Alberta Hansard — 8 June 1987, Evening sitting (20:00) (Legislature 21, Session 2)

19870608

Alberta — Debates (Hansard)

June 8, 1987 ALBERTA HANSARD 1713 LEGISLATIVE ASSEMBLY OF ALBERTA Title: Monday, June 8, 1987 8:00 p.m. Date: 87/06/08 [The House resumed at 8 p.m.] [Mr. Deputy Speaker in the Chair] head: GOVERNMENT BILLS AND ORDERS (Second Reading) Bill 48 Tobacco Tax Amendment Act, 1987 MR. YOUNG: Mr. Speaker, on behalf of the Provincial Treasurer, I move second reading of Bill 48. MR. DEPUTY SPEAKER: Are you ready for the question on Bill 48? SOME HON. MEMBERS: Question. MR. DEPUTY SPEAKER: Hon. Member for Edmonton Kingsway. MR. McEACHERN: Thank you. Mr.

Speaker, I don't think that we should pass a Bill without the Treasurer here to make a few opening comments and explain a little bit about the Bill and some of the major changes in it. If we could have a few minutes' comment from the Treasurer, that would be quite helpful. MR. JOHNSTON: Well, Mr. Speaker, it is a pleasure to introduce the Tobacco Tax Amendment Act, 1987, because for many Albertans it's meant the end of smoking. MR. DEPUTY SPEAKER: Excuse me, hon. minister. With the Provincial Treasurer's comments, the debate is closed on Bill 48. MR.

McEACHERN: Why is that the case when actually it's usually that the . . . MR. DEPUTY SPEAKER: Order please. The Bill was moved by the hon. Acting Government House Leader, as the Chair un- derstands. The Chair understood he heard second reading being moved . . . Order please. The next time a speaker speaks to the same Bill, it will be in concluding debate. Now, if hon. mem bers are upset with that, I'm sorry. The Chair has no option, unless there's a point of order. MR. McEACHERN: Point of order.

Well, my question would be: why wouldn't the man who moved it be the one to close debate rather than the Treasurer then? MR. DEPUTY SPEAKER: Well, as the hon. House leader of your party is well aware, having moved the Bill on behalf of another member, if either member speaks -- and the Chair will find Beauchesne in just a moment to quote 305(2). Now, I'm sorry, hon. member, but those are the rules of the House. Hon. Provincial Treasurer. MR. JOHNSTON: As I say, Mr.

Speaker, there isn't much in this Bill that is contentious in any event, and of course there's nothing inappropriate for one of my colleagues moving a Bill. That's the normal way in which this process operates as long as it's a member of government. However, Mr. Speaker, as I look at the agenda of this piece of legislation, I think if you're one who objects to this tax regime, then of course you are not among many who would sup port the view that we should have lower taxes on tobacco.

In fact, this tax regime with respect to the tobacco tax is, as I say, perhaps a self-fulfilling prophecy in that if you continue to in crease taxes on tobacco, it's likely that your revenue source will suddenly be eliminated in that more people will move off tobacco. Of course, whether or not there's some measurable benefit in terms of the health care costs remains to be seen. . But that of course is part of the typical debate or argument that is provided for this particular type of taxation. Of course, Mr.

Speaker, as I look at the tax regime as it af fects cigars, I can see why I gave up one of my small luxuries, and knowing that, as pointed out by my colleague from Vegreville, it is easy to see why disposable income must be high if you look at the tax regime on cigarettes. Well, Mr. Speaker, let me say that this piece of legislation, a part of the fiscal plan put forward by the province on March 20, is here for second reading. I don't think it's going to take an awful lot of debate with respect to the principles of this Bill. They're well understood. There is the odd

section which deals with the question of enforcement and administration, but those are normal kinds of adjustments that you see in any piece of leg islation of this type. So, Mr. Speaker, in concluding second reading, I must en courage all members to support this tobacco tax legislation, and I do so move. [Motion carried; Bill 48 read a second time] Bill 49 Tax Statutes Amendment Act, 1987 MR. JOHNSTON: I'll just be one second. I'll have to change hats. Mr. Speaker, Bill 49 is the Tax Statutes Amendment Act, 1987.

This legislation combines both of the personal and cor porate tax adjustments which we are proposing for the Legisla tive Assembly. As members know, the essence of the tax cor rections are to increase taxes on the personal side by three kinds of increases: first of all, the general rate increase of the tax regime; secondly, the so-called surtax, or special tax, which ap plies to those Albertans with taxable income above the $3,500 limit; and something called the flat tax, which enters at the tax able income level. Again both of those taxes are described as temporary. Obviously, Mr.

Speaker, in moving those taxes, a great deal of thought was given to the way in which they would impact on Albertans. We have had an opportunity on the expenditure side to deal with those revenue choices, and we have concluded in that debate, I think, that there is some difference of opinion.

It should be known clearly, in terms of the principles of this legis lation on the personal side, that it is the intent of the government to reduce the impact of this tax on those lower income Al bertans, and that is done both in the structure of the tax itself -- that is, by defining the taxable income for the 1 percent surtax -- and the surtax itself, which is applied above the $3,500 limit.

1714 ALBERTA HANSARD June 8, 1987 Those are all described to assist those low-income Albertans. Moreover, Mr. Speaker, as I've indicated before, there is the Alberta special tax reduction, which in fact eliminates or re duces the tax on an additional 200,000 and some Albertans. Forgive me for the rounding, but at least an additional 200,000 Albertans will be protected from or eliminated from the tax rolls as a result of those adjustments. On the corporate side, Mr. Speaker, we have selected in our strategy to attempt to target the tax impact on the larger corpora tions.

In doing that, we're obviously attempting to receive more income from that group. At the same time, almost on a 180, or the converse of that argument, we are eliminating any increases on the small corporation in Alberta.

I think that is a fair balance of equity on the corporate side, by charging those large corpora tions a slightly larger tariff but attempting to free up those smaller corporations so that additional capital or additional cash flow can be reinvested back into expansion, into the definition of investment including inventories and real capital formation, and moreover, both directly and indirectly as a result of that initiative, into new jobs. Mr.

Speaker, as well this legislation, both on the personal and corporate tax side, puts into place certain administrative changes which follow from our tax arrangements with the fed eral government. Now, all hon. members know that on the cor porate side we have our own corporate tax legislation which is separate from the federal legislation. Then we have our own administration and our own tax enforcement section. With respect to the personal side, Mr. Speaker, it is well known as well that we tend to parallel or mirror the legislation of the federal government.

Therefore, from time to time we have to put in place in Alberta tax adjustments and amendments which in fact are similar to or identical to those tax adjustments which have taken place in the federal government, and many of the sections in both of these pieces of legislation in fact do just that. When you deal with such things as the way in which inter est is calculated on overdue or unremitted tax liability or when you deal with certain other administrative sections, they are in fact as a result of the tax sharing agreement which Alberta ad heres to and recognizes and therefore must be put into place as well.

Also, Mr. Speaker, in moving second reading of Bill 49, the Tax Statutes Amendment Act, 1987, I draw attention to the well-founded and well-understood principles, ones which we have described before in our budget and have debated here as well, which increase the revenue of the province through tax increases on the personal side and tax increases on the corporate side.

Secondly, as I described, there is that element in both of these pieces of legislation which parallel the adjustments which the federal government has made to its legislation, and therefore to harmonize the tax system across Canada, we also are im plementing those changes. Mr.

Speaker, it's never a popular initiative to increase taxes, and it isn't one which I have advocated personally or on behalf of the government over my term of the past 12 years, but unfor tunately, given the requirements of this province for the dollars and given the level of services which are now provided, we must turn to the people of Alberta at this period and ask them to pay a touch more for that level of services which are being pro vided and to assist us with dealing with the deficit and downsiz ing the government.

I emphasize in both cases that the two per sonal tax corrections and adjustments are described as tem porary. It is my hope and certainly my objective to stick to that definition. Finally, Mr. Speaker, it should be noted that this tax proposal, in particular the income taxes for corporations and the personal income tax regime, in fact still keep Alberta amongst the lowest of any tax-paying province in Canada. I must admit that on the personal side there are certain intervals where in fact Ontario is a touch below Alberta, but you're down to very nominal basis points.

All in all, because Alberta does not have a sales tax, obviously we have protected the low income or the regressivity of tax impact on the economy and on the taxpayers. Mr. Speaker, I move second reading of Bill 49, the Tax Stat utes Amendment Act, 1987. MS BARRETT: Mr. Speaker, in moving for second reading of Bill 49, I note the Provincial Treasurer concluded by observing that Albertans don't have a sales tax, and therefore we, I think it was implied, ought to be grateful. I speak for another political party that has no use for sales taxes.

They affect the poor much more than they affect the middle- and high-income earners, and we do not believe in being unfair in the tax system. Now, Mr. Speaker, that's the only good thing I think that I can say about this Bill, because the fact of the matter is that the statements made by the Provincial Treasurer in sponsoring his budget on March 20, 1987, are not borne out, I believe, in the contents of this Bill. He says: "Our budget equitably shares the burden of deficit reduction." That was from page 5, Mr. Treasurer.

From page 21: "The burden of tax increases should be shared between businesses and individuals." From page 22: "Businesses are also asked to accept their share of the fiscal adjustment." Well, Mr. Speaker, it doesn't take too long to go through the Budget Address or the budget documents to figure out that the burden is not being equally shared in this province, because what's going to happen is corporations will now pay only 7 per cent of the income tax burden while individual Albertans, through income tax and other taxes, will pay 93 percent of the taxes in this province.

What good does it do to not have had a sales tax when this kind of unfairness comes to rest on the shoulders of average Albertans?

It occurs to me that this gov ernment has been talking lately, in the last few weeks, about the apparent recovery that is now surfacing in Alberta, and I wonder under the circumstances which is cheaper: to make the already low-income people further impoverished, to add to our un employment and diminished demand by way of taking an extra $1 billion out of the pockets of ordinary Albertans, or to service debt for a few years on a deficit that this government has said it's going to wrestle to the ground by the time it goes to the polls the next time. I note, Mr.

Speaker, that there is a serious lack of conviction when this government talks about unemployment, because they won't say it's their target to wrestle unemployment to the ground in the same period of time. I think that's a real shame, and I think that this Bill embodies the contradiction of the gov ernment that's sponsoring it. There have been years, Mr. Speaker, in which the Alberta government actually paid more out in corporate income taxes than it collected. One year, for example last year -- well, the last year for which the facts are available, so it would be '85-86 -- the amount was by $26 million.

I'd like to see this govern ment go to the ordinary taxpayers in the province and say, "Elect me, elect me," on that basis. I don't think we'd even have one Conservative in the Assembly. The contents of this big bite Bill ignore the facts in the province, Mr. Speaker. It is our assessment that the unemploy

June 8, 1987 ALBERTA HANSARD 1715 ment rate in this province, which is staggering and which only comes down periodically, reflecting the seasonal nature of em ployment in this province, is costing Alberta taxpayers some $2 billion in one year. Now, if this government were serious about raising revenues, perhaps what it could do is put more emphasis on reducing the unemployment that we're suffering under and thereby generate the sort of income for our revenue base so we wouldn't have to cut people services the way this government is doing. I remind you, Mr.

Speaker, that not only are we having to put up with this big new tax bite -- once again suspiciously a year after the last election, just like happened in 1983 following the 1982 "recovery is around the comer" election -- but people who are unemployed are adding to the need for services in this province, and it's this government which is at the same time cutting the services for the people who most desperately need them. I'm talking about people who are on social allowance, who have just had their shelter allowance cut from a whopping $290 a month to a now staggering $180 a month.

How any member of this government can go to bed and not worry about this before he or she goes to sleep is beyond me. I think it's unconscionable. Then to add insult to injury, they tell Albertans who are lucky enough to still be working -- because I figure soon they're going to have to be going to job auctions to stay working -- that they've got to pay more to receive less or pay more to give less to the people who need that help. Well, I remind the Provincial Treasurer and the Premier that that's why we have a tax pool in the first place: to help out on social priorities.

