1975 Legislative Session: 5th Session, 30th

Parliament

HANSARD

The following electronic version is for informational

purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

MONDAY, MARCH 3, 1975

Afternoon Sitting

[ Page 281 ]

CONTENTS

Monday, March 3, 1975

Afternoon sitting

Speaker's ruling

Disclosure of public service settlement figures — 281

Routine proceedings

Oral Questions

Casa Loma Motel purchase. Mr. Phillips — 281

CBC Columbia treaty documentary. Mr. McGeer — 283

Eviction of Aberdeen Hospital patients. Mr.

Wallace — 283

Eviction notices to Casa Loma residents. Mr.

McClelland — 283

Columbia River Hydro costs. Hon. R.A. Williams

answers — 284

Budget debate (continued)

Mr. Bennett — 284

Mr. McGeer — 296

Mr. Wallace — 303

Statement

Announcement of inquiry into Columbia River costs and

their allocations. Hon. R.A. Williams — 315

MONDAY, MARCH 3, 1975

The House met at 2 p.m.

Prayers.

MR. H.A. CURTIS (Saanich and the Islands): Mr. Speaker, in

the gallery today is a group of students from Parklands Senior

Secondary School in North Saanich, accompanied by their

teacher, Mr. Robin Hay. I wonder if the House would welcome

them.

MS. K. SANFORD (Comox): I would like to introduce a group of

students today who are here from Campbell River Senior

Secondary School, sponsored by Crown Zellerbach. They are with

their teachers, Ms. Chris Round and Mr. David Brown. I Mould

ask the House to join me in welcoming them.

HON. P.F. YOUNG (Minister of Consumer Services): Mr.

Speaker, we will be having with us this afternoon visiting us

in the gallery some of the members and the spouses of the B.C.

Denturists Society, who are conducting their annual meeting

here in Victoria. At this time I would ask the House to welcome

them.

MR. SPEAKER: Hon. Members, the Hon. Member for North

Vancouver–Capilano (Mr. Gibson) raised a matter of privilege

last Thursday, and I propose to deal with it at this time. It

was a complaint relating to the disclosure of settlement

figures between public service bargaining units and the

government. He cites the Provincial Secretary (Hon. Mr. Hall)

as stating on February 25 to the House during question period:

"I intend to adhere to the agreement I have with the union

involved not to release the details of settlements until all

negotiations are complete."

The Hon. Member considers news of disclosure to the public

and not to the House to be a breach of privilege of the Members

and a contempt. There's no evidence from the Hon. Member that

press releases or public statements to the newspapers and media

have been made by the Hon. Provincial Secretary. Therefore, the

fact that the public has become aware before some Hon. Members

of this House does not preclude the information having been

received by the Employers Council of British Columbia by some

other simple means. For example, the public may be astute

enough to examine existing orders-in-council. Had they done so,

certainly the information sought in question period would have

been easily discovered. That means, of course, that the Hon.

Member for North Vancouver–Capilano could have satisfied his

curiosity without the assistance of question period. I have

secured most, if not all, of these orders-in-council for the

Hon. Member. I have them here and I'll send them to him.

Both May and Beauchesne declare that

information already available in public documents, such as

orders-in-council, statutes or government reports, should not

be sought in oral question period. It follows, therefore, that

such readily accessible information can hardly be the

springboard for a matter of breach of privilege.

In the 18th edition of May ,

page 327, it states:

"Questions requiring information set forth in accessible

documents, such as statutes, treaties, et cetera, have not been

allowed when the Member concerned could obtain the information

of his own accord without difficulty." Thus no prima facie

breach of the privilege of the House can be attributed to the

Provincial Secretary, nor need this decision of these existing

facts require at this time any consideration by the House as to

the whole subject of the release of information outside the

House.

MR. G.F. GIBSON (North Vancouver–Capilano): I would only say

to your Honour, on a point of order, that if these questions

should not be sought in question period, perhaps the answer

should not be denied in question period either.

I think I may later be able to bring before your Honour

information which would indicate that in fact this information

was made public by an agency under the aegis of the Provincial

Secretary, but I will attempt to check that further.

MR. SPEAKER: May I add to the Hon. Members that the

information that was sought in question period about settlement

of negotiations with public service units…? These were

made by order-in-council in January — January 16 — February 6,

and also before this House met. All of them were before this

House met, and they were all public documents.

Oral questions.

CASA LOMA MOTEL PURCHASE

MR. D.M. PHILLIPS (South Peace River): I'd like to direct a

question to the Minister of Housing today. In view of the

recent disclosure by the president of Dunhill Development

regarding the Casa Loma Motel purchase, will the Minister

assure the House that Dunhill did not fraudulently mislead

Central Mortgage and Housing in their application for mortgage

money in order to obtain an amount higher than 90 per cent of

the declared purchase price of $3,177,500?

HON. L. NICOLSON (Minister of Housing): Mr. Speaker, I know

of no fraudulent procedure. I'd be pleased if the Member would

enlighten me more on what his fears are on this matter.

[ Page 282 ]

MR. PHILLIPS: A supplementary question, Mr. Speaker. If

Central Mortgage and Housing were not directly misled in being

asked to put up more than 90 per cent of the mortgage, then the

House has been misled by the Minister as to the actual cost to

the public Treasury for the purchase of the Casa Loma

development, when he said that the end, completed — and he

stressed "completed" — cost of this development would be

$3,177,500. Yet the application to Central Mortgage and Housing

was for approximately that same amount, indicating that the end

cost to the province is going to be approximately one-third of

a million dollars more. Would the Minister please explain?

Either he misled the House in giving the completed cost of the

project or he has misled Central Mortgage and Housing by

applying for more than 90 per cent mortgage on the cost.

HON. MR. NICOLSON: Mr. Speaker, I am glad that the Member

made me aware of what his fears are. The purchase price is as I

announced. The total loan application for Casa Loma was as

reported in The Province on

Saturday: $3,528,500. The

difference between the purchase price of the buildings from

Casa Loma Motel Ltd. and the loan amount requested can be

accounted for in the following estimated project cost, and, of

course, final costs will not be known until after

completion.

Administration costs for Dunhill Development will be

$33,000. There is a contingency for modification, which has

been requested by the B.C. Housing Management Commission — such

as equipping units for the handicapped, ramps, double glazing

on some windows, furniture for indoor and outdoor recreation

areas — in the amount of $100,000. There is interest on

advances, until the CMHC loan is received in June, of $218,000.

All the above items are recognized as legitimate project costs

by Central Mortgage and Housing Corp., and they will be funding

whatever figure eventually becomes the total project cost. This

is the normal procedure followed in all

section 43

applications.

You see, Mr. Speaker, it is the province which is putting in

the front-end funding, and until the mortgage is received it is

an accepted procedure that interest costs be borne on those, on

the advances. Then when we pay off the final $3.1 million….

We are making those advances which I explained earlier — the

$540,000, and then there is the $300,000-odd. There will be

interest charged on that at the rate of 10.375 per cent, which

is the same interest rate charged to us, Mr. Speaker, by the

federal government. So that is an equitable agreement.

Then, when we pick up the total cost upon completion there will be a

period until we get the advance from Central Mortgage and Housing,

which we anticipate in June. So it is estimated that these costs — that

is, our carrying costs until we can get financing from Central Mortgage

and Housing and it is agreed to by Central Mortgage and Housing — will

be figured into the project costs in terms of the cost through poor

administration, through the B.C. Housing Management Commission.

I'm very happy to have this opportunity, Mr. Speaker, to

explain this.

MR. SPEAKER: Does the Hon. Member have a further

question?

MR. PHILLIPS: In view of the Minister's statement which he

just made in the House, I'm afraid I have no alternative but to

accuse the Minister of…

MR. SPEAKER: Order, please!

MR. PHILLIPS: …misleading this Legislature.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please! Would the Hon. Member withdraw

that statement? This is a question period, in addition, besides

making speeches.

MR. PHILLIPS: Mr. Speaker….

MR. SPEAKER: Please, would the Hon. Member…?

MR. PHILLIPS: On a point of order, the Minister, when

questioned in this Legislature, clearly stated that this

project completed, and he emphasized….

Interjections.

MR. SPEAKER: Order, please!

MR. PHILLIPS: I'm on a point of order — yes, right now! He

clearly emphasized that this project would cost the Department

of Housing $3,177,500 and he specified "completed." And I say

the Minister misled this House on the cost of this project.

MR. SPEAKER: Order!

AN HON. MEMBER: We have it — a week ago Tuesday in

Hansard .

MR. PHILLIPS: We have it, Mr. Speaker, and I'd like your

ruling on it. We have it in Hansard

that the Minister

definitely specified, and put emphasis on the fact, that this

project would cost $3,177,500 completed — and he specified

completed.

MR. SPEAKER: Order, please. This is question period and you

are out of order at this time. It's not

[ Page 283 ]

the proper way to do it, as you well know. You

really should

withdraw a statement attacking another Member. You are entitled

to state your opinion and let the public judge between you, but

not to insult another Member in the House.

MR. PHILLIPS: Mr. Speaker, the Minister of Housing just made

his statement during the question period, and it's now that I

say he's misleading….

MR. SPEAKER: I ask you that you withdraw that statement

because it is not parliamentary, and you know that.

HON. R.M. STRACHAN (Minister of

Transport and

Communications): It's wrong in fact.

MR. PHILLIPS: All right, Mr. Speaker, the….

MR. SPEAKER: Would you kindly do so, please? Then we'll get

on with question period.

MR. PHILLIPS: Yes, Mr. Speaker, I'll withdraw it.

I have a further supplementary question to the Minister….

AN HON. MEMBER: Withdraw!

MR. PHILLIPS: I did withdraw.

MR. SPEAKER: The Hon. Member withdrew.

AN HON. MEMBER: Yes, what's the matter with you?

MR. PHILLIPS: A further supplementary question to the

Minister, Mr. Speaker. Are there involved in the extra costs of

the Casa Loma project any moneys to convert the 32 motel units

to suitable living accommodation for senior citizens?

HON. MR. NICOLSON: Hon. Member, in the interests of giving

accurate information, I'll answer that question properly on

Wednesday.

CBC COLUMBIA TREATY

DOCUMENTARY

MR. P.L. McGEER (Vancouver–Point Grey): I have a question

for the Minister of Lands, Forests and Water Resources. With

respect to the documentary film on the Columbia which appeared

on CBC television, did the Minister give permission to

officials of the CBC in preparation of that documentary to go

through the B.C. Hydro files?

HON. R.A. WILLIAMS (Minister of Lands, Forests and Water

Resources): The answer is no, Mr. Speaker.

EVICTION OF

ABERDEEN HOSPITAL PATIENTS

MR. G.S. WALLACE (Oak Bay): I'd like to ask the Minister of

Health, with regard to Aberdeen Hospital, what measures are

being taken to find alternative accommodation for the 93

patients presently housed in that 75-bed hospital who will be

evicted when the hospital closes.

HON. D.G. COCKE (Minister of Health): Mr. Speaker, I'm not

at all sure that that hospital is going to close. At the

present time, we are negotiating with that hospital, and I

suspect that it's a regularly used business ploy to assist in

getting the kind of deal that the present owner of the hospital

would like to get. We, naturally, are disturbed that there

could possibly be a number of patients who would be dislocated,

but certainly I'm quite aware of the problem and am in touch

with it at all times. At the present time, I'm not really

terribly concerned, but if it occurs, we'll certainly make the

necessary arrangements.

MR. WALLACE: A supplementary question, Mr. Speaker. I

recognize the Minister's concern and the statement about

negotiations, but it's my understanding the negotiations have

gone on for some considerable time. I wonder if the Minister

could tell the House if a specific offer has ever been made for

that property and what that sum of money was, in relation to

the asking price of $1.5 million.

HON. MR. COCKE: Well, Mr. Speaker, I think that it would be

a little unbusinesslike if I start giving all our side of the

negotiations in this particular place at this time. Needless to

say, I suspect that ultimately arrangements can be made. I just

hope that that's the case. But I think that we have to be

careful on behalf of the public that we don't spend any more

money than is absolutely essential in order to get that

facility into the hands of the Juan de Fuca Society.

