1998 Legislative Session: 3rd Session, 36th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

WEDNESDAY, APRIL 1, 1998

Afternoon

Volume 8, Number 6

[ Page 6673 ]

The House met at 2:06 p.m.

Prayers.

Hon. D. Miller: In the House today, seated on the floor, is a personal friend of mine and a former colleague, Larry Guno, the former member for the historic riding of Atlin. I would ask all members to give him a very warm welcome.

Hon. P. Priddy: I want to impart a reintroduction and add an additional one today. In the gallery today are people that I met with last night and who were in the precincts yesterday: Dr. Brian Brodie, Dr. Denis Brown, Dr. Alex Black, Dr. Alan Gow and Dr. Don Wilson, who are all northern interior physicians. Clearly the meeting last night got us so much progress that they've brought their colleagues to be here today. I'm very pleased that they wanted to do that. Would the House please make them welcome.

G. Campbell: I'd like to add my voice to that of the Minister of Health. We don't have just those doctors that were mentioned; we have 67 doctors from all over the province. I think it's a shame, actually, that most of them are on that side of the House, because it seems that the only way the NDP is going to see them is if they sit on this side of the House.

I think this gives us not only an opportunity to welcome to the Legislature these physicians from all areas of the province but to take advantage of their knowledge and maybe meet with them after the Legislature adjourns this evening.

V. Anderson: I'd like the House to join me in welcoming 55 grade 11 students from Churchill Secondary School, who are with their teacher Mr. Williams and the adults who have accompanied them to see the fine, upstanding activities that we engage in here in the Legislature. I hope they are more impressed than the students who were here yesterday.

J. Sawicki: I too would like to stand and ask the House to welcome some local doctors. I want to assure the Leader of the Opposition that the three government MLAs from Burnaby see our doctors on a regular basis, and we have met with them regularly for some years.

On behalf of the member for Burnaby North and the member for Burnaby-Edmonds, I'd like the House to welcome Dr. Shelley Ross, Dr. Ross Chang, Dr. Dan MacCarthy and Dr. Marshall Dahl.

Hon. I. Waddell: I'm almost tempted to say that it's a good time to get sick in the House, but I won't.

I would like to introduce a young woman I've known all her life who is from Rossland, the home of Red Mountain and Kerrin Lee-Gartner. I'd like the House to welcome Dana Olsen and her daughter Brittanie.

B. Barisoff: I'm like the member for Peace River North. I don't very often get to introduce visitors from Okanagan-Boundary. I'd like to introduce Dr. Al Ruddiman from Oliver.

Hon. P. Ramsey: Joining us today in the gallery is Marcia Braundy, known to many in this House and in British Columbia as an advocate for many years on issues involving women in trades and technologies. With her today is Dr. Stephen Petrina, a professor at the University of British Columbia in the technology studies education program. Would the House please make both of them welcome.

S. Hawkins: Let me now introduce physicians from my riding, Okanagan West: Dr. Cathy Clelland and Dr. Henry Docherty. We had a very good meeting with them today, and we will meet them any time they ask us to. Would the House please make them welcome.

Hon. M. Farnworth: There's a very distinguished British Columbian in the precincts today. He's an entrepreneur, a long-time Liberal -- but I won't hold that against him. He's an author, a distinguished man of letters and is forging ahead with a new career. Would the House please welcome Mr. Warren Betanko.

A. Sanders: I rise today to welcome the better half of the Sanders family, my husband, Dr. William Sanders. I know it is not otherwise, or I would be up there and he would be down here.

K. Whittred: It is my pleasure to introduce the doctors from the North Shore who are here attending the BCMA convention. Please join me in welcoming Drs. Frank Sigurdson, Doug McTaggart, Tony Chan and Ed Kroll.

J. Wilson: It gives me pleasure today to welcome to the House Dr. John Maile and his wife Susan, from Quesnel, who have been longtime friends of mine. Would everyone make them welcome.

Hon. P. Priddy: I'm not sure if there are any unnamed physicians left, but I do want to acknowledge that present with the physicians today is Dr. Granger Avery, who is the president of the B.C. Medical Association. If we could make him welcome.

D. Symons: I too would like to introduce a doctor who is from Richmond and who arranged a meeting -- from the doctors' side, as I did from the MLA side -- so we could meet over a nice dinner just a short while ago. Charlotte Wong is the person who did that, and I'd like to thank her very much and have the House give her a welcome.

H. Giesbrecht: I always believe that anybody that comes down here from the far north, at least from the Skeena constituency, deserves some sort of recognition. In the gallery today we have Dr. Geoff Appleton from Terrace. Would the House please make him welcome.

Hon. A. Petter: I see in the gallery today someone I recognize from my constituency, Sheila Haegedorn. I'd ask the House to make her very welcome.

[2:15]

Hon. D. Lovick: I have the pleasure and honour of introducing two different sets of guests. The first, from the province of Ontario, is the Minister of Labour from Ontario, the Hon. Jim Flaherty, who is accompanied by his assistant, Mr. Craig Rix. I would ask my colleagues to please join me in welcoming them.

Interjection.

[ Page 6674 ]

Hon. D. Lovick: I was tempted, hon. Speaker, to report on the kind of discussion we're going to have, but I'll hold back.

I also want to acknowledge the presence of a couple of my own constituents and their guests: namely, Ms. Kim Sly, her daughter Jennifer Sly -- Jennifer is about 11 years old and is my best girlfriend in Nanaimo -- and their foreign exchange student from Japan, Ms. Sachi Kikukawa. I would ask the House to please make them all welcome.

K. Krueger: It's my privilege to introduce in the House today Dr. Sheila Burnside and Dr. Randy Patch from Kamloops. Dr. Patch is a practising dentist as well as a practising medical doctor -- the ultimate in one-stop shopping. Would the House please make them welcome.

F. Randall: There are some representatives from the B.C. and Yukon Territory Building and Construction Trades Council here, and I would like to introduce them. There's Don McGill, president of the council and secretary-treasurer of Teamsters Local 213; Charlie Peck, vice-president of the Building Trades Council and business manager of IBEW Local 213; Gary Kroeker, secretary-treasurer of the council and business manager of Operating Engineers Local 115. With them is the executive director of the Building Trades Council, Tom Sigurdson. I would like to add that all of them are working hard to improve the quality of construction in British Columbia. Would the House please make them welcome.

J. Cashore: I'd like to add my welcome to Larry Guno. I feel very honoured that he's sitting on the floor of the House today. I sat beside him during the 1986 parliament, and the House was always very inspired by Larry's speeches. He's an outstanding first nations leader in this province and an outstanding British Columbian.

Also, I'd like to welcome students from Gleneagle Secondary School, one of those fine schools that was enabled by our government and has recently finished construction. I'd like the House to make those students welcome.

J. van Dongen: On behalf of the member for Matsqui and myself, I'd like to introduce three individuals from Abbotsford: Dr. Joginder Grewal, who's on our regional health board; Dr. James Swanney, a general practitioner; Nerma Shergill -- she leads an organization of spouses of doctors, and she can tell you how hard doctors work in this province. I'd ask the House to make them welcome.

V. Anderson: I'd like to introduce Dr. Larry Collins, a longtime friend as well as a medical doctor with whom we've been able to consult regarding government affairs in relation to the medical profession and medical services.

R. Neufeld: I would be completely remiss if I didn't introduce Dr. Wright, who is down here from Fort St. John and who I had a very enjoyable supper with last night. Would the House make him truly welcome.

The Speaker: Perhaps I could say, on behalf of all those MLAs who didn't introduce some folks, welcome to those who weren't introduced.

G. Robertson: I too would like to welcome Dr. Granger Avery to the precincts today. Besides being the president of the B.C. Medical Association, Granger is also my personal physician and has been for about 15 years. I would also like to welcome Dr. Phil MacNeill here today from Campbell River.

Interjections.

G. Robertson: I'd ask the members, instead of talking, to join me in welcoming these gentlemen to the precincts today.

Hon. J. Pullinger: Hon. Speaker, this being the first opportunity, I rise to reserve my right to raise a matter of privilege involving the member for Parksville-Qualicum.

Oral Questions

CORPORATION CAPITAL TAX RATES

G. Campbell: Hon. Speaker, we now know that the Finance minister's recent tinkering with the corporate capital tax on financial institutions will mean that one financial institution will realize a saving of about $8 million in the coming year. Financial officials have told us that there are in fact two institutions that will be benefiting from this reduction in the corporate capital tax on financial institutions. Could the Finance minister tell us which institutions those are -- which one that other institution is -- and how much they will benefit from this tax reduction?

Hon. J. MacPhail: No, that information is confidential.

G. Campbell: Hon. Speaker, I don't know why that would be confidential.

Let me go to the Finance minister again. The Premier has said: "I can't think of a single person, not a small business person, a professional, a working person or even a lawyer . . . who would support cutting $100 million in taxes on the banks." Can the minister tell us what has changed?

Hon. J. MacPhail: Well, other than the changes in the Liberal Party, let me outline the changes that occurred in this budget. The whole 1998 budget is about a new way of doing business. In fact, we've achieved that. We've used our tax system to offer tax cuts and to cut red tape. We've also said that in the context of that, it's all about investment in British Columbia -- opening up the environment for investment -- and about creating jobs. Raising the high-rate threshold was enacted primarily -- and this is the second time our government has actually done it; we did it in 1994 as well -- to encourage locally based financial institutions to promote their operations in British Columbia.

Actually, we want to encourage further investment and job creation. At this current time, Hongkong Bank is the only bank with a head office in British Columbia. They employ 3,000 people in the province, and approximately 1,000 of those are in its head office. That's marvellous news for British Columbia. The more marvellous news we can get like that, our government will assist.

G. Campbell: Hon. Speaker, let me say that I think it is great news that the Hongkong Bank is staying in British Columbia. We would all love to have our situation in the province be a situation where not just the Hongkong Bank but other head-office enterprises were actually moving to British Columbia, as opposed to keeping them here.

The Finance minister said that this is "a very specific signal from our government to financial institutions, saying

[ Page 6675 ]

'we're open for business. Come, bring your assets here.' " Well, that's a laudable goal, hon. Speaker. But you know what? I would love to see our forest companies, our mining companies and major investors from around the world bringing their assets to British Columbia.

Can the Minister of Finance tell us: if she thinks this will encourage investment by financial institutions, why won't she cut the corporate capital tax so we can see our forest industry recovering and our mining industry recovering and private sector investment recovering?

Hon. J. MacPhail: Hon. Speaker, as the Leader of the Opposition poses questions to me about the budget, I'm actually going to try to assemble what their economic plan is. It's very difficult to do so far. Clearly the hon. member is talking about making tax cuts. That's exactly what this budget is all about.

The other thing, though, that business told us . . . . I've said this over and over again, and they said it as recently as yesterday morning: "You make your tax cuts, government, in a way that is fiscally responsible." We did that. We raised the thresholds below which corporations are exempt, so that in our three-year plan -- another requirement of business, that we have a stable three-year plan -- fully 90 percent of businesses will not be paying any corporate capital tax.

G. Farrell-Collins: To put the hypocrisy of the government in perspective . . . .

Interjections.

The Speaker: Hon members, order.

G. Farrell-Collins: To put it in perspective, this is the government that campaigned relentlessly in the last election, ran scathing personal-attack television ads that weren't true and talked about giving million-dollar tax cuts to banks. Now the NDP are doing exactly what they campaigned against in the last election. This is an $8 million cut and only a $3 million cut for 40,000 small businesses.

