowest of the world's major industrialized economies. We have excellent infrastructure, a highly-skilled workforce, and a geographic location that makes our province the natural gateway to the Asia-Pacific.

All of those factors make us competitive. We want to ensure that our children receive the best education possible in order to prepare them for the challenges of tomorrow. We want our businesses to have the incentives to invest in higher productivity and newer technology. We want a strengthening and revitalization of our resource industries and the communities that support them, including an increased focus on value-added

[ Page 3123 ]

products. By broadening our economic base, we will help rural communities, such as Williams Lake and 100 Mile House and throughout B.C., to grow and prosper.

We have the potential. We have a strong foundation. Since 2001 this B.C. government has invested billions of dollars in highways, ports and other infrastructure that open up our Pacific gateway and connect us to global markets; reduced the costs of doing business to amongst the lowest in the world; signed new treaties and forged new relationships with B.C.'s First Nations, creating new certainty for investment and development; and expanded trade and investment partnerships, focusing on emerging economies.

Yes, we are implementing the harmonized sales tax as a major economic recovery tool. Despite the misinformation being spread by the members opposite, the HST is widely regarded by every independent economic expert as the single most important step government can take to strengthen our economy. We are creating a level playing field for business.

Overall, the HST will lower the tax on new investment by 40 percent, helping to create new job opportunities in every region of the province and giving new momentum to our resource industries. That makes a big difference to the people of the Cariboo-Chilcotin — jobs, jobs, jobs.

Mining and forestry are essential to the health of our economy. They are poised for new growth as the world economy continues to recover, and with this budget we are taking steps to support their development. We are extending the B.C. mining flow-through share tax credit for another three years, to 2013. This will provide an added measure of certainty for the industry, and that's important to my constituents who are depending on new jobs in mining to support their families and to create new opportunities.

Equally critical to my constituents is how we manage our forests. In forestry we are making good progress on all 29 recommendations put forward by the working round table, including expanding our commitment to a wood-first policy, showcasing B.C. wood as a climate-friendly building material with unprecedented global exposure prior to and during the Winter Olympics, and setting up a carbon offset credit program for reforestation.

We understand that we are not an economy in isolation, and that is why we have worked tirelessly to expand trade, to expand our markets and to link more consumers from Japan, South Korea, the U.S. and China with B.C. manufacturers of value-added wood products. I am proud of our forest industry, and I know we can meet forestry revenue target increases of more than $140 million in the year ahead, and we will continue to work with the industry to seek new value-added growth opportunities.

The people of the Cariboo-Chilcotin recognize that natural resources are the heart and soul of B.C. and are the backbone of the B.C. economy. In my role as Parliamentary Secretary for Pine Beetle Recovery, I have been working with the provincial emergency pine beetle response team and our three local pine beetle coalitions. Much has been accomplished, but there is much to do.

[1605]

This government's commitment to these communities is strong. We will continue to move forward with our federal and community partners. As our global recession has been a focus of federal and provincial governments, our pine beetle recovery plan has not been altered.

As the government committed in the throne speech, in the months ahead we will also redouble our efforts to simplify regulations and permit processes for approvals for our economic sectors.

This budget builds on our government's commitment to stimulate the economy through good policy. We offer among the lowest corporate income taxes anywhere in the industrialized world. We have invested wisely in our infrastructure. We have trained and attracted a highly skilled workforce, and we have promoted ourselves as the Asia-Pacific gateway economy. That is why we are so competitive on the world stage.

Now we continue to move forward together as we continue to build towards a brand-new decade of growth and prosperity, one based on new innovation in such areas as international commerce, communications, clean technology and carbon trading. That is why we are creating new corporate tax incentives under the International Financial Activity Act that will attract more businesses to make B.C. their home and help B.C. companies to expand their operations.

We have also to take care of our people. That is why we are taking steps to protect our vital social services. But that does not prevent us from returning to balanced budgets. We will account for every dollar being spent in ensuring that the focus be on having the most impact on helping people through health care, education and a helping hand when people are in need.

But in order to pay for those services, we need a range of initiatives to stimulate and sustain economic growth, increase our revenues and lead the country in job creation. It is about giving hope to our young people, growing and providing them with a future of renewed prosperity, confidence and boundless opportunity.

We are keeping our province strong by keeping each and every community strong. Hundreds of accelerated infrastructure projects are now underway across B.C. as part of our plan to create jobs while building social housing, hospitals, schools, roads and community facilities.

Since October 2008, $5.3 billion has been committed to over 850 accelerated capital projects in communities across B.C., generating and protecting approximately 34,000 construction jobs over the life of the projects. These investments will also generate thousands of spinoff jobs, each of which contributes to a family's well-being.