MR. WALLACE: Just a final quick supplementary, Mr. Speaker.

Has any final deadline date been set by the owner of the

hospital by which negotiations either have to come to a

successful end or the place be closed down?

HON. MR. COCKE: I can't really answer that definitively.

EVICTION NOTICES TO

CASA LOMA RESIDENTS

MR. R.H. McCLELLAND (Langley): I'd like to ask the Minister

of Housing again a question on Casa Loma Motels. Is it true,

Mr. Minister, that some people in the motel units are being

given written

[ Page 284 ]

eviction notices, some of them dated March 1, at

this

time?

HON. MR. NICOLSON: Yes, Mr. Speaker, they were given written

notices, but we have had the B.C. Housing Management Commission

contact the owners and the people there, and they're making

arrangements right now. Nobody is going to be radically

displaced.

MR. McCLELLAND: Well, on a supplementary, Mr. Speaker: are

you guaranteeing to this House today then that no one will be

evicted from Casa Loma either under the terms of the rentalsman

Act or under the terms of the Innkeepers Act?

Interjection.

MR. McCLELLAND: Mr. Speaker, the Minister has said on an

earlier occasion that he will operate 32 of those units under

the terms of the Innkeepers Act, which allows him to evict

people because they are undesirable. I'm suggesting that

handicapped people in that unit now have been given eviction

notices, and they haven't been told that their accommodation is

secured. I'd just like the Minister to tell us that he

guarantees that those people will not be evicted.

MR. SPEAKER: I may point out to the Hon. Member that

according to the rules it would be beyond his competence in

question period….

MR. McCLELLAND: Well, we know it's beyond his competence, Mr.

Speaker. What we want to know is whether those people will be evicted

or not.

Interjections.

MR. SPEAKER: Order, please. I don't think it's within the

competence of the Minister to issue eviction orders. That is a

subject of the courts, and it's also the subject of the

rentalsman, I presume. It's also a subject of the housing

commission.

MR. McCLELLAND: Mr. Speaker, you presume it's to do with the

rentalsman. The Minister has said that it will not be to do

with the rentalsman. Those units will be operated under the

Innkeepers Act, which is outside the jurisdiction of the

rentalsman. He can evict those people because he considers them

to be, as it says in the Act, undesirable —

section 7 of the

Act. I'm only asking him to guarantee, Mr. Speaker, assure the

House that those people will not be evicted.

Inteijections.

MR. SPEAKER: This is not officially connected with the

Government, as far as I know.

HON. MR. NICOLSON: The Hon. Member is trying to infer

motives. The reason I said that it could be operated under the

Innkeepers Act was because of the subject of the zoning. If the

zoning is given, it would probably be all consolidated under

one residential zoning.

The Member has tried to lead this House to believe that I

had some ulterior motive in mentioning the Innkeepers Act. That

has certainly nothing to do with it.

COLUMBIA RIVER HYDRO COSTS

HON. R.A. WILLIAMS: Mr. Speaker, I'd simply like to

further clarify the point made by the Hon. Member for

Vancouver–Point Grey with respect to the CBC and the programme,

"The Reckoning." It is that numerous questions — I would think

10 pages of questions — were made with respect to facts on the

Columbia. Some of the data which were not generally available

to the public — all of the answers were provided. That's all I

am aware of.

MR. McGEER: Mr. Speaker, could I ask a supplementary

question? Was the source of the document tabled in this House

from one of the CBC employees, directly or indirectly, or did

it come directly from officials of Hydro?

HON. R.A. WILLIAMS: No, the source was no employee, directly

or indirectly, involved with the Canadian Broadcasting

Corp.

MR. McGEER: Supplementary, Mr. Speaker: was it from the B.C.

Hydro?

HON. R.A. WILLIAMS: The data which the material was based

on, of course, is from B.C. Hydro.

MR. McGEER: Mr. Speaker, a further question. Has the

Minister made inquiries about the typewriter? Was it a B.C.

Hydro typewriter that did the title page, or was it a

typewriter from some other source?

HON. R.A. WILLIAMS: Well, as usual the Liberals are not the

least bit interested in the solid issues involved. The material

was received from a consultant to the government.

Orders of the day.

ON THE BUDGET

MR. W.R. BENNETT (Leader of the Opposition): Mr. Speaker,

I'm pleased to rise in my place and comment on this budget, or

this non-budget, because

[ Page 285 ]

this budget ranks as the most politically expedient

and most

irresponsible and dangerous budget which has ever been laid

before the people of British Columbia in recent years.

Examination would indicate that this may be the first

deficit budget in many, many years in this province.

HON. D. BARRETT (Premier): Now you say "may be."

MR. BENNETT: I will speak further on this.

The Minister of Finance (Hon. Mr. Barrett) and

Attorney-General (Hon. Mr. Macdonald) are fond of quotations

and old sayings. I think that one which characterizes this

budget best is: "When your outgo exceeds your income, your

upkeep becomes your downfall." When your outgo exceeds your

income, Mr. Minister of Finance, your upkeep becomes your

downfall.

I would hope that today the Minister of Finance and Premier

will stay in the House this afternoon because usually he ducks

and runs when people are speaking.

This budget contains $700 million in expected, hoped-for new

revenue, Mr. Speaker, to the provincial Treasury, and almost

all that money must be retained in the hands of this big

government — a government of big bureaucracy which ignores

local government, the housing problems, education, and

employment opportunity in this province. It's a budget of

broken promises — promises to the people of British Columbia

made by this government which have been forgotten because of

the demands of this out-of-control bureaucracy, what it's doing

and the threat it's placing on our revenues. It's a politically

expedient budget because this government is continuing a

reckless programme of self-centred spending without any regard

for leadership — the leadership that British Columbians want to

bring restraint to our economy at this particular time.

How can the people of British Columbia join in the battle to

defeat inflation when their government lays before them a $3.2

billion budget? How can the ordinary people of this province

expect to bring an end to inflation — the cruellest tax of all,

Mr. Speaker — when there is a total bankruptcy of government

leadership?

I think at this time we should take a look at the broken

promises and political expediency which characterize this

budget and last year's budget and some of the statements that

were made last year by this Minister of Finance in presenting

his budget and the fact of what those statements mean

today.

Last year in his budget, the Minister of Finance said: "Our

government came to office in the fall of 1972 with a mandate to

increase the public financial return on the resources of this

province."

AN HON. MEMBER: What a laugh!

MR. BENNETT: This budget, Mr. Speaker, in fact shows that

the revenues from resource taxation have fallen as a percentage

of total revenue. The Minister of Finance, in addition to

relying on greater revenue from personal and income tax, has

found it necessary to add taxes on gasoline, and to increase

the corporate taxation on capital.

Last year the Premier said the voters of this province

called for a programme designed to eliminate taxes from

residential property. In 1975 they're still calling. Today we

are no closer to this goal. Property taxes are skyrocketing in

this province and the "son of homeowner grant" has gone nowhere

in relieving the education tax on property in this province.

The figures given by the Minister are unrealistic in

eliminating education costs from property taxes. He knows it;

the people of the province know it.

Last year the Premier said: "Municipalities which lack the

taxing flexibility of senior governments, yet face increasing

costs every year, will find in this budget several substantial

programmes designed to assist them." But in this year's budget

not only are there not any concrete programmes on which local

government can count in planning its budget, but there is not

sufficient new revenue for local government to keep pace with

increasing costs.

Local government leaders are unanimous in this position. I

refer, as well, to the remarks of His Worship the mayor of

Vancouver who said of this budget: "There's going to be a huge

increase in property taxes this year and there's no way around

it." Referring to the budget's somewhat vague, iffy promise of

revenue-sharing, His Worship said: "We're getting a promise of

some nebulous amount of money in the future, and it's still a

third of nothing." A third of nothing for the municipalities of

this province.

Again quoting from last year's budget, the Premier said:

"Despite major innovative social policies, our government has

been prudent." I remember that word well. He used it several

times last year. "This prudence," he went on to say, "is

also reflected in the good news that none of the spending

programmes to be proposed in today's budget will require an

increase in tax rates for the individual citizens of this

province."

How quickly a year goes by. Prudence is gone this year: the

word is not mentioned once in the budget and it's been replaced

by new taxes by an irresponsible government which has replaced

prudence with expediency in this time of extreme inflation and

hardship on our people.

Last year the Minister of Finance spoke of good returns from those

natural resources because of his government's policies. And yet the

policies continue but not the good returns.

[ Page 286 ]

Revenue from the mining industry has declined dramatically,

Mr. Speaker, as you well know. And it has declined in the

forest industry as well. As the Minister of Finance asked then:

"Where are all those gloom-and-doom boys? He talked about all

the gloom-and-doom boys last year, and he talked about the

gloom-and-doom boys this year.

I'll answer that. There are 38 gloom-and-doom boys sitting

over across the aisle in this Legislature, 38 Members who,

collectively, as government, have achieved the gloomiest

outlook for this province, this resource economy, that British

Columbians have ever known. Not gloom-and-doom, perhaps, but

maybe the glum-and-dumb boys would be a better description.

You know, when we talked about the mining industry in last

year's budget, the Minister of Finance went on to say: "A truly

impressive 55 per cent annual growth in the value of mineral

production was registered last year, as the value reached $993

million, up from $637 million in 1972." He went on to attack

some unnamed Members in the House who were predicting that the

whole mining industry would collapse. That's what he said last

year. Well, has the mining industry collapsed, Mr. Speaker?

What's happened to the search for new minerals? Let's just take

a look at some of the indicators: the search and the number of

mineral claims in this province.

In 1971 there were 36,000 claims; that accelerated to 53,000

in 1972. You would have thought, with the record world revenues

in 1973, that it would have accelerated further, but it dropped —

dropped to 24,000, Mr. Speaker. In 1974 it dropped further to

just 10,643. Is that the buoyant mining industry the Premier

talks about?

At the same time, the Yukon was going the other way: 3,000

claims in 1972; 7,000 in 1973; 12,000 in 1974. His programmes

have been good for the Yukon but not too successful for

building the mining industry, both as an employment base and a

base on which to finance government, in this Province of

British Columbia in 1975.

It must be noted that this government, which took all the

credit a year ago, must now search 3,000 miles across this

country, or around the globe, to attach the blame for the

continued deterioration in our resource economy, because never

have British Columbians seen a budget with so many scapegoats,

none of whom live in British Columbia. They took all the credit

when things were going right, and now the Minister of Finance

would have us believe — in advance he's prepared his scapegoats — that

it's Ottawa's fault, the Americans' fault, the Japanese'

fault, when nothing goes right, but not the fault of the

Government of British Columbia, not this Government of British

Columbia — no, no, no.

You know, the Minister of Finance told us just one year ago that the

province continues to meet the provincial Crown corporations' capital

requirements from its own internal investment funds. That was in the

budget speech last year. The province continues to meet the provincial

Crown corporations' capital requirements from its own internal

investment funds….

AN HON. MEMBER: Is that so?

MR. BENNETT: …thus keeping away from costly borrowings in

the public market.

In the same budget year to which the remarks of this

Minister of Finance referred, he has found it necessary to

borrow $375 million during the time of the highest interest

rates in history. Not only did the Minister of Finance decline

to give British Columbians the opportunity to participate in

this financing, to participate on the same conditions that were

offered outside the country, but he refuses to disclose who the

lenders are for $200 million of that total. It gets curiouser

and curiouser.

AN HON. MEMBER: What's the interest rate?

MR. BENNETT: We hear, in this year's budget, that just one

year later Crown corporations would borrow almost $1 billion.

Costly borrowings last year; prudent financial planning this

year: what a difference a year makes! What a difference a few

months makes in the attitude and in the actions of this

government and the Minister of Finance.

Last year the Minister of Finance said: "As I stated in our budget a

year ago, this government's first priority is to provide the best

social services possible for the people of the province within our

fiscal capabilities." The Premier obviously believes that he can get

the best for less, although, with the record of this government, I

doubt it. This year the social services

section of the budget declines

to 61 per cent of the total budget compared with 68 per cent last year.

On last year's tax base that is a drop of 10 per cent.