We all agree to collectively throw into that pot, and then we agree to collec tively take out of that pot according to people's needs. But now what we see is that people's needs aren't being met, and this government is perfectly willing to further damage the economy by taking spending power out of the pockets of Albertans who, by way of being ordinary citizens and consumers, are actually the people who keep this economy going, despite the assump tions to the contrary as enunciated from time to time by the Provincial Treasurer. But that's not all the problem that we're looking at, I think, in this Bill.

I'd like to point out that what we have in this Bill as a result of this government's budget is the first instance in which we now have the door open to a flat tax regime, which I know those right-wingers on the other side of the House would like to see. I know they don't understand how unfair flat taxes can be. It's obvious, because they're the ones that thought grandly to cut the municipal grants this year, knowing full well that the municipalities would have to increase their property taxes and the mill rates.

The property taxes, as everybody knows, are more like flat taxes than they are like progressive income taxes. What does it matter to this government? They don't lose sleep over items like that. If the poor pay relatively more, no prob. That's their mentality, Mr. Speaker, and that's exactly what's going to happen with this so-called temporary 1 percent income surtax on taxable income. The Treasurer said this is going to be a temporary measure. Well, for how long I ask? Why don't I see the year in which that temporary measure is going to be removed right within this Act? I'd like to know.

Then I have a look further down the Bill. This is the Bill that incorporates that wonderful way to treat the renters in Alberta by removing the renter assistance credit program. You think that that didn't amount to much? It amounted to several hun dred dollars a year for people who obviously can't afford to buy or they would be in owned dwellings. They rent, and now they're losing their ability to reduce the amount that they pay on their taxes by several hundred dollars a year just by the removal of this renter assistance tax credit. What was the Alberta gov ernment saving from this?

I think it was around $50 million a year. But if you have a look at the income accruing to one person earning minimum wage -- the lowest in the country in Alberta, the province which has taken the longest time to raise the lowest in the country, not having seen a raise in the minimum wage since 1981 -- if they were working a full workweek, week after week, month after month, all year round, they'd still be earning less than the poverty line allows for. And we're going to tell these people that they don't deserve the renters' tax credit pro gram anymore, I don't buy it, Mr. Speaker.

And I'll tell you something: neither do my constituents. They don't think that's a very fair policy for this government to embark upon a year after an election in which none of this monkey business was mentioned. No sir, I didn't see Conservatives knocking on the doors in the riding of Edmonton Highlands saying: "Vote for me, and I'm going to increase your taxes. Oh, I might increase the cor porate taxes just a little bit, but don't worry; you'll still be pay ing the bulk of the charges here. And I'm going to take away any of those perks that you ever had before, like the renters' as sistance program.

On top of that, I'm going to cut needed pub lic service." No sir, I didn't see Conservatives saying that in the election campaign that I was involved in in 1986, and it's be cause they didn't say it. They had no intention of saying it. Yet within days of the conclusion of the spring/summer sit ting of 1986, the first sitting after the election, Mr. Speaker, when the Leader of the Official Opposition revealed the memo which showed that the government was now pinpointing a downsize . . .

Yes, I know, Dick, you sent it to us, but we de cided to take you up on it and reveal it anyway. [interjection] Yes, well since you cut our research budget it has been handy having the Treasurer leak memos to us directly; it's been very handy. Thank you, Mr. Premier, as well on that note. Now, it was within days of the conclusion of that sitting that we suddenly get ahold of this information forwarded to us in a brown paper envelope -- unmarked of course -- by the hon.

Treasurer, to let Albertans know they were in for a cut in people services, a cut in the public services of this province, and hinting that the deficit was going to be real big and tax increases would have to come along too. Well, we obviously got that picture last summer, because we had to pass a Bill -- well, pardon me, a Bill was rammed through the Assembly, quite another way of look ing at it -- which allowed for this government to, from behind closed doors, engage in a deficit of up to $5.5 billion. Now, I ask you, Mr.

Speaker, if they were so willing to do that, if they're so willing to spend Albertans' hard-earned dol lars on servicing that amount of debt, which they have not yet had to do, then why is it that they decided to come along and pick the pockets of middle-income Albertans? Why did they do it in this way?

The Treasurer notes, "Well, a couple of poor people got off the hook here, and we don't have to worry about them; they're not going to have to pay the increase." Well, I'm not so sure that a complete restructuring of the tax Act wouldn't have been in order in such a way as to ensure that we implement this policy progressively. What I see right now is that the Al berta income tax payable will be based on your federal tax pay able, now at a ratio of 46.5 percent. Not only that, but that tax increase is going to be a double whammy come July 1, because in his infinite wisdom, the

1716 ALBERTA HANSARD June 8, 1987 Treasurer decided he wanted all the money to be collected this year. But he wasn't willing to phase this in so that the tax in creases would become effective on April 1, say, two weeks after he released his budget. No, he decided it might be real amusing to hit the poorest people and the middle-income people the hard est way possible, maybe to see if they would get used to it, Mr. Speaker.

Because the way he's going to do it is that income tax increase is going to go up by twice the amount on July 1, and then be reduced to its so-called normal amount of an increase on January 1, 1988. Now, what kind of logic governs a policy like that, Mr. Speaker? A distorted logic. A logic that says that it's okay to push people into greater poverty. He is like humpty-dumpty: a words means what he says it means, and it doesn't matter how it affects the rest of the world.

I say that is an intolerable attitude, and this government should run to the polls over this budget, particularly the provisions in parts 3 and 4 of Bill 49. I'd like to have a look at just what this wonderful Conserva tive government has done for us for the last few years -- as a matter of fact, since 1972 -- when it comes to taxation. In the first five years, the Conservative government from 1972 to 1976: individual Albertans paid about 63 percent of the income tax collected, and corporations paid about 37 percent. Now, Mr.

Speaker, I'm not one to hand out plaudits to the Socreds, who were the government prior to Lougheed's big win in 1971, but obviously they must have maintained some kind of balance for the Conservatives to have taken over and maintained it at that level. I confess that since our research budget got slashed, I haven't had the personpower to go and look up the budgets of the Socreds prior to 1971, but I suspect that they maintained a greater balance in taxation between corporate and income- generating sources than that which the Conservative government embarked upon after it became government.

In the second five years, Mr. Speaker, individuals paid about 71 percent and corporations about 29 percent. You can see the shift already, can't you? Next year -- that is, this year actually -- I think individuals are going to be paying the bill at a rate of 93 percent and corporations at a rate of about 7 percent. Now, Mr.

Speaker, the Treasurer, in summing up for second reading -- which he may get to within a couple of days -- may want to talk about how important it is that this government en gage in the sort of corporate handouts, whether by tax breaks or by direct grants and various incentives, and how it is that that's creating jobs. Well, if that's creating jobs, how come we've had a staggering rate of unemployment for the last six consecutive years -- five and a half years, beg your pardon -- that has been double digit? Just what's gone on with all these handouts? It hasn't made a difference.

As a matter of fact, the federal Li brary of Parliament now has a study on business handouts which shows that work projects, not that form of giveaway aid, create jobs. And I remind you that there is work to be done in this province, but the work isn't necessarily fitting into the tech- nicolour dreams of the Career Development and Employment minister, so it may go not done.

Municipalities may not be able to improve their infrastructures, and a number of other programs, including highway expansion, will not take place be cause this government is on a downsizing budget while it's pick ing the pockets of individual Albertans, never minding the fact that the corporate sector not only gets away with all too many grants -- particularly the big players -- but aren't going to pay their fair share of taxation in Alberta.

If the Treasurer thinks this is amusing, maybe he ought to have a look at the number of people on social allowance and see what's going to happen as more people are put out of work as demand diminishes in this province because of his tax Bill. We can count on it, Mr. Speaker. The less money people have to spend on goods and services, the less goods and services required, the fewer people required to produce those goods and services. Hence, ergo, the higher the unemployment. Now, Mr.

Speaker, the Conference Board of Canada itself revised -- it revised -- its economic review and projection for this province after the Provincial Treasurer gave us his budget in March because they knew it was going to make a big difference on aggregate demand in this province, and they were right. They observed that Alberta will be the only province in Canada to show a net negative growth in domestic product here in Alberta. MR. SIGURDSON: Number one again. MS BARRETT: Pardon me? Yeah, number one again. Yeah, I bet you like to compete with Texas all the time, right? Well, you might be competing for bottom place.

I've heard a phrase so many times, Mr. Speaker. It says, "They're so far behind they think they're in first place." I think that categorizes what's happened in this province. You know, Mr. Speaker, I believe the economic cir cumstances in which Albertans find themselves are very similar to those in which Albertans found themselves during the Depression. And you know what? The Depression policy makers figured it out.

They finally figured out that if they kept whittling away at their own budgets and asking people to shovel rocks from location X to location Y and then back to location X in an unproductive fashion, they were going to actually continue to perpetrate that economic syndrome known as the Depression. And they finally learned that maybe the best thing to do was engage in a little bit of creative budgeting based on deficits that would put people back to work and keep them at work in the long run. What they did: they agreed on certain public pro grams that were of use in the short term and in the long run.

Now, I think that's the sort of policy alternative this government ought to be looking at instead of shifting the taxes one more time onto the backs of individuals, Mr. Speaker. Now, the Treasurer might say, if and when he ever gets to conclude remarks on second reading -- and I remind him that we're really looking forward to committee reading, because I'm sure we'll have an amendment or two for the Treasurer to deal with -- you know, we're going to get through this period despite the gloom and doom observations of the opposition.

And one of the ways that we're going to get through it, he might say, is be cause the federal government is going to come up with its famed, or shall I say infamous, but I shall certainly say "as yet nonexistent" western economic survival strategy, if it comes up with it. Well, I'd like to say to the Premier and the Treasurer in anticipation of that sort of argument: (

a) where is it, and (

b) if they were so concerned about balancing the taxation ratios in this country and in this province, then why aren't they working on their federal counterparts to ensure that the $355 million that Ottawa is receiving from the increased gasoline taxes be de voted to helping the troubled Alberta economy get back on its feet? Where are these strong leaders, these leaders who'll talk about separatism at the drop of a hat and then refer to their big majority government? Where are they when it comes to talking about getting our fair share from Ottawa, Mr. Speaker, based upon our natural resources, which I remind you are depleting

June 8, 1987 ALBERTA HANSARD 1717 and nonrenewable? What we are going to see in this province, Mr. Speaker, is yet another round of increases of people standing at the food bank because they haven't got enough money to keep heart and soul together. Increasingly it will not just be the 70,000 to 75,000 cases -- that is, some of them are families and some are individuals -- on welfare. It's going to be the people who are the working poor, who I believe have been ignored by this prov ince in a number of its policy orientations during the last six or eight months. And who do you think pays for that food anyway?

You know what? It's probably mainly low- and middle-income Albertans who pay for it. They're the ones who are probably -- I would love to see a demographic study about who contributes most to the food bank, because I'll tell you that every time I make a donation, I see people who have got rela tively low incomes spending a couple of bucks of their money in the local supermarket to put some food into those baskets for the people they know are even poorer than them. They can barely afford it themselves.

I remind you that one of the reasons we have a taxation sys tem in the first place is so we can make equitable the process whereby we ensure that the low-income people can keep heart and soul together, and we do it from a progressive income tax system, not from a system which calls for even low-income earners to now start paying a new 1 percent surcharge on their income tax payable. It sure as heck doesn't come when you de cide that you're going to give the bigger tax bite to the individu als instead of to the corporations. I wonder where it's all going to end, Mr. Speaker.