Can the Minister of Finance tell me why, on page 52 of her "Budget '98 Reports" -- contrary to reality -- it says that there is no revenue implication for this tax cut? Can she tell me why her document is not stating the facts?

F. Gingell: Do you think it's funny?

Hon. J. MacPhail: I don't think it's funny at all. What I do think is very unusual, actually, is that a Liberal opposition that needs every single bit of help it can get from all people is once again alienating business. I find it unbelievable. They simply have not changed at all from 1996, and therefore they'll probably have the same results in 2000 as well.

The issue of raising the high-rate threshold for financial institutions accomplishes the following. It encourages the growth of locally based financial institutions. It actually protects jobs in the province, enhances our competitiveness and supports the government strategy of developing Vancouver as a financial centre. It also complements the changes to the International Financial Business (Tax Refund) Act. So the short answer is that this is about creating jobs; this is about bringing investment to British Columbia. This is good news for taxpayers.

The Speaker: The Opposition House Leader on a supplemental.

G. Farrell-Collins: If it was such good news today, why wasn't it such good news in 1996?

I ask my question again to the Minister of Finance: why is it that her documents do not reflect the at least $8 million tax benefit that is accruing to a bank in British Columbia? Why is it that her document does not disclose that reality?

The Speaker: I think we'll move on now to Delta South.

Interjections.

The Speaker: Delta South has the floor.

REPORTING OF

BUDGETARY DEFICITS

F. Gingell: Yesterday, in response to a question from the Leader of the Opposition, the Minister of Finance, in referring to the Alberta and Saskatchewan budgets, claimed: "The same principles on which those budgets report apply to us in calculating and reporting our deficit as $95 million." That claim is untrue. The province of Saskatchewan writes off all of its capital expenditures, and the province of Alberta writes off the majority of them through program costs. You can check with their minister. I've talked this morning to the auditor general of Alberta. Will the minister today retract her misstatement of yesterday?

Hon. J. MacPhail: I am very pleased that this member has an accounting background and can talk about the entity and the full reporting. Our province fully reports on all of the financial transactions of the full entity. Our deficit, as reported, for revenue in and government expenditures out is reported in exactly the same way as in other provinces.

[2:30]

F. Gingell: Hon. Speaker, that is not true. I would suggest that until this minister understands her portfolio a little more fully, she spend the time to go and find out before she makes misstatements to this House -- similar to the whole budget report. The whole thing is a misstatement.

Once more, will the minister please retract yesterday's misstatement?

Hon. J. MacPhail: It is very convenient that on this day this Liberal opposition tries to deflect from their own misstatements in their own caucus. It is very convenient for them to do that.

Other provinces do not report any differently than we do on what our deficit is. They do not report on their deficits any differently than we do, and they report on their full

summary statements exactly the same as we do.

CEDAR STUMPAGE RATES

G. Abbott: Forest industry spokesmen have told me that effective today there will be a $6-to-$12 increase in the stumpage on cedar. During the past several months, we've seen the destructive nature of spiralling stumpage rates. The direct consequence of these rates has been thousands of lost jobs. The one bright spot has been cedar. Will the Minister of Forests confirm that stumpage rates on cedar are going up today and that this will cost more jobs in the forests of British Columbia?

[ Page 6676 ]

Hon. D. Zirnhelt: Yes, I will confirm that because the price of . . . .

Interjections.

Hon. D. Zirnhelt: Perhaps you would listen.

Yes, the price of cedar logs has gone up. The value of cedar has gone up; therefore stumpage has gone up. But no, there won't be any jobs lost. In fact, there will be jobs retained and gained because the cedar price has gone up. That's the bright spot.

The truth about stumpage is that you have to look at the average. On average on the coast it's gone down by 73 cents across the board, and in the interior, by a full $4.

The Speaker: Member for Shuswap, supplemental.

G. Abbott: The minister's words will be cold comfort for all of the laid-off forest workers in British Columbia. The price of cedar products has actually declined since January 1, and in the throne speech this government acknowledged that a reduction in stumpage is needed to protect forest jobs. Given the negative impact, can the minister tell this House whether his ministry has investigated any means of deferring this increase and saving jobs in the forests?

Hon. D. Zirnhelt: For more than a year -- and that member knows it -- we have been in detailed discussions and have had no less than eight proposals to deal with stumpage with the industry. Finally, within the last two weeks, we do have agreement from the industry on how we should proceed. We have put on the table a full $5 decrease in stumpage. We are waiting for confirmation that the consultation and notice requirements under the softwood lumber agreement passed the tests of the U.S. trade and commerce department.

Let me remind this House that Price Waterhouse has said that a billion dollars has to be taken out of the industry's costs. We have ponied up with $300 million on stumpage, and we will be announcing and have done the plans for reducing costs under the code by up to $5 a metre. We have put two-thirds of the cost saving on the table, and that will create investment and save jobs in British Columbia.

1998-99 BUDGET

AND SMALL BUSINESSES

R. Thorpe: Small businesses throughout British Columbia are saying that this NDP government is sucking the life out of them. I would like to quote Jim Moore, the owner of a bakery in Vancouver. He responded to the budget on Monday: "We are no further ahead, and this budget does nothing for us." Will the Minister of Small Business stand up and tell this House whether Jim Moore is right or wrong?

Hon. I. Waddell: I must say, I'm unused to this position. Having spent 14 years sort of throwing questions, it's kind of hard to be on the receiving end.

I haven't spoken to the gentleman in question, but I will. But I've spoken to many other small business people in the province -- all kinds.

Some Hon. Members: Name names.

Hon. I. Waddell: I'll give you an example. Yesterday we announced $2.5 million, an addition to the tourism industry, which is a huge boost for tourism in British Columbia. As a result of our meetings . . .

Interjections.

Hon. I. Waddell: Hold on, I'll tell you; just hold on.

. . . with small business people, we reduced the tax rate from 9 to 8 percent -- corporate taxes. That applies to 40,000 small businesses. They're pretty happy about that. As a result of some other meetings and some input from small business, we raised the threshold for the corporate capital tax. It affected 10,000 small businesses -- not bad. The member opposite should remember this: small businesses create the majority of jobs in British Columbia, and we're setting a climate so that they can create even more jobs.

Interjections.

The Speaker: Order, hon. members. The member for Delta South rises on what business?

F. Gingell: I rise to seek leave to table extracts from the budgets of the governments of Saskatchewan and Alberta.

Leave granted.

Orders of the Day

Hon. J. MacPhail: I call budget debate.

Budget Debate

(continued)

The Speaker: The member for Peace River South. You might wait just a moment for any movement to settle down.

J. Weisgerber: The exodus would probably crush a lesser ego, but the fact of the matter is . . . .

Before I start, I do want to acknowledge Dr. Alan Lomax also. I'm sure he'd feel crushed if he were the only physician in the room not welcomed today. He's a good doctor, a good friend and a resident of Dawson Creek.

I'd like to start this examination of the budget by quoting an old adage, and it is: "Why do something today when you can put it off until tomorrow?" As I read the budget, I got a real sense that that was the underlying message, that the government recognized there were some things they should do, some things they wanted to do and some things they weren't prepared to do today, or indeed even this year, but that next year they were in fact prepared to take some steps that were worthwhile.

I was also reminded of the famous quote from the Minister of Forests in 1996, when he said: "Don't forget, government can do anything it wants." So one assumes, then, that the government didn't want to balance the budget this year. That's unfortunate, because the Premier, back in 1989 when he was sitting on this side of the House and was Finance critic, boasted that there was "no magic to balancing the budget in British Columbia," that it was extremely easy, absolutely one of the easiest things he could imagine doing.

So as I look at this budget, it's with some sense of disappointment, because I don't think that the government has met the challenge of balancing the budget, something that was core to re-establishing confidence in the British Columbia economy.

As an independent member, I take no joy in the fact -- no pun intended -- that the budget isn't as it should be. I take no joy in the fact that the budget falls short of the expectations of many British Columbians.

[ Page 6677 ]

The fact of the matter is that the British Columbia economy is in desperate trouble. It's in desperate trouble because Asian markets have slowed down. It's in desperate trouble because in the forest industry, lumber prices and pulp prices are down. But it's very difficult to rationalize that the economies of the nine other provinces, which are also affected by a downturn in the Asian market -- perhaps not as dramatically as British Columbia . . . . Most of those provinces quite dependent on forest industry revenues appear to be in a boom situation.

So we have to ask ourselves: can we fairly lay off against the Asian economy, against the current forest industry difficulties, the situation that we find in British Columbia? I think the answer is no.

If one looks to Alberta . . . . My goodness, we've heard enough about Alberta over the last few days. In Dawson Creek we live only ten miles from Alberta. It's ten miles to the Alberta border. We're very much influenced by what goes on in that province. We're very much affected by the difference in the economies between those two provinces. Alberta is booming. And Alberta is booming at a time when oil prices are lower than they have been in recent memory. I don't remember the last time crude oil prices were $10 a barrel.

So if, in fact, the cyclical downturn in commodity markets is at fault or is at the core of the difficulties in the British Columbia economy, one has to ask oneself: why, then, not in Alberta? Lumber prices are low in Alberta. Coal prices are as tough in Alberta as they are in British Columbia.

Hon. J. MacPhail: It's called gaming revenue.

J. Weisgerber: The Minister of Finance says it's gaming revenue, so I guess we see the philosophy, and it's a troubling philosophy. To believe that the . . . . The Minister of Finance thinks the way to turn the economy of British Columbia around is to increase the amount of gaming in this province.

Hon. J. MacPhail: No, I'm saying that's what Alberta does. You didn't get it.

The Speaker: Hon. members, members speak from their seats only.

Hon. J. MacPhail: Sorry.

J. Weisgerber: In any event, Madam Speaker, I think it's evident that the issue with respect to the Alberta economy and the British Columbia economy is one of confidence. The investment community in British Columbia simply doesn't have confidence in the government of British Columbia. In Alberta they understand that lumber prices will go back up, and they understand that oil prices will go back up, and they are confident enough in the administration of that province to continue making investments during the downturn in commodity prices.

So let's put some reality into this debate about where the bogeyman is, about who's to blame for the downturn in the economy. It is primarily an issue of crisis in confidence in government. I think that if there's a role for government in our economies, it's that ability to instil confidence in the economy. I'm not here to trash the government, and I'm not here to trash the budget, but I think it's important for us to look at this budget in the context of at least the western Canadian economy.

[2:45]

I want to start, in my analysis of the specifics of the budget, by acknowledging that both the budget and the throne speech went a long way toward recognizing issues that are important to my constituents in northeastern British Columbia. I said after the throne speech, and I say again after the budget, that I don't recall documents tabled in this House that had any greater focus on issues in the Peace River region than the current budget and throne speech. I commend the government for paying attention to those concerns. While the throne speech didn't mention Fair Share, the budget appeared to contain a fairly solid commitment, out of oil and gas revenues, to fully funding Fair Share.

Fair Share is important to municipalities and more important to residential and commercial taxpayers in municipalities. It attempts to find tax fairness for those communities that service the gas and oil industry. Communities that service the forest industry normally have a pulp mill, a sawmill -- or two or three sawmills and a pulp mill -- or, in the case of the community of Mackenzie, which I represent, five sawmills, two pulp mills and a paper mill all within the municipal boundaries. That substantially reduces the tax burden on commercial and residential property owners.