AN HON. MEMBER: That services budget: inflation will eat it

all up.

MR. BENNETT: Beyond the broken promises, and the expediency,

Mr. Speaker, this budget is worth boting for what it doesn't say. I

quote from an

article by The Vancouver Sun business editor on

this 1975 budget — that great Vancouver newspaper, The Vancouver Sun ,

which I had the privilege of suing some years ago on remarks made in

this House by Members who are here now, but may not be here later. This

is what The Vancouver Sun

says, the business writer

"Nowhere in the 52-page document is there an attempt

to come to grips with the eight

[ Page 287 ]

major economic problems confronting the world

and British

Columbia.

"Instead, the watchword of the day is to continually

use political superlatives.

"Nowhere is there an attempt to indicate what B.C.'s

economic growth in real terms will be this year other than the

optimistic federal projection that Canada will show real

economic growth of about 3 per cent. The budget predicts that

British Columbia will fall within this range.

"Nowhere is there an attempt to indicate how much

inflation

is expected to subside this year, if at all. Instead we are

told 'we can expect inflation to moderate from the present

level.'

"Nowhere is there a projection indicating what private

and

public investment will be this year. Instead, we are told it

'will continue at an encouraging level….'

"Nowhere does the budget note that most of that profit

(of

Can-Cel) was shown because pulp and paper is in extremely high

demand and market prices soared last year….

"Nowhere is there an attempt made to come to grips

with the

issue that the United States is facing one of the most serious

recessions ever and that forecasts for a major economic upturn

later this year are no longer accepted in Washington….

"All in all, a disappointing performance."

This was a quotation from the business writer of The

Vancouver Sun , and it sums up this budget very well.

"The Premier had the opportunity to try to get

business, labour and every British Columbian to recognize that,

economically, the situation from a world viewpoint is serious. Instead

he dredged up old slogans about the nasty multinational corporations

and big companies. Hardly a theme needed at this time when British

Columbia needs more capital investment to support its social

programmes." When we consider what a budget really is, Mr. Speaker,

perhaps the Minister of Finance has forgotten just what a budget means

and what it means to the people of this province. I went to the

dictionary, and the definition of budget was:

"A detailed presentation of revenue and expenditures

for (in

the case of government) the coming year."

Now, all public organizations and governments have budgets. Most

families, especially in this time of inflation and rising costs, have

budgets. Most single persons have budgets to balance the outgo with

income. The purpose of a budget is to forecast income and, within the

framework of that income, to create priorities for expenditure so that

you can accurately plan and guarantee continuity of those items of

priority that demand first call on expenditures.

Now, in the case of a family, the first priorities would be

food, shelter, clothing, and then into such areas as they may

decide within the framework of their income. Most families in

these times of economic uncertainty are being more cautious in

their budgeting. They are practising restraint — restraint that

will help to ease the inflationary pressure that threatens our

economy. In many instances, that restraint is involuntary and

demanded by necessity; there just isn't the money available.

The families of this province know what a budget is.

For many British Columbians, today the necessity for

restraint in their budgets is caused by unemployment, not the

statistical unemployment of percentages and seasonal

adjustments to make it look better, but that most real

unemployment of all, their own. Over 100,000 British Columbians

fall into this category, many forced to live on the restricted

income of unemployment insurance. Their budgets have declined.

They know what a budget is; they are practicing restraint.

Some of the unemployed citizens of British Columbia have an

even more difficult problem because these are the citizens who

do not qualify for unemployment insurance or welfare so they

must budget to live off their savings. They know what a budget

is; they know very well what a budget is.

Then there are the thousands upon thousands of British

Columbians on welfare. They must live on a restricted budget,

yet face the high cost of inflation that erodes those goods and

services they would buy because of the loss of purchasing

power. They know what a budget is.

Then there are citizens on pensions. They too must show

restraint in their budgets because of fixed incomes and

declining purchasing power. They know what a budget is.

Then there are those still fortunate enough to be employed

in British Columbia in 1975 and still lucky enough to have work

and wages. They are practising restraint, not only because

inflation has robbed most of their purchasing power but also

because government, this government, is demanding and taking

more of their income away to pay for the rising cost of

government bureaucracy.

Inflation and big government go hand-in-hand in robbing the

purchasing power from the people of British Columbia. These are

the twin villains who are increasingly taking more and giving

less in benefits. Whatever benefits they appear to have are an

illusion. These citizens know what a budget is.

Then there are business citizens, mostly small companies,

many family company units. They too must budget. They are

practising restraint from necessity because they are buffeted

by rising costs

[ Page 288 ]

and inflation and higher costs through taxes to

feed the

government bureaucracy. Their only hope of staying alive in a

declining economy is to budget and to compound further our

problem of unemployment in this province by reducing the number

of employees in order to reduce overhead in those areas where

they still have financial self-determination. Mr. Speaker, they

know what a budget is.

Understanding the need for restraint and the

foot-on-the-floorboard drive of this government to inflation

encouragement is not good enough. The light-hearted way in

which the Premier, as Minister of Finance, gave a review of

this province's finances last Friday was frivolous and often

cynical. These people, and the citizens of B.C., know what a

budget is, Mr. Speaker, but does the Premier know that budgets,

from necessity, quite often call for restraint? The people of

British Columbia expected a more responsible document from this

Legislature and from this Premier and Minister of Finance last

Friday.

You know, the way the Premier presented this budget, with

wishful optimism and an "I am sure everything's great, and look

on the bright side" sort of attitude, I am sure that if he'd

been a news reporter covering the story of the Titanic, his

story would have read: "Titanic stops in the middle of the

Atlantic to take on crushed ice." That's the sort of optimism

that was presented in this budget, a sort of wishful-thinking

on expected revenues that may not be there at the end of the

year.

You know, Mr. Speaker, this budget clearly represents a new

system of financial accounting for the Province of British

Columbia. The Minister of Finance chooses to describe this new

system of accounting as realism. According to the Minister,

this budget is real because it represents, in his own mind, a

true estimate of revenue and expenditure when contrasted to the

system of budgeting and the manner of determining revenue and

expenditure in this province. Now for many years in this

province revenues were underestimated. By the early 1950s we'd

built up a considerable debt from a series of deficits — deficit

budgets in this province.

That tradition of deficits and debts was reversed, and

recently it's been traditional in British Columbia that revenue

was underestimated and expenditures were kept within budget.

The net result of this approach was to ensure a hedge, a real

dollar hedge, against the uncertainties of economic prediction

in an increasingly complex and fast-moving economic picture in

British Columbia, Canada and throughout the western economies.

It's interesting to note that it was this principle of

underestimating revenues which save this Minister of Finance's

neck in the 1974 fiscal year.

There would have been chaos were it not for the revenue side

underestimate, because revised estimates for the 1974 fiscal year,

tabled in this House last Friday, show overruns on the expenditure side

approximately $350 million.

MR. D.M. PHILLIPS (South Peace River): That'll

happen next year, too.

MR. BENNETT: That's an incredible sum, equal to

approximately $175 for every man, woman and child in the

province, or approximately $700 for the average family

unit. That was the amount of the underestimate on expenditures

in the year 1974.

MR. PHILLIPS: Way over 10 per cent.

MR. BENNETT: Could the province have withstood the Premier's

realism in 1974?

And now, for 1975, the Minister of Finance has presented a

budget of realism to the people of British Columbia, which

requires the asking of some very serious questions. Is it

realistic to expect that this government can control its

spending habits in 1975, to eliminate all budgetary

overruns?

MR. PHILLIPS: The Premier hasn't got a serious bone in his

body.

MR. BENNETT: Realistically they must do this, because there

is not a red cent of hedge in this budget. Perhaps I should say

a blue cent. Can a government with an overrun of $350 million

in 1974 not overrun by a single penny in 1975?

MR. PHILLIPS: No!

MR. BENNETT: On the basis of this budget, failure to live

within the estimates of expenditure, even by the Premier's own

optimistic accounting, will mean a deficit.

Now let us apply the realism tag to the estimate side. Never

in the history of this province, since the days of the Tolmie

government, have so many "ifs" been ascribed to estimates of

revenue, Mr. Speaker. Estimates of revenue from natural gas

will come true if the federal government raises the export

price. Much-needed assistance for local government will be

available if Ottawa comes through. Estimates from personal

taxation will be met if the economy improves in May. In almost

every case this so-called budget of realism will become fact

only "if," Mr. Speaker.

In almost every case, estimates of revenue for 1975 are subject to

serious question. Certainly they are the most optimistic revenues and

estimates presented to this House in decades. Yet they come at a time

when optimism is hardly the word to describe the economic climate in

British Columbia, Canada or those trading nations whose economies play

such an important role in determining what will happen in

[ Page 289 ]

British Columbia.

My party has sought to achieve the most competent analysis

available with respect to every category of revenue estimates,

and in almost every case we find serious challenges to the

accuracy of these estimates, Mr. Speaker.

During the debate on this budget Hon. Members of the

opposition will spend considerable time challenging the

veracity of these estimates.

The essential point then, Mr. Speaker, is that economically

and politically all the ifs raised by this Minister of Finance

must be answered in the most optimistic response possible in

order to balance this budget.

A continued economic slump in our key resource base, a

decline in consumer spending, continued high unemployment and

its effect on personal income tax revenues or a continued slump

in corporate economic activity taken individually or together

could produce a serious shortfall in the revenue which this

government expects to receive. A shortfall of even 1 or 2 per

cent could bring this budget into deficit position. And this

must be taken together with the rather difficult-to-make

assumption that the Barrett government of waste and welfare can

bring its spending habits under control, something not evident

in earlier budget years since they have been the government of

this province.

Now it is particularly interesting to note that the

estimates of welfare contained in this budget and estimates of

revenue from the forest sector do not support the optimistic

character of the revenue predictions. The federal government's

share of programmes — mostly welfare payments to this province — will

increase by over $200 million. Is that optimistic?

Estimates of revenue from the forest sector are off

approximately one-third from last year, and neither of these

critical elements of this budget support the Minister of

Finance's contention that the economic climate will improve

sufficiently to give this budget any measure of

credibility.

The conclusion is the spectre of a shortfall on the revenue

side and an overrun on the expenditure side. A more

characteristic definition of this budget than "realism" is "a

gambling long-shot." In these economically difficult times of

1975, that's not good enough for any government and certainly

pot good enough for the people of British Columbia.

At a time, Mr. Speaker,

when stringency and restraint in government

are required more than ever, we have a very inflationary budget,

highlighted by a 48 per cent increase in expenditure, the basis of

which is a highly questionable, hypothetical shot in the dark. Even if

the estimates contained in this budget come close to being correct, the

inflationary force of this budget on the purchasing power of British

Columbians will be unprecedented and, by itself, the force of this

budget will be to tax the purchasing power of our people.

Inflation, Mr. Speaker, as you know, is the cruellest tax of

all, and totally irresponsible when it results from the actions

of government, which is there to protect the people and lead

the economy, and not lead it further down the road to inflation

and robbing of the purchasing power of the citizens of British

Columbia.

You know, statements contained in the budget speech with

respect to the increase in capital investment in British

Columbia could be among the most misleading in this budget. The

Minister of Finance is proud to note the 18.5 per cent increase

in capital investment, according to the most recent figures

available. But the Minister notes correctly: "A high proportion

of this investment activity was undertaken by this provincial

government and its agencies." Now if the portion of new capital

investment derived from public funds were extracted from the

total of the investment, capital investment in British Columbia

in 1974 would have been a very different picture.

Moreover, Mr. Speaker, capital investment has become a very

misleading economic indicator in terms of the policy of this

government. Traditionally, capital investment has been an

important yardstick in evaluating the new job opportunities

coming on stream in a given year. Yet since the arrival of this

Finance Minister, this yardstick is very much less meaningful,

because public fund capital investment by this government more

often than not has created no new jobs.

Let me quickly detail some of the government's investments

which have had little or no impact on job creation. We have the

purchase of or public investment in Westcoast Transmission

stock, B.C. Telephone stock, Meadowbrook, Plateau Mills, Casa

Loma, pinko-Panco Poultry, Dunhill Development, Kootenay Forest

Products, and many more, but none of this investment of public

capital has created jobs in British Columbia. We created, by

purchasing that stock, not one new job at Westcoast

Transmission, nor any new jobs at B.C. Telephone. So that

investment of public capital cannot be used as a yardstick to

measure the creation of new jobs in British Columbia.