Will this government be satisfied when Albertans pay the entire tax bill and the corporate sector pays none? Is that when this govern ment will be satisfied? I'm not getting a glance out of the Provincial Treasurer. Perhaps he doesn't want to go on record as having acknowledged that that might be the case. I certainly wouldn't blame him. I wouldn't go back to the electorate under those circumstances. Now, Mr. Speaker, it's so important for this government to raise -- I remember they did this in 1983. It was to raise an ex tra $223 million, I recall.

That's what they achieved by a 13 percent income tax increase, yet the following year, after they had cried "deficit" -- they cried "deficit" the year they went for the tax increase. But the following year, you know what the public accounts showed? We had a surplus, Mr. Speaker. I suspect with talk lately from various ministers on the gov ernment side that they anticipate that oil prices are going to sta bilize and perhaps even increase, that we're not going to have such a big deficit after all.

Then I say: how come it is that Al berta taxpayers are being asked to fork out a few hundred mil lion dollars more, while this government continues to spend un- abated on advertising now to the tune of -- what? -- $51.6 mil lion a year, to tell Albertans through propaganda that they've got a bad budget but they can't afford to fix the budget? That's exactly what they're spending this money on, Mr. Speaker. You can ask.

The hospitals minister spends money on it; I saw a number of ministers in the front benches spending money pro moting the bad budget and acknowledging that they didn't have the money to fix the bad budget. Well, I think that's an appalling track record for this govern ment to establish, and if they were really serious about setting a good example, what they'd do is further downsize their own cabinet, further amalgamate, and stop frittering away Alberta's hard-earned money on this kind of advertising, which doesn't do ordinary Albertans any good. On the other hand, maybe it does.

Maybe they're starting to be aware that their government is spending too much on this kind of nonsense, and maybe they'll give them the turf next time round. I for one plan to campaign on that very item, Mr. Speaker. Now, it seems to me that the Provincial Treasurer has never said in this Assembly how much less it would cost to avoid this form of tax hike for ordinary Albertans and instead, on a tempo rary basis, agree to service debt so that he could continue to al low demand, and particularly aggregate demand, to be an impor tant economic factor in keeping this economy afloat.

The rea son I don't think he's ever answered that, Mr. Speaker, is be cause I don't think he can answer it. You see, the ultimate con tradiction of this government is that they're saying: "Well look, we can handle the deficit for a couple of years. We're going to drive that deficit down, but we can't go after the alternative policies; that is, towards full employment and keeping spending power in the pockets of the consumers so that we can avoid the deficit in the first place." That's the kind of contorted logic that we're dealing with here.

It's the kind of contorted logic that becomes apparent after elections, Mr. Speaker, just after elections. I think this government ought to do some serious rethinking of its new taxation regime and come back to us with a different Bill that rebalances the ratio between corporate and individual taxation, Mr. Speaker, and which has a hard look at the flat rate tax payable on tax payable, which I think is the opening of the door to the worst sort of tax regime we could possibly have in this province and in this country. They're the ones that spout on ad nauseam about how it is we don't have a sales tax.

Well, I'll be on record, Mr. Speaker: New Democrats don't advocate a sales tax either. We know that once they start, they're a black hole. They're an infinite temptation to go back to again and again, and they affect the lower income people more than they do the higher income people. But you have a look at the implications of a flat tax system, and that's what we've got here right now in this Bill. It's going to be exactly the same; it has exactly the same effect, Mr. Speaker. It hurts the lower income people more than it hurts the higher income people.

Of course, that wouldn't weigh too heavy on the consciences of the Alberta government cabinet because they don't mind doing that. They really believe that a transfer of income from the lower to the higher, from the lower to the corporate is the way things should be. Well, I have an idea of an alternative economic strategy that calk for fairness in distribution of income by way of the tax system. It sure as heck doesn't call for this form of taxation.

I'd like to conclude by observing that I believe the Provincial Treasurer and the Premier and a number of other people when they talk about how it is that the provincial government sup ported unduly national coffers over several years while we were in a buoyant state, receiving a lot of revenue from our non renewable resources. But where's the effort been in trying to reclaim that so we could avoid this kind of income tax increase, Mr. Speaker? We're talking about what I believe is close to around $55 billion or $56 billion.

If we even got 10 percent of that back right now, we wouldn't need any income tax increases, and by God, we wouldn't be facing a deficit. What's the matter? They won't talk hard to their kissing cousins in Ot tawa? I say to the Conservatives here: take the gloves off; go after that money. Let's get that regional economic strategy put in place for Alberta, and let's drop the notion of taking more money out of pockets of ordinary Albertans and giving it to the corporate sector, which is the tradition of this province. I say:

1718 ALBERTA HANSARD June 8, 1987 cut it out; go after the money that we can go after in a fair way, Mr. Speaker. I can't support this Bill, and I don't think any member in the Official Opposition caucus is going to either. MR. DEPUTY SPEAKER: Hon. leader of the Liberal Party. MR. TAYLOR: Thank you, Mr. Speaker. [some applause] It just shows you what modem computers can do. I've got them programmed to clap there. Usually you have to throw them a herring before they'll flap their fins. In speaking, Mr. Speaker, against this Bill, I will use the soft, tender, featherlike approach after my hon.

House leader of the Official Opposition has given them such a roasting. To take $600 million to $900 million in personal income tax out of this economy at this stage not only has to be almost criminal but has to be exceedingly stupid, particularly for a party that prides call ing itself conservative, even with the confusing name of Pro gressive Conservative; $600 million to $900 million out of the economy at this time when we need reinvestment. It's been proven time and time again that personal incomes are usually invested close to home or close to where they can see the money go to work.

The minister, of all people, should be familiar with that axiom. When they put out their recent bond issue, it far ex ceeded his expectations. It shows that people like to invest close. Certainly it was nothing to do with this government that attracted the money; it had to be the fact that they could invest close to where they live and in this province. Probably they would even invest that much if the NDP were in charge, but who knows? The fact is that they love to invest close by, and consequently if the money is left in the pockets of the taxpayers, they will invest it and it will create jobs. [Mr.

Musgreave in the Chair] Now, there's another facet to it, Mr. Speaker. Sorry, I didn't put my glasses on; it keeps changing so fast. There a few min utes ago I would have sworn it was someone else. The other part of the equation is that if we want to diversify, there's a double priority. I've already mentioned that in order to diversify, one of the best ways is to have the private sector do it. Government just cannot diversify. It doesn't matter whether the bureaucracy is Conservative, NDP, or even Liberal. They're just not built to think about hundreds of little things, hundreds of little ideas.

They love the megaproject. It's very simple. And whether you're working for a large corporation or for govern ment, the whole idea is to get a big, big project, big enough to carry your name on a plaque that your grandchildren can see, kick it off, and get it under way. Of course, if it's big enough, you won't have to come up with another idea for 10 years, be cause that one will have been so big it'll swallow all the capital. That type of thinking applies whether you're in government or whether you're working for the Standard Oil of New Jersey. Big projects are an attraction that way.

But diversification is really into small business, and no bureaucracy and no government, no Legislature, can think of all the ideas and methods of where money should be invested. So by leaving the money in the private sector, we do create an op portunity to really get our diversification around, rather than having a minister for economic development and a few people with PhDs from Harvard or London School of Economics, what ever they do, dreaming up some scheme and putting out some aid schemes in order to get small business under way.

Small business is best understood by small people and by small in vestors, not by government. So we should be doing our best to encourage that; instead, we're pumping the money off. And there's a second part about the diversification idea that high taxation goes a long way toward killing, and that is being an attractive place to live.

Entrepreneurs, wherever they live in the world, like to -- if they're going to move, if you're going to attract them here, one of the big things, besides of course good schools and good health services, mountains, and ski resorts that are open, you have to have a low personal income tax rate. You should be able to brag that your taxes are lower than anywhere else in the world so that the entrepreneurs will come here and try to diversify. But that little brag that we had, which by the way I'll take a few minutes to point out, was a farce, a snare, and a delusion.

But even that little delusion has gone down the drain when mighty Ontario -- the home of the tobacco growers, the home of uranium, the home of the people that won't use our coal -- now taxes their personal income less and will probably continue to do so because they are in a diversification mode. They are aware that if you can put a personal income tax regime together that keeps the taxes lower than other places, you're go ing to attract the people that in turn will diversify. So that's why I say, Mr. Speaker, that we fall on our sword twice when we increase personal taxes.

We dry up our own entrepreneurs' and people's capital, and we make our province less attractive for other entrepreneurs and people that would diversify to move in. But let's take a look for a minute at that lowest income tax. There is a Bible we use, Mr. Speaker. If there is something be side the bed of every good Tory when he goes to bed, besides his blue and orange nightcap, it's usually a book from the Eraser Institute. The Fraser Institute is, for those in the Progressive Conservative Party that are used to reading more than comic books, required reading, de rigueur. It is the be-all and end-all.

It is the Old Testament and the New Testament of anybody that ever wanted to call themselves a conservative, progressive or otherwise: the Fraser Institute. MR. JOHNSTON: [Inaudible] Karl Marx. MR. TAYLOR: It is the Karl Marx of PCism, if you want to call it that. If you read the gospel according to Eraser, if you go up on the mountains, one of the stone tablets that they have been putting out for some time now is that Alberta has the highest taxes in Canada, the highest taxes per capita. Imagine that, coming from God himself. That's in effect telling Moses to get back into Egypt.

They have the highest taxes, and how do they qualify that? Plain and simply, Mr. Speaker, because all Al bertans own our oil and gas. Our forefathers, the United Farm ers and Liberals -- bless their pointed little heads -- had brains enough to say that oil and gas shall not belong to the people that live on the surface; they shall belong to everybody. And every body does participate in the oil and gas revenues, except for some of the Indian and Metis that this government stole it from. Nevertheless, in general, the concept is that oil and gas be longs to everyone, and if it belongs to everyone. . .

There are regimes in this world, political regimes -- I kid you not -- I would like to convince my PC friends, that actually distribute the wealth that comes from oil and gas: left-wing regimes like Alaska, left-wing regimes like Nevada, and a few other areas like that actually distribute the income that comes from oil and gas. Now, this government of course when that time came.

June 8, 1987 ALBERTA HANSARD 1719 when the income started to rise, they said: "No, no, hold back, hold back. You peasants out there do not know how to save money. If we distribute the royalties amongst all of you, you would do terrible things. You would spend money on unwise things. You might drink too much. You might go off and buy too big a car. You might even put it in a savings account. We're going to save it for you. It's called the heritage trust fund. We're going to save it for you." So in effect you levied a tax. And I don't dream this up. No lesser account than St.

Michael Walker of the Fraser Institute has said time and time again that these individuals were taxed. They were denied the normal fruits of having located in Alberta. The joys of coming to the holy land were not allowed to be dis tributed. I know God put it in the ground, but he didn't choose to reveal it till the Tories were elected. Nevertheless, this wealth, this largess, which should have been distributed to everyone, was confiscated by the government and put into a heritage trust fund, thereby taxing two generations at the same time, the people that should have got these savings.

Then they said: "Lo, there shall come a rainy day. You may spend 40 days and 40 years in the desert, but there will be a rainy day." But, lo, when the people of Alberta went out to reclaim the wealth that had been stolen from them in the '70s and '80s, it was not there. The savings plan had been invested and spent unwisely all across the Dominion. Oh, there was a paper profit there all right, but the liquidation of even the most widely optimistic of the people in the PCs was not much more than 50 to 60 percent of the face value. Of course, that annoys the taxpayers.

Not only have they now been gigged; they were gigged twice. First, the money was confiscated on the grounds that it could be managed better for them. Secondly, when they went to get it, it wasn't there. Now, this has to be some of the highest taxes when you put that together. It means that Albertans have paid an exorbitant fee in their taxes if calculated back on an individual basis, and if you doubt me for a minute, Mr. Speaker, just imagine that our forefathers instead of being Liberals and United Farmers had been Democrats and Republicans and given all the assets to the individuals.