When a community supports a gas and oil industry, which is literally hundreds of square miles, there is no way for those services to tax the main industrial base. The basis of Fair Share is to provide a mechanism for governments, the regional district and the municipalities to get some fair share of taxation out of the gas and oil industry. I believe, as a result of the commitments in the throne speech and the budget, that we are making some important steps in that direction.

The throne speech recognized the importance of the northern road system. I questioned the Minister of Highways yesterday about paving roads to prosperity rather than roads to ruin. It's important to understand that investments in northern roads are investments in the resources and in the ability of the province to benefit from those resources. Again, the throne speech appears to recognize that. The Minister of Highways was a little shaky on the details, when I asked him about the budget yesterday. I hope and trust that he's going to be able to find some way to put into place the commitment and the promise contained in the throne speech.

A third item in the budget -- which was, again, a positive thing from the perspective of the Peace River country -- was changes to the marked-fuel tax, to the Gasoline (Coloured) Tax Act. This will allow farmers to haul grain and other commodities into town with trucks carrying unmarked fuel, which will, as I understand from the budget, pump some $3 million back into the provincial economy. It's fair to say that probably a million of that will come back into the Peace River country.

Finally, the throne speech and the budget both pay attention to the gas and oil industry. On the news at 2 o'clock today, I heard the Premier announce that they would be reducing royalties in order to maintain a vibrant gas and oil industry in British Columbia, which translates into "in the Peace River region." That's important to my constituents, and I appreciate the fact that the government is making an attempt to stabilize that industry and to increase investment in gas and oil. The proposed memorandum with Treaty 8 over consultation processes associated with the gas and oil industry, again, is good news.

[ Page 6678 ]

As I look at the throne speech and budget, there is no question that there are a number of areas where the government has recognized issues that are important to the Peace country. As a resident of that area and as the representative for the South Peace, I appreciate that.

On the provincial scene, the reductions in taxes -- in personal income tax, the surtax, the small business income tax and increases in the threshold for corporate and capital tax -- is good news. It's tragic that it isn't going to be implemented this calendar year; nevertheless, it's something that I think we should try and think about in a positive way. Unfortunately, tragically, that modest step is not going to restore our credit rating. The continued deficit budgeting is not going to restore the credit rating. That's going to take a much bolder step than we've seen in this budget. The modest tax reductions simply aren't going to do the job.

I think what we have to do in British Columbia, first of all, is start to think about reducing disincentives to business. We've got to stop the hemorrhaging of investment and entrepreneurship out of this province before we talk seriously about attracting new business into British Columbia. British Columbia, and particularly northeast British Columbia, is suffering seriously from an outflow of capital, from an outflow of entrepreneurship. We have to turn that around.

The provincial budget and the provincial debt represent an enormous disincentive to investment. They are indeed persuading British Columbians in my part of the province that they're better off somewhere else. So that's the first thing we've got to turn around.

We have a $31 billion debt -- a debt that's up 55 percent since 1992. When this government took office, the combined debt was just around $20 billion; today it's $32 billion. Business people understand that at the end of the day, they are going to be called on to service that debt and, ultimately, to retire that debt. We simply can't turn a blind eye.

When this government was elected in 1991, the cost of debt servicing was about 4 cents on every tax dollar. Today it's 8 cents on the tax dollar, and interest rates are at an all-time low. I shudder to think of what the cost of debt servicing in this province would be if we went back to the interest rates of the late 1970s and early 1980s. Can you imagine the crisis there would be in this province if we were to go back to those bad old days of high rates? And I'll tell you, many, many people remember those days and remember them painfully.

I think the fact that we have the seventh consecutive deficit again scares the daylights out of people thinking about investing in this province. I want people to invest in this province. I want people to have confidence in our economy, confidence in our government, confidence in the value of doing business in this province. But we need to take much bolder steps than we have. We need to get away from a mentality that has to have the highest minimum wage in the country. We need to get away from a mentality that says that we've got to have the highest stumpage rates in the country.

You know, Madam Speaker, there's a new parlour and business-circle game that has developed in the Peace and probably in much of British Columbia. The introduction of computer programs that allow tax preparers, accountants and people who do their taxes at home to simply plug in all of the relevant information and have their taxes calculated has created the situation where, with the push of one button on the computer, you can calculate your taxes for British Columbia. Within a split second the computer will also calculate your taxes if you were an Alberta resident. Believe me, it goes on hundreds of times a day in the Peace country. It is the topic around the coffee shops.

I calculated my taxes last night. I owe X number of dollars, and do you know that if I lived in Alberta, I'd be getting a rebate. This is not fiction; this is fact. People have the capacity, in their own homes . . . . And certainly if they don't, their accountant is more than happy to tell them what the effect would be if they were living ten miles to the east of Dawson Creek. That's all it is -- a nice, straight, well-paved road, ten miles down the way. There's a little community called Bay Tree. It's a grocery store, a service station. I think the post office is in the grocery store.

It has become the location of choice for people with investment in the Peace who are mobile. If you service the gas and oil industry, it doesn't matter whether you live -- Dawson Creek or Fort St. John or Bay Tree or Hythe or Beaverlodge or Grande Prairie. The work is in an enormous geographic area. People are mobile, and they are making decisions -- based on taxation primarily -- on where they want to set up headquarters, where they want to set up and live. I could name people. I don't think it would do them any good. I don't think it would do British Columbia any good.

But it anybody doubts the fact, I would be more than happy to provide a substantial list of names of people who have already made that decision and another equally substantial list of people who are considering it.

The other day I went to the oilmen's dinner. I know the Minister of Energy and Mines, who is responsible for northern development, had the pleasure of addressing that same group up in Fort St. John -- that august group. I met a fellow there, a small, very successful oilfield contractor. He works out of his farmyard, has a farm and some equipment. As a result of a fairly vibrant couple of years, he was able to buy a new motor home. I think it cost him about $150,000.

I suppose one should say: "Well, gee, if he can buy a $150,000 motor home, what's he crying about?" He also was able to buy a new Explorer or Suburban or something like that. He calculated just the provincial sales tax on those two items, on $200,000 worth of equipment, or recreational vehicles -- call them what you will. Had he lived ten miles further east, he would have saved the provincial sales tax -- some $20,000 on those two purchases alone. Believe me . . . . He told me, and I have no reason to doubt him, that he called a realtor and has put his farm on the market.

If he's successful in selling his farm, he's going to move and re-establish in Alberta. It's no idle threat; it's the reality of at least the economy in the Peace country.

I started off by saying that I applaud the government for recognizing that these are issues. I genuinely do that. But I say also that in many cases we don't have a decade to turn these issues around. The capital -- particularly capital in the gas and oil industry -- is incredibly mobile. There are very few shops or fixed assets. Almost everything that's used in the gas and oil industry is on wheels. Almost everything, whether it's service equipment, construction equipment, whatever . . . . There is no big repair or service industry; it's a big, mobile industry. If we want to be competitive in that gas and oil industry, we've got to move much more quickly than this budget is doing today.

[3:00]

I think the government needs to get serious, and it needs to get serious quickly. I'm hoping that we're going to hear some plans in that direction from the Minister of Energy. I genuinely believe that he, like the Minister of Highways, is sincere about dealing with these issues. But I'll tell you, the tax cuts have got to be deeper. They've got to come more quickly.

[ Page 6679 ]

We've got to recognize that in communities -- particularly with the gas and oil industry -- competition with Alberta is a very real factor and simply can't be ignored or denied.

And recognize -- and I genuinely try to recognize -- the fiscal realities. Governments have problems. It's not only the New Democrats; anybody who is going to take power and take office in this province is going to be faced with hard fiscal realities. It's very easy for us over here to stand and say, "Cut taxes and increase services," and do all of the things that cause one to do enormous amounts of mathematical gymnastics in order to try and achieve it.

One area alone where we could do a lot more and move a lot more quickly is in the area of regulatory burdens. The amount of -- "red tape" is more than tired -- regulatory and reporting activities that the average small business is involved in is excessive. Our approval processes, whether it be for cutting permits or to build a road or to get seismic permits, have increased dramatically. It used to be that you could do a walk-around in a day. You could get approvals in a day to move forward in the gas and oil industry. Then it moved to a week. Now we're told that it can be months.

And that entirely ignores the whole issue of consultation with first nations. Again, I want to say that I think the government has not only made a genuine attempt; it appears to have achieved some success, perhaps some considerable success, with Treaty 8 in expediting the referring and approval processes.

Those are the hard realities of the economy, particularly in Peace River and particularly in Peace River South. Those are the issues that I, as an independent member, am interested in -- not in scoring political points against one side or the other but in genuinely trying to draw them to the attention of government, genuinely trying to find some resolution. There is a hemorrhage of investment and entrepreneurship. It's not only in Peace River South, but I'll tell you that it is of great concern to me in Peace River South.

Just last week another business acquaintance of mine bought a second business. It's a large business -- again, I don't particularly want to name it -- in Grande Prairie. It's very complementary to his large, successful operation in Dawson Creek.

The question at the table we were sitting at was: "I assume you will have your head office established in Dawson Creek." The owner, who lives just a mile from Dawson Creek, genuinely sadly shook his head and said: "Given the tax realities of the two jurisdictions, the head office will be Grande Prairie." The accounting, purchasing, all of that part of the business will occur, unfortunately, in Grande Prairie, with the Alberta benefits, as opposed to Dawson Creek.

These are very genuine concerns. I raise them on behalf of my constituents. I urge the government to look at them, to consider them as genuine issues to be dealt with. I particularly urge the new Minister Responsible for Northern Development to consider these issues in the considerable challenges that he and his government face.

G. Bowbrick: I'd like to begin by saying that I certainly listened attentively to what the member for Peace River South had to say. I think his speech underlined why he has a reputation in this House for being a reasonable and fair-minded member. All too often these debates descend into black and white, good and bad, and I thank the member for offering some credit where credit is due. At the same time, I understand that we have differences of opinion and are not always going to agree. The member raises the concerns of his constituents in the north, and I want to say, as an urban member . . . .

For example, on traffic issues, while we're dealing with roads and congestion -- these are the main concerns to my constituents -- I hear what the member is saying about the north and the need for roads in the north. I think this government is . . . . Certainly I am involved in some decision-making capacity in this caucus around those issues, and I'd be more than happy to pursue those issues on behalf of northerners.

What I want to focus on today is not so much a rehash of the specifics of this budget -- I'll touch upon some of them -- but rather looking a little bit at process and what goes into making a budget and, more generally, what it is to be in government and to have to make these decisions and table a document like a budget.

In the last several months, a great deal of listening and consulting has gone on. I think the Premier has certainly received . . . . I know the constituents I've spoken with, whether they're supporters of the government or not, appreciated the fact that the Premier went out and consulted with the business community. I heard that every single week on the doorsteps, again and again, in my constituency. People had a great deal of respect for that.

Now, that's not to say that everyone who had something to say is seeing exactly what they want in this budget, and I guess that's the fundamental point I want to make here: in a budget, a government can't do all things for all people; it can't completely satisfy every interest out there. Governments have an obligation to at least try to address those interests, with a view to brokering some kind of a compromise. That's very much what a budget is about.

It's rare that any single interest group is going to say: "We got everything we wanted in this budget." Certainly, in the reactions to this budget, that's the case. But what this budget does do is attempt to arrive at that kind of compromise.