In this area of non-job producing capital investment, it is

interesting to note that much of the government capital used to

purchase existing companies or operations has left the province

and sometimes even the country, as in the case of funds

received by the vendors of and to Dunhill, which have moved

construction capital to Washington state and to California.

MR. PHILLIPS: Aren't they going to build more houses?

[ Page 290 ]

MR. BENNETT: The characteristics of the present government's

suspect capital investment programme is that in many cases it

only signifies the change of ownership, Mr. Speaker — not the

creation of new job-producing enterprises.

Moreover, the Minister of Finance's statement ignored the hundreds

of millions in capital spending by the mining industry which has been

shelved as a direct consequence of the policies of this government.

It did not mention the curtailment of new plant investment

by the forest industry, nor does it mention the general subject

of the fear the providers of capital have for this province. It

is a shame, Mr. Speaker, that people now boast of their plans

to move capital to Alberta, to Washington, to California or

elsewhere. It's a shame that that should happen to British

Columbia.

MR. PHILLIPS: That's where the Minister of Labour

(Hon. Mr. King) tells them to go looking for their jobs: "Go to

Alberta, Manitoba."

MR. BENNETT: This budget confirms that capital investment in

British Columbia is being shifted from the private sector to

the public sector. Government capital investment in 1974 was 40

per cent of the total — 40 per cent! In 1972, government

capital investment was only one-third of the total in British

Columbia.

It must, therefore, be obvious to you as well as to other

Members, Mr. Speaker, that since the last year of the former

government the private sector is down and the government sector

is up.

Furthermore, housing capital investment is down from 25 per

cent of the total capital investment in 1972 to 20 per cent in

1974. Unfortunately, most of this percentage drop is the result

of investment from the private sector drying up in the

construction of housing.

The continuing theme of unrealism which characterizes the

statements of the Minister of Finance in this budget is further

borne out by comparative figures for capital investment in the

pulp and paper sector of British Columbia's forest industry.

The Minister of Finance says, and believes, that British

Columbia is doing very well. But let's look at the facts.

In the January, 1975, edition of Pulp

and Paper , the

industry magazine, capital investment figures are given for the

period 1974 through 1976, a very meaningful time-frame, Mr.

Speaker. In British Columbia for the period of 1974-76,

projects underway or on the drawing board amount to capital

expenditures of only $168 million. In the one buoyant sector of

the forest economy, pulp and paper, for the same period in

Quebec and Ontario, projects underway or on the drawing boards

total $1,350 million.

Investment in the job-producing primary segment of

the British Columbia economy is only 14 per cent of the total

for Ontario and Quebec. Is that a figure to be proud of, Mr.

Minister of Finance? Is that a figure to be proud of when

British Columbia has consistently led the rest of Canada in

construction of facilities in our forest industry and when now

we're falling so dramatically and drastically behind Quebec and

Ontario?

The same severe decline in capital investment exists with

small companies as well. The Minister of Finance's expressed

concern for the condition of small businessmen does not square

with the facts. For the period December, 1972, to December,

1974, small businesses — those employing less than 20 persons —

declined from 47,734 to 44,969 in British Columbia. They didn't

participate in this glowing optimism and economy which the

Premier talks about. That's a drop, Mr. Speaker, a loss of

3,000 small businesses in the Province of British Columbia

after just two and a half years of this government and this

economy under the control of this Finance Minister.

The position of the opposition on this budget, that it gives

people less, is further substantiated by the estimate of

expenditure for Public Works. In 1972 that department received

$31 million; in 1975 it is to receive $90 million, a remarkable

300 per cent increase in three years. I call attention to the

Public Works estimate because this department accurately

reflects the cost of government, Mr. Speaker. That's the money

that sticks as it comes to government and doesn't get back in

services to people.

The creation of buildings: it is the Public Works which must

pay the rent on high-priced office space, which in the Victoria

area alone has jumped to $5 million per year in just three

years. Public Works must pay the bills for the antique desks

which now adorn so many offices in the cabinet Ministers'

offices. We all know the tale of the $30,000 cabinet table.

The remarkable increase in the budget for Public Works over

the past two years, and now into the third year, I think very

dramatically proves our contention that this is a government

out of control.

This is a big government of big numbers, which is now

requiring more and more of our people's money just to take care

of itself. This is being done without restraint and without any

leadership to our people to show restraint, Mr. Speaker.

HON. MR. BARRETT: A $30,000 cabinet table? Would you stake

your seat on that figure?

MR. BENNETT: By contrast, the Department of Economic

Development will receive….

Interjection.

[ Page 291 ]

MR. BENNETT: Well, it's funny that you don't question any of

the very important statistics dealing with the economy and employment

and the loss of small jobs.

HON. MR. BARRETT: Would you stake your seat on that

figure?

MR. BENNETT: If that is the one statistic you question….

HON. MR. BARRETT: Did you check the figures at

all?

MR. BENNETT: Yes.

By contrast, the Department of Economic Development will

receive $5 million, or about 6 per cent of Public Works. It is

the Department of Economic Development, which is clearly

charged with the responsibility of developing an industrial

base, which will lead to new employment opportunities for

British Columbia.

HON. MR. BARRETT: Who told you there's a desk for

$30,000?

MR. BENNETT: A comparison of these two departments is very

clear — a strong statement of this government's priorities. In

the opinion of my party, they are hopelessly reversed when the

Minister of Finance talks about job security. He can only mean

job security for the friends of this government employed by it,

and that figure from the latest estimate is now approaching

50,000 people.

There is nothing in this budget save a very vague proposal

to spend $15 million in the forest sector which cannot create

the nearly 100,000 jobs needed in British Columbia to achieve

employment for our people.

The incredible thing about this government's record on housing is

that it does not understand that the lack of housing affects real

people with real hopes and frustrations to own their own homes. Most

people in British Columbia want more than shelter for shelter's sake.

They do not wish to be tenants of either the large landlord or the

state; they wish to have the opportunity to own their own homes. They

are becoming increasingly alarmed by the record of this government,

which is strong in bureaucracy and short in performance in building

houses or allowing houses to be built in British Columbia. This

department, which so far has three major ideas, is a proven failure.

Its first idea was the purchase of the Dunhill Development Corp. for

the purpose of getting administrative and technical know how. For

nearly $6 million, it got a proven lemon. Any help it has gotten must

be called "lemon-aid." It's best idea was to increase the

administrative

section of the department, and, after allowing $360,000

last year, it now proposes to spend $3 million for administration. The

administrative

section of this department is to be increased by 900 per

cent. If there had been a 900 per cent increase in housing starts, all

the young people in British Columbia would have been proud of the

Minister of Housing (Hon. Mr. Nicolson). However, to spend an

additional $20 million for housing and development and require 140 new

administrative people at headquarters is irresponsible and shocking in

a time when the public wants restraint, better value for their tax

dollars and direct results of their dollars.

The next idea that this department had was to purchase

properties at excessive prices which had already been built or

to purchase properties where the developer was going broke

halfway through his development. In total, initiative which

should have been expected from this department is simply not

there. It has become strong on bureaucracy and short on

building houses.

As I said at the beginning, housing affects real people. Let

me just relate to this House the situation faced by one of

those people. I received a letter some weeks ago from a

gentleman in Richmond. He is a 26-year old and he has been

married for four years. He has two sons, one six months old and

the other three years old. Out of his take-home pay of $860 per

month, $280 goes for rent; $300 per month goes to his wife for

food and clothing for the children; $80 goes toward a car

payment, insurance and gasoline; and he budgets $50 for

telephone and incidental expenses. Each month this family of

four is committed to expenses of $710. They have $150 left for

discretionary spending or emergencies, a movie, an evening at

the pub, a babysitter, holidays.

These people are typical of British Columbians who are hard

working, just starting out with young families and who desire

to own their own homes. This man's problems, like tens of

thousands of British Columbians, are the direct consequence of

policies, programmes and inflation created by this present

government. A combination of no construction of rental units,

the fleeing of investment capital from this province as a

consequence of ever-increasing taxation, the artificially high

price of land, and the lack of any working programme to help

increase revenues to local government has made it impossible

for many British Columbians of a moderate income to own their

own homes. These conditions are a direct result of this

government.

These conditions didn't exist in 1969 or 1970 or 1971 or

1972 when it was possible for a young family, willing to make

the sacrifice, to get into a small home of their own for $1,000 down or

$1,500 down. Homes were never more affordable,

never more obtainable, never closer to the reach of the

[ Page 292 ]

average man in British Columbia or the young couple

starting

out. Yet this is a no-home government, and the people of

British Columbia are going to tell it to go home the first

chance they get.

The only clear policy the Minister of Housing has is to

totally disrupt the housing market and hinder new construction,

while every day the threat that more and more British

Columbians will become tenants of either the landlords or the

state grows and becomes more serious.

I want to return to the condition of this gentleman from

Richmond because he knows what a budget is all about. With

respect to his discretionary income — the family's spending

money — he is in an overrun position if he spends more than

$150 per month. Certainly he can't afford $40-per-yard

broadloom carpet or an antique desk.

He knows, as do all British Columbians, that a budget is a

statement of priorities for individuals, for families, for

companies, and to the tune of $3.2 billion, for governments

too. He knows what a budget is, and every young couple that

ever hoped to own a home in this province know what a budget is

and they know that the budget they have to meet in the Province

of British Columbia at this time takes home ownership further

and further away as a possibility for them in British Columbia

in 1975.

This man believes that there is something wrong with a

system which exists in a vast province like British Columbia

where he, unless he wins a lottery, will have to wait until his

children approach school age before he can think about

affording to take them to a home of their own. His wife can't

work sooner because it would require some serious compromises

in their family life with a young family, and the children

would be without their mother in their formative years. This is

a very unsatisfactory option for British Columbians who place a

high priority on the quality of life in British Columbia.

The housing estimates barely handle the inflationary

increase. Last year's housing record was pitiful, Mr. Speaker,

and no level on which to base this year's housing approach in

the Province of British Columbia.

For education too, Mr. Speaker, this is a short-change

budget. The 23 per cent increase for universities' operating

costs will be largely absorbed by inflation and the probable

necessity of the universities being asked to meet wage

settlements which the government itself has already agreed to.

This area has already been suitably commented on by Dr. Jewett

of Simon Fraser University in the press, but it was indicated

from the budgets of the universities that they can hardly meet

the existing programmes with the amount given by this

government.

Interjection.

MR. BENNETT: Yes, Dr. Jewett. Her comment was:

"Wow!"

AN HON. MEMBER: "Wow"? My golly!

MR. BENNETT: "Wow!" That's right.

The expenditures for universities on capital are now well

below the increasing capital provided in the late '60s and up

to 1972. When the inflation factor is applied to the 1975

figures, the case that the universities are falling into a

period of neglect becomes quite apparent, Mr. Speaker. The $12

million provided this year, because of that inflation, is the

equivalent of having a cutback on university capital

expenditures of 50 per cent from the $15 million level reached

by 1972. When you take the inflation of the three years since

them, this would be a cutback on their capital expenditures of

50 per cent. Is that meeting the needs of education in this

province?

Similarly, operating grants to school districts will not

accommodate existing wage settlements made to turn the screw a

little further. Last year's so-called $8 million add-on

priority grants have been absorbed into the total, to be made

available for local grants to education.

Perhaps the most significant point to be made in commenting

on this department is the obvious trend towards the central

control of the Department of Education itself. Nearly 100 new

people are to be added to the head office administration of

education. Nearly $2 million more are allocated for beefing up

the ivory tower, Mr. Speaker.

The track record of this department thus far can only be

described as staggering chaos, because the on-again, off-again

research and development sections of this department have

created total bewilderment out there among the people of the

province and particularly among the working teachers and the

school trustees; yet from last year's estimate of $700,000 for

research and development we see a rise to $2.3 million. Last

year this expenditure, as I've indicated, simply created chaos.

The Department of Education became the fire department, Mr.