Then the individuals would have had to pay tax, and we would have had to tax that oil and gas in order to get some sort of royalty. But instead, it was given to all the people, and this government instead of just distributing a largess pre empted it to them. Now, to add insult to injury, not only were those savings, Mr. Speaker, not present when the people came on a rainy day to collect them, but the last election this latter-day tribe of in fidels had run, they had actually spent $3 billion in the hole.

Now we're being asked to try to bail out a government that not only has taken away our money, put it into a heritage trust fund, and threw away a good chunk of the heritage trust fund, but then came around to bail themselves out of an election promise and they say that we have to retire the deficit. Well, I will go this. This is one time I will agree, Mr. Speaker, with the Treasurer. We should retire deficit spending. But does it have to be done this way? Could they not. . . The fact that the price of oil declined is one of the reasons we have this deficit.

So why don't we tie retiring the deficit to the price of oil? Why do we go out -- we sound very much like the man that has had a hard day with the boss. He comes home, bawls out his wife, and kicks the dog. Here again, the poor taxpayer has been ripped off. All right, the wife just had a bad day at the office, comes home, bawls out her husband, and kicks the cat. But whatever way you look at it, here is the taxpayers bid. The savings have been taken away instead of being distributed to him. When he thought they should be there, they weren't there.

Then we go on and we say that we have to retire a deficit which the government creates based on the fact that oil prices have fallen. Well, why don't we put the retirement of the deficit on the fact of oil prices when they rise? In other words, the taxpayer is going to be shafted again. There are $600 million to $900 mil lion coming out of his personal pocket no matter what oil prices go to. You can imagine if oil prices go to $25 U.S., Mr. Speaker -- and they might in the next while -- this Treasurer will get up and say: "Glory, glory hallelujah. The Lord is smiling on us.

We've got a surplus of $3 million." But will it be dis tributed to the taxpayers he has taken $600 million or $700 mil lion out of the pocket of? Why not? This is just common sense, and I'm being as polite and kind to the government as I can. It is a gem of wisdom that I'm going to throw on their lap, some thing that they could write a book on and send to the Eraser In stitute and go down in history as one of the contributors. I say: leave that money, amend your Act, withdraw

part 2 of the Act where it says that the personal income should go up to bring up your $700 million to $900 million out of the taxpayer. Say instead: "No, you keep your money, and we will retire the deficit if and when oil prices go up. We'll take it directly out. Instead of putting it in a heritage trust fund, we'll pay it off, every dollar over $20 a barrel," for argument's sake. That's a nice even argument. I believe the Treasurer made an estimate that the average price of oil. . . He may correct me; all he has to do is nod. Was it $18 or $20? Eighteen dollars, Mr. Treasurer?

He's not nodding, but it's somewhere in there. He made an estimate that income would be $18 or $20 a barrel; I can't recall. Last year he said it was $20 and it averaged $12, but I think this year he said it was $18 and it was averaging $20, I believe. [interjection] Pardon? At $15, okay. Anyhow, just pick a price; $20 a barrel, I believe. Let's pick $20 a barrel and take the income tax back and say that every dollar we make on royalties once oil has gone over $20 a barrel will be used to retire this deficit.

It was the drop in the price of oil and this government's poor budgeting that caused the deficit; let's let the rise in the price of oil and this government's poor budgeting get rid of the deficit. Why take it out of the poor old innocent taxpayer that has already been gigged twice by the government? I know that as a person in the opposition I should sit silently by and watch this government hang itself on the $600 million to $900 million bill that they're going to gouge out of the hide of the taxpayers, even though oil maybe going up, but the sense of justice that moves all Liberals, Mr.

Speaker, prompts me to say . . . MR. FOX: That's a debatable motion. MR. TAYLOR: This is one of the ways, Mr. Speaker, of find ing out whether the NDP is awake or not. That prompts me to say that there is a good capitalistic right-wing method. I know my NDP friends will probably not agree with it because they have the idea too that if a dollar gets in the government's pocket, it's better spent than in a private citizen's pocket. Nevertheless, I've given you a good right- wing solution, a solution that even the NDP won't vote for, so that will give it some dignity.

And that is what you withdraw the personal income tax increase and instead use the money in the increase in the price of oil if and when it comes. If it doesn't

1720 ALBERTA HANSARD June 8, 1987 come, let the deficit stay there. There's no rush -- if and when it comes to retire the deficit. That, Mr. Speaker, is all. I don't know if I have to table the document, but those of you that haven't had a subscription to the Fraser Institute, I could possibly arrange it for you. I could attempt to give it to the NDP, but I'm afraid that they would not think that highly of such a economic -- what could you say? -- forecast. But thank you, Mr. Speaker, and I leave for the fear . . .

The speaker says he's never had a positive idea, or at least he hasn't had one in the last 48 hours; this is one that I give to him now. Thank you, Mr. Speaker. MR. PASHAK: Mr. Speaker, tonight we're looking at second reading of a Bill that would increase taxes for ordinary Al bertans. This Bill comes in spite of cuts to important programs in health, welfare, education, and social services. In addition, it comes on top of a $1.8 billion deficit. Repeatedly in this As sembly I've raised the question: are the cuts to the social serv ices programs, health, welfare, and education necessary?

To night we get to raise the question: are these increased taxes to ordinary Albertans necessary? [Mr. Speaker in the Chair] It's clear if one stops and reviews the Western Accord, the gas pricing agreement, and the consequences that are flowing from those, that this province has completely mismanaged the whole nonrenewable resource sector of our economy. In general, we've seen a dramatic falling off of revenue from non renewable resources. In the year 1985-86 we received almost $3.6 billion. That's fallen to an estimated $1.7 billion in the 1987-88 year.

It's interesting to note in that respect that that's approximately equal to the planned deficit. On the oil side of revenues the crude oil royalty drop is from about $2.5 billion in '85-86 to somewhat less than a billion dollars in the 1987-88 estimates; it drops to about $977 million. The question here is: could anything have been done about that? I have a study that was done by the Petroleum Resources Communication Foundation. It looks at pump prices across the nation, and it's for the week of April 6, 1987. We could take some selective provinces and look at the figures.

In B.C., for example, the total average pump price in that week was 49.2 cents. Now, we get to how that money was distributed between the industry and various levels of government. We see that in dustry took 25.7 cents of that 49.2 cents, the federal government took 9.8 cents, the provincial government of British Columbia took 9.1 cents, and the producing province only got 4.6 cents. We see that as a fairly general pattern right across the country in just about every Canadian province. In Ontario, for example, the pump price during that week was 45.1 cents.

The federal government took 9.7 cents, the On tario government 8.3, and the producing province took 4.3. Now, you have to understand those prices in the context of re duced royalty revenue to the Alberta Treasury. I pointed out that these revenues have fallen from $2.5 billion to less than $1 billion. One of the reasons we've seen decreased royalty reve nues from the oil sector is that we reduced our royalty rates. But what's happened here?

We have gone out of our way to accommodate the oil industry, to encourage economic activity in the industry by reducing our royalty rates, but we've seen no corresponding willingness on the part of other governments to share and pick up the slack in that area.

Now, at the same time we've seen this situation occur in the oil industry, where Alberta with its resource is getting a very small return compared with what other levels and other govern ments are getting from energy, we look at the downstream prof its from the major oil companies in this country -- the integrated companies, those that have marketing and refining operations -- and we see that their downstream profits again have been the highest they've been in the last five-year period of time.

Im perial Oil Limited's products division earned $174 million in 1986, which was a 70 percent increase over 1985 earnings of $102 million and the highest earnings level since 1981 when the company's downstream division recorded a $330 million profit. We could look at company after company and the picture is the same. So other levels of government, other governments in other provinces, and the industry itself -- at least the big in tegrated companies -- are doing better from our oil than we are.

In addition to that, if you look at the budget, there's an esti mated $419 million that's going to be returned to the oil indus try during the 1987-88 year. That $419 million is in royalty tax credits. Every company, including those companies that are making their best profits since 1981, are entitled to the 95 per cent refund of the first $3 million they pay in royalties. Now, it's true that some companies probably need that to survive, but do they need the whole $3 million?

I've talked to a number of companies; a lot of people in the oil industry would say that fig ure's too high, that some companies do need it but they'd rather see the 95 percent level of royalty rebate maintain itself after that program is scheduled to run out. On the gas side, the falloff in revenues from 1985 to 1986 is from $1.8 billion down to an estimated $1 billion. Even that figure of $1.7 billion is probably questionable; it's probably on the high side.

Now, fortunately for the Treasurer oil prices have risen and they're starting to firm up a bit, so perhaps we'll get greater revenues there than he expects from the oil side. But on the gas side we see no such firming. In fact, much of the gas sold ex-Alberta produces no revenue, as far as I can understand it, by way of royalties whatsoever. That's because the gas is being sold at such low prices that by the time the companies pay for the costs to get their gas into the pipelines and into the sys tem, that cost far outweighs any royalty to the Provincial Treasury.

So today in the Legislature I ask the Minister of Energy to answer the question: what percentage of that oil that's going into that U.S. export market is currently paying a royalty into the Treasury? He skillfully managed to avoid answering that question, but I think it's key. How much of the gas that's being sold at the moment from this province is actually producing any return to the Alberta Treasury? I'd like to know if the Treasurer is still confident that his revenue projections from the nonrenew able resource sector for the budget year 1987-88 are still valid in his mind.

In conclusion, we have a government that has totally capitu lated to the energy industry, especially the big players. This has brought unnecessary hardship to the people of the province, and they will remember that, Mr. Speaker. They will remember that. MR. SPEAKER: Before the Chair recognizes Athabasca-Lac La Biche, the Chair would point out to the Member for Calgary Forest Lawn that Beauchesne 363 applies. Whether the minister was skillful or not with respect to his answer earlier today really isn't a matter for this debate this evening. Athabasca-Lac La Biche.

June 8, 1987 ALBERTA HANSARD 1721 MR. PIQUETTE: Thank you, Mr. Speaker. I also rise this eve ning to voice my dissatisfaction with Bill 49, the Tax Statutes Amendment Act, 1987. It's amazing in 1987, with the kind of economy we have in Alberta, with the downturn in the petroleum industry in terms of the unemployment picture, that we as a government have taken approximately $2 billion out of the Alberta economy by first of all cutting back on government expenditures and, secondly, by raising personal income tax to all sectors of the economy from large to small.

For example, as the Member for Edmonton Highlands indicated, we're now even taxing the 1 percent sur tax. Those Albertans who really cannot afford to pay taxes are charged a 1 percent surtax. So it's really not based on a pro gressive income tax but on everybody who pays taxes in Al berta. They will paying more by 1 percent, and I think that's a very sad picture to see developing here in Alberta. Our income tax should be based on the ability to pay.

Now, when we start looking at this $2 billion tax grab, or $1 billion tax grab and $1 billion cutback in government expendi tures, we have to look at what the effect will be on the small business sector in Alberta. The small business sector in Alberta depends on disposable income by the average individual earning a living out there. By withdrawing approximately $1 billion out of the consumer sector of the economy and when we also look at the $906 million which has been taken up by buying govern ment bonds, we are looking there at approximately $2 billion taken by this government out of the consumers of Alberta.

I think we're going to be seeing the result of this very clearly by September, because a lot of the increased taxes the govern ment is going to be grabbing are starting to occur at the begin ning of June by the 5 cents a litre increase in fuel tax and by July 1 the double-whammy the average taxpayer will be receiv ing or it will be taken out of his paycheque. I can predict that by September we're going to be starting to really see the effect on the retail business in Alberta which most of our small businesspeople earn their living from.

If we prided ourselves in having the highest retail sales in Canada, I think when we start looking at those figures, by the end of 1987 Alberta will prob ably fall away from their number one status in Canada to maybe number two to four. I think that will have a very negative effect on the growth of the Alberta economy, because as previous speakers have indi cated, it is not the big corporate sector which is creating jobs in Alberta; it's the small business sector. And basically the retail sectors are the ones where the growth has taken place in Al berta.