One of the things that was said very clearly was: "Have some kind of a plan." What's presented in the budget is a three-year plan, and it is focused on tax cuts and trying to stimulate the economy. As I'm sure members opposite would agree, there's only so much governments can do to stimulate an economy, and tax cuts have something to do with it. Some may say: "Isn't this odd, coming from the left?" But it isn't, especially tax cuts that are going to put some money in people's pockets. I guess it's a strange form, perhaps, of Keynesian economics.

It says that if you put more money out there and it's spent, it will stimulate the economy. So we're taking some steps in that direction in this budget, with a cut in the top marginal tax rate in the country, as it's referred to; a cut in personal income taxes; a cut in taxes for small business on the income tax side; a cut in the corporate capital tax -- or at least raising the threshold at which businesses will have to pay that tax. Granted, it does take place over several years, but that is, in my view, the prudent thing to do in these circumstances.

Beyond that, we didn't just hear people say, "Cut taxes," and we didn't just hear them say: "Balance the budget." Clearly there were people who said those things. The people I talked to also said: "But don't cut health care, don't cut education, don't cut services to children." So we've responded on that front as well. We've increased the Health budget by $228 million -- the seventh consecutive increase in British Columbia. We're the only province to have done that. The same in the education system -- $105 million more this year. Of course there are people who say that's not enough. Others . . . .

They don't say it too publicly, but some might say that we should actually be cutting those things. I fundamentally disagree with that.

Post-secondary education funding. For the third year in a row we have a tuition fee freeze, and we're offering funding to

[ Page 6680 ]

post-secondary institutions to compensate for the difficulty that that could have them face in terms of having to find room for increased costs elsewhere.

There are certainly critics of this budget -- we've heard from them in the last few days -- who say we didn't go far enough. But one of the things I note is that they don't speak with one voice. There are some who say we're not spending enough, that we should spend more on education; we should spend more on health care; we should spend more on roads; we should spend more on building new schools. There are some who say we're spending too much -- that we should make cuts, even in those areas, and we should balance the budget immediately.

There are some who say we should have cut taxes more, and there are some who say that maybe tax cuts could have waited until the budget was balanced. Some say there's too much debt. Some other people say we should be spending more on roads and schools and hospitals. These are all individual views; they don't all fit together. It illustrates my point that the budget-making exercise is an exercise in compromise; it's an exercise in trying to broker those interests.

It's a tough thing to say to people on an individual basis -- whether it's to them as individuals or to the groups they represent: "I'm sorry, but I have to disagree with you." That's a very tough thing in politics. Quite frankly, politicians don't like having to do it, because it means that people might not like you. But you can say, "I agree with you to a point," and that's what we said in this budget. We agree that there should be some tax cuts to stimulate the economy, but I have to say to some people: "I'm sorry, I disagree with you.

The cuts shouldn't go as far as you say." There are other people who say: "I want three new schools in my riding; I want three new schools in my school district." I would have to say, as a politician: "I'm sorry, we just can't do that. I do believe we can afford a certain level of debt, but not that much. It's not sustainable."

I'm convinced that we're doing the right thing in this budget. Maybe not every detail is right -- maybe not. We'll see in the next year as this budget plays out. We can't know yet. For those who say this budget is a failure, how can you say that on the first day of the fiscal year, when we're just implementing the budget now? Give it a chance. I say that while every detail may not prove to be right, the general direction is right.

I say this because I'm convinced that most people -- including, of course, the people I represent -- given the chance and put into a decision-making capacity, would arrive at roughly similar conclusions. We can't have everything; they know that. I have a lot of faith in the people I represent; I have a lot of faith in British Columbians. People are fair-minded and reasonable; the vast majority of people are fair-minded and reasonable on these issues.

I know what I'm talking about when it comes to speaking with my constituents. Every week I take three hours and I go out, and all I do is knock on doors in my constituency and hear what the average person in my constituency has to say. I have talked to them for at least six weeks now about the issues leading up to this budget. I have also, since the last session of the Legislature, met with . . . . I have nine different residents associations in my constituency; I have met with all of them. I have gone to seniors' teas in seniors buildings in my constituency. I have met with parent advisory committees at several of the schools in my riding.

We talk about the alternatives on all kinds of issues. It never ceases to amaze me, especially when you meet with people in a group . . . . We discuss everything. We discuss health care funding; we discuss education funding; we discuss new roads. That's a big issue in New Westminster. You know, in New Westminster we have 50,000 residents, and 350,000 vehicles a day drive through our community. So it's a big issue in my community. People say: "We want more roads. We want a new crossing over the Fraser River."

It's understandable why people would ask for things in isolation like that. We talk about all of those things. We talk about gaming. This isn't a managed thing. I just stand up and we talk. Sometimes it starts at seven and ends at 10:30 at night, and it's a great discussion. What happens is that while people may have individual opinions or individual things that they want, when you start speaking as a group, you see what happens. People see that choices have to be made.

And people say: "Well, yeah, I want a new school in New Westminster and I want the traffic situation addressed." That means that while we might be able to do something on roads in New Westminster, the chances for getting a new crossover on the Fraser River in the next few years aren't very high -- and maybe it's not a reasonable expectation.

There's only, hon. Speaker, a tiny minority . . . . There are always some people who will stick to their guns and say: "I want that bridge" or "I want this" or "I want that." There are always some people like that, but it never ceases to amaze me how the vast majority of people are fair-minded and reasonable, and when we sit down and have a reasonable discussion, we reach these conclusions and we reach these compromises.

[3:15]

In the lead-up to this budget, as I referenced earlier, the Premier held consultations with the business community. The Minister of Finance did that; the Minister of Small Business did that. We certainly . . . . I think most fair-minded people are willing to say we tried. We did try, and we did hear what people had to say. We didn't deliver everything that everyone wanted.

But people were saying: "We want individual tax cuts; we want tax cuts for business." As I said earlier, some people said: "No tax cuts; balance the budget first." They were unanimous in saying, "You've got to do something to address the economy," and there's no question we had to do that. Some people said, "Balance the budget now," and some people said: "Take your time. You're close; you're very close.

We can wait another year or two." More generally, people that I spoke with in my constituency continued to have a wish list: they want a new school; they want better transit; they want better roads; they want congestion relief in our community when it comes to traffic. And nobody -- and I want to emphasize "nobody" -- not one person I spoke to said: "Cut health care and cut education." Nobody said either/or. And that's reflected in this budget.

I have to say, hon. Speaker, that in my experience, no one person or group that I've ever met or heard from has said that we can and should do everything -- that we should cut taxes, that we should increase spending, that we should pay down the debt and that we should balance the budget, all at the same time. Those are individual things that we hear from individual groups with different priorities, but I have yet to hear one person say that we should do all of those things.

And the reason is because it's not possible, because it's contradictory and because most people, as I said before, are fair-minded and reasonable. And they know that. They're thinking people. They know that it's not possible to do everything.

Now, I have to say, to my disappointment, that it's only the Liberal opposition that demands this. They don't say it all

[ Page 6681 ]

at once. They don't present us with a visionary document, an alternative budget, and say: "Do this, this and this." But when it comes to question period, when it comes to estimates, it comes out in dribs and drabs: "Balance the budget. Pay down the debt. Increase spending. Build that hospital in my riding. Build that school in my riding."

It never ceases to amaze me that when I go out -- you know, I've been Parliamentary Secretary to the Minister of Education and did some announcements on his behalf -- opposition members are right there when it's time to announce a school. And I just don't understand that, when they're saying "Cut the debt" at the same time. I don't see that it's possible.

If we were to reduce the debt, that would automatically mean we'd cut $1.25 billion this year -- or at least that spending wouldn't happen. This year we're going to spend $339 million on new schools. If we do what those who say "Pay down the debt" do, then $339 million in schools is out the window. No northern roads, no congestion relief in the lower mainland, no new schools, no new health care facilities . . . . These are the choices we're confronted with in government. It's as simple as that.

If you want to pay down the debt, even by a small amount like $100 million, you have to find that out of the operating budget. So that means you have to find $100 million out of program spending. When we're spending almost 80 percent on health care, education and social services, and if we all agree that health care and education, in particular, are priority areas, it doesn't leave a lot of room to make those kinds of cuts.

We hear the opposition make calls for greater cuts in taxes. It's fine for them to make that call. But lay it out; let's have consistency to this. I don't know what the opposition position is, but I read that the opposition leader said that we should have a 10 percent cut in taxes across the board. This was in the Times Colonist yesterday. I don't know how this fits. We're going to reduce the debt, and we're going to cut the taxes. By the way, they also call for increased spending.

They are the first to get up and say: "You're not spending enough on schools; you're not spending enough on the health care system." They're the first to do that. "By the way, we're not going to build any new schools this year." This is the logical result of their position: no new schools, no new roads, no new health care facilities. "We're going to have to cut the operating budget if we're going to pay down the debt a bit. But by the way, we're going to increase the money for health care and education, and for services to children. We're going to do all of these things.

As well, by the way, the budget will be balanced."

There's a reason that the opposition doesn't put forward a comprehensive plan, and that's because they don't have a comprehensive plan. That's because there can't be one. You can't do all of these things; you can't do them all. As I said at the outset, people are reasonable and fair-minded. The vast majority of people are like that, and they know you can't do those things. Ultimately, they'll understand that when a government puts together a budget, it has to compromise. They have to broker those different interests, and they can't do everything for everyone.

I don't know why the Liberal opposition comes up with this kind of position. I don't know what the thought process is behind it. Is it: "I heard that someone wanted X. They might vote for me. Therefore I should be in favour of that thing"? Is that the thought process? Is their position a conglomeration of individual views? I want tax cuts; I want more spending; I want the debt paid down; I want a new school; I want a new road; I want a new health care facility. Is it a conglomeration of all those things? You just put them all together, and that's your position. Is that a reasonable position? You know what? The people I talk to say: "That's not reasonable; that's not realistic."

I'll offer some gratuitous and unsolicited advice, for what it's worth. You don't have to promise the people everything in politics. You don't have to do that. People are smarter than that; they know better than that. They don't expect you to do everything, and you insult them if you say you can do everything. That's just a bit of gratuitous and unsolicited advice, for what it's worth. We'll see, in the remainder of this budget debate, if it's heeded in any way, shape or form.

I think that what people want to see is a government that sincerely tries to address the difficulties we face, listens to people and then makes decisions, knowing that those decisions will not necessarily satisfy every individual demand and that not everyone will agree. That's what this budget does: it reflects, in my view, a general consensus to address the economic situation in British Columbia.

There is a downturn in British Columbia, and we as government have an obligation to try to address that. There are a number of factors; the Asian economic situation is part of it. But there's no question that other provinces have made moves when it comes to tax policy, for example. That means that we in British Columbia have to respond to that. People understand that. So our budget reflects a general consensus to address the economic situation. That's clearly out there; 100 percent of British Columbians probably agree with that proposition. We have a three-year plan.

We will reduce taxes by $415 million over three years -- not all at once. We can't afford to do it all at once. People understand that, I believe.

We have to attract investment, and that's part of what the tax cuts are about -- attracting some investment in addition to stimulating the economy and putting a few more dollars in people's pockets. Is it as much as people would like? Is it as much as I would like? As an individual taxpayer, would I like to have more money in my pocket at the end of the day? Yeah, but I know that it's not realistic to expect more at this time.