Speaker. Yet this budget provides an over 300 per cent increase

for research and development — hopefully not to provide a 300

per cent increase in the type of confusion that took place in

that department in the year 1974.

As I've already indicated, an important aspect of this

budget is the new escalation of disagreements between British

the federal government with respect to NDP policies which are

failures or which have been promised but in two and a half

years have not come into being. Ottawa will determine whether

or not we get revenue sharing — not the British Columbia

Minister of Finance. Ottawa

[ Page 293 ]

was wrong in indexing income tax. Ottawa doesn't

know

anything about the export price of natural gas. Two years ago

the Premier would have given away all of British Columbia's

natural resources if Ottawa would only nationalize them, or

socialize them, or commit themselves to his political

philosophy, but today he's arguing about whether British

Columbia…and what share they're going to get.

The $1.93 Louisiana gas price is the most ridiculous bit of

political grandstanding that we've seen in British Columbia in

decades, because that gas is unregulated in-state gas which

never leaves Louisiana, Mr. Minister of Finance, and doesn't

come under any regulatory control.

Has the Minister of Finance ever mentioned in this House

that the average price of all natural gas sold in the United

States is less than $1?

All British Columbians, I'm sure, believe that British

Columbia export gas should not be sold to American customers

for less than they pay for their own gas. Because it is a

premium fuel in terms of the environment and efficiency, it

should be accorded a premium price. But suggesting that British

Columbia gas should be sold at the price of a minimal amount of

interstate Louisiana gas is like saying that all desks are as

expensive as some of the desks found in this Legislature.

The true reason that the Premier is adopting the same stance

as his Arabian friends in charging the highest price in the

marketplace is that natural gas revenues are the only resource

revenues left to this government which have not or are not

heading to some sort of major economic collapse. We've seen the

mining industry and the forest industry decline. There appears

to be only one industry left on which we can pin our hopes to

balance the type of budget which he presented to this

Legislature.

Rather than be reasonable and cooperative with the federal

government, which is itself committed to higher export gas

prices…

HON. MR. BARRETT: What do you think the price should be?

What's your opinion?

MR. BENNETT: …this Minister has found it necessary to go

international with his grandstand act in order to try to

balance this budget. You can bet that if it doesn't balance a

year from now or six months from now, he'll blame it on Ottawa.

It will be Ottawa's fault, not his fault, not accountable in

British Columbia. They are already preparing where to present

the blame. It's the first time the excuse has been developed

well in advance of the fact, and in this budget they've

developed their excuse early.

HON. G.R. LEA (Minister of Highways): I thought you said we

didn't plan.

MR. BENNETT: Reflecting on the remarks by the Minister of

Finance about this province's relationship with the Government

of Canada, I'd like to draw the attention of the Premier to a

speech given by the Hon. federal Member for Vancouver Centre,

the Minister of National Revenue (Hon. Mr. Basford):

"Addressing the Vancouver Board of Trade, the Minister

stated that it is time to bring an end to the Maginot line of

provincial insularity. 'One of the most overworked slogans in

the political lexicon is "Bring us together,"' he said,

'but that is precisely what this country and this province

need. Co-operation rather than disputes; tact rather than

tantrum — these are the principles that must become the

foundation of a new approach to politics for this

province.'"

And now is not the time for tantrums, Mr. Speaker, through

you to the Minister of Finance. As the Member and Minister from

Vancouver Centre concluded: "In good times we can perhaps

afford this kind of political behaviour; but in present

economic times, we cannot."

Not only does the Minister not agree with your attitude, Mr.

Minister of Finance, he does not agree with your highly

optimistic economic predictions which form the basis for

estimates of revenue contained in this budget.

HON. MR. BARRETT: Does he agree with my policies?

AN HON. MEMBER: What policies?

MR. BENNETT: Like a great portion of this budget…

MR. P.C. ROLSTON (Dewdney): It took 12 guys to write

that.

MR. BENNETT: …revenue-sharing moves into….

Interjections.

MR. BENNETT: I see by the Vancouver newspapers, in a column,

that the Deputy Minister of Finance (Mr. Bryson) is being

replaced by one of the political writers (Mr. Eliesen) that

wrote this budget. No wonder it was written more on a political

basis than on a factual, numerical basis. It is unfortunate

that Mr. Eliesen has achieved such prominence in the Finance

department.

MR. PHILLIPS: There's $200,000 in the budget for Mr. Eliesen

too.

MR. BENNETT: Unfortunate, Mr. Speaker.

[ Page 294 ]

lnterjections.

MR. BENNETT: The people of B.C. are paying too much in a

declined economy for this Minister of Finance and this

government. The price is staggering.

lnterjection.

MR. BENNETT: The unemployed out there…don't laugh at the

comedy routines and the slapstick and the Keystone-Cops

attitude of this government and this cabinet as it reels from

crisis to crisis. They don't find it funny when they're trying

to get along on unemployment insurance or welfare to know that

this government has now solved its own unemployment problem and

is well-ensconced in comfortable offices and can take trips

around the world. It's no comfort to them that their cabinet is

able to travel and afford a joke book now. It's no comfort to

the people of British Columbia.

Like a great portion of this budget, the words "revenue

sharing" move over into the iffy-iffy country of an iffy-iffy

budget. If expenditures can be restrained, as proposed by

Treasury Board in December, we wind up the year with $500,000

of surplus against the budget of $3.2 billion. Then maybe local

government can get more. If the economy, using the Premier's

own prediction, picks up in May, 1975, his budget revenues will

fall in place with his hopes. If the federal government goes

along.

If you're wrong, you'll ruin this province. Oh, that's

funny; that's funny. If the province goes along with an

increase in gas export prices, the municipalities will share in

that hope.

The farce in all of this, of course, is that municipalities

are in the process of settling budgets. Now, Mr. Minister of

Finance: the municipalities are settling their budgets now; not

next month, not midsummer, but now. They need to know now, not

some airy-fairy, iffy promise developed in the research and

publicity department of your….

Interjection.

MR. BENNETT: One of your new ghostwriters in the Finance

department.

Interjection.

AN HON. MEMBER: Why don't you go shave?

MR. BENNETT: Furthermore, Mr. Speaker, municipalities work on

the calendar year. By the time they get to an unknown number of dollars

from the gas exports, they'll be halfway through their expenditure

programmes for the year we're in now. This deliberately iffy approach

to the real financial problems of the municipalities is so unrealistic

that it is difficult to take seriously.

How much better it would have been if this Minister of

Finance had taken the three areas of revenue enjoyed by the

province — namely, corporation and personal income taxes,

natural resource revenues and sales tax revenues — and simply

shared them on a formula basis with municipal governments. The

total revenue from all of these areas, Mr. Speaker, is $1,948

million, by the Premier's own estimate, nearly 66-2/3 per cent

of the revenues he says we are going to get. And in view of the

fact that last year's growth in provincial revenues was

estimated to have produced only $1,352 million this year,

obviously the Finance Minister is expecting growth in this

revenue which he's not willing to share with municipal

governments, with local governments.

In other words, this year the growth in revenues of the

province are expected to go up by 46 per cent, while the

provincial government leaves the municipalities with iffy

promises. It should be recognized that if the export price goes

to $1.50, the municipalities would receive only $20 million, or

approximately a $10 lift in the per capita grant. A $10 lift in

the per capita grant — if! — would only meet the present costs

of standing still. A $ 10 lift in the per capita grant would

only meet the present cost of standing still.

It is alarming that the total wage bill of this province is

approaching, in this government, $600 million in this province.

During a period of little more than two years we have increased

the overhead of the provincial government by 300 per cent but

the per capita grants to the municipalities over the same

period of time by only 6 per cent. Consider that, Mr. Speaker.

The overhead of this provincial government has increased by 300

per cent, but the per capita grant. to municipalities over the

same period has increased by only 6 per cent. Is this sharing?

Is this caring? Is this concern for the plight of municipal

governments? Is this sharing with them the capital they must

have to serve the people of this province? The waste and

extravagance of this government in maintaining its own central

bureaucracy at the expense of municipalities is unacceptable

and disgraceful.

It is clear now that the days of British Columbia's

economic independence, not only from the rest of Canada but

from the international money-lenders, are at an end as a

consequence of three years of using our funds and misallocating

our funds by the Minister of Finance. The province's internal

financing capability has all but been destroyed, and we see

plans for borrowings this year by Crown corporations of almost

$1 billion.

The Minister of Finance points out with pride the high

credit rating accorded the Province of British Columbia by two

American credit-rating institutions. I might say that

apparently we still enjoy with those

[ Page 295 ]

institutions a book credit rating. The same

Minister fails

to point out as yet that the Government of British Columbia has

no long-term debt, but this budget appears to be a big step in

what could be that unfortunate direction.

However, statements made in this House by the Premier and

president of the railway in this session indicate that

providers of capital are questioning the strength of this

government. In the Crown corporations where there is debt

financing we learned two weeks ago of financing arrangements

for certain B.C. Railway cars. The president of the railway

outlined these terms in this House — that we were paying the

U.S. prime rate plus 1.5 percentage points. When these

agreements were first made, and until very recently, the U.S.

prime rate was at 12 per cent, meaning that a Crown corporation

on an equipment purchase was paying an effective interest rate

of 13.5 per cent. Now I don't know of any government with a

triple-A credit rating that pays 13.5 per cent.

AN HON. MEMBER: Hear, hear!

MR. BENNETT: Another Crown corporation, Mr. Speaker,

borrowed $100 million at 10.25 per cent.

AN HON. MEMBER: What did Can-Cel pay?

MR. BENNETT: This is a fixed, non-adjustable, long-term

loan.

These interest rates do not support the contention of the

Minister of Finance that corporations and agencies of this

government enjoy the same preferred status as they did two and

a half years ago. In fact, on that one loan for 25 years at

10.25 per cent, just a drop in the lending rates between then

and now will cost our people of this province millions of

dollars in extra interest.

I have found this budget to be, in many ways, the easiest to

analyse but in so many ways the saddest budget documented in

British Columbia since, perhaps, the disaster budgets of the

Tolmie government.

It accelerates an alarming trend of lowering the priority

given to people services: education, health and human resources

are down from 68 per cent of the budget in 1974 to 61 per cent

in 1975.

It replaces an expanding reliance on revenue income from resource

industries with dependence on people taxes, Mr. Speaker. Taxes which

directly affect people are up on a staggering scale, while revenues

from forestry and mining are dramatically down. Property taxes — just

to the province, not concerning the rise in property tax to the

municipalities — are up $5 million. Those are people taxes. Sales taxes

— which our people pay — are up $155 million. Personal income taxes are

up $172 million. Gasoline taxes are up $60 million. Hotel taxes are up

$3 million. And look, liquor income is up $50 million. I guess the only

escape in British Columbia these years is to drink more, because liquor

taxes are predicted to be up $50 million more this year.

Resource taxes: forestry is down $125 million from last

year's estimates; mining is down $6 million. More from people

and less from resources — it projects an alarming reliance on

external borrowing which suggests that the bad mismanagement of

internally controlled social capital accounts is forcing us to

obtain secret borrowing from unknown loaners. It projects

enormous deficits from Crown corporations which, in the past,

ran at a profit in most cases.

The logical explanation is that the mismanagement and

perhaps the squandermania affecting the government operations

are now prevalent throughout other government enterprises.

There is talk of millions more to cover the losses of B.C.

Railway. Who knows about ICBC? B.C. Hydro is $3.6 million down.

B.C. Ferries — who knows what their loss is? In fact, there's

only one big winner in the public area, and that's the Liquor

Control Board, and they're talking about $155 million.

This budget projects an enormous ongoing increase in the

bureaucratic structure of government. The wage bill of this

province in 1975 is approaching $600 million, compared to $228

million in 1972. From the estimates, the wage bill for the

coming year adds up to $579 million plus a further $116 million

for professional and special services. And that comes closer to

$700 million, Mr. Speaker.

The budget, in effect, totally rejects the so-called

restraint order issued by the Treasury Board in December and

later publicly confirmed by the Minister of Finance. Salary

contingencies alone are $82 million in this budget. Rentals for

accommodation for the new people go from $8 million to $15

million.