That's been created by people who have been left un- employed by corporate cutbacks and have had to earn their own living. Instead of going on welfare, they've tried to create their own jobs by starting a record number of small businesses in Al berta in the last few years. But as we look at the bankruptcy rate of these beginning small businesses, we will find that around 75 to 85 percent will fail in the next few years, and I think that will be increased by the effect of our taxation policy.

The corporate sector has escaped almost totally from any increase in provincial income tax, so we are not going to be see ing them pay a fair share of income tax in Alberta. The average taxpayer will be paying the bulk of the increased revenues this government is trying to get to pay back their tremendous deficit. When we look as well at what's happening, the small business sector are also facing increases in the educational property taxes and the municipal property taxes, which are really unprogressive taxation methods.

It's the small business that has to pay these taxes, and that's not a government that's really saying to small business that they are the engine of growth; rather we have passed the taxes on to the people who cannot afford. Really, what the government should be doing is addressing the whole corporate income tax structure in Alberta. That should have been the number one thing they addressed in this provincial budget. Instead we find that they have failed to do that.

They have burdened the average taxpayer by really admit ting that the average taxpayer should be penalized, I guess, in terms of earning a decent living. However, when we look again at another sector like the agri cultural sector, it has also been attacked by this provincial budget. We look at the 5 cents a litre tax increase on farm fuel prices which will create a dramatic increase in farm implement cost for farmers beginning again this summer and this fall. We see as well an increase in medicare premiums that all farmers, whether they can afford to not, are going to have to pay.

Vehi cle registration fees have jumped dramatically as well as liquor prices, cigarette prices. The average farm family will suffer a net loss of approximately $2,000 a year during a year when grain prices are predicted to drop by 18 to 25 percent. Just great stuff by this government who campaigned in the last election that agriculture was the number one priority for this government -- that coupled with a 40 percent decrease in the agricultural budget in the 1987 year. So I think this government is really going to be harvesting the fruit of this Bill 49 when they go to the electorate in the next few years.

I think for once the Alberta electorate will not be fooled by these very hypocritical kinds of taxation amendments that have been made by this government, or a tax grab. As well, I think the farming population will also see that the Conserva tives are not to be trusted when election promises are made. One of the things I have heard in some of the recent meet ings I have attended, where some of the Conservative MLAs have tried to defend their pay increase in this year of govern ment cutbacks . . . MR. SPEAKER: Hon. member, what does that have to do with this Bill? MR.

PIQUETTE: Well, we'll relate that to the whole aspect. You know, here we're talking about being fair in terms of our taxpayers of Alberta, but in a time of government cutbacks we have seen a 10 percent increase in MLA pay as well as a dra matic increase in MLAs' benefits. Now, most of the salaries, or I should say the total salary package or benefit package that MLAs receive, are nontaxable. We not taxed as MLAs for the total amount of moneys paid to us as . . . MR. SPEAKER: Order please, hon. member. We're not dis cussing the actions of the Members' Services Committee at this stage.

Could we come back to this point, please. MR. PIQUETTE: I think what I have to indicate to the House here is a double standard. The average taxpayer has been faced with a tremendous increase in his personal tax which is based on his total salary that he receives from government,

whereas if we look at the average MLA, he is receiving over $77,000 a year, of which only $26,000 is taxable. Now that is very hypocritical and immoral when you look at the . . . AN HON. MEMBER: That's not true. Tell the truth. MR. PIQUETTE: That's what it says here.

1722 ALBERTA HANSARD June 8, 1987 MR. SPEAKER: Point of order, Red Deer North. MR. DAY: Thank you, Mr. Speaker. [interjections] MR. SPEAKER: Order in the House, please. Red Deer North has the floor, Athabasca-Lac La Biche. MR. DAY: Despite concern of the member opposite for the use of language in the House, he continues to use language which is very clearly marked in citation 320 of Beauchesne on page 107. He has twice in the last few minutes. The first time I let it go, Mr.

Speaker, but when he did it again I felt it really should be addressed, and also to give other members just a few moments of peace from the . . . But the word "hypocritical" has been used twice in the last few minutes, and clearly has been ruled unpar- liamentary in Beauchesne 320 on page 107. MS BARRETT: On the point of order, Mr. Speaker. It never fails to surprise me that government members only recognize one

section of that citation, that citation commencing on page 104, and the particular reference commencing on page 105 which says under

section 320(2): "Since 1958, it has been ruled unparliamentary to use the following expressions." However, in their usual shortsightedness and, I anticipate, lack of familiarity, they forget to go on to the

section that commences on page 110, which is 320(3), and it shows on page 112 that "hypocrites" and "hypocrisy" have also been ruled parliamentary. MR. SPEAKER: No response on this, hon. Member for Red Deer North. But indeed if we're going to deal in fine points, hon. Member for Edmonton Highlands, the citations you give are indeed correct. However, the Member for Athabasca-Lac La Biche was using the word "hypocritical," which is still regarded as being unparliamentary. But I think the point is: let's get on with the discussion of the Bill and not go off on these tangents. Athabasca-Lac La Biche.

MS BARRETT: On the point of order, Mr. Speaker. If I'm not mistaken, is "hypocritical" not permitted when used as an adjec tive describing a policy? I believe it is. I think it's not supposed to be used when describing an individual. MR. SPEAKER: Hon. member, by your own argument you've proven yourself to be wrong, I'm sorry, if you look at the exact words. But it's been too fine a line. "Hypocritical" is out of order, "hypocrites" and "hypocrisy" are in order. The member used "hypocritical" and is therefore out of order.

So if the mem ber would like to apologize to the House, Athabasca-Lac La Biche, and get back to the Bill, it would be greatly appreciated. MR. PIQUETTE: Okay. Thank you, Mr. Speaker. I guess I'll just change that around then and it's going to be accepted. MR. SPEAKER: Hon. member, will you apologize for the use of the word. MR. PIQUETTE: It's amazing how sensitive we are here. MS BARRETT: I rise on the point of order. I think this is very clear. Under "hypocrites" it is noted "Debates, December 20, 1975, p. 10232"; "hypocrites" is allowed. Now the debate . . . MR. SPEAKER: Hon. member, I'm sorry.

The member used "hypocritical", which is not parliamentary. I told you it's a fine line. The words you used are indeed correct; they can be con strued as being parliamentary now. But under "hypocritical," to turn on a fine line, the member was out of order. There will be no further discussion on the point of order. MR. WRIGHT: With the very greatest deference, Mr. Speaker MR. SPEAKER: Sorry, hon. member. MR. WRIGHT:. . . I think the fine line you are talking about, Mr. Speaker, is between denigration of a member and descrip tion of a policy. The latter is okay to be described as hypocritical. MR. PIQUETTE: Mr.

Speaker, I want to interject and say that I was not indicating that to any particular member. I was talking about the taxation policy of the government. Okay. I guess what I really wanted to indicate here is that there's a double standard here. How we treat ourselves as MLAs and how we treat the average taxpayer is really a double standard. I think we should be very much aware that a lot of the impact of these tax increases brought about by Bill 49 will not adversely affect our income all that much as MLAs or as gov ernment ministers because most of our salary is . . . MR. YOUNG: Mr.

Speaker, on a point of order. MR. SPEAKER: Point of order. MR. YOUNG: Mr. Speaker, this time I refer to

section 313 on page 102, where it is quite clear A Member may not speak against or reflect upon any determination of the House, unless he intends to conclude with a motion for rescinding it. Now, the very thing he speaks of, which is the pay for members of this Assembly, was determined by this House, and therefore the hon. member is quite out of order to be reflecting upon it in the manner he is doing. MR. SPEAKER: The point is well taken. The citation is cor rect, and the Member for Athabasca-Lac La Biche was given godly admonition or ungodly admonition prior to this point of order.

Perhaps the member, for the last time of asking -- the last time of asking -- will forget about that topic and get back to this Bill in a different context, because I'm quite certain the member has plenty of other points to make. MR. PIQUETTE: Well, Mr. Speaker, I find it strange that I can't use comparison here between what . . . [interjections] MR. SPEAKER: Perhaps the member would kindly continue in a different vein. MR. PIQUETTE: Well, Mr. Speaker, I think I will terminate now because I really don't feel I was allowed to conclude what I was trying to say here. I think the message was very implicit here.

We're talking about the taxation system being unfair, and I was trying to draw the analogy between how we treat people differently in Alberta between the corporate sector, between the government MLAs or MLAs generally, how we pay ourselves in terms of using other types of payment, for example . . .

June 8, 1987 ALBERTA HANSARD 1723 MR. SPEAKER: Hon. member, please. This has been raised not once but three times, now four times. The Chair requests you -- I'm certain again that you have plenty of other points to make with respect to the Bill, and hopefully you'll continue. All right. The Member for Edmonton Kingsway. MR. McEACHERN: Thank you, Mr. Speaker. This Bill 49, the Tax Statutes Amendment Act, 1987, embodies the changes to the tax structure and some very important basic philosophical attitudes of the government toward what should be done in the kind of economic situation Alberta finds itself in.

I found just one little technical problem. I'm not sure whether it is or not, but perhaps I could just raise it and perhaps the sponsor of the Bill would like to look at it. There are five parts in the Bill. Yet it says

Part 1 -- that is, the Alberta Cor porate Income Tax Act -- and it goes to

Part 9 next, Insurance Corporations Tax. I'm wondering if that wasn't meant to be

Part 2. Then it goes on to

Part 2, which is the Alberta Income Tax Act;

Part 3, the Alberta Income Tax Amendment Act, 1982; and then

Part 4, the Consequential Amendments. I just wonder if it wasn't a little technical error in the printing of the order of the parts. Perhaps that's just something I could alert the Treas urer to check out and maybe answer. Maybe he's got a good answer to that. The basic principle on which this Bill is set out is the idea that you must balance the budget at all costs.

It's what can be called, I guess, an accountant's budget just in the sense of the Treasurer, as he's the sponsor of it, and of course the govern ment setting out the idea that you've got to get the revenue side and the expenditure side of a budget to somehow balance. Well, that may be a worthy long-term aim; it's not necessarily an aim of a specific budget in a specific year. And I think there are many good reasons why sometimes we should think about, for instance, a stimulative deficit. I know the Treasurer has tried to claim that this budget is, and I will get back to address that question in more detail.

So the budget basically has set out to cut expenditures and raise taxes, and Bill 49 is the part that raises the taxes. Basi cally, the cut to expenditures was done on the backs of those who need it most, and the raising of taxes is being done mainly on the backs of the working poor in this province. This govern ment has basically bought the line of reasoning that has been prevalent in the Ottawa government. The Conservatives there have over the last two years, supposedly in an attempt to reduce the deficit, increased taxes for the average working person by some $1,350.

This budget just brings the same basic principle or same basic idea into the provincial field. This idea of balanc ing the budget at all costs is part of a monetarist philosophy and policy that has been prevalent in North America for some 10 or 15 years. I think it's time that people in the right wing started looking beyond that and started realizing that monetarist policies don't totally answer all situations. I mean, when interests rates went up, they raised interest rates further, initially at least in creasing inflation and increasing the pressures on the economy.

Eventually they raised them high enough to kill the economy. They basically took the decision to say, 'To heck with un employment; we'll not worry about that; we'll just worry about balancing budgets and handouts to oil companies and other big corporations" -- of which there is some in this very Bill -- basi cally deciding that if you give enough money to the corporate sector they will bury us all in cheap goods and services, and it just hasn't worked.

They seem to totally ignore the demand side of an economy, that somehow if ordinary people had a little money in their pockets to spend, when they buy things from retailers, then the retailers could buy from the wholesalers who could buy from the manufacturers and you could get your econ omy going in that way. I'm not saying you can always spend your way out of a deficit, but certainly there are times for stimulative deficit budgets and there are times for surplus budgets. And right now is not the time for a deficit budget that is not a stimulative deficit budget of the type this province has brought in.