As well, people want us to address the bottom line. "What about the deficit?" they say, so we bring it closer to balance. It's not right there, but it's closer. And, very importantly in my view, we have the right spending priorities. Education funding is up by $105 million. Health spending is up by $228 million. The Ministry for Children and Families will get more this year. Students at universities will continue to have a tuition fee freeze. And when it comes to capital -- when it comes to those new schools that people want -- we're delivering. There will be more new schools built this year.

There will be more roads built this year. There will be more health care facilities this year -- $1.25 billion -- and that's a lot of money.

What I say is that if the opposition wants the debt to go down -- if they don't want it to go up -- stand up in this House and say you don't want it to happen. Tell me and tell this government that you don't want the school, you don't want the road and you don't want the hospital. It's the honest thing to do. People will respect you for it. People will respect you for making hard decisions and being straightforward.

Hon. Speaker, with those comments, I conclude. It has been a pleasure to speak today on this budget, and of course I'll wholeheartedly support it.

Hon. D. Miller: I want to briefly touch on some of the budgetary issues and then turn to both energy and mines --

[ Page 6682 ]

oil and gas and mining -- and some of the northern issues. Taking my cue from the member for Peace River South, there are some serious issues. He's identified some of them. I just want to speak very briefly about some of our plans for the coming year and beyond, and hopefully we can start to deal with some of those issues.

Before I do that, I'm very pleased to say that a short while ago I put out a news release which reports that B.C. Rail has successfully concluded a rail freight agreement with Quintette Coal. For those members who are not too familiar with that situation -- the northeast coal projects at Tumbler Ridge -- this was a very important issue. As a result of negotiations with the Japanese, the mines had to take a reduced tonnage. Clearly they've had to move to world price over the preferential price that they had. That has resulted in about 276 people getting layoff notices in Tumbler Ridge.

It's been a very traumatic experience, and people have been waiting to be advised that this agreement has been concluded. I'm very pleased that we've managed to put that news out today. That's good news for northern B.C.

Now, Madam Speaker, my colleague from New Westminster very ably talked about what the issue really is, which is balance. In other words, it's fine to have a shopping list, but anybody who goes grocery shopping . . . . I guess you can make a wish list, but at the end of the day you go and you buy what you can afford to buy, which means you leave some items on the shelf.

You may say: "Well, I'll save now, and I might pick those up at a later date." In other words, you try to juggle the issues of the demands of the economy, the demands that the public makes with respect to services, the demands that clearly have been enunciated by the business sector with respect to taxation, and those kinds of questions. You try to develop what hopefully is a balance.

Certainly the government of British Columbia sent a very strong signal that our priority was to maintain and increase funding for what we -- and I think all British Columbians -- believe are very critical areas of our economy, and that is health care, education and children and families. Everyone would agree that with the dynamic change that's taking place in world economies, one of the best investments you can make for the future is investment in education. All you have to do is look at the charts, look at the statistics, look at the employment levels vis-�-vis their education levels.

All of the statistics tell you, all of the economists tell you, all the educators tell you that over the long haul that is really a key to success.

This government, I believe, has put education as a top priority. I know that as the former Minister of Advanced Education. We expanded spaces on the post-secondary side on a massive scale. We brought in new programs. We've got our institutions now focused on the technical side. We see that despite the gloomy forecast in some of the resource sectors, according to a report in even today's press, our high-tech sector, particularly our biotechnology sector, is growing at rates of 20 to 30 percent. The biggest problem they have is a lack of skilled people. So we put the kinds of resources in place that we think make sense in terms of the changes that are taking place in our economy.

[3:30]

When you talk about that shopping list, again it's easy to cherry-pick; it's easy to say to all that we shouldn't have a debt. It's also easy to say: "I'd like some funding for my school, and I'd like some funding for my road." But surely members appreciate that those are issues that one must balance.

[W. Hartley in the chair.]

I was in Alberta recently. I want to speak to the issue of northeastern British Columbia separately from some general comments with respect to the differences between B.C. and Alberta. Clearly there are substantive differences. There are, and in fact have always been, substantive differences between Alberta and British Columbia -- even our political history, as I recall some of the efforts to move the Social Credit from Alberta to B.C. and the conflicts that developed within the province and the rise and emergence of W.A.C. Bennett. It's a fascinating history, actually.

I also recall that the father of Social Credit in Alberta was the only Premier, up until this government, that brought in recall legislation. After the first time somebody tried to use it against him, he eliminated the legislation. There's lots of tradition in Alberta that I'm sure the members wouldn't espouse that we copy -- or maybe they would; I don't know.

I know that while on the revenue side Alberta has been doing very, very well, I also know that they have been doing well for two principal reasons. One is gambling on VLTs -- which we won't allow here in B.C., by the way. We don't allow VLTs. What did they raise? Some $600 million, $900 million from VLTs in Alberta? We won't allow that here in B.C. I guess that's one of the reasons there's a difference. Secondly, there's an interesting parallel between B.C. and Alberta with respect to what fuels their economy. Oil and gas have been very, very hot. I'll speak to that in the B.C. context in a moment as well.

They've been very, very hot, and Alberta's revenue has increased dramatically as a result of the activity in oil and gas.

It's also interesting to note that that's a different commodity, and the producers have different ways of responding to what happens internationally. We're faced with a slump in commodity prices in some of the primary products that we produce in British Columbia. Pulp is down in the low $500 range. Historically, it has been in the trough for a long time. It's had peaks as high as $1,000. I recall in the '87-88 period -- '89, somewhere in there -- when pulp was up in the $800-$900 range, and that allowed the government at that time to do very well on the budgetary side. Pulp is down. Copper is down.

I believe today it was down around 79 cents. It's been bouncing around. Occasionally it gets up as high as 83 or 84 cents. But we have copper mines here that will struggle with copper below a certain price. The facts are, as Ros Kunin said on the radio this morning, that some of those facts are beyond our ability to influence. We can't influence, if you like, the international price of copper or the international price of pulp. I only cite this not to complain but to illustrate the peculiar problem that British Columbia has.

Interjection.

Hon. D. Miller: The price of oil. I was getting to the price of oil. For every $1 decrease in the price of oil per barrel, the Alberta treasury loses $150 million. If I'm not mistaken, they recently revised their budgetary forecasts downward by about $1 billion to reflect the dramatic drop in the price of oil.

Unlike with copper, pulp and all the rest, they are fortunate, because the OPEC countries, the oil-producing countries, have recently got together in their own self-interest and said: "We're going to cut back in production." Now, we don't have that in copper. We don't have that in any other commodity, really. So perhaps Alberta might be sheltered somewhat, but I suspect you're going to see, by the time they report out next year, that their budget will have been influenced significantly by an issue that is generally beyond their control, and that is the commodity price of oil.

[ Page 6683 ]

It's also interesting . . . . I don't want to really dwell on this, but in terms of cherry-picking, I was in Calgary and Edmonton a week or so ago. I happened to pick up a Calgary paper. I always try to pick up a paper in whichever community I'm in, just to get the flavour of what's happening. There were pictures of people lined up in hospital corridors and angry denunciations from the public and everybody about the cuts to health care in Alberta.

I think that in some of the points people were pointing to British Columbia as a place that maybe the Alberta government should look at with respect to a commitment to health care. It's interesting when you go to Alberta, and I guess maybe the message is . . . .

Oh, the other thing is . . . . I just happen to have a clipping here from an Alberta paper -- Calgary or Edmonton. Over the last six months, the Alberta government has written off $2.5 billion of the taxpayers' money in money that they gave to companies. I'm hoping that there will be an opportunity during this session . . . . I'm somewhat surprised that no one has raised the issue in question period yet, but I am looking forward to it. I know there will be an opportunity to discuss the major initiative in northwestern British Columbia that the government of British Columbia participated in, and why.

I'm hoping to get a thorough debate on that question -- I know that my friends opposite won't disappoint me -- and that will be lively, I hope, and informative and entertaining. But as much as I've heard the opposition go on and tear their hair out and occasionally light their hair on fire about the government here in British Columbia intervening to support working people and communities in northern B.C., and as much as I've heard the opposition moaning -- in fact, their Finance critic almost wishing he was in Alberta . . . .

Really, I don't think there's any reason why he should stay here; if he really wants to go to Alberta, he should go.

Alberta has recently written off $2.5 billion. It's interesting, when you see that that province might write off $130 million for a pulp mill and another $160 million for another pulp mill. This is the free enterprise government of Alberta, which has used the taxpayers' money, has given it to major pulp companies and has then written it off. They probably had their reasons. Who am I to question what they did? But I do find the juxtaposition of the opposition's argument somewhat curious. Perhaps we'll have an opportunity to engage in that debate at some . . . .

It will be interesting to see what the latest position of my friends opposite will be with respect to that issue. They have taken a number of positions; they are well documented. I hope to talk about that again -- not that consistency ever bothered them.

I really want to move into two primary elements. One is that I am very pleased that the government has once again moved the Energy and Mines ministry back to being a stand-alone ministry. I'm very pleased -- on a personal note, if I could say that -- to have that ministry, because I really like the resource sector. I enjoyed my time as Minister of Forests, and I like the mining sector. It's a good sector for British Columbia. It produces significant benefits for our province with respect to the export of the commodities that they produce.

It provides outstanding jobs for the individuals who are employed by the mining sector. They average about $70,000 a year. It's a good industry, and it's one that I hope we can work with. We are engaged with the mining sector in discussions that I think have the potential to lead to more activity in British Columbia.

The member for Peace River South is right, really, in a lot of the remarks he makes. We have to be constantly aware of our competitive position. The industrialized world competes for capital and competes for investment, and we have to work very hard at ensuring that British Columbia is seen as a place where you can invest. You can put money into British Columbia and make a reasonable return. We need to make some changes, and I think the budget that we've delivered has sent a very, very strong signal to the investment community that we are taking the kinds of necessary steps to try to create the climate that we think is important for the long-term prosperity of this province.

Mining. As the minister responsible, I was very pleased recently to participate in the announcement that two new projects have been approved for development in northern B.C. The Willow Creek coalmine project near Chetwynd . . . . B.C. Rail, by the way, is a partner in that project. They are busy now trying to get the market side wrapped up, and I would hope that fairly soon we will be able to announce that the project will proceed. At the end of the day, I believe that's about 70 more permanent jobs, presumably for the Tumbler Ridge community. I'm delighted that the project may go ahead.

It has additional benefits, obviously, for both rail and the port of Prince Rupert. There are some other initiatives we're working on there as well.

The oil and gas sector. I've had the opportunity now to visit Fort St. John twice in the last month. I had a very entertaining evening there with the Fort St. John Petroleum Association. My colleague from Peace River North joined the crowd -- or should I say joined the chorus. I understand he hadn't been there for a while, but it was nice to see him at that dinner. A fairly rambunctious crowd, but I kind of like that. I like things when they're lively.

I think they made the point -- fairly ineloquently, I should say, but they made their point, as they did in the meetings I held with elected officials and municipal leaders; we had a reception for business and community people to come to -- that attention had to be paid to some issues in northeastern British Columbia.

If I could put those in a general context, first of all dealing with the oil and gas industry, we have had phenomenal growth in that sector. The investment in northeastern British Columbia was about $1.7 billion. That's a significant increase from the previous year. We are engaged with that sector in, hopefully, entering into a memorandum of understanding with CAPP, the Canadian Association of Petroleum Producers, which will see even more investment into northeastern British Columbia.

There are many reasons for that. If you look at the long-term forecast for gas, it's good, both on the domestic, or residential side . . . . Quite frankly, with issues about greenhouse gases and global warming, the conversion to and the use of natural gas for energy development has significant potential. We've got two major projects here on Vancouver Island, in Alberni and Elk Falls. I think we'll see even more of those conversions to natural gas.