Successive budgets of this Minister of Finance have

escalated 25 per cent in 1973, 27 per cent in 1974 and 28 per

cent in 1975 — or 48 per cent beyond the estimates of 1974 and

the budget of a year ago. The 1973 budget was overspent by $377

million. This 1975 budget reveals that this government

overspent the 1974 budget by $342 million. In just two budget

years this government has overrun expenditures of $719

million.

The budget provides no evidence that the immediate financial

needs of local government are to be met. For example, to match

the government's own spending designs over 1974 estimates, the

per capita grant should be approximately $51 or, if taken

against the amended estimates, it should be about $42 instead

of $34.

The budget gives built-in recognition to the probability of

enormous increases in the numbers

[ Page 296 ]

likely to be seen on welfare assistance: $55

million more

for welfare.

The budget confirms that capital investment in British

Columbia is being shifted from the private sector to the public

sector. Government capital investment in 1974 was 40 per cent

of the total in British Columbia; in 1972 it was only

one-third. It is therefore obvious that since the last year of

the last government the private sector is down.

Mr. Speaker, the British Columbia Social Credit party in

1975 would provide leadership for British Columbia. Our

proposal for revenue sharing that came out of our Harrison

workshop and was later advocated in this House during the fall

sitting is the only answer for the financial difficulties of

municipal government. We advocate a specific share of both the

provincial income tax share, resource revenues and the sales

tax to be allocated to the municipal government. Later in this

session we will introduce two bills to bring this about — one

entitled the Resource Revenue Sharing Act and the other the

Municipal Consultation Act. Only then will the homeowners of

this province be spared the fantastic tax increases on their

property caused by this NDP government, and only then will our

municipal governments be financially able to receive and

encourage the very necessary construction of new homes desired

by our citizens.

To further encourage the construction of new homes our party

would provide the finances through a B.C. housing corporation

to bring low-cost, serviced lots onto the market, with the help

and cooperation of municipal governments and regional

governments. Our target for 1975 would be 50,000 new,

affordable homes for British Columbians. This would also assist

in the creation of jobs to ease the burden of unemployment in

our province.

Our people want work and wages, Mr. Speaker. The people of

British Columbia have a right to work and wages in this

province; and to further assist them in 1975 our party would

provide more money to the Department of Economic Development,

not less, to create an industrial base of further job

opportunities for our citizens.

We advocate low-cost loans, plus feasibility and marketing

aid for British Columbians with initiative who will help create

employment and economic stability in this Province of British

Columbia. The British Columbia Social Credit Party would

provide leadership in restraint, in fighting the cruel tax of

inflation. Uncontrolled increases in the number and cost of

this centralized bureaucracy would be stopped immediately, and

more of the public's tax dollars would be returned in benefits,

rather than being wasted in feeding this growing

bureaucracy.

The British Columbia Social Credit Party wants work and wages and

opportunity, Mr. Speaker. Opportunity for British Columbians! What we

don't want is the waste and welfare and unemployment of the Barrett NDP

government. We condemn as unnecessary and inflationary those tax

increases imposed in this budget.

Now the Premier has called the opposition the

"doom-and-gloomers." But I am confident in the future of

British Columbia, and I am confident of the effort and

initiative by which our people will guarantee that future. I am

not confident of the NDP ability to achieve that future, nor am

I confident of the financial management of the present Minister

of Finance. Mr. Speaker, we oppose this budget.

HON. MR. BARRETT: On a point of order. One of the statements

made by the Leader of the Opposition was that the Minister of

Finance was misallocating funds. I would ask him to withdraw

that statement.

MR. SPEAKER: Does the Hon. Member impute any improper

motives or improper conduct on the part of the Minister of

Finance?

Interjection.

MR. SPEAKER: I think there's a distinction, but I don't

think you've made that distinction. You can't allocate funds

and misallocate them without authority of law. If you're

suggesting that he's been doing it without authority of law….

MR. BENNETT: Mr. Speaker, if it will clarify it, the word

"misallocation" was used in the context that the Minister of

Finance didn't know what he was doing.

MR. P.L. McGEER (Vancouver–Point Grey): Thank you, Mr.

Speaker.

HON. MR. BARRETT: Did you really meet with him?

MR. McGEER: No, no, no. You've fooled him. Mr. Premier, I'm

going to come to that a little later.

I couldn't have been more pleased, Mr. Speaker, unless the

television cameras had been here. I must say that the Premier put on a

vintage performance on Friday. I want to compliment him on his style.

He was forceful. He dealt with the opposition barbs. He produced this

fantastic budget. You know, they used to talk about "Bet-a-million

Bixby," the Scott Fitzgerald character. We've got "Bet-a-billion"

Barrett. And after it was all over and that $1.1 billion increase had

been laid before the people of British Columbia, I could see the

cameras fading away from the Premier in that very dapper outfit and the

television commercial coming on and saying: "Will it be cash or

Chargex?" (Laughter.)

[ Page 297 ]

Interjections.

HON. MR. BARRETT: Would you like a five-minute recess

to get the rest of your Members here?

MR. McGEER: A better turnout than usual, Mr. Speaker.

HON. MR. BARRETT: Are all the planes grounded?

MR. McGEER: Somebody said that the only light they could see

at the end of the tunnel after that budget address was the

train coming the other way. I don't know if that's right, but I

can tell you this: compared with this spending spree that the

Premier is proposing, he makes King Farouk look like a belt

tightener.

MRS. P.J. JORDAN (North Okanagan): Figuratively

speaking.

MR. McGEER: Figuratively speaking.

MR. R.T. CUMMINGS (Vancouver–Little Mountain): How about

Turner?

MR. McGEER: Oh, we're going to tell Mr. Turner about this

budget. You know, the Leader of the Opposition didn't think the

revenue estimates could be reached. I'm not so sure about that.

I think they can. But John Turner is going to have to learn the

facts of life about the British Columbia budget, because if you

look on page…whatever the page is…I always lose the

pages in the budget. I get to looking at the pictures, you

know.

The only thing you don't get in the budget is a clear

picture of the finances of British Columbia. Beautiful pictures

of these children running around with smiles on their faces — I

hope that the future will be as bright as the picture would

suggest. But the revenue shown for British Columbia — yes, here

it is on page 24 — shows that Canada (that's John Turner) is

going to have a bill from the provincial government that has

gone from $380 million to $643 million in one year, by far the

largest item. Mr. Speaker, you know, for Mr. Turner that

represents a little present from the Province of British

Columbia of $263 million in one year. I'm sure that he'll be

pleased to learn about that — almost $1 million a day.

Mr. Speaker, it is my pleasure this afternoon to bring down

the seventh Liberal budget. It is a tradition. I haven't

brought it in today in a locked case and I'm not wearing a new

pair of shoes, but I hope that the budget will be recognized

for what it is: a fully balanced budget; a dynamic budget; none

of this backward looking, fearful job-security budget the NDP talked

about; something which challenges the

future; a budget with excitement; a budget with opportunity.

These are the features of the seventh Liberal budget, just as

they have been the principal features of the six preceding

Liberal budgets.

I might add that the Liberal budgets have always differed

radically from those of the government of the day, but they

have been consistent in purpose.

MR. J.R. CHABOT (Columbia River): They always will.

MR. McGEER: This seventh Liberal budget will follow that

very fine tradition that has been developed for growth and

fiscal responsibility.

The problem with Social Credit budgets was that they never

told the truth about revenue. They told the truth about

expenditures, but they never told the truth about revenue.

Mr. Speaker, the problem with this NDP budget is that it

tells the truth about revenue but it is not telling the truth

about expenditures. The Leader of the Opposition (Mr. Bennett)

said that there would be a deficit. I don't think there is

going to be a deficit; I think there is going to be an

election.

MR. CUMMINGS: Are you ready?

MR. McGEER: Yes, certainly we're ready. The question is: are

you, my friend? (Laughter.)

HON. MR. LEA: Are you going through it with the same

leader?

MR. McGEER: Are you going with the same leader? After this

budget, you should be having second thoughts.

HON. MR. LEA: Are you going with the same party? United they

stand; divided they fall.

MR. McGEER: But I will say this: when Premier "W.A.C."

Barrett took over finance, he found the old Social Credit

budgets in the file, and he came up with a budget that had all

of the Social Credit faults and none of its virtues. Since

then he has abandoned the Social Credit position of denying

factual information on revenues in the budget and has made an

attempt to give us honest revenues. The Leader of the

Opposition dislikes that approach. He wants to go back to the

old days of dishonest revenues. He found that a better

practice, but I suppose it runs in the family.

The NDP, on the other hand, has given us a very loaded

picture of expenditure, and one that I can't believe could or

would be implemented. We'll have a surplus, I'm sure, next

year.

The Premier will be able to stand up in the House,

[ Page 298 ]

if he is still Premier, and make the Leader of the

Opposition

appear foolish once again by showing that he really had used restraint

by not using the loaded figures that he's given in the budget, but

instead comes up with a tidy surplus. Well, it'll be another fiscal

trick, a new twist, but again denying the people of British Columbia

the full and straightforward facts about the finances of this province

— something which has been denied them for well over a generation.

In some ways, the budget reads like one of these real estate

ads, where if they say there's a gentle brook in the back, you

know there's a raging torrent eating away the foundation. If

it's a "stylish old home," you can bet the only thing

that's holding it up is the termites holding hands underneath

the beams.

When I read page 6 of the budget, for example, I came across

this little item: "The Premier has decided to be an honest man

about revenues." Hon. Members, you may recall that in these

Liberal budgets of the past, the revenue figures I always gave

were greeted with hoots of laughter. How is it possible that

revenue figures as high as the Liberals quoted could possibly

take place? But again, as my friend from Columbia River (Mr.

Chabot) has discovered after a few years, it was just a little

case of diddling the figures by a year — just a little case of

that, so that what we were being given always was last year's

revenues.

That policy was followed right through the Premier's 1974

budget, the one he gave a year ago. I said at that time, Mr.

Speaker, in giving what I thought were realistic revenue

forecasts, that if I wasn't $250 million closer to the truth on

what the revenues would be in British Columbia, I'd buy the

Premier and the Leader of the Opposition (Mr. Bennett) a

dinner, and I'm not a big spender. Luckily, Mr. Speaker, I

don't have to deliver that dinner because the figure I gave of

$2,480 million for probable revenues was within 1 per cent of

being accurate. I was $308 million closer to the truth than the

Premier, Mr. Speaker — the $250 million was just because I was

being canny.

The Premier said $2,172 million a year ago, but now he has

changed his mind and upped that by about $350 million to $2,515

million. What does he give as an excuse? Right here on page 6

of the budget:

"Hon. Members will note that from the report of the

comptroller-general to be tabled in the House

today that to December 31, 1974, a number of revenue sources

have exceeded earlier expectations. Most notable is the

substantially higher level of personal and corporate income tax

revenues."

The one item in the budget that you can get with accuracy is

personal and corporate income taxes, because the federal government

gives honest forecasts of that. It's available not just to the

government, but to every Member of this House. To come up with that as

a feeble explanation for revising revenue estimates is to take the

people of this House and the people of British Columbia for absolute

fools. My voice broke, I got so worked up over that. (Laughter.) I'm

going to break into tears in a minute, Mr. Speaker, at the way the

people of British Columbia are being taken, year after year, by

statements in a published document that will go, I suppose, into the

archives of British Columbia, and which year after year after year will

be a testimony to lack of truth in government. You frown, Mr. Speaker,

but look at these year after year after year, not telling the story of

the finances of British Columbia.

I submit that this document, basically, does no better a job

than has been done in the past. It calls for expenditure

increases of $1.1 billion. In effect, what that does is to add

two years' growth in the economy into a single year's budget

because we've decided to go straight on revenue.

I don't think that's so; I don't think it's going to happen.

I hope it isn't going to happen because our Premier Barrett, if

he increases spending by that amount, will have thrown gasoline

on the fires of inflation and have engaged an unforgivably

irresponsible act of the chief stewardship of this

province.

Look through that budget — the $1.1 billion increase — and

ask yourself this: what have we really got in that budget that

represents an investment for the future? There's no wealth

creation in that budget at all. Whatever the government has

done in the way of moving into the economic sector has been

merely to take over existing corporations and businesses.