The situation last year was such that we had a some $3.5 bil lion deficit without changing anything. We just went ahead with the same usual expenditures and just found ourselves get ting a lot less money. The government claims "due to forces beyond their control," but I'd like to comment on that later. I don't think they should have been totally beyond their control. But this year, in order to try to reduce that deficit, the govern ment has cut expenditures and raised taxes and narrowed that gap, the difference between revenues and expenditures, down to $1.9 billion.

Coming out of the situation we were in last year, there is nothing stimulative about this particular budget. We have taken an extra $1 billion out of the hands of ordinary tax payers, and that will not stimulate the economy in any way, shape, or form. The basic principle behind this Bill again, as I said, is to bal ance the budget as quickly as possible -- I think too quickly.

The government should have taken a serious look at the situ ation we're in and said, "Right now we have a number of fragile industries that are supposed to start carrying the burden now that energy, oil and gas, are not carrying the burden of bringing in their revenues." And the billion dollar tax grab will hurt those new industries. I'm thinking of industries like tourism, some of the new high-tech industries, medical research, a number of those sorts of industries that are fairly new.

The government in fact made its mistake, I think, in terms of handling the economy -- it is now making the people of Alberta pay for it -- when they put all their eggs in the oil basket, and they did that for a number of years. Finally, having put all the eggs in the oil basket, they sold it down the river with deregula tion.

And then they've tried to blame outsiders in saying, "Well, the oil prices are low and grain prices are low because of a trade war, and it's not our fault We can't do anything about it." We could have when we were negotiating the Western Accord In stead of negotiating a deregulation, we could have asked that we have some kind of ceiling price and floor price built into the oil industry to provide some stability in this country. We've got enough gas and oil for our own needs. We don't really need to sell it to other countries particularly. We've got long-term gas supplies and long-term oil supplies for ourselves.

The oil sup ply is getting a little thin, but if you look at the artificial or syn thetic crudes in the oil sands, that sort of thing, we've got a long-term supply. We could develop them for ourselves to be self-sufficient in gas and oil. We didn't need to get hung up on trying to export in a major way and hence going for deregulation and trying to compete in the world market at prices that are so low that right now we're probably not getting any money at all out of our gas sales.

Oil prices seem to be stabilizing, but even so, we could have negotiated a price that would have stopped customers from be ing ripped off. It is, after all, our own gas and oil, so why should we have paid the $40 and $50 a barrel that was antici pated or the $64 that was anticipated by the pricing agreement between this government and the federal government of a few years back? On the other hand, why should we see our industry

1724 ALBERTA HANSARD June 8, 1987 all go down the tube and all the small companies in real trouble because the prices got so low when in fact we need the gas and oil? The consumers of this province have not seen the benefit of that. Those are some of the basic things that this budget has not taken into account This budget basically says that there's noth- ing the government can do about our revenues except to tax the people higher, basically saying that we couldn't recover the kind of resource revenues that we used to get.

That's probably true, but we could maybe go some way toward that if we had fought for a floor price. In 1985-86, of course, oil revenues were some $5,5 billion. Last year they suddenly went down to $1.7 billion and hence resulted in our $3.5 billion deficit We're now with a $1.9 bil lion deficit pushing on the $5.5 billion borrowing power that the government asked for last year, I want to just talk a little bit about some of the detailed taxes, although I won't go at great length because we can get into them in Committee of the Whole, The 1 percent surtax is an unfair tax.

The doubling of the 3 percent increase on the tax base start ing in July 1 through to December 31 on personal income tax is cowardly and unfair. There is no reason why this government when they brought the tax in, couldn't have just said that it started on April 1, or if they'd wanted to make it retroactive back to January 1 -- fine. But they've very carefully avoided collecting any extra taxes under this provision until July 1, when this House will be finished sitting and people will be away on holidays.

They won't even notice until their July cheque comes in, and by that time they won't be able to find an MLA to talk to. So it seems to me that if this government had been honest and upright and forthright with the people of Alberta they would have started that tax immediately at 3 percent, from 43.5 . . . MR. SPEAKER: Order please. Could you give the member the courtesy of your attention, please, MR. McEACHERN: Thank you, Mr. Speaker. . . . to 46.5 per cent and not be faced in July with making that 49.5 percent for the next six months.

That's going to be a very heavy burden, along with the 1 percent tax and along with the 8 percent surtax for those above a $3,500 taxable base. Just going back to the 1 percent surtax as being unfair, that also raises some problems that we can anticipate in the next tax year and that we have to consider, I think, when we're building taxes into this year's taxes. The federal government is consider ing making some tax changes, and one of their considerations is a sales tax. If the federal government does that, then Albertan will have a sales tax the same as everybody else.

I asked a very specific question the other day to the Treasurer, and his answer would indicate that that will be the case. There's no way that he could see of sort of giving the money back to Albertans if the feds imposed a countrywide sales tax. I agree that it would be administratively impossible to deal with it. So we would have a sales tax. A sales tax is an unfair tax. This government is a Conserva tive government. The federal government is a Conservative government. I suggest that you put a lot of pressure on your brothers in Ottawa to not go the sales tax route.

I also suggest that the business transfer tax, which they are considering, is re ally nothing more than a sales tax at every possible level of ex change. So again you need to look very closely and talk to your brothers in Ottawa about those kinds of regressive taxes. The tax increases that are specifically in Bill 49 are heavy. They're going to raise well over $800 million from the pockets of ordinary people.

I know the Treasurer has claimed that he has softened the effect of that tax on the very lowest income people, the working poor people in this province, but that $450 exemption that some people are going to be able to take at least part of -- it's on a formula of taking half; either that or half of the tax payable -- is not going to help very many people. The fact of the matter is that the working poor of this province, the people earning $5 an hour, $6 an hour, are the ones that are go ing to carry the burden of this tax. It's not the way tax reform should be done.

Tax reform should be right across the whole board. We should look at the whole range of taxes that we have, the various categories at different levels of income. We in this province have some rather incredible facts about taxes. For instance, in 1983 there were over 1,500 people earn ing over $50,000 that did not pay any tax at all. We have people in this province that earn over $50,000 a year that let the tax payers pay their medical premiums, because they don't show any income and therefore don't owe any taxes. So the need for tax reform is there. In this tax Bill the Treasurer has also included another one.

It's not really a tax, but the renter assistance that we had before has been dropped. And again the very lowest of income people are the very ones -- many of them on social assistance or other low-income people, UIC and so on -- that will lose that renter assistance credit. So the principle that we must balance the budget at all costs is basically going to cost the low-income peo ple of this province. In looking at this idea of tax reform, it seems to me that we can't afford to just sit and wait for the feds to come up with a program and then react to it.

What we need in Alberta is the Treasurer to do a detailed analysis and put out a working paper indicating the basic facts about where we're at now. For instance, it should show just how much money we collect from corporations and perhaps of different sizes; how much personal income taxes we collect in Alberta, broken down perhaps by income groups; how much we collect in fees and licences, et cetera; how much we collect in royalties. The royalty tax struc ture has got so complicated and convoluted that it would take a Philadelphia lawyer to figure out what's going on.

But not only that "How much is it actually bringing us?" is a good question, and we consistently don't get answers when we ask. Something the government needs to do very carefully is lay out the kinds of tax write-offs and how much they're costing us. We give these write-offs and royalty reductions and then make no attempt to quantify how much that's going to cost us. We brag a lot about how much it's going to give to companies, but it's very hard when it comes time to analyze the public accounts and the annual statements -- just how much anybody has received, or how much benefit they have received.

I've read a lot of the tax Bill very carefully, and it does indicate that when there is a tax write-off or a royalty reduction it goes up to a cer tain amount for certain people in certain categories and changes for different years and so on, and is very complicated, yet we don't have the kind of accounting and the kind of information given to us that will tell us just how much money we do get or how much money we have forgone. I think that's something the government needs to take a really close look at.

I might remind them also that any time the federal govern ment makes any really serious tax changes it tries to project how many jobs that will create or how many jobs that will cost. That's another aspect. It seems like when the government is laying out its tax changes and policies, its budgets and so on, it

June 8, 1987 ALBERTA HANSARD 1725 wants to leave everybody somewhat in the dark and having to scramble to try to sort out what's going on rather than laying it out in a simple and consistent manner that is easy to read so we can get on with the job of policy-making with a good set of ba sic facts behind us. You spend most of your time doing research and trying to analyze what is happening, and even when you ask questions you often don't get very straight answers.

One of the sections indicates an increase in taxes for the larger corporations and exempts the smaller corporations, and that's something I would applaud. Personally, I think the small businesses are the ones that need to be encouraged at this stage. This government for too long in the name of private enterprise has really catered to the big corporations, particularly in the oil industry, and left the little companies on the side. Just talk to the small businessmen. I know the government's trying to bring in some programs now.

I think of the small business incubator program, but it's really not off the ground and really doesn't have an awful lot to offer yet. The Small Business Term Assis tance Fund Act put a little money into the hands of a few businesses, but most are the ones that already had the money and already had the borrowing power, and it was just a sort of rewrite. The SBECs and the Alberta stock savings plan and some of those other companies have not really helped the smaller com panies.

Vencap, again, is not really helping those companies who need $20,000 or $50,000, the very companies that, by the way, do the most to diversify your economy. They run the serv ice industries, they're very flexible, they are more job intensive, they hire more people for the amount of capital they have in vested than do the bigger companies. And we have for too many years catered to the really big companies. Now finally, I see the government at least -- although they've been paying lip service for a long time -- starting to make some moves, but at this stage they're pretty well inadequate.

I might point out at this same time that these last 10 or 15 years have seen an incredible growth in the terms of big corpo rations -- in many cases swallowing up and pushing aside little companies. We've seen a concentration of corporate power in a few hands that's gone on at an incredible rate, often done at great cost to the economy. Often the takeovers were not eco nomically sensible or reasonable; it was just merely a grab for power by one corporation.

Often the company would pay more than the shares were worth, and in order to finance that would then end up taking the two companies, cutting out a number of jobs, and downsizing the whole operation in order to pay for what he had just done. So we didn't get an expansion. We ac tually got a contraction in many cases in terms of jobs and eco nomic development. Now, that process has been going on for a long time and is now finally -- or at least there are some signs that it might be starting to reverse itself.

A lot of the really big corporations, much like this government, have gotten too big and too bureaucratic. They've got to a point where they're finding that they're not operating efficiently. They're trying to operate too big a network of companies from one central office.

And this government has built one of the biggest bureaucracies of all the provincial governments in the country and should appreciate -- they talk a lot about downsizing and about governments being too bureaucratic and governments can't run anything -- I guess they're thinking of themselves when they say governments can't run anything much -- but basically they've been very, very bureaucratic. And now that trend to back to the smaller, to small is beautiful, is starting to make some headway in the eco nomics of this country, and not before its time. Mr.

Speaker, this budget has several different aspects to it, but basically it's a tax grab from ordinary Albertans. This government, by the budget it brought in and is now backing up with these tax changes, has shown no vision and little sense of direction. It merely says: balance the budget, even if it means that eventually we'll build up a deficit while we're doing it, equivalent to the heritage trust fund. There is no rethinking about the direction they've taken, like deregulation.

There are no thoughts about taking a second look at the heritage trust fund -- what's left of it -- and starting to talk about some real diversification. The areas where this government has had the most success with diversifying the economy -- unlike the Member for Westlock-Sturgeon, who said that governments can't diversify the economy; I disagree with what he said there -- is where they have targeted specific money for specific projects. I think in terms of medical research, for example, or of tourism as a poten tial; it still hasn't really come through yet.

I think of high-tech; it hasn't really come through yet, but it's a possibility at least. I think of food processing industries. It's specific targeted direc tions that the government has taken that have shown the most promise and will come through if the billion dollar tax rub does n't kill them in their infancy.