Certainly the Alliance Pipeline project, which I hope gets approved . . . . It's been delayed somewhat by the National Energy Board, but I hope it does get approved. It's a pipeline from northeastern British Columbia into the U.S.'s Chicago-Midwest market. All of the producers and gas people tell me that the netbacks to producers will increase. Quite frankly, one producer I talked to recently said that they thought the delay wasn't bad, because it would give British Columbia the opportunity to accelerate exploration and development and bring new supply on. When that pipeline is ready, it's got to be filled, and right now there's not enough gas to fill it.

So the potential exists to significantly increase the level of exploration and development in the oil and gas sector. We're working with that industry. I'm confident that we will come

[ Page 6684 ]

out with a package that will be a little bit breathtaking with respect to our approach on the tax side and on the regulatory side.

At the same time, it's important that we deal with the other issues that exist in the northeast. I was delighted to again go to Fort St. John and participate in signing, with the tribal association, the five members of the Treaty 8 bands . . . . This agreement extends to all of the eight bands. I was honoured. I really believe that we have to approach these issues with a feeling of mutual respect. I do, and I was honoured to talk to some of the elders and some of the leaders at the little ceremony we had. I think it's a struggle for them, quite frankly.

They have their problems, their issues, and we should understand that. There's a willingness on their part, with the MOU that we've entered into, to develop long-term memorandums of understanding -- hopefully over a five-year period -- that will see the whole process of applications, all of that, dealt with in a much more businesslike way. That's a challenge, but it's one that we've entered into, as I say, in the spirit of mutual respect. I'm absolutely confident and delighted that we're moving forward on that question.

[3:45]

I've also said to the municipal and regional leaders in the region -- I've met them down here; I've met them up in the Peace -- that we will deal with the issues identified by the Fair Share people. We fundamentally agree that the people in the Peace River, while there has been this significant level of investment . . . . It's not well known, but the unemployment rate in that region is 3.3 percent. It's extremely low. I like to encourage young people, if they're looking for work and really not afraid to get dirty, to get out there and get into it, to go up there.

As a young person I went north and started working in pulp mills, and I worked in logging camps. There's nothing wrong with that. They're good-paying jobs, and it's a good experience as well.

While many regions of British Columbia could look at those statistics in northeastern B.C. with some envy, they have problems. Their infrastructure has deteriorated dramatically. The municipal and regional governments are unable to collect taxes based on that industrial activity. So we've made a commitment -- my colleague the Minister of Municipal Affairs was also up there -- to deal with the Fair Share issue. That is something that will be negotiated. As always, I cautioned the council members I met with last time -- the mayor of Fort St.

John, the mayor of Dawson Creek, who represent their areas well -- that you don't always get everything you want. But we're going to deal with the issues that they've identified, and I hope that at the end of the day we can do that successfully.

You can see that by putting Fair Share, Treaty 8 and the MOU with the oil and gas sector all together as a piece, the opportunity exists for a lot more development and, hopefully, a lot more prosperity. A lot of things that people really . . . . Why do they work? They work so they can raise their families and live in communities that are safe and have good infrastructure and all the rest. So we're going to work really hard on that, and I think we're going to have some success. As part of my mandate as the Minister Responsible for Northern Development, I'm certainly looking forward to working with the communities in that region.

The northern development issue is one that is, again, dear to my heart. We spent about a year, last year, working on organizing the Premier's Summit on Northern Development that was held in Prince George last October. It was well attended by a cross-section of people from all across northern British Columbia. We had some very good intensive workshops in that session. We've come out with a document. We broke people into sectoral workshops. So we know what the issues are.

The advisory board that we put together to recommend the agenda and all the rest was again asked to go out on the road and consult with northerners about a permanent structure that could represent northern interests. They came back and recommended that a northern commissioner be appointed. I met with the group. I've said that I accept their recommendations, and I hope that we will proceed this session to give life to those recommendations through legislation and that we can get on with the job of establishing that office. Small staff -- no, I don't want a bureaucracy. Nobody wants a bureaucracy in northern B.C.

We want a small unit that can work on the issues that are important to northerners.

You know, the devil is always in the detail. It's defining what the commission does, defining the priorities for northerners and then getting on and focusing, shining a big light, lobbying and working hard -- through myself, as the Minister Responsible for Northern Development -- to try to achieve those objectives.

We've been working with the government of Alberta. We work very well with the government of Alberta, both the minister, Walter Paszkowski, and Pat Black. Alberta has a significant interest in the northwest transportation corridor that runs through Edmonton to the port of Prince Rupert. It's underutilized. While it could carry many more commodities -- whether that's coal, grain, lumber, pulp, you name it -- it's underutilized. We've been working to try to address that. The first move was announced last October, where we successfully managed to get an agreement between B.C.

Rail and CN Rail for an interchange agreement at Prince George. Quite frankly, it had been a bottleneck for 20 years; nobody had been able to solve the problem. But we devised a commercial agreement that makes sense for both railways and, more importantly, makes sense for shippers. It gives shippers the kind of flexibility in terms of where they want to send their shipments, whether it's down into the U.S., out through the port of Prince Rupert or out through the port of Vancouver. It's good news for shippers.

We're working on another interchange agreement in the Dawson Creek subdivision. I've told my friend the member for Peace River South that once we're in a position to make more substantive announcements, I'll inform him about that. It's my belief that we can do a heck of a lot better job in terms of gathering that Peace River grain -- both B.C. and Alberta -- and getting it down in the shortest and cheapest possible way to tidewater. That's the port of Prince Rupert, which is 600 kilometres closer to the Asian markets than the port of Vancouver.

I'm not being negative about the port of Vancouver, but my job is to tout the north. It's 600 kilometres closer; it's a day's sailing time closer to those Asian markets. It makes all the sense in the world that if we can put the right system in place, if we can gather that Peace River grain and get it to the market, then we're going to be helping the farmers up in the Peace River. Those farmers need some help; they've had two tough years. We want to work with them.

There's some potential for more milling operations -- barley, etc. -- and we want to look at any of those opportunities that exist up in northeastern B.C.

It's a long process. You don't change overnight; you don't create all these things overnight. But if people are engaged together and working together, and they've identified the goals, I think they're achievable.

[ Page 6685 ]

Mr. Speaker, there are other issues in northern B.C., and I won't try to be comprehensive or exhaustive with respect to what those are. But there are many. As a person who has lived there for a long time, I really look forward to the opportunity to work with people in the north on these questions.

I want to say that one of the issues that has compelled me in politics is the resolution of aboriginal land claims. I think it is fundamentally important that we do that. Quite frankly, I think there's been just a little bit too much rhetoric around that question and not enough commitment to resolve it. It's easy to be a critic. It's easy to say, when you get close and you're almost there: "Just a minute . . . . " But haven't we been saying that for a hundred and some-odd years? Hasn't the Laurier Institute now said: "Settle land claims"? Let's get on with it. Hasn't the public of B.C. said: "Settle land claims"?

Haven't the courts, with their series of rulings after rulings after rulings, sent a very clear signal to people like us that we've got to resolve these land claims?

One of the proudest moments in my life was when I stood on the stage in Vancouver, when we reached agreement-in-principle with the Nisga'a. I have never felt prouder in my life as a politician in this province, despite the bleatings of the members opposite, the constant critics who never offer any positive solutions. Watch, they'll be lined up . . . . They'll say: "You can't do this; you can't do that."

Interjection.

Hon. D. Miller: The Duke of Can't . . . . When are they going to offer some positive solutions? When are they going to say something positive about British Columbia? I have not heard them say one positive thing about this province since we reassembled here less than a week ago not one positive word.

Interjection.

Hon. D. Miller: They want to move to Alberta? I say they should go. We don't need these nattering nabobs of negativity that we've got in British Columbia in the form of the opposition. No wonder they're writing their own letters, saying they're good MLAs. Nobody else does it for them.

Interjections.

Hon. D. Miller: Mr. Speaker, you can count on this gang; you can count on them. When we reach agreement with those Nisga'a people, when we finally settle a modern land claim in this province for the first time, I will be standing there and I will be even more filled with pride. But I know the critics will be there; they're always there. And you know what? A critic has never changed the course of history, and, my friends, that will be your lot in life.

I started out in a rather statesman-like tone, I think, and, as I said to myself last year . . . . I said the same thing to myself this year: "Look, you've been here a long time. You're one of the older members in the House." I was hoping I would sort of revert to a little bit more of a senior statesman role. I do believe I have it in me, but my friends keep bringing out the worst in me, I'm afraid, with their unruly heckling.

An Hon. Member: It's not over; you're not finished.

Hon. D. Miller: No, to the member opposite, I'm not finished by a long shot. There will be lots more opportunity, I think, for engagement. Hopefully that will be vigorous, and hopefully it won't be personal. There have been some references outside this House that I think have undermined the role that MLAs should play in terms of their conduct. While we can disagree on substantive issues -- and I think it's important that we do have those debates -- I think the debates should be confined to the issue.

When it strays into the personal, that does nobody any service -- not people on this side and not people on that side. As members opposite know -- or most members opposite -- I'm happy to play on any field by any rule, I will happily do that, but I prefer that there be some element of decorum and lack of personal attacks. But I like the vigorous side of it, so I look forward to the months ahead.

G. Abbott: The first thing I'd like to do today, Mr. Speaker, is to congratulate you and the new Speaker of the House on your elevation to the very important positions that you now hold. I guess the experience of the past week would suggest that there is frequently good reason why the Speakers have to be dragged up into their lofty position. All the best to you, and I'm sure you will both do a fine job.

I would like to begin today by saying something positive. The previous speaker suggested that we never do, but I want to say something positive here. I think the most positive thing I can say about the NDP's budgeting is that it is consistent. It is consistently bad, but it's consistent. I had an opportunity to take a short walk at lunchtime today, and I was reminded of some of the things that we enjoy, or don't enjoy, in the spring -- flowers, warmer weather, sunshine, occasionally rain. But one thing we always seem to get in the spring, as well, is another deficit budget from the current administration.

An Hon. Member: How many have we had?

G. Abbott: I believe it's seven consecutive deficit budgets that we have now suffered in the province of British Columbia. It used to be said that there were only a couple of certainties in life; one, I think, was death and the other was taxes. I think that given that we've now seen seven consecutive deficit budgets in British Columbia, we can now add a springtime NDP deficit budget to the list of certainties in life. Through good times and bad, regardless of what's happening in other provinces or other jurisdictions in North America, one thing we can always count on is that this government will present us with another deficit budget.

This wasn't supposed to be so. When they voted in the 1991 or 1996 election, no one, I think, thought that we would be seeing seven consecutive deficit budgets from this NDP administration. In fact, back in the 1996 election -- as I'm sure you'll very vividly recall -- we were advised that this NDP government had produced two surplus budgets. It wasn't, I don't think, that the government was circumspect at all about their chances. They didn't say: "Well, maybe we have produced two consecutive surplus budgets." They didn't say that at all.

They said, without any circumspection at all, that we would produce two surplus budgets in the province of British Columbia. Just weeks or days after we first sat after the 1996 election, however, suddenly it was: "Whoops, something appears to have gone wrong, and, in fact, those two surplus budgets have gone for nought." But certainly no one was circumspect about what the public should expect in terms of a surplus budget in the 1996 election.