If they start up a huge bureaucracy like the ICBC, they just

displace other people in the insurance industry. If they take

over forest companies, they're merely doing themselves what

private industry did before. There are no new jobs, no new

production.

AN HON. MEMBER: What about Ocean Falls?

MR. McGEER: No new jobs there. You're just keeping the thing

going, that's all.

HON. D.G. COCKE (Minister of Health): It would have closed

down. The same with Can-Cel.

MR. McGEER: What you've done over there is to trade jobs in

private industry for jobs under the government. You've taken

revenues, taxes from people who are working and producing, and

you've blown them on non-productive programmes.

HON. MR. COCKE: Complete nonsense. Absolute nonsense.

[ Page 299 ]

MR. McGEER: Having Premier Barrett in charge of Finance is

like putting a rabbit in charge of a lettuce patch. It wouldn't

be so bad if there weren't so many other rabbits that are

friends. We're interested in the lettuce production in this

province…

HON. MR. LEA: Why are you telling Harvey?

MR. McGEER: …not a feast for the NDP spenders. Rabbits in

charge of the lettuce patch.

I did send the Premier a telegram supporting a position in

principle with regard to resource revenues in this province. I

thought his back needed stiffening before he went down to that

bargaining session. He came back proclaiming a victory. As the

Member for West Vancouver–Howe Sound (Mr. L.A. Williams) said,

there hasn't been a victory like that since Napoleon visited

Moscow.

He was only there a day. I think if he had stayed two days

he would have come home in a barrel. If one can believe the

accounts of the meeting, after giving us his position that he

was going back to Ottawa to fight for, he takes off his jacket,

puts his arms on the table and says, "Let's make a deal." Like

he was right down there from a Kingsway used car lot: a good

deal and a good deal more.

After all of 15 minutes of negotiation he was ready to give

up. So the federal team retired into the next room while they

thought it over, and he was to give a knock on the door when he

was ready. They didn't have time to go to the washroom. Tap,

tap, tap on the door. "We give up."

He came back to British Columbia trumpeting about his

victory. Some victory!

Interjection.

MR. McGEER: Victory? I hope we don't have too many of

those.

What should have happened here is that those four western

Premiers should have been together with a common position on

resource taxation.

HON. MR. COCKE: Sure, go with the rest of them and give it

all away.

MR. McGEER: Give it all away? No, no, Mr. Speaker, those

resource revenues belong here in British Columbia; they belong

here in British Columbia.

If the deal is different in Confederation, if we were to have free

trade so that the people of this province had the same opportunities as

those in central Canada to appreciate and enjoy the benefits of a

common market in manufacturing, if we had equal access to world

markets, if there weren't this protection of eastern industry, I for

one would have a very different attitude toward the extra wealth that

comes to the west because of the richness of the depleting resources.

But when we don't have equal opportunity, when those

resources are finite and are diminishing, then we need those

revenues now to build the infrastructure of industry in this

province and give us in the future the opportunities which we

don't have now.

AN HON. MEMBER: Tell that to Trudeau.

MR. McGEER: I have, and I will again.

I think, Mr. Speaker — and I'll say it again and again — that we

need free trade in this country so the west can reach

its destiny. I applaud the Economic Council of Canada for

finally having the gumption to stand up to the protectionist

industries of the east and say the only thing that makes

economic sense for this country.

I want to go into the details of the Liberal budget, having

gone over some of the preliminary ground.

Our budget calls for revenues of $3,134 million — slightly

under the Premier's forecast because we're going to give some

cuts in the budget, which I'll come to later.

We forecast expenditures of $2,992 million, for a difference

of $142 million. That's our predicted surplus. That almost

exactly equals the value of the outstanding parity bonds; so we

would reiterate our intention to recall the parity bonds in

this province and end the floating crap game.

To go briefly through the various departments and what we

have in store for them, I'll go through the expenditures.

Minister Without Portfolio. Down to $78,000. That's an 80

per cent cut for him, and I'll come to the reasons why. Well, I

might as well say it now. He hasn't done anything useful; he

won't do anything useful. It's a time for trimming back, and we

might as well start right there.

The Premier's office. We're cutting that $10,000. It's only

a small cut but it's symbolic. We're reducing, Mr. Speaker, the

salary increases for the executive assistant and administrative

assistant from 33 per cent to 10 per cent. This is because

they've given the Premier bad advice, and there's no reason why

they should get a larger increase than the administrative

assistants to the Members of the opposition side.

As the debate wears on and you see the quality of the

opposition Members' presentation versus that of the budget, the

common sense of this particular economy measure will become

evident.

We've also cut $1,000 off the Premier's travel allowance.

He's had a nice tourist trip to China; he's been to Europe;

he's been to Japan. He's had an opportunity to travel the

world. We feel that this year, particularly in view of the care

he's got to show

[ Page 300 ]

as Minister of Finance, he needs to be at home and

won't

require all this public travel money. Now very quickly.

Agriculture. Fifty million. That's down $10 million, and

I'll explain why.

Attorney-General. One hundred million. Sorry, Mr.

Attorney-General; we've nailed you for $15 million.

Consumer Services. Down $1 million to only $1.5, and I'll

deal with that one very quickly again. No performance; just a

proliferating bureaucracy. We've got to take the red pencil to

the estimates this year and chop out the useless things. We

won't eliminate her entirely but just to get it down to a

modest increase and not this sort of bloated thing that's in

our estimate figures.

Education. This really hurts me, Mr. Speaker: down $38

million, which is 5 per cent.

Housing. Down 78 per cent. We're taking $70 million off the

housing budget.

Human Resources. This is the biggest cut of all, $93 million

down — to $423 million.

MS. R. BROWN (Vancouver Burrard): You sure don't like

poor people.

MR. McGEER: We're coming to the reasons for that. I think

you'll see that the budget is very, very generous in that

respect, but not profligate.

Provincial Secretary. Down $5 million to $72 million.

Public Works. Twenty million off the Barrett budget to $70

million.

Recreation and Conservation. Seventeen million down there,

to $30.4 million.

We've not touched Legislation, Finance, Labour, Lands and

Forests, and Mines. We've left those as the same, and we have

two increases, Mr. Speaker. The increases come in Economic

Development — an increase of 300 per cent, an increase of $15

million there — and cities and municipalities, an increase of

$20 million there. So the net change is an increase of $231

million, increases of $35 million for a total expenditure of

$2,992 million, and I resisted that temptation to go for the

sensation with a $3 billion budget.

Revenues, as I said, are down for these reasons: the first

is that cutting into the Human Resources department is going to

mean that the federal government pays $46 million less into our

Treasury, because part of that is a shared cost. But they'll

still be going up from $380 million to $600 million, so we've

not put a bad tag on them.

The other reductions are in the fields of manufacturing and natural

resources because we have got to build something into this budget for

the future. So the tax cut is to eliminate mineral royalties and for

the government to go 50-50 in exploration for the resource companies

and in research for industry. Those cuts conceivably could cost the

treasury $30 million.

The reason why we are putting money into this particular

sphere, Mr. Speaker, is because there is a hierarchy of dollars

in an economy. Every dollar has equal purchasing power but

every dollar doesn't have equal value. The highest tier of

dollar value is that which goes into this government. It's in

category No. 1.

It is this category that we have consistently advocated be nourished

by Liberal budgets. It's a category that Social Credit would never

nourish because they didn't understand the value of it.

I will say this: Premier Bennett, former Minister of

Finance, understood it for the private sector and he didn't

actively harm the industries that wanted to undertake this

process of discovery on their own. But the NDP has totally

eliminated the top category in the hierarchy of dollars, namely

discovery. Discovery is the highest because it leads to

growth.

If you discover a mine then at some future time there is

production of jobs and wealth. If you invent a computer, at

some future time there is growth in jobs and wealth. Nothing

equals the value of these discovery dollars.

That's why we provide the tax cut for resource industries

that will undertake discovery again — the petroleum companies

that will search for new wells and hopefully the manufacturing

organizations that will undertake scientific research to invent

and develop new products.

The second in the hierarchy of dollars, Mr. Speaker, is that

which goes into automatic production. One could cite nuclear

power plants, dams, the installing of computers. They are the

kind of things which, once the money has been spent and once

the labour has been done, then wealth continues to flow from

that without any further input of labour.

I think the Social Credit government understood that. They

were certainly prepared to invest in dams but they weren't

prepared to invest in higher technology nor were they prepared

to invest in nuclear power.

Again, the NDP has even killed that side of the economy. And

as you go down this hierarchy, Mr. Speaker, at each lower level

down, the value depends on what has taken place before at a

higher level. If you start with a dollar at the top in

exploration, that filters down through the economy and that

dollar is turned over again and again and again. Secretaries

don't generate wealth and income. People in services don't

generate wealth and income. They are further down this

hierarchy.

Next in line at the third level is manufacturing. Of course,

there's a real wealth here, particularly if it's for export.

That money, though it depends in the

[ Page 301 ]

initial instance on the levels above it,

nevertheless can be

turned over to the levels below.

Then we come to the service industries, and they live off

the first three levels. Now we are beginning to get into the

area where the NDP expenditures escalate. Nothing in the first

two — but service? Yes, sirree! You listen to the Minister of

Human Resources (Hon. Mr. Levi) talk about all the services he

wants to supply.

Lastly and at the bottom of the hierarchy is the non-service

and non-productive items. It's fine to cycle dollars back again

but those that depend on the last two don't generate any basic

wealth at all and they merely take the Province of British

Columbia around in circles.

That's where the budget of the New Democratic Party is

concentrated. The top levels have been killed off, and the

bottom levels have been boated up to an irresponsible degree.

This is why we have to take hold of certain expenditures in the

government, and say no. People who aren't at the top-producing

end can only have what's available and left over. If you pump

40 to 50 per cent wage increases in at the bottom service

levels, you're feeding the fires of inflation and taking away

the life blood of the future.

I suppose it's a little like taking all the fruit off the

tree. Some of it has to be put back in the ground and then you

have got to tend the ground before you get the crop in the

future. If you eat it all and you never plant any seed and you

let the garden waste, there just isn't going to be an orchard

in the future.

This is what's so wrong about the New Democratic Party

approach. As the Member for North Vancouver–Capilano (Mr.

Gibson) has said on many occasions, "You're wonderful at

spending the wealth; you just haven't a clue as to how to

create it."

AN HON. MEMBER: What about Can-Cel?

MR. McGEER: Yes, how about Can-Cel? They still don't

understand. Where's the new growth there? None….

AN HON. MEMBER: They were going to close it down.

MR. McGEER: …You ought to understand about chickens and

eggs.

HON. MR. COCKE: Why don't you read the statistics of B.C.?

There's more input.

MR. McGEER: That's the problem, Mr. Speaker; I am reading the

statistics. I am also reading the line-by-line budgetary estimates and

it makes a shocking story, Mr. Speaker. I can tell you this: when the

estimates come up and the individual Ministers stand up to justify line

by line what they've done, they're certainly going to get a grilling

from me and, I judge, from the other Members of the opposition that

cabinet Ministers have never had in this province before. What's in

there simply won't stand scrutiny. You'd better do your homework, all

of you, and come in and justify every single one of those civil servant

increases and every one of the programmes that you put forward. Because

they cost high and they benefit low.

Interjection.

MR. McGEER: Mr. Minister, I'm going to be here when your

estimates come up, and the rest of you too. Agriculture — that's one,

Mr. Speaker, because the Minister (Hon. Mr.

Stupich) has applied for a tremendous increase. I said minus

$15 million for him, but he still gets 333 per cent increase.

That's not bad for one year…

AN HON. MEMBER: How much did you pick up…?

[Mr. Dent in the chair.]

MR. McGEER: Just one vote — 65. That will save the public of

British Columbia $61,000. That's your consultant and his

office. He's giving you enough bad advice, and I think if we

get rid of him there'll be bigger dividends than just the

$61,000. So I'll leave your budget because I think that the

people of British Columbia have to have their health looked

after but they don't have to have bad advice.