It's time the government looked at not only the deregulation direction they were going with our oil and gas industry, not only taking a second look at the heritage trust fund -- and I was en couraged that the Treasurer did indicate he might just do that a month or so back, although they rejected the idea totally last fall -- it's time they took a better look at the fairness of the tax regime. I know they're somewhat limited in what they can do, but they should get onto their brothers in Ottawa. Some really serious tax reform is needed in this country. We need some new sources of income.

One of them would be a floor price on the oil industry. We need to look at some new federal programs and get our fair share of federal programs. We maybe need to look at some governments getting involved in some of the economic projects on an equity basis, and we could start to bring more money back into this province and into our economy. Mr. Speaker, this caucus will not be able to support Bill 49. MR. SPEAKER: Thank you. The Member for Lethbridge West, followed by Edmonton Belmont. MR. GOGO: Thank you, Mr. Speaker. I can't ever imagine any politician wanting to speak in favour of raising taxes.

The simple fact is: what are the options? I hear and continue to hear rhetoric as to what is the proper way to go; if you hadn't made certain mistakes over the past 15 years, today wouldn't be necessary. Well, as a member of government who has been elected four times -- and perhaps the future, on a voluntary basis, doesn't indicate that a member wants to return -- I don't think I would be overly concerned about the political ex pediency of saying to Bill 49: set it aside and let the deficit grow. Hon. members are well aware, Mr. Speaker, of what has happened to the nation as a whole.

Maybe that's for reasons of political expediency; I don't know. But I would like to speak in support of this Bill for the fol lowing reasons. It seems to me, Mr. Speaker, that one has to look at the role of government, and it's not a bad idea when you're on that side of the House periodically to consider what the role of a government is. Surely it's primarily to (

a) help

1726 ALBERTA HANSARD June 8, 1987 those who cannot help themselves -- not "will not," but cannot help themselves. Surely that's a function of government. To regulate in the public interest is a role of government -- not withstanding the PUB, the comments we heard last week, and I'll comment on those in a moment -- but more importantly, I think, to sort of set the economic climate whereby the business of the province and the citizen can function in a realistic way.

Now, it would seem to me members are well aware that the traditional sources of revenue for the province of Alberta have been in nonrenewable industries, primarily hydrocarbons. Members are well aware of what's happened to the prices of hydrocarbons. I suppose one could realistically say, "Why did n't the government take appropriate action to protect itself?" That's the so-called floor price. I would simply ask hon. mem bers to look at what this government has said over the years in conjunction with the industry, and that is to have market prices. Well, we got market prices.

We may not like them, but we've got them. But at least the government's consistent. At least the government's consistent. Mr. Speaker, the government could well have said through the Treasurer -- because the Treasurer represents the government. Members may not be aware, but the Treasurer doesn't make all the decisions. The Treasurer is part of a government that sets an economic and fiscal policy and tries and puts the pieces together in the form of a budget speech such as we heard on March 20.

The government, with the political philosophy underlying that government, has said in very simple terms that Albertans will not support a deficit. Now, hon. members may find that difficult to accept, but that is a statement of fact. It's been enumerated by the Premier and members of cabinet. Even the odd MLA has supported that. I know that in the riding I repre sent people feel pretty strongly about debt. They don't under- stand why we have to have it. As a matter of fact, they won't tolerate it. So the first thing, Mr.

Speaker, is that I think we have to give the government credit for the fact that they've said we're not taking the easy road. It reminds me of the community I live in. We talked today about the Oldman River. You know, from Lethbridge to Fort Macleod is about 19 miles the way the crow flies, about 30 miles the way the highway goes, but 140 miles the way the Oldman River goes, because it follows the path of least resistance. And this government, Mr. Speaker, could have followed the path of least resistance by not increas ing the income taxes, to let the debt grow.

I'm sure there are members in this House that would say, as a percentage of the provincial domestic product, it wouldn't be that bad. That's the argument they used in Ottawa for years. If you look at the gross national product, is the debt that bad? Well, you get the economists arguing, and they'll come up with rational reasons why it's not that bad. That's why other people have said, Mr. Speaker, it would be a good idea if you took all the economists in the world and laid them end to end, and they still wouldn't reach a conclusion as to a proper economic policy.

The point is that this government has said we'll not tolerate a deficit, and we must balance the budget by a given time. Now, members may not like it, but if you determine that as a prin ciple, then surely you must address your mind to how you're going to achieve it. I haven't heard one member yet say we must reduce government expenditures. It seems to be that what ever government wants to spend is all right; just go and tax the people. I got my tax notice the other day in Lethbridge, my school district -- a 14 percent increase. I'm considering a Bill, Mr. Speaker, to limit what they can increase the tax by.

But we've heard the Minister of Education say a class is $4,300 to $4,500 per student for education in this province. I would just remind hon. members who talk about student/teacher ratios to get 36 students in a class and multiply by $4,300, and that tells you what it costs to run a classroom in this province, of which 80 percent is payroll -- not erasers, not bricks and mortar. And shouldn't we be getting ourselves in gear there and start to say, "Hey, what do we do for 175 to 180 days a year that demands that kind of money?" But I don't hear anybody saying that. I'm hearing them say: "Increase it.

How dare you decrease it 3 per cent? Increase it." Well, you can't have it both ways. If you want to increase it, then who is going to pay? Then let's have people stand up and say, "Let's have those people pay." I'm not hearing that tonight. I'm hearing them say, "Hey, you're pick ing on the wrong guy." Well, who is the other guy? AN HON. MEMBER: You. MR. GOGO: Yeah, me. Who is the other guy? If I had my way, I'm not too sure we should have a corporate income tax. I just say we should tax the person who receives the money. It's not a bad idea, you know. It might even apply to doctors. Then we hear, Mr.

Speaker, about universality. We have no compunction, if you're 65 years of age and a millionaire, you still don't pay. I haven't heard anybody over there saying, "Hey, let's make people pay their share." I haven't heard that suggestion yet, I frankly think we should reconsider that program. You know, it's like they say -- the Keynesian there of economics -- you save in the good times to provide for the bad times. Then I hear about all the good times we've had, but we've never saved anything. That's on the federal scene. But here in Alberta we've experienced a $3.3 billion deficit.

The government party has said, "Hey, people will not tolerate that. We must work out a plan." So they adopted that principle, and we're looking at phase one of that principle now: increase taxes by over $900 million -- that's not an easy thing to do; don't you think the Treasurer would rather decrease them? He doesn't have an option -- and then cut government expenditures by $650 million, plus what the minister of hospitals hopes for. Well, in the aggregate that's about $1,8 billion. I think, Mr. Speaker, that's a very, very courageous move.

How long are we going to tolerate spending $1,300 to $1,500 per person on the health care system without believing we've got to pay for it? I mean, how is it going to be done? I don't hear any suggestions as to how it's going to be done. [Mr. Musgreave in the Chair] But there's a plan in action tonight, and it's in this Bill 49, as to how it's going to be done. Surely the government answers to the people every time there's an election.

Now, if hon. mem bers want to have the system of recall of America and say, "Hey, I don't like what you're doing; I want you back; have an other election," do you think any government in its right mind is going to raise taxes the day before the election? Now, come on, hon. members. The role of the government is to govern, and they'll do it the best way they see fit. Do you think this govern ment had their say about a world oil price? I know hon. mem bers will say, "Yeah, but if you'd put a platform in, we wouldn't have this embarrassment." Big deal. You know, if I had sold Alberta Energy shares, Mr.

Speaker, at $27 instead of letting them go down to $9, I'd have been brilliant too. You can't have it both ways.

June 8, 1987 ALBERTA HANSARD 1727 I don't take any comfort, Mr. Speaker, that we have food banks in this province. I don't particularly take great pride in Albertans having the greatest number of VCRs in Canada or the greatest number of microwaves in Canada. I don't take particu lar pride in that. But I suppose you could say, "Hey, are we re ally doing that badly when we have our citizens owning all these things?" I'm not particularly proud of the fact it takes you three months now to buy a new car because there's such a lineup. I'm not particularly proud, Mr.

Speaker, that last winter you could not get a trip to Hawaii for six weeks because they were fully booked. And at the same time, we have food banks. At the same time in my community we have a soup kitchen. Mr. Speaker, what does that tell us? Surely, it tells us some- thing about attitudes of the public. Is government to not only legislate morals and now they're to get in to ensure that every body has the same? Mr. Speaker, with respect, I don't see that many people -- and I've been chairman of AADAC, and I'm a little bit familiar with the drunks . . . MS LAING: No kidding. MR.

GOGO: And I'm not referring to the hon. member who just let out that laugh. But, Mr. Speaker, as difficult as it is for some people in Alberta, most people in Alberta are reasonably well off. But why are they reasonably well off? Isn't it, to a certain extent, due to the government in this province for the last 25 or 50 years. AN HON. MEMBER: OPEC. MR. GOGO: OPEC, sure. OPEC is a recent innovation -- '73, hon. member. But you know, under Mr. Manning people didn't have it so bad. Now, come on. Be fair.

The other day we were debating whether or not the PUB should be revised, and I heard the critics standing up condemning TransAlta Utilities for mak ing all this money, when I've never read a regulation yet that prohibited you from going and buying part of TransAlta. It's called the stock market, MR. GIBEAULT: On a point of order, Mr. Speaker. Neither the PUB nor TransAlta are the subject of the Bill before us. MR. GOGO: Mr. Speaker, I learned a long time ago that it's so much easier to disagree with things you don't like to hear.

It's like having some suggestions to certain problems when you don't understand what the problem is all about. I simply say, in a nutshell, Mr. Speaker, it's been proven time and time again that when your outgo exceeds your income, your upkeep becomes your downfall. There's nothing new to that.

This government is committed to a program; it's got the courage to come before the Legislature and the people of Al berta in a budget speech saying we've got to have $1 billion more on the one hand in terms of revenue, and cut expenses by $650 million on the other hand, and we will ensure that no one in Alberta who requires essential services will go without. Now, what stronger statement could a government make? Surely, that's up to the public to decide, Mr.

Speaker, I would suggest that if hon. members want to cut education more or cut health care more or cut something else more, then they should say so in this House, but they should not arbitrarily criticize the government's attempting to raise money to run the programs it's committed to. Therefore, Mr. Speaker, I support Bill 49. MR. ACTING DEPUTY SPEAKER: The Member for Ed monton Belmont. MR. SIGURDSON: Thank you, Mr. Speaker. I don't know if I can follow the Member for Lethbridge West, but let me tell you, I don't know if I would want to follow the Member for Lethbridge West. SOME HON. MEMBERS: Sit down then.

MR. SIGURDSON: No, I think I'll stand on behalf of Al bertans here tonight. I don't think I'll sit down and take a back seat to the corporate sector, as some of you opposite have. I think I'll stand and say a few words. You know, Mr. Speaker, the minister tonight started off by saying this particular Bill was well thought out. It's appropriate that he would say that at an evening session, because when I was a little tyke my mother used to take me upstairs and tuck me into bed and tell me a fable. I always enjoyed an Aesop's fable, but this one, Bill 49 -- it looks like a fable from the brothers Grimm. AN HON.

MEMBER: Would you believe your mother? MR. SIGURDSON: I would believe my mother before I'd be lieve you, hon. member. But you know, Mr. Speaker, this is so well thought out, so very well thought out that we have a 1 percent surtax on everybody, regardless of income. It doesn't discriminate, this 1 percent surtax. No, it comes from everybody, regardless of abil ity to pay: 1 percent for everybody in Alberta, out of the pock ets of average Albertans, people who can ill afford to pay the taxes that are there currently, let alone pay taxes that are about to be increased.