[ Page 3124 ]

We recognize that government can help families in one major way, and that is through meaningful tax cuts, leaving more money with every paycheque in the pockets of workers and their families. Since 2001 most British Columbians have had their personal income taxes reduced by 37 percent. An additional 325,000 people no longer pay any B.C. income tax, and with this budget we are delivering further targeted tax relief.

I represent rural B.C., and I understand firsthand the struggle that rural families experience. That is why this budget addresses specifically the plight of rural working families.

We are providing a special homeowner benefit planned exclusively for northern and rural British Columbians. Beginning in 2011 they may receive a benefit of up to $200 over and above the regular homeowner grant. That means rural British Columbians will get up to $770 a year towards their property taxes. Seniors will do even better, with up to $1,045. Every bit helps, and I know the hard-working people of our regions will make good use of those savings.

[1610]

We are also helping homeowners with children to defer their property taxes for as long as they live in their homes. Without any loss to municipal revenues, we are ensuring that communities remain strong while helping families also stay strong. We know that families will put their savings back in their local communities by supporting local businesses, and that way, we all benefit.

Working families are also in need of help with child care, and we are delivering more support for low- and middle-income parents. We will invest an additional $26 million for child care subsidies, which offsets the costs of child care for approximately 28,000 children every month.

Our kids are our most cherished resource. They are the ones that will lead us in the future. We understand that every dollar we spend on young people is an investment in our future, and that is why we are moving forward with our plan to improve education.

Building on the success of our StrongStart early learning centres, we are fulfilling our commitment to provide full-day kindergarten with annual funding that will rise to $129 million by 2012. Through innovation, we are joining forces with the private sector to open new preschools for three- and four-year-olds in neighbourhoods throughout British Columbia.

We will work with partners in municipal governments, school districts and community organizations to turn more of B.C.'s schools into neighbourhood learning centres where people of all ages can access learning opportunities in buildings that should never sit empty. Yes, we have declining enrolments across the province, but this does not mean there should be declining use of our publicly funded school buildings.

In many communities schools are the central hub, the heart of the community, playing a vital role that needs to be expanded in a way that will make life easier for families, with services all in one location. This helps us achieve our goal of getting the greatest benefit from every one of the billions of dollars invested in public education.

Despite the false claims from the members opposite, we have increased education funding every year since 2001, and this year is no different. Per-pupil funding is increasing to $8,300, a new record-high level of commitment in our future success as a province. School boards have asked for further funding in their annual facilities grants, and we are delivering with $110 million.

Like an investment, we are tracking these dollars, and we are ensuring the biggest bang for our dollar. That means ensuring that these funds are targeted to the direct benefit of our children.

We value taking care of our children and youth, and we care deeply for those in need of health care. The vast majority of our public dollars go to ensuring one of the best, most accessible, most affordable health care systems in the world. Despite the challenge of less revenue coming into our coffers, we are still ensuring our investments in health care with an additional $2 billion into health care over three years.

In addition to $1.3 billion for front-line services and $145 million for Pharmacare, $52 million will support improvements to ambulance and telehealth services. That is something that is of great importance to rural British Columbians.

Beginning in July when the harmonized sales tax takes effect, we will allocate every dollar of revenue from that tax to health care. That means every time we pay HST, we are contributing directly to sustaining our cherished health care, ensuring that it is always there when we need it.

Our social programs are what define us as a people. They are vital to our existence, but they can only be sustainable through a sound economy and responsible fiscal management. We are working towards increasing our revenues to finance our programs, and we are working towards rebalancing our budget to ensure future governments will continue to finance our society's service.

I conclude by reminding British Columbians that we cannot lose sight of our goal. We cannot surrender to an adverse economy. We will overcome every obstacle.

We are the government of skill, we are the government of competence, and most importantly, we are a government with vision.

[1615]

We have our sights on a post-recession British Columbia. We know what it looks like, and we know the best route forward to ensuring that we arrive unharmed. Together we are moving forward. Together we will ar-

[ Page 3125 ]

rive at our destination. This budget is about caring for our finances, caring for our families and caring for our future.

D. Donaldson: I rise today to respond to the government's budget speech that we heard yesterday.

First, it's important to provide some context for my comments, context based on where I live. In Stikine we have two predominant founding cultures, First Nations — the Gitxsan, the Wet'suwet'en, Gitanyow, Tahltan, Tlingit and Kaska — and the settler culture. Both are oral cultures. That places a lot of importance on what you say and meaning what you say.

"You're only as good as your word" is not just a quaint saying from the past. Much business is done without paper agreements, simply on trust. Fundamentally, trust, which depends on the integrity of one's word, is at the basis of commerce and trade in the north.

That is why the budget presented yesterday is a severe disappointment for those of us living in the north. It does nothing to increase trust, and it only adds to mistrust of anything this government has to say. It is full of deceit and misleading claims, and for that alone it is a failure and betrayal for those of us living in the north.

Let's look at a few examples. The HST. The promise in the budget speech is that the HST