Mr. Speaker, Education cut $38 million. But there's still a

$163 million increase, 30 per cent in one year. I think the

teaching profession would accept a statement by the government,

if the government had the backbone to give it, saying: "Look

here, there's only so much any government can do in a single

year. Thirty per cent is all we can afford now. If things go

well, there will be more later. But things must go well."

Housing. Minus $70 million, because I think if the

government gets the devil out of the housing business the

crisis will be over and we'll start to get some construction

underway.

The Minister (Hon. Mr. Nicolson) reminds me of a third-class

heavyweight who gets into the ring, gets decked in the first 30

seconds of the fight, gets packed off to the dressing room,

comes to on the rubbing table, as he does when somebody asks

him a question in the House, and says: "I can lick any man."

His answers to the question show ineptitude in the House and an

inability to account for the continual mistakes the government

is making in the real estate field. It's taking revenue that's

needed for other things and using it in a counter-productive

way.

Don't fire him from the cabinet. Just leave him in

[ Page 302 ]

the corner with nothing to do and he won't cause

any

harm.

Human Resources. I know that this will perhaps seem a harsh

thing to say, but in one year the expenditures on Human

Resources have gone from $284 million to $423

million. In my budget, that's a 50 per cent increase in one

year. We want to be generous to the disadvantaged, Mr. Speaker,

and a 50 per cent increase in one year is generous. But again,

limits must be placed on every Treasury. You can't just go up,

because you're in power, and say: "I want the keys to the vault

and a shovel."

HON. MR. COCKE: What are you going to cut out?

MR. McGEER: If you spend in this way, taking everything….

HON. MR. COCKE: Specifically, what would you cut out?

MR. McGEER: Well, we're going to ask the Minister….

Heavenly days, you didn't know what was going on; none of you

on Treasury Board did. Suddenly you were presented with a bill

for $103 million over the estimates you approved and

we approved. The thing just got turned away and you still

haven't brought any restraint. Look at the budget this year:

that $103 million and another $100 million on top of that.

You people in Treasury Board have just got to get hold of this;

it's a tiger. You've got to get your hands on it and control

it.

That Minister (Hon. Mr. Levi) may have the best motives in

the world but he has no sense at all when it comes to money.

None.

Public Works. We've cut that by $20 million. It's a nice

thing to have so many buildings renovated and improved. But,

again, a 50 per cent increase in one year is enough, and that's

the budget that we provide. If you cut that budget $20 million,

it's still 50 per cent above a year ago. Some of these things

just have to be postponed a year or two until the Treasury can

stand it.

Recreation and Conservation. That's cut $17 million — only a

20 per cent increase in one year. But if the parks all don't

get built in one year, it won't be the end of British Columbia.

If the choice is postponing that extra park construction for

one year or providing the kinds of tax incentives that will

start mining, gas and oil exploration going, and scientific t

research to build new products and jobs for the future, it's better to

make that postponement.

So even though the Liberal budget doesn't provide for

48 per cent increases, it nevertheless provides for increased spending

of $600 million. It's balanced. That much

we can afford.

The Premier with his budget has not, as the Attorney-General (Hon.

Mr. Macdonald) suggested to him, provided job security at all. What he

has done, Mr. Speaker, is to have unwittingly provided an insecurity

for the future. By spending now all the money at the bottom of the

hierarchy of dollar value, he's impairing what should come to the

Treasury in the future.

I have before me a budget of the Province of Alberta for

MR. G.S. WALLACE (Oak Bay): A very good budget.

MR. McGEER: Yes, an excellent budget. I think you should be

proud of your colleagues. I'm sure that were we in the Province

of Alberta, Mr. Member, we might find one or two minor faults

with it, but I will say that while it doesn't have any

beautiful pictures from the photographic department, it does

have a clear picture of the state of finances of the Province

of Alberta.

All across Canada we see spending increases: Quebec,

14 per cent; Saskatchewan, 14 per cent;

Prince Edward Island, 14 per cent; Ontario,

14 per cent; Alberta, 17 per cent; Canada, 27 per cent

(a little bit of slippage there); but, British Columbia,

48 per cent! Who is feeding the fires of inflation in

Canada? Who is the least irresponsible politician in power when

it comes to the economy?

MR. C. LIDEN (Delta): The First Member for Vancouver–Point

Grey (Mr. McGeer).

MR. McGEER: It is pretty obvious. The leader of the New

Democratic Party of British Columbia.

HON. R.M. STRACHAN (Minister of Transport and Communications):

You said "the least irresponsible." Don't forget that. I agree with you

— that's what you said.

MR. McGEER: Mr. Speaker, may I amend what I said? If ever

that Minister and I agree, I will amend my position, for I will

know I said something wrong. I hope it is satisfactorily

corrected; who is the least responsible politician in economic

power today?

AN HON. MEMBER: John Turner.

MR. McGEER: Rivaled only by the former leader, the present

Minister of Transport and Communications (Hon. Mr. Strachan) in this

province, in his mismanagement of ICBC. There is an inefficient

corporation, run with taxpayers' subsidies. Where else in the world is

consolidated revenue

used to support an insurance corporation? They used to charge

the same, and pay taxes. That was only a year ago.

[ Page 303 ]

HON. MR. COCKE: Whom did they pay taxes to?

MR. McGEER: They paid taxes to the government.

HON. MR. COCKE: Everyone then said they were losing money,

Pat, so let's don't….

MR. McGEER: They paid taxes. They paid taxes and we enjoyed

the benefits of those taxes. Now all we do is to spend the

money out of consolidated revenue.

HON. MR. COCKE: That is $200 million invested in our

economy, and you know it.

MR. McGEER: Mr. Speaker, they are economic illiterates over

there. They are putting the Treasury of British Columbia to the

worst use to which a government has ever put the Treasury of

British Columbia. We can only hope that before too long there

will be a Liberal budget in this province that can be

implemented.

MR. G.H. ANDERSON (Kamloops): Don't hold your breath.

MR. McGEER: Only when that day arrives will we have this

balance of social justice and economic growth. The people have

been denied this opportunity for too many years.

I for one intent to vote against this inflationary budget of

Premier Barrett.

AN HON. MEMBER: Oh, oh!

MR. McGEER: We will call on him to repent during the

estimates, and we will offer our assistance in trimming the

expenditures in making a realistic and growth budget, If he

fails to take advantage of this offer, we will await the

opportunity to tell the people of British Columbia what has

happened during the term that the NDP has been in office, and

exhort them to turn them out and never let them back in!

MR. G.S. WALLACE (Oak Bay): Mr. Speaker, I will accept the

comments of my neighbour on the right that I'm just a little guy

and I need a lectern for my notes.

Mr. Speaker, I appreciate the opportunity to present the

considered opinion of the Progressive Conservative Party on the

Barrett budget.

We are often laughed at and the media has a real time about the

little party, the one-seat party in the House. But this doesn't bother

us, Mr. Speaker. We have a larger percentage of support in this

province than is generally understood at the present time. I wouldn't

want to leave this House with any impression other than the fact that

many people in this party have studied the budget and given me the

value of their comments and advice, and we will attempt to present our

position in a moderate and balanced way without some of the rhetoric we

heard earlier on this afternoon.

Mr. Speaker, there is no question that this budget, to the

man in the street, is mind-boggling inasmuch as it deals in

enormous sums of money and enormous percentage increases in

both projected revenue and projected expenditure. This must

come as a very great surprise to many of the people in the

province, because as recently as September 4 of last year the

Premier and Minister of Finance was releasing a document which

related to budget figures up to that time. I quote from the

headline — which, of course, was not the Premier's headline — but the

headline in The Vancouver Sun which stated:

"Belt Tightening Promised in B.C." A subheading states:

"Barrett Backs Inflation Parley."

Interjection.

MR. WALLACE: Mr. Minister, you had your turn on

Friday and you'll have another turn at the end. So just let me

have my say. But I appreciate the help you're giving me,

because under the heading it's also stated: "Capital Spending

Curb Pledged." I'm quoting from The Vancouver Sun of

September 4, 1974.

"Premier Dave Barrett endorsed today a call for a

national

conference on inflation. He warned that governments, his own

included, must be prepared to take tough measures to lick the

problem.

"The Premier, speaking at a press conference where he

released a financial and economic review of the province, said:

'B.C. is in good shape financially, but the government plans to

cut back on capital expenditures.'"

That was September 4, 1974. I won't read a great deal of

this article, but I do feel that there are one or two parts

that one should comment upon.

"He said the pace of projects initiated by his

government

over the past two years will not be threatened, but he

cautioned the people of British Columbia not to expect to have

26 per cent increases in expenditure in next year's budget like

that of the past two years."

This is all a quote from the Minister of Finance's

conference on September 4, 1974 — that particular paragraph

that, "the people of B.C. should not expect to have 26 per cent

increases in expenditure in next year's budget" — the one

we're now debating — "like those of the past two years."

What do we find, Mr. Speaker? We find that if we look at the

proposed budget for 1975-6, even on revised figures for last

year, the expenditures will be up 28 per cent. The Minister was

certainly right when he said we couldn't expect it to go up by

26 again.

[ Page 304 ]

No, sir! It's gone up by 28. When we look at the

revenue,

Mr. Speaker, we find again for 1976 that even on revised

figures projected revenue will be up by 31 per cent. Certainly

if you take the original projected revenue for the year ending

the end of March, 1975, and compare it with projected revenue

for the year which will end in March, 1976, the revenue

projected is up by 48 per cent.

This, Mr. Speaker, has to have one asking why the Minister

of Finance went through 180 degrees in his financial thinking

between September 4, 1974, and February, 1975. Has the Minister

of Finance acquired some financial genius in the meantime to

advise him to completely refute his own words in a few months?

Certainly, Mr. Speaker, I don't think there can be any argument

that the very spending programmes which the Minister of Finance

said we could not anticipate in September are exactly the kind

of programmes that we have before us in this budget.

MR. L.A. WILLIAMS (West Vancouver–Howe Sound): Those earlier

words are non-operative.

MR. WALLACE: Perhaps the Member for West

Vancouver–Howe Sound is quoting a famous comment by a former

press correspondent, that the former comments in September are

now non-operative.

Interjection.

MR. WALLACE: No, that's Ron Ziegler.

Interjection.

MR. WALLACE: We feel this budget should have struck a

balance between inflation control, job creation and cost

control. In these areas there should have been a more realistic

appraisal of priorities.

We agree with the government that trading jobs for inflation

is not the solution.

AN HON. MEMBER: Hear, hear!

MR. WALLACE: But we disagree with the government that all of

the responsibility and all of the capacity to deal with inflation lies

in the hands of the federal government. Certainly, the federal

government does have the major role to play through the Bank of Canada

and through the control and alteration of interest rates. We accept

that. But this budget leaves the impression that the provincial

government really can do very little to bring about some dampening of

the fires of inflation, and we don't believe that that is so. We

believe that government, as the largest employer in this province and

as the responsible body to handle such vast sums of taxpayers' money,

should have as its primary responsibility the job of setting an example

to every individual in the province on the matter of responsible

spending and buying.

We in this party were in agreement with the Minister of

Finance's statement in September since it did seem to recognize

the most frequent comment I hear everywhere I go by citizens,

many of them with very little real political interest or very

little interest in the details of political life in this

province. One fact they know very clearly is that this

government sure knows how to spend the money.

We don't have to depend necessarily on what I say or what

opposition Members say. I'm delighted that the lady Minister of

Education (Hon. Mrs. Dailly) has just taken her place because

in a press release on February 26 of this year, the lady

Minister….

Interjection.

MR. WALLACE: Oh, dear me! This liberation movement can make

speechifying very difficult. I happen to like to approach and

address the female sex as "ladies," but I see this is

creating a problem. I'll just refer to the Hon. Minister of

Education because I sometimes think that male Ministers can be

gentlemen.

HON. MR. BARRETT: Do you think a lady Minister can be a

gentleman?

MR. WALLACE: No, no. Equality can't be equated with

sameness, Mr. Minister. In fact, if I might inject that

comment, I think this is the real danger of the liberation

movement: we are confusing equality with sameness. But anyway,

that's another subject. I had better get on with this speech.

I'll quote fro