Now, the Treasurer said that Bill 49 was well thought out. Well thought out for whom? One looks at the constituency of Edmonton Belmont and what the makeup of that constituency is, my constituency. One would suggest that maybe that comer of Edmonton wasn't in the thoughts of the Provincial Treasurer when he and the bureaucrats permed Bill 49. One couldn't have thought too clearly, thought too well, or thought too long about this particular surtax, had they looked at the constituents of Ed monton Belmont. Mr. Speaker, unemployment in Edmonton numbers about 50,000 folk, 11.4 percent.

But let's look at where in Edmonton that 11.4 percent happen to reside. I would suggest that that 11.4 percent is a number far too high for the constituency of Ed monton Whitemud, the constituency where the Premier lives, the constituency that the Premier represents. I would suggest that 11.4 percent is far too high a percentage if we look at the constituency of Edmonton Parkallen, where the Government House Leader lives and represents. And I would suggest that it's far too high a number, that 11,4 percent, if we were to look at the number of unemployed in Edmonton Glenora.

But on the flip side of that, if we look at that 11.4 percent and we look at Edmonton Belmont, we might very well suggest that 11.4 per cent is far, far too low. You see, in the constituency of Ed monton Belmont we have a lot of people that used to be in volved in the construction industry. We have an awful lot of people that were packinghouse workers, packinghouses that have shut down or been consolidated. Or for those who still work, they've had their wages reduced because of the actions of a particular owner, who happens to be a Tory supporter, who

1728 ALBERTA HANSARD June 8, 1987 has decided that they don't deserve the kind of income that they had a few short years ago. I said that my constituency is made up of construction workers, electricians, plumbers and pipe fitters, carpenters, steel workers, and labourers. Twenty percent of the male work force of Edmonton Belmont is involved in the field of construction, or rather, to be more precise, "was" involved in the field of con struction. Twenty percent, regardless of gender, of my con stituency is involved in the areas of sales and service, and quite frankly, Mr.

Speaker, with disposable income going down due to tax increases, dollars that are taken out of the economy, I'll bet that a number of those positions in the area of sales and serv ice will be kissed good-bye. Twenty percent, again regardless of gender, of the constituents in Edmonton Belmont are in volved in clerical work, and once again, if we take disposable dollars out of the economy, who is going to need a bookkeeper? Many companies will only have ledgers that will look as though as they're filled by the accounts receivable.

We won't need too many bookkeepers to keep on adding another column of ac counts receivable. Not an awful lot of teachers reside in Edmonton Belmont, but we know what's happening to the teaching positions: they're being cut. We know what's happening to the health ser vices; those positions, too, are being cut. That's the makeup of Edmonton Belmont, or at least of about 60 percent of it: con struction, sales and service, teaching, health services, and cleri cal. The other 40 percent is involved in a variety of other ser vices: transport, manufacturing, farming, and managerial, but they, too, have suffered.

Mr. Speaker, the unemployment rate in Edmonton Belmont isn't 11.4 percent; it's unfortunately somewhat higher. Un employment in the field of construction is far too high. Farmers are losing their farms, teachers their jobs, and this government wants to add to the misery, increase the taxes to average Al bertans. One might suggest that that's the Tory idea of helping: kick 'em while they're down because, by God, they've been down so long that obviously they like it, so let's help them stay down a little longer. Another regressive measure in this Bill is in the area of hous ing.

Thirty-five percent of my constituents happen to be renters: single moms, young families just starting out, young people just starting out. What will the passage of this Bill do? It removes the renters' tax credit, so not only do the renters in Edmonton Belmont get to enjoy contributing their share to clean up the economic mess we find ourselves in, but they also get the dou ble whammy. They get hit a second time. They get hit with the loss of the renters' tax credit. Cuts in services, increase in taxes: that's not a recipe for debt reduction, Mr. Speaker; that's a recipe for pain for the average Albertan.

When the Treasurer said that this Bill and the effects of this Bill were well thought out, it begs the question: for whom? For whom was it well thought out? For those in the corporate sector and for those who reside in Whitemud or Parkallen or Glenora perhaps, but not well thought out for those who happen to live in Edmonton Belmont. The Member for Lethbridge West asked the question: what are the options? Well, just what are the options? Why don't we put people back to work using capital projects?

You know, we found $13 million for the alternative, the work-for-welfare program, because the minister was surprised that people wanted to work. I'm not surprised that people wanted to work, but I've been out canvassing. I've knocked on the doors of those who are involved in construction and those who are involved in sales and service; they tell me that they want jobs. I'm not surprised by that. It's unfortunate to think that a minister of the Crown would be surprised to find out that people want to work. The federal government, the kissing cousins, found billions of dollars for the defence industry.

We found billions of dollars for destructive tools, and what do we find elsewhere? Cuts. Cuts in education, cuts in social services, and cuts in health care. That money could have gone to those areas. Had there been the political will, that money would have been made available, but there isn't that political will. [interjection] You know what happens when you create capital projects, hon. member? You put Albertans to work, and their dollars happen to generate more jobs, and they'll be productive members of society rather than relying on unemployment insurance and on the welfare rolls.

That's what political will can do, and it's unfortunate to see that political will, with this government, has been lost. The ideologi cal purity seems to be paramount to this government. Common sense would appear to have escaped. This Bill, Mr. Speaker, is a regressive measure, and it ought to be reconsidered. MR. YOUNG: Mr. Speaker, I beg leave to adjourn the debate. MR. ACTING DEPUTY SPEAKER: It's been moved by the Acting Government House Leader that we adjourn debate on Bill 49. All those in favour, please say aye. HON. MEMBERS: Aye. MR. ACTING DEPUTY SPEAKER: Opposed? Carried. MR. YOUNG: Mr.

Speaker, I would request that Bill Pr. 19 be called. head: PRIVATE BILLS (Second Reading) Bill Pr. 19 Calgary Assessment of Annexed Lands Act, 1987 MR. STEWART: Mr. Speaker, I move second reading of Bill Pr. 19, the Calgary Assessment of Annexed Lands Act, 1987, standing in my name on the Order Paper. I do so on behalf of the sponsor of the Bill, the city of Calgary, but more importantly I do so on behalf of the 640,()00 citizens of Calgary who are the persons most concerned with this Bill. Mr.

Speaker, this Bill is based on an important principle, that of fairness and equity in the assessment of the base of municipal taxation in Calgary. This Bill has received considerable atten tion, considerable time in committee hearings, and considerable debate in Private Bills Committee, and I know the petitioner would want me to express his appreciation to the members of the Private Bills Committee for the full consideration given to the Bill at that stage.

It is an important process and one which did provide opportunity for hearings of the evidence from vari ous intervenors as well as from the city as petitioner. Mr. Speaker, I'd like to give a bit of background with respect to the Bill itself. In brief, between 25 and 30 years ago substan tial portions of land were annexed to the city from surrounding municipalities. At that time an effort was made for an orderly and fair transition from a rural base assessment to an urban base. The annexation orders attempted to address this by visualizing

June 8, 1987 ALBERTA HANSARD 1729 the future nature of development and established certain triggers that would mark the time at which such transition would fairly take place for any given taxpayer. Unfortunately, it was diffi cult to forecast the real nature of development as it subsequently took place. And while it was thought reasonable to say, for ex ample, that subdivision to less than 20 acres would be a fair in dication of urbanization, it was not recognized that there would be shopping centres in the future which could encompass more than 20 acres. [Mr.

Deputy Speaker in the Chair] In any event, in an effort to clarify certain terms and remove anomalies in the orders, application was made to the Local Authorities Board, hearings were held, and new orders were granted and approved by cabinet in December of 1986. That, Mr. Speaker, briefly summarizes the nature of the or ders and their purposes, which background the Bill.

Because of certain concerns raised about this Bill and because, unfor tunately, the vast majority of the representations that were made by the intervenors at the time of the hearings were not relevant, really, to the provisions of the Bill itself, I feel a brief review of the purpose of the Bill is in order. First of all, what does the Bill do? The Bill contains two sections. The first

section confirms in statute the provisions of already existing orders of the Local Authorities Board which were amended and approved by cabinet in December 1986. It doesn't change the terms in any way; it confirms them. In addi tion, it makes the orders incontestable, with the result that sec tion 1 of the Bill would in fact extinguish an existing appeal by two landowners who were in fact intervenors at the time of the Private Bills hearings. Why would this be necessary, and even more importantly, why would you ever think of extinguishing this due process of law in respect to these particular appellants?

To appreciate the situation, Mr. Speaker, a few facts have to be stated. Neither of the appellants are adversely affected by this Bill nor by the Local Authorities Board order which they contest. They remain sheltered by the orders. They have received writ ten confirmation from the city to that effect as well. However, in effect they would like something more than that: they would want to roll back the clock to 1961 and in effect freeze it there. In other words, not only would they be taxed as if they were still in the rural municipality of Rocky View but also taxed as if it were still 1961.

That is, of course, a benefit or advantage that no other taxpayer would have. However, the situation is slightly more complex, Mr. Speaker. It is very possible that if these orders were overturned in this appeal, and there may be technicalities by which that is possible, the city -- and by that I mean the 640,000 citizens -- would have to refund tax to those shopping centres and other commercial landowners, and they would be assessed as if they were still sheltered rural lands.

In all likelihood, the Local Authorities Board would have to rehear the entire matter, prob ably come to the same conclusion based on equity and fairness, and the next time around do it right to avoid any technical defaults. The liability to the city and hence to the taxpaying citi zens of Calgary would be $5 million to $6 million a tax year, and probably two such tax years would be affected. When two appellants are unaffected in any event and 640,000 taxpayers stand to lose $12 million and a fair basis of assessment is set aside, the greater public interest must prevail.

I think it is interesting to note that at the time of the private member's Bill hearings, committee hearings, all of the inter venors that were there in respect to

section 2 of this Bill felt that

section 1 was in fact fair and proper.

Section 2 of the Bill, Mr. Speaker, reinforces the effect of

section 30 of the Tax Recovery Act, an existing provision which has been in place for 20 or 25 years, and which provides a period of six months within which claims for taxes in dispute must be made. The purpose of the six-month period is to set a reasonable period for such claims so that there is certainty in fiscal planning by municipalities. [Mr. Speaker in the Chair] It is important to note that the intervenors, on this point, have already exhausted their normal remedies with respect to their assessments. In addition, none of the intervenors have any ex isting right to claim a refund.

They have all long passed their six-month period and are now endeavouring to claim the back taxes for many years ago. They claim that the courts may rule that

section 30 is invalid, as being against the Charier of Rights, and if the six-month period is thrown out, they could jump on that opportunity and claim a refund of taxes paid, with the result that their developed urbanized lands would be taxed on a rural assessment base. The important thing, Mr. Speaker, is that they can still carry on that action to challenge the

section under the Charter. This Bill does not deny them access to make that claim. Their right to the courts is not denied. To succeed, they would have to challenge the Charter in any event. However,

section 2 does reinforce our present legislation by saying that there is a valid purpose to the six-month period in this case and the greater pub lic interest must prevail over opportunism. If the taxpayers in volved in these orders were to succeed in striking down our cur rent, existing legislation, then claims could be made for refunds of taxes for perhaps six years back, a total liability to 640,000 other Calgary taxpayers of $32 million approximately. Should Calgary citizens take that risk or try to reinforce the present rules of the game in the name of fairness and equity?

That is what this Bill is all about, Mr. Speaker. MR. WRIGHT: Mr. Speaker, this is probably the most unusual private Bill that's come before this Assembly for a long time, if ever, not that I have any experience to speak about that, but just from the inquiries I have made. It's unusual because of the ex traordinary nature of paragraph 2 of it, which removes retrospectively legal rig

Document details

Collection	Alberta — Debates (Hansard)
Citation	19870608
Type	hansard
Volume / chapter	L21 S2 19870608 2000 01 han.pdf
Language	en
Format	json
Source	PROVINCIAL
Identifier	eaab484981a23ca66538f0c04501d749be397926

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