For example, the Premier was far less than circumspect in saying -- and I'll quote from the Vancouver Province of May 22, 1996: "We turned a $2.4 billion deficit into two consecutive balanced budgets." Then

[ Page 6686 ]

the Premier continued with a phrase which obviously just drips with irony, given the experience since the 1996 election. He goes on to say, "Actions speak louder than words," and certainly they do. Seven consecutive deficit budgets is certainly a fine example of actions speaking louder than words.

[4:00]

Since the 1996 election, Mr. Speaker, on numerous occasions we've heard a variety of excuses why those two supposed surplus budgets in '95-96 and '96-97 didn't come to fruition. I believe it was weather at one point, and a whole range of phony issues was raised that supposedly explained it. But when one looks at some of the background documents that we've obtained through freedom of information since that time, it certainly makes you question the explanations that were offered by the government.

For example, we have a briefing note from way back in March 1995, well in advance of the May 1996 election -- I guess it would be 15 months in advance. This is a briefing note prepared for the then Minister of Finance and Corporate Relations. It's entitled "Emerging Fiscal Problems in 1996-97." I'll just quote briefly from it, because I think it gives a very good indication of what -- some 15 months in advance of the '96 election -- the prevailing view in the Ministry of Finance was: "As outlined to you by Michael Costello and Chris Trumpy at a meeting on February 17, fiscal problems are emerging in 1996-97.

The problem is that a fairly large 1996-97 deficit -- $600 million to $800 million -- is likely." It then goes on to explain some of the things that were occurring. It concludes by saying: "If the budget is to be balanced in 1996-97, total spending needs to be cut by 1.7 percent or we need an amount of optimism in the forecast that would not be credible, given the known downward pressures already incorporated in the forecast, such as declining natural gas and other resource revenues." So I think it was pretty clear that . . . .

Certainly it was well known to the Minister of Finance just exactly where the provincial economy was going, and that, as we now know so well, was directly into the tank.

But did the government have further confirmation of this? Well, they certainly did. In a memorandum dated December 20, 1995, to the Minister of Finance from the then Minister of Forests, we have the following: "You should be aware that information obtained in recent days indicates a significant shortfall in revenue from the 1995-96 forecast, due to less harvesting and billed volumes than forecast. The trend is attributable to a rapid decline in markets from last year and less volume sold than forecast." So again we have, well in advance of the '96 election, clear evidence that it was well known that this province and its economy were going into the tank.

Finally, just further confirmation of the advice that was being tendered to the cabinet from their administration. This is a revised forecast, dated May 22, just half a dozen days before the 1996 election day. It reads as follows: "1995-96 Revised Financial Forecast: Revenue is now expected to be $169 million below the 1995-96 revised forecast. Expenditure is expected to be $58 million above the 1995-96 revised forecast. As a result, the $16 million surplus shown in the 1995-96 budget, revised forecast, will not materialize. A 1995-96 deficit of $211 million is now expected."

It's entirely clear, based on the documents that we have, over time, secured through freedom of information, that in fact the situation was well known to cabinet. But despite that, they chose to run an election that was based on the very faulty and misleading information that they tendered to the people of British Columbia.

One of the important elements in sending the economy into the tank, which was certainly furthered by this NDP government, was forestry revenues. The memorandum certainly underlined the importance of forestry revenues in the faulty predictions. The thesis of what I have to say here today is that the damage to the forest industry resulting from the disastrous policies of this NDP government will undoubtedly lead to an eighth consecutive deficit budget. This government claims that they are going to balance the budget. But it's funny; we've heard that one before.

With the forest industry going into the tank the way it has as a consequence of this government's policies, I expect full well that the consistent record of deficit budgets produced by this government will continue for 1999-2000.

I want to further argue today, Mr. Speaker, that the economic and fiscal health of this province will not be restored until the health of the forest sector is restored. Regrettably, NDP policies have been entirely destructive of and not supportive of new jobs and new investment in the forest industry and, indeed, in other industries in this province.

One of the defining features of this government is its remarkable, its unbounded capacity for self-delusion. No government, I think, in the history of British Columbia could ever rival this government in its capacity for self-delusion. Some may argue that Amor De Cosmos might compete here, but I doubt it. I suspect that he had a far better grip on reality than the incumbent government has.

The NDP's response to the forest crisis in British Columbia, where literally thousands of forest workers are out of work, is to say: "Crisis? What crisis? Is there a crisis?" If this government was the Titanic -- and I hope the members opposite don't mind the metaphor, because it is so popular these days -- the NDP's response would be: "Iceberg? What iceberg?" That would undoubtedly be their response.

This government claims to have done everything it can to help the forest industry, despite literally a mountain or, if you'd prefer, a forest of evidence to the contrary. The best, the most constructive thing this government could do for the forest industry or, indeed, any other sector of the economy would be to resign and call an election. Were they to do this, I think the announcement would be greeted by dancing in the streets. There would be universal joy were the government to undertake this step. Regrettably, I think it's most unlikely that they will undertake that step.

Given that they are not likely to do it immediately, I think that failing that, what we need in British Columbia are critical reforms to the Forest Practices Code, to our stumpage system and to our tax system. All of these things are critical to our recovery and our health in the forest sector in British Columbia. Sadly, this NDP government has shown neither the inclination nor the ability to undertake such vital reforms.

This NDP government is a government obsessed with the politics of waste and illusion. Where real and substantial reforms are needed, this government responds with expensive smoke-and-mirrors PR exercises to provide the illusion of change. Where hard decisions are required, this government responds with acronyms and pretentious slogans. Only a B.C. NDP government -- and this is remarkable -- would respond to the obvious need for deregulation with further regulation. This is so typical of the NDP government in British Columbia.

Only a B.C. NDP government would further undermine a frigid business and investment climate by creating an office

[ Page 6687 ]

-- I'm talking here of the jobs and timber advocate -- devoted to wheedling, pressuring and coercing jobs from a forest industry that's been robbed of all incentive to invest and create new jobs in British Columbia.

Only a B.C. NDP government would threaten to destroy an efficient and productive silviculture industry to curry favour from big union friends and insiders. This is a government held captive by nineteenth-century notions about the role of government in the economy. This government, again despite mountains and forests of evidence to the contrary, clings to the notion that government can create jobs or, alternatively, cause them to be created by threats, promises or shortsighted giveaways.

This NDP government can't understand that the single most important thing that any government can do for the economy is to create a friendly, stable, predictable and vibrant business climate where people will want to invest, where people will want to create new jobs. That, regrettably, is something that is entirely foreign to this NDP government.

Why would anybody want to invest in the forest industry in a province where the Premier spouts anti-business rhetoric when it suits his purposes and where the Minister of Forests thinks profits are something to be deplored rather than celebrated? Unfortunately, the flip side of profit is loss, and persistent losses spell bankruptcy and further job losses.

I guess it's not surprising that this government can't seem to capture or understand this concept of profit and loss. After all, this is a government that has produced seven consecutive deficit budgets. That's seven losses in a row by this government. But what the heck, it's no problem: "We doubled the debt of the province; it's no big deal. Somewhere down the line we're going to start to address the deficit and debt problem." They don't care; they don't understand that the average business in this province can't incur continuous losses and stay in business. They don't care.

They continue to produce those deficits and that debt, which obviously provides them with no sympathy and no understanding for the situation that faces small business and indeed any business in the province.

In the never-never land of the socialist utopia that we live in here, one is spared the pain of such harsh economic realities. To the NDP, the forest industry is just a fat goose that continuously lays golden eggs, regardless of how much abuse they throw at it. Sadly, the consequences of the NDP's neglect, mismanagement and incompetence are all too clear in communities throughout British Columbia.

I want to take a moment to look at the numbers associated with this crisis which we are currently suffering through. I want to say first of all that it's very difficult to overstate the importance of the forest industry in British Columbia. Just to give you a few brief examples . . . . This is from the Price Waterhouse analysis of the forest industry in British Columbia in 1996. If we look at the numbers, we have employment -- I think a most important statistic here. Direct employment in the forest industry in 1996: 99,100 people. A further 198,200 were indirectly employed as a consequence of the forest industry.

Other important statistics: total sales, $15 billion -- almost $16 billion; exports -- almost $15 billion in provincial exports came from the forest industry. In fact, 60 percent of export sales from British Columbia were from the forest industry. It's of enormous importance to us. Further -- and this is obviously of enormous consequence to the government -- payments to government from the forest industry totalled $4.236 billion. That is the importance in terms of revenue to the provincial government, primarily from the forest industry.

[4:15]

There are some other numbers that are a lot less pleasant than these, and they go to the heart of the crisis that the NDP government has created. For example, from the forest jobs commissioner we had a document entitled "The Forest Worker Transition Program." This is a

summary for the Pacific region. Briefly, the total number of registered and projected layoffs for the Island, 8,267; for the Fraser Valley, 2,153; Vancouver, 1,005; the total number of registered and projected layoffs, 11,425 people. These are statistics. What they don't tell us is that in this province there are 11,425 families that have had their lives turned upside down by unemployment. There are family stresses, family strains, and the inability to meet mortgages. These are the consequences of a government that hasn't thought through its policies about how the province should manage its forest industry.

What are the reasons why we are seeing 11,425 registered and projected layoffs? Well, there are a couple of documents here that go a long way to explain that. The first one is a report prepared by KPMG for the Ministry of Forests on undelivered-wood costs in British Columbia. I won't go through all the numbers here -- I don't think we have time -- but I'll go to the B.C. combined numbers. This is the percentage increase in B.C.-delivered wood costs by cubic metre, 1992 to 1996, combined figures: log cost increase before stumpage, 50 percent; stumpage increase, 197 percent; total log cost increase, 75 percent.

This government, through its reckless policies, has created a situation where British Columbia now has the most expensive fibre in the world, and the consequence of that is evident in 11,000 people, just on the coast, being thrown out of their jobs.

The final document I'll refer to here in terms of our numbers is provided generously by the IWA. It's a table that provides a comparison of average stumpage rates for softwood timber: Quebec, $14.45 per cubic metre; Ontario, $8.99 per cubic metre; Alberta, $7.50. Then we go on to British Columbia -- remember Alberta, $7.50: B.C. interior, $28.87; B.C. coast, $33.80; British Columbia average, $30.01. That's compared to a figure of $7.50 in Alberta, and I'm sure none of the members opposite will question these figures from the IWA.

It's a pathetic example of where this government has taken the forest industry in British Columbia. Further -- and this is a percentage comparison -- B.C. exceeds Quebec by $14.42 per cubic metre, 99.8 percent higher; B.C. exceeds Ontario by $19.88, a 221 percent difference between the stumpage rates in those two provinces.

An Hon. Member: Where do those figures comes from?

G. Abbott: Those figures are from the IWA.

And finally, in the B.C. interior -- and this is for January 1998, the previous quarter -- B.C. exceeds Alberta by $21.37 -- 284.9 percent higher than the stumpage rates in Alberta. It's absolutely outrageous and on its own a deplorable indictment of the absolutely pathetic performance of this government in managing our most important industry and our most important resource.

Another observation which I think should be made today is that the forest industry is, always has been and always will be a cyclical industry. Despite the abysmal incompetence and mismanagement of this NDP government, the current slump we're suffering won't last forever. The crisis won't last forever. Just as clear, however, is that the current slump, depression or crisis experienced by the forest industry is in large measure a product of the policies of the current government. There is absolutely no question about that. If the Asian flu has played a role in bringing the industry to its knees, then so too -- and I

[ Page 6688 ]

think to a far larger extent -- has the New Democratic plague. This plague has had a major impact in lengthening and deepening the crisis that we are currently bogged down in.

We don't have to look far to identify the causes of this malaise. We know that the Forest Practices Code, which was put in place by the current government, is highly prescriptive, highly bureaucratic and inordinately expensive. Last session we spent a good deal of time talking about Bill 47. That was theoretically supposed to help the forest industry. Not one dollar in savings has been delivered to the forest industry as a consequence of those reforms. This government is incapable of delivering reforms to the Forest Practices Code or, indeed, anything else.

The code, in conjunction with an onerous and badly flawed stumpage system, has made B.C.'s fibre the most expensive in the world. As a consequence, what we see is an industry which is crushed between a raising floor of spiralling fibre costs and a descending ceiling of international wood prices. Between those two things, our forest industry -- and indeed our forest workers -- are being crushed. Most importantly, we see thousands of forest workers and their families suffering -- unnecessarily, for the most part -- the social and economic consequences of unemployment and dislocation.

What has been most unforgivable is the NDP's arrogant and stubborn refusal to acknowledge the pending crisis in the forests. This is not new. The documents from 1995 that I spoke of earlier indicated very clearly where the forest industry was going, and that was into the tank. Did they take action to resolve it? No. The only action they have taken is to create the jobs and timber accord to launch the pretentious illusion that this provincial government could create jobs.

Consistent with the Premier's virulent anti-business rhetoric in the 1996 election campaign, the forest industry was the fat goose that the NDP could abuse but that would continue to lay the golden eggs. Rather than deal with the reality of skyrocketing costs and declining markets, the government focused on the politics of illusion. Rather than focusing on the underlying causes of the pending crisis, the government propagated the fatuous belief that government could create tens of thousands of new forest jobs through the jobs and timber accord.

Everything this NDP government has done under the guise of helping the forest industry and helping forest workers has only served to undermine the flexibility and competitiveness that is desperately needed by an industry in a highly competitive world. Make no mistake, we face unprecedented competition from sources around the globe. Not only do we have the traditional players in the forest markets -- Scandinavia, the U.S., eastern Canada -- we also have a host of new players in world forest markets today: Russia, eastern Europe, and so on. A turnaround in Asian markets doesn't mean a turnaround in our fortunes.

We need enhanced competitiveness if we are to recover our markets. Regrettably, however, we're not going to have that. We're caught in a highly destructive spiral where a government has completely undermined the investment climate. There's no investment confidence, no reinvestment, reduced competitiveness and no prospect of profit. It's an ugly cycle that, regrettably, is likely to continue under the current administration.

The time is now for hard but necessary reforms in this province. We need to first of all reduce fibre costs. We need a results-based Forest Practices Code, and we need reform of the stumpage system. Secondly, we need to enhance the business climate in British Columbia. B.C. desperately needs new investment. We need elimination of unnecessary regulation, we need elimination of regressive taxes, and we need elimination of the massive and unaffordable PR smoke-and-mirrors spin machine constructed by our Orwellian Premier and his Orwellian government.

The forest workers of this province -- indeed, all of the people of this province -- deserve better. Families and communities are suffering as a consequence of NDP policies. It's time to get B.C. working again.

J. Wilson: I welcome the opportunity to stand in the House today and speak against this budget. Since the NDP government took office in 1991, it has been one long series of deficit budgets. This is unacceptable. To make matters worse, they have all been bogus budgets. The accounting system and methods that this government uses to prepare its books are all designed to hide the true cost of spending from the taxpayers of British Columbia.

We have introduced truth-in-budgeting legislation in this House, which will make government keep its books the same as you and I are made to keep ours. That is one of the first items needed to even allow me to consider supporting a budget. All provinces in Canada have recognized the importance of balancing their budgets and of good fiscal management -- all provinces except British Columbia. This government has made this province the laughingstock of Canada, and this government is an embarrassment to the citizens of British Columbia.

How bad is it? It is bad. This is not just bad government. This is the worst government that this province has ever had to endure. We have just ended, in the past year, the best economic times that resource industries in this province have ever experienced. Lumber prices have never been higher; gas and oil were booming in 1995 and 1996. Yet we continue to spend and spend and spend when we should be running a surplus budget and paying down the debt in this province. We live in the richest province in Canada, and when markets were at an all-time high, we were being downgraded in our credit rating.

When you look around at all of our neighbouring provinces and states, you see nothing but thriving economies.

I've been asked to sit down and let an introduction be made.

[4:30]

Hon. J. Kwan: I ask the House for leave to make an introduction.

Leave granted.

Hon. J. Kwan: Visiting us today is the former mayor of West Vancouver, Mark Sager. I would like the House to please make him feel welcome.

Deputy Speaker: The member for Cariboo North continues.

J. Wilson: Thriving economies. They will tell you, when you talk to the governing bodies in these provinces or states, that the NDP government of British Columbia is one of their major keys to success. When you go to the province of Alberta, which has become a model for the rest of Canada in fiscal management and job creation, and that government says to you, "If only we had the resources of British Columbia, we could perform miracles," it leaves one conclusion: this government is bad government with a deplorable economic policy and fiscal management. This government has taken British

[ Page 6689 ]

Columbia from first place in job creation and new business investment in Canada to last place in only six years. It's remarkable. This government has only one objective, and that is to stay in power. They do this by intimidating anyone who stands in their path. But they do have a few friends, and they are very well taken care of.

Economic development for this government is quite simple: you increase taxes and create government jobs. This government has never once had the best interests of the people of this province as part of their program. Unfortunately, this budget will do nothing. The basic attitude and direction of this government has not changed in any way, and that is ever so apparent when one reads the throne speech. Anyone who is part of the real world can only shudder and grimace when reading this, because it is simply more of the same political rhetoric that has been going on repeatedly, year after year.

This province is in a very serious recession. The reason for this rests entirely on the shoulders of the Premier. However, blame is always laid somewhere else -- like on the weather or on the Asian crisis or on the federal government. Never is the blame laid where it should be. It is so bad that British Columbia has now entered a deflationary stage. If you have any assets in this province, they are, as each day goes by, worth less and less and less -- and all because of the actions of this government.

Let's look at a few of the achievements and results of the Clark government. We are now in the highest marginal tax bracket of any province in Canada -- quite an achievement -- and are the second-highest personal income tax bracket in Canada -- another terrific achievement. We are losing jobs at an unprecedented rate: 19,000 jobs in the forest industry in January alone. We have the lowest investment rate and job creation rate of any province in Canada -- a remarkable achievement. How could they do this to us?

Industry and investment are fleeing this province on a daily basis. In the first six months of 1997, 76 companies deregistered and moved out of British Columbia to Alberta, taking hundreds of jobs with them, and the loss of future jobs and expansion. It won't come back, hon. Speaker.

Industry has pointed out time and time again what the problems are here, but the government continues to ignore the problems. Corporate capital taxes have got to be removed. It's not just for their friends in the big banks; it has to be removed for all business, right across the board. Personal income taxes have got to be reduced to be on a par with our neighbours. We must become competitive in this province. Labour laws must become flexible. The regulatory burden that has been placed on business is enough to discourage most investment. To cap it all off, the stonewalling by bureaucracy is the final straw in most cases.

This government has no direction, no plan, no focus and, most of all, no discipline. As a result, we witness constant incompetence and inability to govern. What we have in this province today is what I would like to describe as a band-aid government. Every time a problem arises, they run to take care of it with a band-aid. Instead of addressing the problem, getting to the bottom of it and correcting it, they band-aid it. In some cases, they've got so much adhesive applied that all you can see is a big gob of adhesive on the problem.

A good example of this would be this: if you are a working family in Alberta and you earn $50,000 a year, your take-home pay will be $8,500 more per year in your pocket than if you have an equivalent job in British Columbia. What a kick in the teeth for the taxpayers of this province!

What has this government done in response? Why, through tax reductions, rate freezes and grants, they have claimed -- this is theoretical; they have yet to prove this to anyone and haven't proved it to a single person in the province -- that they have actually saved them $700 a year. Well, I could say the same thing: if you don't increase taxes by $3,000 this year, you've saved the taxpayer $3,000. That makes a lot of sense to me. Where is the actual cash in their pockets? There is not one red cent. It's less each day, less money in the pockets of the taxpayers, in their take-home pay, every day in this province.

Is it any wonder that we are experiencing a mass exodus of working people from this province? One thing that this government is noted for is their inaction when a crisis arises and their inability to deal with it -- no direction, no plan, no focus and, most of all, no discipline. No jobs will eventually mean no taxpayers.

[The Speaker in the chair.]

With the demise of big business, which we see coming closer and closer, we will also see the demise of the unions. They will no longer be with us. The only real growth that this province has experienced, and continues to experience, is the growth in government -- another 1,000 FTEs this year alone.

However, government growth will eventually consume itself like a cancer because of the stonewalling attitude of many ministries in this government against the resource industries, which this province depends upon to survive. Mining, forestry, agriculture and fishing have all been seriously crippled in the past two years -- and I might add the gas and oil industry. This government thinks nothing of dumping $300 million-plus into an antiquated, inefficient pulp mill that's nothing but a black hole for the taxpayers of British Columbia -- in an effort to buy a few votes for the Deputy Premier. Shame!

When a health crisis arises, they have no money -- none. The situation with northern doctors is a prime example. Now we have no service on the weekends in my riding -- every second weekend -- and they're not even interested in working out an equitable solution with the doctors.

Children and Families is another example where this government has no direction and no plan.

An Hon. Member: You have the minister's attention.

J. Wilson: Oh, good. I think I hit a raw nerve.

When the situation in Quesnel arose, the only reaction from this government was an effort to protect their political hide. Consideration for the children and consideration for the families was not there. They laid the blame on the front-line workers and the supervisors, ignoring the fact that on more than one occasion the minister had been put on notice that the resources and funding and staff were totally inadequate. Only after the release of the report by Judge Smith, which stated that resources were inadequate, did this minister admit funding needs to be increased.

However, contractors were cut 3 percent last year, and they have been told to cut another 3 percent this year. Does this sound like a government that is serious about increasing funding and providing proper care for children? Unacceptable, Madam Speaker.

What happens when a natural disaster occurs, such as we've had in agriculture in the last year?

Interjections.

[ Page 6690 ]

J. Wilson: There are a lot of natural disasters on the other side of the House, but that can't be helped.

In agriculture, the ministry, in its wisdom, developed a crop insurance program that is designed to be ineffective and to constitute failure. To make it even better, it completely removed the possibility of the beef industry ever receiving any kind of crop insurance. Sad indeed. When people look to government for assistance and guidance, what do they get? They get slapped down every time.

This government continues on the same path with programs for highway maintenance. I heard the Deputy Premier in the House today, and what's he doing? He is paying lip service to the northern interior. Isn't that just great! But that's as far as it'll go, and we all know that. No one believes a word. No one believes that anything will change. But it must change. This government has allowed our highways to deteriorate to an unacceptable level. Under the NDP government over 85 percent of our highways have aged beyond the point where they can be rejuvenated. They're going to require replacement in order to bring them up to standard.

[4:45]

Interjection.

J. Wilson: I'll have you know, sir, that I drive most of the time. I have wrecked more than one vehicle on these roads. I know what northern roads are like. You drive into a pothole and you disappear, and sometimes you've got to get a tow truck out there to pull you out -- that's what you've got